China Recycling Energy Corporation Files Restatement of Certain Liability to Marked to Market

XI'AN, China, July 18, 2013 /PRNewswire-FirstCall/ -- China Recycling Energy Corp. (NASDAQ: CREG; "CREG" or "the Company"), a leading industrial waste-to-energy solution provider in China, wishes to make the following announcement with regard to the scope and impact of its recent restatement of its financial statements.

Restatement of certain liability to marked to market share price and its related restatement of income statements for fiscal quarters ended June 30, 2010 and 2011, September 30, 2010 and 2011, March 31, 2011 ; and fiscal year ended December 31, 2010 and  2011.

On June 29, 2010, our wholly owned subsidiary, Xi'an TCH entered into a Biomass Power Generation Asset Transfer Agreement (the "Transfer Agreement") with Xueyi Dong. Under the Transfer Agreement, Mr. Dong transferred ownership of the Biomass Systems to Xi'an TCH, and Xi'an TCH agreed to pay Mr. Dong $14,705,900 (RMB 100,000,000) for the systems, including RMB 20,000,000 in cash and RMB 80,000,000 in shares of our common stock.

As of September 30, 2011, the Company paid the cash portion in full to Mr. Dong and had shares to be issued of $11,780,471 in connection with this transaction. On November 22, 2011, our Board of Directors approved the issuance of 2,941,176 shares of the Company's common stock to Mr. Dong at $4 per share pursuant to the terms of the agreement. The Company recorded a gain on settlement of debt of $8,251,060 for the financial year ended December 31, 2011.

From June 29, 2010 until settlement of debt on November 22, 2011, we recorded the liability at $11,780,471 pursuant to the terms of the agreement, without marking to market the price of the shares to be issued to Mr. Dong. After review by the SEC, it was agreed that we should have marked to market the shares issued to Mr. Dong, and this is the reason we filed restatements of our Form 10-Qs and Form 10-K that were previously filed from June 2010 to December 2011.

The following table sets out the relevant figures of the restatement and its impact on our financial statements, which is ultimately 'Nil' when taken as a whole between financial years ended December 2010 and 2011.

Balance sheet impact to liability - shares to be issued to Dong












Stock price of CREG:$

3.63

3.75

3.13

3.05


2.69

2.02

1.20

1.20


Balance sheet date, as of

6/29/2010

6/30/2010

9/30/2010

12/31/2010


3/31/2011

6/30/2011

9/30/2011

11/22/2011

12/31/2011












Original

11,780,471

11,780,471

11,780,471

11,780,471


11,780,471

11,780,471

11,780,471

-

-

Restate - marked to market liability

11,780,471

11,029,410

9,205,881

8,970,587


7,911,763

5,941,176

3,529,411

-

-

Difference

-

751,061

2,574,590

2,809,884


3,868,708

5,839,295

8,251,060

-

-












Profit / Loss impact - gain on settlement of Dong's liability



 Quarter ending : $ 

 FY ending : $ 

 Quarter ending : $ 

 as at 

 FY ending : $ 

For the period ending


6/30/2010

9/30/2010

12/31/2010

12/31/2010

3/31/2011

6/30/2011

9/30/2011

11/22/2011

12/31/2011












Original

-

-

-

-

-

-

-

-

8,251,060

8,251,060

Restate - Profit (Loss) Adjustment amount

-

751,061

1,823,529

235,294

2,809,884

1,058,823

1,970,588

2,411,764

-

5,441,176

Difference

-

751,061

1,823,529

235,294

2,809,884

1,058,823

1,970,588

2,411,764

(8,251,060)

(2,809,884)

Safe Harbor Statement

This press release may contain certain "forward-looking statements" relating to the business of China Recycling Energy Corp. and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward looking statements.

For more information, please contact:

Mr. David Chong
Chief Financial Officer
China Recycling Energy Corp.
Tel: +86-1370-1813139
Email: chongscd@creg-cn.com

SOURCE China Recycling Energy Corp.



RELATED LINKS
http://www.creg-cn.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.