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Sunrise New Energy Co., Ltd.

Sunrise New Energy Co., Ltd.EPOW财报

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 — 2022 vs 2023

Top changes in Sunrise New Energy Co., Ltd.'s 2023 20-F

402 paragraphs added · 391 removed · 261 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

54 edited+24 added−29 removed189 unchanged
If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results or prevent fraud. ● We do not intend to pay dividends for the foreseeable future. ● The market price of our Ordinary Shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the initial public offering price. ● As a foreign private issuer, we are not subject to certain U.S. securities law disclosure requirements that apply to a domestic U.S. issuer, and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, which may limit the information publicly available to our investors and afford them less protection than if we were an U.S issuer. ● If we cannot satisfy the listing requirements and other rules of Nasdaq Capital Market, our securities may be delisted, which could negatively impact the price of our securities and your ability to sell them.
If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results or prevent fraud. ● We do not intend to pay dividends for the foreseeable future. ● The market price of our Class A Ordinary Shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the initial public offering price. ● As a foreign private issuer, we are not subject to certain U.S. securities law disclosure requirements that apply to a domestic U.S. issuer, and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, which may limit the information publicly available to our investors and afford them less protection than if we were a U.S. issuer. ● If we cannot satisfy the listing requirements and other rules of Nasdaq Capital Market, our securities may be delisted, which could negatively impact the price of our securities and your ability to sell them.
If the PRC courts or regulatory authorities determine that our contractual arrangements are in violation of applicable PRC laws, rules or regulations, the VIE Agreements will become invalid or unenforceable, and the VIE will not be treated as VIE entities and we will not be entitled to treat the VIE’s assets, liabilities and results of operations as our assets, liabilities and results of operations, which could effectively eliminate the assets, revenue and net income of the VIE from our balance sheet, which would most likely require us to cease conducting our business and would result in the delisting of our ordinary shares from the Nasdaq Capital Market and a significant impairment in the market value of our ordinary shares.
If the PRC courts or regulatory authorities determine that our contractual arrangements are in violation of applicable PRC laws, rules or regulations, the VIE Agreements will become invalid or unenforceable, and the VIE will not be treated as VIE entities and we will not be entitled to treat the VIE’s assets, liabilities and results of operations as our assets, liabilities and results of operations, which could effectively eliminate the assets, revenue and net income of the VIE from our balance sheet, which would most likely require us to cease conducting our business and would result in the delisting of our Class A Ordinary Shares from the Nasdaq Capital Market and a significant impairment in the market value of our Class A Ordinary Shares.
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”.
GAAP for accounting purpose only; 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”.
Risks Related to Doing Business in China Risks and uncertainties related to doing business in China include, but are not limited to, the following: ● The Chinese government exerts substantial influence over the manner in which we must conduct our business, and may intervene or influence our operations at any time, which could result in a material change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors and, and cause the value of our Ordinary Shares to significantly decline or be worthless. ● Recent greater oversight by the Cyberspace Administration of China over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our securities. ● The Trial Measures and the revised Provisions recently issued by the PRC authorities may subject us to additional compliance requirements in the future. ● A severe or prolonged downturn in the global or Chinese economy could materially and adversely affect our business and our financial condition. ● We face risks related to health epidemics such as the COVID-19 first identified in Wuhan city at the end of 2019, which significantly disrupted our operations and may continue to adversely affect our business, financial condition and results of operations. 10 ● Because our business is dependent upon government policies that encourage a market-based economy, change in the political or economic climate in the PRC may impair our ability to operate profitably, if at all. ● PRC laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may materially and adversely affect our business and impede our ability to continue our operations. ● Because our business is conducted in RMB and the price of our Ordinary Shares is quoted in United States dollars, changes in currency conversion rates may affect the value of your investments. ● Under the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified as a “resident enterprise” of China, which could result in unfavorable tax consequences to us and our non-PRC shareholders. ● There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiaries, and dividends payable by our PRC subsidiaries to our offshore subsidiaries may not qualify to enjoy certain treaty benefits. ● PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans or additional capital contributions to our PRC subsidiaries, the VIE and its subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business. ● Government control in currency conversion may adversely affect our financial condition, our ability to remit dividends, and the value of your investment. ● If we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation. ● The disclosures in our reports and other filings with the SEC and our other public pronouncements are not subject to the scrutiny of any regulatory bodies in the PRC. ● The Holding Foreign Companies Accountable Act and related regulations all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB.
Risks Related to Doing Business in China Risks and uncertainties related to doing business in China include, but are not limited to, the following: ● The Chinese government exerts substantial influence over the manner in which we must conduct our business, and may intervene or influence our operations at any time, which could result in a material change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors and, and cause the value of our Class A Ordinary Shares to significantly decline or be worthless. ● Recent greater oversight by the Cyberspace Administration of China over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our securities. ● The Trial Measures and the revised Provisions recently issued by the PRC authorities may subject us to additional compliance requirements in the future. ● A severe or prolonged downturn in the global or Chinese economy could materially and adversely affect our business and our financial condition. ● We face risks related to health epidemics such as the COVID-19, which significantly disrupted our operations and may continue to adversely affect our business, financial condition and results of operations. 10 ● Because our business is dependent upon government policies that encourage a market-based economy, change in the political or economic climate in the PRC may impair our ability to operate profitably, if at all. ● PRC laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may materially and adversely affect our business and impede our ability to continue our operations. ● Because our business is conducted in RMB and the price of our Class A Ordinary Shares is quoted in United States dollars, changes in currency conversion rates may affect the value of your investments. ● Under the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified as a “resident enterprise” of China, which could result in unfavorable tax consequences to us and our non-PRC shareholders. ● There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiaries, and dividends payable by our PRC subsidiaries to our offshore subsidiaries may not qualify to enjoy certain treaty benefits. ● PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans or additional capital contributions to our PRC subsidiaries, the VIE and its subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business. ● Government control in currency conversion may adversely affect our financial condition, our ability to remit dividends, and the value of your investment. ● If we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation. ● The disclosures in our reports and other filings with the SEC and our other public pronouncements are not subject to the scrutiny of any regulatory bodies in the PRC. ● The Holding Foreign Companies Accountable Act and related regulations all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB.
Investors of our Ordinary Shares do not hold shares in the PRC operating entities, but instead hold shares of a Cayman Islands 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.
Further, defective raw materials or raw materials with quality deficiencies could subject Sunrise Guizhou to product liability claims or legal actions, which circumstances could adversely affect Sunrise Guizhou’s financial conditions and results of operations. Sunrise Guizhou entrusts third-party contract manufacturers for the manufacturing of its graphite anode products.
Further, defective raw materials or raw materials with quality deficiencies could subject Sunrise Guizhou to product liability claims or legal actions, which circumstances could adversely affect Sunrise Guizhou’s financial conditions and results of operations. Sunrise Guizhou entrusts third-party contract manufacturers for certain processes for the manufacturing of its graphite anode products.
Because we are a Cayman Island company and all of our business is conducted in the PRC, you may be unable to bring an action against us or our officers and directors or to enforce any judgment you may obtain. We are incorporated in the Cayman Islands and conduct our operations primarily in China.
Because we are a Cayman Islands exempted company and all of our business is conducted in the PRC, you may be unable to bring an action against us or our officers and directors or to enforce any judgment you may obtain. We are incorporated in the Cayman Islands and conduct our operations primarily in China.
(“Innovation Research”) December 13, 2022 PRC 39.35% Research and Development Variable Interest Entity (“VIE”) and subsidiaries of VIE Global Mentor Board (Beijing) 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.
(“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.
(ii) 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.
(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.
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 limited by shares incorporated under the laws of the Cayman Islands; and “SDH” or “the VIE” are to Global Mentor Board (Beijing) 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, which we control via a series of contractual arrangements among GIOP BJ, SDH and shareholders of SDH (the “VIE Agreements”).
Senate passed the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022, legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”) was signed into law, which included an identical provision of the Accelerating Holding Foreign Companies Accountable Act and amended the HFCA Act by requiring the U.S.
On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022, legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”) was signed into law, which included an identical provision of the Accelerating Holding Foreign Companies Accountable Act and amended the HFCA Act by requiring the U.S.
As of the date of this annual report, Sunrise Guizhou entrusts manufacturing of its graphite anode products to third parties contractors, who might be unable to timely manufacture its products or produce the quantity and quality required to meet its commercial needs, or may not be able to execute our manufacturing procedures appropriately, or may not perform as agreed upon, or to produce, store and distribute its products satisfactorily.
As of the date of this annual report, Sunrise Guizhou entrusts certain processes of the manufacturing of its graphite anode products to third-party contractors, who might be unable to timely manufacture its products or produce the quantity and quality required to meet its commercial needs, or may not be able to execute our manufacturing procedures appropriately, or may not perform as agreed upon, or to produce, store and distribute its products satisfactorily.
We may not be able to effectively and efficiently manage the growth of our operations, recruit and retain qualified personnel and integrate new expansion into our operations. As a result, our quality of service may deteriorate and our results of operations or profitability could be adversely affected.
We may not be able to effectively and efficiently manage the growth of our operations, recruit and retain qualified personnel and integrate new expansion into our operations. As a result, our results of operations or profitability could be adversely affected.
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 online business, which could have a material adverse impact on our business, financial conditions and results of operations.” We have been closely monitoring the development in the regulatory landscape in China, particularly regarding the requirement of approvals, including on a retrospective basis, from the CSRC, the CAC, or other PRC authorities with respect to this offering, as well as other procedures that may be imposed on us. 4 Selected Condensed Consolidating Financial Schedule As a holding company with no material operations of our own, we conduct our operations through Sunrise Guizhou, the VIE and its subsidiaries in the PRC.
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.” We have been closely monitoring the development in the regulatory landscape in China, particularly regarding the requirement of approvals, including on a retrospective basis, from the CSRC, the CAC, or other PRC authorities with respect to this offering, as well as other procedures that may be imposed on us. 4 Selected Condensed Consolidating Financial Schedule As a holding company with no material operations of our own, we conduct our operations through Sunrise Guizhou, the VIE and its subsidiaries in the PRC.
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; ● 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. 20 We cannot assure you that the PRC courts or regulatory authorities may not determine that our corporate structure and VIE Agreements violate PRC laws, rules or regulations.
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.
(“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 Hongkong 100% Holding company Zhuhai (Zibo) Investment Co., Ltd.
(“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.
In addition, our Ordinary Shares may be prohibited from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable Act (the “HFCA Act”) and related regulations, if the Public Company Accounting Oversight Board (United States) (the “PCAOB”) is unable to inspect our auditor for two consecutive years beginning in 2022. On June 22, 2021, the U.S.
In addition, our Class A Ordinary Shares may be prohibited from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable Act (the “HFCA Act”) and related regulations, if the Public Company Accounting Oversight Board (United States) (the “PCAOB”) is unable to inspect our auditor for two consecutive years beginning in 2022.
These 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 and the Filing Certificate for Fire Safety Inspection and Acceptance of Construction Project for our new business of manufacturing and sales of graphite anode material.
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.
See “Risk Factors—Risks Related to Doing Business in China,” and “Risk Factors—Risks Related to Our Corporate Structure.” As of December 31, 2022 and 2021, the VIE accounted for an aggregate of 8.79% and 51.21%, respectively, of our consolidated total assets, 13.04% and 99% respectively, of our consolidated total liabilities, and 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, 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.
Risks and uncertainties related to our corporate structure include, but are not limited to, the following: ● If the PRC government finds that the agreements that establish the structure for operating our businesses in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. ● We rely on contractual arrangements with the VIE and its subsidiaries, and shareholders for our China operations, which may not be as effective in providing operational control as direct ownership. ● The contractual arrangements we have entered into with the VIE and its shareholders, and any other arrangements and transactions among related parties that we currently have or will have in future may be subject to scrutiny by the PRC tax authorities and they may determine that we owe additional taxes, which could substantially reduce our consolidated net income and the value of your investment. ● The shareholders of the VIE may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition. ● We may lose the ability to use and enjoy assets held by the VIE that are material to the operation of certain portion of our business if the VIE goes bankrupt or become subject to a dissolution or liquidation proceeding. ● As an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with such corporate governance listing standards.
Risks and uncertainties related to our corporate structure include, but are not limited to, the following: ● If the PRC government finds that the agreements that establish the structure for operating our businesses in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. ● We rely on contractual arrangements with the VIE and its subsidiaries, and shareholders for our China operations, which may not be as effective in providing operational control as direct ownership. ● The contractual arrangements we have entered into with the VIE and its shareholders, and any other arrangements and transactions among related parties that we currently have or will have in future may be subject to scrutiny by the PRC tax authorities and they may determine that we owe additional taxes, which could substantially reduce our consolidated net income and the value of your investment. ● The shareholders of the VIE may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition. ● We may lose the ability to use and enjoy assets held by the VIE that are material to the operation of certain portion of our business if the VIE goes bankrupt or become subject to a dissolution or liquidation proceeding. ● As an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with such corporate governance listing standards. ● 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 dual class structure of our ordinary shares has the effect of concentrating voting control with our Chairman, and his interest may not be aligned with the interests of our other shareholders.
(“Yuantai Fengdeng”) March 4, 2022 PRC 51% by VIE 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, 2022, 2021, 2020, and balance sheet data as of December 31, 2022, 2021, and 2020.
(“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.
The loss was 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 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.
Our planned expansion will also place 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.
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.
If we determine to pay dividends on any of our Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds from our operating entities, pursuant to the VIE Agreements.
If we determine to pay dividends on any of our Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds from our operating entities, pursuant to the VIE Agreements. 3 The Company’s management is directly supervising cash management.
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, 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.
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.
Risks Related to Our Graphite Anode Manufacturing and Sales Business Risks and uncertainties related to our graphite anode manufacturing and sales business include, but are not limited to, the following: ● Our graphite anode manufacturing and sales joint venture may not perform as well as we expected. ● Joint venture with which we engage for developing graphite anode manufacturing and sales business presents a number of challenges that could have a material adverse effect on our business and results of operations and cash flows. ● We may not respond quickly to continued innovations. ● Complying with numerous health, safety and environmental regulations is both complex and costly. ● Sunrise Guizhou depends on a few major customers, and the loss of any of which could cause a significant decline in our revenues. ● Sunrise Guizhou may need additional capital to pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances, and financing may not be available on acceptable terms or at all. 9 Risks Related to Our Corporate Structure With regard to our knowledge sharing and enterprise service platform, 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.
Risks Related to Our Graphite Anode Manufacturing and Sales Business Risks and uncertainties related to our graphite anode manufacturing and sales business include, but are not limited to, the following: ● Our graphite anode manufacturing and sales joint venture may not perform as well as we expected. ● Joint venture with which we engage for developing graphite anode manufacturing and sales business presents a number of challenges that could have a material adverse effect on our business and results of operations and cash flows. ● We may not respond quickly to continued innovations. ● Complying with numerous health, safety and environmental regulations is both complex and costly. ● Sunrise Guizhou depends on a few major customers, and the loss of any of which could cause a significant decline in our revenues. ● Sunrise Guizhou faces the risk of fluctuations in the cost, availability, and quality of raw materials, which could adversely affect our results of operations. ● Price volatility of our finished goods. ● Sunrise Guizhou may need additional capital to pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances, and financing may not be available on acceptable terms or at all. 9 Risks Related to Our Corporate Structure The VIE conducts the knowledge sharing and enterprise service platform and we consolidate the financials of the VIE under the U.S.
(“Jiagui Haifeng”) November 29, 2021 PRC 51% by VIE Business Incubation Services provider Shanghai Nanyu Culture Communication Co., Ltd. (“Nanyu Culture”) July 27, 2021 PRC 51% by VIE Enterprise Information Technology Integration services provider Beijing Mentor Board Health Technology Co., Ltd (“GMB Health”) January 7, 2022 PRC 100% by VIE Health Services Shanghai Yuantai Fengdeng Agricultural Technology Co., Ltd.
(“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.
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. Our historical financial results may not be indicative of our future performance.
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.
For the fiscal year ended December 31, 2022, four customers accounted for more than 10% of Sunrise Guizhou’s total sales, accounting for 28.43%, 19.54%, 19.30% and 18.87% respectively.
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.
Any unauthorized use of our trademarks or other intellectual property rights could harm our competitive advantages and business. Historically, China has not protected intellectual property rights to the same extent as the United States, and infringement of intellectual property rights continues to pose a serious risk of doing business in China. Monitoring and preventing unauthorized use are difficult.
Historically, China has not protected intellectual property rights to the same extent as the United States, and infringement of intellectual property rights continues to pose a serious risk of doing business in China. Monitoring and preventing unauthorized use are difficult. The measures we take to protect our intellectual property rights may not be adequate.
SELECTED CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS DATA Year ended December 31, 2022 Parent Consolidated affiliated entities VIE consolidated entities 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 Consolidated affiliated entities VIE consolidated entities Inter- company elimination Group consolidated (US$) Revenues, net - - 7,409,272 - 7,409,272 Total cost and operating expenses 1,010,536 127,627 13,681,122 - 14,819,285 Loss from operations (1,010,536 ) (127,627 ) (6,271,850 ) - (7,410,013 ) Loss before income taxes (3,021,789 ) (170,253 ) (5,865,989 ) 107,118 (8,950,913 ) Net loss (3,021,789 ) (170,253 ) (5,629,408 ) 107,118 (8,714,332 ) Year ended December 31, 2020 Parent Consolidated affiliated entities VIE consolidated entities Inter- company elimination Group consolidated (US$) Revenues, net 73,744 - 23,107,340 - 23,181,084 Total cost and operating expenses 50,000 - 8,405,024 - 8,455,024 Profit (loss) from operations 23,744 - 14,702,316 - 14,726,060 Profit (loss) before income taxes 28,203 (1,995 ) 14,986,062 - 15,012,270 Net income (loss) 28,203 (1,995 ) 11,931,079 - 11,957,287 6 SELECTED CONDENSED CONSOLIDATING BALANCE SHEETS DATA As of December 31, 2022 Parent Consolidated affiliated entities VIE consolidated entities Inter- company elimination Group consolidated (US$) Total current assets 7,330,103 33,642,263 9,713,750 (6,048,283 ) 44,637,833 Total non-current assets 14,690,000 56,445,366 5,939,175 (14,690,000 ) 62,384,541 Total assets 22,020,103 90,087,629 15,652,925 (20,738,283 ) 107,022,374 Total current liabilities 15,550 27,666,520 4,389,658 (6,048,283 ) 26,023,445 Total non-current liabilities - 7,637,332 - - 7,637,332 Total liabilities 15,550 35,303,852 4,389,658 (6,048,283 ) 33,660,777 As of December 31, 2021 Parent Consolidated affiliated entities VIE consolidated entities Inter- company elimination Group consolidated (US$) 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 As of December 31, 2020 Parent Consolidated affiliated entities VIE consolidated entities Inter- company elimination Group consolidated (US$) Total current assets 125,386 14,360 28,246,141 (128,282 ) 28,257,605 Total non-current assets - - 11,479,238 - 11,479,238 Total assets 125,386 14,360 39,725,379 (128,282 ) 39,736,843 Total current liabilities - - 5,583,463 - 5,583,463 Total non-current liabilities - - 3,196 - 3,196 Total liabilities - - 5,586,659 - 5,586,659 7 SELECTED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS DATA Year ended December 31, 2022 Parent Consolidated affiliated entities VIE consolidated entities Inter-company elimination Group consolidated (US$) 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 Consolidated affiliated entities VIE consolidated entities Inter-company elimination Group consolidated (US$) Net cash (used in) provided by operating activities (1,015,145 ) (6,532,445 ) 2,314,408 - (5,233,182 ) Net cash used in investing activities (25,825,000 ) (8,244,917 ) (3,115,281 ) 15,090,000 (22,095,198 ) Net cash provided by financing activities 28,249,093 17,678,168 - (15,090,000 ) 30,837,261 Year ended December 31, 2020 Parent Consolidated affiliated entities VIE consolidated entities Inter-company elimination Group consolidated (US$) Net cash (used in) provided by operating activities (52,994 ) 120,750 6,998,407 - 7,066,163 Net cash used in investing activities - - (6,493,837 ) 128,282 (6,365,555 ) Net cash provided by financing activities 128,282 - 119,996 (128,282 ) 119,996 A. [Reserved] B.
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.
If we fail to do so, the quality of our services may decrease, which in turn, may cause a negative perception of our brand and adversely affect our business. If we fail to attract or retain qualified service providers, our business and results of operations could be materially and adversely affected.
If we fail to do so, the quality of our services may decrease, which in turn, may cause a negative perception of our brand and adversely affect 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. Failure to maintain or enhance our brand or image could have a material and adverse effect on our business and results of operations.
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.
To successfully establish and operate the graphite anode manufacturing and sales business, in addition to capital contributions, we need our partner’s expertise in a number of areas, such as advanced technology R&D, marketing and sales.In the event that we cannot maintain our cooperative relationships with our joint venture partners, on terms favorable to us or at all, we will need to source other business partners, and we may lose access to key strategic assets, which could result in material and adverse effects on our business and results of operations.
In the event that we cannot maintain our cooperative relationships with our joint venture partners, on terms favorable to us or at all, we will need to source other business partners, and we may lose access to key strategic assets, which could result in material and adverse effects on our business and results of operations.
Risks Related to Our Business Risks and uncertainties related to our business include, but are not limited to, the following: ● We have a limited operating history and are subject to the risks encountered by development-stage companies. ● Our historical financial results may not be indicative of our future performance. ● If we cannot manage our growth effectively and efficiently, our results of operations or profitability could be adversely affected. ● We may not be successful in implementing important new strategic initiatives, which may have an adverse impact on our business and financial results. ● 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.
There is substantial doubt about our ability to continue as a going concern ● If we cannot manage our growth effectively and efficiently, our results of operations or profitability could be adversely affected. ● We may not be successful in implementing important new strategic initiatives, which may have an adverse impact on our business and financial results. ● 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.
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.
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.
There is no assurance that we will be able to obtain all required licenses, permits, or approvals from government authorities. If we fail to obtain all required licenses, permits or approvals, we may be unable to expand our operations.
If we fail to obtain all required licenses, permits or approvals, we may be unable to expand our operations.
This may prevent or discourage unsolicited transaction proposals or offers for our Ordinary Shares that you may believe are in your best interest as one of our shareholders. 21 We may lose the ability to use and enjoy assets held by the VIE that are material to the operation of certain portion of our business if the VIE goes bankrupt or become subject to a dissolution or liquidation proceeding.
We may lose the ability to use and enjoy assets held by the VIE that are material to the operation of certain portion of our business if the VIE goes bankrupt or become subject to a dissolution or liquidation proceeding.
Our current and former auditors are both 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.
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.
The measures we take to protect our intellectual property rights may not be adequate. Furthermore, the application of laws governing intellectual property rights in China and abroad is uncertain and evolving, and could involve substantial risks to us.
Furthermore, the application of laws governing intellectual property rights in China and abroad is uncertain and evolving, and could involve substantial risks to us. If we are unable to adequately protect our brand, trademarks and other intellectual property rights, we may lose these rights and our business may suffer materially.
Failure to take timely and appropriate measures to cope with any of these or similar regulatory compliance challenges could materially and adversely affect our current corporate structure, corporate governance and business operations. Our executive officers, directors and affiliates own a significant percentage of our shares and will be able to exert significant control over matters subject to shareholder approval.
Failure to take timely and appropriate measures to cope with any of these or similar regulatory compliance challenges could materially and adversely affect our current corporate structure, corporate governance and business operations.
Permissions Required from PRC Authorities As of the date of this annual report, we, our PRC subsidiaries, or the VIE and its subsidiaries, (i) are not subject to additional permissions or approval requirements from any governmental agency that are required to approve the operations of our PRC subsidiaries, or the VIE and its subsidiaries, (ii) have received from PRC authorities all requisite licenses, permissions, and approvals needed to engage in the businesses currently conducted in the PRC, and (iii) no such permission or approval has been denied.
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.
See “Risk Factors—Risks Relating to Our Corporate Structure—To the extent cash in the business is in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds may not be available to fund operations or for other use outside of the PRC/Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of our Company, our subsidiaries, or the VIE by the PRC government to transfer cash.” 3 The Company’s management is directly supervising cash management.
See “Risk Factors—Risks Relating to Our Corporate Structure—To the extent cash in the business is in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds may not be available to fund operations or for other use outside of the PRC/Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of our Company, our subsidiaries, or the VIE by the PRC government to transfer cash.” Permissions Required from PRC Authorities As of the date of this annual report, we, our PRC subsidiaries, or the VIE and its subsidiaries, (i) have received from PRC authorities material licenses, permissions, and approvals needed to engage in the businesses currently conducted in the PRC, and (ii) no such permission or approval has been denied.
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.
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.
For fiscal year 2022, Sunrise Guizhou had 16 customers. 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.
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.
Such expansion has placed, and will continue to place, substantial demands on our financial, managerial, operational, technological and other resources.
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.
We also face many competitors in the knowledge sharing industry where a number of competitors have been in business longer than us.
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.
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.
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.
Our net revenue was $7,409,272 and $23,181,084 for the years ended December 31, 2021 and 2020, respectively. Our net loss was $8,714,332 for the year ended December 31, 2021 and net income was $11,957,287 for the year ended December 31, 2020, respectively.
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.
In 2022, Zhuhai Zibo entered into an Investment Agreement with 13 other parties to form a graphite anode manufacturing and sales joint venture, Sunrise Guizhou. As of the date of this annual report, Zhuhai Zibo has invested a total of RMB126,480,000 ($19,858,670) in Sunrise Guizhou.
Risks Related to Graphite Anode Manufacturing and Sales Business Our graphite anode manufacturing and sales joint venture may not perform as well as we expected. In 2022, Zhuhai Zibo entered into an Investment Agreement with 13 other parties to form a graphite anode manufacturing and sales joint venture, Sunrise Guizhou.
We require cooperation from our joint venture partners to establish and operate the graphite anode manufacturing and sales business.
We require cooperation from our joint venture partners to establish and operate the graphite anode manufacturing and sales business. To successfully establish and operate the graphite anode manufacturing and sales business, in addition to capital contributions, we need our partner’s expertise in a number of areas, such as advanced technology R&D, marketing and sales.
As such, we may not be able to realize our expected growth, and our business and financial results will be adversely impacted. If we are not successful in selling inventory, we may have to sell the inventory at significantly reduced prices or may not be able to sell the inventory at all.
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.
We believe our key trademark, “师董会,” for which we have obtained trademark protection in China, and 35 computer software copyrights and one artwork copyright, for which we have obtained protection with the Copyright Protection Centre of China (CPCC), and other intellectual property rights are critical to our success.
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.
As of the date of this annual report, our executive officers, directors and affiliates beneficially own approximately 43.56% of our outstanding Ordinary Shares. Therefore, these stockholders will have the ability to influence us through their ownership positions. Further, our CEO and majority shareholder, Mr. Haiping Hu, has beneficial ownership of 7,324,687 Ordinary Shares.
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.
Removed
Our former auditor, Friedman LLP, the independent registered public accounting firm that issued the audit report included in our 2021 annual report, was a PCAOB-registered public accounting firm headquartered in New York during the time it served as our independent auditor. Our current auditor, Marcum Asia CPAs LLP (“MarcumAsia”), has been our independent auditor since December 16, 2022.
Added
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.
Removed
The change in auditor was made due to the combination of Friedman LLP with Marcum LLP, effective September 1, 2022. MarcumAsia, is a PCAOB registered public accounting firm headquartered in New York.
Added
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.
Removed
As such, as of the date of this annual report, our listing is not affected by the HFCA Act and related regulations.
Added
July 16, 2021 PRC 51% by VIE Health services Shanghai Yuantai Fengdeng Agricultural Technology Co., Ltd.
Removed
Cash is transferred among our Company, our subsidiaries, and the VIE, in the following manners: prior to the completion of our initial public offering in February 2021, the sources of funding of Sunrise New Energy, its subsidiaries and the VIE primarily consisted of capital injection by shareholders and cash generated from operations; after the completion of our initial public offering, Sunrise New Energy made capital contributions to its subsidiaries.
Added
Risks Related to Our Business Risks and uncertainties related to our business include, but are not limited to, the following: ● We have a limited operating history and are subject to the risks encountered by development-stage companies. ● We have incurred substantial losses in the past and may incur losses in the future.
Removed
(iii) For the fiscal year ended December 31, 2020, the VIE provided interest-free loans of $128,282 to the Company for professional fees related to the initial public offering.
Added
There is substantial doubt about our ability to continue as a going concern . As discussed in “Note 3” to the consolidated financial statements to this annual report, we have suffered significant losses from operations resulting in a significant decrease in working capital that raises substantial doubt about our ability to continue as a going concern.
Removed
However, our net revenue was $38,125,668 and we incurred a net loss of $23,124,402 for the year ended December 31, 2022.
Added
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.
Removed
As such, our limited history of operation makes it difficult to evaluate our future prospects. 12 If we cannot manage our growth effectively and efficiently, our results of operations or profitability could be adversely affected. We are expanding our operations into the graphite anode manufacturing and sales business.
Added
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.
Removed
In late 2019, we started selling merchandises obtained through (1) fee exchange arrangements, through which we receive products in exchange for collection of membership fees and consulting fees earned from our customers, and (2) direct purchases from our customers and third parties based on market trend and demand.
Added
In order to fully implement our business plan and recover from continuing losses, we may also seek equity financing from outside investors.
Removed
Our profitability in sale of merchandises depends on our ability to manage inventory levels and respond to shifts in consumer demand patterns. Overestimating customer demand for merchandises will likely result in the need to record inventory markdowns and sell excess inventory at clearance prices which would negatively impact our gross margins and operating results.
Added
There can be no assurance that additional financing, if required, would be available on favorable terms or at all and/or that the foregoing plans and arrangements will be sufficient to fund our ongoing capital expenditures, working capital, and other requirements. If we cannot manage our growth effectively and efficiently, our results of operations or profitability could be adversely affected.
Removed
Underestimating customer demand for merchandises can lead to inventory shortages, missed sales opportunities and negative customer experiences. Our gross margins could suffer if we are unable to effectively manage our inventory and sell merchandises at a significantly reduced price, which could have a material adverse effect on our results of operations and cash flows.
Added
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.
Removed
Increasing competition within the enterprise service and knowledge sharing industries could have an impact on our business prospects. The enterprise service and knowledge sharing are industries where new competitors can easily enter into since there are no significant barriers to entry.
Added
Any failure of these entities to fully comply with such compliance requirements may cause our PRC subsidiaries, or the VIE and its subsidiaries to be unable to begin their new businesses or operations in the PRC, subject them to fines, relevant new businesses or operations suspension for rectification, or other sanctions, which may materially and adversely affect our business, financial conditions and results of operations.
Removed
As of the date of this annual report, we are not aware of any other approvals, licenses, or permits that are material to our business operations that we have not, but may be required to, obtain; nor have we received any notice of warning or been subject to penalties or other disciplinary action from the relevant governmental authorities for lack of approvals and permits or noncompliance with regulations related to our current licenses.
Added
We cannot assure you that the PRC courts or regulatory authorities may not determine that our corporate structure and VIE Agreements violate PRC laws, rules or regulations.
Removed
However, we cannot assure you that we will not be subject to any warning, investigations or penalties in the future.
Added
The dual class structure of our ordinary shares has the effect of concentrating voting control with our Chairman, and his interest may not be aligned with the interests of our other shareholders . We have adopted a dual-class voting structure, consisting of Class A Ordinary Shares and Class B Ordinary Shares.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

8 edited+0 added−1 removed62 unchanged
One-sixth of his or her days in the United States in the second preceding year. 107 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. 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).
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. 108 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. 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.
Documents on Display We previously filed with the SEC registration statement on Form F-1 (File Number 333-233745), as amended, to register our Ordinary Shares in relation to our initial public offering, which was completed on February 11, 2021. We are subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers.
Documents on Display We previously filed with the SEC registration statement on Form F-1 (File Number 333-233745), as amended, to register our Class A Ordinary Shares in relation to our initial public offering, which was completed on February 11, 2021. We are subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers.
The VAT tax rates applicable to our PRC subsidiaries and consolidated affiliates are as follows: 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. 105 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. 106 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; 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.
According to SAT Circular 82 (the Circular on Issues Concerning the Identification of Chinese-Controlled Overseas Registered Enterprises as Resident Enterprises in Accordance With the Actual Standards of Organizational Management), a Chinese-controlled offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a “de facto management body” in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following criteria are met: (i) the places where senior management and senior management departments that are responsible for daily production, operation and management of the enterprise perform their duties are mainly located within the territory of China; (ii) financial decisions (such as money borrowing, lending, financing and financial risk management) and personnel decisions (such as appointment, dismissal and salary and wages) are made or need to be made by organizations or persons located within the territory of China; (iii) main property, accounting books, corporate seal, the board of directors and files of the minutes of shareholders’ meetings of the enterprise are located or preserved within the territory of China; and (iv) half (or more) of the directors or senior management staff having the right to vote habitually reside within the territory of China. 104 We believe that Sunrise New Energy is not a resident enterprise for PRC tax purpose.
According to SAT Circular 82 (the Circular on Issues Concerning the Identification of Chinese-Controlled Overseas Registered Enterprises as Resident Enterprises in Accordance With the Actual Standards of Organizational Management), a Chinese-controlled offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a “de facto management body” in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following criteria are met: (i) the places where senior management and senior management departments that are responsible for daily production, operation and management of the enterprise perform their duties are mainly located within the territory of China; (ii) financial decisions (such as money borrowing, lending, financing and financial risk management) and personnel decisions (such as appointment, dismissal and salary and wages) are made or need to be made by organizations or persons located within the territory of China; (iii) main property, accounting books, corporate seal, the board of directors and files of the minutes of shareholders’ meetings of the enterprise are located or preserved within the territory of China; and (iv) half (or more) of the directors or senior management staff having the right to vote habitually reside within the territory of China.
Subsidiary Information For a listing of our subsidiaries, see “ Item 4C. Organizational Structure” for a chart of our current structure. 109
Subsidiary Information For a listing of our subsidiaries, see “ Item 4C. Organizational Structure” for a chart of our current structure. 101
Sunrise New Energy is not controlled by a PRC enterprise or PRC enterprise group and we do not meet some of the conditions outlined in the immediately preceding paragraph.
We believe that Sunrise New Energy is not a resident enterprise for PRC tax purpose. Sunrise New Energy is not controlled by a PRC enterprise or PRC enterprise group and we do not meet some of the conditions outlined in the immediately preceding paragraph.
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.
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.
Removed
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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

155 edited+79 added−80 removed312 unchanged
The initial step to develop relationships with a potential customer is to making a targeted sales pitch and if a potential customer responds to the sales pitch or shows interest in the products, Sunrise Guizhou then goes through the qualification process in order to become a supplier.
The initial step to develop relationships with a potential customer is making a targeted sales pitch, and if a potential customer responds to the sales pitch or shows interest in the products, Sunrise Guizhou then goes through the qualification process in order to become a supplier.
Net loss attributable to non-controlling interest Non-controlling interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling shareholder.
Net loss attributable to non-controlling interest Non-controlling interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling shareholder.
Although the Company consolidates the results of the VIE and its subsidiaries, the Company only has the access to the assets or earnings of the VIE and their subsidiaries through the contractual arrangements with the VIE and its shareholders.
Although the Company consolidates the results of the VIE and its subsidiaries, the Company only has access to the assets or earnings of the VIE and their subsidiaries through the contractual arrangements with the VIE and its shareholders.
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 (Beijing) 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, 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.
Operating expenses The following table sets forth the breakdown of the operating expenses for the years ended December 31, 2022 and 2021: For the years ended December 31, Change 2022 % 2021 % Amount % Selling expenses $ 1,075,980 6.16 % 946,775 8.66 % 129,205 13.65 % General and administrative expenses 12,678,873 72.62 % 7,834,291 71.66 % 4,844,582 61.84 % Research and development expenses 1,053,882 6.04 % 2,151,565 19.68 % (1,097,683 ) (51.02 )% Impairment of intangible assets 2,650,020 15.18 % - - % 2,650,020 100 % Total costs and operating expenses 17,458,755 100.00 % 10,932,631 100.00 % 6,526,124 59.69 % Selling expenses The selling expenses increased by $129,205 or 13.65%, from $946,775 for the year ended December 31, 2021 to $1,075,980 for the year ended December 31, 2022.
Operating expenses The following table sets forth the breakdown of the operating expenses for the years ended December 31, 2022 and 2021: For the years ended December 31, Change 2022 % 2021 % Amount % Selling expenses $ 1,075,980 6.16 % 946,775 8.66 % 129,205 13.65 % General and administrative expenses 12,678,873 72.62 % 7,834,291 71.66 % 4,844,582 61.84 % Research and development expenses 1,053,882 6.04 % 2,151,565 19.68 % (1,097,683 ) (51.02 )% Impairment of intangible assets 2,650,020 15.18 % - - % 2,650,020 100 % Total costs and operating expenses 17,458,755 100.00 % 10,932,631 100.00 % 6,526,124 59.69 % 76 Selling expenses The selling expenses increased by $129,205 or 13.65%, from $946,775 for the year ended December 31, 2021 to $1,075,980 for the year ended December 31, 2022.
It was primarily due to a) a net loss of $8,714,332, adjusted by depreciation and amortization of $988,672, deferred tax benefits of $232,363, investment losses of $2,118,453, bad debt expense of $3,847,426 and amortization of operating lease right-of-use asset of $90,320; b) decrease in income tax payable of $3,696,654 due to the payment of income tax; c) increase in prepaid expenses and other current assets of $678,288 due to increase of prepayment for service fee of $1,054,240; d) increase of inventories of $331,491 and right-of-use asset of $211,213; e) and partially offset by decrease in accounts receivable of $1,729,006.
It was primarily due to the following: a) a net loss of $8,714,332, adjusted by depreciation and amortization of $988,672, deferred tax benefits of $232,363, investment losses of $2,118,453, bad debt expense of $3,847,426 and amortization of operating lease right-of-use asset of $90,320; b) decrease in income tax payable of $3,696,654 due to the payment of income tax; c) increase in prepaid expenses and other current assets of $678,288 due to increase of prepayment for service fee of $1,054,240; d) increase of inventories of $331,491 and right-of-use asset of $211,213; e) and partially offset by decrease in accounts receivable of $1,729,006.
The following table presents the type of tailored services as well as their respective prices: Type of comprehensive tailored services Pricing Conference and salon organization RMB50,000 (approximately US$7,434) Booth exhibition services RMB50,000 (approximately US$7,434) On-site mentors’ guidance RMB50,000-100,000 (approximately US$7,434-US$14,867) Other additional services RMB10,000-200,000 (approximately US$1,487 -US$29,735) 73 Revenues from comprehensive tailored services decreased by $1,280,189, or 89.28%, from $1,433,847 for the year ended December 31, 2021, to $153,658 for the year ended December 31, 2022.
The following table presents the type of tailored services as well as their respective prices: Type of comprehensive tailored services Pricing Conference and salon organization RMB50,000 (approximately US$7,434) Booth exhibition services RMB50,000 (approximately US$7,434) On-site mentors’ guidance RMB50,000-100,000 (approximately US$7,434-US$14,867) Other additional services RMB10,000-200,000 (approximately US$1,487 -US$29,735) Revenues from comprehensive tailored services decreased by $1,280,189, or 89.28%, from $1,433,847 for the year ended December 31, 2021, to $153,658 for the year ended December 31, 2022.
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. 62 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. 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.
Key Information — Contractual Agreements among GIOP BJ, SDH the VIE and Its Shareholders” for more details. Overview 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 peer-to-peer 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. 57 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. 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.
The Company paid US$1,204,094 as a prepayment during the year ended December 31, 2019 and paid the rest of the consideration of US$1,787,398 and acquired the ownership of the properties in May 2020. II. Sunrise Guizhou maintains the below corporate office space and manufacturing properties in China.
The Company paid US$1,204,094 as a prepayment during the year ended December 31, 2019 and paid the rest of the consideration of US$1,787,398 and acquired the ownership of the properties in May 2020. 67 II. Sunrise Guizhou maintains the below corporate office space and manufacturing properties in China.
Employees are also required to work in safe and sanitary conditions. 61 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. 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.
Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditures ” for a discussion of our capital expenditures. B. Business We are a Cayman Islands holding company conducting a substantial portion of our operations in China through our PRC operating entities.
Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditures ” for a discussion of our capital expenditures. B. Business Overview We are a Cayman Islands holding company conducting a substantial portion of our operations in China through our PRC operating entities.
An enterprise having more than 100 employees shall establish a production safety management institution or be equipped with dedicated production safety management personnel. 64 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. 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.
Since then, the VIE has been operating a knowledge sharing platform and provided services both online, via a mobile application “Shidonghui App” (the “APP”), and offline, through local offices in Beijing, Shanghai, Zibo and Guizhou in China.
Since then, the VIE has been operating a knowledge sharing platform and provided services both online, via a mobile application “Shidonghui App” (the “APP”), and offline, through local offices in Beijing, Shanghai, Hangzhou, Zibo and Guizhou in China.
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%. 60 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%. 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.
It was primarily due to a) a net loss of $23,124,402, adjusted by depreciation and amortization of $2,062,499, share-based compensation of $2,729,969, deferred tax expenses of $807,412, interest expenses of $213,823, investment losses of $3,618,847, bad debt expense of $2,887,754, impairment on inventory of $2,711,158, impairment on intangible assets of $2,650,020, amortization of land use rights of $126,042 and amortization of operating lease right-of-use asset of $213,063; increase in b) account receivable of $1,734,486, notes receivable of $899,481 due to sales of graphite anode products; c) inventories of $18,747,772 finished goods and purchased raw materials of graphite anode; d) prepaid expenses and other current assets of $2,894,690 due to increase on tax prepayment of $4,345,304 offset by decrease on prepaid expenses of 2,251,169; d) account payable of $12,661,801 and notes payable of $ 4,014,213 for payables to vendors of graphite business; and e) deferred government subsidy of $2,973,491 due to relocation bonus received from the government of Zibo City, Shandong Province, PRC.
It was primarily due to the following: a) a net loss of $23,124,402, adjusted by depreciation and amortization of $2,062,499, share-based compensation of $2,729,969, deferred tax expenses of $807,412, interest expenses of $213,823, investment losses of $3,618,847, bad debt expense of $2,887,754, impairment on inventory of $2,711,158, impairment on intangible assets of $2,650,020, amortization of land use rights of $126,042 and amortization of operating lease right-of-use asset of $213,063; decreased by b) account receivable of $1,734,486, notes receivable of $899,481 due to sales of graphite anode products; c) inventories of $18,747,772 finished goods and purchased raw materials of graphite anode; d) prepaid expenses and other current assets of $2,894,690 due to increase on tax prepayment of $4,345,304 offset by decrease on prepaid expenses of 2,251,169; increased by d) account payable of $12,661,801 and notes payable of $ 4,014,213 for payables to vendors of graphite business; and e) deferred government subsidy of $2,973,491 due to relocation bonus received from the government of Zibo City, Shandong Province, 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. 52 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. 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.
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. 54 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. 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.
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. ” 51 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. ” 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.
Pursuant to the Catalog, the development and production of lithium-ion batteries falls within the scope of industries in which foreign investment is encouraged. 63 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. 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.
Infringers of copyright may also subject to fines and/or administrative or criminal liabilities in severe situations. 56 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. 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.
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. 55 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. 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.
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. 67 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. 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 concerned bank shall conduct spot checking in accordance with the relevant requirements. 58 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. 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 process usually consists of the following steps: (1) Sunrise Guizhou sends out samples of its graphite anode to the potential customer, (2) the potential customer conducts preliminary tests to evaluate the sample products, (3) if the sample products pass the initial evaluations, the next step is generally a small commercial order placed by the potential customer to verify the product quality at commercial scale, and (4) the potential customers often send an engineering team to visit Sunrise Guizhou’s R&D center and quality control department, to further assess the quality and performance of Sunrise Guizhou’s products.
The qualification process usually consists of the following steps: (1) Sunrise Guizhou sends out samples of its graphite anode to the potential customer, (2) the potential customer conducts preliminary tests to evaluate the sample products, (3) if the sample products pass the initial evaluations, the next step is generally a small commercial order placed by the potential customer to verify the product quality on a commercial scale, and (4) the potential customers often send an engineering team to visit Sunrise Guizhou’s R&D center and quality control department, to further assess the quality and performance of Sunrise Guizhou’s products.
The Company consolidates Sunrise Guizhou’s financials because it owns a majority of seats on its board of directors and control 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 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.
UNRESOLVED STAFF COMMENTS None. ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion of the Company’s financial condition and results of operations is based upon and should be read in conjunction with the Company’s consolidated financial statements and their related notes included elsewhere in this annual report. This annual report contains forward-looking statements.
ITEM 4.A. UNRESOLVED STAFF COMMENTS None. ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion of the Company’s financial condition and results of operations is based upon and should be read in conjunction with the Company’s consolidated financial statements and their related notes included elsewhere in this annual report. This annual report contains forward-looking statements.
Such exchanges were non-routine and made at our discretion, based on a number of factors, including but not limited to, the market trend and demand for such merchandises, the profit margin expected to be realized from the sale of such merchandises, and the credit-worthiness of and the relationship with these clients.
Such exchanges were non-routine and made at our discretion, based on a number of factors, including but not limited to, the market trend and demand for such merchandise, the profit margin expected to be realized from the sale of such merchandise, and the credit-worthiness of and the relationship with these clients.
The VIE strives to provide Users superb experiences on the APP and has established an in-house Information Technology team of eight employees dedicated to the development and support of our system. To date, the VIE has registered 35 computer software copyrights with the Copyright Protection Centre of China (CPCC), in connection with the development of the APP.
The VIE strives to provide Users superb experiences on the APP and has established an in-house Information Technology team of eight employees dedicated to the development and support of our system. To date, the VIE has registered 37 computer software copyrights with the Copyright Protection Centre of China (CPCC), in connection with the development of the APP.
See “Forward-Looking Information” in this annual report. In evaluating our business, you should carefully consider the information provided under the caption “Item 3. Key Information—D. Risk Factors” in this annual report. The Company caution you that its businesses and financial performance are subject to substantial risks and uncertainties.
See “Forward-Looking Information” in this annual report. In evaluating our business, you should carefully consider the information provided under the caption “Item 3. Key Information—D. Risk Factors” in this annual report. The Company cautions you that its businesses and financial performance are subject to substantial risks and uncertainties.
Other Services Member activities, including study tours and forums, are also open to non-members, who pays a fixed fee of RMB3,000 (approximately US$446) for each activity. Fees are usually collected on site on the date of each activity.
Other Services Member activities, including study tours and forums, are also open to non-members, who pays a fixed fee of RMB3,000 (approximately US$424) for each activity. Fees are usually collected on site on the date of each activity.
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. 59 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. 58 By means of making loans, WFOEs are subject to the relevant PRC laws and regulation relating to foreign debts.
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. 66 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. 65 C.
The majority of Mentors are successful well-known entrepreneurs, executive officers of public companies, PE/VC partners, doctors, and artists, in a wide range of industries including academia, health care, financial service, energy, technology, manufacturing, etc. As of April 30, 2023, the VIE had 784 Mentors, and all of them were hand-picked and invited by our management to join our platform.
The majority of Mentors are successful well-known entrepreneurs, executive officers of public companies, PE/VC partners, doctors, and artists, in a wide range of industries including academia, health care, financial service, energy, technology, manufacturing, etc. As of April 30, 2024, the VIE had 745 Mentors, and all of them were hand-picked and invited by our management to join our platform.
Other merchandises were sourced and purchased from customers directly at preferred prices or from third parties, based on our knowledge of current market trends and demand generated from our platform. For fiscal years 2022 and 2021, the VIE generated $3,165 and $ $2,104,766 in revenue from sale of merchandises, respectively.
Other types of merchandise were sourced and purchased from customers directly at preferred prices or from third parties, based on our knowledge of current market trends and demand generated from our platform. For fiscal years 2023, 2022 and 2021, the VIE generated $nil, $3,165 and $ $2,104,766 in revenue from sale of merchandises, respectively.
On February 25, 2022, Sunrise Guizhou obtained the approval for the Environmental Impact Report for its construction of the first phase of the manufacturing plant. And on April 25, 2022, Sunrise Guizhou obtained the Pollutant Discharge License, which will remain effective for 5 years.
On February 25, 2022 and December 12, 2023, Sunrise Guizhou obtained the approval for the Environmental Impact Report for its construction of the first phase of the manufacturing plant. On April 25, 2022, Sunrise Guizhou obtained the Pollutant Discharge License, which will remain effective for 5 years.
For fiscal years 2022 and 2021, consulting generated $9,645, and $1,583,583 in revenues, respectively. 48 Sponsorship Advertising Sponsorship advertising is a special form of advertising, generally referring to a publicity strategy adopted by enterprises in order to enhance their corporate and product image, as well as brand awareness and influence.
For fiscal years 2023, 2022 and 2021, consulting generated $471,978, $9,645, and $1,583,583 in revenues, respectively. Sponsorship Advertising Sponsorship advertising is a special form of advertising, generally referring to a publicity strategy adopted by enterprises in order to enhance their corporate and product image, as well as brand awareness and influence.
For fiscal years 2022 and 2021, the VIE generated $2,100 and $40,391 in revenue from online service, respectively. The APP The APP was launched in May 2016, and runs on both IOS and Android devices.
For fiscal years 2023, 2022 and 2021, the VIE generated $7,827, $2,100 and $40,391 in revenue from online service, respectively. The APP The APP was launched in May 2016, and runs on both IOS and Android devices.
When these events occur, the Company measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition.
When these events occur, the Company measures impairment by comparing the carrying value of the long-lived assets or assets group to the estimated undiscounted future cash flows expected to result from the use of the assets or asset group and their eventual disposition.
Regulations Related to Mobile Internet Applications Information Services In addition to the telecommunications regulations and other regulations above, mobile Internet applications and application stores are specifically regulated by the Administrative Provisions on Mobile Internet Applications Information Services , or the App Provisions, which were promulgated by the Cyberspace Administration of China, or the CAC, on June 28, 2016, and became effective on August 1, 2016.
Regulations Related to Mobile Internet Applications Information Services In addition to the telecommunications regulations and other regulations above, mobile Internet applications and application stores are specifically regulated by the Administrative Provisions on Mobile Internet Applications Information Services , or the App Provisions, which were promulgated by the Cyberspace Administration of China, or the CAC, on June 14, 2022, and became effective on August 1, 2022.
Investing Activities Net cash used in investing activities amounted to $45,609,072 for the year ended December 31, 2022. It was primarily due to: 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 $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.
Operating lease expense amounted to $270,254, $244,045, and $352,645 for the years ended December 31, 2022, 2021, and 2020, respectively. In December 2019, the Company signed property purchase agreements to acquire four properties in Beijing with approximately an aggregate of 638 square meters of office space for a total consideration of US$2,991,492.
Operating lease expense amounted to $17,653, $270,254, and $244,045 for the years ended December 31, 2023, 2022, and 2021, respectively. In December 2019, the Company signed property purchase agreements to acquire four properties in Beijing with approximately an aggregate of 638 square meters of office space for a total consideration of US$2,991,492.
As of April 30, 2023, the VIE had 1,930 Experts. Service Agreements with Mentors and Experts Each of the Mentors and Experts, as a service provider on our platform, must enter into a service agreement with us that governs the rights and obligations of each party.
As of April 30, 2024, the VIE had 1,928 Experts. Service Agreements with Mentors and Experts Each of the Mentors and Experts, as a service provider on our platform, must enter into a service agreement with us that governs the rights and obligations of each party.
If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss, which is the excess of carrying amount over the fair value of the assets, using the expected future discounted cash flows.
If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets or assets group, the Company would recognize an impairment loss based on the fair value of the assets or assets group, which is the excess of carrying amount over the fair value of the assets, using the expected future discounted cash flows.
For the fiscal year ended December 31, 2022, four customers accounted for more than 10% of Sunrise Guizhou’s total sales, with each accounting for 28.43%, 19.54%, 19.30% and 18.87% of the total sales, respectively. As Sunrise Guizhou grows its customers bases, it is expected that the concentration of sales will diminish in the future.
For the fiscal year ended December 31, 2022, four customers accounted for more than 10% of Sunrise Guizhou’s total sales, with each accounting for 28%, 20%, 19% and 19% of the total sales, respectively. As Sunrise Guizhou grows its customers bases, it is expected that the concentration of sales will diminish in the future.
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 $979,426, $nil and $nil recorded in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020.
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.
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 260,543 Office (3,434), Manufacturing (24,879) staff dormitory (4,919) own Future minimum lease payments under non-cancellable operating leases as of December 31, 2022 was nil. 69 ITEM 4.A.
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.
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.
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.
In fiscal 2022, due to deteriorating consumer demand and market conditions, the Company did not procure any merchandises and wrote down the cost of inventories of the merchandises to the estimated net realizable value, which was $nil, resulting in $2,711,158 impairment.
In fiscal 2022, due to deteriorating consumer demand and market conditions, the Company did not procure any merchandise and wrote down the cost of inventories of the merchandises to the estimated net realizable value, which was $nil, resulting in $2,711,158 impairment. In fiscal year 2023, the VIE discontinued the sale of merchandise.
Online Streaming of Video & Audio Courses and Programs The VIE provides video and audio courses and programs on the APP for on-demand and live streaming. At present, the APP has approximately 4,806 audio and 5,279 video courses and programs available for streaming.
Online Streaming of Video & Audio Courses and Programs The VIE provides video and audio courses and programs on the APP for on-demand and live streaming. At present, the APP has approximately 4,829 audio and 5,289 video courses and programs available for streaming.
Such increase was primarily due to (1) an increase of bad debt expenses of $ $364,346, which was mainly due to the fact that as the Company experienced a slow-down in the collection of accounts receivable resulting from impact from COVID-19 for the year ended December 31, 2022 on peer-to-peer knowledge sharing and enterprise service business; (2) an increases of $1,191,284 due to outsourced labor that due to the launch of graphite anode material business in August 2022, as the Company recruited factory workers and security personnel from labor outsourcing companies; and (3) an increase of $2,674,292 of share-based compensation as the Company adopted the 2022 Stock Incentive Plan for the grant of restricted share units to employees, directors and non-employees to provide incentive for their services. 75 Research and development expenses Research and development expenses decreased by $1,097,683 or 51.02%, from $2,151,565 for the year ended December 31, 2021 to $1,053,882 for the year ended December 31, 2022.
Such increase was primarily due to (1) an increase of bad debt expenses of $ $364,346, which was mainly due to the fact that as the Company experienced a slow-down in the collection of accounts receivable resulting from impact from COVID-19 for the year ended December 31, 2022 on peer-to-peer knowledge sharing and enterprise service business; (2) an increases of $1,191,284 due to outsourced labor that due to the launch of graphite anode material business in August 2022, as the Company recruited factory workers and security personnel from labor outsourcing companies; and (3) an increase of $2,674,292 of share-based compensation as the Company adopted the 2022 Stock Incentive Plan for the grant of restricted share units to employees, directors and non-employees to provide incentive for their services.
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 online business, which could have a material adverse impact on our business, financial conditions and results of operations.” 53 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.” 52 Regulations Related to Information Security Internet content in China is regulated and restricted from a state security standpoint.
Some of the merchandises for sale were obtained from Members and enterprise service clients through exchange for collection of membership fees and consulting fees.
Some of the merchandise for sale was obtained from Members and enterprise service clients through exchange for collection of membership fees and consulting fees.
Our critical accounting policies and practices include the following: (i) revenue recognition, (ii) lease, (iii) asset acquisition and (iv) income taxes. 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 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.
For the fiscal year ended December 31, 2022, or 2021, no client accounted for more than 10% of our revenues. 47 Services Member Service The chart below summarizes the services Members receive: Membership Tier Service Platinum seven organized activities (study tours and forums) per year Diamond seven organized activities (study tours and forum) per year, during which a Member may enjoy special seating assigned only to Diamond Members, and make presentations and sales pitches of his or her business, products and services Protégé seven organized activities (study tours and forum) per year, during which a Member may enjoy special seating assigned only to Protégé Members, make presentations and sales pitches of his or her business, products and services, and communicate with Mentors and Experts in person at such activities During each of the study tours and forums, a number of Mentors and Experts, along with other business leaders, are invited to attend, give speeches and host discussion sessions at these activities.
Services Member Service The chart below summarizes the services Members receive: Membership Tier Service Platinum seven organized activities (study tours and forums) per year Diamond seven organized activities (study tours and forum) per year, during which a Member may enjoy special seating assigned only to Diamond Members, and make presentations and sales pitches of his or her business, products and services Protégé seven organized activities (study tours and forum) per year, during which a Member may enjoy special seating assigned only to Protégé Members, make presentations and sales pitches of his or her business, products and services, and communicate with Mentors and Experts in person at such activities During each of the study tours and forums, a number of Mentors and Experts, along with other business leaders, are invited to attend, give speeches and host discussion sessions at these activities.
Costs of revenues The following table sets forth the breakdown of the cost of revenues for the years ended December 31, 2022 and 2021: For the years ended December 31, Change 2022 % 2021 % Amount % Service costs $ 1,176,956 2.98 % $ 1,823,358 46.91 % $ (646,402 ) (35.45 )% Cost of goods sold 38,299,090 97.02 % 2,063,296 53.09 % 36,235,794 1,756.21 % Total costs of revenues 39,476,046 100.00 % 3,886,654 100.00 % 35,589,392 915.68 % 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 decrease was primarily due to the fact that SDH had not organized trade conferences facilitating the sales of merchandise due to the continuous government restrictions on public gatherings. 75 Costs of revenues The following table sets forth the breakdown of the cost of revenues for the years ended December 31, 2022 and 2021: For the years ended December 31, Change 2022 % 2021 % Amount % Service costs $ 1,176,956 2.98 % $ 1,823,358 46.91 % $ (646,402 ) (35.45 )% Cost of goods sold 38,299,090 97.02 % 2,063,296 53.09 % 36,235,794 1,756.21 % Total costs of revenues 39,476,046 100.00 % 3,886,654 100.00 % 35,589,392 915.68 % 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 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 42 Direct Sales Channel Sunrise Guizhou markets its graphite anode products through a direct sales channel, through its sales department, which department consists of five experienced employees who report directly to the CEO of Sunrise Guizhou, who has more than 20 years of experience in the lithium-ion battery material industry, and has accumulated extensive business connections in this industry.
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.
As of December 31, 2021, for the Company’s consolidated subsidiaries, VIE and VIE’ s subsidiaries, non-controlling interests represent: a) a minority shareholder’s 49% ownership interest in Sunrise (Guizhou), GMB (Beijing), GMB Consulting, Nanyu Culture and Jiagui Haifeng; b) a minority shareholder’s 49% ownership interest in GMB Culture, which has a subsidiary called GMB Technology; c) a minority shareholder’s 25% ownership interest in Shidong Cloud, and 40% ownership interest in Shidong Trading.
As of December 31, 2023, for the Company’s consolidated subsidiaries, the VIE and VIE’ s subsidiaries, non-controlling interests represent: a) a non-controlling shareholder’s 49% ownership interest in GMB (Beijing), GMB Consulting and Shidong Yike; b) a non-controlling shareholder’s 37.81% ownership interest in Sunrise Guizhou; c) a non-controlling shareholder’s 49% ownership interest in GMB Culture, which has a subsidiary called GMB Technology; and d) a non-controlling shareholder’s 25% ownership interest in Shidong Cloud, and 40% ownership interest in Shidong Trading.
From the years of assessment of 2019/2020 onwards, Hong Kong profit tax rates are 8.25% on assessable profits up to HK$2,000,000, (approximately US$257,874), 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.
Clients are required to enter into service agreements with us, which are individually negotiated based on the services and resources we provide. For 2022, the comprehensive enterprise services generated revenue in the amount of US$153,658 from 7 clients. For 2021, the comprehensive enterprise services generated revenue in the amount of US$1,433,847 from 80 clients.
Clients are required to enter into service agreements with us, which are individually negotiated based on the services and resources we provide. For 2023, the comprehensive enterprise services generated revenue in the amount of US$10,784 from 15 clients. For 2022, the comprehensive enterprise services generated revenue in the amount of US$153,658 from 7 clients.
Sunrise Guizhou’s success depends, in part, on its ability to protect its intellectual property. To accomplish this, Sunrise Guizhou relies on a combination of patents, patent applications, trade secrets, including employee and third-party nondisclosure agreements, trademarks, and other contractual rights to establish and protect proprietary rights in intellectual property.
To accomplish this, Sunrise Guizhou relies on a combination of patents, trade secrets, including employee and third-party nondisclosure agreements, trademarks, and other contractual rights to establish and protect proprietary rights in intellectual property.
As of April 30, 2023, the VIE had approximately 518,659 APP Users. 46 Members Members can choose from three annual membership plans: Platinum, Diamond, and Protégé. Members enjoy services included in their respective membership plans. Due to the impact of COVID-19, SDH did not have any Members for fiscal year 2022.
As of April 30, 2024, the VIE had approximately 519,700 APP Users. Members Members can choose from three annual membership plans: Platinum, Diamond, and Protégé. Members enjoy services included in their respective membership plans. SDH did not have any Members for fiscal year 2022 and 2023.
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.
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.
Liquidity and Capital Resources As reflected in the consolidated financial statements, the Company has been incurring $23,124,402 and $8,714,332 net losses for the years ended December 31 2022 and 2021, respectively. Net cash used in operating activities were $9,573,401 and $5,233,182 for the years ended December 31, 2022 and 2021, respectively.
Liquidity and Capital Resources As reflected in the consolidated financial statements, the Company incurred net losses of $32,920,724, $23,124,402 and $8,714,332 for the years ended December 31 2023, 2022 and 2021, respectively. Net cash used in operating activities were $7,282,995, $9,573,401 and $5,233,182 for the years ended December 31, 2023, 2022 and 2021, respectively.
For fiscal year 2022, revenue from the knowledge sharing and enterprise services business was $544,991, which was a 93% decline from fiscal 2021, and accounted for only 1% of our total revenues.
For fiscal year 2022, revenue from the sale of graphite anode material products was $37,580,677, which accounted for 99% of our total revenues, and revenue from the knowledge sharing and enterprise services business was $544,991, which was a 93% decline from fiscal 2021 and accounted for only 1% of our total revenues.
As of December 31, 2022, 72.35% 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 27.65% of cash, cash equivalents and restricted cash were held in Hong Kong, and held by EPOW, SDH New Energy and GMB HK and denominated in US dollars.
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.
Service costs decreased by $646,402, or 35.45% for the year ended December 31, 2022 compared to same period in 2021, mainly due to the decrease of $540,641 in service fee and consultant fee, which was mainly because the Company held less small conferences due to the government limitation on the scale of conferences in COVID-19. 74 Cost of goods sold The cost of goods sold were $38,299,090 and $2,063,296 for the years ended December 31, 2022 and 2021, respectively.
Service costs decreased by $646,402, or 35.45% for the year ended December 31, 2022 compared to same period in 2021, mainly due to the decrease of $540,641 in service fee and consultant fee, which was mainly because the Company held fewer small conferences due to the government limitation on the scale of conferences in COVID-19.
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. As of December 31, 2022, the Company had cash of $1,655,549.
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.
The second phase of the construction of the manufacturing plant (10,000 tons annual manufacturing capacity) is ongoing and expected to be completed June 2023, and 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 expected to start in July 2023. 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. 41 Products Sunrise Guizhou’s products include various artificial graphite anode material products.
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. 65 Sunrise Guizhou obtained the approval for the Construction Land Use Planning Permit and the Construction Works Planning Permit from local urban and rural planning department in March 2022, and obtained the Construction Permit from local housing and urban-rural department in April and July 2022, for its construction of the first phase of the manufacturing plant.
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 .
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. 76 For qualified small and thin-profit enterprises, the annual taxable income up to RMB 1 million (inclusive) is subject to an effective EIT rate of 2.5% from 1 January 2021 to 31 December 2022; where the annual taxable income exceeds RMB 1 million but does not exceed RMB 3 million (inclusive), the amount in excess of RMB 1 million is subject to an effective EIT rate of 5% from 1 January 2022 to 31 December 2024.
For qualified small and thin-profit enterprises, the annual taxable income up to RMB 1 million (inclusive) is subject to an effective EIT rate of 2.5% from 1 January 2021 to 31 December 2022; where the annual taxable income exceeds RMB 1 million but does not exceed RMB 3 million (inclusive), the amount in excess of RMB 1 million is subject to an effective EIT rate of 5% from 1 January 2022 to 31 December 2024.
Questions and Answers (Q &A) Session Mentors and Experts, as providers, are available to answer questions and share valuable personalized guidance and advice in a wide range of fields, including business management, health care, beauty, financial services, education, etc.
The number of average monthly active Users was approximately 230 in 2023 and approximately 495 in 2022. 48 Questions and Answers (Q &A) Session Mentors and Experts, as providers, are available to answer questions and share valuable personalized guidance and advice in a wide range of fields, including business management, health care, beauty, financial services, education, etc.
Impairments charges for intangible assets were $2,650,020, $nil and $nil recorded in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020.
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.
For fiscal year 2022, sales of graphite anode material products became a major revenue source, while revenue from knowledge sharing and enterprise services business accounted for a small portion of the total revenue.
Beginning in fiscal year 2022, sales of graphite anode material products became a major revenue source, while revenue from knowledge sharing and enterprise services business accounted for a small portion of the total revenue. We expect this trend to continue as we continue to develop our graphite anode material business.
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. The VIE obtained the ICP License on July 2, 2019, which will remain effective for 5 years.
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.
Off-Balance Sheet Arrangements The Company does not have any off-balance sheet arrangements as of December 31, 2022. 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.
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.
The Powers of Attorney are irrevocable and continuously valid from the date of execution of the Powers of Attorney, so long as the VIE Shareholders own the equity interests of the VIE. 68 Spousal Consent Pursuant to the Spousal Consent, each spouse of the individual shareholders of the VIE irrevocably agreed that the equity interest in the VIE held by their respective spouses would be disposed of pursuant to the Equity Pledge Agreement, the Exclusive Option Agreement, and the Powers of Attorney.
Spousal Consent Pursuant to the Spousal Consent, each spouse of the individual shareholders of the VIE irrevocably agreed that the equity interest in the VIE held by their respective spouses would be disposed of pursuant to the Equity Pledge Agreement, the Exclusive Option Agreement, and the Powers of Attorney.
Such critical estimates are discussed below. Allowance for doubtful accounts Accounts receivables mainly represent amounts due from clients in the ordinary course of business and are recorded net of allowance for doubtful accounts. The Company mitigates the associated risks by performing credit checks and actively pursuing past due accounts.
Such critical estimates are discussed below. Allowance for credit loss Accounts receivables mainly represent amounts due from clients in the ordinary course of business and are recorded net of allowance for doubtful accounts.
It was primarily due to a) prepayment for land use right, construction and equipment of $8,244,917; b) purchase of short-term investments of $8,000,000; c) interest-bearing loans to third party of 2,825,359; d) and purchase of long-term investments of $2,289,945. Net cash used in investing activities amounted to $6,365,555 for the year ended December 31, 2020.
It was primarily due to the following: a) prepayment for land use right, construction and equipment of $8,244,917; b) purchase of short-term investments of $8,000,000; c) interest-bearing loans to third party of 2,825,359; d) and purchase of long-term investments of $2,289,945.

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Item 6. [Reserved]

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

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Exercise of Options The plan administrator determines the exercise price for each award, which is stated in the award agreement. 90 Agreements with Named Executive Officers We enter into employment agreements with our executive officers.
Exercise of Options The plan administrator determines the exercise price for each award, which is stated in the award agreement. Agreements with Named Executive Officers We enter into employment agreements with our executive officers.
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. 92 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. 88 Corporate Governance and Nominating Committee .
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. 91 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. 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.
Jian Pei satisfy the “independence” requirements of Section 5605(a)(2) of the Nasdaq Listing Rules and Rule 10A-3 under the Securities Exchange Act. Prior to our IPO, our board also determined that Ligang Lu qualifies as an audit committee financial expert within the meaning of the SEC rules or possesses financial sophistication within the meaning of the Nasdaq Listing Rules.
Jian Pei satisfy the “independence” requirements of Section 5605(a)(2) of the Nasdaq Listing Rules and Rule 10A-3 under the Securities Exchange Act. Prior to our IPO, our board also determined that Xin Zhang qualifies as an audit committee financial expert within the meaning of the SEC rules or possesses financial sophistication within the meaning of the Nasdaq Listing Rules.
Deferred revenue -related parties As of December 31, 2022 and 2021, the balances of deferred revenue of related parties were as follows: As of December 31, 2022 2021 2020 Deferred revenue of related parties Shanghai Hui Yang Investment Co.
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.
Compensation of Directors and Executive Officers The following table sets forth certain information with respect to compensation for the year ended December 31, 2022, 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 year ended December 31, 2023, earned by or paid to our chief executive officers.
Compensation Committee. Our compensation committee, formed upon the closing of our IPO, consists of Mr. Xiang Luo, Mr. Ligang Lu and Mr. Jian Pei. Mr. Ligang Lu is the chairman of our compensation committee. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers.
Compensation Committee. Our compensation committee, formed upon the closing of our IPO, consists of Mr. Xiang Luo, Mr. Xin Zhang and Mr. Jian Pei. Mr. Xin Zhang is the chairman of our compensation committee. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers.
Each committee’s members and functions are described below. Audit Committee. Our audit committee, formed upon the closing of our IPO, consists of Mr. Ligang Lu, Mr. Xiang Luo and Mr. Jian Pei, with Mr. Ligang Lu serving as the chairman of our audit committee. We have determined that Mr. Ligang Lu, Mr. Xiang Luo and Mr.
Each committee’s members and functions are described below. Audit Committee. Our audit committee, formed upon the closing of our IPO, consists of Mr. Xin Zhang, Mr. Xiang Luo and Mr. Jian Pei, with Mr. Xin Zhang serving as the chairman of our audit committee. We have determined that Mr. Xin Zhang, Mr. Xiang Luo and Mr.
Related party guarantee On August 4, 2022, Surnise Guizhou entered a line of credit financing contract with Bank of Guizhou for revolving credit of RMB 20,000,000, approximately $ 2,871,665, 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.
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.
(1) $ 347,471 $ - $ Total $ 347,471 $ - $ (1) The balance as of December 31, 2022 represented the advance from the related party for tailored services. d. Related party transactions Related party purchase The Company rented office spaces from Zhuhai Investment.
(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.
Hu has more than 20 years of experience as founder and executive, and is a well-known entrepreneur in China. Ms. Chao Liu has served as our CFO since February 2019, and as the CFO of the VIE since January 2016.
Hu has more than 20 years of experience as founder and executive, and is a well-known entrepreneur in China. Ms. Chao Liu has served as our CFO since February 2019, and as the CFO of the VIE since January 2016. She has also served as our director since June 8, 2023.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our Ordinary Shares as of May 15, 2023 by: ● each of our directors and executive officers; and ● each of our principal shareholders who beneficially own more than 5% of our total outstanding Ordinary Shares.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our Ordinary Shares as of the date of this annual report by: ● each of our directors and executive officers; and ● each of our principal shareholders who beneficially own more than 5% of our total outstanding Ordinary Shares.
Our corporate governance and nominating committee, formed upon the closing of our IPO, consists of Mr. Ligang Lu and Mr. Jian Pei. Mr. Xiang Luo is the chairman of our corporate governance and nominating committee.
Our corporate governance and nominating committee, formed upon the closing of our IPO, consists of Mr. Xin Zhang and Mr. Jian Pei. Mr. Xiang Luo is the chairman of our corporate governance and nominating committee.
Under the 2022 Plan, the maximum aggregate number of shares that may be issued pursuant to all awards shall be 3,679,200 Ordinary Shares. As of the date of this annual report, we issued 833,550 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 1,613,350 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, 2023, 2023: Department Number of Employees Senior Management 5 Human Resources & Administration 8 Sales & Marketing 12 Business & Consulting 1 Customer Service 2 Information Technology 2 Research & Development 10 Finance 8 Total 48 Sunrise Guizhou had 229 and 257 employees as of April 30, 2023, and December 31, 2022, respectively.
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.
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 2,491,318 Ordinary Shares Held by GMB Resource Services Co., Ltd., a British Virgin Islands company.
(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.
The functions and powers of our board of directors include, among others: ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of the company and mortgaging the property of the company; and 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.
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.
Types of awards The 2022 Plan permits the awards of cash, restricted stock units, share options, or any similar securities with a value derived from the value of or related to the Ordinary Shares and/or returns thereon. Plan Administration Our board of directors or a committee of one or more members of the board of directors administers the 2022 Plan.
Types of awards The 2022 Plan permits the awards of cash, restricted stock units, share options, or any similar securities with a value derived from the value of or related to the Class A Ordinary Shares and/or returns thereon.
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 (approximately $1,486,746) was paid in July 2022. The unpaid consideration RMB30,000,000 (approximately $4,307,499) will be paid in installments from 2023 to 2026.
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.
For the year ended December 31, 2020, service costs paid to Beijing Yihe were $27,175. Related party sales The Company sold titanium of $205 to Mr. Shousheng Guo for the year ended December 31, 2022. The Company sold medical wine of $666 to Zhuhai Investment for the year ended December 31, 2021. 96 e.
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.
Due from related parties As of December 31, 2022, 2021 and 2020, the balances of amount due from related parties were as follows: As of December 31, 2022 2021 2020 Due from related parties Bally 5,168 5,168 5,168 Zhuhai Investment - 25,534 155,378 Mr. Xuanming Wang 20,102 26,664 - Mr. Haiwei Zuo - 7,912 - Mr.
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.
Our COO 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.
(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.
(1) 738,128 - - Haicheng Shenhe 50,395 - - Zhuhai Investment 64,643 - - Total $ 885,150 $ - - (1) The balance as of December 31, 2022 represented the loans from the related party, with the annual interest rate of 4.35% and was initially due on August 13, 2022 and extended to December 31, 2023. c.
(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.
Box 2221, Road Town, Tortola, British Virgin Islands. (1) Haiping Hu, our CEO and chairman of the Board, beneficially owns 6,840,887 Ordinary Shares through his 100% ownership of GMB Wisdom Sharing Platform Co., LTD, and 483,800 Ordinary Shares held directly. (2) Representing 2,705,583 Ordinary Shares held by GMB Culture Communication Co., Ltd, a British Virgin Islands company.
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.
Directors and Executive Officers Age Position/Title Haiping Hu 55 Chief Executive Officer (“CEO”), Chairman of the Board of Director Chao Liu 42 Chief Financial Officer (“CFO”) Chenming Qi 52 Chief Operating Officer (“COO”) Haiwei Zuo 40 Director Ligang Lu 54 Independent Director Xiang Luo 52 Independent Director Jian Pei 55 Independent Director Mr.
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.
The calculations in the table below are based on 25,361,550 Ordinary Shares outstanding as of the date of this annual report, including 833,550 Ordinary Shares issued under the Stock Incentive Plan. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
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.
D. Employees We had a total of 134, 96, and 48 full-time employees (excluding the employees of Sunrise Guizhou), as of December 31, 2020, 2021, and 2022, respectively. As of April 30, 2023, we had 48 full-time employees (excluding the employees of Sunrise Guizhou),. We had 4, 22, 7 and 15 employees located in Shanghai, Beijing, Hangzhou, and Zibo, respectively.
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.
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 Gansu QLS See “ Item 4. Information on the Company—C.
Related Party Transactions Contractual Arrangements between GIOP BJ and SDH See “ Item 4. Information on the Company—C.
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) (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.
(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.
Pursuant to the line of credit contract, the Company was obliged to deposit fifty percent of the notes payable amount issued as restricted cash in the designated bank accounts in Bank of Guizhou. Pursuant to the contract, Mr.
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.
Liu studied finance at Beijing Language and Culture University and graduated in January 2016. She has a strong understanding of international accounting and tax policies. 87 Mr. Chenming Qi has served as our COO since February 2019, and as the COO and director of the VIE since July 2017. From May 2014 to June 2017, Mr.
Liu studied finance at Beijing Language and Culture University and graduated in January 2016. She has a strong understanding of international accounting and tax policies. Mr. Xiang Luo was appointed as our director on March 11, 2022. Mr.
For the years ended December 31, 2022, 2021 and 2020, total rental fee to Zhuhai Investment were $118,475, $103,411 and $96,695, respectively. The Company purchased graphite material processing service of $450,591 and purchased raw material of $580,452 from Haicheng Shenhe for the year ended December 31, 2022. The Company also purchased professional services from Yihe Beijing.
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.
Haiping Hu and Guizhou Yilong New Area Industrial Development and Investment Co., Ltd., the non-controlling shareholder of Sunrise Guzhou, were the guarantor of the line of credit.
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.
Wenwu Zhang (1) 337,420 - - Yihe Beijing - - 12,184 Shidong (Suzhou) Investment Co., Ltd. 37,332 - - Total $ 400,022 $ 65,278 172,730 (1) The balance as of December 31, 2022 represented the prepaid acquisition consideration to purchase Mr. Wenwu Zhang’s equity in Haicheng Shenhe. 95 b.
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.
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 $5,743,331, for a term from November 10, 2022 to November 9, 2025. Pursuant to the financing contracts, Mr. Haiping Hu.
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.
The following table sets forth the numbers of Sunrise Guizhou’s employees by areas of business as of April 30, 2023 Department Number of Employees Senior Management 1 Human Resources & Administration 13 Research & Development 50 Manufacturing & Equipment 128 Warehouse & Operation 19 Engineering & Construction 9 Finance & Compliance 5 Sales & Marketing 4 Total 229 93 Generally, we enter into standard employment contracts with our officers, managers, and other employees.
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.
(2) 2,705,583 10.67 % GMB Resource Services Co., Ltd (3) 2,491,318 9.82 % * Unless otherwise indicated, the business address of each of the individuals is Room 350, 3rd Floor, Building 6,Yard 1, Shangdi 10th Street, Haidian District, Beijing, The PRC. ** The principal office of each of the 5% beneficial owners are located at Start Chambers, Wickham’s Cay II, P.O.
(2) 2,607,077 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.
Due to related parties As of December 31, 2022 and 2021, the balances of amounts due to related parties were as follows: As of December 31, 2022 2021 2020 Due to related parties Mr. Haiping Hu 2,872 - - Mr. Chenming Qi 9,189 - - Ms. Jing Ji 19,923 - - Shanghai HuiYang Investment Co.
Haiping Hu $ 903,789 $ 2,872 $ - Mr. Chenming Qi 5,476 9,189 - Ms. Jing Ji 19,543 19,923 - Shanghai HuiYang Investment Co.
Name and Address of Beneficial Owner* Ordinary Shares Beneficially Owned Number % Director and Executive Officers: Haiping Hu (1) 7,324,687 28.88 % Chao Liu 50,000 0.20 % Chenming Qi (3) 2,491,318 9.82 % Haiwei Zuo (4) 1,140,282 4.50 % Ligang Lu 15,000 0.06 % Xiang Luo 12,500 0.05 % Jian Pei 12,500 0.05 % Directors and Executive Officers as a group (7 persons) 11,046,287 43.56 % 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) 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.
Pei’s research focuses on the development of organic semiconducting materials for application in optoelectronics. Mr. Ligang Lu was appointed as our director upon the closing of our IPO. Since January 2011, Mr. Lu has been the auditor director and group supervisor of Shanshan Holdings Co.
Pei’s research focuses on the development of organic semiconducting materials for application in optoelectronics. Mr. Xin Zhang has served as our director since February 8, 2024. He has served as the Director of Risk Control at Albamen Capital Partners since June 2020. Mr.
Jing Ji, CEO of and 46% shareholder of GMB Technology (k) Haicheng Shenhe, 9.6451% shareholder of Sunrise Guizhou (l) Guizhou Yilong New Area Industrial Development and Investment Co., Ltd., 3.0864% shareholder of Sunrise Guizhou (m) Beijing Yihe Business Technology Co., Ltd. (“Yihe Beijing”), a 40% shareholder of GMB (Beijing). a.
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.
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$) Haiping Hu 2022 44,778 967,600 1,012,378 CEO of the Company and the VIE Chao Liu 2022 39,722 100,000 139,722 CFO of the Company and the VIE Chenming Qi 2022 27,300 0 27,300 COO of the Company and the VIE Haiwei Zuo 2022 56,333 110,000 166,333 Director of the Company Jian Pei 2022 0 25,000 25,000 Director of the Company Xiang Luo 2022 0 25,000 25,000 Director of the Company Ligang Lu 2022 0 30,000 30,000 Director of the Company For the year ended December 31, 2022, the Company paid the above compensations to our executive officers and directors. 89 2022 Share Incentive Plan Our board of directors adopted the 2022 Stock Incentive Plan (the “2022 Plan”) in July 2022, effective as of July 11, 2022, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business.
Summary Compensation Table Name and Principal Position Year Salary (US$) 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.
Board Practices Board of Directors Our board of directors consists of five directors. Duties of Directors Under Cayman Islands law, our directors owe fiduciary duties at common law, including, but not limited to a duty to act honestly, in good faith and with a view to our best interests.
Board Practices Board of Directors Our board of directors consists of five directors. Duties of Directors As a matter of Cayman Islands law, a director owes three types of duties to the company: (i) statutory duties, (ii) fiduciary duties, and (iii) common law duties.
Removed
Qi served as the Vice President of the sales division of 360 Enterprise Security Group, which specializes in providing enterprise-level network security technologies, products and services to government, enterprises, education, finance and other institutions and organizations.
Added
Xin Zhang served as the Risk Control Manager at CPE Capital Partners (London/ Paris) from March 2017 to May 2020, and served as the Head of Investment Team (UK) at CGN Europe Energy (London/Paris) from January 2013 to January 2017. Mr.
Removed
He co-founded Netgod Information Technology (Beijing) Co., Ltd, which is engaged in enterprise-level network security technologies, products and services in 2006, and served as a vice president of operations from June 2006 to May 2017. He served as the deputy general manager of Lenovo Information Security Division from April 2004 to June 2006.
Added
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.
Removed
From March 2002 to March 2004, he was the sales director of Hampoo (China) Management Consulting Company, which is engaged in management consulting, IT planning, information implementation, etc. Mr. Qi graduated from Tianjin University with a master’s degree in Precision Instrument Engineering in March 1996. We believe that Mr.
Added
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.
Removed
Qi, with over twenty years of experience in team building and enterprise management, is qualified to serve as our COO. Mr. Haiwei Zuo has served as our director since February 2019, and as Vice Chairman of the VIE since December 2014.
Added
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.
Removed
From September 2013 to December 2014, he served as the Dean of Beijing Huatai Weiye Management Science and Technology Research Institute. From March 2009 to September 2013, he served as the CEO of Beijing Naked in Frontier Cultural Exchange Co., Ltd., which is engaged in producing TV program content that is in category of business and financial management.
Added
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.
Removed
He studied business administration at the China Agricultural University and graduated in July 2019. Mr. Xiang Luo was appointed as our director on March 11, 2022. Mr.
Added
Plan Administration Our board of directors or a committee of one or more members of the board of directors administers the 2022 Plan.
Removed
Ltd. which is mainly engaged in the production of lithium-ion battery parts, such as lithium-ion capacitors, battery pack, and charging pile, and providing new energy services such as new energy vehicle operation and energy management services, etc.
Added
Exercise of Options The plan administrator determines the exercise price for each award, which is stated in the award agreement. 2024 Share Incentive Plan Our board of directors and shareholders adopted the 2024 Stock Incentive Plan (the “2024 Plan”) in February 2024, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business.
Removed
From January 2003 to January 2011, he held several positions at Hebei Hualong Riqing Noodle Industry Group Co., Ltd., which is mainly engaged in noodle manufacturing, including audit manage and chief financial officer. From September 1990 to January 2003, he was the audit office director of Sinosteel Xingji Group, which is engaged in steel productions, sales, distributions related services. Mr.
Added
Under the 2024 Plan, the maximum aggregate number of shares that may be issued pursuant to all awards shall be 2,613,000 Class A Ordinary Shares. As of the date of this annual report, we have not issued any awards under the 2024 Plan. The following describes the principal terms of the 2024 Plan.
Removed
Lu holds a bachelor’s degree in Financial Auditing and Accounting from Hebei University of Economics and Business (formerly Hebei University of Finance and Economics). In May 2001, Mr.
Added
Types of awards The 2024 Plan permits the awards of cash, restricted stock units, share options, or any similar securities with a value derived from the value of or related to the Class A Ordinary Shares and/or returns thereon.
Removed
Lu was certified as senior auditor and accountant by China Human Resources Bureau of Hebei Province, and became a Certified Internal Auditor (“CIA”) by International Registered Institute of Internal Auditors (USA). 88 B.
Added
Plan Administration Our board of directors or a committee of one or more members of the board of directors administers the 2024 Plan.
Removed
When exercising powers or performing duties as a director, our directors also have a duty to exercise the care, diligence and skills that a reasonable director would exercise in comparable circumstances, taking into account, without limitation, the nature of the company, the nature of the decision, the position of the director and the nature of the responsibilities undertaken by him.
Added
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.
Removed
In exercising the powers of a director, our directors must exercise their powers for a proper purpose and shall not act or agree to the company acting in a manner that contravenes our amended and restated memorandum and articles of association or the Companies Act (Revised) of the Cayman Islands.
Added
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.
Removed
Generally, we have the right to seek damages if a duty owed by our directors is breached.
Added
The Companies Act (Revised) of the Cayman Islands (the “ Companies Act ”) imposes a number of statutory duties on a director.
Removed
(1) 6,840,887 26.97 % GMB Information Technology Co., Ltd. (4) 1,085,282 4.28 % GMB Culture Communication Co., Ltd.
Added
A Cayman Islands director’s fiduciary duties are not codified, however the courts of the Cayman Islands have held that a director owes the following fiduciary duties (a) a duty to act in what the director bona fide considers to be in the best interests of the company, (b) a duty to exercise their powers for the purposes they were conferred, (c) a duty to avoid fettering his or her discretion in the future and (d) a duty to avoid conflicts of interest and of duty.
Removed
(4) Haiwei Zuo, our director, beneficially owns 1,085,282 Ordinary Shares through his 100% ownership of GMB Information Technology Co., Ltd., a British Virgin Islands company, and 55,000 Ordinary Shares held directly. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. 94 ITEM 7.
Added
The common law duties owed by a director are those to act with skill, care and diligence that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and, also, to act with the skill, care and diligence in keeping with a standard of care commensurate with any particular skill they have which enables them to meet a higher standard than a director without those skills.
Removed
Organizational Structure .” Material Transactions with Related Parties The following is a list of related parties which the Company had transactions with: (a) Ningbo Zhuhai Investment Co., Ltd. (“Zhuhai Investment”), a company controlled by Mr. Haiping Hu (b) Bally, Corp. (“Bally”), a company controlled by Mr. Haiping Hu (c) Mr.
Added
In fulfilling their duty of care to us, our directors must ensure compliance with our amended articles of association, as amended and restated from time to time. We have the right to seek damages where certain duties owed by any of our directors are breached.
Removed
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. Chenming Qi, General Manager, Director and 3.00% shareholder of GIOP BJ; Director of GMB (Hangzhou) (j) Ms.
Added
The following table sets forth the numbers of Sunrise Guizhou’s employees by areas of business as of April 30, 2024.
Removed
As of December 31, 2022, the Company has utilized RMB 13,500,000, approximately $1,938,374, line of credit by issuing commercial notes to its vendors for amount of RMB 27,000,000, approximately $3,876,748.
Added
(1) 605,589 6,567,272 7,172,861 27.44 87.43 GMB Culture Communication Co., Ltd.
Removed
On September 22, 2022, Sunrise Guizhou entered a financing contract into an eighteen-month loan with Far East to obtain a loan of RMB 20,000,000, approximately $2,871,665, for a term from September 22, 2022 to March 21.

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Item 7. Management's Discussion & Analysis

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

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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 95 ITEM 8. FINANCIAL INFORMATION 97 ITEM 9. THE OFFER AND LISTING 98 ITEM 10. ADDITIONAL INFORMATION 98 ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 110 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 110 PART II 111
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

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