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Sunrise New Energy Co., Ltd.

Sunrise New Energy Co., Ltd.EPOWEarnings & Financial Report

Nasdaq · petroleum industry

Husky Energy Inc. was a Canadian petroleum company that existed from 1938 to 2021. It operated in Western and Atlantic Canada, the United States and the Asia Pacific region, with upstream and downstream business segments. In the 2020 Forbes Global 2000, Husky Energy was ranked as the 1443rd-largest public company in the world.

What changed in Sunrise New Energy Co., Ltd.'s 20-F — 2023 vs 2024

Top changes in Sunrise New Energy Co., Ltd.'s 2024 20-F

319 paragraphs added · 365 removed · 212 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

64 edited+10 added−20 removed183 unchanged
These developments could add uncertainties to our continued listing on the Nasdaq, and Nasdaq may determine to delist our securities if the PCAOB determines that it cannot inspect or fully investigate our auditor. ● Our contractual arrangements with the VIE are governed by the laws of the PRC and we may have difficulty in enforcing any rights we may have under these contractual arrangements. ● The failure to comply with PRC regulations relating to mergers and acquisitions of domestic entities by offshore special purpose vehicles may subject us to severe fines or penalties and create other regulatory uncertainties regarding our corporate structure. ● PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase its registered capital or distribute profits to us, or may otherwise adversely affect us. ● Increases in labor costs in the PRC may adversely affect our business and our profitability. ● U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China. 11 Risks Related to Our Ordinary Shares and the Trading Market Risks and uncertainties related to our Ordinary Shares and the trading market include, but are not limited to, the following: ● If we are a passive foreign investment company for United States federal income tax purposes for any taxable year, United States holders of our Ordinary Shares could be subject to adverse United States federal income tax consequences. ● We have identified several control deficiencies in our internal control over financial reporting.
These developments could add uncertainties to our continued listing on the Nasdaq, and Nasdaq may determine to delist our securities if the PCAOB determines that it cannot inspect or fully investigate our auditor. ● Our contractual arrangements with the VIE are governed by the laws of the PRC and we may have difficulty in enforcing any rights we may have under these contractual arrangements. ● The failure to comply with PRC regulations relating to mergers and acquisitions of domestic entities by offshore special purpose vehicles may subject us to severe fines or penalties and create other regulatory uncertainties regarding our corporate structure. ● PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase its registered capital or distribute profits to us, or may otherwise adversely affect us. ● Increases in labor costs in the PRC may adversely affect our business and our profitability. ● U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China. 11 Risks Related to Our Class A Ordinary Shares and the Trading Market Risks and uncertainties related to our Class A Ordinary Shares and the trading market include, but are not limited to, the following: ● If we are a passive foreign investment company for United States federal income tax purposes for any taxable year, United States holders of our Class A Ordinary Shares could be subject to adverse United States federal income tax consequences. ● We have identified several control deficiencies in our internal control over financial reporting.
There can be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages as a result of the events referenced above. If we fail to hire, train or retain qualified managerial and other employees, our business and results of operations could be materially and adversely affected.
There can be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages as a result of the events referenced above. 14 If we fail to hire, train or retain qualified managerial and other employees, our business and results of operations could be materially and adversely affected.
There can be no assurance that such proceedings and claims, should they arise, will not have a material adverse effect on our business, results of operations and financial condition. 15 Any failure to protect our trademarks and other intellectual property rights could have a negative impact on our business.
There can be no assurance that such proceedings and claims, should they arise, will not have a material adverse effect on our business, results of operations and financial condition. Any failure to protect our trademarks and other intellectual property rights could have a negative impact on our business.
We are a Cayman Islands holding company and operate a substantial portion of our business through the VIE in China through VIE Agreements, as a result of which, under United States generally accepted accounting principles, the assets and liabilities of the VIE are treated as our assets and liabilities and the results of operations of the VIE are treated in all respects as if they were the results of our operations.
We are a Cayman Islands holding company and operate a portion of our business through the VIE in China through VIE Agreements, as a result of which, under United States generally accepted accounting principles, the assets and liabilities of the VIE are treated as our assets and liabilities and the results of operations of the VIE are treated in all respects as if they were the results of our operations.
Our future growth will depend substantially on our ability to address these and the other risks described in this annual report. If we do not successfully address these risks, our business would be significantly harmed. We have incurred substantial losses in the past and may incur losses in the future.
Our future growth will depend substantially on our ability to address the risks described in this annual report. If we do not successfully address these risks, our business would be significantly harmed. We have incurred substantial losses in the past and may incur losses in the future.
If GIOP BJ, the VIE or their ownership structure or the VIE Agreements are determined to be in violation of any existing or future PRC laws, rules or regulations, or GIOP BJ or the VIE fail to obtain or maintain any of the required governmental permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations, including: ● revoking the business and operating licenses of GIOP BJ or the VIE; ● discontinuing or restricting the operations of GIOP BJ or the VIE; ● imposing conditions or requirements with which we, GIOP BJ, or the VIE may not be able to comply; 20 ● requiring us, GIOP BJ, or the VIE to restructure the relevant ownership structure or operations which may significantly impair the rights of the holders of our ordinary shares in the equity of the VIE; and\or ● imposing fines.
If GIOP BJ, the VIE or their ownership structure or the VIE Agreements are determined to be in violation of any existing or future PRC laws, rules or regulations, or GIOP BJ or the VIE fail to obtain or maintain any of the required governmental permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations, including: ● revoking the business and operating licenses of GIOP BJ or the VIE; ● discontinuing or restricting the operations of GIOP BJ or the VIE; ● imposing conditions or requirements with which we, GIOP BJ, or the VIE may not be able to comply; 19 ● requiring us, GIOP BJ, or the VIE to restructure the relevant ownership structure or operations which may significantly impair the rights of the holders of our ordinary shares in the equity of the VIE; and\or ● imposing fines.
(“GMB Culture”) June 22, 2017 PRC 51% by VIE Cultural and artistic exchanges and planning, conference services provider Shidong (Beijing) Information Technology Co., LTD. (“GMB (Beijing)”) June 19, 2018 PRC 100% by VIE Information technology services provider Mentor Board Voice of Seeding (Shanghai) Cultural Technology Co., Ltd.
(“GMB Culture”) June 22, 2017 PRC 51% by VIE Cultural and artistic exchanges and planning, conference services provider Shidong (Beijing) Information Technology Co., LTD. (“GMB (Beijing)”) June 19, 2018 PRC 51% by VIE Information technology services provider Mentor Board Voice of Seeding (Shanghai) Cultural Technology Co., Ltd.
See “ Regulations— Regulations Related to Online Transmission of Audio-Visual Programs .” There are uncertainties with respect to the interpretation and implementation of existing and future laws and regulations governing our business activities.
See “ Regulations— Regulations Related to Online Transmission of Audio-Visual Programs .” 13 There are uncertainties with respect to the interpretation and implementation of existing and future laws and regulations governing our business activities.
As of the date of this annual report, Haiping Hu, our CEO and chairman of the board of directors, beneficially owns the majority of the voting power of our outstanding Ordinary Shares.
As of the date of this annual report, Mr. Haiping Hu, our CEO and chairman of the board of directors, beneficially owns the majority of the voting power of our outstanding Ordinary Shares.
If we are unable to adapt or incorporate technological advances into our operations, our production facilities could become less competitive. Further, it may be necessary for us to incur significant expenditures to acquire any new technologies and retrofit our current processes to remain competitive. 16 We must continuously invest in research and development.
If we are unable to adapt or incorporate technological advances into our operations, our production facilities could become less competitive. Further, it may be necessary for us to incur significant expenditures to acquire any new technologies and retrofit our current processes to remain competitive. 15 We must continuously invest in research and development.
Any damage to persons, equipment or property or other disruption of our business could result in significant additional costs to replace, repair and insure assets, which could negatively affect our business, prospects, operating results and financial condition. 17 Sunrise Guizhou depends on a few major customers, and the loss of any of which could cause a significant decline in our revenues.
Any damage to persons, equipment or property or other disruption of our business could result in significant additional costs to replace, repair and insure assets, which could negatively affect our business, prospects, operating results and financial condition. 16 Sunrise Guizhou depends on a few major customers, and the loss of any of which could cause a significant decline in our revenues.
We have no direct or indirect equity interests in the VIE or any of its subsidiaries. 19 If we had direct ownership of the VIE and its subsidiaries, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of the VIE and its subsidiaries, which in turn could effect changes, subject to any applicable fiduciary obligations, at the management level.
We have no direct or indirect equity interests in the VIE or any of its subsidiaries. 18 If we had direct ownership of the VIE and its subsidiaries, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of the VIE and its subsidiaries, which in turn could effect changes, subject to any applicable fiduciary obligations, at the management level.
As a result, the market price of our Class A Ordinary Shares could be adversely affected. 21 As a “controlled company” under the listing rules of the NASDAQ Stock Market, we may choose to exempt our company from certain corporate governance requirements that could have an adverse effect on our public shareholders.
As a result, the market price of our Class A Ordinary Shares could be adversely affected. 20 As a “controlled company” under the listing rules of the NASDAQ Stock Market, we may choose to exempt our company from certain corporate governance requirements that could have an adverse effect on our public shareholders.
The licenses, permissions, and approvals, which have been successfully obtained, are: (1) business license; (2) the ICP License for our knowledge sharing and enterprise service platform business; and (3) the approval for the Construction Land Use Planning Permit, the Construction Works Planning Permit, the Construction Permit, the Pollutant Discharge License, the filing-for-record procedures with the relevant work safety administrative department, the approval for the Environmental Impact Report, the Filing for Environmental Protection Acceptance upon Completion of the Construction Project and the Filing Certificate for Fire Safety Inspection and Acceptance of Construction Project for our graphite anode material business.
The licenses, permissions, and approvals, which have been successfully obtained, are: (1) business license; (2) the filing-for-record procedures with the relevant competent departments for our knowledge sharing and enterprise service platform business; and (3) the approval for the Construction Land Use Planning Permit, the Construction Works Planning Permit, the Construction Permit, the Pollutant Discharge License, the filing-for-record procedures with the relevant work safety administrative department, the approval for the Environmental Impact Report, the Filing for Environmental Protection Acceptance upon Completion of the Construction Project and the Filing Certificate for Fire Safety Inspection and Acceptance of Construction Project for our graphite anode material business.
There remains uncertainty, however, as to how the Cybersecurity Review Measures and the Security Administration Draft will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Security Administration Draft.
There remains uncertainty, however, as to how the Cybersecurity Review Measures and the Security Administration Regulation will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Security Administration Regulation.
Substantially all of our assets are located outside of the United States. In addition, the majority of our directors and officers reside outside of the United States.
Substantially all of our assets are located outside of the United States. In addition, all of our directors and officers reside outside of the United States.
We believe our key trademark, “Sunrise” and “晖阳,” for which we have obtained trademark protection , and 27 patents , are critical to our success. Any unauthorized use of our trademarks or other intellectual property rights could harm our competitive advantages and business.
We believe our key trademark, “Sunrise” and “晖阳,” for which we have obtained trademark protection , and 32 patents , are critical to our success. Any unauthorized use of our trademarks or other intellectual property rights could harm our competitive advantages and business.
It purchases these raw materials from suppliers in China, the United States, Romania, and Indonesia, in order to meet the requirements of different customers, as well as to maintain a diversified supplier base which is beneficial to a stable supply chain.
It purchases these raw materials from suppliers in China, Romania, and Indonesia, in order to meet the requirements of different customers, as well as to maintain a diversified supplier base which is beneficial to a stable supply chain.
Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in the PRC with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
In recent years, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in the PRC with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
As of the date of this annual report, we (i) have received from PRC authorities the material licenses, permissions, and approvals needed to engage in the businesses currently conducted in the PRC, (ii) no such permission or approval has been denied, and (iii) based on the progress of our relevant construction projects, we are applying for other necessary licenses that are required by relevant PRC rules.
As of the date of this annual report, we (i) have received from PRC authorities the material licenses, permissions, and approvals needed to engage in the businesses currently conducted in the PRC, (ii) no such permission or approval has been denied, and (iii) based on the progress of our relevant construction projects, we will apply for other necessary licenses that are required by relevant PRC rules from time to time.
In addition, based on the progress of our relevant construction projects, we are applying for other necessary licenses that are required by relevant PRC rules. There is no assurance that we will be able to obtain all required licenses, permits, or approvals from government authorities.
In addition, based on the progress of our relevant construction projects, we will apply for other necessary licenses that are required by relevant PRC rules from time to time. There is no assurance that we will be able to obtain all required licenses, permits, or approvals from government authorities.
(“GIOP BJ”) June 3, 2019 PRC 100% Holding company of GIOP BJ Shidong Cloud (Beijing) Education Technology Co., Ltd (“Shidong Cloud”) December 22, 2021 PRC 75% Educational consulting SDH (HK) New Energy Tech Co., Ltd. (“SDH New Energy”) October 8, 2021 HK 100% Holding company Zhuhai (Zibo) Investment Co., Ltd.
(“GIOP BJ”) June 3, 2019 PRC 100% Holding company Shidong Cloud (Beijing) Education Technology Co., Ltd (“Shidong Cloud”) December 22, 2021 PRC 75% Educational consulting SDH (HK) New Energy Tech Co., Ltd. (“SDH New Energy”) October 8, 2021 HK 100% Holding company Zhuhai (Zibo) Investment Co., Ltd.
As confirmed by our PRC counsel, Jincheng Tongda & Neal Law Firm (“JT&N”), as of the date of this annual report, we are not subject to cybersecurity review with the Cyberspace Administration of China, or the CAC, under the Cybersecurity Review Measures that became effective on February 15, 2022, or if the draft Regulations on the Network Data Security Administration (Draft for Comments) (the “Security Administration Draft”) is enacted as proposed, since (i) as companies that engage in business-oriented consulting services and manufacturing and sales of graphite anode materials, we, our PRC subsidiaries, or the VIE and its subsidiaries, are unlikely to be classified as critical information infrastructure operators (“CIIOs”) by the PRC regulatory agencies; (ii) according to the interpretation of the relevant laws by the CAC, for online platform operators who have listed in foreign countries before the effective date of Cybersecurity Review Measures, and who are not seeking a new listing (such as a secondary or dual listing) in foreign countries, a cybersecurity review is not required; and (iii) the data processed in the business of the VIE and its subsidiaries, which is a knowledge sharing and enterprise service platform business, is unlikely to have a bearing on national security.
As confirmed by our PRC counsel, Jincheng Tongda & Neal Law Firm (“JT&N”), as of the date of this annual report, we are not subject to cybersecurity review with the Cyberspace Administration of China, or the CAC, under the Cybersecurity Review Measures that became effective on February 15, 2022, or the Regulations on the Network Data Security Administration (the “Security Administration Regulation”), which became effective on January 1, 2025, since (i) as companies that engage in business-oriented consulting services and manufacturing and sales of graphite anode materials, we, our PRC subsidiaries, or the VIE and its subsidiaries, are unlikely to be classified as critical information infrastructure operators (“CIIOs”) by the PRC regulatory agencies; (ii) according to the interpretation of the relevant laws by the CAC, for online platform operators who have listed in foreign countries before the effective date of Cybersecurity Review Measures, and who are not seeking a new listing (such as a secondary or dual listing) in foreign countries, a cybersecurity review is not required; and (iii) the data processed in the business of the VIE and its subsidiaries, which is a knowledge sharing and enterprise service platform business, is unlikely to have a bearing on national security.
We have obtained the following in relation to our graphite anode manufacturing and sales business: construction permits, fire acceptance record certificate, sewage discharge permit, environmental impact statements, and product quality system certification, including: ISO 14001:2015, ISO 45001:2018, ISO 9001:2015, ISO 16949:2016.
We have obtained the following in relation to our graphite anode manufacturing and sales business: construction permits, fire acceptance record certificate, sewage discharge permit, environmental impact statements, and product quality system certification, including: ISO 14001:2015, ISO 45001:2018, ISO 9001:2015, ISO 16949:2016, ISO27001:2022 and GB/T29490-2023.
Foreign ownership of certain parts of our businesses including the value-added telecommunications services, or the VATS, is subject to restrictions under current PRC laws and regulations. For example, the ultimate foreign equity ownership in a VATS provider may not exceed 50%.
Foreign ownership of certain value-added telecommunications services, or the VATS, is subject to restrictions under current PRC laws and regulations. For example, the ultimate foreign equity ownership in a VATS provider may not exceed 50%.
Besides, as of the date of this annual report, based on the progress of our relevant construction projects, we are applying for other necessary licenses or filings that are required by relevant PRC rules from time to time, such as those related to the construction completion acceptance, fire safety inspection and acceptance, work safety acceptance, environmental protection acceptance, and the processing of relevant real estate certificates, etc.
Besides, based on the progress of our relevant construction projects, we will apply for other necessary licenses or filings that are required by relevant PRC rules from time to time, such as those related to the construction completion acceptance, fire safety inspection and acceptance, work safety acceptance, environmental protection acceptance, and the processing of relevant real estate certificates, etc.
See “Risk Factors—Risks Related to Doing Business in China,” and “Risk Factors—Risks Related to Our Corporate Structure.” As of December 31, 2023, 2022 and 2021, the VIE accounted for an aggregate of 5.48%, 8.79% and 51.21%, respectively, of our consolidated total assets, 6.54%, 13.04% and 99% respectively, of our consolidated total liabilities, and 1.46%, 1.61% and 100% respectively, of our consolidated total net revenues.
See “Risk Factors—Risks Related to Doing Business in China,” and “Risk Factors—Risks Related to Our Corporate Structure.” As of December 31, 2024, 2023 and 2022, the VIE accounted for an aggregate of 4.05%, 5.48% and 8.79%, respectively, of our consolidated total assets, 7.14%, 6.54% and 13.04%, respectively, of our consolidated total liabilities, and 1.05%, 1.46% and 1.61%, respectively, of our consolidated total net revenues.
As of the date of this annual report, we are not aware of the Trial Measures or any other PRC laws or regulations currently in effect requiring that we obtain permission from any PRC government authority for our continued listing on the Nasdaq.
As of the date of this annual report, such filing is still under review of the CSRC. we are not aware of any other PRC laws or regulations currently in effect requiring that we obtain permission from any PRC government authority for our continued listing on the Nasdaq.
Unless otherwise stated, as used in this annual report, the terms “we,” “us,” “our,” “Sunrise New Energy,” “our Company,” and the “Company” refer to Sunrise New Energy Co., Ltd., an exempted company with limited liability incorporated under the laws of the Cayman Islands; and “SDH” or “the VIE” are to Global Mentor Board (Zibo) Information Technology Co., Ltd., a limited liability company organized under the laws of the PRC, which we control via a series of contractual arrangements among GIOP BJ, SDH and shareholders of SDH (the “VIE Agreements”).
Unless otherwise stated, as used in this annual report, the terms “we,” “us,” “our,” “Sunrise New Energy,” “our Company,” and the “Company” refer to Sunrise New Energy Co., Ltd., an exempted company with limited liability incorporated under the laws of the Cayman Islands; and “SDH” or “the VIE” are to Global Mentor Board (Zibo) Information Technology Co., Ltd., a limited liability company organized under the laws of the PRC.
(“Sunrise Tech”) September 1, 2011 PRC 39.35% Manufacture of lithium battery materials Sunrise (Guxian) New Energy Materials Co., Ltd. (“Sunrise Guxian”) April 26, 2022 PRC 20.07% Manufacture of lithium battery materials Guizhou Sunrise Technology Innovation Research Co., Ltd.
(“Sunrise Tech”) September 1, 2011, acquired through an asset acquisition on July 7, 2022 PRC 39.35% Manufacture of lithium battery materials Sunrise (Guxian) New Energy Materials Co., Ltd. (“Sunrise Guxian”) April 26, 2022 PRC 20.07% Manufacture of lithium battery materials Guizhou Sunrise Technology Innovation Research Co., Ltd.
We expect to complete the above procedures around October 2024. However, we cannot assure you that any of these entities will be able to receive clearance of such compliance requirements in a timely manner, or at all.
However, we cannot assure you that any of these entities will be able to receive clearance of such compliance requirements in a timely manner, or at all.
The VIE Agreements, however, may not be as effective in providing us with the necessary control over the VIE and its operations. For example, the VIE and its shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations in an acceptable manner or taking other actions that are detrimental to our interests.
For example, the VIE and its shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations in an acceptable manner or taking other actions that are detrimental to our interests.
For the last three fiscal years, Cash transfers and transfers of other assets between Sunrise New Energy, its subsidiaries, and the VIE were as follows: (i) For the fiscal year ended December 31, 2023, the Company provided interest free loans of $400,000 to Zibo Shidong, a wholly owned subsidiary of the VIE, and received interest-free loans of $150,000 from the Company’s subsidiary, GMB HK; (ii) For the fiscal year ended December 31, 2022, the VIE provided interest-free loans of $6,188,307 to the Company’s subsidiaries, Zhuhai Zibo and Sunrise Guizhou for the construction costs related to the graphite anode business, and the Company’s subsidiary, GMB HK, provided interest-free loans of $310,000 to the Company for professional fees.
(ii) For the fiscal year ended December 31, 2023, the Company provided interest-free loans of $400,000 to Zibo Shidong, a wholly owned subsidiary of the VIE, and received interest-free loans of $150,000 from the Company’s subsidiary, GMB HK; (iii) For the fiscal year ended December 31, 2022, the VIE provided interest-free loans of $6,188,307 to the Company’s subsidiaries, Zhuhai Zibo and Sunrise Guizhou for the construction costs related to the graphite anode business, and the Company’s subsidiary, GMB HK, provided interest-free loans of $310,000 to the Company for professional fees.
As of the date of this annual report, Haping Hu, our CEO and chairman of the board of directors, beneficially owns 1,573,189, or 8.04% of our issued Class A Ordinary Shares, and 6,567,272, or 100%, of our issued Class B Ordinary Shares, representing approximately 88.07% of the voting rights in our Company.
As of the date of this annual report, Haping Hu, our CEO and chairman of the board of directors, beneficially owns 2,056,989, or 10.07%, of our issued Class A Ordinary Shares, and 6,567,272, or 100%, of our issued Class B Ordinary Shares, representing approximately 87.90% of the voting rights in our Company.
Under the current VIE Agreements, however, we rely on the performance by the VIE and its shareholders of their respective obligations under the contracts to exercise control over the VIE. We are also subject to the risks of uncertainty about any future actions of the PRC government in this regard.
Under the current VIE Agreements, however, we rely on the performance by the VIE and its shareholders of their respective obligations under the contracts to direct the activities of a VIE that most significantly impact the VIE’s economic performance. We are also subject to the risks of uncertainty about any future actions of the PRC government in this regard.
Sunrise Guizhou’s customers are manufacturers of industrial and consumer energy storage lithium-ion batteries, such as batteries for electric vehicles and electric ships, and smart consumer electronics. For fiscal year ended December 31, 2023, Sunrise Guizhou had 23 customers. Three customers accounted for more than 10% of Sunrise Guizhou’s total sales, accounting for 38%, 25%, and 11%, respectively.
Sunrise Guizhou’s customers are manufacturers of industrial and consumer energy storage lithium-ion batteries, such as batteries for electric vehicles and electric ships, and smart consumer electronics. For the fiscal year ended December 31, 2024, Sunrise Guizhou had 26 customers. One customer accounted for more than 10% of Sunrise Guizhou’s total sales, accounting for 67%.
Although to our knowledge we have not experienced any such material system failure or material security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of development programs and business operations. 14 Any cyber-attack that leads to unauthorized access, use, or disclosure of personal information, data breach or destruction or loss of data could result in a violation of applicable U.S. and international privacy, data protection and other laws and regulations, subject us to litigation and governmental investigations, proceedings and regulatory actions by federal, state and local regulatory entities in the United States and by international regulatory entities, resulting in exposure to material civil and/or criminal liability, cause us to breach our contractual obligations, which could result in significant legal and financial exposure and reputational damages.
Any cyber-attack that leads to unauthorized access, use, or disclosure of personal information, data breach or destruction or loss of data could result in a violation of applicable U.S. and international privacy, data protection and other laws and regulations, subject us to litigation and governmental investigations, proceedings and regulatory actions by federal, state and local regulatory entities in the United States and by international regulatory entities, resulting in exposure to material civil and/or criminal liability, cause us to breach our contractual obligations, which could result in significant legal and financial exposure and reputational damages.
The losses during the reporting periods were mainly due to the material and negative impact of the COVID-19 pandemic on our business, and the large capital investment injected by us into the new business venture, Sunrise Guizhou, to enter into the manufacture and sales of lithium-ion power battery anode materials.
The losses during the reporting periods were mainly due to the material and negative impact of the COVID-19 pandemic on our knowledge sharing and enterprise business in fiscal year 2022, the large capital investment injected by us into the new business venture, Sunrise Guizhou, to enter into the manufacture and sales of lithium-ion power battery anode materials, and the subsequent losses Sunrise Guizhou has incurred due to overcapacity and intense competition in the graphite material industry.
Our expansion has placed significant demands on us to maintain the quality of our services to ensure that our brand does not suffer as a result of any deviations, whether actual or perceived, in the quality of our services.
Such expansion has placed, and will continue to place, substantial demands on our financial, managerial, operational, technological and other resources. Our expansion has placed significant demands on us to maintain the quality of our services to ensure that our brand does not suffer as a result of any deviations, whether actual or perceived, in the quality of our services.
For fiscal year ended December 31, 2022, Sunrise Guizhou had 16 customers. Four customers accounted for more than 10% of Sunrise Guizhou’s total sales, accounting for 28%, 20%, 19% and 19% respectively.
For the fiscal year ended December 31, 2023, Sunrise Guizhou had 23 customers. Three customers accounted for more than 10% of Sunrise Guizhou’s total sales, accounting for 38%, 25%, and 11%, respectively. For the fiscal year ended December 31, 2022, Sunrise Guizhou had 16 customers.
Our net revenue was $45,050,405, $38,125,668 and $7,409,272 for the years ended December 31, 2023, 2022 and 2021, respectively. Our net loss was $32,920,724, $23,124,402 and $8,714,332 for the year ended December 31, 2023, 2022 and 2021, respectively.
Our net revenue was $64,997,741, $45,050,405 and $38,125,668 for the years ended December 31, 2024, 2023 and 2022, respectively. Our net loss was $17,981,164, $32,920,724 and $23,124,402 for the year ended December 31, 2024, 2023 and 2022, respectively.
Management’s plan to alleviate the substantial doubt about our ability to continue as a going concern as the following: working to improve our liquidity and working capital sources, mainly through cash flow from its operations, renewal of bank borrowings, equity or debt offering and borrowing from related parties.
In assessing its liquidity, management monitors and analyzes the Company’s cash on-hand, its ability to generate sufficient revenue sources and ability to obtain additional financial support in the future, and its operating and capital expenditure commitments. 12 Management’s plan to alleviate the substantial doubt about our ability to continue as a going concern as the following: working to improve our liquidity and working capital sources, mainly through cash flow from its operations, renewal of bank borrowings, equity or debt offering and borrowing from related parties.
The cost, availability, and quality of the principle raw materials, such as asphalt coke, petroleum coke, needle coke, and American petroleum coke, are essential to Sunrise Guizhou’s operations.
Sunrise Guizhou faces the risk of fluctuations in the cost, availability, and quality of raw materials, which could adversely affect our results of operations. The cost, availability, and quality of the principle raw materials, such as asphalt coke, petroleum coke, needle coke, and American petroleum coke, are essential to Sunrise Guizhou’s operations.
For a description of these contractual arrangements, see “ Business—Contractual Arrangements between GIOP BJ, the VIE and Its Shareholders ” and “ Related Party Transactions—Contractual Arrangements with GIOP BJ, the VIE and Its Shareholders. ” In the opinion of our PRC legal counsel, Jincheng Tongda & Neal Law Firm (“JT&N”), based on its understandings of the relevant PRC laws and regulations, (i) the ownership structures of the VIE in China and GIOP BJ are not in violation of applicable PRC laws and regulations currently in effect; and (ii) each of the contracts among GIOP BJ, the VIE and its shareholders is legal, valid, binding and enforceable in accordance with its terms and applicable PRC laws.
In the opinion of our PRC legal counsel, JT&N, based on its understandings of the relevant PRC laws and regulations, (i) the ownership structures of the VIE in China and GIOP BJ are not in violation of applicable PRC laws and regulations currently in effect; and (ii) each of the contracts among GIOP BJ, the VIE and its shareholders is legal, valid, binding and enforceable in accordance with its terms and applicable PRC laws.
(“Innovation Research”) December 13, 2022 PRC 39.35% Research and development Variable Interest Entity (“VIE”) and subsidiaries of VIE Global Mentor Board (Zibo) Information Technology Co., Ltd. (“SDH” or “VIE”) December 5, 2014 PRC VIE Peer-to-peer knowledge sharing and enterprise service platform provider Global Mentor Board (Hangzhou) Technology Co., Ltd.
(“Sunrise Anhui”) January 21,2025 PRC 39.35% Manufacture of lithium battery materials Variable Interest Entity (“VIE”) and subsidiaries of VIE Global Mentor Board (Zibo) Information Technology Co., Ltd. (“SDH” or “VIE”) December 5, 2014 PRC VIE Knowledge sharing and enterprise service platform provider Global Mentor Board (Hangzhou) Technology Co., Ltd.
SELECTED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS DATA Year ended December 31, 2023 Parent Subsidiaries VIE and VIE’s subsidiaries Inter- company elimination Group consolidated (US$) Revenues, net - 44,394,292 656,113 - 45,050,405 Total cost and operating expenses 6,524,022 65,728,723 3,327,665 - 75,580,410 Loss from operations (6,524,022 ) (21,334,431 ) (2,671,552 ) - (30,530,005 ) Loss before income taxes (6,611,490 ) (22,612,303 ) (3,697,157 ) - (32,920,950 ) Net loss (6,611,490 ) (22,612,303 ) (3,696,931 ) - (32,920,724 ) Year ended December 31, 2022 Parent Subsidiaries VIE and VIE’s subsidiaries Inter- company elimination Group consolidated (US$) Revenues, net - 37,511,989 613,679 - 38,125,668 Total cost and operating expenses 3,586,852 39,001,736 14,346,213 - 56,934,801 Loss from operations (3,586,852 ) (1,489,747 ) (13,732,534 ) - (18,809,133 ) Loss before income taxes (5,990,264 ) (1,696,242 ) (14,628,926 ) - (22,315,432 ) Net loss (5,990,264 ) (1,696,003 ) (15,438,135 ) - (23,124,402 ) Year ended December 31, 2021 Parent Subsidiaries VIE and VIE’s subsidiaries Inter- company elimination Group consolidated (US$) Revenues, net - - 7,409,272 - 7,409,272 Total cost and operating expenses 1,010,536 127,627 13,681,122 - 14,819,285 Loss from operations (1,010,536 ) (127,627 ) (6,271,850 ) - (7,410,013 ) Loss before income taxes (3,021,789 ) (170,253 ) (5,865,989 ) 107,118 (8,950,913 ) Net loss (3,021,789 ) (170,253 ) (5,629,408 ) 107,118 (8,714,332 ) 6 SELECTED CONDENSED CONSOLIDATING BALANCE SHEET DATA As of December 31, 2023 Parent Subsidiaries VIE and VIE’s subsidiaries Inter- company elimination Group consolidated (US$) Total current assets 3,030,688 30,874,514 7,673,555 (5,762,862 ) 35,815,895 Total non-current assets 14,540,000 80,084,256 4,604,379 (14,540,000 ) 84,688,635 Total assets 17,570,688 110,958,770 12,277,934 (20,302,862 ) 120,504,530 Total current liabilities 31,823 64,306,203 4,913,254 (5,762,862 ) 63,488,418 Total non-current liabilities - 11,684,348 - - 11,684,348 Total liabilities 31,823 75,990,551 4,913,254 (5,762,862 ) 75,172,766 As of December 31, 2022 Parent Subsidiaries VIE and VIE’s subsidiaries Inter- company elimination Group consolidated (US$) Total current assets 7,330,103 33,642,263 9,713,750 (6,048,283 ) 44,637,833 Total non-current assets 14,690,000 56,445,366 5,939,175 (14,690,000 ) 62,384,541 Total assets 22,020,103 90,087,629 15,652,925 (20,738,283 ) 107,022,374 Total current liabilities 15,550 27,666,520 4,389,658 (6,048,283 ) 26,023,445 Total non-current liabilities - 7,637,332 - - 7,637,332 Total liabilities 15,550 35,303,852 4,389,658 (6,048,283 ) 33,660,777 As of December 31, 2021 Parent Subsidiaries VIE and VIE’s subsidiaries Inter- company elimination Group consolidated (US$) Total current assets 7,776,218 9,932,297 16,864,942 (227,899 ) 34,345,558 Total non-current assets 17,700,060 8,244,917 13,404,549 (15,000,000 ) 24,349,526 Total assets 25,476,278 18,177,214 30,269,491 (15,227,899 ) 58,695,084 Total current liabilities 211,430 33,686 1,703,665 (227,899 ) 1,720,882 Total non-current liabilities - - - - - Total liabilities 211,430 33,686 1,703,665 (227,899 ) 1,720,882 7 SELECTED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS DATA Year ended December 31, 2023 Parent Subsidiaries VIE and VIE’s subsidiaries Inter-company elimination Group consolidated (US$) Net cash (used in) provided by operating activities (1,516,279 ) (5,592,986 ) (423,730 ) 250,000 (7,282,995 ) Net cash provided by (used in) investing activities 878,000 (7,881,035 ) - - (7,003,035 ) Net cash provided by (used in) financing activities - 13,529,267 400,000 (250,000 ) 13,679,267 Year ended December 31, 2022 Parent Subsidiaries VIE and VIE’s subsidiaries Inter-company elimination Group consolidated (US$) Net cash used in operating activities (808,226 ) (5,444,733 ) (3,320,442 ) - (9,573,401 ) Net cash used in investing activities - (45,299,072 ) (6,188,307 ) 5,878,307 (45,609,072 ) Net cash provided by financing activities 310,000 51,328,368 - (5,878,307 ) 45,760,061 Year ended December 31, 2021 Parent Subsidiaries VIE and VIE’s subsidiaries Inter-company elimination Group consolidated (US$) Net cash (used in) provided by operating activities (1,015,145 ) (6,532,445 ) 2,314,408 - (5,233,182 ) Net cash used in investing activities (25,825,000 ) (8,244,917 ) (3,115,281 ) 15,090,000 (22,095,198 ) Net cash provided by financing activities 28,249,093 17,678,168 - (15,090,000 ) 30,837,261 A. [Reserved] B.
SELECTED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS DATA Year ended December 31, 2024 Parent Subsidiaries VIE and VIE’s subsidiaries Inter- company elimination Group consolidated (US$) Revenues, net - 71,276,389 2,899,946 (9,178,594 ) 64,997,741 Total cost and operating expenses 1,776,146 86,746,148 2,250,369 (9,178,594 ) 81,594,069 (Loss) Profit from operations (1,776,146 ) (15,469,759 ) 649,577 - (16,596,328 ) (Loss) Profit before income taxes (1,778,111 ) (17,052,619 ) 855,129 - (17,975,601 ) Net (loss) income (1,778,111 ) (17,057,370 ) 854,317 - (17,981,164 ) Year ended December 31, 2023 Parent Subsidiaries VIE and VIE’s subsidiaries Inter- company elimination Group consolidated (US$) Revenues, net - 44,394,292 656,113 - 45,050,405 Total cost and operating expenses 6,524,022 65,728,723 3,327,665 - 75,580,410 Loss from operations (6,524,022 ) (21,334,431 ) (2,671,552 ) - (30,530,005 ) Loss before income taxes (6,611,490 ) (22,612,303 ) (3,697,157 ) - (32,920,950 ) Net loss (6,611,490 ) (22,612,303 ) (3,696,931 ) - (32,920,724 ) Year ended December 31, 2022 Parent Subsidiaries VIE and VIE’s subsidiaries Inter- company elimination Group consolidated (US$) Revenues, net - 37,511,989 613,679 - 38,125,668 Total cost and operating expenses 3,586,852 39,001,736 14,346,213 - 56,934,801 Loss from operations (3,586,852 ) (1,489,747 ) (13,732,534 ) - (18,809,133 ) Loss before income taxes (5,990,264 ) (1,696,242 ) (14,628,926 ) - (22,315,432 ) Net loss (5,990,264 ) (1,696,003 ) (15,438,135 ) - (23,124,402 ) 6 SELECTED CONDENSED CONSOLIDATING BALANCE SHEET DATA As of December 31, 2024 Parent Subsidiaries VIE and VIE’s subsidiaries Inter- company elimination Group consolidated (US$) Total current assets 2,442,761 66,149,892 14,823,298 (20,405,078 ) 63,010,873 Total non-current assets 14,540,000 75,540,659 4,537,251 (14,605,751 ) 80,012,159 Total assets 16,982,761 141,690,551 19,360,549 (35,010,829 ) 143,023,032 Total current liabilities 252,338 93,511,037 13,398,312 (20,405,078 ) 86,756,609 Total non-current liabilities - 28,971,750 - - 28,971,750 Total liabilities 252,338 122,482,787 13,398,312 (20,405,078 ) 115,728,359 As of December 31, 2023 Parent Subsidiaries VIE and VIE’s subsidiaries Inter- company elimination Group consolidated (US$) Total current assets 3,030,688 30,874,514 7,673,555 (5,762,862 ) 35,815,895 Total non-current assets 14,540,000 80,084,256 4,604,379 (14,540,000 ) 84,688,635 Total assets 17,570,688 110,958,770 12,277,934 (20,302,862 ) 120,504,530 Total current liabilities 31,823 64,306,203 4,913,254 (5,762,862 ) 63,488,418 Total non-current liabilities - 11,684,348 - - 11,684,348 Total liabilities 31,823 75,990,551 4,913,254 (5,762,862 ) 75,172,766 As of December 31, 2022 Parent Subsidiaries VIE and VIE’s subsidiaries Inter- company elimination Group consolidated (US$) Total current assets 7,330,103 33,642,263 9,713,750 (6,048,283 ) 44,637,833 Total non-current assets 14,690,000 56,445,366 5,939,175 (14,690,000 ) 62,384,541 Total assets 22,020,103 90,087,629 15,652,925 (20,738,283 ) 107,022,374 Total current liabilities 15,550 27,666,520 4,389,658 (6,048,283 ) 26,023,445 Total non-current liabilities - 7,637,332 - - 7,637,332 Total liabilities 15,550 35,303,852 4,389,658 (6,048,283 ) 33,660,777 7 SELECTED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS DATA Year ended December 31, 2024 Parent Subsidiaries VIE and VIE’s subsidiaries Inter-company elimination Group consolidated (US$) Net cash used in operating activities (1,269,634 ) (2,574,103 ) (1,508,420 ) - (5,352,157 ) Net cash provided by (used in) investing activities 1,071,942 (2,293,647 ) 423,298 1,430,868 632,461 Net cash (used in) provided by financing activities (150,000 ) 11,251,341 961,196 (1,430,868 ) 10,631,669 Year ended December 31, 2023 Parent Subsidiaries VIE and VIE’s subsidiaries Inter-company elimination Group consolidated (US$) Net cash (used in) provided by operating activities (1,516,279 ) (5,592,986 ) (423,730 ) 250,000 (7,282,995 ) Net cash provided by (used in) investing activities 878,000 (7,881,035 ) - - (7,003,035 ) Net cash provided by (used in) financing activities - 13,529,267 400,000 (250,000 ) 13,679,267 Year ended December 31, 2022 Parent Subsidiaries VIE and VIE’s subsidiaries Inter-company elimination Group consolidated (US$) Net cash used in operating activities (808,226 ) (5,444,733 ) (3,320,442 ) - (9,573,401 ) Net cash used in investing activities - (45,299,072 ) (6,188,307 ) 5,878,307 (45,609,072 ) Net cash provided by financing activities 310,000 51,328,368 - (5,878,307 ) 45,760,061 A. [Reserved] B.
We are expanding our operations into the graphite anode manufacturing and sales business. In April 2022, we entered into an investment agreement with certain partners to form a joint venture, Sunrise Guizhou, which is dedicated to the production of lithium-ion power battery anode materials.
In April 2022, we entered into an investment agreement with certain partners to form a joint venture, Sunrise Guizhou, which is dedicated to the production of lithium-ion power battery anode materials. As of the date of this annual report, we have made substantial investment into the new venture.
The VIE Agreements enable us to consolidate the financial results of the VIE and its subsidiaries in our consolidated financial statements under the generally accepted accounting principles in the United States (“U.S. GAAP”).
Solely for accounting purpose, the VIE Agreements enable us to consolidate the financial results of the VIE and its subsidiaries in our consolidated financial statements under U.S. GAAP.
Investors of our Ordinary Shares do not hold shares in the PRC operating entities, but instead hold shares of a Cayman Islands exempted company. Further, neither we nor our subsidiaries own any shares in the VIE.
Investors of our Ordinary Shares do not hold shares in the PRC operating entities, but instead hold shares of a Cayman Islands exempted company. Further, neither we nor our subsidiaries own any shares in the VIE. Instead, we entered into a series of contractual arrangements, also known as VIE Agreements, dated June 10, 2019, with the VIE and its shareholders.
It is important for us to attract qualified managerial and other employees who have experience in consulting services and are committed to our service approach. There may be a limited supply of such qualified individuals.
Our personnel are critical to maintaining the quality and consistency of our services, brand and reputation. It is important for us to attract qualified managerial and other employees. There may be a limited supply of such qualified individuals.
If Sunrise Guizhou is unable to obtain adequate financing or financing on terms satisfactory to it when required, our ability to continue to pursue our business objectives and to respond to business opportunities, challenges or unforeseen circumstances could be significantly limited, and our business, financial condition, results of operations and prospects could be adversely affected. 18 Risks Related to Our Corporate Structure We control and receive the economic benefits of the business operations of the VIE through the VIE Agreements solely because we met the conditions for consolidation of the VIE under the U.S.
If Sunrise Guizhou is unable to obtain adequate financing or financing on terms satisfactory to it when required, our ability to continue to pursue our business objectives and to respond to business opportunities, challenges or unforeseen circumstances could be significantly limited, and our business, financial condition, results of operations and prospects could be adversely affected. 17 Risks Related to Our Corporate Structure The VIE Agreements have not been tested in a court of law and are subject to significant risks, as set forth in the following risk factors.
As of the date of this annual report, Zhuhai Zibo has invested a total of RMB126,480,000 ($19,858,670) in Sunrise Guizhou. While we believe the joint venture could give the Company new potential growth, it may not perform as well as we expected and, as a result, could impact the Company’s financial performance.
While we believe the joint venture could give the Company new potential growth, it may not perform as well as we expected and, as a result, could impact the Company’s financial performance.
However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination. Our auditor prior to December 16, 2022, Friedman LLP ("Friedman") and our current auditor, Marcum Asia CPAs LLP (“MarcumAsia”), are PCAOB registered public accounting firms headquartered in New York.
However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination.
(“GMB Technology”) August 29, 2018 PRC 30.6% by VIE Technical services provider Shidong Zibo Digital Technology Co., Ltd. (“Zibo Shidong”) October 16, 2020 PRC 100% by VIE Technical services provider Shidong Trading Service (Zhejiang) Co., Ltd. (“Shidong Trading”) April 19, 2021 PRC Deregistered in November 2022 Sale of merchandise Shanghai Jiagui Haifeng Technology Co., Ltd.
(“GMB Technology”) August 29, 2018 PRC 30.6% by VIE Technical services provider Shidong Zibo Digital Technology Co., Ltd. (“Zibo Shidong”) October 16, 2020 PRC 100% by VIE Technical services provider Beijing Mentor Board Health Technology Co., Ltd (“GMB Health”) January 7, 2022 PRC 100% by VIE Health services Shidong Yike (Beijing) Technology Co., Ltd.
(“Yuantai Fengdeng”) March 4, 2022 PRC Deregistered in April 2023 Agricultural technology service 5 The following tables present selected condensed consolidating financial data of Sunrise New Energy and its subsidiaries and the VIE and its subsidiaries for the fiscal years ended December 31, 2023, 2022, 2021, and balance sheet data as of December 31, 2023, 2022, and 2021.
(“Shidong Yike”) July 16, 2021 PRC 100% by VIE Health services Guizhou Yuanneng Zhihui Enterprise Management Partnership Enterprise (Limited Partnership) (“Guizhou Yuanneng”) April 1, 2024 PRC 94% by VIE Holding company 5 The following tables present selected condensed consolidating financial data of Sunrise New Energy and its subsidiaries and the VIE and its subsidiaries for the fiscal years ended December 31, 2024, 2023, and 2022 balance sheet data as of December 31, 2024, 2023, and 2022.
Furthermore, if Sunrise Guizhou experiences difficulties in the collection of its accounts receivables from its key customers, the results of our operation may be materially and adversely affected. Sunrise Guizhou faces the risk of fluctuations in the cost, availability, and quality of raw materials, which could adversely affect our results of operations.
Similarly, a failure to manufacture sufficient quantities of products to meet the demands of these customers may cause Sunrise Guizhou to lose business. Furthermore, if Sunrise Guizhou experiences difficulties in the collection of its accounts receivables from its key customers, the results of our operation may be materially and adversely affected.
See “ Regulations—Regulations Related to Foreign Investment .” In light of the above restrictions and requirements, we currently operate our knowledge sharing and enterprise service platform through SDH, a VIE entity, through a series of contractual arrangements, as a result of which, under United States generally accepted accounting principles, the assets and liabilities of the VIE are treated as our assets and liabilities and the results of operations of the VIE are treated in all aspects as if they were the results of our operations.
As a result of which, under United States generally accepted accounting principles, the assets and liabilities of the VIE are treated as our assets and liabilities and the results of operations of the VIE are treated as if they were the results of our operations.
Together, these government authorities promulgate and enforce regulations that cover many aspects of the operation of online services we provide on our APP, including entry into this online service industry, the scope of permissible business activities, licenses and permits for various business activities, and foreign investment. 13 We currently hold an ICP License (the Administrative Measures on Internet Information Services, or the Internet Measures, promulgated by the State Council requires commercial internet content-related services operators to obtain a VATS (“value added telecommunications service”) License for internet content provision business, or the ICP License).
Together, these government authorities promulgate and enforce regulations that cover many aspects of the operation we provide on our APP, including the scope of permissible business activities, licenses and permits for various business activities, and foreign investment.
If any of its key customers reduces, delays or cancels its orders for any reason, or the financial condition of any of its key customers deteriorates, Sunrise Guizhou’s business could be seriously harmed. Similarly, a failure to manufacture sufficient quantities of products to meet the demands of these customers may cause Sunrise Guizhou to lose business.
Four customers accounted for more than 10% of Sunrise Guizhou’s total sales, accounting for 28%, 20%, 19% and 19% respectively. If any of its key customers reduces, delays or cancels its orders for any reason, or the financial condition of any of its key customers deteriorates, Sunrise Guizhou’s business could be seriously harmed.
Key Information — Contractual Agreements among GIOP BJ, the VIE and Its Shareholders” for a summary of these VIE Agreements. We have relied and expect to continue to rely on the VIE Agreements to control and operate the business of the VIE.
Key Information — Contractual Agreements among GIOP BJ, the VIE and Its Shareholders” for a summary of these VIE Agreements. The VIE Agreements, however, may not be as effective in providing us with the necessary control over the VIE and its operations.
GAAP for accounting purpose; however, the VIE Agreements have not been tested in a court of law and are subject to significant risks, as set forth in the following risk factors. For a description of these VIE Agreements, see “ITEM 4. INFORMATION ON THE COMPANY — C. Organizational Structure”.
For a description of these VIE Agreements, see “ITEM 4. INFORMATION ON THE COMPANY — C. Organizational Structure”.
We are an Existing Issuer, based on the foregoing, and we are not, therefore, required to complete the filing procedures with the CSRC immediately, and shall be required, however, to file with the CSRC for any subsequent offerings.
We are an Existing Issuer, based on the foregoing, we made the filing with the CSRC on November 7, 2024 as required for our subsequent offering completed on November 5, 2024.
They are subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess an auditor’s compliance with the applicable professional standards, and have been inspected by the PCAOB on a regular basis. As such, as of the date of this annual report, our listing is not affected by the HFCA Act and related regulations.
As such, as of the date of this annual report, our listing is not affected by the HFCA Act and related regulations.
As such, we may not be able to realize our expected growth, and our business and financial results will be adversely impacted. Increasing competition within the enterprise service and knowledge sharing industries could have an impact on our business prospects.
Furthermore, overcapacity and intense competition in the graphite material industry have led to a decline in the sales prices of our graphite material products, which contributed significantly to the Company's net losses during the reporting periods. As such, we may not be able to realize our expected growth, and our business and financial results will be adversely impacted.
Removed
Instead, for accounting purposes, we control and receive the economic benefits of the VIE’s business operation through a series of contractual arrangements, also known as VIE Agreements, dated June 10, 2019.
Added
Under the generally accepted accounting principles in the United States (“U.S. GAAP”), we are deemed to have a controlling financial interest in, and be the primary beneficiary of, the VIE for accounting purposes, because such contractual arrangements are designed so that the operations of the VIE are solely for the benefit of GIOP BJ and, ultimately, the Company.
Removed
(iii) For the fiscal year ended December 31, 2021, the Company transferred the proceeds from its initial public offering in the amount of $15,000,000 to its subsidiary, Zhuhai Zibo, and the VIE provided interest-free loans of $90,000 to the Company for professional fees related to the initial public offering.
Added
Our former auditor, Marcum Asia CPAs LLP (“MarcumAsia”), as well as our current auditor, Wei, Wei & Co., LLP (“WW”), are PCAOB-registered public accounting firms subject to laws in the United States, pursuant to which the PCAOB conducts regular inspections to assess an auditor’s compliance with the applicable professional standards.
Removed
(“Jiagui Haifeng”) November 29, 2021 PRC Disposal in March 2023 Business incubation services provider Shanghai Nanyu Culture Communication Co., Ltd. (“Nanyu Culture”) July 27, 2021 PRC Deregistered in July 2023 Enterprise information technology integration services provider Beijing Mentor Board Health Technology Co., Ltd (“GMB Health”) January 7, 2022 PRC 100% by VIE Health services Shidong Yike (Beijing) Technology Co., Ltd.
Added
For the last three fiscal years, Cash transfers and transfers of other assets between Sunrise New Energy, its subsidiaries, and the VIE were as follows: (i) For the fiscal year ended December 31, 2024, the Company provided interest-free loans of $516,661 to GMB HK and an interest-free loans of $1,300,000 to the VIE’s subsidiary, Zibo Shidong; the VIE provided interest-free loans of $77,268 to GIOP BJ; Zibo Shidong provided interest-free loans of $150,880 GIOP BJ ; Sunrise Guizhou provided loans of $166,766 with 4% interest rate to GMB Hangzhou and a loan of $347,430 with 4% interest rate to Zibo Shidong.
Removed
July 16, 2021 PRC 51% by VIE Health services Shanghai Yuantai Fengdeng Agricultural Technology Co., Ltd.
Added
(“Innovation Research”) December 13, 2022 PRC 39.35% Research and development Shenzhen Sunrise Yitan New Energy Technology Co., Ltd. (“Sunrise Yitan”) June 24, 2024 PRC 25.58% Research and development of Sodium-ion battery Shenzhen Sunrise Suiyuan New Materials Technology Co., Ltd. (“Sunrise Suiyuan”) June 24, 2024 PRC 25.58% Research and development of silicon carbon battery Guizhou Chenhui Trading Co., Ltd.
Removed
Our limited history of operation makes it difficult to evaluate our future prospects. 12 In assessing its liquidity, management monitors and analyzes the Company’s cash on-hand, its ability to generate sufficient revenue sources and ability to obtain additional financial support in the future, and its operating and capital expenditure commitments.
Added
(“Sunrise Chenhui”) March 25, 2024 PRC 39.35% Sales of lithium battery materials Guizhou Yihui New Energy Co., Ltd. October 10, 2024 PRC 39.35% Sales of lithium battery materials Sunrise Anhui New Energy Materials Co., Ltd.
Removed
As of the date of this annual report, we have made substantial investment into the new venture. Such expansion has placed, and will continue to place, substantial demands on our financial, managerial, operational, technological and other resources.
Added
Our limited history of operation makes it difficult to evaluate our future prospects.
Removed
The enterprise service and knowledge sharing are industries where new competitors can easily enter into since there are no significant barriers to entry. We also face many competitors in the knowledge sharing industry where a number of competitors have been in business longer than us.
Added
Our ICP License (the Administrative Measures on Internet Information Services, or the Internet Measures, promulgated by the State Council requires commercial internet content-related services operators to obtain a VATS (“value added telecommunications service”) License for internet content provision business, or the ICP License) expired in July 2024 and we believe an ICP License is no longer needed for our knowledge sharing and enterprise service platform business, since except the Company itself, there is no other party conducting business through our APP.
Removed
Competing companies may have significantly greater financial and other resources than we have and may offer services that are more attractive to prospective clients; increased competition would have a negative impact on both our revenues and our profit margins.
Added
Although to our knowledge we have not experienced any such material system failure or material security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of development programs and business operations.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

5 edited+0 added−0 removed65 unchanged
One-sixth of his or her days in the United States in the second preceding year. 99 Taxation of Dividends and Other Distributions on our Ordinary Shares Subject to the passive foreign investment company (PFIC) rules (defined below) discussed below, the gross amount of distributions made by us to you with respect to the Ordinary Shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles).
One-sixth of his or her days in the United States in the second preceding year. 96 Taxation of Dividends and Other Distributions on our Ordinary Shares Subject to the passive foreign investment company (PFIC) rules (defined below) discussed below, the gross amount of distributions made by us to you with respect to the Ordinary Shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles).
As an exempted company, the Company has received a tax exemption certificate from the Financial Secretary of the Cayman Islands pursuant to the Tax Concessions Law (Revised) of the Cayman Islands, containing an undertaking that in the event of any change to the foregoing, the Company, for a period of twenty years from the date of the grant of the undertaking (such date of grant being 1 August 2019), will not be chargeable to tax in the Cayman Islands on its income or its capital gains arising in the Cayman Islands or elsewhere. 96 People’s Republic of China Taxation Enterprise Income Tax and Withholding Tax We are a holding company incorporated in the Cayman Islands and we gain substantial income by way of dividends paid to us from our PRC subsidiaries.
As an exempted company, the Company has received a tax exemption certificate from the Financial Secretary of the Cayman Islands pursuant to the Tax Concessions Law (Revised) of the Cayman Islands, containing an undertaking that in the event of any change to the foregoing, the Company, for a period of twenty years from the date of the grant of the undertaking (such date of grant being 1 August 2019), will not be chargeable to tax in the Cayman Islands on its income or its capital gains arising in the Cayman Islands or elsewhere. 93 People’s Republic of China Taxation Enterprise Income Tax and Withholding Tax We are a holding company incorporated in the Cayman Islands and we gain substantial income by way of dividends paid to us from our PRC subsidiaries.
We will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation in which we own, directly or indirectly, 25% or more (by value) of the stock. 100 Based upon our current and projected income and assets, including the proceeds we received from our initial public offering and the value of our Ordinary Shares, we do not expect to be a PFIC for the current taxable year or the foreseeable future.
We will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation in which we own, directly or indirectly, 25% or more (by value) of the stock. 97 Based upon our current and projected income and assets, including the proceeds we received from our initial public offering and the value of our Ordinary Shares, we do not expect to be a PFIC for the current taxable year or the foreseeable future.
Subsidiary Information For a listing of our subsidiaries, see “ Item 4C. Organizational Structure” for a chart of our current structure. 101
Subsidiary Information For a listing of our subsidiaries, see “ Item 4C. Organizational Structure” for a chart of our current structure. 98
The VAT tax rates applicable to our PRC subsidiaries and consolidated affiliates are as follows: 13% on graphite anode material sales for Sunrise Guizhou; 6% on services for the VIE, GMB (Hangzhou) and Mentor Board Voice of Seeding (Shanghai) Cultural Technology Co., Ltd.; 3% for small-scale taxpayers including GMB (Beijing), GMB Culture, GMB Consulting and GMB Linking and GIOP BJ. 97 United States Federal Income Tax Considerations The following does not address the tax consequences to any particular investor or to persons in special tax situations such as: ● banks; ● financial institutions; ● insurance companies; ● regulated investment companies; ● real estate investment trusts; ● broker-dealers; ● persons that elect to mark their securities to market; ● U.S. expatriates or former long-term residents of the U.S.; ● governments or agencies or instrumentalities thereof; ● tax-exempt entities; ● persons liable for alternative minimum tax; ● persons holding our Ordinary Shares as part of a straddle, hedging, conversion or integrated transaction; ● persons that actually or constructively own 10% or more of our voting power or value (including by reason of owning our Ordinary Shares); ● persons who acquired our Ordinary Shares pursuant to the exercise of any employee share option or otherwise as compensation; ● persons holding our Ordinary Shares through partnerships or other pass-through entities; ● beneficiaries of a Trust holding our Ordinary Shares; or ● persons holding our Ordinary Shares through a Trust. 98 Material Tax Consequences Applicable to U.S.
The VAT tax rates applicable to our PRC subsidiaries and consolidated affiliates are as follows: 13% on graphite anode material sales for Sunrise Guizhou, Zibo Shidong and Sunrise Chenhui; 6% on services for Shidong Cloud and the VIE and its subsidiaries, including Zibo Shidong and GMB (Hangzhou); 3% for small-scale taxpayers including and GIOP BJ. 94 United States Federal Income Tax Considerations The following does not address the tax consequences to any particular investor or to persons in special tax situations such as: ● banks; ● financial institutions; ● insurance companies; ● regulated investment companies; ● real estate investment trusts; ● broker-dealers; ● persons that elect to mark their securities to market; ● U.S. expatriates or former long-term residents of the U.S.; ● governments or agencies or instrumentalities thereof; ● tax-exempt entities; ● persons liable for alternative minimum tax; ● persons holding our Ordinary Shares as part of a straddle, hedging, conversion or integrated transaction; ● persons that actually or constructively own 10% or more of our voting power or value (including by reason of owning our Ordinary Shares); ● persons who acquired our Ordinary Shares pursuant to the exercise of any employee share option or otherwise as compensation; ● persons holding our Ordinary Shares through partnerships or other pass-through entities; ● beneficiaries of a Trust holding our Ordinary Shares; or ● persons holding our Ordinary Shares through a Trust. 95 Material Tax Consequences Applicable to U.S.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

121 edited+52 added−94 removed331 unchanged
Beginning in fiscal year 2022, we started transitioning our core business from knowledge sharing and enterprise services to sales of graphite anode material products. In April 2022, we entered into the graphite anode material manufacturing and sales business through a joint venture, Sunrise Guizhou, of which we currently own 39.35% through our wholly owned subsidiary, Zhuhai Zibo.
Beginning in fiscal year 2022, we started transitioning our core business from knowledge sharing and enterprise services to sales of graphite anode material products. In April 2022, we entered into the graphite anode material manufacturing and sales business through a joint venture, Sunrise Guizhou, of which we currently own 39.35% through Zhuhai Zibo, our wholly owned subsidiary.
Operating expenses The following table sets forth the breakdown of the operating expenses for the years ended December 31, 2023 and 2022: For the years ended December 31, Change 2023 % 2022 % Amount % Selling expenses $ 742,167 4.09 % 1,075,980 6.16 % (333,813 ) (31.02 )% General and administrative expenses 13,040,038 71.94 % 12,678,873 72.62 % 361,165 2.85 % Research and development expenses 1,193,082 6.58 % 1,053,882 6.04 % 139,200 13.21 % Impairment of intangible assets 3,151,467 17.39 % 2,650,020 15.18 % 501,447 18.92 % Total costs and operating expenses 18,126,754 100.00 % 17,458,755 100.00 % 667,999 3.83 % 71 Selling expenses The selling expenses decreased by $333,813 or 31.02%, from $1,075,980 for the year ended December 31, 2022 to $742,167 for the year ended December 31, 2023.
Operating expenses The following table sets forth the breakdown of the operating expenses for the years ended December 31, 2023 and 2022: For the years ended December 31, Change 2023 % 2022 % Amount % Selling expenses $ 742,167 4.09 % 1,075,980 6.16 % (333,813 ) (31.02 )% General and administrative expenses 13,040,038 71.94 % 12,678,873 72.62 % 361,165 2.85 % Research and development expenses 1,193,082 6.58 % 1,053,882 6.04 % 139,200 13.21 % Impairment of intangible assets 3,151,467 17.39 % 2,650,020 15.18 % 501,447 18.92 % Total costs and operating expenses 18,126,754 100.00 % 17,458,755 100.00 % 667,999 3.83 % 72 Selling expenses The selling expenses decreased by $333,813 or 31.02%, from $1,075,980 for the year ended December 31, 2022 to $742,167 for the year ended December 31, 2023.
There are no other taxes likely to be material to us levied by the Government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands.
There are no other taxes likely to be material to us levied by the Government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands.
No stamp duty is payable in the Cayman Islands on the issue of shares by, or any transfers of shares of, Cayman Islands companies (except those which hold interests in land in the Cayman Islands). There are no exchange control regulations or currency restrictions in the Cayman Islands.
No stamp duty is payable in the Cayman Islands on the issue of shares by, or any transfers of shares of, Cayman Islands companies (except those which hold interests in land in the Cayman Islands). There are no exchange control regulations or currency restrictions in the Cayman Islands.
From year of assessment of 2019/2020 onwards, Hong Kong profit tax rates are 8.25% on assessable profits up to HK$2,000,000, and 16.5% on any part of assessable profits over HK$2,000,000.
From year of assessment of 2019/2020 onwards, Hong Kong profit tax rates are 8.25% on assessable profits up to HK$2,000,000, and 16.5% on any part of assessable profits over HK$2,000,000.
Financing Activities Net cash provided by financing activities amounted to $13,679,267 for the year ended December 31, 2023, representing proceeds from a) proceeds from short-term and long-term loan for $7,061,249 and $4,236,750, respectively; b) proceeds from the debt financing from sale and leaseback contracts, net of issuance cost, of $4,825,658 and c) loans from related parties of 3,867,883; offset by d) repayment on the debt financing from sale and leaseback contracts of $4,782,564; e) repayment on finance lease liabilities of $1,282,358 associated with a finance lease contract for graphite anode material manufacturing facilities.
Net cash provided by financing activities amounted to $13,679,267 for the year ended December 31, 2023, representing proceeds from a) proceeds from short-term and long-term loan for $7,061,249 and $4,236,750, respectively; b) proceeds from the debt financing from sale and leaseback contracts, net of issuance cost, of $4,825,658 and c) loans from related parties of 3,867,883; offset by d) repayment on the debt financing from sale and leaseback contracts of $4,782,564; e) repayment on finance lease liabilities of $1,282,358 associated with a finance lease contract for graphite anode material manufacturing facilities.
Such increase was primarily due to (1) an increase in bad debt expenses of $1,297,639, which was mainly due to the negative impact of COVID-19 on the financial condition of the debtors in the peer-to-peer knowledge sharing and enterprise service business; and (2) an increase of $475,910 in tax on property and land use rights on Company’s warehouses for manufacturing graphite anode materials, which were offset by (1) a decrease in professional fee of $193,499; (2) a decrease in insurance fee of $445,757 due to the fact that the Company did not renew the insurance policy for its management; (3) a decrease in rental fee of $283,345 for the peer-to-peer knowledge sharing and enterprise business; and (4) a decrease in share-based compensation of $560,314 as 25% of the restricted shares vested on the grant day August 26, 2022 and the remaining 75% would vested within three years with equal yearly installments from 2022 to 2025.
Such increase was primarily due to (1) an increase in bad debt expenses of $1,297,639, which was mainly due to the negative impact of COVID-19 on the financial condition of the debtors in the knowledge sharing and enterprise service business; and (2) an increase of $475,910 in tax on property and land use rights on Company’s warehouses for manufacturing graphite anode materials, which were offset by (1) a decrease in professional fee of $193,499; (2) a decrease in insurance fee of $445,757 due to the fact that the Company did not renew the insurance policy for its management; (3) a decrease in rental fee of $283,345 for the knowledge sharing and enterprise business; and (4) a decrease in share-based compensation of $560,314 as 25% of the restricted shares vested on the grant day August 26, 2022 and the remaining 75% would vested within three years with equal yearly installments from 2022 to 2025.
If a domestic company fails to complete required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. 61 The Trial Measures outline the circumstances where domestic companies are prohibited from offering and listing securities overseas, if such overseas offering and listing made by domestic companies (i) are explicitly prohibited by laws; (ii) may endanger national security as determined by relevant competent departments under the State Council; (iii) involve criminal offenses that disrupting PRC economy such as corruption, bribery, embezzlement, or misappropriation of property by such domestic company, the controlling shareholder, and/or actual controller in the recent three years; (iv) involve such domestic company in investigations for suspicion of criminal offenses or major violations of laws and regulations; or (v) involve material ownership disputes over the shares held by the controlling shareholder or by other shareholders that are controlled by the controlling shareholder and/or actual controller.
If a domestic company fails to complete required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. 58 The Trial Measures outline the circumstances where domestic companies are prohibited from offering and listing securities overseas, if such overseas offering and listing made by domestic companies (i) are explicitly prohibited by laws; (ii) may endanger national security as determined by relevant competent departments under the State Council; (iii) involve criminal offenses that disrupting PRC economy such as corruption, bribery, embezzlement, or misappropriation of property by such domestic company, the controlling shareholder, and/or actual controller in the recent three years; (iv) involve such domestic company in investigations for suspicion of criminal offenses or major violations of laws and regulations; or (v) involve material ownership disputes over the shares held by the controlling shareholder or by other shareholders that are controlled by the controlling shareholder and/or actual controller.
The revenue increase of peer-to-peer knowledge sharing and enterprise business for the year ended December 31, 2023 was brought by consulting services. SDH provides consulting services to small and medium-sized enterprises to develop strategies and solutions for the following: corporate reorganization, product promotion and marketing, industry supply chain integration, corporate governance, financing and capital structure, etc.
The revenue increase of knowledge sharing and enterprise business for the year ended December 31, 2023 was brought by consulting services. SDH provides consulting services to small and medium-sized enterprises to develop strategies and solutions for the following: corporate reorganization, product promotion and marketing, industry supply chain integration, corporate governance, financing and capital structure, etc.
Key Information — Contractual Agreements among GIOP BJ, SDH the VIE and Its Shareholders” for more details. The VIE, or SDH, started as a consulting company providing enterprise services to small and medium-sized enterprises in the PRC in December 2014, and launched a peer-to-peer knowledge sharing and enterprise service platform in May 2016.
Key Information — Contractual Agreements among GIOP BJ, SDH the VIE and Its Shareholders” for more details. The VIE, or SDH, started as a consulting company providing enterprise services to small and medium-sized enterprises in the PRC in December 2014, and launched a knowledge sharing and enterprise service platform in May 2016.
Pursuant to SAFE Circular 59, the opening of various special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts, and guarantee accounts, the reinvestment of Renminbi proceeds derived by foreign investors in China, and remittance of foreign exchange profits and dividends by a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible previously. 56 In February 2015, SAFE promulgated the Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment, or SAFE Circular 13, pursuant to which, instead of applying for approval regarding foreign exchange registrations of foreign direct investment and overseas direct investment from SAFE, entities and individuals may apply for such foreign exchange registrations from qualified banks.
Pursuant to SAFE Circular 59, the opening of various special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts, and guarantee accounts, the reinvestment of Renminbi proceeds derived by foreign investors in China, and remittance of foreign exchange profits and dividends by a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible previously. 53 In February 2015, SAFE promulgated the Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment, or SAFE Circular 13, pursuant to which, instead of applying for approval regarding foreign exchange registrations of foreign direct investment and overseas direct investment from SAFE, entities and individuals may apply for such foreign exchange registrations from qualified banks.
In the meantime, a $7,238,819 impairment of inventory of graphite anode material was recorded at the lower of cost and net realizable value due to decreasing sales prices. The gross loss was partially set off by a gross profit of $385,371 from the peer-to-peer knowledge sharing and enterprise business.
In the meantime, a $7,238,819 impairment of inventory of graphite anode material was recorded at the lower of cost and net realizable value due to decreasing sales prices. The gross loss was partially set off by a gross profit of $385,371 from the knowledge sharing and enterprise business.
Any financing which involves the sale of equity securities or instruments that are convertible into equity securities could result in immediate and possibly significant dilutions to the existing shareholders. 79 Substantially all of the Company’s operations are conducted in the PRC and all of the revenues and the vast majority of expenses, cash and cash equivalents are denominated in RMB.
Any financing which involves the sale of equity securities or instruments that are convertible into equity securities could result in immediate and possibly significant dilutions to the existing shareholders. Substantially all of the Company’s operations are conducted in the PRC and all of the revenues and the vast majority of expenses, cash and cash equivalents are denominated in RMB.
Revenues from peer-to-peer knowledge sharing and enterprise business Revenues from peer-to-peer knowledge sharing and enterprise business increased by $121,410, or 22.28%, from $544,991 for the year ended December 31, 2022, to $666,401 for the year ended December 31, 2023. During the outbreak of the COVID-19, SDH was not able to offer offline activities.
Revenues from knowledge sharing and enterprise business Revenues from knowledge sharing and enterprise business increased by $121,410, or 22.28%, from $544,991 for the year ended December 31, 2022, to $666,401 for the year ended December 31, 2023. During the outbreak of the COVID-19, SDH was not able to offer offline activities.
Employees are also required to work in safe and sanitary conditions. 60 Social Insurance and Housing Fund Under the Social Insurance Law of the PRC that was promulgated by the SCNPC on October 28, 2010, and came into force as of July 1, 2011, and was most recently amended on December 29, 2018 (also the effective date), together with other laws and regulations, employers are required to pay basic pension insurance, unemployment insurance, basic medical insurance, employment injury insurance, maternity insurance, and other social insurance for its employees at specified percentages of the salaries of the employees, up to a maximum amount specified by the local government regulations from time to time.
Employees are also required to work in safe and sanitary conditions. 57 Social Insurance and Housing Fund Under the Social Insurance Law of the PRC that was promulgated by the SCNPC on October 28, 2010, and came into force as of July 1, 2011, and was most recently amended on December 29, 2018 (also the effective date), together with other laws and regulations, employers are required to pay basic pension insurance, unemployment insurance, basic medical insurance, employment injury insurance, maternity insurance, and other social insurance for its employees at specified percentages of the salaries of the employees, up to a maximum amount specified by the local government regulations from time to time.
The Company had not recorded an adjustment to the opening accumulated deficit as of January 1, 2023 due to immaterial cumulative impact of adopting ASC 326. 82 The Company used an expected credit loss model for the impairment of financial instruments mentioned above as of period ends.
The Company had not recorded an adjustment to the opening accumulated deficit as of January 1, 2023 due to immaterial cumulative impact of adopting ASC 326. The Company used an expected credit loss model for the impairment of financial instruments mentioned above as of period ends.
Revenues from graphite anode material sales business accounted for 98.52% of net revenues for year ended December 31, 2023, as compared to 98.57% for the year ended December 31, 2022. Revenue from peer-to-peer knowledge sharing and enterprise business accounted for 1.48% and 1.43% of net revenues for the years ended December 31, 2023 and 2022, respectively.
Revenues from graphite anode material sales business accounted for 98.52% of net revenues for year ended December 31, 2023, as compared to 98.57% for the year ended December 31, 2022. Revenue from knowledge sharing and enterprise business accounted for 1.48% and 1.43% of net revenues for the years ended December 31, 2023 and 2022, respectively.
An enterprise having more than 100 employees shall establish a production safety management institution or be equipped with dedicated production safety management personnel. 63 According to the Measures for the Supervision and Administration of “Three Simultaneities” for the Safety Facilities of Construction Projects promulgated by the former State Administration of Work Safety (currently known as the Ministry of Emergency Management) on December 14, 2010 and amended on April 2, 2015, the safety facilities in a newly built, reconstructed or expanded construction project must be designed, constructed and put into use in production simultaneously with the main body of the project.
An enterprise having more than 100 employees shall establish a production safety management institution or be equipped with dedicated production safety management personnel. 60 According to the Measures for the Supervision and Administration of “Three Simultaneities” for the Safety Facilities of Construction Projects promulgated by the former State Administration of Work Safety (currently known as the Ministry of Emergency Management) on December 14, 2010 and amended on April 2, 2015, the safety facilities in a newly built, reconstructed or expanded construction project must be designed, constructed and put into use in production simultaneously with the main body of the project.
Overview The VIE, or SDH, started operating as a consulting company providing enterprise services to small and medium-sized enterprises in the PRC in December 2014, and launched its peer-to-peer knowledge sharing and enterprise service platform in May 2016.
Overview The VIE, or SDH, started operating as a consulting company providing enterprise services to small and medium-sized enterprises in the PRC in December 2014, and launched its knowledge sharing and enterprise service platform in May 2016.
The VAT tax rates generally applicable are simplified as 13%, 9%, 6% and 0%, and the VAT tax rate applicable to the small-scale taxpayers is 3%. 59 Withholding Tax The Enterprise Income Tax Law of the PRC provides that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident investors which do not have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within the PRC.
The VAT tax rates generally applicable are simplified as 13%, 9%, 6% and 0%, and the VAT tax rate applicable to the small-scale taxpayers is 3%. 56 Withholding Tax The Enterprise Income Tax Law of the PRC provides that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident investors which do not have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within the PRC.
Under these provisions, non-state owned capital and foreign investors are prohibited from engaging in the business of distributing audio-visual programs through information networks. 51 To further regulate the provision of audio-visual program services to the public via the internet, including through mobile networks, within the territory of the PRC, the SARFT and the MIIT jointly promulgated the Administrative Provisions on Internet Audio-Visual Program Service , or the Audio-Visual Program Provisions, on December 20, 2007, which took effect on January 31, 2008 and subsequently amended on August 28, 2015.
Under these provisions, non-state owned capital and foreign investors are prohibited from engaging in the business of distributing audio-visual programs through information networks. 48 To further regulate the provision of audio-visual program services to the public via the internet, including through mobile networks, within the territory of the PRC, the SARFT and the MIIT jointly promulgated the Administrative Provisions on Internet Audio-Visual Program Service , or the Audio-Visual Program Provisions, on December 20, 2007, which took effect on January 31, 2008 and subsequently amended on August 28, 2015.
In case of any non-compliance under the Data Security Law, a data processor may be ordered to make corrections, and under certain serious circumstances, such as severe data divulgence, may be subject to penalties, including the revocation of business license or other permits. 53 On December 28, 2021, 13 PRC authorities, including the NDRC, the MOFCOM, the MIIT, the CAC, and several other authorities jointly promulgated the revised Cybersecurity Review Measures , which came into effect on February 15, 2022.
In case of any non-compliance under the Data Security Law, a data processor may be ordered to make corrections, and under certain serious circumstances, such as severe data divulgence, may be subject to penalties, including the revocation of business license or other permits. 50 On December 28, 2021, 13 PRC authorities, including the NDRC, the MOFCOM, the MIIT, the CAC, and several other authorities jointly promulgated the revised Cybersecurity Review Measures , which came into effect on February 15, 2022.
See “Risk Factors—Risks Related to Our Business—Sunrise Guizhou depends on a few major customers with whom it does not enter into long-term contracts, the loss of any of which could cause a significant decline in its revenues.” Raw Materials and Suppliers Sunrise Guizhou sources raw materials, including asphalt coke, petroleum coke, needle coke, and American petroleum coke, from suppliers in China, the United States, Romania, and Indonesia, to diversify its raw material origins and stabilize its supply chain.
See “Risk Factors—Risks Related to Our Business—Sunrise Guizhou depends on a few major customers with whom it does not enter into long-term contracts, the loss of any of which could cause a significant decline in its revenues.” Raw Materials and Suppliers Sunrise Guizhou sources raw materials, including asphalt coke, petroleum coke, needle coke, and American petroleum coke, from suppliers in China, Romania, and Indonesia, to diversify its raw material origins and stabilize its supply chain.
See “ Risk Factors—Risks Related to Our Corporate Structure—Uncertainties exist with respect to the interpretation and implementation of the newly enacted PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations. ” 50 Foreign investors’ investment, earnings and other legitimate rights and interests within the territory of China shall be protected in accordance with the law, and all national policies on supporting the development of enterprises shall equally apply to foreign-invested enterprises.
See “ Risk Factors—Risks Related to Our Corporate Structure—Uncertainties exist with respect to the interpretation and implementation of the newly enacted PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations. ” 47 Foreign investors’ investment, earnings and other legitimate rights and interests within the territory of China shall be protected in accordance with the law, and all national policies on supporting the development of enterprises shall equally apply to foreign-invested enterprises.
The following table sets forth the location, approximate size, primary use and lease term of major facilities: Location Approximate Gross Land Area in Square Meters Primary Use (Gross Floor Area in Square Meters) Lease or Own Yilong New Area, Qianxinan Prefecture, Guizhou Province,China 294,453 Office (3,434), Manufacturing (24,879) staff dormitory (4,919) own Future minimum lease payments under non-cancellable operating leases as of December 31, 2023 was nil.
The following table sets forth the location, approximate size, primary use and lease term of major facilities: Location Approximate Gross Land Area in Square Meters Primary Use (Gross Floor Area in Square Meters) Lease or Own Yilong New Area, Qianxinan Prefecture, Guizhou Province,China 294,453 Office (3,434), Manufacturing (24,879) staff dormitory (4,919) own Future minimum lease payments under non-cancellable operating leases as of December 31, 2024 was $nil.
See “ Risk Factors—Risks Related to Our Business— We may be required to obtain and maintain additional approvals, licenses or permits applicable to our business, including our graphite anode manufacturing and sales business and our knowledge share platform, which could have a material adverse impact on our business, financial conditions and results of operations.” 52 Regulations Related to Information Security Internet content in China is regulated and restricted from a state security standpoint.
See “ Risk Factors—Risks Related to Our Business— We may be required to obtain and maintain additional approvals, licenses or permits applicable to our business, including our graphite anode manufacturing and sales business and our knowledge share platform, which could have a material adverse impact on our business, financial conditions and results of operations.” 49 Regulations Related to Information Security Internet content in China is regulated and restricted from a state security standpoint.
Whoever engages in Internet audio-visual program service without the license or registration, the competent authorities shall give it/him an admonition and order it/him to correct, and may impose a fine of not more than RMB30,000 (approximately US$4,348); if the circumstances are serious, a punishment shall be imposed in accordance with the provision of Article 47 of the Radio and Television Administration Regulation .
Whoever engages in Internet audio-visual program service without the license or registration, the competent authorities shall give it/him an admonition and order it/him to correct, and may impose a fine of not more than RMB30,000 (approximately US$4,110); if the circumstances are serious, a punishment shall be imposed in accordance with the provision of Article 47 of the Radio and Television Administration Regulation .
Such decrease was primarily due to a decrease in labor costs of $184,992 and in consulting fees of $116,877, stemming from the decreased operation of the peer-to-peer knowledge sharing and enterprise business.
Such decrease was primarily due to a decrease in labor costs of $184,992 and in consulting fees of $116,877, stemming from the decreased operation of the knowledge sharing and enterprise business.
Due to the government restrictions, SDH was prevented from arranging offline activities, resulting in cancellations or postponements of study tours, forums and sponsorship advertising events. On the other hand, Sunrise Guizhou’s graphite anode material manufacturing and sales business in Guizhou Province were not severely impacted by the COVID-19, primarily due to its relatively remote location.
Due to the government restrictions, the VIE was prevented from arranging offline activities, resulting in cancellations or postponements of study tours, forums and sponsorship advertising events. On the other hand, Sunrise Guizhou’s graphite anode material manufacturing and sales business in Guizhou Province were not severely impacted by the COVID-19, primarily due to its relatively remote location.
Infringers of copyright may also subject to fines and/or administrative or criminal liabilities in severe situations. 55 Pursuant to the Computer Software Copyright Protection Regulations promulgated by the State Council in 1991 and amended in 2001, 2011 and 2013 respectively, Chinese citizens, legal persons and other organizations shall enjoy copyright on software they develop, regardless of whether the software is released publicly.
Infringers of copyright may also subject to fines and/or administrative or criminal liabilities in severe situations. 52 Pursuant to the Computer Software Copyright Protection Regulations promulgated by the State Council in 1991 and amended in 2001, 2011 and 2013 respectively, Chinese citizens, legal persons and other organizations shall enjoy copyright on software they develop, regardless of whether the software is released publicly.
Pursuant to the Civil Code, the collection, storage, use, process, transmission, provision and disclosure of personal information should follow the principles of legitimacy, properness and necessity. 54 On March 12, 2021, the CAC, the MIIT, the MPS and the SAMR jointly promulgated the Regulations on the Scope of Necessary Personal Information for Common Types of Mobile Internet Apps , which will become effective on May 1, 2021.
Pursuant to the Civil Code, the collection, storage, use, process, transmission, provision and disclosure of personal information should follow the principles of legitimacy, properness and necessity. 51 On March 12, 2021, the CAC, the MIIT, the MPS and the SAMR jointly promulgated the Regulations on the Scope of Necessary Personal Information for Common Types of Mobile Internet Apps , which will become effective on May 1, 2021.
Our critical accounting policies and practices include the following: (i) revenue recognition, (ii) lease, (iii) asset acquisition, (iv) income taxes and (v) the accretion to the redemption value of redeemable non-controlling interests. For further information on these accounting policies, see note 2 to our consolidated financial statements included elsewhere in this annual report.
Our critical accounting policies and practices include the following: (i) revenue recognition, (ii) lease, (iii) asset acquisition, (iv) income taxes, (v) the accretion to the redemption value of redeemable non-controlling interests and (vi) extinguishment of the redeemable non-controlling interests. For further information on these accounting policies, see Note 2 to our consolidated financial statements included elsewhere in this annual report.
If the decline in fair value is deemed to be other than temporary, the carrying value of the equity investee is written down to fair value. Impairment charges for long-term investments were $1,450,381, $979,426 and $nil recorded in the Company’s consolidated statements of operations and comprehensive loss for the years ended December 31, 2023, 2022 and 2021, respectively.
If the decline in fair value is deemed to be other than temporary, the carrying value of the equity investee is written down to fair value. Impairment charges for long-term investments were $nil, $1,450,381, and $979,426 recorded in the Company’s consolidated statements of operations and comprehensive loss for the years ended December 31, 2024, 2023 and 2022, respectively.
The Company’s audit committee is required to review and approve in advance any related party transactions, including transactions involving GIOP BJ or the VIE. 66 Equity Pledge Agreement Under the Equity Pledge Agreement between GIOP BJ, and shareholders of the VIE, together holding 100% of the shares of the VIE (the “VIE Shareholders”), the VIE Shareholders pledged all of their equity interests in the VIE to GIOP BJ to guarantee the performance of the VIE’s obligations under the Exclusive Service Agreement.
The Company’s audit committee is required to review and approve in advance any related party transactions, including transactions involving GIOP BJ or the VIE. 63 Equity Pledge Agreement Under the Equity Pledge Agreement between GIOP BJ, and shareholders of the VIE, together holding 100% of the shares of the VIE (the “VIE Shareholders”), the VIE Shareholders pledged all of their equity interests in the VIE to GIOP BJ to guarantee the performance of the VIE’s obligations under the Exclusive Service Agreement.
The concerned bank shall conduct spot checking in accordance with the relevant requirements. 57 Regulations Related to Dividend Distribution The principal regulations governing the distribution of dividends paid by the wholly foreign owned subsidiaries of the Company (the “WFOEs”) include the Company Law of PRC, which applies to both PRC domestic companies and foreign-invested companies, and the Foreign Investment Law and its implementing rules, which apply to foreign-invested companies.
The concerned bank shall conduct spot checking in accordance with the relevant requirements. 54 Regulations Related to Dividend Distribution The principal regulations governing the distribution of dividends paid by the wholly foreign owned subsidiaries of the Company (the “WFOEs”) include the Company Law of PRC, which applies to both PRC domestic companies and foreign-invested companies, and the Foreign Investment Law and its implementing rules, which apply to foreign-invested companies.
Upon receiving the completion report of the construction project, the construction enterprise shall organize the acceptance inspection by the relevant design, construction and supervision enterprises. 64 Sunrise Guizhou obtained the Construction Land Use Planning Permit for construction projects in March 2022 and December 2023, Construction Works Planning Permit from local urban and rural planning department for construction projects in March 2022, June 2023 and November 2023, and obtained Construction Permit from local housing and urban-rural department for construction projects in March and April 2022 .
Upon receiving the completion report of the construction project, the construction enterprise shall organize the acceptance inspection by the relevant design, construction and supervision enterprises. 61 Sunrise Guizhou obtained the Construction Land Use Planning Permit for construction projects in March 2022 and December 2023, Construction Works Planning Permit from local urban and rural planning department for construction projects in March 2022, June 2023 and November 2023, and obtained Construction Permit from local housing and urban-rural department for construction projects in March and April 2022 .
Property, Plants and Equipment I. The VIE currently maintains offices in Beijing and Shanghai in the PRC. The total office space is 1,205 square meters including both leased and owned properties. The VIE leases 567 square meters of office space under a non-cancelable operating lease agreement with expiration dates through December 31, 2023.
Property, Plants and Equipment I. The VIE currently maintains offices in Beijing and Shanghai in the PRC. The total office space is 1,205 square meters including both leased and owned properties. The VIE leases 567 square meters of office space under a non-cancelable operating lease agreement with expiration dates through December 31, 2024.
The Company consolidates Sunrise Guizhou’s financials because it owns a majority of seats on its board of directors and controls its financial and operating policies pursuant to an agreement among its funding shareholders. Sunrise Guizhou is located at Yilong New District, Xingyi City, Qian Southwest State, Guizhou Province, China.
The Company consolidates Sunrise Guizhou’s financial statement because it owns a majority of seats on its board of directors and controls its financial and operating policies pursuant to an agreement among its funding shareholders. Sunrise Guizhou is located at Yilong New District, Xingyi City, Qian Southwest State, Guizhou Province, China.
China The Company’s subsidiaries are incorporated in the PRC, and are subject to the PRC Enterprise Income Tax Laws (“EIT Laws”) with the statutory income tax rate of 25% with the following exceptions. In accordance with the implementation rules of EIT Laws, a qualified “High and New Technology Enterprise” (“HNTE”) is eligible for a preferential tax rate of 15%.
China The Company’s subsidiaries are incorporated in Mainland China, and are subject to the Mainland China Enterprise Income Tax Laws (“EIT Laws”) with the statutory income tax rate of 25% with the following exceptions. In accordance with the implementation rules of EIT Laws, a qualified “High and New Technology Enterprise” (“HNTE”) is eligible for a preferential tax rate of 15%.
The performance, features and uses of Sunrise Guizhou’s products are as follows: Type Product Image Medium Particle Size (um) Designed Capacity (mAh/g) Compaction (g/cc) Features Uses Cost-effective artificial graphite 15.5±2.5 340-348 1.50-1.60 Excellent comprehensive performance, long cycle, cost-effective Power batteries and energy storage batteries; cell of soft pack, square aluminum shell, and cylindrical batteries Volumetric artificial graphite 16.5±2.5 348-355 1.60-1.65 High energy density and comprehensive performance Multiple long-cycle square, cylindrical, polymer batteries Multiplier rate artificial graphite 13.5±3.0 347-353 1.55-1.63 Excellent comprehensive performance, long cycle, good rate performance Power anode material, cell of soft pack, square aluminum shell, and cylindrical batteries High capacity and high compaction artificial graphite 16.0±2.0 353-358 1.63-1.68 High energy density, excellent comprehensive performance Power anode material, cell of soft pack, square aluminum shell, and cylindrical batteries Volumetric artificial graphite 13.5±3.0 350-355 1.60-1.65 High energy density and comprehensive performance Multiple long-cycle square, cylindrical, polymer batteries High capacity and rate artificial graphite 12.5±3.0 349-354 1.58 -1.65 High energy density and power performance, long cycle life Multiple long cycle square and polymer batteries Cost-effective long-cycle artificial graphite 11.0±2.5 340-345 1.45-1.55 Excellent comprehensive performance, long cycle, cost-effective Energy storage anode material, cell of soft pack, square aluminum shell, and cylindrical batteries Higher energy density artificial graphite 13.5±2.0 355-360 1.65-1.70 High energy density, good rate performance Power batteries and energy storage batteries; cell of soft pack, square aluminum shell, and cylindrical batteries EV fast charging artificial graphite 12.0±2.5 ≥350 1.50-1.60 High energy density, good rate performance,long cycle Power batteries and energy storage batteries; cell of soft pack, square aluminum shell, and cylindrical batteries Higher energy density and long cycle artificial graphite 11.0±2.0 350-355 1.55-1.60 High energy density,long cycle Energy storage anode material, cell of soft pack, square aluminum shell, and cylindrical batteries High temperature performance and long cycle artificial graphite 11.0±2.0 ≥350 1.55-1.60 Low swelling,High temperature performance and long cycle Energy storage anode material, cell of soft pack, square aluminum shell, and cylindrical batteries 42 Direct Sales Channel Sunrise Guizhou markets its graphite anode products through a direct sales channel, through its sales department, which consists of five experienced employees who report directly to the CEO of Sunrise Guizhou.
The performance, features and uses of Sunrise Guizhou’s products are as follows: Type Product Image Medium Particle Size (um) Designed Capacity (mAh/g) Compaction (g/cc) Features Uses Cost-effective artificial graphite 15.5±2.5 340-348 1.50-1.60 Excellent comprehensive performance, long cycle, cost-effective Power batteries and energy storage batteries; cell of soft pack, square aluminum shell, and cylindrical batteries Volumetric artificial graphite 16.5±2.5 348-355 1.60-1.65 High energy density and comprehensive performance Multiple long-cycle square, cylindrical, polymer batteries Multiplier rate artificial graphite 13.5±3.0 347-353 1.55-1.63 Excellent comprehensive performance, long cycle, good rate performance Power anode material, cell of soft pack, square aluminum shell, and cylindrical batteries High capacity and high compaction artificial graphite 16.0±2.0 353-358 1.63-1.68 High energy density, excellent comprehensive performance Power anode material, cell of soft pack, square aluminum shell, and cylindrical batteries Volumetric artificial graphite 13.5±3.0 350-355 1.60-1.65 High energy density and comprehensive performance Multiple long-cycle square, cylindrical, polymer batteries High capacity and rate artificial graphite 12.5±3.0 349-354 1.58 -1.65 High energy density and power performance, long cycle life Multiple long cycle square and polymer batteries Cost-effective long-cycle artificial graphite 11.0±2.5 340-345 1.45-1.55 Excellent comprehensive performance, long cycle, cost-effective Energy storage anode material, cell of soft pack, square aluminum shell, and cylindrical batteries Higher energy density artificial graphite 13.5±2.0 355-360 1.65-1.70 High energy density, good rate performance Power batteries and energy storage batteries; cell of soft pack, square aluminum shell, and cylindrical batteries EV fast charging artificial graphite 12.0±2.5 ≥350 1.50-1.60 High energy density, good rate performance,long cycle Power batteries and energy storage batteries; cell of soft pack, square aluminum shell, and cylindrical batteries Higher energy density and long cycle artificial graphite 11.0±2.0 350-355 1.55-1.60 High energy density,long cycle Energy storage anode material, cell of soft pack, square aluminum shell, and cylindrical batteries High temperature performance and long cycle artificial graphite 11.0±2.0 ≥350 1.55-1.60 Low swelling,High temperature performance and long cycle Energy storage anode material, cell of soft pack, square aluminum shell, and cylindrical batteries Low temperature performance and long cycle artificial graphite 8.5±1.5 345±4 1.5-1.55 Low temperature performance and long cycle Energy storage anode material, cell of soft pack, square aluminum shell, and cylindrical batteries Low swelling and long cycle artificial graphite 11.5±2.5 ≥350.0 1.50~1.60 Low swelling and long cycle Energy storage anode material, cell of soft pack, square aluminum shell, and cylindrical batteries High energy efficiency and long cycle artificial graphite 12.0±2.0 354.0±4.0 1.55~1.65 High energy efficiency ,high-rate and long cycle Power batteries and energy storage batteries; cell of soft pack, square aluminum shell, and cylindrical batteries 41 Direct Sales Channel Sunrise Guizhou markets its graphite anode products through a direct sales channel by its sales department, which consists of five experienced employees who report directly to the CEO of Sunrise Guizhou.
The third phase of construction of the manufacturing plant (20,000 tons annual manufacturing capacity) was approved by the board of the directors of the Company in March 2023, and is currently under construction. 41 Products Sunrise Guizhou’s products include various artificial graphite anode material products.
The third phase of construction of the manufacturing plant (20,000 tons annual manufacturing capacity) was approved by the board of the directors of the Company in March 2023, and is currently under construction. 40 Products Sunrise Guizhou’s products include various artificial graphite anode material products.
The costs of raw materials accounted for 34% of the total costs of production for fiscal year 2022, and two suppliers accounted for more than 10% of Sunrise Guizhou’s total costs for raw materials. 43 Third-party Contract Manufacturers Sunrise Guizhou entrusts third-party contract manufacturers for the graphitization processes of the manufacturing of its graphite anode products.
The costs of raw materials accounted for 34% of the total costs of production for fiscal year 2022, and two suppliers accounted for more than 10% of Sunrise Guizhou’s total costs for raw materials. 42 Third-party Contract Manufacturers Sunrise Guizhou entrusts third-party contract manufacturers for the graphitization processes of the manufacturing of its graphite anode products.
We may also make loans to WFOEs subject to the approval from SAFE or its local office and the limitation on the amount of loans. 58 By means of making loans, WFOEs are subject to the relevant PRC laws and regulation relating to foreign debts.
We may also make loans to WFOEs subject to the approval from SAFE or its local office and the limitation on the amount of loans. 55 By means of making loans, WFOEs are subject to the relevant PRC laws and regulation relating to foreign debts.
Impairments charges for long-lived assets were $3,151,467, $2,650,020 and $nil recorded in the Company’s consolidated statements of operations and comprehensive loss for the years ended December 31, 2023, 2022 and 2021, respectively.
Impairments charges for long-lived assets were $nil, $3,151,467, and $2,650,020 recorded in the Company’s consolidated statements of operations and comprehensive loss for the years ended December 31, 2024, 2023 and 2022, respectively.
On March 16, 2023, Sunrise Guizhou obtained the Filing Certificate for Fire Safety Inspection and Acceptance of Construction Project from local urban and rural development authority for its construction of the first phase of the manufacturing plant. 65 C.
On March 16, 2023, Sunrise Guizhou obtained the Filing Certificate for Fire Safety Inspection and Acceptance of Construction Project from local urban and rural development authority for its construction of the first phase of the manufacturing plant. 62 C.
In April 2022, the Company entered into the graphite anode material manufacturing and sales business through a joint venture, Sunrise Guizhou, of which the Company currently owns 39.35% through its wholly owned subsidiary, Zhuhai Zibo.
In April 2022, the Company entered into the graphite anode material manufacturing and sales business through a joint venture, Sunrise Guizhou, of which the Company currently owns 39.35% through Zhuhai Zibo, the Company’s wholly owned subsidiary.
See “Risk Factors—Risks Related to Our Business—Sunrise Guizhou faces the risk of fluctuations in the cost, availability, and quality of raw materials, which could adversely affect our results of operations.” The costs of raw materials accounted for 29% of the total costs of production for fiscal year 2023, and no supplier accounted for more than 10% of Sunrise Guizhou’s total costs for raw materials.
See “Risk Factors—Risks Related to Our Business—Sunrise Guizhou faces the risk of fluctuations in the cost, availability, and quality of raw materials, which could adversely affect our results of operations.” The costs of raw materials accounted for 34% of the total costs of production for fiscal year 2024, and no supplier accounted for more than 10% of Sunrise Guizhou’s total costs for raw materials.
Net cash used in investing activities amounted to $45,609,072 for the year ended December 31, 2022. It was primarily due to the following: a) purchase of plant, property and equipment of $43,714,195; and b) consideration paid for an asset acquisition of $1,486,746. Net cash used in investing activities amounted to $22,095,198 for the year ended December 31, 2021.
Net cash used in investing activities amounted to $45,609,072 for the year ended December 31, 2022. It was primarily due to the following: a) purchase of plant, property and equipment of $43,714,195; and b) consideration paid for an asset acquisition of $1,486,746.
The increase was offset by $346,650 revenue decrease in member services, comprehensive tailored services and other services as the Chinese economy and capital markets did not recovered from the impact of COVID-19. 70 Costs of revenues The following table sets forth the breakdown of the cost of revenues for the years ended December 31, 2023 and 2022: For the years ended December 31, Change 2023 % 2022 % Amount % Service costs $ 281,030 0.49 % $ 1,176,956 2.98 % $ (895,926 ) (76.12 )% Cost of goods sold 57,172,626 99.51 % 38,299,090 97.02 % 18,873,536 49.28 % Total costs of revenues 57,453,656 100.00 % 39,476,046 100.00 % 17,977,610 45.54 % Service costs The service costs primarily include (1) the cost of holding activities, such as venue rental fees, conference equipment fees, (2) professional and consulting fees paid to third parties for the activities; (3) the fees paid to Mentors and Experts; (4) labor costs; and (5) amortization cost of copyright.
The increase was offset by $346,650 revenue decrease in member services, comprehensive tailored services and other services as the Chinese economy and capital markets did not recovered from the impact of COVID-19. 71 Costs of revenues The following table sets forth the breakdown of the cost of revenues for the years ended December 31, 2023 and 2022: For the years ended December 31, Change 2023 % 2022 % Amount % Service costs $ 281,030 0.49 % $ 1,176,956 2.98 % $ (895,926 ) (76.12 )% Cost of goods sold 57,172,626 99.51 % 38,299,090 97.02 % 18,873,536 49.28 % Total costs of revenues 57,453,656 100.00 % 39,476,046 100.00 % 17,977,610 45.54 % Service costs The service costs of the knowledge sharing and enterprise business primarily included (1) the cost of holding activities, such as venue rental fees, conference equipment fees, (2) professional and consulting fees paid to third parties for the activities; (3) labor costs; and (4) amortization cost of copyright.
On May 5, 2023, the World Health Organization declared that COVID-19 is now an established and ongoing health issue which no longer constitutes a public health emergency of international concern. Going forward, we do not expect that COVID-19 will impact our results of operation materially.
On May 5, 2023, the World Health Organization declared that COVID-19 an established and ongoing health issue which no longer constituted a public health emergency of international concern. Going forward, we do not expect that COVID-19 will impact our results of operation materially.
However, the Company’s HK subsidiary did not generate any assessable profits arising in or derived from Hong Kong for the fiscal years ended December 31, 2022, 2021 and 2020, and accordingly no provision for Hong Kong profits tax has been made in these periods.
However, the Company’s HK subsidiary did not generate any assessable profits arising in or derived from Hong Kong for the fiscal years ended December 31, 2024, 2023 and 2022, and accordingly no provision for Hong Kong profits tax has been made in these periods.
Valuation allowance on deferred tax assets were $10,605,326 and $3,936,504 as of December 31, 2023 and 2022, respectively. Accretion to the redemption value of redeemable non-controlling interests On June 13, 2022, New Kinetic Partnership subscribed 22.8395% of the preferred shares of Sunrise Guizhou, at total cash consideration of RMB200,000,000, approximately $29,467,667.
Valuation allowance on deferred tax assets were $10,693,306 and $10,605,326 as of December 31, 2024 and 2023, respectively. Accretion to the redemption value of redeemable non-controlling interests On June 13, 2022, New Kinetic Partnership subscribed 22.8395% of the preferred shares of Sunrise Guizhou, at total cash consideration of RMB200,000,000, approximately $29,467,667.
If Sunrise Guizhou successfully passes each of the above validation steps, the potential customer usually starts negotiating a supplier agreement with Sunrise Guizhou. Customers For fiscal year 2023 and 2022, Sunrise Guizhou had 23 and 16 customers, respectively.
If Sunrise Guizhou successfully passes each of the above validation steps, the potential customer usually starts negotiating a supplier agreement with Sunrise Guizhou. Customers For fiscal years 2024, 2023 and 2022, Sunrise Guizhou had 26, 23 and 16 customers, respectively.
It was primarily due to the following: a) net loss of $32,920,724, adjusted by depreciation and amortization of $3,953,328, share-based compensation of $2,145,801, interest expenses of $575,075, investment losses of $1,170,974, bad debt expense of $3,428,033, impairment of inventory of $7,238,819, impairment of intangible assets of $3,151,467, and amortization of finance lease right-of-use asset of $338,627; increased by b) prepaid expenses and other current assets of $6,157,166 due to decrease on tax prepayment of $2,495,656 and advance to supplier of $2,314,788; c) accounts payable of $6,133,132 for finished goods and raw materials of graphite anode business; offset by d) accounts receivable of $4,074,715 due to sales of graphite anode products; and e) inventories of $5,095,430 for raw materials, work in progress and finished goods of the graphite anode sales business. 80 Net cash used in operating activities amounted to $9,573,401 for the year ended December 31, 2022.
It was primarily due to the following: a) net loss of $32,920,724, adjusted by depreciation and amortization of $3,953,328, share-based compensation of $2,145,801, interest expenses of $575,075, investment losses of $1,170,974, bad debt expense of $3,428,033, impairment of inventory of $7,238,819, impairment of intangible assets of $3,151,467, and amortization of finance lease right-of-use asset of $338,627; increased by b) prepaid expenses and other current assets of $6,157,166 due to decrease on tax prepayment of $2,495,656 and advance to supplier of $2,314,788; c) accounts payable of $6,133,132 for finished goods and raw materials of graphite anode business; offset by d) accounts receivable of $4,074,715 due to sales of graphite anode products; and e) inventories of $5,095,430 for raw materials, work in progress and finished goods of the graphite anode sales business.
In order to encourage and guide the technological progress and normative development of lithium-ion battery industry, the Ministry of Industry and Information Technology (the “MIIT”) enacted the Conditions on the Standardization of Lithium Battery Industry (the “Standardization Conditions”) on August 31, 2015, which was latest amended on December 10, 2021, and provides guidance for all types of upstream and downstream manufacturers in the lithium-ion battery industry, including negative electrode materials, on their production scale and process technology, product quality and performance, comprehensive utilization of resources and environmental protection and safety management, etc.
In order to encourage and guide the technological progress and normative development of lithium-ion battery industry, the Ministry of Industry and Information Technology (the “MIIT”) enacted the Conditions on the Standardization of Lithium Battery Industry (the “Standardization Conditions”) on August 31, 2015, which was latest amended onJune 18, 2024, and was effective on June 20, 2024, and provides guidance for all types of upstream and downstream manufacturers in the lithium-ion battery industry, including negative electrode materials, on their production scale and process technology, product quality and performance, comprehensive utilization of resources and environmental protection and safety management, etc.
Pursuant to the Catalog, the development and production of lithium-ion batteries falls within the scope of industries in which foreign investment is encouraged. 62 According to the Guiding Catalog for Industrial Restructuring , which was promulgated by the NDRC on December 2, 2005, with the latest amendment on December 30, 2021, and was effective on December 30, 2021, new batteries such as lithium-ion batteries, and lithium-ion batteries use intermediate phase Anode materials such as carbon microspheres and silicon carbon fall into the state-encouraged industries.
Pursuant to the Catalog, the development and production of lithium-ion batteries falls within the scope of industries in which foreign investment is encouraged. 59 According to the Guiding Catalog for Industrial Restructuring , which was promulgated by the NDRC on December 2, 2005, with the latest amendment on December 1, 2023, and was effective on February 1, 2024, new batteries such as lithium-ion batteries, and lithium-ion batteries use intermediate phase Anode materials such as carbon microspheres and silicon carbon fall into the state-encouraged industries.
The MIIT further enacted the Management Measures of Standardization Announcement of Lithium Battery Industry according to the Standardization Conditions on January 16, 2019, which was latest amended on December 10, 2021, and provides that the responsible departments of industry and information technology in each province, autonomous region and municipality directly under the central government are responsible for the acceptance, verification and submission of announcement applications for lithium battery industry enterprise in the region, and for supervising and checking the implementation of the Standardization Conditions.
The MIIT further enacted the Management Measures of Standardization Announcement of Lithium Battery Industry according to the Standardization Conditions on January 16, 2019, which was latest amended on June 18, 2024, and was effective on June 20, 2024, and provides that the responsible departments of industry and information technology in each province, autonomous region and municipality directly under the central government are responsible for the acceptance, verification and submission of announcement applications for lithium battery industry enterprise in the region, and for supervising and checking the implementation of the Standardization Conditions.
For fiscal years 2023, 2022 and 2021, the VIE generated fees from other services in the amount of $175,812, $269,699, and $13,965, respectively. Regulations This section sets forth a summary of the principal PRC laws and regulations relevant to our business and operations in China.
For fiscal years 2024, 2023 and 2022, the VIE generated fees from other services in the amount of $116,721, $175,812 and $269,699, respectively. Regulations This section sets forth a summary of the principal PRC laws and regulations relevant to our business and operations in China.
Unless otherwise stated, as used in this annual report, the term’s “we,” “us,” “our,” “Sunrise New Energy,” “our Company,” and the “Company” refer to Sunrise New Energy Co., Ltd., an exempted company limited by shares incorporated under the laws of the Cayman Islands; and “SDH” or “the VIE” are to Global Mentor Board (Zibo) Information Technology Co., Ltd., a limited liability company organized under the laws of the PRC, which we control via a series of contractual arrangements among GIOP BJ, SDH and shareholders of SDH (the “VIE Agreements”). 39 As of the date of this annual report, substantially all of our business is conducted by (1) Sunrise Guizhou, a joint venture formed by Zhuhai Zibo (a wholly owned subsidiary of the Company) and certain other partners, as a limited company pursuant to PRC laws for the purpose of manufacturing and sales of graphite anode materials, and (2) SDH, the Company’s VIE entity that operates a knowledge sharing platform in China.
Unless otherwise stated, as used in this annual report, the term’s “we,” “us,” “our,” “Sunrise New Energy,” “our Company,” and the “Company” refer to Sunrise New Energy Co., Ltd., an exempted company limited by shares incorporated under the laws of the Cayman Islands; and “SDH” or “the VIE” are to Global Mentor Board (Zibo) Information Technology Co., Ltd., a limited liability company organized under the laws of the PRC. 38 As of the date of this annual report, substantially all of our business is conducted by (1) Sunrise Guizhou, a joint venture formed by Zhuhai Zibo (a wholly owned subsidiary of the Company) and certain other partners, as a limited company pursuant to PRC laws for the purpose of manufacturing and sales of graphite anode materials, and (2) SDH, the Company’s VIE entity that operates a knowledge sharing platform in China.
As of the date of this annual report, Sunrise Guizhou has passed the ISO14001, ISO45001, ISO9001 and IATF16949 quality management system certification for its development and manufacturing of graphite anode materials for lithium-ion batteries.
As of the date of this annual report, Sunrise Guizhou has passed the ISO14001, ISO45001, ISO9001, ISO27001, GB/T 29490-2023 and IATF16949 quality management system certification for its development and manufacturing of graphite anode materials for lithium-ion batteries.
Trend Information Other than as disclosed elsewhere in this annual report, the Company is not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on net revenues, incomes from operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition. 81 Off-Balance Sheet Arrangements The Company did not have any off-balance sheet arrangements as of December 31, 2023.
Trend Information Other than as disclosed elsewhere in this annual report, the Company is not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on net revenues, incomes from operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.
Beginning in fiscal year 2022, we commenced the transition of our core business from knowledge sharing and enterprise services to sales of graphite anode material products.
Beginning in fiscal year 2022, the Company commenced the transition of its core business from knowledge sharing and enterprise services to sales of graphite anode material products.
The impaired intangible assets for the year ended December 31, 2022 were associated with the copyrights of course videos purchased from a third party. The peer-to-peer knowledge sharing and enterprise service business was adversely affected by COVID-19 for the year ended December 31, 2022. The Company’s online service was $2,100 for the year ended December 31, 2022.
The impaired intangible assets for the year ended December 31, 2022 were associated with the copyrights of course videos purchased from a third party. The knowledge sharing and enterprise service business was adversely affected by COVID-19 for the year ended December 31, 2022.
In September 2000, the State Council promulgated the Administrative Measures on Internet Information Services , or the Internet Measures, which was most recently amended on January 8, 2011.
In September 2000, the State Council promulgated the Administrative Measures on Internet Information Services , or the Internet Measures, which was most recently amended on January 8, 2011 and December 6, 2024.
For accounting purposes, we control and receive the economic benefits of the VIE’s business operation through the VIE Agreements, each of which are dated June 10, 2019, and which enable us to consolidate the financial results of the VIE and its subsidiaries in our consolidated financial statements under U.S. GAAP. See “Item 3.
For accounting purposes, we consolidate the financial results through the VIE Agreements, each of which are dated June 10, 2019, and which enable us to consolidate the financial results of the VIE and its subsidiaries in our consolidated financial statements under U.S. GAAP. See “Item 3.
The fees and payment structures are based on the specifics of the services we provide, such as the time and efforts required, the duration of the service, and are usually in the range of RMB20,000 (approximately US$2,973) to RMB80,000 (approximately US$11,894) for a one-time service charge, or monthly fees in the amounts of RMB10,000 (approximately US$1,487) to RMB20,000 (approximately US$2,973) for continued services.
The fees and payment structures are based on the specifics of the services we provide, such as the time and efforts required, the duration of the service, and are usually in the range of RMB20,000 (approximately US$2,740) to RMB80,000 (approximately US$10,960) for a one-time service charge, or monthly fees in the amounts of RMB10,000 (approximately US$1,370) to RMB20,000 (approximately US$2,740) for continued services.
Under the Internet Measures, commercial internet content-related services operators shall obtain a VATS License for internet content provision business, or the ICP License, from the relevant government authorities before engaging in any commercial internet content-related services operations within China.
Under the Internet Measures, commercial internet content-related services operators shall obtain a VATS License for internet content provision business, or the ICP License, and the non-commercial internet content-related services operators shall complete the filing-for-record procedures from the relevant government authorities before engaging in any internet content-related services operations within China.
For fiscal year 2023, net revenue increased by $6,924,737, or 18.16%, which increase was mainly driven by the sale of graphite anode material products. For fiscal year 2022, net revenue increased by $30,716,396, or 415%, which increase was mainly driven by the sale of graphite anode material products.
For fiscal year 2022, net revenue increased by $30,716,396, or 415%, which increase was mainly driven by the sale of graphite anode material products.
As of the date of this annual report, Sunrise Guizhou has 27 authorized patents (26 in China and one in Japan), and 34 in the various phases of their applications (32 in China, one in the US, and one in South Korea). In addition, Sunrise Guizhou owns 5 registered trademarks.
As of the date of this annual report, Sunrise Guizhou has 32 authorized patents and utility models (31 in China and one in Japan), and 34 in the various phases of their applications (32 in China, one in the U.S., and one in South Korea). In addition, Sunrise Guizhou owns 5 registered trademarks.
Essentially all the Company’s revenues are generated in China. Consequently, the results of operations and financial performances of the Company, particularly, SDH’s knowledge sharing and enterprise services business was affected materially for the years ended December 31, 2022, 2021 and 2020.
Essentially all the Company’s revenues are generated in China. Consequently, the Company’s results of operations and financial performances, particularly, the knowledge sharing and enterprise services business were affected materially for the year ended December 31, 2022.
Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity. As of December 31, 2023, the Company did not have material litigations or lawsuits against them.
Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity.
The Company intends to finance its future working capital requirements and capital expenditures from financing activities for the cash shortfalls and the negative operating cash flows. The Company expects continued capital financing through debt or equity issuances to support its working capital requirements. As of December 31, 2023, the Company had cash of $1,395,945.
The Company intends to finance its future working capital requirements and capital expenditures from financing activities for the cash shortfalls and the negative operating cash flows. The Company expects continued capital financing through debt or equity issuances to support its working capital requirements. As of December 31, 2024, the Company had cash, cash equivalents and restricted cash of $9,360,584.
The allowance was $8,016,322, and $8,047,527 as of December 31, 2023 and 2022, respectively. Impairment of inventories The cost of inventories is calculated using the weighted average method. Inventory shall be measured at the lower of cost and net realizable value.
The allowance for credit loss was $7,909,571 and $8,016,322 as of December 31, 2024 and 2023, respectively. Impairment of inventories The cost of inventories is calculated using the weighted average method. Inventory shall be measured at the lower of cost and net realizable value.
As of December 31, 2023, 89.61% of cash, cash equivalents and restricted cash were held in China, and held by its subsidiaries, VIE and VIE’s subsidiaries and denominated in Renminbi, while 10.39% of cash, cash equivalents and restricted cash were held in Hong Kong by EPOW, SDH New Energy and GMB HK in US dollars.
As of December 31, 2024, 94.93% of cash, cash equivalents and restricted cash were held in China, and held by its subsidiaries, VIE and VIE’s subsidiaries and denominated in Renminbi, while 5.07% of cash, cash equivalents and restricted cash were held in Hong Kong by EPOW, SDH New Energy and GMB HK in US dollars.
Net loss As a result of the foregoing, the Company reported a net loss of $32,920,724 for the year ended December 31, 2023, compared to $23,124,402 for the year ended December 31, 2022.
Net loss As a result of the foregoing, the Company reported a net loss of $17,981,164 for the year ended December 31, 2024, compared to $32,920,724 for the year ended December 31, 2023.
Artificial graphite is made of petroleum coke, needle coke and pitch coke as the main material, and formed after crushing, shaping, granulation and graphitization.
Revenues from graphite anode material sales The Company’s products include various artificial graphite anode material products. Artificial graphite is made of petroleum coke, needle coke and pitch coke as the main material, and formed after crushing, shaping, granulation and graphitization.
Therefore, SDH is eligible to enjoy a preferential tax rate of 15% from 2017 to 2023 to the extent it has taxable income under the EIT Law.
Sunrise Guizhou is eligible to enjoy a preferential tax rate of 15% from 2024 to 2026 to the extent it has taxable income under the EIT Law.
Investing Activities Net cash used in investing activities amounted to $7,003,035 for the year ended December 31, 2023.
Net cash used in operating activities amounted to $7,282,995 for the year ended December 31, 2023.
Contingencies The Company may be involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable.
Off-Balance Sheet Arrangements The Company did not have any off-balance sheet arrangements as of December 31, 2024. Contingencies The Company may be involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable.
These accounting principles require the Company to make judgments, estimates and assumptions on the reported amounts of assets and liabilities at the end of each fiscal period, and the reported amounts of revenues and expenses during each fiscal period.
Critical Accounting Estimates The Company prepares the consolidated financial statements in accordance with U.S. GAAP. These accounting principles require the Company to make judgments, estimates and assumptions on the reported amounts of assets and liabilities at the end of each fiscal period, and the reported amounts of revenues and expenses during each fiscal period.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

22 edited+2 added−38 removed49 unchanged
Eligibility We may grant awards to our employees, directors and consultants of our Company, and other individuals, as determined by the plan administrator. Vesting Schedule In general, the plan administrator determines the vesting schedule, which is specified in the award agreement.
Eligibility We may grant awards to our employees, directors and consultants of our Company, and other individuals, as determined by the plan administrator. Vesting Schedule In general, the plan administrator determines the vesting schedule, which is specified in the award agreement.
Board Diversity Matrix Country of Principal Executive Offices China Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 5 Female Male Non- Binary Did Not Disclose Gender Part I: Gender Identity Directors 1 4 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 Family Relationships None of our directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K.
Board Diversity Matrix Country of Principal Executive Offices China Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 5 Female Male Non- Binary Did Not Disclose Gender Part I: Gender Identity Directors 1 4 - - Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction - - - - LGBTQ+ - - - - Did Not Disclose Demographic Background - - - - Family Relationships None of our directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K.
The committee or the full board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award grant. 86 Award Agreement Each award granted under the 2024 Plan is evidenced by an award agreement that sets forth terms, conditions and limitations, which may include the provisions applicable in the event of the grantee’s employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.
The committee or the full board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award grant. 83 Award Agreement Each award granted under the 2024 Plan is evidenced by an award agreement that sets forth terms, conditions and limitations, which may include the provisions applicable in the event of the grantee’s employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.
The compensation committee is responsible for, among other things: ● reviewing and recommending to the board with respect to the total compensation package for our chief executive officer; ● approving and overseeing the total compensation package for our executives other than the chief executive officer; ● reviewing and making recommendations to the board with respect to the compensation of our directors; and ● reviewing periodically and approving any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans. 88 Corporate Governance and Nominating Committee .
The compensation committee is responsible for, among other things: ● reviewing and recommending to the board with respect to the total compensation package for our chief executive officer; ● approving and overseeing the total compensation package for our executives other than the chief executive officer; ● reviewing and making recommendations to the board with respect to the compensation of our directors; and ● reviewing periodically and approving any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans. 85 Corporate Governance and Nominating Committee .
Xin Zhang holds a Bachelor of Science from Zhejiang University in PRC, an MBA from the Freeman School of Business, Tulane University in USA, and a Master in Finance from the London Business School in London, UK. 84 Board Diversity The table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.
Xin Zhang holds a Bachelor of Science from Zhejiang University in PRC, an MBA from the Freeman School of Business, Tulane University in USA, and a Master in Finance from the London Business School in London, UK. 81 Board Diversity The table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.
Insider Participation Concerning Executive Compensation Our board of directors, which was comprised of five directors, with the assistance of the Compensation Committee, makes all determinations regarding executive officer compensation. 87 Committees of the Board of Directors We have established three committees under the board of directors: the audit committee, the compensation committee and the corporate governance and nominating committee, and adopt a charter for each of the committees.
Insider Participation Concerning Executive Compensation Our board of directors, which was comprised of five directors, with the assistance of the Compensation Committee, makes all determinations regarding executive officer compensation. 84 Committees of the Board of Directors We have established three committees under the board of directors: the audit committee, the compensation committee and the corporate governance and nominating committee, and adopt a charter for each of the committees.
B. Compensation of Directors and Executive Officers The following table sets forth certain information with respect to compensation for the year ended December 31, 2023, earned by or paid to our chief executive officers.
B. Compensation of Directors and Executive Officers The following table sets forth certain information with respect to compensation for the fiscal year ended December 31, 2024, earned by or paid to our chief executive officers.
Under the 2022 Plan, the maximum aggregate number of shares that may be issued pursuant to all awards shall be 3,679,200 Class A Ordinary Shares. As of the date of this annual report, we issued 1,613,350 Class A Ordinary Shares to qualified persons under the 2022 Plan. The following describes the principal terms of the 2022 Plan.
Under the 2022 Plan, the maximum aggregate number of shares that may be issued pursuant to all awards shall be 3,679,200 Class A Ordinary Shares. As of the date of this annual report, we issued 2,355,650 Class A Ordinary Shares to qualified persons under the 2022 Plan. The following describes the principal terms of the 2022 Plan.
The following table sets forth the numbers of our employees by areas of business as of April 30, 2024: Department Number of Employees Senior Management 5 Human Resources & Administration 5 Sales & Marketing 1 Business & Consulting 1 Customer Service 1 Information Technology 1 Research & Development 6 Finance 5 Total 25 Sunrise Guizhou had 264, 273 and 229 employees as of April 30, 2024, and December 31, 2023 and 2022 respectively.
The following table sets forth the numbers of our employees by areas of business as of April 30, 2025: Department Number of Employees Senior Management 5 Human Resources & Administration 4 Business & Consulting 1 Customer Service 1 Information Technology 1 Research & Development 1 Finance 4 Total 17 Sunrise Guizhou had 229, 273 and 270 employees as of December 31, 2022, 2023 and 2024 respectively.
(2) Representing 2,607,077 Class A Ordinary Shares held by GMB Culture Communication Co., Ltd, a British Virgin Islands company. Ertao Zhao, Yidong Zhang, Xiaoli Chen serve as the directors of GMB Culture Communication Co., Ltd. and share the dispositive and voting power of the shares held by GMB Culture.
Ertao Zhao, Yidong Zhang, Xiaoli Chen serve as the directors of GMB Culture Communication Co., Ltd. and share the dispositive and voting power of the shares held by GMB Culture. (3) Representing 2,018,586 Class A Ordinary Shares Held by GMB Resource Services Co., Ltd., a British Virgin Islands company.
Directors and Executive Officers Age Position/Title Haiping Hu 56 Chief Executive Officer (“CEO”), Chairman of the Board of Director Chao Liu 43 Chief Financial Officer (“CFO”), Director Xiang Luo 53 Independent Director Jian Pei 56 Independent Director Xin Zhang 35 Independent Director Mr.
Directors and Executive Officers Age Position/Title Haiping Hu 57 Chief Executive Officer (“CEO”), Chairman of the Board of Director Chao Liu 44 Chief Financial Officer (“CFO”), Director Xiang Luo 54 Independent Director Jian Pei 57 Independent Director Xin Zhang 36 Independent Director Mr.
The calculations in the table below are based on 26,141,350 Ordinary Shares outstanding as of the date of this annual report, including 19,574,078 Class A Ordinary Shares and 6,567,272 Class B Ordinary Shares. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculations in the table below are based on 26,986,950 Ordinary Shares outstanding as of the date of this annual report, including 20,419,678 Class A Ordinary Shares and 6,567,272 Class B Ordinary Shares. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
(2) 2,607,077 2,607,077 9.97 1.73 GMB Resource Services Co., Ltd (3) 2,481,486 2,481,486 9.49 1.64 * Unless otherwise indicated, the business address of each of the individuals is Room 703, West Zone, R&D Building, Zibo Science and Technology Industrial Entrepreneurship Park, No. 69, Sanying Road, Zhangdian District, Zibo City, Shandong Province, The PRC. ** The principal office of each of the 5% beneficial owners are located at Start Chambers, Wickham’s Cay II, P.O.
(2) 2,213,988 - 2,213,988 8.20 1.46 GMB Resource Services Co., Ltd (3) 2,018,586 - 2,018,586 7.48 1.33 * Unless otherwise indicated, the business address of each of the individuals is Room 703, West Zone, R&D Building, Zibo Science and Technology Industrial Entrepreneurship Park, No. 69, Sanying Road, Zhangdian District, Zibo City, Shandong Province, The PRC. ** The principal office of each of the 5% beneficial owners are located at Start Chambers, Wickham’s Cay II, P.O.
D. Employees SDH had 96, 48, and 25 full-time employees as of December 31, 2021, 2022 and 2023, respectively. As of April 30, 2024, we had 25 full-time employees. SDH had 10, 12 and 3 employees located in Zibo, Beijing and Shanghai, respectively.
D. Employees SDH had 48, 25 and 17 full-time employees as of December 31, 2022, 2023 and 2024, respectively. As of April 30, 2025, SDH had 17 full-time employees. SDH had 7 and 10 employees located in Zibo and Beijing, respectively.
The following table sets forth the numbers of Sunrise Guizhou’s employees by areas of business as of April 30, 2024.
As of April 30, 2025, Sunrise Guizhou had 300 full-time employees. The following table sets forth the numbers of Sunrise Guizhou’s employees by areas of business as of April 30, 2025.
Department Number of Employees Senior Management 3 Human Resources & Administration 10 Research & Development 38 Manufacturing & Equipment 125 Quality Control 27 Warehouse & Operation 28 Engineering & Construction 10 Supply Chain 5 Information Technology 4 Sales & Marketing 14 Total 264 89 Generally, we enter into standard employment contracts with our officers, managers, and other employees.
Department Number of Employees Senior Management 6 Human Resources & Administration 17 Research Development & Analysis 42 Manufacturing & Equipment 140 Quality Control 26 Warehouse & Operation 44 Engineering & Construction 12 Supply Chain 5 Information Technology 4 Sales & Marketing 4 Total 300 86 Generally, we enter into standard employment contracts with our officers, managers, and other employees.
Chenming Qi resigned from his position as the COO on June 8, 2023. 85 2022 Share Incentive Plan Our board of directors adopted the 2022 Stock Incentive Plan (the “2022 Plan”) in July 2022, effective as of July 11, 2022, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business.
Xin Zhang was appointed as our director on February 8, 2024 . 82 2022 Share Incentive Plan Our board of directors adopted the 2022 Stock Incentive Plan (the “2022 Plan”) in July 2022, effective as of July 11, 2022, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business.
Name and Address of Beneficial Owner* Class A Ordinary Shares Beneficially Owned * Class B Ordinary Shares Beneficially Owned * Total Ordinary Shares Beneficially Owned * % of Total Ordinary Shares % of Aggregate Voting Power Director and Executive Officers: Haiping Hu (1) 1,573,189 6,567,272 8,140,461 31.14 88.07 Chao Liu 100,000 100,000 0.07 Jian Pei 25,000 25,000 0.02 Xiang Luo 25,000 25,000 0.02 Directors and Executive Officers as a group (4 persons) 1,723,189 6,567,272 8,290,461 31.71 88.17 5% Beneficial Owners** GMB Wisdom Sharing Platform Co., Ltd.
Name and Address of Beneficial Owner* Class A Ordinary Shares Beneficially Owned* Class B Ordinary Shares Beneficially Owned* Total Ordinary Shares Beneficially Owned* % of Total Ordinary Shares % of Aggregate Voting Power Director and Executive Officers: Haiping Hu (1) 2,056,989 6,567,272 8,624,261 31.96 87.90 Chao Liu 222,176 - 222,176 0.82 0.15 Jian Pei 37,500 - 37,500 0.14 0.02 Xiang Luo 37,500 - 37,500 0.14 0.02 Xin Zhang - - - - - Directors and Executive Officers as a group (5 persons) 2,354,165 6,567,272 8,921,437 33.06 88.09 5% Beneficial Owners** Haiping Hu, GMB Wisdom Sharing Platform Co., Ltd.
Box 2221, Road Town, Tortola, British Virgin Islands. (1) Haiping Hu, our CEO and chairman of the Board, beneficially owns 7,172,861 Ordinary Shares held through his 100% ownership of GMB Wisdom Sharing Platform Co., LTD, including 605,589 Class A Ordinary Shares and 6,567,272 Class B Ordinary Shares, and 967,600 Class A Ordinary Shares held directly.
Box 2221, Road Town, Tortola, British Virgin Islands. (1) Haiping Hu, our CEO and chairman of the Board, beneficially owns 8,624,261 Ordinary Shares, including 2,056,989 Class A Ordinary Shares and 6,567,272 Class B Ordinary Shares. 1,451,400 Class A Ordinary shares are directly held by Mr.
(3) Representing 2,481,486 Class A Ordinary Shares Held by GMB Resource Services Co., Ltd., a British Virgin Islands company. Chenming Qi and Cunyou Li, Jinhai Ying, Gesheng Fei, each of whom serves as a director of GMB Resource Services Co., share the dispositive and voting power of the shares held by GMB Resources.
Chenming Qi and Cunyou Li, Jinhai Ying, Gesheng Fei, each of whom serves as a director of GMB Resource Services Co., share the dispositive and voting power of the shares held by GMB Resources. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. 87
Summary Compensation Table Name and Principal Position Year Salary (US$) Bonus (US$) Stock Awards (US$) Option Awards (US$) Non-Equity Incentive Plan Compensation Deferred Compensation Earnings Other Total (US$) Haiping Hu 2023 43,506 582 931,315 975,403 CEO of the Company and the VIE Chao Liu 2023 36,463 6,038 96,250 138,751 CFO and Director of the Company and the VIE Chenming Qi (3) 2023 33,117 33,117 Chief Operating Officer Haiwei Zuo (1) 2023 43,506 71,768 105,875 221,149 Director of the Company Jian Pei 2023 0 25,000 24,063 Director of the Company Xiang Luo 2023 0 25,000 24,063 Director of the Company Ligang Lu (2) 2023 0 30,000 28,875 Director of the Company (1) Mr.
Summary Compensation Table Name and Principal Position Year Salary (US$) Bonus (US$) Stock Awards (US$) Option Awards (US$) Non-Equity Incentive Plan Compensation Deferred Compensation Earnings Other Total (US$) Haiping Hu 2024 35,582 - 639,478 - - - - 675,060 CEO of the Company and the VIE Chao Liu 2024 28,655 - 66,089 - - - - 94,744 CFO and Director of the Company and the VIE Jian Pei 2024 - - 16,522 - - - - 16,522 Independent Director of the Company Xiang Luo 2024 - - 16,522 - - - - 16,522 Independent Director of the Company Xin Zhang (1) 2024 - - - - - - - - Independent Director of the Company (1) Mr.
(1) 605,589 6,567,272 7,172,861 27.44 87.43 GMB Culture Communication Co., Ltd.
(1) 2,056,989 6,567,272 8,624,261 31.96 87.90 GMB Culture Communication Co., Ltd.
Removed
Haiwei Zuo resigned from the board of directors on June 8, 2023. (2) Mr. Ligang Lu resigned from the board of directors on December 19, 2023. (3) Mr.
Added
Terms of Directors and Executive Officers The Company may by ordinary resolution elect any person to be a director either to fill a casual vacancy or as an addition to the existing board of directors. Any director so appointed shall hold office until his death, resignation or removal.
Removed
Terms of Directors and Executive Officers Each of our directors holds office until a successor has been duly elected and qualified unless the director was appointed by the board of directors, in which case such director holds office until the next following annual meeting of shareholders at which time such director is eligible for reelection.
Added
Hu, while 605,589 Class A Ordinary Shares and 6,567,272 Class B Ordinary Shares are held through his 100% ownership of GMB Wisdom Sharing Platform Co., Ltd. (2) Representing 2,213,988 Class A Ordinary Shares held by GMB Culture Communication Co., Ltd, a British Virgin Islands company.
Removed
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. 90 ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders See “ Item 6. Directors, Senior Management and Employees—E. Share Ownership .” B.
Removed
Related Party Transactions Contractual Arrangements between GIOP BJ and SDH See “ Item 4. Information on the Company—C.
Removed
Organizational Structure .” Material Transactions with Related Parties Our jurisdiction of organization prescribes certain procedures for related party transactions with directors, and our articles of association mandate that directors with a direct or indirect personal interest in any transaction that conflicts with the Company’s interest shall make that interest known and recorded in the board minutes and shall not participate in discussing or voting on such transaction The following is a list of related parties which the Company had transactions with: (a) Ningbo Zhuhai Investment Co., Ltd.
Removed
(“Zhuhai Investment”), a company controlled by Mr. Haiping Hu. (b) Bally, Corp. (“Bally”), a company controlled by Mr. Haiping Hu. (c) Mr. Xuanming Wang, General Manager and legal representative of GMB (Hangzhou). (d) Mr. Haiwei Zuo, Vice Chairman of the Board, 7.49% shareholder of GMB (Beijing).
Removed
(e) Shanghai Hui Yang Investment Co., 9.6451% shareholder of Sunrise Guizhou and controlled by immediate family members of Mr. Haiping Hu. (f) Shidong (Suzhou) Investment Co., Ltd., a company of which Mr. Haiping Hu is the CEO. (g) Mr. Shousheng Guo, Director, 3.00% shareholder of GMB (Beijing). (h) Mr. Wenwu Zhang, Director of Sunrise Guizhou. (i) Mr.
Removed
Chenming Qi, General Manager, Director and 3.00% shareholder of GIOP BJ; Director of GMB (Hangzhou). (j) Ms. Jing Ji, CEO of and 46% shareholder of GMB Technology. (k) Haicheng Shenhe, 9.6451% shareholder of Sunrise Guizhou. (l) Ms. Chao Liu, Chief Financial Officer of the Company. (m) GMB Internet Technology Co., Ltd., one of the shareholders of the Company.
Removed
(n) GMB Business Communication Co., Ltd. one of the shareholders of the Company. (o) GMB Enterprise Cooperation Development Co., Ltd., one of the shareholders of the Company. (p) GMB Information Technology Co., Ltd., one of the shareholders of the Company. (q) GMB Wisdom Sharing Platform Co., Ltd., one of the shareholders of the Company.
Removed
(r) GMB Technology Co., Ltd., one of the shareholders of the Company. (s) GMB Project Incubation Services Co., Ltd., one of the shareholders of the Company. (t) Guizhou Yilong New Area Industrial Development and Investment Co., Ltd., 3.0864% shareholder of Sunrise Guizhou. (u) Ms. Fangfei Liu, spouse of Mr. Haiping Hu. (v) Mr.
Removed
Huiyu Du, the legal representative of Sunrise Guizhou. (w) Beijing Huatai Zhonghe Venture Capital Center (Limited Partnership) (“Huatai Zhonghe”), controlled by Mr. Shousheng Guo 91 a.
Removed
Due from related parties As of December 31, 2023, 2022 and 2021, the balances of amount due from related parties were as follows: As of December 31, 2023 2022 2021 Due from related parties Bally $ 5,172 $ 5,168 $ 5,168 Zhuhai Investment - - 25,534 Mr. Xuanming Wang - 20,102 26,664 Mr. Shousheng Guo (2) 100,000 - - Mr.
Removed
Haiwei Zuo - - 7,912 Mr. Wenwu Zhang (1) 330,991 337,420 - Ms. Chao Liu (2) 141,024 - - Shidong (Suzhou) Investment Co., Ltd. 39,437 37,332 - Others 700 - - Total $ 617,324 $ 400,022 $ 65,278 (1) The balance as of December 31, 2023 and 2022 represented the prepaid acquisition consideration to purchase Mr.
Removed
Wenwu Zhang’s equity in Haicheng Shenhe. (2) The staff advance balances as of December 31, 2023 had been repaid by May 15, 2024. b. Due to related parties As of December 31, 2023, 2022 and 2021, the balances of amounts due to related parties were as follows: As of December 31, 2023 2022 2021 Due to related parties Mr.
Removed
Haiping Hu $ 903,789 $ 2,872 $ - Mr. Chenming Qi 5,476 9,189 - Ms. Jing Ji 19,543 19,923 - Shanghai HuiYang Investment Co.
Removed
(1) 800,785 738,128 - Haicheng Shenhe 451,871 50,395 - Zhuhai Investment (2) 2,183,911 64,643 - Huatai Zhonghe 98,593 - - Others 197 - - Total $ 4,464,165 $ 885,150 $ - (1) The balance as of December 31, 2023 mainly represented the loans from Shanghai HuiYang Investment Co., with the annual interest rate of 4.35% and was initially due on August 13, 2023 and extended to December 31, 2024.
Removed
(2) The balance as of December 31, 2023 represented the loans from Zhuhai Investment, with the annual interest rate of 8% and was initially due on December 31, 2023 and extended to December 31, 2024. c.
Removed
Deferred revenue -related parties As of December 31, 2023, 2022 and 2021, the balances of deferred revenue of related parties were as follows: As of December 31, 2023 2022 2021 Deferred revenue of related parties Shanghai Hui Yang Investment Co.
Removed
(1) $ 340,850 $ 347,471 $ - Total $ 340,850 $ 347,471 $ - (1) The balance as of December 31, 2023 and 2022 represented the advance from the related party for tailored services. 92 d. Related party transactions Related party purchase The Company rented office spaces from Zhuhai Investment.
Removed
For the years ended December 31, 2023, 2022 and 2021, total rental fee to Zhuhai Investment were $nil, $118,475 and $103,411, respectively. The Company purchased raw materials for graphite anode material manufacturing from Haicheng Shenhe. For the years ended December 31, 2023, 2022 and 2021, total purchases were $221,207, $1,031,043 and $nil, respectively.
Removed
Related party sales The Company sold titanium for $205 to Mr. Shousheng Guo for the year ended December 31, 2022. The Company sold medical wine for $666 to Zhuhai Investment for the year ended December 31, 2021. e.
Removed
Related party guarantee On August 4, 2022, Sunrise Guizhou entered into a line of credit financing contract with Bank of Guizhou for revolving credit of RMB 20,000,000, approximately $2,816,941, for a term from August 4, 2022 to August 3, 2023. The line of credit was in various means including bank loans, commercial note and letter of credit.
Removed
As of December 31, 2023, the undue commercial notes issued to the vendors were RMB 26,532,265, approximately $3,736,991. The Company deposited RMB 14,034,196, approximately $1,976,675, as restricted cash in the designated bank accounts in Bank of Guizhou to secure the commercial notes. Pursuant to the contract, Mr.
Removed
Haiping Hu and Guizhou Yilong New Area Industrial Development and Investment Co., Ltd., the non-controlling shareholder of Sunrise Guizhou, were the guarantor of the unsecured commercial notes for RMB 12,498,069, approximately $1,760,316 as of December 31, 2023.
Removed
On September 22, 2022, Sunrise Guizhou entered into a financing contract into an eighteen-month loan with Far East to obtain a loan of RMB 20,000,000, approximately $2,816,941, for a term from September 22, 2022 to March 21, 2024; On November 4, 2022, Sunrise Guizhou entered a sales and leaseback financing contract into a three-year financing with Ronghe to obtain an amount of RMB 40,000,000, approximately $5,633,882, for a term from November 10, 2022 to November 9, 2025; On February 7, 2023, Sunrise Guizhou entered a sales and leaseback financing contract into a two-year financing with Zhongguancun to obtain an amount of RMB 20,000,000, approximately $2,816,941, for a term from February 7, 2023 to February 6, 2025; On October 27, 2023, Sunrise Guizhou entered into a sales and leaseback financing contract for a two-year financing with Guomao for RMB 15,000,000, approximately $2,112,706, for a term from October 27, 2023 to October 26, 2025.
Removed
Pursuant to these financing contracts, Mr. Haiping Hu, CEO and Chairman of the Board of Director, was the guarantor for the debts.
Removed
In July 2022, Sunrise Guizhou entered into purchase agreements with original shareholders of Sunrise to acquire 100% of Sunrise Tech’s assets and equity ownership for a gross consideration of RMB 40,000,000 (approximately $5,743,331), among of which RMB10,000,000 and RMB 5,000,000, approximately $1,486,746 and $706,125, were paid in July 2022 and August 2023, respectively.
Removed
The unpaid consideration RMB 25,000,000 (approximately $3,521,176) will be paid in installments from 2024 to 2026. The consideration payable is guaranteed by Mr. Haiping Hu.
Removed
On May 16, 2023, Sunrise Guizhou entered into a credit facility agreement with Everbright Bank to obtain revolving fund up to RMB 100,000,000, approximately $14,084,705, for a term from June 1, 2023 to May 31, 2024.
Removed
As of December 31, 2023, the Company had been able to utilize the line of credit for RMB 50,000,000 (approximately $7,042,353) with interest rates from 2% to 4.5% which would mature from June 4, 2024 to September 25, 2024, collateralized by the pledge of land use right of Sunrise Tech for RMB 50,000,000. This credit loan was guaranteed by Mr.
Removed
Haiping Hu, CEO and Chairman of the Board of Director, Ms. Fangfei Liu, spouse of Mr. Haiping Hu and Ms. Huiyu Du, the legal representative of Sunrise Guizhou.
Removed
On January 18, 2023, Sunrise Guizhou entered into a credit facility agreement with Post Bank to obtain revolving fund up to RMB 30,000,000, approximately $4,225,412, for a term from January 19, 2023 to January 18, 2031.
Removed
As of December 31, 2023, the Company had utilized the line of credit with Post Bank for RMB 28,300,000, approximately $3,985,972, which would mature from July 2023 to April 2024. In March 2024, the Company early repaid the long-term loan. This credit loan was guaranteed by Mr. Haiping Hu.
Removed
On June 13, 2023, Sunrise Guizhou entered into a finance lease agreement with Chongqing Xingyu Finance Lease Co., Ltd. to obtain graphite anode materials production facilities. The principal of the contract was RMB 29,257,844, approximately $4,120,881, with a nominal interest rate of 5.8%. This finance lease payment was guaranteed by Mr. Haiping Hu and Ms. Fangfei Liu.
Removed
On October 26, 2023, Sunrise Guizhou entered into a three-year debt arrangement with SPD Bank to obtain line of credit up to RMB 50,000,000, approximately $7,042,353, for a term from November 17, 2023 to November 17, 2026. The Company pledged its intellectual property and patent for the line of credit.
Removed
Sunrise Guizhou utilized the line of credit by issuing banker’s acceptance note up to RMB 20,000,000, approximately $2,816,941 from SPD. Pursuant to the banker’s acceptance note contract, the Company was obliged to deposit fifty percent of the note payable amount issued as restricted cash in the designated bank account in SPD Bank.
Removed
Therefore, the line of credit for issuance of acceptance note was RMB 10,000,000, approximately $ 1,408,471. As of December 31, 2023, the banker’s acceptance note was RMB 2,920,000, approximately $411,273 and the deposit for commercial note issuance was RMB 1,460,000, approximately $205,637.
Removed
Other than the pledge of the Company’s intellectual property and patents, the unsecured amount of banker’s acceptance note, which was RMB 1,460,000 (approximately $205,636) was also guaranteed by Mr. Haiping Hu. 93 C. Interests of Experts and Counsel Not applicable.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

0 edited+43 added−1 removed0 unchanged
Removed
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 91 ITEM 8. FINANCIAL INFORMATION 94 ITEM 9. THE OFFER AND LISTING 95 ITEM 10. ADDITIONAL INFORMATION 95 ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 102 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 102 PART II 103
Added
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders See “ Item 6. Directors, Senior Management and Employees—E. Share Ownership .” B. Related Party Transactions Contractual Arrangements between GIOP BJ and SDH See “ Item 4. Information on the Company—C.
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Organizational Structure .” Material Transactions with Related Parties Our jurisdiction of organization prescribes certain procedures for related party transactions with directors, and our articles of association mandate that directors with a direct or indirect personal interest in any transaction that conflicts with the Company’s interest shall make that interest known and recorded in the board minutes and shall not participate in discussing or voting on such transaction The following is a list of related parties which the Company had transactions with: (a) Ningbo Zhuhai Investment Co., Ltd.
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(“Zhuhai Investment”), a company controlled by Mr. Haiping Hu. (b) Bally Corp. (“Bally”), a company controlled by Mr. Haiping Hu. (c) Zhongna Times (Shenzhen) New Energy Technology Co., Ltd. (“Zhongna Times”), a company controlled by Mr. Haiping Hu. (d) Shanghai Huiyang Investment Co., (“Shanghai Huiyang”) 5.4012% shareholder of Sunrise Guizhou and controlled by immediate family members of Mr. Haiping Hu.
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(e) Shidong (Suzhou) Investment Co., Ltd., (Shidong Suizhou) a company of which Mr. Haiping Hu is the CEO. (f) Mr. Shousheng Guo, Director, 3.00% shareholder of GMB (Beijing). (g) Mr. Wenwu Zhang, Director of Sunrise Guizhou. (h) Mr. Chenming Qi, General Manager, Director and 3.00% shareholder of GIOP BJ; Director of GMB (Hangzhou). (i) Ms.
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Jing Ji, CEO of and 46% shareholder of GMB Technology. (j) Haicheng Shenhe, 9.6451% shareholder of Sunrise Guizhou. (k) Ms. Chao Liu, Chief Financial Officer of the Company. (l) GMB Internet Technology Co., Ltd., one of the shareholders of the Company. (m) GMB Business Communication Co., Ltd. one of the shareholders of the Company.
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(n) GMB Enterprise Cooperation Development Co., Ltd., one of the shareholders of the Company. (o) GMB Information Technology Co., Ltd., one of the shareholders of the Company. (p) GMB Wisdom Sharing Platform Co., Ltd., one of the shareholders of the Company. (q) GMB Technology Co., Ltd., one of the shareholders of the Company.
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(r) GMB Project Incubation Services Co., Ltd., one of the shareholders of the Company. (s) Guizhou Yilong New Area Industrial Development and Investment Co., Ltd., 3.0864% shareholder of Sunrise Guizhou. (t) Ms. Fangfei Liu, spouse of Mr. Haiping Hu. (u) Mr. Huiyu Du, the former legal representative of Sunrise Guizhou.
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(v) Beijing Huatai Zhonghe Venture Capital Center (Limited Partnership) (“Huatai Zhonghe”), controlled by Mr. Shousheng Guo. (w) Ningbo Meishan Bonded Port Zone Zhihai Yuncheng Investment Management Partnership Enterprise (Limited Partnership) (“Zhihai Yuncheng”), a limited partnership controlled by Mr. Haiping Hu. (x) Shenzhen Zhuhai New Energy Co., Ltd. (“Shenzhen Zhuhai”), a company ultimately controlled by Mr. Haiping Hu. 88 a.
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Due from related parties As of December 31, 2024, 2023 and 2022, the balances of amount due from related parties were as follows: As of December 31, 2024 2023 2022 Due from related parties Bally $ 5,172 $ 5,172 $ 5,168 Mr. Xuanming Wang - - 20,102 Mr. Shousheng Guo (2) - 100,000 - Mr.
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Wenwu Zhang (1) 321,949 330,991 337,420 Ms. Chao Liu (2) - 141,024 - Shidong Suzhou - 39,437 37,332 Shenzhen Zhuhai (4) 150,699 - - Zhihai Yuncheng (3) 63,588 - - Others 700 700 - Total $ 542,108 $ 617,324 $ 400,022 (1) The balance as of December 31, 2024, 2023 and 2022 represented the prepaid acquisition consideration to purchase Mr.
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Wenwu Zhang’s equity in Haicheng Shenhe. (2) The staff advance balances as of December 31, 2024 had been repaid by May 15, 2024. (3) The balance as of December 31, 2024 represented the prepaid service fee. (4) The balance from Shenzhen Zhuhai as of December 31, 2024 had been repaid on May 15, 2025. b.
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Due to related parties As of December 31, 2024, 2023 and 2022, the balances of amounts due to related parties were as follows: As of December 31, 2024 2023 2022 Due to related parties Mr. Haiping Hu $ - $ 903,789 $ 2,872 Mr. Chenming Qi - 5,476 9,189 Ms.
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Jing Ji 19,009 19,543 19,923 Shanghai Huiyang (1) 235,001 800,785 738,128 Haicheng Shenhe 1,029 451,871 50,395 Zhuhai Investment (2) 3,442,663 2,183,911 64,643 Zhongna Times 493,198 - - Huatai Zhonghe - 98,593 - Others 5,905 197 - Total $ 4,196,805 $ 4,464,165 $ 885,150 (1) The balance as of December 31, 2024 mainly represented the loans from Shanghai Huiyang with the annual interest rate of 4% due on December 31, 2025.
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(2) The balance as of December 31, 2024 represented the loans from Zhuhai Investment, with the annual interest rate of 4% and due on December 31, 2025. c.
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Deferred revenue -related parties As of December 31, 2024, 2023 and 2022, the balances of deferred revenue of related parties were as follows: As of December 31, 2024 2023 2022 Deferred revenue of related parties Shanghai Huiyang (1) $ - $ 340,850 $ 347,471 Total $ - $ 340,850 $ 347,471 (1) The balance as of December 31, 2023 and 2022 represented the advance from the related party for tailored services. 89 d.
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Related party transactions Related party purchase The Company purchased consulting services for knowledge sharing and enterprise business from Zhuhai Investment. For the years ended December 31, 2024, 2023 and 2022, consulting fee to Zhuhai Investment were $ 12,376, $nil and $nil, respectively. The Company rented office spaces from Zhuhai Investment.
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For the fiscal years ended December 31, 2024, 2023 and 2022, total rental fee to Zhuhai Investment were $nil, $nil and $118,475, respectively. The Company purchased maintenance services for the Company’s APP on knowledge sharing and enterprise business from Zhihai Yuncheng.
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For the years ended December 31, 2024, 2023 and 2022, maintenance fee to Zhihai Yuncheng were $32,776, $nil and $nil, respectively. The Company purchased raw materials for graphite anode material manufacturing from Haicheng Shenhe. For the years ended December 31, 2024, 2023 and 2022, total purchases were $nil, $221,207 and $1,031,043, respectively.
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Related party sales The Company sold titanium for $205 to Mr. Shousheng Guo for the year ended December 31, 2022. e.
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Related party guarantee On August 4, 2022, Sunrise Guizhou entered into a line of credit financing contract with Bank of Guizhou for revolving credit of RMB 20,000,000, approximately $2,739,989, for a term from August 4, 2022 to August 3, 2023. The line of credit was in various means including bank loans, commercial note and letter of credit.
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As of December 31, 2024 and 2023, the undue commercial notes issued to the vendors were RMB nil and RMB 26,532,265, approximately $nil and $3,736,991, respectively.
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The Company deposited RMB nil and RMB 14,034,196, approximately $nil and $1,976,675, as restricted cash in the designated bank accounts in Bank of Guizhou to secure the commercial notes as of December 31, 2024 and 2023, respectively. Pursuant to the contract, Mr.
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Haiping Hu and Guizhou Yilong New Area Industrial Development and Investment Co., Ltd., the non-controlling shareholder of Sunrise Guizhou, were the guarantor of the unsecured commercial notes for RMB nil and RMB 12,498,069, approximately $nil and $1,760,316 as of December 31, 2024 and 2023, respectively.
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In July 2022, Sunrise Guizhou entered into purchase agreements with original shareholders of Sunrise to acquire 100% of Sunrise Tech’s assets and equity ownership for a gross consideration of RMB 40,000,000, among of which RMB 10,000,000 and RMB 5,000,000 were paid in July 2022 and August 2023, respectively.
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For the year ended December 31, 2024, the Company and the original shareholder agreed that RMB 5,000,000 (approximately $684,997) consideration due on August 20, 2024 would be offset by the unpaid RMB 8,960,000 (approximately $1,227,515) land use right and property taxes and their associated fines and late payment fee prior to the asset acquisition.
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The unpaid consideration RMB 16,040,000 (approximately $2,197,471) will be paid in installments from 2025 to 2026. The consideration payable is guaranteed by Mr. Haiping Hu.
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On September 22, 2022, Sunrise Guizhou entered into a financing contract into an eighteen-month loan with Far East to obtain a loan of RMB 20,000,000, approximately $2,739,989, for a term from September 22, 2022 to March 21, 2024; On November 4, 2022, Sunrise Guizhou entered a sales and leaseback financing contract into a three-year financing with Ronghe to obtain an amount of RMB 40,000,000, approximately $5,479,978, for a term from November 10, 2022 to November 9, 2025; On February 7, 2023, Sunrise Guizhou entered a sales and leaseback financing contract into a two-year financing with Zhongguancun to obtain an amount of RMB 20,000,000, approximately $2,739,989, for a term from February 7, 2023 to February 6, 2025; On October 27, 2023, Sunrise Guizhou entered into a sales and leaseback financing contract for a two-year financing with Guomao for RMB 15,000,000, approximately $2,054,992, for a term from October 27, 2023 to October 26, 2025.
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On October 14, 2024, Sunrise Guizhou entered into a sales and leaseback financing contract for a thirty two-month financing with Risheng for RMB 6,000,000, approximately $821,997, for a term from October 14, 2024 to June 15, 2027. Pursuant to these financing contracts, Mr. Haiping Hu, CEO and Chairman of the Board of Director, was the guarantor for the debts.
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On May 16, 2023, Sunrise Guizhou entered into a credit facility agreement with Everbright Bank to obtain revolving fund up to RMB 100,000,000, approximately $13,699,944, for a term from June 1, 2023 to May 31, 2024.
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As of December 31, 2023, the Company had been able to utilize the line of credit for RMB 50,000,000, or $7,042,353, with interest rates from 2% to 4.5% which had matured from June 4, 2024 to September 25, 2024, collateralized by the pledge of land use right of Sunrise Tech for RMB 50,000,000. This credit loan was guaranteed by Mr.
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Haiping Hu, Ms. Fangfei Liu and Ms. Huiyu Du. On January 18, 2023, Sunrise Guizhou entered into a credit facility agreement with Post Bank to obtain revolving fund up to RMB 30,000,000, approximately $4,109,983, for a term from January 19, 2023 to January 18, 2031.
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As of December 31, 2023, the Company utilized the line of credit with Post Bank for RMB 28,300,000, or $3,985,972, which had matured from July 2023 to April 2024. In March 2024, the Company early repaid the long-term loan. This credit loan was guaranteed by Mr. Haiping Hu.
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On June 13, 2023, Sunrise Guizhou entered into a finance lease agreement with Chongqing Xingyu Finance Lease Co., Ltd. to lease graphite anode materials production facilities. The principal of the contract was RMB 29,257,844, approximately $4,008,308, with a nominal interest rate of 5.8%. This finance lease payment was guaranteed by Mr. Haiping Hu and Ms.
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Fangfei Liu. 90 On October 26, 2023, Sunrise Guizhou entered into a three-year debt arrangement with SPD Bank to obtain line of credit up to RMB 50,000,000, approximately $6,849,972, for a term from November 17, 2023 to November 17, 2026. The Company pledged its intellectual property and patent for the line of credit.
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Sunrise Guizhou utilized the line of credit by issuing banker’s acceptance note up to RMB 20,000,000, approximately $2,739,989 from SPD. Pursuant to the banker’s acceptance note contract, the Company was obliged to deposit fifty percent of the note payable amount issued as restricted cash in the designated bank account in SPD Bank.
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Therefore, the line of credit for issuance of acceptance note was RMB 10,000,000, approximately $1,369,994 . As of December 31, 2023, the banker’s acceptance note was RMB 2,920,000, approximately $411,273 and the deposit for commercial note issuance was RMB 1,460,000, approximately $205,637.
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Other than the pledge of the Company’s intellectual property and patents, the unsecured amount of banker’s acceptance note, which was RMB 1,460,000 was also guaranteed by Mr. Haiping Hu.
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On March 8, 2024, Sunrise Guizhou obtained bank loan of RMB 100,000,000, approximately $13,699,944 from CCB Qianxinan Branch with an interest rate of 9.504% for a term from March 8, 2024 to March 8, 2026; On June 28, 2024, Sunrise Guizhou obtained bank loan of RMB 100,000,000, approximately $$13,699,944, from CCB Qianxinan Branch for a term from June 28, 2024 to June 28, 2026.
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This loan was guaranteed by Mr. Haiping Hu. On April 26, 2024, the Company obtained a loan for RMB 900,000 (approximately $123,299) from WeBank with an interest rate of 9.504% for a term from April 26, 2024 to April 26, 2026. This credit loan was guaranteed by Ms. Huiyu Du, the former legal representative of Sunrise Guizhou.
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On June 19, 2024, GIOP BJ entered into a line of credit facility agreement with Industrial Bank to obtain revolving fund up to RMB 7,000,000, approximately $958,996.
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On July 23, 2024, GIOP BJ obtained a loan for RMB 7,000,000 with an interest rate of one-year loan prime rate plus 0.05% for a term from August 29, 2024 to August 28, 2025. This loan was guaranteed by Mr. Haiping Hu and Ms. Fangfei Liu. See Note 17.
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On July 31, 2024, Sunrise Guizhou entered into a banker’s acceptance note contract with Everbright Bank for issuing banker’s acceptance note to the suppliers of Sunrise Guizhou. Pursuant to the contract, the Company was obliged to deposit fifty percent of the note payable amount issued as restricted cash in the designated bank account in Everbright Bank.
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As of December 31, 2024 and 2023, the deposit for note issuance was $6,853,541 and $nil, respectively. Pursuant to the contract, Mr. Haiping Hu and Ms. Fangfei Liu were the guarantor of the unsecured commercial notes for $6,853,541 as of December 31, 2024. C. Interests of Experts and Counsel Not applicable.

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