Filed pursuant to Rule 424(b)(4)
Registration No. 333-224302
PROSPECTUS
633,526
Shares
Offered
by the Selling Shareholders
of
China
Ceramics Co., Ltd.
This prospectus
relates to the resale of up to 633,526 of our shares, par value $0.008 per share (“Shares”), which may be offered
for sale from time to time by the Selling Shareholders named in this prospectus. All of the Shares were sold and issued by us
to the Selling Shareholders in the July 2017 private placement of our securities.
The
Selling Shareholders may sell any or all of the Shares on any stock exchange, market or trading facility on which the Shares are
traded or in privately negotiated transactions at fixed prices that may be changed, at market prices prevailing at the time of
sale or at negotiated prices. Information on the Selling Shareholders and the times and manners in which they may offer and sell
our Shares is described under the sections entitled “Selling Shareholders” and “Plan of Distribution”
in this prospectus. While we will bear all costs, expenses and fees in connection with the registration of the Shares, we will
not receive any of the proceeds from the sale of our Shares by the Selling Shareholders.
Our
Shares are currently traded on the Nasdaq Stock Market under the symbol “CCCL”. On May 7, 2018, the closing price
for our Shares on Nasdaq was $1.6 per share.
We
may amend or supplement this prospectus from time to time by filing amendments or supplements as required.
Investing
in our securities involves risks. See “Risk Factors” beginning on page 6 of this prospectus.
Neither
the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved
of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
Prospectus
dated May 18, 2018
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is
part of a registration statement that we filed with the Securities and Exchange Commission. Under this registration process, the
selling shareholders may from time to time sell up to 633,526 Shares in one or more offerings. This prospectus provides you with
a general description of the securities that our selling shareholders may offer. Specific information about the offering may also
be included in a prospectus supplement, which may update or change information included in this prospectus. You should read both
this prospectus and any prospectus supplement together with additional information described under the heading “Where You
Can Find More Information.”
You should rely only
on the information contained in this prospectus, any amendment or supplement to this prospectus or any free writing prospectus
prepared by or on our behalf. Neither we, nor the selling shareholders, have authorized any other person to provide you with different
or additional information. Neither we, nor the selling shareholders, take responsibility for, nor can we provide assurance as to
the reliability of, any other information that others may provide. The selling shareholders are not making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is accurate
only as of the date of this prospectus or such other date stated in this prospectus, and our business, financial condition, results
of operations and/or prospects may have changed since those dates.
Except as otherwise
set forth in this prospectus, neither we nor the selling shareholders have taken any action to permit a public offering of these
securities outside the United States or to permit the possession or distribution of this prospectus outside the United States.
Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions
relating to the offering of these securities and the distribution of this prospectus outside the United States.
Certain Defined Terms and Conventions
Unless otherwise indicated,
references in this prospectus to:
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“China” or the “PRC” are to
the People’s Republic of China, excluding, for the purpose of this prospectus only, Taiwan and the special administrative
regions of Hong Kong and Macau.
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“RMB”
and “Renminbi” are to the legal currency of China (see “Exchange Rate
Information” for translations of RMB into U.S. dollars in this prospectus). This
prospectus contains translations of certain RMB amounts into U.S. dollar amounts at specified
rates. Unless otherwise stated, the translations of RMB into U.S. dollars have been made
at the exchange rate as set forth on December 29, 2017 in the H.10 statistical release
of the Federal Reserve Board, which was RMB 6.5063 to US $1.00. We make no representation
that the RMB or U.S. dollar amounts referred to in this prospectus could have been or
could be converted into U.S. dollars or RMB, as the case may be, at any particular rate
or at all (also see “Risk Factors”). On April 9, 2018, the exchange rate
was RMB 6.3035 to US$1.00.
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“shares” are to our shares, par value
US$0.008 per share.
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“US$” and “U.S. dollars” are
to the legal currency of the United States.
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“we,” “us,” “our,”
and “China Ceramics” refers to China Ceramics Co., Ltd., a British Virgin Islands company, and its subsidiaries, including
Success Winner Limited (“Success Winner”), a British Virgin Islands company and wholly owned subsidiary of China Ceramics,
Stand Best Creation Limited (“Stand Best”), a Hong Kong company and wholly owned subsidiary of Success Winner and
the entity that wholly owns Jinjiang Hengda Ceramics Co., Ltd. (“Hengda”), a PRC operating company that in turn wholly
owns Jiangxi Hengdali Ceramic Materials Co., Ltd. (“Hengdali”), and Fujian Province Hengdali Building Materials Co.,
Ltd. each a PRC operating company.
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WHERE YOU CAN FIND MORE INFORMATION
We have filed with
the SEC a registration statement on Form F-3 under the Securities Act of 1933, as amended (the “Securities Act”) with
respect to the Shares offered under this prospectus. For the purposes of this section, the term registration statement means the
original registration statement and any and all amendments including the schedules and exhibits to the original registration statement
or any amendment. This prospectus does not contain all of the information included in the registration statement we filed. For
further information regarding us and the Shares offered in this prospectus, you may desire to review the full registration statement,
including the exhibits. The registration statement, including its exhibits and schedules, may be inspected and copied at the public
reference facilities maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information
on the operation of the public reference room by calling 1-202-551-8090. Copies of such materials are also available by mail from
the Public Reference Branch of the SEC at 100 F Street, N.E., Washington, D.C. 20549 at prescribed rates. In addition, the SEC
maintains a website (
http://www.sec.gov
) from which interested persons can electronically access the registration statement,
including the exhibits and schedules to the registration statement.
We are subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are applicable
to a foreign private issuer. In accordance with the Exchange Act, we file reports with the SEC, including annual reports on Form
20-F. We also furnish to the SEC under cover of Form 6-K material information required to be made public in the British Virgin
Islands, filed with and made public by any stock exchange or automated quotation system or distributed by us to our shareholders.
As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy
statements to shareholders. In addition, our officers, directors and principal shareholders are exempt from the “short-swing
profits” reporting and liability provisions contained in Section 16 of the Exchange Act and related Exchange Act rules.
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE
The SEC allows us to
“incorporate by reference” the information we file with them. This means that we can disclose important information
to you by referring you to those documents. Each document incorporated by reference is current only as of the date of such document,
and the incorporation by reference of such documents should not create any implication that there has been no change in our affairs
since the date thereof or that the information contained therein is current as of any time subsequent to its date. The information
incorporated by reference is considered to be a part of this prospectus and should be read with the same care. When we update the
information contained in documents that have been incorporated by reference by making future filings with the SEC, the information
incorporated by reference in this prospectus is considered to be automatically updated and superseded. In other words, in the case
of a conflict or inconsistency between information contained in this prospectus and information incorporated by reference into
this prospectus, you should rely on the information contained in the document that was filed later.
We incorporate by reference
the documents listed below:
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our Annual
Report on Form 20-F for the fiscal year ended December 31, 2017 filed with the SEC on
May 4, 2018;
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our material change report dated June 4, 2015 in connection
with a press release distribution, included as Exhibit 99.1 to our Report on Form 6-K furnished to the SEC on June 9, 2015;
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our reports on Form 6-K dated July 7, July 18, August
10, August 25, September 25, October 2, October 10, and October 23, 2017, respectively;
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with respect to each offering of securities under
this prospectus, all our subsequent Annual Reports on Form 20-F and any report on Form 6-K that (i) we file or furnish with the
SEC on or after the date on which this prospectus is first filed with the SEC and until the termination or completion of the offering
under this prospectus and (ii) indicates that it is being incorporated by reference in this prospectus.
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Unless expressly incorporated
by reference, nothing in this prospectus shall be deemed to incorporate by reference information furnished to, but not filed with,
the SEC. We will provide to each person, including any beneficial owner, who receives a copy of this prospectus, upon written or
oral request, without charge, a copy of any or all of the documents we refer to above which we have incorporated by reference in
this prospectus, except for exhibits to such documents unless the exhibits are specifically incorporated by reference into this
prospectus. You should direct your requests to the attention of our chief financial officer at our principal executive office located
in c/o Junbing Industrial Zone, Anhai, Jinjiang City, Fujian Province, PRC. Our telephone number at this address is +86 (595) 8576
5053 and our fax number is Fax: +86 (595) 8576 5059.
You should rely only
on the information contained or incorporated by reference in this prospectus, in any applicable prospectus supplement or any related
free writing prospectus that we may authorize to be delivered to you. We have not authorized any other person to provide you with
different information. If anyone provides you with different or inconsistent information, you should not rely on it. We will not
make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the
information appearing in this prospectus, the applicable supplement to this prospectus or in any related free writing prospectus
is accurate as of its respective date, and that any information incorporated by reference is accurate only as of the date of the
document incorporated by reference, unless we indicate otherwise. Our business, financial condition, results of operations and
prospects may have changed since those dates.
PROSPECTUS SUMMARY
Our Business
We are a leading
Chinese manufacturer of ceramic tiles used for exterior siding and for interior flooring and design in residential and commercial
buildings. The ceramic tiles, sold under the “HD” or “Hengda,” “HDL” or “Hengdeli”,
“Pottery Capital of Tang Dynasty”, “TOERTO” and ”WULIQIAO” brands are available in over two
thousand styles, colors and size combinations. Currently, we have five principal product categories: porcelain tiles, glazed tiles,
glazed porcelain tiles, rustic tiles, and polished glazed tiles. Ceramic tiles are widely used in the PRC as a construction material
for residential and commercial buildings. Ceramic tiles are used for flooring, interior walls for decorative purposes and on exterior
siding due to their resistance to temperature, extreme environments, erosion, abrasion and discoloration for extended periods of
time. Our manufacturing facilities operated by Jinjiang Hengda Ceramics Co., Ltd. are located in Jinjiang, Fujian Province, and
our manufacturing facilities operated by Jiangxi Hengdali Ceramic Materials Co., Ltd. are located in Gaoan, Jiangxi Province.
Corporate Information
Our principal executive
office is located at Junbing Industrial Zone, Anhai, Jinjiang City, Fujian Province, People’s Republic of China. Our telephone
number at this address is +86 595 8576 5053. Our registered office is Craigmuir Chambers, Road Town, Tortola, British Virgin Islands,
and our registered agent is Harneys Corporate Services Limited. We maintain a website at http://www.cceramics.com that contains
information about our company.
Information on this web site is not part of this prospectus
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July 2017 Private Placement
On July 18, 2017,
the Company completed a USD$861,000 private placement of its shares pursuant to subscription agreements (the “Subscription
Agreements”) with certain accredited investors (the “Offering”) at the price of $1.36 per share, the closing
price of the Company’s securities on July 17, 2017. The Company agreed to register the shares sold in the Offering for resale
no later than 270 days after the closing of the Offering. All respective purchasers in the Offering were “accredited investors”
(as such term is defined in Rule 501(a) of Regulation D under the Securities Act), and the Company sold the securities in the Offering
in reliance upon an exemption from registration contained in Section 4(2) and Rule 506 under the Securities Act. There were no
discounts or brokerage fees associated with this Offering. The net proceeds of the Offering were used for working capital and general
corporate purposes.
RISK FACTORS
Any investment in
the Shares is speculative and involves a high degree of risk. Before making an investment decision, you should carefully consider
the risks described under “Risk Factors” in our most recent Annual Report on Form 20-F, or any updates in our reports
on Form 6-K, together with all of the other information appearing in, or incorporated by reference into, this prospectus and any
applicable prospectus supplement. The risks so described are not the only risks facing our company. Additional risks not presently
known to us or that we currently deem immaterial may also impair our business operations. Our business, financial condition and
results of operations could be materially adversely affected by any of these risks. The trading price of our securities could decline
due to any of these risks, and you may lose all or part of your investment.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the information
in this prospectus, any prospectus supplement, and the documents we incorporate by reference contains forward-looking statements
within the meaning of the federal securities laws. You should not rely on forward-looking statements in this prospectus, any prospectus
supplement, or the documents we incorporate by reference. Forward-looking statements typically are identified by use of terms such
as “anticipate,” “believe,” “plan,” “expect,” “future,” “intend,”
“may,” “will,” “should,” “estimate,” “predict,” “potential,”
“continue,” and similar words, although some forward-looking statements are expressed differently. This prospectus,
any prospectus supplement, and the documents we incorporate by reference may also contain forward-looking statements attributed
to third parties relating to their estimates regarding the growth of our markets. All forward-looking statements address matters
that involve risks and uncertainties, and there are many important risks, uncertainties and other factors that could cause our
actual results, as well as those of the markets we serve, levels of activity, performance, achievements and prospects to differ
materially from the forward-looking statements contained in this prospectus, any prospectus supplement, and the documents we incorporate
by reference.
You should also consider
carefully the statements under “Risk Factors” and other sections of this prospectus, any prospectus supplement, and
the documents we incorporate by reference, which address additional facts that could cause our actual results to differ from those
set forth in the forward-looking statements. We caution investors not to place significant reliance on the forward-looking statements
contained in this prospectus, any prospectus supplement, and the documents we incorporate by reference. We undertake no obligation
to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise.
PRICE RANGE OF OUR SHARES
Our shares have been
listed on the NASDAQ Stock Market under the symbols CCCL, since January 18, 2011. Our shares were listed on the NASDAQ Capital
Market from November 3, 2010 through January 17, 2011 and were relisted on the Nasdaq Capital Market on March 23, 2016 following
the listing transfer where it is trading now under the same symbol “CCCL.” Our shares were listed on the NASDAQ Global
Market from January 18, 2011 until March 22, 2016. The shares were previously quoted on the OTC Bulletin Board from December 29,
2009 through November 2, 2010.
The following tables
set forth, for the calendar quarters indicated and through March 31, 2018, the quarterly high and low sale prices for our shares,
as reported on NASDAQ Stock Market and the OTC Bulletin Board, as applicable. The OTC Bulletin Board market quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily reflect actual transactions. Prior
to June 28, 2016, the sale prices of our shares were retroactively restated to reflect the 8:1 reverse split effected on that date.
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Shares
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High
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Low
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Annual Highs and Lows
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2012
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36.32
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11.76
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2013
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32.48
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15.84
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2014
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20.48
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5.92
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2015
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11.36
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6.00
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2016
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8.64
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2.09
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Quarterly Highs and Lows
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2015
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First Quarter
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9.92
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6.48
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Second Quarter
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11.36
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8.88
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Third Quarter
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9.28
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6.00
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Fourth Quarter
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9.60
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6.00
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2016
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First Quarter
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8.64
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2.80
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Second Quarter
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4.08
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2.09
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Third Quarter
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5.30
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2.19
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Fourth Quarter
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3.02
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2.10
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2017
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First Quarter
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2.53
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2.08
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Second Quarter
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2.26
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1.32
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Third Quarter
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1.68
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1.31
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Fourth Quarter
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2.39
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1.30
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January 2018
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2.69
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2.17
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February 2018
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2.14
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1.74
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March 2018
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1.77
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1.43
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April 2018
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1.98
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1.38
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On May 7, 2018,
the closing price of our Shares on the NASDAQ Stock Market was $1.6.
As of May 1, 2018,
there were 4,629,793 of our common shares issued and outstanding, of which approximately 64% were held by approximately 1,000
U.S. record holders.
CAPITALIZATION
The following table
sets forth our capitalization as of December 31, 2017. Because we will not be receiving any proceeds pursuant to the sale of any
Shares by the selling shareholders, our capitalization table is not adjusted to reflect such sales. You should read the following
table in conjunction with our financial statements, which are incorporated by reference into this prospectus.
Capitalization
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As of
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(in RMB except share
data)
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December 31, 2017
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Common shares
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3,851,485
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Par Value Amount
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205,825
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Additional Paid-In Capital
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415,707,035
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Statutory Reserves
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135,343,158
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Retained Earnings
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144,434,902
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Accumulated Other Comprehensive
Income
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(954,610
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Total:
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694,736,310
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USE OF PROCEEDS
We will not receive
any proceeds from the sale of any Shares by the selling shareholders. The selling shareholders will receive all of the net proceeds
from the sale of any Shares offered by them under this prospectus. The selling shareholders will pay any underwriting discounts
and commissions and expenses incurred by the selling shareholders for brokerage, accounting, tax, legal services or any other expenses
incurred by the selling shareholders in disposing of these Shares. We will bear all other costs, fees and expenses incurred in
effecting the registration of the Shares covered by this prospectus.
DIVIDEND POLICY
We paid a cash dividend
of US$0.10 (equivalent to RMB0.61) per share each on July 13, 2013 and January 14, 2014, respectively, to our shareholders which
totaled in aggregate US$4.1 million (equivalent to RMB24.9 million). Also, we paid a cash dividend of US$0.0125 (equivalent to
RMB0.08) per share each on July 14, 2014 and January 14, 2015, respectively, to its shareholders which totaled in aggregate US$0.5
million (equivalent to RMB3.2 million).
We do not currently
have any plans to pay any cash dividends in the foreseeable future on our shares being sold in this offering. We currently intend
to retain most, if not all, of our available funds and any future earnings to operate and expand our business. The payment of dividends
by entities organized in China is subject to limitations. Regulations in the PRC currently permit payment of dividends only out
of accumulated profits as determined in accordance with PRC accounting standards and regulations. Each of our Chinese subsidiaries
is also required to set aside at least 10% of its after-tax profit based on China’s accounting standards each year to its
general reserves until the cumulative amount of such reserves reach 50% of its registered capital. These reserves are not distributable
as cash dividends. The board of directors of our PRC subsidiaries, each of which is a wholly foreign owned enterprise, has the
discretion to allocate a portion of its after-tax profits to its staff welfare and bonus funds, which is likewise not distributable
to its equity owners except in the event of a liquidation of the foreign-invested enterprise. If we decide to pay dividends in
the future, these restrictions may impede our ability to pay dividends. In addition, if any of these Chinese entities incurs debt
on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions
to us.
Our Board of Directors
has discretion on whether to pay dividends. Even if our board of directors decides to pay dividends, the form, frequency and amount
will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual
restrictions and other factors that our board of directors may deem relevant.
SELLING SHAREHOLDERS
This prospectus covers
the public resale of the Shares owned by the selling shareholders named below. Such selling shareholders may from time to time
offer and sell pursuant to this prospectus any or all of the Shares owned by them. The selling shareholders, however, make no representations
that the Shares will be offered for sale. The tables below present information regarding the selling shareholders and the Shares
that each such selling shareholder may offer and sell from time to time under this prospectus.
The Shares being
registered by the selling shareholders represent our securities sold and issued in the April 2017 private placement of our securities.
Unless otherwise indicated, all information with respect to ownership of our Shares of the selling shareholders has been furnished
by or on behalf of the selling shareholders and is as of May 8, 2018. We believe, based on information supplied by the selling
shareholders, that except as may otherwise be indicated in the footnotes to the tables below, the selling shareholders have sole
voting and dispositive power with respect to the Shares reported as beneficially owned by them. Because the selling shareholders
identified in the tables may sell some or all of the Shares owned by them which are included in this prospectus, and because,
except as set forth herein, there are currently no agreements, arrangements or understandings with respect to the sale of any
of the Shares, no estimate can be given as to the number of Shares available for resale hereby that will be held by the selling
shareholders upon termination of this offering. In addition, the selling shareholders may have sold, transferred or otherwise
disposed of, or may sell, transfer or otherwise dispose of, at any time and from time to time, the Shares they hold in transactions
exempt from the registration requirements of the Securities Act after the date on which they provided the information set forth
on the table below. We have, therefore, assumed for the purposes of the following table, that the selling shareholders will sell
all of the Shares owned beneficially by them that are covered by this prospectus, but will not sell any other Ordinary Shares
that they presently own. However, we are not aware of any agreements, arrangements or understandings with respect to the sale
of any of the Shares by any of the selling shareholders. Beneficial ownership for the purposes of this table is determined in
accordance with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities
if such person has or shares the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof or
has the right to acquire such powers within 60 days.
The selling shareholders
and intermediaries through whom such securities are sold may be deemed “underwriters” within the meaning of the Securities
Act with respect to the Shares offered by this prospectus, and any profits realized or commissions received may be deemed underwriting
compensation. Additional selling shareholders not named in this prospectus will not be able to use this prospectus for resales
until they are named in the tables above by prospectus supplement or post-effective amendment. Transferees, successors and donees
of identified selling shareholders will not be able to use this prospectus for resales until they are named in the tables above
by prospectus supplement or post-effective amendment. If required, we will add transferees, successors and donees by prospectus
supplement in instances where the transferee, successor or donee has acquired its Shares from holders named in this prospectus
after the effective date of this prospectus.
The following table sets forth:
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the name of each selling
shareholder holding Shares;
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the number of Shares
beneficially owned by each selling shareholder prior to the sale of the Shares covered by this prospectus;
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the number of Shares
that may be offered by each selling shareholder pursuant to this prospectus;
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the number of Shares
to be beneficially owned by each selling shareholder following the sale of the Shares covered by this prospectus; and
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the percentage of our
issued and outstanding Shares to be owned by each selling shareholder before and after the sale of the Shares covered by this
prospectus.
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Name of Selling Shareholder
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Number of
Shares
Beneficially
Owned
Prior to this
Offering
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Percent
of
Outstanding
Shares
Beneficially
Owned
Before Sale
of Shares (4)
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Number of
Shares
Available
Pursuant to
this
Prospectus
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Number of
Shares
Beneficially
Owned
After Sale
of Shares (5)
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Percent
of
Outstanding
Shares
Beneficially
Owned
After Sale
of Shares (5)
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Sun Cuixia (1)
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491,338
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10.63
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%
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221,734
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269,604
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5.83
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%
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Zhao E (2)
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421,149
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9.11
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%
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|
|
190,058
|
|
|
|
231,091
|
|
|
|
5
|
%
|
Cheh Chau Ho (3)
|
|
|
491,338
|
|
|
|
10.63
|
%
|
|
|
221,734
|
|
|
|
269,604
|
|
|
|
5.83
|
%
|
(1)
|
The address of the selling shareholder is 335 W Norman Ave. Arcadia. CA 91007.
|
(2)
|
The address of the selling shareholder is 32 S. Almansor St., Alhambra. CA 91803.
|
(3)
|
The address of the selling shareholder is 12/F, No. 23, Lane 236, Sec. 5, Chung
Hsiao E. Rd., Taipei, Taiwan.
|
(4)
|
Based on 4,621,793 shares outstanding as of the date of this prospectus.
|
(5)
|
Assumes that the selling shareholder sells all of the shares offered hereby.
|
PLAN OF DISTRIBUTION
The selling shareholders,
which as used herein includes donees, pledgees, transferees or other successors-in-interest selling Shares or interests in Shares
received after the date of this prospectus from a selling shareholder as a gift, pledge, partnership distribution or other transfer,
may, from time to time, sell, transfer or otherwise dispose of any or all of the Shares on any stock exchange, market or trading
facility on which the Shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market
prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale,
or at negotiated prices.
The selling shareholders may use any one or more of the following
methods when disposing of Shares:
|
•
|
ordinary brokerage transactions
and transactions in which the broker-dealer solicits purchasers;
|
|
•
|
block trades in which
the broker-dealer will attempt to sell the Shares as agent, but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
•
|
purchases by a broker-dealer
as principal and resale by the broker-dealer for its account;
|
|
•
|
an exchange distribution
in accordance with the rules of the applicable exchange;
|
|
•
|
privately negotiated
transactions;
|
|
•
|
short sales effected
after the date the registration statement of which this prospectus is a part is declared effective by the SEC;
|
|
•
|
through the writing
or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
|
|
•
|
broker-dealers may agree
with the selling shareholders to sell a specified number of such Shares at a stipulated price per share;
|
|
•
|
a combination of any
such methods of sale; and
|
|
•
|
any other method permitted
by applicable law.
|
The selling shareholders
may, from time to time, pledge or grant a security interest in some or all of the Shares owned by them and, if they default in
the performance of their secured obligations, the pledgees or secured parties may offer and sell the Shares, from time to time,
under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act amending the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders
under this prospectus. The selling shareholders also may transfer the Shares in other circumstances, in which case the transferees,
pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
In connection with
the sale of their Shares or interests therein, the selling shareholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of such Shares in the course of hedging the positions
they assume. The selling shareholders may also sell Shares short and deliver these securities to close out their short positions,
or loan or pledge the Shares to broker-dealers that in turn may sell these securities. The selling shareholders may also enter
into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative
securities which require the delivery to such broker-dealer or other financial institution of the Shares offered by this prospectus,
which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended
to reflect such transaction).
The aggregate proceeds
to the selling shareholders from the sale of the Shares offered by them will be the purchase price of such Shares less discounts
or commissions, if any. Each of the selling shareholders reserves the right to accept and, together with their agents from time
to time, to reject, in whole or in part, any proposed purchase of ordinary shares to be made directly or through agents. We will
not receive any of the proceeds from the resale of the Shares.
The selling shareholders
also may resell all or a portion of their Ordinary Shares in open market transactions in reliance upon Rule 144 under the Securities
Act, provided that they meet the criteria and conform to the requirements of that rule.
The selling shareholders
and any underwriters, broker-dealers or agents that participate in the sale of the Shares therein may be “underwriters”
within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on
any resale of the Ordinary Shares may be underwriting discounts and commissions under the Securities Act. Selling shareholders
who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus
delivery requirements of the Securities Act.
To the extent required,
the Shares to be sold, the names of the selling shareholders, the respective purchase prices and public offering prices, the names
of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer will be set forth
in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes
this prospectus.
In order to comply
with the securities laws of some states, if applicable, the Shares may be sold in these jurisdictions only through registered or
licensed brokers or dealers. In addition, in some states the Shares may not be sold unless it has been registered or qualified
for sale or an exemption from registration or qualification requirements is available and is complied with.
We have advised the
selling shareholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of Shares in the
market and to the activities of the selling shareholders and their affiliates. In addition, to the extent applicable, we will make
copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling shareholders for the
purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling shareholders may indemnify any broker-dealer
that participates in transactions involving the sale of the Shares against certain liabilities, including liabilities arising under
the Securities Act. We have agreed to indemnify the selling shareholders against liabilities, including liabilities under the Securities
Act and state securities laws, relating to the registration of the Ordinary Shares offered by this prospectus.
EXPENSES
We estimate the fees
and expenses to be incurred by us in connection with the resale of the ordinary shares in this offering, other than underwriting
discounts and commissions, to be as follows:
SEC registration fee
|
|
$
|
130.93
|
*
|
Legal fees and expenses
|
|
$
|
10,000
|
|
Accounting fees and expenses
|
|
$
|
10,000
|
|
Miscellaneous expenses
|
|
$
|
2,500
|
|
|
|
|
|
|
Total
|
|
$
|
22,630.93
|
|
All amounts are estimated except the SEC
registration fee.
* Previously paid.
LEGAL MATTERS
We are being represented
by Schiff Hardin LLP, Washington, DC with respect to legal matters of United States federal securities. The validity of the shares
offered in this offering and legal matters as to British Virgin Islands law will be passed upon for us by Harney Westwood &
Riegels. Legal matters will be passed upon for any underwriters, dealers or agents by counsel named in the applicable prospectus
supplement.
EXPERTS
The financial statements
incorporated by reference in this prospectus have been audited by Centurion ZD CPA Limited, our independent registered public accounting
firm, and are included in reliance upon such reports given upon the authority of said firm as experts in auditing and accounting.
ENFORCEABILITY OF CIVIL LIABILITIES
Many of our officers
and directors, and some of the experts named in this prospectus, are residents of PRC or elsewhere outside of the U.S., and all
of our assets and the assets of such persons are located outside the U.S. As a result, it may be difficult for investors in the
U.S. to effect service of process within the U.S. upon such directors, officers and representatives of experts who are not residents
of the U.S. or to enforce against them judgments of a U.S. court predicated solely upon civil liability under U.S. federal securities
laws or the securities laws of any state within the U.S.
Substantially all of
our operations and records, and most of our senior management are located in the PRC. Our shareholders have limited ability to
assert and collect on claims in litigation against us and our principals. In addition, corporate organization and structure could
further impede the ability of a person to prove a claim or collect on a judgment against the Company. Finally, China has very restrictive
secrecy laws that prohibit the delivery of many of the financial records maintained by a business located in China to third parties
absent Chinese government approval. Since discovery is an important part of proving a claim in litigation, and since most if not
all of the Company’s records are in China, Chinese secrecy laws could frustrate efforts to prove a claim against the Company
or its management. In order to commence litigation in the United States against an individual such as an officer or director, that
individual must be served. While directors and officers of a Delaware corporation are routinely served for purposes of a suit against
them in Delaware for breach of fiduciary duty and there are means of serving individuals who reside outside the United States in
other litigation, generally service requires the cooperation of the country in which a defendant resides. China has a history of
failing to cooperate in efforts to effect such service upon Chinese citizens in China. These and other similar PRC laws and regulations
could substantially impair our shareholders abilities to investigate and prosecute claims against our Company, our officers and
our directors.
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