SEC Company Response from Smart Powerr Corp. (CREG) (CIK 0000721693) (CREG) — Mar 9, 2011
Smart Powerr Corp. (CREG) (CIK 0000721693)
Date: March 9, 2011 · CIK: 0000721693 · Accession: 0001144204-11-013641
AI Filing Summary & Sentiment
Reasoning
Referenced dates: February 9, 2011
Letter
Via EDGAR United States Securities and Exchange Commission Division of Corporation Finance China Recycling Energy Corporation Form 10-K for the Fiscal Year Ended December 31, 2009 Filed March 16, 2010 File No. 1-34625
Dear Mr. Thompson:
This firm is counsel to the above-referenced company, China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we” or “our”) and is filing this response to your comment letter, dated February 28, 2011, with respect to the above-referenced filings on CREG’s behalf. For convenience of reference, we have included, in this response letter, the same caption and paragraph number, as well as the text of the comment, set forth in your comment letter followed by our response.
Form 10-K for Fiscal Year Ended December 31, 2009
Item 8. Financial Statements and Supplementary Data, page 26
Consolidated Statements of Cash Flows, page 30
1.
We reviewed the revised consolidated statements of cash flows provided in response to comment one in our letter dated February 9, 2011. Please provide us with a reconciliation of the changes in the “Investment in sales type leases, net,” and “Construction in progress” balance sheet line items to the “Changes in gross sales type leases receivables,” Collection of principal on sales type leases,” and “Construction in progress” reported in the statement for each year presented.
Response:
In accordance with your comment letter, dated February 28, 2011, a reconciliation of the requested changes, for fiscal years ended 2009 and 2010, is attached to and submitted with this response.
United States Securities and Exchange Commission
March 9, 2011
Page 2
Should you have any further comments or require any further information, or if any questions should arise in connection with this submission, please call me at (404) 527-4990 or Mr. James Thornton at (404) 527-8118.
Very truly yours,
/s/ Thomas Wardell
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filename1.htm
Unassociated Document
Albany
Atlanta
Brussels
Denver
Los Angeles
THOMAS WARDELL
(404) 527-4990
www.mckennalong.com
New York
Philadelphia
San Diego
San Francisco
Washington, DC
EMAIL ADDRESS
twardell@mckennalong.com
March 9, 2011
Via EDGAR
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street, NE
Washington, D.C. 20549-0405
Attn:
William H. Thompson, Accounting Branch Chief
Re:
China Recycling Energy Corporation
Form 10-K for the Fiscal Year Ended December 31, 2009
Filed March 16, 2010
File No. 1-34625
Dear Mr. Thompson:
This firm is counsel to the above-referenced company, China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we” or “our”) and is filing this response to your comment letter, dated February 28, 2011, with respect to the above-referenced filings on CREG’s behalf. For convenience of reference, we have included, in this response letter, the same caption and paragraph number, as well as the text of the comment, set forth in your comment letter followed by our response.
Form 10-K for Fiscal Year Ended December 31, 2009
Item 8. Financial Statements and Supplementary Data, page 26
Consolidated Statements of Cash Flows, page 30
1.
We reviewed the revised consolidated statements of cash flows provided in response to comment one in our letter dated February 9, 2011. Please provide us with a reconciliation of the changes in the “Investment in sales type leases, net,” and “Construction in progress” balance sheet line items to the “Changes in gross sales type leases receivables,” Collection of principal on sales type leases,” and “Construction in progress” reported in the statement for each year presented.
Response:
In accordance with your comment letter, dated February 28, 2011, a reconciliation of the requested changes, for fiscal years ended 2009 and 2010, is attached to and submitted with this response.
United States Securities and Exchange Commission
March 9, 2011
Page 2
Should you have any further comments or require any further information, or if any questions should arise in connection with this submission, please call me at (404) 527-4990 or Mr. James Thornton at (404) 527-8118.
Very truly yours,
/s/ Thomas Wardell
Thomas Wardell
cc:
David Chong, CFO, China Recycling Energy Corp.
Jeffrey Li, Esq.
James L. Thornton, Esq.
CHINA RECYCLING ENERGY CORPORATION AND SUBSIDIARIES
RECONCILATION OF CASH FLOW BASED ON BALANCE SHEET
balance sheet date rate
balance sheet date rate
yearly average rate
Exchange rate
6.8282
6.6227
6.7695
2010 vs 2009
NON-CASH
Change
2009
2009
2010
2010
RMB
USD
RMB
USD
difference of the
amount @
12/31/2009 and 12/31/2010
RMB
RMB
Changes in gross sales type leases receivables
Collection of principal on sales type leases
RMB
a
b
c
b+c-a
Investment in sales type leases, net - current
¥
30,019,464
$
4,396,395
¥
50,495,683
$
7,624,637
Investment in sales type leases, net - noncurrent
¥
328,762,385
$
48,147,738
¥
778,737,670
$
117,586,131
Total investment in sales type lease, net
¥
358,781,849
$
52,544,133
¥
829,233,353
$
125,210,768
¥
-470,451,504
¥
80,000,000
¥
-422,589,658
¥
32,138,154
¥
-470,451,504
$
(62,425,535
)
$
4,747,493
Construction in progress
¥
238,023,165
$
34,858,845
¥
168,070,768
$
25,377,983
¥
69,952,397
$
10,333,466
* Non-Cash ￥80,000,000 is stock to be issued for purchase of equipment for biomass BMPG.
Exchange rate
6.8346
6.8282
6.831
2009 vs 2008
difference of the
amount @
12/31/2009 and 12/31/2010
RMB
NON-CASH
Change
2008
2008
2009
2009
RMB
Changes in gross sales type leases receivables
Collection of principal on sales type leases
RMB
USD
RMB
USD
a
b
c
b+c-a
Investment in sales type leases, net - current
¥
13,468,201
$
1,970,591
¥
30,019,464
$
4,396,395
Investment in sales type leases, net - noncurrent
¥
101,410,968
$
14,837,879
¥
328,762,385
$
48,147,738
Total investment in sales type lease, net
¥
114,879,169
$
16,808,470
¥
358,781,849
$
52,544,133
¥
-243,902,680
¥
90,000,000
¥
-171,537,374
¥
17,634,694
¥
-243,902,680
$
(25,111,382
)
$
2,581,568
Construction in progress
¥
25,500,000
$
3,731,016
¥
238,023,165
$
34,858,845
(212,523,165
)
$
(31,111,575
)
* Non-Cash ￥90,000,000 is inventory and advance to suppliers for the equipment which was bought in prior years (in 2008), but used in 2009 for Shengmu project.
CHINA RECYCLING ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31,
2010
2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Income including noncontrolling interest
$
17,826,069
$
10,061,756
Adjustments to reconcile income including noncontrolling
interest to net cash used in operating activities:
Changes in sales type leases receivables
(62,425,535
)
(25,111,381
)
Depreciation and amortization
23,631
35,121
Amortization of discount related to conversion feature of convertible note
1,789,558
-
Stock options and warrants
2,940,985
1,793,228
Stock compensation expense
602,000
-
Accrued interest on convertible notes
246,805
184,530
Changes in deferred tax
4,516,906
2,085,709
(Increase) decrease in current assets:
Interest receivable on sales type lease
(101,476
)
(355,220
)
Collection of principal on sales type leases
4,747,493
2,581,568
Prepaid expenses
31,229
3,415,076
Other receivables
1,153,682
(1,421,503
)
Increase (decrease) in current liabilities:
Accounts payable
2,622,021
2,394,223
Taxes payable
908,894
(633,648
)
Unearned revenue
-
(658,762
)
Accrued liabilities and other payables
481,783
(745,309
)
Construction in progress
10,333,466
(31,111,575
)
Net cash used in operating activities
(14,302,489
)
(37,486,187
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase investment in subsidiary
-
(16,103
)
Restricted cash
(630,697
)
(1,461,060
)
Acquisition of property & equipment
(81,975
)
(33,498
)
Net cash used in investing activities
(712,672
)
(1,510,661
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Insurance of common stock
430,500
2,000,000
Insurance of convertible notes
7,533,391
3,000,000
Notes payable - bank acceptances
-
1,461,060
Cash contribution from noncontrolling interest
908,279
263,439
Proceeds from loans
15,444,272
25,559,947
Advance from related parties
682,158
556,940
Net cash provided by financing activities
24,998,600
32,841,386
EFFECT OF EXCHANGE RATE CHANGE ON CASH & CASH EQUIVALENTS
(23,132
)
61
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS
9,960,307
(6,155,401
)
CASH & EQUIVALENTS, BEGINNING OF YEAR
1,111,943
7,267,344
CASH & EQUIVALENTS, END OF YEAR
$
11,072,250
$
1,111,943
Supplemental Cash flow data:
Income tax paid
$
1,745,643
$
1,480,698
Interest paid
$
4,758,991
$
358,789