China Recycling Energy Corporation Files Restatement of Certain Liability to
Marked to Market
XI'AN, China, July 18, 2013
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,
From June 29, 2010until settlement of debt on November 22, 2011, we recorded
the liability at $11,780,471 pursuant to the terms of the agreement, without
marking to market the price of the shares to be issued to Mr. Dong.After
review by the SEC, it was agreed that we should have marked to market the
shares issued to Mr. Dong, and this is the reason we filed restatements of our
Form 10-Qs and Form 10-K that were previously filed from June 2010 to December
The following table sets out the relevant figures of the restatement and its
impact on our financial statements, which is ultimately 'Nil' when taken as a
whole between financial years ended December 2010 and 2011.
Balance sheet impact to liability - shares to be issued to Dong
StockpriceofCREG:$ 3.63 3.75 3.13 3.05 2.69 2.02 1.20 1.20
Balancesheetdate,asof 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-markedtomarketliability 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 : $ FYending Quarter ending : $ as at FYending:$
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 - 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.
SOURCE China Recycling Energy Corp.
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