UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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): December 23, 2016

 

 

 

CLEANTECH SOLUTIONS INTERNATIONAL, INC.

 

 

(Exact name of registrant as specified in Charter)

 

Nevada   001-34591   90-0648920

(State or other jurisdiction of

incorporation or organization)

  (Commission
File No.) 		  (IRS Employee
Identification No.)

 

No. 9 Yanyu Middle Road

Qianzhou Village, Huishan District, Wuxi City

Jiangsu Province, People’s Republic of China

 

(Address of Principal Executive Offices)

 

(86) 51083397559

 

(Registrant’s Telephone number)

 

Copies to:

Asher S. Levitsky PC

Ellenoff Grossman & Schole LLP

1345 Avenue of the Americas

New York, New York 10105-0302

Phone: (212) 370-1300

Fax: (646) 895-7182

E-mail: alevitsky@egsllp.com

 

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(b) under the Exchange Act (17 CFR 240.14a-12(b))

☐ 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))

 

 

 

 

 

 

Item 1.01 Entry into a Material Definitive Agreement

 

Item 2.01 Completion of Acquisition or Disposition of Assets

 

On December 26, 2016, Wuxi Huayang Dyeing Machinery Co., Ltd. (“Dyeing”), a variable interest entity whose financial statements are included in the Company’s consolidated financial statements, and Xue Miao, an unrelated individual, formed Wuxi Shengxin New Energy Engineering Co., Ltd. (“Shengxin”), a limited liability company organized under the laws of the PRC, pursuant to an agreement dated December 23, 2016.  The agreement sets forth general terms relating to the proposed business, but does not set forth specific funding obligations for either party. Dyeing is the entity that operates the Company’s dyeing and finishing equipment segment.

 

Dyeing has agreed to invest RMB 60,000,000 (approximately $8,640,000) and has already invested RMB 59.8 million (approximately $8,611,000), for which it received a 30% interest, and Mr. Xue has a commitment to invest RMB 140,000,000 (approximately $20.2 million), of which Mr. Xue has contributed RMB 20,000,000 (approximately $2.9 million), for which Mr. Xue received a 70% interest in Shengxin. Shengxin’s registered capital is RMB 200 million (approximately $28.8 million). Mr. Xue has advised Dyeing that he anticipates that he will fund the balance of his RMB 140,000,000 (approximately $20.2 million) commitment during the first half of 2017. If Mr. Xue does not make this payment by the end of 2017, Dyeing will have the right to amend the contract, and both parties will adjust each sides’ equity interest to reflect the amount of capital each side has actually invested.

 

Shengxin intends to develop, construct and maintain photovoltaic power generation projects, known as solar farms, in China, mainly in the provinces of GuiZhou and YunNan. At December 31, 2016, Shengxin had not yet commenced operations.

 

The solar farm industry is China is subject to significant government regulation. In order to construct and operate solar farms in China, it is necessary to obtain a permit for a specific location, to obtain leasehold rights to a significant amount of contiguous land parcels in provinces where there is significant sunlight for most of the year to support a solar farm and to have an agreement to connect with the local grid. The development of solar farms requires significant funding, which, if financing is not available, would have to be provided by Dyeing and Mr. Xue. There are no agreements relating to the funding obligations of either Dyeing or Mr. Xue with respect to any specific project. Shengxin anticipates that to the extent that it obtains permits for solar farms, it will form a new subsidiary for the sole purpose of obtaining the permit for a specific location and constructing the solar farm at that location. The nature of the parties’ respective investments and the respective equity interest in any solar farm project will be determined on a case-by-case basis. To the extent that Mr. Xue develops the project he may receive an equity interest in the project greater than the percentage of his equity investment, with the specific amount being subject to mutual agreement of the parties.

 

The Company’s investment in Shengxin is subject to a high degree of risk. The Company cannot give any assurance that Shengxin will be able to obtain any permits, raise any required funding, develop and operate or sell any solar farms or operate profitably or that Dyeing will have the resources to provide any funds that may be required in order to fund any solar farm projects for which Shengxin may obtain permits. There may be a significant delay between the time funds are advanced for any project and the realization of revenue or cash flow from any project.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

  99.1 English translation of cooperative development agreement for solar PV farms December 23, 2016 between Wuxi Huayang Dyeing & Finishing Machinery Co., Ltd. and Xue Miao.

 

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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.

 

Date: April 6, 2017 Cleantech Solutions International, Inc.
     
  By: /s/ Jianhua Wu
    Jianhua Wu
    Chief Executive Officer

 

 

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Exhibit 99.1

 

Cooperative development agreement for Solar PV farms

 

Party A: Xue Miao

 

Party B: Wuxi Huayang Dyeing & Finishing Machinery Co., Ltd.

 

For the full development and utilization of solar energy resources in the western provinces of Chinese, and to promote the rapid development of the local economy and new energy industry, Xue Miao (hereinafter referred to as Party A) hereby agrees to utilize his resources in the region, to together develop and construct solar photovoltaic power generation projects with Wuxi Huayang dyeing and Finishing Machinery Co. Ltd (hereinafter referred to as Party B). Party A and Party B in accordance with the principle of mutual benefit and common development, on the basis of voluntary, equality and coordination, reached the following agreement:

 

1, Main content:

 

(a) investment subject: the two sides set up a new company, tentatively called Wuxi ShengXin New Energy Engineering Co. Ltd. (hereinafter referred to as “the company”)

 

(b) the content of the construction of the project: to develop and build various solar photovoltaic grid connected power stations with a total capacity of 100-150 MWs in Guizhou, Yunnan and other provinces in China, the final installation capacity and the final construction addresses are to be determined.

 

(c) total projected investment for the project: 600 – 1000 million yuan. (self funding part if currently expected to be 200 million yuan)

 

(d) construction period: all projects are expected to be completed within 2 years and connected to the grid.

 

(e) procurement of equipment and components: joint consultation by both parties and the implementation of a bidding system to choose the best supplier. Party B will have the priority to provide components and equipment for the projects assuming under the same conditions as the other vendors (such as: solar racking and mounting systems, etc.)

 

 

 

 

2, Both sides’ responsibilities and obligations:

 

(a) Party A's responsibilities and obligations:

 

1. Party A shall be responsible for obtaining all the necessary items for the local government, and adopting the method of combination of levy and lease to ensure that the land is legal and in conformity with the relevant policies of the state land, forestry, etc..

 

2. Party A is responsible for assisting in obtaining the project construction land site selection approval, application of land use permits, construction land planning permits, construction permits and any other related administrative approval procedures, Party A guarantees Party B of the project land overall compliance.

 

3. Party A shall keep confidential the relevant documents, materials and relevant trade secrets submitted by both parties.

 

4. Party A is responsible for the connection of water, electricity, and road access for the project sites.

 

5. Party A shall be responsible for obtaining the relevant local meteorological, geological and topographic maps of the project.

 

6. Party A commits to assist in processing the approvals required for the early stages of the projects, and will actively assist the company in obtaining loan financing and governmental subsidies.

 

7. Party A is responsible for investing its corresponding portion of capital in the form of cash. If Party A is to take major credit for the successful development of a project, then Party B agrees that Party A shall reduce its capital contribution requirements and still obtain the same proportion of shares. The specific amount is to be determined by mutual agreement and both parties will sign separate written agreements.

 

8. If Party A cannot fully complete its promised investment before the end of 2017 in cash, then Party B will have the right to amend the contract, and both parties will adjust each sides’ equity interest to reflect the amount of capital each side has actually invested.

 

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(b) Party B's responsibilities and obligations:

 

1. Party B is responsible for investing its corresponding portion of capital in the form of cash, and during the project construction period, will have the priority to supply components and equipment for the projects assuming under the same conditions as the other vendors (such as: solar racking and mounting systems, etc.)

 

2. Party B agrees to cooperate fully with Party A to complete all project application and procedures.

 

3, Both sides agreed:

 

a. due to natural disasters (including fire, flood, earthquake, storm, hurricanes or other natural disasters), war, aggression, foreign fighters, terrorist acts, or other military occupation behavior, political confiscation, nationalization, government sanctions or embargoes and other force majeure factors, resulting in the agreement on terms not perform, after consultation with the parties, the automatic termination of this agreement.

 

b. after the signing of the agreement, the two sides will set up a joint working group to carry out preliminary work.

 

c. in case of dispute, the parties shall settle the dispute through dispute resolution, and if that fails, the dispute shall be submitted to the people's Court of the city/location where the defendant is located at.

 

4, Other matters:

 

1. this agreement is made in 6 copies, each party holds 3 copies.

 

2. This Agreement shall come into force upon signature and seal by Party A and Party B.

 

Party A:

 

Signature

 

/s/ Xue Miao                               

 

Party B:

 

Seal

 

Wuxi Huayang dyeing and Finishing Machinery Co. Ltd.

 

Signing time: December 23, 2016

 

Venue: Wuxi

 

 

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