Chinese Jewelry Maker Puts $80 Million on the Shelf (KGJI)

Kingold Jewelry Inc. (NASDAQ: KGJI) has filed a Form S-3 with the US Securities and Exchange Commission a shelf registration for $80 million in common and preferred stock, warrants, and debt. Kingold makes and sells gold jewelry in the People’s Republic of China.

From the S-3, here’s a bit of history on the company:

We were initially incorporated in 1995 in Delaware as Vanguard Enterprises, Inc. In 1999, we changed our corporate name to Activeworlds.com, Inc. (and subsequently to Activeworlds Corp.) and through a wholly-owned subsidiary we provided internet software products and services that enabled the delivery of three-dimensional content over the internet. We operated that business until September 11, 2002 when we sold that business to our former management and we became a shell company with no significant business operations. As a result of the consummation of a reverse acquisition transaction as described below, on December 23, 2009, we ceased to be a shell company and became an indirect holding company for Wuhan Vogue-Show Jewelry Co., Limited, or Vogue-Show, through Dragon Lead Group Limited, or Dragon Lead.

The company currently has about 53 million shares of common stock outstanding at a current price of $1.73. The stock’s all-time high was just over $10 in September 2010. The company already has authorization to issue 100 million shares of common stock and 500,000 shares of preferred stock. No preferred shares have been issued to date. There are 2.9 million outstanding stock options with a weighted average purchase price of $1.97/share.

The company’s founder and chairman, Zhi Hong Jia, owns nearly a third of the outstanding shares. According to Yahoo! Finance, insiders and major (5%) individual holders own about 44% of the company’s outstanding shares. Today’s filing could be the first move toward taking Kingold private, much to the benefit of the major holders.

Kingold’s shares are down -9% today at $1.73 in a 52-week range of $0.88-$3.00.