x
|
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
o
|
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
|
PUDA
COAL, INC.
|
||
(Exact
name of registrant as specified in its charter)
|
Florida
|
|
65-1129912
|
(State
or other jurisdiction of incorporation or organization)
|
|
(IRS
Employer Identification No.)
|
426
Xuefu Street, Taiyuan, Shanxi Province,
The
People’s Republic of
China
|
030006
|
|
(Address
of principal executive
offices)
|
(Zip
Code)
|
011
86 351 228 1302
|
||
(Registrant’s
telephone number, including area code)
|
|
Page
|
|||
PART
I. FINANCIAL INFORMATION
|
|
|||
|
|
|||
Item
1. Financial Statements
|
|
|||
|
|
|||
Consolidated
Balance Sheets as of June 30, 2008 (unaudited) and December 31, 2007
|
2-3
|
|||
|
||||
Unaudited
Consolidated Statements of Operations for the three and six months
ended
June 30, 2008 and 2007
|
4-5
|
|||
|
||||
Unaudited
Consolidated Statements of Cash Flows for the six months
ended June 30, 2008 and 2007
|
6
|
|||
|
||||
Notes
to Unaudited Consolidated Financial Statements
|
7-30
|
|||
|
||||
Item
2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations
|
31-38
|
|||
|
||||
Item
3. Quantitative and Qualitative Disclosures about Market Risk
|
38-39
|
|||
|
||||
Item
4T. Controls and Procedures
|
39-40
|
|||
|
||||
PART
II. OTHER INFORMATION
|
||||
|
||||
Item
1. Legal Proceedings
|
41
|
|||
|
||||
Item
1A. Risk Factors
|
41-42
|
|||
|
||||
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
|
42
|
|||
|
||||
Item
3. Defaults upon Senior Securities
|
42
|
|||
|
||||
Item
4. Submission of Matters to a Vote of Security Holders
|
43
|
|||
|
||||
Item
5. Other Information
|
42
|
|||
|
||||
Item
6. Exhibits
|
43
|
|||
|
||||
Signatures
|
44
|
|||
|
||||
Certifications
|
Consolidated
Balance Sheets as of June 30, 2008 (unaudited) and December 31,
2007
|
2-3
|
|||
Unaudited
Consolidated Statements of Operations for the three and six months
ended
June 30, 2008 and 2007
|
4-5
|
|||
Unaudited
Consolidated Statements of Cash Flows for the six months ended
June 30,
2008 and 2007
|
6
|
|||
|
||||
Notes
to Unaudited Consolidated Financial Statements
|
7-30
|
Note(s)
|
June
30, 2008
|
December
31, 2007
|
||||||||
(Unaudited)
|
||||||||||
ASSETS
|
||||||||||
CURRENT
ASSETS
|
||||||||||
Cash
and cash equivalents
|
20
|
$
|
27,198
|
$
|
16,381
|
|||||
Restricted
cash
|
3,
20
|
233
|
233
|
|||||||
Accounts
receivable, net
|
4
|
8,952
|
8,137
|
|||||||
Other
receivables
|
||||||||||
-
Related parties
|
5
|
2
|
4
|
|||||||
-
Third
parties
|
—
|
6
|
||||||||
Advances
to suppliers
|
||||||||||
-
Related parties
|
5
|
729
|
685
|
|||||||
-
Third parties
|
12,801
|
1,363
|
||||||||
Inventories
|
6
|
25,188
|
35,953
|
|||||||
Total
current assets
|
75,103
|
62,762
|
||||||||
PROPERTY,
PLANT AND EQUIPMENT, NET
|
7
|
14,205
|
15,018
|
|||||||
INTANGIBLE
ASSETS, NET
|
8
|
3,442
|
3,484
|
|||||||
TOTAL
ASSETS
|
$
|
92,750
|
$
|
81,264
|
||||||
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
|
190
|
182
|
|||||||
-
Third parties
|
3,357
|
2,140
|
||||||||
Other
payables
|
||||||||||
-
Related parties
|
1,5
|
1,914
|
1,851
|
|||||||
-
Third parties
|
2,994
|
2,916
|
||||||||
Accrued
expenses
|
1,601
|
1,350
|
||||||||
Income
taxes payable
|
1,226
|
2,223
|
||||||||
VAT
payable
|
1,804
|
1,379
|
||||||||
Distribution
payable
|
1,167
|
1,096
|
||||||||
Convertible
notes
|
10
|
2,084
|
1,841
|
|||||||
Derivative
conversion feature
|
10,
21
|
1,100
|
1,100
|
|||||||
Penalty
payable
|
10
|
2,104
|
1,725
|
|||||||
Total
current liabilities
|
20,841
|
19,103
|
||||||||
LONG-TERM
LIABILITIES
|
||||||||||
Long-term
debt
|
||||||||||
-
Related party
|
5,
9
|
8,450
|
9,100
|
|||||||
Derivative
warrants
|
10,
21
|
4,260
|
4,480
|
|||||||
Total
long-term liabilities
|
12,710
|
13,580
|
Note(s)
|
June
30, 2008
|
December
31, 2007
|
||||||||
(Unaudited)
|
||||||||||
COMMITMENTS
AND CONTINGENCIES
|
11
|
|||||||||
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 105,252,176
(2007: 105,252,176)
|
105
|
105
|
||||||||
Paid-in
capital
|
28,304
|
28,304
|
||||||||
Statutory
surplus reserve fund
|
1,366
|
1,366
|
||||||||
Retained
earnings
|
21,965
|
14,807
|
||||||||
Accumulated
other comprehensive income
|
7,459
|
3,999
|
||||||||
Total
stockholders’ equity
|
59,199
|
48,581
|
||||||||
|
||||||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
92,750
|
$
|
81,264
|
Note(s)
|
Three
months ended
June
30, 2008
|
Three
months
ended
June
30, 2007
|
Six
months ended
June
30, 2008
|
Six
months
ended
June
30, 2007
|
||||||||||||
NET
REVENUE
|
$
|
53,188
|
$
|
38,097
|
$
|
103,786
|
$
|
75,512
|
||||||||
COST
OF REVENUE
|
(46,491
|
)
|
(31,469
|
)
|
(89,636
|
)
|
(61,379
|
)
|
||||||||
GROSS
PROFIT
|
6,697
|
6,628
|
14,150
|
14,133
|
||||||||||||
OPERATING
EXPENSES
|
||||||||||||||||
Selling
expenses
|
858
|
704
|
1,612
|
1,546
|
||||||||||||
General
and administrative expenses
|
626
|
640
|
1,103
|
992
|
||||||||||||
TOTAL
OPERATING EXPENSES
|
1,484
|
1,344
|
2,715
|
2,538
|
||||||||||||
INCOME
FROM OPERATIONS
|
5,213
|
5,284
|
11,435
|
11,595
|
||||||||||||
INTEREST
INCOME
|
26
|
15
|
53
|
40
|
||||||||||||
INTEREST
EXPENSE
|
12
|
(196
|
)
|
(512
|
)
|
(397
|
)
|
(1,001
|
)
|
|||||||
DEBT
FINANCING COSTS
|
13
|
(109
|
)
|
(639
|
)
|
(622
|
)
|
(1,406
|
)
|
|||||||
DERIVATIVE
UNREALIZED FAIR VALUE (LOSS)/GAIN
|
14
|
(144
|
)
|
(2,716
|
)
|
220
|
(1,848
|
)
|
||||||||
OTHER
EXPENSE
|
15
|
(719
|
)
|
—
|
(719
|
)
|
—
|
|||||||||
INCOME
BEFORE INCOME TAXES
|
4,071
|
1,432
|
9,970
|
7,380
|
||||||||||||
INCOME
TAXES
|
16
|
(1,208
|
)
|
(2,102
|
)
|
(2,812
|
)
|
(4,203
|
)
|
|||||||
NET
INCOME/(LOSS)
|
2,863
|
(670
|
)
|
7,158
|
3,177
|
|||||||||||
OTHER
COMPREHENSIVE INCOME
|
||||||||||||||||
Foreign
currency translation adjustment
|
1,285
|
750
|
3,460
|
1,150
|
||||||||||||
COMPREHENSIVE
INCOME
|
$
|
4,148
|
$
|
80
|
$
|
10,618
|
$
|
4,327
|
||||||||
NET
INCOME/(LOSS)
|
2,863
|
(670
|
)
|
7,158
|
3,177
|
|||||||||||
LESS:
DIVIDENDS
|
||||||||||||||||
Option
holder preference dividend
|
—
|
(2,717
|
)
|
—
|
(2,717
|
)
|
||||||||||
Common
dividend
|
—
|
—
|
—
|
—
|
||||||||||||
UNDISTRIBUTED
EARNINGS
|
$
|
2,863
|
$
|
(3,387
|
)
|
$
|
7,158
|
$
|
460
|
Note(s)
|
Three
months ended
June
30, 2008
|
Three
months
ended
June
30, 2007
|
Six
months ended
June
30, 2008
|
Six
months
ended
June
30, 2007
|
||||||||||||
BASIC
EARNINGS/(LOSS) PER SHARE
|
||||||||||||||||
-
Option holder preference
|
$
|
—
|
$
|
0.04
|
$
|
—
|
$
|
0.04
|
||||||||
-
Other common holders
|
0.03
|
(0.05
|
)
|
0.07
|
0.00
|
|||||||||||
$
|
0.03
|
$
|
(0.01
|
)
|
$
|
0.07
|
$
|
0.04
|
||||||||
DILUTED
EARNINGS/(LOSS) PER SHARE
|
||||||||||||||||
-
Option holder preference
|
$
|
—
|
$
|
0.04
|
$
|
—
|
$
|
0.04
|
||||||||
-
Other common holders
|
0.03
|
(0.05
|
)
|
0.07
|
0.00
|
|||||||||||
$
|
0.03
|
$
|
(0.01
|
)
|
$
|
0.07
|
$
|
0.04
|
||||||||
WEIGHTED
AVERAGE NUMBER OF SHARES
OUTSTANDING-BASIC
|
17
|
105,252,176
|
96,711,763
|
105,252,176
|
95,405,732
|
|||||||||||
-DILUTED
|
17
|
109,546,054
|
97,139,660
|
109,546,054
|
95,838,544
|
Six
months ended June 30,
|
||||||||||
Notes
|
2008
|
2007
|
||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||
Net
income
|
$
|
7,158
|
$
|
3,177
|
||||||
Adjustments
to reconcile net income to net cash provided by operating
activities
|
||||||||||
Amortization
of land-use rights
|
42
|
41
|
||||||||
Depreciation
|
813
|
493
|
||||||||
Allowance
for doubtful debts
|
1
|
5
|
||||||||
Amortization
of debt issue costs
|
—
|
6
|
||||||||
Amortization
of discount on convertible notes and warrants
|
243
|
646
|
||||||||
Derivative
unrealized fair value (gain)/loss
|
(220
|
)
|
1,848
|
|||||||
Discount
on converted shares and exercised warrants
|
—
|
508
|
||||||||
Stock
compensation
|
26
|
—
|
||||||||
Changes
in operating assets and liabilities:
|
||||||||||
Increase
in accounts receivable
|
(280
|
)
|
(1,528
|
)
|
||||||
Decrease
in other receivables
|
8
|
38
|
||||||||
Increase
in advances to suppliers
|
(11,030
|
)
|
(744
|
)
|
||||||
Increase
in VAT recoverable
|
—
|
(627
|
)
|
|||||||
Decrease/(increase)
in inventories
|
12,733
|
(14,916
|
)
|
|||||||
Increase
in accounts payable
|
1,044
|
237
|
||||||||
Increase/(decrease)
in accrued expenses
|
144
|
(67
|
)
|
|||||||
(Decrease)/increase
in other payables
|
(75
|
)
|
707
|
|||||||
Decrease
in income tax payable
|
(1,110
|
)
|
(428
|
)
|
||||||
Increase/(decrease)
in VAT payable
|
326
|
(1,220
|
)
|
|||||||
Increase
in penalty payable
|
379
|
754
|
||||||||
|
||||||||||
Net
cash provided by/(used in) operating activities
|
10,202
|
(11,070
|
)
|
|||||||
|
||||||||||
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
|
—
|
630
|
||||||||
Repayment
of long-term debt
|
(650
|
)
|
(650
|
)
|
||||||
Net
cash used in financing activities
|
(650
|
)
|
(20
|
)
|
||||||
Effect
of exchange rate changes on cash
|
1,265
|
469
|
||||||||
Net
increase/(decrease) in cash and cash equivalents
|
10,817
|
(16,598
|
)
|
|||||||
Cash
and cash equivalents at beginning of period
|
16,381
|
24,943
|
||||||||
Cash
and cash equivalents at end of period
|
$
|
27,198
|
$
|
8,345
|
||||||
Supplementary
cash flow information:
|
18
|
·
|
Puda
Coal, Inc.: Mr. Ming Zhao (approximately 50%); Mr. Yao Zhao (approximately
13%) held directly.
|
·
|
Puda
Investment Holding Limited: Mr. Ming Zhao (approximately 50%); Mr.
Yao
Zhao (approximately 13%) held indirectly through
Puda.
|
·
|
Shanxi
Putai Resources Limited: Mr. Ming Zhao (approximately 50%); 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, Mr. Ming Zhao (approximately 45%); Mr. Yao Zhao (approximately
11.7%) held indirectly through Puda, BVI and
Putai.
|
Puda
Coal, Inc.
“Puda”
|
||
|
100%
|
||
Puda
Investment
Holding
Limited
“BVI”
|
Ming
Zhao (8%)
and
Yao
Zhao (2%)
|
|
|
100%
|
|
|
|
Shanxi
Putai Resources Limited
"Putai"
|
90%
![]() |
Shanxi
Puda Coal Group Co., Ltd.
“Shanxi
Coal”
|
Buildings
and facility
|
20
years
|
|
Machinery
and equipment
|
10
years
|
|
10
years
|
||
Office
equipment and others
|
10
years
|
June
30,
2008
|
December
31,
2007
|
||||||
$’000
|
$’000
|
||||||
Balance,
beginning of period
|
$
|
48
|
$
|
44
|
|||
Additions
|
4
|
4
|
|||||
Balance,
end of period
|
$
|
52
|
$
|
48
|
June
30,
2008
|
December
31, 2007
|
||||||
$’000
|
$’000
|
||||||
Other
receivable from Ming Zhao, director and major shareholder
of Puda
|
$
|
2
|
$
|
4
|
Advance
to Shanxi Liulin Jucai Coal Industry Co., Limited (“Jucai
Coal”), a related company with a common owner
|
$
|
729
|
$
|
685
|
|||
Accounts
payable to Jucai Coal
|
$
|
190
|
$
|
182
|
Other
payable to Shanxi Puda Resources Group Limited (“Resources
Group”), a related company with common owners
|
$
|
791
|
$
|
743
|
|||
Other
payable to Yao Zhao, manager and shareholder of Puda
|
230
|
215
|
|||||
Other
payable to Ming Zhao and Yao Zhao
|
893
|
893
|
|||||
$
|
1,914
|
$
|
1,851
|
Loan
payable to Resources Group
|
|||||||
-current
portion
|
$
|
1,300
|
$
|
1,300
|
|||
-long-term
portion
|
8,450
|
9,100
|
|||||
$
|
9,750
|
$
|
10,400
|
June
30,
2008
|
December
31,
2007
|
||||||
$’000
|
$’000
|
||||||
Raw
materials
|
$
|
14,977
|
$
|
24,252
|
|||
Finished
goods
|
10,211
|
11,701
|
|||||
Total
|
$
|
25,188
|
$
|
35,953
|
June
30,
2008
|
December
31, 2007
|
||||||
$’000
|
$’000
|
||||||
Cost:
|
|||||||
Buildings
and facilities
|
$
|
3,344
|
$
|
3,344
|
|||
Machinery
equipment
|
13,611
|
13,611
|
|||||
Motor
vehicles
|
104
|
104
|
|||||
Office
equipment and others
|
30
|
30
|
|||||
17,089
|
17,089
|
||||||
Accumulated
depreciation:
|
|||||||
Buildings
and facilities
|
340
|
255
|
|||||
Machinery
equipment
|
2,535
|
1,814
|
|||||
Motor
vehicles
|
7
|
2
|
|||||
Office
equipment and others
|
2
|
-
|
|||||
2,884
|
2,071
|
||||||
Carrying
value:
|
|||||||
Buildings
and facilities
|
3,004
|
3,089
|
|||||
Machinery
equipment
|
11,076
|
11,797
|
|||||
Motor
vehicles
|
97
|
102
|
|||||
Office
equipment and others
|
28
|
30
|
|||||
$
|
14,205
|
$
|
15,018
|
Land-use
rights
|
|||||||
June
30,
2008
|
December
31,
2007
|
||||||
$’000
|
$’000
|
||||||
Cost
|
$
|
3,634
|
$
|
3,634
|
|||
Accumulated
amortization
|
192
|
150
|
|||||
Carrying
value
|
$
|
3,442
|
$
|
3,484
|
June
30,
2008
|
December
31,
2007
|
||||||
$’000
|
$’000
|
||||||
Conveyance
loan
|
$
|
9,750
|
$
|
10,400
|
|||
Less:
current portion
|
(1,300
|
)
|
(1,300
|
)
|
|||
Long-term
portion
|
$
|
8,450
|
$
|
9,100
|
Year
|
June
30, 2008
|
|||
$’000
|
||||
2008
|
$
|
1,300
|
||
2009
|
1,300
|
|||
2010
|
1,300
|
|||
2011
|
1,300
|
|||
2012
|
1,300
|
|||
Thereafter
|
3,250
|
|||
$
|
9,750
|
June
30,
2008
|
December
31, 2007
|
||||||
$000
|
$000
|
||||||
Convertible
notes:
|
|||||||
Gross
amount issued
|
$
|
12,500
|
$
|
12,500
|
|||
Less:
amount converted in 2005
|
(850
|
)
|
(850
|
)
|
|||
Less:
amount converted in 2006
|
(6,750
|
)
|
(6,750
|
)
|
|||
Less:
amount converted in 2007
|
(2,660
|
)
|
(2,660
|
)
|
|||
Less:
unamortized discount on conversion feature
|
(156
|
)
|
(366
|
)
|
|||
Less:
unamortized discount on note warrants
|
-
|
(33
|
)
|
||||
$
|
2,084
|
$
|
1,841
|
||||
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
|
)
|
(3,314
|
)
|
|||
Less:
amount transferred to equity upon conversion in 2007
|
(1,306
|
)
|
(1,306
|
)
|
|||
$
|
1,100
|
$
|
1,100
|
||||
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 of note warrantsin
2006
|
(789
|
)
|
(789
|
)
|
|||
Less:
amount transferred to equity upon exercise of placement agent
warrants in 2006
|
(882
|
)
|
(882
|
)
|
|||
Less:
amount transferred to equity upon exercise of note warrants in
2007
|
(1,527
|
)
|
(1,527
|
)
|
|||
Less:
amount transferred to equity upon exercise of placement agent
warrants in 2007
|
(2,716
|
)
|
(2,716
|
)
|
|||
Less:
change in fair value in 2005
|
(700
|
)
|
(700
|
)
|
|||
Less:
change in fair value in 2006
|
(1,237
|
)
|
(1,237
|
)
|
|||
Add:
change in fair value in 2007
|
343
|
343
|
|||||
Less:
change in fair value in 2008
|
(220
|
)
|
-
|
||||
$
|
4,260
|
$
|
4,480
|
Three
months ended
June
30, 2008
|
Three
months ended
June
30, 2007
|
Six
months ended
June
30, 2008
|
Six
months ended
June
30, 2007
|
||||||||||
$’000
|
$’000
|
$’000
|
$’000
|
||||||||||
Current
period provision
|
$
|
1,208
|
$
|
2,102
|
$
|
2,812
|
$
|
4,203
|
Three
months ended
June
30, 2008
|
Three
months ended
June
30, 2007
|
Six
months ended
June
30, 2008
|
Six
months ended
June
30, 2007
|
||||||||||
$’000
|
$’000
|
$’000
|
$’000
|
||||||||||
Income
before income taxes
|
$
|
4,071
|
$
|
1,432
|
$
|
9,970
|
$
|
7,380
|
|||||
Income
tax on pretax income at statutory rate
|
1,384
|
487
|
3,390
|
2,509
|
|||||||||
Tax
effect of expenses that are not deductible in
determining taxable profits
|
137
|
1,518
|
233
|
1,599
|
|||||||||
Effect
of different tax rates of subsidiary operating in other
jurisdictions
|
(419
|
)
|
(54
|
)
|
(981
|
)
|
(117
|
)
|
|||||
Valuation
allowance
|
106
|
151
|
170
|
212
|
|||||||||
Income
tax at effective rate
|
$
|
1,208
|
$
|
2,102
|
$
|
2,812
|
$
|
4,203
|
June
30, 2008
|
December
31, 2007
|
||||||
$’000
|
$’000
|
||||||
Net
operating loss carryforwards
|
$
|
1,750
|
$
|
1,580
|
|||
Less:
Valuation allowance
|
(1,750
|
)
|
(1,580
|
)
|
|||
Net
|
$
|
-
|
$
|
-
|
Three
months ended
June
30, 2008
|
Three
months ended
June
30, 2007
|
Six
months ended
June
30, 2008
|
Six
months ended
June
30, 2007
|
||||||||||
Basic
weighted average number of shares
|
105,252,176
|
96,711,763
|
105,252,176
|
95,405,732
|
|||||||||
Options
outstanding, after adjusting for 10 to 1 reverse
split
|
-
|
-
|
-
|
4,915
|
|||||||||
Issuance
of penalty shares
|
4,293,878
|
427,897
|
4,293,878
|
427,897
|
|||||||||
Diluted
weighted average number of shares
|
109,546,054
|
97,139,660
|
109,546,054
|
95,838,544
|
Six
months ended June 30,
|
|||||||
2008
|
2007
|
||||||
$’000
|
$’000
|
||||||
Cash
paid during the period for:
|
|||||||
Interest
|
$
|
397
|
$
|
493
|
|||
Income
taxes
|
$
|
3,929
|
$
|
4,631
|
|||
Major
non-cash transactions:
|
|||||||
Notes
converted into common shares
|
$
|
-
|
$
|
1,950
|
Number
of
options
granted
|
After
adjusting for the 10
to
1 reverse stock split
|
Exercise
price
|
Expiry
date
|
Estimated
Fair
value
|
||||
150,000
|
15,000
(i)
|
$
1
|
October
20, 2008
|
0
|
(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, 2007 (after adjusting
for the 10 to 1 reverse stock split)
|
15,000
|
$
|
1
|
||||
Granted
|
-
|
-
|
|||||
Exercised
|
-
|
-
|
|||||
Forfeited
|
-
|
-
|
|||||
Expired
|
-
|
-
|
|||||
Options
outstanding at June 30, 2008
|
15,000
|
$
|
1
|
Three
months
ended
June
30, 2008
|
Three
months
ended
June
30, 2007
|
Six
months
ended
June
30, 2008
|
Six
months
ended
June
30, 2007
|
||||||||||||||||||||||
Customers
|
$
|
’000
|
%
|
$
|
’000
|
%
|
$
|
’000
|
%
|
$
|
’000
|
%
|
|||||||||||||
Customer
A
|
$
|
-
|
-
|
$
|
4,990
|
13
|
$
|
-
|
-
|
$
|
11,900
|
16
|
|||||||||||||
Customer
B
|
$
|
-
|
-
|
$
|
3,838
|
10
|
$
|
-
|
-
|
$
|
7,554
|
10
|
Customers
|
June
30,
2008
|
December
31, 2007
|
|||||||||||
$’000
|
%
|
$’000
|
%
|
||||||||||
Customer
A
|
$
|
956
|
11
|
$
|
961
|
12
|
|||||||
Customer
B
|
$
|
989
|
11
|
$
|
-
|
-
|
|||||||
Customer
C
|
$
|
-
|
-
|
$
|
878
|
11
|
|||||||
Customer
D
|
$
|
-
|
-
|
$
|
865
|
11
|
|||||||
Customer
E
|
$
|
-
|
-
|
$
|
849
|
10
|
Fair
Value Measurement as of June 30, 2008
|
|||||||||||||
Description
|
Total
|
Level
1
|
Level
2
|
Level
3
|
|||||||||
$’000
|
$’000
|
$’000
|
$’000
|
||||||||||
Derivative
conversion feature
|
$
|
1,100
|
$
|
-
|
$
|
1,100
|
$
|
-
|
|||||
Derivative
warrants
|
4,260
|
-
|
4,260
|
-
|
|||||||||
Total
|
$
|
5,360
|
$
|
-
|
$
|
5,360
|
$
|
-
|
June
30,
2008
|
||||
ASSETS
|
||||
CURRENT
ASSETS
|
||||
Restricted
cash
|
$
|
233
|
||
Total
current assets
|
233
|
|||
INVESTMENTS
IN SUBSIDIARIES
|
59,168
|
|||
TOTAL
ASSETS
|
$
|
59,401
|
||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||
CURRENT
LIABILITIES
|
||||
Bank
overdrafts
|
$
|
24
|
||
Other
payables
|
2,251
|
|||
Accrued
expenses
|
149
|
|||
Convertible
notes
|
2,084
|
|||
Derivative
conversion feature
|
1,100
|
|||
Penalty
payable
|
2,104
|
|||
Total
current liabilities
|
7,712
|
|||
LONG-TERM
LIABILITIES
|
||||
Derivative
warrants
|
4,260
|
|||
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 105,252,176 shares
|
105
|
|||
Paid-in
capital
|
73,379
|
|||
Accumulated
deficit
|
(26,055
|
)
|
||
Total
stockholders’ equity
|
47,429
|
|||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
59,401
|
Six
months ended
June
30, 2008
|
||||
Revenue:
|
|
|||
Share
of earnings from investment in subsidiaries
|
$
|
11,546
|
||
Total
revenue
|
11,546
|
|||
General
and administrative expenses
|
(436
|
)
|
||
Income
from operations
|
11,110
|
|||
Interest
expense
|
(90
|
)
|
||
Debt
financing costs
|
(622
|
)
|
||
Derivative
unrealized fair value gain
|
220
|
|||
Net
income
|
$
|
10,618
|
Six
months ended
June
30, 2008
|
||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||
Net
income
|
$
|
10,618
|
||
Adjustments
to reconcile net loss to net cash used in operating
activities
|
||||
Share
of earnings from investment in subsidiaries
|
(11,546
|
)
|
||
Amortization
of discount on convertible notes and warrants
|
243
|
|||
Derivative
unrealized fair value gain
|
(220
|
)
|
||
Stock
compensation expense
|
26
|
|||
Changes
in operating assets and liabilities:
|
||||
Advance
from subsidiary
|
130
|
|||
Increase
in other payable
|
365
|
|||
Decrease
in accrued expenses
|
(73
|
)
|
||
Increase
in penalty payable
|
379
|
|||
Net
cash used in operating activities
|
(78
|
)
|
||
Net
decrease in cash and cash equivalents
|
(78
|
)
|
||
Cash
and cash equivalents at beginning of period
|
54
|
|||
Cash
and cash equivalents-bank overdrafts at end of period
|
$
|
(24
|
)
|
|
(a)
|
Exhibits
|
|
|
|
|
31.1*
|
Certification
of Mr. Liping Zhu pursuant to Rule 13a-14(a) or 15d-14(a) under the
Securities Exchange Act of 1934, as amended.
|
|
|
|
|
31.2*
|
Certification
of Ms. Qiong Wu pursuant to Rule 13a-14(a) or 15d-14(a) under the
Securities Exchange Act of 1934, as amended.
|
|
|
|
|
32.1*
|
Certification
of Chief Executive Officer and Chief Financial Officer of Puda Coal,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of
the Sarbanes-Oxley Act of 2002.
|
PUDA
COAL, INC.
|
||
|
|
|
Date:
August 15, 2008
|
By: |
/s/
Liping Zhu
|
Liping
Zhu
|
||
President
and Chief Executive Officer
|
Date:
August 15, 2008
|
/s/ Liping Zhu | |
Liping
Zhu
President
and Chief Executive Officer
(principal
executive officer of Puda Coal,
Inc.)
|
Date:
August 15, 2008
|
/s/
Qiong Wu
|
|
Qiong
Wu
Chief
Financial Officer
(principal
financial officer of Puda Coal, Inc.)
|
Date:
August 15, 2008
|
/s/ Liping Zhu | |
Liping
Zhu
President
and Chief Executive Officer
|
Date:
August 15, 2008
|
/s/ Qiong Wu | |
Qiong
Wu
Chief
Financial Officer
|