Prospectus
Supplement
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Filed
pursuant to Rule 424(b)(5)
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(To
Prospectus dated February 13, 2019)
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Registration
No. 333-229505
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DOGNESS
(INTERNATIONAL) CORPORATION
2,178,120
Class A Common Shares
Pursuant
to this prospectus supplement and the accompanying prospectus, we are offering up to 2,178,120 Class A Common Shares directly to selected
investors. Our Class A Common Shares trade on the NASDAQ Global Market under the symbol “DOGZ.”
As
of the date of this prospectus supplement, the aggregate market value of our outstanding Class A Common Shares held by non-affiliates
was approximately $48,306,163 based on 20,555,814 outstanding Class A Common Shares all of which are held by non-affiliates, and
a per share price of $2.35, which was the last reported price on the NASDAQ Global Market of our Class A Common Shares on July 14, 2021.
During the prior 12 calendar month period that ends on and includes the date of this prospectus supplement, the value of securities we
have sold under this shelf registration statement on Form F-3 is $12,137,870.75. For a more detailed description of the Class A Common
Shares, see the section entitled “Description of Our Securities We Are Offering” beginning on page S-9.
We
have retained FT Global Capital, Inc. to act as the exclusive placement agent to use its best efforts to solicit offers from investors
to purchase the securities in this offering. The placement agent has no obligation to buy any securities from us or to arrange for the
purchase or sale of any specific number or dollar amount of securities. The placement agent is not purchasing or selling any Class A
Common Shares in this offering. We will pay the placement agent a fee equal to the sum of 8% of the aggregate purchase price paid by
investors placed by the placement agent. Additionally, we will issue to the placement agent warrants to purchase 174,249 Class A Common
Shares, which shall expire thirty-six (36) months after issuance and shall have no anti-dilution protection other than adjustments based
on stock splits, stock dividends, combinations of shares and similar recapitalization transactions. The placement agent warrants and
Class A Common Shares underlying such warrant are not being registered herein.
We
estimate the total expenses of this offering, excluding the placement agency fees, will be approximately $200,000. Because there is no
minimum offering amount, the actual offering amount, the placement agency fees and net proceeds to us, if any, in this offering may be
substantially less than the total offering amounts set forth above. We are not required to sell any specific number or dollar amount
of the securities offered in this offering. Assuming we complete the maximum offering, the net proceeds to us from this offering will
be approximately $3.4 million. We expect to deliver the shares to the purchasers on or before July 19, 2021.
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Per Share
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Total
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Public offering price
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$
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1.82
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$
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3,964,178.40
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Placement agent fees(1)
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$
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0.1456
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$
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317,134.27
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Offering proceeds to us, before expenses
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$
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1.6744
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$
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3,647,044.13
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(1)
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See
“Plan of Distribution” for additional information regarding total compensation payable to the placement agent, including
expenses for which we have agreed to reimburse the placement agent.
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Our
business and holding our Class A Common Shares involve a high degree of risk. See “Risk Factors” beginning on page S-5 of
this prospectus supplement, on page 7 of the accompanying base prospectus and the risk factors described in the documents incorporated
by reference into this prospectus supplement and the accompanying base prospectus for more information.
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.
FT
Global Capital, Inc.
The
date of this prospectus supplement is July 15, 2021
TABLE
OF CONTENTS
Prospectus
Supplement
Prospectus
You
should rely only on the information contained in this prospectus supplement and the accompanying prospectus. We have not authorized anyone
else to provide you with additional or different information. We are offering to sell, and seeking offers to buy, Class A Common Shares
only in jurisdictions where offers and sales are permitted. You should not assume that the information in this prospectus supplement
or the accompanying 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 a public offering of the Class A Common Shares or possession
or distribution of this prospectus supplement or the accompanying prospectus in that jurisdiction. Persons who come into possession of
this prospectus supplement or the accompanying 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 prospectus
applicable to that jurisdiction.
ABOUT
THIS PROSPECTUS SUPPLEMENT
On
February 4, 2019, we filed with the SEC a registration statement on Form F-3 (File No. 333-229505) utilizing a shelf registration process
relating to the securities described in this prospectus supplement, which registration statement was declared effective on February 13,
2019. Under this shelf registration process, we may, from time to time, sell up to $88 million in the aggregate of Class A Common Shares,
share purchase contracts, share purchase units, warrants, rights and units, of which approximately $76.6 million will remain available
for sale following the offering and as of the date of this prospectus supplement, excluding the shares issuable upon exercise of the
warrants issued in this and prior offerings.
The
two parts of this document include: (1) this prospectus supplement, which describes the specific details regarding this offering; and
(2) the accompanying base prospectus, which provides a general description of the securities that we may offer, some of which may not
apply to this offering. Generally, when we refer to this “prospectus,” we are referring to both documents combined. If information
in this prospectus supplement is inconsistent with the accompanying base prospectus, you should rely on this prospectus supplement. You
should read this prospectus supplement together with the additional information described below under the heading “Where You Can
Find More Information” and “Incorporation of Documents by Reference.”
Any
statement made in this prospectus supplement or in a document incorporated or deemed to be incorporated by reference into this prospectus
supplement will be deemed to be modified or superseded for purposes of this prospectus supplement to the extent that a statement contained
in this prospectus supplement or in any other subsequently filed document that is also incorporated by reference into this prospectus
supplement modifies or supersedes that statement. Any statements so modified or superseded will be deemed not to constitute a part of
this prospectus supplement except as so modified or superseded. In addition, to the extent of any inconsistencies between the statements
in this prospectus supplement and similar statements in any previously filed report incorporated by reference into this prospectus supplement,
the statements in this prospectus supplement will be deemed to modify and supersede such prior statements.
The
registration statement that contains this prospectus supplement, including the exhibits to the registration statement and the information
incorporated by reference, contains additional information about the securities offered under this prospectus supplement. That registration
statement can be read on the SEC’s website or at the SEC’s offices mentioned below under the heading “Where You Can
Find More Information.”
We
are responsible for the information contained and incorporated by reference in this prospectus supplement, the accompanying base prospectus
and any related free writing prospectus that we prepare or authorize. We have not authorized anyone to provide you with different or
additional information, and we take no responsibility for any other information that others may give you. If you receive any other information,
you should not rely on it.
This
prospectus supplement and the accompanying base prospectus do not constitute an offer to sell or the solicitation of an offer to buy
any securities other than the registered securities to which this prospectus supplement relates, nor do this prospectus supplement and
the accompanying base prospectus 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 in this prospectus supplement and the accompanying base prospectus is accurate at any date other
than the date indicated on the cover page of this prospectus supplement or that any information that we have incorporated by reference
is correct on any date subsequent to the date of the document incorporated by reference. Our business, financial condition, results of
operations or prospects may have changed since that date.
You
should not rely on or assume the accuracy of any representation or warranty in any agreement that we have filed in connection with this
offering or that we may otherwise publicly file in the future because any such representation or warranty may be subject to exceptions
and qualifications contained in separate disclosure schedules, may represent the applicable parties’ risk allocation in the particular
transaction, may be qualified by materiality standards that differ from what may be viewed as material for securities law purposes or
may no longer continue to be true as of any given date.
Unless
stated otherwise or the context otherwise requires, references in this prospectus supplement and the accompanying base prospectus to
the “Company,” “Dogness,” “we,” “us” or “our” refer to Dogness (International)
Corporation.
CAUTIONARY
NOTE ON FORWARD LOOKING STATEMENTS
Certain
statements contained or incorporated by reference in this prospectus, including the documents referred to or incorporated by reference
in this prospectus or statements of our management referring to our summarizing the contents of this prospectus, include “forward-looking
statements”. We have based these forward-looking statements on our current expectations and projections about future events. Our
actual results may differ materially or perhaps significantly from those discussed herein, or implied by, these forward-looking statements.
Forward-looking statements are identified by words such as “believe,” “expect,” “anticipate,” “intend,”
“estimate,” “plan,” “project” and other similar expressions. In addition, any statements that refer
to expectations or other characterizations of future events or circumstances are forward-looking statements. Forward-looking statements
included or incorporated by reference in this prospectus or our other filings with the Securities and Exchange Commission, or the SEC
include, but are not necessarily limited to, those relating to:
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risks
and uncertainties associated with the integration of the assets and operations we have acquired and may acquire in the future;
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our
possible inability to raise or generate additional funds that will be necessary to continue and expand our operations;
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our
potential lack of revenue growth;
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our
potential inability to add new products and services that will be necessary to generate increased sales;
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our
potential lack of cash flows;
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our
potential loss of key personnel;
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the
availability of qualified personnel;
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international,
national regional and local economic political changes;
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general
economic and market conditions;
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increases
in operating expenses associated with the growth of our operations;
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the
potential for increased competition; and
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other
unanticipated factors.
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The
foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or
risk factors that we are faced with that may cause our actual results to differ from those anticipate in our forward-looking statements.
Please see “Risk Factors” in our reports filed with the SEC or in a prospectus supplement related to this prospectus for
additional risks which could adversely impact our business and financial performance.
Moreover,
new risks regularly emerge and it is not possible for our management to predict or articulate all risks we face, nor can we assess the
impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from
those contained in any forward-looking statements. All forward-looking statements included in this prospectus are based on information
available to us on the date of this prospectus. Except to the extent required by applicable laws or rules, we undertake no obligation
to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent
written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety
by the cautionary statements contained above and throughout (or incorporated by reference in) this prospectus.
PROSPECTUS
SUPPLEMENT SUMMARY
The
following summary highlights selected information contained or incorporated by reference in this prospectus. This summary does not contain
all of the information you should consider before investing in the securities. Before making an investment decision, you should read
the entire prospectus and any supplement hereto carefully, including the risk factors section as well as the financial statements and
the notes to the financial statements incorporated herein by reference.
In
this prospectus and any amendment or supplement hereto, unless otherwise indicated, the terms “Dogness (International) Corporation”,
“DOGZ”, the “Company”, “we”, “us”, and “our” refer and relate to Dogness
(International) Corporation and its consolidated subsidiaries.
Our
Company
Dogness
was incorporated as a British Virgin Islands company limited by shares under the BVI Business Companies Act, 2004, on July 11, 2016.
At Dogness we combine our research and development expertise with customer feedback to make products that improve pets’ lives.
We create and manufacture fun, useful and high-quality products for everyone to experience. We believe that high technology pet products
must be accessible and reliable to capture pet lovers’ imagination and to enhance their pets’ lives.
Dogness
has been making the highest quality collars, harnesses, and traditional and retractable leashes since 2003, featuring stylish design
and rugged engineering. Beginning with smart collars and harnesses in 2016, based on the belief that internet-connected products could
improve the lives of pets and their caregivers, Dogness developed a suite of smart products, moving past these first products into smart
feeders, fountains, treat dispensers and robots to interact with pets.
Dogness
focuses on connected pet care, to link pets and pet caregivers and ultimately to integrate the “Smart Pet Ecosystem” into
a single cohesive platform that integrates smart technology into pets’ lives. The Smart Pet Ecosystem has four major areas: smart
pet technology, pet care, leashes and collars, and pet health and wellness.
Dogness
has marketing and sales networks all over the world and has businesses in Dallas, Dongguan, Hong Kong and Zhangzhou. In addition, Dogness
is the process of registering an office in Tokyo. Senior management, R&D and production, marketing, customer service and finance
operate from Dogness’ headquarters in Dongguan, Guangdong Province, which also serves as the manufacturing base for smart products
and dog leashes. Dogness Group LLC in Dallas, Texas, USA serves as the sales and service center for all international markets and R&D
center for pet health and wellness. The company’s factory in Zhangzhou, Fujian serves as a material production base, responsible
for sample dyeing, ribbon dyeing and electroplating. One of Dogness’ competitive advantages comes from integrating the whole industrial
chain, including retraction ropes, textiles, printing and dyeing, mold development, and hardware and plastics. In addition, Dogness’
subsidiaries in the United States and Japan have R&D and design centers for pet smart products, forming a complete supply chain system
with manufacturing bases in China. We benefit from vertically integrated manufacturing operations, which allow us to design, machine
and assemble the vast majority of our products in house, so we can easily incorporate improvements in design.
Our
primary market is mainland China and the United States is the primary market for our export sales.
Corporate
Information
Our
principal executive offices are located at No. 16 N Dongke Road, Tongsha Industrial Zone, Dongguan, Guangdong, People’s Republic
of China. Our telephone number at this address is +86-769-8875-3300. Our Class A Common Shares are traded on the NASDAQ Global Market
under the symbol “DOGZ.”
Our
Internet website, www.dogness.com, provides a variety of information about our Company. We do not incorporate by reference into this
prospectus the information on, or accessible through, our website, and you should not consider it as part of this prospectus. Our Annual
Reports on Form 20-F and reports on Form 6-K filed with the United States Securities and Exchange Commission (the “SEC”)
are available, as soon as practicable after filing, at the investors’ page on our corporate website, or by a direct link to its
filings on the SEC’s free website.
THE
OFFERING
Class
A Common Shares offered by us pursuant to this prospectus supplement
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2,178,120
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Class
A Common Shares to be outstanding after this offering
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22,733,934
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Use
of proceeds
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We
intend to use the net proceeds from this offering for working capital and other general corporate purposes. See “Use of Proceeds”
on page S-6 of this prospectus supplement.
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Risk
factors
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Investing
in our securities involves a high degree of risk. For a discussion of factors you should consider carefully before deciding to invest
in our Class A Common Shares, see the information contained in or incorporated by reference under the heading “Risk Factors”
beginning on page S-5 of this prospectus supplement, on page 7 of the accompanying prospectus, in our Annual Report on Form 20-F
for the fiscal year ended June 30, 2020 and in the other documents incorporated by reference into this prospectus supplement.
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Market
for the Class A Common Shares
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Our
Class A Common Shares are quoted and traded on the NASDAQ Global Market under the symbol “DOGZ.”
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Unless
specifically stated otherwise, the information in this prospectus supplement excludes:
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2,503,975
Class A Common Shares issuable upon the exercise of outstanding share options with a weighted-average exercise price of $2.46 per
share;
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RISK
FACTORS
Before
you make a decision to invest in our securities, you should consider carefully the risks described below, together with other information
in this prospectus supplement, the accompanying prospectus and the information incorporated by reference herein and therein. If any of
the following events actually occur, our business, operating results, prospects or financial condition could be materially and adversely
affected. This could cause the trading price of our Class A Common Shares to decline and you may lose all or part of your investment.
The risks described below are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial
may also significantly impair our business operations and could result in a complete loss of your investment.
RISKS
RELATED TO THIS OFFERING
Since
we have some discretion in how we use the proceeds from this offering, we may use the proceeds in ways with which you disagree.
We
have not allocated specific amounts of the net proceeds from this offering for any specific purpose. Accordingly, subject to any agreed
upon contractual restrictions under the terms of the securities purchase agreement, our management will have some flexibility in applying
the net proceeds of this offering. You will be relying on the judgment of our management with regard to the use of these net proceeds,
and subject to any agreed upon contractual restrictions under the terms of the purchase agreement, you will not have the opportunity,
as part of your investment decision, to assess whether the proceeds are being used appropriately. It is possible that the net proceeds
will be invested in a way that does not yield a favorable, or any, return for us. The failure of our management to use such funds effectively
could have a material adverse effect on our business, financial condition, operating results and cash flow.
There
is no minimum offering amount required to consummate this offering.
There
is no minimum offering amount which must be raised in order for us to consummate this offering. Accordingly, the amount of money raised
may not be sufficient for us to meet our business objectives. Moreover, if only a small amount of money is raised, all or substantially
all of the offering proceeds may be applied to cover the offering expenses and we will not otherwise benefit from the offering. In addition,
because there is no minimum offering amount required, investors will not be entitled to a return of their investment if we are unable
to raise sufficient proceeds to meet our business objectives.
You
will experience immediate dilution in the book value per share you purchase.
Because
the price per share being offered is substantially higher than the book value per share of our Class A Common Shares, you will suffer
substantial dilution in the net tangible book value of the Class A Common Shares you purchase in this offering. After giving effect to
the sale by us of 2,178,120 Class A Common Shares in this offering, and based on a public offering price of $1.82 per share and a net
tangible book value per share of $2.10 as of December 31, 2020, if you purchase securities in this offering, you will suffer immediate
and substantial dilution of $0.24 per share in the net tangible book value of the Common Shares purchased. See “Dilution”
on page S-8 for a more detailed discussion of the dilution you will incur in connection with this offering.
A
large number of shares may be sold in the market following this offering, which may significantly depress the market price of our Class
A Common Shares.
The
Class A Common Shares sold in the offering will be freely tradable without restriction or further registration under the Securities Act.
As a result, a substantial number of our Class A Common Shares may be sold in the public market following this offering. If there are
significantly more Class A Common Shares offered for sale than buyers are willing to purchase, then the market price of our Class A Common
Shares may decline to a market price at which buyers are willing to purchase the offered Class A Common Shares and sellers remain willing
to sell our Class A Common Shares.
RISKS
RELATED TO THE CURRENT PANDEMIC
We
face risks related to health epidemics that could impact our sales and operating results.
Our
business could be adversely affected by the effects of a widespread outbreak of contagious disease, including the recent outbreak of
respiratory illness caused by a novel coronavirus first identified in Wuhan, Hubei Province, China. Any outbreak of contagious diseases,
and other adverse public health developments, particularly in China, could have a material and adverse effect on our business operations.
These could include disruptions or restrictions on our ability to resume the general shipping agency services, as well as temporary closures
of our facilities and ports or the facilities of our customers and third-party service providers. Any disruption or delay of our customers
or third-party service providers would likely impact our operating results and the ability of the Company to continue as a going concern.
In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could
adversely affect the economies and financial markets of China and many other countries, resulting in an economic downturn that could
affect demand for our services and significantly impact our operating results.
The
coronavirus disease 2019 (COVID-19) has had a significant impact on our operations since January 2020 and could materially adversely
affect our business and financial results during the 2021 calendar year.
Our
ability to manufacture and/or sell our products may be impaired by damage or disruption to our manufacturing, warehousing or distribution
capabilities, or to the capabilities of our suppliers, logistics service providers or distributors as a result of the impact from the
COVID-19. This damage or disruption could result from events or factors that are impossible to predict or are beyond our control, such
as raw material scarcity, pandemics, government shutdowns, disruptions in logistics, supplier capacity constraints, adverse weather conditions,
natural disasters, fire, terrorism or other events. In December 2019, COVID-19 emerged in Wuhan, China. In compliance with the government
mandates, the Company temporarily closed and its production operations were halted from late January 2020 through the middle of February
2020. During this closure, employees had only limited access to the Company’s facilities, which led to delayed order manufacturing,
assembly and fulfillment. While the spread of the disease has gradually returned under control in China, COVID-19 could adversely affect
our business and financial results in 2021 due to the effect of COVID-19 in our customers’ jurisdictions. As a result, there is
a possibility that the Company’s revenues and operating cash flows may be significantly lower than expected for fiscal year 2021.
USE
OF PROCEEDS
We
estimate that the net proceeds from the sale of the Shares offered by this prospectus supplement, after deducting the Placement Agent
fee and other estimated expenses of this offering payable by us, will be approximately $3.4 million.
Although
we have not yet determined with certainty the manner in which we will allocate the net proceeds of this offering, we expect to use the
net proceeds from this offering for working capital, capital expenditures, product development, and other general corporate purposes,
including investments in more sales and marketing in the United States and internationally. The precise amount and timing of the application
of these proceeds will depend on our funding requirements and the availability and costs of other funds. Accordingly, we will retain
broad discretion over the use of such proceeds.
DIVIDEND
POLICY
We
have never declared or paid any cash dividends on our Class A Common Shares. We anticipate that we will retain any earnings to support
operations and to finance the growth and development of our business. Therefore, we do not expect to pay cash dividends in the foreseeable
future. Any future determination relating to our dividend policy will be made at the discretion of our Board of Directors (the “Board”)
and will depend on a number of factors, including future earnings, capital requirements, financial conditions and future prospects and
other factors the Board may deem relevant. Payments of dividends to our company are subject to restrictions including primarily the restriction
that foreign invested enterprises may only buy, sell and/or remit foreign currencies at those banks authorized to conduct foreign exchange
business after providing valid commercial documents.
CAPITALIZATION
The
following table sets forth our capitalization as of December 31, 2020:
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on
an actual basis; and
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on
a pro forma basis to give effect to (i) the issuance of 3,455,130 of Class A Common Shares on January 20, 2021 for an aggregate
purchase price of $7,428,529.50, (ii) the issuance of 250,000 Class A Common Shares on April 15, 2021 to a consultant and
(iii) the cashless exercise of options resulting the issuance of 6,053 Class A Common Shares on February 18, 2021; and
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on
a pro forma as adjusted basis to give effect to (i) the issuance of 3,455,130 of Class A Common Shares on January 20, 2021
for an aggregate purchase price of $7,428,529.50, (ii) the issuance of 250,000 Class A Common Shares on April 15, 2021 to a consultant,
(iii) the cashless exercise of options resulting the issuance of 6,053 Class A Common Shares on February 18, 2021 and (iv)
the issuance of 2,178,120 Class A Common Shares at the offering price of $1.82 per share, after deducting placement agent fees
and expenses and estimated offering expenses payable by us.
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As of December 31, 2020
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Actual
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Pro forma
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Pro forma
as adjusted
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(in US$)
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(Unaudited)
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Shareholders’ equity:
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Common Shares, $0.002 par value, 100,0000,000 shares authorized, 25,913,631 issued and outstanding (actual);
29,624,814 issued and outstanding (pro forma); and 31,802,934 issued and outstanding (pro forma as adjusted)
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Class A Common Shares, 16,844,631 shares issued and outstanding at December 31, 2020 (actual);
20,555,814 shares issued and outstanding (pro forma); 22,733,934 shares issued and outstanding (pro forma as adjusted)
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$
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33,689
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$
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41,112
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$
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45,468
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Class B Common Shares, 9,069,000 shares issued and outstanding
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$
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18,138
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$
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18,138
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$
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18,138
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Additional paid in capital
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$
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53,292,689
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$
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60,264,953
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$
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63,719,640
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Statutory reserve
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$
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194,401
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$
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194,401
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$
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194,401
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Retained earnings
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$
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4,052,634
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$
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4,052,634
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$
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4,052,634
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Accumulated other comprehensive loss
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$
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(1,666,480
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)
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$
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(1,666,480
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)
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$
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(1,666,480
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)
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Total shareholders’ equity
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$
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55,925,071
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$
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62,904,758
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$
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66,363,802
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Non-controlling interest
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$
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645,378
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$
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645,378
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$
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645,378
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Total equity
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$
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56,570,449
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$
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63,550,136
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$
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67,009,180
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The
number of issued and outstanding shares as of December 31, 2020 in the table above excludes, as of such date:
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2,503,975
Class A Common Shares issuable upon the exercise of outstanding share options with a weighted-average exercise price of $2.46 per
share;
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DILUTION
Your
ownership interest, as a result of the issuance of the Class A Common Shares in this offering, will be diluted immediately to the extent
of the difference between the offering price per Class A Common Share and the pro forma net tangible book value per share of our Class
A Common Shares after this offering.
Our
historical net tangible book value as of December 31, 2020 was $54,332,243, or $2.10 per Common Share. Historical net tangible book value
per share represents the amount of our total tangible assets, less total liabilities, divided by the number of our Common Shares outstanding
as of December 31, 2020.
After
giving effect to the sale by us in this offering of 2,178,120 Class A Common Shares at a price per share of $1.82, after deducting estimated
placement agent fees and estimated offering expenses payable by us, our pro forma net tangible book value as of December 31, 2020 would
have been approximately $57,791,287, or approximately $2.06 per Common Share. This represents an immediate decrease in pro forma
net tangible book value of approximately $0.03 per Common Share to our existing Common Shareholders and an immediate dilution in pro
forma as adjusted net tangible book value of approximately $0.24 per Common Share to purchasers in this offering, as illustrated by the
following table:
Public offering price per share
|
|
|
|
|
|
$
|
1.82
|
|
Historical net tangible book value per share as of December 31, 2020
|
|
$
|
2.10
|
|
|
|
|
|
Decrease in pro forma as adjusted net tangible book value per share attributed
to the investors purchasing shares issued in this offering
|
|
$
|
(0.03
|
)
|
|
|
|
|
Pro forma, as adjusted, net tangible book value per share after giving effect to this offering
|
|
|
|
|
|
$
|
2.06
|
|
Dilution to pro forma, as adjusted, net tangible book value per share to new investors purchasing Shares in this offering
|
|
|
|
|
|
$
|
(0.24
|
)
|
The
following table summarizes as of December 31, 2020, on a pro forma basis, as described above, the number of our Common Shares, the total
consideration and the average price per share (1) paid to us by our existing shareholders and (2) issued to persons in this offering
at an offering price of $1.82 per share, before deducting estimated offering expenses payable by us:
|
|
Common Shares
Purchased
|
|
|
Total Consideration
|
|
|
Average
Price
|
|
|
|
Number
|
|
|
Percent
|
|
|
Amount
|
|
|
Percent
|
|
|
Per Share
|
|
Existing shareholders
|
|
|
29,624,814
|
|
|
|
93.2
|
%
|
|
$
|
60,324,203
|
|
|
|
93.8
|
%
|
|
$
|
2.04
|
|
New investors
|
|
|
2,178,120
|
|
|
|
6.8
|
%
|
|
$
|
3,964,178
|
|
|
|
6.2
|
%
|
|
$
|
1.82
|
|
Total
|
|
|
31,802,934
|
|
|
|
100.0
|
%
|
|
$
|
64,288,381
|
|
|
|
100.0
|
%
|
|
$
|
2.02
|
|
The
total number of shares of our common stock reflected in the discussion and tables above is based on 29,624,814 Common Shares outstanding
as of July 15, 2021 and excludes:
●
|
2,503,975
Class A Common Shares issuable upon the exercise of outstanding share options with a weighted-average exercise price of $2.46 per
share;
|
DESCRIPTION
OF OUR SECURITIES WE ARE OFFERING
Common
Shares
A
description of our Class A Common Shares we are offering pursuant to this prospectus supplement is set forth under the heading “Description
of Share Capital,” starting on page 9 of the accompanying prospectus. The Description of Share Capital also sets forth the terms
of our Class B Common Shares, which are not being offered in this offering. As of July 15, 2021, we had 29,624,814 outstanding
Class A Common Shares and 9,069,000 Class B Common Shares.
Transfer
Agent and Registrar
The
transfer agent and registrar for the Class A Common Shares is TranShare Corporation, Bayside Center
1, 17755 North US Highway 19 Suite 140, Clearwater, Florida 33764.
Listing
Our
Class A Common Shares are listed on the NASDAQ Global Market under the symbol “DOGZ”.
PLAN
OF DISTRIBUTION
Placement
Agency Agreement and Securities Purchase Agreement
FT
Global Capital, Inc., which we refer to as the placement agent, has agreed to act as the exclusive placement agent in connection with
this offering subject to the terms and conditions of a placement agency agreement dated as of July 15, 2021. The placement agent is not
purchasing or selling any securities offered by this prospectus supplement, nor is it required to arrange the purchase or sale of any
specific number or dollar amount of securities, but it has agreed to use its reasonable efforts to arrange for the sale of all of the
securities offered hereby.
We
will enter into a securities purchase agreement with the purchasers pursuant to which we will sell to the purchasers 2,178,120 Class
A Common Shares at a price of $1.82 per share. We negotiated the price for the securities offered in this offering with the purchasers.
The factors considered in determining the price included the recent market price of our Class A Common Shares, the general condition
of the securities market at the time of this offering, the history of, and the prospects, for the industry in which we compete, our past
and present operations, and our prospects for future revenues.
The
placement agent may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any fees or commissions
received by it and any profit realized on the resale of securities sold by it while acting as principal might be deemed to be underwriting
discounts or commissions under the Securities Act. As an underwriter, the placement agent is required to comply with the requirements
of the Securities Act and the Exchange Act, including, without limitation, Rule 415(a)(4) under the Securities Act and Rule 10b-5 and
Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of Class A Common Shares
by the placement agent. Under these rules and regulations, the placement agent:
●
may not engage in any stabilization activity in connection with our securities; and
●
may not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted
under the Exchange Act, until it has completed its participation in the distribution.
From
time to time in the common course of their respective businesses, the placement agent or its affiliates have in the past or may in the
future engage in investment banking and/or other services with us and our affiliates for which it has or may in the future receive customary
fees and expenses. In January 2021, the placement agent in connection with this Offering served as our placement agent in connection
with the issuance and sale of 3,455,130 Class A Common Shares and warrants to purchase an aggregate of 1,727,565 Class A Common Shares
with a per share exercise price of $2.70. In connection with such offering, we (i) paid the placement agent a cash fee equal to 8% of
the aggregate purchase price of the securities sold, (ii) reimbursed the placement agent for expenses incurred by it in connection with
the offering in the amount of $40,000; and (iii) issued the placement agent a warrant to purchase 8% of the Class A Common Shares sold
to the purchasers (or 276,410 Class A Common Shares) at an exercise price of $2.70 per share.
Under
the securities purchase agreement, we will be precluded from engaging in equity or equity-linked securities offerings for a period of
90 days from closing of the offering, subject to certain exceptions.
In
addition, we also agreed with the purchasers that for twelve months following this offering, we will not effect or enter into an agreement
to effect a “Variable Rate Transaction,” which means a transaction in which we:
●
issue or sell any convertible securities either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or
varies with the trading prices of, or quotations for, the shares of our Class A Common Shares at any time after the initial issuance
of such convertible securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date
after the initial issuance of such convertible securities or upon the occurrence of specified or contingent events directly or indirectly
related to our business or the market for our Class A Common Shares, other than pursuant to a customary “weighted average”
anti-dilution provision; or
●
enter into any agreement (including, without limitation, an “equity line of credit”) whereby we may sell securities at a
future determined price (other than standard and customary “preemptive” or “participation” rights).
We
agreed with the purchasers that, subject to certain exceptions, if we issue securities within the 12 months following the closing of
this offering, the purchasers shall have the right to purchase 35% of the securities on the same terms, conditions and price provided
for in the proposed issuance of securities.
We
also agreed to indemnify the purchasers against certain losses resulting from our breach of any of our representations, warranties, or
covenants under agreements with the purchasers as well as under certain other circumstances described in the securities purchase agreement.
Fees
and Expenses
We
have agreed to pay the placement agent upon the closing of this offering a cash fee equal to 8% of the aggregate purchase price of the
securities offered under this prospectus supplement and accompanying prospectus. In addition, we have agreed to pay additional compensation
in the form of warrants to purchase 8% of the Class A Common Shares to be sold to the purchasers (or 174,249 Class A Common Shares assuming
the maximum offering is completed) at an exercise price of $1.82 per share. Under the placement agent agreement, the placement agent
is also entitled to additional tail compensation for any financings consummated within the twelve month period following the closing
date of this offering to the extent that such financing is provided to us by investors that the placement agent had introduced to us.
The
warrant issuable to the placement agent shall expire thirty-six (36) months after the warrants are issued and shall have no anti-dilution
protection other than adjustments based on stock splits, stock dividends, combinations of shares and similar recapitalization transactions.
Pursuant to FINRA Rule 5110(e)(1), with limited exceptions, neither the placement agent warrants nor any of the Class A Common Shares
issued upon exercise of the placement agent warrants shall 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 commencement of sales in this offering.
Because
there is no minimum offering amount in this offering, the actual total placement agent fees are not presently determinable.
We
are obligated to reimburse the placement agent for expenses incurred by it in connection with the offering, not to exceed $40,000.
We
have agreed to indemnify the placement agent and certain other persons against certain liabilities, including liabilities under the Securities
Act of 1933, as amended. We also have agreed to contribute to payments the placement agent may be required to make in respect of such
liabilities.
After
deducting fees due to the placement agent and our estimated offering expenses, we expect the net proceeds from this offering to be approximately
$3.4 million assuming completion of the maximum offering.
Delivery
of Class A Common Shares
Delivery
of our Class A Common Shares issued and sold in this offering will occur on or before July 19, 2021.
LEGAL
MATTERS
Certain
legal matters relating to the offering of Class A Common Shares under this prospectus supplement will be passed upon for us by Campbells
with respect to matters of British Virgin Islands law and by Kaufman & Canoles, P.C., Richmond, Virginia, with respect to matters
of U.S. law. Certain legal matters in connection with this offering will be passed upon for the placement agent by Schiff Hardin LLP,
Washington, D.C., with respect to U.S. law.
EXPERTS
The
consolidated financial statements of our Company for the years ended June 30, 2020 and 2019 appearing in our annual report on Form 20-F
for the fiscal years ended June 30, 2020 have been audited by Friedman LLP, independent registered public accounting firm, as set forth
in the reports thereon included therein and incorporated herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given on the authority of such firm as an expert in accounting and auditing.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
All
documents filed by the registrant after the date of filing the initial registration statement on Form F-3 of which this prospectus forms
a part and prior to the effectiveness of such registration statement pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934 shall be deemed to be incorporated by reference into this prospectus and to be part hereof from the date of filing
of such documents. In addition, the documents we are incorporating by reference as of the date hereof are as follows:
(1)
Our Annual Report on Form 20-F for the year ended June 30, 2020, filed on October 30, 2020;
(2)
Our Report on Form 6-K filed on January 15, 2021, January 19, 2021, January 20, 2021, March 23, 2021, April 4, 2021, May 19, 2021, and
June 4, 2021;
(3)
All other reports filed by the Registrant pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered
by the Annual Report on Form 20-F referred to in the paragraph above;
(4)
The description of the Class A Common Shares, $0.002 par value per share, contained in the Registrant’s registration statement
on Form F-3 filed with the SEC on February 4, 2019 (File Number 333-229505), and declared effective by the SEC on February 13, 2019;
and
(5)
The description of our 2017 Share Incentive Plan in our Registration Statement on Form S-8 (File 333-226985) filed pursuant to Rule 428
of the Securities Act on August 23, 2018.
Any
statement contained in a document we incorporate by reference will be modified or superseded for all purposes to the extent that a statement
contained in this prospectus (or in any other document that is subsequently filed with the Securities and Exchange Commission and incorporated
by reference herein prior to the termination of this offering) modifies or is contrary to that previous statement. Any statement so modified
or superseded will not be deemed a part of this prospectus except as so modified or superseded.
You
may obtain a copy of these filings, without charge, by writing or calling us at:
Dogness
(International) Corporation
No.
16 N Dongke Road, Tongsha Industrial Zone,
Dongguan,
Guangdong, People’s Republic of China.
+86-769-8875-3300
Attn:
Investor Relations
You
should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with different information. You should not assume that the information in this prospectus or any
prospectus supplement is accurate as of any date other than the date on the front page of those documents.
WHERE
YOU CAN FIND MORE INFORMATION
We
have filed a registration statement with the Securities and Exchange Commission under the Securities Act of 1933, as amended, with respect
to the Class A Common Shares offered by this prospectus. This prospectus is part of that registration statement and does not contain
all the information included in the registration statement.
For
further information with respect to our Class A Common Shares and us, you should refer to the registration statement, its exhibits and
the material incorporated by reference therein. Portions of the exhibits have been omitted as permitted by the rules and regulations
of the Securities and Exchange Commission. Statements made in this prospectus as to the contents of any contract, agreement or other
document referred to are not necessarily complete. In each instance, we refer you to the copy of the contracts or other documents filed
as an exhibit to the registration statement, and these statements are hereby qualified in their entirety by reference to the contract
or document.
The
registration statement may be inspected and copied at the public reference facilities maintained by the Securities and Exchange Commission
at Room 1024, Judiciary Plaza, 100 F Street, N.E., Washington, D.C. 20549 and the Regional Offices at the Commission located in the Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and at 233 Broadway, New York, New York 10279. Copies of those
filings can be obtained from the Commission’s Public Reference Section, Judiciary Plaza, 100 F Fifth Street, N.E., Washington,
D.C. 20549 at prescribed rates and may also be obtained from the web site that the Securities and Exchange Commission maintains at http://www.sec.gov.
You may also call the Commission at 1-800-SEC-0330 for more information. We file annual, quarterly and current reports and other information
with the Securities and Exchange Commission. You may read and copy any reports, statements or other information on file at the Commission’s
public reference room in Washington, D.C. You can request copies of those documents upon payment of a duplicating fee, by writing to
the Securities and Exchange Commission.
DISCLOSURE
OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES LAW VIOLATIONS
British
Virgin Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers
and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,
such as to provide indemnification against civil fraud or the consequences of committing a crime. Under our memorandum and articles of
association, we may indemnify our directors, officers and liquidators against all expenses, including legal fees, and against all judgments,
fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigative proceedings
to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be
entitled to indemnification, these persons must have acted honestly and in good faith with a view to our best interest and, in the case
of criminal proceedings, they must have had no reasonable cause to believe their conduct was unlawful.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us
pursuant to the foregoing provisions, we have been informed that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
DOGNESS
(INTERNATIONAL) CORPORATION
$88,000,000
Class
A Common Shares, Share Purchase Contracts, Share Purchase Units,
Warrants,
Debt Securities, Rights and Units
We
may offer and sell, from time to time in one or more offerings on terms we may determine at the time of offering, any combination of
Class A Common Shares, warrants, debt securities, rights, share purchase contracts, share purchase units or units having an aggregate
initial offering price of up to $88,000,000.
We
will provide the specific terms of these securities in supplements to this prospectus. The prospectus supplement may also add, update
or change information in this prospectus. Before you invest, we urge you to read carefully this prospectus and any prospectus supplement,
as well as the documents incorporated by reference or deemed to be incorporated by reference into this prospectus.
These
securities may be offered and sold in the same offering or in separate offerings; to or through underwriters, dealers, and agents; or
directly to purchasers. The names of any underwriters, dealers, or agents involved in the sale of our securities, their compensation
and any over-allotment options held by them will be described in the applicable prospectus supplement. For a more complete description
of the plan of distribution of these securities, see the section entitled “Plan of Distribution” beginning on page 25 of
this prospectus.
Our
Class A Common Shares are listed on the NASDAQ Global Market under the symbol “DOGZ”. On February 1, 2019, the closing sale
price of our Common Shares as reported by the NASDAQ Global Market was $3.90. We have not offered any securities pursuant to General
Instruction I.B.5 of Form F-3 during the prior 12 calendar month period that ends on and includes the date of this prospectus. We will
provide information in any applicable prospectus supplement regarding any listing of securities other than our Common Shares on any securities
exchange.
This
prospectus may not be used to offer or sell our securities unless accompanied by a prospectus supplement. The information contained or
incorporated in this prospectus or in any prospectus supplement is accurate only as of the date of this prospectus, or such prospectus
supplement, as applicable, regardless of the time of delivery of this prospectus or any sale of our securities.
Investing
in our securities being offered pursuant to this prospectus involves a high degree of risk. You should carefully read and consider the
risk factors beginning on page 7 of this prospectus and in the applicable prospectus supplement before you make your investment decision.
Neither
the Securities and Exchange Commission, British Virgin Islands, 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 February 13, 2019
Table
of Contents
You
should rely only on the information contained or incorporated by reference in this prospectus or any prospectus supplement. We have not
authorized any person to provide you with different or additional information. If anyone provides you with different or inconsistent
information, you should not rely on it. This prospectus is not an offer to sell securities, and it is not soliciting an offer to buy
securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus
or any prospectus supplement, as well as information we have previously filed with the SEC and incorporated by reference, is accurate
as of the date on the front of those documents only. Our business, financial condition, results of operations and prospects may have
changed since those dates.
Prospectus
Summary
This
prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (“SEC”) using a
shelf registration process. Under this shelf registration process, we may offer from time to time, in one or more offerings, securities
having an aggregate initial offering price of up to $88,000,000 (or its equivalent in foreign or composite currencies). This prospectus
provides you with a general description of the securities that may be offered. Each time we offer securities under this shelf registration
statement, we will provide you with a prospectus supplement that describes the specific amounts, prices and terms of the securities being
offered. The prospectus supplement also may add, update or change information contained in this prospectus. You should read carefully
both this prospectus and any prospectus supplement together with additional information described below under the caption “Where
You Can Find More Information,” before making an investment decision. We have incorporated exhibits into this registration statement.
You should read the exhibits carefully for provisions that may be important to you.
You
should rely only on the information contained or incorporated by reference in this prospectus or any prospectus supplement. We have not
authorized any person to provide you with different or additional information. If anyone provides you with different or inconsistent
information, you should not rely on it. This prospectus is not an offer to sell securities, and it is not soliciting an offer to buy
securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus
or any prospectus supplement, as well as information we have previously filed with the SEC and incorporated by reference, is accurate
as of the date on the front of those documents only. Our business, financial condition, results of operations and prospects may have
changed since those dates.
We
may sell securities through underwriters or dealers, through agents, directly to purchasers or through a combination of these methods.
We and our agents reserve the sole right to accept or reject, in whole or in part, any proposed purchase of securities. The prospectus
supplement, which we will provide to you each time we offer securities, will set forth the names of any underwriters, agents or others
involved in the sale of securities and any applicable fee, commission or discount arrangements with them. See the information described
below under the heading “Plan of Distribution.”
Except
where the context otherwise requires and for purposes of this prospectus only, “we”, “us”, “our company”,
“Company”, “our”, “Dogness” and “DOGZ” refer to
|
●
|
Dogness
(International) Corporation, a British Virgin Islands business company (“Dogness” when individually referenced), which
is the parent holding company issuing securities hereby);
|
|
|
|
|
●
|
Jiasheng
Enterprise (Hongkong) Co., Limited, a Hong Kong company (“HK Jiasheng” when individually referenced), which is a wholly
owned subsidiary of Dogness;
|
|
|
|
|
●
|
Dogness
(Hongkong) Pet’s Products Co., Limited, a Hong Kong company (“HK Dogness” when individually referenced), which
is a wholly owned subsidiary of Dogness;
|
|
|
|
|
●
|
Dogness
Intelligent Technology (Dongguan) Co., Ltd., a PRC company (“Dongguan Dogness”), which is a wholly owned subsidiary of
HK Dogness;
|
|
|
|
|
●
|
Dongguan
Jiasheng Enterprise Co., Ltd., a PRC company (“Dongguan Jiasheng”), which is a wholly owned subsidiary of Dongguan Dogness;
|
|
|
|
|
●
|
Dogness
Group LLC (“Dogness Group”), a Delaware limited company, which is a wholly owned subsidiary of Dogness Overseas; and
|
|
|
|
|
●
|
Dogness
Overseas Ltd (“Dogness Overseas”), a British Virgin Islands business company, which is owned by Dogness.
|
Our
Company
Overview
Technology
can bring pets and their caregivers closer together. At Dogness we combine our research and development expertise with customer feedback
to make products that improve pets’ lives. We create and manufacture fun, useful and high-quality products for everyone to experience.
We believe that high technology pet products must be accessible and reliable to capture pet lovers’ imagination and to enhance
their pets’ lives.
Dogness
has been making the highest quality collars, harnesses, and traditional and retractable leashes since 2003, featuring stylish design
and rugged engineering. Beginning with smart collars and harnesses in 2016, based on the belief that internet-connected products could
improve the lives of pets and their caregivers, Dogness developed a suite of smart products, moving past these first products into smart
feeders, fountains, treat dispensers and robots to interact with pets.
Dogness
focuses on connected pet care, to link pets and pet caregivers and ultimately to integrate the “Smart Pet Ecosystem” into
a single cohesive platform that integrates smart technology into pets’ lives. The Smart Pet Ecosystem has four major areas: smart
pet technology, pet care, leashes and collars, and pet health and wellness.
Smart
Pet Technology
Through
a single platform, the Dogness mobile app, the Company’s smart products allow pet owners to remotely see, hear, speak, feed, play,
and interact with their pets in different ways. We accomplish all of this with a tool the owner likely already has, a smart phone. The
Dogness app is available for both Android and iOS and communicates with the smart product anywhere the phone and smart product both have
wifi or cellular service. If your dog will listen to you from across the room, you can tell her to roll over from around the world
Dogness
Smart Wearables: Our smart wearable collars and harnesses feature integrated electronics, which allows us to pair high quality collars
with a lightweight smart component and LED lights. We have focused on the important details for dog owners, allowing owners to locate
their pets, direct their pets’ movements, communicate with their dogs, provide tailored instantaneous feedback to problem barking
and keep track of exercise and other biodata.
Dogness
Smart iPet Robot: Pet owners will be able to see their pets through a camera, hear their pets through a built-in microphone, interact
with their pets by feeding them treats, and play with their pets through an interactive laser pointer. Pet owners have full control over
the 360-degree mobility of the robot through the Dogness app and can securely take and save pictures and videos of their dogs.
Dogness
Mini Treat Robot: Space-conscious pet owners can see their pets through a stationary tilting camera that securely records photo and
video, hear their pets through a built-in microphone, interact with their pets by feeding them treats, and play with them through an
interactive laser pointer.
Dogness
Smart CAM Feeder: Pet owners can now ensure that their pets are well-fed and on-schedule. Able to hold around 6.5 pounds of dry food,
the smart feeder helps pet owners ensure the health of their pets, even when away from home. Pet owners can see their pets’ eating
habits night and day through a built-in camera with night vision and call their pets to the feeder through a voice recording that can
be programmed to be played at meal times.
Dogness
Smart Fountain: The smart fountain ensures that pets stay hydrated with a source of clean filtered water from a patented filtering
technology. Additional features include an oxygenating, free-falling, recirculating water stream for optimal freshness, the ability to
increase or decrease the flow of water, a replaceable carbon water filter and a nano filter to maintain water freshness, a submersible
pump for quiet operation, dishwasher-safe material, and an easily assembled and disassembled design.
Dogness
Smart CAM Treater: Allows pet owners to see their pets night and day through a 160-degree full HD camera with night vision, hear
their pets through a built-in microphone, interact with their pets by speaking to them through a built-in speaker, and play with their
pets by tossing them treats.
Pet
Care
Our
pet care products currently focus on high quality pet shampoos. We launched these shampoo products in August 2018.
We
have two lines of shampoos, which are focused on and tailored to Chinese online and offline consumption. Our One on One Service line
is focused on consumer purchasers and consists of dog and cat shampoo products that feature natural plant and amino acid composition.
In addition to universal-purpose products, we have also developed seven breed-tailored shampoo products for golden retrievers, poodles,
huskies, bulldogs, border collies and corgis. Our Professional Bathing & Spa line is focused on professional purchasers, like dog
and cat groomers. These products consist of bathing products, hair conditioners and essential oil products.
Leashes
and Collars
Traditional
Product Lines: We produce collars, harnesses and leashes in seven main series (Classic, Elegance, Luxury, LED, Holiday, Special Function,
and Cat series). Given the choices available to customers, we currently manufacture between 500 and 600 traditional products and can
add additional options to meet customer preferences. Our traditional product lines use leather, nylon, Teflon-coated fabrics and other
materials to suit consumer preferences. Not only do we produce these products; we also design fabric patterns and invent improved components
such as a comfort curved buckle for collars and locking closing mechanism for leashes.
Retractable
Leashes: In addition to our newest smart products, we have devoted significant effort to designing and manufacturing some of the
finest retractable leashes available. Retractable leashes balance freedom for the dog with control for the owner. If used well, a retractable
leash promotes good communication between the two, as the dog has exactly as much room to roam as the owner permits, and this amount
can be adjusted to suit the environment and circumstances. Dogness also offers an updated retractable leash to enhance the pet walking
experience. The new leash allows pet owners to attach Dogness accessories to their retractable leashes, which currently include an LED
light for better visibility in low light settings; a convenience box to store items such as doggie bags, treats, or keys; and a Bluetooth
speaker to listen to music or answer calls.
Other
Products: In addition to collars, leashes and harnesses, we also produce lanyards for use by humans and ornaments that attach to
collars. As to the lanyards, we produce such lanyards using our fabric weaving machines. Because we have our production in-house, we
can design lanyards that match a customer’s need, in terms of color, size, quantity and pattern. Our hanging ornament series uses
high-quality electroplating techniques to create fashionable accents for pet collars. We make a variety of patterns in bright and vibrant
colors, as well as custom bells for cat collars.
Pet
Health and Wellness
One
of our new research areas is pet-focused health and wellness products. While we do not currently offer these products for sale, we are
currently developing supplements and nutrition products in consultation with veterinarians and pharmacists and anticipate introducing
these products in the near term.
Operations
Dogness
has marketing and sales networks all over the world and has businesses in Dallas, Dongguan, Hong Kong and Zhangzhou. In addition, Dogness
is the process of registering an office in Tokyo. Senior management, R&D and production, marketing, customer service and finance
operate from Dogness’ headquarters in Dongguan, Guangdong Province, which also serves as the manufacturing base for smart products
and dog leashes. Dogness Group LLC in Dallas, Texas, USA serves as the sales and service center for all international markets and R&D
center for pet health and wellness. The company’s factory in Zhangzhou, Fujian serves as a material production base, responsible
for sample dyeing, ribbon dyeing and electroplating. One of Dogness’ competitive advantages comes from integrating the whole industrial
chain, including retraction ropes, textiles, printing and dyeing, mold development, and hardware and plastics. In addition, Dogness’
subsidiaries in the United States and Japan have R&D and design centers for pet smart products, forming a complete supply chain system
with manufacturing bases in China. We benefit from vertically integrated manufacturing operations, which allow us to design, machine
and assemble the vast majority of our products in house, so we can easily incorporate improvements in design.
Intellectual
Property
From
2015 to 2017, Dogness has owned over 120 approved and pending patents. Unique patents such as switches, webbing, retractable leashes
and buckles reflect the uniqueness and innovation of Dogness. After listing on NASDAQ in 2017, Dogness has continued to invest in product
research and development. In 2018, Dogness won four international patents in the pet smart category and has more than 20 new patents
pending.
General
Description of the Securities We May Offer
We
may offer our Class A Common Shares, share purchase contracts, share purchase units, warrants, debt securities, rights or units, with
a total value of up to $88,000,000 from time to time under this prospectus at prices and on terms to be determined by our board of directors
and based on market conditions at the time of any offering. This prospectus provides you with a general description of the securities
we may offer. Each time we offer a type or series of securities under this prospectus, we will provide a prospectus supplement that will
describe the specific amounts, prices and other important terms of the securities, including, to the extent applicable:
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Designation
or classification;
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Aggregate
offering price;
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Rates
and times of payment of dividends, if any;
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Redemption,
conversion, exercise and exchange terms, if any;
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Restrictive
covenants, if any;
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Voting
or other rights, if any;
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Conversion
prices, if any; and
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Material
U.S. federal income tax considerations.
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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 documents we have incorporated by reference. However, no prospectus supplement or free
writing prospectus will offer a security that is not registered and described in this prospectus at the time of the effectiveness of
the registration statement of which this prospectus is a part.
Risk
Factors
Before
making an investment decision, you should carefully consider the risks described under “Risk Factors” in the applicable prospectus
supplement and in our then most recent Annual Report on Form 20-F, or included in any Annual Report on Form 20-F filed with the SEC after
the date of this prospectus or Reports on Form 6-K furnished to the SEC after the date of this prospectus, together with all of the other
information appearing in this prospectus or incorporated by reference into this prospectus and any applicable prospectus supplement,
in light of your particular investment objectives and financial circumstances. Please see “Where You Can Find More Information”
on how you can view our SEC reports and other filings. Our business, financial condition or 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. When we offer and sell any securities pursuant to a prospectus supplement, we may include additional
risk factors that you should carefully consider.
The
risks and uncertainties described in this prospectus, any applicable prospectus supplement, any related free writing prospectus and any
document incorporated by reference into this prospectus are not the only ones that we face. Additional risks and uncertainties that we
do not presently know about or that we currently believe are not material may also adversely affect our business. If any of the risks
and uncertainties described in this prospectus, any applicable prospectus supplement, any related free writing prospectus and any document
incorporated by reference into this prospectus actually occur, our business, financial condition and results of operations could be materially
and adversely affected. The value of our securities could decline and you may lose some or all of your investment if one or more of these
risks and uncertainties develop into actual events. Keep these risk factors in mind when you read forward-looking statements contained
in this prospectus, any applicable prospectus supplement, any related free writing prospectus and any document incorporated by reference
into this prospectus.
Special
Note Regarding Forward-Looking Statements
This
prospectus, each prospectus supplement and the information incorporated by reference in this prospectus and each prospectus supplement
contain certain statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words “anticipate,” “expect,” “believe,”
“goal,” “plan,” “intend,” “estimate,” “may,” “will,” and similar
expressions and variations thereof are intended to identify forward-looking statements, but are not the exclusive means of identifying
such statements. Any statements regarding the intent, belief or current expectations of the Company and management that are subject to
known and unknown risks, uncertainties and assumptions are considered forward-looking statements. You are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially
from those projected in the forward-looking statements.
Because
forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should
not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking
statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements.
Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC, we
do not plan to publicly update or revise any forward-looking statements contained herein after we distribute this prospectus, whether
as a result of any new information, future events or otherwise.
Capitalization
and Indebtedness
The
table below sets forth our capitalization as of June 30, 2018.
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As of June 30, 2018
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Short-term debt (including current maturities of long term loans and debt)
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$
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8,843,158
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Long-term loans
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-
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Total shareholders’ equity
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60,739,532
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Total liabilities and shareholders’ equity
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$
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69,582,690
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Market
for our Shares
Our
Common Shares have been listed on the NASDAQ Global Market since December 18, 2017 under the symbol “DOGZ.” The table below
shows, for the periods indicated, the high and low market prices for our shares.
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Market Price Per Share
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High
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Low
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2017
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$
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6.40
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$
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5.49
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Fourth quarter
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$
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6.40
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$
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5.49
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2018
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$
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5.8499
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$
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1.77
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First quarter
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$
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5.8499
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$
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3.551
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Second quarter
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$
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4.95
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$
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3.59
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Third quarter
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$
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4.445
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$
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2.2445
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July
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$
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4.445
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$
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2.50
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August
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$
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3.633
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$
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2.70
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September
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$
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2.9828
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$
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2.2445
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Fourth quarter
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$
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4.2491
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$
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1.77
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October
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$
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2.6898
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$
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1.77
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November
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$
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3.49
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$
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1.9565
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December
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$
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4.2491
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$
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3.15
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2019 (through February 1, 2019)
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$
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4.14
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$
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3.41
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First quarter (through February 1, 2019)
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$
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4.14
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$
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3.41
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January
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$
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4.14
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$
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3.41
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February (through February 1, 2019)
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$
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4.0899
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$
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3.80
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Ratio
of Earnings to Fixed Charges
Our
ratio of earnings to fixed charges for each of the five (5) most recently completed fiscal years and any required interim periods will
each be specified in a prospectus supplement or in a document we file with the SEC and incorporate by reference pertaining to the issuance,
if any, by us of debt securities in the future.
Use
of Proceeds
Except
as otherwise provided in a prospectus supplement, we expect to use the net proceeds from the sale of securities offered pursuant to this
prospectus for general corporate purposes, including for our research and development needs for current and future products, expansion
of marketing efforts, and possible acquisitions of complementary assets or businesses. When a particular series of securities is offered,
the prospectus supplement relating to that offering will set forth our intended use of the net proceeds received from the sale of those
securities.
Description
of Share Capital
Dogness
was incorporated on July 11, 2016 under the BVI Companies Act, 2004 as a company limited by shares. Our company has 100,0000,000 authorized
shares of US$0.002 par value each, consisting of (a) 90,931,000 authorized Class A Common Shares, of which 16,844,631 Class A
Common Shares are issued and outstanding as of February 4, 2019, (b) 9,069,000 authorized Class B Common Shares, all of which are issued
and outstanding. Mr. Chen, through Fine victory holding company Limited, is the only holder of Class B Common Shares. Our Class B Common
Shares have three votes per share, and our Class A Common Shares have one vote per share; however, Class A and Class B Common Shares
have identical economic rights.
Common
Shares
General
All
of our outstanding Common Shares are fully paid and non-assessable. Our Common Shares are issued in registered form and are issued when
registered in our register of members. Our shareholders who are non-residents of the British Virgin Islands may freely hold and vote
their Common Shares. Our Memorandum and Articles of Association do not permit us to issue bearer shares. As of February 4, 2019, the
Company had an aggregate of 25,913,631 Common Shares outstanding, consisting of 16,844,631 Class A and 9,069,000 Class
B Common Shares.
Listing
Our
Common Shares are listed on The NASDAQ Global Market under the symbol “DOGZ.”
Transfer
Agent and Registrar
The
transfer agent and registrar for our Class A Common Shares is TranShare Corporation, 15500 Roosevelt Boulevard, Suite 301, Clearwater,
FL 33760.
Distributions
The
holders of our Common Shares are entitled to such dividends as may be declared by our board of directors subject to the BVI Business
Companies Act.
Voting
rights
Any
action required or permitted to be taken by the shareholders must be effected at a duly called annual or special meeting of the shareholders
entitled to vote on such action and may be effected by a resolution in writing. At each general meeting, each Class A Holder who is present
in person or by proxy (or, in the case of a shareholder being a corporation, by its duly authorized representative) will have one vote
for each Class A Common Share which such shareholder holds and each Class B Holder who is present in person or by proxy (or, in the case
of a shareholder being a corporation, by its duly authorized representative) will have three votes for each Class B Common Share which
such shareholder holds.
Election
of directors
Delaware
law permits cumulative voting for the election of directors only if expressly authorized in the certificate of incorporation. The laws
of the British Virgin Islands, however, do not specifically prohibit or restrict the creation of cumulative voting rights for the election
of our directors. Cumulative voting is not a concept that is accepted as a common practice in the British Virgin Islands, and we have
made no provisions in our Memorandum and Articles of Association to allow cumulative voting for elections of directors.
Warrants
On
December 18, 2017, we completed an initial public offering of 10,913,631 Class A Common Shares. The offering was completed at an issuance
price of $5.00 per share. Prior to the offering, the Company had 15,000,000 issued and outstanding shares, and after the offering, the
Company had 25,913,631 issued and outstanding shares. The Company issued to the placement agent in the initial public offering,
warrants to purchase up to a total of 545,681 Common Shares for an exercise price of $6.25 per share. The placement agent’s warrants
have a term of three years.
Description
of Warrants
The
following description, together with the additional information we may include in any applicable prospectus supplements, summarizes the
material terms and provisions of the warrants that we may offer under this prospectus and the related warrant agreements and warrant
certificates. While the terms summarized below will apply generally to any warrants that we may offer under this prospectus, we will
describe the particular terms of any series of warrants that we may offer in more detail in the applicable prospectus supplement. If
we indicate in the prospectus supplement, the terms of any warrants offered under that prospectus supplement may differ from the terms
described below. However, no prospectus supplement shall 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. Specific warrant agreements will
contain additional important terms and provisions and will be incorporated by reference as an exhibit to the registration statement that
includes this prospectus or as an exhibit to a report filed under the Exchange Act.
General
We
may issue warrants that entitle the holder to purchase Class A Common Shares, debt securities or any combination thereof. We may issue
warrants independently or together with Class A Common Shares, debt securities or any combination thereof, and the warrants may be attached
to or separate from these securities.
We
will describe in the applicable prospectus supplement the terms of the series of warrants, including:
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the
offering price and aggregate number of warrants offered;
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the
currency for which the warrants may be purchased, if not United States dollars;
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if
applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with
each such security or each principal amount of such security;
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if
applicable, the date on and after which the warrants and the related securities will be separately transferable;
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in
the case of warrants to purchase Class A Common Shares, the number of Class A Common Shares purchasable upon the exercise of one
warrant and the price at which these shares may be purchased upon such exercise;
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in
the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant
and the price at, and currency, if not United States dollars, in which, this principal amount of debt securities may be purchased
upon such exercise;
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the
effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants;
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the
terms of any rights to redeem or call the warrants;
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any
provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants;
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the
dates on which the right to exercise the warrants will commence and expire;
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the
manner in which the warrant agreement and warrants may be modified;
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federal
income tax consequences of holding or exercising the warrants;
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the
terms of the securities issuable upon exercise of the warrants; and
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any
other specific terms, preferences, rights or limitations of or restrictions on the warrants.
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Before
exercising their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon such exercise,
including:
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in
the case of warrants to purchase debt securities, the right to receive payments of principal of, or premium, if any, or interest
on, the debt securities purchasable upon exercise or to enforce covenants in the applicable indenture; or
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in
the case of warrants to purchase our Class A Common Shares, the right to receive dividends, if any, or, payments upon our liquidation,
dissolution or winding up or to exercise voting rights, if any.
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Exercise
of Warrants
Each
warrant will entitle the holder to purchase the securities that we specify in the applicable prospectus supplement at the exercise price
that we describe in the applicable prospectus supplement. Unless we otherwise specify in the applicable prospectus supplement, holders
of the warrants may exercise the warrants at any time up to the specified time on the expiration date that we set forth in the applicable
prospectus supplement. After the close of business on the expiration date, unexercised warrants will become void.
Holders
of the warrants may exercise the warrants by delivering the warrant certificate representing the warrants to be exercised together with
specified information, and paying the required amount to the warrant agent in immediately available funds, as provided in the applicable
prospectus supplement. We will set forth on the reverse side of the warrant certificate and in the applicable prospectus supplement the
information that the holder of the warrant will be required to deliver to the warrant agent.
Upon
receipt of the required payment and the warrant certificate properly completed and duly executed at the corporate trust office of the
warrant agent or any other office indicated in the applicable prospectus supplement, we will issue and deliver the securities purchasable
upon such exercise. If fewer than all of the warrants represented by the warrant certificate are exercised, then we will issue a new
warrant certificate 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.
Enforceability
of Rights by Holders of Warrants
Each
warrant agent will act solely as our agent under the applicable warrant agreement and will not assume any obligation or relationship
of agency or trust with any holder of any warrant. A single bank or trust company may act as warrant agent for more than one issue of
warrants. A warrant agent will have no duty or responsibility in case of any default by us under the applicable warrant agreement or
warrant, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder
of a warrant may, without the consent of the related warrant agent or the holder of any other warrant, enforce by appropriate legal action
its right to exercise, and receive the securities purchasable upon exercise of, its warrants.
Warrant
Agreement Will Not Be Qualified Under Trust Indenture Act
No
warrant agreement will be qualified as an indenture, and no warrant agent will be required to qualify as a trustee, under the Trust Indenture
Act. Therefore, holders of warrants issued under a warrant agreement will not have the protection of the Trust Indenture Act with respect
to their warrants.
Modification
of the Warrant Agreement
The
warrant agreements may permit us and the warrant agent, if any, without the consent of the warrant holders, to supplement or amend the
agreement in the following circumstances:
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to
cure any ambiguity;
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to
correct or supplement any provision which may be defective or inconsistent with any other provisions; or
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to
add new provisions regarding matters or questions that we and the warrant agent may deem necessary or desirable and which do not
adversely affect the interests of the warrant holders.
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Description
of Debt Securities
As
used in this prospectus, debt securities means the debentures, notes, bonds and other evidences of indebtedness that we may issue from
time to time. The debt securities may be either secured or unsecured and will either be senior debt securities or subordinated debt securities.
The debt securities will be issued under one or more separate indentures between us and a trustee to be specified in an accompanying
prospectus supplement. Senior debt securities will be issued under a new senior indenture. Subordinated debt securities will be issued
under a subordinated indenture. Together, the senior indentures and the subordinated indentures are sometimes referred to in this prospectus
as the indentures. This prospectus, together with the applicable prospectus supplement, will describe the terms of a particular series
of debt securities.
The
statements and descriptions in this prospectus or in any prospectus supplement regarding provisions of the indentures and debt securities
are summaries thereof, do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all of
the provisions of the indentures (and any amendments or supplements we may enter into from time to time which are permitted under each
indenture) and the debt securities, including the definitions therein of certain terms.
General
Unless
otherwise specified in a prospectus supplement, the debt securities will be direct unsecured obligations of the Company. The senior debt
securities will rank equally with any of our other senior and unsubordinated debt. The subordinated debt securities will be subordinate
and junior in right of payment to any senior indebtedness.
Unless
otherwise specified in a prospectus supplement, the indentures do not limit the aggregate principal amount of debt securities that we
may issue and provide that we may issue debt securities from time to time at par or at a discount, and in the case of the new indentures,
if any, in one or more series, with the same or various maturities. Unless indicated in a prospectus supplement, we may issue additional
debt securities of a particular series without the consent of the holders of the debt securities of such series outstanding at the time
of the issuance. Any such additional debt securities, together with all other outstanding debt securities of that series, will constitute
a single series of debt securities under the applicable indenture.
Each
prospectus supplement will describe the terms relating to the specific series of debt securities being offered. These terms will include
some or all of the following:
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the
title of the debt securities and whether they are subordinated debt securities or senior debt securities;
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any
limit on the aggregate principal amount of the debt securities;
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the
ability to issue additional debt securities of the same series;
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the
price or prices at which we will sell the debt securities;
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the
maturity date or dates of the debt securities on which principal will be payable;
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the
rate or rates of interest, if any, which may be fixed or variable, at which the debt securities will bear interest, or the method
of determining such rate or rates, if any;
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the
date or dates from which any interest will accrue or the method by which such date or dates will be determined;
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the
right, if any, to extend the interest payment periods and the duration of any such deferral period, including the maximum consecutive
period during which interest payment periods may be extended;
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whether
the amount of payments of principal of (and premium, if any) or interest on the debt securities may be determined with reference
to any index, formula or other method, such as one or more currencies, commodities, equity indices or other indices, and the manner
of determining the amount of such payments;
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the
dates on which we will pay interest on the debt securities and the regular record date for determining who is entitled to the interest
payable on any interest payment date;
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the
place or places where the principal of (and premium, if any) and interest on the debt securities will be payable, where any securities
may be surrendered for registration of transfer, exchange or conversion, as applicable, and notices and demands may be delivered
to or upon us pursuant to the indenture;
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if
we possess the option to do so, the periods within which and the prices at which we may redeem the debt securities, in whole or in
part, pursuant to optional redemption provisions, and the other terms and conditions of any such provisions;
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our
obligation, if any, to redeem, repay or purchase debt securities by making periodic payments to a sinking fund or through an analogous
provision or at the option of holders of the debt securities, and the period or periods within which and the price or prices at which
we will redeem, repay or purchase the debt securities, in whole or in part, pursuant to such obligation, and the other terms and
conditions of such obligation;
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the
denominations in which the debt securities will be issued, if other than denominations of $1,000 and integral multiples of $1,000;
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the
portion, or methods of determining the portion, of the principal amount of the debt securities which we must pay upon the acceleration
of the maturity of the debt securities in connection with an event of default (as described below), if other than the full principal
amount;
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the
currency, currencies or currency unit in which we will pay the principal of (and premium, if any) or interest, if any, on the debt
securities, if not United States dollars;
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provisions,
if any, granting special rights to holders of the debt securities upon the occurrence of specified events;
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any
deletions from, modifications of or additions to the events of default or our covenants with respect to the applicable series of
debt securities, and whether or not such events of default or covenants are consistent with those contained in the applicable indenture;
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any
limitation on our ability to incur debt, redeem shares, sell our assets or other restrictions;
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the
application, if any, of the terms of the indenture relating to defeasance and covenant defeasance (which terms are described below)
to the debt securities;
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whether
the subordination provisions summarized below or different subordination provisions will apply to the debt securities;
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the
terms, if any, upon which the holders may convert or exchange the debt securities into or for our Class A Common Shares or other
securities or property;
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whether
any of the debt securities will be issued in global form and, if so, the terms and conditions upon which global debt securities may
be exchanged for certificated debt securities;
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any
change in the right of the trustee or the requisite holders of debt securities to declare the principal amount thereof due and payable
because of an event of default;
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the
depository for global or certificated debt securities;
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any
special tax implications of the debt securities;
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any
foreign tax consequences applicable to the debt securities, including any debt securities denominated and made payable, as described
in the prospectus supplements, in foreign currencies, or units based on or related to foreign currencies;
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any
trustees, authenticating or paying agents, transfer agents or registrars, or other agents with respect to the debt securities;
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any
other terms of the debt securities not inconsistent with the provisions of the indentures, as amended or supplemented;
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to
whom any interest on any debt security shall be payable, if other than the person in whose name the security is registered, on the
record date for such interest, the extent to which, or the manner in which, any interest payable on a temporary global debt security
will be paid if other than in the manner provided in the applicable indenture;
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if
the principal of or any premium or interest on any debt securities of the series is to be payable in one or more currencies or currency
units other than as stated, the currency, currencies or currency units in which it shall be paid and the periods within and terms
and conditions upon which such election is to be made and the amounts payable (or the manner in which such amount shall be determined);
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the
portion of the principal amount of any securities of the series which shall be payable upon declaration of acceleration of the maturity
of the debt securities pursuant to the applicable indenture if other than the entire principal amount; and
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if
the principal amount payable at the stated maturity of any debt security of the series will not be determinable as of any one or
more dates prior to the stated maturity, the amount which shall be deemed to be the principal amount of such securities as of any
such date for any purpose, including the principal amount thereof which shall be due and payable upon any maturity other than the
stated maturity or which shall be deemed to be outstanding as of any date prior to the stated maturity (or, in any such case, the
manner in which such amount deemed to be the principal amount shall be determined).
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Unless
otherwise specified in the applicable prospectus supplement, the debt securities will not be listed on any securities exchange and will
be issued in fully-registered form without coupons.
Debt
securities may be sold at a substantial discount below their stated principal amount, bearing no interest or interest at a rate which
at the time of issuance is below market rates. The applicable prospectus supplement will describe the federal income tax consequences
and special considerations applicable to any such debt securities. The debt securities may also be issued as indexed securities or securities
denominated in foreign currencies, currency units or composite currencies, as described in more detail in the prospectus supplement relating
to any of the particular debt securities. The prospectus supplement relating to specific debt securities will also describe any special
considerations and certain additional tax considerations applicable to such debt securities.
Subordination
The
prospectus supplement relating to any offering of subordinated debt securities will describe the specific subordination provisions. However,
unless otherwise noted in the prospectus supplement, subordinated debt securities will be subordinate and junior in right of payment
to any existing senior indebtedness.
Unless
otherwise specified in the applicable prospectus supplement, under the subordinated indenture, “senior indebtedness” means
all amounts due on obligations in connection with any of the following, whether outstanding at the date of execution of the subordinated
indenture, or thereafter incurred or created:
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the
principal of (and premium, if any) and interest due on our indebtedness for borrowed money and indebtedness evidenced by bonds, notes,
debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
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all
of our capital lease obligations or attributable debt (as defined in the indentures) in respect of sale and leaseback transactions;
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all
obligations representing the balance deferred and unpaid of the purchase price of any property or services, which purchase price
is due more than six months after the date of placing such property in service or taking delivery and title thereto, except any such
balance that constitutes an accrued expense or trade payable or any similar obligation to trade creditors;
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all
of our obligations in respect of interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest
rate cap agreements and interest rate collar agreements; other agreements or arrangements designed to manage interest rates or interest
rate risk; and other agreements or arrangements designed to protect against fluctuations in currency exchange rates or commodity
prices;
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all
obligations of the types referred to above of other persons for the payment of which we are responsible or liable as obligor, guarantor
or otherwise; and
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all
obligations of the types referred to above of other persons secured by any lien on any property or asset of ours (whether or not
such obligation is assumed by us).
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However,
senior indebtedness does not include:
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any
indebtedness which expressly provides that such indebtedness shall not be senior in right of payment to the subordinated debt securities,
or that such indebtedness shall be subordinated to any other of our indebtedness, unless such indebtedness expressly provides that
such indebtedness shall be senior in right of payment to the subordinated debt securities;
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any
of our obligations to our subsidiaries or of a subsidiary guarantor to us or any other of our other subsidiaries;
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any
liability for federal, state, local or other taxes owed or owing by us or any subsidiary guarantor,
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any
accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or
instruments evidencing such liabilities);
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any
obligations with respect to any capital stock;
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any
indebtedness incurred in violation of the indenture, provided that indebtedness under our credit facilities will not cease to be
senior indebtedness under this bullet point if the lenders of such indebtedness obtained an officer’s certificate as of the
date of incurrence of such indebtedness to the effect that such indebtedness was permitted to be incurred by the indenture; and
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any
of our indebtedness in respect of the subordinated debt securities.
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Senior
indebtedness shall continue to be senior indebtedness and be entitled to the benefits of the subordination provisions irrespective of
any amendment, modification or waiver of any term of such senior indebtedness.
Unless
otherwise noted in an accompanying prospectus supplement, if we default in the payment of any principal of (or premium, if any) or interest
on any senior indebtedness when it becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or
otherwise, then, unless and until such default is cured or waived or ceases to exist, we will make no direct or indirect payment (in
cash, property, securities, by set-off or otherwise) in respect of the principal of or interest on the subordinated debt securities or
in respect of any redemption, retirement, purchase or other requisition of any of the subordinated debt securities.
In
the event of the acceleration of the maturity of any subordinated debt securities, the holders of all senior debt securities outstanding
at the time of such acceleration, subject to any security interest, will first be entitled to receive payment in full of all amounts
due on the senior debt securities before the holders of the subordinated debt securities will be entitled to receive any payment of principal
(and premium, if any) or interest on the subordinated debt securities.
If
any of the following events occurs, we will pay in full all senior indebtedness before we make any payment or distribution under the
subordinated debt securities, whether in cash, securities or other property, to any holder of subordinated debt securities:
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any
dissolution or winding-up or liquidation or reorganization of Dogness (International) Corporation, whether voluntary or involuntary
or in bankruptcy,
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insolvency
or receivership;
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any
general assignment by us for the benefit of creditors; or
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any
other marshaling of our assets or liabilities.
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In
such event, any payment or distribution under the subordinated debt securities, whether in cash, securities or other property, which
would otherwise (but for the subordination provisions) be payable or deliverable in respect of the subordinated debt securities, will
be paid or delivered directly to the holders of senior indebtedness in accordance with the priorities then existing among such holders
until all senior indebtedness has been paid in full. If any payment or distribution under the subordinated debt securities is received
by the trustee of any subordinated debt securities in contravention of any of the terms of the subordinated indenture and before all
the senior indebtedness has been paid in full, such payment or distribution will be received in trust for the benefit of, and paid over
or delivered and transferred to, the holders of the senior indebtedness at the time outstanding in accordance with the priorities then
existing among such holders for application to the payment of all senior indebtedness remaining unpaid to the extent necessary to pay
all such senior indebtedness in full.
The
subordinated indenture does not limit the issuance of additional senior indebtedness.
Events
of Default, Notice and Waiver
Unless
an accompanying prospectus supplement states otherwise, the following shall constitute “events of default” under the indentures
with respect to each series of debt securities:
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we
default for 30 consecutive days in the payment when due of interest on the debt securities;
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we
default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on the debt
securities;
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our
failure to observe or perform any other of our covenants or agreements with respect to such debt securities for 60 days after we
receive notice of such failure;
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certain
events of bankruptcy, insolvency or reorganization of the Dogness (International) Corporation; or
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any
other event of default provided with respect to securities of that series.
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Unless
an accompanying prospectus supplement states otherwise, if an event of default with respect to any debt securities of any series outstanding
under either of the indentures shall occur and be continuing, the trustee under such indenture or the holders of at least 25% (or at
least 10%, in respect of a remedy (other than acceleration) for certain events of default relating to the payment of dividends) in aggregate
principal amount of the debt securities of that series outstanding may declare, by notice as provided in the applicable indenture, the
principal amount (or such lesser amount as may be provided for in the debt securities of that series) of all the debt securities of that
series outstanding to be due and payable immediately; provided that, in the case of an event of default involving certain events in bankruptcy,
insolvency or reorganization, acceleration is automatic; and, provided further, that after such acceleration, but before a judgment or
decree based on acceleration, the holders of a majority in aggregate principal amount of the outstanding debt securities of that series
may, under certain circumstances, rescind and annul such acceleration if all events of default, other than the nonpayment of accelerated
principal, have been cured or waived. Upon the acceleration of the maturity of original issue discount securities, an amount less than
the principal amount thereof will become due and payable. Reference is made to the prospectus supplement relating to any original issue
discount securities for the particular provisions relating to acceleration of maturity thereof.
Any
past default under either indenture with respect to debt securities of any series, and any event of default arising therefrom, may be
waived by the holders of a majority in principal amount of all debt securities of such series outstanding under such indenture, except
in the case of (1) default in the payment of the principal of (or premium, if any) or interest on any debt securities of such series
or (2) certain events of default relating to the payment of dividends.
The
trustee is required within 90 days after the occurrence of a default (which is known to the trustee and is continuing), with respect
to the debt securities of any series (without regard to any grace period or notice requirements), to give to the holders of the debt
securities of such series notice of such default.
The
trustee, subject to its duties during default to act with the required standard of care, may require indemnification by the holders of
the debt securities of any series with respect to which a default has occurred before proceeding to exercise any right or power under
the indentures at the request of the holders of the debt securities of such series. Subject to such right of indemnification and to certain
other limitations, the holders of a majority in principal amount of the outstanding debt securities of any series under either indenture
may direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or
power conferred on the trustee with respect to the debt securities of such series, provided that such direction shall not be in conflict
with any rule of law or with the applicable indenture and the trustee may take any other action deemed proper by the trustee which is
not inconsistent with such direction.
No
holder of a debt security of any series may institute any action against us under either of the indentures (except actions for payment
of overdue principal of (and premium, if any) or interest on such debt security or for the conversion or exchange of such debt security
in accordance with its terms) unless (1) the holder has given to the trustee written notice of an event of default and of the continuance
thereof with respect to the debt securities of such series specifying an event of default, as required under the applicable indenture,
(2) the holders of at least 25% in aggregate principal amount of the debt securities of that series then outstanding under such indenture
shall have requested the trustee to institute such action and offered to the trustee indemnity reasonably satisfactory to it against
the costs, expenses and liabilities to be incurred in compliance with such request; (3) the trustee shall not have instituted such action
within 60 days of such request and (4) no direction inconsistent with such written request has been given to the trustee during such
60-day period by the holders of a majority in principal amount of the debt securities of that series. We are required to furnish annually
to the trustee statements as to our compliance with all conditions and covenants under each indenture.
Discharge,
Defeasance and Covenant Defeasance
We
may discharge or defease our obligations under the indenture as set forth below, unless otherwise indicated in the applicable prospectus
supplement.
We
may discharge certain obligations to holders of any series of debt securities issued under either the senior indenture or the subordinated
indenture which have not already been delivered to the trustee for cancellation by irrevocably depositing with the trustee money in an
amount sufficient to pay and discharge the entire indebtedness on such debt securities not previously delivered to the trustee for cancellation,
for principal and any premium and interest to the date of such deposit (in the case of debt securities which have become due and payable)
or to the stated maturity or redemption date, as the case may be, and we or, if applicable, any guarantor, have paid all other sums payable
under the applicable indenture.
If
indicated in the applicable prospectus supplement, we may elect either (1) to defease and be discharged from any and all obligations
with respect to the debt securities of or within any series (except in all cases as otherwise provided in the relevant indenture) (“legal
defeasance”) or (2) to be released from our obligations with respect to certain covenants applicable to the debt securities of
or within any series (“covenant defeasance”), upon the deposit with the relevant indenture trustee, in trust for such purpose,
of money and/or government obligations which through the payment of principal and interest in accordance with their terms will provide
money in an amount sufficient to pay the principal of (and premium, if any) or interest on such debt securities to maturity or redemption,
as the case may be, and any mandatory sinking fund or analogous payments thereon. As a condition to legal defeasance or covenant defeasance,
we must deliver to the trustee an opinion of counsel to the effect that the holders of such debt securities will not recognize income,
gain or loss for federal income tax purposes as a result of such legal defeasance or covenant defeasance and will be subject to federal
income tax on the same amounts and in the same manner and at the same times as would have been the case if such legal defeasance or covenant
defeasance had not occurred. Such opinion of counsel, in the case of legal defeasance under clause (i) above, must refer to and be based
upon a ruling of the Internal Revenue Service or a change in applicable federal income tax law occurring after the date of the relevant
indenture. In addition, in the case of either legal defeasance or covenant defeasance, we shall have delivered to the trustee (1) if
applicable, an officer’s certificate to the effect that the relevant debt securities exchange(s) have informed us that neither
such debt securities nor any other debt securities of the same series, if then listed on any securities exchange, will be delisted as
a result of such deposit and (2) an officer’s certificate and an opinion of counsel, each stating that all conditions precedent
with respect to such legal defeasance or covenant defeasance have been complied with.
We
may exercise our defeasance option with respect to such debt securities notwithstanding our prior exercise of our covenant defeasance
option.
Modification and Waiver
Under the indentures, unless an accompanying prospectus
supplement states otherwise, we and the applicable trustee may supplement the indentures for certain purposes which would not materially
adversely affect the interests or rights of the holders of debt securities of a series without the consent of those holders. We and the
applicable trustee may also modify the indentures or any supplemental indenture in a manner that affects the interests or rights of the
holders of debt securities with the consent of the holders of at least a majority in aggregate principal amount of the outstanding debt
securities of each affected series issued under the indenture. However, the indentures require the consent of each holder of debt securities
that would be affected by any modification which would:
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reduce
the principal amount of debt securities whose holders must consent to an amendment, supplement or waiver;
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reduce
the principal of or change the fixed maturity of any debt security or, except as provided in any prospectus supplement, alter or
waive any of the provisions with respect to the redemption of the debt securities;
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reduce
the rate of or change the time for payment of interest, including default interest, on any debt security;
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waive
a default or event of default in the payment of principal of or interest or premium, if any, on, the debt securities (except a rescission
of acceleration of the debt securities by the holders of at least a majority in aggregate principal amount of the then outstanding
debt securities and a waiver of the payment default that resulted from such acceleration);
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make
any debt security payable in money other than that stated in the debt securities;
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make
any change in the provisions of the applicable indenture relating to waivers of past defaults or the rights of holders of the debt
securities to receive payments of principal of, or interest or premium, if any, on, the debt securities;
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waive
a redemption payment with respect to any debt security (except as otherwise provided in the applicable prospectus supplement);
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except
in connection with an offer by us to purchase all debt securities, (1) waive certain events of default relating to the payment of
dividends or (2) amend certain covenants relating to the payment of dividends and the purchase or redemption of certain equity interests;
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make
any change to the subordination or ranking provisions of the indenture or the related definitions that adversely affect the rights
of any holder; or
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make
any change in the preceding amendment and waiver provisions.
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The
indentures permit the holders of at least a majority in aggregate principal amount of the outstanding debt securities of any series issued
under the indenture which is affected by the modification or amendment to waive our compliance with certain covenants contained in the
indentures.
Payment
and Paying Agents
Unless
otherwise indicated in the applicable prospectus supplement, payment of interest on a debt security on any interest payment date will
be made to the person in whose name a debt security is registered at the close of business on the record date for the interest.
Unless
otherwise indicated in the applicable prospectus supplement, principal, interest and premium on the debt securities of a particular series
will be payable at the office of such paying agent or paying agents as we may designate for such purpose from time to time. Notwithstanding
the foregoing, at our option, payment of any interest may be made by check mailed to the address of the person entitled thereto as such
address appears in the security register.
Unless
otherwise indicated in the applicable prospectus supplement, a paying agent designated by us will act as paying agent for payments with
respect to debt securities of each series. All paying agents initially designated by us for the debt securities of a particular series
will be named in the applicable prospectus supplement. We may at any time designate additional paying agents or rescind the designation
of any paying agent or approve a change in the office through which any paying agent acts, except that we will be required to maintain
a paying agent in each place of payment for the debt securities of a particular series.
All
moneys paid by us to a paying agent for the payment of the principal, interest or premium on any debt security which remain unclaimed
at the end of two years after such principal, interest or premium has become due and payable will be repaid to us upon request, and the
holder of such debt security thereafter may look only to us for payment thereof.
Denominations,
Registrations and Transfer
Unless
an accompanying prospectus supplement states otherwise, debt securities will be represented by one or more global certificates registered
in the name of a nominee for The Depository Trust Company, or DTC. In such case, each holder’s beneficial interest in the global
securities will be shown on the records of DTC and transfers of beneficial interests will only be effected through DTC’s records.
A
holder of debt securities may only exchange a beneficial interest in a global security for certificated securities registered in the
holder’s name if:
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we
deliver to the trustee notice from DTC that it is unwilling or unable to continue to act as depository or that it is no longer a
clearing agency registered under the Exchange Act and, in either case, a successor depositary is not appointed by us within 120 days
after the date of such notice from DTC;
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we
in our sole discretion determine that the debt securities (in whole but not in part) should be exchanged for definitive debt securities
and deliver a written notice to such effect to the trustee; or
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there
has occurred and is continuing a default or event of default with respect to the debt securities.
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If
debt securities are issued in certificated form, they will only be issued in the minimum denomination specified in the accompanying prospectus
supplement and integral multiples of such denomination. Transfers and exchanges of such debt securities will only be permitted in such
minimum denomination. Transfers of debt securities in certificated form may be registered at the trustee’s corporate office or
at the offices of any paying agent or trustee appointed by us under the indentures. Exchanges of debt securities for an equal aggregate
principal amount of debt securities in different denominations may also be made at such locations.
Governing
Law
The
indentures and debt securities will be governed by, and construed in accordance with, the laws of the State of New York, without regard
to its principles of conflicts of laws, except to the extent the Trust Indenture Act is applicable or as otherwise agreed to by the parties
thereto.
Trustee
The
trustee or trustees under the indentures will be named in any applicable prospectus supplement.
Conversion
or Exchange Rights
The
prospectus supplement will describe the terms, if any, on which a series of debt securities may be convertible into or exchangeable for
our Class A Common Shares or other debt securities. These terms will include provisions as to whether conversion or exchange is mandatory,
at the option of the holder or at our option. These provisions may allow or require the number of shares of our Class A Common Shares
or other securities to be received by the holders of such series of debt securities to be adjusted. Any such conversion or exchange will
comply with applicable British Virgin Islands law and our Memorandum and Articles of Association.
Description
of Units
We
may issue units comprising one or more of the other securities described in this prospectus 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 or occurrence.
The
applicable prospectus supplement may describe:
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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 for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and
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whether
the units will be issued in fully registered or global form.
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The
applicable prospectus supplement will describe the terms of any units. The preceding description and any description of units in the
applicable prospectus supplement does not purport to be complete and is subject to and is qualified in its entirety by reference to the
unit agreement and, if applicable, collateral arrangements and depository arrangements relating to such units.
Description
of Share Purchase Contracts and Share Purchase Units
We
may issue share purchase contracts, including contracts obligating holders to purchase from us, and obligating us to sell to the holders,
a specified number of Class A Common Shares or other securities registered hereunder at a future date or dates, which we refer to in
this prospectus as “share purchase contracts.” The price per share of the securities and the number of shares of the securities
may be fixed at the time the share purchase contracts are issued or may be determined by reference to a specific formula set forth in
the share purchase contracts.
The
share purchase contracts may be issued separately or as part of units consisting of a share purchase contract and debt securities, warrants,
other securities registered hereunder or debt obligations of third parties, including U.S. treasury securities, securing the holders’
obligations to purchase the securities under the share purchase contracts, which we refer to herein as “share purchase units.”
The share purchase contracts may require holders to secure their obligations under the share purchase contracts in a specified manner.
The share purchase contracts also may require us to make periodic payments to the holders of the share purchase units or vice versa,
and those payments may be unsecured or refunded on some basis.
The
share purchase contracts, and, if applicable, collateral or depositary arrangements, relating to the share purchase contracts or share
purchase units, will be filed with the SEC in connection with the offering of share purchase contracts or share purchase units. The prospectus
supplement relating to a particular issue of share purchase contracts or share purchase units will describe the terms of those share
purchase contracts or share purchase units, including the following:
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if
applicable, a discussion of material tax considerations; and
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any
other information we think is important about the share purchase contracts or the share purchase units.
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Description
of Rights
We
may issue rights to purchase Class A Common Shares that we may offer to our security holders. The rights may or may not be transferable
by the persons purchasing or receiving the rights. In connection with any rights offering, we may enter into a standby underwriting or
other arrangement with one or more underwriters or other persons pursuant to which such underwriters or other persons would purchase
any offered securities remaining unsubscribed for after such rights offering. Each series of rights will be issued under a separate rights
agent agreement to be entered into between us and a bank or trust company, as rights agent, that we will name in the applicable prospectus
supplement. The rights agent will act solely as our agent in connection with the rights and will not assume any obligation or relationship
of agency or trust for or with any holders of rights certificates or beneficial owners of rights.
The
prospectus supplement relating to any rights that we offer will include specific terms relating to the offering, including, among other
matters:
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the
date of determining the security holders entitled to the rights distribution;
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the
aggregate number of rights issued and the aggregate number of Class A Common Shares purchasable upon exercise of the rights;
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the
exercise price;
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the
conditions to completion of the rights offering;
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the
date on which the right to exercise the rights will commence and the date on which the rights will expire; and
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applicable
tax considerations.
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Each
right would entitle the holder of the rights to purchase for cash the principal amount of debt securities or Class A Common Shares at
the exercise price set forth in the applicable prospectus supplement. Rights may be exercised at any time up to the close of business
on the expiration date for the rights provided in the applicable prospectus supplement. After the close of business on the expiration
date, all unexercised rights will become void.
If
less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to persons
other than our security holders, to or through agents, underwriters or dealers or through a combination of such methods, including pursuant
to standby arrangements, as described in the applicable prospectus supplement.
Plan
of Distribution
We
may sell the securities described in this prospectus through underwriters or dealers, through agents, or directly to one or more purchasers
or through a combination of these methods. The applicable prospectus supplement will describe the terms of the offering of the securities,
including:
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the
name or names of any underwriters, if any, and if required, any dealers or agents, and the amount of securities underwritten or purchased
by each of them, if any;
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the
public offering price or purchase price of the securities from us and the net proceeds to us from the sale of the securities;
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any
underwriting discounts and other items constituting underwriters’ compensation;
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any
discounts or concessions allowed or re-allowed or paid to dealers; and
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any
securities exchange or market on which the securities may be listed.
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We
may distribute the securities from time to time in one or more transactions at:
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a
fixed price or prices, which may be changed;
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market
prices prevailing at the time of sale;
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varying
prices determined at the time of sale related to such prevailing market prices; or
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negotiated
prices.
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Only
underwriters named in the prospectus supplement will be underwriters of the securities offered by the prospectus supplement.
If
we use underwriters in the sale, the underwriters will either acquire the securities for their own account and may resell the securities
from time to time in one or more transactions at a fixed public offering price or at varying prices determined at the time of sale, or
sell the Shares on a “best efforts, minimum/maximum basis” when the underwriters agree to do their best to sell the securities
to the public. We may offer the securities to the public through underwriting syndicates represented by managing underwriters or by underwriters
without a syndicate. Any public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may change from
time to time.
If
we use a dealer in the sale of the securities being offered pursuant to this prospectus or any prospectus supplement, the securities
will be sold directly to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined
by the dealer at the time of resale.
Our
Class A Common Shares are listed on the NASDAQ Global Market. Unless otherwise specified in the related prospectus supplement, all securities
we offer, other than Common Shares, will be new issues of securities with no established trading market. Any underwriter may make a market
in these securities, but will not be obligated to do so and may discontinue any market making at any time without notice. We may apply
to list any series of warrants or other securities that we offer on an exchange, but we are not obligated to do so. Therefore, there
may not be liquidity or a trading market for any series of securities.
We
may sell the securities directly or through agents we designate from time to time. We will name any agent involved in the offering and
sale of securities and we will describe any commissions we may pay the agent in the applicable prospectus supplement.
We
may authorize agents or underwriters to solicit offers by institutional investors to purchase securities from us at the public offering
price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified
date in the future. We will describe the conditions to these contracts and the commissions we must pay for solicitation of these contracts
in the applicable prospectus supplement.
In
connection with the sale of the securities, underwriters, dealers or agents may receive compensation from us or from purchasers of the
securities for whom they act as agents in the form of discounts, concessions or commissions. Underwriters may sell the securities to
or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters
or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution
of the securities, and any institutional investors or others that purchase securities directly and then resell the securities, may be
deemed to be underwriters, and any discounts or commissions received by them from us and any profit on the resale of the securities by
them may be deemed to be underwriting discounts and commissions under the Securities Act.
We
may provide agents and underwriters with indemnification against particular civil liabilities, including liabilities under the Securities
Act, or contribution with respect to payments that the agents or underwriters may make with respect to such liabilities. Agents and underwriters
may engage in transactions with, or perform services for, us in the ordinary course of business.
In
addition, we may enter into derivative transactions with third parties (including the writing of options), or sell securities not covered
by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection
with such a transaction, the third parties may, pursuant to this prospectus and the applicable prospectus supplement, sell securities
covered by this prospectus and the applicable prospectus supplement. If so, the third party may use securities borrowed from us or others
to settle such sales and may use securities received from us to close out any related short positions. We may also loan or pledge securities
covered by this prospectus and the applicable prospectus supplement to third parties, who may sell the loaned securities or, in an event
of default in the case of a pledge, sell the pledged securities pursuant to this prospectus and the applicable prospectus supplement.
The third party in such sale transactions will be an underwriter and will be identified in the applicable prospectus supplement or in
a post-effective amendment.
To
facilitate an offering of a series of securities, persons participating in the offering may engage in transactions that stabilize, maintain,
or otherwise affect the market price of the securities. This may include over-allotments or short sales of the securities, which involves
the sale by persons participating in the offering of more securities than have been sold to them by us. In those circumstances, such
persons would cover such over-allotments or short positions by purchasing in the open market or by exercising the over-allotment option
granted to those persons. In addition, those persons may stabilize or maintain the price of the securities by bidding for or purchasing
securities in the open market or by imposing penalty bids, whereby selling concessions allowed to underwriters or dealers participating
in any such offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The effect
of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise
prevail in the open market. Such transactions, if commenced, may be discontinued at any time. We make no representation or prediction
as to the direction or magnitude of any effect that the transactions described above, if implemented, may have on the price of our securities.
Legal
Matters
Unless
otherwise indicated in the applicable prospectus supplement, the validity of the securities registered and certain legal matters as to
British Virgin Islands law in connection with this offering will be passed upon for us by Campbells, British Virgin Islands counsel to
our Company. Additional legal matters may be passed on for us, or any underwriters, dealers or agents, by counsel that we will name in
the applicable prospectus supplement.
Experts
The
consolidated financial statements of our Company appearing in our annual report on Form 20-F for the year ended June 30, 2017 and 2018
have been audited by Friedman LLP, independent registered public accounting firm, as set forth in the reports thereon included therein
and incorporated herein by reference.
Such
consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firms
as experts in accounting and auditing.
Enforceability
of Civil Liabilities Under United States Federal Securities Laws and Other Matters
We
are incorporated under the laws of the British Virgin Islands with limited liability. We are incorporated in the British Virgin Islands
because of certain benefits associated with being a British Virgin Islands business company, such as political and economic stability,
an effective judicial system, a favorable tax system, the absence of exchange control or currency restrictions and the availability of
professional and support services. However, the British Virgin Islands has a less developed body of securities laws as compared to the
United States and provides protections for investors to a lesser extent. In addition, British Virgin Islands companies may not have standing
to sue before the federal courts of the United States.
Substantially
all of our assets are located outside the United States. In addition, a majority of our directors and officers are nationals and/or residents
of countries other than the United States, and all or a substantial portion of such persons’ assets are located outside the United
States. As a result, it may be difficult for investors to effect service of process within the United States upon us or such persons
or to enforce against them or against us, judgments obtained in United States courts, including judgments predicated upon the civil liability
provisions of the securities laws of the United States or any state thereof.
We
have appointed CT Corporation System as our agent to receive service of process with respect to any action brought against us in the
United States District Court for the Southern District of New York under the federal securities laws of the United States or of any State
of the United States or any action brought against us in the Supreme Court of the State of New York in the County of New York under the
securities laws of the State of New York.
Yunnan
Kangsi Law Firm, our counsel as to Chinese law, has advised us that there is uncertainty as to whether the courts of China would (1)
recognize or enforce judgments of United States courts obtained against us or such persons predicated upon the civil liability provisions
of the securities laws of the United States or any state thereof, or (2) be competent to hear original actions brought in each respective
jurisdiction, against us or such persons predicated upon the securities laws of the United States or any state thereof.
Yunnan
Kangsi Law Firm has advised us that the recognition and enforcement of foreign judgments are provided for under the Chinese Civil Procedure
Law. Chinese courts may recognize and enforce foreign judgments in accordance with the requirements of the Chinese Civil Procedure Law
based either on treaties between China and the country where the judgment is made or in reciprocity between jurisdictions. China does
not have any treaties or other agreements with the British Virgin Islands or the United States that provide for the reciprocal recognition
and enforcement of foreign judgments. Notwithstanding the absence of a bilateral agreement with the United States, a provincial intermediate
court in China has recognized and enforced a US court judgment. As a result of the absence of treaties and recent changes in court rulings,
it is uncertain whether a Chinese court would enforce a judgment rendered by a court in either of these two countries.
We
have been advised by Campbells, our counsel as to British Virgin Islands law, that although there is no statutory enforcement in the
British Virgin Islands of judgments obtained in U.S. federal or state courts, the courts of the British Virgin Islands will recognize
such a foreign judgment and treat it as a cause of action in itself which may be sued upon as a debt at common law so that no retrial
of the issues would be necessary if fresh proceedings are brought in the British Virgin Islands to enforce that judgment, provided however
that such judgment: (i) is not in respect of penalties, fines, taxes or similar fiscal or revenue obligations of the Company; (ii) is
final and for a liquidated sum; (iii) was not obtained in a fraudulent manner; (iv) is not of a kind the enforcement of which is contrary
to the public policy in the British Virgin Islands; (v) is not contrary to the principles of natural justice; and (vi) provided that
the U.S. federal or state courts had jurisdiction in the matter and the Company either submitted to such jurisdiction or was resident
or carrying on business within such jurisdiction and was duly served with process. Non-money judgments from a foreign court are not directly
enforceable in the British Virgin Islands. However, it is possible for a non-money judgment from a foreign court to be indirectly enforced
by means of a claimant bringing an identical action in the courts of the British Virgin Islands in respect of which a non-money judgment
has been made by a foreign court. In appropriate circumstances, the courts of the British Virgin Islands may give effect to issues and
causes of action determined by the foreign court, such that those matters need not be retried.
Where
You Can Find More Information
We
are a reporting company and file annual, quarterly and current reports, proxy statements and other information with the SEC. This prospectus
does not contain all of the information set forth in the registration statement or the exhibits that are a part of the registration statement.
You may read and copy the registration statement and any document we file with the SEC at the public reference room maintained by the
SEC 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
. Our filings with the SEC are also available
to the public through the SEC’s Internet site at http://www.sec.gov.
Information
Incorporated by Reference
The
SEC allows us to “incorporate by reference” into this prospectus the information we file with them. The information we incorporate
by reference into this prospectus is an important part of this prospectus. Any statement in a document we have filed with the SEC prior
to the date of this prospectus and which is incorporated by reference into this prospectus will be considered to be modified or superseded
to the extent a statement contained in this prospectus or any other subsequently filed document that is incorporated by reference into
this prospectus modifies or supersedes that statement. The modified or superseded statement will not be considered to be a part of this
prospectus, except as modified or superseded.
We
incorporate by reference into this prospectus the information contained in the following documents that we have filed with the SEC pursuant
to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which is considered to be a part of this prospectus:
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our
Annual Report on Form 20-F for the year ended June 30, 2018, filed on October 30, 2018;
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our
Reports on Form 6-K filed on January 22, January 23 and February 1, 2019;
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the
description of the Common Shares, $0.002 par value per share, contained in the Registrant’s registration statement on Form
F-1 filed with the Commission on September 20, 2017 (File Number 333-220547) and declared effective by the Commission on December
07, 2017, and any amendment or report filed with the Commission for purposes of updating such description.
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In
addition, we may incorporate by reference into this prospectus our reports on Form 6-K filed after the date of this prospectus (and before
the time that all of the securities offered by this prospectus have been sold or de-registered) if we identify in the report that it
is being incorporated by reference in this prospectus.
Certain
statements in and portions of this prospectus update and replace information in the above listed documents incorporated by reference.
Likewise, statements in or portions of a future document incorporated by reference in this prospectus may update and replace statements
in and portions of this prospectus or the above listed documents.
We
also incorporate by reference all additional documents that we file with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act that are filed (i) after the filing date of the registration statement of which this prospectus is a part and prior to effectiveness
of that registration statement or (ii) after the effective date of the registration statement of which this prospectus is a part and
prior to the termination of the offering of securities offered pursuant to this prospectus. We are not, however, incorporating, in each
case, any documents or information that we are deemed to “furnish” and not file in accordance with SEC rules.
You
may obtain a copy of these filings by accessing them pursuant to the directions described above in the section titled “Where You
Can Find More Information.” You may also obtain a copy of these filings, without charge, by writing or calling us at:
Dogness
(International) Corporation
Tongsha
Industrial Estate, East District
Dongguan,
Guangdong 523217
People’s
Republic of China
Attention:
Investor Relations
$88,000,000
DOGNESS
(INTERNATIONAL) CORPORATION
Class
A Common Shares
Share
Purchase Contracts
Share
Purchase Units
Warrants
Debt
Securities
Rights
Units
PROSPECTUS
February
13, 2019
No
dealer, salesperson, or other person has been authorized to give any information or to make any representation not contained in this
prospectus, and, if given or made, such information and representation should not be relied upon as having been authorized by us. This
prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered by this prospectus
in any jurisdiction or to any person to whom it is unlawful to make such offer or solicitation. Neither the delivery of this prospectus
nor any sale made hereunder shall under any circumstances create an implication that there has been no change in the facts set forth
in this prospectus or in our affairs since the date hereof.
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