As
filed with the Securities and Exchange Commission on June 10,
2009
|
Registration
No. 333-130380
|
FLORIDA
|
2800
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65-1129912
|
||
(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):
|
|
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)
|
PROSPECTUS
SUMMARY
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5
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RISK
FACTORS
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9
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SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
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17
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USE
OF PROCEEDS
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19
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MARKET
PRICE OF COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
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19
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DIVIDEND
POLICY
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20
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DILUTION
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20
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SELECTED
CONSOLIDATED FINANCIAL DATA
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20
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MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
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21
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BUSINESS
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31
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MANAGEMENT
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38
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EXECUTIVE
COMPENSATION
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40
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TRANSACTIONS
WITH RELATED PERSONS AND CERTAIN CONTROL PERSONS
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44
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
46
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SELLING
SECURITY HOLDERS
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47
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DESCRIPTION
OF CAPITAL STOCK
|
50
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IMPORTANT
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS FOR NON-UNITED STATES
HOLDERS
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50
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PLAN
OF DISTRIBUTION
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52
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LEGAL
MATTERS
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54
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EXPERTS
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54
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|
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
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54
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INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS
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F-1
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PART
II – INFORMATION NOT REQUIRED IN PROSPECTUS
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55
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Item
13.
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OTHER
EXPENSES OF ISSUANCE AND DISTRIBUTION
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55
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Item
14.
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INDEMNIFICATION
OF DIRECTORS AND OFFICERS
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55
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Item
15.
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RECENT
SALES OF UNREGISTERED SECURITIES
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55
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Item
16.
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EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES
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56
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Item
17.
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UNDERTAKINGS
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58
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SIGNATURES
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60
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EXHIBIT
INDEX
|
·
|
Shanxi
Province
|
·
|
Inner
Mongolia Autonomous Region
|
·
|
Hebei
Province
|
·
|
Beijing
|
·
|
Tianjin
|
|
·
|
We are a Large Volume Supplier
of Coking Coal in China’s Top Coal Province. We currently have an
annual coal washing capacity of approximately 3.5 million
MT. All three of our new coal cleaning facilities have become
operational. 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.
|
·
|
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. 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.
|
·
|
the
plans and objectives of management for the future growth of Puda and its
subsidiaries;
|
·
|
our
plans and objectives related to the consummation of acquisitions and
future private and public issuances of Puda’s equity and debt
securities;
|
·
|
our
expected access to sufficient quantities of high-quality coking coal to
meet our future needs;
|
·
|
our
ability to produce the optimum raw coking coal mix and at a lower
effective cost per MT, with increased
yields;
|
·
|
our
good positioning for participation in China’s modernization of the coal,
coking and steel making industries;
|
·
|
our
expectation of achieving continued growth and executing our growth
strategy;
|
·
|
increasing
production of cleaned coking coal;
|
·
|
continued
rapid market growth in China’s steel industry and the demand for quality
cleansed coking coal;
|
·
|
advantages
we expect to enjoy as a large volume supplier of high-quality coking
coal;
|
·
|
our
good positioning to serve the demand for steel production in
China;
|
·
|
our
business strategy that should make us a leader of Shanxi Province’s future
coal sector;
|
·
|
our
expectations of obtaining increased supplies of high-quality coking coal
and achieving continued growth;
|
·
|
our
ability to provide cleaned coking coal that meets industry
specifications;
|
·
|
competitive
advantage provided by our proprietary
technology;
|
·
|
the
continuation of China’s growing appetite for steel
production;
|
·
|
our
continued compliance with emission standards and other regulatory
developments;
|
·
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possible
increase in market share;
|
·
|
increasing
yield realized in our new
facilities;
|
·
|
developing
coal export sales; and
|
·
|
the
expectation that we will not experience significant credit
risk.
|
|
High*
|
Low*
|
||||||
2007
- Quarter Ended:
|
||||||||
March
31, 2007
|
1.340 | 0.770 | ||||||
June
30, 2007
|
2.59 | 0.83 | ||||||
September
30, 2007
|
2.36 | 1.24 | ||||||
December
31, 2007
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2.11 | 0.78 | ||||||
|
||||||||
2008
- Quarter Ended:
|
||||||||
March
31, 2008
|
0.29 | 0.27 | ||||||
June
30, 2008
|
0.54 | 0.49 | ||||||
September
30, 2008
|
0.29 | 0.25 | ||||||
December
31, 2008
|
0.21 | 0.18 |
Plan Category
|
Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options, Warrants
and Rights
|
Weighted-
Average
Exercise Price
of Outstanding
Options,
Warrants and
Rights
|
Number of
Securities
Remaining
Available for
Future Issuance
Under Equity
Compensation
Plans
|
|||||||||
Equity compensation plans
approved by security holders:
|
||||||||||||
Puda
Coal, Inc. 2008 Equity Incentive Plan
|
10,000 | $ | 2.5 | 4,772,976 | (1) | |||||||
Equity
compensation plans not approved by security holders:
|
None
|
N/A | N/A |
(1)
|
This number represents the number
of securities available for future issuance under the Plan, excluding the
shares that the Company is obligated to issue to the directors under the
directors contracts and the shares issuable upon the exercise of the
10,000 warrants.
|
Year
ended December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
|
$’000
|
$’000
|
$’000
|
$’000
|
$’000
|
|||||||||||||||
OPERATIONS
DATA
|
||||||||||||||||||||
Revenues
|
$ | 242,338 | $ | 165,267 | $ | 137,771 | $ | 51,710 | $ | 19,735 | ||||||||||
Net
income
|
17,061 | 10,874 | 1,354 | 965 | 3,693 | |||||||||||||||
Option
holder preference dividend
|
- | - | (2,717 | ) | (2,717 | ) | — | |||||||||||||
Income/(loss)
applicable to common Shares
|
$ | 17,061 | $ | 10,874 | $ | (1,363 | ) | $ | (1,752 | ) | $ | 3,693 | ||||||||
Income/(loss)
per common share - basic and diluted
|
$ | 0.16 | $ | 0.11 | $ | (0.02 | ) | $ | (0.03 | ) | $ | 0.05 | ||||||||
Cash
dividends declared per common Share
|
$ | 0.00 | $ | — | $ | — | $ | 0.02 | $ | 0.03 | ||||||||||
BALANCE
SHEET DATA
|
||||||||||||||||||||
Total
assets
|
$ | 98,632 | $ | 81,264 | $ | 62,984 | $ | 46,701 | $ | 11,344 | ||||||||||
Convertible
notes and warrants
|
$ | 4,086 | $ | 7,421 | $ | 13,894 | $ | 18,925 | $ | — | ||||||||||
Other
Long-term debt
|
$ | 7,800 | $ | 9,100 | $ | 10,400 | $ | 11,700 | $ | — | ||||||||||
Shareholders’
equity
|
$ | 72,277 | $ | 48,581 | $ | 23,037 | $ | 6,082 | $ | 7,149 |
First
|
Second
|
Third
|
Fourth
|
|||||||||||||||||
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Year
|
||||||||||||||||
YEAR
ENDED December 31, 2008
|
||||||||||||||||||||
Revenues
|
$ | 50,598 | 53,188 | 74,051 | $ | 64,501 | $ | 242,338 | ||||||||||||
Gross
profit
|
$ | 7,453 | 6,697 | 10,190 | $ | 5,996 | $ | 30,336 | ||||||||||||
Net
income
|
$ | 4,295 | 2,863 | 6,539 | $ | 3,364 | $ | 17,061 | ||||||||||||
Option
holder preference dividend
|
$ | — | — | — | $ | — | $ | — | ||||||||||||
Income
applicable to common shares
|
$ | 4,295 | 2,863 | 6,539 | $ | 3,364 | $ | 17,061 | ||||||||||||
Income
per common share - basic and diluted
|
$ | 0.04 | 0.03 | 0.06 | $ | 0.03 | $ | 0.16 | ||||||||||||
YEAR
ENDED December 31, 2007
|
||||||||||||||||||||
Revenues
|
$ | 37,415 | 38,097 | 40,536 | $ | 49,219 | $ | 165,267 | ||||||||||||
Gross
profit
|
$ | 7,505 | 6,628 | 6,655 | $ | 7,827 | $ | 28,615 | ||||||||||||
Net
income/(loss)
|
$ | 3,847 | (670 | ) | 3,365 | $ | 4,332 | $ | 10,874 | |||||||||||
Option
holder preference dividend
|
$ | — | — | — | $ | — | $ | — | ||||||||||||
Income/(loss)
applicable to common shares
|
$ | 3,847 | (670 | ) | 3,365 | $ | 4,332 | $ | 10,874 | |||||||||||
Income/(loss)
per common share - basic and diluted
|
$ | 0.04 | (0.00 | ) | 0.03 | $ | 0.04 | $ | 0.11 |
Obligations
|
Total Ending
Balance
|
Less Than
One Year
|
1-3 Years
|
3-5 Years
|
More than 5
Years
|
|||||||||||||||
Long Term
Debt Obligations
|
$ | 9,100 | $ | 1,300 | 2,600 | 2,600 | 2,600 | |||||||||||||
Capital
Lease Obligations
|
- | - | - | - | - | |||||||||||||||
Operating
Lease Obligations
|
$ | 65 | $ | 13 | 26 | 26 | - | |||||||||||||
Purchase
Obligations
|
- | - | - | - | - | |||||||||||||||
Repayment
Obligations under Line of Credit
|
- | - | - | - | ||||||||||||||||
Total
|
$ | 9,165 | $ | 1,313 | 2,626 | 2,626 | 2,600 |
1.
|
Lack of documentation for review
and authorization procedures in purchase, sales and payroll transaction
cycles;
|
2.
|
Lack of an internal control audit
function throughout our company and an inadequate culture
regarding control
consciousness;
|
3.
|
Insufficient or lack of written
policies and procedures relating to the periodic review of current
policies and procedures and their
implementation;
|
4.
|
The lack of adequate training of
employees, especially those newly hired, regarding our accounting policies
and our antifraud programs;
and
|
5.
|
No periodic review of the
company’s insurance
policies.
|
1.
|
Based on the nature of our
production and operating environment, setting appropriate written policies
and procedures, establishing clear roles, responsibilities, and
accountability in all positions, and training staff in different
positions;
|
2.
|
Re-designing control procedures
with standard documentation for review and authorization in the purchase,
sales and payroll transactions cycles;
and
|
3.
|
Establishing internal audit
functions, and implementing internal control supervision processes into
transactions cycles.
|
1.
|
Ensuring that account
reconciliations and analyses for significant financial statement accounts
are reviewed for completeness and accuracy by the Chief Financial
Officer;
|
2.
|
Implementing a process that
ensures the timely review and approval of complex accounting estimates by
qualified accounting personnel and subject matter experts, where
appropriate;
|
3.
|
Developing better monitoring
controls at both the corporate accounting and factory operation
level;
|
4.
|
Documenting and implementing
antifraud programs and controls as well as comprehensive risk assessment
of procedures, programs and controls;
and
|
5.
|
Developing written policies and
procedures.
|
·
|
Shanxi
Province
|
·
|
Inner Mongolia Autonomous
Region
|
·
|
Hebei
Province
|
·
|
Beijing
|
·
|
Tianjin
|
l
|
Puda Coal, Inc.: Mr. Ming Zhao
(approximately 49%); Mr. Yao Zhao (approximately 12%) held
directly.
|
l
|
Puda Investment Holding Limited:
Mr. Ming Zhao (approximately 49%); Mr. Yao Zhao (approximately 12%) held
indirectly through Puda.
|
l
|
Shanxi Putai Resources Limited:
Mr. Ming Zhao (approximately 49%); Mr. Yao Zhao (approximately 12%) held
indirectly through Puda and
BVI.
|
l
|
Shanxi Puda Coal Group Co., Ltd.:
Mr. Ming Zhao (8%); Mr. Yao Zhao (2%) held directly, Mr. Ming Zhao
(approximately 44%); Mr. Yao Zhao (approximately 11%) held indirectly
through Puda, BVI and Putai.
|
·
|
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 their
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 $6,270,458, $8,065,596 and $12,152,000 of raw coal
from this mine in 2006, 2007 and 2008,
respectively.
|
·
|
Liulin
Dadongzhuang Coal Mine - Shanxi Coal purchased about
$5,995,774, $7,880,949 and $12,839,000 of raw coal from this mine in 2006,
2007and 2008, respectively.
|
·
|
Shanxi Liulin
Jucai Plant -
located in Liulin County about 2 miles away from Jucai Coal, has an annual
cleaning capacity of 1.1 million MT. Shanxi Coal purchased
facility 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. Shanxi Coal purchases the plant under financial
lease agreement with Resources Group. The financial lease loan due to
Resources Group is amortized over 10 years and bears interest at a rate of
6% per annum payable
quarterly.
|
·
|
Shanxi Zhongyang Ruixu Plant - located in Zhongyang County,
started production in April of 2006. It has an annual
clean coal washing capacity of 1.2 million MT. This
plant plus land-use right is acquired by Shanxi Coal at a price
of $7.2 million. Shanxi Coal purchases the plant under
financial lease agreement with Resources Group. The financial
lease loan due to Resources Group is amortized over 10 years and bears
interest at a rate of 6% per annum payable
quarterly.
|
·
|
Lingshi Dongqiang Plant - This facility, which is
located in Lingshi County, has an annual coal washing capacity of 1.2
million MT. We purchased this facility through an asset
exchange with Lingshi Jinliao Coal & Chemical Co. on June 22,
2007.
|
·
|
Shanxi
Province
|
·
|
Inner Mongolia
Autonomous Region
|
·
|
Hebei
Province
|
·
|
Beijing
|
·
|
Tianjin
|
Department
|
Job
Title / Responsibility
|
Number
of
Employees
|
||
Corporate
|
President,
Vice Presidents, Managers
|
8
|
||
Finance
|
Finance
and Accounting
|
5
|
||
Supply;
Marketing and Sales
|
Purchase
raw coal and maintain relationship with suppliers; Sell cleaned coal,
maintain relationship with customers, and acquire new
customers
|
22
|
||
Transportation
|
Short-range
truck drivers (within plant)
|
21
|
||
Production
|
Produce
cleaned coal
|
226
|
||
Quality
Control
|
Quality
check on input (raw coal) and output (cleaned coal)
|
21
|
||
Reception
and Security
|
Administrative
matters on reception and security
|
25
|
||
Total
|
328
|
NAME
|
AGE
|
POSITION
|
||
Ming
Zhao
|
36
|
Chairman,
Chief Executive Officer before June 25, 2008
|
||
Liping
Zhu
|
54
|
Chief
Executive Officer
|
||
Qiong
Wu
|
34
|
Chief
Financial Officer
|
||
Wenwei
Tian
|
38
|
Chief
Operating Officer
|
||
Lawrence
S. Wizel
|
66
|
Director
|
||
C.
Mark Tang
|
44
|
Director
|
||
Jianfei
Ni
|
62
|
Director
|
Name and
Principal
Position
|
Year
|
Salary ($)
(1)
|
Other
Annual
Compensation
(1)(2) ($)
|
Total (1)($)
|
||||||||||
Ming
Zhao (President and Chief Executive Officer before June
|
2008
|
48,361 | (4) | 6,771 | 55,132 | |||||||||
25,
2008)(3)
|
2007
|
102,883 | 12,346 | 115,229 | ||||||||||
2006
|
79,747 | 9,570 | 89,317 | |||||||||||
|
||||||||||||||
Liping
Zhu (President and Chief Executive Officer since June
|
2008
|
38,571 | (5) | 1,145 | 9,327 | |||||||||
25,
2008)(3)
|
||||||||||||||
Xia
Jin (Chief Financial Officer before July 23, 2008)(3)
|
2008
|
6,909 | (6) | 967 | 7,876 | |||||||||
2007
|
15,568 | 1,868 | 17,436 | |||||||||||
2006
|
14,889 | 1,787 | 16,676 | |||||||||||
Qiong
Wu (Chief Financial Officer since July 23, 2008)(3)
|
2008
|
50,000 | (7) | 1,410 | 11, 485 |
(1)
|
All
compensations were paid in Reminbi but are reported in U.S. dollars. The
currency conversion ratio we used to report the compensation in the table
is 6.9477, which is the average
conversion ratio for fiscal year 2008, consistent with the conversion
ratio we used in our financial statements for the fiscal year ended
December 31, 2008.
|
(2)
|
In
accordance with Chinese law, we contributed 14% of the base
salary of each employee (including named executive officers) to such
employees’ social pension insurance in 2008. These amounts are included in
the “Other Annual Compensation” column of this Summary Compensation
Table.
|
(3)
|
Mr. Liping
Zhu replaced Mr. Ming Zhao as our CEO on June 25, 2008. Ms.
Qiong Wu replaced Ms. Xia Jin as our CFO on July 23,
2008.
|
(4)
|
Represents
the salary Mr. Ming Zhao received until June 25, 2008, the day he ceased
to be our CEO.
|
(5)
|
Represents
the salary Mr. Liping Zhu earned from June 25, 2008, the day he became our
CEO, to the end of 2008 pursuant to the employment agreement between the
Company and Mr. Zhu. The actual payment by the end of December
31, 2008 is $8,182.
|
(6)
|
Represents
the salary Ms. Xia Jin received until July 23, 2008, the day she ceased to
be our CFO.
|
(7)
|
Represents
the salary Ms. Qiong Wu earned from July 23, 2008, the day she became our
CFO, to the end of 2008 pursuant to the employment agreement between the
company and Ms. Wu. The actual payment by the end of December
31, 2008 is $10,075.
|
Name
|
Grant Date
|
All Other Stock Awards: Number of
Shares of Stocks or Units (#)
|
Grant Date Fair Value of Stock and Option
Awards ($) (1)
|
|||||||||
Ming
Zhao
|
8/11/2008
|
20,000 | 8,400 | |||||||||
12/11/2008
|
40,000 | 8,000 | ||||||||||
Liping
Zhu
|
- | - | - | |||||||||
Xia
Jin
|
- | - | - | |||||||||
Qiong
Wu
|
- | - | - |
Stock Awards
|
||||||||||||||||
Name
|
Number of
Shares or
Units
of
Stock That
Have Not
Vested
(#)
|
Market Value
of Shares or
Units of Stock
That Have Not
Vested
($)
|
Equity Incentive Plan
Awards: Number of
Unearned Shares, Units
or Other Rights That
Have Not Vested
(#)
|
Equity Incentive Plan
Awards: Market or
Payout Value of
Unearned Shares,
Units or Other Rights
That Have Not Vested
($)
|
||||||||||||
Ming
Zhao
|
- | - | 60,000 | (1) | 11,400 | (2) | ||||||||||
Liping
Zhu
|
- | - | - | - | ||||||||||||
Xia
Jin
|
- | - | - | - | ||||||||||||
Laby
Wu
|
- | - | - | - |
Name (1)
|
Fees Earned or
Paid in
Cash
($)
|
Stock
Awards ($)(2)
|
Total ($)
|
||||||
|
|
||||||||
Lawrence
Wizel
|
40,000
|
(3) |
24,375.04
|
(4) |
64,375.04
|
||||
|
|
||||||||
C
Mark Tang
|
32,500
|
(5) |
20,521
|
(6) |
53,021
|
||||
|
|
||||||||
Jianfei
Ni
|
-
|
12,500.04
|
(7) |
12,500.04
|
(1)
|
Mr.
Ming Zhao, Chairman of our board of directors, is also our
CEO. He received no compensation for his service as a director
in 2008.
|
(2)
|
Represents
the dollar amount recognized for financial statements reporting purpose
with respect to fiscal year 2008 in accordance with FAS
123R.
|
(3)
|
50%
of the $40,000 annual cash fee to Mr. Wizel was earned on March 3, 2008;
the remaining 50% was earned on August 11,
2008.
|
(4)
|
$11,875
of the stock awards to Mr. Wizel was vested on March 3, 2008 and
$12,500.04 of the stock awards to Mr. Wizel was vested on August 11,
2008. The grants date fair value of the shares is computed in
accordance with FASA 123(R).
|
(5)
|
50%
of the $40,000 annual cash fee to Mr. Tang was earned on April 9, 2008;
50% of the $25,000 was earned on October 9,
2008.
|
(6)
|
$13,021
of the stock awards to Mr. Tang was vested on April 9, 2008 and $7,500 of
the stock awards to Mr. Tang was vested on October 9, 2008. The
grants date fair value of the shares is computed in accordance with FASA
123(R).
|
(7)
|
$12,500.04
of the stock awards to Mr. Ni was vested on August 11,
2008. The grants date fair value of the shares is computed in
accordance with FASA 123(R).
|
December 31,
2008
|
December 31,
2007
|
|||||||
$‘000
|
$‘000
|
|||||||
Other
receivable from Ming Zhao, director and major shareholder of
Puda
|
$ | - | $ | 4 | ||||
Advance
to Shanxi Liulin Jucai Coal Industry Co., Limited (“Jucai Coal”), a
related company with a common owner
|
$ | 879 | $ | 685 | ||||
Accounts
payable to Jucai Coal
|
$ | - | $ | 182 | ||||
Other
payable to Shanxi Puda Resources Group Limited (“Resources Group”), a
related company with common owners
|
$ | 796 | $ | 743 | ||||
Other
payable to Yao Zhao, manager and shareholder of Puda
|
234 | 215 | ||||||
Other
payable to Ming Zhao and Yao Zhao
|
- | 893 | ||||||
$ | 1,030 | $ | 1,851 | |||||
Distribution
payable to Ming Zhao and Yao Zhao
|
$ | 117 | $ | 1,096 | ||||
Loan
payable to Resources Group
|
||||||||
-current
portion
|
$ | 1,300 | $ | 1,300 | ||||
-long-term
portion
|
7,800 | 9,100 | ||||||
$ | 9,100 | $ | 10,400 |
Name of Beneficial Owner
|
Amount of
Beneficial
Ownership
|
Percent of
Beneficial
Ownership
%(2)
|
||||||
Ming
Zhao, Former President and CEO;
Chairman of
the Board (1)
|
53,100,000 | (3) | 49.47 | % | ||||
Yao
Zhao
|
13,275,000 | 12.37 | % | |||||
Liping
Zhu, President and CEO
|
0 | 0 | ||||||
Xia
Jin, Former CFO (1)
|
0 | 0 | ||||||
Laby
Wu, CFO
|
0 | 0 | ||||||
Wenwei
Tian, COO (1)
|
0 | 0 | ||||||
Lawrence
S. Wizel, director (1)
|
12,500 | (3) | 0.01 | % | ||||
C.
Mark Tang, director (1)
|
13,021 | (3) | 0.01 | % | ||||
Jianfei
Ni, director (1)
|
0 | 0 | ||||||
|
||||||||
All
executive officers and directors as a group
|
66,400,521 | 61.86 | % |
(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.
|
(3)
|
As
of December 31, 2008, none of the additional shares and warrants granted
to the director or officer in 2008 (other than the ones listed in the
table above) were issued or
outstanding.
|
Number of Shares of Common Stock Beneficially Owned
|
||||||||||||||||||||||||
Prior to Offering
|
||||||||||||||||||||||||
Name of Selling Security Holder
|
(a) Common
Stock Issuable
Upon Warrant
Exercise
|
(b) Common
Stock
(excluding
penalty
shares)
|
(c) Penalty
Shares
|
(d) Total
|
Number of Shares
of Common Stock
Being Offered
|
Shares of Common
Stock Owned After
the Offering (1)
|
||||||||||||||||||
(e)
|
(f)
|
|||||||||||||||||||||||
Alpha
Capital AG (Konrad Acherman (2))
|
700,000 | 0 | 20,826 | 720,826 | 700,000 | 20,826 | ||||||||||||||||||
Anasazi
Partners III Offshore, Ltd.**(11) (Christopher P. Baker (2))
|
400,000 | 0 | 33,026 | 433,026 | 400,000 | 33,026 | ||||||||||||||||||
Anasazi
Partners III, LLC ** (11) (Christopher P. Baker (2))
|
600,000 | 0 | 58,676 | 658,676 | 600,000 | 58,676 | ||||||||||||||||||
Baker,
Adrienne ** (11)
|
50,000 | 0 | 2,804 | 52,804 | 50,000 | 2,804 | ||||||||||||||||||
Baker,
Christopher ** (11)
|
400,000 | 0 | 39,308 | 439,308 | 400,000 | 39,308 | ||||||||||||||||||
Banca
Gesfid (Graziano Deli (2))
|
800,000 | 0 | 800,000 | 800,000 | 0 | |||||||||||||||||||
Barish,
Michael
|
200,000 | 0 | 30,279 | 230,279 | 200,000 | 30,279 | ||||||||||||||||||
Barletta,
Joseph & Karen
|
50,000 | 0 | 7,569 | 57,569 | 50,000 | 7,569 | ||||||||||||||||||
Baum,
David M.
|
400,000 | 0 | 0 | 400,000 | 400,000 | 0 | ||||||||||||||||||
Beeman
Insurance Agency Inc. (Dean S. Kachudis (2))
|
50,000 | 25,000 | 6,290 | 81,290 | 75,000 | 6,290 | ||||||||||||||||||
CCM
Master Qualified Fund, Ltd. (Clint D. Coghill (2))
|
200,000 | 0 | 0 | 200,000 | 200,000 | 0 | ||||||||||||||||||
Chilcott,
John
|
100,000 | 0 | 5,608 | 105,608 | 100,000 | 5,608 | ||||||||||||||||||
Cimarolo
Partners, LLC ** (11) (Christopher P. Baker (2))
|
200,000 | 0 | 13,958 | 213,958 | 200,000 | 13,958 | ||||||||||||||||||
Conn,
Michael
|
50,000 | 0 | 3,731 | 53,731 | 50,000 | 3,731 | ||||||||||||||||||
Crestview
Capital Master, LLC * (11) (Stewart Flink, Robert Hoyt, Daniel Warsh
(2)(4))
|
1,950,375 | 0 | 0 | 1,950,375 | 1,950,375 | 0 | ||||||||||||||||||
DiPietro,
Robert
|
50,000 | 0 | 6,412 | 56,412 | 50,000 | 6,412 | ||||||||||||||||||
F.
Berdon Co. L.P. ** (11) (Fredierick Berdon (2))
|
500,000 | 0 | 10,818 | 510,818 | 500,000 | 10,818 | ||||||||||||||||||
Flynn,
Jason
|
50,000 | 0 | 7,569 | 57,569 | 50,000 | 7,569 | ||||||||||||||||||
Fort
Mason Master LP
|
281,730 | 0 | 0 | 281,730 | 281,730 | 0 | ||||||||||||||||||
Fort
Mason Partners LP
|
18,270 | 0 | 0 | 18,270 | 18,270 | 0 | ||||||||||||||||||
Fuller,
James H.
|
50,000 | 39,843 | 7,569 | 97,412 | 89,843 | 7,569 | ||||||||||||||||||
Gerdz
Investments Limited Partnership, RLLLP (Robert Zappa (2))
|
50,000 | 0 | 7,569 | 57,569 | 50,000 | 7,569 | ||||||||||||||||||
Grose,
D. Austin
|
100,000 | 23,844 | 13,247 | 137,091 | 123,844 | 13,247 | ||||||||||||||||||
H.L.
Severance Inc., Pension Plan & Trust (H. Leigh Severance
(2)(5))
|
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))
|
150,000 | 122,900 | 3,472 | 276,372 | 272,900 | 3,472 | ||||||||||||||||||
Hodel,
Ann
|
50,000 | 0 | 3,961 | 53,961 | 50,000 | 3,961 | ||||||||||||||||||
Hollman,
Mark & Stacia (7)
|
50,000 | 0 | 5,655 | 55,655 | 50,000 | 5,655 | ||||||||||||||||||
Hollman,
Scott
|
100,000 | 0 | 15,140 | 115,140 | 100,000 | 15,140 | ||||||||||||||||||
Johnson,
Bruce ** (11)
|
150,000 | 0 | 0 | 150,000 | 150,000 | 0 | ||||||||||||||||||
Kahn,
Sheldon & Liron, Sarah (8)
|
400,000 | 0 | 23,384 | 423,384 | 400,000 | 23,384 | ||||||||||||||||||
Lemak,
John S. ** (11)
|
200,000 | 0 | 0 | 200,000 | 200,000 | 0 | ||||||||||||||||||
Masters,
Paul IRA ** (11)
|
150,000 | 0 | 4,226 | 154,226 | 150,000 | 4,226 | ||||||||||||||||||
Micek
II, John Revocable Trust Dated 03/27/03 (John Micek (2))
|
150,000 | 0 | 0 | 150,000 | 150,000 | 0 | ||||||||||||||||||
Micek
III, John
|
200,000 | 0 | 25,650 | 225,650 | 200,000 | 25,650 | ||||||||||||||||||
Micek,
Maurice & Jennifer (8)
|
150,000 | 0 | 19,237 | 169,237 | 150,000 | 19,237 | ||||||||||||||||||
Micek,
Maurice Custodian for Andrew Micek (Maurice Micek (2))
|
50,000 | 0 | 6,412 | 56,412 | 50,000 | 6,412 | ||||||||||||||||||
Micek,
Maurice Custodian for Benjamin Micek (Maurice Micek (2))
|
50,000 | 0 | 6,412 | 56,412 | 50,000 | 6,412 | ||||||||||||||||||
Midsouth
Investor Fund LP ** (11) (Lyman O. Heidtke (2))
|
200,000 | 0 | 0 | 200,000 | 200,000 | 0 | ||||||||||||||||||
Parsley,
Rod
|
50,000 | 0 | 7,569 | 57,569 | 50,000 | 7,569 | ||||||||||||||||||
Perinest
Dividend Equity Fund Ltd.
|
100,000 | 0 | 0 | 100,000 | 100,000 | 0 | ||||||||||||||||||
Professional
Offshore Opportunity Fund Ltd (Howard Boyer and Marc Swickle (2))
|
1,470,000 | 151,499 | 0 | 1,621,499 | 1,621,499 | 0 | ||||||||||||||||||
Professional
Traders Fund, LLC (Howard Boyer and Marc Swickle(2))
|
200,000 | 0 | 6,615 | 206,615 | 200,000 | 6,615 | ||||||||||||||||||
Purvis,
Steve
|
100,000 | 0 | 15,140 | 115,140 | 100,000 | 15,140 | ||||||||||||||||||
Ross,
Michael
|
630,000 | 0 | 0 | 630,000 | 630,000 | 0 | ||||||||||||||||||
Samuels,
Leonard & Kaplan-Samuels, Leah (8)
|
0 | 200,000 | 22,709 | 222,709 | 200,000 | 22,709 | ||||||||||||||||||
Sandor
Capital Master Fund, L. P.** (John Lemak (2))
|
1,000,000 | 0 | 49,986 | 1,049,986 | 1,000,000 | 49,986 | ||||||||||||||||||
Severance,
H. Leigh
|
250,000 | 0 | 0 | 250,000 | 250,000 | 0 | ||||||||||||||||||
Silicon
Prairie Partners, L. P. (John Micek (2))
|
300,000 | 0 | 35,104 | 335,104 | 300,000 | 35,104 | ||||||||||||||||||
Silver
Rock I Limited (Rima Salam (2))
|
500,000 | 16,467 | 11,573 | 528,040 | 516,467 | 11,573 | ||||||||||||||||||
Stowell,
Kurt
|
50,000 | 0 | 0 | 50,000 | 50,000 | 0 | ||||||||||||||||||
Thompson,
Jack
|
150,000 | 133,500 | 22,709 | 306,209 | 283,500 | 22,709 | ||||||||||||||||||
Ungar,
Jonathan
|
200,000 | 0 | 15,845 | 215,845 | 200,000 | 15,845 | ||||||||||||||||||
Vicis
Capital Master Fund (John Succo, Sky Lucas and Shad Stastny (2))
|
1,000,000 | 0 | 151,394 | 1,151,394 | 1,000,000 | 151,394 | ||||||||||||||||||
Whalehaven
Capital Fund Limited (9) (Arthur Jones, Trevor Williams, Macro Weisfeld,
Michael Fwkelskin (2))
|
1,200,000 | 0 | 0 | 1,200,000 | 1,200,000 | 0 | ||||||||||||||||||
White
Sand Investor Group, LP (10) (Elliott Donnelley, Owen Donnelley and
Marshall Donnelley (2))
|
0 | 100,000 | 15,140 | 115,140 | 100,000 | 15,140 | ||||||||||||||||||
Wrolstad,
Christopher * (11)
|
164,167 | 0 | 6,888 | 171,055 | 164,167 | 6,888 | ||||||||||||||||||
Zelinger,
Steven & Gordon, Lisa (8)
|
50,000 | 0 | 6,412 | 56,412 | 50,000 | 6,412 | ||||||||||||||||||
Andrews,
Jeff ** (3)
|
147,500 | 0 | 0 | 147,500 | 147,500 | 0 | ||||||||||||||||||
Henricks,
Steve** (3)
|
337,500 | 0 | 0 | 337,500 | 337,500 | 0 | ||||||||||||||||||
Rogers,
Kyle ** (3)
|
77,500 | 0 | 0 | 77,500 | 77,500 | 0 | ||||||||||||||||||
Calicchia,
Vincent ** (3)
|
1,443 | 0 | 0 | 1,443 | 1,443 | 0 | ||||||||||||||||||
Troccoli,
Carmelo ** (3)
|
2,350 | 0 | 0 | 2,350 | 2,350 | 0 | ||||||||||||||||||
Legend
Merchant Group, Inc. * (3) (John H. Shaw III (2))
|
27,125 | 0 | 0 | 27,125 | 27,125 | 0 | ||||||||||||||||||
Garisch
Financial Inc. (Frederic M. Schweiger (2))
|
50,000 | 0 | 0 | 50,000 | 50,000 | 0 | ||||||||||||||||||
TOTAL
|
16,657,960 | 1,703,053 | 758,207 | 19,119,220 | 18,361,013 | 758,207 |
*
|
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 has sole or shared 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 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 Marshall Donnelley, officers of the White
Sand Investment Corporation, General Partner of White Sand Investor Group,
LP have the power to vote, sell, transfer or otherwise dispose of the
common stock upon Conversion.
|
(11)
|
Selling
Security Holder represented and warranted that the securities were
purchased 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.
|
(12)
|
Selling
Security Holder acquired securities when it was affiliated with a
broker-dealer and, at the time of acquisition, represented and warranted
that it had no plans to dispose of the securities. Selling Security Holder
is no longer a broker-dealer as of the date of this
prospectus.
|
·
|
a
citizen or resident of the United
States;
|
·
|
a
corporation (or other entity treated as a corporation for United States
federal income tax purposes) created or organized in or under the laws of
the United States, any state thereof or the District of
Columbia;
|
·
|
an
estate the income of which is subject to United States federal income
taxation regardless of its source;
or
|
·
|
a
trust (i) which is subject to primary supervision by a court situated
within the United States and as to which one or more United States persons
have the authority to control all substantial decisions of the trust, or
(ii) that has a valid election in effect under applicable U.S. Treasury
regulations to be treated as a United States
person.
|
·
|
the
gain is effectively connected with a trade or business of the Non-U.S.
Holder in the United States or, where a tax treaty applies, is
attributable to a United States permanent establishment or fixed base of
the Non-U.S. Holder;
|
·
|
the
Non-U.S. Holder is an individual who is present in the United States for
183 or more days during the taxable year of disposition, meets certain
other requirements and is not eligible for relief under an income tax
treaty; or
|
·
|
we
are or have been a “U.S. real property holding corporation” within the
meaning of Section 897(c)(2) of the Code, also referred to as a USRPHC (as
described below), for United States federal income tax purposes at any
time within the five-year period preceding the disposition (or, if
shorter, the Non-U.S. Holder’s holding period for the common
stock).
|
|
·
|
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;
|
|
·
|
in ordinary brokerage
transactions and transactions in which the broker-dealer solicits
purchasers;
|
|
·
|
through 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;
|
|
·
|
through purchases by a
broker-dealer as principal and resale by the broker-dealer for its
account;
|
|
·
|
in an exchange distribution in
accordance with the rules of the applicable
exchange;
|
|
·
|
in privately negotiated
transactions;
|
|
·
|
pursuant to Rule 144 under the
Securities Act;
|
|
·
|
involving broker-dealers that may
agree with the Selling Security Holders to sell a specified number of such
securities at a stipulated price per security;
|
|
·
|
through a combination of any such
methods of sale; and
|
·
|
through any other method
permitted pursuant to applicable
law.
|
Report
of Independent Registered Public Accounting Firm
|
F-1
|
|||
Consolidated
Balance Sheets
|
F-2
|
|||
Consolidated
Statements of Operations
|
F-4
|
|||
Consolidated
Statements of Changes in Stockholders’ Equity
|
F-6
|
|||
Consolidated
Statements of Cash Flows
|
F-8
|
|||
Notes
to Consolidated Financial Statements
|
F-10
|
Note(s)
|
December 31,
2008
|
December 31,
2007
|
||||||||||
ASSETS
|
||||||||||||
CURRENT
ASSETS
|
||||||||||||
Cash
and cash equivalents
|
22
|
$
|
39,108
|
$
|
16,381
|
|||||||
Restricted
cash
|
3,
22
|
-
|
233
|
|||||||||
Accounts
receivable, net
|
4
|
14,645
|
8,137
|
|||||||||
Other
receivables
|
||||||||||||
-
Related parties
|
5
|
-
|
4
|
|||||||||
- Third parties
|
7
|
6
|
||||||||||
Advances
to suppliers
|
||||||||||||
-
Related parties
|
5
|
879
|
685
|
|||||||||
-
Third parties
|
5,635
|
1,363
|
||||||||||
Inventories
|
6
|
21,589
|
35,953
|
|||||||||
Total
current assets
|
81,863
|
62,762
|
||||||||||
PROPERTY,
PLANT AND EQUIPMENT, NET
|
7
|
13,370
|
15,018
|
|||||||||
INTANGIBLE
ASSETS, NET
|
8
|
3,399
|
3,484
|
|||||||||
TOTAL
ASSETS
|
$
|
98,632
|
$
|
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
|
-
|
182
|
|||||||||
-
Third parties
|
4,272
|
2,140
|
||||||||||
Other
payables
|
||||||||||||
-
Related parties
|
5
|
1,030
|
1,851
|
|||||||||
-
Third parties
|
2,714
|
2,916
|
||||||||||
Accrued
expenses
|
1,991
|
1,350
|
||||||||||
Income
taxes payable
|
1,319
|
2,223
|
||||||||||
VAT
payable
|
1,726
|
1,379
|
||||||||||
Distribution
payable
|
5
|
117
|
1,096
|
|||||||||
Convertible
notes
|
10
|
-
|
1,841
|
|||||||||
Derivative
conversion feature
|
10
|
-
|
1,100
|
|||||||||
Penalty
payable
|
10
|
-
|
1,725
|
|||||||||
Total
current liabilities
|
14,469
|
19,103
|
||||||||||
LONG-TERM
LIABILITIES
|
||||||||||||
Long-term
debt
|
||||||||||||
-
Related party
|
5,
9
|
7,800
|
9,100
|
|||||||||
Derivative
warrants
|
10,
25
|
4,086
|
4,480
|
|||||||||
Total
long-term liabilities
|
11,886
|
13,580
|
Note(s)
|
December
31,
2008
|
December
31,
2007
|
||||||||||
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 107,335,759 (2007:
105,252,176)
|
107
|
105
|
||||||||||
Paid-in
capital
|
31,555
|
28,304
|
||||||||||
Statutory
surplus reserve fund
|
1,366
|
1,366
|
||||||||||
Retained
earnings
|
31,752
|
14,807
|
||||||||||
Accumulated
other comprehensive income
|
7,497
|
3,999
|
||||||||||
Total
stockholders’ equity
|
72,277
|
48,581
|
||||||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
98,632
|
$
|
81,264
|
Years
ended December 31,
|
||||||||||||||||
Note(s)
|
2008
|
2007
|
2006
|
|||||||||||||
NET
REVENUE
|
$
|
242,338
|
$
|
165,267
|
$
|
137,771
|
||||||||||
COST
OF REVENUE
|
212,002
|
136,652
|
109,381
|
|||||||||||||
GROSS
PROFIT
|
30,336
|
28,615
|
28,390
|
|||||||||||||
OPERATING
EXPENSES
|
||||||||||||||||
Selling
expenses
|
3,191
|
2,975
|
3,231
|
|||||||||||||
General
and administrative expenses
|
2,207
|
2,215
|
2,387
|
|||||||||||||
TOTAL
OPERATING EXPENSES
|
5,398
|
5,190
|
5,618
|
|||||||||||||
INCOME
FROM OPERATIONS
|
24,938
|
23,425
|
22,772
|
|||||||||||||
INTEREST
INCOME
|
406
|
83
|
59
|
|||||||||||||
INTEREST
EXPENSE
|
13
|
(763
|
)
|
(1,577
|
)
|
(4,441
|
)
|
|||||||||
DEBT
FINANCING COSTS
|
14
|
(778
|
)
|
(2,422
|
)
|
(10,669
|
)
|
|||||||||
DERIVATIVE
UNREALIZED FAIR VALUE
GAIN/(LOSS)
|
10(c),
15
|
394
|
(343
|
)
|
1,237
|
|||||||||||
OTHER
EXPENSE
|
16
|
(719
|
)
|
-
|
-
|
|||||||||||
INCOME
BEFORE INCOME TAXES
|
23,478
|
19,166
|
8,958
|
|||||||||||||
INCOME
TAXES
|
17
|
(6,417
|
)
|
(8,292
|
)
|
(7,604
|
)
|
|||||||||
NET
INCOME
|
17,061
|
10,874
|
1,354
|
|||||||||||||
OTHER
COMPREHENSIVE INCOME
|
||||||||||||||||
Foreign
currency translation adjustment
|
3,498
|
2,860
|
985
|
|||||||||||||
COMPREHENSIVE
INCOME
|
$
|
20,559
|
$
|
13,734
|
$
|
2,339
|
||||||||||
NET
INCOME
|
17,061
|
10,874
|
1,354
|
|||||||||||||
LESS:
DIVIDENDS
|
||||||||||||||||
Option
holder preference dividend
|
1,
2(n)
|
-
|
-
|
(2,717
|
)
|
|||||||||||
Common
dividend
|
(116
|
)
|
-
|
-
|
||||||||||||
UNDISTRIBUTED
EARNINGS
|
$
|
16,945
|
$
|
10,874
|
$
|
(1,363
|
)
|
Years ended December 31,
|
||||||||||||||
Note(s)
|
2008
|
2007
|
2006
|
|||||||||||
BASIC
EARNINGS/(LOSS) PER SHARE
|
||||||||||||||
-
Option holder preference
|
$
|
-
|
$
|
-
|
$
|
0.04
|
||||||||
-
Other common holders
|
0.16
|
0.11
|
(0.02
|
)
|
||||||||||
$
|
0.16
|
$
|
0.11
|
$
|
0.02
|
|||||||||
DILUTED
EARNINGS/(LOSS) PER SHARE
|
||||||||||||||
-
Option holder preference
|
$
|
-
|
$
|
-
|
$
|
0.04
|
||||||||
-
Other common holders
|
0.16
|
0.11
|
(0.02
|
)
|
||||||||||
$
|
0.16
|
$
|
0.11
|
$
|
0.02
|
|||||||||
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING-BASIC
|
18
|
106,288,598
|
98,404,914
|
80,167,110
|
||||||||||
-DILUTED
|
18
|
106,602,646
|
100,591,136
|
80,329,032
|
COMMON STOCK
|
PAID-IN
|
STATUTORY
SURPLUS
RESERVE
|
RETAINED
|
ACCUMULATED
OTHER
COMPREHENSIVE
|
TOTAL
STOCKHOLDERS’
|
|||||||||||||||||||||||
No.
of shares
|
Par
Value
|
CAPITAL
|
FUND
|
EARNINGS
|
INCOME
|
EQUITY
|
||||||||||||||||||||||
Balance,
January 1, 2006
|
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(c)
|
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
note warrants transferred to equity upon exercise (Note
10(c)
|
-
|
-
|
789
|
-
|
-
|
-
|
789
|
|||||||||||||||||||||
Derivative
placement agent warrants transferred to equity upon exercise (Note
10(c)
|
-
|
-
|
882
|
-
|
-
|
-
|
882
|
|||||||||||||||||||||
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
|
|||||||||||||||
Notes
converted to common stock, at $0.50 per share (Note 10(c)
|
5,320,000
|
5
|
2,655
|
-
|
-
|
-
|
2,660
|
|||||||||||||||||||||
Exercise
of warrants, at $0.60 per share (Note 10(a)
|
6,000,000
|
6
|
3,594
|
-
|
-
|
-
|
3,600
|
|||||||||||||||||||||
Cashless
exercise of placement agent warrants (Note 10(b)
|
1,050,875
|
1
|
-
|
-
|
-
|
-
|
1
|
|||||||||||||||||||||
Derivative
conversion feature transferred to equity upon conversion (Note
10(c)
|
-
|
-
|
1,306
|
-
|
-
|
-
|
1,306
|
|||||||||||||||||||||
Derivative
note warrants transferred to equity upon exercise (Note
10(c)
|
-
|
-
|
1,527
|
-
|
-
|
-
|
1,527
|
|||||||||||||||||||||
Derivative
placement agent warrants transferred to equity upon exercise (Note
10(c)
|
-
|
-
|
2,716
|
-
|
-
|
-
|
2,716
|
|||||||||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
10,874
|
-
|
10,874
|
|||||||||||||||||||||
Foreign
currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
2,860
|
2,860
|
|||||||||||||||||||||
Balance,
December 31, 2007
|
105,252,176
|
$
|
105
|
$
|
28,304
|
$
|
1,366
|
$
|
14,807
|
$
|
3,999
|
$
|
48,581
|
COMMON STOCK
|
PAID-IN
CAPITAL
|
STATUTORY
SURPLUS
RESERVE
FUND
|
RETAINED
EARNINGS
|
ACCUMULATED
OTHER
COMPREHENSIVE
INCOME
|
TOTAL
STOCKHOLDERS’
EQUITY
|
|||||||||||||||||||||||
Derivative
conversion feature transferred to equity upon maturity (Note
10(c)
|
-
|
-
|
1,100
|
-
|
-
|
-
|
1,100
|
|||||||||||||||||||||
Issue of
penalty shares (Note 10(a)
|
2,058,062
|
2
|
2,102
|
-
|
-
|
-
|
2,104
|
|||||||||||||||||||||
Issue
of directors shares (Note
21)
|
25,521
|
-
|
49
|
-
|
-
|
-
|
49
|
|||||||||||||||||||||
Dividend
distribution
|
(116
|
)
|
-
|
(116
|
)
|
|||||||||||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
17,061
|
-
|
17,061
|
|||||||||||||||||||||
Foreign
currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
3,498
|
3,498
|
|||||||||||||||||||||
Balance,
December 31, 2008
|
107,335,759
|
$
|
107
|
$
|
31,555
|
$
|
1,366
|
$
|
31,752
|
$
|
7,497
|
$
|
72,277
|
Years ended December 31,
|
||||||||||||||
Notes
|
2008
|
2007
|
2006
|
|||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||||
Net
income
|
$
|
17,061
|
$
|
10,874
|
$
|
1,354
|
||||||||
Adjustments
to reconcile net income to net cash provided by operating
activities
|
||||||||||||||
Amortization
of land-use rights
|
85
|
78
|
78
|
|||||||||||
Depreciation
|
1,650
|
1,252
|
953
|
|||||||||||
Provision
for doubtful debts
|
17
|
1
|
10
|
|||||||||||
Amortization
of debt issue costs
|
-
|
6
|
838
|
|||||||||||
Amortization
of discount on convertible notes and warrants
|
399
|
895
|
8,627
|
|||||||||||
Derivative
unrealized fair value (gain)/loss
|
(394
|
)
|
343
|
(1,237
|
)
|
|||||||||
Discount
on converted shares and exercised warrants
|
-
|
663
|
2,898
|
|||||||||||
Stock
compensation expense
|
74
|
46
|
-
|
|||||||||||
Issue
of common stock for services
|
-
|
-
|
21
|
|||||||||||
Issue
of common stock for penalty
|
379
|
-
|
1,000
|
|||||||||||
Changes
in operating assets and liabilities:
|
||||||||||||||
Increase
in accounts receivable
|
(5,844
|
)
|
(444
|
)
|
(2,972
|
)
|
||||||||
Decrease
in other receivables
|
4
|
41
|
4
|
|||||||||||
(Increase)/decrease
in advances to suppliers
|
(4,243
|
)
|
(799
|
)
|
1,819
|
|||||||||
Decrease/(increase)
in inventories
|
16,600
|
(18,518
|
)
|
(8,104
|
)
|
|||||||||
Increase/(decrease)
in accounts payable
|
1,754
|
(596
|
)
|
1,426
|
||||||||||
Increase
in accrued expenses
|
526
|
289
|
588
|
|||||||||||
(Decrease)/increase
in other payables
|
(991
|
)
|
660
|
1,432
|
||||||||||
(Decrease)/increase
in income tax payable
|
(1,042
|
)
|
(415
|
)
|
1,088
|
|||||||||
Increase
in VAT payable
|
245
|
90
|
887
|
|||||||||||
Increase
in penalty payable
|
-
|
1,521
|
204
|
|||||||||||
Decrease
in restricted cash
|
233
|
-
|
382
|
|||||||||||
Net
cash provided by/(used in) operating activities
|
26,513
|
(4,013
|
)
|
11,296
|
||||||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||||
Purchase
of property, plant and equipment
|
(2
|
)
|
(6,111
|
)
|
-
|
|||||||||
Payment
for the purchase of equity interest in Shanxi Coal
|
(893
|
)
|
(1,799
|
)
|
-
|
|||||||||
Net
cash used in investing activities
|
(895
|
)
|
(7,910
|
)
|
-
|
|||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||||
Exercise
of warrants
|
-
|
3,600
|
1,860
|
|||||||||||
Repayment
of long-term debt
|
(1,300
|
)
|
(1,300
|
)
|
(1,300
|
)
|
||||||||
Repayment
of convertible notes
|
(2,015
|
)
|
-
|
-
|
||||||||||
Distribution
paid to owners of a subsidiary
|
(1,172
|
)
|
-
|
-
|
||||||||||
Net
cash (used in)/provided by financing activities
|
(4,487
|
)
|
2,300
|
560
|
||||||||||
Effect
of exchange rate changes on cash
|
1,596
|
1,061
|
1,020
|
Years ended December 31,
|
||||||||||||||
Notes
|
2008
|
2007
|
2006
|
|||||||||||
Net
increase/(decrease) in cash and cash equivalents
|
22,727
|
(8,562
|
)
|
12,876
|
||||||||||
Cash
and cash equivalents at beginning of year
|
16,381
|
24,943
|
12,067
|
|||||||||||
Cash
and cash equivalents at end of year
|
$
|
39,108
|
$
|
16,381
|
$
|
24,943
|
||||||||
Supplementary
cash flow information:
|
19
|
l
|
Puda
Coal, Inc.: Mr. Ming Zhao (approximately 49%); Mr. Yao Zhao (approximately
12%) held directly.
|
l
|
Puda
Investment Holding Limited: Mr. Ming Zhao (approximately 49%); Mr. Yao
Zhao (approximately 12%) held indirectly through
Puda.
|
l
|
Shanxi
Putai Resources Limited: Mr. Ming Zhao (approximately 49%); Mr. Yao Zhao
(approximately 12%) held indirectly through Puda and
BVI.
|
l
|
Shanxi
Puda Coal Group Co., Ltd.: Mr. Ming Zhao (8%); Mr. Yao Zhao (2%) held
directly, Mr. Ming Zhao (approximately 44%); Mr. Yao Zhao (approximately
11%) held indirectly through Puda, BVI and
Putai.
|
Buildings
and facility
|
20
years
|
Machinery
and equipment
|
10
years
|
Motor
vehicles
|
10
years
|
Office
equipment and others
|
10
years
|
December 31,
2008
|
December 31,
2007
|
|||||||
$’000
|
$’000
|
|||||||
Balance,
beginning of year
|
$
|
48
|
$
|
44
|
||||
Additions
|
22
|
4
|
||||||
Balance,
end of year
|
$
|
70
|
$
|
48
|
December 31,
2008
|
December 31,
2007
|
|||||||
$’000
|
$’000
|
|||||||
Other
receivable from Ming Zhao, director and major shareholder of
Puda
|
$
|
-
|
$
|
4
|
||||
Advance
to Shanxi Liulin Jucai Coal Industry Co., Limited (“Jucai Coal”), a
related company with a common owner
|
$
|
879
|
$
|
685
|
||||
Accounts
payable to Jucai Coal
|
$
|
-
|
$
|
182
|
||||
Other
payable to Shanxi Puda Resources Group Limited (“Resources Group”), a
related company with common owners
|
$
|
796
|
$
|
743
|
||||
Other
payable to Yao Zhao, manager and shareholder of Puda
|
234
|
215
|
||||||
Other
payable to Ming Zhao and Yao Zhao
|
-
|
893
|
||||||
$
|
1,030
|
$
|
1,851
|
|||||
Distribution
payable to Ming Zhao and Yao Zhao
|
$
|
117
|
$
|
1,096
|
||||
Loan
payable to Resources Group
|
||||||||
-current
portion
|
$
|
1,300
|
$
|
1,300
|
||||
-long-term
portion
|
7,800
|
9,100
|
||||||
$
|
9,100
|
$
|
10,400
|
December 31,
2008
|
December 31,
2007
|
|||||||
$’000
|
$’000
|
|||||||
Raw
materials
|
$
|
7,816
|
$
|
24,252
|
||||
Finished
goods
|
13,773
|
11,701
|
||||||
Total
|
$
|
21,589
|
$
|
35,953
|
December 31,
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
|
32
|
30
|
||||||
17,091
|
17,089
|
|||||||
Accumulated
depreciation:
|
||||||||
Buildings
and facilities
|
427
|
255
|
||||||
Machinery
equipment
|
3,278
|
1,814
|
||||||
Motor
vehicles
|
13
|
2
|
||||||
Office
equipment and others
|
3
|
-
|
||||||
3,721
|
2,071
|
|||||||
Carrying
value:
|
||||||||
Buildings
and facilities
|
2,917
|
3,089
|
||||||
Machinery
equipment
|
10,333
|
11,797
|
||||||
Motor
vehicles
|
91
|
102
|
||||||
Office
equipment and others
|
29
|
30
|
||||||
$
|
13,370
|
$
|
15,018
|
Land-use rights
|
||||||||
December 31,
2008
|
December 31,
2007
|
|||||||
$’000
|
$’000
|
|||||||
Cost
|
$
|
3,634
|
$
|
3,634
|
||||
Accumulated
amortization
|
235
|
150
|
||||||
Carrying
value
|
$
|
3,399
|
$
|
3,484
|
December 31,
2008
|
December 31,
2007
|
|||||||
$’000
|
$’000
|
|||||||
Conveyance
loan
|
$
|
9,100
|
$
|
10,400
|
||||
Less:
current portion
|
(1,300
|
)
|
(1,300
|
)
|
||||
Long-term
portion
|
$
|
7,800
|
$
|
9,100
|
December 31,
2008
|
||||
Year
|
$’000
|
|||
2009
|
$ | 1,300 | ||
2010
|
1,300 | |||
2011
|
1,300 | |||
2012
|
1,300 | |||
2013
|
1,300 | |||
Thereafter
|
2,600 | |||
$ | 9,100 |
December 31,
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
|
-
|
(366
|
)
|
|||||
Less:
unamortized discount on note warrants
|
-
|
(33
|
)
|
|||||
Less:
amount redeemed upon maturity
|
(2,015
|
)
|
-
|
|||||
Less:
amount reclassified to other payable
|
(225
|
)
|
-
|
|||||
$
|
-
|
$
|
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
|
)
|
||||
Less:
amount transferred to equity upon maturity in 2008
|
(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 warrants in
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
|
(394
|
)
|
-
|
|||||
$
|
4,086
|
$
|
4,480
|
December 31,
2008
|
||||
Year
|
$’000
|
|||
2009
|
$ | 13 | ||
2010
|
13 | |||
2011
|
13 | |||
2012
|
13 | |||
2013
|
13 | |||
$ | 65 |
Years ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
$’000
|
$’000
|
$’000
|
||||||||||
Current
year provision
|
$
|
6,417
|
$
|
8,292
|
$
|
7,604
|
Years ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
$’000
|
$’000
|
$’000
|
||||||||||
Income
before income taxes
|
$
|
23,478
|
$
|
19,166
|
$
|
8,958
|
||||||
Income
tax on pretax income at statutory rate
|
7,982
|
6,516
|
3,046
|
|||||||||
Tax
effect of expenses that are not deductible in determining taxable
profits
|
417
|
1,560
|
4,544
|
|||||||||
Tax
effect of income that is not taxable in determining taxable
profits
|
(134
|
)
|
-
|
(421
|
)
|
|||||||
Effect
of different tax rates of subsidiary operating in other
jurisdictions
|
(2,264
|
)
|
(240
|
)
|
(234
|
)
|
||||||
Change
in valuation allowance
|
416
|
456
|
669
|
|||||||||
Income
tax at effective rate
|
$
|
6,417
|
$
|
8,292
|
$
|
7,604
|
December 31, 2008
|
December 31, 2007
|
|||||||
$’000
|
$’000
|
|||||||
Net
operating loss carryforwards
|
$
|
1,996
|
$
|
1,580
|
||||
Less:
Valuation allowance
|
(1,996
|
)
|
(1,580
|
)
|
||||
Net
|
$
|
-
|
$
|
-
|
Years ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Basic
weighted average number of shares
|
106,288,598
|
98,404,914
|
80,167,110
|
|||||||||
Options
outstanding, after adjusting for 10 to 1 Reverse split
|
-
|
2,678
|
9,683
|
|||||||||
Assumed
conversion of notes
|
-
|
-
|
-
|
|||||||||
Assumed
exercise of warrants
|
-
|
-
|
-
|
|||||||||
Issuance
of penalty shares
|
-
|
2,183,544
|
152,239
|
|||||||||
Issuance
of directors/employees shares
|
314,048
|
-
|
-
|
|||||||||
Diluted
weighted average number of shares
|
106,602,646
|
100,591,136
|
80,329,032
|
Years ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
$’000
|
$’000
|
$’000
|
||||||||||
Cash
paid during the period for:
|
||||||||||||
Interest
|
$
|
763
|
$
|
914
|
$
|
1,543
|
||||||
Income
taxes
|
$
|
7,454
|
$
|
8,706
|
$
|
6,516
|
||||||
Major
non-cash transactions:
|
||||||||||||
Notes
converted into common shares
|
$
|
-
|
$
|
2,660
|
$
|
6,750
|
||||||
Issue
of common stock for services
|
$
|
-
|
$
|
-
|
$
|
21
|
||||||
Issue
of common stock for penalty
|
$
|
2,104
|
$
|
-
|
$
|
1,000
|
||||||
Dividend
declared
|
$
|
116
|
$
|
-
|
$
|
-
|
Years ended December 31,
|
||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||
Customers
|
||||||||||||||||
$
‘000
|
%
|
$
‘000
|
%
|
$
‘000
|
%
|
|||||||||||
Customer
A
|
$
|
-
|
-
|
$
|
21,626
|
13
|
$
|
27,387
|
20
|
Customers
|
December 31,
2008
|
December 31,
2007
|
||||||||||||||
$
‘000
|
%
|
$
‘000
|
%
|
|||||||||||||
Customer
A
|
$
|
-
|
-
|
$
|
961
|
12
|
||||||||||
Customer
B
|
$
|
-
|
-
|
$
|
878
|
11
|
||||||||||
Customer
C
|
$
|
-
|
-
|
$
|
865
|
11
|
||||||||||
Customer
D
|
$
|
-
|
-
|
$
|
849
|
10
|
Fair Value Measurement as of December 31, 2008
|
||||||||||||||||
Description
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
$
‘000
|
$
‘000
|
$
‘000
|
$
‘000
|
|||||||||||||
Derivative
warrants
|
4,086
|
-
|
4,
086
|
-
|
||||||||||||
Total
|
$
|
4,086
|
$
|
-
|
$
|
4,086
|
$
|
-
|
Note(s)
|
December 31,
2008
|
December 31,
2007
|
||||||||||
ASSETS
|
||||||||||||
CURRENT
ASSETS
|
||||||||||||
Cash
and cash equivalents
|
$
|
196
|
$
|
54
|
||||||||
Restricted
cash
|
-
|
233
|
||||||||||
Total
current assets
|
196
|
287
|
||||||||||
INVESTMENTS
IN SUBSIDIARIES
|
66,366
|
47,622
|
||||||||||
TOTAL
ASSETS
|
$
|
66,562
|
$
|
47,909
|
||||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||||||
CURRENT
LIABILITIES
|
||||||||||||
Other
payable
|
257
|
1,886
|
||||||||||
Accrued
expenses
|
232
|
196
|
||||||||||
Convertible
notes
|
10
|
-
|
1,841
|
|||||||||
Derivative
conversion feature
|
10
|
-
|
1,100
|
|||||||||
Penalty
payable
|
10
|
-
|
1,725
|
|||||||||
Total
current liabilities
|
489
|
6,748
|
||||||||||
LONG-TERM
LIABILITIES
|
||||||||||||
Derivative
warrants
|
10
|
4,086
|
4,480
|
|||||||||
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 107,335,759 shares (2007: 105,252,176)
|
107
|
105
|
||||||||||
Paid-in
capital
|
88,690
|
61,703
|
||||||||||
Accumulated
deficit
|
(26,810
|
)
|
(25,127
|
)
|
||||||||
Total
stockholders’ equity
|
61,987
|
36,681
|
||||||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
66,562
|
$
|
47,909
|
Note(s)
|
Years ended December 31,
|
|||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||
Revenue:
|
||||||||||||||||
Share
of earnings from investment in subsidiaries
|
$
|
18,744
|
$
|
15,689
|
$
|
15,648
|
||||||||||
Total
revenue
|
18,744
|
15,689
|
15,648
|
|||||||||||||
General
and administrative expenses
|
(1,130
|
)
|
(1,147
|
)
|
(1,171
|
)
|
||||||||||
Income
from operations
|
17,614
|
14,542
|
14,477
|
|||||||||||||
Interest
expense
|
13
|
(169
|
)
|
(903
|
)
|
(3,691
|
)
|
|||||||||
Debt
financing costs
|
14
|
(778
|
)
|
(2,422
|
)
|
(10,669
|
)
|
|||||||||
Derivative
unrealized fair value gain/(loss)
|
10(c),
15
|
394
|
(343
|
)
|
1,237
|
|||||||||||
Net
income
|
$
|
17,061
|
$
|
10,874
|
$
|
1,354
|
Years ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
income
|
$
|
17,061
|
$
|
10,874
|
$
|
1,354
|
||||||
Adjustments
to reconcile net loss to net cash used in operating
activities
|
||||||||||||
Share
of earnings from investment in subsidiaries
|
(18,744
|
)
|
(15,689
|
)
|
(15,648
|
)
|
||||||
Amortization
of debt issue costs
|
-
|
6
|
838
|
|||||||||
Amortization
of discount on convertible notes and warrants
|
399
|
895
|
8,627
|
|||||||||
Derivative
unrealized fair value (gain)/loss
|
(394
|
)
|
343
|
(1,237
|
)
|
|||||||
Discount
on converted shares and exercised warrants
|
-
|
663
|
2,898
|
|||||||||
Stock
compensation expense
|
74
|
46
|
||||||||||
Issue
of common stock for penalty
|
379
|
-
|
1,000
|
|||||||||
Issue
of common stock for service
|
-
|
-
|
21
|
|||||||||
Changes
in operating assets and liabilities:
|
||||||||||||
Advance
from/(to) subsidiary
|
3,219
|
(771
|
)
|
(1,079
|
)
|
|||||||
Increase
in other payable
|
812
|
471
|
523
|
|||||||||
Increase/(decrease)
in accrued expenses
|
11
|
(91
|
)
|
242
|
||||||||
Increase
in penalty payable
|
-
|
1,521
|
204
|
|||||||||
Decrease
in restricted cash
|
233
|
-
|
382
|
|||||||||
Net
cash provided by/(used in) operating activities
|
3,050
|
(1,732
|
)
|
(1,875
|
)
|
|||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Payment
for the purchase of equity interest in Shanxi Coal
|
(893
|
)
|
(1,799
|
)
|
-
|
|||||||
Net
cash used in investing activities
|
(893
|
)
|
(1,799
|
)
|
-
|
|||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Repayment
of convertible notes
|
(2,015
|
)
|
-
|
-
|
||||||||
Exercise
of warrants
|
-
|
3,600
|
1,860
|
|||||||||
Net
cash (used in)/provided by financing activities
|
(2,015
|
)
|
3,600
|
1,860
|
||||||||
Net
increase/(decrease) in cash and cash equivalents
|
142
|
69
|
(15
|
)
|
||||||||
Cash
and cash equivalents at beginning of year
|
54
|
(15
|
)
|
-
|
||||||||
Cash
and cash equivalents/(bank overdraft) at end of year
|
$
|
196
|
$
|
54
|
(15
|
)
|
||||||
Supplementary
cash flow information:
|
||||||||||||
Cash
paid during the period for:
|
||||||||||||
Interest
|
$
|
169
|
$
|
240
|
$
|
793
|
||||||
Income
taxes
|
$
|
-
|
$
|
-
|
$
|
-
|
Securities
and Exchange registration fee
|
$
|
12,423
|
||
Legal
fees and expenses
|
$
|
370,000
|
||
Accounting
fees and expenses
|
$
|
130,000
|
||
Blue
sky fees and expenses
|
$
|
5,000
|
||
Transfer
Agent and Registrar fees and expenses
|
$
|
30,000
|
||
Miscellaneous
|
$
|
35,577
|
||
Total:
|
$
|
583,000
|
Exhibit
No.
|
Exhibits
|
|
3.1
|
Articles
of Incorporation (incorporated by reference to Exhibit 3.1 to Current
Report of the Company on Form 8-K filed 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 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 on Form 8-K filed September 4,
2007).
|
|
3.4
|
Compensation
Committee Charter (incorporated by reference to Exhibit 3.1 to Current
Report of the Company on Form 8-K filed October 29,
2007).
|
|
3.5
|
Nominating
Committee Charter (incorporated by reference to Exhibit 3.2 to Current
Report of the Company on Form 8-K filed October 29,
2007).
|
|
5.1
|
Legality
Opinion by Broad and Cassel (incorporated by reference to Exhibit 23.2 to
the registration on Form S-1 filed May 8,
2008).
|
10.1
|
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).
|
|
10.2
|
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).
|
|
10.3
|
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).
|
|
10.4
|
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).
|
|
10.5
|
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).
|
|
10.6
|
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).
|
|
10.7
|
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).
|
|
10.8
|
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).
|
10.9
|
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).
|
|
10.10
|
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).
|
|
10.11
|
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).
|
|
10.12
|
Clean
Coal Supply Letter of Intent - Sinochem Corporation (incorporated by
reference to Exhibit 10.21 to SB-2/A filed March 10,
2006).
|
|
10.13
|
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).
|
|
10.14
|
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).
|
|
10.15
|
Clean
Coal Supply Contract - Shandong Haihua Group (incorporated by reference to
Exhibit 10.24 to SB-2/A , filed March 10, 2006).
|
|
10.16
|
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).
|
|
10.17
|
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).
|
10.18
|
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).
|
|
10.19
|
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).
|
|
10.20
|
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).
|
|
10.21
|
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).
|
|
10.22
|
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).
|
|
10.23
|
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).
|
|
10.24
|
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).
|
|
10.25
|
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).
|
|
10.26
|
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).
|
|
10.27
|
Amendment
No. 1 to Director’s Contract, dated December 29, 2008, 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 December 31,
2008).
|
|
10.28
|
Amendment
No. 1 to Director’s Contract, dated December 29, 2008 between the
Company and Jianfei Ni (incorporated by reference to Exhibit 10.2 to
Current Report of the Company filed on Form 8-K filed December 31,
2008).
|
10.29
|
Amendment
No. 1 to Director’s Contract, dated December 29, 2008, between the
Company and C. Mark Tang (incorporated by reference to Exhibit 10.3 to
Current Report of the Company filed on Form 8-K filed December 31,
2008).
|
||
10.30
|
Puda
Coal, Inc. 2008 Equity Incentive Plan and form agreements under the plan
(incorporated by reference to Exhibits 10.4-10.7 to Current Report of the
Company filed on Form 8-K filed December 31, 2008).
|
||
23.1*
|
Consent of Moore Stephens |
23.2*
|
Consent
of Broad and Cassel
|
*
|
filed
herewith
|
i.
|
Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
|
ii.
|
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;
|
iii.
|
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
|
iv.
|
Any
other communication that is an offer in the offering made by the
undersigned registrant to the
purchaser
|
PUDA
COAL, INC.
|
||
|
|
|
By:
|
/s/
Liping Zhu
|
|
Liping
Zhu
|
||
President
and Chief Executive
Officer
|
Signature
|
Title
|
Date
|
||
/s/
Liping Zhu
|
President
and Chief Executive Officer
|
June
10, 2009
|
||
Liping
Zhu
|
(Principal
Executive Officer)
|
|||
/s/
Qiong Wu
|
Chief
Financial Officer
|
June
10, 2009
|
||
Qiong
Wu
|
(Principal
Financial and Accounting Officer)
|
|||
/s/
Ming Zhao
|
Chairman
of the Board of Directors
|
June
10, 2009
|
||
Ming
Zhao
|
||||
/s/
Lawrence S. Wizel
|
Director
|
June
10, 2009
|
||
Lawrence
S. Wizel
|
||||
/s/
C. Mark Tang
|
Director
|
June
10, 2009
|
||
C.
Mark Tang
|
||||
/s/
Jianfei Ni
|
Director
|
June
10, 2009
|
||
Jianfei
Ni
|