China Recycling Energy Corporation Reports 520% Increase in 9 Months' Profit for 2013 Third Quarter Financial Results

 China Recycling Energy Corporation Reports 520% Increase in 9 Months' Profit
                   for 2013 Third Quarter Financial Results

PR Newswire

XI'AN, China, Nov. 14, 2013

XI'AN, China, Nov. 14, 2013 /PRNewswire-FirstCall/ --China Recycling Energy
Corp. (NASDAQ: CREG; "CREG" or "the Company"), a leading industrial
waste-to-energy solution provider in China, today announces its financial
results for the 2013 third quarter ended September 30, 2013.

Third Quarter 2013 Financial Highlights (Comparison data is for the same
period Year-over-Year)

  oTotal sales was $21.74 million, an increase of 21.26 million as compared
    to $0.48 million for the third quarter of 2012.
  oIncome from operations was $10.46 million, increased 108% compared to
    $5.03 million for the third quarter of 2012.
  oThe net income is 4.39 million, while it was a net loss of 1.41 million in
    the third quarter of 2012.
  oFully diluted EPS of $0.08, increased 167% compared to $0.03 for the third
    quarter of 2012.
  oCompletionandDeliveryofPucheng 2^nd Phase - 12MWBMPG Systems.

Summary of Financial Results:

(In USD 000,              Three Months Ended         Nine Months Ended

except for per share      Sep. 30                    Sep. 30
data)
                          2013          2012         2013          2012
Total Sales (1) + (2)     $21,739       $476         $49,992       $1,027
(1) System Sales          21,389        -            49,092        -
(2) Contingent Rental     349           476          900           1,027
Income
Gross Profit              5,259         444          12,110        952
Interest income on                                                
sales-type leases         5,205         4,587
                                                     13,758        14,115
Total Operating Income    10,464        5,031        25,868        15,067
Net Income                4,394         (1,405)      11,425        1,841
Basic EPS                 0.08          (0.03)       0.22          0.04
Diluted EPS               0.08          (0.03)       0.22          0.04
Adjusted Net Income in    5,478         274          13,929        4,240
non-GAAP (1)
Adjusted EPS in Non-GAAP  0.11          0.05         0.28          0.09
(1) (2)
(1) CREG provides adjusted net income and earnings per share on a non-GAAP
basis that excludes non-cash, share-based compensation expense and non-cash
interest expense on the amortization of the beneficial conversion feature for
the convertible notes and non-cash deferred income tax expenses, as described
below, to enable investors to better assess the Company's operating
performance. The non-GAAP measures are described below and reconciled to the
corresponding GAAP measure in the section below titled "Non-GAAP Financial
Measures";
(2) Non-GAAP diluted weighted average shares outstanding were calculated based
on outstanding shares, issued options, and estimated shares under the
assumption that they would be converted from our convertible debentures.

Mr. Guohua Ku, Chairman and Chief Executive Officer of China Recycling Energy,
commented, "As we completed two 3 MW BPRT systems of Shanxi Datong project and
the 12 MW BMPG system of Pucheng Phase II project, we now have 15 systems
completed in total. With new completed projects, we are very delighted to see
there is a large increase in the total sales and net income. At the meantime,
the company is seeking cooperation with companies across China and developing
economic financing methods. We will expand our recycling energy market
andreward our shareholders with consistent and growing profits."

Mr. Ku continued tocomment: "All our projects under constructionare goingon
well and are expected to be delivered on time. While developing new projects,
we also focus on the development and improvement of recycling energy
technology, applying new technology to our existing projects and developing
more projects, which in turn becomes a beneficial cycle for us and our
customers. We intend to be the leader in the development of recycling energy
technology, bringing more social and economic benefits to our customers,
provide better results to our investors, and make greater contributions to the
environmental protection of the country."

Financial Results for Three Months Ended September 30, 2013

Total sales, including system sales and contingent rental income, for the
three months ended September 30, 2013 was $21.74 million while total sales for
the comparable period of 2012 was $0.48 million, an increase of $21.26 million
as a result of an increase in the sales of systems. Of the total sales, sales
of systems for the three months ended September 30, 2013 was $21.39 million,
compared to $0 million for the comparable period of 2012, an increase of
$21.39 million. During the three months ended September 30, 2013, the Pucheng
Biomass Phase II project was completed and sold. In the comparable period of
2012, none of the Company's power generation systems were completed and sold.
For the three months ended September 30, 2013, the Company received contingent
rental income of $0.35 million from the usage of electricity in addition to
the minimum lease payments, compared to $0.48 million for the comparable
period in 2012. For the sales-type lease, sales and cost of sales ("COS") are
recorded at the time of leases; interest income from the sales-type leases is
our other major revenue source in addition to sales revenue.

Cost of Sales for the three months ended September 30, 2013 was $16.48 million
while our COS for the comparable period of 2012 was $32,505, an increase of
$16.45 million. This increase was due to the completion and sale of the
Pucheng Biomass Phase II project compared with zero system sales in the
previous comparable period.

Gross profit was $5.26 million for the three months ended September 30, 2013
compared to $0.44 million for the comparable period of 2012.Combined gross
margin was 24% and 93% for the comparable periods of 2013 and 2012,
respectively. Thelower profit margin in the three months ended September 30,
2013 was mainly due to a relatively low profit margin of 24% that was realized
from the sale of the Pucheng Biomass Phase II project.

Interest income on sales-type leases for the three months ended September 30,
2013 was $5.20 million, a $0.62 million increase from $4.59 million for the
comparable period of 2012. During the third quarter of 2013, interest income
was derived from 14 systems: one TRT system, two CHPG systems, two systems
with Erdos Phase I project and three systems of Erdos Phase II project, two
Pucheng biomass power generation systems, two Shenqiu biomass power generation
systems and Zhongbao WHPG system. Even though the Company sold Shanxi Datong
Phase I project (consisting of two 3MW BPRT power generation systems) in June
2013, the Company did not start collecting payments until July. In comparison,
during the third quarter of 2012, interest income was derived from 11 systems:
one TRT systems, two CHPG systems, two systems with Erdos Phase I project and
three systems of Erdos Phase II project, the Pucheng biomass power generation
system, Shenqiu biomass power generation system and Zhongbao WHPG system.

Operating expenses consisted of selling, general and administrative expenses
totaling $0.93 million for the three months ended September 30, 2013 compared
to $3.59 million for the comparable period of 2012, a decrease of $2.66
million or 74%. This was mainly due to a $2.97 million loss resulting from the
termination of the Erdos TCH Phase III power generation projects in 2012.

Net income for the three months ended September 30, 2013 was $4.39 million
compared to net loss of $1.41 million for the comparable period of 2012, an
increase of $5.80 million. This increase in net income was mainly due to the
increased sales, interest income on sales-type leases, and decreased
non-operating expenses compared with the comparable period of 2012.

For the three months ended September 30, 2013, GAAP diluted EPS was $0.08 with
approximately 54.94 million shares of common stock outstanding, as compared
with minus $0.03 in the same period of 2012 when the Company had 50.83 million
shares of common stock outstanding.

As of September 30, 2013, the Company had cash and cash equivalents of $34.86
million, other current assets were $19.3 million and current liabilities were
$65.47 million.

Financial Results for Nine Months Ended September 30, 2013

Total sales, including system sales and contingent rental income, for the nine
months ended September 30, 2013 was $49.99 million while total sales for the
comparable period of 2012 was $1.03 million, an increase of $48.96 million.
This increase was a result of an increases in the sale of systems. Of our
total sales, sales of systems for the nine months ended September 30, 2013 was
$49.09 million, compared to $0 million for the comparable period of 2012, an
increase of $49.09 million. The increase was primarily due to the Shenqiu
Phase II project, the Shanxi Datong Phase I project and the Pucheng Biomass
Phase II project being completed and sold in 2013; in comparision, no power
generation system was completed and sold in 2012. For the nine months ended
September 30, 2013, the Company received contingent rental income of $0.90
million from the usage of electricity in addition to the minimum lease
payments, compared to $1.03 million for the comparable period in 2012.
Sales-type lease, sales and COS are recorded at the time of leases. In
addition to sales revenue, the interest income from the sales-type leases is
our other major revenue source.

Cost of Sales for the nine months ended September 30, 2013 was $37.88 million,
while our COS for the comparable period of 2012 was $0.08 million, an increase
of $37.81 million. This increase was mainly due to the completion and sale of
the Shenqiu Phase II project, the Shanxi Datong Phase I project (two 3MW BPRT
power generation systems) and the Pucheng Biomass Phase II project.

Gross profit was $12.11 million for the nine months ended September 30, 2013
compared to $0.95 million for the comparable period of 2012, a gross margin of
24% and 93% for the comparable period of 2013 and 2012, respectively. This
significant increase in our gross profit, but lower profit margin, for the
nine months ending September 30, 2013 was primarily due to sale of the systems
with a relatively low 24% average profit margin.

Interest income on sales-type leases for the nine months ended September 30,
2013 was $13.76 million, a $0.36 million decrease from $14.11 million for the
comparable period of 2012. During the nine months ended September 30, 2013,
interest income was derived from 14 systems: one TRT system, two CHPG systems,
two systems with Erdos Phase I project and three systems of Erdos Phase II
project, two Pucheng biomass power generation systems, two Shenqiu biomass
power generation systems and Zhongbao WHPG system, and Shanxi Datong Phase I
project. In comparison, during the nine months ended September 30, 2012,
interest income was derived from 11 systems: one TRT systems, two CHPG
systems, two systems with Erdos Phase I project and three systems of Erdos
Phase II project, the Pucheng biomass power generation system, Shenqiu biomass
power generation system and Zhongbao WHPG system.

Operating expenses consisted of selling, general and administrative expenses
totaling $2.70 million for the nine months ended September 30, 2013 compared
to $5.18 million for the comparable period of 2012, a decrease of $2.48
million or 48%. This was mainly due to a $2.97 million loss resulting from the
termination of the Erdos TCH Phase III power generation projects in 2012.

Our net income for the nine months ended September 30, 2013 was $11.43 million
compared to $1.84 million for the comparable period of 2012, an increase of
$9.58 million. This increase in net income was mainly due to three systems
being completed and sold in 2013 compared with no systems sold in the
comparable period of 2012.

For the nine months ended September 30, 2013, GAAP diluted EPS was $0.22 with
approximately 52.18 million shares of common stock outstanding, as compared
with $0.04 in the same period of 2012 when the Company had 51.11 million
shares of common stock outstanding.

Net Investment in Sales-Type Leases as of September 30, 2013

The Company, through its subsidiary, Xi'an TCH leased TRT systems to Zhangzhi
with terms of 13 years; and leased CHPG systems to Tong Chuan, Shengwei, and
Jing Yang Shengwei respectively for 5 years, BMPG systems to Pucheng Phase I
and II for 15 and 10 years respectively, BMPG systems to Shenqiu Phase I for
11 years, Shenqiu Phase II for 9.5 years, a power and steam generating system
from waste heat from metal refining to Erdos (five projects) for 20 years,
WHPG system of Zhongbao for nine (9) years, and Datong two BPRT systems for 30
years.

The components of the net investment in sales-type leases as of September 30,
2013 and December 31, 2012 are as follows:

                                          September 30, 2013 December 31, 2012
Total future minimum lease payments       $487,405,870       $380,608,263
receivable
Less: executory cost                      (124,038,565)      (113,529,216)
Less: unearned interest income            (190,280,460)      (138,668,584)
Net investment in sales - type leases     173,086,845        128,410,463
Current portion                           10,425,585         10,389,028
Noncurrent portion                        $162,661,260       $118,021,435

As of September 30, 2013, the future minimum rentals to be received on
non-cancelable sales-type leases by years are as follows:

2014       $41,577,205
2015       35,821,007
2016       35,821,007
2017       35,821,007
2018       35,774,982
Thereafter 302,590,662
Total      $487,405,870

Non-GAAP Financial Measures

For the 2013 third quarter, Non-GAAP net income was $5.48 million, as compared
with $4.4 million in the 2013 second quarter and $0.27 million in the 2012
third quarter.

The Company believes that "adjusted net income" and "adjusted earnings per
share" information, when taken in conjunction with reported results, provide a
useful measure of financial performance since they eliminate the impact of
certain non-recurring, non-cash charges. These non-GAAP measures should not be
considered in isolation or as a substitute for the most comparable GAAP
measures. Additionally, the non-GAAP financial measures used by CREG may not
be comparable to non-GAAP financial measures used by other companies.

(In USD 000,               Three Months              Nine Months

except for per share data) Ended September  30       Ended September  30
Adjusted Net Income and    2013         2012         2013         2012
EPS
Net Income                 4,394        (1,405)      11,425       1,841
Adjustments
Deferred Income Taxes      1,084        1,007        2,504        1,574
Interest expense related
to beneficiary conversion  -            584          -            1,751
feature of convertible
debentures
Stock based compensation   -            88           -            201
expenses
Interest expense from
changes in conversion      -            -            -            (1,127)
liability
Adjusted Net Income (1)    5,478        274          13,929       4,240
Basic Weighted Average
Shares Outstanding         53,927       47,045       51,472       46,666
(Shares)
Adjusted EPS in Non-GAAP   0.10         0.05         0.27         0.09
(1)
(1) CREG provides adjusted net income and earnings per share on a non-GAAP
basis that excludes non-cash, share-based compensation expense and non-cash
interest expense on the amortization of the beneficial conversion feature for
the convertible notes and non-cash deferred income tax expenses, as described
below, to enable investors to better assess the Company's operating
performance. The non-GAAP measures are described below and reconciled to the
corresponding GAAP measure in the section below titled "About Non-GAAP
Financial Measures."

Financial Results Conference Call

The Company will host a conference call at 8:30 a.m. EST on Monday, November
18, 2013, to discuss the Company's third quarter 2013 financial results. Mr.
Guohua Ku, Chief Executive Officer, and Mr. David Chong, Chief Financial
Officer, will be hosting the call.

Investors are invited to participate on the live call by
dialing1-877-870-4263for domestic investors. International investors can
dial1-412-317-0790.

10Q Filing
For more information regarding China Recycling Energy Corp.'s financial
performance during the quarter ended September 30, 2013, please refer to the
Quarterly Report on Form 10-Q, which is being filed with the Securities and
Exchange Commission on Nov 14, 2013.

About Non-GAAP Financial Measures
This press release contains non-GAAP financial measures for earnings that
exclude the effect of non-cash, non-operating expenses related to the
Convertible Notes issued in April 2008, and the compensation expenses for the
fair value of stock options, as well as deferred income tax expenses. The
Company uses non-GAAP financial measures when it internally evaluates the
performance of its business and makes operating decisions, including internal
budgeting and performance measurement. The Company believes that providing the
non-GAAP measures is useful to investors for a number of reasons. The non-GAAP
measures provide a consistent basis for investors to understand CREG's
financial performance in comparison to historical periods, and it allows
investors to evaluate CREG's performance using the same methodology and
information as that used by the Company's management. However, investors need
to be aware that non-GAAP measures are subject to inherent limitations because
they do not include all of the expenses included under GAAP, and they involve
the exercise of judgment of which charges are excluded from the non-GAAP
financial measure.

About China Recycling Energy Corp.
China Recycling Energy Corp. (NASDAQ: CREG or "the Company") is based in
Xi'an, China and provides environmentally friendly waste-to-energy
technologies to recycle industrial byproducts for steel mills, cement
factories and coke plants in China. Byproducts include heat, steam, pressure,
and exhaust to generate large amounts of lower-cost electricity and reduce the
need for outside electrical sources. The Chinese government has adopted
policies to encourage the use of recycling technologies to optimize resource
allocation and reduce pollution. Currently, recycled energy represents only an
estimated 1 percent of total energy consumption and this renewable energy
resource is viewed as a growth market due to intensified environmental
concerns and rising energy costs as the Chinese economy continues to expand.
The management and engineering teams have over 20 years of experience in
industrial energy recovery in China. For more information about CREG, please
visit http://www.creg-cn.com.

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 or+65-9721-6163
Email: chongscd@creg-cn.com



CHINA RECYCLING ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2013 AND DECEMBER 31, 2012
                                     2013                  2012
                                     (UNAUDITED)
ASSETS
CURRENT ASSETS
 Cash & equivalents            $            $         
                                     34,860,204           45,004,304
 Restricted cash                3,334,418             2,725,002
 Accounts receivable            112,619               81,819
 Current portion of investment  10,425,585            10,389,028
in sales type leases, net
 Interest receivable on sales   782,743               912,467
type leases
 Prepaid expenses              1,363,307             49,581
 Other receivables              1,711,784             121,109
 Notes receivable               650,618               -
 Advance to related party       -                     440,987
 Prepaid interest on trust      834,418               816,164
loans
 Prepaid loan fees - current    82,954                81,139
 Total current assets        54,158,650            60,621,600
NON-CURRENT ASSETS
 Prepaid loan fees -            145,169               202,848
noncurrent
 Investment in sales type       162,661,260           118,021,435
leases, net
 Long term investment           567,664               -
 Long term deposit              345,641               388,508
 Property and equipment, net    56,139                68,305
 Construction in progress       78,563,009            22,993,905
 Total non-current assets    242,338,882           141,675,001
TOTAL ASSETS                        $             $        
                                     296,497,532          202,296,601
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
 Accounts payable               $           $         
                                       768,734              239,722
 Notes payable - bank           5,367,599             3,659,216
acceptances
 Taxes payable                 1,997,869             1,372,535
 Accrued liabilities and other  1,199,762             1,534,829
payables
 Deferred tax liability        2,574,083             2,471,925
 Due to related parties         4,084,277             -
 Bank loans payable - current   12,361,744            13,523,188
 Trust loans payable           32,124,268            31,421,526
 Interest payable on trust      3,593,734             317,962
loans
 Cinda note payable             -                     3,766,694
 Accrued interest on Cinda      -                     383,929
note
 Current portion of long term   1,401,276             1,292,185
payable
 Total current liabilities  65,473,346            59,983,711
NONCURRENT LIABILITIES
 Deferred tax liability, net   9,196,399             6,565,618
 Refundable deposit from       1,154,847             588,656
customers for systems leasing
 Shares to be issued           16,481,108            -
 Long term payable            2,729,662             3,711,658
 Bank loans payable            6,506,181             12,091,321
 Entrusted loan payable        62,134,027            -
 Total noncurrent           98,202,224            22,957,253
liabilities
 Total liabilities          163,675,570           82,940,964
CONTINGENCIES AND COMMITMENTS       -                     -
STOCKHOLDERS' EQUITY
 Common stock, $0.001 par
value; 100,000,000 shares
authorized, 52,136,673 and          52,137                50,225
50,224,350 shares issued and
outstanding at September 30, 2013
and December 31, 2012, respectively
 Additional paid in capital     61,455,925            58,501,642
 Statutory reserve              9,167,710             7,766,002
 Accumulated other              14,863,330            11,554,225
comprehensive income
 Retained earnings             46,904,131            37,107,107
 Total Company              132,443,233           114,979,201
stockholders' equity
 Noncontrolling interest    378,729               4,376,436
 Total equity               132,821,962           119,355,637
TOTAL LIABILITIES AND EQUITY        $             $        
                                     296,497,532          202,296,601



CHINA RECYCLING ENERGY CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND
COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
                     NINE MONTHS ENDED SEPTEMBER  THREE MONTHS ENDED SEPTEMBER
                     30,                          30,
                     2013          2012           2013          2012
Revenue
 Sales of        $       $        $       $      
systems               49,092,120           21,389,320       
                                     -                         -
 Contingent      899,582       1,027,180      349,248       476,207
rental income
Total revenue        49,991,702    1,027,180      21,738,568    476,207
Cost of sales
 Cost of         37,882,123    75,456         16,479,275    32,505
systems
Total cost of sales  37,882,123    75,456         16,479,275    32,505
Gross profit         12,109,579    951,724        5,259,293     443,702
Interest income on   13,758,083    14,114,986     5,204,537     4,587,009
sales-type leases
 Total           25,867,662    15,066,710     10,463,830    5,030,711
operating income
Operating expenses
 General and     2,700,589     2,213,647      934,029       624,952
administrative
 Loss on         -             2,966,849      -             2,966,849
project termination
 Total           2,700,589     5,180,496      934,029       3,591,801
operating expenses
Income from          23,167,073    9,886,214      9,529,801     1,438,910
operations
Non-operating
income (expenses)
 Interest        185,511       130,893        32,279        58,582
income
 Interest        (4,498,766)   (7,282,044)    (1,711,077)   (2,166,497)
expense
 Changes in
fair value of        -             1,127,400      -             -
conversion feature
liability
 Other income    (1,843,018)   17,338         (1,845,891)   111,100
(expenses)
 Total
non-operating        (6,156,273)   (6,006,413)    (3,524,689)   (1,996,815)
expenses, net
Income (loss)        17,010,800    3,879,801      6,005,112     (557,905)
before income tax
Income tax expense   5,363,136     2,425,970      1,636,266     1,483,889
Income (loss)
before               11,647,664    1,453,831      4,368,846     (2,041,794)
noncontrolling
interest
Less: Income (loss)
attributable to      222,348       (387,625)      (24,936)      (636,563)
noncontrolling
interest
Net income (loss)
attributable to      11,425,316    1,841,456      4,393,782     (1,405,231)
China Recycling
Energy Corp
Other comprehensive
items
 Foreign
currency
translation gain
(loss)               3,309,105     (756,886)      948,570       (294,160)
 attributable
to China Recycling
Energy Corp
 Foreign
currency
translation gain
(loss)               79,263        (27,310)       1,110         (9,354)
 attributable
to noncontrolling
interest
Comprehensive income                              $      
(loss) attributable  $       $                    $      
to China Recycling    14,734,421    1,084,570  5,342,352     (1,699,391)
Energy Corp
Comprehensive
income (loss)        $       $        $       $      
attributable to                                         
noncontrolling       301,611      (414,935)      (23,826)      (645,917)
interest
Basic weighted
average shares       51,472,254    46,665,956     53,927,370    47,045,002
outstanding
Diluted weighted
average shares       52,179,389    51,111,582     54,942,648    50,834,592
outstanding **
Basic earnings       $       $        $       $      
(loss) per share                                  
                     0.22         0.04          0.08          (0.03)
Diluted earnings     $       $        $       $      
(loss) per share *                                
                     0.22         0.04          0.08          (0.03)
* Interest expense accrued on convertible
notes is added back to net income for the
computation of diluted EPS.
** For the purpose of calculating diluted earnings per share,
the dilutive securities were excluded due to anti-dilution for
the three months ended September 30, 2012.



CHINA RECYCLING ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012 (UNAUDITED)
                                                NINE MONTHS ENDED SEPTEMBER
                                                30,
                                                2013            2012
CASH FLOWS FROM OPERATING ACTIVITIES:
 Income including noncontrolling     $        $      
interest                                                       
                                                11,647,664      1,453,831
 Adjustments to reconcile income
including noncontrolling
 interest to net cash provided by
(used in) operating activities:
 Changes in sales type leases        (49,092,120)    -
receivables
 Shares to be issued - system cost   16,481,108      -
 Loss on project termination         -               2,966,849
 Depreciation and amortization       34,983          38,585
 Amortization of prepaid loan fees   61,549          60,551
 Amortization of discount related    -               1,750,950
to conversion feature of convertible note
 Changes in fair value of            -               (1,127,400)
conversion feature liability
 Stock options and warrants          -               200,800
expenses
 Changes in deferred tax             2,503,693       1,574,393
 Changes in assets and
liabilities:
 Interest     148,522         1,712,041
receivable on sales type leases
 Collection   7,735,644       6,281,461
of principal on sales type leases
 Prepaid      (1,298,550)     61,266
expenses
 Accounts     (28,660)        18,908,380
receivable
 Other        (1,032,584)     367,387
receivables
              (54,464,836)    13,413,237
Construction in progress
 Accounts     2,127,152       (1,322,419)
payable
 Taxes        588,265         (2,230,106)
payable
 Interest     3,233,632       3,221,545
payable
 Accrued      (355,792)       179,804
liabilities and other payables
 Accrued      (383,929)       33,366
interest on convertible notes
 Long term    547,099         -
refundable deposit from customer
 Net cash provided by (used in)      (61,547,160)    47,544,521
operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
 Changes in restricted cash          (542,593)       (1,682,444)
 Acquisition of property &           (21,437)        (262)
equipment
 Increased investment in subsidiary  (1,287,291)     -
 Distribution to acquire             (226,585)       -
noncontrolling interest
 Long term investment                (12,629,936)    -
 Net cash used in investing          (14,707,842)    (1,682,706)
activities
CASH FLOWS FROM FINANCING ACTIVITIES:
 Notes receivable - bank             (643,646)       82,318
acceptances
 Proceeds from loans                 78,363,853      1,741,333
 Repayment of loans                  (15,835,050)    (1,899,636)
 Long term payable                   (974,262)       (882,626)
 Contribution from noncontroling     400,669         -
interest
 Advance to related party            -               (479,460)
 Advance from related party          4,000,257       (2,933,597)
 Net cash provided by (used in)      65,311,821      (4,371,668)
financing activities
EFFECT OF EXCHANGE RATE CHANGE ON CASH &        799,081         (275,084)
EQUIVALENTS
NET INCREASE (DECREASE) IN CASH & EQUIVALENTS   (10,144,100)    41,215,063
CASH & EQUIVALENTS, BEGINNING OF PERIOD         45,004,304      14,949,253
                                                $        $      
CASH & EQUIVALENTS, END OF PERIOD                             
                                                34,860,204      56,164,316
Supplemental Cash flow data:
                                                $        $      
 Income tax paid                                            
                                                2,712,123       3,041,376
                                                $        $      
 Interest paid                                              
                                                6,777,997       2,877,598
Supplemental disclosure of non-cash financing
activities:
 Conversion of convertible debt into common   $        $      
shares                                                    
                                                   -         3,000,000

SOURCE China Recycling Energy Corp.

Website: http://www.creg-cn.com