Form 10-K Greenland Technologies For: Dec 31 (2024)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ______ TO ______

COMMISSION FILE NUMBER 001-38605

GREENLAND TECHNOLOGIES HOLDING CORPORATION

(Exact name of Registrant as specified in its charter)

REGISTRANT’S TELEPHONE NUMBER, INCLUDINGAREA CODE: 1 (888) 827-4832

SECURITIES REGISTERED PURSUANT TO SECTION 12(b)OF THE ACT:

SECURITIES REGISTERED PURSUANT TO SECTION 12(g)OF THE ACT:

NONE

(Title of Class)

Indicate by check mark if the registrant is awell-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes☐No☒

Indicate by check mark if the registrant is notrequired to file reports pursuant to Section 13 or Section 15(d) of the Act.Yes☐No☒

Indicate by check mark whether the registrant(1) has filed all reports required to be filed be Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days.Yes☒No☐

Indicate by check mark whether the registranthas submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).Yes☒No☐

Indicate by check mark whether the registrantis a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accountingstandards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registranthas filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financialreporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared orissued its audit report. ☐

If securities are registered pursuant to Section12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correctionof an error to previously issued financial statements. ☐

Indicate by check mark whether any of those errorcorrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’sexecutive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrantis a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes☐No☒

The aggregate market value of the voting and non-votingcommon equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid andasked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarterwas approximately $10.81 million.

As of April 16, 2024, there were 13,594,530 ordinaryshares of the registrant outstanding.

TABLE OF CONTENTS

i

Cautionary Note Regarding Forward Looking Statements

This Annual Report on Form 10-K, or this Report,contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “SecuritiesAct”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements, whichexpress management’s current views concerning future business, events, trends, contingencies, financial performance, or financialcondition, appear at various places in this report and use words like “aim,” “anticipate,” “assume,”“believe,” “continue,” “could,” “estimate,” “expect,” “forecast,”“future,” “goal,” “intend,” “likely,” “may,” “might,” “plan,”“potential,” “predict,” “project,” “see,” “seek,” “should,” “strategy,”“strive,” “target,” “will,” and “would” and similar expressions, and variations or negativesof these words. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors,some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressedor forecasted. These risks and uncertainties include the following:

This Report should be read completely and withthe understanding that actual future results may be materially different from what we expect. The forward-looking statements includedin this Report are made as of the date of this Report and should be evaluated with consideration of any changes occurring after the dateof this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligationto update any forward-looking statements, whether as a result of new information, future events or otherwise.

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PART I

ITEM 1. BUSINESS

General

Greenland Technologies Holding Corporation (the“Company” or “Greenland”) designs, develops, manufactures and sells components and products for the global materialhandling industries.

Through its PRC subsidiaries, Greenland offerstransmission 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 companiesacross 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 usedin 1-ton to 15-tons forklift trucks, some with mechanical shift and some with automatic shift. Greenland sells these transmission productsdirectly to forklift-truck manufacturers. In the fiscal years ended December 31, 2023 and 2022, Greenland sold an aggregate of 149,543and 129,686 sets of transmission products, respectively, to more than 100 forklift manufacturers in the PRC.

In January 2020, Greenland launched HEVI Corp.(“HEVI”), formerly known as Greenland Technologies Corp. to focus on the production and sale of electric industrial vehiclesto meet the increasing demand for electric industrial vehicles and machinery powered by sustainable energy in order to reduce air pollutionand lower carbon emissions. HEVI is a wholly owned subsidiary of Greenland incorporated under the laws of the State of Delaware. HEVI’selectric industrial vehicle products currently include GEF-series electric forklifts, a series of lithium powered forklifts with threemodels 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 wheeledfront loader. In addition, HEVI introduced a line of mobile DC battery chargers that support DC powered EV applications in the North Americamarket. These products are available for purchase in the United States (“U.S.”) market. In August 2022, Greenland launcheda 54,000 square foot industrial electric vehicle assembly site in Baltimore, Maryland to support local services, assembly and distributionof its electric industrial heavy equipment products line.

Greenland serves as the parent company of GreenlandHolding Enterprises Inc. (“Greenland Holding”), a holding company formed in the State of Delaware on August 28, 2023, whichin turn acts as the holding company for Zhongchai Holding (Hong Kong) Limited, a holding company formed under the laws of the Hong KongSpecial Administrative Region (“Hong Kong”) on April 23, 2009 (“Zhongchai Holding”). Zhongchai Holding’ssubsidiaries include Zhejiang Zhongchai Machinery Co. Ltd., an operating company formed under the laws of the People’s Republicof 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”). Through Zhongchai Holding and its subsidiaries, Greenland develops and manufactures traditional transmissionproducts for material handling machineries in the PRC.

Greenlandwas incorporated on December28, 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 TechnologiesHolding Corporation.

As of December 31, 2023,Cenntro Holding Limited owned 45.69% of our outstanding ordinary shares. Cenntro Holding Limited is controlled and beneficially ownedby Mr. Peter Zuguang Wang, the chairman of the board of directors of the Company.

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Significant Activities since Inception

Initial Public Offering

On July 27, 2018, we consummated our initial publicoffering of 4,400,000 units, including a partial exercise by the underwriters of their over-allotment option in the amount of 400,000units. Each unit consisted of one ordinary share, no par value, one warrant to purchase one-half of one ordinary share and one right toreceive one-tenth of one ordinary share upon the consummation of our Business Combination, pursuant to a registration statement on FormS-1. Warrants must be exercised in multiples of two warrants, and each two warrants are exercisable for one ordinary share at an exerciseprice 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.

Simultaneously with the consummation of our initialpublic 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. Wealso sold to Chardan (and its designees), for $100, an option to purchase up to 240,000 units exercisable at $11.50 per unit (or an aggregateexercise price of $2,760,000) commencing on consummation of the Business Combination (as defined below). The unit purchase option maybe exercised for cash or on a cashless basis, at the holder’s option, and expired on July 24, 2023. On February 18, 2021, Chardanexercised its option to purchase 120,000 units.

Business Combination

On October 24, 2019, we consummated our businesscombination with Zhongchai Holding (the “Business Combination”) after a special meeting, where the shareholders of Greenlandconsidered and approved, among other matters, a proposal to adopt a share exchange agreement (the “Share Exchange Agreement”),dated as of July 12, 2019, among (i) Greenland, (ii) Zhongchai Holding, (iii) the Sponsor, in the capacity as the purchaser representative(the “Purchaser Representative”), and (iv) Cenntro Holding Limited, the sole member of Zhongchai Holding (the “ZhongchaiEquity Holder” or the “Seller”).

Pursuant to the Share Exchange Agreement, Greenlandacquired from the Seller all of the issued and outstanding equity interests of Zhongchai Holding in exchange for 7,500,000 newly issuedordinary shares, no par value, of Greenland, to the Seller (the “Exchange Shares”). As a result, the Seller became the controllingshareholder of Greenland, and Zhongchai Holding became a directly and wholly owned subsidiary of Greenland. The Business Combination wasaccounted for as a reverse merger effected by the Share Exchange Agreement, where Zhongchai Holding is considered the acquirer for accountingand financial reporting purposes.

The Business Combination was accounted for asa reverse recapitalization (the “Recapitalization Transaction”) in accordance with Accounting Standard Codification (“ASC”)805, Business Combinations. For accounting and financial reporting purposes, Zhongchai Holding is considered the acquirer based on thefollowing facts and circ*mstances:

As a result of Zhongchai Holding being the accountingacquirer, the financial reports filed with the SEC by the Company subsequent to the Business Combination are prepared “as if”Zhongchai Holding is the predecessor and legal successor to the Company. The historical operations of Zhongchai Holding are deemed tobe those of the Company. Thus, the financial statements included in this Report reflect (i) the historical operating results of ZhongchaiHolding prior to the Business Combination; (ii) the combined results of Zhongchai Holding and Greenland following the Business Combinationin October 2019; (iii) the assets and liabilities of Zhongchai Holding at their historical cost, and (iv) Greenland’s equitystructure for all periods presented. Zhongchai Holding received 7,500,000 shares of Greenland in exchange for all the share capital, whichis reflected retroactively to December 31, 2017 and will be utilized for calculating earnings per share in all prior periods. No step-upbasis of intangible assets or goodwill was recorded in the Business Combination transaction, which is consistent with the treatment ofthe transaction as a reverse recapitalization of Zhongchai Holding.

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Incorporation of HEVI Corp.

On January 14, 2020, HEVI Corp., formerly knownas Greenland Technologies Corp. prior to May 2022, was incorporated under the laws of the state of Delaware. HEVI is a wholly owned subsidiaryof the Company and promotes sales of sustainable alternative products for the heavy industrial equipment industry, including electricindustrial vehicles, in the North American market.

June 2021 Public Offering

On June 28, 2021, the Company entered into anunderwriting agreement with Aegis Capital Corp., pursuant to which the Company agreed to sell to Aegis Capital Corp. in a firm commitmentpublic offering 857,884 ordinary shares of the Company, for an offering price of $8.16 per share. The Company received $7.0 million ingross proceeds from this offering, before deducting underwriting discounts and other related offering expenses.

At-the-market Offering Agreement

On November 19, 2021, the Company entered intoan at the market offering agreement with H.C. Wainwright & Co., LLC, to create at an the market equity program pursuant to which theCompany may offer and sell, from time to time, through or to H.C. Wainwright & Co., LLC, the Company’s ordinary shares, no parvalue per share, having an aggregate gross offering price of up to $7.72 million. As of the date of this Report, no ordinary shares ofthe Company have been sold under the at the market offering agreement.

July 2022 Registered Direct Offering

On July 25, 2022, the Company entered into a securitiespurchase agreement with an investor, pursuant to which the Company agreed to issue and sell 1,250,000 ordinary shares and 398,974 pre-fundedwarrants (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. The Company received $6.88 million in gross proceeds fromthat registered direct offering, before deducting placement agent fees and other related offering expenses.

July 2022 Private Placement

On July 25, 2022, the Company entered into anothersecurities purchase agreement with an investor for a private placement offering of 616,026 pre-funded warrants and 4,530,000 common warrants.Each ordinary share and accompanying common warrants were sold together at a combined offering price of $5.089 per unit, with an exerciseprice per pre-funded warrant of $0.001 per share. The Company received $3.14 million in gross proceeds from that private placement, beforededucting placement agent fees and other related offering expenses.

Formation of Hengyu Capital Limited

On August 16, 2022, Hengyu Capital Limited wasformed in Hong Kong as a subsidiary of Zhongchai Holding (Hong Kong) Limited, which owns 62.5% equity interests in Hengyu Capital Limited.The remaining 37.5% of the equity interests of Hengyu Capital Limited are owned by the chairman of our board of directors, Mr. Peter ZuguangWang. Hengyu Capital Limited does not have any business activities at this time.

Dissolution of Shanghai Hengyu BusinessManagement Consulting Co., Ltd.

From the consummation of the Business Combinationto July 2023, Shanghai Hengyu Business Management Consulting Co., Ltd., a company formed in the PRC, was an indirect subsidiary of theCompany, in which the Company owns 62.5% equity interests. 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 formedin the State of Delaware with no shares issued. On March 26, 2024, the Company entered into a share exchange agreement with GreenlandHolding and Zhongchai Holding (the “2024 Share Exchange Agreement”), pursuant to which, on March 27, 2024, the Company transferredall the equity interests it held in Zhongchai Holding to Greenland Holding, and in return, Greenland Holding issued 100 shares to theCompany, representing 100% of the issued and outstanding shares of Greenland Holding. As a result, Greenland Holding has become a whollyowned subsidiary of the Company, which in turn holds 100% of the equity interests in Zhongchai Holding.

Announcement of Spin-off of Greenland Holding

On February 14, 2024, the Company announced itsintent, as approved by its board of directors, to explore a separation of its electric industrial vehicles and drivetrain systems segmentsinto two independent, publicly-traded companies by spinning off its drivetrain systems business.

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Corporate Structure

The following diagram illustrates the currentcorporate structure of Greenland, including the jurisdiction of formation and ownership interest of each of its subsidiaries.

Greenland was incorporated on December28,2017 as a British Virgin Islands company with limited liability. As a result of the consummation of the Business Combination, Greenlandserves as the parent company for Zhongchai Holding.

Greenland Holding was incorporated in the Stateof Delaware on August 28, 2023. Upon consummation of the share exchange as contemplated by the 2024 Share Exchange Agreement, GreenlandHolding became a wholly owned subsidiary of the Company, and holds 100% equity interests in Zhongchai Holding. As of the date of thisReport, Greenland Holding has no business operations and acts as a holding company.

Zhongchai Holding was incorporated in Hong Kongon April23, 2009. From April23, 2009 to November1, 2011, Zhongchai Holding was a subsidiary of Equicap, Inc., a Nevadacorporation, with its stock quoted on the OTC Markets until July29, 2011.

HEVI was incorporated in the state of Delawareon January 14, 2020 as a wholly owned subsidiary of Greenland. HEVI promotes sales of sustainable alternative products for the heavy industrialequipment industry, including electric industrial vehicles, in the North American market.

Zhejiang Zhongchai, a 71.58% ownedsubsidiaryof Zhongchai Holding, was formed in the PRC on November21, 2005 and engages in the business of designing, manufacturing, and sellingtransmission products mainly for forklift trucks. 20.0% of the equity interests in Zhejiang Zhongchai is held by Xinchang County JiuheEnterprise Management (Limited Partnership), representing the collective equity interests of Zhejiang Zhongchai owned by its employees.The remaining 10.53% of Zhejiang Zhongchai’s capital stock is owned by Xinchang County Jiuxin Investment Management Partnership(LP) (“Jiuxin”), an entity owned by Mengxing He, director and general manager of Zhejiang Zhongchai.

Hangzhou Greenland, formerly known as HangzhouGreenland Robotic Co., Ltd. prior to November 6, 2020 (“Hangzhou Greenland”), a wholly ownedsubsidiary of ZhongchaiHolding, was formed in the PRC on August9, 2019 and engages in the business of research and development of electric engineeringvehicles, including electric forklifts, electric loading vehicles, electric digging vehicles, and other products. Hangzhou Greenland isalso committed to product supply chain integration and overseas sales.

Hengyu Capital Limited, a 62.5% owned subsidiaryof Zhongchai Holding, was formed in Hong Kong on August 16, 2022. Hengyu Capital Limited does not have any business activities at thistime and will be engaging in the business of investing. The remaining 37.5% of the capital stock of Hengyu Capital Limited is owned byPeter Zuguang Wang, the chairman of our board of directors.

Products

Greenland provides transmission systems and integratedpowertrains for material handling machineries, particularly for electric forklift trucks. In order to expand and diversify existing productofferings, Greenland recently entered into the electric industry vehicles market, by designing and developing electric industry vehicles.

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Transmission products for material handlingmachineries

Transmission Systems. For 15 years, Greenland,along with its subsidiaries, specializes in designing, developing, and manufacturing a wide range of transmission systems for materialhandling machineries, in particular forklift trucks. The range of the transmission systems covers machineries from one ton to fifteentons. Most transmission systems contain auto transmission features. This feature allows for easy machine operations. In addition, Greenlandprovides transmission system for internal combustion powered machineries as well as for electrical powered machineries. Greenland hasrecently experienced an increasing demand for electric powered transmission systems. These transmission systems are key components formaterial handling machinery assembly. To meet this increasing demand, Greenland is able to providing these transmission systems to majorforklift truck original equipment manufacturers (“OEMs”) as well as certain global branded manufacturers.

Integrated Powertrain. Through its PRCsubsidiaries, Greenland designs and develops new and distinctive powertrains, which integrates electric motor, speed reduction gearbox,and driving axles into a combined integral module, in order to meet a growing demand for advanced electric forklift trucks. This integratedpowertrain will enable the OEMs to significantly shorten design cycle, improve machinery efficiency, and simplify manufacturing process.There is a new trend that OEMs would rather use an integrated powertrain than separate electric motor, speed reduction gearbox, and drivingaxles, particularly in electric forklift trucks. Currently, Greenland makes two tons to three and a half-tons integrated powertrains forfew electric forklift truck OEMs. Greenland is in the process of adding more integrated powertrain products for electric forklift truckOEMs with different sizes.

Electric Industrial Heavy Equipment

GEL-5000 Electric Wheel Loader

Offering all-electric clean and sustainable alternativesto traditional heavy-emission systems in the industrial heavy equipment industry, HEVI sells equipment that produce no operating emissionsand reduced noise pollution while offering the strength and power for many applications. Assembled in Maryland, HEVI’s first productline includes the GEL-5000 and GEL-1800 electric wheeled front loader, the GEX-8000 electric excavator and the GEF-series of electricl*thium forklifts.

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GEL-5000

The GEL-5000 is a 39,683 lb. lithium powered all-electricwheeled front loader capable of supporting a 5.0-ton rated load. Its 282 kWh 620V lithium battery sourced from Contemporary Amperex TechnologyCo., Limited (“CATL”) produces the power to support eight hours of operation time and can be charged in as little as two hours.

GEL-1800

The GEL-1800 is a 11,464 lb. lithium powered all-electricwheeled front loader capable of supporting a 1.8-ton rated load. Its 141 kWh 620V CATL-sourced lithium battery produces the power to supportnine 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-electricexcavator capable of supporting an 8.0-ton rated load. Its 141 kWh 620V CATL-sourced lithium battery produces the power to support ninehours of operation time and can be charged in as little as one and a half hours.

The GEL-5000, GEL-1800 and GEX-8000 come standardwith advanced systems such as an intelligent system diagnostic display, quick-hitch attachment system with a wide range of attachmentsand quality-of-life operation features that further add value to our customers.

GEF-Series Forklifts

HEVI offers the GEF-series of lithium poweredelectric forklifts that range in power from 1.5-ton to 3.5-ton rated load.

Charging Solutions

DCH-480-30 Mobile Direct Current (“DC”)Charger

HEVI has developed a line of DC mobile chargingsolutions 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. These solutions create a seamless adoption of HEVI’s electric heavy equipment or any compatibleDC-powered EV into any existing fleet operation while creating another revenue stream for the HEVI business.

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Recent Regulatory Developments

We are a holding company incorporated in the BritishVirgin Islands and not a Chinese operating company. As a holding company with no material operations of our own, we conduct our operationsthrough our U.S. subsidiary, HEVI, and our PRC subsidiaries. We hold equity interests in our subsidiaries and do not currently use a variableinterest entity (“VIE”) structure. Investors in our ordinary shares are purchasing equity interest in a British Virgin Islandsholding company. As used in this Report, “we,” “us,” “our company,” or “our” refers toGreenland Technologies Holding Corporation and when describing the consolidated financial results of Greenland Technologies Holding Corporationand its subsidiaries, also includes its subsidiaries.

We and our PRC subsidiaries are subject to certainlegal and operational risks associated with our PRC subsidiaries’ operations in China. PRC laws and regulations governing our PRCsubsidiaries’ current business operations are sometimes vague and uncertain, and, as a result, these risks may result in materialchanges in the operations of our PRC subsidiaries, significant depreciation of the value of our ordinary shares, or a complete hindranceof our ability to offer or continue to offer our securities to investors. For instance, except for fulfilling the filing procedure withthe China Securities Regulatory Commission, or the CSRC, in connection with future offerings, we believe that we and our PRC subsidiariesare currently not required to obtainany permission or approval from the CSRC and theCyberspace Administration of China, orthe CAC, in the PRC tooffer securities to foreign investors. However, there is no guarantee that this will continue to bethe case in the future in relation to a follow-on offering or the continued listing of our securities on a U.S. securities exchange, oreven in the event such permission or approval is required and obtained, it will not be subsequently revoked or rescinded. In the eventthat such approval is required in the future and we and/or our PRC subsidiaries do not receive or maintain such approval, our ordinaryshares may significantly decline in value or become worthless, and our ability to offer or continue to offer securities to investors maybe significantly limited or completely hindered.

In addition, we and our PRC subsidiaries are subjectto risks and uncertainties of the interpretations and applications of PRC laws and regulations, including but not limited to, those imposinglimitations on foreign ownership in the industry our PRC subsidiaries operate. We and our PRC subsidiaries are also subject to the risksand uncertainties about any future actions of the PRC government. If any future actions of the PRC government result in a material changein our PRC subsidiaries’ operations, the value of our ordinary shares may depreciate significantly or become worthless. See “RiskFactors —Risks Related to Doing Business in China—Uncertainties with respect to the PRC legal system couldadversely affect us and our PRC subsidiaries.”

Recently, the PRC government adopted a seriesof regulatory actions and issued statements to regulate business operations in China, including cracking down on illegal activities inthe securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adoptingnew measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As of the date of thisReport, our Company and our PRC subsidiaries have not been involved in any investigations on cybersecurity review initiated by any PRCregulatory authority, nor has any of them received any inquiry, notice or sanction.As of the date of this Report, we and our PRCsubsidiaries have not received any inquiry, notice, warning, or sanctions from the CSRC or any other PRC governmental authorities regardingthe offering of our securities outside of the PRC.

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On February 17, 2023, the CSRC published the Regulationsof 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 issuesshares, depositary receipts, corporate bonds convertible into shares, or other securities of an equity nature outside of the PRC, or listsits securities for trading outside of the PRC. According to such regulations, a domestic enterprise that issues and lists its securitiesoutside of the PRC shall comply with the filing procedures and report the relevant information to the CSRC. A domestic enterprise shallnot be listed on an overseas stock exchange if any of the following circ*mstances exists: (i) where such securities offering and listingis explicitly prohibited by provisions in laws, administrative regulations and relevant state rules; (ii) where the intended securitiesoffering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordancewith law; (iii) where the domestic company intending to make the securities offering and listing, or its controlling shareholders andthe actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining theorder of the socialist market economy during the latest three years; (iv) where the domestic company intending to make the securitiesoffering and listing is suspected of committing crimes or major violations of laws and regulations, and is under investigation accordingto law, and no conclusion has yet been made thereof; (v) where there are material ownership disputes over equity held by the domesticcompany’s controlling shareholder or by other shareholders that are controlled by the controlling shareholder and/or actual controller.The Trial Measures changes the management of licensing to record management, strengthen the supervision in the aftermath, create a moretransparent and predictable institutional environment, and support the standardized development of enterprises using the overseas capitalmarket. As such, we will be required to complete filing procedures with CSRC in connection with our future offerings. Additionally, wemay be prohibited from continued listing if we fit into any of the five scenarios as discussed above. Furthermore, in the event that anapproval from Chinese authorities is required for our future offerings or continued listing on Nasdaq,if we and/or our PRC subsidiariesdo not receive or maintain required approvals, or we inadvertently conclude that such approvals are not required, or applicable laws,regulations, or interpretations change such that we and/or our PRC subsidiaries are required to obtain approval in the future, we and/orour PRC subsidiaries may be subject to an investigation by Chinese regulators, fines or penalties, or an order prohibiting us from conductingan offering, and these risks could result in a material adverse change in our operations and the value of our ordinary shares, significantlylimit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantlydecline in value or become worthless. In additionsince these statements and regulatory actions are newly published, and officialguidance and related implementation rules have not been issued, it is highly uncertain what the potential impact such modified or newlaws and regulations will have on our subsidiaries’ daily business operation, the ability to accept foreign investments and ourability to continue our listing on a U.S. exchange. See “Risk Factors —Risks Related to Doing Business in China—OurPRC subsidiaries may be liable for improper use or appropriation of personal information provided by their customers and any failure tocomply 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.”

Although we are not currently owned or controlledby a governmental entity in any foreign jurisdiction, the PRC government has exercised, and continues to exercise, substantial controlover virtually every sector of the Chinese economy through regulation and state ownership, including the steel sector where our PRC subsidiarieshave been conducting their business. Any government decisions or actions to change the steel production, or any decisions the governmentmight make to cut spending, could adversely impact our PRC subsidiaries’ business and our results of operations. We believe thatour PRC subsidiaries’ operations in China are in material compliance with all applicable legal and regulatory requirements. However,the central or local governments of the jurisdictions in which our PRC subsidiaries operate may impose new, stricter regulations or interpretationsof existing regulations with little advance notice that could require additional expenditures and efforts on our part to ensure our andour PRC subsidiaries’ compliance with such regulations or interpretations. Furthermore, the PRC government authorities may continueto 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, whichmay be beyond our control. Therefore, any such action may adversely affect the operations of our PRC subsidiaries and significantly limitor hinder our ability to offer or continue to offer securities to you and reduce the value of such securities or cause the value of suchsecurities to be completely worthless. See “Risk Factors —Risks Related to Doing Business in China—ThePRC government exerts substantial influence over the manner in which our PRC subsidiaries must conduct their business activities. If theChinese government significantly regulates the business operations of our PRC subsidiaries in the future and our PRC subsidiaries arenot able to substantially comply with such regulations, the business operations of our PRC subsidiaries may be materially and adverselyaffected and the value of our ordinary shares may significantly decrease.”

Trading in our securities may be prohibited underthe Holding Foreign Companies Accountable Act, or the HFCA Act, if Public Company Accounting Oversight Board (United States)(the“PCAOB”) determines that it cannot inspect or fully investigate our auditor, and that as a result, an exchange may determineto delist our securities. The PCAOB has been able to inspect our auditor, WWC P.C., an independent registered public accounting firm withits headquarters in San Mateo, California, and its latest inspection has been ongoing since November 2023. See “Risk Factors —RisksRelated to Doing Business in China—A recent joint statement by the SEC and the PCAOB, proposed rule changes submittedby Nasdaq, and the HFCA Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessingthe qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB.”

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Trading in our securities may be prohibited underthe HFCA Act if the PCAOB determines that it cannot inspect or fully investigate our auditor, and that as a result, an exchange may determineto delist our securities. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act and on December29, 2022, a legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”)was signed into law by President Biden, which contained, among other things, an identical provision to Accelerating Holding Foreign CompaniesAccountable Act and amended the Holding Foreign Companies Accountable Act by requiring the SEC to prohibit an issuer’s securitiesfrom trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three,thus reducing the time period before our securities may be prohibited from trading or delisted. The PCAOB has been able to inspect ourauditor, WWC P.C., an independent registered public accounting firm with its headquarters in San Mateo, California, and its latest inspectionhas been ongoing since November 2023. On December 16, 2021, the PCAOB issued a report to notify the SEC of its determinations that itis unable to inspect or investigate completely registered public accounting firms headquartered in Mainland China and Hong Kong, respectively,and identifies the registered public accounting firms in Mainland China and Hong Kong that are subject to such determinations. Our auditoris not subject to the determinations announced by the PCAOB on December 16, 2021. On August 26, 2022, the CSRC, the Ministry of Finance(the “MOF”), and the PCAOB signed the Protocol, governing inspections and investigations of audit firms based in China andHong Kong. The Protocol remains unpublished and is subject to further explanation and implementation. Pursuant to the fact sheet withrespect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection orinvestigation and has the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB Board determined thatthe PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland Chinaand Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise failto facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination. See “RiskFactors — Risks Related to Doing Business in China — A recent joint statement by the SEC and the PCAOB, proposed rule changessubmitted by Nasdaq, and the HFCA Act all call for additional and more stringent criteria to be applied to emerging market companies uponassessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB.”

Dividend Policy and Cash Transfers

We intend to retain all of our available fundsand any future earnings to fund the development and growth of our business. As such, we do not expect to pay any cash dividends in theforeseeable future. We are permitted under PRC laws and regulations to provide funding to our PRC subsidiaries only through loans or capitalcontributions, and only if we satisfy the applicable government registration and approval requirements.

Our PRC subsidiaries are permitted to pay dividendsonly out of their retained earnings. However, each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profitseach year, after making up for previous year’s accumulated losses, if any, to fund certain statutory reserves, until the aggregateamount of such funds reaches 50% of registered capital. This portion of our PRC subsidiaries’ respective net assets are prohibitedfrom being distributed to their shareholders as dividends. However, none of our PRC subsidiaries has made any dividends or distributionsto our holding company or any U.S. investors as of the date of this Report. See “Risk Factors —Risks Related to DoingBusiness in China—We may rely on dividends paid by our subsidiaries for our cash needs, and any limitation on the abilityof our subsidiaries to make payments to us could have a material adverse effect on our ability to conduct business.”

In addition, the PRC government imposes controlson the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. If the foreignexchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not beable to pay dividends in foreign currencies to our shareholders. See “Risk Factors —Risks Related to Doing Businessin China—Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affectthe value of your investment.”

A 10% PRC withholding tax is applicable to dividendspayable to investors that are non-resident enterprises. Any gain realized on the transfer of ordinary shares by such investors is alsosubject to PRC tax at a current rate of 10%, which in case of dividends will be withheld at source if such gain is regarded as incomederived from sources within the PRC. See “Risk Factors —Risks Related to Doing Business in China—Underthe PRC EIT Law, we may be classified as a ‘Resident Enterprise’ of China. Any classification as such will likely result inunfavorable tax consequences to us and our non-PRC shareholders.”

We have adopted written cash management policiesand procedures that dictate how funds are transferred within our organization. According to such policies and procedures, each subsidiaryof the Company may initiate a cash transfer request by timely filling out a fund application form, which shall be signed by the financialprincipal and the principal of the subsidiary and then submitted to the financial department of the Company for approval. After a cashtransfer request is approved by the financial department, the relevant subsidiary may proceed to initiate such transfer. Our Company distributedcash as loans to our subsidiaries. Several cash transfers have been made between our Company and our subsidiaries. As of December 31,2023, our Company provided a loan of $7,457,076 to Zhongchai Holding.

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Competitive Strengths

Greenland believes that it is in the right positionand 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.

Favorable Market Trends

Greenland believes that a number of key industrytrends in the PRC will continue to benefit Greenland and its subsidiaries and continue to drive its growth, including:

As a result of these favorable industry trends,Greenland believes that it is well-positioned to capitalize on the increasing market demand for transmission products in the PRC as wellas on the growing demand for emission-free and labor substitution by electric vehicles in the United States.

Well-Developed Manufacturing CapabilitiesLeading to Higher Efficiency

Greenland’s well-developed manufacturingprocess contributes to manufacturing efficiency and cost-effectiveness. Specifically, a combination of modern operational and managementsystems, advanced manufacturing equipment, experienced manufacturing know-hows, skilledworkforce, and flexible manufacturing systemallows Greenland to shorten the “time to market” for its new products. Moreover, the combination allows Greenland to timelyadjust its lines of products in anticipation of changes in market demands.

Robust Research and Product DevelopmentCapabilities

Research and product development capabilitieshave been critical to Greenland’s historical growth and current market position. Greenland’s research and development teamis comprised of more than 17 professionals, or over 5% of Greenland’s employees. Greenland’s research and development facilitiesconsist of a transmission technology center and an electric industry vehicle center. The transmission technology center is accreditedby the Zhejiang provincial government. 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-doctoralworkstationcertified by the PRC Ministry of Human Resource and Social Security.

Strategic Service Network

The ability to provide timely after-salesservicesis critical in building and maintaining a loyal and solid customer base. We have strategically established an after-salesservicenetwork in locations with developed economies. For example, the eastern provinces of the PRC generally have significant demand for logisticsservices. Accordingly, Greenland, through its subsidiaries, has operated an in-house service center and retained service providers thatconduct businesses predominantly in these regions. Users of Greenland’s products are able to reach Greenland through a service line,through which Greenland is able to provide prompt on-sitetechnical services.

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Experienced Management Team with SuccessfulTrack Records

Greenland’s senior management team is comprisedof individuals who have operational experience, market knowledge, international management skill, and technical expertise. In addition,each member of the senior management team has a proven track record in building and turning companies into successful enterprises.

Customers

Greenland, through its subsidiaries, sells mostof its transmission products in the PRC and electric industrial heavy equipment in the U.S. Its customer bases are primarily in the businessesof material handling equipment and forklift trucks. Greenland believes that its customers include some of the leading manufacturers intheir respective market segments. Greenland also supplies transmission products to the PRC subsidiaries of a number of blue-chipinternationalbrands based in Europe and Asia.

During the years ended December31, 2023and 2022, Greenland’s five largest customers contributed 45.06% and 50.85%, respectively, of its total revenues. For the years endedDecember 31, 2023 and 2022, Greenland’s single largest customer, Hangcha Group, accounted for 14.98% and 17.14%, respectively, ofGreenland’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 varioussuppliers for use in the manufacture of its products.

The key raw materials used to manufacture itsproducts are processed metal-based parts and components, including iron castings and gears, which are purchased from our domestic suppliersin the PRC. Most of our suppliers are located within close proximity to our manufacturing facilities, which reduces our transportationand inventory costs.

The prices for iron and steel and other raw materialshave historically fluctuated significantly in the PRC, which in turn has affected the Company’s business and operation results.Greenland closely monitors changes in raw material prices and seeks to adjust its inventory of raw materials during inflation periods.In addition, Greenland seeks to minimize the impact of fluctuations in raw material prices by adopting bidding processes in its raw materialprocurement process Greenland also seeks to price its products to reflect the expected fluctuations in raw material prices to the extentpossible. However, there can be no assurance that Greenland could precisely estimate any increase in raw material price or pass on suchincrease to its customers.

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HEVI purchases components, electronics, batterysystems and metal-based parts for use in the assembly of its electric industrial heavy equipment from various suppliers based in the PRC.These items are transported to the United States for assembly of the final products.

HEVI seeks to price its products to reflect expectedincreases in the component prices and transportation costs to the extent possible. However, there can be no assurance that HEVI couldprecisely estimate any increase in components or pass on such increase to its customers.

Production

Greenland’s transmission products are comprisedof a number of major parts and components, including gearbox housing, gears, bearings, oil pumps, gear shafts, hydraulics, electric forklifts,wheeled excavators, and electrical components. The gearbox housing and gears parts are processed in-house at its manufacturing facilityin Xinchang County, Zhejiang Province, the PRC. Components of such products, in general, are sourced, from third parties, assembled, andintegrated to form finished products. The finished products then undergo further adjustments, fine tunings, testing, and quality inspections.At the end of the inspection process and prior to shipment to our warehouses for storage and distribution, the finished products are coatedand painted.

Greenland’s electric industrial heavy equipmentis manufactured and assembled in its 54,000 square foot industrial electric vehicle assembly site in Baltimore, Maryland.

Inventory and Warehousing

Greenland undertakes inventory control in orderto reduce the risks of under and over-stocking. On average, Greenland typically maintains a 30 days stock piles for production needs.It generally increases its inventories toward the end of the year in order to meet any production demand, in anticipation of any demandsincrease, from the second quarter of the following year. Furthermore, Greenland maintains higher inventories at year-end because ChineseNew Year typically falls in January or February, which affects production and transportation of raw materials. Greenland has installedan enterprise resource planning (“ERP”) system, which provides real-time information about purchases, production schedules,and supplies of the raw materials. The ERP system has substantially improved Greenland’s inventory controls, providing the Companywith quick access to various data and easy formulation of operating models, and allowing the Company to keep its inventory at an appropriablelevel to facilitate the manufacturing process.

Research and Development

Greenland’s research and development teamselects research or development projects or both and draws up preliminary project proposals based on various factors, such as industryand market trends, customer feedback, and input from other departments (i.e. finance and manufacturing departments).

Greenland’s management, including the headsand lead managers of various internal departments, such as sales and marketing and finance departments, as well as its chief executiveofficer and chief technology officer, reviews the preliminary project proposals and its research and development team formulates a finalplan for each approved project after considering suggestions and comments by its management. The final plans will include detailed schedulesand budgets for the projects. Greenland’s finance department monitors budget overruns. Any increase in the original budget mustbe reviewed and approved by management before the relevant project can continue.

Greenland has also focused on research and developmentwith respect to its electric industrial equipment and related products. Greenland’s electric industrial heavy equipment productscurrently include GEF-series electric forklifts, a series of lithium powered forklifts with three models ranging in size from 1.8 tonsto 3.5 tons, and GEL-1800, a 1.8 ton rated load lithium powered electric wheeled front loader and GEX-8000, an all-electric 8.0 ton ratedload lithium powered wheeled excavator. These products have become available for purchase in the U.S. market.

Greenland, through HEVI, continues to focus itsresearch and development efforts on its next generation of electric industrial heavy equipment along with supporting products such asmobile charging units and attachments that will increase the value of its portfolio.

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Intellectual Property

Greenland relies on a combination of trademark,copyright, patent, software registration, and trade secret laws to protect its intellectual property rights. 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 registeredpatents with the PRC National Intellectual Property Administration (“CNIPA”), 94 of which are utility patents and 15 of whichare invention patents. These patents relate to the manufacturing of products.

Trademarks

As of December31, 2023, Greenland had beengranted two trademarks registered with the CNIPA.

As of the date of this Report, Greenland has notregistered any intellectual properties in the U.S.

Greenland’s intellectual property also includestechnical data such as test results and operating data from projects, drawings, designs, and machinery and manufacturing techniques itdeveloped in-house.

Sales and Marketing

Greenland sells its products through its salesand marketing teams. To promote Greenland’s brand, sales employees also attend trade shows and exhibitions to showcase our products.

As of December31, 2023, Greenland’ssales and marketing team consisted of 10 employees, with six (6) members in the PRC and four (4) in the U.S. Members of its sales andmarketing teams have extensive experience and knowledge in the material handling equipment sector of the manufacturing industry. Theyare 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 highlycompetitive in the PRC. 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 typical competitive criteria are quality,price, technology, after-salesservice, 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, companiesentering the market must have significant financial and technical resources. Moreover, the time and cost required to establish a proventrack record, necessary for general market acceptance, are substantial. An extensive after-salesservice network is essential fora company to gain general market acceptance.

Greenland believes that it is able to competebased on its market position, strong research and development capabilities, high quality products, integrated service systems, and strongrelationships with its customers.

Our key competitors are Shaoxing Advance GearboxCo., Ltd., Changsha Zhongchuan Transmission Machinery Co. Ltd., and Ganzhou Wuhuan Machine Co., Ltd.

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Electric Industrial Heavy Equipment Industry

Utilizing Greenland’s expertise in manufacturingand R&D, it established HEVI in January 2020 to create clean and sustainable products and services in the heavy industrial equipmentindustry that help organizations pursue a carbon neutral operation. HEVI designs, develops, and manufactures electric heavy industrialequipment and accessories and sells them directly to the end consumers in various markets in the United States. HEVI’s product lineavailable for purchase includes the GEL-5000 all-electric lithium 5.0-ton rated load wheeled front loader, GEL-1800 all-electric lithium1.8-ton rated load wheeled front loader, the GEX-8000 all-electric lithium 8.0-ton rated load excavator, and the GEF-series of electricl*thium forklifts. In August 2022, HEVI launched a 54,000 square foot industrial electric vehicle assembly site in Baltimore, Marylandto support local assembly, services and distribution of its product line.

Fast Growing Market. The global constructionequipment market is anticipated to grow at a compound annual growth rate (“CAGR”) of 3.9% from 2020 to 2025, reaching US$205billion, according to a November 2020 report published by MarketsandMarkets. The North American market is projected to exhibit one ofthe fastest growth rates during the forecast period. Consequently, we believe this growth will increase with the introduction of the UnitedState infrastructure overhaul program. Should the program be implemented, then it will be a powerful driver of growth in the engineeringand construction industry that will proliferate the demand for industrial equipment.

Call for Carbon Emission Reduction. Globalefforts to reduce greenhouse gas and carbon emissions continue to grow with proposals such as the current U.S. administration seekinga target of net zero emission by 2050. These strategies will result in government and public support for the adoption of emission zerotechnologies and equipment across industries thus boosting the demand for eco-friendly electric powered industrial heavy equipment. Assuch, we expect that the demand for electric industrial heavy equipment will increase rapidly.

Highly Fragmented and Emerging Market.The electric industrial heavy equipment market is highly fragmented with few, if any, dominant local market participants. Although a fewconventional industrial heavy equipment and construction equipment makers are in the process of electric products development, a majorityare years away from product deployment. This is to avoid cannibalization with the mature fossil fuel-powered equipment product lines whichresults in the lack of incentive to launch the full-electric industrial heavy equipment at the near term. As a result, with the earlymover advantage together with Greenland’s strong research and development capability, we believe that Greenland is well-positionedto secure a meaningful role in the electric industrial heavy equipment market.

High Technology Barriers for New Entrants.To compete in the electric industrial heavy equipment market, enterprises need a high-levelof core technologies and capabilitiesin order to successfully develop a commercial product. The investment and expertise required create a high barrier of entry for new marketplayers. Greenland’s success in the material handling industry and its achievements in research and development milestones givesGreenland the opportunity and the competitive edge to successfully compete in the industrial heavy equipment market.

Distribution Barriers for Market Leaders.Traditional OEMs in the industrial heavy equipment industry sell through established dealership models which have been proven to be difficultto adapt to electric alternatives. These dealerships rely heavily on service/maintenance revenue. As electric products require over 40%less of maintenance costs, it is challenging for OEMs to motivate their dealers to promote and service the new technology. Without a dealernetwork to cater to, we believe Greenland is well-positioned to establish a meaningful role in the electric industrial heavy equipmentmarket.

Our key competitors in the industrial heavy equipmentindustry are the traditional diesel-powered industrial heavy equipment manufacturers such as Caterpillar, Volvo CE and John Deere.

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Employees

As of December31, 2023, the total numberof full-timeemployees employed at Greenland and its subsidiaries was 325, with 314 employees located in the PRC and 11 employeeslocated in the U.S. The following table sets forth the number of its full-timeemployees by function as of December31, 2023:

Greenland maintains mandatory social securityinsurance for its employees pursuant to Chinese laws. Furthermore, it contributes mandatory social security funds for employees with respectto retirement, medical, work-relatedinjury, maternity, and unemployment benefits. Greenland has also included retirement plans forits employees in the U.S., including social security and pension along with medical, vision, dental, workers compensation, work-relatedinjury and maternity benefits.

Greenland believes that its success and continuedgrowth depend on its ability to attract, retain, and motivate qualified employees. Greenland offers its employees competitive salaries,comprehensive training, and other fringe benefits and incentives. None of our employees are represented by labor unions, and no collectivebargaining agreement has been put in place. Greenland has not had any labor strikes or other labor disturbances that have materially interfacedwith its operations, and it believes that it has maintained a good work relationship with its employees.

Regulations

PRC Law and Regulation

Policy Relating to the Foreign Invested GeneralEquipment Manufacturing Industry

The PRC implements its guidance on foreign investmentin different industries through the Catalogue for the Guidance of Foreign Investment Industries and the Special Administrative Measures(Negative List) for Foreign Investment Access jointly amended and promulgated by the National Development and Reform Commission and theMinistry of Commerce from time to time. According to the Catalogue of Encouraged Industries for Foreign Investment (Edition 2022) andthe Special Administrative Measures (Negative List) for Foreign Investment Access (Edition 2021) currently in force, the business activitiesthat we engage in are not classified as “prohibited” or “restricted” foreign invested industries.

Law and Regulation Relating to Product Quality

Pursuant to the Product Quality Law of the PRCwhich was promulgated on February22, 1993 and amended on December29, 2018, it is prohibited to produce or sell products thatdo not meet the standards or requirement for safeguarding human health and ensuring human and property safety.

Where a defective product causes physical injuryto a person or damage to property, the aggrieved party may claim compensation against the producer or the seller of such product. Wherethe responsibility for product defects lies with the producer, the seller shall, after settling compensation, have the right to recoversuch compensation from the producer, and vice versa. Violations of the Product Quality Law may result in the imposition of fines. In addition,the seller or the producer may be ordered to suspend operation and its business license may be revoked. Criminal liability may be incurredin serious cases.

Law and Regulation Relating to Production Safety

Pursuant to the Production Safety Law of the PRC(the “Production Safety Law”) promulgated by the Standing Committee of the National People’s Congress on June29,2002, last amended on June 10, 2021 and effective on September 1, 2021, enterprises and institutions shall be equipped with the conditionsfor safe production as provided in the Production Safety Law and other relevant laws, administrative regulations, national standards andindustrial standards. Any entity that is not equipped with such conditions is not allowed to engage in production and business operationactivities.

The law also requires manufacturers to offer educationand training programs to their employees regarding production safety and to hire qualified employees who have completed special trainingsto engage in specialized operations. Manufacturers are required to provide protection equipment that meets the national or industry standardsto employees and to supervise and educate them regarding the use of such equipment. In addition, the design, manufacture, installation,use, inspection and maintenance of safety equipment are required to conform to applicable national or industry standards. Furthermore,emergency measures shall be established by an enterprise to prepare for the occurrence of any accidents threatening safe production.

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Law and Regulation Relating to EnvironmentalProtection

The laws and regulations governing the environmentalrequirements for all units that cause environmental pollution and other public hazards in the PRC include, but are not limited to, theEnvironmental Protection Law of the People’s Republic of China, the Environmental Impact Assessment Law of the People’s Republicof China, and the Administrative Regulations on Environmental Protection for Construction Projects. Pursuant to these laws and regulations,depending on the impacts on the environment caused by the project, environmental impact assessment documents shall be submitted by a developerfor approval or record at the required time. In addition, a construction project for which an environment impact report or environmentimpact statement is formulated shall be put into production or use only when its complementary environmental protection facilities passacceptance inspection.

Law and Regulation Relating to Labor Protection

Pursuant to the Labor Law of the PRC and the LaborContract Law of the PRC which came into effect on January1, 1995 (amended on December29, 2018) and January1, 2008 (amendedon December28, 2012), respectively, labor contracts shall be concluded if labor relationships are to be established between theemployer and the employees.

Pursuant to the Social Insurance Law of the PRCwhich was promulgated on October28, 2010 and last amended on December29, 2018, employees shall participate in basic pensioninsurance, basic medical insurance and unemployment insurance. Basic pension, medical and unemployment insurance contributions shall bepaid by both employers and employees. Employees shall also participate in work-relatedinjury insurance and maternity insurance.Work-relatedinjury insurance and maternity insurance contributions shall be paid by employers rather than employees. An employershall make registration with the local social insurance agency in accordance with the provisions of the Social Insurance Law of PRC. Moreover,an employer shall declare and make social insurance contributions in full and on time. Pursuant to the Regulations on Management of HousingProvident Fund which was promulgated on April3, 1999 and amended on March24, 2019, employers shall undertake registrationat the competent administrative center of housing provident fund and then, undergo the procedures of opening the account of housing providentfund for their employees. Enterprises are also obliged to timely pay and deposit housing provident fund for their employees in full amount.

Law and Regulation Relating to Tax

Enterprise Income Tax

On March16, 2007 and December6, 2007respectively, the National People’s Congress of China and the State Council of the PRC (the “State Council”) enactedthe Enterprise Income Tax Law of the PRC and the Implementation Regulations of Enterprise Income Tax Law of the PRC (collectively the“PRC EIT Law”), both of which became effective on January1, 2008 (amended successively from 2017 to 2019). The PRC EITLaw imposes a uniform enterprise income tax rate of 25% on all residence enterprises, including foreign-investedenterprises, andterminates most of the tax exemptions, reductions and preferential treatments available under previous tax laws and regulations.

However, the PRC EIT Law and its implementationrules permit certain “high-technologyenterprises strongly supported by the state” which hold independent ownership ofcore intellectual property and simultaneously meet a list of other criteria, financial or non-financial, as stipulated in the ImplementationRules, to enjoy a 15% enterprise income tax rate subject to certain new qualification criteria. The State Administration of Taxation (the“SAT”), the PRC Ministry of Science and Technology and the MOF jointly issued the Administrative Rules for the Certificationof High and New Technology Enterprise delineating the specific criteria and procedures for “high and new technology enterprises”certification.

Withholding Tax

The PRC EIT Law removes the prior tax exemptionand imposes a 10% withholding tax on dividends paid by foreign-investedenterprises to foreign investors. However, for foreign investorswhose home countries or regions have signed bilateral tax agreements with PRC, the withholding tax rate may be reduced to as low as 5%depending on the terms of the applicable tax treaty. In accordance with the Arrangement between Mainland PRC and Hong Kong for the Avoidanceof Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income signed on August21, 2006, the 5% withholdingtax rate applies to dividends paid by a PRC company to a Hong Kong tax resident, provided that the recipient is a company that holds directlyat least 25% of the interest of the PRC company, otherwise, the applicable withholding tax rate should be 10%. Further, pursuant to theNotice on the Issues concerning the Application of the Dividend Clauses of Tax Agreements issued by the SAT on February20, 2009,the preferential tax rate under the relevant tax treaties shall only apply to a tax resident from the other side that directly holds atleast 25% of the interest of a PRC company for a period of consecutive 12months prior to receiving the dividends.

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Value Added Tax

The Provisional Regulations of the PRC ConcerningValue Added Tax (the “VAT Regulations”) was promulgated on December13, 1993 and amended by the State Council and becameeffect on November19, 2017. Under the VAT Regulations and its implementation regulations, value added tax, or the VAT, is imposedon the sales of goods and provision of processing, repair and replacement services within the PRC and the importation of goods into thePRC. The VAT standard rates had been 17% for taxpayers who have VAT taxable sales activities and 11% for taxpayers who imported goodsuntil April30, 2018, after which date the rates were reduced to 16% and 10%, respectively. The VAT rates was further reduced to13% and 9%, respectively, starting from April1, 2019.

Regulations of Trial Administrative Measuresof Overseas Securities Offering and Listing by Domestic Companies

On February 17, 2023, the CSRC published the Regulationsof 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 enterpriseissues 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 itssecurities outside of the PRC shall comply with the filing procedures and report the relevant information to the CSRC. Where a domesticcompany fails to fulfill filing procedure, offers and lists securities in an overseas market in violation of the Trial Measures, or thefiling documents contain misrepresentation, misleading statement or material omission, the CSRC shall order rectification, issue warningto such domestic company, and impose a fine.

Under the PRC EIT Law, enterprises are classifiedas either “resident enterprises” or “non-residententerprises.” Pursuant to PRC EIT Law and its implementationrules, besides enterprises established within the PRC, enterprises established outside PRC whose “de facto management bodies”are located in PRC are considered “resident enterprises” for PRC enterprise income tax purposes and subject to the uniform25% enterprise income tax rate for their global income. According to the implementation rules of the PRC EIT Law, “de facto managementbody” refers to a managing body that exercises, in substance, overall management and control over the manufacture and business,personnel, accounting and assets of an enterprise.

Law and Regulation Relating to IntellectualProperty Rights

Copyright Law

According to the Copyright Law of the PRC, whichwas amended on November 11, 2020 and became effective on June 1, 2021, Chinese citizens, legal entities or other organizations shall enjoythe copyright in their works, whether published or not, which include original intellectual achievements in the fields of literature,art and science which can be expressed in a certain form. Copyright owners shall enjoy various kinds of rights, including the right ofpublication, right of authorship and right of reproduction.

Patent Law

Pursuant to the Patent Law of the PRC which wasamended on October 17, 2020 and became effective on June 1, 2021, the patent administration departments of the State Council are responsiblefor the administration of patents across the nation. The patent administration departments of provincial, autonomous region or municipalgovernments are responsible for administering patents within their respective jurisdictions. The PRC patent system adopts a “firstcome, first file” principle, which means where more than one person files a patent application for the same invention, a patentwill be granted to the person who files the application first. To be patentable, invention or utility models must meet three criteria:novelty, inventiveness and practicability. Invention patents are valid for 20 years, while utility model patents are valid for 10 yearsand design patents are valid for 15 years, commencing from the date of application. The patentee shall pay annual fees commencing fromthe year when the parent right is granted. If the patentee does not pay annual fees according to the requirements, the patent will beterminated prior to its expiry. Other person must obtain consent or a proper license from the patent owner to use the patent. Otherwise,the use constitutes an infringement of the patent rights. The infringer must, in accordance with the applicable regulations, undertaketo cease the infringement, take remedial action and/or pay damages.

Trademark Law

Pursuant to the Trademark Law of the PRC whichwas amended on April 23, 2019 and became effective on November 1, 2019, the right to exclusive use of a registered trademark shall belimited to trademarks which have been approved for registration and to commodities for which the use of trademark has been approved. Theperiod of validity of a registered trademark shall be 10 years, counted from the day the registration is approved. If a trademark registrantwishes to use a trademark after the expiration of the duration of the trademark registration, according to the requirements, a registrationrenewal application should be filed within 12 months prior to the expiration. Each registration renewal is valid for 10 years. Using atrademark that is identical with a registered trademark on the same commodities without the licensing of the registrant of the registeredtrademark; or using a trademark that is similar to a registered trademark on the same commodities, or using a trademark that is identicalwith or similar to the registered trademark on similar commodities without the licensing of the registrant of the registered trademark,which is likely to cause confusion; selling commodities that infringe upon the exclusive right to use a registered trademark; forging,manufacturing a registered trademark which was registered by others without authorization, or selling a registered trademark forged ormanufactured without authorization; changing a registered trademark and putting the commodities with the changed trademark into the marketwithout the consent of the registrant of the registered trademark; providing, intentionally, convenience for activities infringing uponothers’ exclusive right to use a registered trademark, and facilitating others to commit infringement on the exclusive right touse a registered trademark, constitutes an infringement of the exclusive right to use a registered trademark. The infringer must undertaketo cease the infringement, take remedial action and pay damages. The infringer also may be subject to fines or even criminal punishment.

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Domain Names

The domain names are protected under the AdministrativeMeasures for Internet Domain Names promulgated by Ministry of Industry and Information Technology, or the MIIT, on August24, 2017,the effective date of which was November1, 2017. MIIT is the major regulatory body responsible for the administration of the PRCInternet domain names, under supervision of which PRC Internet Network Information Center, or CNNIC, is responsible for the daily administrationof CN domain names and Chinese domain names On June 18, 2019, CNNIC promulgated the Implementing Rules for the Registration of NationalTop-level Domain Names, the Measures for the Resolution of Disputes over National Top-level Domain Names and the Procedures for the Resolutionof Disputes over National Top-level Domain Names in accordance with the Administrative Measures for Internet Domain Names. Pursuant tosuch rules, the registration of domain names adopts the “first to file” principle and the registrant shall complete the registrationvia the domain name registration service institutions. In the event of a domain name dispute, the disputed parties may lodge a complaintto the designated domain name dispute resolution institution to trigger the domain name dispute resolution procedure in accordance withthe CNNIC Measures on Resolution of the Top-Level Domains Disputes, file a suit to the People’s Court or initiate an arbitrationprocedure.

Law and Regulation Relating to Foreign CurrencyExchange

The principal regulations governing foreign currencyexchange in the PRC are the Foreign Exchange Administrative Regulations (the “SAFE Regulations”) which was promulgated bythe State Council and last amended on August5, 2008. Under the SAFE Regulations, the RMB is generally freely convertible for currentaccount items, including the distribution of dividends, trade and service related foreign exchange transactions, but not for capital accountitems, such as direct investment, loan, repatriation of investment and investment in securities outside the PRC, unless the prior approvalof the State Administration of Foreign Exchange is obtained.

U.S. Laws and Regulations

Battery Safety and Testing

Our battery packs of electric industrial heavyequipment will be subject to various U.S. regulations that govern transport of “dangerous goods,” defined to include lithiumbatteries, which may present a risk in transportation. We expect to use lithium battery packs in our electric industrial heavy equipment.The use, storage and disposal of our battery packs are regulated under existing laws and are the subject of ongoing regulatory changesthat may add additional requirements in the future.

Product Liability Law

U.S. state law generally imposes liability onall manufacturers and retailers (and parties in the supply chain) for injuries that result from unsafe, defective and dangerous productssold to consumers. Product liability claims in the United States are typically based on three theories of law: (1) strict liability, (2)negligence and (3) breach of warranty. In addition, as noted above, U.S. laws and regulations can also obligate manufacturers and retailers(and parties in the supply chain) to remedy product defects, which can include safety recall campaigns.

Parties involved in manufacturing, distributingor selling a product may be subject to liability for harm caused by a defect in that product. There are three types of product defects,namely, design defects, manufacturing defects and defects in marketing. In a negligence claim, a defendant may be held liable for personalinjury or property damage caused by the failure to use due care. Strict liability claims, however, do not depend on the degree of carefulnessby the defendant. A defendant is liable when it is shown that an injury (personal or to property) occurred as the result of a product’sdefect. Breach of warranty is also a form of strict liability in the sense that a showing of fault is not required. The plaintiff needonly establish the warranty was breached, regardless of how that came about. Companies that manufacture, distribute or sell a productin a particular state may be subject to the jurisdiction of such state’s product liability laws, whether the company’s jurisdictionof incorporation or principal place of business is in that state, in another U.S. state or in a non-U.S. jurisdiction.

Product liability legal actions and recall campaignsin the United States (“Product Liability Matters”) could involve personal injury and property damage and could involve claimsfor substantial monetary damages. The results of any future litigation and claims involving product liability in the United States areinherently unpredictable.

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Employment and Labor Law

Private businesses operating in the United Statesare subject to employment laws of the federal governments, state government, and, to a lesser extent, local counties or municipalities.These laws govern many aspects of the workplace as set forth herein and failure to comply can result in fines and penalties from relevantoversight agencies and liability to employees, which can include a multiple of actual damages, counsel fees, and punitive damages forcertain violations.

Businesses that operate in New Jersey must complywith governing federal laws and New Jersey State laws (together, “US-NJEmployment Laws”).The default rule in NewJersey is that, in the absence of a labor agreement or contract for employment for a specified term, employment is terminable at will.Employers have a right to discharge an employee at any time, for any reason, or for no reason, provided the termination is not for a reasonprohibited by law.

Broadly, our obligation to comply with applicableUS-NJEmployment Laws, includes laws and rules relating to:

Failure to comply with the US-NJEmploymentLaws may, in some instances, expose us to civil liability to employees or former employees for compensatory damages, statutory damages,as well as punitive damages and counsel fees. We could also be subject to fines, penalties, and assessments from various regulatory authorities.

ITEM 1A. RISK FACTORS

The following is a summary of certain risksthat should be carefully considered along with the other information contained or incorporated by reference in this Report and the documentsincorporated by reference, as updated by our subsequent filings under the Exchange Act. If any of the following events actually occurs,our business, operating results, prospects, or financial condition could be materially and adversely affected. The risks described beloware not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also significantlyimpair our business operations and could result in a complete loss of your investment.

Summary of Risk Factors

An investment in our ordinary shares is subjectto a number of risks, including risks related to our business and industry, risks related to our corporate structure, risks related todoing business in China and risks related to our ordinary shares. You should carefully consider all of the information in this Reportbefore making an investment in the ordinary shares. The following list summarizes some, but not all, of these risks. Please read the informationin this section for a more thorough description of these and other risks.

Risks Related to Our Business and Industry

For more detailed discussions of the followingrisks, see “Risk Factors—Risks Related to our Business and Industry” on pages 21 through 26.

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Risks Related to Doing Business in China

For more detailed discussions of the followingrisks, see “Risk Factors—Risks Related to Doing Business in China” on pages 26 through 34.

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Risks Related to Our Ordinary Shares

For more detailed discussions of the followingrisks, see “Risk Factors—Risks Related to Our Ordinary Shares” on pages 34 through 35.

Risks Related to our Business and Industry

Our subsidiaries’ business operationsare cash intensive, and our subsidiaries’ business could be adversely affected if we fail to maintain sufficient levels of liquidityand working capital.

As of December 31, 2023, we had approximately$22.98 million of cash and cash equivalents. Historically, we have spent a significant amount of cash on our operational activities, principallyto procure raw materials for our subsidiaries’ products. Our short-term loans are from Chinese banks and are generally secured bya portion of our fixed assets, land use rights and/or guarantees by related parties. Certain of these loans are secured against a portionof the shares of our PRC subsidiaries. The term of a majority of such loans is one year. Historically, we rolled over such loans on anannual basis. However, we may not have sufficient funds available to pay all of our borrowings upon maturity in the future. Failure toroll over our short-term borrowings at maturity or to service our debt could result in a transfer of the ownership of a portion of theshares of our PRC subsidiaries to secured lenders, the imposition of penalties, including increases in interest rates, legal actions againstus by our creditors, and even insolvency.

Although we have been able to maintain adequateworking capital primarily through cash from operations and short-term and long-term borrowings, any failure by our customers to settleoutstanding accounts receivable, or our inability to borrow sufficient capital from local banks in the future could materially and adverselyaffect our cash flow, financial condition and results of operations.

We grant relatively long payment terms foraccounts 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 maynot be adequate. We are subject to the risk that we may be unable to collect accounts receivable in a timely manner. If the accounts receivablecannot be collected in time, or at all, a significant amount of expected credit losses will occur, and our business, financial conditionand results of operation will likely be materially and adversely affected.

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Our subsidiaries face short lead-times fordelivery of products to customers. Failure to meet delivery deadlines could result in the loss of customers and damage to our reputationand goodwill.

Most of our subsidiaries’ customers arelarge manufacturers, who generally place large orders for our subsidiaries’ products and require prompt delivery. Our subsidiaries’product sale agreements typically contain short lead-timesfor the delivery of products and tight production and manufacturer supplyschedules that can reduce our profit margins on the products procured from our subsidiaries’ suppliers. Our subsidiaries’suppliers may lack sufficient capacity at any given time to meet all of the demands from our subsidiaries’ customers if orders exceedtheir production capacity. Our subsidiaries strive for rapid response to customer demands, which can lead to reduced purchasing efficiency,increased procurement costs and low profit margins. If our subsidiaries are unable to meet the customer demands, they may lose customers.Moreover, failure to meet customer demands may damage our reputation and goodwill.

Our subsidiaries face intense competition,and, if our subsidiaries are unable to compete effectively, we may not be able to maintain profitability.

Our subsidiaries compete with many other companieslocated in the PRC and internationally that manufacture similar products. Many of our subsidiaries’ competitors are larger companieswith greater financial resources. Intense competition in a challenging economic environment in the PRC has, in the past, put pressureon our margins and may adversely affect our future financial performance. Moreover, intense competition may result in potential or actuallitigation between our subsidiaries and their competitors relating to such activities as competitive sales practices, relationships withkey suppliers and customers or other matters.

It is likely that our subsidiaries’ competitorswill seek to develop similar competing products in the near future. Some of our subsidiaries’ competitors may have more resourcesthan our subsidiaries do, operate in greater scale, be more capitalized than our subsidiaries are, have access to cheaper raw materialsthan our subsidiaries do, or offer products at a more competitive price. There can be no assurance that our initial competitive advantagewill be retained and that one or more competitors will not develop products that are equal or superior in quality and are better pricedthan our subsidiaries’ products. If our subsidiaries are unable to compete effectively, our results of operations and financialposition may be materially and adversely affected.

Our revenues are highly dependent on a limitednumber of customers and the loss of any one of our subsidiaries’ major customers could materially and adversely affect our growthand revenues.

During the fiscal years ended December 31, 2023and 2022, our subsidiaries’ five largest customers contributed 45.06% and 50.85% of our revenues, respectively. For the years endedDecember 31, 2023 and 2022, Greenland’s single largest customer, Hangcha Group, accounted for 14.98% and 17.14%, respectively, ofGreenland’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. As a result of our subsidiaries’ reliance on a limited number of customers, oursubsidiaries may face pricing and other competitive pressures, which may have a material adverse effect on our profits and our revenues.The volume of products sold for specific customers varies from year to year, especially since our subsidiaries are not the exclusive providerfor any customers. In addition, there are a number of factors that could cause the loss of a customer or a substantial reduction in theproducts that our subsidiaries provide to any customer that may not be predictable. For example, our subsidiaries’ customers maydecide to reduce spending on our subsidiaries’ products or a customer may no longer need our subsidiaries’ products followingthe completion of a project. The loss of any one of our subsidiaries’ major customers, a decrease in the volume of sales to oursubsidiaries’ customers or a decrease in the price at which our subsidiaries sell their products to customers could materially adverselyaffected our profits and revenues.

In addition, this customer concentration may subjectour subsidiaries to perceived or actual leverage that our subsidiaries’ customers may have in negotiations, given their relativesize and importance to our subsidiaries. If our subsidiaries’ customers seek to negotiate their agreements on terms less favorableto our subsidiaries and our subsidiaries accept such terms, such unfavorable terms may have a material adverse effect on our subsidiaries’business and our financial condition and results of operations. Accordingly, unless and until our subsidiaries diversify and expand theircustomer base, our future success will significantly depend upon the timing and volume of business from our subsidiaries’ largestcustomers and the financial and operational success of these customers.

As our subsidiaries expand their operations,they may need to establish a more diverse supplier network for raw materials. The failure to secure a more diverse supplier network couldhave an adverse effect on our financial condition.

In the event that our subsidiaries need to diversifytheir supplier network, our subsidiaries may not be able to procure a sufficient supply of raw materials at a competitive price, whichcould have an adverse effect on our results of operations, financial condition and cash flows. Furthermore, despite our subsidiaries’efforts to control their supply of raw materials and maintain good relationships with their existing suppliers, our subsidiaries couldlose one or more of their existing suppliers at any time. The loss of one or more key suppliers could increase our subsidiaries’reliance on higher cost or lower quality supplies, which could negative affect our profitability. Any interruptions to, or decline in,the amount or quality of our subsidiaries’ raw materials supply could materially disrupt our subsidiaries’ production andadversely affect our subsidiaries’ business and our financial condition and financial prospects.

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To remain competitive, our subsidiarieshave introduced new lines of business, including the production and sale of electric industrial heavy equipment. If these efforts arenot successful, our results of operations may be materially and adversely affected.

Prior to December 2020, through ZhongchaiHolding and its PRC subsidiaries, our products mainly included transmission systems and integrated powertrains for material handlingmachineries, particularly for electric forklift trucks. In December 2020, through HEVI, we launched a new division to focus on theproduction and sale of electric industrial heavy equipment—a division that Greenland intends to develop to diversify itsproduct offerings. HEVI’s electric industrial heavy equipment products currently include GEF-series electric forklifts, aseries 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 loadlithium powered electric wheeled front loader, GEX-8000, an all-electric 8.0 ton rated load lithium powered wheeled excavator, andGEL-5000, an all-electric 5.0 ton rated load lithium wheeled front loader. HEVI also introduced mobile DC battery chargers tosupport a growing market of EV applications requiring DC charging capabilities in the North America market. These products areavailable for purchase in the U.S. market. In August 2022, HEVI launched a 54,000 square foot industrial electric vehicle assemblysite in Baltimore, Maryland to support local services, assembly and distribution of its electric industrial heavy equipment productline.

There are risks in connection with this new lineof business. HEVI may experience difficulties in the development and launch of electric industrial heavy equipment, and HEVI’s productsmay not be well-accepted by the market. As we have limited experience in the electric industrial heavy equipment business, our effortsin developing such business may not succeed and we may not be able to generate sufficient revenue to cover our investment and become profitable.During such process, our results of operations and financial conditions may not be improved in a timely manner, or at all. We cannot assureyou that we will successfully transition our business focus and it is possible that we remain in such transition period for an extendedperiod of time. During such period, our revenue may be very limited and we may continue to experience material and adverse effects toour results of operations, financial condition and business prospects.

New lines of business, including the productionand sale of electric industrial heavy equipment, may subject us and our subsidiaries to additional risks.

From time to time, we may implement new linesof business or offer new products within our subsidiaries’ existing lines of business. Currently, we plan to offer additional modelsof electric industrial heavy equipment through HEVI. As such, we face significant challenges, uncertainties and risks, including, amongothers, with respect to our subsidiaries’ ability to:

Moreover, there can be no assurance that the introductionand development of new lines of business or new products and services would not encounter significant difficulties or delay or would achievethe profitability as we expect. Failure to successfully manage these risks in the development and implementation of new lines of businessor new products or services could have a material adverse effect on our subsidiaries’ business and our results of operations andprospects. For example, HEVI may experience difficulties in developing and launching additional models of electric industrial heavy equipment,or may not be able to develop them at reasonable costs. Due to HEVI’s limited experience with electric industrial heavy equipment,HEVI also face challenges and uncertainties relating to the possibility of success of this new business.

As our subsidiaries enter into new business sectors,our subsidiaries are also subject to competition from such industries. There can be no assurance that our subsidiaries will be able tocompete effectively with respect to their new businesses. If our subsidiaries fail to establish their strengths or maintain their competitivenessin those industries, our business prospects, results of operations and financial condition may be materially and adversely affected.

Volatile steel prices can cause significantfluctuations in our operating results. Our revenues and operating income could decrease if steel prices increase or if our subsidiariesare unable to pass price increases on to their customers.

Our subsidiaries’ principal raw materialsare processed metal parts and components which are made of carburizing steel. The steel industry as a whole is cyclical and, at times,pricing and availability of steel can be volatile due to numerous factors beyond our subsidiaries’ control, including general domesticand international economic conditions, labor costs, sales levels, competition, levels of inventory, consolidation of steel producers,higher raw material costs for steel producers, import duties and tariffs and currency exchange rates. This volatility can significantlyaffect the availability and cost of raw materials.

Our subsidiaries’ suppliers, like many otherprocessed metal parts and components manufacturers, maintain substantial inventories of steel to accommodate the short lead times andjust-in-time delivery requirements of customers. Accordingly, our subsidiaries’ suppliers purchase steel in an effort to maintaintheir inventory at levels that they believe to be appropriate to satisfy the anticipated needs of customers based upon historic buyingpractices, supply agreements with customers and market conditions. When steel prices increase, competitive conditions will influence howmuch of the price increase suppliers would pass on to our subsidiaries and how much our subsidiaries can pass on to their customers. Tothe extent our subsidiaries are unable to pass on future price increases in raw materials to their customers, the revenues and profitabilityof our business could be adversely affected.

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We are subject to various risks and uncertaintiesthat might affect our subsidiaries’ ability to procure raw materials.

Our performance depends upon our subsidiaries’ability to procure low cost, high quality raw materials on a timely basis from their suppliers. Our subsidiaries’ suppliers aresubject to certain risks, including the availability of raw materials, labor disputes, inclement weather, natural disasters, and generaleconomic and political conditions, which might limit the ability of our subsidiaries’ suppliers to provide low cost, high qualitymerchandise on a timely basis. Furthermore, for these or other reasons, one or more of our subsidiaries’ suppliers might not adhereto our subsidiaries’ quality control standards, and our subsidiaries might not identify the deficiency. Any failure by our subsidiaries’suppliers to supply quality materials at a reasonable cost on a timely basis could reduce our net sales or profits, damage our reputationand have an adverse effect on our financial condition.

Our subsidiaries may lose their competitiveadvantage, and their operations may suffer, if they fail to prevent the loss or misappropriation of, or disputes over, their intellectualproperty.

Our subsidiaries rely on a combination of patents,trademarks, trade secrets and confidentiality agreements to protect their intellectual property rights. While our subsidiaries are notcurrently aware of any infringement on their intellectual property rights, our subsidiaries’ ability to compete successfully andto achieve future revenue growth will depend, in significant part, on their ability to protect their proprietary technology. Despite manylaws and regulations promulgated, as well as other efforts made, by China over the past several years in an attempt to protect intellectualproperty rights, intellectual property rights are not as certain in China as they would be in many Western countries, including the UnitedStates. Furthermore, enforcement of such laws and regulations in China has not been fully developed. Neither the administrative agenciesnor the court systems in China are as equipped as their counterparts in developed countries to deal with violations or handle the nuancesand complexities between compliant technological innovation and non-compliant infringement.

Our subsidiaries’ transmission technologyis protected through a combination of patents, trade secrets, confidentiality agreements and other methods. However, our subsidiaries’competitors may independently develop similar proprietary methodologies or duplicate our products, or develop alternatives, which couldhave a material adverse effect on our subsidiaries’ business and our results of operations and financial condition. The misappropriationor 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. Anysuch litigation could be time consuming and costly and the outcome of any such litigation cannot be guaranteed.

Our PRC subsidiaries have limited insurancecoverage for their operations in China and may incur losses resulting from product liability claims, business interruption or naturaldisasters.

HEVI, our subsidiary in the U.S., maintains commercialgeneral liability insurance for its business operations. However, our PRC subsidiaries have limited insurance coverage for their operationsin China, and our PRC subsidiaries are therefore exposed to risks associated with product liability claims against our PRC subsidiariesor otherwise against their operations in the PRC in the event that the use of our PRC subsidiaries’ products results in propertydamage or personal injury. Since our subsidiaries’ transmission products are ultimately incorporated into forklifts, it is possiblethat users of forklifts or people installing these products could be injured or killed, whether as a result of defects, improper installationor other causes. We are unable to predict whether product liability claims will be brought against our PRC subsidiaries in the futureor to predict the impact of any resulting adverse publicity on our PRC subsidiaries’ business. The successful assertion of productliability claims against our PRC subsidiaries could result in potentially significant monetary damages and require us to make significantpayments. Our subsidiaries do not carry product liability insurance and may not have adequate resources to satisfy a judgment in the eventof a successful claim against us. In addition, our subsidiaries do not currently, and may not in the future, maintain business interruptioninsurance coverage. As such, our subsidiaries may suffer losses that result from interruptions in their operations as a result of inabilityto operate or failures of equipment and infrastructure at our subsidiaries’ facilities. Our subsidiaries also do not currently maintaincatastrophe insurance. As such, any natural disaster or man-made disaster could result in substantial losses and diversion of our subsidiaries’resources to address the effects of such an occurrence, which could materially and adversely affect our subsidiaries’ business andour financial condition and results of operations.

Failure to make adequate contributions tovarious employee benefit plans as required by PRC regulations may subject us to penalties.

Our PRC subsidiaries are required under PRC lawsto participate in various government sponsored employee benefit plans, including social security insurance, housing funds and other welfare-orientedpayments, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of theiremployees up to a maximum amount specified by the local government from time to time at locations where our PRC subsidiaries operate theirbusinesses. Our PRC subsidiaries have not made adequate employee benefit payments to the social security insurance and the housing fund.As a result, they may be required to make up the contributions for these plans within a stipulated period of time. In addition, our PRCsubsidiaries may be required to pay late fees equal to 0.05% of the shortage of the contributions to the social security fund for eachday our PRC subsidiaries fail to make up the contributions and may be imposed fines up to three times of such shortage if our PRC subsidiariesfail to make up the difference within the time frame prescribed by relevant government authorities. The maximum amount of such penaltiesthat we anticipate could be imposed on our PRC subsidiaries with respect such employee benefits payments is approximately US$200,000.If our PRC subsidiaries are subject to late fees or fines in relation to the underpaid employee benefits, our financial condition andresults of operations may be adversely affected. As of the date of this Report, our PRC subsidiaries have not been ordered to pay outstandingcontributions or related penalties.

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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 experiencedinflation and labor cost increases. Average wages are projected to continue to increase. Further, under PRC law an employer is requiredto pay various statutory employee benefits, including pensions, housing funds, medical insurance, work-relatedinjury insurance,unemployment insurance and maternity insurance to designated government agencies for the benefit of its employees. The relevant governmentagencies may examine whether an employer has made adequate payments to the statutory employee benefits, and those employers who fail tomake adequate payments may be subject to late payment fees, fines and/or other penalties. We expect that our labor costs, including wagesand employee benefits, will continue to increase based on the past trends. If we are unable to control our labor costs or pass such increasedlabor costs on to our subsidiaries’ customers, our financial condition and results of operations may be adversely affected.

We recorded a full provision for expectedcredit losses for a substantial balance due from a related party.

As of December 31, 2023, Cenntro Holding Limitedowed 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, werecorded a full provision for expected credit loss for the year ended December31, 2023.

The ongoing COVID-19 pandemic could adverselyaffect our business, results of operations and financial condition.

The ongoing COVID-19 pandemic has continued tospread 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. New COVID-19 variants have also emerged, potentiallyextending the period during which COVID-19 will negatively impact the global economy.

Since 2021, a few waves of COVID-19 infectionsemerged in various regions of China, and in response, the Chinese government implemented certain anti-COVID measures and protocols. Chineseindustries 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. 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, andthe duration of, the COVID-19 pandemic may be difficult to assess or predict, and any associated negative impact on us will depend onmany factors beyond our control. The extent to which the COVID-19 pandemic impacts our future results remains uncertain, and we are closelymonitoring its impact on us. Our subsidiaries’ business and our results of operations, financial conditions and prospects couldbe adversely affected directly, as well as indirectly, to the extent that the ongoing COVID-19 pandemic harms the Chinese and global economyin general.

We may not be able to effectively protectour intellectual property from unauthorized use by others.

Through its subsidiaries, we hold patents, trademarksand 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.We cannot assure you that (i) all of the intellectual property rights we owned will be adequately protected, or (ii)our intellectualproperty rights will not be challenged by third parties or found by a judicial authority to be invalid or unenforceable. Moreover, therecan be no assurance that we will obtain such trademarks and any other trademarks that are crucial to our business in the future. Thus,third parties may also take the position that we are infringing their rights, and we may not be successful in defending these claims.Additionally, we may not be able to enforce and defend its proprietary rights or prevent infringement or misappropriation, without incurringsubstantial expenses to us and a significant diversion of management time and attention from our business strategy.

To protect our parents, trademarks and other proprietaryrights, we reply on and expect to continue to rely on a combination of physical and electronic security measures and trademark, patentand trade secret protection laws. If the measures we have taken to protect our proprietary rights are inadequate to prevent the use ormisappropriation by third parties or such rights are diminished due to successful challenges, the value of our brand and other intangibleassets may be diminished and our ability to attract and retain customers may be adversely affected.

Competition for our and our subsidiaries’employees is intense, and we and our subsidiaries may not be able to attract and retain the highly skilled employees needed to supportour subsidiaries’ business.

As we continue to experience growth, our futuresuccess depends on our and our subsidiaries’ ability to attract, develop, motivate and retain highly qualified and skilled employees,including engineers, financial personnel and marketing professionals. Competition for highly skilled engineering, sales, technical andfinancial personnel is extremely intense. We and our subsidiaries may not be able to hire and retain these personnel at compensation levelsconsistent with our existing compensation and salary structure. Many of the companies with which we and our subsidiaries compete for experiencedemployees have greater resources than we and our subsidiaries have and may be able to offer more attractive terms of employment.

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In addition, we and our subsidiaries invest significanttime and expense in training our employees, which increases their value to competitors who may seek to recruit them. If we and our subsidiariesfail to retain our employees, we could incur significant expenses in hiring and training their replacements, and the quality of our productscould decrease, resulting in a material adverse effect on our subsidiaries’ business.

Our business depends on the continued effortsof our senior management. If one or more of our key executives were unable or unwilling to continue in their present positions, our businessmay be severely disrupted.

Our business operations depend on the continuingservices of our senior management. While we have provided different incentives to our management, we cannot assure you that we can continueto retain their services. If one or more of our key executives were unable or unwilling to continue in their present positions, we maynot be able to replace them easily or at all, our future growth may be constrained, business may be severely disrupted and our financialcondition and results of operations may be materially and adversely affected, and we may incur additional expenses to recruit, train andretain qualified personnel. In addition, although we have entered into a non-competition agreement with Mr. Peter Zuguang Wang, the chairmanof our board of directors, there is no assurance that Mr. Wang will not join our competitors or form a competing business. If any disputearises between us and Mr. 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.

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 choosesto terminate his or her services with us.

We do not maintain “key person” insurancefor our directors, executive officers, senior management or other key employees. If any of our key employees terminate his or her servicesor otherwise becomes unable to provide continuous services to us, our business, financial condition and results of operations may be materiallyand adversely affected and we may incur additional expenses to recruit, train and retain qualified personnel. If any of our executiveofficers or key employees joins a competitor or forms a competing company, we may lose customers, operational know-how and key professionalsand staff members.

We are currently operating in a period of economic uncertaintyand capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing invasion of*ckrainebyRussia and conflicts between Israel and Hamas.

U.S. and global markets are experiencing volatilityand disruption as a result of the outbreak or escalation of wards including Russia’s launch of a full-scale military invasion of*ckraine, conflicts between Israel and Hamas. Although the length and impact of these ongoing conflicts are highly unpredictable, theseconflicts have led to market disruptions, including significant volatility in commodity prices, credit, and capital markets. In addition,as a result of the ongoing conflicts around the world, we may experience other risks, difficulties and challenges in the way we conductour business and operations generally. For example, the conflict could adversely affect supply chains and impact our ability to controlraw material costs. A protracted conflict betweenUkraineand 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.

High inflation rates may adversely affectus by increasing costs beyond what we can recover through price increases and limit our ability to enter into future traditional debtfinancing.

Inflation can adversely affect us by increasingcosts of critical materials, equipment, labor, and other services. In addition, inflation is often accompanied by higher interest rates.Continued inflationary pressures could impact our profitability. Inflation may also affect our ability to enter into future traditionaldebt financing, as high inflation may result in an increase in cost.

Risks Related to Doing Business in China

Changes in China’s economic, politicalor social conditions or government policies could have a material adverse effect on our business and operations.

A substantial majority of our assets and operationsare located in China. Accordingly, our business, financial condition, results of operations and prospects may be influenced to a significantdegree by political, economic and social conditions in China generally. The PRC economy differs from the economies of most developed countriesin many respects, including with regard to the level of government involvement, level of development, growth rate, control of foreignexchange and allocation of resources. Although the PRC government has implemented measures emphasizing the utilization of market forcesfor economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate governance inbusiness enterprises, a substantial portion of productive assets in China is still owned by the government. In addition, the PRC governmentcontinues to play a significant role in regulating industry development by imposing industrial policies.

The PRC government also exercises significantcontrol over China’s economic growth through allocating resources, controlling payment of foreign currency-denominatedobligations,setting monetary policy, and providing preferential treatment to particular industries or companies.

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While the PRC economy has experienced significantgrowth over the past decades, growth has been uneven, both geographically and among various sectors of the economy, and the rate of growthhas been slowing since 2012. Any adverse changes in economic conditions in China, in the policies of the PRC government or in the lawsand regulations in China could have a material adverse effect on the overall economic growth of China. Such developments could adverselyaffect our business and operating results, lead to reduction in demand for our subsidiaries’ products and adversely affect our subsidiaries’competitive position. The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources.Some of these measures may benefit the overall PRC economy, but may have a negative effect on us and our subsidiaries. For example, ourfinancial condition and results of operations may be adversely affected by government control over capital investments or changes in taxregulations. In addition, in the past the PRC government has implemented certain measures, including interest rate adjustment, to controlthe pace of economic growth. These measures may cause decreased economic activity in China, which may adversely affect our business andoperating results.

Uncertainties with respect to the PRC legalsystem could adversely affect us and our PRC subsidiaries.

The PRC legal system is a civil law system basedon written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but havelimited precedential value. Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve,the interpretations of many laws, regulations and rules are not always uniform and the enforcement of these laws, regulations and rulesinvolves uncertainties.

In 1979, the PRC government began to promulgatea comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation over the pastfour decades has significantly enhanced the protections afforded to various forms of foreign investments in China. However, China hasnot developed a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, the interpretation and enforcement of these laws and regulations involve uncertainties. Since PRCadministrative and court authorities have significant discretion in interpreting and implementing statutory provisions and contractualterms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy.These uncertainties may affect our and/or our PRC subsidiaries’ judgment on the relevance of legal requirements and our/our PRCsubsidiaries’ ability to enforce our/their contractual rights or tort claims. In addition, the regulatory uncertainties may be exploitedthrough unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from us and our PRC subsidiaries.

Furthermore, the PRC legal system is based inpart on government policies and internal rules, some of which are not published on a timely basis or at all and may have retroactive effect.As a result, we and/or our PRC subsidiaries may not be aware of our/their violation of any of these policies and rules until sometimeafter the violation. In addition, any administrative and court proceedings in China may be protracted, resulting in substantial costsand diversion of resources and management attention.

In addition, we and our PRC subsidiaries are subjectto risks and uncertainties of the interpretations and applications of PRC laws and regulations, including, but not limited to, limitationson foreign ownership in the industry our PRC subsidiaries operate. We and our PRC subsidiaries are also subject to the risks and uncertaintiesabout any future actions of the PRC government. If any future actions of the PRC government result in a material change in our operations,and the value of our ordinary shares may depreciate significantly or become worthless.

The PRC government exerts substantial influenceover the manner in which our PRC subsidiaries must conduct their business activities. If the Chinese government significantly regulatesthe business operations of our PRC subsidiaries in the future and our PRC subsidiaries are not able to substantially comply with suchregulations, the business operations of our PRC subsidiaries may be materially and adversely affected and the value of our ordinary sharesmay significantly decrease.

The PRC government has exercised, and continuesto exercise, substantial control over virtually every sector of the Chinese economy through regulation and state ownership, includingsteel sector where our PRC subsidiaries have been doing their business. Any government decisions or actions to change the way steel productionis regulated, or any decisions the government might make to cut spending, could adversely impact our PRC subsidiaries’ businessand our results of operations. In addition, the ability of our PRC subsidiaries to operate in China may be harmed by changes in PRC lawsand regulations, including those relating to taxation, environmental conditions, land use rights, property and other matters. The centralor local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that wouldrequire additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly,government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrallyplanned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economicconditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.

We believe that our PRC subsidiaries’ operationsin China are in material compliance with all applicable legal and regulatory requirements. However, the central or local governments ofthe jurisdictions in which our PRC subsidiaries operate may impose new, stricter regulations or interpretations of existing regulationswith little advance notice that would require additional expenditures and efforts on their part to ensure our subsidiaries’ compliancewith such regulations or interpretations.

Our PRC subsidiaries may incur increased costsnecessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. In the event that ourPRC subsidiaries are not able to substantially comply with any existing or newly adopted laws and regulations, our business operationsmay be materially adversely affected and the value of our ordinary shares may significantly decrease.

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Furthermore, the PRC government authorities maystrengthen 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, whichmay be beyond our control. Therefore, any such action may adversely affect the operations of our PRC subsidiaries and substantially limitor hinder our ability to offer or continue to offer securities to you and significantly reduce the value of such securities or cause thevalue of such securities to be completely worthless.

We are required under PRC laws to submitfilings to CSRC for our future offerings. However, we believe that we and our PRC subsidiaries are not currently required to obtain theapproval and/or comply with other requirements of the CSRC, the CAC, or other PRC governmental authorities under PRC rules, regulationsor policies in connection with our continued listing on Nasdaq. In the event that any such approval is required or that there are otherrequirements we and/or our PRC subsidiaries are obligated to comply with, we cannot predict whether or how soon we and/or our PRC subsidiarieswill be able to obtain such approvals and/or comply with such requirements.

The Regulations on Mergers and Acquisitions ofDomestic Enterprises by Foreign Investors, or the M&A Rules, purport to require offshore special purpose vehicles that are controlledby PRC companies or individuals and that have been formed for the purpose of seeking a public listing on an overseas stock exchange throughacquisitions of PRC domestic companies or assets to obtain CSRC approval prior to publicly listing their securities on an overseas stockexchange. The interpretation and application of those regulations remain unclear.

In addition, the PRC government authorities maystrengthen future oversight over offerings that are conducted overseas. For instance, on July 6, 2021, the relevant PRC governmental authoritiespromulgated the Opinions on Strictly Cracking Down on Illegal Securities Activities, which emphasized the need to strengthen the PRC government’ssupervision over overseas listings by PRC companies. Pursuant to the Opinions, effective measures, such as promoting the constructionof relevant regulatory systems, are to be taken to deal with the risks of China-based overseas-listed companies, cybersecurity and dataprivacy protection requirements and similar matters. The Cybersecurity Review Measures (Decree No. 8 of the Cybersecurity Administrationof the PRC), or the revised Cybersecurity Review Measures, enacted on December 28, 2021 and came into effect on February 15, 2022, alsorequire online platform operators holding over one million users’ personal information to apply for a cybersecurity review beforeany public offering on a foreign stock exchange. These statements and regulations are recently issued, and there remain substantial uncertaintiesabout their interpretation and implementation. See also “—Our PRC subsidiaries may be liable for improper use or appropriationof personal information provided by their customers and any failure to comply with PRC laws and regulations over data security could resultin materially adverse impact on our business, results of operations, and our continued listing on Nasdaq.”

On February 17, 2023, the CSRC published the Regulationsof 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 issuesshares, depositary receipts, corporate bonds convertible into shares, or other securities of an equity nature outside of the PRC, or listsits securities for trading outside of the PRC. According to such regulations, a domestic enterprise that issues and lists its securitiesoutside of the PRC shall comply with the filing procedures and report the relevant information to the CSRC. A domestic enterprise shallnot be listed on an overseas stock exchange if any of the following circ*mstances exists: (i) where such securities offering and listingis explicitly prohibited by provisions in laws, administrative regulations and relevant state rules; (ii) where the intended securitiesoffering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordancewith law; (iii) where the domestic company intending to make the securities offering and listing, or its controlling shareholders andthe actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining theorder of the socialist market economy during the latest three years; (iv) where the domestic company intending to make the securitiesoffering and listing is suspected of committing crimes or major violations of laws and regulations, and is under investigation accordingto law, and no conclusion has yet been made thereof; (v) where there are material ownership disputes over equity held by the domesticcompany’s controlling shareholder or by other shareholders that are controlled by the controlling shareholder and/or actual controller.The Trial Measures changes the management of licensing to record management, strengthen the supervision in the aftermath, create a moretransparent and predictable institutional environment, and support the standardized development of enterprises using the overseas capitalmarket.

According to the Notice on Filing Management Arrangementsfor Overseas Listings of Domestic Enterprises issued and implemented by the CSRC on February 17, 2023, since the date of effectivenessof the Trial Measures, the domestic enterprises falling within the scope of filing that have been listed overseas or met the followingcirc*mstances are existing enterprises: Before the effectiveness of the Trial Measures, the application for indirect overseas issuanceand listing has been agreed by the overseas regulators or overseas stock exchanges (such as having passed the hearing on the Hong Kongmarket or registration become effective as agreed on the U.S. market, etc.), and it is not required to perform issuance and listing supervisionprocedures of the overseas regulators or overseas stock exchanges (such as rehearing on the Hong Kong market, etc.), and the overseasissuance and listing will be completed by September 30, 2023. 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.

As of the date of this Report, we believe we andour PRC subsidiaries are not required to obtain any permission from PRC authorities (including the CSRC and the CAC) to operate our PRCsubsidiaries’ business as presently conducted or listing on Nasdaq. Therefore, as of the date of this Report, we and our PRC subsidiarieshave not applied for any permission or approval from any PRC governmental authority in connection with our offshore listing or offeringand, as such, no such permission or approval has been granted or denied. However, if it fails to comply with the Trial Measures duringfuture issuance of securities or listing on other stock exchanges outside of China, we may be subjected sanctions imposed by the PRC regulatoryauthorities, and our reputation, financial condition, and results of operations may be materially and adversely affected.

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Our PRC subsidiaries may be liable for improperuse or appropriation of personal information provided by their customers and any failure to comply with PRC laws and regulations overdata security could result in materially adverse impact on our business, results of operations, and our continued listing on Nasdaq.

Our PRC subsidiaries’ business involvescollecting and retaining certain internal and customer data. Our PRC subsidiaries also maintain information about various aspects of theiroperations. The integrity and protection of customer and company data is critical to our business. Our subsidiaries’ customers expectthat our subsidiaries will adequately protect their personal information. Our PRC subsidiaries are required by applicable laws to keepstrictly confidential the personal information that they collect, and to take adequate security measures to safeguard such information.

The PRC Criminal Law, as amended by its Amendment7 (effective on February 28, 2009) and Amendment 9 (effective on November 1, 2015), prohibits institutions, companies and their employeesfrom selling or otherwise illegally disclosing a citizen’s personal information obtained in performing duties or providing servicesor obtaining such information through theft or other illegal ways. On November 7, 2016, the Standing Committee of the PRC National People’sCongress issued the Cyber Security Law of the PRC, or Cyber Security Law, which became effective on June 1, 2017. Pursuant to the CyberSecurity Law, network operators must not, without users’ consent, collect their personal information, and may only collect users’personal information necessary to provide their services. Providers are also obliged to provide security maintenance for their productsand services and shall comply with provisions regarding the protection of personal information as stipulated under the relevant laws andregulations.

The Civil Code of the PRC (issued by the PRC NationalPeople’s Congress on May 28, 2020 and effective from January 1, 2021) provides the legal basis for privacy and personal informationinfringement claims under the Chinese civil laws. PRC regulators, including the CAC, the Ministry of Industry and Information Technology,and the Ministry of Public Security, have been increasingly focused on regulation in data security and data protection.

The PRC regulatory requirements regarding cybersecurityare evolving. For instance, various regulatory bodies in China, including the CAC, the Ministry of Public Security and the State Administrationfor Market Regulation, have enforced data privacy and protection laws and regulations with varying and evolving standards and interpretations.In April 2020, the Chinese government promulgated Cybersecurity Review Measures, which came into effect on June 1, 2020. According tothe Cybersecurity Review Measures, operators of critical information infrastructure must pass a cybersecurity review when purchasing networkproducts and services which do or may affect national security.

In December 2021, the CAC and other related authoritiespromulgated the revised Cybersecurity Review Measures, which came into effect on February 15, 2022. The revised Cybersecurity Review Measurespropose the following key changes:

Certain internet platforms in China have reportedlybecome subject to heightened regulatory scrutiny in relation to cybersecurity matters. As of the date of this Report, we have not beenincluded within the definition of “operator of critical information infrastructure” by a competent authority, nor have webeen informed by any PRC governmental authority of any requirement that we file for a cybersecurity review. However, if we are deemedto be a critical information infrastructure operator or an online platform operator that is engaged in data processing and holds personalinformation of more than one million users, we could be subject to PRC cybersecurity review in the future.

As there remains significant uncertainty in theinterpretation 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. Any failure or delayin the completion of the cybersecurity review procedures or any other non-compliance with the related laws and regulations may resultin fines or other penalties, including suspension of business, website closure and revocation of prerequisite licenses, as well as reputationaldamage or legal proceedings or actions against us and/or our PRC subsidiaries, which may have material adverse effect on our business,financial condition or results of operations. As of the date of this Report, we and our PRC subsidiaries have not been involved in anyinvestigations on cybersecurity review initiated by the CAC or related governmental regulatory authorities, and we and our PRC subsidiarieshave not received any inquiry, notice, warning, or sanction in such respect.

On June 10, 2021, the Standing Committee of theNational People’s Congress of China, or the SCNPC, promulgated the PRC Data Security Law, which took effect in September 2021. ThePRC Data Security Law imposes data security and privacy obligations on entities and individuals carrying out data activities, and introducesa data classification and hierarchical protection system based on the importance of data in economic and social development, and the degreeof harm it will cause to national security, public interests, or legitimate rights and interests of individuals or organizations whensuch data is tampered with, destroyed, leaked, illegally acquired or used. The PRC Data Security Law also provides for a national securityreview procedure for data activities that may affect national security and imposes export restrictions on certain data an information.

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As of the date of this Report, we do not expectthat the current PRC laws on cybersecurity or data security would have a material adverse impact on our business operations. However,as the scope of the PRC Data Security Law is broad and includes the collection, storage, use, processing, transmission, availability anddisclosure of data, among others, and uncertainties remain regarding the interpretation and implementation of these laws and regulations,we cannot assure you that we and our PRC subsidiaries will comply with such regulations in all respects and we and/or our PRC subsidiariesmay be ordered to rectify or terminate any actions that are deemed illegal by regulatory authorities. Any directly liable person withinour Company for violations or alleged violations of the PRC Data Security Law may become subject to fines. We and/or our PRC subsidiariesmay also become subject to fines and/or other sanctions that may have material adverse effect on our business, operations and financialcondition.

A severe or prolonged downturn in the PRCor global economy could materially and adversely affect our business and our financial condition.

The global macroeconomic environment is facingchallenges. There is considerable uncertainty over the long-termeffects of the expansionary monetary and fiscal policies adoptedby the central banks and financial authorities of some of the world’s leading economies, including the United States and China.There have been concerns over unrest and terrorist threats in the Middle East, Europe and Africa and over the conflicts involving Ukraine,Syria, Russia and North Korea. There have also been concerns on the relationship among China and other Asian countries, which may resultin, or intensify potential conflicts in relation to, territorial disputes, and the trade disputes between China and other countries. Itis unclear whether these challenges and uncertainties will be contained or resolved, and what effects they may have on the global politicaland economic conditions in the long term.

Economic conditions in China are sensitive toglobal economic conditions, changes in domestic economic and political policies and the expected or perceived overall economic growthrate in China. While the economy in China has grown significantly over the past decades, growth has been uneven, both geographically andamong various sectors of the economy, and the rate of growth has been slowing in recent years. Although growth of China’s economyremained relatively stable, there is a possibility that China’s economic growth may materially decline in the near future. Any severeor prolonged slowdown in the global or PRC economy may materially and adversely affect our business, results of operations and financialcondition.

You may have difficulty enforcing judgmentsagainst us.

A significant portion of our assets are located,and a substantial amount of our subsidiaries’ operations are conducted, in the PRC. In addition, some of our directors and officersare nationals or residents of the PRC, including our chief financial officer, Mr. Jing Jin, and independent director, Mr. Ming Zhao, anda substantial majority of their assets are located outside the United States. As a result, it may be difficult to effect service of processwithin the United States upon these persons. In addition, there is uncertainty as to whether the courts of the PRC would recognize orenforce judgments of U.S. courts because China does not have any treaties or other arrangements that provide for the reciprocal recognitionand enforcement of foreign judgments with the United States. In addition, according to the PRC Civil Procedures Law, courts in the PRCwill not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates basic principlesof PRC law or national sovereignty, security, or the public interest.

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 taxconsequences to us and our non-PRC shareholders.

Under the PRC EIT Law, an enterprise establishedoutside of China with “de facto management bodies” within China is considered a “resident enterprise,” meaningthat it can be subject to an enterprise income tax, or EIT, rate of 25.0% on its global income. In April 2009, the SAT promulgated a circular,known as Circular 82, and partially amended by Circular 9 promulgated in January 2014, to clarify the certain criteria for the determinationof the “de facto management bodies” for foreign enterprises controlled by PRC enterprises or PRC enterprise groups. UnderCircular 82, a foreign enterprise is considered a PRC resident enterprise if all of the following apply: (1) the senior management andcore management departments in charge of daily operations are located mainly within China; (2) decisions relating to the enterprise’sfinancial and human resource matters are made or subject to approval by organizations or personnel in China; (3) the enterprise’sprimary assets, accounting books and records, company seals, and board and shareholders’ meeting minutes are located or maintainedin China; and (4) 50.0% or more of voting board members or senior executives of the enterprise habitually reside in China. Further toCircular 82, the SAT issued a bulletin, known as Bulletin 45, effective in September 2011 and amended on June 1, 2015 and October 1, 2016,to provide more guidance on the implementation of Circular 82 and clarify the reporting and filing obligations of such “Chinesecontrolled offshore incorporated resident enterprises.” Bulletin 45 provides for, among other matters, procedures for the determinationof resident status and administration of post-determination matters. Although Circular 82 and Bulletin 45 explicitly provide that theabove standards apply to enterprises that are registered outside China and controlled by PRC enterprises or PRC enterprise groups, Circular82 may reflect the SAT’s criteria for determining the tax residence of foreign enterprises in general.

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If the PRC tax authorities determine that we area “resident enterprise” for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow.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 incometax reporting obligations. In our case, this would mean that income such as non-China source income would be subject to PRC enterpriseincome tax at a rate of 25%. Second, under the PRC EIT Law, dividends paid to us from our PRC subsidiaries would be deemed as “qualifiedinvestment income between resident enterprises” and therefore qualify as “tax-exempt income” pursuant to the clause26 of the PRC EIT Law. Finally, it is possible that future guidance issued with respect to the new “resident enterprise” classificationcould result in a situation in which the dividends we pay with respect to our ordinary shares, or the gain our non-PRC shareholders mayrealize from the transfer of our ordinary shares, may be treated as PRC-sourced income and may therefore be subject to a 10% PRC withholdingtax. The PRC EIT Law is, however, relatively new and ambiguities exist with respect to the interpretation and identification of PRC-sourcedincome, and the application and assessment of withholding taxes. If we are required under the PRC EIT Law to withhold PRC income tax ondividends payable to our non-PRC shareholders, should there be a determination in the future to pay dividends, or if non-PRC shareholdersare required to pay PRC income tax on gains on the transfer of their ordinary shares, our business could be negatively impacted and thevalue of your investment may be materially reduced. 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 creditableagainst such other taxes.

PRC regulation of loans to, and direct investmentsin, PRC entities by offshore holding companies may delay or prevent us from using proceeds from our future financing activities to makeloans or additional capital contributions to our PRC subsidiaries.

As an offshore holding company with PRC subsidiaries,we may transfer funds to our PRC subsidiaries or finance our PRC entities by means of loans or capital contributions. Any capital contributionsor loans that we, as an offshore entity, make to our PRC subsidiaries, are subject to PRC regulations. Any loans to our PRC subsidiaries,which are foreign-invested enterprises, cannot exceed statutory limits based on the difference between the amount of our investments andregistered capital in such subsidiaries, and shall be registered with State Administration of Foreign Exchange, or SAFE, or its localcounterparts. Furthermore, any capital increase contributions we make to our PRC subsidiaries, which are foreign-invested enterprises,are subject to the requirement of making necessary reports in Foreign Investment Comprehensive Management Information System, and registrationwith other government authorities in China. We may not be able to obtain these government registrations or approvals on a timely basis,if at all. If we fail to obtain such approvals or make such registration, our ability to make equity contributions or provide loans toour PRC subsidiaries or to fund their operations may be negatively affected, which may adversely affect their liquidity and ability tofund their working capital and expansion projects and meet their obligations and commitments. As a result, our liquidity and our abilityto fund and expand our business may be negatively affected.

We may rely on dividends paid by our subsidiariesfor our cash needs, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effecton our ability to conduct business.

As a holding company, we conduct a substantialamount of our business through our subsidiaries in China. We may rely on dividends paid by these PRC subsidiaries for our cash needs,including the funds necessary to pay any dividends and other cash distributions to our shareholders, to service any debt we may incurand to pay our operating expenses. The payment of dividends by entities established in China is subject to limitations. Regulations inChina currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards andregulations in China. In accordance with the Article 166, 168 of the Company Law of the PRC (Amended in 2018), each of our PRC subsidiariesis required to set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its general reserves or statutorycapital reserve fund until the aggregate amount of such reserves reaches 50% of its respective registered capital. A company may discontinuethe contribution when the aggregate sum of the statutory surplus reserve is more than 50% of its registered capital. The statutory commonreserve fund of a company may only be used to cover the losses of the company, expand the business and production of the company or beconverted into additional capital. As a result, our PRC subsidiaries are restricted in their ability to transfer a portion of their netassets to us in the form of dividends. In addition, if any of our PRC subsidiaries incurs debt on its own behalf in the future, the instrumentsgoverning the debt may restrict such subsidiary’s ability to pay dividends or make other distributions to us. Any limitations onthe ability of our PRC subsidiaries to transfer funds to us could materially and adversely limit our ability to grow, make investmentsor acquisitions that could be beneficial to our business, pay dividends and otherwise fund and conduct our business.

You may be subject to PRC income tax ondividends from us or on any gain realized on the transfer of our ordinary shares.

Under the PRC EIT Law, subject to any applicabletax treaty or similar arrangement between the PRC and your jurisdiction of residence that provides for a different income tax arrangement,PRC withholding tax at the rate of 10.0% is normally applicable to dividends from PRC sources payable to investors that are non-PRC residententerprises, which do not have an establishment or place of business in China, or which have such establishment or place of business ifthe relevant income is not effectively connected with the establishment or place of business. Any gain realized on the transfer of sharesby such investors is subject to 10.0% PRC income tax if such gain is regarded as income derived from sources within China unless a treatyor similar arrangement otherwise provides. Under the Individual Income Tax Law of the PRC and its implementation rules, dividends fromsources within China paid to foreign individual investors who are not PRC residents are generally subject to a PRC withholding tax ata rate of 20% and gains from PRC sources realized by such investors on the transfer of shares are generally subject to 20% PRC incometax, in each case, subject to any reduction or exemption set forth in applicable tax treaties and PRC laws.

There is a risk that we will be treated by thePRC tax authorities as a PRC tax resident enterprise. In that case, any dividends we pay to our shareholders may be regarded as incomederived from sources within China and we may be required to withhold a 10.0% PRC withholding tax for the dividends we pay to our investorswho are non-PRC corporate shareholders, or a 20.0% withholding tax for the dividends we pay to our investors who are non-PRC individualshareholders, including the holders of our Shares. In addition, our non-PRC shareholders may be subject to PRC tax on gains realized onthe sale or other disposition of our ordinary shares, if such income is treated as sourced from within China. It is unclear whether ournon-PRC shareholders would be able to claim the benefits of any tax treaties between their tax residence and China in the event that weare considered as a PRC resident enterprise. If PRC income tax is imposed on gains realized through the transfer of our ordinary sharesor on dividends paid to our non-resident investors, should there be a determination in the future to pay dividends, the value of yourinvestment in our ordinary shares may be materially and adversely affected. Furthermore, our shareholders whose jurisdictions of residencehave tax treaties or arrangements with China may not qualify for benefits under such tax treaties or arrangements.

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We may be unable to complete a businesscombination transaction efficiently or on favorable terms due to complicated merger and acquisition regulations and certain other PRCregulations.

On August 8, 2006, six PRC regulatory authorities,including Ministry of Commerce, the State Assets Supervision and Administration Commission, the SAT, the Administration for Industry andCommerce, the CSRC and SAFE, jointly issued the M&A Rules, which became effective on September 8, 2006 and were amended in June 2009.The M&A Rules, governing the approval process by which a PRC company may participate in an acquisition of assets or equity interestsby foreign investors, requires the PRC parties to make a series of applications and supplemental applications to the government agencies,depending on the structure of the transaction. In some instances, the application process may require presentation of economic data concerninga transaction, including appraisals of the target business and evaluations of the acquirer, which are designed to allow the governmentto assess the transaction. Accordingly, due to the M&A Rules, our ability to engage in business combination transactions has becomesignificantly more complicated, time-consuming and expensive, and we may not be able to negotiate a transaction that is acceptable toour shareholders or sufficiently protective of their interests in a transaction.

The M&A Rules allow PRC government agenciesto assess the economic terms of a business combination transaction. Parties to a business combination transaction may have to submit toMinistry of Commerce and other relevant government agencies an appraisal report, an evaluation report and the acquisition agreement, allof which form part of the application for approval, depending on the structure of the transaction. The M&A Rules also prohibit a transactionat an acquisition price obviously lower than the appraised value of the business or assets in China and in certain transaction structures,require that consideration must be paid within defined periods, generally not in excess of a year. In addition, the M&A Rules alsolimit our ability to negotiate various terms of the acquisition, including aspects of the initial consideration, contingent consideration,holdback provisions, indemnification provisions and provisions relating to the assumption and allocation of assets and liabilities. Transactionstructures involving trusts, nominees and similar entities are prohibited. Therefore, such regulations may impede our ability to negotiateand complete a business combination transaction on legal and/or financial terms that satisfy our investors and protect our shareholders’economic interests.

Fluctuations in exchange rates could havea material adverse impact on our results of operations and the value of your investment.

The conversion of Renminbi into foreign currencies,including U.S. dollars, is based on rates set by the People’s Bank of China. The Renminbi has fluctuated against the U.S. dollar,at times significantly and unpredictably. The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and isaffected by, among other things, changes in political and economic conditions in China and by China’s foreign exchange policies,among other things. We cannot assure you that Renminbi will not appreciate or depreciate significantly in value against the U.S. dollarin the future. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between theRenminbi and the U.S. dollar in the future.

Significant fluctuation of the Renminbi may havea material adverse effect on your investment. For example, to the extent that we need to convert U.S. dollars into Renminbi for our operations,appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive from the conversion.Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our ordinary sharesor for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amountavailable to us.

Very limited hedging options are available inChina to reduce our exposure to exchange rate fluctuations. As of the date of this Report, we have not entered into any material hedgingtransactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactionsin the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposureor at all. In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability toconvert Renminbi into foreign currency.

Governmental control of currency conversionmay limit our ability to utilize our revenues effectively and affect the value of your investment.

The PRC government imposes controls on the convertibilityof the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive a significant portionof our revenues in Renminbi. Under our current corporate structure, our British Virgin Islands holding company may rely on dividend paymentsfrom our PRC subsidiaries to fund any cash and financing requirements we may have. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions,can be made in foreign currencies without prior approval of SAFE, by complying with certain procedural requirements. Specifically, underthe existing exchange restrictions, without prior approval of SAFE, cash generated from the operations of our PRC subsidiaries in Chinamay be used to pay dividends to our Company. However, approval from or registration with appropriate government authorities is requiredwhere Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loansdenominated in foreign currencies. As a result, we need to obtain SAFE approval to use cash generated from the operations of our PRC subsidiariesto pay off their respective debt in a currency other than Renminbi owed to entities outside China, or to make other capital expenditurepayments outside China in a currency other than Renminbi. If such approval is withheld or the PRC government imposes other restrictionson the convertibility of Renminbi into foreign currencies, we may not be able to utilize our revenues effectively, and as a result, ourbusiness and results of operations may be materially adversely affected, and the value of our ordinary shares may decrease.

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U.S. regulatory bodies may be limited intheir ability to conduct investigations or inspections of our operations in China.

The SEC, the U.S. Department of Justice and otherU.S. authorities may also have difficulties in bringing and enforcing actions against us or our directors or executive officers in thePRC. The SEC has stated that there are significant legal and other obstacles to obtaining information needed for investigations or litigationin China. China has recently adopted a revised securities law that became effective on March 1, 2020, Article 177 of which provides, amongother things, that no overseas securities regulator is allowed to directly conduct an investigation or evidence collection activitieswithin the territory of the PRC. Accordingly, without governmental approval in China, no entity or individual in China may provide documentsand information relating to securities business activities to overseas regulators when it is under direct investigation or evidence discoveryconducted by overseas regulators, which could present significant legal and other obstacles to obtaining information needed for investigationsand litigation conducted outside of China.

A recent joint statement by the SEC andthe PCAOB, proposed rule changes submitted by Nasdaq, and the HFCA Act all call for additional and more stringent criteria to be appliedto emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspectedby the PCAOB.

On April21, 2020, SEC Chairman Jay Claytonand PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associatedwith investing in companies based in or having substantial operations in emerging markets including China. The joint statement emphasizedthe risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud inemerging markets.

On May18, 2020, Nasdaq filed three proposalswith the SEC to (i)apply minimum offering size requirement for companies primarily operating in “Restrictive Market,”(ii)adopt a new requirement relating to the qualification of management or board of directors for Restrictive Market companies,and (iii)apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company’sauditors.

On May20, 2020, the Senate passed the HFCAAct, requiring a foreign company to certify that it is not owned or manipulated by a foreign government if the PCAOB is unable to auditspecified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the company’sauditors for three consecutiveyears, the company’s securities are prohibited from trading on a national exchange.

On March 24, 2021, the SEC announced that it hadadopted interim final amendments to implement congressionally mandated submission and disclosure requirements of the HFCA Act . The interimfinal amendments will apply to registrants that the SEC identifies as having filed an annual report on Forms 10-K, 20-F, 40-F or N-CSRwith an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB has determinedit is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction. The SEC will implementa process for identifying such a registrant and any such identified registrant will be required to submit documentation to the SEC establishingthat it is not owned or controlled by a governmental entity in that foreign jurisdiction, and will also require disclosure in the registrant’sannual report regarding the audit arrangements of, and governmental influence on, such a registrant. We will be required to comply withthese rules if the SEC identifies us as having a “non-inspection” year under the related process that will be implementedby the SEC.

On June 22, 2021, the U.S. Senate passed the AcceleratingHolding Foreign Companies Accountable Act and on December 29, 2022, the Consolidated Appropriations Act was signed into law by PresidentBiden, which contained, among other things, an identical provision to Accelerating Holding Foreign Companies Accountable Act and amendedthe Holding Foreign Companies Accountable Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stockexchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time periodbefore our securities may be prohibited from trading or delisted.

On September 22, 2021, the PCAOB adopted rulesto create a framework for the PCAOB to use when determining, as contemplated under the HFCA Act, whether it is unable to inspect or investigatecompletely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authoritiesin that jurisdiction.

On December 2, 2021, the SEC adopted amendmentsto finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply to registrants that the SECidentifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreignjurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in a foreignjurisdiction.

On December 16, 2021, the PCAOB issued a reporton its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered inChina and in Hong Kong because of positions taken by PRC and Hong Kong authorities in those jurisdictions. The PCAOB has made such designationsas mandated under the HFCA Act. Pursuant to each annual determination by the PCAOB, the SEC will, on an annual basis, identify issuersthat have used non-inspected audit firms and thus are at risk of such suspensions in the future.

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On August 26, 2022, the CSRC, the MOF, and thePCAOB signed the Protocol, governing inspections and investigations of audit firms based in China and Hong Kong. The Protocol remainsunpublished and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the Protocol disclosedby the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfetteredability to transfer information to the SEC. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure completeaccess to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacateits previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’saccess 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, and its latest inspection hasbeen ongoing since November 2023. As such, it is not subject to the designations issued by the PCAOB on December 16, 2021. However, ifthe PCAOB is unable to inspect our accounting firm in a foreign jurisdiction during any period of three consecutive years or we becomeowned or controlled by a government in that foreign jurisdiction in the future, the HFCA Act may require our ordinary shares to be delistedfrom the Nasdaq Stock Market or any exchange on which our securities are traded in the future.

The recent developments would add uncertaintiesto our offering and may result in prohibitions on the trading of our ordinary shares on the Nasdaq Stock Market, if our auditors failto meet the PCAOB inspection requirement in time.

We plan to empower our audit committee to takethe PCAOB’s lack of inspection, as applicable, into account in connection with the oversight of our independent registered publicaccounting firm’s audit procedures and establish relevant internal quality control procedures. However, we cannot assure you thatour audit committee’s oversight would be effective. In addition, the SEC may initiate proceedings against our independent registeredpublic accounting firm, whether in connection with an audit of our Company or other China-based companies, which could result in the impositionof penalties against our independent registered public accounting firm, such as suspension of its ability to practice before the SEC.All of these could cause our shareholders and investors to lose confidence in our reported financial information and procedures and thequality of our financial statements, which may have a material effect on our business.

Risks Related to Our Ordinary Shares

Future sales of our ordinary shares, whetherby us or our shareholders, could cause the price of our ordinary shares to decline.

If our existing shareholders sell, or indicatean intent to sell, substantial amounts of our ordinary shares in the public market, the trading price of our ordinary shares could declinesignificantly. Similarly, the perception in the public market that our shareholders might sell our ordinary shares could also depressthe market price of our shares. A decline in the price of our ordinary shares might impede our ability to raise capital through the issuanceof additional ordinary shares or other equity securities. In addition, the issuance and sale by us of additional ordinary shares, or securitiesconvertible into or exercisable for our ordinary shares, or the perception that we will issue such securities, could reduce the tradingprice for our ordinary shares as well as make future sales of equity securities by us less attractive or not feasible. The sale of ordinaryshares issued upon the exercise of our outstanding warrants could further dilute the holdings of our then existing shareholders.

We do not know whether a market for theordinary shares will be sustained or what the trading price of the ordinary shares will be and as a result it may be difficult for youto sell your ordinary shares.

Although our ordinary shares trade on Nasdaq,an active trading market for the ordinary shares may not be sustained. It may be difficult for you to sell your ordinary shares withoutdepressing the market price for the ordinary shares. As a result of these and other factors, you may not be able to sell your ordinaryshares. Further, an inactive market may also impair our ability to raise capital by selling ordinary shares, or may impair our abilityto enter into strategic partnerships or acquire companies or products by using our ordinary shares as consideration.

Securities analysts may not cover our ordinaryshares and this may have a negative impact on the market price of our ordinary shares.

The trading market for our ordinary shares willdepend, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have anycontrol over independent analysts (provided that we have engaged various non-independent analysts). We do not currently have and may neverobtain research coverage by independent securities and industry analysts. If no independent securities or industry analysts commence coverageof us, the trading price for our ordinary shares would be negatively impacted. If we obtain independent securities or industry analystcoverage and if one or more of the analysts who covers us downgrades our ordinary shares, changes their opinion of our shares or publishesinaccurate or unfavorable research about our business, the price of our ordinary shares would likely decline. If one or more of theseanalysts ceases coverage of us or fails to publish reports on us regularly, demand for our ordinary shares could decrease and we couldlose visibility in the financial markets, which could cause the price and trading volume of our ordinary shares to decline.

Because we do not expect to pay dividendsin the foreseeable future, you must rely on the price appreciation of our ordinary shares for a return on your investment.

We currently intend to retain most, if not all,of our available funds and any future earnings to fund the development and growth of our business. As a result, we do not expect to payany cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our ordinary shares as a source for anyfuture dividend income.

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Our board of directors has complete discretionas to whether to distribute dividends, subject to certain requirements of British Virgin Islands law. In addition, our shareholders mayby ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors. Under BritishVirgin Islands law, a British Virgin Islands company may pay a dividend out of either profit or share premium account, provided that inno circ*mstances may a dividend be paid if this would result in the company being unable to pay its debts as they fall due in the ordinarycourse of business. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends,if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, theamount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions, and other factorsdeemed relevant by our board of directors. Accordingly, the return on your investment in our ordinary shares will likely depend entirelyupon any future price appreciation of our ordinary shares. There is no guarantee that our ordinary shares will appreciate in value oreven maintain the price at which you purchased the ordinary shares. You may not realize a return on your investment in our ordinary sharesand you may even lose your entire investment in our ordinary shares.

Techniques employed by short sellers maydrive down the market price of our ordinary shares.

Short selling is the practice of selling securitiesthat the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a laterdate to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowedsecurities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in thesale. As it is in the short seller’s interest for the price of the security to decline, many short sellers publish, or arrange forthe publication of, negative opinions regarding the relevant issuer and its business prospects in order to create negative market momentumand generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares inthe market.

Other public companies listed in the United Statesthat have substantial operations in China have been the subject of short selling. Much of the scrutiny and negative publicity has centeredon allegations of a lack of effective internal control over financial reporting resulting in financial and accounting irregularities andmistakes, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result,many of these companies are now conducting internal and external investigations into the allegations and, in the interim, are subjectto shareholder lawsuits and/or SEC enforcement actions.

We may in the future be the subject of unfavorableallegations made by short sellers. Any such allegations may be followed by periods of instability in the market price of our ordinaryshares and negative publicity. If and when we become the subject of any unfavorable allegations, whether such allegations are proven tobe true or untrue, we could be required to expend a significant amount of resources to investigate such allegations and/or defend ourselves.While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed againstthe relevant short seller by principles of freedom of speech, applicable federal or state law or issues of commercial confidentiality.Such a situation could be costly and time- consuming and could distract our management from growing our business. Even if such allegationsare 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.UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 1C.CYBERSECURITY

Cybersecurity Risk Management and Strategy

We have processes for assessing, identifying andmanaging cybersecurity risks, which are an integral part of decision-making at every level. Such processes include physical, proceduraland technical safeguards, response plans, and routine review of our policies and procedures to identify risks and refine our practices.We have integrated cybersecurity risk management into our broader enterprise risk management framework to promote a company-wide cultureof cybersecurity risk awareness and management.

We do not believe that any risks from cybersecuritythreats, nor any previous cybersecurity incidents, have materially affected us. However, the sophistication of cyber threats continuesto increase, and the preventative actions that we have taken and continues to take to reduce the risk of cyber incidents and protect itssystems and information may not successfully protect against all cyber incidents. For more information on how cybersecurity risk may materiallyaffect our business strategy, results of operations, or financial condition, please refer to Item 1A Risk Factors.

Cybersecurity Governance

Our Audit Committee of the Board of Directorsis responsible for overseeing cybersecurity risk and periodically updates our Board of Directors on such matters. The Audit Committeeregularly reviews and discusses with management the strategies, processes, procedures and controls pertaining to the management of ourinformation technology operations, including cyber risks and cybersecurity. The Audit Committee regularly and management the strategiescontinuously analyzes cybersecurity and resiliency risks to our business, considers industry trends and implements controls, as appropriate,to mitigate these risks.

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ITEM 2.PROPERTIES

The address of our principal executive officesand 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 locatedin Xinchang County, Zhejiang Province, China.

Properties Owned by us

As of December31, 2023, Greenland held landuse rights of four parcels of land with an aggregate site area of approximately 81,171 square meters, located in Xinchang County, ZhejiangProvince, PRC. The terms of these land use rights are due to expire on November14, 2062.

As of December31, 2023, Greenland held threebuilding ownership certificates for three buildings with an aggregate gross floor area of approximately 44,751 square meters. These propertiesare primarily used for production and office purposes.

Properties Leased by us

As of December31, 2023, Greenland leasedan 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, 2023, Greenland leased an assemblyspace 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 propertiesto further support the expansion of its HEVI business in the United States.

ITEM 3.LEGAL PROCEEDINGS

From time to time, we may become involved in variouslawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and anadverse result in these or other matters may arise from time to time that may harm our business. There are currently no legal proceedingsor claims that we believe will have a material adverse effect on our business, financial condition or operating results, except the followingmatter.

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMONEQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information for Ordinary Shares

Our ordinary shares are traded on the Nasdaq CapitalMarket under the symbol “GTEC.” Our ordinary shares commenced public trading on August 8, 2018.

The market price of our ordinary shares is subjectto significant fluctuations in response to variations in our quarterly operating results, general trends in the market, and other factors,over many of which we have little or no control. In addition, broad market fluctuations, as well as general economic, business, and politicalconditions, may adversely affect the market for our ordinary shares, regardless of our actual or projected performance. We cannot assureyou that there will be a market for our ordinary shares in the future.

As of April 12, 2024, the last sale price reportedon the Nasdaq Capital Market for our ordinary shares was approximately $1.96 per share.

Dividend Policy

We intend to retain all of our available fundsand any future earnings to fund the development and growth of our subsidiaries’ business. As such, we do not expect to pay anycash dividends in the foreseeable future.

Shareholders of Record

As of April 16, 2024, we had eleven (11) recordedholders 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.

Transfer Agent

The transfer agent for our ordinary shares isContinental Stock Transfer & Trust Company, located at 1 State Street 30th Floor, New York, NY 10004-1561. The telephone number ofContinental Stock Transfer & Trust Company is (212) 509-4000.

Equity Compensation Plan Information

For information on the securities authorized forissuance under our equity compensation plan, please see “Item 12. Security Ownership of Certain Beneficial Owners and Managementand Related Shareholder Matters.”

Recent Sales of Unregistered Securities

During the fiscal years ended December 31, 2023and 2022, we did not have sales of unregistered securities other than those already disclosed in the quarterly reports on Form 10-Q andthe current reports on Form 8-K.

Purchases of Equity Securities by the Issuerand Affiliated Purchasers

None.

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ITEM 6.[RESERVED]

ITEM 7. MANAGEMENT’S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF GREENLAND TECHNOLOGIES HOLDING CORPORATION

The following discussion and analysis of financialcondition and results of operations relates to the operations and financial condition reported in the consolidated financial statementsof the Company thereto, which appear elsewhere in this Report, and should be read in conjunction with such financial statements and relatednotes included in this Report. Except for the historical information contained herein, the following discussion, as well as other informationin this Report, contain “forward-looking statements,” within the meaning of Section 27A of the Securities Act, and Section21E of the Exchange Act, and are subject to the “safe harbor” created by those sections. Actual results and the timing ofthe events may differ materially from those contained in these forward-looking statements due to many factors, including those discussedin the “Cautionary Note Regarding Forward-Looking Statements” set forth elsewhere in this Report.

Overview

The Company was incorporated on December28,2017 as a British Virgin Islands Company with limited liability. The Company was incorporated as a blank check company for the purposeof effecting a merger, capital stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar businesscombination with one or more target businesses. Following the Business Combination (as described below) in October 2019, the Company changedits name from Greenland Acquisition Corporation to Greenland Technologies Holding Corporation.

On July 27, 2018, we consummated our initial publicoffering of 4,400,000 units, including a partial exercise by the underwriters of their over-allotment option in the amount of 400,000units. Each unit consisted of one ordinary share, no par value, one warrant to purchase one-half of one ordinary share, and one rightto receive one-tenth of one ordinary share upon the consummation of our Business Combination, pursuant to a registration statement onForm S-1. Warrants must be exercised in multiples of two warrants, and each two warrants are exercisable for one ordinary share at anexercise price of $11.50 per share. The units were sold in our initial public offering at an offering price of $10.00 per unit, generated$44,000,000 (before underwriting discounts and offering expenses) in gross proceeds.

Simultaneously with the consummation of our initialpublic offering, we completed a private placement of 282,000 units, issued to the Sponsor and Chardan, which generated $2,820,000 in grossproceeds. We also sold to Chardan (and its designees), for $100, an option to purchase up to 240,000 units exercisable at $11.50 per unit(or an aggregate exercise price of $2,760,000) commencing on consummation of the Business Combination. The unit purchase option may beexercised for cash or on a cashless basis, at the holder’s option, and expired on July 24, 2023. On February 18, 2021, Chardan exercisedits option to purchase 120,000 units.

On October 24, 2019, we consummated our BusinessCombination with Zhongchai Holding following a special meeting, where the shareholders of Greenland considered and approved, among othermatters, a proposal to adopt andentered into the Share Exchange Agreement that allowed Greenland to acquire from the Seller allof the issued and outstanding equity interests of Zhongchai Holding in exchange for 7,500,000 newly issued ordinary shares, no par valueof Greenland, issued to the Seller. As a result, the Seller became the controlling shareholder of Greenland, and Zhongchai Holding becamea directly and wholly owned subsidiary of Greenland. The Business Combination was accounted for as a reverse merger effected by a shareexchange, wherein Zhongchai Holding is considered the acquirer for accounting and financial reporting purposes.

In connection with the Business Combination, allthe outstanding rights of the Company were converted into 468,200 ordinary shares on a one-tenth (1/10) ordinary share per right basisif holders of the rights elected to convert their rights into the underlying ordinary shares.

On December 17, 2019, the Company’s warrants,which were trading under the ticker symbol “GTECW,” were delisted from the Nasdaq Capital Market by the Nasdaq Listing QualificationsStaff.

On January 14, 2020, HEVI was incorporated underthe laws of the State of Delaware. HEVI is a 100% owned subsidiary of Greenland. HEVI focuses on the production and sale of electric industrialequipment, including electric industrial vehicles, for the North American market.

Greenland serves as the parent company to ZhongchaiHolding. Through Zhongchai Holding and its subsidiaries, Greenland develops and manufactures traditional transmission products for materialhandling machineries and electric industrial heavy equipment, including electric industrial vehicles.

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Through its PRC subsidiaries, Greenland offerstransmission 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 companiesacross 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 $90.83million in the fiscal year 2022 to $90.33 million in the fiscal year 2023. 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 salesvolume, driven by decreasing market demand for the year ended December 31, 2023. Based on our revenues in the fiscal years ended December31, 2023 and 2022, we believe that Greenland is one of the major developers and manufacturers of transmission products for small and medium-sizedforklift trucks in China.

Greenland’s transmission products are usedin 1-ton to 15-tons forklift trucks, some with mechanical shift and some with automatic shift. Greenland sells these transmission productsdirectly to forklift-truck manufacturers. In the fiscal years ended December 31, 2023 and 2022, Greenland sold an aggregate of 149,543and 129,686 sets of transmission products, respectively, to more than 100 forklift manufacturers in the PRC.

There is increasing demand for electric industrialheavy equipment powered by sustainable energy in order to reduce air pollution and lower carbon emissions. Utilizing Greenland’sexpertise in manufacturing and R&D, it established HEVI in January 2020 to create clean and sustainable products and services in theheavy industrial equipment industry that help organizations pursue a carbon neutral operation. HEVI designs, develops, and manufactureselectric heavy industrial equipment and accessories and sells them directly to the end consumers in various markets in the United States.HEVI’s product line available for purchase includes the GEL-5000 all-electric lithium 5.0-ton rated load wheeled front loader, GEL-1800all-electric lithium 1.8-ton rated load wheeled front loader, the GEX-8000 all-electric lithium 8.0-ton rated load excavator, and theGEF-series of electric lithium forklifts. HEVI also introduced mobile DC battery chargers to support a growing market of EV applicationsrequiring DC charging capabilities in the North America market. These products are available for purchase in the U.S. market. In August2022, HEVI launched a 54,000 square foot industrial electric vehicle assembly site in Baltimore, Maryland to support local assembly, servicesand distribution of its product line.

Impact of COVID-19 Pandemic on Our Operationsand Financial Performance

The COVID-19 pandemic has severely affected globaleconomy. In an effort to contain the spread of the COVID-19 pandemic, in 2021 and 2022, China and many other countries took precautionarymeasures, such as imposing travel restrictions, quarantining individuals infected with or suspected of being infected with COVID-19, encouragingor requiring people to work remotely, and canceling public activities, among others.

Since 2021, a few waves of COVID-19 infectionsemerged in various regions of China, and in response, the Chinese government implemented certain anti-COVID measures and protocols. Chineseindustries 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 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.

The extent to which the COVID-19 pandemic maycontinue to affect our operations and financial performance in the future will depend on future developments, which are highly uncertainand cannot be predicted at this time.

Recent Developments

On February14, 2024, the Company issued a press release announcing its intent, as approved by its board of directors, to explore a separation ofits electric industrial vehicles and drivetrain systems segments into two independent, publicly-traded companies by spinning off its drivetrainsystems business. After the proposed spin-off, Greenland would be solely comprised of the Company’s current industrial electricvehicle business under its HEVI brand.

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Results of Operations

For the fiscal years ended December 31,2023 and 2022

Overview

Components of Results of Operations

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. However, excluding the impact of exchange rate fluctuation, our revenue forthe fiscal year ended December 31, 2023 increased by approximately 4.3% compared to the fiscal year ended December 31, 2022. The actualincrease in revenue was primarily the result of an increase in the Company’s sales volume, driven by increasing market demand forthe year ended December 31, 2023.

Cost of Goods Sold

Greenland’s cost of goods sold consistsprimarily of material costs, freight charges, purchasing and receiving costs, inspection costs, warehousing costs, internal transfer costs,wages, employee compensation, amortization, depreciation and related costs, which are directly attributable to Greenland’s productionactivities. The write down of inventory using net realizable value impairment test is also recorded in cost of goods sold. The total costof goods sold decreased by approximately $5.24 million, or approximately 7.4%, to approximately $65.76 million for the fiscal year endedDecember 31, 2023, from approximately $71.00 million for the fiscal year ended December 31, 2022. Cost of goods sold decreased in fiscalyear 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 millionfor the fiscal year ended December 31, 2022. For the fiscal years ended December 31, 2023 and 2022, Greenland’s gross margin wasapproximately 27.21% and 21.84%, respectively. The increase in gross margin in fiscal year 2023 compared to fiscal year 2022 was primarilydue 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.

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Operating Expense

Greenland’s operating expenses consist ofselling expenses, general and administrative expenses and research and development expenses. 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 endedDecember 31, 2022. The decrease in operating expenses was primarily due to a decrease in the after-sales service fees and advertisingand marketing expenses offset by an increase in staff salary and lease costs in fiscal year 2023.

Selling Expenses

Greenland’s selling expenses mainly includeoperating expenses such as sales staff payroll, traveling expenses and transportation expenses. 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 fiscalyear ended December 31, 2022. The decrease in selling expenses was mainly due to a decrease in the after-sales service fees and advertisingand marketing expenses for the year ended December 31, 2023.

General and Administrative Expenses

Greenland’s general and administrative expensesinclude management and office staff salaries and employee benefits, depreciation for office facility and office furniture and equipment,travel and entertainment, legal and accounting, consulting fees and other office expenses. General and administrative expenses increasedby approximately $0.59 million, or approximately 10.9%, to approximately $6.05 million for the fiscal year ended December 31, 2023, fromapproximately $5.46 million for the fiscal year ended December 31, 2022. The fundamental reasons for the rise in the general and administrativeexpenses were an increase in staff salary and an increase in lease cost.

Research and Development Expenses

R&D expenses consist of R&D personnelcompensation, costs of materials used in R&D projects, and depreciation costs for research-related equipment. R&D expenses decreasedby 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. Such decrease was primarily attributable to a decrease in the Company’sR&D activities for the fiscal year ended December 31, 2023.

Income from Operations

As a result of the foregoing, income from operationsfor 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.

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. The increase in interest income was because more cash was deposited in banksduring the fiscal year ended December 31, 2023 as compared to the fiscal year ended December 31, 2022.

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. The decrease was primarily due to a reduction of our short-term loans for theyear ended December 31, 2023, as compared to the year ended December 31, 2022.

Change in fair value of the warrant liability

Greenland recognized a gain of approximately $1.40million for the investor warrant from a change in fair value of the warrant liability for the fiscal year ended December 31, 2023, ascompared to a loss of approximately $2.81 million for the investor warrant, from a change in fair value of the warrant liability for thefiscal year ended December 31, 2022.

Impairment for investments

Impairment for investments for the year endedDecember 31, 2023 was approximately $0.30 million, representing an increase of approximately $0.30 million, as compared to nil for theyear ended December 31, 2022. The loss is related to the HEVI’s investment in Princeton Nuenergy Inc and Learn EV. HEVI held a lowpercentage of equity interests in the invested company as of December 31, 2023, and we recorded fully impairment of the investment.

Allowance for expected credit loss-relatedparties receivable

As of December 31, 2023, Cenntro Holding Limitedowed Greenland an aggregate of $34.46 million. Greenland does not expect the amount of $34.46 million due from Cenntro Holding Limitedwill be repaid. As a result, Greenland recorded a full provision for expected credit loss for the year ended December31, 2023.

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. The increase was primarily due to an increase in income fromwealth management products and VAT deduction for the fiscal year ended December 31, 2023 as compared to the fiscal year ended December31, 2022.

41

Remeasurement loss from change in functionalcurrency

Greenland’s remeasurement loss fromchange in functional currency was approximately $2.49 million for the fiscal year ended December 31, 2023, a decrease ofapproximately $2.49 million, as compared to nil of remeasurement loss from change in functional currency for the fiscal year endedDecember 31, 2022. On July 10, 2023, the Company’s subsidiary, Shanghai Hengyu Business Management Consulting Co., Ltd., wasdissolved under the laws of the PRC, and we recorded a remeasurement loss from change in functional currency of approximately $2.49million, due to Shanghai Hengyu’s main assets due from related party in the amount of $36.46 million transferred to Hengyu Capital, which was originallydenominated in RMB in Shanghai Hengyu, transferred to Hengyu Capital and denominated in USD.

Government subsidies income

Greenland’s government subsidies incomewas approximately $0.69 million for the fiscal year ended December 31, 2023, a decrease of approximately $0.54 million, as compared toapproximately $1.03 million of government subsidies income for the fiscal year ended December 31, 2022. The decrease was primarily dueto 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 December31, 2022.

Zhejiang Zhongchai obtained a “high-techenterprise” status near the end of the fiscal year of 2022. Such status allows Zhejiang Zhongchai to enjoy a reduced statutory incometax rate of 15%, rather than the standard PRC corporate income tax rate of 25%. Income tax for both fiscal years 2023 and 2022 were calculatedbased on a rate of 15%. The “high-tech enterprise” status is reevaluated by relevant Chinese government agencies every threeyears. Zhejiang Zhongchai’s current “high-tech enterprise” will be reevaluated near the end of 2025.

Greenland’s other PRC subsidiaries are subjectto different income tax rates. Hangzhou Greenland, the wholly owned subsidiary of Zhongchai Holding, is subject to the 25% standard incometax rate Greenland is a holding company registered in the British Virgin Islands and is not subject to tax on income or capital gainsunder the current British Virgin Islands law. In addition, upon payment of dividends to its shareholders, the Company will not be subjectto any British Virgin Islands withholding tax.

On January 14, 2020, Greenland established HEVI,its wholly owned subsidiary in the state of Delaware. HEVI promotes sales of sustainable alternative products for the heavy industrialequipment industry, including electric industrial vehicles, in the North American market. On December 22, 2017, the U.S. federal governmentenacted the 2017 Tax Act. The 2017 Tax Act includes a number of changes in existing tax law impacting businesses, including the transitiontax, a one-time deemed repatriation of cumulative undistributed foreign earnings and a permanent reduction in the U.S. federal statutoryrate from 35% to 21%, effective on January 1, 2018. ASC 740 requires companies to recognize the effect of tax law changes in the periodof enactment, and accordingly, the effects must be recognized on companies’ calendar year-end financial statements, even thoughthe effective date for most provisions is January 1, 2018. Since HEVI was established in 2020, the one-time transition tax did not haveany impact on the Company’s tax provision and there was no undistributed accumulated earnings and profits as of December 31, 2023.

Net Income (Loss)

As a result of the foregoing, Greenland’snet loss was approximately $25.02 million for the fiscal year ended December 31, 2023, representing a decrease of approximately $28.82million, from the net income of approximately $3.8 million for the fiscal year ended December 31, 2022.

Liquidity and Capital Resources

Greenland is a holding company incorporated inthe British Virgin Islands. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of their accumulated profits,if any, determined in accordance with PRC accounting standards and regulations. In addition, our PRC subsidiaries are required to setaside at least 10% of their respective accumulated profits each year, if any, to fund certain reserve funds until the total amount setaside reaches 50% of their respective registered capital. Our PRC subsidiaries may also allocate a portion of their after-tax profitsbased on PRC accounting standards to employee welfare and bonus funds at their discretion. These reserves are not distributable as cashdividends.

We have funded working capital and other capitalrequirements primarily by equity contributions, cash flow from operations, short-term bank loans and bank acceptance notes, and long-termbank loans. Cash is required primarily to purchase raw materials, repay debts and pay salaries, office expenses, income taxes and otheroperating expenses.

For the fiscal year ended December 31, 2023, ourPRC subsidiary, Zhejiang Zhongchai, paid off approximately $12.42 million in bank loan and maintained $28.19 million cash on hand. Forthe 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 andrely on governmentally supported loans with lower cost, if necessary.

Government subsidies mainly consist of an incentivegranted by the Chinese government to encourage transformation of fixed assets in China and other miscellaneous subsidies from the Chinesegovernment.Government subsidies are recognized when there is reasonable assurance that the subsidy will be received and all conditionsbe completed. 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 operationsmainly through cash flow from its operations, renewal of bank borrowings, additional equity financing, and continuation of financial supportfrom its shareholders and affiliates controlled by its principal shareholders, if necessary. The Company might implement a stricter policyon sales to less creditworthy customers and plans to continue to improve its collection efforts on accounts with outstanding balances.The Company is actively working with customers and suppliers and expects to fully collect the remaining balance.

We believe that the Company has sufficient cash,even with uncertainty in the Company’s manufacturing and sale of electric industrial heavy equipment in the future and declineon sale of transmission products. However, our capital contribution from existing funding sources, to operate for the next 12 monthswill be sufficient. 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, orother developments. We may also need additional cash resources, if the Company wishes to pursue opportunities for investment, acquisition,strategic cooperation, or other similar actions. If the Company’s management and its board of directors determine that the cashrequired for specific corporate activities exceed Greenland’s cash and cash equivalents on hand, the Company may issue debt or equitysecurities to raise cash.

Historically, we have expended considerable resourceson building a new factory and paid off a considerable amount of debt, resulting in less available cash. However, we anticipate that ourcash flow will continue to improve for fiscal year 2024. More specifically, Zhejiang Zhongchai has completed the construction of a newfactory, and our PRC subsidiaries have received COVID-19 related government subsidies. Furthermore, Zhejiang Zhongchai pledged the deedof its new factory as a collateral to banks in order to obtain additional loans, refinance expiring loans, restructure short-term loans,and fund other working capital needs upon acceptable terms to Greenland.

Cash and Cash Equivalents

Cash equivalents refers to all highly liquid investmentspurchased with original maturity of three months or less. As of December 31, 2023, Greenland had approximately $22.98 million of cashand cash equivalents, an increase of approximately $6.68 million, or 41.03%, as compared to approximately $16.30 million as of December31, 2022. The increase of cash and cash equivalents was mainly due to an increase in notes payable, as compared to that as of December31, 2022.

Restricted Cash

Restricted cash represents the amount held bya bank as security for bank acceptance notes and therefore is not available for use until the bank acceptance notes are fulfilled or expired,which typically takes less than twelve months. 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 increaseof restricted cash was due to an increase in mortgaged assets.

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 millionas of December 31, 2022. The increase in accounts receivables was due to our slowed down efforts in receivables collections.

Greenland recorded approximately $0.87 millionand $0.76 million of allowance for expected credit losses as of December 31, 2023 and 2022, respectively. Greenland conducted an aginganalysis of each customer’s delinquent payments to determine whether allowance for expected credit losses is adequate. In establishingthe allowance for expected credit losses, Greenland considers historical experience, economic environment, and expected collectabilityof past due receivables. An estimate of expected credit losses is recorded when collection of the full amount is no longer probable. Whenbad debts are identified, such debts are written off against the allowance for expected credit losses. Greenland will continuously assessits expected credit losses based on the credit history of and relationships with its customers on a regular basis to determine whetherits allowance for expected credit losses on its accounts receivables is adequate. Greenland believes that its collection policies aregenerally in line with the transmissions industry’s standard in the PRC.

Due from Related Party

Due from related party was $0.23 million and $36.67million as of December 31, 2023 and December 31, 2022, respectively. The balance of due from related parties as of December 31, 2023 andDecember 31, 2022 consisted primarily of other receivables from Cenntro Holding Limited in the amount of $34.46 million and $36.46 millionasof December 31, 2023 and December 31, 2022, respectively. We do not expect the amount of $34.46 million due from Cenntro Holding Limitedwill be repaid. As a result, we recorded a full provision for expected credit losses for the year ended December31, 2023.

Notes Receivable

As of December 31, 2023, Greenland had approximately$27.14 million of notes receivables, which will be collected by us within twelve months. The decrease was approximately $1.61 million,or 5.61%, as compared to approximately $28.75 million as of December 31, 2022.

Working Capital

Our working capital was approximately $27.27 millionas of December 31, 2023, as compared to $59.70 million as of December 31, 2022. The decrease in working capital of $32.43 million in thefiscal year 2023 as compared with the fiscal year 2022 was primarily contributed to a decrease in cash and cash equivalents and due fromrelated parties-current.

43

Cash Flow

Operating Activities

Greenland’s net cash provided by operatingactivities was approximately $2.45 and $8.12 million for the fiscal years ended December 31, 2023 and 2022, respectively.

In the fiscal year ended December 31, 2023, themain sources of cash inflow from operating activities were the increase in allowance for expected credit loss-related parties receivableof $34.46 million and depreciation and amortization of $2.19 million. The main causes of changes in cash outflow were net loss of approximately$25.02 million, change in fair value of warrant liability of approximately $1.40 million, changes in other current and noncurrent assetsof approximately $6.34 million and changes in accounts receivable of $2.39 million.

In the fiscal year ended December 31, 2022, themain 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. The maincauses of changes in cash outflow were changes in other current and noncurrent assets of approximately $7.82 million and changes in accountspayable of $2.08 million.

Investing Activities

Investing activities resulted a cash inflow ofapproximately $1.07 million for the fiscal year ended December 31, 2023. Cash provided by investing activities for the fiscal year endedDecember 31, 2023 was mainly due to approximately $0.44 million in proceeds from sale of short-term investment and approximately $1.84million repayment of loans lend to third parties offset by approximately $0.74 million used for purchases of long-term assets.

Investing activities resulted a cash outflow ofapproximately $0.78 million for the fiscal year ended December 31, 2022. Cash used in investing activities for the fiscal year ended December31, 2022 was mainly due to approximately $0.53 million used for purchases of long-term assets and approximately $0.25 million used forinvestment in a joint venture.

Financing Activities

Financing activities resulted a cash inflow ofapproximately $2.87 million for the fiscal year ended December 31, 2023, which was mainly attributable to approximately $6.72 millionin 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.

Financing activities resulted a cash outflow ofapproximately $4.28 million for the fiscal year ended December 31, 2022, which was mainly attributable to repayment of loans due to relatedparties 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. 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 risksfor Greenland’s business. Accounts receivable are typically unsecured and derived from revenues earned from customers, thereby exposingGreenland to credit risk. Credit risk is controlled by the application of credit approvals, limits, and monitoring procedures. Greenlandidentifies credit risk collectively based on industry, geography, and customer type. This information is monitored regularly by the Company’smanagement. In measuring the credit risk of sales to customers, Greenland mainly reflects the “probability of default” bythe customer on its contractual obligations and considers the current financial position of the customer and the exposures to the customerand its future development.

44

Liquidity Risk

Greenland is exposed to liquidity risk when itis unable to provide sufficient capital resources and liquidity to meet its commitments and/or business needs. Liquidity risk is managedby the application of financial position analysis to test if Greenland is in danger of liquidity issues and also by application of monitoringprocedures to constantly monitor its conditions and movements. When necessary, Greenland resorts to other financial institutions to obtainadditional short-term funding to meet the liquidity shortage.

Inflation Risk

Greenland is also exposed to inflation risk. Inflationaryfactors, such as increases in raw material and overhead costs, could impair Greenland’s operating results. Although Greenland doesnot believe that inflation has had a material impact on its financial position or results of operations to date, a high rate of inflationin the future may have an adverse effect on its ability to maintain current levels of gross margin and operating expenses as a percentageof sales revenues if the selling prices of its products do not increase with such increased costs.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statementsin accordance with U.S. GAAP. In applying accounting principles, it is often required to use estimates. These estimates consider the facts,circ*mstances and information available, and may be based on subjective inputs, assumptions and information known and unknown to us. Materialchanges in certain of the estimates that we use could potentially affect, by a material amount, our consolidated financial position andresults of operations. Although results may vary, we believe our estimates are reasonable and appropriate. See Note 2 to our consolidatedfinancial statements included under “Item 8. Financial Statements and Supplementary Data” for a summary of our significantaccounting policies. The following describes certain of our significant accounting policies that involve more subjective and complex judgmentswhere the effect on our consolidated financial position and operating performance could be material.

Revenue Recognition

In accordance with ASC Topic 606, “Revenuefrom Contracts with Customers,” the Company recognizes revenues when goods or services are transferred to customers in an amountthat reflects the consideration which the Company expects to receive in exchange for those goods or services. In determining when andhow revenues are recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification ofcontract with customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv)allocation of the transaction price to the performance obligations, and (v) recognition of revenues when (or as) the Company satisfieseach performance obligation. The Company derives revenues from the processing, distribution and sale of its products. The Company recognizesits revenues net of VAT. The Company is subject to VAT which had been levied at the rate of 17% on the invoiced value of sales until April30, 2018, after which date the rate was reduced to 16%. VAT rate was further reduced to 13% starting from April 1, 2019. Output VAT isborne by customers in addition to the invoiced value of sales and input VAT is borne by the Company in addition to the invoiced valueof purchases to the extent not refunded for export sales.

Revenues are recognized at a point in time oncethe Company has determined that the customer has obtained control over the product. Control is typically deemed to have been transferredto the customer when the performance obligation is fulfilled, usually at the time of customers’ acceptance or consumption, at thenet sales price (transaction price) and each of the criteria under ASC 606 have been met. Contract terms may require the Company to deliverthe finished goods to the customers’ location or the customer may pick up the finished goods at the Company’s factory. Internationalsales 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”). The adoption of ASC 606 had no impact on the Company’sbeginning balance of retained earnings.

The Company’s contracts are all short-termin nature with a contract term of one year or less. Receivables are recorded when the Company has an unconditional right to consideration.

Business Combination

On October 24, 2019, we consummated our BusinessCombination with Zhongchai Holding following a special meeting, where the shareholders of Greenland considered and approved, among othermatters, a proposal to adopt and entered into the Share Exchange Agreement, dated as of July 12, 2019, among (i) Greenland, (ii) ZhongchaiHolding, (iii) the Sponsor in the capacity as the Purchaser Representative, and (iv) Cenntro Holding Limited, the sole member of ZhongchaiHolding.

Pursuant to the Share Exchange Agreement, Greenlandacquired from the Seller all of the issued and outstanding equity interests of Zhongchai Holding in exchange for 7,500,000 newly issuedordinary shares, no par value of Greenland, to the Seller. As a result, the Seller became the controlling shareholder of Greenland, andZhongchai Holding became a directly and wholly owned subsidiary of Greenland. The Business Combination was accounted for as a reversemerger effected by a share exchange, wherein Zhongchai Holding is considered the acquirer for accounting and financial reporting purposes.

Pursuant to the Finder Agreement, 50,000 newlyissued ordinary shares issued to Zhou Hanyi is the finder fee for the Business Combination.

45

Inventories

Inventories are stated at the lower of cost ornet realizable value, which is based on estimated selling prices less any further costs expected to be incurred for completion and disposal.Cost of raw materials is calculated using the weighted average method and is based on purchase cost. Work-in-progress and finished goodscosts are determined using the weighted average method and comprise direct materials, direct labor and an appropriate proportion of overhead.

Income Taxes

The Company accounts for income taxes followingthe liability method pursuant to FASB ASC 740 “Income Taxes”. Under this method, deferred tax assets and liabilities are determinedbased on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be ineffect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred taxassets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assetswill not be realized. The effect on deferred taxes of a change in tax rate is recognized in income in the period that includes the enactmentdate.

The Company also follows FASB ASC 740, which addressesthe determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position willbe sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in thefinancial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihoodof being realized upon ultimate settlement. ASC 740 also provides guidance on recognition, classification, interest and penalties on incometaxes, accounting in interim periods and requires increased disclosures. As of December 31, 2023, the Company did not have a liabilityfor unrecognized tax benefits. It is the Company’s policy to include penalties and interest expense related to income taxes as acomponent of other expense and interest expense, respectively, as necessary. The Company’s historical tax years will remain openfor examination by the local authorities until the statute of limitations has passed.

Off Balance Sheet Arrangements

None.

ITEM 7A. QUANTITATIVE AND QUALITATIVEDISCLOSURES ABOUT MARKET RISK

Certain information regarding this Item is containedin Item 7 under the headings “Credit Risk,” “Liquidity Risk,” and “Inflation Risk.”

46

ITEM 8. FINANCIAL STATEMENTSAND SUPPLEMENTARY DATA

GREENLAND TECHNOLOGIES HOLDING CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 and 2022

INDEX

F-1

Report of IndependentRegistered Public Accounting Firm

Opinion on the Financial Statements

We have audited the accompanying consolidatedbalance sheets of Greenland Technologies Holding Corporation and its subsidiaries (the “Company”) as of December 31, 2023and 2022, and the related consolidated statements of income and comprehensive incomes, changes in shareholders’ equity, and cashflows for each of the years in the two-year period ended December 31, 2023 and the related notes (collectively referred to as the financialstatements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Companyas of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period endedDecember 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Emphasis of Matters

Wedraw your attention to Note 23(b), where the Company recorded a full provision for expected credit losses with an aggregate amount in$34.46 million for the year ended December 31, 2023, as the Company does not expect the amount due from Cenntro Holding Limited willbe repaid.

We also draw your attention to Note 25, where the Company issued a press release on February 14, 2024 announcing its intentto 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. After the proposed spin-off, the Company would be solely comprised of the Company’scurrent industrial electric vehicle business under its HEVI brand. Our opinion is not modified with respect to these matters.

Basis for Opinion

These financial statements are the responsibilityof the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on ouraudits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and arerequired to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with thestandards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engagedto perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understandingof internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’sinternal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures toassess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures thatrespond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as wellas evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

F-2

Critical Audit Matters

The critical audit matters communicated beloware matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicatedto the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii)involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in anyway our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit mattersbelow, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of Warrant Liability

As described in Notes 17 to the consolidatedfinancial statements, the Company’s warrant liability was $4.1million and $5.5million as of December 31,2023 and 2022, respectivelywhich these amounts were material to the financial statements as a whole. Management applies significant judgments in estimating fairvalues of warrant liability including selection of valuation methods and significant assumptions used in valuation such as Black–Scholesmodel and significant inputs into the model.

Our principal audit procedures performed to address this critical auditmatter included the following:

The accounts relevant to this critical audit matterinclude the value of the warrant liabilities and the related disclosures in the accompanying notes 17 to the financial statements.

We have served as the Company’s auditorsince November 16, 2020.

San Mateo, California

(PCAOB ID #1171)

April 16, 2024

F-3

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2023 AND 2022

(AUDITED, IN U.S. DOLLARS)

F-4

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2023 AND 2022 (Continued)

(AUDITED, IN U.S. DOLLARS)

See accompanying notes to the consolidated financialstatements.

F-5

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVEINCOME

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

(AUDITED, IN U.S. DOLLARS)

See accompanying notes to the consolidated financialstatements.

F-6

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHARE HOLDERS’EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

(AUDITED, IN U.S. DOLLARS)

See accompanying notes to the consolidated financialstatements.

F-7

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

(AUDITED, IN U.S. DOLLARS)

See accompanying notes to the consolidated financialstatements.

F-8

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022(Continued)

(AUDITED, IN U.S. DOLLARS)

See accompanying notes to the consolidated financialstatements.

F-9

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

F-10

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)

F-11

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES(CONTINUED)

F-12

GREENLAND TECHNOLOGIESHOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATEDFINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANTACCOUNTING POLICIES (CONTINUED)

F-13

GREENLAND TECHNOLOGIESHOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATEDFINANCIAL STATEMENTS

NOTE 2 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

F-14

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTINUED)

F-15

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTINUED)

F-16

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTINUED)

F-17

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTINUED)

F-18

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTINUED)

F-19

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

F-20

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

F-21

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

F-22

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 – ACCOUNTS RECEIVABLE (CONTINUED)

F-23

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

F-24

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

F-25

GREENLAND TECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 – SHORT TERM BANK LOANS (CONTINUED)