Item 1.01 Entry into a Material Definitive Agreement.
On August 24, 2020, China Recycling Energy
Corporation (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”)
with certain purchaser identified on the signature pages thereto (the “Purchaser”), pursuant to which the Company
will offer to the Purchaser, in a registered direct offering, an aggregate of up to 265,250 shares (the “Shares”)
of common stock, par value $0.001 per share (“Common Stock”) at negotiated
purchase prices without reference to the market price. The
Shares are being offered by the Company pursuant to an effective shelf registration statement on Form S-3, which was originally
filed with the Securities and Exchange Commission on December 1, 2017, and was declared effective on December 8, 2017 (File No.
333-221868) (the “Registration Statement”).
The Company also agreed to indemnify the
placement agent and the Purchaser against certain losses resulting from its breach of any representations, warranties or covenants
under agreements with the Purchaser, as well as under certain other circumstances described in the Purchase Agreement.
Newbridge
Securities Corporation is acting as the Company’s exclusive placement agent in connection with the offerings under the Purchase
Agreement and will receive an aggregate cash fee equal to 7.0% of the gross proceeds received by the Company from the
offerings and an aggregate of $2,500 for certain expenses.
The representations,
warranties and covenants contained in the Purchase Agreement were made solely for the benefit of the parties to the Purchase Agreement.
In addition, such representations, warranties and covenants (i) are intended as a way of allocating the risk between the parties
to the Purchase Agreement and not as statements of fact, and (ii) may apply standards of materiality in a way that is different
from what may be viewed as material by shareholders of, or other investors in, the Company. Accordingly, the form of Purchase Agreement
is filed with this report only to provide investors with information regarding the terms of transaction, and not to provide investors
with any other factual information regarding the Company. Shareholders should not rely on the representations, warranties and covenants
or any descriptions thereof as characterizations of the actual state of facts or condition of the Company. Moreover, information
concerning the subject matter of the representations and warranties may change after the date of the Purchase Agreement, which
subsequent information may or may not be fully reflected in public disclosures.
The form of Purchase
Agreement is filed as Exhibit 10.42 to this Current Report on Form 8-K. The foregoing summary of the terms of the
Purchase Agreement is subject to, and qualified in its entirety by, the form of Purchase Agreement, which is incorporated herein
by reference.
A copy of the consent of Prager Metis,
CPA’s LLC with respect to the consolidated financial statement for the year ended December 31, 2019 incorporated by reference
into the Registration Statement, is filed herein as Exhibit 23.1.
A copy of the consent of MJF & Associates,
APC with respect to the consolidated financial statements for the year ended December 31, 2018 incorporated by reference into
the Registration Statement, is filed herein as Exhibit 23.2.
A copy of the opinion of The Crone Law
Group, P.C., relating to the validity of the Shares issued in the offering described above is filed as Exhibit 5.1 hereto.