| PROSPECTUS |
Filed
Pursuant to Rule 424(b)(3)
Registration
No. 333-149018
|
8,423,222
Shares
China
Clean Energy Inc.
Common
Stock
_________________
This
prospectus relates to the sale by the selling stockholders identified in this
prospectus of up to 8,423,222 shares of our common stock, which includes (i)
2,223,222 shares issued to investors in a private placement and (ii) 6,200,000
shares issuable upon the exercise of warrants with an exercise price of $2.00
per share. All of these shares of our common stock are being offered for resale
by the selling stockholders.
The
prices at which the selling stockholders may sell shares will be determined by
the prevailing market price for the shares or in negotiated transactions. We
will not receive any proceeds from the sale of these shares by the selling
stockholders. However, we will receive proceeds from the exercise of the
warrants if they are exercised by the selling stockholders.
We will
bear all costs relating to the registration of these shares of our common stock,
other than any selling stockholders’ legal or accounting costs or
commissions.
Our
common stock is quoted on the regulated quotation service of the OTC Bulletin
Board under the symbol “CCGY.OB”. The last reported sale price of our common
stock as reported by the OTC Bulletin Board on April 13, 2010, was $0.77 per
share.
Investing
in our common stock is highly speculative and involves a high degree of risk.
You should carefully consider the risks and uncertainties described under the
heading “Risk Factors” beginning on page 4 of this prospectus before making a
decision to purchase our common stock.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
The date
of this prospectus is April 23, 2010.
TABLE
OF CONTENTS
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Page
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1
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4
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4
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4
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5
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10
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12
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14
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14
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14
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14
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15
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You
should rely only on the information contained in this prospectus. We have not
authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. We are not making an offer to sell these securities in any jurisdiction
where an offer or sale is not permitted. You should assume that the information
appearing in this prospectus is accurate only as of the date on the front cover
of this prospectus. Our business, financial condition, results of operations and
prospects may have changed since that date.
|
PROSPECTUS
SUMMARY
The
following summary highlights information contained elsewhere in this
prospectus. It may not contain all the information that may be important
to you. You should read this entire prospectus carefully, including the
sections entitled “Risk Factors” and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations,” and our historical
financial statements and related notes included elsewhere in this
prospectus, any accompanying prospectus supplement or the documents
incorporated herein by reference before making an investment decision. In
this prospectus, unless the context requires otherwise, references to the
“Company,” “we,” “our” and “us” for periods prior to the closing of our
reverse merger on October 24, 2006, refer to China Clean Energy
Resources, Ltd., a private British Virgin Islands corporation that is now
our wholly-owned subsidiary, and references to the “Company,” “we,” “our”
and “us” for periods subsequent to the closing of the reverse merger on
October 24, 2006, refer to China Clean Energy Inc., a publicly traded
company, and its subsidiary, China Clean Energy Resources,
Ltd.
Overview
We,
through our wholly-owned subsidiary, Fujian Zhongde Technology Co., Ltd.,
are engaged in the development, manufacturing, and distribution of
biodiesel and specialty chemical products made from renewable
resources. Through cooperation with outside experts at various
research institutes and our research and development efforts, we
formulated a proprietary process for refining biodiesel from waste
vegetable oils and waste grease. Using this proprietary process, we began
producing biodiesel in 2005 and commenced selling biodiesel commercially
in December 2005. Our strategy is to profitably commercialize our
patented, proprietary technology and become the industry leader in the
production of biodiesel and specialty chemicals located within the
People’s Republic of China. We currently own two refineries which can
continuously produce biodiesel and specialty chemicals, in Fuqing City, in
the Fujian Province of the People’s Republic of China. Our first refinery
is capable of producing 10,000 tons, or approximately 3 million gallons,
of biodiesel per year and up to 10,000 tons of specialty chemicals per
year. Our second refinery has the flexibility to produce 100,000 tons of
biodiesel per year, or 30,000 tons of specialty chemicals per year, or a
combination of biodiesel and specialty chemicals for a total of 70,000
tons per year.
Our
biodiesel can be used in diesel engines with no modifications as 100%
biodiesel (B100) or mixed with petroleum diesel—most commonly as a 20%
biodiesel blend (B20). A blended biodiesel may enhance petroleum diesel
because it has the ability to extend engine life and decrease operating
expense due to the increase in engine lubricity. Furthermore, biodiesel is
biodegradable, nontoxic and essentially free of sulfur and aromatics.
Currently, the key markets for biodiesel are mass transit vehicles,
commercial fleets and marine fleets, as well as for general use in
environmentally-sensitive areas.
Our
principal executive office is located at Jiangyin Industrial Zone,
Jiangyin Town, Fuqing City, Fujian Province, People’s Republic of China.
Our telephone number is (347) 235-0258. Our website address is
http://www.chinacleanenergyinc.com. Except for any documents that are
incorporated by reference into this prospectus that may be accessed from
our website, the information available on or through our website is not
part of this prospectus.
Our
History
We
were formed in the State of Delaware on November 12, 2004 as a
Canadian based resource exploration company. On October 24, 2006 we
entered into a Share Exchange Agreement with China Clean Energy Resources,
Ltd., its shareholders and both Chet Kurzawski and Doug Reid, our sole
officers and directors at the time. Upon closing of the transactions
contemplated by the Share Exchange Agreement, the shareholders of China
Clean Energy Resources, Ltd. exchanged their entire interest in China
Clean Energy Resources, Ltd. for an aggregate of 15,995,000 shares of our
common stock, thus causing China Clean Energy Resources, Ltd. to become
our wholly-owned subsidiary.
|
1
|
At
the time we negotiated the Share Exchange Agreement we had yet to complete
any mineral exploration activities and thus decided to abandon this line
of business in favor of manufacturing and distributing biodiesel and
specialty chemicals from renewable resources inside the People’s Republic
of China. In anticipation of this transition, on October 13, 2006 we
both changed our corporate name from Hurley Exploration Inc. to China
Clean Energy Inc. and effectuated a 1-for-2.26187510124 reverse stock
split.
|
|||
| The chart below depicts our current corporate structure. As depicted below: | |||
|
·
|
we
own 100% of the capital stock of China Clean Energy Resources, Ltd. and
have no other direct subsidiaries;
|
||
|
·
|
China
Clean Energy Resources, Ltd. owns 100% of the capital stock of Fujian
Zhongde Technology Co. Ltd. and Fujian Zhongde Energy Co. Ltd. and has no
other subsidiaries;
|
||
|
·
|
Fujian
Zhongde Technology Co. Ltd., a wholly-owned direct subsidiary of China
Clean Energy Resources, Ltd., has no subsidiaries; and
|
||
|
·
|
Fujian
Zhongde Energy Co. Ltd, a wholly-owned direct subsidiary of China Clean
Energy Resources, Ltd., has no subsidiaries.
|
||
| All of our operations are conducted by and through Fujian Zhongde Technology Co. Ltd. and Fujian Zhongde Energy Co. Ltd. in the People’s Republic of China. | |||
 |
|||
| The Offering | |||
|
Common
stock offered by the selling stockholders:
|
8,423,222
shares, consisting of 2,223,222 shares issued to investors in a private
placement and 6,200,000 shares issuable upon the exercise of outstanding
warrants.
|
||
|
Offering
price:
|
Market
price or privately negotiated prices.
|
||
|
Common
stock outstanding after this offering:
|
31,512,269
shares (1).
|
||
|
Use
of proceeds:
|
We
will not receive any proceeds from the sale of the shares of common stock
but will receive proceeds from the exercise of the warrants, if exercised
for cash, which proceeds will be used for working capital
purposes.
|
||
|
OTC
Bulletin Board symbol:
|
CCGY.OB.
|
||
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|
|||
2
|
Risk
Factors:
|
You
should carefully consider the information set forth in this prospectus
and, in particular, the specific factors set forth in the “Risk Factors”
section beginning on page 4 of this prospectus before deciding
whether or not to invest in shares of our common
stock.
|
||
| ___________ | |||
| (1) The number of outstanding shares after the offering is based upon 31,512,269 shares outstanding as of April 13, 2010. | |||
| The number of shares of common stock outstanding after this offering excludes: | |||
|
·
|
6,200,000
shares of common stock issuable upon the exercise of currently outstanding
warrants with an exercise price of $2.00 per share;
and
|
||
|
·
|
590,000
shares of common stock issuable upon the exercise of currently outstanding
options with exercise prices ranging from $2.50 to $3.00 and having a
weighted average exercise price of $2.75 per
share.
|
||
|
|
|||
3
RISK FACTORS
Investors
should carefully consider the risks and uncertainties and all other information
contained or incorporated by reference in this prospectus, including the risks
and uncertainties discussed under “Risk Factors” in our Annual Report on Form
10-K for the year ended December 31, 2009. All of these “Risk Factors” are
incorporated by reference herein in their entirety. These risks and
uncertainties are not the only ones facing us. Additional risks of which we are
not presently aware or that we currently believe are immaterial may also harm
our business and results of operations. The trading price of our common shares
could decline due to the occurrence of any of these risks, and investors could
lose all or part of their investment. In assessing these risks, investors should
also refer to the information contained or incorporated by reference in our
other filings with the SEC.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains “forward-looking statements,” which include information
relating to future events, future financial performance, strategies,
expectations, competitive environment and regulations. Words such as “may,”
“should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,”
“anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and
similar expressions, as well as statements in future tense, identify
forward-looking statements. These statements are subject to risks and
uncertainties that cannot be predicted or quantified and, consequently, actual
results may differ materially from those expressed or implied by these
forward-looking statements. Forward-looking statements involve risks and
uncertainties. These uncertainties include factors that affect all businesses as
well as matters specific to us. We caution readers not to place undue reliance
on any forward-looking statement that speaks only as of the date made and to
recognize that forward-looking statements are predictions of future results,
which may not occur as anticipated. Actual results could differ materially from
those anticipated in the forward-looking statements and from historical results,
due to the risks and uncertainties described and incorporated by reference
herein under the heading “Risk Factors,” as well as others that we may consider
immaterial or do not anticipate at this time.
Forward-looking
statements in this prospectus are based on management’s beliefs and opinions at
the time the statements are made. The forward-looking statements contained in
this prospectus are expressly qualified in their entirety by this cautionary
statement. The forward-looking statements included in this prospectus are made
as of the date of this prospectus and we undertake no obligation to publicly
update or revise any forward-looking statements to reflect new information,
future events or otherwise, except as required by applicable securities
laws.
USE OF PROCEEDS
We will
not receive any proceeds from the sale of common stock by the selling
stockholders.
A portion
of the shares covered by this prospectus are issuable upon exercise of warrants
to purchase our common stock, which warrants have a cashless exercise option.
If, however, a selling stockholder were to exercise its warrants for cash, the
selling stockholder would pay us the exercise price of the warrants. We will use
any proceeds received from the exercise of the warrants for working capital
purposes.
4
SELLING STOCKHOLDERS
Up to
8,423,222 shares of common stock are being offered by this prospectus, all of
which are being registered for sale for the accounts of the selling stockholders
and include the following:
|
|
·
|
2,223,222
shares of common stock issued in a private
placement;
|
|
|
·
|
5,000,000
shares of common stock initially issuable upon the exercise of warrants
issued in a private placement; and
|
|
|
·
|
1,200,000
shares of common stock initially issuable upon the exercise of warrants
issued to a placement agent in connection with our private placement of
common stock and warrants.
|
Each of
the transactions by which the selling stockholders acquired their securities
from us was exempt under the registration provisions of the Securities Act of
1933, as amended.
The
shares of common stock referred to above are being registered to permit public
sales of the shares, and the selling stockholders may offer the shares for
resale from time to time pursuant to this prospectus. The selling stockholders
may also sell, transfer or otherwise dispose of all or a portion of their shares
in transactions exempt from the registration requirements of the Securities Act
of 1933, as amended, or pursuant to another effective registration statement
covering those shares. We may from time to time include additional selling
stockholders in supplements or amendments to this prospectus.
The table
below sets forth certain information regarding the selling stockholders and the
shares of our common stock offered by them in this prospectus. All information
with respect to share ownership has been furnished by or on behalf of the
selling stockholders. The selling stockholders have not had a
material relationship with us during the past three years other than as
described in the footnotes to the table below or as a result of their
acquisition of our shares or other securities. We believe, based on information
supplied by the selling stockholders and subject to community property laws
where applicable, each person named in the table has sole voting and investment
power with respect to the shares of common stock set forth opposite such
person’s name.
Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission. Each selling stockholder’s percentage of ownership of
our outstanding shares in the table below is based upon 31,512,269 shares of
common stock outstanding as of April 13, 2010. With respect to the outstanding
warrants, there exist contractual provisions limiting conversion and exercise to
the extent such conversion or exercise would cause such selling stockholder,
together with its affiliates or members of a “group”, to beneficially own a
number of shares of common stock that would exceed 4.99% of our then outstanding
shares of common stock following such conversion or exercise. The shares
and percentage ownership of our outstanding shares indicated in the table
below do not give effect to this limitation. Because the selling
stockholders may sell all or part of their shares, no estimates can be given as
to the number of shares of common stock that will be held by the selling
stockholders upon termination of any offering made hereby. For purposes of the
table below, however, we have assumed that after termination of this offering
none of the shares covered by this prospectus will be held by the selling
stockholders.
|
Ownership
Before Offering
|
After
Offering (1)
|
|||||||
|
Selling
Stockholder
|
Number
of
shares
of
common
stock
beneficially
owned
|
Number
of
shares
offered
|
Number
of
shares
of
common
stock
beneficially
owned
|
Percentage
of
common
stock
beneficially
owned
|
||||
|
Fred
L. Astman Wedbush Securities Inc CTDN IRA R/O Holding 10/13/92
(2)
|
33,000
(3)
|
30,000
(3)
|
3,000
|
*
|
||||
|
Samir
Barakat and Claudia Marseille
|
198,000
(4)
|
180,000
(4)
|
18,000
|
*
|
||||
|
Chestnut
Ridge Partners, LP (5)
|
821,450
(6)
|
80,000
(6)
|
741,450
|
2.4%
|
||||
|
Hugh
Cohen
|
10,999
(7)
|
9,999
(7)
|
1,000
|
*
|
||||
5
|
Ownership
Before Offering
|
After
Offering (1)
|
|||||||
|
Selling
Stockholder
|
Number
of
shares
of
common
stock
beneficially
owned
|
Number
of
shares
offered
|
Number
of
shares
of
common
stock
beneficially
owned
|
Percentage
of
common
stock
beneficially
owned
|
||||
|
Gregory
Cook Wedbush Securities Inc CTDN IRA Contributory 1/16/02
(8)
|
33,000
(3)
|
30,000
(3)
|
3,000
|
*
|
||||
|
Cranshire
Capital, LP (9)
|
20,000
(10)
|
20,000
(10)
|
--
|
--
|
||||
|
Crastvell
Trading Ltd. (11)
|
781,001
(12)
|
710,001
(12)
|
71,000
|
*
|
||||
|
Crypto
Corporation (13)
|
6,500
(14)
|
5,000
(14)
|
1,500
|
*
|
||||
|
Herbert
Arnold Duke
|
43,000
(3)
|
30,000
(3)
|
13,000
|
*
|
||||
|
James
R. Echols, Sr.
|
16,500
(14)
|
15,000
(14)
|
1,500
|
*
|
||||
|
Bai
Ye Feng
|
264,000
(6)
|
240,000
(6)
|
24,000
|
*
|
||||
|
Barry
Goldstein
|
16,500
(14)
|
15,000
(14)
|
1,500
|
*
|
||||
|
GRQ
Consultants, Inc. 401K Plan (15)
|
583,333
(16)
|
583,333
(16)
|
--
|
--
|
||||
|
Nicholas
Hammond
|
66,000
(10)
|
60,000
(10)
|
6,000
|
*
|
||||
|
Michael
Harvey & Lyn Harvey JTWROS
|
16,500
(14)
|
15,000
(14)
|
1,500
|
*
|
||||
|
David
R. Holbrooke
|
33,000
(3)
|
30,000
(3)
|
3,000
|
*
|
||||
|
Heller
Capital Investments, LLC (17)
|
396,565
(18)
|
350,000
(18)
|
46,565
|
*
|
||||
|
IRA
FBO John P. O’Shea, Pershing LLC as Custodian (19)
|
140,116(20)
|
45,000
(20)
|
95,116
|
*
|
||||
|
Iroquois
Master Fund Ltd. (21)
|
65,000
(22)
|
50,000
(22)
|
15,000
|
*
|
||||
|
Feinberg
Family Trust (23)
|
2,330,000
(24)
|
2,330,000
(24)
|
957,311
|
2.8%
|
||||
|
Todd
Kice (25)
|
23,000
(3)
|
15,000
(3)
|
8,000
|
*
|
||||
|
William
Kung
|
82,500
(26)
|
75,000
(26)
|
7,500
|
*
|
||||
|
Anna
Lo
|
16,500
(14)
|
15,000
(14)
|
1,500
|
*
|
||||
|
Market
Street Union, LLC (27)
|
21,500
(3)
|
15,000
(3)
|
6,500
|
*
|
||||
|
John
B. Marsala
|
29,000
(3)
|
23,000
(3)
|
6,000
|
*
|
||||
|
Mere
Lane Investment Fund LP (28)
|
8,667
(29)
|
6,667
(29)
|
2,000
|
*
|
||||
|
MidSouth
Investor Fund LP (30)
|
130,000
(31)
|
100,000
(31)
|
30,000
|
*
|
||||
|
Northern
Valley Partners, LLC (32)
|
82,500
(26)
|
75,000
(26)
|
7,500
|
*
|
||||
|
Octagon
Capital Partners (33)
|
20,000
(10)
|
20,000
(10)
|
--
|
--
|
||||
|
Taixing
Ou (34)
|
1,689,000
(35)
|
900,000
(35)
|
789,000
|
2.5%
|
||||
|
Professional
Offshore Opportunity Fund Ltd. (36)
|
500,000
(37)
|
500,000
(37)
|
--
|
--
|
||||
|
Robert
S. Colman Trust UDT 3/13/85 (38)
|
264,000
(6)
|
240,000
(6)
|
24,000
|
*
|
||||
|
Sandor
Capital Master Fund LP (39)
|
91,000
(33)
|
70,000
(40)
|
21,000
|
*
|
||||
|
John
Peter Selda Wedbush Securities Inc CTDN IRA Contributory 08/27/96
(41)
|
33,000
(3)
|
30,000
(3)
|
3,000
|
*
|
||||
6
|
Ownership
Before Offering
|
After
Offering (1)
|
|||||||
|
Selling
Stockholder
|
Number
of
shares
of
common
stock
beneficially
owned
|
Number
of
shares
offered
|
Number
of
shares
of
common
stock
beneficially
owned
|
Percentage
of
common
stock
beneficially
owned
|
||||
|
The
Black Diamond Fund, LLLP (42)
|
70,000
(40)
|
70,000
(40)
|
--
|
--
|
||||
|
Westminster
Securities Corp. (43)
|
517,050
(44)
|
517,050
(44)
|
--
|
--
|
||||
|
Jung
Min Choi (45)
|
350,550
(46)
|
350,550
(46)
|
--
|
--
|
||||
|
Richard
Louise (47)
|
110,475
(48)
|
110,475
(48)
|
--
|
--
|
||||
|
Jeffrey
McLaughlin (49)
|
115,450
(50)
|
111,450
(50)
|
4000
|
*
|
||||
|
Ken
Hart (51)
|
104,850
(52)
|
104,850
(52)
|
--
|
--
|
||||
|
Joe
Wolfe (53)
|
5,625
(54)
|
5,625
(54)
|
--
|
--
|
||||
*Less
than 1%
|
(1)
|
Represents
the amount of shares that will be held by the selling stockholders after
completion of this offering based on the assumptions that (a) all shares
registered for sale by the registration statement of which this prospectus
is part will be sold and (b) that no other shares of our common stock are
acquired or sold by the selling stockholders prior to completion of this
offering. However, the selling stockholders may sell all, some or none of
the shares offered pursuant to this prospectus and may sell other shares
of our common stock that they may own pursuant to another registration
statement under the Securities Act of 1933, as amended, or sell some or
all of their shares pursuant to an exemption from the registration
provisions of the Securities Act of 1933, as amended, including under
Rule 144. To our knowledge there are currently no agreements,
arrangements or understanding with respect to the sale of any of the
shares that may be held by the selling stockholders after completion of
this offering or otherwise.
|
|
(2)
|
Fred
Astman has voting and dispositive power over these
securities.
|
|
(3)
|
Includes
currently exercisable warrants to purchase 10,000 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(4)
|
Includes
currently exercisable warrants to purchase 60,000 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(5)
|
Kenneth
Pasternak, as principal, has voting and dispositive power over these
securities.
|
|
(6)
|
Includes
currently exercisable warrants to purchase 80,000 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(7)
|
Includes
currently exercisable warrants to purchase 3,333 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(8)
|
Gregory
Cook, as beneficiary, has voting and dispositive power over these
securities.
|
|
(9)
|
Mitchell
P. Kopin, the president of Downsview Capital, Inc., the general partner of
Cranshire Capital, L.P., has sole voting control and investment discretion
over securities held by Cranshire Capital, L.P. Each of Mitchell P. Kopin
and Downsview Capital, Inc. disclaims beneficial ownership of the shares
held by Cranshire Capital, L.P.
|
|
(10)
|
Includes
currently exercisable warrants to purchase 20,000 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(11)
|
Olga
Mirimskaya, as principal, has voting and dispositive power over these
securities.
|
|
(12)
|
Includes
currently exercisable warrants to purchase 236,667 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(13)
|
Evelyn
Cann, as president, has voting and dispositive power over these
securities.
|
|
(14)
|
Includes
currently exercisable warrants to purchase 5,000 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(15)
|
Barry
Honig, as president, has voting and dispositive power over these
securities.
|
|
(16)
|
Includes
currently exercisable warrants to purchase 583,333 shares of our common
stock at an exercise price of $2.00 per
share.
|
7
|
(17)
|
Ronald
Heller, as Chief Information Officer of Heller Capital Investments, LLC,
has voting and dispositive power over these
securities.
|
|
(18)
|
Includes
currently exercisable warrants to purchase 200,000 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(19)
|
John
P. O’Shea has voting and dispositive power over these
securities.
|
|
(20)
|
Includes
currently exercisable warrants to purchase 45,000 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(21)
|
Joshua
Silverman has voting and dispositive power over these
securities.
|
|
(22)
|
Includes
currently exercisable warrants to purchase 50,000 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(23)
|
Jeff
Feinberg has voting and dispositive power over these
securities.
|
|
(24)
|
Includes
currently exercisable warrants to purchase 2,330,000 shares of our
common stock at an exercise price of $2.00 per
share.
|
|
(25)
|
Todd
Kice is a former affiliate of Westminster Securities Corporation,
formerly a registered broker-dealer. Mr. Kice bought the shares
of common stock in the ordinary course of business, and at the time of the
purchase of the shares of common stock to be resold, had no agreements or
understandings directly or indirectly with any person to distribute the
shares of common stock.
|
|
(26)
|
Includes
currently exercisable warrants to purchase 25,000 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(27)
|
Frank
Brock, as managing member, has voting and dispositive power over these
securities.
|
|
(28)
|
Hugh
Cohen has voting and dispositive power over these
securities.
|
|
(29)
|
Includes
currently exercisable warrants to purchase 6,667 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(30)
|
Lyman
O. Heidtke, as general partner, has voting and dispositive power over
these securities.
|
|
(31)
|
Includes
currently exercisable warrants to purchase 100,000 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(32)
|
Michael
Potter, as president, has voting and dispositive power over these
securities.
|
|
(33)
|
Steven
Hart, as general partner, has voting and dispositive power over these
securities.
|
|
(34)
|
Taixing
Ou is the brother of Tai-ming Ou, our Chief Executive Officer and
Chairman.
|
|
(35)
|
Includes
currently exercisable warrants to purchase 300,000 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(36)
|
Howard
Berger, as manager, has voting and dispositive power over these
securities.
|
|
(37)
|
Includes
currently exercisable warrants to purchase 500,000 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(38)
|
Robert
S. Colman has voting and dispositive power over these
securities.
|
|
(39)
|
John
S. Lemak, as manager, has voting and dispositive power over these
securities. Sandor Capital Mater Fund, L.P. is an affiliate of WFG
Investments, Inc., a registered broker-dealer. Sandor Capital Master Fund,
L.P. bought the shares of common stock in the ordinary course of business,
and at the time of the purchase of the shares of common stock to be
resold, had no agreements or understandings directly or indirectly with
any person to distribute the shares of common
stock.
|
|
(40)
|
Includes
currently exercisable warrants to purchase 70,000 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(41)
|
John
Peter Selda has voting and dispositive power over these
securities.
|
|
(42)
|
Brandon
S. Goulding has voting and dispositive power over these
securities.
|
|
(43)
|
John
O’ Shea, as chairman, has voting and dispositive power over these
securities. Westminster Securities Corporation is a former registered
broker-dealer and served as our placement agents in connection with our
private placement of common stock and warrants that occurred on
January 9, 2008. Westminster Securities Corporation was issued a
warrant to purchase these 1,200,000 shares as consideration in connection
with our January 9, 2008 private placement, and at the time received,
had no agreements or understandings directly or indirectly with any person
to distribute the shares of common stock underlying such
warrant.
|
8
|
(44)
|
Includes
currently exercisable warrants to purchase 517,050 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(45)
|
Jung
Min Choi is a former affiliate of Westminster Securities Corporation,
formerly a registered broker-dealer. These securities were
transferred to Mr. Choi by Westminster Securities Corporation in the
ordinary course of business, and at the time of the time of transfer,
Mr. Choi had no agreements or understandings directly or indirectly
with any person to distribute the shares of common stock underlying this
warrant.
|
|
(46)
|
Includes
currently exercisable warrants to purchase 350,550 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(47)
|
Richard
Louise is a former affiliate of Westminster Securities Corporation,
formerly a registered broker-dealer,
and is currently registered as a broker with Hudson Securities,
Inc. These securities were transferred to Mr. Louise by
Westminster Securities Corporation in the ordinary course of business, and
at the time of the time of transfer, Mr. Louise had no agreements or
understandings directly or indirectly with any person to distribute the
shares of common stock underlying this
warrant.
|
|
(48)
|
Includes
currently exercisable warrants to purchase 110,475 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(49)
|
Jeffrey
McLaughlin is a former affiliate of Westminster Securities
Corporation, formerly a registered broker-dealer,
and is currently registered as a broker with R.F. Lafferty & Co.,
Inc. These securities were transferred to Mr. McLaughlin by
Westminster Securities Corporation in the ordinary course of business, and
at the time of the time of transfer, Mr. McLaughlin had no agreements
or understandings directly or indirectly with any person to distribute the
shares of common stock underlying this
warrant.
|
|
(50)
|
Includes
currently exercisable warrants to purchase 111,450 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(51)
|
Ken
Hart is a former affiliate of Westminster Securities Corporation,
formerly a registered broker-dealer,
and is currently registered as a broker with Hudson Securities,
Inc. These securities were transferred to Mr. Hart by
Westminster Securities Corporation in the ordinary course of business, and
at the time of the time of transfer, Mr. Hart had no agreements or
understandings directly or indirectly with any person to distribute the
shares of common stock underlying this
warrant.
|
|
(52)
|
Includes
currently exercisable warrants to purchase 104,850 shares of our common
stock at an exercise price of $2.00 per
share.
|
|
(53)
|
Joe
Wolfe is a former affiliate of Westminster Securities Corporation,
formerly a registered broker-dealer,
and is currently registered as a broker with Emergent Financial Group,
Inc. These securities were transferred to Mr. Wolfe by
Westminster Securities Corporation in the ordinary course of business, and
at the time of the time of transfer, Mr. Wolfe had no agreements or
understandings directly or indirectly with any person to distribute the
shares of common stock underlying this
warrant.
|
|
(54)
|
Includes
currently exercisable warrants to purchase 5,625 shares of our common
stock at an exercise price of $2.00 per
share.
|
9
DESCRIPTION OF SECURITIES
We are
authorized to issue 90,000,000 shares of common stock and 10,000,000 shares of
preferred stock. On April 13, 2010, there were 31,512,269 shares of common stock
issued and outstanding and no shares of preferred stock issued and
outstanding.
Common
Stock
The
holders of common stock are entitled to one vote per share. Our certificate of
incorporation does not provide for cumulative voting. The holders of our common
stock are entitled to receive ratably such dividends, if any, as may be declared
by the board of directors out of legally available funds. Upon liquidation,
dissolution or winding-up, the holders of our common stock are entitled to share
ratably in all assets that are legally available for distribution. The holders
of our common stock have no preemptive, subscription, redemption or conversion
rights. The rights, preferences and privileges of holders of our common stock
are subject to, and may be adversely affected by, the rights of the holders of
any series of preferred stock, which may be designated solely by action of the
board of directors and issued in the future.
Preferred
Stock
The board
of directors is authorized, subject to any limitations prescribed by law,
without further vote or action by the stockholders, to issue from time to time
shares of preferred stock in one or more series. Each such series of preferred
stock shall have such number of shares, designations, preferences, voting
powers, qualifications, and special or relative rights or privileges as shall be
determined by the board of directors, which may include, among others, dividend
rights, voting rights, liquidation preferences, conversion rights and preemptive
rights.
Warrants
Investor Warrants. In
connection with the private placement of our common stock and warrants completed
on January 9, 2008, we issued warrants to purchase up to an aggregate of
5,000,000 shares of common stock to the investors. The warrants provide for the
purchase of shares of common stock for five years at an exercise price of $2.00
per share. Should we, at any time while the warrants are outstanding, sell or
grant any option to purchase or sell or grant any right to reprice, or otherwise
dispose of or issue any common stock or common stock equivalents entitling any
party to acquire shares of our common stock at a per share price less than the
then existing exercise price of the warrants, the exercise price shall be
reduced to equal that lower price. We are prohibited from effecting the exercise
of the warrants to the extent that as a result of such exercise the holder of
the exercised warrants beneficially owns more than 4.99% (or, if such limitation
is waived by the holder upon no less than 61 days prior notice to us, 9.99%) in
the aggregate of the issued and outstanding shares of our common stock
calculated immediately after giving effect to the issuance of shares of our
common stock upon the exercise of the warrants. If at any time after
January 9, 2009 there is no effective registration statement registering,
or no current prospectus available for, the resale of the shares of common stock
underlying the warrants, then the holders of such warrants have the right to
exercise the warrants by means of a cashless exercise.
If within
three trading days from date on which the exercise of the warrants shall be
effected (the “Warrant Share Delivery Date”) we fail to deliver to a holder of
the warrants certificates representing the shares into which such warrants are
convertible, and if after such Warrant Share Delivery Date the holder of the
warrants is required by its brokerage firm to purchase, or the holder’s
brokerage firm otherwise purchases, shares of our common stock to deliver in
satisfaction of a sale by such holder of the shares of our common stock which
the holder was entitled to receive upon the exercise, then we are obligated to
(A) pay in cash to the holder the amount by which (x) the holder’s total
purchase price for our common stock so purchased exceeds (y) the product of (1)
the aggregate number of shares of common stock that such holder was entitled to
receive from the exercise multiplied by (2) the actual sale price at which the
sell order giving rise to such purchase obligation was executed and (B) at the
option of the holder, either reinstate the warrant for which such exercise was
not honored or to deliver to the holder the number of shares of common stock
that would have been issued if we had timely complied with our delivery
requirements.
10
Placement Agent
Warrants. In connection with our offering on January 9,
2008, we issued a warrant to purchase up to 1,200,000 shares of common stock to
Westminster Securities Corporation, our placement agent. Such warrant has the
same terms as the warrants issued to the investors in the private placement
completed on January 9, 2008.
Registration
Rights
On
January 9, 2008, in connection with our private placement of common stock
and warrants, we entered into a registration rights agreement with the
purchasers pursuant to which we agreed to provide certain registration rights
with respect to the common stock issued and the common stock issuable upon
exercise of the warrants. Specifically, we agreed to file a registration
statement (of which this prospectus forms a part) with the Securities and
Exchange Commission covering the resale of the common stock issued and
underlying the warrants on or before February 23, 2008 and to cause such
registration statement to be declared effective by the Securities and Exchange
Commission on or before May 8, 2008.
If (i)
the registration statement was not filed on or before February 23, 2008 or
(ii) we failed to file with the Securities and Exchange Commission a request for
acceleration of the registration statement in accordance with Rule 461
promulgated by the Securities and Exchange Commission pursuant to the Securities
Act, within five trading days of the date that we were notified by the
Securities and Exchange Commission that such registration statement would not be
“reviewed” or would not be subject to further review (unless the failure to make
such request for acceleration was the result of our determination that events
affecting us would require the filing of an amendment to the registration
statement), or (iii) the registration statement was not declared effective by
the Securities and Exchange Commission on or before May 8, 2008, or (iv)
the registration statement ceases to remain continuously effective for more than
15 consecutive calendar days or more than an aggregate of 20 calendar days
during any 12-month period after its first effective date, then we would be
subject to liquidated damage payments to the holders of the shares sold in the
private placement in an amount equal to either (i) 1% of the aggregate purchase
price paid by such purchasers per month of delinquency or (ii) 1% of the number
of shares of common stock purchased by such purchasers in the offering per month
of delinquency. Notwithstanding the foregoing, in no event shall liquidated
damages paid exceed 6% of the aggregate gross proceeds of the offering or 6% of
the aggregate number of shares of common stock issued in the offering, or a
combination thereof. In addition, we shall not be obligated to pay liquidated
damages with respect to any securities that we may be unable to register
pursuant to the authority of the Securities and Exchange Commission with respect
to Rule 415 of the Securities Act of 1933, as amended.
Pursuant
to the registration rights agreement, we must maintain the effectiveness of the
registration statement from the effective date until the date on which all
securities registered under the registration statement have been sold, or are
otherwise able to be sold pursuant to Rule 144, subject to our right to
suspend or defer the use of the registration statement in certain
events.
Anti-Takeover
Effect of Delaware Law
We are
subject to the provisions of Section 203 of the Delaware General
Corporation Law, an anti-takeover law. In general, Section 203 prohibits a
publicly held Delaware corporation from engaging in a “business combination”
with an “interested stockholder” for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner. For purposes of
Section 203, a “business combination” includes a merger, asset sale or
other transaction resulting in a financial benefit to the interested
stockholder, and an “interested stockholder” is a person who, together with
affiliates and associates, owns, or within three years prior, did own, 15% or
more of the voting stock of the Delaware corporation.
11
Indemnification
of Directors and Officers
Section 145
of the General Corporation Law of the State of Delaware provides, in general,
that a corporation incorporated under the laws of the State of Delaware, as we
are, may indemnify any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding
(other than a derivative action by or in the right of the corporation) by reason
of the fact that such person is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another enterprise, against expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such person’s conduct was unlawful. In the case of a
derivative action, a Delaware corporation may indemnify any such person against
expenses (including attorneys’ fees) actually and reasonably incurred by such
person in connection with the defense or settlement of such action or suit if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation, except that no
indemnification will be made in respect of any claim, issue or matter as to
which such person will have been adjudged to be liable to the corporation unless
and only to the extent that the Court of Chancery of the State of Delaware or
any other court in which such action was brought determines such person is
fairly and reasonably entitled to indemnity for such expenses.
Our
certificate of incorporation and bylaws provide that we will indemnify our
directors, officers, employees and agents to the extent and in the manner
permitted by the provisions of the General Corporation Law of the State of
Delaware, as amended from time to time.
We are
also permitted to apply for insurance on behalf of any director, officer,
employee or other agent for liability arising out of his actions, whether or not
the General Corporation Law of the State of Delaware would permit
indemnification.
Disclosure
of Commission Position on Indemnification for Securities Act
Liabilities
Insofar
as indemnification for liabilities arising under the Securities Act of 1933, as
amended, may be permitted to our directors, officers and persons controlling us,
we have been advised that it is the Securities and Exchange Commission’s opinion
that such indemnification is against public policy as expressed in the
Securities Act of 1933, as amended, and is, therefore,
unenforceable.
PLAN OF DISTRIBUTION
Each
selling stockholder of the common stock and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on the OTC Bulletin Board or any other stock exchange, market or
trading facility on which the shares are traded or in private transactions.
These sales may be at fixed or negotiated prices. A selling stockholder may use
any one or more of the following methods when selling shares:
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|
·
|
ordinary
brokerage transactions and transactions in which the broker dealer
solicits purchasers;
|
|
|
·
|
block
trades in which the broker dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
|
·
|
purchases
by a broker dealer as principal and resale by the broker dealer for its
account;
|
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|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
12
|
|
·
|
privately
negotiated transactions;
|
|
|
·
|
settlement
of short sales entered into after the effective date of the registration
statement of which this prospectus is a
part;
|
|
|
·
|
broker
dealers may agree with the selling stockholders to sell a specified number
of such shares at a stipulated price per
share;
|
|
|
·
|
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or
otherwise;
|
|
|
·
|
a
combination of any such methods of sale;
or
|
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
The
selling stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended, if available, rather than under this
prospectus.
Broker
dealers engaged by the selling stockholders may arrange for other brokers
dealers to participate in sales. Broker dealers may receive commissions or
discounts from the selling stockholders (or, if any broker dealer acts as agent
for the purchaser of shares, from the purchaser) in amounts to be negotiated,
but, except as set forth in a supplement to this prospectus, in the case of an
agency transaction not in excess of a customary brokerage commission in
compliance with FINRA Rule 2440; and in the case of a principal transaction
a markup or markdown in compliance with FINRA IM-2440.
In
connection with the sale of the common stock or interests therein, the selling
stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The selling
stockholders may also sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling
stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).
The
selling stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act of 1933, as amended, in connection with such sales. In such
event, any commissions received by such broker-dealers or agents and any profit
on the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act of 1933, as amended. Each
selling stockholder has informed us that it does not have any written or oral
agreement or understanding, directly or indirectly, with any person to
distribute the common stock. In no event shall any broker-dealer receive fees,
commissions and markups which, in the aggregate, would exceed eight percent
(8%).
We are
required to pay certain fees and expenses incurred by us incident to the
registration of the shares. We have agreed to indemnify the selling stockholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act of 1933, as amended.
Because
selling stockholders may be deemed to be “underwriters” within the meaning of
the Securities Act of 1933, as amended, they will be subject to the prospectus
delivery requirements of the Securities Act of 1933, as amended, including
Rule 172 thereunder. In addition, any securities covered by this prospectus
which qualify for sale pursuant to Rule 144 under the Securities Act of
1933, as amended, may be sold under Rule 144 rather than under this
prospectus. There is no underwriter or coordinating broker acting in connection
with the proposed sale of the resale shares by the selling
stockholders.
13
We agreed
to keep this prospectus effective until the earlier of (i) the date on which the
shares may be resold by the selling stockholders without registration and
without regard to any volume limitations by reason of Rule 144 under the
Securities Act of 1933, as amended, or any other rule of similar effect or (ii)
all of the shares have been sold pursuant to this prospectus or Rule 144
under the Securities Act of 1933, as amended, or any other rule of similar
effect. The resale shares will be sold only through registered or licensed
brokers or dealers if required under applicable state securities laws. In
addition, in certain states, the resale shares may not be sold unless they have
been registered or qualified for sale in the applicable state or an exemption
from the registration or qualification requirement is available and is complied
with.
Under
applicable rules and regulations under the Securities Exchange Act of 1934, as
amended, any person engaged in the distribution of the resale shares may not
simultaneously engage in market making activities with respect to the common
stock for the applicable restricted period, as defined in Regulation M,
prior to the commencement of the distribution. In addition, the selling
stockholders will be subject to applicable provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder, including
Regulation M, which may limit the timing of purchases and sales of shares
of the common stock by the selling stockholders or any other person. We will
make copies of this prospectus available to the selling stockholders and have
informed them of the need to deliver a copy of this prospectus to each purchaser
at or prior to the time of the sale (including by compliance with Rule 172
under the Securities Act of 1933, as amended).
LEGAL MATTERS
Haynes
and Boone, LLP, New York, New York, has passed upon the validity of the shares
of our common stock offered by us pursuant to this prospectus.
The
consolidated financial statements of China Clean Energy Inc. and its
subsidiaries at December 31, 2009 appearing in this prospectus have been
audited by Frazer Frost, LLP (successor entity of Moore Stephens Wurth Frazer
and Torbet, LLP), independent certified public accountant as set forth in its
report thereon appearing elsewhere herein, and are included in reliance upon
such report, given on the authority of said firm as experts in accounting and
auditing.
MATERIAL CHANGES
There
have been no material changes to us since December 31, 2009 that have not been
described in our Annual Report on Form 10-K, this prospectus and our Current
Reports on Form 8-K that should be included.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC
allows us to “incorporate by reference” certain information we have filed with
them, which means that we can disclose important information to you by referring
you to documents we have filed with the SEC. The information incorporated by
reference is considered to be part of this prospectus. We incorporate by
reference the documents listed below, excluding any disclosures therein that are
furnished and not filed:
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·
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Annual
Report on Form 10-K for the fiscal year ended December 31, 2009, filed on
March 31, 2010, as amended by Amendment No. 1 on Form 10-K/A filed on
April 14, 2010;
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·
|
Current
Report on Form 8-K dated January 1, 2010 and filed on January 7, 2010, as
amended by Amendment No. 1 on Form 8-K/A filed on January 14,
2010;
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·
|
Current
Report on Form 8-K dated January 31, 2010 and filed on February 5, 2010;
and
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|
·
|
Current
Report on Form 8-K dated February 24, 2010 and filed on March 12,
2010.
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14
We will
provide, upon written or oral request, to each person, including any beneficial
owner, to whom a prospectus is delivered, a copy of these filings (other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference in any such documents) at no cost. We can be contacted at the address
and phone number indicated below:
William
Chen
Jiangyin Industrial
Zone, Jiangyin Town
Fuqing
City, Fujian Province
People’s
Republic of China
(347)
235-0258
Our
incorporated reports and other documents may be accessed at our website address:
http://www.chinacleanenergyinc.com or by contacting the SEC as described below
in “Where You Can Find More Information.”
The
information contained on our website does not constitute a part of this
prospectus, and our website address supplied above is intended to be an inactive
textual reference only and not an active hyperlink to our website.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We file
annual, quarterly and current reports and other information with the SEC. You
can read these SEC filings, and this registration statement, over the Internet
at the SEC’s website at www.sec.gov. You may also read and copy any document we
file with the SEC at its public reference facilities at 100 F Street, N.E.,
Washington, D.C. 20549. You may also obtain copies of the documents at
prescribed rates by writing to the Public Reference Section of the SEC at 100 F
Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the operation of the public reference
facilities.
15