Amendment No.1 to Schedule 13G

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

SCHEDULE 13G

(Rule 13d-102)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO RULES 13d-1(b), (c), AND (d) AND AMENDMENTS THERETO FILED

PURSUANT TO RULE 13d-2(b)

(Amendment No. 1)*

 

 

 

CHINANET ONLINE HOLDINGS, INC.

(Name of Issuer)

 

 

 

Common Stock, par value $0.001 per share

(Title of Class of Securities)

 

16949H102

(CUSIP Number)

 

December 31, 2010

(Date of Event Which Requires Filing of this Statement)

 

 

Check the appropriate box to designate the rule pursuant to which this Schedule is filed:

x Rule 13d-1(b)

¨ Rule 13d-1(c)

¨ Rule 13d-1(d)

 

*   The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page.

The information required in the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 

  13G       Page 2 of 6 Pages

 

 

CUSIP No.16949H102

 

  1.   

NAME OF REPORTING PERSON

S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

 

Sansar Capital Management, L.L.C.

  2.  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*

(a)  ¨        (b)  ¨

 

  3.  

SEC USE ONLY

 

  4.  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

    Delaware

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

    5.    

SOLE VOTING POWER

 

    1,828,725 shares

   6.   

SHARED VOTING POWER

 

    —

   7.   

SOLE DISPOSITIVE POWER

 

    1,828,725 shares

   8.   

SHARED DISPOSITIVE POWER

 

    —

  9.

  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

    1,828,725 shares

10.

  

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES  ¨

 

11.

  

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)

 

    9.99% based on 18,305,656 shares outstanding 1

12.

  

TYPE OF REPORTING PERSON

 

    IA

 

1 The number of shares outstanding is based upon the sum of 17,078,720 shares outstanding as of November 12, 2010 plus 1,226,936 shares attributable to 10% Series A Convertible Preferred Stock that is convertible into Common Stock (the “Series A Preferred Stock”) and Series A-1 and Series A-2 Warrants to purchase Common Stock (the Series A-1 Warrants together with the Series A-2 Warrants, collectively, “Warrants”), which are beneficially owned by the reporting person (see Item 4).

 

Page 2 of 6 Pages

SCHEDULE 13G

 

Item 1  

(a)

    Name of Issuer:      
     CHINANET ONLINE HOLDINGS, INC.      
         1  

(b)

    Address of Issuer’s Principal Executive Offices:      
    

No. 3 Min Zhuang Road, Building 6

Yu Quan Hui Gu Tuspark, Haidan District

Beijing, PRC 100195

      
Item 2  

(a)

    Name of Person Filing:      
     Sanjay Motwani is the managing member of Sansar Family I, L.L.C., which is the managing member of Sansar Capital Management, L.L.C. All of the shares of Common Stock beneficially owned by the reporting person are directly held by a fund to which Sansar Capital Management, L.L.C. acts as an investment advisor (the “Fund”).      
         2  

(b)

    Address of Principal Business Office or, if none, Residence:      
     The principal business address of the reporting person is 152 West 57th Street, 8th Floor, New York, NY 10019.      
         2  

(c)

    Citizenship:      
     Sanjay Motwani is a United Kingdom citizen. Sansar Family I, L.L.C. is a Delaware limited liability company. Sansar Capital Management, L.L.C. is a Delaware limited liability company.      
         2  

(d)

    Title of Class of Securities:      
     Common stock, par value $0.001 per share      
         2  

(e)

    CUSIP Number:      
     16949H102      
Item 3   If this statement is filed pursuant to §§ 240.13d-1(b) or 240.13d-2(b) or (c), check whether the person filing is a:   
  (a)    ¨    Broker or dealer registered under section 15 of the Act (15 U.S.C. 78o);
  (b)    ¨    Bank as defined in section 3(a)(6) of the Act (15 U.S.C. 78c);
  (c)    ¨    Insurance company as defined in section 3(a)(19) of the Act (15 U.S.C. 78c);
  (d)    ¨    Investment company registered under section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8);
  (e)    x    An investment adviser in accordance with § 240.13d-1(b)(1)(ii)(E);

 

Page 3 of 6 Pages

  (f)    ¨    An employee benefit plan or endowment fund in accordance with § 240.13d-1(b)(1)(ii)(F);
  (g)    ¨    A parent holding company or control person in accordance with §240.13d-1(b)(1)(ii)(G);
  (h)    ¨    A savings association as defined in Section 3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813);
  (i)    ¨    A church plan that is excluded from the definition of an investment company under section 3(c)(14) of the Investment Company Act of 1940 (15 U.S.C. 80a-3);
  (j)    ¨    A non-U.S. institution in accordance with § 240.13d-1(b)(1)(ii)(J);
  (k)    ¨    Group, in accordance with § 240.13d-1(b)(1)(ii)(K). If filing as a non-U.S. institution in accordance with § 240.13d-1(b)(1)(ii)(J), please specify the type of institution:                     .
Item 4   Ownership:   
 

With respect to the beneficial ownership of shares of Common Stock of ChinaNet Online Holdings, Inc. (the “Issuer”) by the reporting person, see Items 5 through 11 of the cover pages of this Schedule 13G/A, which are incorporated herein by reference.

 

On August 21, 2009, the Fund and several other investors entered into a securities purchase agreement, pursuant to which the Fund purchased units, comprised of 1,000,000 shares of 10% Series Preferred Stock, 500,000 Series A-1 Warrants to purchase Common Stock and 500,000 Series A-2 Warrants to purchase Common Stock. Pursuant to the terms of the Warrants and the Certificate of Designation for the Series A Preferred Stock, at no time may the Fund convert its shares into shares of the Issuer’s Common Stock if the conversion would result in the Fund beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) more than 9.99% of the Issuer’s then issued and outstanding shares of Common Stock; provided, however, that upon the Fund providing the Issuer with sixty-one days’ notice that the Fund wishes to waive the cap, then the cap will be of no force or effect with regard to all or a portion of the Series A Preferred Stock and/or the Warrants, as applicable, referenced in the waiver notice. These provisions had the immediate effect of restricting the Fund’s ability to convert all of its Series A Preferred Stock and/or exercise all of its Warrants. The Fund has also acquired 601,789 shares of the Issuer’s Common Stock. As of the date hereof, these provisions would permit the conversion of Series A Preferred Stock and/or exercise of the Warrants into approximately 1,226,936 shares of the Issuer’s Common Stock.

   

 

Page 4 of 6 Pages

Item 5    Ownership of Five Percent or Less of a Class:   
   If this statement is being filed to report the fact that as of the date hereof the reporting person has ceased to be the beneficial owner of more than five percent of the class of securities, check the following  ¨   
Item 6    Ownership of More than Five Percent on Behalf of Another Person:      
   Not Applicable.      
Item 7    Identification and Classification of the Subsidiary which Acquired the Security Being Reported on by the Parent Holding Company:
   Not Applicable.
Item 8    Identification and Classification of Members of the Group:      
   Not Applicable.      
Item 9    Notice of Dissolution of Group:      
   Not Applicable.      
Item 10    Certification:      
   By signing below the undersigned certifies that, to the best of the undersigned’s knowledge and belief, the securities referred to above were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect.      

 

Page 5 of 6 Pages

After reasonable inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

 

SANSAR CAPITAL MANAGEMENT,

L.L.C.

By:   Sansar Family I, L.L.C.,
  its Managing Member
By:  

/s/ Sanjay Motwani

  Sanjay Motwani
  Managing Member

February 10, 2011

 

Page 6 of 6 Pages