SEC Company Response from Smart Powerr Corp. (CREG) (CIK 0000721693) (CREG) — Apr 8, 2013
Smart Powerr Corp. (CREG) (CIK 0000721693)
Date: April 8, 2013 · CIK: 0000721693 · Accession: 0001144204-13-020543
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-34625
Referenced dates: March 20, 2013
Letter
Via EDGAR United States Securities and Exchange Commission Division of Corporation Finance Tony Watson Re: China Recycling Energy Corporation Form 10-K for Fiscal Year Ended December 31, 2011 File No. 001-34625
Dear Mr. Thompson:
On behalf of our client, China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we” or “our”), and pursuant to our phone conference on March 14, 2013, this firm is filing a final response to the SEC Comment Letters, dated December 14, 2012, January 23, 2013, February 7, 2013, March 4, 2013, March 20, 2013 and March 28, 2013, in connection with complying with the issues and outstanding disclosure items set forth therein. 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 March 28, 2013 comment letter followed by our response.
Upon learning from you that the SEC has no further comment, the Company will promptly file Amendment No. 1 to the Company’s Form 10-K for fiscal year ended December 31, 2011 with the SEC (as attached to the Company’s Response Letter, filed February 15, 2013).
Form 10-K for Fiscal Year Ended December 31, 2011
Item 8. Financial Statements and Supplementary Data, page
Note 17: Shareholders’ Equity, page 78
Comment 1. We reviewed your response to the comment in our letter dated March 20, 2013. Please tell us why your initial measurement and subsequent measurements of the obligation complies with the measurement guidance in ASC 480-10-30 and ASC 480-10-35.
United States Securities and Exchange Commission
April 8, 2013
Page 2
Response:
Our initial measurement and subsequent measurements of the obligation complies with the measurement guidance in ASC 480-10-30-7 and ASC 480-10-35-5 as follows:
ASC 480-10-30-7: All Other Financial Instruments 30-7
This measurement guidance states that all other financial instruments recognized under the guidance in Section 480-10-25 shall be measured initially at fair value.
The obligation was incurred on June 29, 2010 and the Company recognized the fair value of the obligation, which was $11.7 Million (RMB 80 million/6.82), to be settled in shares worth $11.7 million. The number of shares could be less or more subject to a maximum of 2.9 million shares. The obligation was fixed at $11.7 million, which was the fair value of the obligation.
ASC 480-10-35-5: All Other Financial Instruments 35-5
This measurement guidance states that all other financial instruments recognized under the guidance in Section 480-10-25 shall be measured subsequently at fair value with changes in fair value recognized in earnings, unless either this subtopic or another subtopic specifies another measurement attribute.
The obligation was fixed at $11.7 million. The Company recorded the shares at fair value when issued on November 22, 2011. The Company did not measure the changes in fair value during the intervening period (June 2010 to November 2011), as the obligation under FAS 5 was a contingent gain throughout this period and as such, according to FAS 5 would only be recorded when the contingency was resolved, which, in fact, occurred when the holder asked for the shares issued.
I will confirm with you shortly whether our response is satisfactory, and, if so, we will file the Form 10-K/A attached to our previous responses. If, before that time, 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. Jay Shah at (404) 527-4593.
Very truly yours,
/s/ Thomas Wardell, Esq.
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CORRESP
1
filename1.htm
Albany
Atlanta
Brussels
Denver
Los Angeles
Miami
New York
mckennalong.com
Northern
Virginia
Orange
County
Rancho
Santa Fe
San
Diego
San
Francisco
Seoul
Washington,
DC
THOMAS WARDELL
404.527.4990
EMAIL ADDRESS
twardell@mckennalong.com
April 8, 2013
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
Tony Watson
Re: China Recycling Energy Corporation
Form 10-K for Fiscal Year Ended December 31, 2011
File No. 001-34625
Dear Mr. Thompson:
On behalf of our
client, China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we”
or “our”), and pursuant to our phone conference on March 14, 2013, this firm is filing a final response to the SEC
Comment Letters, dated December 14, 2012, January 23, 2013, February 7, 2013, March 4, 2013, March 20, 2013 and March 28, 2013,
in connection with complying with the issues and outstanding disclosure items set forth therein. 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 March 28, 2013 comment letter followed by our response.
Upon learning from
you that the SEC has no further comment, the Company will promptly file Amendment No. 1 to the Company’s
Form 10-K for fiscal year ended December 31, 2011 with the SEC (as attached to the Company’s Response Letter, filed February
15, 2013).
Form 10-K for Fiscal Year Ended December 31, 2011
Item 8. Financial Statements and Supplementary Data, page
50
Note 17: Shareholders’ Equity, page 78
Comment 1. We reviewed your response to the comment in our letter
dated March 20, 2013. Please tell us why your initial measurement and subsequent measurements of the obligation complies with
the measurement guidance in ASC 480-10-30 and ASC 480-10-35.
United States Securities and Exchange Commission
April 8, 2013
Page 2
Response:
Our initial measurement
and subsequent measurements of the obligation complies with the measurement guidance in ASC 480-10-30-7 and ASC 480-10-35-5 as
follows:
ASC 480-10-30-7: All Other Financial
Instruments 30-7
This measurement guidance
states that all other financial instruments recognized
under the guidance in Section 480-10-25 shall be measured
initially at fair value.
The obligation was
incurred on June 29, 2010 and the Company recognized the fair value of the obligation, which was $11.7 Million (RMB 80 million/6.82),
to be settled in shares worth $11.7 million. The number of shares could be less or more subject to a maximum of 2.9 million shares.
The obligation was fixed at $11.7 million, which was the fair value of the obligation.
ASC 480-10-35-5: All Other Financial
Instruments 35-5
This measurement guidance
states that all other financial instruments recognized under the guidance in Section 480-10-25 shall
be measured subsequently at fair value with changes
in fair value recognized in earnings, unless either this subtopic or another subtopic specifies another measurement attribute.
The obligation was
fixed at $11.7 million. The Company recorded the shares at fair value when issued on November 22, 2011. The Company did not measure
the changes in fair value during the intervening period (June 2010 to November 2011), as the obligation under FAS 5 was a contingent
gain throughout this period and as such, according to FAS 5 would only be recorded when the contingency was resolved, which, in
fact, occurred when the holder asked for the shares issued.
I will confirm with
you shortly whether our response is satisfactory, and, if so, we will file the Form 10-K/A attached to our previous responses.
If, before that time, 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. Jay Shah at (404) 527-4593.
Very truly yours,
/s/ Thomas Wardell, Esq.
Thomas Wardell, Esq.
cc:
David Chong, CFO, China Recycling Energy Corp.
Jeffrey Li, Esq.
Jay V. Shah, Esq.