SEC Comment Letter for Smart Powerr Corp. (CREG) (CIK 0000721693) (CREG) — Aug 14, 2013
Smart Powerr Corp. (CREG) (CIK 0000721693)
Date: Aug. 14, 2013 · CIK: 0000721693 · Accession: 0000000000-13-044601
AI Filing Summary & Sentiment
Reasoning
Referenced dates: July 25, 2013
Letter
August 14 , 2013 Via E-mail David Chong Chief Financial Officer China Recycling Energy Corporation 12/F, Tower A Chang An International Building No. 88 Nan Guan Zheng Jie Xi’an City, Shaanxi Province China
Re: China Recycling Energy Corporation Amendment No. 1 to Form 10-K for Fiscal Year Ended December 31, 2011 Filed July 18, 2013 Response dated August 5, 2013 File No. 1 -34625
Dear Mr. Chong :
We have reviewed your response dated April 8, 2013 and have the following additional comment . In our comment , we may ask you to provide us with information so we may better understand your disclosure.
Please respond to this letter within ten business days by amending your fil ing, by providing the requested information, or by advising us when you will provide the requested response. If you do not believe our comment applies to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in you r response.
After reviewing any amendment to your filing and the information you provide in response to this comment , we may have additional comments
Amendment No. 1 to Form 10 -K for Fiscal Y ear Ended December 31, 20 11
Item 8. Financial Statements and Supplementary Data, page 51
15. Convertible Notes Payable and Revolving Financing Agreement, page 71
Convertible Note Agreement with China Cinda , page 73
1. We reviewed your response to the comment in our letter dated July 25, 2013. We understand that the conversion feature of the notes was eliminated at the time of
David Chong China Recycling Energy Corporation August 14 , 2013 Page 2
execution of supplemental agreement, the elimination of the conversion feature was recognized during the quarter ended March 31, 2012 and you did not revise your financial statements for the year ended December 31, 2011 since the correcting adjustment was not material to your financial position and results of operations for that year. However, it appears that the impact of adjustment to the fair value of the conversion feature liability had a material impact on your results of operations for the year ended December 31, 2012. As such, please provide us with your materiality analysis for the year en ded December 31, 2012 and summarize in detail why the adjustment to the fair value of the conversion feature liability should not be recognized during the year in which the supplemental agreement was executed in light of the results of your materiality ana lysis.
You may contact Tony Watson, Accountant, at (202) 551 -3318 if you have questions regarding our comments. Please contact me at (202) 551 -3344 with any other questions.
Sincerely,
/s/ William H. Thompson
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August 14 , 2013 Via E-mail David Chong Chief Financial Officer China Recycling Energy Corporation 12/F, Tower A Chang An International Building No. 88 Nan Guan Zheng Jie Xi’an City, Shaanxi Province China Re: China Recycling Energy Corporation Amendment No. 1 to Form 10-K for Fiscal Year Ended December 31, 2011 Filed July 18, 2013 Response dated August 5, 2013 File No. 1 -34625 Dear Mr. Chong : We have reviewed your response dated April 8, 2013 and have the following additional comment . In our comment , we may ask you to provide us with information so we may better understand your disclosure. Please respond to this letter within ten business days by amending your fil ing, by providing the requested information, or by advising us when you will provide the requested response. If you do not believe our comment applies to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in you r response. After reviewing any amendment to your filing and the information you provide in response to this comment , we may have additional comments Amendment No. 1 to Form 10 -K for Fiscal Y ear Ended December 31, 20 11 Item 8. Financial Statements and Supplementary Data, page 51 15. Convertible Notes Payable and Revolving Financing Agreement, page 71 Convertible Note Agreement with China Cinda , page 73 1. We reviewed your response to the comment in our letter dated July 25, 2013. We understand that the conversion feature of the notes was eliminated at the time of David Chong China Recycling Energy Corporation August 14 , 2013 Page 2 execution of supplemental agreement, the elimination of the conversion feature was recognized during the quarter ended March 31, 2012 and you did not revise your financial statements for the year ended December 31, 2011 since the correcting adjustment was not material to your financial position and results of operations for that year. However, it appears that the impact of adjustment to the fair value of the conversion feature liability had a material impact on your results of operations for the year ended December 31, 2012. As such, please provide us with your materiality analysis for the year en ded December 31, 2012 and summarize in detail why the adjustment to the fair value of the conversion feature liability should not be recognized during the year in which the supplemental agreement was executed in light of the results of your materiality ana lysis. You may contact Tony Watson, Accountant, at (202) 551 -3318 if you have questions regarding our comments. Please contact me at (202) 551 -3344 with any other questions. Sincerely, /s/ William H. Thompson William H. Thompson Accounting Branch Chief