![]() |
Loeb
& Loeb LLP
345
Park Avenue
New
York, NY 10154-1895
|
Direct
Main
Fax
|
212.407.4000
212.407.4000
212.407.4990
|
Jessica
Plowgian
Attorney-Advisor
Securities
and Exchange Commission
100
F Street, N.E.
Washington,
D.C. 20549
|
Re:
|
ChinaNet
Online Holdings, Inc.
Form
S-1/A
Filed
November 12, 2009
File
No. 333-162038
|
1.
|
We
note your response to comment one from our letter dated October 19,
2009. We have considered your response and are unable to concur
with your conclusion. We note your statement that only six
selling stockholders are registered broker-dealers. However, we
also note the disclosure on page 71 which indicates that 15 of the selling
stockholders are registered broker-dealers or affiliates of
broker-dealers. Please explain this discrepancy. We
further note that five of your selling stockholders are selling more than
10% of the outstanding shares held by non-affiliates, and that the shares
you are registering represent 167.2% of your public
float.
|
![]() |
Jessica
Plowgian
Securities
and Exchange Commission
December
4, 2009
Page
2
|
![]() |
Jessica
Plowgian
Securities
and Exchange Commission
December
4, 2009
Page
3
|
|
·
|
None
of the investors who received securities in the August Placement is an
“affiliate” of the Company, as such term is defined under Rule 405
promulgated under the Securities Act of 1933, as amended. None
of such investors, directly, or indirectly (including through any
contractual arrangement), controls, or is controlled by, or is under
common control with, the Company, nor did any such investor have a
relationship with the Company prior to the August
Placement.
|
|
·
|
The
securities issued as part of the August Placement were distributed to a
large number of investors (almost 40), of whom only four are registering
more than five percent (5%) of the total number of securities being
registered.
|
|
·
|
The
August Placement was structured as a traditional PIPE, with the investors
bearing market risk, and not as an equity line of credit. The
investors made customary representations as to their investment intent and
agreed to transfer restrictions and legending of certificates and, based
upon information obtained from the selling stockholders, do not have an
existing short position in the Company's Common
Stock.
|
|
·
|
The
securities being registered for resale are shares of Common Stock and
shares of Common Stock underlying fixed rate convertible preferred stock
and fixed exercise price warrants with standard weighted average
anti-dilution provisions and adjustments for corporate changes, stock
reclassifications and similar events and, therefore, present no risk of
“downward spiral” dilution of current shareholders if the Company’s stock
price decreases.
|