Sinocoking Coal & Coke (NASDAQ:SCOK)

We may offer and sell, from time to time in one or more offerings, any combination of common stock, preferred stock, debt securities, warrants, or units having a maximum aggregate offering price of $120,000,000. When we decide to sell a particular class or series of securities, we will provide specific terms of the offered securities in a prospectus supplement.

On April 2, 2011, Henan Province Pingdingshan Hongli Coal & Coke Co., Ltd. (“Hongli”), through which all of the Registrant’s business operations are conducted, entered into a loan agreement with Bairei Trust Co., Ltd. (the “Lender”) to borrow 360 million Renminbi (“RMB”). Pingdingshan Hongyuan Energy Science and Technology Development Co., Ltd. (“Hongyuan”), the Registrant’s wholly-owned subsidiary in the People’s Republic of China and through which the Registrant controls Hongli by means of contractual arrangements, and Jianhua Lv, the Registrant’s chief executive officer, were both made parties to the loan agreement as guarantors for Hongli’s obligations thereunder.

On August 10, 2010 Hongli Coal & Coke Co., Ltd. entered into two Equity Interests Transfer Agreements, both dated as of August 10, 2010:

• The first Agreement is entered into with Dongping Wu, Xiaoling Zhao and Dianqing Li who collectively own 100% of the equity interests of Baofeng Shuangrui Coal Co., Ltd. (“Shuangrui”), to acquire 60% of Shuangrui equity interests held by them (the “Shuangrui Equity Interests”).
  
• The second Agreement is entered into with Mingxun Du and Xingling Li who collectively own 100% of the equity interests of Baofeng Xingsheng Coal Co., Ltd. (“Xingsheng”), to acquire 60% of Xingsheng equity interests held by them (the “Xingsheng Equity Interests”).

Hongli operates the Registrant’s China-based coal and coke producing business, and is controlled by the Registrant through a series of contractual arrangements between Hongli and Pingdingshan Hongyuan Energy Science and Technology Development Co., Ltd., a wholly-owned subsidiary of the Registrant.

Some material terms of the Agreement for the Shuangrui Equity Interests are as follows:

   1. Hongli shall acquire the Shuangrui Equity Interests for consideration of 42 million Renminbi (“RMB”)

   2. If the total coal output of Shuangrui for the twelve-month period from the completion of the Modification Registration is less than 150,000 metric tons, then Hongli shall be entitled to an additional percentage of Shuangrui equity interests held by the Shuangrui Owners equal to 16.67% of the Shuangrui Equity Interests, or liquidated damages from the Shuangrui Owners equal to 16.67% of the Consideration if such equity interests cannot be timely transferred to Hongli.

   3. If the total coal reserves of Shuangrui Coal Mine as of the Effective Date is less than 2 million metric tons, as determined in accordance with the standards of the Securities Act Industry Guide 7, then Hongli shall be entitled to an additional percentage of Shuangrui equity interests held by the Shuangrui Owners equal to 16.67% of the Shuangrui Equity Interests, or liquidated damages from the Shuangrui Owners equal to 20% of the Consideration if such equity interests cannot be timely transferred to Hongli. If the total reserves of Shuangrui Coal Mine is less than 400,000 metric tons, then Hongli may cancel the Agreement and be reimbursed the full amount of Consideration paid through such time of cancellation.

The material terms of the Agreement with the Xingsheng Owners for the Xingsheng Equity Interests are identical to those of the Agreement for the Shuangrui Equity Interests as described above.