SOURCE: Puda Coal, Inc

March 16, 2006 14:26 ET

Puda Coal, Inc. Files Amendment No. 1 to SB-2

TAIYUAN CITY, CHINA -- (MARKET WIRE) -- March 16, 2006 -- Puda Coal, Inc. ("Puda" or the "Company") (OTC BB: PUDC), a leading supplier of China's highest grade metallurgical coking coal -- which is used to make coke for the purposes of steel manufacturing -- announced today that it has filed Form SB-2 Amendment 1 with the Securities and Exchange Commission. The document is a response to inquiries made by the SEC following the filing of the Company's registration statement on December 16, 2005.

Pursuant to a registration rights agreement in connection with the November 18, 2005 private placement of $12.5 million of Convertible Debenture Units, Puda has agreed to register for resale both the Common Stock into which the Debentures may be converted as well as the Common Stock underlying the Unit Warrants. The registration rights agreement required the registration statement to be declared effective 120 days after the closing date of the private placement, or March 18, 2006. Because this date fell on a weekend, March 17, 2006 became the practical deadline. As a penalty for not having the registration statement declared effective by March 17th, Puda will be required to pay private placement investors an amount equal to 1% of the purchase price (or $125,000 in aggregate) for every 30-day period (or part) after March 18th (the technical deadline) until the registration statement is declared effective.

The registration penalty is payable in shares of Puda Coal's Common Stock priced at 50% of the closing bid price of Puda Coal's Common Stock on the day such penalty is due. As an illustration, if the registration statement were declared effective on April 18th (1 month late) and the closing bid price of Puda's Common Stock was $4.00 per share, the number of penalty shares to be issued to private placement investors would be 62,500 [$125,000/ ($4.00 x 50%)]. Puda will be using its commercially reasonable best efforts to cause the registration statement to be declared effective as soon as is practicable.

About Puda Coal, Inc.

Puda Coal, through its affiliates and controlled entities, supplies premium grade coking coal to the steel making industry for use in making coke. The Company currently processes 1.5 million metric tons of coking coal annually, and management believes it is one of the largest coke coal cleaning companies in terms of capacity in Shanxi Province, China. Shanxi Province provides 20-25% of China's coal output and supplies nearly 50% of China's coke.

FORWARD-LOOKING STATEMENTS

The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.

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