UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): ~~January~~ April 111, 2011

China New Energy Group Company ~~(Exact name of Registrant as specified in its charter)~~

(Exact name of Registrant as specified in its charter)

Delaware		001-32691		65-0972647
(State or other jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

18/F, Block B1, ~~TianJin~~Tianjin Emperor Place, No. 85 NanJing Road

~~No. 85~~He ~~NanJing~~Ping ~~Road~~District, Tianjin, 300042

HePing District, Tianjin, 300042

People's Republic of China

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code: (011)-86-22-~~2321~~5829 ~~0508~~9778

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o	Written communications pursuant to Rule 425 under the Securities Act(17CFR230.425)

o	Soliciting material pursuant to Rule14a-12 under the Exchange Act(17CFR240.14a-12)

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR240.14d-2(b))

o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR240.13e-4(c))

Item 2 1.01 ~~Completion~~ Entry ofInto ~~Acquisition~~a orMaterial ~~Disposition~~Definitive ~~of Assets~~Agreement.

~~Completion~~As ofdescribed ~~Acquisition~~in ~~of 70~~a Current Report on Form 8-K filed on December 22, 2009 by China New Energy Group Company (the “Company” or “we”), pursuant to an Equity Interest Purchase Agreement entered into on December 16, 2009 (the “Lean Zhongran Purchase Agreement”), our wholly-owned subsidiary, Willsky Development, Ltd., a BVI company (“Willsky”), acquired 100% ~~interest~~of the equity of ~~Friendship~~Fuzhou CoCity Lean Zhongran Gas Inc., a PRC company (“Lean Zhongran.”)

AsThe ~~more fully~~total ~~described~~purchase price was RMB 4,800,000 (approximately $0.7 million) payable in ~~our~~three ~~Form~~installments. The ~~8-K~~first ~~filed~~installment ~~with~~of ~~the~~approximately ~~Securities~~$0.19 ~~Exchange~~million ~~Commission (“SEC”)~~was onpaid. ~~September~~The ~~20,~~second ~~2010~~and ~~(the~~third ~~“8-K”)~~installments of approximately $0.36 million and approximately $0.15 million, respectively, were due on ~~September 14~~April 30, 2010 and August 30, ~~China~~2010 ~~New~~and ~~Energy~~neither ~~Investment~~of Cothese payments has been made. Accordingly, ~~Ltd~~the ~~(“Buyer”),~~total ~~a wholly-owned~~amount ~~PRC~~owed ~~subsidiary~~by ofWillsky ~~China~~to ~~New~~the ~~Energy~~seller ~~Group~~under ~~Company~~the Lean Zhongran Purchase Agreement (prior to the ~~“Company”~~execution of the supplementary agreement described below), ~~entered into:~~was approximately $0.51 million.

·As andescribed ~~Equity~~in ~~Transfer~~our ~~Agreement~~Current ~~(the~~Report ~~“Century~~on ~~Dadi~~Form ~~Acquisition~~8-K ~~Agreement”)~~filed ~~with~~on ~~Beijing~~December ~~Fengyin~~22, ~~Xianghe~~2009, pursuant ~~Scientific~~to ~~Technology~~an ~~Co.,~~Equity ~~Ltd.~~Interest ~~(“Seller”),~~Purchase aAgreement ~~PRC~~entered ~~company~~into ~~controlled~~on byDecember ~~Mr.~~16, ~~Tang~~2009 ~~Zhixiang~~ (the “~~Mr.~~Wuyan ~~Tang”~~Purchase Agreement’), toWillsky ~~acquire~~acquired ~~from~~100% of the ~~Seller a 70%~~ equity ~~interest~~of inWuyan ~~Beijing~~County Zhongran ~~Century Dadi~~ Gas ~~Engineering Co.,~~ Ltd., a PRC company (“~~Century Dadi~~Wuyan”)~~; and~~.

·The antotal ~~Equity~~purchase ~~Transfer~~price ~~Agreement~~was ~~(the~~RMB ~~“Zhoulu~~6,000,000 ~~Dadi~~(approximately ~~Agreement”~~$0.88 million) ~~with~~payable ~~Seller~~in ~~and~~three Mrinstallments. ~~Tang,~~The tofirst ~~acquire~~installment ~~from~~of ~~the~~approximately ~~Seller~~$0.23 amillion ~~70%~~was ~~equity~~paid. ~~interest~~The insecond ~~Zhoulu~~and ~~Dadi~~third ~~Gas~~installments Coof approximately $0.46 ~~Ltd~~million and $0.19 million were due on April 30, a2010 ~~PRC~~and ~~company~~August 30, 2010, respectively, and neither of these payments has been made. Accordingly, the total amount owed by Willsky to the seller under the Wuyan Purchase Agreement (~~“Zhoulu~~prior ~~Dadi”~~to the execution of the Supplementary Agreement described below) was approximately $0.65 million.

~~Summaries of~~The aggregate amount currently owed by Willsky to the ~~terms~~sellers ofunder the ~~Century~~Lean ~~Dadi~~Zhongran ~~Acquisition~~Purchase Agreement and ~~Zhoulu~~the ~~Dadi~~Wuyan Purchase Agreement (prior to the ~~“September Acquisition~~execution ~~Agreements”)~~of ~~are~~the ~~incorporated~~Supplementary ~~herein~~Agreement bydescribed ~~reference~~below) towas ~~the 8-K~~approximately $1.16 million.

As ~~more fully~~ described in ~~the~~our ~~Form~~Current ~~10-Q~~Report ~~for~~on ~~the~~Form ~~quarterly~~8-K ~~period ended September 30, 2010,~~ filed ~~by the Company with the SEC~~ on ~~November~~January 228, ~~2010~~ ~~(the “10-Q”)~~2010, on ~~October~~ 28January 5, 2010, ~~the~~Willsky ~~parties restructured the September Acquisition Agreements such that the Buyer~~ entered into an Equity ~~Transfer~~Interest Purchase Agreement (~~the~~ “~~Friendship~~Dongxiang ~~Co.~~ Purchase Agreement”) ~~with Seller and Mr. Tang,~~ to acquire ~~a 70~~100% of the equity ~~interest~~of Fuzhou ~~in Tianjin~~Zhongran ~~Dadi~~Flying ~~Friendship~~Dragon ~~Co.~~Gas ~~Ltd~~Inc., a PRC company (“~~Friendship Co.”~~Dongxiang), ~~from the~~for a ~~Seller. Prior~~total topurchase ~~entering~~price ~~into~~of ~~the Friendship Co. Agreement~~26, ~~Seller~~000,000 ~~transferred~~RMB to(approximately ~~Friendship Co~~$3.8 ~~its~~million) ~~100%~~payable ~~ownership~~ in ~~each~~three ~~of Century Dadi and Zhoulu Dadi~~installments. ~~Accordingly,~~Under ~~on consummation of~~ the ~~acquisition~~terms of ~~the~~ ~~70% interest of Friendship Co. contemplated by~~ the ~~Friendship~~Dongxiang ~~Co.~~Purchase Agreement~~, Buyer~~ ~~became~~ the ~~indirect owner of 70% of each of Century Dadi and Zhoulu Dadi through its 70% ownership of Friendship Co., which in turn owns a 100%~~ equity interest inhas ~~each~~not ofyet ~~Century~~been ~~Dadi~~transferred ~~and~~to ~~Zhoulu Dadi~~Willsky.

The ~~total purchase~~first ~~price~~installment ~~for~~of ~~the~~approximately ~~70%~~$1.11 ~~equity~~million ~~interest~~was inpaid. The ~~Friendship~~second Coand third installments. isof approximately $392.7101 million ~~(RMB~~and ~~270,000,000)~~$0. ~~The~~68 ~~purchase~~million, ~~price~~were isdue ~~payable~~on ~~in three~~April ~~installments. The~~30, ~~first~~2010 ~~installment~~and isAugust ~~for~~30, ~~$17.6~~2010, ~~million~~respectively, ~~the second~~and ~~installment~~neither isof ~~for~~these ~~$19.12~~payments ~~million~~has ~~and~~been made. Accordingly, the ~~third~~total ~~installment~~amount isowed ~~for~~by ~~$2.99 million,~~Willsky ~~respectively. Each~~to ~~payment~~the isseller ~~subject~~under the Dongxiang Purchase Agreement (prior to ~~satisfaction~~the execution of ~~certain~~ ~~preconditions~~the Supplementary Agreement described below) was approximately $2. 69 million.

~~On September~~We ~~17,~~have ~~2010,~~determined ~~the~~not ~~Company deposited the first installment of the purchase price into a mutually managed account which amount was released~~ to ~~the~~proceed ~~Seller~~with ~~on December 8, 2010 following satisfaction by~~ the ~~Seller~~acquisition of ~~the released conditions~~Dongxiang.

~~Under~~Accordingly, on April 1, 2011 we entered into a Supplementary Agreement with the ~~terms~~ ofabove mentioned sellers whereby (i) the ~~Friendship~~Dongxiang ~~Co.~~Purchase Agreement, is being terminated (ii) Willsky is releasing the seller from its obligation under the Dongxiang Purchase Agreement to transfer ofto Willsky the 70100% equity interest in ~~Friendship~~ ~~Co.~~Dongxiang; ~~was~~(iii) ~~deemed~~seller towill beapply ~~complete~~the on$1.11 ~~the~~million ~~date~~previously ~~(following~~paid ~~payment~~to ofseller as the first installment) ofunder the ~~delivery~~Dongxiang byPurchase Agreement against the ~~Buyer~~$1.16 million owed to seller under the ~~Seller~~Lean ofZhongran ~~written confirmation~~Purchase ~~that~~Agreement and the ~~Seller~~Wuyan ~~has~~Purchase ~~performed~~Agreement; ~~all~~and of(iv) ~~its~~Willsky ~~closing~~is ~~obligations required~~released tofrom beits ~~performed~~obligation byto ~~the~~make ~~Seller~~any further payments under ~~the~~Lean ~~agreement. On January~~Zhongran ~~11,~~Purchase ~~2011~~Agreement and the ~~Company~~Wuyan ~~delivered~~Purchase toAgreement ~~the~~(which ~~Seller~~in the ~~written~~aggregate ~~confirmation~~amounted ~~of completion~~to ofapproximately ~~the~~$1.16 ~~transfer~~million).

The Company plans to raise additional capital from third party investors to fund the payment of the second and third installment payments. Under the terms of the agreement in the event the Buyer is unable to pay the second installment of the purchase price (after the expiration of the applicable grace periods) then Buyer is required to transfer 42% of the Friendship Co. back to the Seller.

The Company has an option to acquire the remaining 30% equity interest in Friendship Co. for a price of $19.55 million (RMB 130,000,000).

Funding of Purchase Price

Payment of First Installment

Sale of Series C and D Preferred Stock

As more fully described in the 8-K, on September 14, 2010, the Company entered into a Series C and Series D Convertible Preferred Stock Securities Purchase Agreement (the “Securities Purchase Agreement”) with China Hand Fund I, LLC (“China Hand”), providing for the sale to China Hand of (i) 18.73 shares of the Company’s Series C Convertible Preferred Stock, and (ii) 4 shares of the Company’s Series D Convertible Preferred Stock for an aggregate purchase price of $15,000,000. The closing occurred on September 14, 2010. Immediately following the closing, China Hand transferred its rights to the Series C Preferred Stock and to 2 of shares of Series D Preferred Stock to Vicis Capital Master Fund (“Vicis”). As the beneficial owner of 79.9% of our outstanding voting securities before the closing, Vicis is an affiliate.

The proceeds of this financing were used to finance a portion of the first installment of the purchase price for the acquisition of the 70% equity interest in Friendship Co.

Notes Offering

As more fully described in the 8-K, on September 14, 2009, the Company entered into and consummated the sale to certain accredited investors pursuant to the Note Purchase Agreements (the “Note Purchase Agreements”) of Convertible Notes which were originally due October 15, 2010 (the “Notes”) in the aggregate principal amount of $3,000,000. The maturity date of the Notes was extended to February 28, 2011.

The proceeds were used to fund the payment of a portion of the first installment of the purchase price for the acquisition of the 70% equity interest in Friendship Co.

Payment of Second and Third Installment

Additional Financing

The Company plans to raise additional capital from third party investors to fund the payment of the second and third installment payments but there can be no assurance that the Company will be successful in its efforts to raise additional financing.

Backstop Agreement

On September 14, 2010, the Company and China Hand entered into a Backstop Agreement pursuant to which China Hand (or its designee) agreed to provide additional financing of up to $20,100,000 to the extent that the Company is unable to raise capital from third party investors prior to the time the second and third installment of the purchase price for the acquisition of the 70% equity interest Friendship Co. become due.

Item 9.01 Financial Statements and Exhibits

~~(a) Financial Statements of Business Acquired~~Exhibits

Financial statements of business acquired for periods will be provided no later than 71 calendar days of the due date of this report.

Exhibit No.		Description
10.1		Supplementary Agreement dated April 1, 2011 by and among China New Energy Group Company, Flying Dragon Investment Management Limited and Flying Dragon Resource Development Limited.

(d) Exhibits

Exhibit No.		Description
10.1		Equity Transfer Agreement on 70% Equity of Tianjin Dadi Friendship Co. Ltd., dated October 28, 2010, by and among China New Energy Investment Co., Ltd, Beijing Fengyin Xianghe Scientific Technology Co., Ltd. and Mr. Tang Zhixiang

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this current report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: ~~January~~ 14April 1, 2011

CHINA NEW ENERGY GROUP COMPANY (Registrant) By: ~~/s/~~ Yangkan Chong Yangkan Chong Chief Executive Officer

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