Item
5.02 Departure of Directors or Certain officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
(b)
On April 24, 2017, the Board of Directors (the “Board”) of China Recycling Energy Corporation, a Nevada corporation
(the “Company”) received the resignation of Mr. Cangsang Huang, a director of the Company, Chairman of the Audit Committee,
and a member of the Corporate Governance and Nominating Committee and the Compensation Committee of the Board, effective on May
31, 2017. Mr. Huang indicated that his resignation is due to personal considerations.
On
April 26, 2017, the Board received the resignation of Mr. Yulong Ding, a director of the Company, Chairman of the Compensation
Committee, and a member of the Corporate Governance and Nominating Committee and the Audit Committee of the Board, effective on
May 31, 2017. Mr. Ding indicated that his resignation is due to personal considerations.
(d)
On April 27, 2017, the Board appointed Mr. Xiaogang Zhu and Mr. Xiaoping Guo as new members of the Board to fill the pending vacancies
on the Board, effective on June 1, 2017 and until their successors have been duly elected and qualified. On April 27, 2017, Mr.
Zhu was appointed as Chairman of the Audit Committee and a member of the Corporate Governance and Nominating Committee and the
Compensation Committee of the Board, effective on June 1, 2017 and Mr. Guo was appointed as Chairman of the Compensation Committee
and a member of the Corporate Governance and Nominating Committee and the Audit Committee of the Board, effective on June 1, 2017.
Mr.
Xiaogang Zhu has served as a financial consultant to Shaanxi Coal Chemical Engineering New Energy Co., Ltd., since May 2014. From
December 2007 until May 10, 2014, Mr. Zhu served as the Company’s accounting manager and vice president of accounting. Prior
to that, Mr. Zhu was the Chief Financial Officer of China Natural Gas, Inc., from 2005 to 2007, and as the vice president of Xi’an
Dapeng Biological Technology Co., Ltd. from 2000 to 2005. Mr. Zhu received his bachelor degree in accounting from Shaanxi University
of Finance and Economics in 1992.
Mr.
Xiaoping Guo has served as the assistant to president of Datang New Energy Co., Ltd., since 2010. Mr. Guo received his bachelor
degree from the Xi’an Jiaotong University in 1977, and his master’s degree in systems engineering from the same school
in 2000. Mr. Guo is a professor level senior engineer in China.
Based
on its investigation, the Board determined that Mr. Zhu will be “independent” under the independence requirements
of The NASDAQ Stock Market LLC and Rule 10A-3 under the Securities Exchange Act of 1934 on and after June 1, 2017, and that he
does not have any relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities
of a director. The Board also determined that Mr. Guo is “independent” under the independence requirements of The
NASDAQ Stock Market LLC and Rule 10A-3 under the Securities Exchange Act of 1934, and that 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 each of Mr. Zhu and Mr. Guo qualifies as a “Non-Employee Director” as
defined by Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and as an “outside director” under Section
162(m) of the Internal Revenue Code and related regulations.
The
Board further determined that Mr. Zhu is an “audit committee financial expert,” as defined by NASDAQ Rule 5605(a)(2)
and Item 401(h) of Regulation S-K.
There
are no arrangements or understandings between Mr. Zhu or Mr. Guo and any other person pursuant to which Mr. Zhu and Mr. Guo are
appointed as directors of the Company. In addition, there is no family relationship between Mr. Zhu or Mr. Guo and any director
or executive officer of the Company.