Filed
Pursuant to Rule 424(b)(2)
File
No.: 333-163474
File
No.: 333-164919
PROSPECTUS
SUPPLEMENT
(To
Prospectus dated January 29, 2010)
PUDA
COAL, INC.
2,855,652
Shares of Common Stock
______________
Puda
Coal, Inc, is offering 2,855,652 shares of common stock.
Our
shares are quoted on the NYSE Amex under the symbol “PUDA”. On
February 11, 2010, the last sale price of our common stock as reported on the
NYSE Amex was $5.10 per share.
______________
Investing
in our securities involves a high degree of risk. See “Risk Factors”
beginning on page S-4 of this prospectus supplement and on page 3 of the
prospectus dated January 29, 2010 (the “Prospectus”) accompanying this
prospectus supplement for a discussion of important risks that you should
consider before making an invest decision.
______________
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|
|
|
|
|
|
|
|
Public
offering price
|
|
$ |
4.75 |
|
|
$ |
13,564,347.00 |
|
|
Underwriting
discounts and commissions
|
|
$ |
0.285 |
|
|
$ |
813,860.82 |
|
|
Proceeds,
before expenses, to us
|
|
$ |
4.465 |
|
|
$ |
12,750,486.18 |
|
The
underwriters may also purchase up to an additional 428,348 shares of our
common stock at the public offering price, less the underwriting discounts and
commissions, within 30 days from the date of this prospectus supplement to cover
overallotments.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined that this prospectus
supplement or the accompanying Prospectuses is truthful or complete. Any
representation to the contrary is a criminal offense.
______________
Sole
Book-Running Manager
|
Brean
Murray, Carret & Co.
|
Newbridge
Securities Corp.
|
The date
of this prospectus supplement is February 16, 2010
table
of contents
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Page
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prospectus
supplement
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statements
regarding forward-looking information
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S-2
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prospectus
supplement summary
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S-3
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risk
factors
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S-4
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use
of proceeds
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S-4
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underwriting
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S-5
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legal
matters
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S-7
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documents
incorporated by reference
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S-7
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Page
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| |
|
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accompanying
prospectus
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about
the prospectus
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1
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the
company
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1
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forward-looking
statements
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2
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risk
factors
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3
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use
of proceeds
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14
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description
of the common stock and preferred stock we may offer
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15
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description
of the warrants we may offer
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15
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plan
of distribution
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17
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|
legal
matters
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19
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experts
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19
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|
where
you can find more information
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19
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This
prospectus supplement is not complete without, and may not be utilized except in
connection with, the accompanying Prospectus and any amendments to such
Prospectus. This prospectus supplement provides supplemental information
regarding the Company, updates and changes information contained in the
accompanying Prospectus and describes the specific terms of this offering. The
accompanying Prospectus gives more general information, some of which may not
apply to this offering. We incorporate by reference important
information into this prospectus supplement and the accompanying
Prospectus. You may obtain the information incorporated by reference
into this prospectus supplement and the accompanying Prospectus without charge
by following the instructions under “Documents Incorporated by Reference” in the
accompanying Prospectus. You should carefully read both this prospectus
supplement and the accompanying Prospectus, as well as additional information
described under “Documents Incorporated by Reference,” before deciding to invest
in shares of our common stock. If the information in, or incorporated
by reference in, this prospectus supplement conflicts with information in the
accompanying Prospectus or a document incorporated by reference herein or
therein, the information in, or incorporated by reference in, this prospectus
supplement shall control. All references in this prospectus supplement to
“Puda,” “the Company,” “we,” “us” or “our” mean Puda Coal, Inc., unless we state
otherwise or the context otherwise requires.
You
should rely only on the information contained in, or incorporated by reference
in, this prospectus supplement and the accompanying Prospectus. We have not, and
the underwriters have not, authorized anyone to provide you with different
information. If anyone provides you with different or inconsistent information,
you should not reply on it. We are not, and the underwriters are not, making an
offer to sell these securities in any jurisdiction where the offer or sale is
not permitted. The information contained in, or incorporated by reference in,
this prospectus supplement and the accompanying Prospectus is accurate only as
of the date on the front cover of this prospectus supplement and the
accompanying Prospectus or the date of the documents incorporated by reference,
as applicable. Our business, financial condition, results of operations, cash
flows and prospects may have changed since those dates.
STATEMENTS
REGARDING FORWARD-LOOKING INFORMATION
This
prospectus supplement and the accompanying Prospectus and the documents
incorporated herein and therein by reference include or incorporate by reference
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, or the Securities Act, and Section 21E of the
Securities Exchange Act of 1934, as amended, or the Exchange Act. The words
“anticipate,” “believe,” “estimate,” “will,” “may,” “intend” and “expect” and
similar expressions generally identify forward-looking statements. Although we
believe that our plans, intentions and expectations reflected in the
forward-looking statements are reasonable, we cannot be sure that they will be
achieved. Important factors that could cause actual results differ materially
from our forward-looking statements are set forth in the section entitled
“Risk Factors” in this prospectus supplement, in the section entitled
“Risk Factors” in the accompanying Prospectus, and in the documents incorporated
by reference into this prospectus supplement and the accompanying Prospectus.
These factors are not intended to represent a complete list of the general or
specific factors that may affect us. It should be recognized that other factors,
including general economic factors and business strategies, may be significant,
now or in the future, and the factors set forth in this prospectus supplement
and the accompanying Prospectus may affect us to a greater extent than
indicated. All forward-looking statements attributable to us or persons acting
on our behalf are expressly qualified in their entirety by the cautionary
statements set forth in or incorporated into this prospectus supplement and the
accompanying Prospectus. Except as required by law, we undertake no obligation
to update any forward-looking statement, whether as a result of new information,
future events or otherwise.
PROSPECTUS
SUPPLEMENT SUMMARY
The
following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and our consolidated financial
statements and notes thereto appearing elsewhere in or incorporated by reference
in this prospectus supplement and the accompanying Prospectus. This summary does
not contain all of the information that you should consider before investing in
our securities. You should read the entire prospectus supplement and the
accompanying Prospectus, together with the documents incorporated by reference
herein and therein carefully.
Our
Company
Puda
Coal, Inc. (“Puda” or the “Company”) is a supplier of high-grade metallurgical
coking coal to the industrial sector of the People’s Republic of China. Its
processed coking coal is primarily purchased by coke and steel producers for the
purpose of making the coke required for the steel manufacturing process. Its
operations are conducted exclusively by an entity in China, Shanxi Puda Coal
Group Col., Ltd. (“Shanxi Coal”), which it controls through 90% indirect equity
ownership.
Puda
cleans raw coking coal sourced from third party coal mines primarily located in
Liulin County, Shanxi Province, and markets the cleaned, high quality coking
coal to coke and steel makers in its geographic market. Its current primary
geographic markets include Shanxi Province, Inner Mongolia Autonomous Region,
Hebei Province, Beijing and Tianjin, China.
The
Company focuses on value-added coal washing processes and specializes in
providing high quality, cleaned coking coal, which is the quality level required
to produce steel. The demand for the form of high quality coking coal which the
Company produces is primarily driven by China’s industrial expansion and
advancement, which depends on the availability of large amounts of steel for
building infrastructure. The Company currently purchases raw coal from a
diversified pool of local coal mines in Shanxi Province.
To
diversify its source of revenue and increase its gross margin, the board of
directors of Puda has approved a change in its business strategy to permit Puda
to enter into coal mining business, which can be operated separately from, or
synergistically with, its coal washing business. In December 2009,
Puda announced that it had entered into agreements with two companies to acquire
assets and mining rights with respect to two coal mines.
The
Offering
|
Common
stock offered by
us
|
2,855,652
Shares
|
| |
|
|
Common
stock to be outstanding after this offering
|
18,694,515
Shares
|
| |
|
|
NYSE
Amex
|
The
net proceeds from the sale of common stock offered by this prospectus
supplement will be used to fund the purchase of two coal mines. See “Use
of Proceeds.”
|
| |
|
|
Risk
Factors
|
See
“Risk Factors” beginning on page S-4 of this prospectus supplement and on
page 3 of the accompanying Prospectus for a discussion of the factors you
should carefully consider before deciding to invest in our
securities.
|
The
number of shares of common stock to be outstanding after this offering is based
on 15,838,863 shares of outstanding as of January 25, 2010 and excludes
2,586,557 shares issuable upon exercise of outstanding options and
warrants.
Unless
otherwise indicated, all information in the prospectus supplement assumes no
exercise of the underwriters’ overallotment option to purchase up to 428,348
shares of our common stock.
RISK
FACTORS
Any
investment in our common stock involves a high degree of risk. You should
consider carefully the risks and uncertainties described in the accompanying
Prospectus under “Risk Factors,” and all other information included or
incorporated by reference in this prospectus supplement and the accompanying
Prospectus, before you decide whether to purchase our common stock. Additional
risks and uncertainties not currently know to us or that we currently deem
immaterial may also become important factors that may harm our business. The
occurrence of any of such risks could harm our business. The trading price of
our common stock could decline due to any of these risks and uncertainties, and
you may lose part or all of your investment.
USE
OF PROCEEDS
We expect
the net proceeds from the sale of the shares of common stock being offered by
this prospectus supplement will be $12,569,486 (or $14,663,060 if the
underwriters exercise their overallotment option in full), after deducting the
underwriting fees and our estimated offering expenses. We intend to use the net
proceeds from the sale of the shares of common stock, together with our
available cash, to fund the purchase price of the previously-announced
acquisition of two coal mines. We may invest the net proceeds
temporarily until we use them for their stated purpose.
UNDERWRITING
We have
entered into an underwriting agreement with Brean Murray, Carret & Co., LLC
and Newbridge Securities Corp. (collectively, the “underwriters”) with respect
to the shares subject to this offering. Subject to certain conditions, we have
agreed to sell to the underwriters, and the underwriters have agreed to purchase
from us, the number of shares of our common stock set forth opposite its name in
the table below: Under the terms and subject to the conditions
contained in an underwriting agreement dated February 11, 2010, we have agreed
to sell to the underwriters named below, for whom Brean Murray, Carret &
Co., LLC, is acting as the representative, the following respective numbers of
shares of common stock:
|
Underwriter
|
|
Number of Shares
|
|
|
Brean
Murray, Carret & Co., LLC
|
|
|
1,998,956
|
|
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Newbridge
Securities Corp.
|
|
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856,696
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Total
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2,855,652
|
|
The
underwriting agreement provides that the obligation of the underwriters to
purchase the shares offered hereby is subject to certain conditions and that the
underwriters are obligated to purchase all of the shares of common stock offered
hereby if any of the shares are purchased.
If the
underwriters sell more shares than the above number, the underwriters have an
option for 30 days to buy up to an additional 428,348 shares from us at the
public offering price less the underwriting commissions and discounts to cover
these sales.
The
underwriters propose to offer to the public the shares of common stock purchased
pursuant to the underwriting agreement at the public offering price on the cover
page of this prospectus. In addition, the underwriters may offer some of the
shares to other securities dealers at such price less a concession of $0.14 per
share. After the shares are released for sale to the public, the underwriters
may change the offering price and other selling terms at various
times.
The
following table summarizes the compensation and estimated expenses we will
pay:
|
|
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Per Share
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|
Total
|
|
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Without
Over-allotment
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With
Over-allotment
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Without
Over-allotment
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With
Over-allotment
|
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Underwriting
discounts and commissions paid by us
|
|
|
$0.285
|
|
|
|
$0.285
|
|
|
|
$813,861
|
|
|
|
$935,940
|
|
|
Expenses
payable by us
|
|
|
$0.063
|
|
|
|
$0.063
|
|
|
|
$181,000
|
|
|
|
$181,000
|
|
|
|
|
|
$0.348
|
|
|
|
$0.348
|
|
|
|
$994,861
|
|
|
|
$1,116,940
|
|
We have
agreed to reimburse the underwriters for certain out-of-pocket expenses incurred
by it up to an aggregate of $50,000 with respect to this offering, which amount
is included in “Expenses Payable by us” above.
We have
agreed not to offer, sell, contract to sell or otherwise issue any shares of
common stock or securities exchangeable or convertible into common stock,
without the prior written consent of Brean Murray, Carret & Co., LLC, for a
period of 90 days, subject to an 18 day extension under certain circumstances,
following the date of this prospectus, subject to certain exceptions. In
addition, Ming Zhao and Yao Zhao, our principal shareholders who collectively
own approximately 60.8% of our outstanding shares of common stock, have entered
into lock-up agreements with Brean Murray, Carret & Co., LLC. Under those
lock-up agreements, subject to exceptions, those holders of such stock may not,
directly or indirectly, offer, sell, contract to sell, pledge or otherwise
dispose of or hedge any common stock or securities convertible into or
exchangeable for shares of common stock, or publicly announce to do any of the
foregoing, without the prior written consent of Brean Murray, Carret & Co.,
LLC, for a period of 90 days, subject to an 18 day extension under certain
circumstances, from the date of this prospectus. This consent may be given at
any time without public notice.
Pursuant
to the underwriting agreement, we have agreed to indemnify the underwriters
against certain liabilities, including liabilities under the Securities Act, or
to contribute to payments which the underwriters or such other indemnified
parties may be required to make in respect of any such liabilities.
The
underwriters and their affiliates have provided, and may in the future provide,
various investment banking, commercial banking and other financial services for
us for which services they have received, and may receive in the future,
customary fees.
Our
common stock is traded on the NYSE AMEX under the symbol “PUDA.” In
connection with the offering the underwriters may engage in stabilizing
transactions, over-allotment transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Exchange
Act.
|
|
·
|
Stabilizing
transactions permit bids to purchase the underlying security so long as
the stabilizing bids do not exceed a specified
maximum.
|
|
|
·
|
Over-allotment
involves sales by the underwriters of shares in excess of the number of
shares the underwriters are obligated to purchase, which creates a
syndicate short position. The short position may be either a covered short
position or a naked short position. In a covered short position, the
number of shares over-allotted by the underwriters is not greater than the
number of shares that they may purchase in the over-allotment option. In a
naked short position, the number of shares involved is greater than the
number of shares in the over-allotment option. The underwriters may close
out any covered short position by either exercising their over-allotment
option and/or purchasing shares in the open
market.
|
|
|
·
|
Syndicate
covering transactions involve purchases of the common stock in the open
market after the distribution has been completed in order to cover
syndicate short positions. In determining the source of shares to close
out the short position, the underwriters will consider, among other
things, the price of shares available for purchase in the open market as
compared to the price at which they may purchase shares through the
over-allotment option. A naked short position occurs if the underwriters
sell more shares than could be covered by the over-allotment
option. This position can only be closed out by buying shares
in the open market. A naked short position is more likely to be created if
the underwriters are concerned that there could be downward pressure on
the price of the shares in the open market after pricing that could
adversely affect investors who purchase in the
offering.
|
|
|
·
|
Penalty
bids permit the representative to reclaim a selling concession from a
syndicate member when the common stock originally sold by the syndicate
member is purchased in a stabilizing or syndicate covering transaction to
cover syndicate short
positions.
|
These
stabilizing transactions, syndicate covering transactions and penalty bids may
have the effect of raising or maintaining the market price of our common stock
or preventing or retarding a decline in the market price of the common stock. As
a result the price of our common stock may be higher than the price that might
otherwise exist in the open market. These transactions may be discontinued at
any time.
This
prospectus supplement and the accompanying prospectus may be made available in
electronic format on the Internet sites or through other online services
maintained by the underwriter participating in the offering or by its
affiliates. In those cases, prospective investors may view offering terms online
and prospective investors may be allowed to place orders online. Other than the
prospectus supplement and the accompanying Prospectus in electronic format, the
information on the underwriter’s or our website and any information contained in
any other website maintained by the underwriter or by us is not part of the
prospectus supplement, the accompanying Prospectus or the registration statement
of which this prospectus supplement and the accompanying Prospectus form a part,
has not been approved and/or endorsed by us or the underwriter in its capacity
as underwriter and should not be relied upon by investors.
LEGAL
MATTERS
The
validity of the common stock being offered hereby will be passed upon for us by
Goodwin Procter LLP, New York, New York. DLA Piper, New York, New York, is
acting as counsel for the underwriters in connection with various legal matters
relating to the shares of common stock offered hereby.
DOCUMENTS
INCORPORATED BY REFERENCE
We file
annual, quarterly and special reports, proxy statements and other information
with the SEC. These documents are on file with the SEC. You may read and copy
any document we file at the SEC’s public reference room at 100 F Street, N.E.,
Washington, D.C. 20549. You can request copies of these documents by contacting
the SEC and paying a fee for the copying cost. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room. Our SEC
filings are also available to the public from the SEC’s website at www.sec.gov.
This
prospectus supplement and the accompanying Prospectus are part of registration
statements on Form S-3, including amendments, relating to the common stock
offered by this prospectus supplement and the accompanying Prospectus, which
have been filed with the SEC. This prospectus supplement and the accompanying
Prospectus do not contain all of the information set forth in the registration
statements and the exhibits and schedules thereto, certain parts of which are
omitted in accordance with the rules and regulations of the SEC. Statements
contained in this prospectus supplement and the accompanying Prospectus as to
the contents of any contract or other document referred to are not necessarily
complete and in each instance reference is made to the copy of that contract or
other document filed as an exhibit to the registration statements. For further
information about us and the common stock offered by this prospectus supplement
and the accompanying Prospectus we refer you to the registration statements and
the exhibits and schedules which may be obtained as described
above.
The SEC
allows us to “incorporate by reference” the information contained in documents
that we file with them, which means that we can disclose important information
to you by referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus supplement and the
accompanying Prospectus. Information in the accompanying Prospectus supersedes
information incorporated by reference that we filed with the SEC before the date
of the accompanying Prospectus, and information in this prospectus supplement
supersedes information incorporated by reference that we filed with the SEC
before the date of the prospectus supplement, while information that we file
later with the SEC will automatically update and supersede prior
information.