x
|
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
¨
|
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
|
Delaware
|
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 September 30, 2009 (unaudited) and December 31,
2008
|
3-4
|
Unaudited
Consolidated Statements of Operations for the three and nine months
ended September 30, 2009 and 2008
|
5
|
Unaudited
Consolidated Statements of Cash Flows for the nine months ended September
30, 2009 and 2008
|
6
|
Notes
to Unaudited Consolidated Financial Statements
|
7-30
|
Item
2. Management’s Discussion and Analysis of Financial Condition and
Results of Operations
|
31-36
|
Item
3. Quantitative and Qualitative Disclosures about Market
Risk
|
36-37
|
Item
4T. Controls and Procedures
|
37
|
PART
II. OTHER INFORMATION
|
|
Item
1A. Risk Factors
|
39
|
Item
6. Exhibits
|
38
|
Signatures
|
39
|
Certifications
|
|
Note(s)
|
September 30,
2009
|
December 31,
2008
|
||||||||||
(Unaudited)
|
||||||||||||
ASSETS
|
||||||||||||
CURRENT
ASSETS
|
||||||||||||
Cash
and cash equivalents
|
22 | $ | 17,880 | $ | 39,108 | |||||||
Accounts
receivable, net
|
3 | 29,791 | 14,645 | |||||||||
Other
receivables
|
- | 7 | ||||||||||
Advances
to suppliers
|
||||||||||||
-
Related parties
|
4 | 835 | 879 | |||||||||
-
Third parties
|
2,996 | 5,635 | ||||||||||
Prepayment
|
5 | 8,790 | - | |||||||||
Inventories
|
6 | 27,952 | 21,589 | |||||||||
Total
current assets
|
88,244 | 81,863 | ||||||||||
PROPERTY,
PLANT AND EQUIPMENT, NET
|
7 | 12,112 | 13,370 | |||||||||
INTANGIBLE
ASSETS, NET
|
8 | 3,334 | 3,399 | |||||||||
TOTAL
ASSETS
|
$ | 103,690 | $ | 98,632 | ||||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||||||
CURRENT
LIABILITIES
|
||||||||||||
Current
portion of long-term debt
|
||||||||||||
-
Related party
|
4,9 | $ | 1,300 | $ | 1,300 | |||||||
Accounts
payable
|
5,432 | 4,272 | ||||||||||
Other
payables
|
||||||||||||
-
Related parties
|
4 | 1,031 | 1,030 | |||||||||
-
Third parties
|
2,462 | 2,714 | ||||||||||
Accrued
expenses
|
1,752 | 1,991 | ||||||||||
Income
taxes payable
|
1,112 | 1,319 | ||||||||||
VAT
payable
|
525 | 1,726 | ||||||||||
Distribution
payable
|
||||||||||||
-
Related party
|
4 | 117 | 117 | |||||||||
Total
current liabilities
|
13,731 | 14,469 | ||||||||||
LONG-TERM
LIABILITIES
|
||||||||||||
Long-term
debt
|
||||||||||||
-
Related party
|
4, 9 | 6,825 | 7,800 | |||||||||
Derivative
warrants
|
10, 23 | 7,571 | 4,086 | |||||||||
Total
long-term liabilities
|
14,396 | 11,886 |
Note(s)
|
September 30,
2009
|
December 31,
2008
|
||||||||||
(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 15,400,308 (2008: 15,333,680)
|
12 | 15 | 15 | |||||||||
Paid-in
capital
|
12 | 31,947 | 31,647 | |||||||||
Statutory
surplus reserve fund
|
1,366 | 1,366 | ||||||||||
Retained
earnings
|
34,976 | 31,752 | ||||||||||
Accumulated
other comprehensive income
|
7,259 | 7,497 | ||||||||||
Total
stockholders’ equity
|
75,563 | 72,277 | ||||||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 103,690 | $ | 98,632 |
Note(s)
|
Three months
ended
September
30, 2009
|
Three months
ended
September
30, 2008
|
Nine months
ended
September
30, 2009
|
Nine months
ended
September
30, 2008
|
||||||||||||||||
NET
REVENUE
|
$ | 56,106 | $ | 74,051 | 153,817 | $ | 177,837 | |||||||||||||
COST
OF REVENUE
|
50,731 | 63,861 | 140,969 | 153,497 | ||||||||||||||||
GROSS
PROFIT
|
5,375 | 10,190 | 12,848 | 24,340 | ||||||||||||||||
OPERATING
EXPENSES
|
||||||||||||||||||||
Selling
expenses
|
655 | 783 | 1,765 | 2,395 | ||||||||||||||||
General
and administrative expenses
|
682 | 422 | 1,427 | 1,525 | ||||||||||||||||
TOTAL
OPERATING EXPENSES
|
1,337 | 1,205 | 3,192 | 3,920 | ||||||||||||||||
INCOME
FROM OPERATIONS
|
4,038 | 8,985 | 9,656 | 20,420 | ||||||||||||||||
INTEREST
INCOME
|
16 | 31 | 72 | 84 | ||||||||||||||||
INTEREST
EXPENSE
|
13 | (127 | ) | (191 | ) | (396 | ) | (588 | ) | |||||||||||
DEBT
FINANCING COSTS
|
14 | - | (118 | ) | - | (740 | ) | |||||||||||||
DERIVATIVE
UNREALIZED FAIR VALUE (LOSS)/GAIN
|
15 | (3,436 | ) | 121 | (3,549 | ) | 341 | |||||||||||||
OTHER
EXPENSE
|
16 | - | - | - | (719 | ) | ||||||||||||||
INCOME
BEFORE INCOME TAXES
|
491 | 8,828 | 5,783 | 18,798 | ||||||||||||||||
INCOME
TAXES
|
17 | (1,112 | ) | (2,289 | ) | (2,559 | ) | (5,101 | ) | |||||||||||
NET
(LOSS)/INCOME
|
(621 | ) | 6,539 | 3,224 | 13,697 | |||||||||||||||
OTHER
COMPREHENSIVE INCOME
|
||||||||||||||||||||
Foreign
currency translation adjustment
|
(42 | ) | 483 | (238 | ) | 3,943 | ||||||||||||||
COMPREHENSIVE
(LOSS)/INCOME
|
$ | (663 | ) | $ | 7,022 | $ | 2,986 | $ | 17,640 | |||||||||||
EARNINGS
PER SHARE - BASIC
|
$ | (0.04 | ) | $ | 0.43 | $ | 0.21 | $ | 0.91 | |||||||||||
-
DILUTED
|
$ | (0.04 | ) | $ | 0.43 | $ | 0.21 | $ | 0.91 | |||||||||||
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC
|
18 | 15,387,110 | 15,327,393 | 15,360,301 | 15,133,857 | |||||||||||||||
-
DILUTED
|
18 | 15,387,110 | 15,327,393 | 15,386,790 | 15,133,857 |
Nine months ended September 30,
|
||||||||||
Notes
|
2009
|
2008
|
||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||
Net
income
|
$ | 3,224 | $ | 13,697 | ||||||
Adjustments
to reconcile net income to net cash provided by operating
activities
|
||||||||||
Amortization
of land-use rights
|
65 | 65 | ||||||||
Depreciation
|
1,258 | 1,244 | ||||||||
Allowance
for doubtful debts
|
46 | 6 | ||||||||
Amortization
of discount on convertible notes and warrants
|
- | 361 | ||||||||
Derivative
unrealized fair value loss/(gain)
|
3,549 | (341 | ) | |||||||
Stock
compensation
|
73 | 29 | ||||||||
Changes
in operating assets and liabilities:
|
||||||||||
Increase
in accounts receivable
|
(15,187 | ) | (1,895 | ) | ||||||
Decrease
in other receivables
|
7 | 8 | ||||||||
Decrease/(increase)
in advances to suppliers
|
2,677 | (6,081 | ) | |||||||
(Increase)/decrease
in inventories
|
(6,370 | ) | 13,088 | |||||||
Increase
in accounts payable
|
1,161 | 2,107 | ||||||||
(Decrease)/increase
in accrued expenses
|
(225 | ) | 221 | |||||||
Decrease
in other payables
|
(248 | ) | (562 | ) | ||||||
Decrease
in income tax payable
|
(206 | ) | (85 | ) | ||||||
(Decrease)/increase
in VAT payable
|
(1,199 | ) | 318 | |||||||
Increase
in penalty payable
|
- | 379 | ||||||||
Net
cash (used in)/provided by operating activities
|
(11,375 | ) | 22,559 | |||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||
Prepayment
for equity purchase of coal mine
|
(8,782 | ) | - | |||||||
Purchase
of property, plant and equipment
|
- | (2 | ) | |||||||
Net
cash used in investing activities
|
(8,782 | ) | (2 | ) | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||
Exercise
of note warrants
|
150 | - | ||||||||
Repayment
of long-term debt
|
(975 | ) | (975 | ) | ||||||
Net
cash used in financing activities
|
(825 | ) | (975 | ) | ||||||
Effect
of exchange rate changes on cash
|
(246 | ) | 1,466 | |||||||
Net
(decease)/increase in cash and cash equivalents
|
(21,228 | ) | 23,048 | |||||||
Cash
and cash equivalents at beginning of period
|
39,108 | 16,381 | ||||||||
Cash
and cash equivalents at end of period
|
$ | 17,880 | $ | 39,429 | ||||||
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
|
September 30,
2009
|
December 31,
2008
|
|||||||
$’000
|
$’000
|
|||||||
Balance,
beginning of period
|
$ | 70 | $ | 48 | ||||
Additions
|
45 | 22 | ||||||
Balance,
end of period
|
$ | 115 | $ | 70 |
September 30,
2009
|
December 31,
2008
|
|||||||
$’000
|
$’000
|
|||||||
Advance
to Shanxi Liulin Jucai Coal Industry Co., Limited (“Jucai Coal”), a
related company with a common owner
|
$ | 835 | $ | 879 | ||||
Other
payable to Shanxi Puda Resources Group Limited (“Resources
Group”), a related company with common owners
|
$ | 795 | $ | 796 | ||||
Other
payable to Yao Zhao, manager and shareholder of Puda
|
236 | 234 | ||||||
$ | 1,031 | $ | 1,030 | |||||
Distribution
payable to Ming Zhao and Yao Zhao
|
$ | 117 | $ | 117 | ||||
Loan
payable to Resources Group
|
||||||||
-current
portion
|
$ | 1,300 | $ | 1,300 | ||||
-long-term
portion
|
6,825 | 7,800 | ||||||
$ | 8,125 | $ | 9,100 |
September 30,
2009
|
December 31,
2008
|
|||||||
$’000
|
$’000
|
|||||||
Raw
materials
|
$ | 12,732 | $ | 7,816 | ||||
Finished
goods
|
15,220 | 13,773 | ||||||
Total
|
$ | 27,952 | $ | 21,589 |
September 30,
2009
|
December 31,
2008
|
|||||||
$’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 | 32 | ||||||
17,091 | 17,091 | |||||||
Accumulated
depreciation:
|
||||||||
Buildings
and facilities
|
558 | 427 | ||||||
Machinery
equipment
|
4,394 | 3,278 | ||||||
Motor
vehicles
|
21 | 13 | ||||||
Office
equipment and others
|
6 | 3 | ||||||
4,979 | 3,721 | |||||||
Carrying
value:
|
||||||||
Buildings
and facilities
|
2,786 | 2,917 | ||||||
Machinery
equipment
|
9,217 | 10,333 | ||||||
Motor
vehicles
|
83 | 91 | ||||||
Office
equipment and others
|
26 | 29 | ||||||
$ | 12,112 | $ | 13,370 |
Land-use rights
|
||||||||
September 30,
2009
|
December 31,
2008
|
|||||||
$’000
|
$’000
|
|||||||
Cost
|
$ | 3,634 | $ | 3,634 | ||||
Accumulated
amortization
|
300 | 235 | ||||||
Carrying
value
|
$ | 3,334 | $ | 3,399 |
September 30,
2009
|
December 31,
2008
|
|||||||
$’000
|
$’000
|
|||||||
Conveyance
loan
|
$ | 8,125 | $ | 9,100 | ||||
Less:
current portion
|
(1,300 | ) | (1,300 | ) | ||||
Long-term
portion
|
$ | 6,825 | $ | 7,800 |
September 30,
2009
|
||||
$’000
|
||||
Year
|
||||
2009
(remaining three months)
|
$ | 325 | ||
2010
|
1,300 | |||
2011
|
1,300 | |||
2012
|
1,300 | |||
2013
|
1,300 | |||
Thereafter
|
2,600 | |||
$ | 8,125 |
September 30,
2009
|
December 31,
2008
|
|||||||
$000
|
$000
|
|||||||
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 | ) | (394 | ) | ||||
Less:
amount transferred to equity upon exercise of note warrants in
2009
|
(64 | ) | - | |||||
Add:
change in fair value in 2009
|
3,549 | - | ||||||
$ | 7,571 | $ | 4,086 |
(i) Fair values of derivative instruments
|
||||||
Liability derivatives
|
||||||
September 30, 2009
|
||||||
Balance sheet location
|
Fair
Value
|
|||||
$000
|
||||||
Derivatives
not designated as hedging instruments under ASC 815
|
||||||
Derivative
warrants
|
Long-term
liabilities
|
$ | 7,571 | |||
Total
derivatives
|
$ | 7,571 | ||||
(ii)
Effect of derivative instruments on the statement of
operations
|
||||||
Derivatives
not designated as hedging instruments under ASC
815
|
||||||
Nine months ended September 30, 2009
|
||||||
Location of gain or (loss)
recognized in income on
derivatives
|
Amount of gain or
(loss) recognized
in income on
derivatives
|
|||||
$000
|
||||||
Derivative
warrants
|
Derivative
unrealized fair value loss
|
$ | (3.549 | ) | ||
Total
|
$ | (3,549 | ) |
September 30,
2009
|
||||
$’000
|
||||
Year
|
||||
2009
(remaining three months)
|
$ | 40 | ||
2010
|
160 | |||
2011
|
160 | |||
2012
|
160 | |||
2013
|
160 | |||
$ | 680 |
Common Stock
|
Paid-in Capital
|
|||||||||||
No. of shares
|
$000
|
$000
|
||||||||||
Balance, January
1, 2009 (after adjusting for the 7-to-1 Share Conversion)
|
15,333,680 | $ | 15 | $ | 31,647 | |||||||
Issue
of directors shares (after adjusting for the 7-to-1 Share
Conversion)
|
27,721 | - | 65 | |||||||||
Issue
of director warrants
|
- | - | 21 | |||||||||
Exercise
of note warrants
|
35,715 | - | 150 | |||||||||
Derivative
note warrants transferred to equity upon exercise
|
- | - | 64 | |||||||||
Round
up fractional shares for the 7-to-1 Share Conversion
|
3,192 | - | - | |||||||||
Balance,
September 30, 2009
|
15,400,308 | $ | 15 | $ | 31,947 |
Three months
ended
September 30,
2009
|
Three months
ended
September 30,
2008
|
Nine months
ended
September 30,
2009
|
Nine months
ended
September 30,
2008
|
|||||||||||||
$’000
|
$’000 |
$’000
|
$’000
|
|||||||||||||
Current
period provision
|
$ | 1,112 | $ | 2,289 | $ | 2,559 | $ | 5,101 |
Three months
ended
September 30,
2009
|
Three months
ended
September 30,
2008
|
Nine months
ended
September
30, 2009
|
Nine months
ended
September
30, 2008
|
|||||||||||||
$’000 |
$’000
|
$’000
|
$’000
|
|||||||||||||
Income
before income taxes
|
$ | 491 | $ | 8,828 | $ | 5,783 | $ | 18,798 | ||||||||
Income
tax on pretax income at statutory rate
|
167 | 3,001 | 1,966 | 6,391 | ||||||||||||
Tax
effect of expenses that are not deductible in determining taxable
profits
|
1,195 | (8 | ) | 1,269 | 226 | |||||||||||
Effect
of different tax rates of subsidiary operating in other
jurisdictions
|
(396 | ) | (827 | ) | (907 | ) | (1,808 | ) | ||||||||
Valuation
allowance
|
146 | 123 | 231 | 292 | ||||||||||||
Income
tax at effective rate
|
$ | 1,112 | $ | 2,289 | $ | 2,559 | $ | 5,101 |
September 30, 2009
|
December 31, 2008
|
|||||||
$’000
|
$’000
|
|||||||
Net
operating loss carryforwards
|
$ | 2,334 | $ | 1,996 | ||||
Less:
Valuation allowance
|
(2,334 | ) | (1,996 | ) | ||||
Net
|
$ | - | $ | - |
Three months
ended
September 30,
2009
|
Three months
ended
September 30,
2008
|
Nine months
ended
September 30,
2009
|
Nine months
ended
September 30,
2008
|
|||||||||||||
Basic
weighted average number of shares (after
adjusting
for the 7-to-1 Share Conversion)
|
15,387,110 | 15,327,393 | 15,360,301 | 15,133,857 | ||||||||||||
Issuance
of directors’/employees’ shares (after
adjusting
for the 7-to-1 Share Conversion)
|
- | - | 26,489 | - | ||||||||||||
Diluted
weighted average number of shares
|
15, 387,110 | 15,327,393 | 15,386,790 | 15,133,857 |
Nine months ended September 30,
|
||||||||
2009
|
2008
|
|||||||
$’000
|
$’000 | |||||||
Cash
paid during the period for:
|
||||||||
Interest
|
$ | 396 | $ | 588 | ||||
Income
taxes
|
$ | 2,764 | $ | 5,228 | ||||
Major
non-cash transactions:
|
||||||||
Issue
of penalty shares
|
$ | - | $ | 2,104 | ||||
Issue
of directors’ shares
|
$ | 86 | $ | 49 | ||||
Dividend
declared
|
$ | - | $ | 116 |
Three months
ended
September 30,
2009
|
Three months
ended
September 30,
2008
|
Nine months
ended
September 30,
2009
|
Nine months
ended
September 30,
2008
|
|||||||||||||
$’000
|
$’000
|
$’000
|
$’000
|
|||||||||||||
Stock
compensation
|
$ | 40 | $ | 3 | $ | 73 | $ | 29 |
Fair Value Measurement as of September 30, 2009
|
||||||||||||||||
Description
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
$’000
|
$’000
|
$’000
|
$’000 | |||||||||||||
Derivative
warrants
|
$ | 7,571 | - | $ | 7,571 | - | ||||||||||
Total
|
$ | 7,571 | $ | - | $ | 7,571 | $ | - |
Note(s)
|
September 30,
2009
|
December 31,
2008
|
|||||||||
ASSETS
|
|||||||||||
CURRENT
ASSETS
|
|||||||||||
Cash
and cash equivalents
|
$ | - | $ | 196 | |||||||
Total
current assets
|
- | 196 | |||||||||
INVESTMENTS
IN SUBSIDIARIES
|
73,893 | 66,366 | |||||||||
TOTAL
ASSETS
|
$ | 73,893 | $ | 66,562 | |||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||||||
CURRENT
LIABILITIES
|
|||||||||||
Bank
overdraft
|
29 | - | |||||||||
Other
payable
|
155 | 257 | |||||||||
Accrued
expenses
|
63 | 232 | |||||||||
Total
current liabilities
|
247 | 489 | |||||||||
LONG-TERM
LIABILITIES
|
|||||||||||
Derivative
warrants
|
10
|
7,571 | 4,086 | ||||||||
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 15,400,308 shares (2008:
15,333,680)
|
15 | 15 | |||||||||
Paid-in
capital
|
97,173 | 88,782 | |||||||||
Accumulated
deficit
|
(31,113 | ) | (26,810 | ) | |||||||
Total
stockholders’ equity
|
66,075 | 61,987 | |||||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 73,893 | $ | 66,562 |
Note(s)
|
Nine months ended September 30,
|
||||||||||
2009
|
2008
|
||||||||||
Revenue:
|
|||||||||||
Share
of earnings from investment in subsidiaries
|
$ | 7,527 | $ | 14,986 | |||||||
Total
revenue
|
7,527 | 14,986 | |||||||||
General
and administrative expenses
|
(754 | ) | (755 | ) | |||||||
Income
from operations
|
6,773 | 14,231 | |||||||||
Interest
expense
|
13
|
- | (135 | ) | |||||||
Debt
financing costs
|
14
|
- | (740 | ) | |||||||
Derivative
unrealized fair value (loss)/gain
|
10(c),
15
|
(3,549 | ) | 341 | |||||||
Net
income
|
$ | 3,224 | $ | 13,697 | |||||||
Nine months ended September
30,
|
||||||||
2009
|
2008
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
income
|
$ | 3,224 | $ | 13,697 | ||||
Adjustments
to reconcile net loss to net cash used in
operating
activities
|
||||||||
Share
of earnings from investment in subsidiaries
|
(7,527 | ) | (14,986 | ) | ||||
Amortization
of discount on convertible notes and warrants
|
- | 361 | ||||||
Derivative
unrealized fair value loss/(gain)
|
3,549 | (341 | ) | |||||
Stock
compensation
|
73 | 29 | ||||||
Changes
in operating assets and liabilities:
|
||||||||
Advance
from subsidiary
|
564 | 130 | ||||||
(Decrease)/increase
in other payable
|
(102 | ) | 780 | |||||
Decrease
in accrued expenses
|
(156 | ) | (151 | ) | ||||
Increase
in penalty payable
|
- | 379 | ||||||
Net
cash used in operating activities
|
(375 | ) | (102 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Exercise
of note warrants
|
150 | - | ||||||
Net
cash used in financing activities
|
150 | - | ||||||
Net
decrease in cash and cash equivalents
|
(225 | ) | (102 | ) | ||||
Cash
and cash equivalents at beginning of period
|
196 | 54 | ||||||
Cash
and cash equivalents/(bank overdrafts) at end of period
|
$ | (29 | ) | $ | (48 | ) |
(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.
|
||
By:
|
/s/
Liping Zhu
|
|
Liping
Zhu
|
||
President
and Chief Executive Officer
|
||
Date: November
13, 2009
|