FLORIDA
|
|
2800
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|
65-1129912
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(State or other jurisdiction of
incorporation or organization)
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(Primary Standard Industrial
Classification Code)
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(I.R.S. Employer
Identification Number)
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Act.
(Check one):
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Large
accelerated filer
o
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Accelerated
filer
o
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Non-accelerated
filer
x
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Smaller
reporting company
o
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(Do
not check if a smaller reporting
company)
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Page
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|||
PART
I - INFORMATION REQUIRED IN PROSPECTUS
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1
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|||
SUMMARY
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1
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|||
RISK
FACTORS
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6
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|||
SELECTED
FINANCIAL DATA
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20
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|||
USE
OF PROCEEDS
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21
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|||
DETERMINATION
OF OFFERING PRICE
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22
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|||
DILUTION
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22
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|||
SELLING
SECURITY HOLDERS
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22
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|||
PLAN
OF DISTRIBUTION
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30
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|||
DESCRIPTION
OF SECURITIES TO BE REGISTERED
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32
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|||
LEGAL
MATTERS
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33
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|||
INTERESTS
OF NAMED EXPERTS AND COUNSEL
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33
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INFORMATION
WITH RESPECT TO REGISTRANT
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33
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|||
DESCRIPTION
OF BUSINESS
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33
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|||
DESCRIPTION
OF PROPERTY
|
52
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|||
LEGAL
PROCEEDINGS
|
53
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|||
COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS
|
53
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|||
FINANCIAL
STATEMENTS
|
F-1
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|||
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
57
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|||
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
68
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|||
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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68
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|||
DIRECTORS
AND EXECUTIVE OFFICERS
|
70
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|||
EXECUTIVE
COMPENSATION
|
71
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|||
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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77
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|||
TRANSACTIONS
WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL
PERSONS
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78
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|||
PART
II - OTHER INFORMATION
|
83
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|||
OTHER
EXPENSES OF ISSUANCE AND DISTRIBUTION
|
83
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|||
INDEMNIFICATION
OF DIRECTORS AND OFFICERS
|
84
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|||
RECENT
SALES OF UNREGISTERED SECURITIES
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84
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|||
EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES
|
99
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|||
UNDERTAKINGS
|
105
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|||
SIGNATURE
|
||||
EXHIBIT
INDEX
|
|
·
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Shanxi
Province
|
|
·
|
Inner
Mongolia Autonomous Region
|
|
·
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Hebei
Province
|
|
·
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Beijing
|
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·
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Tianjin
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·
|
We
are a Large Volume Supplier of Coking Coal in China’s Top Coal
Province.
We currently have an annual coal washing capacity of 3.5 million
MT. One
of our new cleaning facilities became operational in late 2005
and the
other became operational in April 2006. As such a large volume
supplier, we expect to continue to enjoy certain advantages as
we believe
our primary customer base of coke and steel makers will continue
to focus
on suppliers that can deliver large volume, consistently high quality
coking coal.
|
|
·
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Access
to High Quality Raw Coking Coal.
We have access to the high quality raw coking coal in Liulin County
- an
area famed as China’s “King of Coal”, which has high processing yield and
low processing cost. Jucai Coal is giving us priority over its
other
customers and has agreed to supply us with our entire high quality
raw
coking coal requirements.
|
|
·
|
Low
Cost Producer.
We believe we have a competitive advantage over our competitors
because of
our processing know-how and experience, modern facilities, operating
efficiencies, and our strategic location in Shanxi Province’s Liulin
County. Our new cleaning facilities are projected to increase the
amount
of cleaned coking coal produced per MT of raw coking coal input,
although
there can be no assurance that we will be able to achieve such
production
capacity in the future.
|
|
·
|
Rapid
Market Growth.
Demand for consistent quality cleaned coking coal is tied to the
demand
for steel. China’s steel production has continued to grow significantly
(up 28% in 2005 over 2004 and 19.7% in 2006 over 2005). Steel is
a key
component of the rail systems, bridges, ports, airports, construction
projects and car production that are spearheading China’s economic growth.
Shanxi Province alone includes independent coke producers that
supply 50%
of China’s coke and 80% of China’s exported coke. With rail line access to
Shanxi Province, Inner Mongolia Autonomous Region, Hebei Province,
Beijing
and Tianjin, we can readily serve China’s growing appetite for steel
production among our long-standing customers - mostly, coking companies
that supply the steel mills and steel mills with their own coking
facilities.
|
|
Year
ended December 31,
|
|||||||||||||||
|
2006
|
2005
|
2004
|
2003
|
2002
|
|||||||||||
OPERATIONS
DATA
|
|
$’000
|
|
$’000
|
|
$’000
|
|
$’000
|
|
$’000
|
||||||
|
|
|
|
|
|
|||||||||||
Revenues
|
$
|
137,771
|
$
|
51,710
|
$
|
19,735
|
$
|
13,397
|
$
|
—
|
||||||
|
|
|
|
|
|
|||||||||||
Net
income/(loss)
|
1,354
|
965
|
3,693
|
2,402
|
(527
|
)
|
||||||||||
|
|
|
|
|
|
|||||||||||
Option
holder preference dividend
|
(2,717
|
)
|
(2,717
|
)
|
—
|
—
|
—
|
|||||||||
(Loss)/income
applicable to common shares
|
$
|
(1,363
|
)
|
$
|
(1,752
|
)
|
$
|
3,693
|
$
|
2,402
|
(527
|
)
|
||||
|
|
|
|
|
|
|||||||||||
(Loss)/income
per common share (basic and diluted)
|
$
|
(0.02
|
)
|
$
|
(0.03
|
)
|
$
|
0.05
|
$
|
0.03
|
$
|
(0.05
|
)
|
|||
|
|
|
|
|
|
|||||||||||
Cash
dividends declared per common share
|
$
|
—
|
$
|
0.02
|
$
|
0.03
|
$
|
0.02
|
$
|
—
|
||||||
|
|
|
|
|
|
|||||||||||
BALANCE
SHEET DATA
|
|
|
|
|
|
|||||||||||
Total
assets
|
$
|
62,984
|
$
|
46,701
|
$
|
11,344
|
$
|
11,707
|
$
|
480
|
||||||
Convertible
Notes and other long-term debt
|
$
|
24,294
|
$
|
30,625
|
$
|
—
|
$
|
—
|
$
|
668
|
||||||
Shareholders'
equity
|
$
|
23,037
|
$
|
6,082
|
$
|
7,149
|
$
|
5,849
|
$
|
(191
|
)
|
|
Nine
months ended
|
||||||
|
September
30
|
||||||
|
2007
|
2006
|
|||||
OPERATIONS
DATA
|
|
|
|||||
|
|
|
|||||
Revenues
|
$
|
116,048
|
$
|
94,364
|
|||
|
|
|
|||||
Net
Income/(loss)
|
6,542
|
(4,642
|
)
|
||||
|
|
|
|||||
Option
holder preference dividend
|
-
|
(2,717
|
)
|
||||
Income/(loss)
applicable to common shares
|
$
|
6,542
|
$
|
(7,359
|
)
|
||
|
|
|
|||||
Income/(loss)
per common share (basic and diluted)
|
$
|
0.07
|
$
|
(0.10
|
)
|
||
|
|
|
|||||
Cash
dividends per common share
|
$
|
—
|
$
|
—
|
|||
|
|
|
|||||
BALANCE
SHEET DATA
|
|
|
|||||
Total
assets
|
$
|
74,198
|
$
|
56,864
|
|||
Convertible
Notes and other long-term debt
|
$
|
18,825
|
$
|
33,809
|
|||
Shareholders'
equity
|
$
|
39,523
|
$
|
8,623
|
First
|
Second
|
Third
|
Fourth
|
|||||||||||||||||
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Year
|
||||||||||||||||
YEAR
ENDED December 31, 2006
|
||||||||||||||||||||
Revenues
|
$
|
20,771
|
$
|
30,943
|
$
|
42,650
|
$
|
43,407
|
$
|
137,771
|
||||||||||
Gross
profit
|
$
|
4,513
|
$
|
6,027
|
$
|
8,925
|
$
|
8,925
|
$
|
28,390
|
||||||||||
Net
(loss)/income
|
$
|
(6,445
|
)
|
$
|
(363
|
)
|
$
|
2,166
|
$
|
5,996
|
$
|
1,354
|
||||||||
Option
holder preference dividend
|
$
|
(2,717
|
)
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
(2,717
|
)
|
||||||||
(Loss)/income
applicable to common shares
|
$
|
(9,162
|
)
|
$
|
(363
|
)
|
$
|
2,166
|
$
|
5,996
|
$
|
(1,363
|
)
|
|||||||
(Loss)/income
per common share -basic
|
$
|
(0.13
|
)
|
$
|
(0.00
|
)
|
$
|
0.03
|
$
|
0.08
|
$
|
(0.02
|
)
|
|||||||
(Loss)/income
per common share -diluted
|
(0.13
|
)
|
(0.00
|
)
|
$
|
0.02
|
0.09
|
$
|
(0.02
|
)
|
||||||||||
|
||||||||||||||||||||
YEAR
ENDED December 31, 2005
|
||||||||||||||||||||
Revenues
|
$
|
4,272
|
$
|
8,747
|
$
|
18,037
|
$
|
20,654
|
$
|
51,710
|
||||||||||
Gross
profit
|
$
|
862
|
$
|
1,869
|
$
|
4,202
|
$
|
4,730
|
$
|
11,663
|
||||||||||
Net
income/(loss)
|
$
|
494
|
$
|
1,096
|
$
|
1,547
|
$
|
(2,172
|
)
|
$
|
965
|
|||||||||
Option
holder preference dividend
|
$
|
—
|
$
|
(2,717
|
)
|
$
|
—
|
$
|
—
|
$
|
(2,717
|
)
|
||||||||
Income/(loss)
applicable to common shares
|
$
|
494
|
$
|
(1,621
|
)
|
$
|
1,547
|
$
|
(2,172
|
)
|
$
|
(1,752
|
)
|
|||||||
Income/(loss)
per common share (basic and diluted)
|
$
|
0.01
|
$
|
(0.03
|
)
|
$
|
0.02
|
$
|
(0.03
|
)
|
$
|
(0.03
|
)
|
|||||||
|
||||||||||||||||||||
NINE
MONTHS ENDED SEPTEMBER 30, 2007
|
||||||||||||||||||||
Revenues
|
$
|
37,415
|
38,097
|
40,536
|
||||||||||||||||
Gross
profit
|
$
|
7,505
|
6,628
|
6.655
|
||||||||||||||||
Net
income/(loss)
|
$
|
3,847
|
(670
|
)
|
3,365
|
|||||||||||||||
Option
preference dividend
|
$
|
—
|
—
|
—
|
||||||||||||||||
Income/(loss)
applicable to common shares
|
$
|
3,847
|
(670
|
)
|
3,365
|
|||||||||||||||
Income/(loss)
per common share (basic and diluted)
|
$
|
0.04
|
(0.00
|
)
|
0.03
|
|
Number of Shares of Common Stock Beneficially Owned
Prior To Offering
|
|||||||||||||||||||||
Name
of Selling Shareholder
|
Common
Stock
Issuable
upon
Note
Conversion
|
|
Common
Stock
Issuable
upon
Warrant
Exercise
|
|
Common
Stock (excluding penalty shares)
|
|
Penalty
Shares
|
|
Total
|
|
Number
of
Shares
of
Common
Stock
Being
Offered (1)
|
|
Shares of
Common Stock Owned After the Offering
|
|
||||||||
Alpha
Capital AG
(Konrad
Acherman (2))
|
0
|
700,000
|
0
|
0
|
700,000
|
700,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Anasazi
Partners III
Offshore,
Ltd.**(12)
(Christopher
P. Baker (2))
|
100,000
|
400,000
|
0
|
0
|
500,000
|
500,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Anasazi
Partners III, LLC ** (12)
(Christopher
P. Baker (2))
|
300,000
|
600,000
|
0
|
0
|
900,000
|
900,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
EMERGING
MARKETS
(Alberto
Foa, Giovanni Brambilla (2))
|
0
|
0
|
400,000
|
9,258
|
409,258
|
400,000
|
9,258
|
Anima
S.G.R.p.A. RUBRICA ANIMA
(Alberto
Foa, Giovanni Brambilla (2))
|
0
|
0
|
1,100,000
|
25,460
|
1,125,460
|
1,100,000
|
25,460
|
|||||||||||||||
|
||||||||||||||||||||||
Baker,
Adrienne ** (12)
|
0
|
50,000
|
0
|
0
|
50,000
|
50,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Baker,
Christopher ** (12)
|
200,000
|
400,000
|
0
|
0
|
600,000
|
600,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Banca
Gesfid (Graziano Deli (2))
|
0
|
0
|
800,000
|
18,516
|
818,516
|
800,000
|
18,516
|
|||||||||||||||
|
||||||||||||||||||||||
Barish,
Michael
|
200,000
|
200,000
|
0
|
4,629
|
404,629
|
400,000
|
4,629
|
|||||||||||||||
|
||||||||||||||||||||||
Barletta,
Joseph & Karen
|
50,000
|
50,000
|
0
|
1,157
|
101,157
|
100,000
|
1,157
|
|||||||||||||||
|
||||||||||||||||||||||
Baum,
David M.
|
0
|
400,000
|
0
|
0
|
400,000
|
400,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Beeman
Insurance Agency Inc.
(Dean
S. Kachudis (2))
|
0
|
50,000
|
25,000
|
1,157
|
76,157
|
75000
|
1,157
|
|||||||||||||||
|
||||||||||||||||||||||
CCM
Master Qualified Fund, Ltd (Clint D. Coghill
(2))
|
0
|
200,000
|
0
|
0
|
200,000
|
200,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
CIM
Dividend Income Fund Limited (3)(14)
(R.
James P. Morton (2))
|
0
|
0
|
712,400
|
25,460
|
737,860
|
712,400
|
25,460
|
|||||||||||||||
|
||||||||||||||||||||||
Chilcott,
John
|
0
|
100,000
|
0
|
0
|
100,000
|
100,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
CIM
Special Situations Limited (3)(14)
(R.
James P. Morton (2))
|
0
|
0
|
50,000
|
0
|
50,000
|
50,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Cimarolo
Partners, LLC ** (12)
(Christopher
P. Baker (2))
|
0
|
200,000
|
0
|
0
|
200,000
|
200,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Conn,
Michael
|
0
|
50,000
|
0
|
1,157
|
51,157
|
50,000
|
1,157
|
|||||||||||||||
|
||||||||||||||||||||||
Crestview
Capital Master, LLC
(Stewart
Flink, Robert Hoyt, Daniel Warsh
(2)(4)
* (12))
|
0
|
1,950,375
|
1,231,500
|
0
|
3,181,875
|
3,181,875
|
0
|
Datsopoulos,
Milton
|
200,000
|
0
|
0
|
4,629
|
204,629
|
200,000
|
4,629
|
|||||||||||||||
|
||||||||||||||||||||||
DiPietro,
Robert
|
0
|
50,000
|
50,000
|
1,157
|
101,157
|
100,000
|
1,157
|
|||||||||||||||
|
||||||||||||||||||||||
Double
U Master Fund L.P.
(Isaac
Winehouse (2)(11))
|
0
|
0
|
200,000
|
0
|
200,000
|
200,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
F.
Berdon Co. L.P. ** (12)
(Fredierick
Berdon (2))
|
0
|
500,000
|
0
|
5,786
|
505,786
|
500,000
|
5,786
|
|||||||||||||||
|
||||||||||||||||||||||
Flynn,
Jason
|
0
|
50,000
|
50,000
|
1,157
|
101,157
|
100,000
|
1,157
|
|||||||||||||||
|
||||||||||||||||||||||
Fuller,
James H.
|
0
|
50,000
|
39,843
|
1,157
|
91,000
|
89,843
|
1,157
|
|||||||||||||||
|
||||||||||||||||||||||
Gerdz
Investments Limited Partnership, RLLLP
(Robert
Zappa (2))
|
0
|
50,000
|
50,000
|
1,157
|
101,157
|
100,000
|
1,157
|
|||||||||||||||
|
||||||||||||||||||||||
Grose,
D. Austin
|
0
|
100,000
|
50,000
|
2,315
|
152,315
|
150,000
|
2,315
|
|||||||||||||||
|
||||||||||||||||||||||
H.L.
Severance Inc., Pension Plan & Trust
(H.
Leigh Severance (2)(5))
|
0
|
100,000
|
90,000
|
2,315
|
192,315
|
190,000
|
2,315
|
|||||||||||||||
|
||||||||||||||||||||||
H.L.
Severance Inc., Profit Sharing Plan & Trust
(H.
Leigh Severance (2)(6))
|
0
|
150,000
|
122,900
|
3,472
|
276,372
|
272,900
|
3,472
|
|||||||||||||||
|
||||||||||||||||||||||
Hodel,
Ann
|
0
|
50,000
|
0
|
1,157
|
51,157
|
50,000
|
1,157
|
|||||||||||||||
|
||||||||||||||||||||||
Hollman,
Mark & Stacia (7)
|
30,000
|
50,000
|
0
|
0
|
80,000
|
80,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Hollman,
Scott
|
100,000
|
100,000
|
0
|
2,315
|
202,315
|
200,000
|
2,315
|
|||||||||||||||
|
||||||||||||||||||||||
Jayhawk
China Fund (Cayman) Ltd.
(Kent
C. McCarthy (2))
|
0
|
0
|
650,000
|
0
|
650,000
|
650,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Johnson,
Bruce ** (12)
|
150,000
|
150,000
|
0
|
3,472
|
303,472
|
300,000
|
3,472
|
|||||||||||||||
|
||||||||||||||||||||||
Kahn,
Sheldon & Liron, Sarah (8)
|
0
|
400,000
|
0
|
0
|
400,000
|
400,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Lapidus,
Robert & Donna (8)
|
0
|
0
|
20,000
|
1,157
|
21,157
|
20,000
|
1,157
|
|||||||||||||||
|
||||||||||||||||||||||
Lemak,
John S. ** (12)
|
0
|
200,000
|
0
|
4,629
|
204,629
|
200,000
|
4,629
|
|||||||||||||||
|
||||||||||||||||||||||
Levy,
Peter
|
0
|
0
|
100,000
|
2,315
|
102,315
|
100,000
|
2,315
|
Masters,
Paul IRA ** (12)
|
0
|
150,000
|
0
|
2,315
|
152,315
|
150,000
|
2,315
|
|||||||||||||||
|
||||||||||||||||||||||
Micek
II, John Revocable Trust Dated 03/27/03
(John
Mickek (2))
|
0
|
150,000
|
0
|
150,000
|
150,000
|
0
|
||||||||||||||||
|
||||||||||||||||||||||
Micek
III, John
|
0
|
200,000
|
127,500
|
4,629
|
332,129
|
327,500
|
4,629
|
|||||||||||||||
|
||||||||||||||||||||||
Micek,
Maurice & Jennifer (8)
|
0
|
150,000
|
0
|
0
|
150,000
|
150,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Micek,
Maurice Custodian for Andrew Micek
(Maurice
Micek(2))
|
0
|
50,000
|
0
|
0
|
50,000
|
50,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Micek,
Maurice Custodian for Benjamin Micek
(Maurice
Micek (2))
|
0
|
50,000
|
0
|
0
|
50,000
|
50,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Midsouth
Investor Fund LP ** (12)
(Lyman
O. Heidtke (2))
|
0
|
200,000
|
0
|
0
|
200,000
|
200,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Murphy,
Brian
|
0
|
0
|
50,000
|
1,157
|
51,157
|
50,000
|
1,157
|
|||||||||||||||
|
||||||||||||||||||||||
Parsley,
Rod
|
50,000
|
50,000
|
0
|
1,157
|
101,157
|
100,000
|
1,157
|
|||||||||||||||
|
||||||||||||||||||||||
Teawood
Nominees Limited (14)
(R.
James P. Morton (2))
|
0
|
100,000
|
0
|
6,944
|
106,944
|
100,000
|
6,944
|
|||||||||||||||
|
||||||||||||||||||||||
Platinum
Global Dividend Fund (3)(14)
(R.
James P. Morton (2))
|
0
|
0
|
174,397
|
0
|
174,397
|
174,397
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Professional
Offshore Opportunity Fund Ltd
(Howard
Boyer and Marc Swickle) (2)
|
0
|
100,000
|
0
|
0
|
100,000
|
100,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Professional
Traders Fund, LLC
(Howard
Boyer and Marc Swickle) (2)
|
0
|
200,000
|
0
|
4,629
|
204,629
|
200,000
|
4,629
|
|||||||||||||||
|
||||||||||||||||||||||
Purvis,
Steve
|
100,000
|
100,000
|
0
|
2,315
|
202,315
|
200,000
|
2,315
|
|||||||||||||||
|
||||||||||||||||||||||
Samuels,
Leonard & Kaplan-Samuels, Leah (8)
|
0
|
0
|
200,000
|
3,472
|
203,472
|
200,000
|
3,472
|
|||||||||||||||
|
||||||||||||||||||||||
Sandor
Capital Master Fund, L. P.
(John
Lemak (2) **)
|
0
|
1,000,000
|
0
|
23,145
|
1,023,145
|
1,000,000
|
23,145
|
Severance,
H. Leigh
|
0
|
250,000
|
0
|
0
|
250,000
|
250,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Silicon
Prairie Partners, L. P.
(John
Micek (2))
|
0
|
300,000
|
250,000
|
6,944
|
556,944
|
550,000
|
6,944
|
|||||||||||||||
|
||||||||||||||||||||||
Silver
Rock I Limited (Rima Salam (2))
|
0
|
500,000
|
0
|
11,573
|
511,573
|
500,000
|
11,573
|
|||||||||||||||
|
||||||||||||||||||||||
Simgest
SpA (Fausto Fontanesi (2))
|
2,000,000
|
2,000,000
|
0
|
46,290
|
4,046,290
|
4,000,000
|
46,290
|
|||||||||||||||
|
||||||||||||||||||||||
Stowell,
Kurt
|
0
|
50,000
|
25,000
|
0
|
75,000
|
75,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Thompson,
Jack
|
0
|
150,000
|
133,500
|
3,472
|
286,972
|
283,500
|
3,472
|
|||||||||||||||
|
||||||||||||||||||||||
Ungar,
Jonathan
|
0
|
200,000
|
0
|
4,629
|
204,629
|
200,000
|
4,629
|
|||||||||||||||
|
||||||||||||||||||||||
Vicis
Capital Master Fund
(John
Succo, Sky Lucas and Shad Stastny (2))
|
1,000,000
|
1,000,000
|
0
|
23,145
|
2,023,145
|
2,000,000
|
23,145
|
|||||||||||||||
|
||||||||||||||||||||||
Vision
Opportunity (Adam Benowitz (2))
|
0
|
0
|
3,500,000
|
0
|
3,500,000
|
3,500,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Whalehaven
Capital Fund Limited (9)
(Arthur
Jones, Trevor Williams, Macro
Weisfeld,
Michael Fwkelskin) (2)
|
0
|
1,200,000
|
0
|
0
|
1,200,000
|
1,200,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
White
Sand Investor Group, LP (10)
(Elliott
Donnelley, Owen Donnelley and
Marcshall
Donnelley (2))
|
0
|
0
|
100,000
|
2,315
|
102,315
|
100,000
|
2,315
|
|||||||||||||||
|
||||||||||||||||||||||
Wrolstad,
Christopher * (12)
|
0
|
164,167
|
0
|
2,315
|
166,482
|
164,167
|
2,315
|
|||||||||||||||
|
||||||||||||||||||||||
Zelinger,
Steven & Gordon, Lisa (8)
|
0
|
50,000
|
50,000
|
1,157
|
101,157
|
100,000
|
1,157
|
Andrews,
Jeff ** (3)
|
0
|
147,500
|
0
|
0
|
147,500
|
147,500
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Henricks,
Steve** (3)
|
0
|
337,500
|
0
|
0
|
337,500
|
337,500
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Haag,
Randy ** (3)
|
0
|
0
|
100,000
|
0
|
100,000
|
100,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Rogers,
Kyle ** (3)
|
0
|
60,000
|
58,603
|
0
|
118,603
|
118,603
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Calicchia,
Vincent ** (3)
|
0
|
1,443
|
0
|
0
|
1,443
|
1,443
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Serna,
Pablo
|
0
|
0
|
4,630
|
0
|
4,630
|
4,630
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Troccoli,
Carmelo ** (3)
|
0
|
2,350
|
0
|
0
|
2,350
|
2,350
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
vFinance
Investments, Inc.* (13)
(Leonard
Sokolow and Sheila Reilen (2))
|
0
|
0
|
9,801
|
0
|
9,801
|
9,801
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Legend
Merchant Group, Inc. * (3) (John
H.
Shaw III)
|
0
|
27,125
|
0
|
0
|
27,125
|
27,125
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
Garisch
Financial Inc. (Frederic M. Schweiger (2))
|
0
|
50,000
|
0
|
0
|
50,000
|
50,000
|
0
|
|||||||||||||||
|
||||||||||||||||||||||
TOTAL
|
4,480,000
|
16,340,460
|
10,525,074
|
276,587
|
31,622,121
|
31,345,534
|
276,587
|
*
|
Denotes
a broker-dealer.
|
|
|
**
|
Denotes
an affiliate of a broker-dealer.
|
(1)
|
Assumes
that all of the shares offered hereby are sold and that shares
owned
before the offering but not offered hereby are not
sold.
|
(2)
|
Individual(s)
who have voting and the power to vote, sell, transfer or otherwise
dispose
of the common stock.
|
(3)
|
Selling
Security Holder is an underwriter of this offering. The Company
has no
material relationship with such Selling Security Holder. The
underwriter
has no arrangement under which the underwriter may purchase additional
shares in connection with this offering. At the time of acquisition
of the
securities, the Selling Security Holder had no understanding,
directly or
indirectly with any person to distribute the securities being
offered
hereunder.
|
(4)
|
Managing
Partners of Crestview Capital Partners, LLC.
|
(5)
|
Trustee
of the H.L. Severance Inc., Pension Plan & Trust.
|
(6)
|
Trustee
of the H.L. Severance Inc., Profit Sharing Plan &
Trust.
|
(7)
|
Tenants
by the Entirety.
|
(8)
|
Community
Property.
|
(9)
|
Arthur
Jones, Trevor Williams, Macro Weisfeld, and Michael Fwkelskin
are the
persons who have Individual(s) who have voting and the power
to vote,
sell, transfer or otherwise dispose of the common stock upon
Conversion,
but disclaim beneficial ownership
thereof.
|
(10)
|
Elliott
Donnelley, Owen Donnelley and Marshal Donnelley, officers of the
White
Sand Investment Corporation, General Partner of White Sand Investor
Group,
LP are the individual(s) who have voting and the power to vote,
sell,
transfer or otherwise dispose of the common stock upon
Conversion.
|
(11)
|
Isaac
Winehouse has voting and investment control over the shares as
general
partner of B&W Equities, LLC, and general partner of Double U Master
Fund L.P. He disclaims beneficial ownership of the
shares.
|
(12)
|
Selling
Security Holder purchased securities in the ordinary course of
business
and at the time of purchase, had no agreements or understandings,
directly
or indirectly, with any party to distribute the
securities.
|
(13)
|
Selling
Security Holder received securities as compensation for investment
banking
services.
|
(14)
|
Selling
Security Holder acquired securities when it was affiliated with
a
broker-dealer and at the time of acquisition, had no plans to dispose
of
the securities. Selling Security Holder is no longer a broker-dealer
as of
the date of this Prospectus.
|
(15)
|
Formerly
known as PerInvest Special Situations
Fund.
|
|
·
|
on
any national securities exchange or quotation service on which
the
securities may be listed or quoted at the time of
sale;
|
|
·
|
in
the over-the-counter market;
|
|
·
|
in
transactions otherwise than on these exchanges or systems or
in the
over-the-counter market;
|
|
·
|
through
the writing of options, whether such options are listed on an
options
exchange or otherwise;
|
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
·
|
block
trades in which the broker-dealer will attempt to sell the securities
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;
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
·
|
privately
negotiated transactions;
|
|
·
|
pursuant
to Rule 144 under the Securities
Act;
|
|
·
|
broker-dealers
may agree with the Selling Security Holders to sell a specified
number of
such securities at a stipulated price per
security;
|
|
·
|
a
combination of any such methods of sale;
and
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
|
·
|
Shanxi
Province
|
|
·
|
Inner
Mongolia Autonomous Region
|
|
·
|
Hebei
Province
|
|
·
|
Beijing
|
|
·
|
Tianjin
|
|
·
|
Puda
Coal, Inc.: Mr. Ming Zhao (approximately 74%); Mr. Yao Zhao (approximately
18%) held directly.
|
|
·
|
Puda
Investment Holding Limited: Mr. Ming Zhao (approximately 74%);
Mr. Yao
Zhao (approximately 18%) held indirectly through
Puda.
|
|
·
|
Taiyuan
Putai Business Consulting Co., Ltd (now known as Shanxi Putai Resources
Limited): Mr. Ming Zhao (approximately 74%); Mr. Yao Zhao (approximately
18%) held indirectly through Puda and
BVI.
|
|
·
|
Shanxi
Puda Coal Group Co., Ltd.: Mr. Ming Zhao (80%); Mr. Yao Zhao (20%)
held
directly.
|
|
·
|
Coal-fired
power plants
|
|
·
|
Steel
manufacturing
|
|
·
|
Metallurgy
of non-ferrous metals
|
|
·
|
Cement
production
|
|
·
|
High
quality raw coking coal is needed to consistently meet our customer
specifications for cleaned coking coal, with our larger customers
insisting on even greater levels of quality consistency to improve
the
operating efficiency, pollution control and profits of our own
operations.
|
|
·
|
If
we are required to use a lower quality of raw coking coal, the
yield, or
the volume of cleaned coking coal produced from a MT of raw coking
coal,
will be reduced and adversely affect our gross
margins.
|
|
·
|
The
further the cleaning facilities are from the mines, the higher
the cost to
transport raw coal from the mines to the cleaning facilities, a
cost
typically absorbed by the coal cleaning facility. Our current and
new
cleaning facilities are all located in close proximity to our major
raw
coking coal sources, especially Jucai Coal and the other two related
party
mines.
|
|
·
|
Liujiazhuang
Coal Mine
-
Shanxi Coal purchased about $1,576,005, $2,522,655 and $6,270,458
of raw
coal from this mine in 2004, 2005 and 2006,
respectively.
|
|
·
|
Liulin
Dadongzhuang Coal Mine
-
Shanxi Coal purchased about $1,586,289, $4,443,774 and $5,995,774
of raw
coal from this mine in 2004, 2005 and 2006,
respectively.
|
|
2006
|
||||||
Suppliers
|
Amount
|
%
of
|
|||||
|
($
’000)
|
Total
|
|||||
Jucai
Coal Mine
|
15,906
|
14.3
|
%
|
||||
Shipogou
Coal Mine
|
8,305
|
7.5
|
%
|
||||
Yumenzhen
Coal Mine
|
7,495
|
6.7
|
%
|
||||
Liujiawan
Coal Mine
|
7,492
|
6.7
|
%
|
||||
Liulin
Nanpo Coal Mine
|
7,451
|
6.7
|
%
|
||||
Huajin
Coke
|
7,298
|
6.6
|
%
|
||||
Jijiata
Coal Mine
|
7,080
|
6.4
|
%
|
||||
Liulin
Nianyan Coal Mine
|
7,014
|
6.3
|
%
|
||||
Liulin
Nanyu Coal Mine
|
6,813
|
6.1
|
%
|
||||
Renjiasan
Coal Mine
|
6,492
|
5.8
|
%
|
||||
Liujiazhuang
Coal Mine
|
6,270
|
5.6
|
%
|
||||
Jijiata
Dongzhuang Coal Mine
|
6,042
|
5.4
|
%
|
||||
Liulin
Dadongzhuang Coal Mine
|
5,996
|
5.4
|
%
|
||||
Dengjiagua
Coal Mine
|
4,760
|
4.3
|
%
|
||||
Zhaiyadi
Coal
|
4,735
|
4.2
|
%
|
||||
Meisheng
Dengjiazhuang
|
2,171
|
2.0
|
%
|
||||
Total
|
111,320
|
100
|
%
|
|
2005
|
||||||
Suppliers
|
Amount
|
%
of
|
|||||
|
($
’000)
|
Total
|
|||||
Jucai
Coal Mine
|
5,469
|
13.6
|
%
|
||||
Liulin
Dadongzhuang Coal Mine
|
4,444
|
11.0
|
%
|
||||
Yumenzhen
Coal Mine
|
4,152
|
10.3
|
%
|
||||
Liulin
Nanpo Coal Mine
|
4,040
|
10.0
|
%
|
||||
Renjiasan
Coal Mine
|
3,605
|
9.0
|
%
|
||||
Jijiata
Coal Mine
|
3,221
|
8.0
|
%
|
||||
Pangpangta
Coal Mine
|
3,044
|
7.6
|
%
|
||||
Jijiata
Dongzhuang Coal Mine
|
2,725
|
6.8
|
%
|
||||
Liujiazhuang
Coal Mine
|
2,523
|
6.3
|
%
|
||||
Liulin
Nanyu Coal Mine
|
2,360
|
5.8
|
%
|
||||
Liulin
Nianyan Coal Mine
|
1,829
|
4.5
|
%
|
||||
Shipogou
Coal Mine
|
1,533
|
3.8
|
%
|
||||
Liujiawan
Coal Mine
|
1,332
|
3.3
|
%
|
||||
Total
|
40,277
|
100
|
%
|
|
2004
|
||||||
Suppliers
|
Amount
|
%
of
|
|||||
|
($
’000)
|
Total
|
|||||
Liulin
Dadongzhuang Coal Mine
|
1,586
|
14.0
|
%
|
||||
Liulin
Jijiata Coal Mine
|
1,582
|
14.0
|
%
|
||||
Liujiazhuang
Coal Mine
|
1,576
|
13.9
|
%
|
||||
Jucai
Coal Mine
|
1,557
|
13.7
|
%
|
||||
Liulin
Pangpangta Coal Mine
|
1,519
|
13.4
|
%
|
||||
Liulin
Yumenzhen Coal Mine
|
1,272
|
11.2
|
%
|
||||
Liulin
Dongzhuang Coal Mine
|
1,235
|
10.9
|
%
|
||||
Liulin
Renjiashan Coal Mine
|
1,001
|
8.9
|
%
|
||||
Total
|
11,328
|
100
|
%
|
|
·
|
Shipogou
Coal Mine
-
Annual production of 400,000MT in 2004 and estimated 600,000MT
in
2005.
|
|
·
|
Houshanyuan
Coal Mine
-
Annual production of 300,000MT in 2004 and
2005.
|
|
·
|
Shanxi
Liulin Jucai Plant
-
This facility, which we ceased operating on December 31, 2005,
has an
annual clean coal washing capacity of 100,000MT. It is located
in Liulin
County and was leased to us by Jucai Coal. The leasing agreement
was
entered into on December 2, 2001 for a term of 5 years. The cost
for the
leased capacity was approximately $604,000 annually with four quarterly
payments per year. This plant is located about 5 miles from the
cleaned
coal storage facility used by us to store clean coal until customer
pick
up. The lease for this plant expired in December 31, 2005 and was
not
renewed.
|
|
·
|
Shanxi
Liulin Dongqiang Plant
-
This facility has an annual clean coal washing capacity of 400,000MT.
This
facility is owned by Shanxi Coal, has a land area of approximately
1.5
hectares, and is located about 15 miles from Jucai Coal. This plant
is
located about ½ miles from the cleaned coal storage facility used by
Shanxi Coal.
|
|
·
|
New
Shanxi Liulin Jucai Plant
-
This facility, which is adjacent to the formerly leased Shanxi
Liulin
Jucai Plant in Liulin County and located in Liulin County about
2 miles
away from Jucai Coal, has an annual cleaning capacity of 1.1 million
MT.
After completing its testing phase, the New Shanxi Liulin Jucai
Plant
became fully operational in December 2005. This new facility has
separate
land use rights owned by Shanxi Coal. Shanxi Coal purchased New
Shanxi
Liulin Jucai Plant from Resources Group, a related party, at cost
for
approximately $5,800,000 of which $900,000 is for the 50-year land
use
rights, $1,000,000 is for the plant and $3,900,000 is for the equipment.
Resources Group financed the new facility under a
loan.
|
|
·
|
New
Zhongyang Plant
-
This facility, which is located in Zhongyang County approximately
15 miles
from Jucai Coal and about 3 miles from Resources Group’s Zhongyang Coal
Mine, will have an annual cleaning capacity of 1.2 million MT.
This
facility became fully operational in April 2006. The new facility
will
have a large storage facility and rail dock. We purchased New Zhongyang
Plant from Resources Group at cost for approximately $7,200,000
of which
$2,000,000 is for the 50-year land use rights, $1,000,000 is for
the plant
and $4,200,000 is for the equipment. Resources Group financed the
new
facility under a loan.
|
|
·
|
New
Linshi Plant
-
This facility, which is located in Linshi County, has an annual
coal
washing capacity of 1.2 million MT. We purchased this facility
through an
asset exchange with Linshi Jinliao Coal & Chemical Co. Ltd. (“Linshi
Coal & Chemical”) on June 22, 2007. Upon the closing of the asset
exchange, Shanxi Coal acquired all the assets of a coal washing
plant of
Linshi Coal & Chemical, which has an annual coal washing capacity of
1.2 million tons and a book value of RMB 57 million (approximately
$7.4
million). In exchange, Linshi Coal & Chemical received RMB 45.5
million (approximately $5.9 million) in cash from Shanxi Coal and
all the
assets of a coal washing plant of Shanxi Coal located in Liulin
County of
the same province, which has an annual coal washing capacity of
400,000
tons and a book value of RMB 11.5 million (approximately $1.5
million).
|
|
2006
|
||||||
Customers
|
Amount
|
%
of
|
|||||
|
($’000)
|
Total
|
|||||
Baotou
Steel Group
|
27,450
|
19.9
|
%
|
||||
Xuanhua
Steel Group
|
13,219
|
9.6
|
%
|
||||
Wulin
Coke
|
11,996
|
8.6
|
%
|
||||
Liulin
Coal Cleaning Plant
|
9,968
|
7.2
|
%
|
||||
Liulin
Jinmei Coal
|
9,249
|
6.7
|
%
|
||||
Liulin
Huatai Coke
|
7,937
|
5.7
|
%
|
||||
Xiaoyi
Jinyan Electricity
|
7,554
|
5.5
|
%
|
||||
Liulin
Changzhong Coke
|
7,273
|
5.3
|
%
|
||||
Liulin
Dongjiagou Coal Mine
|
7,118
|
5.2
|
%
|
||||
Liulin
Luojiapo Coal Mine
|
6,565
|
4.8
|
%
|
||||
Jiangsu
Yueda
|
6,211
|
4.5
|
%
|
||||
Shizhou
Coal Gas
|
5,603
|
4.1
|
%
|
||||
Lvliang
Longteng Coke
|
4,769
|
3.5
|
%
|
||||
Zhongyang
Rongxin
|
4,487
|
3.3
|
%
|
||||
Gengyang
Coal
|
4,299
|
3.1
|
%
|
||||
Yatai
Coke
|
4,073
|
3.0
|
%
|
||||
Total
|
137,771
|
100
|
%
|
|
2005
|
||||||
Customers
|
Amount
|
%
of
|
|||||
|
($’000)
|
Total
|
|||||
Baotou
Steel Group
|
7,858
|
15.2
|
%
|
||||
Liulin
Coal Cleaning Plant
|
6,629
|
12.8
|
%
|
||||
Liulin
Jinmei Coal
|
4,964
|
9.6
|
%
|
||||
Jiangsu
Yueda
|
4,823
|
9.3
|
%
|
||||
Xiaoyi
Jinyan Electricity
|
4,435
|
8.6
|
%
|
||||
Shizhou
Coal Gas
|
4,169
|
8.1
|
%
|
||||
Liulin
Dongjiagou Coal Mine
|
3,826
|
7.4
|
%
|
||||
Liuliang
Longteng Coking Corporation
|
3,530
|
6.8
|
%
|
||||
Liulin
Luojiapo Coal Mine
|
3,405
|
6.6
|
%
|
||||
Zhongyang
Rongxin
|
3,198
|
6.2
|
%
|
||||
Liulin
Changzhong Coke
|
2,548
|
4.9
|
%
|
||||
Liulin
Huatai Coke
|
2,325
|
4.5
|
%
|
||||
Total
|
51,710
|
100
|
%
|
|
2004
|
||||||
Customers
|
Amount
|
%
of
|
|||||
|
($’000)
|
Total
|
|||||
Liudian
Burning Materials
|
2,923
|
14.8
|
%
|
||||
Liulin
Coal Cleaning Plant
|
2,664
|
13.5
|
%
|
||||
Xiaoyi
Jinyan Corp.
|
2,057
|
10.4
|
%
|
||||
Jiansu
Yancheng Clean Coal Co., Ltd.
|
1,904
|
9.6
|
%
|
||||
Xishan
Coal & Electricity Company
|
1,874
|
9.5
|
%
|
||||
Shizhou
Gas Company
|
1,777
|
9.0
|
%
|
||||
Baotou
Steel Resources Company
|
1,618
|
8.2
|
%
|
||||
Zhonglv
Company
|
1,556
|
7.9
|
%
|
||||
Zhongyang
Rongxin
|
1,320
|
6.7
|
%
|
||||
Liuliang
Longteng Coking Corporation
|
1,238
|
6.3
|
%
|
||||
Taiyuan
Gas Company
|
804
|
4.1
|
%
|
||||
Total
|
19,735
|
100
|
%
|
|
·
|
Shanxi
Province
|
|
·
|
Inner
Mongolia Autonomous Region
|
|
·
|
Hebei
Province
|
|
·
|
Beijing
|
|
·
|
Tianjin
|
|
·
|
Taiyuan
Steel & Iron
-
a steel maker located in Shanxi Province with projected annual
sales of
600,000MT in 2006.
|
|
·
|
Handan
Steel & Iron
-
a steel maker located in Hebei Province with projected annual sales
of
400,000MT in 2006.
|
|
·
|
Tangshan
Steel & Iron
-
a steel maker located in Hebei Province with projected annual sales
of
300,000MT in 2006.
|
|
·
|
Beijing
Capital Iron & Steel
-
a steel maker located in Beijing with projected annual sales of
300,000MT
in 2006.
|
|
·
|
Shanxi
Coal Import and Export Group Corporation
-
Import-export company with projected annual sales of 600,000MT
in 2006.
This sales volume is based on a portion of the expressed intent
in the
non-binding letter to purchase 1,320,000MT in 2006 from
us.
|
|
·
|
Sinochem
Corporation
-
a 2005 Fortune Global 500 company. Chemical and diversified manufacturer
with projected annual sales of 600,000MT in 2006. This sales volume
is
based on a portion of the expressed intent in the non-binding letter
to
purchase 2,400,000MT in 2006 from us.
The
Company did not enter into sales contract with the above potential
customers.
|
Department
|
|
Job
Title / Responsibility
|
|
Number
of
Employees
|
Corporate
|
|
President,
Vice Presidents, Managers
|
|
9
|
Finance
|
|
Finance
and Accounting
|
|
10
|
Supply;
Marketing and Sales
|
|
Purchase
raw coal and maintain relationship with suppliers; Sell cleaned
coal,
maintain relationship with customers, and acquire new
customers
|
|
48
|
Transportation
|
|
Short-range
truck drivers (within plant)
|
|
10
|
Production
|
|
Produce
cleaned coal
|
|
126
|
Quality
Control
|
|
Quality
check on input (raw coal) and output (cleaned coal)
|
|
17
|
Reception
and Security
|
|
Administrative
matters on reception and security
|
|
12
|
Total
|
|
|
|
232
|
Risk
Covered
|
Insured
Amount
(RMB)
|
Insured
Amount
($)
|
Premium
(RMB)
|
Premium
($)
|
|||||||||
Risk
of Loss of New Equipment
|
10,000,000
|
1,233,046
|
36,000
|
4,439
|
|||||||||
Third
Party Liability
|
100,000
|
12,330
|
887
|
109
|
|||||||||
Risk
of Theft and Robbery
|
10,000,000
|
1,233,046
|
36,000
|
4,440
|
|||||||||
Irrespective
of Percentage *
|
30,000,000
|
3,699,137
|
108,000
|
13,317
|
|||||||||
Risk
of Spontaneous Combustion
|
30,000,000
|
3,699,137
|
15,000
|
1,850
|
|||||||||
Risk
of Malicious Damage
|
10,000,000
|
1,233,046
|
36,000
|
4,439
|
|||||||||
Total
|
90,100,000
|
11,109,740
|
231,887
|
28,594
|
|
High***
|
Low***
|
|||||
2004
|
|||||||
March
31, 2004*
|
0.200
|
0.200
|
|||||
June
30, 2004
|
0.800
|
0.200
|
|||||
September
30, 2004
|
1.000
|
0.700
|
|||||
December
31, 2004
|
1.000
|
1.000
|
|||||
|
|||||||
2005
|
|||||||
March
31, 2005
|
1.000
|
1.000
|
|||||
June
30, 2005
|
9.000
|
1.000
|
|||||
September
30, 2005**
|
3.900
|
1.000
|
|||||
December
31, 2005
|
3.750
|
1.020
|
|||||
|
|||||||
2006
|
|||||||
March
31, 2006
|
4.700
|
1.950
|
|||||
June
30, 2006
|
6.35
|
3.00
|
|||||
September
30, 2006
|
3.80
|
2.54
|
|||||
December
31, 2006
|
4.95
|
1.30
|
|||||
|
|||||||
2007
|
|||||||
March
31, 2007
|
1.340
|
0.770
|
|||||
June
30, 2007
|
0.83
|
2.59
|
|||||
September
30, 2007
|
1.24
|
2.36
|
|||||
December
31, 2007
|
2.11
|
0.78
|
*
|
first
available price February 17, 2004
|
|
|
**
|
10
for 1 stock split occurred September 8, 2005; the high price of
$3.90
occurred prior to the split; the post-split high for the quarter
was
$2.300; the low of $1.000 occurred before the split; the post-split
low
was $1.05
|
|
|
***
|
Source:
Yahoo! Finance
|
Dividend
payable as of 12/31/02
|
0
|
|||
Dividend
declared in 2003
|
1,295
|
|||
Dividend
paid in 2003
|
0
|
|||
|
||||
Dividend
payable as of 12/31/03
|
1,295
|
|||
Dividend
declared in 2004
|
2,393
|
|||
Dividend
paid in 2004
|
(3,204
|
)
|
||
|
||||
Dividend
payable as of 12/31/04
|
484
|
|||
Dividend
declared in 2005
|
1,452
|
|||
Dividend
paid in 2005
|
(944
|
)
|
||
|
||||
Dividend
payable as of 12/31/05
|
992
|
|||
Plus:
exchange rate difference
|
34
|
|||
Dividend
payable as of 12/31/06
|
1,026
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated
Balance Sheets
|
F-3-F-4
|
Consolidated
Statements of Operations
|
F-5–F-6
|
Consolidated
Statements of Changes in Stockholders’ Equity
|
F-7
|
Consolidated
Statements of Cash Flows
|
F-8
|
Notes
to Consolidated Financial Statements
|
F-9-F-63
|
|
Note(s)
|
December 31,
2006
|
December 31,
2005
|
|||||||
ASSETS
|
||||||||||
CURRENT
ASSETS
|
||||||||||
Cash
and cash equivalents
|
22
|
$
|
24,943
|
$
|
12,067
|
|||||
Restricted
cash
|
3,
22
|
233
|
615
|
|||||||
Accounts
receivable, net
|
4
|
7,186
|
4,224
|
|||||||
Other
receivables
|
||||||||||
-
Related parties
|
5
|
9
|
17
|
|||||||
- Third
parties
|
40
|
36
|
||||||||
Advances
to suppliers
|
||||||||||
-
Related parties
|
5
|
602
|
-
|
|||||||
-
Third parties
|
538
|
2,959
|
||||||||
Deferred
charges
|
10
|
171
|
4,594
|
|||||||
Inventories
|
6
|
15,663
|
7,559
|
|||||||
|
||||||||||
Total
current assets
|
49,385
|
32,071
|
||||||||
|
||||||||||
PROPERTY,
PLANT AND EQUIPMENT, NET
|
7
|
9,870
|
10,823
|
|||||||
|
||||||||||
INTANGIBLE
ASSETS, NET
|
8
|
3,729
|
3,807
|
|||||||
|
||||||||||
TOTAL
ASSETS
|
$
|
62,984
|
$
|
46,701
|
||||||
|
||||||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||||
CURRENT
LIABILITIES
|
||||||||||
Current
portion of long-term debt
|
||||||||||
-
Related party
|
5,
9
|
$
|
1,300
|
$
|
1,300
|
|||||
Accounts
payable
|
||||||||||
-
Related parties
|
5
|
221
|
154
|
|||||||
-
Third parties
|
2,531
|
1,172
|
||||||||
Other
payables
|
||||||||||
-
Related party
|
5
|
901
|
874
|
|||||||
-
Third parties
|
2,113
|
708
|
||||||||
Accrued
expenses
|
951
|
363
|
||||||||
Income
taxes payable
|
2,485
|
1,397
|
||||||||
VAT
payable
|
1,204
|
317
|
||||||||
Distribution
payable
|
1,026
|
992
|
||||||||
Penalty
payable
|
10
|
204
|
-
|
|||||||
|
||||||||||
Total
current liabilities
|
12,936
|
7,277
|
||||||||
|
||||||||||
LONG-TERM
LIABILITIES
|
||||||||||
Long-term
debt
|
||||||||||
-
Related party
|
5,
9
|
10,400
|
11,700
|
|||||||
Convertible
notes
|
10
|
3,108
|
1,917
|
|||||||
Derivative
conversion feature
|
10
|
2,406
|
5,720
|
|||||||
Derivative
warrants
|
10
|
8,380
|
11,288
|
|||||||
|
||||||||||
Total
long-term liabilities
|
24,294
|
30,625
|
||||||||
|
||||||||||
COMMITMENTS
AND CONTINGENCIES
|
11
|
|
Note(s)
|
December
31,
2006
|
December
31,
2005
|
|||||||
TEMPORARY
EQUITY
|
||||||||||
Option
to buy-out Shanxi Coal
|
1
|
2,717
|
2,717
|
|||||||
|
||||||||||
STOCKHOLDERS’
EQUITY
|
||||||||||
Preferred
stock, authorized 5,000,000 shares, par value $0.01, issued and
outstanding None
|
-
|
-
|
||||||||
Common
stock, authorized 150,000,000 shares, par value $0.001, issued
and
outstanding 92,881,301 (2005: 75,450,000)
|
93
|
75
|
||||||||
Paid-in
capital
|
16,506
|
1,908
|
||||||||
Statutory
surplus reserve fund
|
13
|
1,366
|
1,366
|
|||||||
Retained
earnings
|
3,933
|
2,579
|
||||||||
Accumulated
other comprehensive income
|
1,139
|
154
|
||||||||
|
||||||||||
Total
stockholders’ equity
|
23,037
|
6,082
|
||||||||
|
||||||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
62,984
|
$
|
46,701
|
|
|
Years
ended December 31,
|
|||||||||||
|
Note(s)
|
2006
|
2005
|
2004
|
|||||||||
|
|
|
|
|
|||||||||
NET
REVENUE
|
$
|
137,771
|
$
|
51,710
|
$
|
19,735
|
|||||||
|
|||||||||||||
COST
OF REVENUE
|
(109,381
|
)
|
(40,047
|
)
|
(13,229
|
)
|
|||||||
|
|||||||||||||
GROSS
PROFIT
|
28,390
|
11,663
|
6,506
|
||||||||||
|
|||||||||||||
OPERATING
EXPENSES
|
|||||||||||||
Selling
expenses
|
3,231
|
791
|
322
|
||||||||||
General
and administrative expenses
|
2,387
|
789
|
203
|
||||||||||
|
|||||||||||||
TOTAL
OPERATING EXPENSES
|
5,618
|
1,580
|
525
|
||||||||||
|
|||||||||||||
INCOME
FROM OPERATIONS
|
22,772
|
10,083
|
5,981
|
||||||||||
|
|||||||||||||
GAIN
ON SHORT-TERM INVESTMENTS
|
-
|
6
|
(4
|
)
|
|||||||||
|
|||||||||||||
INTEREST
INCOME
|
59
|
12
|
-
|
||||||||||
|
|||||||||||||
INTEREST
EXPENSE
|
14
|
(4,441
|
)
|
(531
|
)
|
(4
|
)
|
||||||
|
|||||||||||||
DEBT
FINANCING COSTS
|
15
|
(10,669
|
)
|
(4,964
|
)
|
-
|
|||||||
|
|||||||||||||
DERIVATIVE
UNREALIZED FAIR VALUE
GAIN
|
10(c),
16
|
1,237
|
700
|
-
|
|||||||||
|
|||||||||||||
OTHER
FINANCING EXPENSES
|
17
|
-
|
(902
|
)
|
(414
|
)
|
|||||||
|
|||||||||||||
INCOME
BEFORE INCOME TAXES
|
8,958
|
4,404
|
5,559
|
||||||||||
|
|||||||||||||
INCOME
TAXES
|
18
|
(7,604
|
)
|
(3,439
|
)
|
(1,866
|
)
|
||||||
|
|||||||||||||
NET
INCOME
|
1,354
|
965
|
3,693
|
||||||||||
|
|||||||||||||
OTHER
COMPREHENSIVE INCOME
|
|||||||||||||
Foreign
currency translation adjustment
|
985
|
154
|
-
|
||||||||||
|
|||||||||||||
COMPREHENSIVE
INCOME
|
$
|
2,339
|
$
|
1,119
|
$
|
3,693
|
|||||||
|
|||||||||||||
NET
INCOME
|
1,354
|
965
|
3,693
|
||||||||||
|
|||||||||||||
LESS:
DIVIDENDS
|
|||||||||||||
Option
holder preference dividend
|
1,
2(n)
|
|
(2,717
|
)
|
(2,717
|
)
|
-
|
||||||
Common
dividend
|
-
|
-
|
-
|
||||||||||
|
|||||||||||||
UNDISTRIBUTED
EARNINGS
|
$
|
(1,363
|
)
|
$
|
(1,752
|
)
|
$
|
3,693
|
|
|
Years
ended December 31,
|
|||||||||||
|
Note(s)
|
2006
|
2005
|
2004
|
|||||||||
|
|
|
|
|
|||||||||
BASIC
EARNINGS/(LOSS) PER SHARE
|
|||||||||||||
-
Option holder preference
|
$
|
0.04
|
$
|
0.04
|
$
|
-
|
|||||||
-
Other common holders
|
(0.02
|
)
|
(0.03
|
)
|
0.05
|
||||||||
|
$
|
0.02
|
$
|
0.01
|
$
|
0.05
|
|||||||
|
|||||||||||||
DILUTED
EARNINGS/(LOSS) PER SHARE
|
|||||||||||||
-
Option holder preference
|
$
|
0.04
|
$
|
0.04
|
$
|
-
|
|||||||
-
Other common holders
|
(0.02
|
)
|
(0.03
|
)
|
0.05
|
||||||||
|
$
|
0.02
|
$
|
0.01
|
$
|
0.05
|
|||||||
|
|||||||||||||
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING-BASIC
|
19
|
80,167,110
|
73,950,274
|
73,750,000
|
|||||||||
-DILUTED
|
19
|
80,329,032
|
77,576,036
|
73,762,817
|
|||||||||
|
|
COMMON
STOCK
|
PAID-IN
CAPITAL
|
STATUTORY
SURPLUS RESERVE FUND
|
RETAINED
EARNINGS
|
ACCUMULATED
OTHER COMPREHENSIVE INCOME
|
TOTAL
STOCK HOLDERS’ EQUITY
|
||||||||||||||||
|
No. of shares
|
|
|
|
|
|
|
|||||||||||||||
Balance,
January 1, 2004, as recapitalized (see Notes 1 and 12)
|
73,750,000
|
$
|
74
|
$
|
2,643
|
$
|
675
|
$
|
2,457
|
$
|
-
|
$
|
5,849
|
|||||||||
Net
income
|
-
|
-
|
-
|
-
|
3,693
|
-
|
3,693
|
|||||||||||||||
Transfer
to statutory surplus reserve fund
|
-
|
-
|
-
|
568
|
(568
|
)
|
-
|
-
|
||||||||||||||
Dividend
distribution
|
-
|
-
|
-
|
-
|
(2,393
|
)
|
-
|
(2,393
|
)
|
|||||||||||||
Balance,
December 31, 2004
|
73,750,000
|
$
|
74
|
$
|
2,643
|
$
|
1,243
|
$
|
3,189
|
$
|
-
|
$
|
7,149
|
|||||||||
|
||||||||||||||||||||||
Shareholder
contribution
|
-
|
-
|
50
|
-
|
-
|
-
|
50
|
|||||||||||||||
Notes
converted to common stock, at $0.50 per share (Note 10(a)
|
1,700,000
|
1
|
849
|
-
|
-
|
-
|
850
|
|||||||||||||||
Conversion
feature transferred to equity upon conversion (Note 10(c)
|
-
|
-
|
417
|
-
|
-
|
-
|
417
|
|||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
965
|
-
|
965
|
|||||||||||||||
Transfer
to statutory surplus reserve fund
|
-
|
-
|
-
|
123
|
(123
|
)
|
-
|
-
|
||||||||||||||
Dividend
distribution
|
-
|
-
|
-
|
-
|
(1,452
|
)
|
-
|
(1,452
|
)
|
|||||||||||||
Difference
between book value of assets of a related party and the purchase
price for
assets being conveyed from the related party
|
-
|
-
|
666
|
-
|
-
|
-
|
666
|
|||||||||||||||
Reclassification
to temporary equity (Note 1)
|
-
|
-
|
(2,717
|
)
|
-
|
-
|
-
|
(2,717
|
)
|
|||||||||||||
Foreign
currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
154
|
154
|
|||||||||||||||
Balance,
December 31, 2005
|
75,450,000
|
75
|
1,908
|
1,366
|
2,579
|
154
|
6,082
|
|||||||||||||||
|
||||||||||||||||||||||
Notes
converted to common stock, at $0.50 per share (Note 10(a)
|
13,500,000
|
14
|
6,736
|
-
|
-
|
-
|
6,750
|
|||||||||||||||
Exercise
of warrants, at $0.60 per share (Note 10(a)
|
3,100,000
|
3
|
1,857
|
-
|
-
|
-
|
1,860
|
|||||||||||||||
Cashless
exercise of placement agent warrants (Note 10(b)
|
242,180
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Derivative
conversion feature transferred to equity upon conversion (Note
10(c)
|
-
|
-
|
3,314
|
-
|
-
|
-
|
3,314
|
|||||||||||||||
Derivative
warrants transferred to equity upon exercise (Note 10(c)
|
-
|
-
|
1,671
|
-
|
-
|
-
|
1,671
|
|||||||||||||||
Issue
of common stock for services
|
10,000
|
-
|
21
|
-
|
-
|
-
|
21
|
|||||||||||||||
Issue
of common stock for fractional shares and round lot
holders
|
487
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Issue
of penalty shares (Note 10(a)
|
578,634
|
1
|
999
|
-
|
-
|
-
|
1,000
|
|||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
1,354
|
-
|
1,354
|
|||||||||||||||
Foreign
currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
985
|
985
|
|||||||||||||||
Balance,
December 31, 2006
|
92,881,301
|
$
|
93
|
$
|
16,506
|
$
|
1,366
|
$
|
3,933
|
$
|
1,139
|
$
|
23,037
|
|
|
Years
ended December 31,
|
|||||||||||
|
Notes
|
2006
|
2005
|
2004
|
|||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||||||||
Net
income
|
$
|
1,354
|
$
|
965
|
$
|
3,693
|
|||||||
Adjustments
to reconcile net income to net cash provided by operating
activities
|
|||||||||||||
Amortization
of land-use rights
|
78
|
9
|
4
|
||||||||||
Depreciation
|
953
|
183
|
111
|
||||||||||
Provision
for doubtful debts
|
10
|
5
|
1
|
||||||||||
Amortization
of debt issue costs
|
838
|
739
|
-
|
||||||||||
Amortization
of discount on convertible notes and warrants
|
8,627
|
4,225
|
-
|
||||||||||
Derivative
unrealized fair value gain
|
(1,237
|
)
|
(700
|
)
|
-
|
||||||||
Discount
on converted shares and exercised warrants
|
2,898
|
417
|
-
|
||||||||||
Issue
of common stock for services
|
21
|
-
|
-
|
||||||||||
Issue
of common stock for penalty
|
1,000
|
-
|
-
|
||||||||||
Changes
in operating assets and liabilities:
|
|||||||||||||
Decrease/(increase)
in short-term investments
|
-
|
117
|
(117
|
)
|
|||||||||
Increase
in accounts receivable
|
(2,972
|
)
|
(1,507
|
)
|
(383
|
)
|
|||||||
Decrease/(increase)
in notes receivable
|
-
|
638
|
(372
|
)
|
|||||||||
Decrease
in other receivables
|
4
|
2,251
|
635
|
||||||||||
Decrease/(increase)
in advances to suppliers
|
1,819
|
(2,430
|
)
|
(136
|
)
|
||||||||
Increase/(decrease)
in inventories
|
(8,104
|
)
|
(3,994
|
)
|
20
|
||||||||
Increase
in accounts payable
|
1,426
|
610
|
37
|
||||||||||
Decrease
in note payable
|
(72
|
)
|
|||||||||||
Increase
in accrued expenses
|
588
|
115
|
73
|
||||||||||
Decrease
in advance from customers
|
-
|
-
|
(368
|
)
|
|||||||||
Increase
in other payables
|
1,432
|
1,094
|
147
|
||||||||||
Increase/(decrease)
in income tax payable
|
1,088
|
(611
|
)
|
187
|
|||||||||
Increase/(decrease)
in VAT payable
|
887
|
66
|
(856
|
)
|
|||||||||
Increase
in penalty payable
|
204
|
-
|
-
|
||||||||||
Decrease/(increase)
in restricted cash
|
382
|
(615
|
)
|
-
|
|||||||||
|
|||||||||||||
Net
cash provided by operating activities
|
11,296
|
1,577
|
2,604
|
||||||||||
|
|||||||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||||||||
Exercise
of warrants
|
1,860
|
-
|
-
|
||||||||||
Repayment
of long-term debt
|
(1,300
|
)
|
-
|
-
|
|||||||||
Issue
of convertible notes
|
-
|
12,500
|
-
|
||||||||||
Debt
issue costs
|
-
|
(1,583
|
)
|
-
|
|||||||||
Shareholder
contribution
|
-
|
50
|
-
|
||||||||||
Distribution
paid to owners of a subsidiary
|
-
|
(947
|
)
|
(3,204
|
)
|
||||||||
|
|||||||||||||
Net
cash provided by/(used in) financing activities
|
560
|
10,020
|
(3,204
|
)
|
|||||||||
|
|||||||||||||
Effect
of exchange rate changes on cash
|
1,020
|
157
|
-
|
||||||||||
|
|||||||||||||
Net
increase/(decrease) in cash and cash equivalents
|
12,876
|
11,754
|
(600
|
)
|
|||||||||
Cash
and cash equivalents at beginning of year
|
12,067
|
313
|
913
|
||||||||||
|
|||||||||||||
Cash
and cash equivalents at end of year
|
$
|
24,943
|
$
|
12,067
|
$
|
313
|
|||||||
|
|||||||||||||
Supplementary
cash flow information:
|
20
|
|
·
|
Puda
Coal, Inc.: Mr. Ming Zhao (approximately 74%); Mr. Yao Zhao (approximately
18%) held directly.
|
|
·
|
Puda
Investment Holding Limited: Mr. Ming Zhao (approximately 74%);
Mr. Yao
Zhao (approximately 18%) held indirectly through
Puda.
|
|
·
|
Shanxi
Putai Resources Limited: Mr. Ming Zhao (approximately 74%); Mr.
Yao Zhao
(approximately 18%) held indirectly through Puda and
BVI.
|
|
·
|
Shanxi
Puda Coal Group Co., Ltd.: Mr. Ming Zhao (80%); Mr. Yao Zhao (20%)
held
directly.
|
20
years
|
|
Machinery
and equipment
|
10
years
|
10
years
|
|
Office
equipment and others
|
10
years
|
|
December 31, 2006
|
December 31, 2005
|
|||||
|
’000
|
’000
|
|||||
|
|
|
|||||
Balance,
beginning of year
|
$
|
34
|
$
|
29
|
|||
Additions
|
10
|
5
|
|||||
|
|||||||
Balance,
end of year
|
$
|
44
|
$
|
34
|
|
December
31, 2006
|
December
31, 2005
|
|||||
|
$’000
|
$’000
|
|||||
|
|
|
|||||
Other
receivable from Ming Zhao, CEO, director and major shareholder
of
Puda
|
$
|
9
|
$
|
17
|
|||
|
|||||||
Advance
to Shanxi Liulin Jucai Coal Industry Co., Limited. (“Jucai
Coal”), a related company with a common owner
|
$
|
602
|
$
|
-
|
|||
|
|||||||
Accounts
payable to Jucai Coal
|
$
|
221
|
$
|
154
|
|||
|
|||||||
Other
payable to Shanxi Puda Resources Group Limited (“Resources
Group”), a related company with common owners
|
$
|
696
|
$
|
673
|
|||
|
|||||||
Other
payable Yao Zhao, manager and shareholder of Puda
|
205
|
201
|
|||||
|
|||||||
|
$
|
901
|
$
|
874
|
|||
Loan
payable to Resources Group
|
|||||||
-current
portion
|
$
|
1,300
|
$
|
1,300
|
|||
-long-term
portion
|
10,400
|
11,700
|
|||||
|
|||||||
|
$
|
11,700
|
$
|
13,000
|
|
December
31, 2006
|
December
31, 2005
|
|||||
|
$’000
|
$’000
|
|||||
|
|
|
|||||
Raw
materials
|
$
|
12,342
|
$
|
6,516
|
|||
Finished
goods
|
3,321
|
1,043
|
|||||
|
|||||||
Total
|
$
|
15,663
|
$
|
7,559
|
|
December 31, 2006
|
December 31, 2005
|
|||||
|
$’000
|
$’000
|
|||||
Cost:
|
|||||||
Buildings
and facilities
|
$
|
2,961
|
$
|
2,961
|
|||
Machinery
equipment
|
8,131
|
8,131
|
|||||
Motor
vehicles
|
254
|
254
|
|||||
Office
equipment and others
|
76
|
76
|
|||||
|
|||||||
|
11,422
|
11,422
|
|||||
|
|||||||
Accumulated
depreciation:
|
|||||||
Buildings
and facilities
|
243
|
107
|
|||||
Machinery
equipment
|
1,130
|
345
|
|||||
Motor
vehicles
|
143
|
118
|
|||||
Office
equipment and others
|
36
|
29
|
|||||
|
|||||||
|
1,552
|
599
|
|||||
Carrying
value:
|
|||||||
Buildings
and facilities
|
2,718
|
2,854
|
|||||
Machinery
equipment
|
7,001
|
7,786
|
|||||
Motor
vehicles
|
111
|
136
|
|||||
Office
equipment and others
|
40
|
47
|
|||||
|
|||||||
|
$
|
9,870
|
$
|
10,823
|
|
Land-use
rights
|
||||||
|
December 31, 2006
|
December 31, 2005
|
|||||
|
$’000
|
$’000
|
|||||
|
|
|
|||||
Cost
|
$
|
3,831
|
$
|
3,831
|
|||
|
|||||||
Accumulated
amortization
|
102
|
24
|
|||||
|
|||||||
Carrying
value
|
$
|
3,729
|
$
|
3,807
|
|
December 31, 2006
|
December 31, 2005
|
|||||
|
$’000
|
$’000
|
|||||
|
|||||||
Conveyance loan
|
$
|
11,700
|
$
|
13,000
|
|||
Less:
current portion
|
(1,300
|
)
|
(1,300
|
)
|
|||
Long-term
portion
|
$
|
10,400
|
$
|
11,700
|
|
December 31, 2006
|
|||
Year
|
$’000
|
|||
2007
|
$
|
1,300
|
||
2008
|
1,300
|
|||
2009
|
1,300
|
|||
2010
|
1,300
|
|||
2011
|
1,300
|
|||
Thereafter
|
5,200
|
|||
|
$
|
11,700
|
|
December 31,
2006
|
December 31,
2005
|
|||||
|
|
$000
|
|
$000
|
|||
Convertible
notes:
|
|||||||
Gross
amount issued
|
$
|
12,500
|
$
|
12,500
|
|||
Less:
amount converted
|
(7,600
|
)
|
(850
|
)
|
|||
Less:
unamortized discount on conversion feature
|
(1,538
|
)
|
(5,491
|
)
|
|||
Less:
unamortized discount on note warrants
|
(254
|
)
|
(4,242
|
)
|
|||
|
$
|
3,108
|
$
|
1,917
|
|||
|
|||||||
Derivative
conversion feature:
|
|||||||
Amount
allocated to conversion feature
|
$
|
6,137
|
$
|
6,137
|
|||
Less:
amount transferred to equity upon conversion in 2005
|
(417
|
)
|
(417
|
)
|
|||
Less:
amount transferred to equity upon conversion in 2006
|
(3,314
|
)
|
-
|
||||
|
$
|
2,406
|
$
|
5,720
|
|||
|
|||||||
Derivative
warrants:
|
|||||||
Amount
allocated to investor warrants
|
$
|
6,363
|
$
|
6,363
|
|||
Placement
agent warrants
|
5,625
|
5,625
|
|||||
Less:
amount transferred to equity upon exercise in 2006
|
(1,671
|
)
|
-
|
||||
Less:
change in fair value in 2005
|
(700
|
)
|
(700
|
)
|
|||
Less:
change in fair value in 2006
|
(1,237
|
)
|
-
|
||||
|
$
|
8,380
|
$
|
11,288
|
December 31, 2006
|
||||
Year
|
$’000
|
|||
|
|
|||
2007
|
$
|
6
|
||
2008
|
6
|
|||
|
||||
|
$
|
12
|
|
Number of shares
|
|||
|
|
|||
Outstanding
shares as at July 15, 2005 prior to the reorganization
|
59,000,000
|
|||
|
||||
Common
stock converted from preferred stock issued as a result of the
reorganization
|
678,500,000
|
|||
Effect
of the 1 for 10 reverse stock split
|
(663,750,000
|
)
|
||
|
||||
Number
of shares of common stock presented in the consolidated statement
of
changes in stockholders’ equity as of January 1, 2004
|
73,750,000
|
|
Years ended December 31,
|
|||||||||
|
2006
|
2005
|
2004
|
|||||||
|
$
|
’000
|
$
|
’000
|
$
|
’000
|
||||
|
||||||||||
Current
year provision
|
$
|
7,604
|
$
|
3,439
|
$
|
1,866
|
|
Years ended December 31,
|
|
||||||||
|
2006
|
2005
|
2004
|
|||||||
|
$’000
|
$’000
|
$’000
|
|||||||
|
|
|
|
|||||||
Income
before income taxes
|
$
|
8,958
|
$
|
4,404
|
$
|
5,559
|
||||
|
||||||||||
Income
tax on pretax income at statutory rate
|
3,046
|
1,497
|
1,890
|
|||||||
Tax
effect of expenses that are not deductible in determining taxable
profits
|
4,544
|
2,195
|
32
|
|||||||
Tax
effect of income that is not taxable in determining taxable profits
|
(421
|
)
|
(238
|
)
|
-
|
|||||
Effect
of different tax rates of subsidiary operating inother
jurisdictions
|
(234
|
)
|
(94
|
)
|
(56
|
)
|
||||
Valuation
allowance
|
669
|
79
|
-
|
|||||||
|
||||||||||
Income
tax at effective rate
|
$
|
7,604
|
$
|
3,439
|
$
|
1,866
|
|
December 31, 2006
|
December 31, 2005
|
|||||
|
$’000
|
$’000
|
|||||
|
|
|
|||||
Net
operating loss carryforwards
|
$
|
1,124
|
$
|
455
|
|||
Less:
Valuation allowance
|
(1,124
|
)
|
(455
|
)
|
|||
|
|||||||
Net
|
$
|
-
|
$
|
-
|
|
Years ended December 31,
|
|||||||||
|
2006
|
2005
|
2004
|
|||||||
|
|
|
|
|||||||
Basic
weighted average number of shares
|
80,167,110
|
73,950,274
|
73,750,000
|
|||||||
Options
outstanding, after adjusting for 10 to 1 reverse split
|
9,683
|
56,218
|
12,817
|
|||||||
Assumed
conversion of notes
|
-
|
1,742,904
|
-
|
|||||||
Assumed
exercise of warrants
|
-
|
1,826,640
|
-
|
|||||||
Issue
of penalty shares
|
152,239
|
-
|
-
|
|||||||
|
||||||||||
Diluted
weighted average number of shares
|
80,329,032
|
77,576,036
|
73,762,817
|
|
Years ended December 31,
|
|||||||||
|
2006
|
2005
|
2004
|
|||||||
|
$’000
|
$’000
|
$’000
|
|||||||
|
|
|
|
|||||||
Cash
paid during the period for:
|
|
|
|
|||||||
Interest
|
$
|
1,543
|
$
|
114
|
$
|
4
|
||||
Income
taxes
|
$
|
6,516
|
$
|
2,039
|
$
|
-
|
||||
|
||||||||||
Major
non-cash transactions:
|
||||||||||
Notes
converted into common shares
|
$
|
6,750
|
$
|
850
|
$
|
-
|
||||
Dividend
declared
|
$
|
-
|
$
|
1,452
|
$
|
2,393
|
||||
Purchase
of land-use rights, property, plant and equipment from Resources
Group
|
$
|
-
|
$
|
13,000
|
$
|
-
|
Number of
options granted
|
After adjusting for the
10 to 1 reverse stock
split
|
|
Exercise price
|
|
Expiry date
|
|
Estimated
Fair value
|
||||||
|
|
|
|
$’000
|
|||||||||
150,000
|
15,000
|
(i)
|
$
|
1
|
October
20,
2008
|
5
|
|
(i)
|
were
granted in 2003 to former directors/officers in consideration of
services
rendered.
|
|
Number of
options
|
Weighted average
exercise price
|
|||||
|
|
$
|
|||||
Options
outstanding at December 31, 2003
|
|
|
|||||
(after
adjusting for the 10 to 1 reverse stock split)
|
165,000
|
9.2
|
|||||
Granted
|
-
|
-
|
|||||
Exercised
|
-
|
-
|
|||||
Forfeited
|
-
|
-
|
|||||
Expired
|
-
|
-
|
|||||
|
|||||||
Options
outstanding at December 31, 2004
|
165,000
|
9.2
|
|||||
Granted
|
-
|
-
|
|||||
Exercised
|
-
|
-
|
|||||
Forfeited
|
-
|
-
|
|||||
Expired
|
-
|
-
|
|||||
|
|||||||
Options
outstanding at December 31, 2005
|
165,000
|
9.2
|
|||||
Granted
|
-
|
-
|
|||||
Exercised
|
-
|
-
|
|||||
Forfeited
|
-
|
-
|
|||||
Expired
|
(150,000
|
)
|
(8.2
|
)
|
|||
|
|||||||
Options
outstanding at December 31, 2006
|
15,000
|
1
|
Years ended December 31,
|
|||||||||||||||||||
Customers
|
2006
|
2005
|
2004
|
||||||||||||||||
$
’000 %
|
$
’000 %
|
$
’000 %
|
|||||||||||||||||
Customer
A
|
$
|
27,387
|
20
|
$
|
7,810
|
20
|
$
|
-
|
-
|
||||||||||
Customer
B
|
$
|
-
|
-
|
$
|
6,588
|
-
|
$
|
2,664
|
13
|
||||||||||
Customer
F
|
$
|
-
|
-
|
$
|
-
|
-
|
$
|
2,056
|
10
|
||||||||||
Customer
G
|
$
|
-
|
-
|
$
|
-
|
-
|
$
|
2,923
|
15
|
|
December 31, 2006
|
December 31, 2005
|
|||||||||||
|
$’000
|
%
|
$’000
|
% | |||||||||
|
|
|
|
|
|||||||||
Customer
A
|
$
|
2,135
|
30
|
$
|
465
|
-
|
|||||||
Customer
C
|
$
|
863
|
12
|
$
|
-
|
-
|
|||||||
Customer
B
|
$
|
798
|
11
|
$
|
-
|
-
|
|||||||
Customer
D
|
$
|
739
|
10
|
$
|
-
|
-
|
|||||||
Customer
E
|
$
|
729
|
10
|
$
|
-
|
-
|
|||||||
Customer
H
|
$
|
-
|
-
|
$
|
480
|
11
|
|||||||
Customer
J
|
$
|
-
|
-
|
$
|
470
|
11
|
|
December 31, 2006
|
|||
ASSETS
|
|
|||
CURRENT
ASSETS
|
|
|||
Cash
and cash equivalents
|
$
|
(15
|
)
|
|
Restricted
cash
|
233
|
|||
Deferred
charges
|
171
|
|||
|
||||
Total
current assets
|
389
|
|||
|
||||
INVESTMENT
IN SUBSIDIARIES
|
29,099
|
|||
|
||||
TOTAL
ASSETS
|
$
|
29,488
|
||
|
||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||
CURRENT
LIABILITIES
|
||||
Other
payable
|
$
|
523
|
||
Accrued
expenses
|
242
|
|||
Penalty
payable
|
204
|
|||
|
||||
Total
current liabilities
|
969
|
|||
|
||||
LONG-TERM
LIABILITIES
|
||||
Convertible
notes
|
3,108
|
|||
Derivative
conversion feature
|
2,406
|
|||
Derivative
warrants
|
8,380
|
|||
|
||||
Total
long-term liabilities
|
13,894
|
|||
|
||||
STOCKHOLDERS’
EQUITY
|
||||
Preferred
stock, authorized 5,000,000 shares, par value $0.01, issued and
outstanding None
|
-
|
|||
Common
stock, authorized 150,000,000 shares, par value $0.001, issued and
outstanding 92,881,301 shares
|
93
|
|||
Paid-in
capital
|
32,128
|
|||
Accumulated
deficit
|
(20,313
|
)
|
||
|
||||
Total
stockholders’ equity
|
11,908
|
|||
|
||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
29,488
|
|
Year ended
December 31, 2006
|
|||
|
|
|||
Revenue:
|
|
|||
Share
of earnings from investment in subsidiaries
|
$
|
16,634
|
||
|
||||
Total
revenue
|
16,634
|
|||
|
||||
General
and administrative expenses
|
(1,171
|
)
|
||
|
||||
Income
from operations
|
15,463
|
|||
|
||||
Interest
expense
|
(3,691
|
)
|
||
|
||||
Debt
financing costs
|
(10,669
|
)
|
||
|
||||
Derivative
unrealized fair value gain
|
1,237
|
|||
|
||||
Net
income
|
$
|
2,340
|
|
Year ended
December 31, 2006
|
|||
|
|
|||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|||
Net
income
|
$
|
2,340
|
||
Adjustments
to reconcile net income to net cash used in operating
activities
|
||||
Share
of earnings from investment in subsidiaries
|
(16,634
|
)
|
||
Amortization
of debt issue costs
|
838
|
|||
Amortization
of discount on convertible notes and warrants
|
8,627
|
|||
Derivative
unrealized fair value gain
|
(1,237
|
)
|
||
Discount
on converted shares and exercised warrants
|
2,898
|
|||
Issue
of common stock for services
|
21
|
|||
Issue
of common stock for penalty
|
1,000
|
|||
Changes
in operating assets and liabilities:
|
||||
Advances
to subsidiaries
|
(1,079
|
)
|
||
Increase
in other payable
|
523
|
|||
Increase
in accrued expenses
|
242
|
|||
Increase
in penalty payable
|
204
|
|||
Decrease
in restricted cash
|
382
|
|||
|
||||
Net
cash used in operating activities
|
(1,875
|
)
|
||
|
||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||
Exercise
of warrants
|
1,860
|
|||
|
||||
Net
cash provided by financing activities
|
1,860
|
|||
|
||||
Net
decrease in cash and cash equivalents
|
(15
|
)
|
||
Cash
and cash equivalents at beginning of year
|
-
|
|||
|
||||
Cash
and cash equivalents at end of year
|
$
|
(15
|
)
|
Unaudited
consolidated Balance Sheet as of September 30, 2007
|
5-6
|
|||
|
||||
Unaudited
Consolidated Statements of Operations for the nine months ended September
30, 2007 and 2006
|
7-8
|
|||
|
||||
Unaudited
Consolidated Statements of Cash Flows for the nine months ended September
30, 2007 and 2006
|
9
|
|||
|
||||
Notes
to Unaudited Consolidated Financial Statements
|
10-36
|
|
Note(s)
|
September 30,
2007
|
|||||
ASSETS
|
|
(unaudited)
|
|||||
CURRENT
ASSETS
|
|
|
|||||
Cash
and cash equivalents
|
19
|
$
|
1,817
|
||||
Restricted
cash
|
3,
19
|
233
|
|||||
Accounts
receivable, net
|
7,754
|
||||||
Other
receivables
|
|||||||
-
Related parties
|
4
|
7
|
|||||
- Third
parties
|
6
|
||||||
Advances
to suppliers
|
|||||||
-
Related parties
|
4
|
597
|
|||||
-
Third parties
|
1,205
|
||||||
VAT
recoverable
|
958
|
||||||
Deferred
charges
|
-
|
||||||
Inventories
|
5
|
42,854
|
|||||
|
|||||||
Total
current assets
|
55,431
|
||||||
|
|||||||
PROPERTY,
PLANT AND EQUIPMENT, NET
|
6
|
15,264
|
|||||
|
|||||||
INTANGIBLE
ASSETS, NET
|
7
|
3,503
|
|||||
|
|||||||
TOTAL
ASSETS
|
$
|
74,198
|
|||||
|
|||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
CURRENT
LIABILITIES
|
|||||||
Current
portion of long-term debt
|
|||||||
-
Related party
|
4,8
|
$
|
1,300
|
||||
Accounts
payable
|
|||||||
-
Related parties
|
4
|
205
|
|||||
-
Third parties
|
2,714
|
||||||
Other
payables
|
|||||||
-
Related parties
|
1,4
|
3,626
|
|||||
-
Third parties
|
2,672
|
||||||
Accrued
expenses
|
1,021
|
||||||
Income
taxes payable
|
1,901
|
||||||
VAT
payable
|
-
|
||||||
Distribution
payable
|
1,069
|
||||||
Penalty
payable
|
9
|
1,342
|
|||||
|
|||||||
Total
current liabilities
|
15,850
|
||||||
|
|||||||
LONG-TERM
LIABILITIES
|
|||||||
Long-term
debt
|
|||||||
-
Related party
|
4,
8
|
9,425
|
|||||
Convertible
notes
|
9
|
1,798
|
|||||
Derivative
conversion feature
|
9
|
1,149
|
|||||
Derivative
warrants
|
9
|
6,453
|
|||||
|
|||||||
Total
long-term liabilities
|
18,825
|
||||||
|
|||||||
COMMITMENTS
AND CONTINGENCIES
|
10
|
|
Note(s)
|
September 30,
2007
|
|||||
|
|
(unaudited)
|
|||||
STOCKHOLDERS’
EQUITY
|
|
|
|||||
Preferred
stock, authorized 5,000,000 shares, par value $0.01, issued and
outstanding None
|
-
|
||||||
Common
stock, authorized 150,000,000 shares, par value $0.001, issued
and
outstanding 100,902,176 (2006: 92,881,301)
|
11
|
101
|
|||||
Paid-in
capital
|
11
|
24,613
|
|||||
Statutory
surplus reserve fund
|
1,366
|
||||||
Retained
earnings
|
10,475
|
||||||
Accumulated
other comprehensive income
|
2,968
|
||||||
|
|||||||
Total
stockholders’ equity
|
39,523
|
||||||
|
|||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
74,198
|
|
|
Nine months
ended
September 30,
2007
|
|
Nine months
ended
September 30,
2006
|
||||||
|
Note(s)
|
|
|
|||||||
|
|
|
|
|||||||
NET
REVENUE
|
$
|
116,048
|
$
|
94,364
|
||||||
|
||||||||||
COST
OF REVENUE
|
(95,260
|
)
|
(74,899
|
)
|
||||||
|
||||||||||
GROSS
PROFIT
|
20,788
|
19,465
|
||||||||
|
||||||||||
OPERATING
EXPENSES
|
||||||||||
Selling
expenses
|
2,240
|
2,192
|
||||||||
General
and administrative expenses
|
1,444
|
1,627
|
||||||||
|
||||||||||
TOTAL
OPERATING EXPENSES
|
3,684
|
3,819
|
||||||||
|
||||||||||
INCOME
FROM OPERATIONS
|
17,104
|
15,646
|
||||||||
|
||||||||||
INTEREST
INCOME
|
58
|
38
|
||||||||
|
||||||||||
INTEREST
EXPENSE
|
12
|
)
|
(1,346
|
)
|
(2,356
|
)
|
||||
|
||||||||||
DEBT
FINANCING COSTS
|
13
|
)
|
(1,921
|
)
|
(9,513
|
)
|
||||
|
||||||||||
DERIVATIVE
UNREALIZED FAIR VALUE GAIN/(LOSS)
|
14
|
)
|
(1,260
|
)
|
(3,327
|
)
|
||||
|
||||||||||
INCOME
BEFORE INCOME TAXES
|
12,635
|
488
|
||||||||
|
||||||||||
INCOME
TAXES
|
15
|
)
|
(6,093
|
)
|
(5,130
|
)
|
||||
|
||||||||||
NET
INCOME/(LOSS)
|
6,542
|
(4,642
|
)
|
|||||||
|
||||||||||
OTHER
COMPREHENSIVE INCOME
|
||||||||||
Foreign
currency translation adjustment
|
1,804
|
548
|
||||||||
|
||||||||||
COMPREHENSIVE
INCOME/(LOSS)
|
$
|
8,346
|
$
|
(4,094
|
)
|
|||||
|
||||||||||
NET
INCOME/(LOSS)
|
6,542
|
(4,642
|
)
|
|||||||
|
||||||||||
LESS:
DIVIDENDS
|
||||||||||
Option
holder preference dividend
|
-
|
(2,717
|
)
|
|||||||
Common
dividend
|
-
|
-
|
||||||||
|
|
|
||||||||
UNDISTRIBUTED
EARNINGS
|
$
|
6,542
|
$
|
(7,359
|
)
|
|
|
Nine months
ended
September 30,
2007
|
|
Nine months
ended
September 30,
2006
|
||||||
|
Note(s)
|
|
|
|||||||
|
|
|
|
|||||||
BASIC
EARNINGS/(LOSS) PER SHARE
|
|
|
|
|||||||
-
Option holder preference
|
$
|
-
|
$
|
0.04
|
||||||
-
Other common holders
|
0.07
|
(0.10
|
)
|
|||||||
|
$
|
0.07
|
$
|
(0.06
|
)
|
|||||
|
||||||||||
DILUTED
EARNINGS/(LOSS) PER SHARE
|
||||||||||
-
Option holder preference
|
$
|
-
|
$
|
0.04
|
||||||
-
Other common holders
|
0.07
|
(0.10
|
)
|
|||||||
|
$
|
0.07
|
$
|
(0.06
|
)
|
|||||
|
||||||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | ||||||||||
-BASIC
|
16
|
97,017,522
|
77,920,661
|
|||||||
-DILUTED
|
16
|
97,729,596
|
78,140,768
|
|
|
Nine months ended September 30,
|
||||||||
|
Notes
|
2007
|
2006
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|||||||
Net
income/(loss)
|
$
|
6,542
|
$
|
(4,642
|
)
|
|||||
Adjustments
to reconcile net income/(loss) to net cash provided by operating
activities
|
||||||||||
Amortization
of land-use rights
|
59
|
58
|
||||||||
Depreciation
|
872
|
711
|
||||||||
Provision
for doubtful debts
|
1
|
12
|
||||||||
Amortization
of debt issue costs
|
6
|
821
|
||||||||
Amortization
of discount on convertible notes and warrants
|
777
|
7,871
|
||||||||
Derivative
unrealized fair value loss
|
1,260
|
3,327
|
||||||||
Discount
on converted shares and exercised warrants
|
638
|
1,146
|
||||||||
Issue
of common stock for services
|
-
|
21
|
||||||||
Changes
in operating assets and liabilities:
|
||||||||||
Increase
in accounts receivable
|
(265
|
)
|
(3,760
|
)
|
||||||
Decrease/(increase)
in other receivables
|
38
|
(1
|
)
|
|||||||
(Increase)/decrease
in advances to suppliers
|
(602
|
)
|
1,760
|
|||||||
Increase
in VAT recoverable
|
(938
|
)
|
-
|
|||||||
Increase
in inventories
|
(26,007
|
)
|
(6,041
|
)
|
||||||
Increase
in accounts payable
|
51
|
1,184
|
||||||||
Increase
in accrued expenses
|
34
|
236
|
||||||||
Increase
in other payables
|
877
|
902
|
||||||||
(Decrease)/increase
in income tax payable
|
(673
|
)
|
1,056
|
|||||||
(Decrease)/increase
in VAT payable
|
(1,228
|
)
|
218
|
|||||||
Increase
in penalty payable
|
1,138
|
821
|
||||||||
Decrease
in restricted cash
|
-
|
382
|
||||||||
|
||||||||||
Net
cash (used in)/provided by operating activities
|
(17,420
|
)
|
6,082
|
|||||||
|
||||||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||
Purchase
of property, plant and equipment
|
(5,977
|
)
|
-
|
|||||||
|
||||||||||
Net
cash used in investing activities
|
(5,977
|
)
|
-
|
|||||||
|
||||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||
Exercise
of warrants
|
1,110
|
1,800
|
||||||||
Repayment
of long-term debt
|
(975
|
)
|
(975
|
)
|
||||||
|
||||||||||
Net
cash provided by financing activities
|
135
|
825
|
||||||||
|
||||||||||
Effect
of exchange rate changes on cash
|
136
|
569
|
||||||||
|
||||||||||
Net
(decrease)/increase in cash and cash equivalents
|
(23,126
|
)
|
7,476
|
|||||||
Cash
and cash equivalents at beginning of period
|
24,943
|
12,067
|
||||||||
|
||||||||||
Cash
and cash equivalents at end of period
|
$
|
1,817
|
$
|
19,543
|
||||||
|
||||||||||
Supplementary
cash flow information:
|
17
|
· |
Puda
Coal, Inc.: Mr. Ming Zhao (approximately 53%); Mr. Yao Zhao (approximately
13%) held directly.
|
· |
Puda
Investment Holding Limited: Mr. Ming Zhao (approximately 53%); Mr.
Yao
Zhao (approximately 13%) held indirectly through
Puda.
|
· |
Shanxi
Putai Resources Limited: Mr. Ming Zhao (approximately 53%); Mr. Yao
Zhao
(approximately 13%) held indirectly through Puda and
BVI.
|
· |
Shanxi
Puda Coal Group Co., Ltd.: Mr. Ming Zhao (8%); Mr. Yao Zhao (2%)
held
directly.
|
Buildings
and facility
|
20
years
|
Machinery
and equipment
|
10
years
|
Motor
vehicles
|
10
years
|
Office
equipment and others
|
10
years
|
|
September 30,
2007
|
|||
|
$’000
|
|||
|
|
|||
Other
receivable from Ming Zhao, CEO, director and major shareholder of
Puda
|
$
|
7
|
||
Advance
to Shanxi Liulin Jucai Coal Industry Co., Limited (“Jucai Coal”), a
related company with a common owner
|
$
|
597
|
||
|
||||
Accounts
payable to Jucai Coal
|
$
|
205
|
||
Other
payable to Shanxi Puda Resources Group Limited (“Resources Group”), a
related company with common owners
|
$
|
725
|
||
|
||||
Other
payable to Yao Zhao, manager and shareholder of Puda
|
209
|
|||
Other
payable to Ming Zhao and Yao Zhao
|
2,692
|
|||
|
||||
|
$
|
3,626
|
||
Loan
payable to Resources Group
|
||||
-current
portion
|
$
|
1,300
|
||
-long-term
portion
|
9,425
|
|||
|
||||
|
$
|
10,725
|
|
September
30,
2007
|
|||
|
$’000
|
|||
|
|
|||
Raw
materials
|
$
|
31,140
|
||
Finished
goods
|
11,714
|
|||
|
||||
Total
|
$
|
42,854
|
|
September
30,
2007
|
|||
|
$’000
|
|||
Cost:
|
||||
Buildings
and facilities
|
$
|
3,015
|
||
Machinery
equipment
|
13,940
|
|||
Motor
vehicles
|
-
|
|||
Office
equipment and others
|
-
|
|||
|
||||
|
16,955
|
|||
|
||||
Accumulated
depreciation:
|
||||
Buildings
and facilities
|
211
|
|||
Machinery
equipment
|
1,480
|
|||
Motor
vehicles
|
-
|
|||
Office
equipment and others
|
-
|
|||
|
||||
|
1,691
|
|||
Carrying
value:
|
||||
Buildings
and facilities
|
2,804
|
|||
Machinery
equipment
|
12,460
|
|||
Motor
vehicles
|
-
|
|||
Office
equipment and others
|
-
|
|||
|
||||
|
$
|
15,264
|
|
Land-use
rights
|
|||
|
September
30,
2007
|
|||
|
$’000
|
|||
|
|
|||
Cost
|
$
|
3,634
|
||
|
||||
Accumulated
amortization
|
131
|
|||
|
||||
Carrying
value
|
$
|
3,503
|
|
September
30,
2007
|
|||
|
$’000
|
|||
|
|
|||
Conveyance
loan
|
$
|
10,725
|
||
Less:
current portion
|
(1,300
|
)
|
||
Long-term
portion
|
$
|
9,425
|
Year
|
September 30,
2007
|
|||
|
$’000
|
|||
|
|
|||
2007
|
$
|
1,300
|
||
2008
|
1,300
|
|||
2009
|
1,300
|
|||
2010
|
1,300
|
|||
2011
|
1,300
|
|||
Thereafter
|
4,225
|
|||
|
$
|
10,725
|
|
September 30,
2007
|
|||
|
$000
|
|||
Convertible
notes:
|
||||
Gross
amount issued
|
$
|
12,500
|
||
Less:
amount converted
|
(10,160
|
)
|
||
Less:
unamortized discount on conversion feature
|
(488
|
)
|
||
Less:
unamortized discount on note warrants
|
(54
|
)
|
||
|
$
|
1,798
|
||
|
||||
Derivative
conversion feature:
|
||||
Amount
allocated to conversion feature
|
$
|
6,137
|
||
Less:
amount transferred to equity upon conversion in 2005
|
(417
|
)
|
||
Less:
amount transferred to equity upon conversion in 2006
|
(3,314
|
)
|
||
Less:
amount transferred to equity upon conversion in 2007
|
(1,257
|
)
|
||
|
$
|
1,149
|
||
|
||||
Derivative
warrants:
|
||||
Amount
allocated to investor warrants
|
$
|
6,363
|
||
Placement
agent warrants
|
5,625
|
|||
Less:
amount transferred to equity upon exercise of note warrants in
2006
|
(789
|
)
|
||
Less:
amount transferred to equity upon exercise of placement agent warrants
in
2006
|
(882
|
)
|
||
Less:
amount transferred to equity upon exercise of note warrants in
2007
|
(471
|
)
|
||
Less:
amount transferred to equity upon exercise of placement agent warrants
in
2007
|
(2,716
|
)
|
||
Less:
change in fair value in 2005
|
(700
|
)
|
||
Less:
change in fair value in 2006
|
(1,237
|
)
|
||
Add:
change in fair value in 2007
|
1,260
|
|||
|
$
|
6,453
|
Year
|
September
30,
2007
|
|||
|
$’000
|
|||
|
|
|||
2008
|
$
|
6
|
|
Common Stock
|
Paid-in
Capital
|
||||||||
|
No. of shares
|
$000
|
$000
|
|||||||
Balance,
January 1, 2007
|
92,881,301
|
$
|
93
|
$
|
16,506
|
|||||
Notes
converted to common stock, at $0.50 per share
|
5,120,000
|
5
|
2,555
|
|||||||
Exercise
of warrants, at $0.60 per share
|
1,850,000
|
2
|
1,108
|
|||||||
Cashless
exercise of placement agent warrants
|
1,050,875
|
1
|
-
|
|||||||
Derivative
conversion feature transferred to equity upon conversion
|
-
|
-
|
1,257
|
|||||||
Derivative
warrants transferred to equity upon exercise
|
-
|
-
|
3,187
|
|||||||
|
||||||||||
Balance,
September 30, 2007
|
100,902,176
|
$
|
101
|
$
|
24,613
|
|
Nine months
ended
September
30,
2007
|
Nine months
ended
September
30,
2006
|
|||||
|
$’000
|
$’000
|
|||||
|
|
|
|||||
Current
period provision
|
$
|
6,093
|
$
|
5,130
|
|
Nine months
ended
September
30,
2007
|
Nine months
ended
September
30,
2006
|
|||||
|
$’000
|
$’000
|
|||||
|
|
|
|||||
Income
before income taxes
|
$
|
12,635
|
$
|
488
|
|||
|
|||||||
Income
tax on pretax income at statutory rate
|
4,296
|
166
|
|||||
Tax
effect of expenses that are not deductible in determining taxable
profits
|
1,681
|
4,645
|
|||||
Effect
of different tax rates of subsidiary operating in other
jurisdictions
|
(173
|
)
|
(161
|
)
|
|||
Change
in valuation allowance
|
289
|
480
|
|||||
|
|||||||
Income
tax at effective rate
|
$
|
6,093
|
$
|
5,130
|
|
September
30,
2007
|
|||
|
$’000
|
|||
|
|
|||
Net
operating loss carryforwards
|
$
|
1,
413
|
||
Less:
Valuation allowance
|
(1,413
|
)
|
||
|
||||
Net
|
$
|
-
|
|
Nine
months
ended
September
30,
2007
|
Nine
months
ended
September
30,
2006
|
|||||
|
|
|
|||||
Basic
weighted average number of shares
|
97,017,522
|
77,920,661
|
|||||
Options
outstanding, after adjusting for 10 to 1 reverse split
|
5,758
|
-
|
|||||
Assumed
conversion of notes
|
-
|
-
|
|||||
Assumed
exercise of warrants
|
-
|
-
|
|||||
Issuance
of penalty shares
|
706,316
|
220,107
|
|||||
|
|||||||
Diluted
weighted average number of shares
|
97,729,596
|
78,140,768
|
|
Nine
months
ended
September
30,
2007
|
Nine
months
ended
September
30,
2006
|
|||||
|
$’000
|
$’000
|
|||||
|
|
|
|||||
Cash
paid during the period for:
|
|
|
|||||
Interest
|
$
|
708
|
$
|
1,211
|
|||
Income
taxes
|
$
|
6,769
|
$
|
4,074
|
|||
|
|||||||
Major
non-cash transactions:
|
|||||||
Notes
converted into common shares
|
$
|
2,560
|
$
|
2,125
|
|||
Issue
of common stock for services
|
$
|
-
|
$
|
21
|
|||
Cashless
exercise of 1,468,706 placement agent warrants into 1,050,875 common
shares
|
$
|
-
|
$
|
-
|
Number of
options granted
|
After adjusting for
the 10 to 1 reverse
stock split
|
Exercise price
|
Expiry date
|
Estimated
Fair value
|
|||||||||
|
|
|
|
$’000
|
|||||||||
150,000
|
15,000
|
(i)
|
$
|
1
|
October
20, 2008
|
14
|
(i)
|
granted
in 2003 to former directors/officers in consideration of services
rendered.
|
|
Number
of
options
|
Weighted
average
exercise
price
|
|||||
|
|
|
|||||
Options
outstanding at December 31, 2006 (after adjusting for the 10 to 1
reverse
stock split)
|
15,000
|
$
|
1
|
||||
Granted
|
-
|
-
|
|||||
Exercised
|
-
|
-
|
|||||
Forfeited
|
-
|
-
|
|||||
Expired
|
-
|
-
|
|||||
|
|||||||
Options
outstanding at September 30, 2007
|
15,000
|
$
|
1
|
Customers |
Nine months
ended
September 30,
2007
|
Nine months
ended
September 30,
2006
|
|||||||||||
|
$’000
|
%
|
$’000
|
%
|
|||||||||
|
|
|
|
|
|||||||||
Customer
A
|
$
|
16,652
|
14
|
$
|
18,228
|
19
|
|||||||
Customer
B
|
$
|
-
|
-
|
$
|
-
|
-
|
Customers
|
September 30, 2007
|
||||||
|
$’000
|
%
|
|||||
|
|
|
|||||
Customer
A
|
$
|
869
|
11
|
||||
Customer
B
|
$
|
963
|
12
|
||||
Customer
C
|
$
|
908
|
12
|
||||
Customer
D
|
$
|
891
|
11
|
||||
Customer
E
|
$
|
-
|
-
|
||||
Customer
F
|
$
|
-
|
-
|
September 30,
2007
|
||||
ASSETS
|
|
|||
CURRENT
ASSETS
|
|
|||
Restricted
cash
|
$
|
233
|
||
|
||||
Total
current assets
|
233
|
|||
|
||||
INVESTMENTS
IN SUBSIDIARIES
|
42,113
|
|||
|
||||
TOTAL
ASSETS
|
$
|
42,346
|
||
|
||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||
CURRENT
LIABILITIES
|
||||
Bank
overdraft
|
$
|
25
|
||
Other
payable
|
3,585
|
|||
Penalty
payable
|
1,342
|
|||
|
||||
Total
current liabilities
|
4,952
|
|||
|
||||
LONG-TERM
LIABILITIES
|
||||
Convertible
notes
|
1,798
|
|||
Derivative
conversion feature
|
1,149
|
|||
Derivative
warrants
|
6,453
|
|||
|
||||
Total
long-term liabilities
|
9,400
|
|||
|
||||
STOCKHOLDERS’
EQUITY
|
||||
Preferred
stock, authorized 5,000,000 shares, par value $0.01, issued and
outstanding None
|
-
|
|||
Common
stock, authorized 150,000,000 shares, par value $0.001, issued
and
outstanding 100,902,176 shares
|
101
|
|||
Paid-in
capital
|
52,874
|
|||
Accumulated
deficit
|
(24,981
|
)
|
||
|
||||
Total
stockholders’ equity
|
27,994
|
|||
|
||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
42,346
|
Nine months
ended
September 30,
2007
|
||||
|
|
|||
Revenue
|
|
|||
|
|
|||
Share
of earnings from investment in subsidiaries
|
$
|
13,014
|
||
|
||||
Total
revenue
|
13,014
|
|||
|
||||
General
and administrative expenses
|
(654
|
)
|
||
|
||||
Income
from operations
|
12,360
|
|||
|
||||
Interest
expense
|
(833
|
)
|
||
|
||||
Debt
financing costs
|
(1,921
|
)
|
||
|
||||
Derivative
unrealized fair value loss
|
(1,260
|
)
|
||
|
||||
Net
income
|
$
|
8,346
|
Nine months
ended
September 30,
2007
|
||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||
Net
income
|
$
|
8,346
|
||
Adjustments
to reconcile net loss to net cash used in operating activities
|
||||
Share
of earnings from investment in subsidiaries
|
(13,014
|
)
|
||
Amortization
of debt issue costs
|
6
|
|||
Amortization
of discount on convertible notes and warrants
|
777
|
|||
Derivative
unrealized fair value loss
|
1,260
|
|||
Discount
on converted shares and exercised warrants
|
638
|
|||
Changes
in operating assets and liabilities:
|
||||
Advance
to subsidiary
|
(400
|
)
|
||
Increase
in other payable
|
371
|
|||
Decrease
in accrued expenses
|
(242
|
)
|
||
Increase
in penalty payable
|
1,138
|
|||
|
||||
Net
cash used in operating activities
|
(1,120
|
)
|
||
|
||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||
Exercise
of warrants
|
1,110
|
|||
|
||||
Net
cash provided by financing activities
|
1,110
|
|||
|
||||
Net
decrease in cash and cash equivalents
|
(10
|
)
|
||
Cash
and cash equivalents at beginning of period
|
(15
|
)
|
||
|
||||
Cash
and cash equivalents-bank overdraft at end of period
|
$
|
(25
|
)
|
Obligations
|
Total Ending
Balance
|
Less Than
One
Year
|
1-3 Years
|
3-5 Years
|
More than 5
Years
|
|||||||||||
Long
Term Debt Obligations
|
$
|
11,700
|
$
|
1,300
|
2,600
|
2,600
|
5,200
|
|||||||||
Capital
Lease Obligations
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
Operating
Lease Obligations
|
$
|
12
|
$
|
6
|
6
|
-
|
-
|
|||||||||
Purchase
Obligations
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
Repayment
Obligations under Line of Credit
|
-
|
-
|
-
|
-
|
||||||||||||
Total
|
$
|
11,712
|
$
|
1,306
|
2,606
|
2,600
|
5,200
|
NAME
|
|
AGE
|
|
POSITION
|
Ming
Zhao
|
|
35
|
|
Chief
Executive Officer, President and Chairman of the Board
|
Xia
Jin
|
|
42
|
|
Chief
Financial Officer
|
Wenwei
Tian
|
|
37
|
|
Chief
Operating Officer
|
Lawrence
S. Wizel
|
|
64
|
|
Director
|
C.
Mark Tang
|
|
43
|
|
Director
|
Jianfei
Ni
|
|
61
|
|
Director
|
Annual
Compensation (1)
|
||||||||||||||||||||||||||||
Name
and
Principal
Position
(2)
|
Year
|
Salary ($)
(cash or non-
cash) (6)
|
Bonus ($)
(cash or
non-cash)
|
Stock
Awards
|
Option
Awards
|
Nonequity
Incentive
Plan
Compensation
|
Change in
Pension
Value &
Nonqualified
Deferred
Compensation
Earnings
|
Other
Annual
Compensation
(3) ($)
|
Total ($)
|
|||||||||||||||||||
Ming
Zhao (Chairman and CEO) (4)
|
2006
2005
|
79,747
20,000
|
0
0
|
0
0
|
0
0
|
-
-
|
-
-
|
9,570
2,400
|
89,317
22,400
|
|||||||||||||||||||
Xia
Jin (CFO) (4)
|
2006
2005
|
14,889
11,920
|
0
0
|
0
0
|
0
0
|
-
-
|
-
-
|
1,787
1,430
|
16,676
13,350
|
|||||||||||||||||||
Kevin
Keating (former CEO and CFO) (5)
|
2006
2005
2004
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
-
-
-
|
-
-
-
|
0
0
0
|
0
0
0
|
Name
|
Fees
Earned
or Paid
in Cash
(3)
|
Stock
Awards
(3)
|
Option
Awards
(3)
|
Nonequity
Incentive Plan
Compensation
(3)
|
Change in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings (3)
|
All
Other
Compensation
(3)
|
Total
(3)
|
|||||||||||||||
Ming
Zhao (1)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||
Lisheng
Wang (2)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Name of Beneficial Owner
|
Amount of
Beneficial
Ownership
|
Percent of
Beneficial
Ownership
|
Amount of
Beneficial
Ownership
After
Offering(3)
|
Percent of
Beneficial
Ownership
After
Offering(2)
|
|||||||||
Ming
Zhao, CEO (1)(2)
|
53,100,000
|
52.52
|
%
|
53,100,000
|
42.12
|
%
|
|||||||
|
|
|
|
|
|||||||||
Xia
Jin, CFO (1)
|
0
|
0
|
0
|
0
|
|||||||||
Lawrence
S. Wizel, director (1)
|
0
|
0
|
0
|
0
|
|||||||||
C.
Mark Tang, director (1)
|
0
|
0
|
0
|
0
|
|||||||||
Jianfei
Ni, director (1)
|
0
|
0
|
0
|
0
|
|||||||||
|
|
|
|
|
|||||||||
All
executive officers and directors as a group
|
53,100,000
|
52.52
|
%
|
53,100,000
|
42.12
|
%
|
(1)
|
Address
is c/o Shanxi Puda Coal Group Co., Ltd. 426 Xuefu Street, Taiyuan,
Shanxi
Province, China.
|
(2)
|
Assumes
that all of the Notes are converted and all of the Warrants are
exercised.
|
September 30,
2007
|
December 31,
2006
|
||||||
$’000
|
$’000
|
||||||
|
|
|
|||||
Other
receivable from Ming Zhao, CEO, director and major shareholder of
Puda
|
$
|
7
|
$
|
9
|
|||
Advance
to Shanxi Liulin Jucai Coal Industry Co., Limited (“Jucai Coal”), a
related company with a common owner
|
$
|
597
|
$
|
602
|
|||
|
|
|
|||||
Accounts
payable to Jucai Coal
|
$
|
205
|
$
|
221
|
|||
Other
payable to Shanxi Puda Resources Group Limited (“Resources Group”), a
related company with common owners
|
$
|
725
|
$
|
696
|
|||
|
|
|
|||||
Other
payable to Yao Zhao, manager and shareholder of Puda
|
209
|
205
|
|||||
Other
payable to Ming Zhao and Yao Zhao
|
2,692
|
-
|
|||||
|
|
|
|||||
|
$
|
3,626
|
$
|
901
|
|||
Loan
payable to Resources Group
|
|
|
|||||
-current
portion
|
$
|
1,300
|
$
|
1,300
|
|||
-long-term
portion
|
9,425
|
10,400
|
|||||
|
|
|
|||||
|
$
|
10,725
|
$
|
11,700
|
Securities
and Exchange registration fee
|
$
|
12,423
|
||
Legal
fees and expenses
|
$
|
340,000
|
||
Accounting
fees and expenses
|
$
|
120,000
|
||
Blue
sky fees and expenses
|
$
|
3,000
|
||
Transfer
Agent and Registrar fees and expenses
|
$
|
30,000
|
||
Miscellaneous
|
$
|
33,577
|
||
Total:
|
$
|
509,000
|
Shareholder
|
Number
of
Penalty
Shares
|
|||
Silver
Rock I, Ltd.
|
11,573
|
|||
Alpha
Capital AG
|
16,202
|
|||
Anasazi
Partners III Offshore, Ltd.
|
9,258
|
|||
Anasazi
Partners III, LLC
|
13,887
|
|||
Anima
S.G.R.p.A. RUBRICA ANIMA EMERGING MARKETS
|
9,258
|
|||
Anima
S.G.R.p.A. RUBRICA ANIMA FONDO TRADING
|
25,460
|
|||
Baker,
Adrienne
|
1,157
|
|||
Baker,
Christopher
|
9,258
|
|||
Banca
Gesfid
|
18,516
|
|||
Barish,
Michae
|
4,629
|
|||
Barletta,
Joseph & Karen JTWROS
|
1,157
|
|||
Baum,
David
|
9,258
|
|||
Beeman
Insurance Agency Inc.
|
1,157
|
|||
Brahmbhatt,
Bimalkumar P.
|
1,157
|
|||
Carter,
Janet
|
1,157
|
|||
Chelverton
Dividend Income Fund Limited (now known as CIM Dividend Income
Fund)
|
25,460
|
|||
Chilcott,
John
|
2,315
|
|||
Cimarolo
Partners, LLC
|
4,629
|
|||
Conn,
Michael
|
1,157
|
|||
Crestview
Capital
|
46,290
|
|||
Datsopoulos,
Milton
|
4,629
|
|||
Dynamic
Decisions Euro Growth Fund*
|
2,315
|
|||
Dynamic
Decisions Growth Premium Fund*
|
2,315
|
|||
DiPietro,
Robert
|
1,157
|
|||
Double
U Master Fund L.P.
|
4,629
|
|||
Dowling,
Victor & Jody JTWROS
|
6,944
|
|||
Erigero,
Greg
|
1,157
|
|||
F.
Berdon Co. L.P.
|
5,786
|
|||
Flynn,
Jason
|
1,157
|
|||
French,
David
|
2,315
|
|||
Fuller,
James W.
|
1,157
|
|||
Gerdz
Investments Limited Partnership, RLLLP
|
1,157
|
|||
Gibson
Living Trust
|
1,157
|
|||
Grose,
D. Austin
|
2,315
|
|||
H.L.
Severance Inc., Pension Plan & Trust
|
2,315
|
|||
H.L.
Severance Inc., Profit Sharing Plan & Trust
|
3,472
|
|||
Hodel,
Ann
|
1,157
|
|||
Hollman,
Mark & Stacia (Tenants by Entirety)
|
1,157
|
|||
Hollman,
Scott
|
2,315
|
|||
Jayhawk
China Fund (Cayman) Ltd
|
15,044
|
|||
Johnson,
Bruce
|
3,472
|
|||
Kahn,
Sheldon & Liron, Sarah (Community Property)
|
9,258
|
|||
Katz,
Michael
|
2,315
|
*
|
Dynamic
Decisions Euro Growth Fund and Dynamic Decisions Growth Premium Fund
transferred the 4,630 penalty shares to their affiliate, Dynamic
Decisions
Strategic Opportunities Fund.
|
Lapidus,
Robert & Donna JTWROS
|
1,157
|
|||
Lemak,
John S.
|
4,629
|
|||
Levy,
David
|
1,157
|
|||
Levy,
Peter
|
2,315
|
|||
Masters,
Paul IRA
|
2,315
|
|||
Micek
II, John Revocable Trust Dated 03/27/03
|
3,472
|
|||
Micek
III, John
|
4,629
|
|||
Micek,
Maurice & Jennifer JTWROS
|
3,472
|
|||
Micek,
Maurice Custodian for Andrew Micek
|
1,157
|
|||
Micek,
Maurice Custodian for Benjamin Micek
|
1,157
|
|||
Murphy,
Brian
|
1,157
|
|||
Nite
Capital LP
|
6,944
|
|||
Ossellos
of Butte Profit Sharing Trust FBO Guy J. Ossello ttee
|
1,157
|
|||
Parsley,
Rod
|
1,157
|
|||
Perinvest
Dividend Equity Fund Limited
|
6,944
|
|||
Wachovia
FBO PerInvest Special Situations
|
4,629
|
|||
Peterson,
Jerry
|
2,315
|
|||
Petrino,
William
|
1,157
|
|||
Philadelphia
Health & Education Corporation
|
1,157
|
|||
Professional
Traders Fund, LLC
|
4,629
|
|||
Purvis,
Steve
|
2,315
|
|||
Rock
Associates c/o Stuart Schapiro
|
2,315
|
|||
Samuels,
Leonard & Kaplan-Samuels, Leah JTWROS
|
3,472
|
|||
Sandor
Capital Master Fund, L. P.
|
23,145
|
|||
Severance,
H. Leigh
|
5,786
|
|||
Silicon
Prairie Partners, L. P.
|
6,944
|
|||
Simgest
(Italy)
|
46,290
|
|||
Southridge
Partners, LP
|
24,302
|
|||
Stowell,
Kurt
|
1,157
|
|||
Thompson,
Jack
|
3,472
|
|||
Ungar,
Jonathan
|
4,629
|
|||
Vicis
Capital Master Fund
|
23,145
|
|||
Vision
Opportunity
|
11,573
|
|||
Vision
Opportunity Master Fund
|
16,202
|
|||
Weissenberger,
Erich
|
11,573
|
|||
Whalehaven
Capital Fund Limited
|
27,774
|
|||
White
Sand Investors
|
2,315
|
|||
Wrolstad,
Christopher
|
2,315
|
|||
Zelinger,
Steven & Gordon, Lisa (Community Property)
|
1,157
|
|||
Whitehorse
Capital
|
2,315
|
|||
JP
Carey
|
2,315
|
|||
Granada
|
2,315
|
|||
Maytiv
|
1,736
|
|||
Alexander
Westcott & Co
|
579
|
|||
Sage
Capital Investments
|
1,157
|
Exhibit
No.
|
|
Exhibits
|
|
|
|
3.1
|
|
Articles
of Incorporation (incorporated by reference to Current Report of
the
Company on Form 8-K file September 21, 2005)
|
|
|
|
3.2
|
|
Bylaws
of Puda Coal, Inc., as amended on June 29, 2007 (incorporated by
reference
to Exhibit 3.1 to Current Report of the Company filed on Form 8-K
filed
July 6, 2007).
|
|
|
|
3.3
|
|
Audit
Committee Charter (incorporated by reference to Exhibit 3.1 to Current
Report of the Company filed on Form 8-K filed September 4,
2007).
|
|
|
|
3.4
|
|
Compensation
Committee Charter (incorporated by reference to Exhibit 10.1 to Current
Report of the Company filed on Form 8-K filed October 29,
2007).
|
|
|
|
3.5
|
|
Nominating
Committee Charter (incorporated by reference to Exhibit 10.1 to Current
Report of the Company filed on Form 8-K filed October 29,
2007
|
|
|
|
4.1
|
|
Voting
Agreement dated 6/29/05 by and among Keating Revenue Merger Fund,
LLC,
Ming Zhao and Other Shareholders (incorporated by reference to Exhibit
4.1
to SB-2/A , File # 333-130380 filed on March 10,
2006)
|
5.1*
|
|
Legality
Opinion by Broad and Cassel
|
10.1
|
|
Stock
Purchase Agreement dated April 23, 2004, among the
Keating Reverse Merger Fund, LLC, Purezza Group, Inc. and International
Equities Group, Inc., (incorporated by reference to Exhibit 10.1
of
Current Report of the Company filed on Form 8-K on May 14,
2005)
|
|
|
|
10.2
|
|
Exchange
Agreement by and among Purezza Group, Inc., Taiyuan Putai Business
Consulting Co., Ltd. (now known as Shanxi Putai Resources Limited),
Shanxi
Puda Resources Co, Ltd., Puda Investment Holding Limited, and each
member of Puda BVI dated June 20, 2005 (incorporated by reference
to
Exhibit 2.1 Current Report of the Company filed on Form 8-K on June
24,
2005)
|
|
|
|
10.3
|
|
Technology
License Agreement dated June 24, 2005 between Puda and Putai (incorporated
by reference to Exhibit 10.1 to Current Report of the Company filed
on
Form 8-K on July 18, 2005)
|
|
|
|
10.4
|
|
Operating
Agreement dated June 24, 2005 between Puda, Putai, Ming Zhao and
Yao Zhao
(incorporated by reference to Exhibit 10.2 to Exhibit 10.3 to Current
Report of the Company filed on Form 8-K on July 18,
2005)
|
|
|
|
10.5
|
|
Exclusive
Consulting Agreement dated June 24, 2005 between Puda and Putai
(incorporated by reference to Exhibit 10.3 to Current Report of the
Company filed on Form 8-K on July 18, 2005)
|
|
|
|
10.6
|
|
Exclusive
Option Agreement dated June 24, 2005 between Puda, Putai, Ming Zhao
and
Yao Zhao (incorporated by reference to Exhibit 10.4 to Current Report
of
the Company filed on Form 8-K on July 18, 2005)
|
|
|
|
10.7
|
|
Authorization
dated June 24, 2005 between Puda, Putai and Ming Zhao (incorporated
by
reference to Exhibit 10.5 to Current Report of the Company filed
on Form
8-K on July 18, 2005)
|
10.8
|
|
Authorization
dated June 24, 2005 between Puda, Putai and Yao Zhao (incorporated
by
reference to Exhibit 10.6 to Current Report of the Company filed
on Form
8-K on July 18, 2005)
|
|
|
|
10.9
|
|
Financial
Advisory Agreement dated June 29, 2005, between Purezza and Keating
Securities, LLC. (incorporated by reference to Exhibit 10.7 to Current
Report of the Company filed on Form 8-K on July 18,
2005)
|
|
|
|
10.10
|
|
Form
of Subscription Agreement dated November 18, 2005 entered into by
Puda
Coal, Inc. and the Investors (incorporated by reference to Exhibit
99.1 to
Current Report of the Company filed on Form 8-K on November 23,
2005)
|
|
|
|
10.11
|
|
Form
of Note dated November 18, 2005 (incorporated by reference to Exhibit
99.2
to Current Report of the Company filed on Form 8-K on November 23,
2005)
|
|
|
|
10.12
|
|
Form
of Warrant dated November 18, 2005 (incorporated by reference to
Exhibit 99.3 to Current Report of the Company filed on Form 8-K on
November 23, 2005)
|
|
|
|
10.13
|
|
Zhang
Yang Plant Conveyance Agreement dated November 17, 2005 between Shanxi
Puda Coal Group Co., Ltd. and Shanxi Puda Resources Group Limited
(incorporated by reference to Exhibit 99.5 to Current Report of the
Company filed on Form 8-K on November 23, 2005)
|
|
|
|
10.14
|
|
Coking
Coal Supply Agreement dated November 17, 2005 between Shanxi Puda
Coal
Group Co., Ltd. and Jucai Coal Industry Co. (incorporated by reference
to
Exhibit 99.4 to Current Report of the Company filed on Form 8-K on
November 23, 2005)
|
|
|
|
10.15
|
|
Liu
Lin Plant Conveyance Agreement dated November 17, 2005 between Shanxi
Puda
Coal Group Co., Ltd. and Shanxi Puda Resources Group Limited
(incorporated by reference to Exhibit 99.6 to Current Report of the
Company filed on Form 8-K on November 23, 2005)
|
|
|
|
10.16
|
|
Clean
Coal Supply Contract - Taiyuan Steel & Iron (Group) Raw Material Trade
Co., Ltd. (incorporated by reference to Exhibit 10.16 to SB-2/A filed
March 10, 2006)
|
|
|
|
10.17
|
|
Clean
Coal Supply Contract - Handan Steel & Iron Joint-Stock Co., Ltd.
(incorporated by reference to Exhibit 10.17 to SB-2/A filed March
10,
2006)
|
|
|
|
10.18
|
|
Clean
Coal Supply Contract - Tangshan Steel & Iron Group Co., Ltd.
(incorporated by reference to Exhibit 10.18 to SB-2/A filed March
10,
2006)
|
|
|
|
10.19
|
|
Clean
Coal Supply Contract - Capital Steel & Iron Group Mineral Co.
(incorporated by reference to Exhibit 10.19 to SB-2/A filed March
10,
2006)
|
|
|
|
10.20
|
|
Clean
Coal Supply Letter of Intent - Shanxi Coal Import & Export Group
Luliang Branch (incorporated by reference to Exhibit 10.20 to SB-2/A
filed
March 10, 2006)
|
10.21
|
|
Clean
Coal Supply Letter of Intent - Sinochem Corporation (incorporated
by
reference to Exhibit 10.21 to SB-2/A filed March 10,
2006)
|
|
|
|
10.22
|
|
Clean
Coal Supply Contract - Shanxi Changzhi Steel Group Raw Material Co.
Ltd.
(incorporated by reference to Exhibit 10.22 to SB-2/A filed March
10,
2006)
|
|
|
|
10.23
|
|
Clean
Coal Supply Contract - Baotou Steel Group Resources Supplying Company
(incorporated by reference to Exhibit 10.23 to SB-2/A filed March
10,
2006)
|
|
|
|
10.24
|
|
Clean
Coal Supply Contract - Shandong Haihua Group (incorporated by reference
to
Exhibit 10.24 to SB-2/A , filed March 10, 2006)
|
|
|
|
10.25
|
|
Note
& Indebtedness Subordination Agreement dated November 17, 2005 among
Puda Coal, Inc., Shanxi Puda Coal Group Co., Ltd., Shanxi Puda Resources
Group Limited, and Taiyuan Putai Business Consulting Co., Ltd. (now
known
as Shanxi Putai Resources Limited) (incorporated by reference to
Exhibit
99.7 to Current Report of the Company filed on Form 8-K on November
23,
2005)
|
|
|
|
10.26
|
|
Agreement
between Shanxi Puda Resources Group, Ltd. and Shanxi Puda Resources
Co.,
Ltd. dated April 25, 2005 (incorporated by reference to Exhibit
10.26 to SB-2/A , File # 333-130380 filed on March 10,
2006)
|
|
|
|
10.27
|
|
Summary
of Clean Coal Supply Arrangement - Liulin Coal Cleaning Plant
(incorporated by reference to Exhibit 10.27 to SB-2 filed on May
31,
2006)
|
10.28
|
|
Asset
Exchange Agreement, dated June
6, 2007, between the Shanxi Coal and Lingshi Coal & Chemical
(incorporated by reference to Exhibit 10.1 to Current Report of the
Company filed on Form 8-K filed June 12, 2007).
|
|
|
|
10.29
|
|
Director’s
Contract, dated June 29, 2007, between the Company and Jianfei Ni
(incorporated by reference to Exhibit 10.1 to Current Report of the
Company filed on Form 8-K filed July 6, 2007).
|
|
|
|
10.30
|
|
Director’s
Contract, dated August 3, 2007, between the Company and Lawrence
S. Wizel
(incorporated by reference to Exhibit 10.1 to Current Report of the
Company filed on Form 8-K filed August 9, 2007).
|
|
|
|
10.31
|
|
Agreement,
dated September
6, 2007, between the Shanxi Coal and Xin Kai Yuan Hotel and Restaurant
Co.
Limited (incorporated by reference to Exhibit 10.1 to Current Report
of
the Company filed on Form 8-K filed September 12,
2007).
|
10.32
|
|
Share
Transfer Agreement, between Putai and Ming Zhao, dated September
13, 2007
(incorporated by reference to Exhibit 10.1 to Current Report of the
Company filed on Form 8-K on September 19, 2007).
|
|
|
|
10.33
|
|
Share
Transfer Agreement, between Putai and Yao Zhao, dated September 13,
2007
(incorporated by reference to Exhibit 10.2 to Current Report of the
Company filed on Form 8-K filed September 19,
2007).
|
10.34
|
|
Agreement,
among Putai, Shanxi Coal, Ming Zhao and Yao Zhao, dated September
13, 2007
(incorporated by reference to Exhibit 10.3 to Current Report of the
Company filed on Form 8-K filed September 19, 2007).
|
|
|
|
10.35
|
|
Director’s
Contract, dated October 9, 2007, between the Company and C. Mark
Tang
(incorporated by reference to Exhibit 10.1 to Current Report of the
Company filed on Form 8-K filed October 9, 2007).
|
|
|
|
16.1
|
|
Letter
from Durland & Company, CPA’s, P.A. dated July 19, 2005
regarding change in certifying accountant (incorporated by reference
to
Exhibit 16/1.7 to Current Report of the Company filed on Form 8-K
filed
July 22, 2005)
|
|
|
|
23.1*
|
|
Consent
of Moore Stephens
|
23.2*
|
|
Consent
of Broad and Cassel (incorporated by reference to Exhibit 5.1 to
this
registration statement on Form
S-1)
|
*
|
filed
herewith
|
|
Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
|
|
Any
free writing prospectus relating to the offering prepared by or on
behalf
of the undersigned registrant or used or referred to by the undersigned
registrant;
|
|
The
portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant
or its
securities provided by or on behalf of the undersigned registrant;
and
|
|
Any
other communication that is an offer in the offering made by the
undersigned registrant to the
purchaser
|
|
PUDA
COAL, INC.
|
|
|
|
|
|
By:
|
/s/
Ming Zhao
|
|
|
Ming
Zhao
|
|
|
Chief
Executive Officer and President
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/
Ming Zhao
|
|
Chief
Executive Officer, President and
|
|
March
14, 2008
|
Ming
Zhao
|
|
Chairman
of the Board
(Principal
Executive Officer)
|
|
|
|
|
|
|
|
/s/
Xia Jin
|
|
Chief
Financial Officer
|
|
March
14, 2008
|
Xia
Jin
|
|
(Principal
Financial and Accounting Officer)
|
|
|
|
|
|
|
|
/s/
Lawrence S. Wizel
|
|
Director
|
|
March
14, 2008
|
Lawrence
S. Wizel
|
|
|
|
|
|
|
|
|
|
/s/
C. Mark Tang
|
|
Director
|
|
March
14, 2008
|
C.
Mark Tang
|
|
|
|
|
|
|
|
|
|
/s/
Jianfei Ni
|
|
Director
|
|
March
14, 2008
|
Jianfei
Ni
|
|
|
|
|
Exhibit
No.
|
|
Exhibits
|
|
|
|
3.1
|
|
Articles
of Incorporation (incorporated by reference to Current Report of
the
Company on Form 8-K file September 21, 2005)
|
|
|
|
3.2
|
|
Bylaws
of Puda Coal, Inc., as amended on June 29, 2007 (incorporated by
reference
to Exhibit 3.1 to Current Report of the Company filed on Form 8-K
filed
July 6, 2007).
|
|
|
|
3.3
|
|
Audit
Committee Charter (incorporated by reference to Exhibit 3.1 to Current
Report of the Company filed on Form 8-K filed September 4,
2007).
|
|
|
|
3.4
|
|
Compensation
Committee Charter (incorporated by reference to Exhibit 10.1 to Current
Report of the Company filed on Form 8-K filed October 29,
2007).
|
|
|
|
3.5
|
|
Nominating
Committee Charter (incorporated by reference to Exhibit 10.1 to Current
Report of the Company filed on Form 8-K filed October 29,
2007
|
|
|
|
4.1
|
|
Voting
Agreement dated 6/29/05 by and among Keating Revenue Merger Fund,
LLC,
Ming Zhao and Other Shareholders (incorporated by reference to Exhibit
4.1
to SB-2/A , File # 333-130380 filed on March 10,
2006)
|
5.1*
|
|
Legality
Opinion by Broad and
Cassel
|
10.1
|
|
Stock
Purchase Agreement dated April 23, 2004, among the
Keating Reverse Merger Fund, LLC, Purezza Group, Inc. and International
Equities Group, Inc., (incorporated by reference to Exhibit 10.1
of
Current Report of the Company filed on Form 8-K on May 14,
2005)
|
|
|
|
10.2
|
|
Exchange
Agreement by and among Purezza Group, Inc., Taiyuan Putai Business
Consulting Co., Ltd. (now known as Shanxi Putai Resources Limited),
Shanxi
Puda Resources Co, Ltd., Puda Investment Holding Limited, and each
member of Puda BVI dated June 20, 2005 (incorporated by reference
to
Exhibit 2.1 Current Report of the Company filed on Form 8-K on June
24,
2005)
|
|
|
|
10.3
|
|
Technology
License Agreement dated June 24, 2005 between Puda and Putai (incorporated
by reference to Exhibit 10.1 to Current Report of the Company filed
on
Form 8-K on July 18, 2005)
|
|
|
|
10.4
|
|
Operating
Agreement dated June 24, 2005 between Puda, Putai, Ming Zhao and
Yao Zhao
(incorporated by reference to Exhibit 10.2 to Exhibit 10.3 to Current
Report of the Company filed on Form 8-K on July 18,
2005)
|
|
|
|
10.5
|
|
Exclusive
Consulting Agreement dated June 24, 2005 between Puda and Putai
(incorporated by reference to Exhibit 10.3 to Current Report of the
Company filed on Form 8-K on July 18, 2005)
|
|
|
|
10.6
|
|
Exclusive
Option Agreement dated June 24, 2005 between Puda, Putai, Ming Zhao
and
Yao Zhao (incorporated by reference to Exhibit 10.4 to Current Report
of
the Company filed on Form 8-K on July 18,
2005)
|
10.7
|
|
Authorization
dated June 24, 2005 between Puda, Putai and Ming Zhao (incorporated
by
reference to Exhibit 10.5 to Current Report of the Company filed
on Form
8-K on July 18, 2005)
|
|
|
|
10.8
|
|
Authorization
dated June 24, 2005 between Puda, Putai and Yao Zhao (incorporated
by
reference to Exhibit 10.6 to Current Report of the Company filed
on Form
8-K on July 18, 2005)
|
|
|
|
10.9
|
|
Financial
Advisory Agreement dated June 29, 2005, between Purezza and Keating
Securities, LLC. (incorporated by reference to Exhibit 10.7 to Current
Report of the Company filed on Form 8-K on July 18,
2005)
|
|
|
|
10.10
|
|
Form
of Subscription Agreement dated November 18, 2005 entered into by
Puda
Coal, Inc. and the Investors (incorporated by reference to Exhibit
99.1 to
Current Report of the Company filed on Form 8-K on November 23,
2005)
|
|
|
|
10.11
|
|
Form
of Note dated November 18, 2005 (incorporated by reference to Exhibit
99.2
to Current Report of the Company filed on Form 8-K on November 23,
2005)
|
|
|
|
10.12
|
|
Form
of Warrant dated November 18, 2005 (incorporated by reference to
Exhibit 99.3 to Current Report of the Company filed on Form 8-K on
November 23, 2005)
|
|
|
|
10.13
|
|
Zhang
Yang Plant Conveyance Agreement dated November 17, 2005 between Shanxi
Puda Coal Group Co., Ltd. and Shanxi Puda Resources Group Limited
(incorporated by reference to Exhibit 99.5 to Current Report of the
Company filed on Form 8-K on November 23, 2005)
|
|
|
|
10.14
|
|
Coking
Coal Supply Agreement dated November 17, 2005 between Shanxi Puda
Coal
Group Co., Ltd. and Jucai Coal Industry Co. (incorporated by reference
to
Exhibit 99.4 to Current Report of the Company filed on Form 8-K on
November 23, 2005)
|
|
|
|
10.15
|
|
Liu
Lin Plant Conveyance Agreement dated November 17, 2005 between Shanxi
Puda
Coal Group Co., Ltd. and Shanxi Puda Resources Group Limited
(incorporated by reference to Exhibit 99.6 to Current Report of the
Company filed on Form 8-K on November 23, 2005)
|
|
|
|
10.16
|
|
Clean
Coal Supply Contract – Taiyuan Steel & Iron (Group) Raw Material Trade
Co., Ltd. (incorporated by reference to Exhibit 10.16 to SB-2/A ,
File #
333-130380 filed on March 10, 2006)
|
|
|
|
10.17
|
|
Clean
Coal Supply Contract – Handan Steel & Iron Joint-Stock Co., Ltd.
(incorporated by reference to Exhibit 10.17 to SB-2/A , File # 333-130380
filed on March 10, 2006)
|
10.18
|
|
Clean
Coal Supply Contract – Tangshan Steel & Iron Group Co., Ltd.
(incorporated by reference to Exhibit 10.18 to SB-2/A , File # 333-130380
filed on March 10, 2006)
|
|
|
|
10.19
|
|
Clean
Coal Supply Contract – Capital Steel & Iron Group Mineral Co.
(incorporated by reference to Exhibit 10.19 to SB-2/A , File # 333-130380
filed on March 10, 2006)
|
|
|
|
10.20
|
|
Clean
Coal Supply Letter of Intent – Shanxi Coal Import & Export Group
Luliang Branch (incorporated by reference to Exhibit 10.20 to SB-2/A
,
File # 333-130380 filed on March 10,
2006)
|
10.21
|
|
Clean
Coal Supply Letter of Intent – Sinochem Corporation (incorporated by
reference to Exhibit 10.21 to SB-2/A filed March 10,
2006)
|
|
|
|
10.22
|
|
Clean
Coal Supply Contract – Shanxi Changzhi Steel Group Raw Material Co. Ltd.
(incorporated by reference to Exhibit 10.22 to SB-2/A filed on March
10,
2006)
|
|
|
|
10.23
|
|
Clean
Coal Supply Contract – Baotou Steel Group Resources Supplying Company
(incorporated by reference to Exhibit 10.23 to SB-2/A , filed on
March 10,
2006)
|
|
|
|
10.24
|
|
Clean
Coal Supply Contract – Shandong Haihua Group (incorporated by reference to
Exhibit 10.24 to SB-2/A filed on March 10, 2006)
|
|
|
|
10.25
|
|
Note
& Indebtedness Subordination Agreement dated November 17, 2005 among
Puda Coal, Inc., Shanxi Puda Coal Group Co., Ltd., Shanxi Puda Resources
Group Limited, and Taiyuan Putai Business Consulting Co., Ltd. (now
known
as Shanxi Putai Resources Limited) (incorporated by reference to
Exhibit
99.7 to Current Report of the Company filed on Form 8-K on November
23,
2005)
|
|
|
|
10.26
|
|
Agreement
between Shanxi Puda Resources Group, Ltd. and Shanxi Puda Resources
Co.,
Ltd. dated April 25, 2005 (incorporated by reference to Exhibit
10.26 to SB-2/A filed March 10, 2006)
|
|
|
|
10.27
|
|
Summary
of Clean Coal Supply Arrangement – Liulin Coal Cleaning Plant
(incorporated by reference to Exhibit 10.27 to SB-2 filed May 31,
2006)
|
|
|
|
10.28
|
|
Asset
Exchange Agreement, dated June
6, 2007, between the Shanxi Coal and Linshi Coal & Chemical
(incorporated by reference to Exhibit 10.1 to Current Report of the
Company filed on Form 8-K filed June 12, 2007).
|
|
|
|
10.29
|
|
Director’s
Contract, dated June 29, 2007, between the Company and Jianfei Ni
(incorporated by reference to Exhibit 10.1 to Current Report of the
Company filed on Form 8-K filed July 6, 2007).
|
|
|
|
10.30
|
|
Director’s
Contract, dated August 3, 2007, between the Company and Lawrence
S. Wizel
(incorporated by reference to Exhibit 10.1 to Current Report of the
Company filed on Form 8-K filed August 9, 2007).
|
|
|
|
10.31
|
|
Agreement,
dated September
6, 2007, between the Shanxi Coal and Xin Kai Yuan Hotel and Restaurant
Co.
Limited (incorporated by reference to Exhibit 10.1 to Current Report
of
the Company filed on Form 8-K filed September 12,
2007).
|
10.32
|
|
Share
Transfer Agreement, between Putai and Ming Zhao, dated September
13, 2007
(incorporated by reference to Exhibit 10.1 to Current Report of the
Company filed on Form 8-K filed September 19, 2007).
|
|
|
|
10.33
|
|
Share
Transfer Agreement, between Putai and Yao Zhao, dated September 13,
2007
(incorporated by reference to Exhibit 10.2 to Current Report of the
Company filed on Form 8-K filed September 19,
2007).
|
10.34
|
|
Agreement,
among Putai, Shanxi Coal, Ming Zhao and Yao Zhao, dated September
13, 2007
(incorporated by reference to Exhibit 10.3 to Current Report of the
Company filed on Form 8-K filed September 19, 2007).
|
|
|
|
10.35
|
|
Director’s
Contract, dated October 9, 2007, between the Company and C. Mark
Tang
(incorporated by reference to Exhibit 10.1 to Current Report of the
Company filed on Form 8-K filed October 9, 2007).
|
|
|
|
16.1
|
|
Letter
from Durland & Company, CPA’s, P.A. dated July 19, 2005
regarding change in certifying accountant (incorporated by reference
to
Exhibit 16/1.7 to Current Report of the Company filed on Form 8-K
filed
July 22, 2005)
|
|
|
|
23.1*
|
|
Consent
of Moore Stephens
|
23.2*
|
|
Consent
of Broad and Cassel (incorporated by reference to Exhibit 5.1 to
this
registration statement on Form
S-1)
|
*
|
filed
herewith
|