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):
September 29, 2019
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 3rd 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. ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange
on which registered |
||
| Common Stock, par value $0.001 per share | CREG | Nasdaq Stock Market |
Item 1.01 Entry into a Material Definitive Agreement
On September 29, 2019, Xi’an TCH Energy Technology Co., Ltd. (“Xi’an TCH”), a wholly owned subsidiary of China Recycling Energy Corporation, a Nevada corporation (the “Company”), entered into a Termination Agreement of the Lease Agreement of Biomass Power Generation Project (the “Termination Agreement”) with Pucheng Xin Heng Yuan Biomass Power Generation Co., Ltd., a Chinese company (the “Xin Heng Yuan”).
Xin Heng Yuan has failed to pay fees it owed to Xi’an TCH for leasing two biomass power generation systems from Xi’an TCH with total capacity of 24,000 kw (the “Project”) due to its long suspension of production resulting from the significant reduction of raw material supplies for its biomass power generation operation in Pucheng County, which has caused the biomass power generation project no longer being suitable. Pursuant to the Termination Agreement, the parties agreed: (i) Xin Heng Yuan shall pay off outstanding lease fees of RMB 97.6 million (approximately $14 million) owed as of December 31, 2018 to Xi’an TCH before January 15, 2020; (ii) Xi’an TCH will waive the lease fees owed after January 1, 2019; (iii) Xi’an TCH will not return RMB 3.8 million (approximately $542,857) in cash deposits paid by Xin Heng Yuan; (iv) Xi’an TCH will transfer the Project to Xin Heng Yuan at no additional cost after receiving RMB 97.6 million from Xin Heng Yuan, and the original lease agreement between the parties will be formally terminated; and (v) if Xin Heng Yuan fails to pay off RMB 97.6 million to Xi’an TCH before January 15, 2020, Xi’an TCH will still hold ownership of the Project and the original lease agreement shall still be valid.
The foregoing description of the Termination Agreement is not complete and is qualified in its entirety by reference to the full text of the Termination Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference herein.
Item 1.02 Termination of a Material Definitive Agreement.
See Item 1.01 above, which is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) The following exhibits are filed with this report.
1
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: October 2, 2019 | /s/ Guohua Ku |
|
Guohua Ku,
Chairman & Chief Executive Officer |
2
Exhibit 10.1
Termination Agreement
of Lease Agreement of Biomass Power Generation Project
| Party A: | Xi’an TCH Energy Technology Co., Ltd. |
| Party B: | Pucheng Xin Heng Yuan Biomass Power Generation Co., Ltd. |
Party A and Party B signed two Lease Agreements of Biomass Power Generation Project on June 29, 2010 and September 5, 2013 respectively (“Lease Agreement”). The leased assets are biomass power generation projects of phase I and phase II with total capacity of 2 × 12,000 KW (the “Project”).
Whereas, Party B failed to pay the lease fee to Party A due to its long-term suspension of production resulting from the significant reduction of the raw materials for biomass power generation in Pucheng County. This Project is no longer suitable for the biomass power generation. Through friendly negotiation, the parties enter into below agreement to terminate the Lease Agreement in advance.
As of December 31, 2018, Party B has owed RMB 97.6 million of lease fee to Party A. Party A will waive the lease fee after January 1, 2019. Party B will pay off the RMB 97.6 million to Party A before January 15, 2020. Party A will not return the RMB 3.8 million of cash deposit to Party B.
Party A will transfer the Project to Party B after receives RMB 97.6 million from Party B. The Lease Agreement will formally terminate. If Party B fails to pay off RMB 97.6 to Party A before January 15, 2020, Party A will still hold the ownership of the Project and the Lease Agreement is still valid.
This agreement is made in quadruplicate, with each party holding two copies with the same legal effect.
Party A: (signed and sealed)
Representative: Guohua Ku
Party B: (signed and sealed)
Representative: Xueyi Dong
Date: September 29, 2019.