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China Recycling Energy Corporation Reports 2012 Third Quarter Financial Results

XI'AN, China, Nov. 14, 2012 /PRNewswire-FirstCall/ -- China Recycling Energy Corp. (NASDAQ: CREG; "CREG" or "the Company"), a leading industrial waste-to-energy solution provider in China, today announced its financial results for the 2012 third quarter ended September 30, 2012.

Summary of Financial Results:

(In USD 000,
except for per share data)

Three Months Ended

Sep. 30

Nine Months Ended

Sep. 30


2012

2011

2012

2011

Total Sales (1) + (2)

$476

$18,845

$1,027

$30,774

(1) System Sales

-

18,583

-

29,927

(2) Contingent Rental Income

476

262

1,027

847

Gross Profit

444

4,519

952

7,924


Interest income on sales-type leases

4,587

5,466

 

14,115

 

16,093

Total Operating Income

5,031

9,986

15,067

24,017

Net Income

(1,405)

8,655

1,841

16,913

Basic EPS

(0.03)

0.20

0.04

0.41

Diluted EPS

(0.03)

0.16

0.04

0.33

Adjusted Net Income in non-GAAP (1)

274

7,458

4,240

14,981

Adjusted EPS in Non-GAAP (1) (2)

0.05

0.05

0.09

0.36

(1) CREG provides adjusted net income and earnings per share on a non-GAAP basis that excludes non-cash, share-based compensation expense and non-cash interest expense on the amortization of the beneficial conversion feature for the convertible notes and non-cash deferred income tax expenses, as described below, to enable investors to better assess the Company's operating performance. The non-GAAP measures are described below and reconciled to the corresponding GAAP measure in the section below titled "Non-GAAP Financial Measures";

(2) Non-GAAP diluted weighted average shares outstanding were calculated based on outstanding shares, issued options, and estimated shares under the assumption that they would be converted from our convertible debentures.

Mr. Guohua Ku, Chairman and Chief Executive Officer of China Recycling Energy, discussed quarterly financial results, current projects and the company's growth potential, "As expected, we do not have project completion during the third quarter, hence we do not realize system sales for this quarter. Interest income from our sales-type lease is our other major revenue. During this quarter, we generate stable income and cash flow from our 11 systems. As most of our projects are recognized as sales-type lease, we experience non-linear revenue flows in our financial statement due to the special revenue recognition method for sales-type lease. We need to indicate that this quarterly result does not represent the long-term growth potential of the Company. Currently, we have a large-scale ongoing project and a series of projects with great potentials. We will expand our recycling energy market in 2013 and payback our shareholders with consistent and growing profits."

Mr. Ku continued to  comment: "For ongoing projects, construction of Shanxi Datong Project goes on well. It is estimated that one of the power stations will be completed by the end of 2012. As of September 30, we successfully won two significant government awards; one is Xi'an City High Tech Development Special Financial Reward; the other one is Shaanxi Province Technology Innovation Award and provincial government grant. These awards not only demonstrate the company's leading comprehensive competence in energy recycling high-tech research and development, but also show the government support to energy recycling industry. While developing new projects, we also focus on the development  and improvement of recycling energy technology, apply new technology to our existing projects and develop more projects, which in turn becomes a beneficial cycle for us and our customers. We intend to lead the development of recycling energy technology, bring more social and economic benefits to our customers, provide better results to our investors, and make greater contributions to the environmental protection of the country."

Financial Results for Three Months Ended September 30, 2012

Total sales, including system sales and contingent rental income, for the three months ended September 30, 2012 was $0.48 million while total sales for the comparable period of 2011 was $18.84 million, a decrease of $18.37 million as a result of decrease in sales of systems. Of the total sales, sales of systems for the three months ended September 30, 2012 was $0, as compared to $18.58 million for the comparable period of 2011, a decrease of $18.58 million. For the three months ended September 30, 2012, none of the Company's power stations has been completed and sold, while in the same period of 2011, we completed and sold Shenqiu biomass power generation system. For the three months ended September 30, 2012, the Company received contingent rental income of $0.48 million from usage of electricity in addition to the minimum lease payments, compared to $0.26 million for the comparable period in 2011. For the sales-type lease, sales and cost of sales ("COS") are recorded at the time of leases; interest income from the sales-type leases is our other major revenue source in addition to sales revenue.

COS for the three months ended September 30, 2012 was $0.03 million while our COS for the comparable period of 2011 was $14.33 million, a decrease of $14.29 million. This decrease was mainly due to the fact that, unlike during the fiscal quarter ended September 30, 2011, the Company did not complete and sell a power generation system during the fiscal quarter ended September 30, 2012.

Gross profit was $0.44 million for the three months ended September 30, 2012 compared to $4.52 million for the comparable period of 2011. This decrease was mainly due to a combined gross margin for sales of systems and rental income of 93% and 24% for the comparable period of 2012 and 2011, respectively.

Interest income on sales-type leases for the three months ended September 30, 2012 was $4.59 million, a $0.88 million decrease from $5.47 million for the comparable period of 2011. During the third quarter of 2012, interest income was derived from 11 systems: one TRT system (the other system completed the lease term), two CHPG systems, two systems with Erdos Phase I project and three systems of Erdos Phase II project, the Pucheng biomass power generation system, Shenqiu biomass power generation system and Zhongbao WHPG system. During the third quarter of 2011, the interest income was derived from 12 systems: two TRT systems, two CHPG systems, one WGPG system, two waste heat power generating systems associated with our Erdos Phase I project and three systems of Erdos Phase II project, the Pucheng biomass power generation system and Zhongbao WHPG system.

Operating expenses consisted of selling, general and administrative expenses totaling $3.59 million for the three months ended September 30, 2012 compared to $0.39 million for the comparable period of 2011, an increase of $3.20 million or 820%. The increase was mainly due to the loss resulting from termination of Erdos TCH Phase III power generation projects of $2.97 million.

Our net income (loss) for the three months ended September 30, 2012 was a net loss of $1.41 million compared to net income of $8.66 million for the comparable period of 2011, a decrease of $10.06 million. This decrease in net income was mainly due to decreased total sales, increased operating expenses and increased non-operating expenses as explained above.

For the three months ended September 30, 2012, GAAP diluted EPS was minus $0.03 with approximately 50.83 million shares of common stock outstanding, as compared with $0.16 in the same period of 2011 when the Company had 54.95 million shares of common stock outstanding.

As of September 30, 2012, the Company had cash and cash equivalents of $56.16 million, other current assets were $13.16 million and current liabilities were $33.14 million. Working capital was $36.18 million. The debt-to-equity ratio was 0.68:1 as of September 30, 2012.

Financial Results for Nine Months Ended September 30, 2012

Net sales of systems for the nine months ended September 30, 2012 were $1.03 million while our net sales for the comparable period of 2011 were $30.77 million, a decrease of $29.75 million. The decrease was primarily due to no power stations being completed and only $1.03 million from contingent rental income during the nine months ended September 30, 2012. During the comparable period of 2011, we completed and sold $29.93 million of the 3rd 9MW capacity power station of Erdos Phase II project and 12MW Shenqiu biomass power generation system, and received $0.85 million from contingent rental income. Sales-type lease, sales and COS are recorded at the time of leases; the interest income from the sales-type leases is our other major revenue source in addition to sales revenue. 

COS for the nine months ended September 30, 2012 was $0.07 million while our COS for the comparable period of 2011 was $22.85 million, a decrease of $22.78 million. No projects were completed and sold, unlike during the comparable period of 2011, when the 3rd 9MW capacity power station of Erdos Phase II project and the 12MW Shenqiu biomass power generation system were completed and sold.

Gross profit was $0.95 million for the nine months ended September 30, 2012 compared to $7.92 million for the comparable period of 2011. This decrease was mainly due to a blended gross margin for sales of systems and rental income of 93% and 26% for the comparable period of 2012 and 2011, respectively.

Interest income on sales-type leases for the nine months ended September 30, 2012 was $14.11 million, a $1.98 million decrease from $16.09 million for the comparable period of 2011.  During the nine months ended September 30, 2012, interest income was derived from 11 systems: one TRT system (the other system completed its leasing term), two CHPG systems, two systems with Erdos Phase I project and three systems of Erdos Phase II project, the Pucheng biomass power generation system, Shenqiu biomass power generation system and Zhongbao WHPG system. In comparison, during the nine months ended September 30, 2011, interest income was derived from 12 systems:  two TRT systems, two CHPG systems, one WGPG system, two waste heat power generating systems associated with our Erdos Phase I project and two systems of Erdos Phase II project, the Pucheng biomass power generation system and Zhongbao WHPG system, and the 3rd 9MW waste heat power generating system of Erdos Phase II project.

Operating expenses consisted of selling, general and administrative expenses totaling $5.18 million for the nine months ended September 30, 2012 as compared to $3.83 million for the comparable period of 2011, an increase of $1.35 million or 35%. The increase was mainly due to $2.97 million loss resulting from the termination of the Erdos TCH Phase III power generation projects.

Our net income for the nine months ended September 30, 2012 was $1.84 million compared to $16.91 million for the comparable period of 2011, a decrease of $15.07 million. This decrease in net income was mainly due to decreased total sales, increased operating expenses and increased non-operating expenses as explained above.

For the nine months ended September 30, 2012, GAAP diluted EPS was $0.04 with approximately 51.11 million shares of common stock outstanding, as compared with $0.33 in the same period of 2011 when the Company had 55.08 million shares of common stock outstanding.

Net Investment in Sales-Type Leases as of September 30, 2012

The Company, through its subsidiary, Xi'an TCH leased TRT systems to Zhangzhi with terms of 5 and 13 years, respectively; and leased CHPG systems to Tong Chuan, Shengwei, and Jing Yang Shengwei respectively for 5 years, BMPG systems to Pucheng for 15 years, BMPG systems to Shenqiu for 11 years, and a power and steam generating system from waste heat from metal refining to Erdos (five projects) for 20 years.

The components of the net investment in sales-type leases as of September 30, 2012 and December 31, 2011 are as follows:


September 30, 2012

December 31, 2011

Total future minimum lease payments receivable

$385,079,476

$415,796,738

Less: executory cost

(114,553,886)

(121,384,498)

Less: unearned interest income

(141,343,200)

(158,110,200)

Net investment in sales - type leases

129,182,390

136,302,040

Current portion

9,543,015

8,725,345

Noncurrent portion

$119,639,375

$127,576,695

As of September 30, 2012, the future minimum rentals to be received on non-cancelable sales-type leases by years are as follows: 

2013

$35,468,635

2014

30,599,522

2015

26,154,398

2016

26,154,398

2017

26,154,398

Thereafter

240,548,125

Total

$385,079,476

Non-GAAP Financial Measures

For the 2012 third quarter, Non-GAAP net income was $0.27 million, as compared with $2.23 million in the 2012 second quarter and $7.46 million in the 2011 third quarter.

The Company believes that "adjusted net income" and "adjusted earnings per share" information, when taken in conjunction with reported results, provide a useful measure of financial performance since they eliminate the impact of certain non-recurring, non-cash charges. These non-GAAP measures should not be considered in isolation or as a substitute for the most comparable GAAP measures. Additionally, the non-GAAP financial measures used by CREG may not be comparable to non-GAAP financial measures used by other companies.

(In USD 000,

except for per share data)

Three Months

Ended September 30

Nine Months

Ended September 30

Adjusted Net Income and EPS

2012

2011

2012

2011

Net Income

(1,405)

8,655

1,841

16,913

Adjustments





Deferred Income Taxes

1,007

1,408

1,574

2,016

Interest expense related to beneficiary conversion feature of convertible debentures

584

1,075

1,751

4,420

Stock based compensation expenses

88

166

201

1,611

Interest expense from changes in conversion liability

-

(3,846)

(1,127)

(9,979)

Adjusted Net Income (1)

274

7,458

4,240

14,981

Basic Weighted Average Shares Outstanding (Shares)

47,045

43,533

46,666

41,660

Adjusted EPS in Non-GAAP (1)

0.05

0.05

0.09

0.36

(1) CREG provides adjusted net income and earnings per share on a non-GAAP basis that excludes non-cash, share-based compensation expense and non-cash interest expense on the amortization of the beneficial conversion feature for the convertible notes and non-cash deferred income tax expenses, as described below, to enable investors to better assess the Company's operating performance. The non-GAAP measures are described below and reconciled to the corresponding GAAP measure in the section below titled "About Non-GAAP Financial Measures."

10Q Filing

For more information regarding China Recycling Energy Corp.'s financial performance during the quarter ended September 30, 2012, please refer to the Quarterly Report on Form 10-Q, which was filed with the Securities and Exchange Commission on Nov 14, 2012.

About Non-GAAP Financial Measures
This press release contains non-GAAP financial measures for earnings that exclude the effect of non-cash, non-operating expenses related to the Convertible Notes issued in April 2008, and the compensation expenses for the fair value of stock options, as well as deferred income tax expenses. The Company uses non-GAAP financial measures when it internally evaluates the performance of its business and makes operating decisions, including internal budgeting and performance measurement. The Company believes that providing the non-GAAP measures is useful to investors for a number of reasons. The non-GAAP measures provide a consistent basis for investors to understand CREG's financial performance in comparison to historical periods, and it allows investors to evaluate CREG's performance using the same methodology and information as that used by the Company's management. However, investors need to be aware that non-GAAP measures are subject to inherent limitations because they do not include all of the expenses included under GAAP, and they involve the exercise of judgment of which charges are excluded from the non-GAAP financial measure.

About China Recycling Energy Corp.
China Recycling Energy Corp. (NASDAQ: CREG or "the Company") is based in Xi'an, China and provides environmentally friendly waste-to-energy technologies to recycle industrial byproducts for steel mills, cement factories and coke plants in China. Byproducts include heat, steam, pressure, and exhaust to generate large amounts of lower-cost electricity and reduce the need for outside electrical sources. The Chinese government has adopted policies to encourage the use of recycling technologies to optimize resource allocation and reduce pollution. Currently, recycled energy represents only an estimated 1 percent of total energy consumption and this renewable energy resource is viewed as a growth market due to intensified environmental concerns and rising energy costs as the Chinese economy continues to expand. The management and engineering teams have over 20 years of experience in industrial energy recovery in China. For more information about CREG, please visit http://www.creg-cn.com.

Safe Harbor Statement
This press release may contain certain "forward-looking statements" relating to the business of China Recycling Energy Corp. and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

 CHINA RECYCLING ENERGY CORPORATION AND SUBSIDIARIES 

 CONSOLIDATED BALANCE SHEETS 

 AS OF SEPTEMBER 30, 2012 AND DECEMBER, 31, 2011 





2012

2011

 ASSETS 

 (UNAUDITED) 





 CURRENT ASSETS 



      Cash & equivalents  

$ 56,164,316

$ 14,949,253

      Restricted cash 

1,991,484

317,415

      Notes receivable 

-

82,528

      Accounts receivable 

156,123

19,113,812

      Current portion of investment in sales
        type leases,net  

9,543,015

8,725,345

      Interest receivable on sales type leases 

702,299

2,423,184

      Prepaid expenses  

83,661

145,615

      Other receivables 

163,570

530,283

      Advance to related party 

436,742

-

      Prepaid loan fees - current 

80,429

80,941




         Total current assets 

69,321,639

46,368,376




 NON-CURRENT ASSETS 



      Prepaid interest on trust loans 

809,021

814,169

      Prepaid loan fees - noncurrent 

221,180

283,293

      Investment in sales type leases, net 

119,639,375

127,576,695

      Long term deposit 

385,108

387,559

      Property and equipment, net 

77,897

116,815

      Construction in progress 

15,942,839

32,466,242




         Total non-current assets 

137,075,420

161,644,773




 TOTAL ASSETS 

$  206,397,059

$208,013,149




 LIABILITIES AND STOCKHOLDERS' EQUITY 






 CURRENT LIABILITIES 



      Accounts payable 

$ 673,282

$ 3,907,854

      Notes payable - bank acceptances 

2,523,261

634,830

      Taxes payable  

702,756

2,943,034

      Accrued liabilities and other payables 

1,454,327

1,279,558

      Advance from related parties 

-

2,981,977

      Deferred tax liability  

2,369,241

1,624,665

      Accrued interest on convertible notes - current 

201,366

168,000

      Bank loans payable - current 

13,877,937

6,983,129

      Trust loans payable - current 

3,154,077

3,174,150

      Interest payable on trust loans 

3,552,480

345,311

      Convertible notes, net of discount due to beneficial conversion feature 

3,377,596

4,626,645

      Conversion feature liability on convertible notes 

-

1,127,401

      Current portion of long term payable 

1,255,960

1,183,516




          Total current liabilities 

33,142,283

30,980,070




 NONCURRENT LIABILITIES 



       Deferred tax liability, net 

7,161,720

6,388,537

       Refundable deposit from customers for systems leasing 

583,504

587,218

       Long term payable  

4,008,886

4,999,718

       Bank loans payable 

13,562,530

20,790,681

       Trust loans payable 

31,304,211

31,503,436




          Total noncurrent liabilities 

56,620,851

64,269,590




          Total liabilities 

89,763,133

95,249,660




 CONTINGENCIES AND COMMITMENTS 

-

-




 STOCKHOLDERS' EQUITY 



      Common stock, $0.001 par value; 100,000,000 shares authorized, 50,224,350 and 46,474,350 shares issued and outstanding as of September 30, 2012 and December 31, 2011 respectively 

50,225

46,475

      Additional paid in capital 

58,613,191

55,416,140

      Statutory reserve 

7,632,331

7,051,843

      Accumulated other comprehensive income 

10,527,304

11,284,190

      Retained earnings  

35,675,240

34,414,271




          Total Company stockholders' equity  

112,498,291

108,212,919




          Noncontrolling interest 

4,135,635

4,550,570




          Total equity 

116,633,926

112,763,489




 TOTAL LIABILITIES AND EQUITY 

$ 206,397,059

$208,013,149




 

 

 CHINA RECYCLING ENERGY CORPORATION AND SUBSIDIARIES 

 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) 

 (UNAUDITED) 


NINE MONTHS ENDED SEPTEMBER 30, 


 THREE MONTHS ENDED SEPTEMBER 30, 


2012

2011


2012

2011

 Revenue 






      Sales of systems 

$ -

$29,927,036


$ -

$18,583,238

      Contingent rental income 

1,027,180

846,579


476,207

261,556







 Total revenue 

1,027,180

30,773,615


476,207

18,844,794







 Cost of sales 






      Cost of systems 

75,456

22,850,068


32,505

14,325,396







 Total cost of sales 

75,456

22,850,068


32,505

14,325,396







 Gross profit 

951,724

7,923,547


443,702

4,519,398







 Interest income on sales-type leases 

14,114,986

16,093,099


4,587,009

5,466,295







      Total operating income 

15,066,710

24,016,646


5,030,711

9,985,693







 Operating expenses 






      General and administrative  

2,213,647

3,834,242


624,952

387,786

       Loss on project termination 

2,966,849

-


2,966,849

-

 Total operating expenses 

5,180,496

3,834,242


3,591,801

387,786







 Income from operations 

9,886,214

20,182,404


1,438,910

9,597,907







 Non-operating income (expenses) 






      Interest income  

130,893

84,966


58,582

26,324

      Interest expense  

(7,282,044)

(8,146,088)


(2,166,497)

(2,534,629)

      Changes in fair value of conversion feature liability 

1,127,400

9,978,573


-

3,845,667

      Other expenses 

17,338

(46,127)


111,100

(2,438)







      Total non-operating income (expenses), net 

(6,006,413)

1,871,324


(1,996,815)

1,334,924







 Income (loss) before income tax 

3,879,801

22,053,728


(557,905)

10,932,831

 Income tax expense  

2,425,970

4,369,257


1,483,889

2,189,626







 Income (loss) before noncontrolling interest 

1,453,831

17,684,471


(2,041,794)

8,743,205

 Less: Income (loss) attributable to noncontrolling interest 

(387,625)

771,271


(636,563)

87,973







 Net income (loss) attributable to China Recycling Energy Corp 

1,841,456

16,913,200


(1,405,231)

8,655,232







 Other comprehensive items 






      Foreign currency translation gain (loss)
     attributable to China Recycling Energy Corp 

(756,886)

4,405,097


(294,160)

2,045,695

      Foreign currency translation gain (loss)
     attributable to noncontrolling interest 

(27,310)

160,786


(9,354)

73,953







 Comprehensive income (loss) attributable to China Recycling Energy Corp 

$1,084,570

$21,318,297


$(1,699,391)

$10,700,927







 Comprehensive income (loss) attributable to noncontrolling interest 

$(414,935)

$932,057


$ (645,917)

$161,926







 Basic weighted average shares outstanding 

46,665,956

41,659,787


47,045,002

43,533,174

 Diluted weighted average shares outstanding * 

51,111,582

55,078,137


50,834,592

54,950,761







 Basic earnings (loss) per share  

$0.04

$0.41


$(0.03)

$0.20

 Diluted earnings (loss) per share * 

$0.04

$0.33


$(0.03)

$0.16













 *     Interest expense accrued on convertible notes is added back to net income for the computation of diluted EPS.  


 **   For the purpose of calculating diluted earnings per share, the dilutive securities were excluded due to anti-dilution for the three months ended September 30, 2012.  


 CHINA RECYCLING ENERGY CORPORATION AND SUBSIDIARIES 

 CONSOLIDATED STATEMENTS OF CASH FLOWS 

 (UNAUDITED) 


NINE MONTHS ENDED SEPTEMBER 30, 


2012

2011




 CASH FLOWS FROM OPERATING ACTIVITIES: 



             Income including noncontrolling interest 

$1,453,831

$17,684,471

             Adjustments to reconcile income including noncontrolling 



                 interest to net cash provided by (used in) operating activities: 



             Changes in sales type leases receivables  

-

(29,927,036)

             Loss on project termination 

2,966,849

-

             Depreciation and amortization 

38,585

43,918

             Amortization of prepaid loan fees 

60,551

19,623

            Amortization of discount related to beneficial conversion feature of 
             convertible note 

1,750,950

4,420,353

            Interest expense from changes in fair value of conversion feature liability 

(1,127,400)

(9,978,574)

             Stock options and warrants expenses 

200,800

1,610,897

             Changes in deferred tax 

1,574,393

2,015,593

                          (Increase) decrease in current assets: 



                                    Interest receivable on sales type lease 

1,712,041

(1,299,323)

                                    Collection of principal on sales type leases 

6,281,461

5,283,212

                                    Prepaid expenses 

61,266

28,005

                                    Accounts receivable 

18,908,380

-

                                    Other receivables 

367,387

10,242

                                    Construction in progress 

13,413,237

(5,605,957)

                                    Deposit 

-

(375,832)

                          Increase (decrease) in current liabilities: 



                                    Accounts payable 

(1,322,419)

5,701,341

                                    Taxes payable 

(2,230,106)

(543,434)

                                    Interest payable 

3,221,545

3,515,463

                                    Refundable deposit from customers 

-

292,420

                                    Accrued liabilities and other payables 

179,804

(632,332)

                                    Accrued interest on convertible notes 

33,366

(154,021)




             Net cash provided by (used in) operating activities 

47,544,521

(7,890,971)




 CASH FLOWS FROM INVESTING ACTIVITIES: 



             Changes of restricted cash 

(1,682,444)

2,193,151

             Acquisition of property & equipment 

(262)

(4,676)




             Net cash provided by (used in) investing activities 

(1,682,706)

2,188,475




 CASH FLOWS FROM FINANCING ACTIVITIES: 



             Issuance of convertible notes 

-

7,583,801

             Notes receivable - bank acceptances 

82,318

-

             Notes payable - bank acceptances 

-

(2,924,202)

             Proceeds from loans  

1,741,333

4,155,444

             Repayment of loans 

(1,899,636)

(923,432)

             Long term payable 

(882,626)

6,274,151

             Prepaid loan fees 

-

(392,459)

             Advance to related parties 

(479,460)

(466,141)

             Advance from related parties 

(2,933,597)

300,839




             Net cash provided by (used in) financing activities 

(4,371,668)

13,608,001




 EFFECT OF EXCHANGE RATE CHANGE ON CASH & EQUIVALENTS 

(275,084)

718,956




 NET INCREASE IN CASH & EQUIVALENTS 

41,215,063

8,624,461

 CASH & EQUIVALENTS, BEGINNING OF PERIOD 

14,949,253

11,072,250




 CASH & EQUIVALENTS, END OF PERIOD 

$56,164,316

$19,696,711




 Supplemental cash flow data: 



    Income tax paid 

$3,041,376

$2,825,975

    Interest paid 

$2,877,598

$1,726,085




 Supplemental disclosure of non-cash financing activities 






 Conversion of convertible debt into common shares

$3,000,000

$-




 

SOURCE China Recycling Energy Corp.

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