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 21, 2018

 

CHINA RECYCLING ENERGY CORPORATION
(Exact name of registrant as specified in its charter)

 

Nevada   000-12536   90-0093373
(State or other jurisdiction of
incorporation) 		  (Commission File Number)   (IRS Employer
Identification No.)

 

4/F, Tower C

Rong Cheng Yun Gu Building

Keji 3 rd  Road, Yanta District

Xi’an City, Shaanxi Province

China 710075
(Address of principal executive offices, including zip code)

 

(86-29) 8765-1097
(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:

 

☐ 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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 

 

 

 

Item 1.01 Entry into a Material Definitive Agreement

 

On November 21, 2018, Shanghai TCH Energy Technology Co., Ltd. (“Shanghai TCH”), a wholly-owned subsidiary of China Recycling Energy Corporation, a Nevada corporation (the “Company”), and Mr. Jihua Wang entered into an Agreement of Supplementary and Amendment (the “Amendment Agreement”) to that Equity Purchase Agreement, dated September 30, 2018, by and between Shanghai TCH and Mr. Jihua Wang (the “Original Agreement”). The Original Agreement was disclosed in, and a copy of the Original Agreement was filed with, the Company’s Current Report on Form 8-K filed on October 2, 2018.

 

Pursuant to the Amendment Agreement, Shanghai TCH agreed to (a) purchase an 18% equity interest in Xi’an Xinhuan Energy Co., Ltd. (“Xinhuan”) instead of the 20% equity interest contemplated by the Original Agreement; (b) pay an aggregate of RMB 288 million for such equity interests (the “Purchase Price) instead of the RMB 320 million contemplated by the Original Agreement; (c) pay RMB 228 million of the Purchase Price in shares of the Company’s capital stock (the “Share Payment”) instead of the RMB 260 million contemplated by the Original Agreement; (d) complete the Share Payment using a per share value of $1.70 for both common and preferred shares instead of the $1.90 contemplated by the Original Agreement; and (e) issue to Mr. Wang 16,837,340 preferred shares as a portion of the Share Payment instead of the 17,376,950 preferred shares contemplated by the Original Agreement.

 

The description contained herein of the terms of the Amendment Agreement does not purport to be complete and is qualified in its entirety by reference to the Amendment Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference herein.

 

  1  

 

  

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit No.   Exhibit Title or Description
     
10.1   Agreement of Supplementary and Amendment by and between Shanghai TCH Energy Technology Co., Ltd. and Jinhua Wang, dated November 21, 2018.

  

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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.

 

  China Recycling Energy Corporation
   
Date: November 26, 2018 /s/ Guohua Ku
  Guohua Ku,
Chairman & Chief Executive Officer

  

  3  

Exhibit 10.1

 

Shanghai TCH Energy Technology Co., Ltd. and Jihua Wang

Agreement of Supplementary and Amendment to the Equity Purchase Agreement

 

This Agreement of Supplementary and Amendment is signed on November 21, 2018 in Xi’an by two parties below.

 

Party A: Shanghai TCH Energy Technology Co., Ltd. (“Party A”)

 

Legal Representative: Geyun Wang

 

Address: No. 88 Century Avenue, Pudong New District, Shanghai

 

Party B: Jihua Wang

 

Address: Yanta District, Xi’an

 

All terms in this Agreement of Supplementary and Amendment, unless otherwise specified, are defined in the Equity Purchase Agreement entered by the Party A and Party B on September 30, 2018 (hereinafter referred to as the “Original Agreement”).

 

Whereas:

 

(1) The parties signed an Equity Purchase Agreement on September 30, 2018.

 

(2) The parties need to make supplementary agreements on matters not specified in the Equity Purchase Agreement.

 

(3) The parties have negotiated and reached new agreements on the transferred asset, transaction price and payment method in consideration of the issues encountered by both parties in the process of implementing the Equity Purchase Agreement.

 

According to the “Company Law of the People’s Republic of China”, the “Contract Law of the People’s Republic of China”, the “Regulations of Administration Measures for Material Assets Reorganization of Non-listed Public Company”, based on the principle of equality and voluntariness, after friendly negotiation, the two parties agree to revise certain parts of the Original Agreement and have reached the following supplementary amendment agreements:

 

Article I Transferred Asset, Transaction Price and Payment Method

 

1. The Transferred Asset of the transaction in Article 2.1 of the Original Agreement shall be revised from “20% equity ownership of Target Company owned by Party B” to “18% equity ownership of Target Company owned by Party B”;

 

 

 

 

2. The Transaction Price of Transferred Asset in Article 2.2 of the Original Agreement shall be revised from “RMB 320 million” to “RMB 288 million”.

 

3. The shares payment in Article 2.3.1 of the Original Agreement shall be revised from “RMB 260 million” to “RMB 228 million”; The issuance price for both common stock and preferred shares of CREG shall be revised from “$1.90 per share” to “$1.70 per share”; The number of preferred shares to be issued to Party B shall be revised from “17,376,950 shares” to “16,837,340 shares”.

 

Article II If any activities of the Target Company before the equity transfer result in the administrative actions, judicial proceedings or penalties which cause the Target Company unable to conduct its normal operation after the transfer of the equity, Party B shall reimburse all the Transaction Price to Party A.

 

Article III Party B shall assist Party A to complete the equity transfer and registration change of Target Company. If the Original Agreement or this Agreement of Supplementary and Amendment are invalid due to the reasons of Party B or Target Company, Party B shall assume all the responsibilities and compensate Party A for its losses.

 

Article IV Party B warrants that its equity of Target Company does not have any defect of rights. If there is any loss caused to Party A or the Target Company due to the defect of the Transferred Asset of Party B, Party B shall be liable for compensation.

 

Article V If there is any inconsistency between the Original Agreement and this Agreement of Supplementary and Amendment, this Agreement shall prevail.

 

Article VI This Agreement of Supplementary and Amendment shall become effective after being signed and sealed by both parties. The applicable law and dispute resolution of this Agreement shall be the same as the Original Agreement.

 

Article VII When this Agreement becomes effective, it shall become an integral part of the Original Agreement and shall have the same legal effect as the Original Agreement. . Except for the contents that are expressly revised in this Agreement, all terms of the Original Agreement remain in full force and effect.

 

Article VIII This Agreement is made in fourteen counterparts, each party shall hold two counterparts, and the remaining copies shall be reserved for the purpose of reporting to the approval and registration authorities related to this transaction, each of which shall have the same legal effect.

 

Party A: Shanghai TCH Energy Technology Co., Ltd.

 

Legal Representative/Authorized Representative:  /s/ Geyun Wang  

 

Party B: Jihua Wang

 

Authorized Representative:  /s/ Jihua Wang