On February 4, 2016, China Ceramics Co. Ltd. (the “Company”), announced the pricing of public offering of its common shares (and common stock equivalents) with total gross proceeds of approximately $900,000 (the “Offering”). The net proceeds to the Company from this offering, before deducting the placement agent’s fees and expenses, are expected to be approximately $785,000. The Company intends to use the net proceeds from the offering to fund inventory, distribution expenses, vendor obligations outside of the PRC, as well as for general corporate and working capital purposes.
In connection with the Offering, the Company will issue 1,428,571 common shares at the price of $0.63 per share, with each common share coupled with a Class A Warrant (1,428,571 Class A Warrants in the aggregate) to purchase one common share and a Class B Warrant (1,428,571 Class B Warrants in the aggregate) to purchase one common share. The common shares, the Class A Warrants and the Class B Warrants were sold as units, but are immediately separable and will be issued separately. The Class A Warrants will have an exercise price of $0.63 per share and the Class B Warrants will have an exercise price of $0.78 per share. The Class A Warrants will be exercisable on or after the date of issuance and will terminate on the six-month anniversary of the date of issuance. The Class B Warrants will be exercisable on or after the date of issuance and will terminate on the five-year anniversary of the date of issuance.
In connection with the Offering, the Company entered into a Securities Purchase Agreement (the “SPA”) with an institutional investor. Dawson James Securities, Inc. acted as the Company’s exclusive placement agent, on a best efforts basis, in connection with the Offering. Pursuant to the terms and provisions of the Placement Agency Agreement by and between the Company and the Placement Agent, dated as of February 3, 2016 (the “PAA”), the Company paid the Placement Agent a cash placement fee equal to 8% of the gross proceeds of the Offering, or $71,999, plus a non-accountable expense allowance equal to $25,000. The Placement Agent will also receive five-year warrants (the “Compensation Warrants”) to purchase up to a number of common shares equal to 8% of the aggregate number of common shares sold in the Offering, or 114,286 common shares, which such Compensation Warrants shall have substantially the same terms as the Class B Warrants in the Offering, except that such Compensation Warrants will have an exercise price of $0.78 (125% of the public offering price per share) and terminate on the five year anniversary of the effective date of this offering.
This offering is being made pursuant to an effective "shelf" registration statement on Form F-3 (File No. 333-206516), as amended, which became effective on October 15, 2015, and a related prospectus supplement dated February 4, 2016 in connection with the Offering.
The Offering is expected to close on or about February 9, 2016, subject to the satisfaction of customary closing conditions as set forth in the SPA.
On February 4, 2016, the Company issued a press release relating to the Offering. A copy of the press release is filed as Exhibit 99.1 hereto and is incorporated herein by reference.
Copies of the PAA, the SPA, the form Warrant are filed as Exhibits 1.1, 10.1 and 4.1, respectively, to this report and are incorporated by reference herein. The foregoing summaries of such documents are subject to, and qualified in their entirety by reference to, such exhibits. Such agreements and documents contain representations and warranties that the parties made to, and solely for the benefit of, the others in the context of all of the terms and conditions of that agreement and in the context of the specific relationship between the parties. The provisions of such agreements, including the representations and warranties contained therein, are not for the benefit of any party other than the parties to such agreements and are not intended as documents for investors and the public to obtain factual information about the current state of affairs of the parties to those documents and agreements. Rather, investors and the public should look to other disclosures contained in the Company’s filings with the SEC.
