Filed pursuant to Rule 424(b)(5)
No. 333-207466
PROSPECTUS SUPPLEMENT
(To prospectus dated October 16, 2015)
2,150,001 Shares
of Common Stock
Warrants to Purchase up to 645,000 Shares of Common Stock
ChinaNet Online
Holdings, Inc.
Common Stock
Warrants
We are offering to certain institutional investors, pursuant to
this prospectus supplement and the accompanying base prospectus, up to an aggregate of 2,150,001 shares of our common stock, par
value $0.001 per share, together with warrants, exercisable for a period of thirty (30) months commencing on the closing date,
to purchase up to an aggregate of 645,000 shares of common stock. Each warrant entitles the investor to purchase 0.30 shares of
our common stock for every share of common stock purchased by such investor in the offering. The purchase price for each share
of common stock and the related warrants is $5.15. Each warrant has an exercise price of $6.60 per share. The common stock and
the warrants will be issued separately but will be purchased together in the offering. This prospectus supplement also relates
to the offering of shares of common stock upon the exercise, if any, of the warrants issued in this offering.
Our common stock is listed on The NASDAQ Capital Market under
the symbol “CNET.” The last reported sale price of our common stock on January 11, 2018 was $6.38 per share. The warrants
will not be listed on any national securities exchange.
INVESTING IN OUR SECURITIES INVOLVES RISKS, INCLUDING THOSE
DESCRIBED IN THE “RISK FACTORS” SECTION BEGINNING ON PAGE S-6
OF THIS PROSPECTUS SUPPLEMENT AND SET FORTH IN THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING BASE PROSPECTUS.
FT Global Capital, Inc. acted as placement agent on this transaction.
The placement agent is not purchasing or selling any securities nor is it required to arrange for the sale of any specific number
or dollar amount of securities, but has agreed to use its best efforts to arrange for the sale of other securities offered by this
prospectus supplement. We have agreed to pay the placement agent the placement agent fees set forth in the table below.
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Per Share
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Total (2)
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Offering Price
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$
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5.15
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$
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11,072,505.20
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Placement Agent Fees (1)
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$
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0.309
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$
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664,350.31
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Proceeds to Us, Before Expenses
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$
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4.841
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$
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10,408,154.89
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(1) See “Plan of Distribution”
for additional disclosure regarding placement agent fees and estimated offering expenses. We will issue to the placement agent
warrants to purchase 6% of the shares of common stock issued in this offering on substantially the same terms as the warrants sold
in this offering, except that the placement agent warrants shall not be exercisable for a period of six months and one day after the closing date of this offering. The placement agent warrant and shares of common stock underlying such warrant are
being registered herein.
(2) Assumes maximum offering
is completed.
We estimate the total expenses of this offering, excluding the placement
agent’s fees, will be approximately $110,000.
We expect delivery of the common stock and warrants being sold in
this offering to be made to the investors on or about January 17, 2018, against payment of immediately available funds. Because
there is no minimum offering amount, the actual offering amount, placement agent fees and proceeds to us, if any, are not presently
determinable and may be substantially less than the maximum amounts set forth above.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying base
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Placement Agent
FT Global Capital,
Inc.
The date of this prospectus supplement is January 12, 2018
TABLE OF CONTENTS
Prospectus Supplement
ABOUT THIS PROSPECTUS SUPPLEMENT
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S-1
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SUMMARY
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S-2
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THE OFFERING
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S-6
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RISK FACTORS
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S-7
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FORWARD-LOOKING STATEMENTS
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S-10
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USE OF PROCEEDS
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S-11
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PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
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S-11
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CAPITALIZATION
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S-12
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DESCRIPTION OF SECURITIES
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S-12
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DILUTION
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S-14
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PLAN OF DISTRIBUTION
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S-15
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LEGAL MATTERS
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S-16
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EXPERTS
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S-16
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WHERE YOU CAN FIND ADDITIONAL INFORMATION ABOUT US
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S-17
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
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S-18
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Base Prospectus
ABOUT THIS PROSPECTUS
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1
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ABOUT CNET PROSPECTUS
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2
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RISK FACTORS
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3
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NOTE REGARDING FORWARD LOOKING STATEMENTS
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3
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USE OF PROCEEDS
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4
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DILUTION
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4
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DESCRIPTION OF COMMON STOCK AND PREFERRED STOCK
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4
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DESCRIPTION OF WARRANTS
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5
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DESCRIPTION OF UNITS
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8
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PLAN OF DISTRIBUTION
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9
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LEGAL MATTERS
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11
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EXPERTS
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11
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INFORMATION INCORPORATED BY REFERENCE
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11
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WHERE YOU CAN FIND MORE INFORMATION
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12
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You should rely only on the information contained in this prospectus
supplement and the accompanying base prospectus that we have authorized to be distributed to you, or information incorporated by
reference herein. We have not, and the placement agent has not, authorized anyone else to provide you with additional or different
information. We are offering to sell, and seeking offers to buy, common stock only in jurisdictions where offers and sales are
permitted. You should not assume that the information in this prospectus supplement or the accompanying base prospectus is accurate
as of any date other than the date on the front of those documents or that any document incorporated by reference is accurate as
of any date other than its filing date.
No action is being taken in any jurisdiction outside the United
States to permit an offering of the common stock or possession or distribution of this prospectus supplement or the accompanying
base prospectus in that jurisdiction. Persons who come into possession of this prospectus supplement or the accompanying base prospectus
in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to this offering
and the distribution of this prospectus supplement and the accompanying base prospectus applicable to that jurisdiction.
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement and the accompanying base prospectus are
part of a registration statement on Form S-3 (File No. 333-207466) that we filed with the Securities and Exchange Commission (the
“SEC”) using a “shelf” registration process. Under this “shelf” registration process, we may
from time to time sell any combination of securities described in the accompanying base prospectus in one or more offerings up
to a total of $50 million.
This document is in two parts. The first part is this prospectus
supplement, which describes the specific terms of this offering of common stock and warrants, including the price, the number of
shares of common stock and warrants being offered, the risks relating to an investment in our common stock and the placement agent
arrangements, and also adds to and updates information contained in the accompanying base prospectus and the documents incorporated
by reference into the prospectus supplement and the accompanying base prospectus. The second part is the accompanying base prospectus,
which gives more general information, some of which, such as the descriptions of unissued securities other than our common stock
and warrants, do not apply to this offering.
If the description of the offering varies between this prospectus
supplement and the accompanying base prospectus, you should rely on the information contained in this prospectus supplement. However,
if any statement in one of these documents is inconsistent with a statement in another document having a later date — for
example, a document incorporated by reference in this prospectus supplement and the accompanying base prospectus — the
statement in the document having the later date modifies or supersedes the earlier statement. We are not incorporating by reference
any information submitted under Item 2.02 or Item 7.01 of any Current Report on Form 8-K into any filing under the Securities Act
of 1933, as amended (the “Securities Act”), or the Exchange Act of 1934, as amended (the “Exchange Act”),
or into this prospectus supplement or the accompanying base prospectus.
Any statement contained in a document incorporated by reference,
or deemed to be incorporated by reference, into this prospectus supplement or the accompanying base prospectus will be deemed to
be modified or superseded for purposes of this prospectus supplement or the accompanying base prospectus to the extent that a statement
contained herein, therein or in any other subsequently filed document which also is incorporated by reference in this prospectus
supplement or the accompanying prospectus modifies or supersedes that statement. Any such statement so modified or superseded will
not be deemed, except as so modified or superseded, to constitute a part of this prospectus supplement or the accompanying base
prospectus.
We further note that the representations, warranties and covenants
made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference in this prospectus supplement
and the accompanying base prospectus were made solely for the benefit of the parties to such agreement, including, in some cases,
for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty
or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly,
such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
SUMMARY
The following summary may not contain all the information that
may be important to you in making an investment in our securities. This prospectus supplement and accompanying base prospectus
incorporate important business and financial information about us that is not included in, or delivered with, this prospectus supplement
and the accompanying base prospectus. Before making an investment, you should read the entire prospectus supplement and the accompanying
base prospectus carefully. You should also carefully read the risks of investing discussed under “Risk Factors” and
the financial statements included in our other filings with the SEC. This information is incorporated by reference into this prospectus
supplement and the accompanying base prospectus, and you can obtain it from the SEC as described below under the headings “Where
You Can Find Additional Information About Us” and “Incorporation of Certain Documents by Reference.” Unless otherwise
mentioned or unless the context requires otherwise, when used in this prospectus supplement, the terms “Company,” “we,”
“us,” and “our” refer to ChinaNet Online Holdings, Inc. and its wholly-owned subsidiaries and consolidated
entities. “China” and the “PRC” refer to the People’s Republic of China.
Our Business
We are a holding company that conducts our primary businesses through
our PRC subsidiaries and operating entities (the “VIEs”). We primarily operate a one-stop services for our clients
on our integrated service platform, primarily including Omni-channel precision advertising and marketing platform, CloudX with
a data analysis management system. Our CloudX omni-channel precision advertising and marketing artificial intelligence platform,
primarily consists of digital advertising and marketing portals, include internet and mobile, and our other non-digital advertising
units, such as TV. We provide and monitor varieties of advertising and marketing campaigns through this service system which generates
effective sales leads through the combination of the Internet, mobile, content and others, including TV and schemes,while coordinating
search engine marketing services through this platform to maximize market exposure and effectiveness for our clients. Our data
analysis management system is an information and data analysis portal for small and medium-sized enterprises (“SMEs”)
or entrepreneurs who plan to start their own business, helping them for a higher survival and faster deal closing rate. It is built
to further expand our service and data-link to assist our clients in developing their sales both online and offline, so that the
overall service platform can create a traceable looped online to offline (O2O) ecosystem for our clients in their ground sales
expansion throughout the cities in the PRC. During the past few years, we have been developing our SMEs intelligent operation and
marketing data service applications, which consists of several online cloud technology based advertising and marketing, lead management,
elite store management, client membership management and other administrative operational management tools specifically designed
for small business in China to match their simplicity. We are intending to use these applications to create social community-based
consumption ecosystem, by deploying our Big Data technologies and analyze both online and offline businesses’ operational
and customers’ consumption data to help the SMEs improve their marketing efficiency and sales effectiveness with their target
customers.
We derive our revenue principally by:
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selling internet advertising space on our web portals and providing related data service and other value-added services to our clients through the internet advertising management systems and platforms developed and managed by us;
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selling effective sales lead information;
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providing search engine marketing services to increase the sales lead conversion rate for our clients’ business promotion on both mobile and PC searches; and
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selling advertising time slots on our television shows.
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In order to concentrate all resources on our core business, which
is internet advertising, online to offline (O2O) sales channel expansion, precision marketing and the related data services, in
the 4
th
quarter of 2015, we decided to exit our bank kiosk advertising and brand management and sales channel building
services. During that time, we also committed to a plan to sell our internet advertising and marketing business operated under
www.liansuo.com (“liansuo.com”), which is primarily aimed to serve larger SMEs through membership fees to continue
the expansion of our core business as discussed above. We terminated our plan to sell liansuo.com in February 2017.
Excluding revenues generated and net loss incurred from discontinued
operations for the years ended December 31, 2016 and 2015, we generated total revenues of US$34.8 million for the year ended December
31, 2016, compared with US$32.3 million in 2015, and incurred a net loss from continuing operations (before allocation to the non-controlling
interest shareholders) of US$6.3 million in 2016, compared with a net loss from continuing operations (before allocation to the
non-controlling interest shareholders) of US$7.7 million in 2015. Excluding approximately US$1.9 million and US$1.8 million of
share-based compensation expenses recognized in relation to the restricted common stock and common stock purchase options granted
to our management, employees and directors in September 2015 and December 2014, our adjusted net loss from continuing operations
(before allocation to the non-controlling interest shareholders) was US$4.4 million and US$5.9 million, respectively, for the years
ended December 31, 2016 and 2015, respectively. Loss from discontinued operations (i.e. brand management and sale channel building
channel business segment) was approximately US$0.06 million and US$1.47 million for the years ended December 31, 2016 and 2015,
respectively.
Intellectual Property
As of the date hereof, we have twenty-four software copyright certificates
issued by the State Copyright Office of the PRC (“SCO”), including, but not limited to, software systems covering monitoring
and management platforms on internet advertising effects, analysis systems on internet traffic statistics and internet user behavior,
analysis systems on log-based visit hotspot and browsing trails and analysis systems on search engine marketing.
With this intellectual property, we provide value-added services
that are in demand by our clients and track end users to help our clients assess and adjust their marketing strategies and enhance
the effectiveness and efficiency of their advertisements placed through our multi-channel advertising and marketing service platforms
on both PC and mobile devices.
We increased, and plan to continue increasing, expenditures to enhance
the safety of our hardware and server which we depend on to support our network and manage and monitor programs on the network.
We also increased, and plan to continue increasing, investment in research and development as we continue to expand, optimize and
enhance the technologies of our portal website, upgrade our advertising and internet management software and develop our cloud-computing
and mobile based operational management tools for our SMEs clients.
Corporate Structure
We operate our business in the PRC through certain contractual agreements
between Rise King Century Technology Development (Beijing) Co., Ltd. (“Rise King WFOE”) and Business Opportunity Online
(Beijing) Network Technology Co., Ltd. (“Business Opportunity Online”) and Beijing CNET Online Advertising Co., Ltd.
(“Beijing CNET Online”). Rise King WFOE is our indirect wholly-owned subsidiary that is a registered wholly foreign
owned enterprise in the PRC. Business Opportunity Online and Beijing CNET Onlineare based in Beijing, PRC and owned by three Chinese
citizens, including Mr. Handong Cheng, our chairman and chief executive officer, who owns a46% equity interest in both Business
Opportunity Online and Beijing CNET Online.
Recent Developments
On January 2, 2018, we formed a strategic partnership with Wuxi Jingtum
Network Technology, a People’s Republic of China company ("Jingtum" or "Jingtum Technology"), which is
a blockchain ecology builder, and expanded our business into the blockchain industry and its related technology. Through this partnership,
both companies will utilize their respective advantages and collaborate to jointly develop blockchain applications to build a credible,
highly secured blockchain and transparent platform for business opportunities and transactions. To support this new partnership
and advance our expansion into blockchain, on January 11, 2018, we appointed Mr. Zhongyi Liu as Chief Strategy Officer to head
our blockchain strategy plan and related business development. We have been exploring the potential of blockchain for over a year
and Mr. Liu has been advising us on blockchain for the past four months.
Through the contribution of underlying technologies in the blockchain,
Jingtum Technology aims to develop a new generation of value-based internet technologies in China helping to upgrade from an information-based
network to a value-based exchange network, establishing a credible ecology and promoting preparation as Chinese enterprises enter
a new era of digital assets. Jingtum's system is a decentralized and ecologically interactive internet trading network based on
blockchain technology. The system addresses data trust issues through cryptography and distributed coherency mechanisms while maintaining
rich transactional and contractual features.
We believe that blockchain technology enjoys extremely large demand
in applications for small and medium-sized enterprises including product traceability, product certification, disintermediation,
customer identification, and brand communication. We believe that the most fundamental value and significance is that the enterprise
brand and reputation can be converted into digital form and can help SMEs across the world build a new business ecosystem based
on algorithmic trust andenter the global digital asset trading market for transactions and circulation.
Our Principal Executive Offices
Our executive offices are located at No. 3 Min Zhuang Road, Building
6,Yu Quan Hui Gu Tuspark, Haidian District, Beijing, PRC. Our telephone number is +86-10-6084-6616. Our corporate website is at
www.chinanet-online.com
. Information contained on, or accessed through our website is not intended to constitute, and shall
not be deemed to constitute, part of this prospectus supplement.
THE OFFERING
The Offering
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Pursuant to this prospectus supplement and the accompanying prospectus, we are offering the following securities:
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Common stock
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Up to 2,150,001 shares of common stock, par value $0.001 per share, at a purchase price of $5.15 for each share of common stock and the related warrants described below.
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Warrants
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Warrants, exercisable for a period of thirty months commencing on the closing date, to purchase up to an aggregate of 645,000 shares of common stock, for an exercise price of $6.60 per share. Each warrant entitles the investor to purchase 0.30 shares of our common stock for every share of common stock purchased by such investor in the offering. This prospectus supplement also relates to the offering of the shares of common stock issuable upon exercise, if any, of the warrants.
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Common stock to be outstanding after this offering
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16,132,543 shares, based on 13,982,542 shares of our common stock outstanding as of January 8, 2018 and excluding any
shares of our common stock issuable upon exercise of outstanding warrants, preferred stock, options or other rights to
purchase shares of our common stock, including the warrants to be issued in this offering.
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Use of proceeds
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We estimate that the net proceeds from this offering, after deducting placement agent fees and before offering expenses
payable by us, will be approximately $10,408,000. We intend to use the net proceeds from this offering for working capital
and general corporate purposes. See “Use of Proceeds” on page S-
13
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Risk Factors
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See “Risk Factors” beginning on page S-6 of this prospectus supplement and other information included or incorporated by reference in this prospectus supplement and the accompanying base prospectus, including the section entitled “Risk Factors” beginning on page 21 of our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2016, for a discussion of the factors you should carefully consider before deciding to invest in our common stock.
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NASDAQ Capital Market Symbol
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CNET
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Transfer Agent
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Empire Stock Transfer, Inc.,1859 Whitney Mesa Dr., Henderson, Nevada 89014
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Placement Agent
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FT Global Capital, Inc.
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RISK FACTORS
The following is a summary of certain risks that should be carefully
considered along with the other information contained or incorporated by reference in this prospectus supplement and the accompanying
base prospectus. You should carefully consider the risk factors incorporated by reference to our Quarterly Report on Form 10-Q
for the quarter ended March 31, 2017, Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, Quarterly Report on Form
10-Q for the quarter ended September 30, 2017 and our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and
the other information contained in this prospectus supplement and accompanying base prospectus, as updated by our subsequent filings
under the Exchange Act. The occurrence of any of these risks might cause you to lose all or part of your investment in the offered
securities. If any other material risks of which we are unaware later occur or become material, our business, financial condition,
and operating results, and the price of and trading market for our stock, could be materially harmed. The risks discussed below
also include forward-looking statements and our actual results may differ substantially from those discussed in these forward-looking
statements. See “Forward-Looking Statements.”
Risks Related to Our Entry into BlockChain Business
We have an evolving business model.
As blockchain technologies become more widely available, we expect
the services and products associated with them to evolve. As a result, to stay current with the industry, our business model may
need to evolve as well. From time to time, we may modify aspects of our business model relating to our product mix and service
offerings. We cannot offer any assurance that these or any other modifications will be successful or will not result in harm to
the business. We may not be able to manage growth effectively, which could damage our reputation, limit our growth and negatively
affect our operating results.
Risks Related to this Offering
There is no minimum aggregate offering amount
required as a condition to the closing of this offering and the actual amount of net proceeds we receive may be lower than we anticipate,
which may have a material adverse effect on our business.
There is no minimum aggregate offering amount required as a condition
to the closing of this offering. Accordingly, the actual amount of securities we sell may be less, and perhaps substantially less,
than the maximum amount set forth on the cover page of this prospectus supplement. Likewise, the actual amount of net proceeds
we receive may be substantially less than the amount set forth in this prospectus supplement under the caption “Use of Proceeds,”
which is based upon an assumption that we sell the maximum amount of securities offered hereby. Any substantial shortfall in the
amount of securities we sell in this offering compared to the maximum amount offered hereby could have a material adverse effect
on our financial condition and liquidity.
Management will have broad discretion as to the
use of the proceeds from this offering, and we may not use the proceeds effectively.
Although we plan to use all of the net proceeds from this offering
for working capital and general corporate purposes, our management still has broad discretion as to the application of the net
proceeds from this offering and could use them for purposes other than those contemplated at the time of this offering. Our stockholders
may not agree with the manner in which our management chooses to allocate and spend the net proceeds. Moreover, our management
may use the net proceeds for corporate purposes that may not increase our profitability or market value.
You will experience immediate dilution in the
book value per share of the common stock you purchase.
Because the price per share of our common stock being
offered is substantially higher than the book value per share of our common stock, you will suffer substantial dilution in
the net tangible book value of the common stock you purchase in this offering. Based on an offering price of $5.15 per share,
after deducting estimated offering commissions and expenses, the net tangible book value of the common stock per share as
of September 30, 2017 would have been $1.25 per share. If you purchase shares of common stock in this offering, you will suffer
dilution of $3.90 per share in the net tangible book value of the common stock.
A large number of shares may be sold in the market
following this offering, which may depress the market price of our common stock.
Sales of a substantial number of shares of our common stock in the
public market following this offering could cause the market price of our common stock to decline. If there are more shares of
common stock offered for sale than buyers are willing to purchase, then the market price of our common stock may decline to a market
price at which buyers are willing to purchase the offered shares of common stock and sellers remain willing to sell the shares.
All of the shares sold in this offering will be freely tradable without restriction or further registration under the Securities
Act.
After the completion of this offering, one stockholder
will continue to own a large percentage of our outstanding stock and could significantly influence the outcome of our corporate
matters.
Mr. Handong Cheng, our chairman, chief executive officer and president,
through Rise King WFOE, which he controls, currently beneficially owns approximately 31.9% of our issued and outstanding common
stock. Upon the completion of this offering, his ownership interest will decrease to approximately 26.6%. As a result, he, together
with other major shareholders, will continue to maintain control over substantially all corporate actions and decisions that require
stockholder approval, including the election of directors and approval of significant corporate transactions, such as mergers,
consolidations or the sale of substantially all of our assets.
There may be future sales or other dilution of
our equity, which may adversely affect the market price of our common stock.
We are not generally restricted from issuing additional common stock,
or any securities that are convertible into or exchangeable for, or that represent the right to receive, common stock. The issuance
of any additional common stock or preferred stock or securities convertible into, exchangeable for, or that represent the right
to receive, common stock, or the exercise of such securities, could be substantially dilutive to holders of our common stock. The
market price of our common stock could decline as a result of this offering, sales of our common stock made after this offering
or the perception that such sales could occur. Because our decision to issue securities in any future offering will depend on market
conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of future offerings.
Thus, our stockholders bear the risk of future offerings reducing the market price of our common stock and diluting their shareholdings
in us.
We do not anticipate paying cash dividends on
our common stock and investors in this offering may never obtain a return on their investment.
You should not rely on an investment in our common stock to provide
dividend income, as we have not paid any cash dividends on our common stock to date, and do not plan to pay any cash dividends
in the foreseeable future. Accordingly, investors must rely on sales of their common stock after price appreciation, which may
never occur, as the only way to realize any return on their investment.
Our common stock may be affected by limited trading
volume and may fluctuate significantly.
Our common stock is traded on the NASDAQ Capital Market. Although
an active trading market exists for our common stock, there can be no assurance that an active trading market for our common stock
will be sustained. Failure to maintain an active trading market for our common stock may adversely affect our shareholders’
ability to sell our common stock in short time periods, or at all. Our common stock has experienced, and may experience in the
future, significant price and volume fluctuations, which could adversely affect the market price of our common stock.
The price of our common stock may be volatile
or may decline, which may make it difficult for investors to resell shares of our common stock at prices they find attractive.
The trading price of our common stock may fluctuate widely as a result
of a number of factors, many of which are outside our control. In addition, the stock market is subject to fluctuations in the
share prices and trading volumes that affect the market prices of the shares of many companies. These broad market fluctuations
could adversely affect the market price of our common stock. Among the factors that could affect our stock price are:
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actual or anticipated quarterly fluctuations in our operating results and financial condition, and, in particular, further
deterioration of asset quality;
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changes in revenue or earnings estimates or publication of research reports and recommendations by financial analysts;
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failure to meet analysts’ revenue or earnings estimates;
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speculation in the press or investment community;
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strategic actions by us or our competitors, such as acquisitions or restructurings;
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actions by institutional shareholders;
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fluctuations in the stock price and operating results of our competitors;
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general market conditions and, in particular, developments related to market conditions for the financial services industry;
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proposed or adopted regulatory changes or developments;
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anticipated or pending investigations, proceedings or litigation that involve or affect us; or
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domestic and international economic factors unrelated to our performance.
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The stock market has experienced significant volatility recently.
As a result, the market price of our common stock may be volatile. In addition, the trading volume in our common stock may fluctuate
more than usual and cause significant price variations to occur. The trading price of the shares of our common stock and the value
of our other securities will depend on many factors, which may change from time to time, including, without limitation, our financial
condition, performance, creditworthiness and prospects, future sales of our equity or equity related securities, and other factors
identified below in “Forward-Looking Statements.”
Accordingly, the shares of our common stock that an investor purchases,
whether in this offering or in the secondary market, may trade at a price lower than that at which they were purchased, and, similarly,
the value of our other securities may decline. Current levels of market volatility are unprecedented. The capital and credit markets
have been experiencing volatility and disruption for more than a year. In some cases, the markets have produced downward pressure
on stock prices and credit availability for certain issuers without regard to those issuers’ underlying financial strength.
A significant decline in our stock price could result in substantial
losses for individual shareholders and could lead to costly and disruptive securities litigation.
There is no public market for the warrants.
There is no established public trading market for the warrants being
offered in this offering and we do not expect a market to develop. In addition, we do not intend to apply for listing of the warrants
on any securities exchange or automated quotation system. Without an active market, investors in this offering may be unable to
readily sell the warrants.
The exercise price of the warrants exceeds the
market price of our common stock.
Each warrant will have an exercise price of $6.60 per share of
our common stock, which exceeds the current market price of one share of our common stock. If the market price of our common
stock does not exceed the exercise price of the warrants during the period in which the warrants are exercisable, the
warrants may not have any value.
The warrants may be dilutive to holders of our
common stock.
The ownership interest of the existing holders of our common stock
will be diluted to the extent the warrants are exercised. The shares of our common stock underlying the warrants represented approximately
3.8% of our common stock outstanding as of January 8, 2018 (assuming that the total shares of common stock outstanding includes
the 2,150,001 offered pursuant to this prospectus supplement and the 645,000 shares of common stock issuable upon exercise of the
warrants).
FORWARD-LOOKING STATEMENTS
This prospectus supplement and the accompanying base prospectus,
including the documents that we incorporate by reference, may contain forward-looking statements within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements include those that express plans, anticipation,
intent, contingencies, goals, targets or future development and/or otherwise are not statements of historical fact. Any forward-looking
statements are based on our current expectations and projections about future events and are subject to risks and uncertainties,
known and unknown, that could cause actual results and developments to differ materially from those expressed or implied in such
statements.
In some cases, you can identify forward-looking statements by terminology,
such as “expects,”“anticipates,”“intends,”“estimates,”“plans,”“believes,”“seeks,”“may,”“should,”“could”
or the negative of such terms or other similar expressions. Accordingly, these statements involve estimates, assumptions and uncertainties
that could cause actual results to differ materially from those expressed in such forward-looking statements. Any forward-looking
statements are qualified in their entirety by reference to the risk factors described herein and those incorporated by reference
in this prospectus supplement and the accompanying base prospectus or in any document incorporated by reference into this prospectus.
You should read this prospectus supplement and the accompanying base
prospectus and the documents that we have incorporated by reference completely and with the understanding that our actual future
results may be materially different from what we currently expect. You should assume that the information appearing in this prospectus
supplement and the accompanying base prospectus and any document incorporated herein or therein by reference is accurate as of
its date only. Because the risk factors referred to above and in our most recent Annual Report on Form 10-K for the fiscal year
ended December 31, 2016 could cause actual results or outcomes to differ materially from those expressed in any forward-looking
statements made by us or on our behalf, you should not place undue reliance on any forward-looking statements. Further, any forward-looking
statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement
to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we
cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any forward-looking statements. We qualify all of the information presented
in this prospectus supplement and the accompanying base prospectus supplement and any document incorporated herein by reference,
and particularly our forward-looking statements, by these cautionary statements.
USE OF PROCEEDS
Assuming the maximum offering is completed, we estimate that the net proceeds from this offering will be approximately
$10,296,005 after deducting the placement agent fees and estimated offering expenses.
We intend to use the net proceeds from this offering for working
capital and general corporate purposes.
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
Our common stock has been listed on The NASDAQ Capital Market under
the symbol “CNET” since October 29, 2013.
On August 18, 2016, we filed a Certificate of Amendment to our Articles
of Incorporation with the Secretary of State of Nevada to effect a one-for-two and one-half (1 for 2.5) reverse stock split of
our common stock, which became effective on August 19, 2016.
The following table shows the high and low closing sale prices for
our common stock reported by The NASDAQ Capital Market for the two years ended December 31, 2017 and subsequent periods.
|
|
High
|
|
Low
|
|
|
(US$)
|
Fiscal Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
First Quarter
|
|
|
2.08
|
|
|
|
1.60
|
|
Second Quarter
|
|
|
1.75
|
|
|
|
1.18
|
|
Third Quarter
|
|
|
2.08
|
|
|
|
1.38
|
|
Fourth Quarter
|
|
|
1.71
|
|
|
|
0.97
|
|
Fiscal Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
First Quarter
|
|
|
1.02
|
|
|
|
1.33
|
|
Second Quarter
|
|
|
1.09
|
|
|
|
1.38
|
|
Third Quarter
|
|
|
0.92
|
|
|
|
1.17
|
|
Fourth Quarter
|
|
|
1.00
|
|
|
|
1.37
|
|
Fiscal Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
First Quarter (through January 11, 2018)
|
|
|
1.12
|
|
|
|
9.34
|
|
Dividend Policy
We have never paid any dividends and we plan to retain earnings,
if any, for use in the development of our business.
Under current PRC regulations, wholly foreign-owned enterprises and
Sino-foreign equity joint ventures in the PRC may pay dividends only out of their accumulated profits, if any, determined in accordance
with PRC accounting standards and regulations. Additionally, these foreign-invested enterprises are required to set aside certain
amounts of their accumulated profits each year, if any, to fund certain reserve funds. These reserves are not distributable as
cash dividends. Payment of future dividends, if any, will be at the discretion of our board of directors after taking into account
various factors, including current financial condition, operating results and current and anticipated cash needs.
CAPITALIZATION
The following table sets forth our cash and cash equivalents and capitalization as of September 30, 2017 on
an actual basis and on an as adjusted basis to give effect to the sale by us of 2,150,001 shares of our common stock in this offering
after deducting placement agent fees and estimated offering expenses payable by us. You should read this table in conjunction with
our consolidated financial statements and the related notes thereto, “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and the other financial information included in or incorporated by reference into this
prospectus supplement and the accompanying base prospectus.
|
|
As of September 30, 2017
|
|
|
Actual
|
|
As Adjusted
|
|
|
(unaudited)
|
Cash and Cash Equivalents
|
|
$
|
1,234,000
|
|
|
$
|
12,306,505
|
|
Total Current Liabilities
|
|
$
|
9,330,000
|
|
|
$
|
10,104,350
|
|
Stockholders’ Equity
|
|
|
|
|
|
|
|
|
Common stock ($0.001 par value; authorized 50,000,000 shares; issued and outstanding 12,340,542 shares at September 30, 2017)
|
|
|
12,000
|
|
|
|
14,000
|
|
Additional Paid in Capital
|
|
|
29,769,000
|
|
|
|
40,065,155
|
|
Statutory Reserve
|
|
|
2,607,000
|
|
|
|
2,607,000
|
|
Accumulated deficit
|
|
|
(14,325,000
|
)
|
|
|
(14,325,000
|
)
|
Accumulated other comprehensive income
|
|
|
1,504,000
|
|
|
|
1,504,000
|
|
Total Stockholders’ Equity
|
|
$
|
19,567,000
|
|
|
$
|
29,865,155
|
|
Total Capitalization
|
|
$
|
29,140,000
|
|
|
$
|
40,212,505
|
|
DESCRIPTION OF SECURITIES
We are offering to certain institutional investors, pursuant to this prospectus supplement and the accompanying
prospectus, up to an aggregate of 2,150,001 shares of our common stock, together with the warrants. The purchase price for each
share of common stock and the related warrants is $5.15. Each warrant has an exercise price of $6.60per share. The common stock
and the warrants will be issued separately but will be purchased together in the offering. This prospectus supplement also relates
to the offering of shares of common stock upon the exercise, if any, of the warrants issued in this offering.
Common Stock
The material terms and provisions of our common stock are described
in the section entitled “Description of the Securities We May Offer” in the accompanying prospectus. The shares of
common stock issued in this offering will be, when issued and paid for in accordance with the securities purchase agreement, duly
and validly authorized, issued and fully paid and non-assessable.
Warrants
The material terms and provisions of the warrants being offered pursuant
to this prospectus supplement and the accompanying prospectus are summarized below. This summary is subject to, and qualified in
its entirety by, the form of warrant, which will be provided to the investors in this offering and will be filed as an exhibit
to a Current Report on Form 8-K that we will file with the SEC in connection with the consummation of this offering.
The warrants to be issued in this offering represent the right to
purchase up to an aggregate of 2,150,001 shares of our common stock. Each warrant entitles the investor to purchase 0.30 shares
of our common stock for every share of common stock purchased by such investor in the offering. The warrants are exercisable at
the option of the holder for a thirty (30) month period following the closing date of this offering. Each warrant has an exercise
price of $6.60 per share.
The exercise price of the warrants will be subject to adjustment in the case of stock splits, stock dividends,
combinations of shares and similar recapitalization transactions. The holder will not have the right to exercise any portion of
a warrant if the holder, together with its affiliates, would, subject to limited exceptions, beneficially own in excess of 4.99%
of the number of shares of our common stock outstanding immediately after the exercise. The holder may elect to decrease or increase
this beneficial ownership limitation up to 9.99% upon 61 days’ prior written notice to us. The warrants also contain “full
ratchet” price protection in the event of subsequent issuances below the applicable exercise price.
The warrant holders must surrender payment in cash of the exercise
price of the shares being acquired upon exercise of the warrants. If, however, we are unable to offer and sell the shares underlying
the warrants pursuant to this prospectus supplement due to the ineffectiveness of the registration statement of which this prospectus
supplement is a part, then the warrants may be exercised on a “cashless” basis.
DILUTION
If you invest in our common stock and warrants in this offering,
your interest will be diluted immediately to the extent of the difference between the offering price per share of common stock
you will pay in this offering and the as adjusted net tangible book value per share of our common stock after giving effect to
this offering. Our historical net tangible book value as of September 30, 2017 was $7,830,000, or $0.63 per share of common
stock. Historical net tangible book value per share represents the amount of our total tangible assets less total liabilities,
divided by the number of shares of our common stock outstanding on September 30, 2017.
After giving effect to the assumed sale of our common stock in the
aggregate amount of $11,072,505 in this offering at an assumed offering price of $5.15 per share, and after deducting estimated
offering commissions and expenses payable by us, our net tangible book value as of September 30, 2017 would have been approximately
$18,128,155, or $1.25 per share. This represents an immediate increase in as adjusted net tangible book value per share of $0.62
to existing stockholders and immediate dilution of $3.90 in as adjusted net tangible book value per share to new investors participating
in this offering. The following table illustrates this per share dilution to investors participating in this offering:
Offering price per share
|
|
|
|
|
|
$
|
5.15
|
|
Net tangible book value per share as of September 30, 2017
|
|
$
|
0.63
|
|
|
|
|
|
Increase attributable to new investors
|
|
$
|
0.62
|
|
|
|
|
|
As adjusted net tangible book value per share after this offering
|
|
|
|
|
|
$
|
1.25
|
|
Dilution per share to new investors
|
|
|
|
|
|
$
|
3.90
|
|
The above discussion and table are based on 12,340,542 shares of
our common stock outstanding as of September 30, 2017 and excludes:
|
·
|
835,216 shares of our common stock issuable upon the exercise of stock options outstanding as of September 30, 2017, at a weighted
average exercise price of $ 2.49 per share;
|
|
·
|
4,145,522 shares of common stock reserved for future issuance under our ChinaNet Online Holdings, Inc. 2015 Equity
Incentive Plan as of September 30, 2017; and
|
|
·
|
645,000 shares underlying the warrants issuable in the offering.
|
To the extent that any options are exercised, new options are issued
under our 2015 Equity Incentive Plan or we otherwise issue additional shares of common stock in the future at a price less than
the offering price, there may be further dilution to new investors purchasing common stock in this offering.
PLAN OF DISTRIBUTION
We have entered into a placement agency agreement, dated January
8, 2018, with FT Global Capital, Inc., pursuant to which FT Global Capital, Inc. agreed to act as our exclusive placement agent
in connection with this offering. The placement agent is not purchasing or selling any other securities offered by this prospectus
supplement and the accompanying prospectus, nor is the placement agent required to arrange for the purchase or sale of any other
specific number or dollar amount of securities, but has agreed to use its best efforts to arrange for the sale of all other securities
being offered in this offering. We will enter into a securities purchase agreement directly with investors in connection with this
offering.
We currently anticipate that the closing of this offering will take
place on or about January 17, 2018. On the closing date, the following will occur:
|
•
|
we will receive funds in the amount of the aggregate purchase price of the shares of common stock and related warrants sold;
|
|
•
|
we will irrevocably instruct the transfer agent to deliver the shares of common stock, and we will deliver the warrants, to
the investors; and
|
|
•
|
the placement agent will receive the placement agent fees in accordance with the terms of the placement agency agreement.
|
We have agreed to pay the placement agent an aggregate fee equal
to six percent (6%) of the gross proceeds from the sale of the shares of common stock and related warrants in this offering. We
have also agreed to reimburse the placement agent for certain expenses, including $15,000 for fees and expenses related to “blue
sky” counsel and $25,000 for additional legal expenses.
We have agreed to issue to the placement agent a warrant to purchase
a number of shares of common stock equal to 6.0% of the aggregate number of shares of common stock sold in this offering, which
warrant will have an exercise price of $6.60 per share and will terminate on the three-year anniversary of the effective date of
the offering. The placement agent warrants will have substantially the same terms as the warrants being sold in the offering. Pursuant
to FINRA Rule 5110(g), the placement agent warrants and any shares issued upon exercise of the placement agent warrants shall not
be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put or call
transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately
following the date of effectiveness or commencement of sales of this offering, except the transfer of any security: (i) by operation
of law or by reason of our reorganization; (ii) to any FINRA member firm participating in the offering and the officers or partners
thereof, if all securities so transferred remain subject to the lock-up restriction set forth above for the remainder of the time
period; (iii) if the aggregate amount of our securities held by the placement agent or related persons do not exceed 1% of the
securities being offered; (iv) that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided
that no participating member manages or otherwise directs investments by the fund and the participating members in the aggregate
do not own more than 10% of the equity in the fund; or (v) the exercise or conversion of any security, if all securities remain
subject to the lock-up restriction set forth above for the remainder of the time period. In addition, the placement agent warrants
shall not be exercisable for a period of six months and one day after the closing date of this offering.
We have also agreed to a 6-month tail fee equal to the cash compensation
in this offering if any investor either introduced to us during the term of its engagement or that participated in the offering
provides us with further capital during such 6-month period following termination of our engagement with the placement agent.
The estimated offering expenses payable by us, in addition to the
aggregate fees and expenses of approximately $704,350 due to the placement agent, are approximately $70,000.
We have agreed to indemnify the placement agent and certain other
persons against certain liabilities relating to or arising out of the placement agent’s activities under the placement agency
agreement. We have also agreed to contribute to payments the placement agent may be required to make in respect of such liabilities.
The transfer agent for our common stock is Empire Stock Transfer,
Inc.
Our common stock is traded on The NASDAQ Capital Market under the
symbol “CNET.” The warrants are not eligible for trading on any market.
The purchase price per share of common stock and the exercise price
for the warrants were determined based on negotiations with the investors and discussions with the placement agent.
The placement agency agreement and the securities purchase agreement
will be included as exhibits to our Current Report on Form 8-K that we will file with the SEC in connection with the consummation
of this offering.
LEGAL MATTERS
Certain legal matters governed by the laws of the State of New York
and the State of Nevada with respect to the validity of the offered securities will be passed upon for us by Loeb & Loeb LLP,
New York, New York. Schiff Hardin LLP, Washington, DC is acting as counsel for the placement agent in this offering.
EXPERTS
The consolidated balance sheets of ChinaNet Online Holdings, Inc.
and subsidiaries as of December 31, 2016 and 2015 and the related consolidated statements of operations and comprehensive loss,
and cash flows for the years then ended are incorporated in this prospectus supplement by reference to the Company’s Annual
Report on Form 10-K, which have been audited by Marcum Bernstein & Pinchuk LLP, an independent registered public accounting
firm, as stated in their report, which is incorporated herein by reference, and has been so incorporated in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND ADDITIONAL INFORMATION ABOUT
US
We have filed a registration statement on Form S-3 with the SEC for
the securities we are offering by this prospectus supplement and the accompanying base prospectus. This prospectus supplement and
the accompanying base prospectus do not include all of the information contained in the registration statement. You should refer
to the registration statement and its exhibits for additional information. We will provide to each person, including any beneficial
owner, to whom a prospectus supplement and the accompanying base prospectus are delivered, a copy of any or all of the information
that has been incorporated by reference in the prospectus supplement and the accompanying base prospectus but not delivered with
the prospectus supplement and the accompanying base prospectus. We will provide this information upon oral or written request,
free of charge. Any requests for this information should be made by calling or sending a letter to the Secretary of the Company,
c/o ChinaNet Online Holdings, Inc., at the Company’s office located at No. 3 Min Zhuang Road, Building 6,Yu Quan Hui Gu Tuspark,
Haidian District, Beijing, PRC. The Company’s telephone number is +86-10-6084-6616.
We are required to file annual and quarterly reports, current reports,
proxy statements, and other information with the SEC. We make these documents publicly available, free of charge, on our website
at
www.chinanet-online.com
as soon as reasonably practicable after filing such documents with the SEC. You can read our
SEC filings, including the registration statement, on the SEC’s website at
http://www.sec.gov.
You also may read and
copy any document we file with the SEC at its public reference facility at:
Public Reference Room
100 F Street N.E.
Washington, DC 20549
Please call the SEC at 1-800-732-0330 for further information on
the operation of the public reference facilities.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by us with the Securities and Exchange Commission are incorporated
by reference in this prospectus supplement:
|
•
|
Annual Report on Form 10-K for the fiscal year ended December 31, 2016;
|
|
•
|
Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2017, June 30, 2017 and September 30, 2017;
|
|
•
|
Current Reports on Form 8-K, filed on June 19, 2017, August 16, 2017, December 8, 2017 and January 11, 2018;
|
|
•
|
Definitive Information Statement on Schedule 14A filed on April 28, 2017; and
|
|
•
|
The description of our common stock set forth in our Registration Statement on Form 8-A (Registration No. 333-34647) filed
with the SEC on March 2, 2010, including any amendments thereto or reports filed for the purpose of updating such description.
|
All documents subsequently filed with the SEC by us pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date of the filing of this prospectus supplement (other than current
reports or portions thereof furnished under Items 2.02 or 7.01 of Form 8-K), prior to the termination of this offering, shall be
deemed to be incorporated by reference herein and to be part of this prospectus supplement from the respective dates of filing
of such documents. Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes hereof to the extent that a statement in any other subsequently filed
document which is also incorporated or deemed to be incorporated herein modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus supplement.
PROSPECTUS
CHINANET ONLINE HOLDINGS, INC.
$50,000,000
Common Stock
Preferred Stock
Warrants
Units
We may, from time to time in one or more offerings, offer and sell
up to $50,000,000 in the aggregate of common stock, preferred stock, warrants to purchase common stock or preferred stock, or any
combination of the foregoing, either individually or as units comprised of one or more of the other securities.
This prospectus provides a general description of the securities
we may offer. We will provide the specific terms of the securities offered in one or more supplements to this prospectus. We may
also authorize one or more free writing prospectuses to be provided to you in connection with these offerings. The prospectus supplement
and any related free writing prospectus may add, update or change information contained in this prospectus. You should read carefully
this prospectus, the applicable prospectus supplement and any related free writing prospectus, as well as the documents incorporated
or deemed to be incorporated by reference, before you invest in any of our securities.
This prospectus may not be used to offer
or sell any securities unless accompanied by the applicable prospectus supplement.
Our common stock is traded on The Nasdaq Capital Market under the
symbol “CNET.” On October 12, 2015, the last reported sale price for our common stock was $0.94 per share. As of that
date, the aggregate market value of our outstanding common stock held by non-affiliates was approximately $16,617,487 based on
29,580,130 shares of our outstanding common stock, of which approximately 17,678,178 shares were held by non-affiliates. Pursuant
to General Instruction I.B.6. of Form S-3, in no event will we sell the securities covered hereby in a public primary offering
with a value exceeding more than one-third of the aggregate market value of our common stock in any 12-month period so long as
the aggregate market value of our outstanding common stock held by non-affiliates remains below $75,000,000. During the 12 calendar
months prior to and including the date of this prospectus, we have not offered or sold any securities pursuant to General Instruction
I.B.6 of Form S-3.
Investing in our securities involves a high degree of risk. See
“Risk Factors” on page 2 of this prospectus and in the documents incorporated by reference in this prospectus, as updated
in the applicable prospectus supplement, any related free writing prospectus and other future filings we make with the Securities
and Exchange Commission that are incorporated by reference into this prospectus, for a discussion of the factors you should consider
carefully before deciding to purchase our securities.
We may sell these securities directly to investors, through agents
designated from time to time or to or through underwriters or dealers. For additional information on the methods of sale, you should
refer to the section entitled “Plan of Distribution” in this prospectus. If any underwriters are involved in the sale
of any securities with respect to which this prospectus is being delivered, the names of such underwriters and any applicable commissions
or discounts will be set forth in a prospectus supplement. The price to the public of such securities and the net proceeds we expect
to receive from such sale will also be set forth in a prospectus supplement.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The date of this prospectus is October 29, 2015.
TABLE OF CONTENTS
|
Page
|
|
About this Prospectus
|
|
1
|
|
About CNET
|
|
2
|
|
Risk Factors
|
|
3
|
|
Note Regarding Forward-Looking Statements
|
|
3
|
|
Use of Proceeds
|
|
4
|
|
Dilution
|
|
4
|
|
Description of Common Stock and Preferred Stock
|
|
4
|
|
Description of Warrants
|
|
5
|
|
Description of Units
|
|
8
|
|
Plan of Distribution
|
|
9
|
|
Legal Matters
|
|
11
|
|
Experts
|
|
11
|
|
Information Incorporated by Reference
|
|
11
|
|
Where You Can Find More Information
|
|
12
|
|
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed
with the Securities and Exchange Commission, or the SEC, under the Securities Act of 1933, as amended, or the Securities Act, using
a “shelf” registration process. Under this shelf registration process, we may from time to time sell common stock,
preferred stock or warrants to purchase common stock or preferred stock, or any combination of the foregoing, either individually
or as units comprised of one or more of the other securities, in one or more offerings up to a total dollar amount of $50,000,000.
We have provided to you in this prospectus a general description of the securities we may offer. Each time we sell securities under
this shelf registration, we will, to the extent required by law, provide a prospectus supplement that will contain specific information
about the terms of that offering. We may also authorize one or more free writing prospectuses to be provided to you that may contain
material information relating to these offerings. The prospectus supplement and any related free writing prospectus that we may
authorize to be provided to you may also add, update or change information contained in this prospectus or in any documents that
we have incorporated by reference into this prospectus. To the extent there is a conflict between the information contained in
this prospectus and the prospectus supplement or any related free writing prospectus, you should rely on the information in the
prospectus supplement or the related free writing prospectus; provided that if any statement in one of these documents is inconsistent
with a statement in another document having a later date – for example, a document filed after the date of this prospectus
and incorporated by reference into this prospectus or any prospectus supplement or any related free writing prospectus –
the statement in the document having the later date modifies or supersedes the earlier statement.
We have not authorized any dealer, agent or other person to give
any information or to make any representation other than those contained or incorporated by reference in this prospectus and any
accompanying prospectus supplement, or any related free writing prospectus that we may authorize to be provided to you. You must
not rely upon any information or representation not contained or incorporated by reference in this prospectus or an accompanying
prospectus supplement, or any related free writing prospectus that we may authorize to be provided to you. This prospectus and
the accompanying prospectus supplement, if any, do not constitute an offer to sell or the solicitation of an offer to buy any securities
other than the registered securities to which they relate, nor do this prospectus and the accompanying prospectus supplement constitute
an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to
make such offer or solicitation in such jurisdiction. You should not assume that the information contained in this prospectus,
any applicable prospectus supplement or any related free writing prospectus is accurate on any date subsequent to the date set
forth on the front of the document or that any information we have incorporated by reference is correct on any date subsequent
to the date of the document incorporated by reference (as our business, financial condition, results of operations and prospects
may have changed since that date), even though this prospectus, any applicable prospectus supplement or any related free writing
prospectus is delivered or securities are sold on a later date.
As permitted by SEC rules and regulations, the registration statement
of which this prospectus forms a part includes additional information not contained in this prospectus. You may read the registration
statement and the other reports we file with the SEC at its website or at its offices described below under “Where You Can
Find More Information.”
Unless the context otherwise requires, all references in this prospectus
to “CNET,” “we,” “us,” “our,” “the Company” or similar words refer
to ChinaNet Online Holdings, Inc., together with our subsidiaries.
ABOUT CNET
Overview
We are a holding company that conducts our primary businesses through
our PRC subsidiary and operating entities (the “VIEs”). We are one of China’s leading business-to-businesses
(“B2B”), fully integrated Internet technology company providing online-to-offline (O2O) sales channel expansion services
for small and medium-sized enterprises (“SMEs”) and entrepreneurial management and networking services for entrepreneurs
in the People's Republic of China. Our services were founded on proprietary internet and advertising technologies that include
(i) preparing and publishing rich media enabled advertising and marketing campaigns for clients on the Internet, mobile phone,
television and other valued added communication channels, (ii) hosting mini-sites with online messaging and consulting functionalities,
(iii) generating effective sales leads, (iv) providing search engine marketing services; and (v) providing online management tools
to help SMEs manage the expansion of their sales networks. Our goal is to strengthen our position as the leading diversified one-stop
O2O sales channel expansion services provider to SMEs and entrepreneurial management and networking services for entrepreneurs
in China. We expect to grow from a business opportunities platform to a comprehensive one on one digital advertising and marketing
services provider with a total solution for the business to business to customer (“B2b2c”) ecosystem, helping businesses
expand sales and customers through mobile and Internet.
We primarily operate a one-stop services for our clients on our integrated
service platforms, primarily including multi-channel advertising and promotion platform, brand management and sales channel building
platform and management tools platform. Our multi-channel advertising and promotion platform primarily consists of internet advertising
and marketing portals, including www.28.com (“28.com”), www.liansuo.com (“liansuo.com”) and www.sooe.cn
(“sooe.cn”), ChinaNet TV as our TV production and advertising unit and the bank kiosk advertising unit. We provide
varieties of marketing campaigns through this platform by the combination of the Internet, mobile, television, bank kiosks and
printed-medias to maximize market exposure and effectiveness for our clients. Our band management and sales channel building platform
consists of our brand consulting and management service and offline sales channel expansion service, which is to physically help
small businesses to recruit dealers, wholesalers, partners or franchisees based on their business needs. Management tools platform
consists of a mobile-based sales and administrative management tools specifically designed for small business in China to match
their simplicity.
We derive our revenue principally by:
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selling internet advertising space on our website portals and effective sales lead information;
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selling value-added technical services to our clients through the internet advertising management systems and platforms developed and managed by us;
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providing search engine marketing services to increase the sales lead conversion rate for our clients’ business promotion on both mobile and PC searches;
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selling advertising time slots on our television shows and on our installed bank kiosks; and
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providing brand management and sales channel building services to a certain group of clients.
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The five largest industries in terms of revenue in which our advertising
and marketing clients operate are (1) food and beverage, (2) cosmetics and health care, (3) footwear, apparel and garments, (4)
environmental protection equipment, and (5) home goods and construction materials.
Corporate Information
We were incorporated in the State of Texas in April 2006 and re-domiciled
to become a Nevada corporation in October 2006. From the date of our incorporation until June 26, 2009, when we consummated a share
exchange, our business development activities were primarily concentrated in web server access and company branding in hosting
web based e-games.
Our wholly owned subsidiary, China Net Online Media Group Limited,
was incorporated in the British Virgin Islands on August 13, 2007 (“China Net BVI”). On April 11, 2008, China Net BVI
became the parent holding company of a group of companies comprised of CNET Online Technology Limited, a Hong Kong company (“China
Net HK”), which established, and is the parent company of, Rise King Century Technology Development (Beijing) Co., Ltd.,
a wholly foreign-owned enterprise (“WFOE”) established in the People's Republic of China (“Rise King WFOE”).
Our principal executive offices are located at No. 3 Min Zhuang
Road, Building 6, Yu Quan Hui Gu Tuspark, Haidian District, Beijing, PRC. Our telephone number at this address is (86 10) 69005520
and our fax number is (86 10) 88857816. For more information, see www.chinanet-online.com. We make available free of charge through
our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those
reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange
Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The information
contained in, or that can be accessed through, our website is not part of this prospectus or any prospectus supplement.
RISK FACTORS
Investing in our securities involves a high degree of risk. You
should carefully consider the risk factors set forth under “Risk Factors” described in our most recent annual report
on Form 10-K, as supplemented and updated by subsequent quarterly reports on Form 10-Q and current reports on Form 8-K that we
have filed with the SEC, together with all other information contained or incorporated by reference in this prospectus and any
applicable prospectus supplement and in any related free writing prospectus in connection with a specific offering, before making
an investment decision. Each of the risk factors could materially and adversely affect our business, operating results, financial
condition and prospects, as well as the value of an investment in our securities, and the occurrence of any of these risks might
cause you to lose all or part of your investment.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and our SEC filings that are incorporated by reference into this prospectus
contain or incorporate by reference forward-looking statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. All statements, other than statements of historical fact, included or incorporated by reference in this
prospectus regarding our business strategy, future operations, projected financial position, potential strategic transactions,
proposed distribution channels, projected sales growth, proposed new products, estimated future revenues, cash flows and profitability,
projected costs, potential sources of additional capital, future prospects, future economic conditions, the future of our industry
and results that might be obtained by pursuing management’s current plans and objectives are forward-looking statements.
The words “believe,” “anticipate,” “estimate,” “plan,” “expect,” “intend,”
“may,” “could,” “should,” “potential,” “likely,” “projects,”
“continue,” “will,” and “would” and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain these identifying words. Forward-looking statements reflect our
current views with respect to future events, are based on assumptions and are subject to risks and uncertainties. We cannot guarantee
that we actually will achieve the plans, intentions or expectations expressed in our forward-looking statements and you should
not place undue reliance on these statements. There are a number of important factors that could cause our actual results to differ
materially from those indicated or implied by forward-looking statements. These important factors include those discussed under
the heading “Risk Factors” contained or incorporated by reference in this prospectus and in the applicable prospectus
supplement and any free writing prospectus we may authorize for use in connection with a specific offering. These factors and
the other cautionary statements made in this prospectus should be read as being applicable to all related forward-looking statements
whenever they appear in this prospectus. Except as required by law, we undertake no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or otherwise.
USE OF PROCEEDS
Except as described in any prospectus supplement and any free writing
prospectus in connection with a specific offering, we currently intend to use the net proceeds from the sale of the securities
offered under this prospectus to fund the growth of our business, primarily working capital, and for general corporate purposes.
We may also use a portion of the net proceeds to acquire or invest in technologies, products and/or businesses that we believe
will enhance the value of our Company, although we have no current commitments or agreements with respect to any such transactions
as of the date of this prospectus. We have not determined the amount of net proceeds to be used specifically for the foregoing
purposes. As a result, our management will have broad discretion in the allocation of the net proceeds and investors will be relying
on the judgment of our management regarding the application of the proceeds of any sale of the securities. If a material part of
the net proceeds is to be used to repay indebtedness, we will set forth the interest rate and maturity of such indebtedness in
a prospectus supplement. Pending use of the net proceeds, we intend to invest the proceeds in investment-grade, interest-bearing
securities.
DILUTION
If required, we will set forth in a prospectus supplement the following
information regarding any material dilution of the equity interests of investors purchasing securities in an offering under this
prospectus:
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the net tangible book value per share of our equity securities before and after the offering;
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the amount of the increase in such net tangible book value per share attributable to the cash payments made by purchasers in the offering; and
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the amount of the immediate dilution from the public offering price which will be absorbed by such purchasers.
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DESCRIPTION OF COMMON STOCK AND PREFERRED STOCK
The following description of our common stock and preferred stock,
together with any additional information we include in any applicable prospectus supplement or any related free writing prospectus,
summarizes the material terms and provisions of our common stock and the preferred stock that we may offer under this prospectus.
While the terms we have summarized below will apply generally to any future common stock or preferred stock that we may offer,
we will describe the particular terms of any class or series of these securities in more detail in the applicable prospectus supplement.
For the complete terms of our common stock and preferred stock, please refer to our articles of incorporation and our bylaws, as
amended, that are incorporated by reference into the registration statement of which this prospectus is a part or may be incorporated
by reference in this prospectus or any applicable prospectus supplement. The terms of these securities may also be affected by
Nevada law. The summary below and that contained in any applicable prospectus supplement or any related free writing prospectus
are qualified in their entirety by reference to our articles of incorporation and bylaws, as in effect at the time of any offering
of securities under this prospectus. For information on how to obtain copies of our articles of incorporation and bylaws, see “Where
You Can Find More Information.”
Common Stock
We have 50,000,000 authorized shares of common stock, $.001 par
value per share, of which 13,982,542 shares of common stock are issued and outstanding as of the date of this prospectus. Each
holder of shares of common stock is entitled to one vote per share at stockholders’ meetings. Our articles of incorporation
do not provide for cumulative voting for the election of directors. Holders of shares of common stock are entitled to receive,
pro rata, such dividends as may be declared by the board of directors out of funds legally available therefor, and are also entitled
to share, pro rata, in any other distributions to the stockholders. Upon any liquidation, dissolution or winding-up, holders of
shares of common stock are entitled to share ratably in all assets remaining after payment of liabilities. Holders of shares of
common stock do not have any preemptive rights or other rights to subscribe for additional shares. The outstanding shares of common
stock are paid for, fully paid and non-assessable.
Securities Exchange Listing
Our common stock is listed on The Nasdaq Capital Market under the
symbol “CNET.”
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Empire
Stock Transfer.
Preferred Stock
As of the date of this prospectus, our articles of incorporation
authorize us to issue 20,000,000 shares of preferred stock, par value $0.001 per share, none of which is currently designated or
outstanding. Pursuant to our articles of incorporation, our board of directors has the authority to provide for the issuance, in
one or more series, of our authorized preferred stock and to fix or alter the rights, preferences, privileges and restrictions
granted to or imposed upon any series of our preferred stock. The rights, privileges, preferences and restrictions of any such
series of our preferred stock may be subordinated to, pari passu with (including, without limitation, inclusion in provisions with
respect to liquidation and acquisition preferences, redemption or approval of matters by vote or written consent), or senior to
any of those of any present or future class or series of preferred stock or common stock. The issuance of preferred stock may have
the effect of decreasing the market price of our common stock and may adversely affect the voting power of holders of our common
stock and reduce the likelihood that holders of our common stock will receive dividend payments and payments upon liquidation.
The particular terms of each class or series of preferred stock
that we may offer under this prospectus, including redemption privileges, liquidation preferences, voting rights, dividend rights
and/or conversion rights, will be more fully described in the applicable prospectus supplement relating to the preferred stock
offered thereby. The rights, preferences, privileges and restrictions of any series of preferred stock that we may offer under
this prospectus will be set forth in the particular articles supplementary that we would file with the State of Nevada. We will
file as an exhibit to the registration statement of which this prospectus is a part, or will incorporate by reference from another
report we file with the SEC, the form of any articles supplementary that describe the terms of the series of preferred stock we
may offer before the issuance of the related series of preferred stock. The applicable prospectus supplement will specify the terms
of the series of preferred stock we may offer, including, but not limited to:
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the distinctive designation and the maximum number of shares in the series;
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the number of shares we are offering and purchase price per share;
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the liquidation preference, if any;
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the terms on which dividends, if any, will be paid;
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the voting rights, if any, of the shares of the series;
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the terms and conditions, if any, on which the shares of the series shall be convertible into, or exchangeable for, shares of any other class or classes of capital stock;
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the terms on which the shares may be redeemed, if at all;
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any listing of the preferred stock on any securities exchange or market;
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a discussion of any material United States federal income tax considerations applicable to the preferred stock; and
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any or all other preferences, rights, restrictions, including restrictions on transferability, and qualifications of shares of the series.
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The description of preferred stock above and the description of
the terms of a particular series of preferred stock in any applicable prospectus supplement are not complete. You should refer
to the applicable articles supplementary for complete information.
DESCRIPTION OF WARRANTS
General
We may issue warrants for the purchase of common stock or preferred
stock. Warrants may be offered independently or together with common stock or preferred stock offered by any prospectus supplement
and may be attached to or separate from those securities. While the terms we have summarized below will apply generally to any
warrants that we may offer under this prospectus, we will describe in particular the terms of any series of warrants that we may
offer in more detail in the applicable prospectus supplement and any applicable free writing prospectus. The terms of any warrants
offered under a prospectus supplement may differ from the terms described below.
We will file as an exhibit to the registration statement of which
this prospectus is a part, or will incorporate by reference from another report that we file with the SEC, the form of warrant
and/or warrant agreement, which may include a form of warrant certificate, as applicable, that describes the terms of the particular
series of warrants we may offer before the issuance of the related series of warrants. We may issue the warrants under a warrant
agreement that we will enter into with a warrant agent to be selected by us. The warrant agent will act solely as our agent in
connection with the warrants and will not assume any obligation or relationship of agency or trust for or with any registered holders
of warrants or beneficial owners of warrants. The following summary of material provisions of the warrants and warrant agreements
is subject to, and qualified in its entirety by reference to, all the provisions of the form of warrant and/or warrant agreement
and warrant certificate applicable to a particular series of warrants. We urge you to read the applicable prospectus supplement
and any related free writing prospectus, as well as the complete form of warrant and/or the warrant agreement and warrant certificate,
as applicable, that contain the terms of the warrants.
The particular terms of any issue of warrants will be described
in the prospectus supplement relating to the issue. Those terms may include:
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the title of such warrants;
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the aggregate number of such warrants;
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the price or prices at which such warrants will be issued;
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the currency or currencies (including composite currencies) in which the price of such warrants may be payable;
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the terms of the securities purchasable upon exercise of such warrants and the procedures and conditions relating to the exercise of such warrants;
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the price at which the securities purchasable upon exercise of such warrants may be purchased;
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the date on which the right to exercise such warrants will commence and the date on which such right shall expire;
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any provisions for adjustment of the number or amount of securities receivable upon exercise of the warrants or the exercise price of the warrants;
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if applicable, the minimum or maximum amount of such warrants that may be exercised at any one time;
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if applicable, the designation and terms of the securities with which such warrants are issued and the number of such warrants issued with each such security;
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if applicable, the date on and after which such warrants and the related securities will be separately transferable;
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information with respect to book-entry procedures, if any;
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the terms of any rights to redeem or call the warrants;
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United States federal income tax consequences of holding or exercising the warrants, if material; and
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any other terms of such warrants, including terms, procedures and limitations relating to the exchange or exercise of such warrants.
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Each warrant will entitle its holder to purchase the number of shares
of common stock or preferred stock at the exercise price set forth in, or calculable as set forth in, the applicable prospectus
supplement. The warrants may be exercised as set forth in the prospectus supplement relating to the warrants offered. Unless we
otherwise specify in the applicable prospectus supplement, warrants may be exercised at any time up to the close of business on
the expiration date set forth in the prospectus supplement relating to the warrants offered thereby. After the close of business
on the expiration date, unexercised warrants will become void.
We will specify the place or places where, and the manner in which,
warrants may be exercised in the form of warrant, warrant agreement or warrant certificate and applicable prospectus supplement.
Upon receipt of payment and the warrant or warrant certificate, as applicable, properly completed and duly executed at the corporate
trust office of the warrant agent, if any, or any other office, including ours, indicated in the prospectus supplement, we will,
as soon as practicable, issue and deliver the securities purchasable upon such exercise. If less than all of the warrants (or the
warrants represented by such warrant certificate) are exercised, a new warrant or a new warrant certificate, as applicable, will
be issued for the remaining amount of warrants. If we so indicate in the applicable prospectus supplement, holders of the warrants
may surrender securities as all or part of the exercise price for warrants.
Prior to the exercise of any warrants to purchase common stock or
preferred stock, holders of the warrants will not have any of the rights of holders of the common stock or preferred stock purchasable
upon exercise, including the right to vote or to receive any payments of dividends or payments upon our liquidation, dissolution
or winding up on the common stock or preferred stock purchasable upon exercise, if any.
Outstanding Warrants
As of the date of this prospectus, there were no outstanding warrants
to purchase shares of our common stock.
DESCRIPTION OF UNITS
The following description, together with the additional information
we may include in any applicable prospectus supplement, summarizes the material terms and provisions of the units that we may offer
under this prospectus. While the terms we have summarized below will apply generally to any units that we may offer under this
prospectus, we will describe the particular terms of any series of units in more detail in the applicable prospectus supplement
and any related free writing prospectus. The terms of any units offered under a prospectus supplement may differ from the terms
described below. However, no prospectus supplement will fundamentally change the terms that are set forth in this prospectus or
offer a security that is not registered and described in this prospectus at the time of its effectiveness.
We will file as an exhibit to the registration statement of which
this prospectus is a part, or will incorporate by reference from another report we file with the SEC, the form of unit agreement
that describes the terms of the series of units we may offer under this prospectus, and any supplemental agreements, before the
issuance of the related series of units. The following summaries of material terms and provisions of the units are subject to,
and qualified in their entirety by reference to, all the provisions of the unit agreement and any supplemental agreements applicable
to a particular series of units. We urge you to read the applicable prospectus supplement and any related free writing prospectus,
as well as the complete unit agreement and any supplemental agreements that contain the terms of the units.
General
We may issue units comprised of shares of common stock or preferred
stock and warrants in any combination. Each unit will be issued so that the holder of the unit is also the holder of each security
included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The
unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred
separately, at any time or at any time before a specified date.
We will describe in the applicable prospectus supplement the terms
of the series of units, including, but not limited to:
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the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;
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any provisions of the governing unit agreement that differ from those described below; and
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any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units.
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The provisions described in this section, as well as those described
under “Description of Common Stock and Preferred Stock” and “Description of Warrants” will apply to each
unit and to any common stock, preferred stock or warrant included in each unit, respectively.
Issuance in Series
We may issue units in such amounts and in numerous distinct series
as we determine.
Enforceability of Rights by Holders of Units
We may enter into unit agreements with a unit agent. Each unit agent
will act solely as our agent under the applicable unit agreement and will not assume any obligation or relationship of agency or
trust with any holder of any unit. A single bank or trust company may act as unit agent for more than one series of units. A unit
agent will have no duty or responsibility in case of any default by us under the applicable unit agreement or unit, including any
duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder of a unit may,
without the consent of the related unit agent or the holder of any other unit, enforce by appropriate legal action its rights as
holder under any security included in the unit.
We, the unit agents and any of their agents may treat the registered
holder of any unit certificate as an absolute owner of the units evidenced by that certificate for any purpose and as the person
entitled to exercise the rights attaching to the units so requested, despite any notice to the contrary.
PLAN OF DISTRIBUTION
We may sell our securities in any one or more of the following ways
from time to time:
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through agents;
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to or through underwriters;
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through brokers or dealers;
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in “at the market offerings” within the meaning of Rule 415(a)(4) under the Securities Act, to or through a market maker or into an existing trading market, on an exchange or otherwise;
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directly by us to purchasers, including through a specific bidding, auction or other process; or
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through a combination of any of these methods of sale.
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The applicable prospectus supplement will contain the terms of the
transaction, the name or names of any underwriters, dealers, agents and the respective amounts of securities underwritten or purchased
by them, the initial public offering price of the securities, and the applicable agent’s commission, dealer’s purchase
price or underwriter’s discount. Any dealers and agents participating in the distribution of the securities may be deemed
to be underwriters, and compensation received by them on resale of the securities may be deemed to be underwriting discounts.
Any initial offering price, dealer purchase price, discount or commission
may be changed from time to time.
The securities may be distributed from time to time in one or more
transactions, at negotiated prices, at a fixed price or fixed prices (that may be subject to change), at market prices prevailing
at the time of sale, at various prices determined at the time of sale or at prices related to prevailing market prices.
Offers to purchase securities may be solicited directly by us or
by agents designated by us from time to time. Unless otherwise indicated in the prospectus supplement, any such agent will use
its commercially reasonable efforts to solicit purchases for the period of its appointment or to sell securities on a continuing
basis. Agents may receive compensation in the form of commissions, discounts or concessions from us. Agents may also receive compensation
from the purchasers of the securities for whom they sell as principals. Each particular agent will receive compensation in amounts
negotiated in connection with the sale, which might be in excess of customary commissions. Any such agent may be deemed to be an
underwriter, as that term is defined in the Securities Act, of the securities so offered and sold. Accordingly, any commission,
discount or concession received by them and any profit on the resale of the securities purchased by them may be deemed to be underwriting
discounts or commissions under the Securities Act. We have not entered into any agreements, understandings or arrangements with
any underwriters or broker-dealers regarding the sale of their securities. As of the date of this prospectus, there are no special
selling arrangements between any broker-dealer or other person and us. No period of time has been fixed within which the securities
will be offered and sold.
If underwriters are utilized in the sale of any securities in respect
of which this prospectus is being delivered, such securities will be acquired by the underwriters for their own account and may
be resold from time to time in one or more transactions, including negotiated transactions, at fixed public offering prices or
at varying prices determined by the underwriters at the time of sale. Securities may be offered to the public either through underwriting
syndicates represented by managing underwriters or directly by one or more underwriters. If any underwriter or underwriters are
utilized in the sale of securities, unless otherwise indicated in the applicable prospectus supplement, the obligations of the
underwriters are subject to certain conditions precedent, and the underwriters will be obligated to purchase all such securities
if they purchase any of them.
If a dealer is utilized in the sale of the securities in respect
of which this prospectus is delivered, we will sell such securities to the dealer as principal. The dealer may then resell such
securities to the public at varying prices to be determined by such dealer at the time of resale. Transactions through brokers
or dealers may include block trades in which brokers or dealers will attempt to sell shares as agent but may position and resell
as principal to facilitate the transaction or in cross trades, in which the same broker or dealer acts as agent on both sides of
the trade. Any such dealer may be deemed to be an underwriter, as such term is defined in the Securities Act, of the securities
so offered and sold.
Offers to purchase securities may be solicited directly by us, and
the sale thereof may be made by us, directly to institutional investors or others who may be deemed to be underwriters within the
meaning of the Securities Act with respect to any resale thereof.
Agents, underwriters and dealers may be entitled under relevant
agreements with us to indemnification by us against certain liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which such agents, underwriters and dealers may be required to make in respect thereof. The
terms and conditions of any indemnification or contribution will be described in the applicable prospectus supplement.
Underwriters, broker-dealers or agents may receive compensation
in the form of commissions, discounts or concessions from us. Underwriters, broker-dealers or agents may also receive compensation
from the purchasers of shares for whom they act as agents or to whom they sell as principals, or both. Compensation as to a particular
underwriter, broker-dealer or agent will be in amounts to be negotiated in connection with transactions involving shares and might
be in excess of customary commissions. In effecting sales, broker-dealers engaged by us may arrange for other broker-dealers to
participate in the resales.
Any securities offered other than common stock will be a new issue
and, other than the common stock, which is listed on The Nasdaq Capital Market, will have no established trading market. We may
elect to list any series of securities on an exchange, and in the case of the common stock, on any additional exchange, but, unless
otherwise specified in the applicable prospectus supplement and/or other offering material, we shall not be obligated to do so.
It is possible that one or more underwriters may make a market in a class or series of securities, but the underwriters will not
be obligated to do so and may discontinue any market making at any time without notice. No assurance can be given as to the liquidity
of, or the trading market for, any of the securities.
Agents, underwriters and dealers may engage in transactions with,
or perform services for, us or our subsidiaries in the ordinary course of business.
Any underwriter may engage in overallotment, stabilizing transactions,
short covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. Overallotment involves sales
in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified maximum. Short covering transactions involve purchases of the
securities in the open market after the distribution is completed to cover short positions. Penalty bids permit the underwriters
to reclaim a selling concession from a dealer when the securities originally sold by the dealer are purchased in a covering transaction
to cover short positions. Those activities may cause the price of the securities to be higher than it would otherwise be. If commenced,
the underwriters may discontinue any of the activities at any time. An underwriter may carry out these transactions on The Nasdaq
Capital Market, in the over-the-counter market or otherwise.
The place and time of delivery for securities will be set forth
in the accompanying prospectus supplement.
LEGAL MATTERS
The validity of the securities being offered by this prospectus
will be passed upon for us by Loeb & Loeb LLP, New York, New York. If the validity of any securities is also passed upon by
counsel for any underwriters, dealers or agents, that counsel will be named in the prospectus supplement relating to that specific
offering.
EXPERTS
The consolidated financial statements incorporated in this prospectus
by reference to the Annual Report on Form 10-K for the year ended December 31, 2014 have been so incorporated in reliance on the
report of Marcum Bernstein & Pinchuk LLP, an independent registered public accounting firm, given on the authority of such
firm as experts in auditing and accounting.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to “incorporate by reference” into
this prospectus the information we file with the SEC. This means that we can disclose important information to you by referring
you to those documents. Any statement contained in a document incorporated by reference in this prospectus shall be deemed to be
modified or superseded for purposes of this prospectus to the extent that a statement contained herein, or in any subsequently
filed document, which also is incorporated by reference herein, modifies or supersedes such earlier statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
We hereby incorporate by reference into this prospectus the following
documents that we have filed with the SEC under the Exchange Act (File No. 001-34647):
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the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed with the SEC on April 15, 2015;
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the Company’s Quarterly Report on Form 10-Q for the six months ended June 30, 2015, filed with the SEC on August 14, 2015;
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the Company’s Current Reports on Form 8-K, filed with the SEC on April 17, 2015, May 7, 2015, May 19, 2015, May 28, 2015, June 29, 2015, August 18, 2015 and September 9, 2015;
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the Company’s Registration Statement on Form 8-A (Registration No. 001-34647) filed with the SEC on September 13, 2010, pursuant to Section 12 of the Securities Exchange Act of 1934, together with any amendments or reports filed for the purpose of updating such description;
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the Company’s Registration Statement on Form 8-A (Registration No. 001-34647) filed with the SEC on March 2, 2010, pursuant to Section 12 of the Securities Exchange Act of 1934, together with any amendments or reports filed for the purpose of updating such description; and
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the Company’s Registration Statement on Form 8-A (Registration No. 001-52672) filed with the SEC on June 5, 2007, pursuant to Section 12 of the Securities Exchange Act of 1934, together with any amendments or reports filed for the purpose of updating such description.
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All documents that we file with the SEC pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act (other than Current Reports on Form 8-K, or portions thereof, furnished under Item 2.02
or 7.01 of Form 8-K) (i) after the initial filing date of the registration statement of which this prospectus forms a part and
prior to the effectiveness of such registration statement and (ii) after the date of this prospectus and prior to the termination
of the offering shall be deemed to be incorporated by reference in this prospectus from the date of filing of the documents, unless
we specifically provide otherwise. Information that we file with the SEC will automatically update and may replace information
previously filed with the SEC. To the extent that any information contained in any Current Report on Form 8-K or any exhibit thereto,
was or is furnished to, rather than filed with the SEC, such information or exhibit is specifically not incorporated by reference.
WHERE YOU CAN FIND MORE INFORMATION
As permitted by SEC rules, this prospectus omits certain information
and exhibits that are included in the registration statement of which this prospectus forms a part. Since this prospectus may not
contain all of the information that you may find important, you should review the full text of these documents. If we have filed
a contract, agreement or other document as an exhibit to the registration statement of which this prospectus forms a part, you
should read the exhibit for a more complete understanding of the document or matter involved. Each statement in this prospectus,
including statements incorporated by reference as discussed above, regarding a contract, agreement or other document is qualified
in its entirety by reference to the actual document.
We are subject to the information reporting requirements of the
Exchange Act, and, in accordance with these requirements, we file annual, quarterly and current reports, proxy statements, and
other information with the SEC. You may inspect, read and copy the reports and other information we file with the SEC at the SEC’s
Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet website at
www.sec.gov
that
contains our filed reports, proxy and information statements, and other information that we file electronically with the SEC.
2,150,001 Shares
of Common Stock
Warrants to Purchase up to 645,000 Shares of Common Stock
ChinaNet Online
Holdings, Inc.
Common Stock
Warrants
PROSPECTUS
SUPPLEMENT
Placement Agent
FT Global
Capital, Inc.
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