CHINA RECYCLING ENERGY CORPORATION (NASDAQ:CREG) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On March 6, 2020, China Recycling Energy Corporation, a Nevada corporation (the “Company”), entered into an Exchange Agreement (the “Agreement”) with Iliad Research and Trading, L.P., a Utah limited partnership (the “Lender”).
to the Agreement, the Company and the Lender agreed to partition a new Promissory Note in the original principal amount of $145,000 (the “Partitioned Note”) from a Convertible Promissory Note dated January 31, 2019 which was exchanged for a new Promissory Note in the original principal amount of $1,173,480 on April 14, 2019. The Company and the Lender agreed to exchange the Partitioned Note for 483,333 shares of common stock of the Company, and then the amount of the outstanding balance of the Promissory Note will be reduced by an amount equal to the Partitioned Note. The shares of common stock were issued without any restrictions.
The foregoing description of the Exchange Agreement is not complete and is qualified in its entirety by reference to the full text of the Exchange Agreement, a copy of which is attached hereto as Exhibit 10.2.
Section 3 – Securities and Trading Markets
Item. 3.02. Unregistered Sales of Equity Securities.
Reference is made to the disclosure set forth under Item 1.01 above, which disclosure is incorporated herein by reference.
The issuance of the shares of common stock was made to Section 3(a)(9) of the Securities Act of 1933, as amended.
Section 5. Corporate Governance and Management
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On March 5, 2020, Xiaogang Zhu resigned as a member of the Board of Directors of the Company; Mr. Zhu was also the Chairman of the Audit Committee, as well as a member of the Compensation, Nominating and Corporate Governance Committees. Mr. Zhu’s resignation was not due to any disagreements with management of the Company or any of its operations, policies or practices.
On March 6, 2020, Zhongli Liu was appointed as a member of the Board of Directors of the Company. Mr. Liu was also appointed as the Chairman of the Audit Committee and a member of the Compensation, Nominating and Corporate Governance Committees.
Mr. Zhongli Liu has more than 20 years of finance experience at enterprise management, company listing, corporate governance, mergers and acquisitions, capital operations, equity investment. He served as the inspector to be in charge of securities inspection at Shaanxi Supervision Bureau of China Securities Regulatory Commission from 1999 to September 2019. He worked as the head of department of economics and management, professor, chief of scientific research at Xi’an Finance And Economics University from 1984 to 1998. Since July 2017, he served as the independent director of the Board at China Haiseng Fresh Fruit Juice Co., Ltd. (00359.HK). Mr. Liu studied industrial economy management at Xi’an Jiaotong University from September 1978 to July 1982 and was awarded his his bachelor’s degree of finance in 1982. He studied planning economics at Renmin University of China from 1982 to 1984 and was awarded his master’s degree of finance in 1984.
Based on its investigation, the Board determined that Mr. Liu is “independent” under the independence requirements of The NASDAQ Stock Market LLC and Rule 10A-3 under the Securities Exchange Act of 1934, and he does not have any relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Based on its review, the Board also determined that Mr. Liu qualifies as a “Non-Employee Director” as defined by Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and an “outside director” under Section 162(m) of the Internal Revenue Code and related regulations. Further, the Board has determined that Mr. Liu is an "audit committee financial expert" as defined by applicable SEC rules and has the requisite financial sophistication as defined under the applicable Nasdaq rules and regulations.
In connection with the appointment, the Company executed a Director Agreement with Mr. Liu to which the Company will compensate Mr. Liu for his services as a director in the amount of 50,000 RMB per month quarter. The agreement also contains customary confidentiality and non-compete provisions. The foregoing description of the Director Agreement is not complete and is qualified in its entirety by reference to the full text of the Director Agreement, a copy of which is attached hereto as Exhibit 10.29.
Other than as described above, there are no arrangements or understandings between Mr. Liu and any other person to which he was appointed as a director of the Company. In addition, there are no family relationships between Mr. Liu and any of the Company’s other officers or directors. Further, there are no transactions since the beginning of our last fiscal year, or any currently proposed transaction, in which the Company is a participant, the amount involved exceeds $120,000, and in which Mr. Liu had, or will have, a direct or indirect material interest.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| 10.29 | Director Agreement dated March 6, 2020 by and between China Recycling Energy Corporation and Zhongli Liu |
CHINA RECYCLING ENERGY CORP Exhibit
EX-10.2 2 ea119519ex10-2_china.htm EXCHANGE AGREEMENT DATED AS OF MARCH 6,…
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About CHINA RECYCLING ENERGY CORPORATION (NASDAQ:CREG)
China Recycling Energy Corporation is engaged in the recycling energy business, providing energy savings and recycling products and services. The Company develops waste energy recycling projects for industrial applications in China. It offers waste energy recycling systems to companies for use in iron and steel, nonferrous metal, cement, coal and petrochemical plants. Its waste pressure-to-energy solution consists of the blast furnace top gas recovery turbine unit (TRT), a system that utilizes high pressure gas emitted from the blast furnace top to drive turbine units and generate electricity. Its waste heat-to-energy solution consists of heat power generation projects for applications in cement, steel, coking coal and nonferrous metal industries, which collect the residual heat from various manufacturing processes, such as the entrance and exit ends of the cement rotary kilns, to generate electricity.