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What changed in Greenland Technologies Holding Corp.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Greenland Technologies Holding Corp.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+260 added−262 removedSource: 10-K (2024-04-16) vs 10-K (2023-03-31)

Top changes in Greenland Technologies Holding Corp.'s 2023 10-K

260 paragraphs added · 262 removed · 213 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

66 edited+21 added−14 removed152 unchanged
Biggest changeThe State Administration of Taxation (the “SAT”), the PRC Ministry of Science and Technology and the MOF jointly issued the Administrative Rules for the Certification of High and New Technology Enterprise delineating the specific criteria and procedures for “high and new technology enterprises” certification. 15 Regulations of Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies On February 17, 2023, the CSRC published the Trial Measures and its accompanying guidelines and instructions, which came into effect on March 31, 2023, and will apply if a domestic enterprise issues shares, depositary receipts, corporate bonds convertible into shares, or other securities of an equity nature outside of the PRC, or lists its securities for trading outside of the PRC.
Biggest changeAs of the date of this Report, we and our PRC subsidiaries have not received any inquiry, notice, warning, or sanctions from the CSRC or any other PRC governmental authorities regarding the offering of our securities outside of the PRC. 7 On February 17, 2023, the CSRC published the Regulations of Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”) and its accompanying guidelines and instructions, which came into effect on March 31, 2023, and will apply if a domestic enterprise issues shares, depositary receipts, corporate bonds convertible into shares, or other securities of an equity nature outside of the PRC, or lists its securities for trading outside of the PRC.
According to such regulations, a domestic enterprise that issues and lists its securities outside of the PRC shall comply with the filing procedures and report the relevant information to the CSRC.
According to such regulations, a domestic enterprise that issues and lists its securities outside of the PRC shall comply with the filing procedures and report the relevant information to the CSRC.
Laws and Regulations Battery Safety and Testing Our battery packs of electric industrial heavy equipment will be subject to various U.S. regulations that govern transport of “dangerous goods,” defined to include lithium batteries, which may present a risk in transportation. We expect to use lithium battery packs in our electric industrial heavy equipment.
U.S. Laws and Regulations Battery Safety and Testing Our battery packs of electric industrial heavy equipment will be subject to various U.S. regulations that govern transport of “dangerous goods,” defined to include lithium batteries, which may present a risk in transportation. We expect to use lithium battery packs in our electric industrial heavy equipment.
Broadly, our obligation to comply with applicable US-NJ Employment Laws, includes laws and rules relating to: (i) Wage and hour standards, such as paying required overtime for employees who do not meet exemption requirements and work in excess of 40 hours in a week, paying minimum wage, and paying wages when due; (ii) Providing leave and leave benefits to eligible employees, including requirements that unpaid family leave and unpaid leave for reasons including domestic violence or sexual assault shall be provided by covered employers; (iii) Non-discrimination and anti-retaliation; (iv) Providing reasonable accommodations to and engaging in the interactive process with employees with disabilities, religious needs, or other protected characteristics; 18 (v) Ensuring employees are eligible to be employed in the United States; and (vi) Occupational safety.
Broadly, our obligation to comply with applicable US-NJ Employment Laws, includes laws and rules relating to: (i) Wage and hour standards, such as paying required overtime for employees who do not meet exemption requirements and work in excess of 40 hours in a week, paying minimum wage, and paying wages when due; (ii) Providing leave and leave benefits to eligible employees, including requirements that unpaid family leave and unpaid leave for reasons including domestic violence or sexual assault shall be provided by covered employers; (iii) Non-discrimination and anti-retaliation; (iv) Providing reasonable accommodations to and engaging in the interactive process with employees with disabilities, religious needs, or other protected characteristics; (v) Ensuring employees are eligible to be employed in the United States; and (vi) Occupational safety.
See “Risk Factors — Risks Related to Doing Business in China — Uncertainties with respect to the PRC legal system could adversely affect us and our PRC subsidiaries.” 6 Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in China, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
See “Risk Factors — Risks Related to Doing Business in China — Uncertainties with respect to the PRC legal system could adversely affect us and our PRC subsidiaries.” Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in China, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
Its 141 kWh 620V CATL-sourced lithium battery produces the power to support nine hours of operation time and can be charged in as little as one and a half hours. GEX-8000 The GEX-8000 is a 18,739 lb lithium powered all-electric excavator capable of supporting a 8.0-ton rated load.
Its 141 kWh 620V CATL-sourced lithium battery produces the power to support nine hours of operation time and can be charged in as little as one and a half hours. GEX-8000 The GEX-8000 is a 18,739 lb. lithium powered all-electric excavator capable of supporting an 8.0-ton rated load.
Users of Greenland’s products are able to reach Greenland through a service line, through which Greenland is able to provide prompt on-site technical services. Experienced Management Team with Successful Track Records Greenland’s senior management team is comprised of individuals who have operational experience, market knowledge, international management skill, and technical expertise.
Users of Greenland’s products are able to reach Greenland through a service line, through which Greenland is able to provide prompt on-site technical services. 10 Experienced Management Team with Successful Track Records Greenland’s senior management team is comprised of individuals who have operational experience, market knowledge, international management skill, and technical expertise.
Any entity that is not equipped with such conditions is not allowed to engage in production and business operation activities. 14 The law also requires manufacturers to offer education and training programs to their employees regarding production safety and to hire qualified employees who have completed special trainings to engage in specialized operations.
Any entity that is not equipped with such conditions is not allowed to engage in production and business operation activities. The law also requires manufacturers to offer education and training programs to their employees regarding production safety and to hire qualified employees who have completed special trainings to engage in specialized operations.
See “Risk Factors — Risks Related to Doing Business in China — A recent joint statement by the SEC and the PCAOB, proposed rule changes submitted by Nasdaq, and the HFCA Act 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.” 7 Trading in our securities may be prohibited under the HFCA Act if the PCAOB determines that it cannot inspect or fully investigate our auditor, and that as a result, an exchange may determine to delist our securities.
See “Risk Factors — Risks Related to Doing Business in China — A recent joint statement by the SEC and the PCAOB, proposed rule changes submitted by Nasdaq, and the HFCA Act 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.” 8 Trading in our securities may be prohibited under the HFCA Act if the PCAOB determines that it cannot inspect or fully investigate our auditor, and that as a result, an exchange may determine to delist our securities.
We and our PRC subsidiaries are also subject to the risks and uncertainties about any future actions of the PRC government. If any future actions of the PRC government result in a material change in our operations, the value of our ordinary shares may depreciate significantly or become worthless.
We and our PRC subsidiaries are also subject to the risks and uncertainties about any future actions of the PRC government. If any future actions of the PRC government result in a material change in our PRC subsidiaries’ operations, the value of our ordinary shares may depreciate significantly or become worthless.
No step-up basis of intangible assets or goodwill was recorded in the Business Combination transaction, which is consistent with the treatment of the transaction as a reverse recapitalization of Zhongchai Holding. Incorporation of HEVI Corp.
No step-up basis of intangible assets or goodwill was recorded in the Business Combination transaction, which is consistent with the treatment of the transaction as a reverse recapitalization of Zhongchai Holding. 2 Incorporation of HEVI Corp.
On February 17, 2023, the CSRC published the Regulations of Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”) and its accompanying guidelines and instructions, which came into effect on March 31, 2023, and will apply if a domestic enterprise issues shares, depositary receipts, corporate bonds convertible into shares, or other securities of an equity nature outside of the PRC, or lists its securities for trading outside of the PRC.
Regulations of Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies On February 17, 2023, the CSRC published the Regulations of Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”) and its accompanying guidelines and instructions, which will come into effect on March 31, 2023, and will apply if a domestic enterprise issues shares, depositary receipts, corporate bonds convertible into shares, or other securities of an equity nature outside of the PRC, or lists its securities for trading outside of the PRC.
However, there can be no assurance that Greenland could precisely estimate any increase in raw material price or pass on such increase to its customers. 10 HEVI purchases components, electronics, battery systems and metal-based parts for use in the assembly of its electric industrial heavy equipment from various suppliers based in the PRC.
However, there can be no assurance that Greenland could precisely estimate any increase in raw material price or pass on such increase to its customers. 11 HEVI purchases components, electronics, battery systems and metal-based parts for use in the assembly of its electric industrial heavy equipment from various suppliers based in the PRC.
Under the SAFE Regulations, the RMB is generally freely convertible for current account items, including the distribution of dividends, trade and service related foreign exchange transactions, but not for capital account items, such as direct investment, loan, repatriation of investment and investment in securities outside the PRC, unless the prior approval of the State Administration of Foreign Exchange is obtained. 17 U.S.
Under the SAFE Regulations, the RMB is generally freely convertible for current account items, including the distribution of dividends, trade and service related foreign exchange transactions, but not for capital account items, such as direct investment, loan, repatriation of investment and investment in securities outside the PRC, unless the prior approval of the State Administration of Foreign Exchange is obtained.
Greenland, through HEVI, continues to focus its research and development efforts on its next generation of electric industrial heavy equipment along with supporting products such as mobile charging units and attachments that will increase the value of its portfolio. 11 Trademarks and Other Intellectual Property Greenland relies on a combination of trademark, copyright, patent, software registration, and trade secret laws to protect its intellectual property rights.
Greenland, through HEVI, continues to focus its research and development efforts on its next generation of electric industrial heavy equipment along with supporting products such as mobile charging units and attachments that will increase the value of its portfolio. 12 Intellectual Property Greenland relies on a combination of trademark, copyright, patent, software registration, and trade secret laws to protect its intellectual property rights.
Each unit consists of one ordinary share, no par value, one warrant to purchase one-half of one ordinary share and one right to receive one-tenth of one ordinary share upon the consummation of our initial business combination, pursuant to a registration statement on Form S-1.
Each unit consisted of one ordinary share, no par value, one warrant to purchase one-half of one ordinary share and one right to receive one-tenth of one ordinary share upon the consummation of our Business Combination, pursuant to a registration statement on Form S-1.
In addition, we and our PRC subsidiaries are subject to risks and uncertainties of the interpretations and applications of PRC laws and regulations, including but not limited to, limitations on foreign ownership in the industry in which our PRC subsidiaries operate.
In addition, we and our PRC subsidiaries are subject to risks and uncertainties of the interpretations and applications of PRC laws and regulations, including but not limited to, those imposing limitations on foreign ownership in the industry our PRC subsidiaries operate.
In August 2022, HEVI launched a 54,000 square foot industrial electric vehicle assembly site in Baltimore, Maryland to support local assembly, services and distribution of its product line.
In August 2022, HEVI launched a 54,000 square foot industrial electric vehicle assembly site in Baltimore, Maryland to support local assembly, services and distribution of its product line. Fast Growing Market .
The following table sets forth the number of its full-time employees by the function as of December 31, 2022: Function Number Management 6 Administration 9 Production 273 Research and development 17 Sales and marketing 16 Other 9 Total 330 Greenland maintains mandatory social security insurance for its employees pursuant to Chinese laws.
The following table sets forth the number of its full-time employees by function as of December 31, 2023: Function Number Management 6 Administration 9 Production 273 Research and development 17 Sales and marketing 10 Other 10 Total 325 Greenland maintains mandatory social security insurance for its employees pursuant to Chinese laws.
Greenland’s electric industrial heavy equipment products currently include GEF-series electric forklifts, a series of lithium powered forklifts with three models ranging in size from 1.8 tons to 3.5 tons, GEL-1800, a 1.8 ton rated load lithium powered electric wheeled front loader and GEX-8000, an all-electric 8.0 ton rated load lithium powered wheeled excavator.
HEVI’s electric industrial vehicle products currently include GEF-series electric forklifts, a series of lithium powered forklifts with three models ranging in size from 1.8 tons to 3.5 tons, GEL-1800, a 1.8 ton rated load lithium powered electric wheeled front loader, GEX-8000, an all-electric 8.0 ton rated load lithium powered wheeled excavator, and GEL-5000, an all-electric 5.0 ton rated load lithium wheeled front loader.
Wang has served as our chief executive officer since October 2019, the chief executive officer of Zhongchai Holding since April 2019, and the chief executive officer of HEVI Corp since January 2020. Mr.
Wang has served as our chief executive officer since October 2019, the chief executive officer of Zhongchai Holding since April 2019, and the chief executive officer of HEVI Corp since January 2020. From February 2019 to November 2020, Mr.
Our key competitors in the industrial heavy equipment industry are the traditional diesel-powered industrial heavy equipment manufacturers such as Caterpillar, Volvo CE and John Deere. 13 Employees As of December 31, 2022, the total number of full-time employees employed at Greenland and its subsidiaries was 330, with 319 employees located in the PRC and 11 employees located in the U.S.
Our key competitors in the industrial heavy equipment industry are the traditional diesel-powered industrial heavy equipment manufacturers such as Caterpillar, Volvo CE and John Deere. 14 Employees As of December 31, 2023, the total number of full-time employees employed at Greenland and its subsidiaries was 325, with 314 employees located in the PRC and 11 employees located in the U.S.
Despite these precautions, it may be possible for third parties to infringe our Company’s intellectual property rights. Patents As of December 31, 2022, Greenland held 104 registered patents with the PRC National Intellectual Property Administration (“CNIPA”), 91 of which are utility patents and 13 of which are invention patents. These patents relate to the manufacturing of products.
Despite these precautions, it may be possible for third parties to infringe our Company’s intellectual property rights. Patents As of December 31, 2023, Greenland held 109 registered patents with the PRC National Intellectual Property Administration (“CNIPA”), 94 of which are utility patents and 15 of which are invention patents. These patents relate to the manufacturing of products.
Products Greenland provides transmission systems and integrated powertrains for material handling machineries, particularly for electric forklift trucks. In order to expand and diversify existing product offerings, Greenland recently entered into the electric industry vehicles market, by designing and developing electric industry vehicles. Transmission products for material handling machineries 4 Transmission Systems.
In order to expand and diversify existing product offerings, Greenland recently entered into the electric industry vehicles market, by designing and developing electric industry vehicles. 4 Transmission products for material handling machineries Transmission Systems.
The units were sold in our initial public offering at an offering price of $10.00 per unit, which generated $44,000,000 (before underwriting discounts and offering expenses) in gross proceeds. 1 Simultaneously with the consummation of our initial public offering, we completed a private placement of 282,000 units at a price of $10.00 per unit to Greenland Asset Management Corporation (the “Sponsor”) and Chardan Capital Markets, LLC (“Chardan”), which generated $2,820,000 in gross proceeds.
Simultaneously with the consummation of our initial public offering, we completed a private placement of 282,000 units at a price of $10.00 per unit to Greenland Asset Management Corporation (the “Sponsor”) and Chardan Capital Markets, LLC (“Chardan”), which generated $2,820,000 in gross proceeds.
For the years ended December 31, 2022 and 2021, Greenland’s single largest customer, Hangcha Group, accounted for 17.14% and 18.47%, respectively, of Greenland’s total revenue, and Greenland’s second largest customer, Longgong Forklift Truck, accounted for 14.14% and 14.94%, respectively, of Greenland’s total revenue. Suppliers Greenland purchases its raw materials from various suppliers for use in the manufacture of its products.
For the years ended December 31, 2023 and 2022, Greenland’s single largest customer, Hangcha Group, accounted for 14.98% and 17.14%, respectively, of Greenland’s total revenue, and Greenland’s second largest customer, Longgong Forklift Truck, accounted for 11.75% and 14.14%, respectively, of Greenland’s total revenue. Suppliers Greenland purchases its raw materials from various suppliers for use in the manufacture of its products.
As of the date of this Report, no ordinary shares of the Company have been sold under the at the market offering agreement. 2 July 2022 Registered Direct Offering On July 25, 2022, the Company entered into a securities purchase agreement with an investor, pursuant to which the Company agreed to issue and sell 1,250,000 ordinary shares and 398,974 pre-funded warrants (the “RD pre-funded warrants”), with each RD pre-funded warrant exercisable for one ordinary share of the Company, for an offering price of $4.17 per share and $4.169 per RD pre-funded warrant.
July 2022 Registered Direct Offering On July 25, 2022, the Company entered into a securities purchase agreement with an investor, pursuant to which the Company agreed to issue and sell 1,250,000 ordinary shares and 398,974 pre-funded warrants (the “RD pre-funded warrants”), with each RD pre-funded warrant exercisable for one ordinary share of the Company, for an offering price of $4.17 per share and $4.169 per RD pre-funded warrant.
Significant Activities since Inception Initial Public Offering On July 27, 2018, we consummated our initial public offering of 4,400,000 units, including a partial exercise by the underwriters of their over-allotment option in the amount of 400,000 units.
Peter Zuguang Wang, the chairman of the board of directors of the Company. 1 Significant Activities since Inception Initial Public Offering On July 27, 2018, we consummated our initial public offering of 4,400,000 units, including a partial exercise by the underwriters of their over-allotment option in the amount of 400,000 units.
The PCAOB has been able to inspect our auditor, WWC P.C., an independent registered public accounting firm with its headquarters in San Mateo, California, and with its last inspection completed in November 2021.
The PCAOB has been able to inspect our auditor, WWC P.C., an independent registered public accounting firm with its headquarters in San Mateo, California, and its latest inspection has been ongoing since November 2023.
The PCAOB has been able to inspect our auditor, WWC P.C., an independent registered public accounting firm with its headquarters in San Mateo, California, with its last inspection conducted in November 2021.
The PCAOB has been able to inspect our auditor, WWC P.C., an independent registered public accounting firm with its headquarters in San Mateo, California, and its latest inspection has been ongoing since November 2023.
An extensive after-sales service network is essential for a company to gain general market acceptance. Greenland believes that it is able to compete based on its market position, strong research and development capabilities, high quality products, integrated service systems, and strong relationships with its customers. Our key competitors are Shaoxing Advance Gearbox Co., Ltd., Changsha Zhongchuan Transmission Machinery Co.
Greenland believes that it is able to compete based on its market position, strong research and development capabilities, high quality products, integrated service systems, and strong relationships with its customers. Our key competitors are Shaoxing Advance Gearbox Co., Ltd., Changsha Zhongchuan Transmission Machinery Co.
The unit purchase option may be exercised for cash or on a cashless basis, at the holder’s option, and expires on July 24, 2023. On February 18, 2021, Chardan exercised its option to purchase 120,000 units. As of the date of this Report, 120,000 units remain exercisable under the option.
The unit purchase option may be exercised for cash or on a cashless basis, at the holder’s option, and expired on July 24, 2023. On February 18, 2021, Chardan exercised its option to purchase 120,000 units.
Greenland sells these transmission products directly to forklift-truck manufacturers. In the fiscal years ended December 31, 2022 and 2021, Greenland sold an aggregate of 129,686 and 141,431 sets of transmission products, respectively, to more than 100 forklift manufacturers in the PRC.
Greenland sells these transmission products directly to forklift-truck manufacturers. In the fiscal years ended December 31, 2023 and 2022, Greenland sold an aggregate of 149,543 and 129,686 sets of transmission products, respectively, to more than 100 forklift manufacturers in the PRC. In January 2020, Greenland launched HEVI Corp.
Greenland was incorporated on December 28, 2017 as a British Virgin Islands company with limited liability. As a result of the consummation of the Business Combination, Greenland serves as the parent company for Zhongchai Holding. 3 Zhongchai Holding was incorporated in Hong Kong on April 23, 2009.
Greenland was incorporated on December 28, 2017 as a British Virgin Islands company with limited liability. As a result of the consummation of the Business Combination, Greenland serves as the parent company for Zhongchai Holding. Greenland Holding was incorporated in the State of Delaware on August 28, 2023.
Domain Names The domain names are protected under the Administrative Measures for Internet Domain Names promulgated by Ministry of Industry and Information Technology, or the MIIT, on August 24, 2017, the effective date of which was November 1, 2017.
The infringer also may be subject to fines or even criminal punishment. 17 Domain Names The domain names are protected under the Administrative Measures for Internet Domain Names promulgated by Ministry of Industry and Information Technology, or the MIIT, on August 24, 2017, the effective date of which was November 1, 2017.
Product liability legal actions and recall campaigns in the United States (“Product Liability Matters”) could involve personal injury and property damage and could involve claims for substantial monetary damages. The results of any future litigation and claims involving product liability in the United States are inherently unpredictable.
Product liability legal actions and recall campaigns in the United States (“Product Liability Matters”) could involve personal injury and property damage and could involve claims for substantial monetary damages.
From April 23, 2009 to November 1, 2011, Zhongchai Holding was a subsidiary of Equicap, Inc., a Nevada corporation, with its stock quoted on the OTC Markets until July 29, 2011. HEVI was incorporated in the state of Delaware on January 14, 2020 as a wholly owned subsidiary of Greenland.
Zhongchai Holding was incorporated in Hong Kong on April 23, 2009. From April 23, 2009 to November 1, 2011, Zhongchai Holding was a subsidiary of Equicap, Inc., a Nevada corporation, with its stock quoted on the OTC Markets until July 29, 2011.
Charging Solutions HEVI has developed a line of DC mobile charging solutions that are designed for easy, flexible and cost-effective charging integration to support a DC-powered EV fleet at any powered work site.
Charging Solutions DCH-480-30 Mobile Direct Current (“DC”) Charger HEVI has developed a line of DC mobile charging solutions that are designed for easy, flexible and cost-effective charging integration to support a DC-powered electric vehicle (“EV”) fleet at any powered work site.
Employment and Labor Law Private businesses operating in the United States are subject to employment laws of the federal governments, state government, and, to a lesser extent, local counties or municipalities.
The results of any future litigation and claims involving product liability in the United States are inherently unpredictable. 18 Employment and Labor Law Private businesses operating in the United States are subject to employment laws of the federal governments, state government, and, to a lesser extent, local counties or municipalities.
Further, pursuant to the Notice on the Issues concerning the Application of the Dividend Clauses of Tax Agreements issued by the SAT on February 20, 2009, the preferential tax rate under the relevant tax treaties shall only apply to a tax resident from the other side that directly holds at least 25% of the interest of a PRC company for a period of consecutive 12 months prior to receiving the dividends.
Further, pursuant to the Notice on the Issues concerning the Application of the Dividend Clauses of Tax Agreements issued by the SAT on February 20, 2009, the preferential tax rate under the relevant tax treaties shall only apply to a tax resident from the other side that directly holds at least 25% of the interest of a PRC company for a period of consecutive 12 months prior to receiving the dividends. 16 Value Added Tax The Provisional Regulations of the PRC Concerning Value Added Tax (the “VAT Regulations”) was promulgated on December 13, 1993 and amended by the State Council and became effect on November 19, 2017.
Greenland also supplies to the PRC subsidiaries of a number of blue-chip international brands based in Europe and Asia. During the years ended December 31, 2022 and 2021, Greenland’s five largest customers contributed 50.85% and 54.06%, respectively, of its total revenues.
Greenland believes that its customers include some of the leading manufacturers in their respective market segments. Greenland also supplies transmission products to the PRC subsidiaries of a number of blue-chip international brands based in Europe and Asia. During the years ended December 31, 2023 and 2022, Greenland’s five largest customers contributed 45.06% and 50.85%, respectively, of its total revenues.
Law and Regulation Relating to Environmental Protection The laws and regulations governing the environmental requirements for all units that cause environmental pollution and other public hazards in the PRC include, but are not limited to, the Environmental Protection Law of the People’s Republic of China, the Environmental Impact Assessment Law of the People’s Republic of China, and the Administrative Regulations on Environmental Protection for Construction Projects.
Furthermore, emergency measures shall be established by an enterprise to prepare for the occurrence of any accidents threatening safe production. 15 Law and Regulation Relating to Environmental Protection The laws and regulations governing the environmental requirements for all units that cause environmental pollution and other public hazards in the PRC include, but are not limited to, the Environmental Protection Law of the People’s Republic of China, the Environmental Impact Assessment Law of the People’s Republic of China, and the Administrative Regulations on Environmental Protection for Construction Projects.
As of December 31, 2022, our Company had provided loans in the amount of $4,286,589 to Zhongchai Holding. 8 Competitive Strengths Greenland believes that it is in the right position and the right time to supply a new generation of industrial heavy equipment, including electric industrial vehicles, that is green, safe, and cost-effective.
As of December 31, 2023, our Company provided a loan of $7,457,076 to Zhongchai Holding. 9 Competitive Strengths Greenland believes that it is in the right position and the right time to supply a new generation of industrial heavy equipment, including electric industrial vehicles, that is green, safe, and cost-effective. The following is a summary of Greenland’s competitive strengths.
The infringer must, in accordance with the applicable regulations, undertake to cease the infringement, take remedial action and/or pay damages. 16 Trademark Law Pursuant to the Trademark Law of the PRC which was amended on April 23, 2019 and became effective on November 1, 2019, the right to exclusive use of a registered trademark shall be limited to trademarks which have been approved for registration and to commodities for which the use of trademark has been approved.
Trademark Law Pursuant to the Trademark Law of the PRC which was amended on April 23, 2019 and became effective on November 1, 2019, the right to exclusive use of a registered trademark shall be limited to trademarks which have been approved for registration and to commodities for which the use of trademark has been approved.
As of December 31, 2022, Greenland had been granted two trademarks registered with the CNIPA. Greenland’s intellectual property also includes technical data such as test results and operating data from projects, drawings, designs, and machinery and manufacturing techniques it developed in-house. Sales and Marketing Greenland sells its products in PRC through its sales and marketing teams.
Trademarks As of December 31, 2023, Greenland had been granted two trademarks registered with the CNIPA. As of the date of this Report, Greenland has not registered any intellectual properties in the U.S. Greenland’s intellectual property also includes technical data such as test results and operating data from projects, drawings, designs, and machinery and manufacturing techniques it developed in-house.
The technology center is made up of a product development and design department, a research center, three research departments that focuses on design, application, and manufacturing of internal combustion engines, and a post-doctoral workstation certified by the PRC Ministry of Human Resource and Social Security. 9 Strategic Service Network The ability to provide timely after-sales services is critical in building and maintaining a loyal and solid customer base.
The technology center is made up of a product development and design department, a research center, three research departments that focuses on design, application, and manufacturing of internal combustion engines, and a post-doctoral workstation certified by the PRC Ministry of Human Resource and Social Security.
(“Hangzhou Greenland”), an operating company formed under the laws of the PRC in 2019, Shanghai Hengyu Business Management Consulting Co., Ltd., a company formed under the laws of the PRC in 2005 (“Shanghai Hengyu”), and Hengyu Capital Limited, a company formed in Hong Kong on August 16, 2022 (“Hengyu Capital”).
Ltd., an operating company formed under the laws of the People’s Republic of China (the “PRC” or “China”) in 2005, Hangzhou Greenland Energy Technologies Co., Ltd. (“Hangzhou Greenland”), an operating company formed under the laws of the PRC in 2019, and Hengyu Capital Limited, a company formed in Hong Kong on August 16, 2022 (“Hengyu Capital”).
Jin is a Certified Public Account and has over 10 years of experience in accounting, budgeting, and financial planning across operations in the PRC and overseas. Prior to August 2019, Mr. Jin has also served as the chief financial officer of Tantech Holdings Ltd. (Nasdaq: TANH).
Wang received his Bachelor’s degree in Economics from Rutgers University. ● Jing Jin has served as our chief financial officer since October 2019. Mr. Jin is a Certified Public Account and has over 10 years of experience in accounting, budgeting, and financial planning across operations in the PRC and overseas. Prior to August 2019, Mr.
International brand manufacturers equipped with better technology and capital resources are also aiming to expand into the PRC. As a result, it is expected that the PRC transmission market will become more competitive. The typical competitive criteria are quality, price, technology, after-sales service, product offering, and performance record. The transmissions market is capital intensive.
Under the current market trend, domestically produced transmissions account for the largest share of the PRC market. International brand manufacturers equipped with better technology and capital resources are also aiming to expand into the PRC. As a result, it is expected that the PRC transmission market will become more competitive.
The infringer must undertake to cease the infringement, take remedial action and pay damages. The infringer also may be subject to fines or even criminal punishment.
The infringer must undertake to cease the infringement, take remedial action and pay damages.
These solutions create a seamless adoption of our electric heavy equipment or any compatible DC-powered EV into any existing fleet operation while creating another revenue stream for the HEVI business. Recent Regulatory Developments We and our PRC subsidiaries are subject to certain legal and operational risks associated with our PRC subsidiaries’ operations in China.
These solutions create a seamless adoption of HEVI’s electric heavy equipment or any compatible DC-powered EV into any existing fleet operation while creating another revenue stream for the HEVI business. 6 Recent Regulatory Developments We are a holding company incorporated in the British Virgin Islands and not a Chinese operating company.
HEVI promotes sales of sustainable alternative products for the heavy industrial equipment industry, including electric industrial vehicles, in the North American market.
HEVI was incorporated in the state of Delaware on January 14, 2020 as a wholly owned subsidiary of Greenland. HEVI promotes sales of sustainable alternative products for the heavy industrial equipment industry, including electric industrial vehicles, in the North American market.
They are primarily responsible for identifying business opportunities, promoting products, collecting customer feedbacks and market information, bidding for or negotiating orders, and collecting payments. Competition Transmission Industry The transmission industry is fragmented and highly competitive in the PRC. Under the current market trend, domestically produced transmissions account for the largest share of the PRC market.
Members of its sales and marketing teams have extensive experience and knowledge in the material handling equipment sector of the manufacturing industry. They are primarily responsible for identifying business opportunities, promoting products, collecting customer feedbacks and market information, bidding for or negotiating orders, and collecting payments. Competition Transmission Industry The transmission industry is fragmented and highly competitive in the PRC.
These products have become available for purchase in the U.S. market. In August 2022, HEVL launched a 54,000 square foot industrial electric vehicle assembly site in Baltimore, Maryland to support local services, assembly and distribution of its electric industrial heavy equipment product line. Fast Growing Market .
In August 2022, Greenland launched a 54,000 square foot industrial electric vehicle assembly site in Baltimore, Maryland to support local services, assembly and distribution of its electric industrial heavy equipment products line. Greenland serves as the parent company of Greenland Holding Enterprises Inc.
Utilizing Greenland’s expertise in manufacturing and R&D, HEVI exists to create clean and sustainable products and services in the heavy industrial equipment industry that help organizations pursue a carbon neutral operation. HEVI designs, develops, and manufactures electric heavy industrial equipment and accessories and sells them directly to the end consumers in various markets in the United States.
Ltd., and Ganzhou Wuhuan Machine Co., Ltd. 13 Electric Industrial Heavy Equipment Industry Utilizing Greenland’s expertise in manufacturing and R&D, it established HEVI in January 2020 to create clean and sustainable products and services in the heavy industrial equipment industry that help organizations pursue a carbon neutral operation.
Forklifts play an important role in the logistic systems of many companies across different industries in China and globally. Generally, industries with the largest demand for forklifts include the transportation, warehousing logistics, electrical machinery, and automobile industries. Greenland’s revenue decreased from approximately $98.84 million in the fiscal year 2021 to $90.83 million in the fiscal year 2022.
Forklifts play an important role in the logistic systems of many companies across different industries in China and globally. Generally, industries with the largest demand for forklifts include the transportation, warehousing logistics, electrical machinery, and automobile industries. Greenland’s transmission products are used in 1-ton to 15-tons forklift trucks, some with mechanical shift and some with automatic shift.
Customers Greenland, through its subsidiaries, sells most of its transmission products in the PRC and electric industrial heavy equipment in the U.S. Its customer bases are primarily in the businesses of material handling equipment and forklift trucks. Greenland believes that its customers include some of the leading manufacturers in their respective market segments.
Jin graduated from Simon Fraser University in June 2008 in Burnaby, Canada with a Bachelor of Business Administration degree. Customers Greenland, through its subsidiaries, sells most of its transmission products in the PRC and electric industrial heavy equipment in the U.S. Its customer bases are primarily in the businesses of material handling equipment and forklift trucks.
Warrants must be exercised in multiples of two warrants, and each two warrants are exercisable for one ordinary share at an exercise price of $11.50 per share.
Warrants must be exercised in multiples of two warrants, and each two warrants are exercisable for one ordinary share at an exercise price of $11.50 per share. The units were sold in our initial public offering at an offering price of $10.00 per unit, which generated $44,000,000 (before underwriting discounts and offering expenses) in gross proceeds.
To promote Greenland’s brand, sales employees also attend trade shows and exhibitions to showcase our products. As of December 31, 2022, Greenland’s sales and marketing team consisted of 16 employees. Members of its sales and marketing teams have extensive experience and knowledge in the material handling equipment sector of the manufacturing industry.
Sales and Marketing Greenland sells its products through its sales and marketing teams. To promote Greenland’s brand, sales employees also attend trade shows and exhibitions to showcase our products. As of December 31, 2023, Greenland’s sales and marketing team consisted of 10 employees, with six (6) members in the PRC and four (4) in the U.S.
We have strategically established an after-sales service network in locations with developed economies. For example, the eastern provinces of the PRC generally have significant demand for logistics services. Accordingly, Greenland, through its subsidiaries, has operated an in-house service center and retained service providers that conduct businesses predominantly in these regions.
Accordingly, Greenland, through its subsidiaries, has operated an in-house service center and retained service providers that conduct businesses predominantly in these regions.
In addition, the manufacturing process requires technical expertise and significant research and development budgets. As a result, companies entering the market must have significant financial and technical resources. Moreover, the time and cost required to establish a proven track record, necessary for general market acceptance, are substantial.
The typical competitive criteria are quality, price, technology, after-sales service, product offering, and performance record. The transmissions market is capital intensive. In addition, the manufacturing process requires technical expertise and significant research and development budgets. As a result, companies entering the market must have significant financial and technical resources.
HEVI is a wholly-owned subsidiary of Greenland and promotes sales of sustainable alternative products for the heavy industrial equipment industry, including electric industrial vehicles, in the North American market. Through its PRC subsidiaries, Greenland offers transmission products, which are key components for forklift trucks used in manufacturing and logistic applications, such as factories, workshops, warehouses, fulfilment centers, shipyards, and seaports.
ITEM 1. BUSINESS General Greenland Technologies Holding Corporation (the “Company” or “Greenland”) designs, develops, manufactures and sells components and products for the global material handling industries. Through its PRC subsidiaries, Greenland offers transmission products, which are key components for forklift trucks used in manufacturing and logistic applications, such as factories, workshops, warehouses, fulfilment centers, shipyards, and seaports.
Hangzhou Greenland is also committed to product supply chain integration and overseas sales. Shanghai Hengyu, a 62.5% owned subsidiary of Zhongchai Holding, was formed in PRC on September 10, 2005 and holds no assets other than an account receivable owed by Cenntro Holding Limited, the sole member of Zhongchai Holding prior to the closing of the Business Combination.
Hangzhou Greenland is also committed to product supply chain integration and overseas sales. Hengyu Capital Limited, a 62.5% owned subsidiary of Zhongchai Holding, was formed in Hong Kong on August 16, 2022. Hengyu Capital Limited does not have any business activities at this time and will be engaging in the business of investing.
ITEM 1. BUSINESS General Greenland Technologies Holding Corporation (the “Company” or “Greenland”) was incorporated on December 28, 2017 as a British Virgin Islands company with limited liability.
Through Zhongchai Holding and its subsidiaries, Greenland develops and manufactures traditional transmission products for material handling machineries in the PRC. Greenland was incorporated on December 28, 2017 as a British Virgin Islands company with limited liability.
Following the Business Combination (as described and defined below) in October 2019, the Company changed its name from Greenland Acquisition Corporation to Greenland Technologies Holding Corporation. Greenland serves as the parent company of Zhongchai Holding (Hong Kong) Limited, a holding company formed under the laws of the Hong Kong Special Administrative Region (“Hong Kong”) on April 23, 2009 (“Zhongchai Holding”).
(“Greenland Holding”), a holding company formed in the State of Delaware on August 28, 2023, which in turn acts as the holding company for Zhongchai Holding (Hong Kong) Limited, a holding company formed under the laws of the Hong Kong Special Administrative Region (“Hong Kong”) on April 23, 2009 (“Zhongchai Holding”). Zhongchai Holding’s subsidiaries include Zhejiang Zhongchai Machinery Co.
Hengyu Capital Limited does not have any business activities at this time and will be engaging in the business of investing. The remaining 37.5% of the capital stock of Hengyu Capital Limited is owned by Peter Zuguang Wang, the chairman of our board of directors.
The remaining 37.5% of the capital stock of Hengyu Capital Limited is owned by Peter Zuguang Wang, the chairman of our board of directors. Products Greenland provides transmission systems and integrated powertrains for material handling machineries, particularly for electric forklift trucks.
Removed
The Company was incorporated as a blank check company for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more target businesses.
Added
(“HEVI”), formerly known as Greenland Technologies Corp. to focus on the production and sale of electric industrial vehicles to meet the increasing demand for electric industrial vehicles and machinery powered by sustainable energy in order to reduce air pollution and lower carbon emissions. HEVI is a wholly owned subsidiary of Greenland incorporated under the laws of the State of Delaware.
Removed
Zhongchai Holding’s subsidiaries include Zhejiang Zhongchai Machinery Co. Ltd., an operating company formed under the laws of the PRC in 2005, Hangzhou Greenland Energy Technologies Co., Ltd.
Added
In addition, HEVI introduced a line of mobile DC battery chargers that support DC powered EV applications in the North America market. These products are available for purchase in the United States (“U.S.”) market.
Removed
Through Zhongchai Holding and its subsidiaries, Greenland develops and manufactures traditional transmission products for material handling machineries in the People’s Republic of China (the “PRC” or “China”). HEVI Corp. (“HEVI”), formerly known as Greenland Technologies Corp. prior to May 2022, was incorporated on January 14, 2020 under the laws of the State of Delaware.
Added
Following the Business Combination (as described and defined below) in October 2019, the Company changed its name from Greenland Acquisition Corporation to Greenland Technologies Holding Corporation . As of December 31, 2023, Cenntro Holding Limited owned 45.69% of our outstanding ordinary shares. Cenntro Holding Limited is controlled and beneficially owned by Mr.
Removed
The decrease in revenue was primarily the result of a decrease in the Company’s sales volume resulting from COVID-19 related lockdowns in China for the year ended December 31, 2022.
Added
As of the date of this Report, no ordinary shares of the Company have been sold under the at the market offering agreement.
Removed
Based on our revenues in the fiscal years ended December 31, 2022 and 2021, we believe that Greenland is one of the major developers and manufacturers of transmission products for small and medium-sized forklift trucks in China. Greenland’s transmission products are used in 1-ton to 15-tons forklift trucks, some with mechanical shift and some with automatic shift.
Added
Hengyu Capital Limited does not have any business activities at this time. Dissolution of Shanghai Hengyu Business Management Consulting Co., Ltd. From the consummation of the Business Combination to July 2023, Shanghai Hengyu Business Management Consulting Co., Ltd., a company formed in the PRC, was an indirect subsidiary of the Company, in which the Company owns 62.5% equity interests.
Removed
Hengyu Capital Limited does not have any business activities at this time and will be engaging in the business of investing. Corporate Structure The following diagram illustrates the current corporate structure of Greenland, including the jurisdiction of formation and ownership interest of each of its subsidiaries.
Added
On July 10, 2023, Shanghai Hengyu Business Management Consulting Co., Ltd. was dissolved under the laws of the PRC. Formation of Greenland Holding On August 28, 2023, Greenland Holding was formed in the State of Delaware with no shares issued.
Removed
The remaining 37.5% of Shanghai Hengyu’s capital stock is beneficially owned by Peter Zuguang Wang, the chairman of our board of directors. Hengyu Capital Limited, a 62.5% owned subsidiary of Zhognchai Holding, was formed in Hong Kong on August 16, 2022.
Added
On March 26, 2024, the Company entered into a share exchange agreement with Greenland Holding and Zhongchai Holding (the “2024 Share Exchange Agreement”), pursuant to which, on March 27, 2024, the Company transferred all the equity interests it held in Zhongchai Holding to Greenland Holding, and in return, Greenland Holding issued 100 shares to the Company, representing 100% of the issued and outstanding shares of Greenland Holding.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

69 edited+10 added−13 removed246 unchanged
Biggest changeOn February 17, 2023, the CSRC published the “Trial Measures and its accompanying guidelines and instructions, which came into effect on March 31, 2023, and will apply if a domestic enterprise issues shares, depositary receipts, corporate bonds convertible into shares, or other securities of an equity nature outside of the PRC, or lists its securities for trading outside of the PRC.
Biggest changeSee also “— Our PRC subsidiaries may be liable for improper use or appropriation of personal information provided by their customers and any failure to comply with PRC laws and regulations over data security could result in materially adverse impact on our business, results of operations, and our continued listing on Nasdaq .” On February 17, 2023, the CSRC published the Regulations of Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”) and its accompanying guidelines and instructions, which came into effect on March 31, 2023, and will apply if a domestic enterprise issues shares, depositary receipts, corporate bonds convertible into shares, or other securities of an equity nature outside of the PRC, or lists its securities for trading outside of the PRC.
See “Risk Factors—Risks Related to Doing Business in China—The PRC government exerts substantial influence over the manner in which we must conduct our business activities.
See “Risk Factors—Risks Related to Doing Business in China—The PRC government exerts substantial influence over the manner in which we must conduct our business activities.
Our subsidiaries may lose our competitive advantage, and their operations may suffer, if they fail to prevent the loss or misappropriation of, or disputes over, their intellectual property. Our subsidiaries rely on a combination of patents, trademarks, trade secrets and confidentiality agreements to protect their intellectual property rights.
Our subsidiaries may lose their competitive advantage, and their operations may suffer, if they fail to prevent the loss or misappropriation of, or disputes over, their intellectual property. Our subsidiaries rely on a combination of patents, trademarks, trade secrets and confidentiality agreements to protect their intellectual property rights.
Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders; ● PRC regulation of loans to, and direct investments in, PRC entities by offshore holding companies may delay or prevent us from using proceeds from our future financing activities to make loans or additional capital contributions to our PRC operating subsidiaries; ● We may rely on dividends paid by our subsidiaries for our cash needs, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on our ability to conduct business; ● Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment; ● U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China; and ● Our securities may be delisted and prohibited from being traded under the HFCA Act if the PCAOB is unable to inspect our auditor in the future.
Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders; ● PRC regulation of loans to, and direct investments in, PRC entities by offshore holding companies may delay or prevent us from using proceeds from our future financing activities to make loans or additional capital contributions to our PRC subsidiaries; ● We may rely on dividends paid by our subsidiaries for our cash needs, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on our ability to conduct business; ● Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment; ● U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China; and ● Our securities may be delisted and prohibited from being traded under the HFCA Act if the PCAOB is unable to inspect our auditor in the future.
Failure to meet delivery deadlines could result in the loss of customers and damage to our reputation and goodwill; ● Our subsidiaries face intense competition, and if we are unable to compete effectively, we may not be able to maintain profitability; ● Our revenues are highly dependent on a limited number of customers and the loss of any one of our subsidiaries’ major customers could materially and adversely affect our growth and revenues; ● As our subsidiaries expand their operations, they may need to establish a more diverse supplier network for raw materials.
Failure to meet delivery deadlines could result in the loss of customers and damage to our reputation and goodwill; ● Our subsidiaries face intense competition, and if we are unable to compete effectively, we may not be able to maintain profitability; 19 ● Our revenues are highly dependent on a limited number of customers and the loss of any one of our subsidiaries’ major customers could materially and adversely affect our growth and revenues; ● As our subsidiaries expand their operations, they may need to establish a more diverse supplier network for raw materials.
Moreover, intense competition may result in potential or actual litigation between our subsidiaries and their competitors relating to such activities as competitive sales practices, relationships with key suppliers and customers or other matters. 22 It is likely that our subsidiaries’ competitors will seek to develop similar competing products in the near future.
Moreover, intense competition may result in potential or actual litigation between our subsidiaries and their competitors relating to such activities as competitive sales practices, relationships with key suppliers and customers or other matters. It is likely that our subsidiaries’ competitors will seek to develop similar competing products in the near future.
In the event that any such approval is required or that there are other requirements we are obligated to comply with, we cannot predict whether or how soon we will be able to obtain such approvals and/or comply with such requirements.” and “Risk Factors—Risks Related to Doing Business in China—We may be liable for improper use or appropriation of personal information provided by our customers and any failure to comply with PRC laws and regulations over data security could result in materially adverse impact on our business, results of operations, and our continued listing on Nasdaq”; 20 ● We may be liable for improper use or appropriation of personal information provided by our customers and any failure to comply with PRC laws and regulations over data security could result in materially adverse impact on our business, results of operations, and our continued listing on Nasdaq; ● You may have difficulty enforcing judgments against us; ● Under the Enterprise Income Tax Law, we may be classified as a “Resident Enterprise” of China.
In the event that any such approval is required or that there are other requirements we are obligated to comply with, we cannot predict whether or how soon we will be able to obtain such approvals and/or comply with such requirements.” and “Risk Factors—Risks Related to Doing Business in China—We may be liable for improper use or appropriation of personal information provided by our customers and any failure to comply with PRC laws and regulations over data security could result in materially adverse impact on our business, results of operations, and our continued listing on Nasdaq”; 20 ● Our subsidiaries may be liable for improper use or appropriation of personal information provided by their customers and any failure to comply with PRC laws and regulations over data security could result in materially adverse impact on our business, results of operations, and our continued listing on Nasdaq; ● You may have difficulty enforcing judgments against us; ● Under the PRC Enterprise Income Tax Law, we may be classified as a “Resident Enterprise” of China.
If the PCAOB is unable to inspect the company’s auditors for three consecutive years, the company’s securities are prohibited from trading on a national exchange. 37 On March 24, 2021, the SEC announced that it had adopted interim final amendments to implement congressionally mandated submission and disclosure requirements of the HFCA Act .
If the PCAOB is unable to inspect the company’s auditors for three consecutive years, the company’s securities are prohibited from trading on a national exchange. On March 24, 2021, the SEC announced that it had adopted interim final amendments to implement congressionally mandated submission and disclosure requirements of the HFCA Act .
As of the date of this Report, our PRC subsidiaries have not been ordered to pay outstanding contributions or related penalties. If labor costs in the PRC increase substantially, our PRC subsidiaries’ business and our costs of operations may be adversely affected. In recent years, the Chinese economy has experienced inflation and labor cost increases.
As of the date of this Report, our PRC subsidiaries have not been ordered to pay outstanding contributions or related penalties. 24 If labor costs in the PRC increase substantially, our PRC subsidiaries’ business and our costs of operations may be adversely affected. In recent years, the Chinese economy has experienced inflation and labor cost increases.
Any interruptions to, or decline in, the amount or quality of our subsidiaries’ raw materials supply could materially disrupt our subsidiaries’ production and adversely affect our subsidiaries’ business and our financial condition and financial prospects. To remain competitive, our subsidiaries have introduced new lines of business, including the production and sale of electric industrial heavy equipment.
Any interruptions to, or decline in, the amount or quality of our subsidiaries’ raw materials supply could materially disrupt our subsidiaries’ production and adversely affect our subsidiaries’ business and our financial condition and financial prospects. 22 To remain competitive, our subsidiaries have introduced new lines of business, including the production and sale of electric industrial heavy equipment.
Any severe or prolonged slowdown in the global or PRC economy may materially and adversely affect our business, results of operations and financial condition. 33 You may have difficulty enforcing judgments against us. A significant portion of our assets are located, and a substantial amount of our subsidiaries’ operations are conducted, in the PRC.
Any severe or prolonged slowdown in the global or PRC economy may materially and adversely affect our business, results of operations and financial condition. You may have difficulty enforcing judgments against us. A significant portion of our assets are located, and a substantial amount of our subsidiaries’ operations are conducted, in the PRC.
To the extent our subsidiaries are unable to pass on future price increases in raw materials to their customers, the revenues and profitability of our business could be adversely affected. We are subject to various risks and uncertainties that might affect our subsidiaries’ ability to procure raw materials .
To the extent our subsidiaries are unable to pass on future price increases in raw materials to their customers, the revenues and profitability of our business could be adversely affected. 23 We are subject to various risks and uncertainties that might affect our subsidiaries’ ability to procure raw materials .
If our subsidiaries fail to establish their strengths or maintain their competitiveness in those industries, our business prospects, results of operations and financial condition may be materially and adversely affected. 24 Volatile steel prices can cause significant fluctuations in our operating results.
If our subsidiaries fail to establish their strengths or maintain their competitiveness in those industries, our business prospects, results of operations and financial condition may be materially and adversely affected. Volatile steel prices can cause significant fluctuations in our operating results.
The PRC government also exercises significant control over China’s economic growth through allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, and providing preferential treatment to particular industries or companies. 28 While the PRC economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy, and the rate of growth has been slowing since 2012.
The PRC government also exercises significant control over China’s economic growth through allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, and providing preferential treatment to particular industries or companies. 26 While the PRC economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy, and the rate of growth has been slowing since 2012.
As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our ordinary shares as a source for any future dividend income. 39 Our board of directors has complete discretion as to whether to distribute dividends, subject to certain requirements of British Virgin Islands law.
As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our ordinary shares as a source for any future dividend income. 34 Our board of directors has complete discretion as to whether to distribute dividends, subject to certain requirements of British Virgin Islands law.
Furthermore, our shareholders whose jurisdictions of residence have tax treaties or arrangements with China may not qualify for benefits under such tax treaties or arrangements. 35 We may be unable to complete a business combination transaction efficiently or on favorable terms due to complicated merger and acquisition regulations and certain other PRC regulations.
Furthermore, our shareholders whose jurisdictions of residence have tax treaties or arrangements with China may not qualify for benefits under such tax treaties or arrangements. 31 We may be unable to complete a business combination transaction efficiently or on favorable terms due to complicated merger and acquisition regulations and certain other PRC regulations.
Such a situation could be costly and time- consuming and could distract our management from growing our business. Even if such allegations are ultimately proven to be groundless, allegations against us could severely impact our business operations and shareholder’s equity, and the value of any investment in our ordinary shares could be greatly reduced or rendered worthless.
Such a situation could be costly and time- consuming and could distract our management from growing our business. Even if such allegations are ultimately proven to be groundless, allegations against us could severely impact our business operations and shareholder’s equity, and the value of any investment in our ordinary shares could be greatly reduced or rendered worthless. ITEM 1B.
In addition, although we have entered into a non-competition agreement with Mr. Peter Zuguang Wang, our controlling shareholder and chairman of the board of directors, there is no assurance that Mr. Wang will not join our competitors or form a competing business. If any dispute arises between us and Mr.
In addition, although we have entered into a non-competition agreement with Mr. Peter Zuguang Wang, the chairman of our board of directors, there is no assurance that Mr. Wang will not join our competitors or form a competing business. If any dispute arises between us and Mr.
If the Chinese government significantly regulates the business operations of our PRC subsidiaries in the future and our PRC subsidiaries are not able to substantially comply with such regulations, our business operations may be materially adversely affected and the value of our ordinary shares may significantly decrease” and “Risk Factors—Risks Related to Doing Business in China—Uncertainties with respect to the PRC legal system could adversely affect us”; ● The Chinese government may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers.
If the Chinese government significantly regulates the business operations of our PRC subsidiaries in the future and our PRC subsidiaries are not able to substantially comply with such regulations, our business operations may be materially adversely affected and the value of our ordinary shares may significantly decrease” and “Risk Factors—Risks Related to Doing Business in China—Uncertainties with respect to the PRC legal system could adversely affect us and our PRC subsidiaries”; ● The Chinese government may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers.
Risks Related to Doing Business in China For more detailed discussions of the following risks, see “Risk Factors—Risks Related to Doing Business in China” on pages 28 through 39. ● Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations; ● Uncertainties arising from the legal system in China, including uncertainties regarding the interpretation and enforcement of PRC laws and the possibility that regulations and rules can change quickly with little advance notice, could hinder our ability to offer or continue to offer our securities, result in a material adverse change to our business operations, and damage our reputation, which could materially and adversely affect our financial condition and results of operations and cause our securities to significantly decline in value or become worthless.
Risks Related to Doing Business in China For more detailed discussions of the following risks, see “Risk Factors—Risks Related to Doing Business in China” on pages 26 through 34. ● Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations; ● Uncertainties arising from the legal system in China, including uncertainties regarding the interpretation and enforcement of PRC laws and the possibility that regulations and rules can change quickly with little advance notice, could hinder our ability to offer or continue to offer our securities, result in a material adverse change to our business operations, and damage our reputation, which could materially and adversely affect our financial condition and results of operations and cause our securities to significantly decline in value or become worthless.
See “Risk Factors—Risks Related to Doing Business in China—A recent joint statement by the SEC and the PCAOB, proposed rule changes submitted by Nasdaq, and the HFCA Act 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 Our Ordinary Shares For more detailed discussions of the following risks, see “Risk Factors—Risks Related to Our Ordinary Shares” on pages 39 through 40. ● Future sales of our ordinary shares, whether by us or our shareholders, could cause the price of our ordinary shares to decline; 21 ● Because we do not expect to pay dividends in the foreseeable future, you must rely on the price appreciation of our ordinary shares for return on your investment; and ● Techniques employed by short sellers may drive down the market price of our ordinary shares.
See “Risk Factors—Risks Related to Doing Business in China—A recent joint statement by the SEC and the PCAOB, proposed rule changes submitted by Nasdaq, and the HFCA Act 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 Our Ordinary Shares For more detailed discussions of the following risks, see “Risk Factors—Risks Related to Our Ordinary Shares” on pages 34 through 35. ● Future sales of our ordinary shares, whether by us or our shareholders, could cause the price of our ordinary shares to decline; ● Because we do not expect to pay dividends in the foreseeable future, you must rely on the price appreciation of our ordinary shares for return on your investment; and ● Techniques employed by short sellers may drive down the market price of our ordinary shares.
Therefore, as of the date of this prospectus, we and our PRC subsidiaries have not applied for any permission or approval from any PRC governmental authority in connection with our offshore listing or offering and, as such, no such permission or approval has been granted or denied.
Therefore, as of the date of this Report, we and our PRC subsidiaries have not applied for any permission or approval from any PRC governmental authority in connection with our offshore listing or offering and, as such, no such permission or approval has been granted or denied.
Risks Related to Our Business and Industry For more detailed discussions of the following risks, see “Risk Factors—Risks Related to our Business and Industry” on pages 22 through 28. ● Our subsidiaries’ business operations are cash intensive, and our subsidiaries’ business could be adversely affected if we fail to maintain sufficient levels of liquidity and working capital; ● We grant relatively long payment terms for accounts receivable which can adversely affect our cash flow; ● Our subsidiaries face short lead-times for delivery of products to customers.
Risks Related to Our Business and Industry For more detailed discussions of the following risks, see “Risk Factors—Risks Related to our Business and Industry” on pages 21 through 26. ● Our subsidiaries’ business operations are cash intensive, and our subsidiaries’ business could be adversely affected if we fail to maintain sufficient levels of liquidity and working capital; ● We grant relatively long payment terms for accounts receivable which can adversely affect our cash flow; ● Our subsidiaries face short lead-times for delivery of products to customers.
If our efforts are not successful, our results of operations may be materially and adversely affected; ● New lines of business, including the production and sale of electric industrial heavy equipment, may subject us to additional risks; 19 ● Volatile steel prices can cause significant fluctuations in our operating results.
If these efforts are not successful, our results of operations may be materially and adversely affected; ● New lines of business, including the production and sale of electric industrial heavy equipment, may subject us and our subsidiaries to additional risks; ● Volatile steel prices can cause significant fluctuations in our operating results.
Under the PRC EIT Law, we may be classified as a “Resident Enterprise” of China. Any classification as such will likely result in unfavorable tax consequences to us and our non-PRC shareholders.
Under the PRC Enterprise Income Tax Law, we may be classified as a “Resident Enterprise” of China. Any classification as such will likely result in unfavorable tax consequences to us and our non-PRC shareholders.
Our revenues are highly dependent on a limited number of customers and the loss of any one of our subsidiaries’ major customers could materially and adversely affect our growth and revenues. During the fiscal years ended December 31, 2022 and 2021, our subsidiaries’ five largest customers contributed 50.85% and 54.06% of our revenues, respectively.
Our revenues are highly dependent on a limited number of customers and the loss of any one of our subsidiaries’ major customers could materially and adversely affect our growth and revenues. During the fiscal years ended December 31, 2023 and 2022, our subsidiaries’ five largest customers contributed 45.06% and 50.85% of our revenues, respectively.
A protracted conflict between Ukraine and Russia, any escalation of that conflict, and the wider global economy and market conditions could, in turn, have a material adverse impact on our business, financial condition, cash flows and results of operations and could cause the market value of our ordinary shares to decline.
A protracted conflict between Ukraine and Russia or between Israel and Hamas, any escalation of either conflict, and the wider global economy and market conditions could, in turn, have a material adverse impact on our business, financial condition, cash flows and results of operations and could cause the market value of our ordinary shares to decline.
Our subsidiaries face short lead-times for delivery of products to customers. Failure to meet delivery deadlines could result in the loss of customers and damage to our reputation and goodwill. Most of our subsidiaries’ customers are large manufacturers, who generally place large orders for our subsidiaries’ products and require prompt delivery.
Failure to meet delivery deadlines could result in the loss of customers and damage to our reputation and goodwill. Most of our subsidiaries’ customers are large manufacturers, who generally place large orders for our subsidiaries’ products and require prompt delivery.
Risks Related to our Business and Industry Our subsidiaries’ business operations are cash intensive, and our subsidiaries’ business could be adversely affected if we fail to maintain sufficient levels of liquidity and working capital. As of December 31, 2022, we had approximately $16.30 million of cash and cash equivalents.
Risks Related to our Business and Industry Our subsidiaries’ business operations are cash intensive, and our subsidiaries’ business could be adversely affected if we fail to maintain sufficient levels of liquidity and working capital. As of December 31, 2023, we had approximately $22.98 million of cash and cash equivalents.
We grant relatively long payment terms for accounts receivable which can adversely affect our cash flow. As is customary in China, for competitive reasons, we grant relatively long payment terms to most of our subsidiaries’ customers. The reserves we establish for our receivables may not be adequate based on the current bad debts.
We grant relatively long payment terms for accounts receivable which can adversely affect our cash flow. As is customary in China, for competitive reasons, we grant relatively long payment terms to most of our subsidiaries’ customers. The allowances we establish for our receivables may not be adequate.
Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC.
The Protocol remains unpublished and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC.
These products are available for purchase in the U.S. market. In August 2022, HEVI launched a 54,000 square foot industrial electric vehicle assembly site in Baltimore, Maryland to support local services, assembly and distribution of its electric industrial heavy equipment product line. 23 There are risks in connection with this new line of business.
In August 2022, HEVI launched a 54,000 square foot industrial electric vehicle assembly site in Baltimore, Maryland to support local services, assembly and distribution of its electric industrial heavy equipment product line. There are risks in connection with this new line of business.
If we are unable to control our labor costs or pass such increased labor costs on to our subsidiaries’ customers, our financial condition and results of operations may be adversely affected. We are subject to risks related to a substantial balance due from a related party.
If we are unable to control our labor costs or pass such increased labor costs on to our subsidiaries’ customers, our financial condition and results of operations may be adversely affected. We recorded a full provision for expected credit losses for a substantial balance due from a related party.
However, if we are deemed to be a critical information infrastructure operator or an online platform operator that is engaged in data processing and holds personal information of more than one million users, we could be subject to PRC cybersecurity review in the future. 32 As there remains significant uncertainty in the interpretation and enforcement of relevant PRC cybersecurity laws and regulations, we could be subject to cybersecurity review.
However, if we are deemed to be a critical information infrastructure operator or an online platform operator that is engaged in data processing and holds personal information of more than one million users, we could be subject to PRC cybersecurity review in the future.
If such approval is withheld or the PRC government imposes other restrictions on the convertibility of Renminbi into foreign currencies, we may not be able to utilize our revenues effectively, and as a result, our business and results of operations may be materially adversely affected, and the value of our ordinary shares may decrease.
If such approval is withheld or the PRC government imposes other restrictions on the convertibility of Renminbi into foreign currencies, we may not be able to utilize our revenues effectively, and as a result, our business and results of operations may be materially adversely affected, and the value of our ordinary shares may decrease. 32 U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China.
For the years ended December 31, 2022 and 2021, Greenland’s single largest customer, Hangcha Group, accounted for 17.14% and 18.47%, respectively, of Greenland’s total revenue, and Greenland’s second largest customer, Longgong Forklift Truck, accounted for 14.14% and 14.94%, respectively, of Greenland’s total revenue.
For the years ended December 31, 2023 and 2022, Greenland’s single largest customer, Hangcha Group, accounted for 14.98% and 17.14%, respectively, of Greenland’s total revenue, and Greenland’s second largest customer, Longgong Forklift Truck, accounted for 11.75% and 14.14%, respectively, of Greenland’s total revenue.
Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties. 29 We believe that our PRC subsidiaries’ operations in China are in material compliance with all applicable legal and regulatory requirements.
Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.
The misappropriation or duplication of our subsidiaries’ intellectual property could disrupt their ongoing business, distract our management and employees, reduce our revenues and increase our expenses. Our subsidiaries may need to litigate to enforce their intellectual property rights.
The misappropriation or duplication of our subsidiaries’ intellectual property could disrupt their ongoing business, distract our management and employees, reduce our revenues and increase our expenses. Our subsidiaries may need to litigate to enforce their intellectual property rights. Any such litigation could be time consuming and costly and the outcome of any such litigation cannot be guaranteed.
Although Circular 82 and Bulletin 45 explicitly provide that the above standards apply to enterprises that are registered outside China and controlled by PRC enterprises or PRC enterprise groups, Circular 82 may reflect the SAT’s criteria for determining the tax residence of foreign enterprises in general.
Although Circular 82 and Bulletin 45 explicitly provide that the above standards apply to enterprises that are registered outside China and controlled by PRC enterprises or PRC enterprise groups, Circular 82 may reflect the SAT’s criteria for determining the tax residence of foreign enterprises in general. 30 If the PRC tax authorities determine that we are a “resident enterprise” for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow.
In our case, this would mean that income such as non-China source income would be subject to PRC enterprise income tax at a rate of 25%.
First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. In our case, this would mean that income such as non-China source income would be subject to PRC enterprise income tax at a rate of 25%.
Pursuant to each annual determination by the PCAOB, the SEC will, on an annual basis, identify issuers that have used non-inspected audit firms and thus are at risk of such suspensions in the future.
Pursuant to each annual determination by the PCAOB, the SEC will, on an annual basis, identify issuers that have used non-inspected audit firms and thus are at risk of such suspensions in the future. 33 On August 26, 2022, the CSRC, the MOF, and the PCAOB signed the Protocol, governing inspections and investigations of audit firms based in China and Hong Kong.
The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive a significant portion of our revenues in Renminbi.
Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment. The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive a significant portion of our revenues in Renminbi.
In the event that our PRC subsidiaries are not able to substantially comply with any existing or newly adopted laws and regulations, our business operations may be materially adversely affected and the value of our ordinary shares may significantly decrease.
In the event that our PRC subsidiaries are not able to substantially comply with any existing or newly adopted laws and regulations, our business operations may be materially adversely affected and the value of our ordinary shares may significantly decrease. 27 Furthermore, the PRC government authorities may strengthen oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers like us.
While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all.
While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all. In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert Renminbi into foreign currency.
Wang, we may incur substantial costs and expenses in order to enforce the non-competition agreement in China, and we may be unable to enforce it at all. 27 We do not maintain “key person” insurance, and as a result, we may incur losses if any of our directors, executive officers, senior manager or other key employees chooses to terminate his or her services with us.
We do not maintain “key person” insurance, and as a result, we may incur losses if any of our directors, executive officers, senior manager or other key employees chooses to terminate his or her services with us. We do not maintain “key person” insurance for our directors, executive officers, senior management or other key employees.
Since 2021, a few waves of COVID-19 infections emerged in various regions of China, and in response, the Chinese government implemented certain anti-COVID measures and protocols.
New COVID-19 variants have also emerged, potentially extending the period during which COVID-19 will negatively impact the global economy. Since 2021, a few waves of COVID-19 infections emerged in various regions of China, and in response, the Chinese government implemented certain anti-COVID measures and protocols.
However, if it fails to comply with the Trial Measures during future issuance of securities or listing on other stock exchanges outside of China, we may be subjected sanctions imposed by the PRC regulatory authorities, and our reputation, financial condition, and results of operations may be materially and adversely affected.
However, if it fails to comply with the Trial Measures during future issuance of securities or listing on other stock exchanges outside of China, we may be subjected sanctions imposed by the PRC regulatory authorities, and our reputation, financial condition, and results of operations may be materially and adversely affected. 28 Our PRC subsidiaries may be liable for improper use or appropriation of personal information provided by their customers and any failure to comply with PRC laws and regulations over data security could result in materially adverse impact on our business, results of operations, and our continued listing on Nasdaq.
As of the date of this Report, we do not expect that the current PRC laws on cybersecurity or data security would have a material adverse impact on our business operations.
The PRC Data Security Law also provides for a national security review procedure for data activities that may affect national security and imposes export restrictions on certain data an information. 29 As of the date of this Report, we do not expect that the current PRC laws on cybersecurity or data security would have a material adverse impact on our business operations.
Through its subsidiaries, we hold trademarks and other intellectual properties that are critical to our business in the PRC. Any of our intellectual property rights could be challenged, invalidated, circumvented or misappropriated, or such intellectual property may not be sufficient to provide us with competitive advantages.
Any of our intellectual property rights could be challenged, invalidated, circumvented or misappropriated, or such intellectual property may not be sufficient to provide us with competitive advantages.
Further, if we were treated as a “resident enterprise” by PRC tax authorities, we would be subject to taxation in both China and such countries in which we have taxable income, and our PRC tax may not be creditable against such other taxes. 34 PRC regulation of loans to, and direct investments in, PRC entities by offshore holding companies may delay or prevent us from using proceeds from our future financing activities to make loans or additional capital contributions to our PRC subsidiaries.
Further, if we were treated as a “resident enterprise” by PRC tax authorities, we would be subject to taxation in both China and such countries in which we have taxable income, and our PRC tax may not be creditable against such other taxes.
In addition, we could become subject to enhanced cybersecurity review or investigations launched by PRC regulators in the future.
As there remains significant uncertainty in the interpretation and enforcement of relevant PRC cybersecurity laws and regulations, we could be subject to cybersecurity review. In addition, we could become subject to enhanced cybersecurity review or investigations launched by PRC regulators in the future.
Our subsidiaries’ business and our results of operations, financial conditions and prospects could be adversely affected directly, as well as indirectly, to the extent that the ongoing COVID-19 pandemic harms the Chinese and global economy in general. We may not be able to effectively protect our intellectual property from unauthorized use by others.
The extent to which the COVID-19 pandemic impacts our future results remains uncertain, and we are closely monitoring its impact on us. Our subsidiaries’ business and our results of operations, financial conditions and prospects could be adversely affected directly, as well as indirectly, to the extent that the ongoing COVID-19 pandemic harms the Chinese and global economy in general.
However, the potential downturn brought by, and the duration of, the COVID-19 pandemic may be difficult to assess or predict, and any associated negative impact on us will depend on many factors beyond our control. The extent to which the COVID-19 pandemic impacts our future results remains uncertain, and we are closely monitoring its impact on us.
For the fiscal years ended December 31, 2023 and 2022, we experienced decreased and decreased raw material costs, respectively. However, the potential downturn brought by, and the duration of, the COVID-19 pandemic may be difficult to assess or predict, and any associated negative impact on us will depend on many factors beyond our control.
U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China. The SEC, the U.S. Department of Justice and other U.S. authorities may also have difficulties in bringing and enforcing actions against us or our directors or executive officers in the PRC.
The SEC, the U.S. Department of Justice and other U.S. authorities may also have difficulties in bringing and enforcing actions against us or our directors or executive officers in the PRC. The SEC has stated that there are significant legal and other obstacles to obtaining information needed for investigations or litigation in China.
Any such litigation could be time consuming and costly and the outcome of any such litigation cannot be guaranteed. 25 Our PRC subsidiaries have limited insurance coverage for their operations in China and may incur losses resulting from product liability claims, business interruption or natural disasters.
Our PRC subsidiaries have limited insurance coverage for their operations in China and may incur losses resulting from product liability claims, business interruption or natural disasters. HEVI, our subsidiary in the U.S., maintains commercial general liability insurance for its business operations.
Furthermore, the PRC government authorities may strengthen oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers like us. Such actions taken by the PRC government authorities may intervene or influence the operations of our PRC subsidiaries at any time, which may be beyond our control.
Such actions taken by the PRC government authorities may intervene or influence the operations of our PRC subsidiaries at any time, which may be beyond our control.
We and our subsidiaries may not be able to hire and retain these personnel at compensation levels consistent with our existing compensation and salary structure. Many of the companies with which we and our subsidiaries compete for experienced employees have greater resources than we and our subsidiaries have and may be able to offer more attractive terms of employment.
We and our subsidiaries may not be able to hire and retain these personnel at compensation levels consistent with our existing compensation and salary structure.
We are subject to the risk that we may be unable to collect accounts receivable in a timely manner. If the accounts receivable cannot be collected in time, or at all, a significant amount of bad debt expense will occur, and our business, financial condition and results of operation will likely be materially and adversely affected.
If the accounts receivable cannot be collected in time, or at all, a significant amount of expected credit losses will occur, and our business, financial condition and results of operation will likely be materially and adversely affected. 21 Our subsidiaries face short lead-times for delivery of products to customers.
In addition, we and our subsidiaries invest significant time and expense in training our employees, which increases their value to competitors who may seek to recruit them.
Many of the companies with which we and our subsidiaries compete for experienced employees have greater resources than we and our subsidiaries have and may be able to offer more attractive terms of employment. 25 In addition, we and our subsidiaries invest significant time and expense in training our employees, which increases their value to competitors who may seek to recruit them.
If any of our executive officers or key employees joins a competitor or forms a competing company, we may lose customers, operational know-how and key professionals and staff members. We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing invasion of Ukraine by Russia.
We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing invasion of Ukraine by Russia and conflicts between Israel and Hamas.
The recent developments would add uncertainties to our offering and may result in prohibitions on the trading of our ordinary shares on the Nasdaq Stock Market, if our auditors fail to meet the PCAOB inspection requirement in time. 38 We plan to empower our audit committee to take the PCAOB’s lack of inspection, as applicable, into account in connection with the oversight of our independent registered public accounting firm’s audit procedures and establish relevant internal quality control procedures.
The recent developments would add uncertainties to our offering and may result in prohibitions on the trading of our ordinary shares on the Nasdaq Stock Market, if our auditors fail to meet the PCAOB inspection requirement in time.
See also “— Our PRC subsidiaries may be liable for improper use or appropriation of personal information provided by their customers and any failure to comply with PRC laws and regulations over data security could result in materially adverse impact on our business, results of operations, and our continued listing on Nasdaq .” 30 As of the date of this Report, we believe we and our PRC subsidiaries are not required to obtain any permission from PRC authorities (including the CSRC and the CAC) to operate our PRC subsidiaries’ business as presently conducted or listing on Nasdaq.
As of the date of this Report, we believe we and our PRC subsidiaries are not required to obtain any permission from PRC authorities (including the CSRC and the CAC) to operate our PRC subsidiaries’ business as presently conducted or listing on Nasdaq.
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. The PCAOB has been able to inspect our auditor, WWC P.C., an independent registered public accounting firm with its headquarters in San Mateo, California, with its last inspection conducted in November 2021.
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.
Such failure to be paid back by Cenntro Holding Limited could have a material negative impact on our balance sheet. 26 The ongoing COVID-19 pandemic could adversely affect our business, results of operations and financial condition. The ongoing COVID-19 pandemic has continued to spread across the world and has created unique global and industry-wide challenges.
The ongoing COVID-19 pandemic could adversely affect our business, results of operations and financial condition. The ongoing COVID-19 pandemic has continued to spread across the world and has created unique global and industry-wide challenges. COVID-19 has resulted in quarantines, travel restrictions, and the temporary closure of offices and facilities in China and many other countries.
In addition, as a result of the ongoing conflict between Russia and Ukraine, we may experience other risks, difficulties and challenges in the way we conduct our business and operations generally. For example, the conflict could adversely affect supply chains and impact our ability to control raw material costs.
For example, the conflict could adversely affect supply chains and impact our ability to control raw material costs.
However, in the fiscal year ended December 31, 2021, these scattered outbreaks were brought under control in a relatively short period of time, and the COVID-19 pandemic had a limited impact on our financial condition and results of operations in the fiscal year ended December 31, 2021.
Chinese industries have gradually resumed businesses as the Chinese government lifted its COVID-19 protocols and measures since December 2022. The COVID-19 pandemic had a limited impact on our financial condition and results of operations in the fiscal year ended December 31, 2023 and 2022.
According to the above regulations, the Company is an existing enterprise, which do not be required to file immediately, and filing should be made as required if they involve refinancing and other filing matters. 31 Our PRC subsidiaries may be liable for improper use or appropriation of personal information provided by their customers and any failure to comply with PRC laws and regulations over data security could result in materially adverse impact on our business, results of operations, and our continued listing on Nasdaq.
According to the above regulations, the Company is an existing enterprise, which do not be required to file immediately, and filing should be made as required if they involve refinancing and other filing matters.
U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and Russia’s launch of a full-scale military invasion of Ukraine in February 2022. Although the length and impact of the ongoing military conflict is highly unpredictable, the war in Ukraine has led to market disruptions, including significant volatility in commodity prices, credit, and capital markets.
U.S. and global markets are experiencing volatility and disruption as a result of the outbreak or escalation of wards including Russia’s launch of a full-scale military invasion of Ukraine, conflicts between Israel and Hamas.
As such, it is not subject to the designations issued by the PCAOB on December 16, 2021.
The PCAOB has been able to inspect our auditor, WWC P.C., an independent registered public accounting firm with its headquarters in San Mateo, California, and its latest inspection has been ongoing since November 2023. As such, it is not subject to the designations issued by the PCAOB on December 16, 2021.
Removed
HEVI, our subsidiary in the U.S., maintains commercial general liability insurance for its business operations.
Added
We are subject to the risk that we may be unable to collect accounts receivable in a timely manner.
Removed
As of December 31, 2022, we were owed $36.46 million from Cenntro Holding Limited, our controlling shareholder, and such amount is recorded as “due from related parties” on our balance sheet.
Added
HEVI also introduced mobile DC battery chargers to support a growing market of EV applications requiring DC charging capabilities in the North America market. These products are available for purchase in the U.S. market.
Removed
We expect the amount due from Cenntro Holding Limited to be paid back based on certain payment schedules, with the last payment to be made by June 30, 2024, as the Company and Cenntro Holding Limited mutually agreed to an extension of the repayment deadline from April 27, 2022.
Added
As of December 31, 2023, Cenntro Holding Limited owed us $34.46 million. We do not expect the amount of $34.46 million due from Cenntro Holding Limited will be repaid. As a result, we recorded a full provision for expected credit loss for the year ended December 31, 2023.
Removed
However, there is no guarantee that such amount will be repaid in whole or in part before the end of June 2024, or at all.
Added
We may not be able to effectively protect our intellectual property from unauthorized use by others. Through its subsidiaries, we hold patents, trademarks and other intellectual properties that are critical to our business in the PRC.
Removed
COVID-19 has resulted in quarantines, travel restrictions, and the temporary closure of offices and facilities in China and many other countries. New COVID-19 variants have also emerged, potentially extending the period during which COVID-19 will negatively impact the global economy.
Added
Wang, we may incur substantial costs and expenses in order to enforce the non-competition agreement in China, and we may be unable to enforce it at all.
Removed
For the fiscal year ended December 31, 2022, we experienced rising raw material costs which we believe to be short term, as China lifted its COVID-19 protocols and measures in December 2022.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur manufacturing and R&D facilities are all located in Xinchang County, Zhejiang Province, China. 40 Properties Owned by us As of December 31, 2022, Greenland held land use rights of four parcels of land with an aggregate site area of approximately 81,171 square meters, located in Xinchang County, Zhejiang Province, PRC.
Biggest changeProperties Owned by us As of December 31, 2023, Greenland held land use rights of four parcels of land with an aggregate site area of approximately 81,171 square meters, located in Xinchang County, Zhejiang Province, PRC. The terms of these land use rights are due to expire on November 14, 2062.
Properties Leased by us As of December 31, 2022, Greenland leased an office space with an aggregate floor area of approximately 1,440 square feet in New Jersey and a monthly rent of $2,850.
Properties Leased by us As of December 31, 2023, Greenland leased an office space with an aggregate floor area of approximately 1,440 square feet in New Jersey and a monthly rent of $2,820.
As of December 31, 2022, Greenland leased an assembly space with an aggregate floor area of approximately 54,121 square feet in Maryland and a monthly rent of $37,208. Greenland will continue to pursue additional properties to further support the expansion of its HEVI business in the United States.
As of December 31, 2023, Greenland leased an assembly space with an aggregate floor area of approximately 54,121 square feet in Maryland and a monthly rent of $46,944. Greenland will continue to pursue additional properties to further support the expansion of its HEVI business in the United States.
ITEM 2. PROPERTIES The address of our principal executive offices and corporate offices is 50 Millstone Road, Building 400, Suite 130, East Windsor, NJ 08512, USA. Our office in China is located at 11-F, Building #12, Sunking Plaza, Gaojiao Road, Hangzhou, Zhejiang Province, China, 311122.
ITEM 2. PROPERTIES The address of our principal executive offices and corporate offices is 50 Millstone Road, Building 400, Suite 130, East Windsor, NJ 08512, USA. Our office in China is located at 11-F, Building #12, Sunking Plaza, Gaojiao Road, Hangzhou, Zhejiang Province, China, 311122. Our manufacturing and R&D facilities are all located in Xinchang County, Zhejiang Province, China.
The terms of these land use rights are due to expire on November 14, 2062. As of December 31, 2022, Greenland held three building ownership certificates for three buildings with an aggregate gross floor area of approximately 44,751 square meters. These properties are primarily used for production and office purposes.
As of December 31, 2023, Greenland held three building ownership certificates for three buildings with an aggregate gross floor area of approximately 44,751 square meters. These properties are primarily used for production and office purposes.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThere are currently no legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results, except the following matter. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 41 PART II
Biggest changeThere are currently no legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results, except the following matter. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 36 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+0 added−9 removed3 unchanged
Biggest changeFinally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Transfer Agent The transfer agent for our ordinary shares is Continental Stock Transfer & Trust Company, located at 1 State Street 30th Floor, New York, NY 10004-1561.
Biggest changeTransfer Agent The transfer agent for our ordinary shares is Continental Stock Transfer & Trust Company, located at 1 State Street 30th Floor, New York, NY 10004-1561. The telephone number of Continental Stock Transfer & Trust Company is (212) 509-4000.
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.” Recent Sales of Unregistered Securities During the fiscal years ended December 31, 2022 and 2021, we did not have sales of unregistered securities other than those already disclosed in the quarterly reports on Form 10-Q and the current reports on Form 8-K, and the following transactions.
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.” Recent Sales of Unregistered Securities During the fiscal years ended December 31, 2023 and 2022, we did not have sales of unregistered securities other than those already disclosed in the quarterly reports on Form 10-Q and the current reports on Form 8-K.
As such, we do not expect to pay any cash dividends in the foreseeable future. Shareholders of Record As of March 28, 2023, we had 11 recorded holders of our ordinary shares. This number excludes any estimate by us of the number of beneficial owners of shares held in street name, the accuracy of which cannot be guaranteed.
As such, we do not expect to pay any cash dividends in the foreseeable future. Shareholders of Record As of April 16, 2024, we had eleven (11) recorded holders of our ordinary shares. This number excludes any estimate by us of the number of beneficial owners of shares held in street name, the accuracy of which cannot be guaranteed.
As of March 30, 2023, the last sale price reported on the Nasdaq Capital Market for our ordinary shares was approximately $1.58 per share. Dividend Policy We intend to retain all of our available funds and any future earnings to fund the development and growth of our subsidiaries’ business.
As of April 12, 2024, the last sale price reported on the Nasdaq Capital Market for our ordinary shares was approximately $1.96 per share. Dividend Policy We intend to retain all of our available funds and any future earnings to fund the development and growth of our subsidiaries’ business.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. 37 ITEM 6. [RESERVED]
The telephone number of Continental Stock Transfer & Trust Company is (212) 509-4000. 42 Equity Compensation Plan Information For information on the securities authorized for issuance under our equity compensation plan, please see “Item 12.
Equity Compensation Plan Information For information on the securities authorized for issuance under our equity compensation plan, please see “Item 12.
Removed
Effective August 11, 1993, the SEC adopted Rule 15g-9, which established the definition of a “penny stock,” for purposes relevant to the Company, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions.
Removed
For any transaction involving a penny stock, unless exempt, the rules require: (i) that a broker or dealer approve a person’s account for transactions in penny stocks; and (ii) that the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
Removed
In order to approve a person’s account for transactions in penny stocks, the broker or dealer must (i) obtain financial information and investment experience and objectives of the person; and (ii) make a reasonable determination that the transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
Removed
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, (i) sets forth the basis on which the broker or dealer made the suitability determination; and (ii) states that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
Removed
Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading, and about commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions.
Removed
On October 24, 2020, our board of directors held a meeting and executed resolutions to approve the issuance of 120,000 ordinary shares to Raymond Wang, our chief executive officer, to offset unpaid salary to him in the amount of $120,833.33 and the issuance of 135,000 ordinary shares to Jing Jin, our chief financial officer, to offset unpaid salary to him in the amount of $60,000 and his personal loan to us in the amount of $75,000.
Removed
On November 10, 2020, we issued 135,000 ordinary shares to Jing Jin. On December 30, 2020 and February 8, 2021, we issued 69,000 and 51,000 ordinary shares to Raymond Wang, respectively.
Removed
On March 29, 2021, our board of directors held a meeting and approved the issuance to 2,500 ordinary shares of the Company to each of the Company’s directors, namely Peter Zuguang Wang, Ming Zhao, Everett Xiaolin Wang, Frank Shen and Charles Athle Nelson, as compensation for their services to the Company.
Removed
On April 19, 2021, these shares were issued to the directors. On April 16, 2021, our board of directors approved the issuance of 2,700 ordinary shares of the Company to Xiaqing Yang, an employee of the Company, under the Company’s 2020 Equity Incentive Plan. On the same date, the shares were issued to Xiaqing Yang.

Item 7. Management's Discussion & Analysis

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

66 edited+16 added−13 removed48 unchanged
Biggest changeThe fundamental reasons for the rise in the general and administrative expenses were the following: (i) increased legal fees and consultancy fees on the Company’s business planning and projects for the fiscal year ended December 31, 2022 as the Company expanded its operations, compared to the fiscal year ended December 31, 2021; (ii) increase in staff salary; and (iii) increase in lease cost. 47 Research and Development Expenses R&D expenses consist of R&D personnel compensation, costs of materials used in R&D projects, and depreciation costs for research-related equipment.
Biggest changeResearch and Development Expenses R&D expenses consist of R&D personnel compensation, costs of materials used in R&D projects, and depreciation costs for research-related equipment. R&D expenses decreased by approximately $0.36 million, or 6.3%, to approximately $5.42 million for the fiscal year ended December 31, 2023, from approximately $5.79 million for the fiscal year ended December 31, 2022.
Contract terms may require the Company to deliver the finished goods to the customers’ location or the customer may pick up the finished goods at the Company’s factory. International sales are recognized when shipment clears customs and leaves the port. The Company has adopted ASC 606 on January 1, 2018, using the transition method of Modified-Retrospective Method (“MRM”).
Contract terms may require the Company to deliver the finished goods to the customers’ location or the customer may pick up the finished goods at the Company’s factory. International sales are recognized when shipment clears customs and leaves the port. The Company adopted ASC 606 on January 1, 2018, using the transition method of Modified-Retrospective Method (“MRM”).
Hangzhou Greenland, the wholly owned subsidiary of Zhongchai Holding, is subject to the 25% standard income tax rate. 48 Greenland is a holding company registered in the British Virgin Islands and is not subject to tax on income or capital gains under the current British Virgin Islands law.
Hangzhou Greenland, the wholly owned subsidiary of Zhongchai Holding, is subject to the 25% standard income tax rate Greenland is a holding company registered in the British Virgin Islands and is not subject to tax on income or capital gains under the current British Virgin Islands law.
Based on our revenues in the fiscal years ended December 31, 2022 and 2021, we believe that Greenland is one of the major developers and manufacturers of transmission products for small and medium-sized forklift trucks in China. Greenland’s transmission products are used in 1-ton to 15-tons forklift trucks, some with mechanical shift and some with automatic shift.
Based on our revenues in the fiscal years ended December 31, 2023 and 2022, we believe that Greenland is one of the major developers and manufacturers of transmission products for small and medium-sized forklift trucks in China. Greenland’s transmission products are used in 1-ton to 15-tons forklift trucks, some with mechanical shift and some with automatic shift.
Pursuant to the Finder Agreement, 50,000 newly issued ordinary shares issued to Zhou Hanyi is the finder fee for the Business Combination. 53 Inventories Inventories are stated at the lower of cost or net realizable value, which is based on estimated selling prices less any further costs expected to be incurred for completion and disposal.
Pursuant to the Finder Agreement, 50,000 newly issued ordinary shares issued to Zhou Hanyi is the finder fee for the Business Combination. 45 Inventories Inventories are stated at the lower of cost or net realizable value, which is based on estimated selling prices less any further costs expected to be incurred for completion and disposal.
We remain confident and expect to continue to generate positive cash flow from our operations. 49 We may need additional cash resources in the future, if the Company experiences failure in collecting account receivables, changes in business condition, changes in financial condition, or other developments.
We remain confident and expect to continue to generate positive cash flow from our operations. 42 We may need additional cash resources in the future, if the Company experiences failure in collecting account receivables, changes in business condition, changes in financial condition, or other developments.
Historically, we have expended considerable resources on building a new factory and paid off a considerable amount of debt, resulting in less available cash. However, we anticipate that our cash flow will continue to improve for fiscal year 2023.
Historically, we have expended considerable resources on building a new factory and paid off a considerable amount of debt, resulting in less available cash. However, we anticipate that our cash flow will continue to improve for fiscal year 2024.
As of December 31, 2021, the Company did not have a liability for unrecognized tax benefits. It is the Company’s policy to include penalties and interest expense related to income taxes as a component of other expense and interest expense, respectively, as necessary.
As of December 31, 2023, the Company did not have a liability for unrecognized tax benefits. It is the Company’s policy to include penalties and interest expense related to income taxes as a component of other expense and interest expense, respectively, as necessary.
Since HEVI was established in 2020, the one-time transition tax did not have any impact on the Company’s tax provision and there was no undistributed accumulated earnings and profits as of December 31, 2022.
Since HEVI was established in 2020, the one-time transition tax did not have any impact on the Company’s tax provision and there was no undistributed accumulated earnings and profits as of December 31, 2023.
Financing Activities Financing activities resulted a cash outflow of approximately $4.28 million for the fiscal year ended December 31, 2022, which was mainly attributable to repayment of loans due to third parties in the amount of approximately $2.16 million, repayment of notes payable in the amount of approximately $10.85 million and repayment of short-term bank loans in the amount of approximately $10.79 million.
Financing activities resulted a cash outflow of approximately $4.28 million for the fiscal year ended December 31, 2022, which was mainly attributable to repayment of loans due to related parties in the amount of approximately $2.16 million, repayment of loans due to third parties in the amount of approximately $1.48 million, repayment of notes payable in the amount of approximately $10.85 million and repayment of short-term bank loans in the amount of approximately $10.79 million.
The decrease was primarily due to a reduction of our short-term loans for the year ended December 31, 2022, as compared to the year ended December 31, 2021.
The decrease was primarily due to a reduction of our short-term loans for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
Each unit consists of one ordinary share, no par value, one warrant to purchase one-half of one ordinary share, and one right to receive one-tenth of one ordinary share upon the consummation of our initial business combination, pursuant to a registration statement on Form S-1.
Each unit consisted of one ordinary share, no par value, one warrant to purchase one-half of one ordinary share, and one right to receive one-tenth of one ordinary share upon the consummation of our Business Combination, pursuant to a registration statement on Form S-1.
In an effort to contain the spread of the COVID-19 pandemic, in the fiscal years ended December 31, 2021 and 2022, China and many other countries took precautionary measures, such as imposing travel restrictions, quarantining individuals infected with or suspected of being infected with COVID-19, encouraging or requiring people to work remotely, and canceling public activities, among others.
In an effort to contain the spread of the COVID-19 pandemic, in 2021 and 2022, China and many other countries took precautionary measures, such as imposing travel restrictions, quarantining individuals infected with or suspected of being infected with COVID-19, encouraging or requiring people to work remotely, and canceling public activities, among others.
The balance of due from related parties as of December 31, 2022 and December 31, 2021 consisted primarily of other receivables from Cenntro Holding Limited in the amount of $36.46 million and $39.46 million as of December 31, 2022 and December 31, 2021, respectively.
The balance of due from related parties as of December 31, 2023 and December 31, 2022 consisted primarily of other receivables from Cenntro Holding Limited in the amount of $34.46 million and $36.46 million as of December 31, 2023 and December 31, 2022, respectively.
Greenland sells these transmission products directly to forklift-truck manufacturers. In the fiscal years ended December 31, 2022 and 2021, Greenland sold an aggregate of 129,686 and 141,431 sets of transmission products, respectively, to more than 100 forklift manufacturers in the PRC.
Greenland sells these transmission products directly to forklift-truck manufacturers. In the fiscal years ended December 31, 2023 and 2022, Greenland sold an aggregate of 149,543 and 129,686 sets of transmission products, respectively, to more than 100 forklift manufacturers in the PRC.
Although Greenland does not believe that inflation has had a material impact on its financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on its ability to maintain current levels of gross margin and operating expenses as a percentage of sales revenues if the selling prices of its products do not increase with such increased costs. 52 Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with U.S.
Although Greenland does not believe that inflation has had a material impact on its financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on its ability to maintain current levels of gross margin and operating expenses as a percentage of sales revenues if the selling prices of its products do not increase with such increased costs.
The Company’s historical tax years will remain open for examination by the local authorities until the statute of limitations has passed.
The Company’s historical tax years will remain open for examination by the local authorities until the statute of limitations has passed. Off Balance Sheet Arrangements None.
The write down of inventory using net realizable value impairment test is also recorded in cost of goods sold. The total cost of goods sold decreased by approximately $8.25 million, or approximately 10.4%, to approximately $71.00 million for the fiscal year ended December 31, 2022, from approximately $79.25 million for the fiscal year ended December 31, 2021.
The write down of inventory using net realizable value impairment test is also recorded in cost of goods sold. The total cost of goods sold decreased by approximately $5.24 million, or approximately 7.4%, to approximately $65.76 million for the fiscal year ended December 31, 2023, from approximately $71.00 million for the fiscal year ended December 31, 2022.
The decrease in interest income was because less cash was deposited in banks during the fiscal year ended December 31, 2022 as compared to the fiscal year ended December 31, 2021.
The increase in interest income was because more cash was deposited in banks during the fiscal year ended December 31, 2023 as compared to the fiscal year ended December 31, 2022.
In the fiscal year ended December 31, 2022, the main sources of cash inflow from operating activities were net income of $6.62 million, changes in notes receivable of $6.07 million, and depreciation and amortization of $2.44 million.
In the fiscal year ended December 31, 2022, the main sources of cash inflow from operating activities were net income of $3.80 million, changes in notes receivable of $6.07 million, change in fair value of warrant liability of approximately $2.81 million, and depreciation and amortization of $2.44 million.
Greenland’s interest expenses were approximately $0.40 million for the fiscal year ended December 31, 2022, a decrease of approximately $0.19 million, or 31.4%, as compared to approximately $0.59 million for the fiscal year ended December 31, 2021.
Greenland’s interest expenses were approximately $0.25 million for the fiscal year ended December 31, 2023, a decrease of approximately $0.15 million, or 37.9%, as compared to approximately $0.40 million for the fiscal year ended December 31, 2022.
GAAP. In applying accounting principles, it is often required to use estimates. These estimates consider the facts, circumstances and information available, and may be based on subjective inputs, assumptions and information known and unknown to us.
Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with U.S. GAAP. In applying accounting principles, it is often required to use estimates. These estimates consider the facts, circumstances and information available, and may be based on subjective inputs, assumptions and information known and unknown to us.
The unit purchase option may be exercised for cash or on a cashless basis, at the holder’s option, and expires on July 24, 2023. On February 18, 2021, Chardan exercised its option to purchase 120,000 units. As of the date of this Report, an option exercisable by Chardan for 120,000 units is outstanding.
The unit purchase option may be exercised for cash or on a cashless basis, at the holder’s option, and expired on July 24, 2023. On February 18, 2021, Chardan exercised its option to purchase 120,000 units.
In 2021 and 2022, a few waves of COVID-19 infections emerged in various regions of China, and in response, the Chinese government implemented certain anti-COVID measures and protocols.
Since 2021, a few waves of COVID-19 infections emerged in various regions of China, and in response, the Chinese government implemented certain anti-COVID measures and protocols. Chinese industries have gradually resumed businesses as the Chinese government lifted its COVID-19 protocols and measures since December 2022.
Cash and Cash Equivalents Cash equivalents refers to all highly liquid investments purchased with original maturity of three months or less. As of December 31, 2022, Greenland had approximately $16.30 million of cash and cash equivalents, an increase of approximately $5.24 million, or 47.30%, as compared to approximately $11.06 million as of December 31, 2021.
Cash and Cash Equivalents Cash equivalents refers to all highly liquid investments purchased with original maturity of three months or less. As of December 31, 2023, Greenland had approximately $22.98 million of cash and cash equivalents, an increase of approximately $6.68 million, or 41.03%, as compared to approximately $16.30 million as of December 31, 2022.
Cash provided by investing activities for the fiscal year ended December 31, 2022 was mainly due to $0.81 million in proceeds from government subsidies for Zhejiang Zhongchai’s construction activities, offset by approximately $0.53 million used for purchases of long-term assets and approximately $0.25 million used for investment in a joint venture.
Investing activities resulted a cash outflow of approximately $0.78 million for the fiscal year ended December 31, 2022. Cash used in investing activities for the fiscal year ended December 31, 2022 was mainly due to approximately $0.53 million used for purchases of long-term assets and approximately $0.25 million used for investment in a joint venture.
The increase in operating expenses was primarily due to the increase in after-sales service fees, advertising and marketing expenses, consultancy fees, lease cost, and research and development expenses in fiscal year 2022. Selling Expenses Greenland’s selling expenses mainly include operating expenses such as sales staff payroll, traveling expenses and transportation expenses.
The decrease in operating expenses was primarily due to a decrease in the after-sales service fees and advertising and marketing expenses offset by an increase in staff salary and lease costs in fiscal year 2023. Selling Expenses Greenland’s selling expenses mainly include operating expenses such as sales staff payroll, traveling expenses and transportation expenses.
Selling expenses increased by $0.76 million, or 40.8%, to approximately $2.63 million for the fiscal year ended December 31, 2022, from approximately $1.87 million for the fiscal year ended December 31, 2021. The increase in selling expenses was mainly due to an increase in the after-sales service fees and advertising and marketing expenses for the year ended December 31, 2022.
Selling expenses decreased by $0.31 million, or 11.8%, to approximately $2.32 million for the fiscal year ended December 31, 2023, from approximately $2.63 million for the fiscal year ended December 31, 2022. The decrease in selling expenses was mainly due to a decrease in the after-sales service fees and advertising and marketing expenses for the year ended December 31, 2023.
Accounts receivable are typically unsecured and derived from revenues earned from customers, thereby exposing Greenland to credit risk. Credit risk is controlled by the application of credit approvals, limits, and monitoring procedures. Greenland identifies credit risk collectively based on industry, geography, and customer type. This information is monitored regularly by the Company’s management.
Credit risk is controlled by the application of credit approvals, limits, and monitoring procedures. Greenland identifies credit risk collectively based on industry, geography, and customer type. This information is monitored regularly by the Company’s management.
The increase of cash and cash equivalents was mainly due to a decrease in accounts receivable and notes receivable, as compared to that as of December 31, 2021.
The increase of cash and cash equivalents was mainly due to an increase in notes payable, as compared to that as of December 31, 2022.
HEVI focuses on the production and sale of electric industrial equipment, including electric industrial vehicles, for the North American market. Greenland serves as the parent company to Zhongchai Holding. Through Zhongchai Holding and its subsidiaries, Greenland develops and manufactures traditional transmission products for material handling machineries and electric industrial heavy equipment, including electric industrial vehicles.
HEVI focuses on the production and sale of electric industrial equipment, including electric industrial vehicles, for the North American market. Greenland serves as the parent company to Zhongchai Holding.
For the fiscal year ended December 31, 2022, our PRC subsidiary, Zhejiang Zhongchai, paid off approximately $10.79 million in bank loan, approximately $2.16 million in related parties loan, and maintained $19.73 million cash on hand.
For the fiscal year ended December 31, 2023, our PRC subsidiary, Zhejiang Zhongchai, paid off approximately $12.42 million in bank loan and maintained $28.19 million cash on hand.
Other Income Greenland’s other income was approximately $1.71 million for the fiscal year ended December 31, 2022, an increase of approximately $0.33 million, or 23.7%, as compared to approximately $1.38 million of other income for the fiscal year ended December 31, 2021.
Other Income Greenland’s other income was approximately $1.21 million for the fiscal year ended December 31, 2023, an increase of approximately $0.54 million, or 79.3%, as compared to approximately $0.68 million of other income for the fiscal year ended December 31, 2022.
Cost of goods sold decreased in fiscal year 2022 compared to fiscal year 2021 due to a decrease in our sales volume. Gross Profit Greenland’s gross profit increased by approximately $0.24 million, or 1.2%, to approximately $19.83 million for the fiscal year ended December 31, 2022, from approximately $19.59 million for the fiscal year ended December 31, 2021.
Cost of goods sold decreased in fiscal year 2023 compared to fiscal year 2022 due to a decrease in raw material costs. Gross Profit Greenland’s gross profit increased by approximately $4.75 million, or 23.9%, to approximately $24.58 million for the fiscal year ended December 31, 2023, from approximately $19.83 million for the fiscal year ended December 31, 2022.
In measuring the credit risk of sales to customers, Greenland mainly reflects the “probability of default” by the customer on its contractual obligations and considers the current financial position of the customer and the exposures to the customer and its future development.
In measuring the credit risk of sales to customers, Greenland mainly reflects the “probability of default” by the customer on its contractual obligations and considers the current financial position of the customer and the exposures to the customer and its future development. 44 Liquidity Risk Greenland is exposed to liquidity risk when it is unable to provide sufficient capital resources and liquidity to meet its commitments and/or business needs.
Income from Operations As a result of the foregoing, income from operations for the fiscal year ended December 31, 2022 was approximately $5.96 million, representing a decrease of approximately $2.29 million, from approximately $8.25 million for the fiscal year ended December 31, 2021.
Income from Operations As a result of the foregoing, income from operations for the fiscal year ended December 31, 2023 was approximately $10.78 million, representing an increase of approximately $4.82 million, from approximately $5.96 million for the fiscal year ended December 31, 2022.
The Business Combination was accounted for as a reverse merger effected by a share exchange, wherein Zhongchai Holding is considered the acquirer for accounting and financial reporting purposes. 44 In connection with the Business Combination, all the outstanding rights of the Company were converted into 468,200 ordinary shares on a one-tenth (1/10) ordinary share per right basis if holders of the rights elected to convert their rights into the underlying ordinary shares.
In connection with the Business Combination, all the outstanding rights of the Company were converted into 468,200 ordinary shares on a one-tenth (1/10) ordinary share per right basis if holders of the rights elected to convert their rights into the underlying ordinary shares.
The Company currently plans to fund its operations mainly through cash flow from its operations, renewal of bank borrowings, additional equity financing, and continuation of financial support from its shareholders and affiliates controlled by its principal shareholders, if necessary.
Total government subsidies recorded under long-term liabilities were $1.53 million and $1.81 million as of December 31, 2023 and 2022, respectively. The Company currently plans to fund its operations mainly through cash flow from its operations, renewal of bank borrowings, additional equity financing, and continuation of financial support from its shareholders and affiliates controlled by its principal shareholders, if necessary.
Generally, industries with the largest demand for forklifts include the transportation, warehousing logistics, electrical machinery, and automobile industries. Greenland’s revenue decreased from approximately $98.84 million in the fiscal year 2021 to $90.83 million in the fiscal year 2022.
Forklifts play an important role in the logistic systems of many companies across different industries in China and globally. Generally, industries with the largest demand for forklifts include the transportation, warehousing logistics, electrical machinery, and automobile industries. Greenland’s revenue decreased from approximately $90.83 million in the fiscal year 2022 to $90.33 million in the fiscal year 2023.
Greenland will continuously assess its potential losses based on the credit history of and relationships with its customers on a regular basis to determine whether its bad debt allowance on its accounts receivables is adequate.
Greenland will continuously assess its expected credit losses based on the credit history of and relationships with its customers on a regular basis to determine whether its allowance for expected credit losses on its accounts receivables is adequate. Greenland believes that its collection policies are generally in line with the transmissions industry’s standard in the PRC.
Interest Income and Interest Expenses Greenland’s interest income was approximately $0.06 million for the fiscal year ended December 31, 2022, representing a decrease of approximately $0.01 million, or 16.8%, from approximately $0.07 million for the fiscal year ended December 31, 2021.
Interest Income and Interest Expenses Greenland’s interest income was approximately $0.14 million for the fiscal year ended December 31, 2023, representing an increase of approximately $0.08 million, or 151.9%, from approximately $0.06 million for the fiscal year ended December 31, 2022.
Net Income As a result of the foregoing, Greenland’s net income was approximately $6.62 million for the fiscal year ended December 31, 2022, representing a decrease of approximately $0.65 million, from the net income of approximately $7.27 million for the fiscal year ended December 31, 2021.
Net Income (Loss) As a result of the foregoing, Greenland’s net loss was approximately $25.02 million for the fiscal year ended December 31, 2023, representing a decrease of approximately $28.82 million, from the net income of approximately $3.8 million for the fiscal year ended December 31, 2022.
Greenland recorded approximately $0.76 million and $0.86 million of provision for doubtful accounts as of December 31, 2022 and 2021, respectively. Greenland conducted an aging analysis of each customer’s delinquent payments to determine whether allowance for doubtful accounts is adequate. In establishing the allowance for doubtful accounts, Greenland considers historical experience, economic environment, and expected collectability of past due receivables.
Greenland recorded approximately $0.87 million and $0.76 million of allowance for expected credit losses as of December 31, 2023 and 2022, respectively. Greenland conducted an aging analysis of each customer’s delinquent payments to determine whether allowance for expected credit losses is adequate.
As of December 31, 2022, Greenland had approximately $3.43 million of restricted cash, a decrease of approximately $3.31 million, or 49.05%, as compared to approximately $6.74 million as of December 31, 2021. The decrease of restricted cash was due to a decrease in mortgaged assets.
As of December 31, 2023, Greenland had approximately $5.21 million of restricted cash, an increase of approximately $1.78 million, or 51.69%, as compared to approximately $3.43 million as of December 31, 2022. The increase of restricted cash was due to an increase in mortgaged assets.
Such status allows Zhejiang Zhongchai to enjoy a reduced statutory income tax rate of 15%, rather than the standard PRC corporate income tax rate of 25%. The “high-tech enterprise” status is reevaluated by relevant Chinese government agencies every three years. Zhejiang Zhongchai’s current “high-tech enterprise” will be reevaluated near the end of 2025.
The “high-tech enterprise” status is reevaluated by relevant Chinese government agencies every three years. Zhejiang Zhongchai’s current “high-tech enterprise” will be reevaluated near the end of 2025. Greenland’s other PRC subsidiaries are subject to different income tax rates.
The main causes of changes in cash outflow were changes in other current and noncurrent assets of approximately $7.80 million and changes in accounts payable of $2.08 million.
The main causes of changes in cash outflow were changes in other current and noncurrent assets of approximately $7.82 million and changes in accounts payable of $2.08 million. Investing Activities Investing activities resulted a cash inflow of approximately $1.07 million for the fiscal year ended December 31, 2023.
An estimate of doubtful accounts is recorded when collection of the full amount is no longer probable. When bad debts are identified, such debts are written off against the allowance for doubtful accounts.
In establishing the allowance for expected credit losses, Greenland considers historical experience, economic environment, and expected collectability of past due receivables. An estimate of expected credit losses is recorded when collection of the full amount is no longer probable. When bad debts are identified, such debts are written off against the allowance for expected credit losses.
Accounts Receivable As of December 31, 2022, Greenland had approximately $14.34 million of accounts receivables, a decrease of approximately $1.58 million, or 9.91%, as compared to approximately $15.92 million as of December 31, 2021. The decrease in accounts receivables was due to our accelerated efforts in receivables collections and a decrease in our sales volume.
Accounts Receivable As of December 31, 2023, Greenland had approximately $17.35 million of accounts receivables, an increase of approximately $2.25 million, or 14.91%, as compared to approximately $15.10 million as of December 31, 2022. The increase in accounts receivables was due to our slowed down efforts in receivables collections.
Investing activities resulted a cash outflow of approximately $0.64 million for the fiscal year ended December 31, 2021. Cash used in investing activities for the fiscal year ended December 31, 2021 was mainly due to $0.26 million in proceeds from government subsidies for Zhejiang Zhongchai’s construction activities, offset by approximately $0.90 million used for purchases of long-term assets.
Cash provided by investing activities for the fiscal year ended December 31, 2023 was mainly due to approximately $0.44 million in proceeds from sale of short-term investment and approximately $1.84 million repayment of loans lend to third parties offset by approximately $0.74 million used for purchases of long-term assets.
For the fiscal years ended December 31, 2022 and 2021, Greenland’s gross margin was approximately 21.84% and 19.82%, respectively. The increase in gross margin in fiscal year 2022 compared to fiscal year 2021 was primarily due to a shift in Greenland’s product mix towards higher value and more sophisticated products, such as hydraulic transmission products.
The increase in gross margin in fiscal year 2023 compared to fiscal year 2022 was primarily due to a decrease in raw material costs and a shift in Greenland’s product mix towards higher value and more sophisticated products, such as hydraulic transmission products. 40 Operating Expense Greenland’s operating expenses consist of selling expenses, general and administrative expenses and research and development expenses.
Through its PRC subsidiaries, Greenland offers transmission products, which are key components for forklift trucks used in manufacturing and logistic applications, such as factories, workshops, warehouses, fulfilment centers, shipyards, and seaports. Forklifts play an important role in the logistic systems of many companies across different industries in China and globally.
Through Zhongchai Holding and its subsidiaries, Greenland develops and manufactures traditional transmission products for material handling machineries and electric industrial heavy equipment, including electric industrial vehicles. 38 Through its PRC subsidiaries, Greenland offers transmission products, which are key components for forklift trucks used in manufacturing and logistic applications, such as factories, workshops, warehouses, fulfilment centers, shipyards, and seaports.
Income Taxes Greenland’s income tax was approximately $0.70 million for the fiscal year ended December 31, 2022, compared to approximately $1.84 million for the fiscal year ended December 31, 2021. Zhejiang Zhongchai obtained a “high-tech enterprise” status near the end of the fiscal year of 2022.
The decrease was primarily due to a decrease in policy incentive income for the fiscal year ended December 31, 2023 as compared to the fiscal year ended December 31, 2022. Income Taxes Greenland’s income tax was approximately $1.71 million for the fiscal year ended December 31, 2023, compared to approximately $0.70 million for the fiscal year ended December 31, 2022.
In the fiscal year ended December 31, 2021, the main sources of cash inflow from operating activities were net income of $7.27 million, changes in accounts payable of $6.46 million, and depreciation and amortization of $2.51 million.
In the fiscal year ended December 31, 2023, the main sources of cash inflow from operating activities were the increase in allowance for expected credit loss-related parties receivable of $34.46 million and depreciation and amortization of $2.19 million.
However, these scattered outbreaks were brought under control in a relatively short period of time, and the COVID-19 had limited impact on our financial condition and results of operations in the fiscal years ended December 31, 2022 and 2021.
The COVID-19 pandemic had a limited impact on our financial condition and results of operations in the fiscal years ended December 31, 2023 and 2022. For the fiscal years ended December 31, 2023 and 2022, we experienced decreased and decreased raw material costs, respectively.
Such amounts were further offset by approximately $11.70 million in proceeds from short-term bank loans and approximately $9.20 million in proceeds from equity and debt financing.
Such amounts were further offset by approximately $11.70 million in proceeds from short-term bank loans and approximately $9.20 million in proceeds from equity and debt financing. Credit Risk Credit risk is one of the most significant risks for Greenland’s business. Accounts receivable are typically unsecured and derived from revenues earned from customers, thereby exposing Greenland to credit risk.
Cash Flow For the Fiscal Year Ended December 31, 2022 2021 Net cash provided by(used in) operating activities $ 7,313,245 $ (5,755,940 ) Net cash provided by(used in) investing activities $ 33,693 $ (638,980 ) Net cash provided by(used in) financing activities $ (4,284,479 ) $ 14,462,981 Net increase (decrease) in cash and cash equivalents and restricted cash $ 3,062,459 $ 8,068,063 Effect of exchange rate changes on cash and cash equivalents $ (1,134,295 ) $ 329,778 Cash and cash equivalents and restricted cash at beginning of year $ 17,800,892 $ 9,403,053 Cash and cash equivalents and restricted cash at end of year $ 19,729,056 $ 17,800,892 Operating Activities Greenland’s net cash provided by/(used in) operating activities was approximately $7.31 and $(5.76) million for the fiscal years ended December 31, 2022 and 2021, respectively.
The decrease in working capital of $32.43 million in the fiscal year 2023 as compared with the fiscal year 2022 was primarily contributed to a decrease in cash and cash equivalents and due from related parties-current. 43 Cash Flow For the Fiscal Year Ended December 31, 2023 2022 Net cash provided by operating activities $ 2,449,040 $ 8,122,066 Net cash provided by(used in) investing activities $ 1,070,907 $ (775,128 ) Net cash provided by(used in) financing activities $ 2,865,814 $ (4,284,479 ) Net increase in cash and cash equivalents and restricted cash $ 6,385,761 $ 3,062,459 Effect of exchange rate changes on cash and cash equivalents $ 2,074,570 $ (1,134,295 ) Cash and cash equivalents and restricted cash at beginning of year $ 19,729,056 $ 17,800,892 Cash and cash equivalents and restricted cash at end of year $ 28,189,387 $ 19,729,056 Operating Activities Greenland’s net cash provided by operating activities was approximately $2.45 and $8.12 million for the fiscal years ended December 31, 2023 and 2022, respectively.
As a result, the Seller became the controlling shareholder of Greenland, and Zhongchai Holding became a directly and wholly owned subsidiary of Greenland.
As a result, the Seller became the controlling shareholder of Greenland, and Zhongchai Holding became a directly and wholly owned subsidiary of Greenland. The Business Combination was accounted for as a reverse merger effected by a share exchange, wherein Zhongchai Holding is considered the acquirer for accounting and financial reporting purposes.
Operating Expense Greenland’s operating expenses consist of selling expenses, general and administrative expenses and research and development expenses. Greenland’s operating expenses were $13.88 million for the fiscal year ended December 31, 2022, representing an increase of 22.3% from $11.34 million for the fiscal year ended December 31, 2021.
Greenland’s operating expenses were $13.80 million for the fiscal year ended December 31, 2023, representing a decrease of 0.6% from $13.88 million for the fiscal year ended December 31, 2022.
General and administrative expenses increased by approximately $1.51 million, or approximately 38.2%, to approximately $5.46 million for the fiscal year ended December 31, 2022, from approximately $3.95 million for the fiscal year ended December 31, 2021.
General and administrative expenses increased by approximately $0.59 million, or approximately 10.9%, to approximately $6.05 million for the fiscal year ended December 31, 2023, from approximately $5.46 million for the fiscal year ended December 31, 2022. The fundamental reasons for the rise in the general and administrative expenses were an increase in staff salary and an increase in lease cost.
Financing activities resulted a cash inflow of approximately $14.46 million for the fiscal year ended December 31, 2021, which was mainly attributable to approximately $8.67 million in proceeds from short-term bank loans, approximately $5.39 million in investment proceeds from an entity with non-controlling interests, and approximately $8.21 million in proceeds from equity and debt financing.
Financing Activities Financing activities resulted a cash inflow of approximately $2.87 million for the fiscal year ended December 31, 2023, which was mainly attributable to approximately $6.72 million in proceeds from short-term bank loans and approximately $9.27 million in notes payable. Such amounts were further offset by approximately $12.42 million in repayment of short-term bank loans.
For the fiscal year ended December 31, 2021, our PRC subsidiary, Zhejiang Zhongchai, paid off approximately $18.72 million in bank loan, approximately $4.05 million in related parties loan, approximately $0.31 million in third parties loan, and maintained $17.80 million cash on hand.
For the fiscal year ended December 31, 2022, our PRC subsidiary, Zhejiang Zhongchai, paid off approximately $10.79 million in bank loan, approximately $2.16 million in related parties loan, and maintained $19.73 million cash on hand. We plan to maintain the current debt structure and rely on governmentally supported loans with lower cost, if necessary.
The decrease in revenue was primarily the result of a decrease in the Company’s sales volume resulting from COVID-19 related lockdowns in China for the year ended December 31, 2022. On an RMB basis, our revenue for the fiscal year ended December 31, 2022 decreased by approximately 3.7% compared to the fiscal year ended December 31, 2021.
However, excluding the impact of exchange rate fluctuation, our revenue for the fiscal year ended December 31, 2023 increased by approximately 4.3% compared to the fiscal year ended December 31, 2022. The actual increase in revenue was primarily the result of an increase in the Company’s sales volume, driven by increasing market demand for the year ended December 31, 2023.
We plan to maintain the current debt structure and rely on governmentally supported loans with lower cost, if necessary. Government subsidies mainly consist of an incentive granted by the Chinese government to encourage transformation of fixed assets in China and other miscellaneous subsidies from the Chinese government.
Government subsidies mainly consist of an incentive granted by the Chinese government to encourage transformation of fixed assets in China and other miscellaneous subsidies from the Chinese government. Government subsidies are recognized when there is reasonable assurance that the subsidy will be received and all conditions be completed.
Greenland believes that its collection policies are generally in line with the transmissions industry’s standard in the PRC. 50 Due from Related Party Due from related party was $36.67 million and $39.68 million as of December 31, 2022 and December 31, 2021, respectively.
Due from Related Party Due from related party was $0.23 million and $36.67 million as of December 31, 2023 and December 31, 2022, respectively.
The increase was primarily due to an increase in grant income and an increase in industry research services offered by Zhongchai Holding for the fiscal year ended December 31, 2022 as compared to the fiscal year ended December 31, 2021.
The increase was primarily due to an increase in income from wealth management products and VAT deduction for the fiscal year ended December 31, 2023 as compared to the fiscal year ended December 31, 2022. 41 Remeasurement loss from change in functional currency Greenland’s remeasurement loss from change in functional currency was approximately $2.49 million for the fiscal year ended December 31, 2023, a decrease of approximately $2.49 million, as compared to nil of remeasurement loss from change in functional currency for the fiscal year ended December 31, 2022.
The decrease in revenue was primarily the result of a decrease in the Company’s sales volume resulting from COVID-19 related lockdowns in China for the year ended December 31, 2022.
Such decrease was primarily attributable to a decrease in the Company’s R&D activities for the fiscal year ended December 31, 2023.
Removed
In the fiscal years ended December 31, 2022 and 2021, we experienced rising raw material costs, which we believe to be short term as China lifted its COVID-19 protocols and measures in December 2022.
Added
However, excluding the impact of exchange rate fluctuation, the actual revenue increased 4.3%. The actual increase in revenue was primarily the result of an increase in the Company’s sales volume, driven by decreasing market demand for the year ended December 31, 2023.
Removed
The extent to which the COVID-19 pandemic may continue to affect our operations and financial performance in the future will depend on future developments, which are highly uncertain and cannot be predicted at this time. 45 Results of Operations For the fiscal years ended December 31, 2022 and 2021 Overview For the Fiscal Years Ended December 31, 2022 2021 $ Change % Variance Revenues $ 90,830,674 $ 98,839,900 $ (8,009,226 ) (8.1 ) Cost of Goods Sold 70,995,940 79,246,280 (8,250,340 ) (10.4 ) Gross Profit 19,834,734 19,593,620 241,114 1.2 Selling expenses 2,630,226 1,868,156 762,070 40.8 General and administrative expenses 5,459,020 3,948,850 1,510,170 38.2 Research and development expenses 5,786,946 5,526,546 260,400 4.7 Total Operating Expenses 13,876,192 11,343,552 2,532,640 22.3 Income from operations 5,958,542 8,250,068 (2,291,526 ) (27.8 ) Interest income 56,817 68,295 (11,478 ) (16.8 ) Interest expenses, net (402,968 ) (587,264 ) 184,296 (31.4 ) Loss on disposal of property and equipment (1,511 ) 1,785 (3,296 ) (184.6 ) Other income 1,705,506 1,378,597 326,909 23.7 Income before income tax 7,316,386 9,111,481 (1,795,095 ) (19.7 ) Income tax 699,691 1,843,260 (1,143,569 ) (62.0 ) Net income $ 6,616,695 $ 7,268,221 $ (651,526 ) (9.0 ) Components of Results of Operations For the Fiscal Years ended December 31, Component of Results of Operations 2022 2021 Revenues $ 90,830,674 $ 98,839,900 Cost of Goods Sold 70,995,940 79,246,280 Gross Profit 19,834,734 19,593,620 Operating Expenses 13,876,192 11,343,552 Net Income $ 6,616,695 $ 7,268,221 46 Revenue Greenland’s revenue decreased by approximately $8.01 million, or approximately 8.1%, to approximately $90.83 million for the fiscal year ended December 31, 2022, from approximately $98.84 million for the fiscal year ended December 31, 2021.
Added
HEVI also introduced mobile DC battery chargers to support a growing market of EV applications requiring DC charging capabilities in the North America market. These products are available for purchase in the U.S. market.
Removed
R&D expenses increased by approximately $0.26 million, or 4.7%, to approximately $5.79 million for the fiscal year ended December 31, 2022, from approximately $5.53 million for the fiscal year ended December 31, 2021. Such increase was primarily attributable to an increase in the Company’s R&D investment in higher value and more sophisticated products and the electrification of machinery products.
Added
The extent to which the COVID-19 pandemic may continue to affect our operations and financial performance in the future will depend on future developments, which are highly uncertain and cannot be predicted at this time.
Removed
Greenland’s other PRC subsidiaries are subject to different income tax rates. Greenland’s other PRC subsidiaries are subject to different income tax rates. Shanghai Hengyu, the 62.5% owned subsidiary of Zhongchai Holding, is subject to the 25% standard income tax rate.
Added
Recent Developments On February 14, 2024, the Company issued a press release announcing its intent, as approved by its board of directors, to explore a separation of its electric industrial vehicles and drivetrain systems segments into two independent, publicly-traded companies by spinning off its drivetrain systems business .
Removed
Government subsidies are recognized when there is reasonable assurance that the subsidy will be received and all conditions be completed. Total government subsidies recorded under long-term liabilities were $1.81 million and $2.21 million as of December 31, 2022 and 2021, respectively.
Added
After the proposed spin-off, Greenland would be solely comprised of the Company’s current industrial electric vehicle business under its HEVI brand. 39 Results of Operations For the fiscal years ended December 31, 2023 and 2022 Overview For the Fiscal Years Ended December 31, 2023 2022 $ Change % Variance Revenues $ 90,333,240 $ 90,830,674 $ (497,434 ) (0.5 ) Cost of Goods Sold 65,757,237 70,995,940 (5,238,703 ) (7.4 ) Gross Profit 24,576,003 19,834,734 4,741,269 23.9 Selling expenses 2,319,835 2,630,226 (310,391 ) (11.8 ) General and administrative expenses 6,052,541 5,459,020 593,521 10.9 Research and development expenses 5,424,400 5,786,946 (362,546 ) (6.3 ) Total Operating Expenses 13,796,776 13,876,192 (79,416 ) (0.6 ) Income from operations 10,779,227 5,958,542 4,820,685 80.9 Interest income 143,094 56,817 86,277 151.9 Interest expenses (250,410 ) (402,968 ) 152,558 (37.9 ) Loss on disposal of property and equipment (31,072 ) (1,511 ) (29,561 ) 1,956.4 Impairment for investments (300,000 ) - (300,000 ) 100.0 Change in fair value of the warrant liability 1,398,774 (2,814,012 ) 4,212,786 (149.7 ) Allowance for expected credit loss-related parties receivable (34,462,992 ) - (34,462,992 ) 100.0 Remeasurement gain from change in functional currency (2,490,646 ) - (2,490,646 ) 100.0 Government subsidies income 692,443 1,029,370 (336,927 ) (32.7 ) Other income 1,212,354 676,136 536,218 79.3 Income(Loss) before income tax (23,309,228 ) 4,502,374 (27,811,602 ) (617.7 ) Income tax 1,708,262 699,691 1,008,571 144.1 Net income(Loss) $ (25,017,490 ) $ 3,802,683 $ (28,820,173 ) (757.9 ) Components of Results of Operations For the Fiscal Years ended December 31, Component of Results of Operations 2023 2022 Revenues $ 90,333,240 $ 90,830,674 Cost of Goods Sold 65,757,237 70,995,940 Gross Profit 24,576,003 19,834,734 Operating Expenses 13,796,776 13,876,192 Net Income(Loss) $ (25,017,490 ) $ 3,802,683 Revenue Greenland’s revenue decreased by approximately $0.50 million, or approximately 0.5%, to approximately $90.33 million for the fiscal year ended December 31, 2023, from approximately $90.83 million for the fiscal year ended December 31, 2022.
Removed
Notes Receivable As of December 31, 2022, Greenland had approximately $28.75 million of notes receivables, which will be collected by us within twelve months. The decrease was approximately $8.80 million, or 23.44%, as compared to approximately $37.55 million as of December 31, 2021.
Added
For the fiscal years ended December 31, 2023 and 2022, Greenland’s gross margin was approximately 27.21% and 21.84%, respectively.
Removed
Working Capital Our working capital was approximately $66.16 million as of December 31, 2022, as compared to $53.84 million as of December 31, 2021. The increase in working capital of $12.32 million in the fiscal year 2022 as compared with the fiscal year 2021 was primarily contributed to a decrease in notes payable and accounts payable.
Added
Change in fair value of the warrant liability Greenland recognized a gain of approximately $1.40 million for the investor warrant from a change in fair value of the warrant liability for the fiscal year ended December 31, 2023, as compared to a loss of approximately $2.81 million for the investor warrant, from a change in fair value of the warrant liability for the fiscal year ended December 31, 2022.

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