Attached files
| file | filename |
|---|---|
| EX-99.1 - PRESS RELEASE - CHINA RECYCLING ENERGY CORP | v164396_ex99-1.htm |
| EX-10.3 - SUPPLEMENTARY AGREEMENT TO COOPERATIVE CONTRACT - CHINA RECYCLING ENERGY CORP | v164396_ex10-3.htm |
| EX-10.2 - GAS SUPPLY CONTRACT - CHINA RECYCLING ENERGY CORP | v164396_ex10-2.htm |
| EX-10.1 - COOPERATIVE CONTRACT - CHINA RECYCLING ENERGY CORP | v164396_ex10-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported):
November 2, 2009
CHINA
RECYCLING ENERGY CORPORATION
(Exact
name of registrant as specified in its charter)
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Nevada
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000-12536
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90-0093373
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||
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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Suite
909, Tower B
Chang An
International Building
No. 88
Nan Guan Zheng Jie
Xi An
City, Shan Xi Province
China
710068
(Address
of principal executive offices, including zip code)
(86-29)
8769-1097
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
£
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
£
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
£
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
£
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
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Item
1.01.
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Entry
into a Material Definitive
Agreement
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On
November 2, 2009, China Recycling Energy Corporation (the “Company”) announces
that on September 30, 2009 its wholly owned subsidiary Xi’an TCH Energy
Technology Co., Ltd (“Xi’an TCH”) has delivered to Shenmu County Juijiang
Trading Co., Ltd. (“Shenmu”) a set of 18 megawatt capacity power generating
systems pursuant to a Cooperative Contract on Coke-oven Gas Power Generation
Project (including its Supplementary Agreement) and a Gas Supply Contract for
Coke-oven Gas Power Generation Project (collectively as
“Contracts”). The Contracts are for 10 years and provide that Xi’an
TCH will recycle coke furnace gas from the coke-oven plant of Shenmu to generate
power, which will then be supplied back to Shenmu. Shenmu agrees to
supply Xi’an TCH the coke-oven gas free of charge. Power generation
and delivery of power begin in October of 2009.
Under the
Contracts, Shenmu will pay to the Company “energy-saving service fees” of
approximately $473,000 per month for the life of the Contracts, as well as such
additional amount as may result from the supply of power to Shenmu in excess of
10.80 million kilowatt hours per month at the rate of .30 yuan (approximately
$.04) per kilowatt hour. The Company is responsible for operating the
systems and will do so through an unrelated third party at a cost of
approximately $438,000 per year.
The
Company expects to treat the Contracts as a sale-type lease. Based on
the accounting model CREG applies regarding sale-type leasing under GAAP, the
Company expects to recognize approximately $18.3 million in revenue at September
30, 2009 (the delivery date) with a related cost of goods sold of $14.1
million. After the inception of the lease, CREG anticipates that it
will recognize a total amount of $38.4 million as interest income from this
sale-type lease over the 10-year term, on a monthly accumulative basis as it
receives the monthly installment payments from Shenmu.
Shenmu
agrees to provide enough gas to support power generation for 7,200 hours
annually for the generation systems which are the subject of the
Contracts. Xi’an TCH expects to receive 0.30 yuan (about $0.04) per
kilowatt hour for the power generated. The Company anticipates
that the volume of power generation contemplated in the contract by
this arrangement will yield approximately $5.7 million per year. Shenmu
guarantees that monthly gas supply will not be lower than 21.6 million standard
cubic meters, paid monthly. If gas supply is lower than that, Shenmu agrees to
pay Xi’an TCH an energy-saving service fee of up to 10.80 million kilowatt-hours
a month, the amount that results in the “energy-saving service fees” of
approximately $473,000 per month described above.
Xi’an TCH
maintains the ownership of the project throughout the term of the Contracts,
including the already completed investment, design, equipment, construction and
installation as well as the operation and maintenance of the
project. Xi’an TCH agrees to pay to Shenmu 50,000 yuan (about
$7,300) a year to use the land for the power station. At the
end of the 10-year term, ownership of the systems transfers to Shenmu at no
additional charge.
Shenmu
agrees to provide a lien on its production line to guarantee its performance
under the Contracts. Three individuals provide an unlimited joint
liability guarantee to Xi’an TCH for Shenmu’s performance under the Contracts
and the Yulin Huiyuan Group provides a guarantee to Xi’an TCH for Shenmu’s
performance under the Contracts.
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Item
9.01.
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Financial
Statements and Exhibits.
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(d) The following exhibit is
filed with this report.
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Exhibit No.
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Description
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10.1
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Cooperative
Contract on Coke-oven Gas Power Generation Project
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10.2
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Gas
Supply Contract for Coke-oven Gas Power Generation
Project
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10.3
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Supplementary
Agreement to Cooperative Contract on Coke-over Gas Power Generation
Project
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99.1
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Press
release dated November 2, 2009
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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China
Recycling Energy Corporation
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| Date: November 2, 2009 |
/s/
Xinyu Peng
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Xinyu
Peng, Chief Financial
Officer
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EXHIBIT
INDEX
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Exhibit
Number
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Description
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10.1
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Cooperative
Contract on Coke-oven Gas Power Generation Project
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10.2
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Gas
Supply Contract for Coke-oven Gas Power Generation
Project
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10.3
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Supplementary
Agreement to Cooperative Contract on Coke-over Gas Power Generation
Project
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99.1
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Press
release dated November 2, 2009
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