Per Share
|
Total
|
|||||||
Public
Offering Price
|
$ | 4.60 | $ | 9,200,000 | ||||
Underwriting
Discounts and Commissions
|
$ | 0.276 | $ | 552,000 | ||||
Proceeds
to us (before expenses)
|
$ | 4.324 | $ | 8,648,000 |
Page
|
|
Prospectus
Supplement
|
|
About
this Prospectus Supplement
|
S-1
|
Prospectus
Summary
|
S-2
|
Risk
Factors
|
S-10
|
Forward-Looking
Statements
|
S-19
|
Use
of Proceeds
|
S-20
|
Capitalization
|
S-20
|
Underwriting
|
S-21
|
Legal
Matters
|
S-23
|
Experts
|
S-23
|
Incorporation
of Certain Information by Reference
|
S-23
|
Prospectus
|
|
About
this Prospectus
|
1
|
Use
of Terms
|
1
|
China
Advanced Construction Materials Group, Inc..
|
1
|
Risk
Factors
|
2
|
Forward-Looking
Statements
|
2
|
Use
of Proceeds
|
2
|
Description
of Capital Stock
|
3
|
Description
of Warrants
|
6
|
Description
of Debt Securities
|
7
|
Description
of Units
|
14
|
Plan
of Distribution
|
15
|
Legal
Matters
|
16
|
Experts
|
16
|
Where
You Can Find Additional Information
|
17
|
Incorporation
of Certain Information by Reference
|
17
|
PROSPECTUS
SUMMARY
This
summary highlights information about us and the offering contained
elsewhere in, or incorporated by reference into, this prospectus
supplement and the accompanying prospectus. It is not complete and may not
contain all the information that may be important to you. You should
carefully read the entire prospectus supplement and the accompanying
prospectus, as well as the information incorporated by reference, before
making an investment decision, especially the information presented under
the heading “Risk Factors” beginning on page S-10 of this prospectus
supplement, “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” in our most recent Annual Report on Form 10-K
and Quarterly Report on Form 10-Q for the quarterly period ended December
31, 2009, and our consolidated financial statements which are incorporated
by reference.
Company
Overview
We
are a holding company whose China-based operating entities are primarily
engaged in the production and supply of a wide range of advanced ready-mix
concrete materials for large scale commercial, residential, and
infrastructure developments. Through these entities, we operate five (5)
fixed concrete manufacturing plants in Beijing and twelve (12) portable
concrete plants located throughout China near our seven (7) high speed
railway projects. We lease the land on which all of our plants are
located, as well as substantially all of the buildings on such
land. We also lease substantially all of the concrete
manufacturing equipment at four (4) of the fixed plants, however, we own
substantially all of the concrete manufacturing equipment, including 119
concrete mixers and 18 pump trucks at one of the fixed plants
and we own all of the equipment and temporary removable structures at all
of the portable plants. In addition, we have technical and
preferred procurement agreements with five (5) independently owned
concrete mixture stations, three (3) in Beijing, one (1) in Shaanxi and
one (1) in Sichuan, pursuant to which we are paid by percentages of cost
savings for technical support provided to clients and of the sales price
for projects we have to refer to other stations due to the geographical
location of our owned and leased plants.
Our
manufacturing services are used primarily for our national high speed
railway projects; almost all of our general contract contractors on the
high speed railway projects supply the needed raw materials, which results
in higher gross margins for us and reduces our upfront capital investments
needed to purchase raw materials. We also produce ready-mix
concrete at portable plants, which can be dismantled and moved to new
sites for new projects.
We
were founded as an unincorporated business on September 1, 2005, under the
name TJS Wood Flooring, Inc., and became a C corporation in the State of
Delaware on February 15, 2007. On April 29, 2008, we changed our name to
China Advanced Construction Materials Group, Inc. in connection with a
reverse acquisition transaction with Xin Ao Construction Materials, Inc.
Prior to the reverse acquisition, we were a development stage enterprise
and had not yet generated any revenues. From and after the reverse
acquisition, our business became the business of our indirect, wholly
owned subsidiaries in the People’s Republic of China.
We
own all of the issued and outstanding capital stock of Xin Ao Construction
Materials, Inc., or BVI-ACM, a British Virgin Islands corporation, which
in turn owns 100% of the outstanding capital stock of Beijing Ao Hang
Construction Materials Technology Co., Ltd., or China-ACMH, a company
incorporated under the laws of China. On November 28, 2007, China-ACMH
entered into a series of contractual agreements with Beijing Xin Ao
Concrete Co., Ltd., or Xin Ao, a company incorporated under the laws of
China, and its two shareholders, in which China-ACMH effectively took over
management of the business activities of Xin Ao and has the right to
appoint all executives and senior management and the members of the board
of directors of Xin Ao. While we have no direct equity
ownership in Xin Ao, through these contractual agreements we receive the
economic benefits of Xin Ao’s operations and are entitled to consolidate
the financial results of operations and accounts of Xin Ao in our
financial statements under U.S. Generally Accepted Accounting
Principles.
S-2
|
Our
Industry
According
to Global Insight, a leading provider of global economic and financial
intelligence, the global construction market has experienced a decrease
over the past 2 years, and a slow recovery expected only after
2011. Despite the global construction market problems, however,
the Chinese construction market has maintained a double digit increase
over the past 10 years, which makes it one of the most dynamic markets in
the world.
China
is among the world’s largest construction materials producers, ranking
first in the world’s annual output of cement, flat glass, building ceramic
and ceramic sanitary ware. According to Industrial Ceramics, Vol. 27,
February 2007, “[t]otal revenues for the Chinese construction materials
market in 2006 was approximately $171.5 billion,” and “[i]t is estimated
that the total production value will reach $294.8 billion by 2011, an
average annual growth rate of 11.4%. (Industrial Ceramics, Vol. 27,
February 2007,” page 142). This information is publicly available at www.technagroup.it/sample_IC.pdf. According
to the National Development and Reform Commission, or NDRC, profits by
companies in the construction materials market in China during the first
five months of 2009 were approximately $6.16 billion, representing an
increase of 13.7% over the same period in 2008. The “Year 2009
First Five Months Construction Material Industry Sector Analysis” is
provided by the National Development and Reform Commission (NDRC). The
Chinese version of this information is publicly available on NDRC’s
website at http://yxj.ndrc.gov.cn/gjyx/cyyxdt/t20090722_292050.htm.
Construction
Demand in China
According
to the evaluation by Research Institute of Investment, National
Development and Research Commission, China’s November 2008 economic
stimulus package, valued at RMB 4 trillion (approximately US$593 billion),
has had a material impact on the construction industry, contributing to
growth in the construction industry of approximately RMB 594 billion in
2009. According to data prepared by the National Bureau of Statistics of
China, from January to April 2009, urban fixed assets investment reached
RMB3.7 trillion, up 30.5 percent year by year. Driven by a series of
policies on keeping growth and expanding domestic demand, we believe that
the construction industry in China will continue to grow.
The
stimulus package has been and is expected to be used to finance programs,
during 2009 and 2010 in 10 major areas, such as low-income housing, rural
infrastructure, water, electricity, transportation, the environment,
technological innovation and rebuilding disaster struck areas. The
economic stimulus package also focuses on infrastructure projects such as
new railways, roads, and airports. According to the Ministry of Railways,
China doubled its investment in railways to about RMB 600 billion
(approximately US$87.8 billion) for 2009 and 2010. Part of the new funds
will go to building 5,148 km of new lines, including five passenger-only
high-speed lines. The ministry also plans to start 70 other new projects,
which will cost and estimated RMB 1.5 trillion (approximately US$219.6
billion). By 2012 China is expected to have 110,000 km of rail lines,
including 13,000 km of passenger routes, of which, many will be high-speed
railways allowing trains to run between 200 and 350 km an hour. Chinese
version available at http://www.concrete365.com/news/2009/7-20/H142630705.htm).
The
Chinese Construction industry accounted for approximately 20% of the
nominal gross domestic product (GDP), contributing RMB 6,114 billion in
2008. The government stimulus package has helped to fuel growth
in construction and infrastructure development. The government’s
continued efforts to modernize the country’s infrastructure is exemplified
by such massive projects as the South-North Water Diversion — designed to
redirect water to the northern plains from Central and South China. This
project, scheduled for completion in 2050, is expected to result in annual
cement consumption of over one million metric tons.
China
accounts for half of all new building activity in the world and rapid
expansion is expected to continue to 2030 as up to 400 million citizens
are expected to move into urban areas.
S-3
|
China’s
Cement & Concrete Demand
In
the last four months of 2009, the country's cement output rose 13 percent
from the same period of 2008. The year to year growth was 3.1
percentage points larger than that of a year ago. “Demand for cement
in China is forecast to rise 6.0 percent annually through 2012 to 1.8
billion metric tons. Growth will be driven by rising, but decelerating,
construction expenditures in China. Further advances in cement
manufacturing technology are also expected to help stimulate sales by
improving the quality of the product. Blended cements are expected to
account for about 90 percent of total sales in 2012, reflecting the
versatility of these types across a range of construction applications, as
well as their performance and/or price benefits over other types of
cement. Regional cement markets reflect differences in construction
expenditures, which in turn are driven by local trends in demographics,
industrial output and economic activity. Central and Eastern China are
expected to remain the largest cement market in China through 2012, fueled
by increases in regional construction expenditures. However, the cement
markets in Northwest and Southwest China are expected to grow at the
faster pace, benefiting from the government’s Great Western Development
strategy, which aims to promote investment in these areas. Consumption of
cement in Central and Northern China is also expected to perform above the
national average, supported by high levels of transportation
infrastructure construction and booming urban markets in Beijing and
Tianjin.” (from Business Wire).
Residential
and non-residential buildings in China are increasingly requiring much
more concrete due to, among other reasons, the short supply of wood. China
is currently the largest consumption market of cement worldwide at over
$200 billion annually. China’s cement consumption amounted to
approximately 44% of global demand in 2008 and are expected to be greater
than current combined consumption of India and the U.S. by 2010. According
to the National Development and Reform Commission, companies in the
construction materials market in China recognized a 92.6% increase in
profits from 2005 to 2006. At the present rate, it is presumed that China
will continue to be an important player in the global construction
materials marketplace for at least the next two decades.
As
a result of the government stimulus package, the demand for cement and
concrete is expected to be significantly increased in China in the
following several years.
Demand
for Ready-Mixed Concrete
Construction
contractors are expected to continue to represent the largest market for
cement, accounting for an estimated one-third of total demand in 2012.
However, we believe that the ready-mix concrete market could exhibit the
strongest growth in the cement industry, and could possibly have near
double-digit gains through 2012. Gains are expected to benefit from
government regulations banning on-site concrete and mortar mixing. Demand
for cement used in concrete products is expected to be driven by the
increasing popularity of precast concrete with many construction
contractors. In addition, the phase-out of clay bricks will heighten
demand for concrete blocks. We anticipate that cement demand in the
ready-mixed concrete market will realize the strongest gains of any market
category through 2010, with an annual increase of 11.2%. Recognizing the
significant environmental impact created from the large-scale construction
activities undertaken in the past few decades, China’s government
implemented Decree #341 in 2004 which bans onsite concrete production in
over 200 major cities across China in order to reduce environmental damage
from onsite cement mixing and improve the quality of concrete used in
construction.
Our
Competitive Strengths
We
believe that the following competitive strengths enable us to compete
effectively and to capitalize on the growth of the market for construction
materials in China:
|
●
|
Large Scale
Contractor Relationships. We have contracts
with major construction contractors that are constructing key
infrastructure, commercial and residential projects. Our sales efforts
focus on large-scale projects and large customers that place large
recurring orders and present less credit risks to us. Our top five
customers accounted for approximately 15.95%, 32.03 % and 41.49% of the
Company’s sales for 1H FY2010 and the years ended June 30, 2009 and 2008,
respectively. The total accounts receivable from these customers amounted
to$3,784,153.42,
$3,624,793 and $3,584,879 as of December 31, 2009, June 30, 2009 and
2008.
|
S-4
|
●
|
Experienced
Management. We believe that our management’s technological
knowledge and business relationships gives us the ability to secure major
infrastructure projects, which provides us with leverage to potentially
acquire less sophisticated operators, increase production volumes, and
implement quality standards and environmentally sensitive
policies.
|
●
|
Innovation Efforts. We strive to produce the most technically and scientifically advanced products to our customers and maintain close relationships with Tsinghua University, Xi’an University of Architecture and Technology and Beijing Dongfangjianyu Institute of Concrete Science & Technology which assist us with our research and development activities. As a result of our relationships with these universities and institute, we believe that we have realized an advantage over many of our competitors by gaining access to a wide array of resources and knowledge. |
Our Growth Strategy | |
We are committed to enhancing profitability and cash flows through the following strategies: | |
● |
Capacity
Expansion via Building New Plants. We added nine portable stations
during the fiscal year 2009 in order to meet the requirements of existing
contracts and anticipated demand. We plan to add more portable stations in
2010 and 2011 as part of our long-term expansion plans due to very
attractive margins and high return on investment.
|
●
|
Mergers and
Acquisitions. We intend to capitalize on the challenges that
smaller companies are encountering in our industry by acquiring
complementary companies at favorable prices. We believe that buying rather
than building capacity is an option that may be attractive to us if
replacement costs are higher than purchase prices. We are currently
looking into acquiring smaller concrete manufacturers in China as part of
our expansion plans; further information will be reported when key details
have been confirmed. No Letters-of-Intent have been entered into or
specific targets identified at this time.
|
● |
Vertical
Integration. We plan to acquire smaller companies within the
construction industry, develop more material recycling centers, and hire
additional highly qualified employees. In order to accomplish this, we may
be required to offer additional equity or debt securities. Certain of the
companies we may seek to acquire are suppliers of the raw materials we
purchase to manufacture our products. If we do acquire such companies we
will have greater control over our raw material costs.
|
●
|
Supply
Chain Efficiencies and Scale. We intend to streamline our supply
chain process and leveraging our economies of scale.
|
● |
New Product
Offering. We plan to produce a lightweight aggregate concrete for
use in projects and to expand product offerings to include pre-cast
concrete.
|
Recent
Developments
On
January 25, 2010, we announced that we entered into a definitive contract
to provide our ready-mix concrete service to the high-speed railway
project between Xi'an and Ankang, the largest city in southern Shanxi
Province, in the form of technical counseling for the production of
270,000 cubic meters of ready-mix concrete. The duration of
this project is estimated to be 20 months, with associated revenues
estimated to be $3 million, anticipated to result in an estimated $800,000
in net income.
Corporate
Information
Our
principal executive offices are located at Yingu Plaza, 9 Beisihuanxi
Road, Suite 1708, Haidian District, Beijing 100080 China and our
telephone number at that address is +(86 10) 825 25361. Our principal
website is located at www.china-acm.com. The information on our website is
not part of this prospectus supplement or the accompanying
prospectus.
S-5
|
The
following chart reflects our organizational structure as of the date of
this prospectus supplement.
Conventions
In
this prospectus supplement, unless otherwise indicated, references
to
|
||||
·
|
“China”
and “PRC,” are to the People's Republic of China,
|
|||
·
|
“China
ACM,” “the Company,” “we,” “our” and “us” refer to the combined business
of China Advanced Construction
Materials Group, Inc. and its wholly-owned subsidiary, BVI-ACM, along with
BVI-ACM’s wholly-owned subsidiary, China-ACMH, and its variable interest
entity, Xin Ao,
|
|||
·
|
“BVI-ACM,”
are to Xin Ao Construction Materials, Inc., a British Virgin Islands
corporation,
|
|||
·
|
“China-ACMH”
are to Beijing Ao Hang Construction Materials Technology Co., Ltd., a
company incorporated under the laws of China, and
|
|||
·
|
“Xin
Ao” are to Beijing Xin Ao Concrete Co., Ltd., a company incorporated under
the laws of China.
|
|||
The
Offering
|
||||||
Shares
of Common Stock Offered by Us
|
2,000,000
shares, 2,300,000 shares if the underwriter exercises its over-allotment
option in full.
|
|||||
Shares
of Common Stock to be Outstanding After the Offering
|
15,216,420
shares, 15,516,420 shares if the underwriter exercises its over-allotment
option in full. (1)
|
|||||
Nasdaq
Global Market Symbol
|
CADC
|
|||||
Use
of Proceeds
|
We
intend to use the net proceeds from this offering for general corporate
purposes, including future capacity expansion, strategic acquisitions,
capital expenditure and research and development
expenditures. See “Use of Proceeds” in this prospectus
supplement.
|
|||||
Dividend
Policy
|
Our
board of directors does not intend to declare cash dividends on our common
stock for the foreseeable future.
|
|||||
Risk
Factors
|
See
“Risk Factors” beginning on page S-10 of this prospectus supplement and on
page 2 of the accompanying prospectus and other information included or
incorporated by reference in this prospectus supplement and the
accompanying prospectus.
|
|||||
Transfer
Agent and Registrar
|
Action
Stock Transfer
|
|||||
_______________ | ||||||
(1)
|
The number of shares of common stock to be outstanding after this offering is based on 13,216,420 shares of common stock outstanding on February 23, 2010. | |||||
Summary
Consolidated Financial Information
This
section presents our summary consolidated financial data and should be
read in conjunction with “Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and our
consolidated financial statements and related notes included in our Annual
Report on Form 10-K for the year ended June 30, 2009 and
“Item 1. Financial Statements” and “Item 2. Management’s
Discussion and Analysis of Financial Condition and Results of Operations”
of our Quarterly Report on Form 10-Q for the period ended December
31, 2009. The selected consolidated financial data in this section is not
intended to replace our consolidated financial
statements.
We
derived the statement of operations data, statement of cash flows data and
balance sheet data for the years ended June 30, 2009 and 2008 from the
audited consolidated financial statements and related notes included in
our Annual Report on Form 10-K for the year ended June 30, 2009. We
derived the statement of operations data and statement of cash flows data
for the six months ended December 31, 2009 and 2008, and the balance sheet
data as of December 31, 2009 from our unaudited financial statements and
related notes included in our Quarterly Report on Form 10-Q for the period
ended December 31, 2009. The unaudited interim period financial
information, in our opinion, includes all adjustments that are normal and
recurring in nature and necessary for a fair presentation for the periods
shown. Results for the six months ended December 31, 2009 are not
necessarily indicative of the results to be expected for the full fiscal
year.
|
||||||||||||||||
(In
thousands, except per share data)
|
Year
Ended
|
Six
Months Ended
|
||||||||||||||
June
30,
|
December
31,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
(Unaudited)
|
(Unaudited)
|
||||||||||||||
|
||||||||||||||||
Statement
of Operations Data:
|
||||||||||||||||
Revenue
|
$ | 39,715 | $ | 27,565 | $ | 45,645 | $ | 15,965 | ||||||||
Cost
of revenue
|
24,518 | 20,799 | 37,124 | 9,321 | ||||||||||||
Gross
profit
|
15,197 | 6,766 | 8,522 | 6,644 | ||||||||||||
Selling,
general and administrative expenses
|
1,718 | 1,947 | 2,052 | 1,269 | ||||||||||||
Income
from operations
|
13,479 | 4,819 | 6,469 | 5,375 | ||||||||||||
Other
income (expense), net
|
705 | 1,357 | (1,699 | ) | 304 | |||||||||||
(Loss)
Income before provision for income taxes
|
14,184 | 6,177 | 4,771 | 5,679 | ||||||||||||
Provision
for income taxes
|
2,115 | 1,012 | 1,349 | 1,575 | ||||||||||||
Net
(loss) income
|
$ | 12,068 | $ | 5,164 | $ | 3,422 | $ | 4,104 | ||||||||
(Loss)
Earnings per share:
|
||||||||||||||||
Basic
|
$ | 1.03 | $ | 0.57 | $ | 0.24 | $ | 0.33 | ||||||||
Diluted
|
$ | 0.86 | $ | 0.56 | $ | 0.22 | $ | 0.29 | ||||||||
|
Balance Sheet Data: | ||||||||||||||||
As
of June 30,
|
As
of December 31,
|
|||||||||||||||
(Unaudited)
|
||||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Working
capital
|
$ | 5,267 | $ | 3,152 | $ | 6,511 | $ | 6,732 | ||||||||
Current
assets
|
25,303 | 16,235 | 34,431 | 21,596 | ||||||||||||
Total
assets
|
56,320 | 37,718 | 73,207 | 43,433 | ||||||||||||
Current
liabilities
|
20,036 | 13,083 | 27,920 | 14,864 | ||||||||||||
Total
liabilities
|
20,036 | 13,083 | 33,467 | 14,864 | ||||||||||||
Stockholders’
equity
|
30,042 | 18,804 | 35,509 | 22,437 | ||||||||||||
Statement
of Cash Flows Data:
|
||||||||||||||||
Net
cash provided by (used in):
|
For
the Years ended
June
30,
|
For
the Six Months Ended
December 31, |
||||||||||||||
(Unaudited)
|
||||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Operating
Activities
|
$ | 3,361 | $ | 5,111 | $ | 1,056 | $ | 1,063 | ||||||||
Investing
Activities
|
(1,772 | ) | (8,701 | ) | (261 | ) | (32 | ) | ||||||||
Financing
Activities
|
137 | 4,377 | (2,726 | ) | 275 |
·
|
our
expectations regarding the market for our cement products and
services;
|
·
|
our
expectations regarding the continued growth of the cement
industry;
|
·
|
our
beliefs regarding the competitiveness of our
products;
|
·
|
our
expectations regarding the expansion of our manufacturing
capacity;
|
·
|
our
expectations with respect to increased revenue growth and our ability to
achieve profitability resulting from increases in our production
volumes;
|
·
|
our
future business development, results of operations and financial
condition;
|
·
|
competition
from other manufacturers of cement
products;
|
·
|
the
loss of any member of our management
team;
|
·
|
our
ability to integrate acquired subsidiaries and operations into existing
operations;
|
·
|
market
conditions affecting our equity
capital;
|
·
|
our
ability to successfully implement our selective acquisition
strategy;
|
·
|
changes
in general economic conditions; and
|
·
|
changes
in accounting rules or the application of such
rules.
|
As
of December 31, 2009
|
|||||||||
Actual
|
As
Adjusted
|
||||||||
(in
thousands)
|
|||||||||
(unaudited)
|
|||||||||
Cash
|
$ | 1,696 | $ | 10,094 | |||||
Debt:
|
|||||||||
Short-term
debt
|
146 | 146 | |||||||
Long-term
debt
|
- | - | |||||||
REDEEMABLE
CONVERTIBLE PREFERRED STOCK ($0.001 par value, 549,875 shares issued
and outstanding as of December 31, 2009, net of discount for
the amount of $167,851 as of December 31, 2009
|
4,231 | 4,231 | |||||||
Shareholders’
equity:
Preferred
stock $0.001 par value, 1,000,000 shares authorized, 549,875 issued and
outstanding as of December 31, 2009 , and classified outside shareholders'
equity (see above), liquidation preference of $8.00 per share and accrued
dividends as of December 31, 2009
|
- | - | |||||||
Common
stock, $0.001 par value, authorized 74,000,000 shares authorized,
12,751,971 issued and outstanding as of December 31, 2009 actual and 14,751,971
shares as adjusted
|
13 | 15 | |||||||
Paid
in capital
|
17,735 | 26,131 | |||||||
Contribution
receivable
|
- | - | |||||||
Retained
earnings
|
11,591 | 11,591 | |||||||
Statutory
reserves
|
3,545 | 3,545 | |||||||
Accumulated
other comprehensive income
|
2,625 | 2,625 | |||||||
Total
shareholders’ equity
|
$ | 35,509 | $ | 43,907 | |||||
Total
Capitalization
|
$ | 39,886 | $ | 48,284 | |||||
Per
Share
|
Total
|
|||||||||||||||
Without
Over-allotment
|
With
Over-allotment
|
Without
Over-allotment
|
With
Over-allotment
|
|||||||||||||
Underwriting
discounts and
commissions
paid by us
|
$ | 0.276 | $ | 0.276 | $ | 552,000 | $ | 634,800 | ||||||||
Expenses
payable by us
|
$ | 0.125 | $ | 0.087 | $ | 250,000 | $ | 250,000 |
·
|
Stabilizing
transactions permit bids to purchase the underlying security so long as
the stabilizing bids do not exceed a specified maximum.
|
·
|
Over-allotment
involves sales by the underwriter of shares in excess of the number of
shares the underwriter is obligated to purchase, which creates a syndicate
short position. The short position may be either a covered short position
or a naked short position. In a covered short position, the number of
shares over-allotted by the underwriter is not greater than the number of
shares that they may purchase in the over-allotment option. In a naked
short position, the number of shares involved is greater than the number
of shares in the over-allotment option. The underwriter may close out any
covered short position by either exercising its over-allotment option
and/or purchasing shares in the open market.
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·
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Syndicate
covering transactions involve purchases of the common stock in the open
market after the distribution has been completed in order to cover
syndicate short positions. In determining the source of shares to close
out the short position, the underwriter will consider, among other things,
the price of shares available for purchase in the open market as compared
to the price at which they may purchase shares through the over-allotment
option. A naked short position occurs if the underwriter sells more shares
than could be covered by the over-allotment option. This
position can only be closed out by buying shares in the open market. A
naked short position is more likely to be created if the underwriter is
concerned that there could be downward pressure on the price of the shares
in the open market after pricing that could adversely affect investors who
purchase in the offering.
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·
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Penalty
bids permit the representative to reclaim a selling concession from a
syndicate member when the common stock originally sold by the syndicate
member is purchased in a stabilizing or syndicate covering transaction to
cover syndicate short
positions.
|
· |
Our
Annual Report on Form 10-K for the fiscal year ended June 30, 2009, filed
September 28, 2009;
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·
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Our
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30,
2009, filed on November 16, 2009;
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·
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Our
Quarterly Report on Form 10-Q for the fiscal quarter ended December 31,
2009, filed on February 9, 2010;
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·
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The
description of our common stock, $0.001 par value per share, contained in
our Registration Statement on Form 8-A, filed on October 30, 2009 pursuant
to Section 12(b) of the Exchange Act, as amended;
and
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·
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Our
Current Reports on Form 8-K filed on August 3, 2009, August 17, 2009,
October 9, 2009, January 7, 2010, January 22, 2010, January 29, 2010 and
February 8, 2010.
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ABOUT
THIS PROSPECTUS
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1
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USE
OF TERMS
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1
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CHINA
ADVANCED CONSTRUCTION MATERIALS GROUP, INC.
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1
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RISK
FACTORS
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2
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FORWARD-LOOKING
STATEMENTS
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2
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USE
OF PROCEEDS
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2
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DESCRIPTION
OF CAPITAL STOCK
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3
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DESCRIPTION
OF WARRANTS
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6
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DESCRIPTION
OF DEBT SECURITIES
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7
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DESCRIPTION
OF UNITS
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14
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PLAN
OF DISTRIBUTION
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15
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LEGAL
MATTERS
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16
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EXPERTS
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16
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WHERE
YOU CAN FIND ADDITIONAL INFORMATION
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17
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INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
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17
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·
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acquisitions;
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working
capital;
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capital
expenditures;
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repayment
of debt;
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research
and development expenditures; and
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investments.
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the
value of the Series A Preferred Stock is $8.00 per
share;
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the
Series A Preferred Stock shall rank senior to all classes of common stock
of the Company in regards to liquidation, dissolution and winding up of
the affairs of the Company;
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the
holders of the Series A Preferred Stock are entitled to receive cumulative
dividends on each share of Series A Preferred Stock, payable in cash, at
an annual rate of 9%;
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each
share of Series A Preferred Stock is convertible, at the option of the
holder, into four shares of the Company’s common
stock;
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each
share of Series A Preferred Stock will automatically convert into shares
of the Company’s common stock, based on the if the closing price of the
Company’s common stock on the Company’s principal securities exchange
exceeds $5.00 per share for any 20 of the past 30 consecutive trading days
and the average trading volume is no less than 100,000 shares per day
during such period;
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upon
the second anniversary of the issuance date of the Series A Preferred
Stock, the Company shall redeem all of the outstanding shares of Series A
Preferred Stock at an amount equal to $8.00 per share plus all accrued
dividends unpaid thereon; and
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the
holders of Series A Preferred Stock will vote together with the holders of
common stock on all matters and not as a separate class, and each share of
Series A Preferred Stock shall have a number of votes equal to the number
of shares of common stock then issuable upon conversion. Our board of
directors is authorized, without action by the shareholders, to issue
preferred stock from time to time with dividend, liquidation, conversion,
voting, and other rights and restrictions as it may
determine. Shares of preferred stock may be issued in one or
more classes or series within a class as may be determined by our board of
directors, who may also establish the number of shares to be included in
each class or series. Any preferred stock so issued by the board of
directors may rank senior to the common stock with respect to the payment
of dividends or amounts upon liquidation, dissolution or winding up of us,
or both.
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·
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number
of shares of preferred stock to be issued and the offering price of the
preferred stock;
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·
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the
title and stated value of the preferred
stock;
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·
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dividend
rights, including dividend rates, periods, or payment dates, or methods of
calculation of dividends applicable to the preferred
stock;
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the
date from which distributions on the preferred stock shall accumulate, if
applicable;
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right
to convert the preferred stock into a different type of
security;
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voting
rights attributable to the preferred
stock;
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rights
and preferences upon our liquidation or winding up of our
affairs;
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terms
of redemption;
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the
procedures for any auction and remarketing, if any, for the preferred
stock;
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the
provisions for a sinking fund, if any, for the preferred
stock;
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any
listing of the preferred stock on any securities
exchange;
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the
terms and conditions, if applicable, upon which the preferred stock will
be convertible into our common stock, including the conversion price (or
manner of calculation thereof);
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·
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a
discussion of federal income tax considerations applicable to the
preferred stock;
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·
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the
relative ranking and preferences of the preferred stock as to distribution
rights (including whether any liquidation preference as to the preferred
stock will be treated as a liability for purposes of determining the
availability of assets for distributions to holders of stock ranking
junior to the shares of preferred stock as to distribution
rights);
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·
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any
limitations on issuance of any series of preferred stock ranking senior to
or on a parity with the series of preferred stock being offered as to
distribution rights and rights upon the liquidation, dissolution or
winding up or our affairs; and
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any
other specific terms, preferences, rights, limitations or restrictions of
the preferred stock.
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·
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before
such person became an interested stockholder, the board of directors of
the corporation approved either the business combination or the
transaction that resulted in the interested stockholder becoming an
interested stockholder;
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·
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upon
the consummation of the transaction that resulted in the interested
stockholder becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at
the time the transaction commenced, excluding shares held by directors who
also are officers of the corporation and shares held by employee stock
plans; or
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·
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at
or following the time such person became an interested stockholder, the
business combination is approved by the board of directors of the
corporation and authorized at a meeting of stockholders by the affirmative
vote of the holders of 66 2/3% of the outstanding voting stock of the
corporation which is not owned by the interested
stockholder.
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·
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the
offering price or prices;
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·
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the
aggregate amount of securities that may be purchased upon exercise of such
warrants and minimum number of warrants that are
exercisable;
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·
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the
currency or currency units in which the offering price, if any, and the
exercise price are payable;
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·
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the
number of securities, if any, with which such warrants are being offered
and the number of such warrants being offered with each
security;
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·
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the
date on and after which such warrants and the related securities, if any,
will be transferable separately;
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·
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the
amount of securities purchasable upon exercise of each warrant and the
price at which the securities may be purchased upon such exercise, and
events or conditions under which the amount of securities may be subject
to adjustment;
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·
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the
date on which the right to exercise such warrants shall commence and the
date on which such right shall
expire;
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·
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the
circumstances, if any, which will cause the warrants to be deemed to be
automatically exercised;
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·
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any
material risk factors, if any, relating to such
warrants;
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the
identity of any warrant agent; and
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·
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any
other terms of such warrants (which shall not be inconsistent with the
provisions of the warrant
agreement).
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the
title and authorized denominations of the series of debt
securities;
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·
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any
limit on the aggregate principal amount of the series of debt
securities;
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·
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whether
such debt securities will be issued in fully registered form without
coupons or in a form registered as to principal only with coupons or in
bearer form with coupons;
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·
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whether
issued in the form of one or more global securities and whether all or a
portion of the principal amount of the debt securities is represented
thereby;
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·
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the
price or prices at which the debt securities will be
issued;
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·
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the
date or dates on which principal is
payable;
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·
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the
place or places where and the manner in which principal, premium or
interest, if any, will be payable and the place or places where the debt
securities may be presented for transfer and, if applicable, conversion or
exchange;
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·
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interest
rates, and the dates from which interest, if any, will accrue, and the
dates when interest is payable and the
maturity;
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·
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the
right, if any, to extend the interest payment periods and the duration of
the extensions;
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·
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our
rights or obligations to redeem or purchase the debt
securities;
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·
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any
sinking fund or other provisions that would obligate us to repurchase or
otherwise redeem some or all of the debt
securities;
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·
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conversion
or exchange provisions, if any, including conversion or exchange prices or
rates and adjustments
thereto;
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the
currency or currencies of payment of principal or
interest;
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the
terms applicable to any debt securities issued at a discount from their
stated principal amount;
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·
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the
terms, if any, under which any debt securities will rank junior to any of
our other debt;
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·
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whether
and upon what terms the debt securities may be defeased, if different from
the provisions set forth in the
indenture;
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·
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if
the amount of payments of principal or interest is to be determined by
reference to an index or formula, or based on a coin or currency other
than that in which the debt securities are stated to be payable, the
manner in which these amounts are determined and the calculation agent, if
any, with respect thereto;
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·
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the
provisions, if any, relating to any collateral provided for the debt
securities;
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·
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if
other than the entire principal amount of the debt securities when issued,
the portion of the principal amount payable upon acceleration of maturity
as a result of a default on our
obligations;
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·
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the
events of default and covenants relating to the debt securities that are
in addition to, modify or delete those described in this
prospectus;
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the
nature and terms of any security for any secured debt securities;
and
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·
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any
other specific terms of any debt
securities.
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the
conversion or exchange price;
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the
conversion or exchange period;
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provisions
regarding the ability of us or the holder to convert or exchange the debt
securities;
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·
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events
requiring adjustment to the conversion or exchange price;
and
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provisions
affecting conversion or exchange in the event of our redemption of the
debt securities.
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failure
to pay interest for 30 days after the date payment is due and
payable;
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failure
to pay principal or premium, if any, on any debt security when due, either
at maturity, upon any redemption, by declaration or
otherwise;
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failure
to make sinking fund payments when
due;
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failure
to perform other covenants for 60 days after notice that performance
was required;
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events
in bankruptcy, insolvency or reorganization relating to us;
or
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any
other Event of Default provided in the applicable officer’s certificate,
resolution of our board of directors or the supplemental indenture under
which we issue a series of debt
securities.
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the
holder has previously given to the trustee written notice of default and
continuance of such default;
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the
holders of not less than a majority in principal amount of the outstanding
debt securities of the affected series of equal ranking have requested
that the trustee institute the
action;
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the
requesting holders have offered the trustee reasonable indemnity for
expenses and liabilities that may be incurred by bringing the
action;
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the
trustee has not instituted the action within 60 days of the request;
and
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the
trustee has not received inconsistent direction by the holders of a
majority in principal amount of the outstanding debt securities of the
affected series of equal ranking.
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by
the depositary for such registered global security to its
nominee;
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by
a nominee of the depositary to the depositary or another nominee of the
depositary; or
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by
the depositary or its nominee to a successor of the depositary or a
nominee of the successor.
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ownership
of beneficial interests in a registered global security will be limited to
persons that have accounts with the depositary for such registered global
security, these persons being referred to as “participants,” or persons
that may hold interests through
participants;
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upon
the issuance of a registered global security, the depositary for the
registered global security will credit, on its book-entry registration and
transfer system, the participants’ accounts with the respective principal
amounts of the debt securities represented by the registered global
security beneficially owned by the
participants;
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any
dealers, underwriters, or agents participating in the distribution of the
debt securities represented by a registered global security will designate
the accounts to be credited; and
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ownership
of beneficial interest in such registered global security will be shown
on, and the transfer of such ownership interest will be effected only
through, records maintained by the depositary for such registered global
security for interests of participants, and on the records of participants
for interests of persons holding through
participants.
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will
not be entitled to have the debt securities represented by a registered
global security registered in their
names;
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will
not receive or be entitled to receive physical delivery of the debt
securities in the definitive form;
and
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will
not be considered the owners or holders of the debt securities under the
relevant indenture.
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we
irrevocably deposit with the trustee cash or U.S. government obligations,
as trust funds, in an amount certified to be enough to pay at maturity, or
upon redemption, the principal, premium and interest, if any, on all
outstanding debt securities of the
series;
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we
deliver to the trustee an opinion of counsel from a nationally recognized
law firm to the effect that the holders of the series of debt securities
will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of the defeasance or covenant defeasance and that
defeasance or covenant defeasance will not otherwise alter the holders’
U.S. federal income tax treatment of principal, premium and interest, if
any, payments on the series of debt securities;
and
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in
the case of subordinated debt securities, no event or condition shall
exist that, based on the subordination provisions applicable to the
series, would prevent us from making payments of principal of, premium and
interest, if any, on any of the applicable subordinated debt securities at
the date of the irrevocable deposit referred to above or at any time
during the period ending on the 91st day after the deposit
date.
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secure
any debt securities and provide the terms and conditions for the release
or substitution of the security;
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evidence
the assumption by a successor corporation of our
obligations;
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add
covenants for the protection of the holders of debt
securities;
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add
any additional events of default;
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cure
any ambiguity or correct any inconsistency or defect in the
indenture;
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add
to, change or eliminate any of the provisions of the indenture in a manner
that will become effective only when there is no outstanding debt security
which is entitled to the benefit of the provision as to which the
modification would apply;
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establish
the forms or terms of debt securities of any
series;
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eliminate
any conflict between the terms of the indenture and the Trust Indenture
Act of 1939;
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·
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evidence
and provide for the acceptance of appointment by a successor trustee and
add to or change any of the provisions of the indenture as is necessary
for the administration of the trusts by more than one trustee;
and
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make any other provisions with
respect to matters or questions arising under the indenture that will not
be inconsistent with any provision of the indenture as long as the new
provisions do not adversely affect the interests of the holders of any
outstanding debt securities of any series created prior to the
modification.
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extend
the final maturity of any debt
security;
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reduce
the principal amount or premium, if
any;
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reduce
the rate or extend the time of payment of
interest;
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reduce
any amount payable on redemption or impair or affect any right of
redemption at the option of the holder of the debt
security;
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change
the currency in which the principal, premium or interest, if any, is
payable;
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reduce
the amount of the principal of any debt security issued with an original
issue discount that is payable upon acceleration or provable in
bankruptcy;
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alter
provisions of the relevant indenture relating to the debt securities not
denominated in U.S. dollars;
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impair
the right to institute suit for the enforcement of any payment on any debt
security when due;
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if
applicable, adversely affect the right of a holder to convert or exchange
a debt security; or
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reduce
the percentage of holders of debt securities of any series whose consent
is required for any modification of the
indenture.
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a
continuing default in the payment of interest on, premium, if any, or
principal of, any such debt security held by a non-consenting holder;
or
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a
default in respect of a covenant or provision of the indenture that cannot
be modified or amended without the consent of the holder of each
outstanding debt security of each series
affected.
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would
not conflict with any rule of law or with the relevant
indenture;
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would
not be unduly prejudicial to the rights of another holder of the debt
securities;
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and
would not involve any trustee in personal
liability.
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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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any
additional terms of the governing unit
agreement.
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directly
to investors, including through a specific bidding, auction or other
process;
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to
investors through agents;
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directly
to agents;
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to
or through brokers or dealers;
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to
the public through underwriting syndicates led by one or more managing
underwriters;
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to
one or more underwriters acting alone for resale to investors or to the
public; and
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through
a combination of any such methods of
sale.
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the
name or names of any underwriters, dealers or
agents;
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the
purchase price of the securities and the proceeds to us from the
sale;
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any
over-allotment options under which underwriters may purchase additional
securities from us;
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any
underwriting discounts and other items constituting compensation to
underwriters, dealers or agents;
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any
public offering price;
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any
discounts or concessions allowed or reallowed or paid to dealers;
and
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any
securities exchange or market on which the securities offered in the
prospectus supplement may be
listed.
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·
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Our
Annual Report on Form 10-K for the fiscal year ended June 30, 2009, filed
September 28, 2009;
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·
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Our
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30,
2009, filed on November 16, 2009;
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·
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The
description of our common stock, $0.001 par value per share, contained in
our Registration Statement on Form 8-A, filed on October 30, 2009,
pursuant to Section 12(b) of the Exchange Act, as amended;
and
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·
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Our
Current Reports on Form 8-K, as
follows:
|
Form
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Filed On
|
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8-K
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August
3, 2009
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|
8-K
|
August
17, 2009
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|
8-K
|
October
9, 2009
|