# EDGAR Filing Document

**Accession Number:** 0001780731
**File Stem:** 0001213900-26-056928
**Filing Date:** 2026-5
**Character Count:** 1014461
**Document Hash:** f0b7f709fb96088e6108aeb0458a2f11
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-26-056928.hdr.sgml**: 20260515

**ACCESSION NUMBER**: 0001213900-26-056928

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 176

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260515

**DATE AS OF CHANGE**: 20260514

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** E-Power Inc.
- **CENTRAL INDEX KEY:** 0001780731
- **STANDARD INDUSTRIAL CLASSIFICATION:** MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 000000000
- **STATE OF INCORPORATION:** F4

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-40008
- **FILM NUMBER:** 26981283

**BUSINESS ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** R703 W R&D BLDG,ZIBO SCIENCE & TECH PARK
- **STREET 2:** NO. 69 SANYING ROAD ZHANGDIAN DISTRICT
- **CITY:** ZIBO CITY, SHANDONG PROVINCE
- **PROVINCE COUNTRY:** F4
- **BUSINESS PHONE:** 86-01082967728

**MAIL ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** R703 W R&D BLDG,ZIBO SCIENCE & TECH PARK
- **STREET 2:** NO. 69 SANYING ROAD ZHANGDIAN DISTRICT
- **CITY:** ZIBO CITY, SHANDONG PROVINCE
- **PROVINCE COUNTRY:** F4

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Sunrise New Energy Co., Ltd.
- **DATE OF NAME CHANGE:** 20220811

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Global Internet of People, Inc.
- **DATE OF NAME CHANGE:** 20190625

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 20-F**

☐ **REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934**

**OR**

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

**For the fiscal year ended December 31, 2025**

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**OR**

☐ **SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

Date of event requiring this shell company report:

**For the transition period from _________ to _____________.**

Commission file number: 001-40008

---

| |
|:---|
| **E-Power Inc.** |
| (Exact name of Registrant as Specified in its Charter) |

---

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| |
|:---|
| **Cayman Islands** |
| (Jurisdiction of Incorporation or Organization) |

---

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| |
|:---|
| **Room 703, West Zone, R&D Building** <br> **Zibo Science and Technology Industrial Entrepreneurship Park, No. 69<br> Sanying Road**<br> **Zhangdian District, Zibo City, Shandong Province**<br> **People's Republic of China**<br> **+861082967728** |
| (Address of Principal Executive Offices) |

---

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| |
|:---|
| **Haiping Hu, Chief Executive Officer**<br> **Room 703, West Zone, R&D Building** <br> **Zibo Science and Technology Industrial Entrepreneurship Park, No. 69<br> Sanying Road**<br> **Zhangdian District, Zibo City, Shandong Province**<br> **People's Republic of China**<br> **+861082967728** |
| (Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person) |

---

Securities registered or to be registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Class A ordinary share | EPOW | The Nasdaq Stock Market LLC |

---

Securities registered or to be registered pursuant to Section 12(g) of the Act:

**<u>None</u>**

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

**<u>None</u>**

(Title of Class)

Indicate the number of outstanding shares of each of the issuer's classes of capital stock as of the close of the period covered by the annual report.

An aggregate of 32,161,978 Class A ordinary shares and 6,567,272 Class B ordinary shares, par value $0.0001 per share, were outstanding as of December 31, 2025.

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

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by 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 requirements for the past 90 days. Yes ☒ No ☐

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "large accelerated filer, 'accelerated filer" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Emerging growth company ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

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

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

☒ U.S. GAAP ☐ International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ Other

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

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

**TABLE OF CONTENTS**

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| | | |
|:---|:---|:---|
| [INTRODUCTION](#a_002) | [INTRODUCTION](#a_002) | ii |
| [FORWARD-LOOKING INFORMATION](#a_003) | [FORWARD-LOOKING INFORMATION](#a_003) | iv |
| [PART I](#a_004) | [PART I](#a_004) | 1 |
| ITEM 1. | [IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS](#a_005) | 1 |
| ITEM 2. | [OFFER STATISTICS AND EXPECTED TIMETABLE](#a_006) | 1 |
| ITEM 3. | [KEY INFORMATION](#a_007) | 1 |
| ITEM 4. | [INFORMATION ON THE COMPANY](#a_008) | 38 |
| ITEM 4A. | [UNRESOLVED STAFF COMMENTS](#a_009) | 68 |
| ITEM 5. | [OPERATING AND FINANCIAL REVIEW AND PROSPECTS](#a_010) | 68 |
| ITEM 6. | [DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](#a_011) | 85 |
| ITEM 7. | [MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](#a_012) | 92 |
| ITEM 8. | [FINANCIAL INFORMATION](#a_013) | 97 |
| ITEM 9. | [THE OFFER AND LISTING](#a_014) | 98 |
| ITEM 10. | [ADDITIONAL INFORMATION](#a_015) | 98 |
| ITEM 11. | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#a_016) | 107 |
| ITEM 12. | [DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES](#a_017) | 107 |
| [PART II](#a_018) | [PART II](#a_018) | 108 |
| ITEM 13. | [DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES](#a_019) | 108 |
| ITEM 14. | [MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS](#a_020) | 108 |
| ITEM 15. | [CONTROLS AND PROCEDURES](#a_021) | 109 |
| ITEM 16. | [\[RESERVED\]](#a_022) | 110 |
| ITEM 16A. | [AUDIT COMMITTEE FINANCIAL EXPERT](#a_023) | 110 |
| ITEM 16B. | [CODE OF ETHICS](#a_024) | 110 |
| ITEM 16C. | [PRINCIPAL ACCOUNTANT FEES AND SERVICES](#a_025) | 111 |
| ITEM 16D. | [EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES](#a_026) | 111 |
| ITEM 16E. | [PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS](#a_027) | 111 |
| ITEM 16F. | [CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT](#a_028) | 111 |
| ITEM 16G. | [CORPORATE GOVERNANCE](#a_029) | 112 |
| ITEM 16H. | [MINE SAFETY DISCLOSURE](#a_030) | 112 |
| ITEM 16I. | [DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS](#a_031) | 112 |
| ITEM 16J. | [INSIDER TRADING POLICIES](#a_032) | 112 |
| ITEM 16K. | [CYBERSECURITY](#a_033) | 112 |
| [PART III](#a_034) | [PART III](#a_034) | 113 |
| ITEM 17. | [FINANCIAL STATEMENTS](#a_035) | 113 |
| ITEM 18. | [FINANCIAL STATEMENTS](#a_036) | 113 |
| ITEM 19. | [EXHIBITS](#a_037) | 113 |

---

i

**INTRODUCTION**

We are a holding company incorporated in the Cayman Islands with no material operations of our own. We are not a Chinese operating company. Investors of our Class A Ordinary Shares do not own any equity interests in the VIE, but instead own shares of a Cayman Islands holding company. Unless otherwise stated, as used in this annual report and in the context of describing our operations and consolidated financial information, "we," "us," "Company," "E-Power Inc.", or "our," refers to E-Power Inc., a Cayman Islands holding company (formerly known as Sunrise New Energy Co., Ltd.), and "VIE" refers to the variable interest entity ("VIE"), Global Mentor Board (Zibo) Information Technology Co., Ltd., or SDH.

Unless the context otherwise requires, in this annual report on Form 20-F, references to:

● "Affiliated Entities" are to E-Power Inc.'s subsidiaries, and the VIE and its subsidiaries;

● "Alchemistica" are to Alchemistica Inc, a company organized under the laws of the State of Delaware and 71% of its equity interest is owned by E-Power Inc.;

● "APP" are to our mobile application, "Shidonghui APP;"

● "China" or the "PRC" are to the People's Republic of China;

● "Class A Ordinary Shares" or "Class A ordinary shares" are to Class A ordinary shares in the capital of the Company, par value $0.0001 per share;

● "Class B Ordinary Shares" or "Class B ordinary shares" are to Class B ordinary shares in the capital of the Company, par value $0.0001 per share;

● "GIOP BJ" or "WFOE" are to Beijing Mentor Board Union Information Technology Co, Ltd., a limited liability company organized under the laws of the PRC, Zhuhai Zibo's wholly owned subsidiary;

● "GMB HK" are to "Global Mentor Board Information Technology Limited", E-Power Inc.'s wholly-owned-subsidiary, a Hong Kong corporation.

● "GMB (Hangzhou)" are to Global Mentor Board (Hangzhou) Technology Co., Ltd., a limited liability company organized under the laws of the PRC, the VIE's wholly owned subsidiary;

● "GMB (Beijing)" are to Shidong (Beijing) Information Technology Co., Ltd., a limited liability company organized under the laws of the PRC and 51% of its equity interest is owned by the VIE;

● "GMB Culture" are to Shanghai Voice of Seedling Cultural Media Co., Ltd., a limited liability company organized under the laws of the PRC and 51% of its equity interest is owned by the VIE;

● "GMB Consulting" are to Global Mentor Board (Shanghai) Enterprise Management Consulting Co. Ltd., a limited liability company organized under the laws of the PRC and 51% of its equity interest is owned by the VIE;

● "GMB Technology" are to Mentor Board Voice of Seeding (Shanghai) Cultural Technology Co., Ltd., a limited liability company organized under the laws of the PRC and 51% of its equity interest is owned by the VIE.

● "GMB Health" are to Beijing Mentor Board Health Technology Co., Ltd., a limited liability company organized under the laws of the PRC and 51% of its equity interest is owned by the VIE.

● "Guizhou Yuanneng" are to Guizhou Yuanneng Zhihui Enterprise Management Partnership Enterprise (Limited Partnership), a limited partnership organized under the laws of the PRC and 94% of its equity interest is owned by the VIE.

● "HK subsidiaries" are to GMB HK and SDH New Energy;

● "Innovation Research" are to Guizhou Sunrise Technology Innovation Research Co., Ltd., a limited liability company organized under the laws of the PRC and 39.35% of its equity interest is owned by E-Power Inc.

● "PRC subsidiaries" are to GIOP BJ, Zhuhai Zibo, Zhuhai Guizhou and their respective subsidiaries.

● "shares," "Shares," or "Ordinary Shares" are, collectively, to the Class A Ordinary Shares and Class B Ordinary Shares;

● "SDH" or "the VIE" are to Global Mentor Board (Zibo) Information Technology Co., Ltd, formerly known as Global Mentor Board (Beijing) Information Technology Co., Ltd., a limited liability company organized under the laws of the PRC;

ii

● "SDH Cloud" are to Global Mentor Cloud (Beijing) Education Technology Co., Ltd.; 75% of the shares of SDH Cloud are held by GIOP BJ and the remaining 25% shares are held by Beijing Yunqianyi Information Technology Co., Ltd.

● "SDH New Energy" are to SDH (HK) New Energy Tech Co., Limited, E-Power Inc.'s wholly-owned-subsidiary, a Hong Kong corporation.

● "Shidong Yike" are to Shidong Yike (Beijing) Technology Co., Ltd., a limited liability company organized under the laws of the PRC and 51% of its equity interest is owned by the VIE.

● "Sunrise Anhui" are to Sunrise Anhui New Energy Materials Co., Ltd., a limited liability company organized under the laws of the PRC and 39.35% of its equity interest is owned by E-Power Inc.

● "Sunrise Guizhou" are to Sunrise (Guizhou) New Energy Material Co., Ltd, a limited liability company organized under the laws of the PRC and 39.3519% of its equity interest is owned by E-Power Inc.;

● "Sunrise Guxian" are to Sunrise (Guxian) New Energy Materials Co., Ltd., a limited liability company organized under the laws of the PRC and 20.07% of its equity interest is owned by E-Power Inc.;

● "Sunrise Tech" are to Guizhou Sunrise Technology Co., Ltd., a limited liability company organized under the laws of the PRC and 39.35% of its equity interest is owned by E-Power Inc.;

● "Sunrise Yitan" are to Shenzhen Sunrise Yitan New Energy Technology Co., Ltd., a limited liability company organized under the laws of the PRC and 25.58% of its equity interest is owned by E-Power Inc.

● "Sunrise Suiyuan" are to Shenzhen Sunrise Suiyuan New Materials Technology Co., Ltd., a limited liability company organized under the laws of the PRC and 25.58% of its equity interest is owned by E-Power Inc.

● "Sunrise Chenhui" are to Guizhou Chenhui Trading Co., Ltd, a limited liability company organized under the laws of the PRC and 39.35% of its equity interest is owned by E-Power Inc.

● "U.S." are to the United States;

● "VIE" are to variable interest entity;

● "Zhuhai Zibo" are to Zhuhai (Zibo) Investment Co., Ltd., a limited liability company organized under the laws of the PRC, SDH New Energy's wholly owned subsidiary;

● "Zhuhai Guizhou" are to Zhuhai (Guizhou) New Energy Investment Co., Ltd., a limited liability company organized under the laws of the PRC, SDH New Energy's wholly owned subsidiary;

● "Zibo Shidong" are to Zibo Shidong Digital Technology Service Co., Ltd., a limited liability company organized under the laws of the PRC, the VIE's wholly owned subsidiary;

As of the date of this annual report, substantially all of the Company's business is conducted by (1) Sunrise Guizhou, a joint venture formed by Zhuhai Zibo (a wholly owned subsidiary of the Company) and certain other shareholders in 2022, and (2) SDH, the Company's VIE entity, in the PRC, using RMB, the currency of China. Our consolidated financial statements are presented in United States dollars or US$. In this annual report, we refer to assets, obligations, commitments and liabilities in our consolidated financial statements in United States dollars or US$. These US$ references are based on the exchange rate of RMB to United States dollars, determined as of a specific date or for a specific period. Changes in the exchange rate will affect the amount of our obligations and the value of our assets in terms of United States dollars which may result in an increase or decrease in the amount of our obligations and the value of our assets, including accounts receivable.

Unless otherwise noted, all translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi in this annual report are made as follows:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2023** | **December 31, 2023** | **December 31, 2024** | **December 31, 2024** | **December 31, 2025** | **December 31, 2025** |
|  | **Period-end<br> spot rate** | **Average<br> rate** | **Period-end<br> spot rate** | **Average<br> rate** | **Period-end<br> spot rate** | **Average<br> rate** |
| US$ against Renminbi | US$1=RMB<br> 7.0999 | US$1=RMB<br> 7.0809 | US$1=RMB<br> 7.2993 | US$1=RMB<br> 7.1957 | US$1=RMB<br> 6.9931 | US$1=RMB<br> 7.1875 |

---

Unless expressly indicated herein to the contrary, all references to share amounts in this annual report give retroactive effect to share consolidations, the last of which was effected on April 24, 2020.

iii

**FORWARD-LOOKING INFORMATION**

This annual report on Form 20-F contains 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties. Known and unknown risks, uncertainties and other factors, including those listed under "Item 3. Key Information—D. Risk Factors," may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.

You can identify some of these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "is/are likely to," "potential," "continue" or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include statements relating to:

● future financial and operating results, including revenues, income, expenditures, cash balances and other financial items;

● our ability to execute our growth and expansion, including our ability to meet our goals;

● current and future economic and political conditions;

● the future growth of the graphite anode materials industry and knowledge sharing and enterprise service industries;

● our ability to continue to operate through the VIE structure;

● our capital requirements and our ability to raise any additional funds which we may require;

● our ability to attract clients and further enhance our brand recognition;

● our ability to hire and retain qualified management personnel and key employees in order to enable us to develop our business;

● trends and competition in graphite anode materials industry and enterprise service and knowledge sharing industries; and

● other assumptions described in this annual report underlying or relating to any forward-looking statements.

These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may later be found to be incorrect. Our actual results could be materially different from our expectations. Other sections of this annual report include additional factors that could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. You should read thoroughly this annual report and the documents that we refer to with the understanding that our actual future results may be materially different from, or worse than, what we expect. We qualify all of our forward-looking statements by these cautionary statements.

This annual report contains certain data and information that we obtained from various government and private publications. Statistical data in these publications also include projections based on a number of assumptions. The graphite anode materials industry may not grow at the rate projected by market data, or at all. Failure of this market to grow at the projected rate may have a material and adverse effect on our business and the market price of the Class A Ordinary Shares. In addition, the rapidly evolving nature of this industry results in significant uncertainties for any projections or estimates relating to the growth prospects or future condition of our market. Furthermore, if any one or more of the assumptions underlying the market data are later found to be incorrect, actual results may differ from the projections based on these assumptions. You should not place undue reliance on these forward-looking statements.

The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made in this annual report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this annual report and the documents that we refer to in this annual report and exhibits to this annual report completely and with the understanding that our actual future results may be materially different from what we expect.

iv

**PART I**

**Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**

Not Applicable.

**Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE**

Not Applicable.

**Item 3. KEY INFORMATION**

We are a Cayman Islands holding company conducting a substantial portion of our operations in China through our PRC operating entities. Unless otherwise stated, as used in this annual report, the terms "we," "us," "our," "E-Power Inc.," "our Company," and the "Company" refer to E-Power Inc., an exempted company with limited liability incorporated under the laws of the Cayman Islands (formerly known as Sunrise New Energy Co., Ltd.); and "SDH" or "the VIE" are to Global Mentor Board (Zibo) Information Technology Co., Ltd., a limited liability company organized under the laws of the PRC.

As of the date of this annual report, substantially all of our business is conducted by (1) Sunrise Guizhou, a joint venture established by Zhuhai Zibo (a wholly owned subsidiary of the Company) and certain other partners, as a limited company pursuant to PRC laws for the purpose of manufacturing and sales of graphite anode materials; and (2) SDH, the Company's VIE entity that operates a knowledge sharing platform in China. Investors of our Ordinary Shares do not hold shares in the PRC operating entities, but instead hold shares of a Cayman Islands exempted company. Further, neither we nor our subsidiaries own any shares in the VIE. Instead, we entered into a series of contractual arrangements, also known as VIE Agreements, dated June 10, 2019, with the VIE and its shareholders. Under the generally accepted accounting principles in the United States ("U.S. GAAP"), we are deemed to have a controlling financial interest in, and be the primary beneficiary of, the VIE for accounting purposes, because such contractual arrangements are designed so that the operations of the VIE are solely for the benefit of GIOP BJ and, ultimately, the Company. Solely for accounting purpose, the VIE Agreements enable us to consolidate the financial results of the VIE and its subsidiaries in our consolidated financial statements under U.S. GAAP. Pursuant to the VIE Agreements, which have not been tested in a court of law, under, the assets and liabilities of the VIE are treated as our assets and liabilities and the results of operations of the VIE are treated as if they were the results of our operations. See "Item 3. Key Information — Contractual Agreements among GIOP BJ, the VIE and Its Shareholders" for a summary of these VIE Agreements.

The VIE Agreements, however, may not be as effective in providing us with the necessary control over the VIE and its operations. For example, the VIE and its shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations in an acceptable manner or taking other actions that are detrimental to our interests. If we had direct ownership of the VIE, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of the VIE, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level. Under the current VIE Agreements, however, we rely on the performance by the VIE and its shareholders of their respective obligations under the contracts to direct the activities of a VIE that most significantly impact the VIE's economic performance. We are also subject to the risks of uncertainty about any future actions of the PRC government in this regard. Because of our corporate structure, we are subject to risks due to uncertainty of the interpretation and the application of the PRC laws and regulations, including but not limited to the validity and enforcement of the VIE Agreements. The VIE Agreements may not be effective in providing control over the VIE. We may be also subject to sanctions imposed by PRC regulatory agencies including Chinese Securities Regulatory Commission if we fail to comply with their rules and regulations. See "Risk Factors—Risks Related to Doing Business in China," and "Risk Factors—Risks Related to Our Corporate Structure."

As of December 31, 2025, 2024 and 2023, the VIE accounted for an aggregate of 6.30%, 4.05% and 5.48%, respectively, of our consolidated total assets, 3.76%, 7.14% and 6.54%, respectively, of our consolidated total liabilities, and 0.61%, 1.05% and 1.46%, respectively, of our consolidated total net revenues. See our consolidated financial statements and the related notes in this annual report.·

We are subject to legal and operational risks associated with being based in the PRC, which could result in a material change in our PRC operating entities and the VIE's operations and/or the value of the securities we are registering for sale, or could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless. PRC laws and regulations governing our current business operations are sometimes vague and uncertain. In recent years, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in the PRC with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. For example, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law, or the Opinions, which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities and the need to strengthen the supervision over overseas listings by Chinese companies. As of the date of this annual report, we, our PRC subsidiaries, or the VIE and its subsidiaries have not been involved in any investigations on cybersecurity review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice, or sanction.

As confirmed by our PRC counsel, Jincheng Tongda & Neal Law Firm ("JT&N"), as of the date of this annual report, we are not subject to cybersecurity review with the Cyberspace Administration of China, or the CAC, under the Cybersecurity Review Measures that became effective on February 15, 2022, or the Regulations on the Network Data Security Administration (the "Security Administration Regulation"), which became effective on January 1, 2025, since (i) as companies that engage in business-oriented consulting services and manufacturing and sales of graphite anode materials, we, our PRC subsidiaries, or the VIE and its subsidiaries, are unlikely to be classified as critical information infrastructure operators ("CIIOs") by the PRC regulatory agencies; (ii) according to the interpretation of the relevant laws by the CAC, for online platform operators who have listed in foreign countries before the effective date of Cybersecurity Review Measures, and who are not seeking a new listing (such as a secondary or dual listing) in foreign countries, a cybersecurity review is not required; and (iii) the data processed in the business of the VIE and its subsidiaries, which is a knowledge sharing and enterprise service platform business, is unlikely to have a bearing on national security. There remains uncertainty, however, as to how the Cybersecurity Review Measures and the Security Administration Regulation will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Security Administration Regulation. See "Risk Factors—Risks Relating to Doing Business in the PRC—Recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our offering."

Furthermore, on February 17, 2023, the China Securities Regulatory Commission (the "CSRC") released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the "Trial Measures") and five supporting guidelines, which took effect on March 31, 2023. Pursuant to the Trial Measures, PRC domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of relevant applications or its completion of subsequent offerings. If a domestic company fails to complete required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. On the same day, the CSRC also held a press conference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, or the CSRC Notice, which, among others, clarifies that PRC domestic companies that have already been listed overseas before the effective date of the Trial Measures, which is March 31, 2023, shall be deemed to be "Existing Issuers", and Existing Issuers are not required to complete the filing procedures with the CSRC immediately, and they shall be required to file with the CSRC for any subsequent offerings. We are an Existing Issuer, based on the foregoing, we made the requisite filing with the CSRC on November 7, 2024 as required for our subsequent offering completed on November 5, 2024. We are not aware of any other PRC laws or regulations currently in effect requiring that we obtain permission from any PRC government authority for our continued listing on the Nasdaq. However, since these statements and regulatory actions are newly published, official guidance and related implementation rules have not been issued. It is highly uncertain what the potential impact such modified or new laws and regulations will have on the daily business operations of our subsidiaries and the VIE, our ability to accept foreign investments, and our listing on an U.S. exchange. See "Risk Factors—Risks Relating to Doing Business in the PRC—The Trial Measures and the revised Provisions recently issued by the PRC authorities may subject us to additional compliance requirements in the future."

Since 2021, the Chinese government has strengthened its anti-monopoly supervision, mainly in three aspects: (i) establishing the National Anti-Monopoly Bureau; (ii) revising and promulgating anti-monopoly laws and regulations, including: the Anti-Monopoly Law of the PRC (amended on June 24, 2022 and effective on August 1, 2022), the anti-monopoly guidelines for various industries, and the Detailed Rules for the Implementation of the Fair Competition Review System; and (iii) expanding the anti-monopoly law enforcement targeting Internet companies and large enterprises. As of the date of this annual report, the Chinese government's recent statements and regulatory actions related to anti-monopoly concerns have not impacted our or our PRC subsidiaries, or the VIE and its subsidiaries' ability to conduct business, our ability to accept foreign investments or issue our securities to foreign investors because neither we and our subsidiaries, nor our PRC subsidiaries, or the VIE and its subsidiaries engage in monopolistic behaviors that are subject to these statements or regulatory actions.

In addition, our Class A Ordinary Shares may be prohibited from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable Act (the "HFCA Act") and related regulations, if the Public Company Accounting Oversight Board (United States) (the "PCAOB") is unable to inspect our auditor for two consecutive years beginning in 2022. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022, legislation entitled "Consolidated Appropriations Act, 2023" (the "Consolidated Appropriations Act") was signed into law, which included an identical provision of the Accelerating Holding Foreign Companies Accountable Act and amended the HFCA Act by requiring the U.S. Securities and Exchange Commission (the "SEC") to prohibit an issuer's securities from 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 for triggering the delisting of our Company and the prohibition of trading in our securities if the PCAOB is unable to inspect our accounting firm at such future time. On December 16, 2021, the PCAOB issued a report on its determinations that it was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, because of positions taken by PRC authorities in those jurisdictions. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB's access in the future, the PCAOB Board will consider the need to issue a new determination. Our former auditor, Marcum Asia CPAs LLP ("MarcumAsia"), as well as our current auditor, Wei, Wei & Co., LLP ("WW"), are PCAOB-registered public accounting firms subject to laws in the United States, pursuant to which the PCAOB conducts regular inspections to assess an auditor's compliance with the applicable professional standards. As such, as of the date of this annual report, our listing is not affected by the HFCA Act and related regulations. See "Risk Factors—Risks Relating to Doing Business in the PRC—The Holding Foreign Companies Accountable Act and related regulations, all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our continued listing on the Nasdaq, and Nasdaq may determine to delist our securities if the PCAOB determines that it cannot inspect or fully investigate our auditor."

As of the date of this annual report, our Company, our subsidiaries, and the VIE have not distributed any earnings or settled any amounts owed under the VIE Agreements, nor do they have any plan to distribute earnings or settle amounts owed under the VIE Agreements in the foreseeable future. As of the date of this annual report, none of our subsidiaries or the VIE have made any dividends or distributions to our Company and our Company has not made any dividends or distributions to our shareholders. We intend to keep any future earnings to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future. If we determine to pay dividends on any of our Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds from our operating entities, pursuant to the VIE Agreements.

The Company's management is directly supervising cash management. Our finance department is responsible for establishing the cash management policies and procedures among our subsidiaries and departments and our PRC subsidiaries, or the VIE and its subsidiaries. Each subsidiary, department, or PRC operating entity initiates a cash request by putting forward a cash demand plan, which explains the specific amount and timing of cash requested, and submitting it to designated management members of the Company, based on the amount and the use of cash requested. The designated management member examines and approves the allocation of cash based on the sources of cash and the priorities of the needs, and submit it to the cashier specialists of our finance department for a second review. Other than the above, we currently do not have other cash management policies or procedures that dictate how funds are transferred. Prior to the completion of our initial public offering in February 2021, the sources of funding of the Company, its subsidiaries and the VIE primarily consisted of capital injections by shareholders and cash generated from operations. For the last three fiscal years, cash transfers and transfers of other assets among E-Power Inc., its subsidiaries, and fiscal year ended December 31, 2025, Zibo Shidong provided an interest-free loan of $427,687 to GIOP BJ; Sunrise Guizhou repaid a loan of $139,130 to Zibo Shidong, bearing interest at 4%; Sunrise Chenhui provided an interest-free loan of $278,261 to Zibo Shidong; Sunrise Guizhou repaid a loan of $166,957 to GMB Hangzhou, bearing interest at 4%; Zibo Shidong paid $42,002 on behalf of the Company for legal fees; Alchemistica paid $175,426 on behalf of the Company for professional fees and the Company repaid Alchemistica $100,000. (ii) For the fiscal year ended December 31, 2024, the Company provided interest-free loans in the aggregate principal amount of $516,661 to GMB HK and an interest-free loan of $1,300,000 to the VIE's subsidiary, Zibo Shidong; the VIE provided interest-free loans in the aggregate principal amount of $77,268 to GIOP BJ; Zibo Shidong provided interest-free loans in the aggregate principal amount of $150,880 to GIOP BJ; Sunrise Guizhou provided loans in the aggregate principal amount of $166,766 with a 4% interest rate to GMB Hangzhou and a loan of $347,430 with a 4% interest rate to Zibo Shidong. (iii) For the fiscal year ended December 31, 2023, the Company provided interest-free loans in the aggregate principal amount of $400,000 to Zibo Shidong, and received interest-free loans in the aggregate principal amount of $150,000 from the Company's subsidiary, GMB HK. To the extent cash in the business is in the PRC, the funds may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of our Company, our subsidiaries, or the VIE by the PRC government to transfer cash. See "Risk Factors—Risks Relating to Our Corporate Structure—To the extent cash in the business is in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds may not be available to fund operations or for other use outside of the PRC/Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of our Company, our subsidiaries, or the VIE by the PRC government to transfer cash."

***Permissions Required from PRC Authorities***

As of the date of this annual report, we, our PRC subsidiaries, or the VIE and its subsidiaries, (i) have received from PRC authorities material licenses, permissions, and approvals needed to engage in the businesses currently conducted in the PRC, and (ii) no such permission or approval has been denied. The licenses, permissions, and approvals, which have been successfully obtained, are: (1) business license; (2) the filing-for-record procedures with the relevant competent departments for our knowledge sharing and enterprise service platform business; and (3) the approval for the Construction Land Use Planning Permit, the Construction Works Planning Permit, the Construction Permit, the Pollutant Discharge License, the filing-for-record procedures with the relevant work safety administrative department, the approval for the Environmental Impact Report, the Filing for Environmental Protection Acceptance upon Completion of the Construction Project and the Filing Certificate for Fire Safety Inspection and Acceptance of Construction Project for our graphite anode material business. Besides, based on the progress of our relevant construction projects, we will apply for other necessary licenses or filings that are required by relevant PRC rules from time to time, such as those related to the construction completion acceptance, fire safety inspection and acceptance, work safety acceptance, environmental protection acceptance, and the processing of relevant real estate certificates, etc. However, we cannot assure you that any of these entities will be able to receive clearance of such compliance requirements in a timely manner, or at all. Any failure of these entities to fully comply with such compliance requirements may cause our PRC subsidiaries, or the VIE and its subsidiaries to be unable to begin their new businesses or operations in the PRC, subject them to fines, relevant new businesses or operations suspension for rectification, or other sanctions. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—We may be required to obtain and maintain additional approvals, licenses or permits applicable to our business, including our graphite anode manufacturing and sales business and our knowledge share platform, which could have a material adverse impact on our business, financial conditions and results of operations." We have been closely monitoring the development in the regulatory landscape in China, particularly regarding the requirement of approvals, including on a retrospective basis, from the CSRC, the CAC, or other PRC authorities with respect to this offering, as well as other procedures that may be imposed on us.

**Selected Condensed Consolidating Financial Schedule**

As a holding company with no material operations of our own, we conduct our operations through Sunrise Guizhou, the VIE and its subsidiaries in the PRC. Our subsidiaries and the VIE and its subsidiaries as of the date of this annual report are described below:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Name** | **Date of <br> incorporation** | **Place of <br> incorporation** | **Percentage of <br> effective <br> ownership** | **Principal Activities** |
| **Subsidiaries** |  |  |  |  |
| Global Mentor Board Information Technology Limited ("GMB HK") | March 22, 2019 | HK | 100% by the Company | Holding company |
| Alchemistica Inc. ("Alchemistica") | August 5, 2025 | U.S. | 71% by the Company | Business development on lithium battery materials |
| Beijing Mentor Board Union Information Technology Co, Ltd. ("GIOP BJ") | June 3, 2019 | PRC | 100% by the Company | Holding company |
| Shidong Cloud (Beijing) Education Technology Co., Ltd ("Shidong Cloud") | December 22, 2021 | PRC | 75% by the Company | Educational consulting |
| SDH (HK) New Energy Tech Co., Ltd. ("SDH New Energy") | October 8, 2021 | HK | 100% by the Company | Holding company |
| Zhuhai (Zibo) Investment Co., Ltd. ("Zhuhai Zibo") | October 15, 2021 | PRC | 100% by the Company | New energy investment |
| Zhuhai (Guizhou) New Energy Investment Co., Ltd. ("Zhuhai Guizhou") | November 23, 2021 | PRC | 100% by the Company | New energy investment |
| Sunrise (Guizhou) New Energy Materials Co., Ltd. ("Sunrise Guizhou") | November 8, 2021 | PRC | 39.35% by the Company | Manufacture of lithium battery materials |
| Guizhou Sunrise Technology Co., Ltd. ("Sunrise Tech") | September 1, 2011, acquired through an asset acquisition on<br> July 7, 2022 | PRC | 39.35% by the Company | Manufacture of lithium battery materials |
| Sunrise (Guxian) New Energy Materials Co., Ltd. ("Sunrise Guxian") | April 26, 2022 | PRC | 20.07% by the Company | Manufacture of lithium battery materials |
| Guizhou Sunrise Technology Innovation Research Co., Ltd. ("Innovation Research") | December 13, 2022 | PRC | 39.35% by the Company | Research and development |
| Shenzhen Sunrise Yitan New Energy Technology Co., Ltd. ("Sunrise Yitan") | June 24, 2024 | PRC | 25.58% by the Company | Research and development of Sodium-ion battery |
| Shenzhen Sunrise Suiyuan New Materials Technology Co., Ltd. ("Sunrise Suiyuan") | June 24, 2024 | PRC | 25.58% by the Company | Research and development of silicon carbon battery |
| Guizhou Chenhui Trading Co., Ltd. ("Sunrise Chenhui") | March 25, 2024 | PRC | 39.35% by the Company | Sales of lithium battery materials |
| Sunrise Anhui New Energy Materials Co., Ltd. (Sunrise Anhui)&nbsp;&nbsp;&nbsp;&nbsp; | January 21, 2025 | PRC | 39.35% by the Company | Production of lithium battery materials |
| **Variable Interest Entity ("VIE") and subsidiaries of VIE** |  |  |  |  |
| Global Mentor Board (Zibo) Information Technology Co., Ltd. ("SDH" or "VIE") | December 5, 2014 | PRC | N/A | Knowledge sharing and enterprise service platform provider |
| Global Mentor Board (Hangzhou) Technology Co., Ltd. ("GMB (Hangzhou)") | November 1, 2017 | PRC | 100% by the VIE | Consulting, training and tailored services provider |
| Global Mentor Board (Shanghai) Enterprise Management Consulting Co., Ltd. ("GMB Consulting") | June 30, 2017 | PRC | 51% by the VIE | Consulting services provider |
| Shanghai Voice of Seedling Cultural Media Co., Ltd. ("GMB Culture") | June 22, 2017 | PRC | 51% by the VIE | Cultural and artistic exchanges and planning, conference services provider |
| Shidong (Beijing) Information Technology Co., LTD. ("GMB (Beijing)") | June 19, 2018 | PRC | 51% by the VIE | Information technology services provider |
| Mentor Board Voice of Seeding (Shanghai) Cultural Technology Co., Ltd. ("GMB Technology") | August 29, 2018 | PRC | 30.6% by the VIE | Technical services provider |
| Shidong Zibo Digital Technology Co., Ltd. ("Zibo Shidong") | October 16, 2020 | PRC | 100% by the VIE | Technical services provider |
| Beijing Mentor Board Health Technology Co., Ltd ("GMB Health") | January 7, 2022 | PRC | 100% by the VIE | Health services |
| Shidong Yike (Beijing) Technology Co., Ltd. ("Shidong Yike") | July 16, 2021 | PRC | 100% by the VIE | Health services |
| Guizhou Yuanneng Zhihui Enterprise Management Partnership Enterprise (Limited Partnership) ("Guizhou Yuanneng") | April 1, 2024 | PRC | 94% by the VIE | Holding company |

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The following tables present selected condensed consolidating financial data of E-Power Inc. and its subsidiaries and the VIE and its subsidiaries for the fiscal years ended December 31, 2025, 2024, and 2023 and balance sheet data as of December 31, 2025, 2024, and 2023.

**SELECTED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS DATA**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31, 2025** | **Year ended December 31, 2025** | **Year ended December 31, 2025** | **Year ended December 31, 2025** | **Year ended December 31, 2025** |
|  | **Parent** | **Subsidiaries** | **VIE and<br> VIE's<br> subsidiaries** | **Inter-<br> company<br> elimination** | **Group<br> consolidated** |
|  | **(US$)** | **(US$)** | **(US$)** | **(US$)** | **(US$)** |
| Revenues, net | - | 53588439 | 9358263 | (16530570) | 46416132 |
| Total cost and operating expenses | 1273505 | 68660177 | 9040508 | (16530570) | 62443620 |
| (Loss) Profit from operations | (1273505) | (15071737) | 317754 | - | (16027488) |
| (Loss) Profit before income taxes | (7809895) | (19273462) | 423589 | - | (26659768) |
| Net (loss) income | (7809895) | (19273075) | 423589 | - | (26659381) |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2024** | **Year ended December 31, 2024** | **Year ended December 31, 2024** | **Year ended December 31, 2024** |
|  | **Parent** | **Subsidiaries** | **VIE and<br> VIE's<br> subsidiaries** | **Inter-<br> company<br> elimination** | **Group<br> consolidated** |
|  | **(US$)** | **(US$)** | **(US$)** | **(US$)** | **(US$)** |
| Revenues, net | - | 71276389 | 2899946 | (9178594) | 64997741 |
| Total cost and operating expenses | 1776146 | 86746148 | 2250369 | (9178594) | 81594069 |
| (Loss) Profit from operations | (1776146) | (15469759) | 649577 | - | (16596328) |
| (Loss) Profit before income taxes | (1778111) | (17052619) | 855129 | - | (17975601) |
| Net (loss) income | (1778111) | (17057370) | 854317 | - | (17981164) |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31, 2023** | **Year ended December 31, 2023** | **Year ended December 31, 2023** | **Year ended December 31, 2023** | **Year ended December 31, 2023** |
|  | **Parent** | **Subsidiaries** | **VIE and<br> VIE's<br> subsidiaries** | **Inter-<br> company<br> elimination** | **Group<br> consolidated** |
|  | **(US$)** | **(US$)** | **(US$)** | **(US$)** | **(US$)** |
| Revenues, net | - | 44394292 | 656113 |  | 45050405 |
| Total cost and operating expenses | 6524022 | 65728723 | 3327665 |  | 75580410 |
| Loss from operations | (6524022) | (21334431) | (2671552) |  | (30530005) |
| Loss before income taxes | (6611490) | (22612303) | (3697157) |  | (32920950) |
| Net loss | (6611490) | (22612303) | (3696931) |  | (32920724) |

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**SELECTED CONDENSED CONSOLIDATING BALANCE SHEET DATA**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** |
|  | **Parent** | **Subsidiaries** | **VIE and<br> VIE's<br> subsidiaries** | **Inter-<br> company<br> elimination** | **Group<br> consolidated** |
|  | **(US$)** | **(US$)** | **(US$)** | **(US$)** | **(US$)** |
| Total current assets | 8953999 | 89876704 | 18481304 | (45068778) | 72243229 |
| Total non-current assets | 14939000 | 79531416 | 4730433 | (15007629) | 84193220 |
| Total assets | 23892999 | 169408120 | 23211737 | (60076407) | 156436449 |
| Total current liabilities | 371987 | 133490256 | 11871961 | (45068778) | 100665426 |
| Total non-current liabilities | - | 39878853 | - | - | 39878853 |
| Total liabilities | 371987 | 173369109 | 11871961 | (45068778) | 140544279 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
|  | **Parent** | **Subsidiaries** | **VIE and<br> VIE's<br> subsidiaries** | **Inter-<br> company<br> elimination** | **Group<br> consolidated** |
|  | **(US$)** | **(US$)** | **(US$)** | **(US$)** | **(US$)** |
| Total current assets | 2442761 | 66149892 | 14823298 | (20405078) | 63010873 |
| Total non-current assets | 14540000 | 75540659 | 4537251 | (14605751) | 80012159 |
| Total assets | 16982761 | 141690551 | 19360549 | (35010829) | 143023032 |
| Total current liabilities | 252338 | 93511037 | 13398312 | (20405078) | 86756609 |
| Total non-current liabilities | - | 28971750 | - | - | 28971750 |
| Total liabilities | 252338 | 122482787 | 13398312 | (20405078) | 115728359 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2023** | **As of December 31, 2023** | **As of December 31, 2023** | **As of December 31, 2023** | **As of December 31, 2023** |
|  | **Parent** | **Subsidiaries** | **VIE and<br> VIE's<br> subsidiaries** | **Inter-<br> company<br> elimination** | **Group<br> consolidated** |
|  | **(US$)** | **(US$)** | **(US$)** | **(US$)** | **(US$)** |
| Total current assets | 3030688 | 30874514 | 7673555 | (5762862) | 35815895 |
| Total non-current assets | 14540000 | 80084256 | 4604379 | (14540000) | 84688635 |
| Total assets | 17570688 | 110958770 | 12277934 | (20302862) | 120504530 |
| Total current liabilities | 31823 | 64306203 | 4913254 | (5762862) | 63488418 |
| Total non-current liabilities | - | 11684348 | - | - | 11684348 |
| Total liabilities | 31823 | 75990551 | 4913254 | (5762862) | 75172766 |

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**SELECTED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS DATA**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31, 2025** | **Year ended December 31, 2025** | **Year ended December 31, 2025** | **Year ended December 31, 2025** | **Year ended December 31, 2025** |
|  | **Parent** | **Subsidiaries** | **VIE and<br> VIE's<br> subsidiaries** | **Inter-<br> company elimination** | **Group consolidated** |
|  | **(US$)** | **(US$)** | **(US$)** | **(US$)** | **(US$)** |
| Net cash (used in) provided by operating activities | (773372) | (24868890) | 481678 | - | (25160584) |
| Net cash used in investing activities | (399000) | (10311033) | (980477) | 469426 | (11221084) |
| Net cash provided by financing activities | 7743162 | 46922201 | 264348 | (469426) | 54460285 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2024** | **Year ended December 31, 2024** | **Year ended December 31, 2024** | **Year ended December 31, 2024** |
|  | **Parent** | **Subsidiaries** | **VIE and<br> VIE's<br> subsidiaries** | **Inter-<br> company elimination** | **Group consolidated** |
|  | **(US$)** | **(US$)** | **(US$)** | **(US$)** | **(US$)** |
| Net cash used in operating activities | (1269634) | (2574103) | (1508420) | - | (5352157) |
| Net cash provided by (used in) investing activities | 1071942 | (2293647) | 423298 | 1430868 | 632461 |
| Net cash (used in) provided by financing activities | (150000) | 11251341 | 961196 | (1430868) | 10631669 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31, 2023** | **Year ended December 31, 2023** | **Year ended December 31, 2023** | **Year ended December 31, 2023** | **Year ended December 31, 2023** |
|  | **Parent** | **Subsidiaries** | **VIE and<br> VIE's<br> subsidiaries** | **Inter-<br> company elimination** | **Group consolidated** |
|  | **(US$)** | **(US$)** | **(US$)** | **(US$)** | **(US$)** |
| Net cash (used in) provided by operating activities | (1516279) | (5592986) | (423730) | 250000 | (7282995) |
| Net cash provided by (used in) investing activities | 878000 | (7881035) | - | - | (7003035) |
| Net cash provided by (used in) financing activities | - | 13529267 | 400000 | (250000) | 13679267 |

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**A. [Reserved]**

**B. Capitalization and Indebtedness**

Not applicable.

**C. Reasons for the Offer and Use of Proceeds**

Not applicable.

**D. Risk Factors**

*An investment in our Ordinary Shares involves a high degree of risk. Before deciding whether to invest in our Ordinary Shares, you should consider carefully the risks described below, together with all of the other information set forth in this annual report. If any of these risks actually occurs, our business, financial condition, results of operations or cash flow could be materially and adversely affected, which could cause the trading price of our Ordinary Shares to decline, resulting in a loss of all or part of your investment. The risks described below are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also affect our business. You should only consider investing in our Ordinary Shares if you can bear the risk of loss of your entire investment.*

**Risks Related to Our Business**

Risks and uncertainties related to our business include, but are not limited to, the following:

● We have a limited operating history and are subject to the risks encountered by development-stage companies.

● We have incurred substantial losses in the past and may incur losses in the future. There is substantial doubt about our ability to continue as a going concern.

● If we cannot manage our growth effectively and efficiently, our results of operations or profitability could be adversely affected.

● We may not be successful in implementing important new strategic initiatives, which may have an adverse impact on our business and financial results.

● We may be required to obtain and maintain additional approvals, licenses or permits applicable to our business, including our graphite anode manufacturing and sales business and our knowledge share platform, which could have a material adverse impact on our business, financial conditions and results of operations.

**Risks Related to Our Graphite Anode Manufacturing and Sales Business**

Risks and uncertainties related to our graphite anode manufacturing and sales business include, but are not limited to, the following:

● Our graphite anode manufacturing and sales joint venture may not perform as well as we expected.

● Joint venture with which we engage for developing graphite anode manufacturing and sales business presents a number of challenges that could have a material adverse effect on our business and results of operations and cash flows.

● We may not respond quickly to continued innovations.

● Complying with numerous health, safety and environmental regulations is both complex and costly.

● Sunrise Guizhou depends on a few major customers, and the loss of any of which could cause a significant decline in our revenues.

● Sunrise Guizhou faces the risk of fluctuations in the cost, availability, and quality of raw materials, which could adversely affect our results of operations.

● Price volatility of our finished goods.

● Sunrise Guizhou may need additional capital to pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances, and financing may not be available on acceptable terms or at all.

**Risks Related to Our Corporate Structure**

The VIE conducts the knowledge sharing and enterprise service platform and we consolidate the financials of the VIE under the U.S. GAAP for accounting purpose only; however, the VIE Agreements have not been tested in a court of law and are subject to significant risks, as set forth in the following risk factors. For a description of these VIE Agreements, see "ITEM 4. INFORMATION ON THE COMPANY — C. Organizational Structure".

Risks and uncertainties related to our corporate structure include, but are not limited to, the following:

● If the PRC government finds that the agreements that establish the structure for operating our businesses in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.

● We rely on contractual arrangements with the VIE and its subsidiaries, and shareholders for our China operations, which may not be as effective in providing operational control as direct ownership.

● The contractual arrangements we have entered into with the VIE and its shareholders, and any other arrangements and transactions among related parties that we currently have or will have in future may be subject to scrutiny by the PRC tax authorities and they may determine that we owe additional taxes, which could substantially reduce our consolidated net income and the value of your investment.

● The shareholders of the VIE may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.

● We may lose the ability to use and enjoy assets held by the VIE that are material to the operation of certain portion of our business if the VIE goes bankrupt or become subject to a dissolution or liquidation proceeding.

● As an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with such corporate governance listing standards.

● As a "controlled company" under the listing rules of the NASDAQ Stock Market, we may choose to exempt our company from certain corporate governance requirements that could have an adverse effect on our public shareholders.

● Our dual class share structure with different voting rights may adversely affect the value and liquidity of the Class A Ordinary Shares.

● The dual class structure of our ordinary shares has the effect of concentrating voting control with our Chairman, and his interest may not be aligned with the interests of our other shareholders.

**Risks Related to Doing Business in China** 

Risks and uncertainties related to doing business in China include, but are not limited to, the following:

● The Chinese government exerts substantial influence over the manner in which we must conduct our business, and may intervene or influence our operations at any time, which could result in a material change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors and, and cause the value of our Class A Ordinary Shares to significantly decline or be worthless.

● Recent greater oversight by the Cyberspace Administration of China over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our securities.

● The Trial Measures and the revised Provisions recently issued by the PRC authorities may subject us to additional compliance requirements in the future.

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

● Because our business is dependent upon government policies that encourage a market-based economy, change in the political or economic climate in the PRC may impair our ability to operate profitably, if at all.

● PRC laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may materially and adversely affect our business and impede our ability to continue our operations.

● Because our business is conducted in RMB and the price of our Class A Ordinary Shares is quoted in United States dollars, changes in currency conversion rates may affect the value of your investments.

● Under the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified as a "resident enterprise" of China, which could result in unfavorable tax consequences to us and our non-PRC shareholders.

● There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiaries, and dividends payable by our PRC subsidiaries to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.

● PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans or additional capital contributions to our PRC subsidiaries, the VIE and its subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

● Government control in currency conversion may adversely affect our financial condition, our ability to remit dividends, and the value of your investment.

● If we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation.

● The disclosures in our reports and other filings with the SEC and our other public pronouncements are not subject to the scrutiny of any regulatory bodies in the PRC.

● The Holding Foreign Companies Accountable Act and related regulations all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our continued listing on the Nasdaq, and Nasdaq may determine to delist our securities if the PCAOB determines that it cannot inspect or fully investigate our auditor.

● Our contractual arrangements with the VIE are governed by the laws of the PRC and we may have difficulty in enforcing any rights we may have under these contractual arrangements.

● The failure to comply with PRC regulations relating to mergers and acquisitions of domestic entities by offshore special purpose vehicles may subject us to severe fines or penalties and create other regulatory uncertainties regarding our corporate structure.

● PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries' ability to increase its registered capital or distribute profits to us, or may otherwise adversely affect us.

● Increases in labor costs in the PRC may adversely affect our business and our profitability.

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

**Risks Related to Our Class A Ordinary Shares and the Trading Market**

Risks and uncertainties related to our Class A Ordinary Shares and the trading market include, but are not limited to, the following:

● If we are a passive foreign investment company for United States federal income tax purposes for any taxable year, United States holders of our Class A Ordinary Shares could be subject to adverse United States federal income tax consequences.

● We have identified several control deficiencies in our internal control over financial reporting. If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results or prevent fraud.

● We do not intend to pay dividends for the foreseeable future.

● The market price of our Class A Ordinary Shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the initial public offering price.

● As a foreign private issuer, we are not subject to certain U.S. securities law disclosure requirements that apply to a domestic U.S. issuer, and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, which may limit the information publicly available to our investors and afford them less protection than if we were a U.S. issuer.

● If we cannot satisfy the listing requirements and other rules of Nasdaq Capital Market, our securities may be delisted, which could negatively impact the price of our securities and your ability to sell them.

● Nasdaq has proposed a new $5 million minimum market value continued listing requirement that, if approved, could result in immediate suspension and delisting of our Class A Ordinary Shares without any cure period or opportunity to regain compliance.

● Geopolitical conflicts involving Iran, military actions in the Middle East, and the war in Ukraine may adversely affect global economic conditions and cause significant volatility in the trading price of our Class A Ordinary Shares.

● Nasdaq has adopted enhanced listing standards and has proposed other related rule changes that expand its discretionary authority, which could adversely affect our ability to maintain our listing on Nasdaq, limit the liquidity of our securities, or result in increased volatility or delisting risk.

**Risks Related to Our Business**

***We have a limited operating history and are subject to the risks encountered by development-stage companies.***

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Our PRC operating entities have been in business since 2014 as a consulting company. In 2022, we entered into a new business, manufacturing and sales of graphite anode materials, by forming a joint venture (Sunrise Guizhou) in Guizhou Province, China. As a development-stage company, our business strategies and model are constantly being tested by the market and operating results, and we adjust the allocation of our resources accordingly. As such, our business may be subject to significant fluctuations in operating results in terms of amounts of revenues and percentages of total with respect to the business segments.

We are, and expect for the foreseeable future to be, subject to all the risks and uncertainties, inherent in a development-stage business. As a result, we must establish many functions necessary to operate a business, including expanding our managerial and administrative structure, assessing and implementing our marketing program, implementing financial systems and controls and personnel recruitment. Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by companies with a limited operating history. These risks and challenges are, among other things:

● we operate in industries that are or may in the future be subject to increasing regulation by various governmental agencies in China;

● we may require additional capital to develop and expand our operations which may not be available to us when we require it;

● our marketing and growth strategy may not be successful;

● our business may be subject to significant fluctuations in operating results; and

● we may not be able to attract, retain and motivate qualified professionals.

Our future growth will depend substantially on our ability to address the risks described in this annual report. If we do not successfully address these risks, our business would be significantly harmed.

***We have incurred substantial losses in the past and may incur losses in the future. There is substantial doubt about our ability to continue as a going concern***.

As discussed in "Note 3" to the consolidated financial statements to this annual report, we have suffered significant losses from operations resulting in a significant decrease in working capital that raises substantial doubt about our ability to continue as a going concern. Our net revenue was $46,416,132, $64,997,741 and $45,050,405 for the years ended December 31, 2025, 2024 and 2023, respectively. Our net loss was $26,659,381, $17,981,164 and $32,920,724 for the year ended December 31, 2025, 2024 and 2023, respectively. The losses during the reporting periods were mainly due to the large capital investment injected by us into the new business venture, Sunrise Guizhou, to enter into the manufacture and sales of lithium-ion power battery anode materials, and the subsequent losses Sunrise Guizhou has incurred due to overcapacity and intense competition in the graphite material industry. Our limited history of operation makes it difficult to evaluate our future prospects.

In assessing its liquidity, management monitors and analyzes the Company's cash on-hand, its ability to generate sufficient revenue sources and ability to obtain additional financial support in the future, and its operating and capital expenditure commitments.

Management's plan to alleviate the substantial doubt about our ability to continue as a going concern as the following: working to improve our liquidity and working capital sources, mainly through cash flow from its operations, renewal of bank borrowings, equity or debt offering and borrowing from related parties. In order to fully implement our business plan and recover from continuing losses, we may also seek equity financing from outside investors. There can be no assurance that additional financing, if required, would be available on favorable terms or at all and/or that the foregoing plans and arrangements will be sufficient to fund our ongoing capital expenditures, working capital, and other requirements.

***If we cannot manage our growth effectively and efficiently, our results of operations or profitability could be adversely affected.***

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In April 2022, we entered into an investment agreement with certain partners to form a joint venture, Sunrise Guizhou, which is dedicated to the production of lithium-ion power battery anode materials. As of the date of this annual report, we have made substantial investment into the new venture. Such expansion has placed, and will continue to place, substantial demands on our financial, managerial, operational, technological and other resources. Our expansion has placed significant demands on us to maintain the quality of our services to ensure that our brand does not suffer as a result of any deviations, whether actual or perceived, in the quality of our services. In order to manage and support our growth, we must continue to improve our existing operational and administrative systems and our quality control, and recruit, train and retain additional qualified professionals as well as other administrative and sales and marketing personnel, particularly as we expand into new business ventures and launch new business initiatives. We may not be able to effectively and efficiently manage the growth of our operations, recruit and retain qualified personnel and integrate new expansion into our operations. As a result, our results of operations or profitability could be adversely affected.

***We may not be successful in implementing important new strategic initiatives, which may have an adverse impact on our business and financial results.***

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There is no assurance that we will be able to implement important strategic initiatives in accordance with our expectations, which may result in an adverse impact on our business and financial results. For example, our latest strategic initiative, establishing our graphite anode manufacturing and sales joint venture, Sunrise Guizhou, is designed to create growth, improve our results of operations and drive long-term shareholders value; however, our management may lack required experience, knowledge, insight, or human and capital resources to carry out the effective implementation to expand into new spaces outside of our current focuses. Furthermore, overcapacity and intense competition in the graphite material industry have led to a decline in the sales prices of our graphite material products, which contributed significantly to the Company's net losses during the reporting periods. As such, we may not be able to realize our expected growth, and our business and financial results will be adversely impacted.

***We may be required to obtain and maintain additional approvals, licenses or permits applicable to our business, including our graphite anode manufacturing and sales business and our knowledge share platform, which could have a material adverse impact on our business, financial conditions and results of operations.***

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Before we develop certain new products in our graphite anode manufacturing and sales business, we must obtain a variety of approvals from local and municipal governments in the PRC for the operating of our graphite anode manufacturing and sales business. We have obtained the following in relation to our graphite anode manufacturing and sales business: construction permits, fire acceptance record certificate, sewage discharge permit, environmental impact statements, and product quality system certification, including: ISO 14001, ISO 45001, ISO 9001, IATF 16949, ISO 27001 and GB/T29490. In addition, based on the progress of our relevant construction projects, we will apply for other necessary licenses that are required by relevant PRC rules from time to time. There is no assurance that we will be able to obtain all required licenses, permits, or approvals from government authorities. If we fail to obtain all required licenses, permits or approvals, we may be unable to expand our operations.

The operation of our knowledge sharing platform is subject to governmental supervision and regulation by the relevant PRC governmental authorities, including the Ministry of Commerce, or MOFCOM, the Ministry of Industry and Information Technology, or MIIT, the National Radio and Television Administration, or NRTA, and other governmental authorities in charge of the relevant categories of services offered by us. Together, these government authorities promulgate and enforce regulations that cover many aspects of the operations we provide on our APP, including the scope of permissible business activities, licenses and permits for various business activities, and foreign investment.

Our ICP License (the Administrative Measures on Internet Information Services, or the Internet Measures, promulgated by the State Council requires commercial internet content-related services operators to obtain a VATS ("value added telecommunications service") license for internet content provision business, or the "ICP License") expired in July 2024. Our new ICP license was approved on May 27, 2025 and is valid until May 27, 2030. See "Regulations— Regulations Related to Online Transmission of Audio-Visual Programs."

There are uncertainties with respect to the interpretation and implementation of existing and future laws and regulations governing our business activities. As of the date of this annual report, we (i) have received from PRC authorities the material licenses, permissions, and approvals needed to engage in the businesses currently conducted in the PRC, (ii) no such permission or approval has been denied, and (iii) based on the progress of our relevant construction projects, we will apply for other necessary licenses that are required by relevant PRC rules from time to time. However, we cannot assure you that any of these entities will be able to receive clearance of such compliance requirements in a timely manner, or at all. Any failure of these entities to fully comply with such compliance requirements may cause our PRC subsidiaries, or the VIE and its subsidiaries to be unable to begin their new businesses or operations in the PRC, subject them to fines, relevant new businesses or operations suspension for rectification, or other sanctions, which may materially and adversely affect our business, financial conditions and results of operations.

***Cyber-attacks or other failures in our telecommunications or information technology systems, or those of our collaborators, third-party logistics providers, distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption of our business operations.***

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We, our programs, our collaborators, third-party logistics providers, distributors and other contractors and consultants utilize information technology, or IT, systems and networks to process, transmit and store electronic information, including but not limited to intellectual property, proprietary business information and personal information, in connection with our business activities. Our internal IT systems and those of current and future third parties on which we rely may fail and are vulnerable to breakdown, breach, interruption or damage from cyber incidents, employee error or malfeasance, theft or misuse, sophisticated nation-state and nation-state-supported actors, unauthorized access, natural disasters, terrorism, war, telecommunication and electrical failures or other compromises. As use of digital technologies has increased, cyber incidents, including third parties gaining access to employee accounts using stolen or inferred credentials, computer malware, viruses, spamming, phishing attacks, denial-of-service attacks or other means, and deliberate attacks and attempts to gain unauthorized access to computer systems and networks, have increased in frequency, intensity, and sophistication. These threats pose a risk to the security of our, our programs', our collaborators', third-party logistics providers', distributors' and other contractors' and consultants' systems and networks, and the confidentiality, availability and integrity of our data. There can be no assurance that we will be successful in preventing cyber-attacks or successfully mitigating their effects. We may not be able to anticipate all types of security threats, and we may not be able to implement preventive measures effective against all such security threats. The techniques used by cyber criminals change frequently, may not be recognized until launched, and can originate from a wide variety of sources, including outside groups such as external service providers, organized crime affiliates, terrorist organizations or hostile foreign governments or agencies. Similarly, there can be no assurance that our collaborators, third-party logistics providers, distributors and other contractors and consultants will be successful in protecting our clinical and other data that is stored on their systems. Any loss of clinical trial data from our completed or ongoing clinical trials for any of our product candidates could result in delays in our development and regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Although to our knowledge we have not experienced any such material system failure or material security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of development programs and business operations.

Any cyber-attack that leads to unauthorized access, use, or disclosure of personal information, data breach or destruction or loss of data could result in a violation of applicable U.S. and international privacy, data protection and other laws and regulations, subject us to litigation and governmental investigations, proceedings and regulatory actions by federal, state and local regulatory entities in the United States and by international regulatory entities, resulting in exposure to material civil and/or criminal liability, cause us to breach our contractual obligations, which could result in significant legal and financial exposure and reputational damages. As cyber threats continue to evolve, we may be required to incur significant additional expenses in order to implement further data protection measures or to remediate any information security vulnerability. Further, our general liability insurance and corporate risk program may not cover all potential claims to which we are exposed and may not be adequate to indemnify us for all liability that maybe imposed, which could have a material adverse effect on our business and prospects. There can be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages as a result of the events referenced above.

***If we fail to hire, train or retain qualified managerial and other employees, our business and results of operations could be materially and adversely affected.***

Our personnel are critical to maintaining the quality and consistency of our services, brand and reputation. It is important for us to attract qualified managerial and other employees. There may be a limited supply of such qualified individuals. We must hire and train qualified managerial and other employees on a timely basis to keep pace with our rapid growth while maintaining consistent quality of services across our operations. We must also provide continuous training to our managerial and other employees so that they are equipped with up-to-date knowledge of various aspects of our operations and can meet our demand for high-quality services. If we fail to do so, the quality of our services may decrease, which in turn, may cause a negative perception of our brand and adversely affect our business.

***We may be involved from time to time in legal proceedings and commercial or contractual disputes, which could have a material adverse effect on our business, results of operations and financial condition.***

From time to time, we may be involved in legal proceedings and commercial disputes. Such proceedings or disputes are typically claims that arise in the ordinary course of business, including, without limitation, commercial or contractual disputes, and other disputes with customers and suppliers, intellectual property matters, tax matters and employment matters. There can be no assurance that such proceedings and claims, should they arise, will not have a material adverse effect on our business, results of operations and financial condition.

***Any failure to protect our trademarks and other intellectual property rights could have a negative impact on our business.***

We believe our key trademark, "Sunrise" and "晖阳," for which we have obtained trademark protection, and 41 patents, are critical to our success. Any unauthorized use of our trademarks or other intellectual property rights could harm our competitive advantages and business. Historically, China has not protected intellectual property rights to the same extent as the United States, and infringement of intellectual property rights continues to pose a serious risk of doing business in China. Monitoring and preventing unauthorized use are difficult. The measures we take to protect our intellectual property rights may not be adequate. Furthermore, the application of laws governing intellectual property rights in China and abroad is uncertain and evolving, and could involve substantial risks to us. If we are unable to adequately protect our brand, trademarks and other intellectual property rights, we may lose these rights and our business may suffer materially.

**Risks Related to Graphite Anode Manufacturing and Sales Business**

***Our graphite anode manufacturing and sales joint venture may not perform as well as we expected.***

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In 2022, Zhuhai Zibo entered into an Investment Agreement with 13 other parties to form a graphite anode manufacturing and sales joint venture, Sunrise Guizhou. While we believe the joint venture could give the Company new potential growth, it may not perform as well as we expected and, as a result, could impact the Company's financial performance.

***Joint venture with which we engage for developing graphite anode manufacturing and sales business presents a number of challenges that could have a material adverse effect on our business and results of operations and cash flows.***

The success of our overall development plans for our graphite anode manufacturing and sales business depends on our relationships with our joint venture partners. Transactions included in developing a joint venture typically involve a number of risks and present financial, managerial and operational challenges, including the existence of unknown potential disputes, liabilities or contingencies that arise after entering into the joint venture related to the counterparties to such joint venture. We could experience financial or other setbacks, if transactions encounter unanticipated problems due to challenges, including problems related to execution or integration. Any of these risks could reduce our revenues or increase our expenses, which could adversely affect our results of operations and cash flows.

***We require cooperation from our joint venture partners to establish and operate the graphite anode manufacturing and sales business.***

To successfully establish and operate the graphite anode manufacturing and sales business, in addition to capital contributions, we need our partner's expertise in a number of areas, such as advanced technology R&D, marketing and sales. In the event that we cannot maintain our cooperative relationships with our joint venture partners, on terms favorable to us or at all, we will need to source other business partners, and we may lose access to key strategic assets, which could result in material and adverse effects on our business and results of operations.

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***We may not respond quickly to continued innovations in the graphene products industry.***

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We believe that technological advances in graphite manufacture will continue to evolve and new technologies will continue to develop. Advances in the manufacture of graphite could allow our competitors to develop products faster or produce more efficiently or at lower cost than we can. If we are unable to adapt or incorporate technological advances into our operations, our production facilities could become less competitive. Further, it may be necessary for us to incur significant expenditures to acquire any new technologies and retrofit our current processes to remain competitive.

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***We must continuously invest in research and development.***

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To remain competitive, we must continuously invest in research and development which can be costly. Much of our technology and intellectual property portfolio is at an early stage of development, and we may not be able to continue to identify, develop, exploit, market and, in certain cases, secure regulatory approval for, innovative products in a timely manner or at all.

***Risks of relationships with third parties in respect of research and development.***

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Although we have resources and staff dedicated to research and development, market conditions and other factors such as management efficiencies may make it required or preferable for us to enter into arrangements with third parties for the development, production and commercialization of graphite. If we are unable to negotiate favorable terms for such arrangements with respect to intellectual property or otherwise or disagreements arise between us and any partner or potential partner, our business, financial condition, and results of operations may be adversely affected. Further, there can be no assurance that any otherwise successful collaborations will generate products or intellectual property which can be commercialized or will result in any revenue or cash flow.

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***Government support of electric vehicles and renewable energy may be reduced.***

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Demand for and development of the products that incorporate our graphite products, including electric vehicles, renewable energy technologies, and power storage technologies, are significantly affected by government policies, support, and subsidies. Any reduction in government support for relevant industries or technologies may adversely affect our business.

***Price volatility of our finished goods.***

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Whether due to the entry into the market of new manufacturers, the development of new graphite products manufacturing technologies, changes in downstream technologies, or other causes, there may be an increase in the availability of graphite products in the market relative to the demand for those products. In the event that production exceeds demand, we may not be able to negotiate favorable pricing for the sale of our products, and there is no assurance that we will maintain or achieve growth in revenue, profitability or cash flow from our graphite products.

***Complying with numerous health, safety and environmental regulations is both complex and costly.***

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Sunrise Guizhou's graphite manufacturing business is subject to numerous health, safety, and environmental requirements in the PRC. Such laws and regulations govern, among other matters, air emissions, wastewater discharges, solid and hazardous waste management and the use, composition, handling, distribution, and transportation of hazardous materials. Many such laws and regulations are becoming increasingly stringent (and may impose strict liability) and the cost of compliance with these requirements can be expected to increase over time. Although we believe that our operations will comply with applicable regulations, any failure to comply with these laws and regulations could result in us incurring costs and/or liabilities, including as a result of regulatory enforcement, personal injury, property damage and claims and litigation resulting from such events, which could adversely affect our results of operations and financial condition.

***Industrial operations can be hazardous.***

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Accidents involving the mishandling of heavy equipment or hazardous substances could cause severe or critical damage or injury to property and human health. Such an event could result in civil lawsuits and/or regulatory enforcement proceedings, both of which could lead to significant liabilities. Any damage to persons, equipment or property or other disruption of our business could result in significant additional costs to replace, repair and insure assets, which could negatively affect our business, prospects, operating results and financial condition.

***Sunrise Guizhou depends on a few major customers, and the loss of any of which could cause a significant decline in our revenues.***

Sunrise Guizhou's customers are manufacturers of industrial and consumer energy storage lithium-ion batteries, such as batteries for electric vehicles and electric ships, and smart consumer electronics. For the fiscal year ended December 31, 2025, Sunrise Guizhou had 35 customers. Two customers accounted for more than 10% of Sunrise Guizhou's total sales, accounting for 52% and 12%, respectively. For the fiscal year ended December 31, 2024, Sunrise Guizhou had 26 customers. One customer accounted for more than 10% of Sunrise Guizhou's total sales, accounting for 67%. For the fiscal year ended December 31, 2023, Sunrise Guizhou had 23 customers. Three customers accounted for more than 10% of Sunrise Guizhou's total sales, accounting for 38%, 25%, and 11%, respectively.

If any of its key customers reduces, delays or cancels its orders for any reason, or the financial condition of any of its key customers deteriorates, Sunrise Guizhou's business could be seriously harmed. Similarly, a failure to manufacture sufficient quantities of products to meet the demands of these customers may cause Sunrise Guizhou to lose business. Furthermore, if Sunrise Guizhou experiences difficulties in the collection of its accounts receivables from its key customers, the results of our operation may be materially and adversely affected.

***Sunrise Guizhou faces the risk of fluctuations in the cost, availability, and quality of raw materials, which could adversely affect our results of operations.***

The cost, availability, and quality of the principle raw materials, such as asphalt coke, petroleum coke, needle coke, and American petroleum coke, are essential to Sunrise Guizhou's operations. It purchases these raw materials from suppliers in China, Romania, and Indonesia, in order to meet the requirements of different customers, as well as to maintain a diversified supplier base which is beneficial to a stable supply chain. Lack of availability of raw materials, whether due to shortages in supply, delays or interruptions in processing, failure of timely delivery, or otherwise, could interrupt Sunrise Guizhou's operations and adversely affect our financial results. If the costs of raw materials increases due to policy changes, significant market price fluctuation, or any other causes that generally cannot be controlled by Sunrise Guizhou, Sunrise Guizhou's business and results of operations could be adversely affected.

Further, defective raw materials or raw materials with quality deficiencies could subject Sunrise Guizhou to product liability claims or legal actions, which circumstances could adversely affect Sunrise Guizhou's financial conditions and results of operations.

***Sunrise Guizhou entrusts third-party contract manufacturers for certain processes for the manufacturing of its graphite anode products.***

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As of the date of this annual report, Sunrise Guizhou entrusts certain processes of the manufacturing of its graphite anode products to third-party contractors, who might be unable to timely manufacture its products or produce the quantity and quality required to meet its commercial needs, or may not be able to execute our manufacturing procedures appropriately, or may not perform as agreed upon, or to produce, store and distribute its products satisfactorily. Any of the above could adversely affect the business results of operations and financial condition.

***Sunrise Guizhou may need additional capital to pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances, and financing may not be available on acceptable terms or at all.***

As Sunrise Guizhou intends to continue to make investments to support the growth of its business, it may require additional capital to pursue its business objectives and respond to business opportunities, challenges or unforeseen circumstances, including expanding manufacturing capacities, developing new products and service offerings, increasing sales and marketing expenditures, and engage customers through expanded channels, enhancing its operating infrastructure and acquiring complementary businesses and technologies. Accordingly, Sunrise Guizhou may need to engage in equity or debt financing to secure additional funds. However, additional funds may not be available when needed, on terms that are acceptable, or at all. Repayment of any such debt may divert a substantial portion of cash flow to repay principal and interest on such debt, which would reduce the funds available for expenses, capital expenditures, acquisitions and other general corporate purposes. Sunrise Guizhou may suffer as a result of any default and foreclosure on assets pledged to secure any such financing, if the operating cash flow is insufficient to service debt obligations, which could in turn result in acceleration of obligations to repay the indebtedness and limit sources of financing.

Volatility in the credit markets may also have an adverse effect on Sunrise Guizhou's ability to obtain debt financing. If it raises additional funds through further issuance of equity or convertible debt securities, our existing shareholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Ordinary Shares. If Sunrise Guizhou is unable to obtain adequate financing or financing on terms satisfactory to it when required, our ability to continue to pursue our business objectives and to respond to business opportunities, challenges or unforeseen circumstances could be significantly limited, and our business, financial condition, results of operations and prospects could be adversely affected.

**Risks Related to Our Corporate Structure**

***The VIE Agreements have not been tested in a court of law and are subject to significant risks, as set forth in the following risk factors. For a description of these VIE Agreements, see "ITEM 4. INFORMATION ON THE COMPANY — C. Organizational Structure".***

***If the PRC government finds that the agreements that establish the structure for operating our businesses in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.***

 **

Foreign ownership of certain value-added telecommunications services, or the VATS, is subject to restrictions under current PRC laws and regulations. For example, the ultimate foreign equity ownership in a VATS provider may not exceed 50%. Also, for a foreign investor contemplating to acquire any equity interest in a VATS business in China, it must satisfy a number of stringent performance and operational experience requirements. In addition, to conduct any VATS business in China, foreign investors have to set up foreign-invested enterprises and obtain a relevant telecommunications business operating license. See "Regulations—Regulations Related to Foreign Investment."

The Company's knowledge sharing business previously included VATS, and in light of the above restrictions and requirements, the Company opted to rely on contractual arrangements between GIOP BJ and the VIE to operate its knowledge sharing and enterprise business in China. As a result of which, under United States generally accepted accounting principles, the assets and liabilities of the VIE are treated as our assets and liabilities and the results of operations of the VIE are treated as if they were the results of our operations. For a description of these contractual arrangements, see "Business—Contractual Arrangements between GIOP BJ, the VIE and Its Shareholders" and "Related Party Transactions—Contractual Arrangements with GIOP BJ, the VIE and Its Shareholders." As of the date of this annual report, the Company no longer engages in business activities that are VATS.

In the opinion of our PRC legal counsel, JT&N, based on its understandings of the relevant PRC laws and regulations, (i) the ownership structures of the VIE in China and GIOP BJ are not in violation of applicable PRC laws and regulations currently in effect; and (ii) each of the contracts among GIOP BJ, the VIE and its shareholders is legal, valid, binding and enforceable in accordance with its terms and applicable PRC laws. However, our PRC legal counsel has also advised us that there are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations. Accordingly, the PRC regulatory authorities may ultimately take a view contrary to the opinion of our PRC legal counsel. It is uncertain whether any new PRC laws or regulations relating to variable interest entity structures will be adopted or if adopted, what they would provide. If we or the VIE are found to be in violation of any PRC laws or regulations, if the contractual arrangements among GIOP BJ, the VIE and its shareholders are determined to be illegal or invalid by a PRC court, arbitral tribunal or regulatory authorities, or if we or the VIE fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures, including:

● revoking the business and/or operating licenses of GIOP BJ or the VIE;

● discontinuing or restricting the operations of GIOP BJ or the VIE;

● imposing conditions or requirements with which we, GIOP BJ, or the VIE may not be able to comply;

● requiring us, GIOP BJ, or the VIE to restructure the relevant ownership structure or operations which may significantly impair the rights of the holders of our Ordinary Shares in the equity of the VIE;

● restricting or prohibiting our use of the proceeds from our initial public offering to finance our business and operations in China; and\or

● imposing fines.

The imposition of any of these penalties would result in a material and adverse effect on our ability to conduct our business. In addition, it is unclear what impact the PRC government actions would have on us and on our ability to consolidate the financial results of the VIE in our consolidated financial statements, if the PRC government authorities were to find our legal structure and contractual arrangements to be in violation of PRC laws and regulations. If the imposition of any of these government actions causes us to lose our right to direct the activities of the VIE or our right to receive substantially all of the economic benefits and residual returns from the VIE and we are not able to restructure our ownership structure and operations in a satisfactory manner, we would no longer be able to consolidate the financial results of the VIE in our consolidated financial statements. Either of these results, or any other significant penalties that might be imposed on us in this event, would have a material adverse effect on our financial condition and results of operations.

***We rely on contractual arrangements with the VIE and its subsidiaries, and shareholders for our China operations, which may not be as effective in providing operational control as direct ownership.***

We have relied and expect to continue to rely on contractual arrangements with the VIE, its subsidiaries and shareholders to operate our business in China. For a description of these contractual arrangements, see "Business—Contractual Arrangements between GIOP BJ, the VIE and Its Shareholders" and "Related Party Transactions— Contractual Arrangements with GIOP BJ, the VIE and Its Shareholders." These contractual arrangements may not be as effective in providing us with control over the VIE and its subsidiaries as direct ownership. We have no direct or indirect equity interests in the VIE or any of its subsidiaries.

If we had direct ownership of the VIE and its subsidiaries, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of the VIE and its subsidiaries, which in turn could effect changes, subject to any applicable fiduciary obligations, at the management level. But under the current contractual arrangements, as a legal matter, if the VIE or any of its subsidiaries and shareholders fails to perform their obligations under these contractual arrangements, we may have to incur substantial costs and resources to enforce such arrangements and rely on legal remedies under PRC law, including seeking specific performance or injunctive relief and claiming damages, which may not be effective. For example, if the shareholders of the VIE were to refuse to transfer their equity interest in the VIE to us or our designee when we exercise the call option pursuant to these contractual arrangements, or if they were otherwise to act in bad faith toward us, then we may have to take legal action to compel them to fulfill their contractual obligations.

Many of these contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in some other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements. In the event we are unable to enforce these contractual arrangements, we may not be able to exert effective control over our affiliated entities, and our ability to conduct our business may be negatively affected.

***The contractual arrangements we have entered into with the VIE and its shareholders, and any other arrangements and transactions among related parties that we currently have or will have in future may be subject to scrutiny by the PRC tax authorities and they may determine that we owe additional taxes, which could substantially reduce our consolidated net income and the value of your investment.***

Under applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities within ten years after the taxable year when the transactions are conducted. We could face material and adverse tax consequences if the PRC tax authorities determine that the VIE contractual arrangements were not entered into on an arm's-length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and adjust the income of the VIE in the form of a transfer pricing adjustment. A transfer pricing adjustment could, among other things, result in a reduction of expense deductions recorded by the VIE for PRC tax purposes, which could in turn increase its tax liabilities without reducing GIOP BJ's tax expenses. In addition, the PRC tax authorities may impose late payment fees and other penalties on the VIE for the adjusted but unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected if the VIE's tax liabilities increase or if it is required to pay late payment fees and other penalties.

***Because we are a Cayman Islands holding company and conduct a knowledge sharing platform through the VIE in China, if we fail to comply with applicable PRC law, we could be subject to severe penalties and our business could be adversely affected.***

We are a Cayman Islands holding company and operate a portion of our business through the VIE in China through VIE Agreements, as a result of which, under United States generally accepted accounting principles, the assets and liabilities of the VIE are treated as our assets and liabilities and the results of operations of the VIE are treated in all respects as if they were the results of our operations. There are uncertainties regarding the interpretation and application of PRC laws, rules and regulations, including but not limited to the laws, rules and regulations governing the validity and enforcement of the VIE Agreements between GIOP BJ and the VIE.

The Provisions Regarding Mergers and Acquisitions of Domestic Projects by Foreign Investors (the "M&A Rules") requires an overseas special purpose vehicle that are controlled by PRC companies or individuals formed for the purpose of seeking a public listing on an overseas stock exchange through acquisitions of PRC domestic companies using shares of such special purpose vehicle or held by its shareholders as considerations to obtain the approval of the China Securities Regulatory Commission, or the CSRC, prior to the listing and trading of such special purpose vehicle's securities on an overseas stock exchange. However, the application of the M&A Rules remains unclear. If CSRC approval is required, it is uncertain whether it would be possible for us to obtain the approval. Any failure to obtain or delay in obtaining CSRC approval for such an offering would subject us to sanctions imposed by the CSRC and other PRC regulatory agencies.

If GIOP BJ, the VIE or their ownership structure or the VIE Agreements are determined to be in violation of any existing or future PRC laws, rules or regulations, or GIOP BJ or the VIE fail to obtain or maintain any of the required governmental permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations, including:

● revoking the business and operating licenses of GIOP BJ or the VIE;

● discontinuing or restricting the operations of GIOP BJ or the VIE;

● imposing conditions or requirements with which we, GIOP BJ, or the VIE may not be able to comply;

● requiring us, GIOP BJ, or the VIE to restructure the relevant ownership structure or operations which may significantly impair the rights of the holders of our ordinary shares in the equity of the VIE; and\or

● imposing fines.

We cannot assure you that the PRC courts or regulatory authorities may not determine that our corporate structure and VIE Agreements violate PRC laws, rules or regulations. If the PRC courts or regulatory authorities determine that our contractual arrangements are in violation of applicable PRC laws, rules or regulations, the VIE Agreements will become invalid or unenforceable, and the VIE will not be treated as VIE entities and we will not be entitled to treat the VIE's assets, liabilities and results of operations as our assets, liabilities and results of operations, which could effectively eliminate the assets, revenue and net income of the VIE from our balance sheet, which would most likely require us to cease conducting our business and would result in the delisting of our Class A Ordinary Shares from the Nasdaq Capital Market and a significant impairment in the market value of our Class A Ordinary Shares.

***The shareholders of the VIE may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.***

Almost all of our beneficiary owners hold equity interests in the VIE. They may have conflicts of interest with us. Conflicts of interest may arise between the dual roles of them who are both shareholders of our Company and shareholders of SDH, the VIE. These shareholders may breach, or cause the VIE to breach, or refuse to renew, the existing contractual arrangements we have with them and SDH, which would have a material and adverse effect on our ability to effectively control the VIE and receive economic benefits from it. For example, the shareholders may be able to cause our agreements with the VIE to be performed in a manner adverse to us by, among other things, failing to remit payments due under the contractual arrangements to us on a timely basis. We cannot assure you that when conflicts of interest arise any or all of these shareholders will act in the best interests of our Company or such conflicts will be resolved in our favor.

Currently, we do not have any arrangements to address potential conflicts of interest between these shareholders and our Company, except that we could exercise our purchase option under the exclusive option agreements with these shareholders to request them to transfer all of their equity interests in the VIE to a PRC entity or individual designated by us, to the extent permitted by PRC law. If we cannot resolve any conflicts of interest or disputes between us and those individuals, we would have to rely on legal proceedings, which may materially disrupt our business. There is also substantial uncertainty as to the outcome of any such legal proceeding.

***Uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.***

On March 15, 2019, the National People's Congress approved the Foreign Investment Law, which has come into effect on January 1, 2020 and replaced the trio of existing laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations. The Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments. However, since it is relatively new, uncertainties still exist in relation to its interpretation and implementation. For instance, under the Foreign Investment Law, "foreign investment'' refers to the investment activities directly or indirectly conducted by foreign individuals, enterprises or other entities in China. Though it does not explicitly classify VIE Agreements as a form of foreign investment, there is no assurance that operation conducted by foreign investors or foreign-invested enterprises via contractual arrangement would not be interpreted as a type of indirect foreign investment activities under the definition in the future. In addition, the definition contains a catch-all provision which includes investments made by foreign investors through means stipulated in laws or administrative regulations or other methods prescribed by the State Council. Therefore, it still leaves leeway for future laws, administrative regulations or provisions promulgated by the Stale Council to provide for VIE Agreements as a form of foreign investment. In any of these cases, it will be uncertain whether the VIE Agreements will be deemed to be in violation of the market access requirements for foreign investment under the PRC laws and regulations. Furthermore, if future laws, administrative regulations or provisions prescribed by the State Council mandate further actions to be taken by companies with respect to existing VIE Agreements, we may face substantial uncertainties as to whether we can complete such actions in a timely manner, or at all. Failure to take timely and appropriate measures to cope with any of these or similar regulatory compliance challenges could materially and adversely affect our current corporate structure, corporate governance and business operations.

***Our dual class share structure with different voting rights may adversely affect the value and liquidity of the Class A Ordinary Shares.***

We cannot predict whether our dual class share structure with different voting rights will result in a lower or more volatile market price of the Class A Ordinary Shares, in adverse publicity, or other adverse consequences. Certain index providers have announced restrictions on including companies with multiple class share structures in certain of their indices. Because of our dual class structure, we will likely be excluded from these indices and other stock indices that take similar actions. Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from certain stock indices would likely preclude investment by many of these funds and could make the Class A Ordinary Shares less attractive to investors. In addition, several shareholder advisory firms have announced their opposition to the use of multiple class structure and our dual class structure may cause shareholder advisory firms to publish negative commentary about our corporate governance, in which case the market price and liquidity of the Class A Ordinary Shares could be adversely affected.

***The dual class structure of our ordinary shares has the effect of concentrating voting control with our Chairman, and his interest may not be aligned with the interests of our other shareholders*.**

We have adopted a dual-class voting structure, consisting of Class A Ordinary Shares and Class B Ordinary Shares. Under this structure, holders of Class A Ordinary Shares are entitled to one vote per Class A Ordinary Share, and holders of Class B Ordinary Shares are entitled to twenty votes per Class B Ordinary Share, which may cause the holders of Class B Ordinary Shares to have an unbalanced, higher concentration of voting power. As of the date of this annual report, Haping Hu, our CEO and chairman of the board of directors, beneficially owns 2,540,789, or 7.90%, of our issued Class A Ordinary Shares, and 6,567,272, or 100%, of our issued Class B Ordinary Shares, representing approximately 81.88% of the voting rights in our Company. As a result, until such time as Haiping Hu's voting power is below 50%, he, as the controlling shareholder, has substantial influence over our business, including decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors, and other significant corporate actions. He may take actions that are not in our best interest or in the best interest of other shareholders. These corporate actions may be taken even if they are opposed by other shareholders. Further, such concentration of voting power may discourage, prevent, or delay the consummation of change of control transactions that shareholders may consider favorable, including transactions in which shareholders might otherwise receive a premium for their shares. Future issuances of Class B Ordinary Shares may also be dilutive to the holders of Class A Ordinary Shares. As a result, the market price of our Class A Ordinary Shares could be adversely affected.

***As a "controlled company" under the listing rules of the NASDAQ Stock Market, we may choose to exempt our company from certain corporate governance requirements that could have an adverse effect on our public shareholders.***

As of the date of this annual report, Mr. Haiping Hu, our CEO and chairman of the board of directors, beneficially owns the majority of the voting power of our outstanding Ordinary Shares. Under NASDAQ Listing Rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including the requirement that a majority of our directors be independent, as defined in the NASDAQ Listing Rules, and the requirement that our compensation and nominating and corporate governance committees consist entirely of independent directors. Although we do not intend to rely on the "controlled company" exemption under the Nasdaq listing rules, we could elect to rely on this exemption in the future if we meet certain disclosure requirements. If we elect to rely on the "controlled company" exemption, a majority of the members of our board of directors might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors. Accordingly, during any time while we remain a controlled company relying on the exemption and during any transition period following a time when we are no longer a controlled company, you would not have the same protections afforded to shareholders of companies that are subject to all of the NASDAQ Stock Market corporate governance requirements. Our status as a controlled company could cause our Class A Ordinary Share to look less attractive to certain investors or otherwise harm our trading price.

***We may lose the ability to use and enjoy assets held by the VIE that are material to the operation of certain portion of our business if the VIE goes bankrupt or become subject to a dissolution or liquidation proceeding.***

As part of our contractual arrangements with the VIE, the VIE and its subsidiaries hold certain assets that are material to the operation of certain portion of our business, including intellectual property and licenses. If the VIE goes bankrupt and all or part of its assets become subject to liens or rights of third-party creditors, we may be unable to continue some or all of our business activities, which could materially and adversely affect our business, financial condition and results of operations. Under the contractual arrangements, the VIE may not, in any manner, sell, transfer, mortgage or dispose of their assets or legal or beneficial interests in the business without our prior consent. If the VIE undergoes a voluntary or involuntary liquidation proceeding, independent third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could materially and adversely affect our business, financial condition and results of operations.

***Because we are a Cayman Islands exempted company and all of our business is conducted in the PRC, you may be unable to bring an action against us or our officers and directors or to enforce any judgment you may obtain.***

We are incorporated in the Cayman Islands and conduct our operations primarily in China. Substantially all of our assets are located outside of the United States. In addition, all of our directors and officers reside outside of the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe we have violated your rights, either under United States federal or state securities laws or otherwise, or if you have a claim against us. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of China may not permit you to enforce a judgment against our assets or the assets of our directors and officers.

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

***As an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with such corporate governance listing standards.***

As a Cayman Islands exempted company listed on the Nasdaq Stock Market, we are subject to the Nasdaq listing standards. However, the Nasdaq Stock Market Rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Currently, we rely on home country practice with respect to certain aspects of our corporate governance. See "Item 16G. Corporate Governance." Our shareholders may be afforded less protection than they would otherwise enjoy under the Nasdaq listing standards applicable to U.S. domestic issuers given our reliance on the home country practice exception.

**Risks Related to Doing Business in China** 

***The Chinese government exerts substantial influence over the manner in which we must conduct our business, and may intervene or influence our operations at any time, which could result in a material change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors and, and cause the value of our Class A Ordinary Shares to significantly decline or be worthless.***

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The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations, land use rights, property and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require 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 centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.

Furthermore, given recent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted overseas, although we are currently not required to obtain permission from any of the PRC federal or local government authorities and have not received any denial to list on the U.S. exchange, it is uncertain when and whether we will be required to obtain permission from the PRC government to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded, which could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and cause the value of our securities to significantly decline or be worthless.

***Recent greater oversight by the Cyberspace Administration of China over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our securities.***

On December 28, 2021, 13 governmental departments of the PRC, including the Cyberspace Administration of China, or the CAC, issued the Cybersecurity Review Measures, which became effective on February 15, 2022. The Cybersecurity Review Measures provide that, in addition to critical information infrastructure operators ("CIIOs") that intend to purchase Internet products and services, online platform operators engaging in data processing activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity Review Office of the PRC.

On January 1, 2025, the Regulations on the Network Data Security Administration (the "Security Administration Regulation") became effective, which provides that data processing operators engaging in data processing activities that affect or may affect national security must be subject to network data security review by the relevant Cyberspace Administration of the PRC.

As confirmed by our PRC counsel, JT&N, as of the date of this annual report, we are not subject to cybersecurity review with the CAC, under the Cybersecurity Review Measures that became effective on February 15, 2022, or the Security Administration Regulation, since (i) as companies that engage in business-oriented consulting services and manufacturing and sales of graphite anode materials, we, our PRC subsidiaries, or the VIE and its subsidiaries are unlikely to be classified as CIIOs by the PRC regulatory agencies; (ii) according to the interpretation of the relevant laws by the CAC, for online platform operators who have listed in foreign countries before the effective date of Cybersecurity Review Measures, and who are not seeking a new listing (such as a secondary or dual listing) in foreign countries, a cybersecurity review is not required; (iii) the data processed in the business of the VIE and its subsidiaries, which is knowledge sharing and enterprise service platform business, is unlikely to have a bearing on national security. There remains uncertainty, however, as to how the Cybersecurity Review Measures and the Security Administration Regulation will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Security Administration Regulation. If any such new laws, regulations, rules, or implementation and interpretation come into effect, we will take all reasonable measures and actions to comply with and to mitigate any adverse effect of such new laws, regulations, rules, or implementation and interpretation on us. We cannot guarantee, however, that we will not be subject to cybersecurity review and network data security review in the future. During such reviews, if required, our operations could be suspended or experience other disruptions. Further, cybersecurity review and network data security review could also result in negative publicity with respect to our Company and diversion of our managerial and financial resources, which could materially and adversely affect our business, financial conditions, and results of operations.

***The Trial Measures and the revised Provisions recently issued by the PRC authorities may subject us to additional compliance requirements in the future.***

On February 17, 2023, the CSRC promulgated the Trial Measures and five supporting guidelines, which took effect on March 31, 2023. Pursuant to the Trial Measures, PRC domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of relevant applications or its completion of subsequent offerings. If a domestic company fails to complete required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. On the same day, the CSRC also held a press conference for the release of the Trial Measures and issued the *Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies*, or the CSRC Notice, which, among others, clarifies that PRC domestic companies that have already been listed overseas before the effective date of the Trial Measures, which is March 31, 2023, shall be deemed to be Existing Issuers, and Existing Issuers are not required to complete the filing procedures with the CSRC immediately, and they shall be required to file with the CSRC for any subsequent offerings. We are an Existing Issuer, based on the foregoing, and we are not, therefore, required to complete the filing procedures with the CSRC immediately, and shall be required, however, to file with the CSRC for any subsequent offerings.

On February 24, 2023, the CSRC, together with the MOF, the National Administration of State Secrets Protection and National Archives Administration of China, revised the *Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing*, which were issued by the CSRC and National Administration of State Secrets Protection and National Archives Administration of China in 2009, or the Provisions. The revised Provisions were issued under the title the "*Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies*," and came into effect on March 31, 2023, together with the Trial Measures. One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, among other things, (i) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities, including securities companies, securities service providers, and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (ii) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities, including securities companies, securities service providers, and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations. Any failure or perceived failure by our Company, our subsidiaries or the VIE and its subsidiaries to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities being held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime. See "Regulations—Regulations Related to Mergers and Acquisitions and Overseas Listings."

The Trial Measures and the revised Provisions that recently issued by the PRC authorities may subject us to additional compliance requirements in the future, as there are still uncertainties regarding the interpretation and implementation of such regulatory guidance, and we cannot assure you that we will be able to comply with all the new regulatory requirements of the Trial Measures, the revised Provisions, or any future implementing rules on a timely basis, or at all. Any failure by us to fully comply with the new regulatory requirements, including, but not limited to, the failure to complete the filing procedures with the CSRC if required, may significantly limit or completely hinder our ability to offer or continue to offer our Class A Ordinary Shares, cause significant disruption to our business operations, and severely damage our reputation, which would materially and adversely affect our financial condition and results of operations and cause our Class A Ordinary Shares to significantly decline in value or become worthless.

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

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The rapid growth of the Chinese economy has slowed down since 2012, and there is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the People's Bank of China 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, which have resulted in volatility in oil and other markets. There have also been concerns on the relationship among China and other Asian countries, which may result in or intensify potential conflicts in relation to territorial disputes. Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any severe or prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results of operations and financial condition.

***Changes in international trade policies, or the escalation of tensions in international relations, particularly with regard to China, may adversely impact our business and operating results.***

There have been heightened tensions in international relations, particularly between the United States and China. Recently, the U.S. government has taken steps to reassess its trade policies with several countries, with a primary focus on China. These policies have undergone significant recent changes, including the imposition of escalating tariffs, strategic export controls, and targeted sanctions. However, the future direction of U.S. and global trade policy remains uncertain. It is unclear what additional actions may be taken by the U.S. or other governments regarding international trade agreements, tariffs on imported goods, tax policies related to international commerce, or other trade-related measures. Should new tariffs, legislation, or regulations be introduced—or if existing trade agreements are renegotiated or further retaliatory actions are taken in response to ongoing U.S.-China trade tensions—such developments could materially and adversely affect our business, financial condition, and results of operations.

These tensions have strained both diplomatic and economic relations between the two countries. Heightened geopolitical friction may reduce trade volumes, investment activity, technology exchange, and other forms of economic engagement between the U.S. and China. A further deterioration in international relations could negatively impact China's broader economic and social conditions. Given our dependence on the Chinese market, any such developments may have a material adverse effect on our business, financial condition, and results of operations.

In addition to trade related tensions between China and the United States, the U.S. government escalated tensions between the U.S. and China in recent years by revoking Hong Kong's special trading status. Also, the Congress of the United States enacted the Uyghur Forced Labor Prevention Act (the "UFLPA") in December 2021. Effective from June 21, 2022, the UFLPA creates a rebuttable presumption that goods mined, produced, or manufactured (wholly or in part) in China's Xinjiang Uyghur Autonomous Region are made with forced labor, where goods designated as such will be subject to an import ban into the United States. The President of the United States may also impose sanctions on companies that knowingly engage in, are responsible for, or facilitate forced labor in Xinjiang. As of the date of this prospectus, we do not have any operations in Xinjiang Uyghur Autonomous Region, and our business is not impacted by the UFLPA.

Moreover, recently, the war in Ukraine and sanctions on Russia have increased the uncertainties in the relations between China and the United States, and tensions between these two countries could be heightened as a result. These tensions have affected both diplomatic and economic ties between the two countries. Heightened tensions could reduce levels of trade, investments, technological exchanges, and other economic activities between the two major economies. The impacts of the war in Ukraine and sanctions on Russia to our business are very limited, because the PRC subsidiaries and the VIE and its subsidiaries source their raw materials from China, Romania and Indonesia and can seek alternative suppliers to their current suppliers from such sources without undue cost or effort. The prices of main raw materials used in the products were stable in fiscal years ended December 31, 2025 and 2024. However, the existing tensions and any further deterioration in international relations may have a negative impact on the general, economic, political, and social conditions in China and, given our reliance on the foregoing markets for raw materials, could adversely impact our business, financial condition, and results of operations.

***Geopolitical conflicts involving Iran, military actions in the Middle East, and the war in Ukraine may adversely affect global economic conditions and cause significant volatility in the trading price of our Class A Ordinary Shares.***

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The heightened military conflict involving the United States, Israel, and Iran, which escalated significantly in February 2026, has led to profound instability in global financial and energy markets. These events, including the closure of strategic airspaces and critical maritime routes such as the Strait of Hormuz and the Red Sea, have contributed to a dramatic increase in the price of oil and gas and created widespread market uncertainty. The ongoing disruptions caused by these military actions, and the potential for further escalation, could result in protracted and severe damage to the global economy and investment climate.

***Nasdaq has adopted enhanced listing standards and has proposed other related rule changes that expand its discretionary authority, which could adversely affect our ability to maintain our listing on Nasdaq, limit the liquidity of our securities, or result in increased volatility or delisting risk.***

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Nasdaq has recently adopted a series of rule changes that enhance its initial and continued listing standards and has proposed other related rule changes to the SEC for approval, that expand Nasdaq's discretionary authority in evaluating and enforcing compliance with those standards. For example, Nasdaq has recently proposed amendments to its initial listing standards that would impose additional requirements specifically on China-based issuers, including heightened liquidity thresholds and more rigorous corporate governance disclosures. These proposed changes reflect a broader trend by Nasdaq to increase scrutiny of companies with significant operations or affiliations in China. In addition, recent changes to Nasdaq listing standards and Nasdaq's expanded discretionary authority to deny initial listings under Rule IM-5101-3, even where a company meets all applicable quantitative and qualitative criteria, further signal a trend toward tighter listing controls. In exercising this discretion, Nasdaq has indicated that it may consider factors such as a company's geographic nexus, business model, and relationships with professional advisors. As such, companies with operations in China or other emerging markets may face a higher burden in satisfying Nasdaq's listing expectations. Moreover, Nasdaq has recently increased its initial listing requirements relating to the minimum market value of unrestricted publicly held shares. Effective January 17, 2026, companies seeking to list on the Nasdaq Capital Market or the Nasdaq Global Market under the net income standard are required to have a minimum market value of unrestricted publicly held shares of $15 million, compared to prior thresholds of $5 million and $8 million, respectively.

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On January 13, 2026, Nasdaq filed a rule proposal with the SEC to adopt a new continued listing requirement that would require all companies listed on the Nasdaq Global Market or Nasdaq Capital Market to maintain a minimum market value of listed securities of US$5 million. Under the proposed rule, if a company's market value of listed securities falls below this threshold for 30 consecutive trading days, Nasdaq may immediately suspend trading and initiate delisting proceedings without affording the company a compliance cure period. This proposed rule, if adopted, would be in addition to Nasdaq's existing continued listing requirements, which include minimum bid price, publicly held shares, and shareholders' equity, among others. If the market value of our Class A Ordinary Shares were to fall below the proposed $5 million threshold or we otherwise fail to satisfy Nasdaq's continued listing standards, we could face delisting proceedings on an accelerated basis. Moreover, even if we remain in compliance with quantitative criteria, Nasdaq retains discretionary authority under Rule IM-5101-1 to suspend or terminate a company's listing if necessary to protect investors or ensure the orderly operation of the market. We cannot assure you that we will be able to maintain compliance with Nasdaq's continued listing standards, particularly in light of our trading volume, market capitalization, public float and other qualitative factors. If we are unable to maintain our listing, we may be forced to trade on an over-the-counter market, which may be less liquid and more volatile and could impair investors' ability to buy or sell our Class A Ordinary Shares. The loss of our Nasdaq listing could also reduce our visibility and credibility in the market and adversely affect our ability to access capital through future equity financings.

Furthermore, the continuing war in Ukraine and the resulting sanctions levied by the United States, the European Union, and other nations against Russia continue to impact global financial markets. The extent and duration of these military actions in the Middle East and Eastern Europe, as well as the resulting sanctions and market disruptions, are impossible to predict but are expected to remain substantial.

Such geopolitical instability often leads to broad sell-offs in the equity markets and heightened investor sensitivity to risk. Consequently, these developments may materially and adversely affect the market price of our Class A Ordinary Shares, regardless of our actual operating performance. We cannot predict the ultimate progress or outcome of these situations, and any prolonged unrest or intensified military activities could have a material adverse effect on the global economy, which in turn could negatively impact our financial condition and the value of our securities.

***Because our business is dependent upon government policies that encourage a market-based economy, change in the political or economic climate in the PRC may impair our ability to operate profitably, if at all.***

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Although the PRC government has been pursuing a number of economic reform policies for more than two decades, the PRC government continues to exercise significant control over economic growth in the PRC. Because of the nature of our business, we are dependent upon the PRC government pursuing policies that encourage private ownership of businesses. We cannot assure you that the PRC government will pursue policies favoring a market-oriented economy or that existing policies will not be significantly altered, especially in the event of a change in leadership, social or political disruption, or other circumstances affecting political, economic and social life in the PRC.

***PRC laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may materially and adversely affect our business and impede our ability to continue our operations.***

There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations including, but not limited to, the laws and regulations governing our business and the enforcement and performance of our arrangements with customers in certain circumstances. The laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement may involve substantial uncertainty. In fact, the PRC legal system is evolving rapidly, and the interpretations of many laws, regulations and rules may contain inconsistencies and enforcement of these laws, regulations and rules involves uncertainties. The effectiveness and interpretation of newly enacted laws or regulations, including amendments to existing laws and regulations, may be delayed, and our business may be affected if we rely on laws and regulations which are subsequently adopted or interpreted in a manner different from our understanding of these laws and regulations. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. Furthermore, if China adopts more stringent standards with respect to environmental protection or social issues, which are increasingly becoming the focus globally, we may incur increased compliance cost or become subject to additional restrictions in our operations. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business.

From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy in the PRC legal system than in more developed legal systems. Furthermore, the PRC legal system is based in part on government policies and internal rules (some of which are not published in a timely manner or at all) that may have retroactive effect. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation. Such uncertainties, including uncertainties over the scope and effect of our contractual, property (including intellectual property) and procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely affect our business and impede our ability to continue our operations.

For example, on July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued an announcement to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws. Since this announcement is relatively new, uncertainties still exist in relation to how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on companies like us.

***Because our business is conducted in RMB and the price of our Class A Ordinary Shares is quoted in United States dollars, changes in currency conversion rates may affect the value of your investments.***

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Our business is conducted in the PRC, our books and records are maintained in RMB, which is the currency of the PRC, and the financial statements that we file with the SEC and provide to our shareholders are presented in United States dollars. Changes in the exchange rate between the RMB and dollar affect the value of our assets and the results of our operations in United States dollars. The value of the RMB against the United States dollar and other currencies may fluctuate and is affected by, among other things, changes in the PRC's political and economic conditions and perceived changes in the economy of the PRC and the United States. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenue and financial condition.

***Under the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified as a "resident enterprise" of China, which could result in unfavorable tax consequences to us and our non-PRC shareholders.***

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The EIT Law and its implementing rules provide that enterprises established outside of China whose "de facto management bodies" are located in China are considered "resident enterprises" under PRC tax laws. The implementing rules promulgated under the EIT Law define the term "de facto management bodies" as a management body which substantially manages, or has control over the business, personnel, finance and assets of an enterprise. In April 2009, the State Administration of Taxation, or SAT, issued the Circular on Issues Concerning the Identification of Chinese-Controlled Overseas Registered Enterprises as Resident Enterprises in Accordance With the Actual Standards of Organizational Management, known as SAT Circular 82, which has been revised by the Decision of the State Administration of Taxation on Issuing the Lists of Invalid and Abolished Tax Departmental Rules and Taxation Normative Documents on December 29, 2017 and by the Decision of the State Council on Cancellation and Delegation of a Batch of Administrative Examination and Approval Items on November 8, 2013. Circular 82 has provided certain specific criteria for determining whether the "de facto management bodies" of a PRC-controlled enterprise that is incorporated offshore is located in China. Although this circular only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the criteria set forth in the circular may reflect the SAT's general position on how the "de facto management body" text should be applied in determining the tax resident status of all offshore enterprises. According to SAT Circular 82, a Chinese-controlled offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a "de facto management body" in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following criteria are met: (i) the places where senior management and senior management departments that are responsible for daily production, operation and management of the enterprise perform their duties are mainly located within the territory of China; (ii) financial decisions (such as money borrowing, lending, financing and financial risk management) and personnel decisions (such as appointment, dismissal, salary and wages) are made or need to be made by organizations or persons located within the territory of China; (iii) main property, accounting books, corporate seal, the board of directors and files of the minutes of shareholders' meetings of the enterprise are located or preserved within the territory of China; and (iv) one half (or more) of the directors or senior management staff having the right to vote habitually reside within the territory of China.

We believe that E-Power Inc. is not a resident enterprise for PRC tax purpose. E-Power Inc. is not controlled by a PRC enterprise or PRC enterprise group and we do not meet some of the conditions outlined in the immediately preceding paragraph. For example, as a holding company, the key assets and records of E-Power Inc., including the resolutions and meeting minutes of our board of directors and the resolutions and meeting minutes of our shareholders, are located and maintained outside the PRC. In addition, we are not aware of any offshore holding companies with a corporate structure similar to ours that has been deemed a PRC "resident enterprise" by the PRC tax authorities. However, as the tax residency status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term "de facto management body".

If we are deemed to be a PRC "resident enterprise" by PRC tax authorities, we will be subject to PRC enterprise income tax on our worldwide income at a uniform tax rate of 25%, although dividends distributed to us from our existing PRC subsidiaries and any other PRC subsidiaries which we may establish from time to time could be exempt from the PRC dividend withholding tax due to our PRC "resident recipient" status. This could have a material and adverse effect on our overall effective tax rate, our income tax expenses and our net income. Furthermore, dividends, if any, paid to our shareholders may be decreased as a result of the decrease in distributable profits. In addition, if we were considered a PRC "resident enterprise", any dividends we pay to our non-PRC investors, and the gains realized from the transfer of our Ordinary Shares may be considered income derived from sources within the PRC and be subject to PRC tax, at a rate of 10% in the case of non-PRC enterprises or 20% in the case of non-PRC individuals (in each case, subject to the provisions of any applicable tax treaty). It is unclear whether holders of our Ordinary Shares would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. This could have a material and adverse effect on the value of your investment in us and the price of our Ordinary Shares.

***There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiaries, and dividends payable by our PRC subsidiaries to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.***

Under the EIT Law and its implementation rules, the profits of a foreign invested enterprise generated through operations, which are distributed to its immediate holding company outside the PRC, will be subject to a withholding tax rate of 10%. Pursuant to the *Arrangement between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income*, or the Double Tax Avoidance Arrangement, a withholding tax rate of 10% may be lowered to 5% if the PRC enterprise is at least 25% held by a Hong Kong enterprise for at least 12 consecutive months prior to distribution of the dividends and is determined by the relevant PRC tax authority to have satisfied other conditions and requirements under the Double Tax Avoidance Arrangement and other applicable PRC laws.

However, based on the *Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties*, or the SAT Circular 81, which became effective on February 20, 2009, if the relevant PRC tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment. According to *Circular on Several Issues regarding the "Beneficial Owner" in Tax Treaties*, which became effective as of April 1, 2018, when determining an applicant's status as the "beneficial owner" regarding tax treatments in connection with dividends, interests, or royalties in the tax treaties, several factors will be taken into account. Such factors include whether the business operated by the applicant constitutes actual business activities, and whether the counterparty country or region to the tax treaties does not levy any tax, grant tax exemption on relevant incomes, or levy tax at an extremely low rate. This circular further requires any applicant who intends to be proved of being the "beneficial owner" to file relevant documents with the relevant tax authorities. Our PRC subsidiaries is wholly owned by their respective HK based parent companies. However, we cannot assure you that our determination regarding our qualification to enjoy the preferential tax treatment will not be challenged by the relevant PRC tax authority or we will be able to complete the necessary filings with the relevant PRC tax authority and enjoy the preferential withholding tax rate of 5% under the Double Tax Avoidance Arrangement with respect to dividends to be paid by our PRC subsidiaries to our HK subsidiaries, in which case, we would be subject to the higher withdrawing tax rate of 10% on dividends received.

***PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans or additional capital contributions to our PRC subsidiaries, the VIE and its subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.***

We are an offshore holding company conducting our operations in China through Sunrise Guizhou, the VIE and its subsidiaries. We may make loans to Sunrise Guizhou, the VIE and its subsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any capital contributions or loans that we, as an offshore entity, make to our PRC subsidiaries, are subject to PRC regulations. For example, loans to our PRC subsidiaries cannot exceed statutory limits and are subject to foreign exchange loan registrations. Our capital contributions to our PRC subsidiaries must be registered with the MOFCOM or its local counterpart. For more details, see "Regulation—Regulations Related to Foreign Debt." and "Regulation—Regulations Related to Foreign Exchange."

In light of the various requirements imposed by of PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals or filings on a timely basis, if at all, with respect to future loans by us to our PRC subsidiaries or the VIE or with respect to future capital contributions by us to our PRC subsidiaries. If we fail to complete such registrations or obtain such approvals on a timely basis or at all, our ability to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

***Government control in currency conversion may adversely affect our financial condition, our ability to remit dividends, and the value of your investment.***

The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our revenues in Renminbi. Under our current corporate structure, our Cayman Islands holding company may rely on dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have.

Under existing PRC foreign exchange regulations, Renminbi cannot be freely converted into any foreign currency, and conversion and remittance of foreign currencies are subject to PRC foreign exchange regulations. It cannot be guaranteed that under a certain exchange rate, we will have sufficient foreign exchange to meet our foreign exchange requirements. Under the current PRC foreign exchange control system, foreign exchange transactions under the current account conducted by us, including the payment of dividends, do not require advance approval from SAFE, but we are required to present documentary evidence of such transactions and conduct such transactions at designated foreign exchange banks within China that have the licenses to carry out foreign exchange business. Foreign exchange transactions under the capital account conducted by us, however, must be approved in advance by SAFE.

Under existing foreign exchange regulations, we will be able to pay dividends in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. However, we cannot assure you that these foreign exchange policies regarding payment of dividends in foreign currencies will continue in the future.

In fact, in light of the flood of capital outflows of China in 2016 due to the weakening Renminbi, the PRC government has imposed more restrictive foreign exchange policies and stepped up scrutiny of major outbound capital movement including overseas direct investment. More restrictions and substantial vetting process are put in place by SAFE to regulate cross-border transactions falling under the capital account. If any of our shareholders regulated by such policies fails to satisfy the applicable overseas direct investment filing or approval requirement timely or at all, it may be subject to penalties from the relevant PRC authorities. The PRC government may at its discretion further restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of the Ordinary Shares. Our capital expenditure plans and our business, operating results and financial condition may be materially and adversely affected.

***If we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation.***

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U.S. public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese companies sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on us, our business and our stock price. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our company. This situation will be costly and time consuming and distract our management from growing our business. If such allegations are not proven to be groundless, we and our business operations will be severely affected and you could sustain a significant decline in the value of our stock.

***The disclosures in our reports and other filings with the SEC and our other public pronouncements may be subject to the scrutiny of any regulatory bodies in the PRC.***

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We are regulated by the SEC and our reports and other filings with the SEC are subject to SEC review in accordance with the rules and regulations promulgated by the SEC under the Securities Act and the Exchange Act. Our SEC reports and other disclosures and public pronouncements are not subject to the review or scrutiny of any PRC regulatory authority. For example, the disclosure in our SEC reports and other filings are not subject to the review by the CSRC, a PRC regulator that is responsible for oversight of the capital markets in China. However, on February 17, 2023, with the approval of the State Council, the CSRC released the Trial Measures and five supporting guidelines, which took effect on March 31, 2023. According to the Trial Measures, PRC domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedures and submit relevant documents, including the prospectus and other listing documents submitted to overseas regulatory authorities, to the CSRC. However, as the laws and regulations are relatively new, substantial uncertainties exist with respect to its interpretation and implementation regarding such laws and regulations. It is not clear how the CSRC may review and scrutinize these listing documents and we cannot assure you whether and how such scrutiny may affect our listing on an U.S. exchange.

***The Holding Foreign Companies Accountable Act and related regulations all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our continued listing on the Nasdaq, and Nasdaq may determine to delist our securities if the PCAOB determines that it cannot inspect or fully investigate our auditor.***

On April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in emerging markets.

On May 18, 2020, Nasdaq filed three proposals with 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 director 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's auditors.

On December 18, 2020, the "Holding Foreign Companies Accountable Act" was signed by President Donald Trump and became law. This legislation requires certain issuers of securities to establish that they are not owned or controlled by a foreign government. Specifically, an issuer must make this certification if the PCAOB is unable to audit specified reports because the issuer has retained a foreign public accounting firm not subject to inspection by the PCAOB. Furthermore, if the PCAOB is unable to inspect the issuer's public accounting firm for three consecutive years beginning in 2021, the issuer's securities are banned from trade on a national exchange or through other methods.

On June 22, 2021, the U.S. Senate passed the "Accelerating Holding Foreign Companies Accountable Act", which proposed to decrease the number of non-inspection years for foreign companies to comply with PCAOB audits from three to two years, thus reducing the time period before their securities may be prohibited from trading or delisted.

On December 16, 2021, the PCAOB issued a report on its determinations that the Board was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, a Special Administrative Region of the People's Republic of China (PRC), because of positions taken by PRC authorities in those jurisdictions (the "Determination"). The Board made these determinations pursuant to PCAOB Rule 6100, which provides a framework for how the PCAOB fulfills its responsibilities under the Holding Foreign Companies Accountable Act (HFCAA).

On August 26, 2022, the CSRC, the MOF, and the PCAOB signed a Protocol, governing inspections and investigations of audit firms based in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC.

On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB's access in the future, the PCAOB Board will consider the need to issue a new determination.

On December 29, 2022, the provisions of the Accelerating Holding Foreign Companies Accountable Act were signed into law by President Biden as part of the Consolidated Appropriations Act, amending the HFCAA and requiring the SEC to prohibit an issuer's securities from trading on any U.S. stock exchange if its auditor is not subject to PCAOB inspections for two consecutive years instead of three consecutive years. The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and has resumed regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has also indicated that it will act immediately to issue new determinations with the HFCAA, if needed.

Our former and current auditor are PCAOB-registered public accounting firms subject to laws in the United States, pursuant to which the PCAOB conducts regular inspections to assess our auditor's compliance with the applicable professional standards As such, as of the date of this annual report, our listing is not affected by the Holding Foreign Companies Accountable Act and related regulations. However, we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor's audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as related to the audit of our financial statements. Furthermore, there is a risk that our auditor cannot be inspected by the PCAOB in the future. The lack of inspection could cause trading in our securities to be prohibited under the Holding Foreign Companies Accountable Act, and, as a result, Nasdaq may determine to delist our securities, which may cause the value of our securities to decline or become worthless.

***The failure to comply with PRC regulations relating to mergers and acquisitions of domestic entities by offshore special purpose vehicles may subject us to severe fines or penalties and create other regulatory uncertainties regarding our corporate structure.***

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On August 8, 2006, MOFCOM, joined by the CSRC, the State-owned Assets Supervision and Administration Commission of the State Council, the SAT, the State Administration for Industry and Commerce (the "SAIC", currently known as the PRC State Administration for Market Regulation, or the SAMR), and State Administration of Foreign Exchange ("SAFE"), jointly promulgated regulations entitled the Provisions Regarding Mergers and Acquisitions of Domestic Entities by Foreign Investors (the "M&A Rules"), which took effect as of September 8, 2006, and as amended on June 22, 2009. These regulations, among other things, have certain provisions that require offshore special purpose vehicles formed for the purpose of acquiring PRC domestic companies and controlled directly or indirectly by PRC individuals and companies, to obtain the approval of MOFCOM prior to engaging in such acquisitions and to obtain the approval of the CSRC prior to publicly listing their securities on an overseas stock market. On September 21, 2006, the CSRC published on its official website a notice specifying the documents and materials that are required to be submitted for obtaining CSRC approval. The application of the M&A Rules with respect to our corporate structure remains unclear, with no current consensus existing among leading PRC law firms regarding the scope and applicability of the M&A Rules.

If the CSRC, MOFCOM, or another PRC regulatory agency determines that government approval was required for the VIE arrangement between GIOP BJ and the VIE, or if prior CSRC approval for overseas financings is required and not obtained, we may face severe regulatory actions or other sanctions from MOFCOM, the CSRC or other PRC regulatory agencies. In such event, these regulatory agencies may impose fines or other penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from overseas financings into the PRC, restrict or prohibit payment or remittance of dividends to us or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our Class A Ordinary Shares. The CSRC or other PRC regulatory agencies may also take actions requiring us, or making it advisable for us, to delay or cancel overseas financings, to restructure our current corporate structure, or to seek regulatory approvals that may be difficult or costly to obtain.

***PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries' ability to increase its registered capital or distribute profits to us, or may otherwise adversely affect us.***

On July 4, 2014, SAFE issued the Circular on Issues Concerning Foreign Exchange Control over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles, or SAFE Circular 37, which became effective as of July 4, 2014 and has replaced the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents' Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles ("SAFE Circular 75"). According to SAFE Circular 37, prior registration with the local SAFE branch is required for PRC residents, including PRC individuals and PRC corporate entities as well as foreign individuals that are deemed as PRC residents for foreign exchange administration purpose, in connection with their direct or indirect contribution of domestic assets or interests to offshore companies, known as SPVs. SAFE Circular 37 further requires amendment to the SAFE registrations in the event of any changes with respect to the basic information of the offshore special purpose vehicle, such as change of a PRC individual shareholder, name and operation term, or any significant changes with respect to the offshore special purpose vehicle, such as increase or decrease of capital contribution, share transfer or exchange, or mergers or divisions. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future. In February 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, effective June 2015. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE Circular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the applications and accept registrations under the supervision of SAFE.

In addition to SAFE Circular 37 and SAFE Notice 13, our ability to conduct foreign exchange activities in China may be subject to the interpretation and enforcement of the Implementation Rules of the Administrative Measures for Individual Foreign Exchange promulgated by SAFE in January 2007 (as amended and supplemented, the "Individual Foreign Exchange Rules"). Under the Individual Foreign Exchange Rules, any PRC individual seeking to make a direct investment overseas or engage in the issuance or trading of negotiable securities or derivatives overseas must make the appropriate registrations in accordance with SAFE provisions, the failure of which may subject such PRC individual to warnings, fines or other liabilities.

All of our shareholders who are subject to the SAFE Circular 37 and Individual Foreign Exchange Rules have completed the initial registrations with the qualified banks as required by the regulations. However, we may not be informed of the identities of all the PRC residents holding direct or indirect interest in our company, and we have no control over any of our beneficial owners. Thus, we cannot provide any assurance that our current or future PRC resident beneficial owners will comply with our request to make or obtain any applicable registrations or continuously comply with all registration procedures set forth in these SAFE regulations. Such failure or inability of our PRC residents beneficial owners to comply with these SAFE regulations may subject us or our PRC residents beneficial owners to fines and legal sanctions, restrict our cross-border investment activities, or limit our PRC subsidiaries' ability to distribute dividends to, or obtain foreign-exchange-dominated loans from, our company, or prevent us from being able to make distributions or pay dividends, as a result of which our business operations and our ability to distribute profits to you could be materially adversely affected.

***Our contractual arrangements with the VIE are governed by the laws of the PRC and we may have difficulty in enforcing any rights we may have under these contractual arrangements.***

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As all of our contractual arrangements with the VIE are governed by the PRC laws and provide for the resolution of disputes through arbitration in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. Disputes arising from these contractual arrangements between us and the VIE will be resolved through arbitration in China, although these disputes do not include claims arising under the United States federal securities law and thus do not prevent you from pursuing claims under the United States federal securities law. The legal environment in the PRC is not as developed as in the United States. As a result, uncertainties in the PRC legal system could further limit our ability to enforce these contractual arrangements, through arbitration, litigation and other legal proceedings remain in China, which could limit our ability to enforce these contractual arrangements and exert effective control over the VIE. Furthermore, these contracts may not be enforceable in China if PRC government authorities or courts take a view that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event we are unable to enforce these contractual arrangements, we may not be able to exert effective control over the VIE, and our ability to conduct our business may be materially and adversely affected.

***Increases in labor costs in the PRC may adversely affect our business and our profitability.***

China's economy has experienced increases in labor costs in recent years, which is expected to continue to grow. The average wage level for our employees has also increased in recent years. We expect that our labor costs, including wages and employee benefits, will continue to increase. Unless we are able to pass on these increased labor costs to our customers by increasing prices for our products or services, our profitability and results of operations may be materially and adversely affected.

In addition, we have been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees and paying various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and childbearing insurance to designated government agencies for the benefits of our employees. Pursuant to the PRC Labor Contract Law, or the Labor Contract Law, that became effective in January 2008 and its implementing rules that became effective in September 2008 and its amendments that became effective in July 2013, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employees' probation and unilaterally terminating labor contracts. In the event that we decide to terminate some of our employees or otherwise change our employment or labor practices, the Labor Contract Law and its implementation rules may limit our ability to effect those changes in a desirable or cost-effective manner, which could adversely affect our business and results of operations.

As the interpretation and implementation of labor-related laws and regulations are still evolving, we cannot assure you that our employment practice does not and will not violate labor-related laws and regulations in China, which may subject us to labor disputes or government investigations. If we are deemed to have violated relevant labor laws and regulations, we could be required to provide additional compensation to our employees and our business, financial condition and results of operations could be materially and adversely affected.

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

The SEC, the U.S. Department of Justice and other U.S. authorities may also have difficulties in bringing and enforcing actions against us or our directors or executive officers in the PRC. The SEC has stated that there are significant legal and other obstacles to obtaining information needed for investigations or litigation in China. Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in Hong Kong or other jurisdictions may not be efficient in the absence of mutual and practical cooperation mechanism. Furthermore, China has recently adopted a revised securities law that became effective on March 1, 2020, Article 177 of which provides, among other things, that no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. Accordingly, without governmental approval in China, no entity or individual in China may provide documents and information relating to securities business activities to overseas regulators when it is under direct investigation or evidence discovery conducted by overseas regulators. While detailed interpretation of or implementation rules under Article 177 have yet to be promulgated, it could present significant legal and other obstacles to obtaining information needed for investigations and litigation conducted outside of China, which may further increase difficulties faced by you in protecting your interests.

**Risks Related to Our Class A Ordinary Shares and the Trading Market**

***If we are a passive foreign investment company for United States federal income tax purposes for any taxable year, United States holders of our Class A Ordinary Shares could be subject to adverse United States federal income tax consequences.***

A non-United States corporation will be a passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year if either (i) at least 75% of its gross income for such taxable year is passive income or (ii) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce or are held for the production of passive income. Based on the current and anticipated value of our assets and the composition of our income and assets, we do not expect to be a PFIC for United States federal income tax purposes for our current taxable year or in the foreseeable future. However, the determination of whether or not we are a PFIC according to the PFIC rules is made on an annual basis and will depend on the composition of our income and assets and the value of our assets from time to time. Therefore, changes in the composition of our income or assets or the value of our assets may cause us to become a PFIC. The determination of the value of our assets (including goodwill not reflected on our balance sheet) may be based, in part, on the quarterly market value of our Class A Ordinary Shares, which is subject to change and may be volatile. It is possible that, for any subsequent year, more than 50% of our assets may be assets which produce passive income. We will make this determination following the end of any particular tax year.

Although the U.S. tax law with regards to VIEs is unclear, we are treating the VIE as being owned by us for United States federal income tax purposes, not only because we control their management decisions, but also because we are entitled to the economic benefits associated with the VIE, and as a result, we are treating the VIE as our wholly-owned subsidiary for U.S. federal income tax purposes. For purposes of the PFIC analysis, in general, according to Section 1297(c) of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), a non-U.S. corporation is deemed to own its pro rata share of the gross income and assets of any entity in which it is considered to own at least 25% of the equity by value. Although our Company does not technically own any stock in the VIE there are numerous factors that give rise to a strong conclusion that its control of management decisions, the entitlement to economic benefits associated with the VIE, and the inclusion of the VIE as part of the consolidated group (Under Accounting Standards Codification (ASC) Topic 810, "Consolidation," VIEs are generally consolidated with other related entities under common control) is so akin to our Company holding a stock interest in the VIE that it is reasonable and consistent to consider our Company's interest in the VIE as a deemed stock interest. Therefore, the income and assets of the VIE should be included in the determination of whether or not we are a PFIC in any taxable year. It is important to emphasize that there is little to no guidance other than the statute itself (Internal Revenue Code Section 1297(c)) and analogous portions of the code, treasury regulations and other accepted authorities and as such it is possible for the IRS to challenge the argument that the look through rule would apply in this case, especially since the statute explicitly says "stock".

The classification of certain of our income as active or passive, and certain of our assets as producing active or passive income, and hence whether we are or will become a PFIC, depends on the interpretation of certain United States Treasury Regulations as well as certain IRS guidance relating to the classification of assets as producing active or passive income. Such regulations and guidance are potentially subject to different interpretations. If due to different interpretations of such regulations and guidance the percentage of our passive income or the percentage of our assets treated as producing passive income increases, we may be a PFIC in one or more taxable years.

If we are a PFIC for any taxable year during which a United States person holds Class A Ordinary Shares, certain adverse United States federal income tax consequences could apply to such United States person.

For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were or are determined to be a PFIC, see "Taxation—U.S. Federal Income Taxation—Passive Foreign Investment Company."

U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISERS ABOUT THE PFIC RULES, THE POTENTIAL APPLICABILITY OF THESE RULES TO THE COMPANY CURRENTLY AND IN THE FUTURE, AND THEIR FILING OBLIGATIONS IF THE COMPANY IS A PFIC.

***We have identified several material weaknesses in our internal control over financial reporting. If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results or prevent fraud.***

The Securities and Exchange Commission, as required by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring every public company to include a management report on such company's internal controls over financial reporting in its annual report, which contains management's assessment of the effectiveness of the company's internal controls over financial reporting. In addition, an independent registered public accounting firm must attest to and report on management's assessment of the effectiveness of the company's internal controls over financial reporting when the Company no longer qualifies as an emerging company. Our reporting obligations as a public company place a significant strain on our management, operational and financial resources and systems for the foreseeable future.

Since we are an emerging company, our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. During the course of preparing our consolidated financial statements as of and for the fiscal year ended December 31, 2025, we identified material weaknesses and other control deficiencies in our internal control over financial reporting. Many of the deficiencies noted below were communicated to us from our independent registered public accounting firm as observations, which stemmed from their audit. The material weaknesses identified included: (1) a lack of formal internal controls policies over financial closing and reporting processes, which may increase risk of error, fraud, misstatement of financial reporting, or even non-compliance with related regulations for a U.S. listed Group; (2) a lack of accounting staff and resources with appropriate knowledge of U.S. GAAP and SEC reporting and compliance requirements, and accounting policies and procedures manual that covers U.S. GAAP and SEC financial reporting requirements to complete relate US GAAP and SEC reporting; and (3) a lack of appropriately restricted to privileged level access to employees. As a result of the above, our management has concluded that, as of December 31, 2025, our disclosure controls and procedures were not effective.

We are taking a number of measures to address the control deficiencies identified, including: (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework; (ii) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel; (iii) preparing a comprehensive accounting policies and procedures manual that covers financial closing and reporting processes, U.S. GAAP and SEC financial reporting requirements, and ensuring that accounting personnel are familiar with and follow the manual; and (iv) Reinforcing the implementation of IT authorization limits matrix and segregation of duties systems to ensure the appropriateness of all approvals, authorizations, and confirmations granted.

Effective internal controls over financial reporting are necessary for us to produce reliable financial reports and are important to help prevent fraud. As a result, our failure to achieve and maintain effective internal controls over financial reporting could result in the loss of investor confidence in the reliability of our financial statements, which in turn could harm our business and negatively impact the trading price of our Class A Ordinary Shares. Furthermore, we anticipate that we will incur considerable costs and devote significant management time and efforts and other resources to comply with Section 404 of the Sarbanes-Oxley Act.

***We do not intend to pay dividends for the foreseeable future.***

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We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. As a result, you may only receive a return on your investment in our Class A Ordinary Shares if the market price of our Class A Ordinary Shares increases.

***The market price of our Class A Ordinary Shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the initial public offering price.***

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The market price of our Class A Ordinary Shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

● actual or anticipated fluctuations in our revenue and other operating results;

● the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;

● actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;

● announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;

● price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;

● lawsuits threatened or filed against us; and

● other events or factors, including those resulting from war or incidents of terrorism, or responses to these events.

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, shareholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.

***As a foreign private issuer, we are not subject to certain U.S. securities law disclosure requirements that apply to a domestic U.S. issuer, and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, which may limit the information publicly available to our investors and afford them less protection than if we were a U.S. issuer.***

As a Cayman Islands company listed on the Nasdaq Global Select Market, we are subject to the Nasdaq Stock Market listing standards ("Nasdaq Rules"). However, the Nasdaq Rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq Rules. We currently follow home country practice in lieu of the requirements under the Nasdaq Rules with respect to certain corporate governance standards. For example, based on home country practice, we are not required to seek shareholder approval for issuance of 20% or more of our outstanding ordinary shares or voting power in a private offering (as defined by Nasdaq Rules). Accordingly, our shareholders may not be provided with the benefits of certain corporate governance requirements of the Nasdaq Rules. Please see ITEM 16.G. CORPORATE GOVERNANCE for further details.

Further, as a foreign private issuer we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act and therefore there may be less publicly available information about us than if we were a U.S. domestic issuer. We are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:

● the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K;

● the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;

● the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and the selective disclosure rules by issuers of material non-public information under Regulation FD.

We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.

***Anti-takeover provisions in our memorandum and articles of association may discourage, delay or prevent a change in control.***

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Some provisions in our memorandum and articles of association, may discourage, delay or prevent a change in control of our company or management that shareholders may consider favorable, including, among other things, the following:

● provisions that permit our board of directors by resolution to issue classes of shares with preferred, deferred or other special rights or restrictions as the board of directors determine in their discretion, without any further vote or action by our shareholders. If issued, the rights, preferences, designations and limitations of any class of preferred shares could operate to the disadvantage of the outstanding ordinary shares the holders of which would not have any pre-emption rights in respect of such an issue of preferred shares. Such terms could include, among others, preferences as to dividends and distributions on liquidation, or could be used to prevent possible corporate takeovers;

● provisions that restrict the ability of our shareholders holding in aggregate less than thirty percent (30%) of the outstanding voting shares in the company to call general meetings or annual general meetings and to include matters for consideration at shareholder meetings; and

● provisions that prevent shareholders holding in aggregate less than ten percent (10%) of the outstanding voting shares in the company to requisition general meetings of the Company.

***If we cannot satisfy the listing requirements and other rules of Nasdaq Capital Market, our securities may be delisted, which could negatively impact the price of our securities and your ability to sell them.***

In order to maintain our listing on the Nasdaq Capital Market, we are required to comply with certain rules of Nasdaq Capital Market, including those regarding minimum stockholders' equity, minimum share price and certain corporate governance requirements. Even if we initially meet the listing requirements and other applicable rules of the Nasdaq Capital Market, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our securities could be subject to delisting.

If the Nasdaq Capital Market delists our securities from trading, we could face significant consequences, including:

● a limited availability for market quotations for our securities;

● reduced liquidity with respect to our securities;

● a determination that our Class A Ordinary Shares are a "penny stock," which will require brokers trading in our Class A Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Class A Ordinary Shares;

● limited amount of news and analyst coverage; and

● a decreased ability to issue additional securities or obtain additional financing in the future.

***You may be unable to call, requisition or present proposals before general meetings.***

Cayman Islands law provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company's articles of association and have been provided for in the amended articles and memorandum of association of the Company, subject to the restrictions described therein. General meetings may be convened on the written requisition of one or more of the shareholders entitled to attend and vote at our general meetings who (together) hold not less than ten percent of the rights to vote at such general meetings.

To the extent that shareholders hold in aggregate less than thirty percent (30%) of the outstanding voting shares in the Company, they cannot: (a) call general meetings or annual general meetings; and (b) include matters for consideration at shareholder meetings.

A shareholder may give notice to the Company of business proposed to be brought before an annual general meeting provided that such notice of proposal of business must be delivered to, or mailed and received at the principal executive offices of the Company not less than ninety (90) days and not more than one hundred and twenty (120) days prior to the one-year anniversary of the preceding year's annual general meeting; provided, however, that if the date of the annual general meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, such notice by the Member, to be timely, must be so delivered, or so mailed and received, not later than the ninetieth (90th) day prior to such annual general meeting or, if later, the tenth (10th) day following the day on which "public disclosure" of the date of such meeting was first made by the Company.

***The dual-class structure of our ordinary shares may adversely affect the trading market and price for our Class A Ordinary Shares.***

We have adopted a dual-class share voting structure. Several shareholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the dual class structure of our ordinary shares may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure. Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the value of our Class A Ordinary Shares. Furthermore, our Class A Ordinary Shares may be excluded from certain stock indices as a result of our disparate voting stock structure, which structure may adversely affect the trading market and price for our Class A Ordinary Shares.

***Nasdaq has proposed a new $5 million minimum market value continued listing requirement that, if approved, could result in immediate suspension and delisting of our Class A Ordinary Shares without any cure period or opportunity to regain compliance.***

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On January 13, 2026, Nasdaq proposed new listing rules requiring companies on the Nasdaq Global and Capital Markets to maintain a minimum market value of listed securities of at least $5 million. Under this proposal, if our market value falls below $5 million for 30 consecutive business days, our Class A Ordinary Shares would be immediately suspended from trading and delisted from Nasdaq, with no cure period, no compliance period, and no stay of suspension during any appeal.

This proposed rule represents a fundamental departure from Nasdaq's traditional approach to listing deficiencies. Unlike other continued listing requirements that provide companies with 180 days or more to regain compliance, the proposed market value requirement would result in immediate and irreversible consequences. While we could request a hearing before a Nasdaq Listing Qualifications Hearings Panel to appeal a delisting determination, such a request would not prevent the immediate suspension of our Class A Ordinary Shares from trading. Furthermore, the panel would have extremely limited discretion and could only reverse the delisting decision if it determines that the initial determination was in error, and the panel could not consider evidence that we had subsequently regained compliance or grant us additional time to do so.

Nasdaq's proposal reflects its belief that once a company's market value falls below $5 million, the challenges facing that company are generally not temporary and are so severe that the company is unlikely to regain and sustain compliance for the long term. Nasdaq further believes it is difficult to maintain fair and orderly markets for such low-value companies. The SEC must decide on the proposal within 45 days of publication in the Federal Register, unless it extends the review period, creating uncertainty regarding whether and when this rule may become effective.

Our market value is calculated as our consolidated closing bid price multiplied by our total listed securities. Factors that could cause our market value to fall below the proposed threshold include continued stock price decline, lack of investor interest, adverse market conditions, negative developments in our business operations, dilutive financing transactions, or broader market volatility affecting microcap companies.

This proposal is part of a broader trend of Nasdaq tightening listing standards for smaller issuers, including recent rules granting Nasdaq discretion to deny initial listings based on susceptibility to manipulative trading and other market value-based requirements. This increasingly stringent regulatory environment creates greater challenges for microcap companies such as us to maintain public listings.

If the proposed $5 million market value continued listing requirement is approved and we subsequently fail to maintain the required market value for 30 consecutive business days, our Class A Ordinary Shares would be immediately suspended from trading and delisted from Nasdaq without any opportunity to cure the deficiency. Such suspension and delisting would have severe adverse consequences for our business, our ability to raise capital, and the liquidity and value of our shareholders' investments. Moreover, even if we remain in compliance with quantitative criteria, Nasdaq retains discretionary authority under Rule IM-5101-1 to suspend or terminate a company's listing if necessary to protect investors or ensure the orderly operation of the market, which could result in similar adverse consequences even absent a failure to meet specific quantitative thresholds.

Because we are a small company, the requirements of being a public company, including compliance with the reporting requirements of the Exchange Act and certain requirements of the Sarbanes-Oxley Act of 2022 (the "Sarbanes-Oxley Act") and the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), may strain our resources, increase our costs and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner.

As a public company with listed equity securities, we must comply with the federal securities laws, rules, and regulations, including certain corporate governance provisions of the Sarbanes-Oxley Act and the Dodd-Frank Act, related rules and regulations of the SEC and Nasdaq, with which a private company is not required to comply. Complying with these laws, rules and regulations occupies a significant amount of the time of our board of directors and management and significantly increases our costs and expenses. Among other things, we must:

● maintain a system of internal control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC;

● comply with rules and regulations promulgated by Nasdaq;

● prepare and distribute periodic public reports in compliance with our obligations under the federal securities laws;

● maintain various internal compliance and disclosures policies, such as those relating to disclosure controls and procedures and insider trading in our Class A Ordinary Shares; and

● involve and retain to a greater degree outside counsel and accountants in the above activities.

**ITEM 4. INFORMATION ON THE COMPANY**

**A. History and Development of the Company**

We are a holding company incorporated in the Cayman Islands. As a holding company with no material operations of our own, we primarily operate our businesses through PRC operating entities. In 2022, Sunrise Guizhou was established by our wholly owned subsidiary, Zhuhai Zibo, and certain other joint venture partners, as a limited company pursuant to PRC laws, for the purpose of manufacturing and sales of graphite anode materials. Zhuhai Zibo currently owns a 39.35% equity interest in Sunrise Guizhou, but has the power to cast a majority of votes at the meeting of the board of directors and governs the financial and operating policies of Sunrise Guizhou under an agreement among the shareholders. We operate a knowledge sharing platform through the VIE, of which we do not own any equity interest; rather we consolidate the VIE via a series of contractual arrangements between GIOP BJ and the VIE. The VIE (formerly known as Beijing Huatai Yihe Co., Ltd.) was established in 2014 as a limited company pursuant to PRC laws for the purpose of providing corporate consulting services.

The VIE established a wholly owned subsidiary, GMB Hangzhou, on November 1, 2017, pursuant to PRC laws.

In 2017 and 2018, the VIE also established three subsidiaries pursuant to PRC laws, which were GMB (Beijing), GMB Culture, and GMB Consulting. The VIE owns 51% of the equity interest of each of these three subsidiaries. Additionally, GMB Culture has a subsidiary, Mentor Board Voice of Seeding (Shanghai) Cultural Technology Co., Ltd., and owns 60% of its equity interest.

On February 22, 2019, the holding company, E-Power Inc. (then known as Global Internet of People, Inc.), was incorporated as an exempted company with limited liability under the laws of the Cayman Islands. E-Power Inc. owns 100% of GMB HK, a Hong Kong company incorporated on March 22, 2019.

On June 3, 2019, GIOP BJ was incorporated pursuant to PRC laws as a wholly foreign owned enterprise. GMB HK holds 100% of the equity interest in GIOP BJ. On August 26, 2022, GMB HK transferred its equity interest in GIOP BJ to Zhuhai Zibo, and GIOP BJ became a wholly owned subsidiary of Zhuhai Zibo.

On October 16, 2020, the VIE established another wholly owned subsidiary, Zibo Shidong, pursuant to PRC laws. See "Item 4C. Organizational Structure for a chart of our current structure."

On February 11, 2021, the Company closed its initial public offering ("IPO"). The ordinary shares of par value US$0.0001 each in the capital of the Company commenced trading on The Nasdaq Capital Market under the ticker symbol "SDH" on February 9, 2021.

On October 8, 2021, the Company established a wholly-owned-subsidiary, SDH New Energy, pursuant to Hong Kong laws.

On October 15, 2021, SDH New Energy established a wholly-owned-subsidiary, Zhuhai Zibo, pursuant to PRC laws.

On November 23, 2021, SDH New Energy established a wholly-owned-subsidiary, Zhuhai Guizhou, pursuant to PRC laws.

On January 7, 2022, the VIE established Beijing Mentor Board Health Technology Co., Ltd ("GMB Health") pursuant to PRC laws. The VIE owns 100% of the equity interest of GMB Health. Additionally, on December 8, 2023, GMB Health acquired a subsidiary, Shidong Yike (Beijing) Technology Co., Ltd., and owns 51% of its equity interest.

On April 2, 2022, Zhuhai Zibo entered into an investment agreement (the "Agreement") with certain parties to form Sunrise Guizhou, a joint venture (the "JV") dedicated to the production of high-grade lithium-ion power battery anode materials. Pursuant to the Agreement, Zhuhai Zibo owned 51% equity interest in the JV. The Agreement and related transactions were approved by E-Power Inc.'s shareholders at an extraordinary general meeting of shareholders held on April 1, 2022.

On June 13, 2022, Zhuhai Zibo and the other thirteen founding shareholders of Sunrise Guizhou (the "Original Shareholders") entered into an investment agreement (the "Investment Agreement") with Guizhou Province New Kinetic Industry Development Fund Partnership (the "Investor"). Pursuant to the Investment Agreement, the Investor invested RMB 200 million in Sunrise in exchange for 22.8395% of Sunrise Guizhou's equity interest (the "Capital Increase"), and the Original Shareholders have agreed to waive their pre-emptive rights and accept the Investor as a new shareholder of Sunrise. As a result of the Capital Increase, each Original Shareholder's equity interest in Sunrise was reduced by the same ratio. Zhuhai Zibo's equity share in Sunrise Guizhou was reduced from 51% to 39.3519%. On April 12, 2022, Zhuhai Zibo entered into an "Agreement of Action in Concert" with twelve of the thirteen Original Shareholders, who agreed to act in concert with Zhuhai Zibo in matters relating to the corporate governance of Sunrise, including voting on shareholder proposals and nominating directors of Sunrise Guizhou. The Agreement of Action in Concert ensures that Zhuhai Zibo controls 74.0743% of Sunrise Guizhou's voting rights after the Capital Increase took effect pursuant to the Investment Agreement.

On July 11, 2022, the Company relocated its principal executive offices from Room 208, Building 1, No. 28 Houtun Road, Haidian District, Beijing, PRC, to Room 703, West Zone, R&D Building, Zibo Science and Technology Industrial Entrepreneurship Park, No. 69 Sanying Road, Zhangdian District, Zibo City, Shandong Province, PRC.

On August 5, 2022, at the 2022 annual general meeting of shareholders of the Company, the shareholders of the Company approved to change the Company's name from Global Internet of People, Inc. to Sunrise New Energy Co., Ltd. The name change of the Company became effective on August 10, 2022. In conjunction with the name change, the Company's Ordinary Shares of par value US$0.0001 each began trading on the NASDAQ Capital Market under the new ticker symbol "EPOW" as of the opening of trading on August 15, 2022.

On February 8, 2024, at the 2023 annual general meeting of shareholders of Company, the shareholders approved a re-designation and re-classification of the Company's Ordinary Shares into Class A Ordinary Shares and Class B Ordinary Shares.

On February 10, 2025, at the 2024 annual general meeting of shareholders of Company, the shareholders approved, among other things, (i) a special resolution to adopt amended and restated articles of association, which included, among other things, the removal of the requirement for the Company to hold annual general meetings, the removal of the provision that the office of an appointed director expires at the next following annual general meeting, and the removal of certain financial information disclosure requirements to shareholders; and (ii) ordinary resolutions to approve the re-election of Haiping Hu, Chao Liu, Xiang Luo, Jian Pei, and Xin Zhang as directors of the Company, each to hold office in accordance with the Company's articles of association.

On July 31, 2025, the Company entered into a securities purchase agreement with the investor named therein, pursuant to which the Company agreed to issue and sell, in a registered direct offering (the "July 2025 Registered Direct Offering"), 1,000,000 Class A ordinary shares of the Company, par value $0.0001 per share. The purchase price for each share was $0.55. The July 2025 Registered Direct Offering closed on September 23, 2025. None of the transaction expenses incurred in respect of the July 2025 Registered Direct Offering included payments to directors or officers of the Company or their associates, or any persons owning 10% or more of the equity securities of the Company or its affiliates. None of the net proceeds the Company received from the July 2025 Registered Direct Offering were paid, directly or indirectly, to any of the directors or officers of the Company or their associates, or any persons owning 10% or more of the equity securities of the Company or its affiliates. The Company received $550,000 in gross proceeds from the July 2025 Registered Direct Offering and has used the net proceeds from the July 2025 Registered Direct Offering for working capital and general corporate purposes.

On August 5, 2025, the Company entered into a joint venture agreement (the "JV Agreement") with SDH (HK), Kekecely Ltd, a corporation organized under the laws of British Virgin Islands, and Simple Cloud Technology, a corporation organized under the laws of the state of Maryland. Pursuant to the JV Agreement, the parties agreed to establish a joint venture to be named "Alchemistica Inc" (the "JV") under the laws of the State of Delaware, to support the expansion of the Company's operations into the United States. The parties have agreed to make an aggregate capital contribution of US$1,000,000 to finance the JV. The Company has contributed a total of US$399,000 and holds a 71% equity interest in the JV. As of the date of this annual report, the remaining parties have not made any contributions.

On August 8, 2025, the Company entered into a securities purchase agreement with the investor named therein, pursuant to which the Company agreed to issue and sell, in a registered direct offering (the "August 2025 Registered Direct Offering"), 3,000,000 Class A ordinary shares of the Company, par value $0.0001 per share. The purchase price for each share was $0.55. The August 2025 Registered Direct Offering closed on October 3, 2025. None of the transaction expenses incurred in respect of the August 2025 Registered Direct Offering included payments to directors or officers of the Company or their associates, or any persons owning 10% or more of the equity securities of the Company or its affiliates. None of the net proceeds the Company received from the August 2025 Registered Direct Offering were paid, directly or indirectly, to any of the directors or officers of the Company or their associates, or any persons owning 10% or more of the equity securities of the Company or its affiliates. The Company received $1,650,000 in gross proceeds from the registered direct offering and has used the net proceeds from the August 2025 Registered Direct Offering for working capital and general corporate purposes.

On November 3, 2025, the Company entered into subscription agreements with three purchasers, pursuant to which the purchasers agreed to subscribe for and purchase from the Company, and the Company agreed to issue and sell to the purchasers, an aggregate of 7,000,000 Class A ordinary shares, par value US$0.0001 per share, of the Company, together with warrants to purchase up to 3,500,000 Class A ordinary shares (the "November 2025 Warrants"), at a combined purchase price of $0.80 per unit, each unit consisting of one Class A ordinary share and one-half of one warrant, for an aggregate purchase price of $5,600,000 (the "November 2025 Offering"). The November 2025 Warrants have an exercise price of $0.80 per share, were initially exercisable immediately upon issuance, and expire one year from the date of issuance. The transaction was closed on November 19, 2025. None of the transaction expenses incurred in respect of the November 2025 Offering included payments to directors or officers of the Company or their associates, or any persons owning 10% or more of the equity securities of the Company or its affiliates. None of the net proceeds the Company received from the November 2025 Offering were paid, directly or indirectly, to any of the directors or officers of the Company or their associates, or any persons owning 10% or more of the equity securities of the Company or its affiliates. The Company has used $2,550,116 from the November 2025 Offering for working capital and general corporate purposes and intends to use the remaining net proceeds of $3,049,884 for the same purposes.

On January 5, 2026, at the 2025 annual general meeting of shareholders of the Company, the shareholders approved (i) ordinary resolutions to approve the re-election of each of Haiping Hu, Chao Liu, Xiang Luo, Jian Pei, and Xin Zhang as directors of the Company, each to hold office in accordance with the Company's articles of association; (ii) a special resolution to change the Company's name from Sunrise New Energy Co., Ltd. to E-Power Inc. and remove its dual foreign name; and (iii) a special resolution to adopt further amended and restated articles of association, in substitution for, and to the exclusion of, the Company's current amended and restated articles of association, to reflect the name changes.

Pursuant to PRC laws, each entity formed under PRC law shall have certain business scopes as submitted to the Administration of Industry and Commerce or its local counterpart. Pursuant to specific business scopes, approval by the relevant competent regulatory agencies may be required prior to commencement of business operations. As such, GIOP BJ's business scope is to primarily engage in the following: technology development, technology promotion, technology transfer, technical consultation, technical services; sales of self-developed products; business management consulting; corporate planning; conference services, organization of cultural and artistic exchange activities (excluding commercial performances); economic and trade consulting. Since the sole business of GIOP BJ is to provide the VIE with technical support, consulting services and other management services relating to its day-to-day business operations and management in exchange for a service fee approximately equal to the VIE's earnings before corporate income tax, i.e., the VIE's revenue after deduction of operating costs, expenses and other taxes, subject to adjustment based on services rendered and the VIE's operation needs, such business scope is necessary and appropriate under PRC laws.

We consolidate the VIE through contractual arrangements, which are described under "*Business — Contractual Arrangements between GIOP BJ,* the VIE *and Its Shareholders.*" E-Power Inc. is a holdings company with no business operation other than holding the shares in GMB HK, which is also a pass-through entity with no business operation.

Our principal executive offices are located at Room 703, West Zone, R&D Building, Zibo Science and Technology Industrial Entrepreneurship Park, No. 69 Sanying Road, Zhangdian District, Zibo City, Shandong Province, PRC, and our phone number is +86 10-82967728. Our registered office in the Cayman Islands is located at Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands, and the phone number of our registered office is +1 345 945 3901. We maintain a corporate website at https://www.sunrisenewenergy.com/.

Investor inquiries should be directed to us at the address and telephone number of our principal executive offices set forth above. Our agent for service of process in the United States is Cogency Global Inc., 122 East 42nd Street, 18th Floor, New York, NY 10168.

The SEC maintains a website at *www.sec.gov* that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC using its EDGAR system.

See "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditures" for a discussion of our capital expenditures.

**B. Business Overview**

We are a Cayman Islands holding company conducting a substantial portion of our operations in China through our PRC operating entities. Unless otherwise stated, as used in this annual report, the term's "we," "us," "our," "E-Power Inc.," "our Company," and the "Company" refer to E-Power Inc., an exempted company limited by shares incorporated under the laws of the Cayman Islands; and "SDH" or "the VIE" are to Global Mentor Board (Zibo) Information Technology Co., Ltd., a limited liability company organized under the laws of the PRC.

As of the date of this annual report, substantially all of our business is conducted by (1) Sunrise Guizhou, a joint venture formed by Zhuhai Zibo (a wholly owned subsidiary of the Company) and certain other partners, as a limited company pursuant to PRC laws for the purpose of manufacturing and sales of graphite anode materials, and (2) SDH, the Company's VIE entity that operates a knowledge sharing platform in China. Investors of our Ordinary Shares do not hold shares in the PRC operating entities, but instead hold shares of a Cayman Islands company. Further, neither we nor our subsidiaries own any shares in the VIE. For accounting purposes, we consolidate the financial results through the VIE Agreements, each of which are dated June 10, 2019, and which enable us to consolidate the financial results of the VIE and its subsidiaries in our consolidated financial statements under U.S. GAAP. See "Item 3. Key Information — Contractual Agreements among GIOP BJ, SDH the VIE and Its Shareholders" for more details.

The VIE, or SDH, started as a consulting company providing enterprise services to small and medium-sized enterprises in the PRC in December 2014, and launched a knowledge sharing and enterprise service platform in May 2016.

Beginning in fiscal year 2022, we started transitioning our core business from knowledge sharing and enterprise services to sales of graphite anode material products. In April 2022, we entered into the graphite anode material manufacturing and sales business through a joint venture, Sunrise Guizhou, of which we currently own 39.35% through Zhuhai Zibo, our wholly owned subsidiary. We consolidate Sunrise Guizhou's financials because we own a majority of seats on its board of directors and control its financial and operating policies pursuant to an agreement among its funding shareholders. Sunrise Guizhou is located at Yilong New District, Xingyi City, Qian Southwest State, Guizhou Province, China. The land use of Sunrise Guizhou's graphite anode manufacturing site is 401,545 square meters, which Sunrise Guizhou purchased in March 2022 for approximately $6.6 million. Sunrise Guizhou began construction of the manufacturing plant in April 2022, and the first and second phase construction of (30,000 tons annual manufacturing capacity) of the manufacturing plant has been completed. The third phase of construction of the manufacturing plant (20,000 tons annual manufacturing capacity) was approved by the board of the directors of the Company in March 2023, and remains under construction .

Graphite anode materials are essential components used in fast-charging batteries, energy storage batteries, electric vehicle power batteries, and long-cycle high-power batteries. The market is driven primarily by demand for Li-ion batteries that require anode materials. We believe that a significant driver for Li-ion batteries is their use in electric vehicles (EVs) and in grid-storage applications. According to a research report published by Goldman Sachs on February 10, 2023, entitled "Electric vehicles are forecast to be half of global car sales by 2035", EV sales is expected to soar to about 73 million units in 2040, up from around 2 million in 2020. The percentage of EVs in worldwide car sales, meanwhile, is expected to rise to 61% from 2% during that time-span, and EV sales are anticipated to be well over 80% in many developed countries in 2040. The International Energy Agency ("IEA")'s Net Zero by 2050 Roadmap predicts that 2 billion battery electric, plug-in hybrid and fuel-cell electric light-duty vehicles are needed by that year to reach net zero emission. A typical Li-ion High-Energy (100 Ah) cell of around 3,400g requires over 650g of graphite and each EV contains approximately 70kg of graphite. The Company sees this as a major growth driver for the graphite anode industry. Sunrise Guizhou's products are critical to the transition to a more sustainable, resilient and environmentally friendly future. We expect that the sales for Sunrise Guizhou's graphite anode material products will continue to grow.

**Our Past Performance**

We generated net revenue of $46,416,132, $64,997,741 and $45,050,405 for the fiscal years ended December 31, 2025, 2024 and 2023, respectively. For fiscal year 2025, net revenue decreased by $18,581,609, or 28.59%, which decrease was mainly driven by the strategy to decrease sales volume on low gross margin products. For fiscal year 2024, net revenue increased by $19,947,336, or 44.28%, which increase was mainly driven by the continued growth of our graphite anode business. For fiscal year 2023, net revenue increased by $6,924,737, or 18.16%, which increase was mainly driven by the sale of graphite anode material products.

Our revenues for fiscal years 2025, 2024 and 2023 were derived from the following sources:

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| | | | |
|:---|:---|:---|:---|
| **REVENUES, NET** | **2025** | **2024** | **2023** |
| Graphite anode business | $46342154 | $64365362 | $44384004 |
| Knowledge sharing and enterprise business | 73978 | 632379 | 666401 |
| **Revenues, net** | $46416132 | $**64997741** | $**45050405** |

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For fiscal year 2025, revenue from the sale of graphite anode material products was $46,342,154, which accounted for 99.84% of our total revenues, and revenue from knowledge sharing and enterprise business was $73,978, which accounted for approximately 0.16% of our total revenue.

For fiscal year 2024, revenue from the sale of graphite anode material products was $64,365,362, which accounted for 99.03% of our total revenues, and revenue from knowledge sharing and enterprise business was $632,379, which accounted for approximately 0.97% of our total revenue.

For fiscal year 2023, revenue from the sale of graphite anode material products was $44,384,004, which accounted for 98.52% of our total revenues, and revenue from knowledge sharing and enterprise business was $666,401, which accounted for approximately 1% of our total revenue.

**<u>Graphite Anode Material Manufacturing and Sales Business</u>**

In April 2022, we entered into the graphite anode material manufacturing and sales business through a joint venture, Sunrise Guizhou, of which we currently own 39.35% through our wholly owned subsidiary, Zhuhai Zibo. Sunrise Guizhou is located at Yilong New District, Xingyi City, Qian Southwest State, Guizhou Province, China. The land use of Sunrise Guizhou's graphite anode manufacturing site is 401,545 square meters. Sunrise Guizhou purchased the site in March 2022 for approximately $6.6 million. Sunrise Guizhou began construction of the manufacturing plant in April 2022, and the first and second phases of construction of (30,000 tons annual manufacturing capacity) of the manufacturing plant has been completed. The third phase of construction of the manufacturing plant (20,000 tons annual manufacturing capacity) was approved by the board of the directors of the Company in March 2023, and remains under construction.

*<u>Products</u>*

Sunrise Guizhou's products include various artificial graphite anode material products. Artificial graphite is made of petroleum coke, needle coke and pitch coke as the main material, and formed after crushing, shaping, granulation and graphitization. The performance, features and uses of Sunrise Guizhou's products are as follows:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Type** | **Product <br> Image** | **Medium<br> Particle Size<br> (um)** | **Designed<br> Capacity<br> (mAh/g)** | **Compaction<br> (g/cc)** | **Features** | **Uses** |
| Cost-effective artificial graphite | ![](ea028883401_img1.jpg) | 15.5±2.5 | 340-348 | 1.50-1.60 | Excellent comprehensive performance, long cycle, cost-effective | Power batteries and energy storage batteries; cell of soft pack, square aluminum shell, and cylindrical batteries |
| Volumetric artificial graphite | ![](ea028883401_img2.jpg) | 16.5±2.5 | 348-355 | 1.60-1.65 | High energy density and comprehensive performance | Multiple long-cycle square, cylindrical, polymer batteries |
| Multiplier rate artificial graphite | ![](ea028883401_img3.jpg) | 13.5±3.0 | 347-353 | 1.55-1.63 | Excellent comprehensive performance, long cycle, good rate performance | Power anode material, cell of soft pack, square aluminum shell, and cylindrical batteries |
| High capacity and high compaction artificial graphite | ![](ea028883401_img4.jpg) | 16.0±2.0 | 353-358 | 1.63-1.68 | High energy density, excellent comprehensive performance | Power anode material, cell of soft pack, square aluminum shell, and cylindrical batteries |
| Volumetric artificial graphite | ![](ea028883401_img5.jpg) | 13.5±3.0 | 350-355 | 1.60-1.65 | High energy density and comprehensive performance | Multiple long-cycle square, cylindrical, polymer batteries |
| High capacity and rate artificial graphite | ![](ea028883401_img6.jpg) | 12.5±3.0 | 349-354 | 1.58 -1.65 | High energy density and power performance, long cycle life | Multiple long cycle square and polymer batteries |
| Cost-effective long-cycle artificial graphite | ![](ea028883401_img7.jpg) | 11.0±2.5 | 340-345 | 1.45-1.55 | Excellent comprehensive performance, long cycle, cost-effective | Energy storage anode material, cell of soft pack, square aluminum shell, and cylindrical batteries |
| Higher energy density artificial graphite | ![](ea028883401_img8.jpg) | 13.5±2.0 | 355-360 | 1.65-1.70 | High energy density, good rate performance | Power batteries and energy storage batteries; cell of soft pack, square aluminum shell, and cylindrical batteries |
| EV fast charging artificial graphite | ![](ea028883401_img9.jpg) | 12.0±2.5 | ≥350 | 1.50-1.60 | High energy density, good rate performance,long cycle | Power batteries and energy storage batteries; cell of soft pack, square aluminum shell, and cylindrical batteries |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| Higher energy density and long cycle artificial graphite | ![](ea028883401_img10.jpg) | 11.0±2.0 | 350-355 | 1.55-1.60 | High energy density, long cycle | Energy storage anode material, cell of soft pack, square aluminum shell, and cylindrical batteries |
| High temperature performance and long cycle artificial graphite | ![](ea028883401_img11.jpg) | 11.0±2.0 | ≥350 | 1.55-1.60 | Low swelling, high temperature performance and long cycle | Energy storage anode material, cell of soft pack, square aluminum shell, and cylindrical batteries |
| Low temperature performance and long cycle artificial graphite | ![](ea028883401_img12.jpg) | 8.5±1.5 | 345±4 | 1.5-1.55 | Low temperature performance and long cycle | Energy storage anode material, cell of soft pack, square aluminum shell, and cylindrical batteries |
| Low swelling and long cycle artificial graphite | ![](ea028883401_img13.jpg) | 11.5±2.5 | ≥350.0 | 1.50~1.60 | Low swelling and long cycle | Energy storage anode material, cell of soft pack, square aluminum shell, and cylindrical batteries |
| High energy efficiency and long cycle artificial graphite | ![](ea028883401_img14.jpg) | 12.0±2.0 | 354.0±4.0 | 1.55~1.65 | High energy efficiency ,high-rate and long cycle | Power batteries and energy storage batteries; cell of soft pack, square aluminum shell, and cylindrical batteries |
| High energy efficiency and long cycle artificial graphite | ![](ea028883401_img15.jpg) | 12.0±2.0 | 354.0±4.0 | 1.55~1.65 | High energy efficiency ,high-rate and long cycle | Power batteries and energy storage batteries; cell of soft pack, square aluminum shell, and cylindrical batteries |
| Cost-effective long-cycle artificial graphite | ![](ea028883401_img16.jpg) | 12.0±2.0 | ≥350.0 | 1.55~1.65 | Excellent comprehensive performance, long cycle, cost-effective | Power batteries and energy storage batteries; cell of soft pack, square aluminum shell, and cylindrical batteries |
| Cost-effective artificial graphite | ![](ea028883401_img17.jpg) | 14.5 ± 2.0 | ≥350 | 1.50~1.60 | Excellent cost-effectiveness and comprehensive performance, | Energy storage anode material, cell of soft pack, square aluminum shell, and cylindrical batteries |
| High temperature performance and long cycle artificial graphite | ![](ea028883401_img18.jpg) | 11.5±1.5 | ≥350 | 1.60~1.65 | Low swelling, high temperature performance and long cycle | Power batteries and energy storage batteries;cell of soft pack, square aluminum shell, and cylindrical batteries |

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*<u>Direct Sales Channel</u>*

 

Sunrise Guizhou markets its graphite anode products through a direct sales channel by its sales department, which consists of five experienced employees who report directly to the CEO of Sunrise Guizhou. The CEO of Sunrise Guizhou has more than 20 years of experience in the lithium-ion battery material industry, and has accumulated extensive business connections in this industry. The initial step to develop relationships with a potential customer is making a targeted sales pitch, and if a potential customer responds to the sales pitch or shows interest in the products, Sunrise Guizhou then goes through the qualification process in order to become a supplier. The qualification process usually consists of the following steps: (1) Sunrise Guizhou sends out samples of its graphite anode to the potential customer, (2) the potential customer conducts preliminary tests to evaluate the sample products, (3) if the sample products pass the initial evaluations, the next step is generally a small commercial order placed by the potential customer to verify the product quality on a commercial scale, and (4) the potential customers often send an engineering team to visit Sunrise Guizhou's R&D center and quality control department, to further assess the quality and performance of Sunrise Guizhou's products. If Sunrise Guizhou successfully passes each of the above validation steps, the potential customer usually starts negotiating a supplier agreement with Sunrise Guizhou.

*<u>Customers</u>*

For fiscal years 2025, 2024 and 2023, Sunrise Guizhou had 35, 26 and 23 customers, respectively. Sunrise Guizhou's customers are manufacturers of industrial and consumer energy storage lithium-ion batteries, such as batteries for electric vehicles and electric ships, and smart consumer electronics. The vast majority of Sunrise Guizhou's customers are Chinese companies, and some of them are large well-known companies, such as BYD Company Limited and Contemporary Amperex Technology Co. Limited.

For the fiscal year ended December 31, 2025, two customers accounted for more than 10% of Sunrise Guizhou's total sales, with each accounting for 52% and 12% of the total sales, respectively. For the fiscal year ended December 31, 2024, one customer accounted for more than 10% of Sunrise Guizhou's total sales, accounting for or 67%, of the total sales. For the fiscal year ended December 31, 2023, three customers accounted for more than 10% of Sunrise Guizhou's total sales, with each accounting for 38%, 25% and 11% of the total sales, respectively. See "Risk Factors—Risks Related to Our Business—Sunrise Guizhou depends on a few major customers with whom it does not enter into long-term contracts, the loss of any of which could cause a significant decline in its revenues."

 

*<u>Raw Materials and Suppliers</u>*

Sunrise Guizhou sources raw materials, including asphalt coke, petroleum coke, needle coke, and American petroleum coke, from suppliers in China, Romania, and Indonesia, to diversify its raw material origins and stabilize its supply chain. Sunrise Guizhou selects suppliers based on many criteria including but not limited to: quality, production site, production process, delivery cycle, and price. As there are a variety of options for supplies, and the technical demand of preparing most of the raw materials are relatively low, Sunrise Guizhou does not anticipate difficulties in obtaining raw materials. Sunrise Guizhou purchases raw materials on a per purchase order basis. The prices for these raw materials are nevertheless subject to market forces largely beyond our control, including energy costs, market demand, economy trend, and freight costs. The prices for raw materials have fluctuated in the past, and may fluctuate significantly in the future. See "Risk Factors—Risks Related to Our Business—Sunrise Guizhou faces the risk of fluctuations in the cost, availability, and quality of raw materials, which could adversely affect our results of operations." The costs of raw materials accounted for 22.55% of the total costs of production for fiscal year 2025, and no supplier accounted for more than 10% of Sunrise Guizhou's total costs for raw materials. The costs of raw materials accounted for 34% of the total costs of production for fiscal year 2024, and no supplier accounted for more than 10% of Sunrise Guizhou's total costs for raw materials. The costs of raw materials accounted for 29% of the total costs of production for fiscal year 2023, and no supplier accounted for more than 10% of Sunrise Guizhou's total costs for raw materials.

*<u>Third-party Contract Manufacturers</u>*

Sunrise Guizhou entrusts third-party contract manufacturers for the graphitization processes of the manufacturing of its graphite anode products. Sunrise Guizhou implements a rigorous process for selecting third-party contract manufacturers. Sunrise Guizhou strictly evaluates various factors, including the production capacity, quality control management, environmental qualifications, and key customers of its contract manufacturers. Sunrise Guizhou regularly sends its technical team and quality control team to the facilities of the contract manufacturers for on-site supervision, guidance and quality control. Sunrise Guizhou issues a detailed quantitative scoring table for each contract manufacturer every month to evaluate their performance. As of the date of this annual report, Sunrise Guizhou contracts with 65 third-party contract manufacturers in China.

*<u>Industry and Competition</u>*

 

At present, lithium batteries are widely used in new energy vehicles, energy storage, electric ships, and smart homes, and the boundaries of use continue to expand, resulting in a trillion-dollar market. According to the "Lithium-ion Battery Market Size, Share & Trends Analysis Report By Product (Lithium Cobalt Oxide, Lithium Iron Phosphate, Lithium Nickel Cobalt Aluminum Oxide), by Application (Automotive, Consumer Electronics), Region, and Segment Forecasts, 2024 - 2030" published by Grand View Research in November 2023, the global lithium-ion battery market size was estimated at USD 54.4 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 20.3% from 2024 to 2030. Global registration of electric vehicles (EVs) is anticipated to increase significantly over the forecast period. We believe that the lithium-ion battery industry is witnessing unprecedented growth, fueled by pivotal roles these batteries play in addressing both environmental concerns and the need for reliable energy storage solutions in automotive sector. This trend is expected to reshape the energy landscape, with lithium-ion batteries at the forefront of powering a cleaner and more sustainable future for transportation. Lithium-ion batteries are also utilized for providing backup power supply for commercial buildings, data centers, and institutions. Also, lithium-ion battery is preferred for energy storage in residential solar PV systems. These factors are expected to boost the growth of energy storage applications over the forecast period. In addition, lithium-ion batteries are used in numerous industrial applications, such as power tools, cordless tools, marine equipment & machinery, agricultural machinery, industrial automation systems, aviation, military & defense, electronics, civil infrastructure, and oil & gas.

As of the date of this annual report. Sunrise Guizhou's main competitors are lithium-ion battery anode material manufacturers such as BTR New Energy, Hitachi Chem, Shanshan Tech, Mitsubishi Chem, Zichen Tech.

*<u>Intellectual Property</u>*

 

Sunrise Guizhou has built a portfolio of intellectual property and plans to continue to invest in research and development. Sunrise Guizhou's success depends, in part, on its ability to protect its intellectual property. To accomplish this, Sunrise Guizhou relies on a combination of patents, trade secrets, including employee and third-party nondisclosure agreements, trademarks, and other contractual rights to establish and protect proprietary rights in intellectual property. As of the date of this annual report, Sunrise Guizhou and its subsidiaries have 41 authorized patents and utility models (38 in China, one in the U.S., one in Japan and one in South Korea). In addition, Sunrise Guizhou owns 5 registered trademarks. Set forth below is a detailed description of its authorized patents and utility models:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **No.** | **Country** | **No.** | **Name** | **Publication Date** | **Type** | **Validity Period** |
| 1 | PRC | 2022103393295 | A sulfur-phosphorus co-doped rigid carbon composite material and its preparation method | April 1, 2022 | patent | 20 years |
| 2 | PRC | 2022103862461 | A rigid carbon composite material with high initial efficiency and its preparation method | April 13, 2022 | patent | 20 years |
| 3 | PRC | 2022103961109 | A rapid ion-conductive coating silicon-carbon composite material and its preparation method | April 15, 2022 | patent | 20 years |
| 4 | PRC | 2022104007752 | A method for preparing a lithium-ion battery cathode material | April 17, 2022 | patent | 20 years |
| 5 | PRC | 2022104007964 | High energy density rapid charging graphite composite material and its preparation method | April 17, 2022 | patent | 20 years |
| 6 | PRC | 2022104007748 | Sulfur-containing fast-ion-conducting coating graphite composite material and its preparation method | April 17, 2022 | patent | 20 years |
| 7 | PRC | 202210400788X | A long-life rapid-charging lithium-ion battery cathode material and its preparation method | April 17, 2022 | patent | 20 years |
| 8 | PRC | 2022104013823 | Long-lasting, high initial efficiency rigid carbon composite materials and their preparation methods | April 18, 2022 | patent | 20 years |
| 9 | PRC | 2022107414888 | A method for preparing porous silver-coated hard carbon composite materials via magnetron sputtering | June 28, 2022 | patent | 20 years |
| 10 | PRC | 2022108518691 | A preparation method for a rigid carbon composite material used in sodium-ion batteries | July 20, 2022 | patent | 20 years |
| 11 | PRC | 2022108516728 | Cathode materials with high initial efficiency and high energy density and their preparation methods | July 20, 2022 | patent | 20 years |
| 12 | PRC | 2022108674134 | A method for preparing mesophase carbon microsphere-silicon-carbon composite cathode material | July 22, 2022 | patent | 20 years |
| 13 | PRC | 2022108796377 | A method for preparing high-energy-density fast-charging graphite anode materials | July 25, 2022 | patent | 20 years |
| 14 | PRC | 2022109176278 | A method for preparing a rigid carbon composite material of co-doped copper phosphide/phosphorus/carbon nanotubes | August 1, 2022 | patent | 20 years |
| 15 | PRC | 202210916309X | A template method for preparing magnesium-doped hollow silicon-carbon composite materials and its preparation technique | August 1, 2022 | patent | 20 years |
| 16 | PRC | 2022112813356 | A method for preparing a high-energy-density fast-charging lithium-ion battery cathode material | October 19, 2022 | patent | 20 years |
| 17 | PRC | 2022113284608 | A method for preparing graphite composites with high initial efficiency | October 26, 2022 | patent | 20 years |
| 18 | PRC | 202211376694X | High energy density composite cathode material and its preparation method | November 4, 2022 | patent | 20 years |
| 19 | PRC | 2022113845496 | High energy density graphite composite materials and their preparation methods | November 7, 2022 | patent | 20 years |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| 20 | PRC | 2022114198864 | A method for preparing aluminum-based rare-earth-coated graphite anode composite materials | November 14, 2022 | patent | 20 years |
| 21 | PRC | 2022114380072 | A rigid carbon composite material for lithium-ion batteries and its preparation method | November 16, 2022 | patent | 20 years |
| 22 | JPN | 2022-170556 | The present invention relates to a method for preparing a lithium-ion battery anode material. | October 26, 2022 | patent | 20 years |
| 23 | PRC | 2023102635126 | A method for preparing high-energy-density lithium-ion battery cathode materials | March 17, 2023 | patent | 20 years |
| 24 | PRC | 202310306784X | A method for preparing an amorphous carbon-coated graphite composite material doped with tin nitride | March 27, 2023 | patent | 20 years |
| 25 | PRC | 202322551688X | Intake cooling system | September 20, 2023 | patent | 20 years |
| 26 | PRC | 2023234054841 | A Multivariate Particle Size Control System for the Production of Graphite Micro powder | December 14, 2023 | utility model | 10 years |
| 27 | PRC | 2024208463072 | A System for Preventing the Internal Blowing Phenomenon in Graphitization Furnaces | April 23, 2024 | utility model | 10 years |
| 28 | PRC | 2022114272063 | A method for preparing an anode material for long-cycle lithium-ion batteries | November 15, 2022 | patent | 20 years |
| 29 | PRC | 2022114271111 | A method for preparing high-energy-density fast-charging cathode materials | November 15, 2022 | patent | 20 years |
| 30 | PRC | 2017111552502 | A lithium-ion battery, the silicon-carbon anode material used therein, and its preparation method | November 20, 2017 | patent | 20 years |
| 31 | PRC | 2017215525393 | A system for intermittent negative coke production | November 20, 2017 | utility model | 10 years |
| 32 | PRC | 2018216838031 | Production Device for Continuous Heating Coating Granulation of Multi-level Cathode Materials | October 17, 2018 | utility model | 10 years |
| 33 | PRC | 2023103678152 | A Preparation Method for a Lithium Metacerate-Coated Graphite Iron Oxide Anode Material | April 7, 2023 | patent | 20 years |
| 34 | PRC | 2023106433091 | A preparation method for the anode material used in an energy storage lithium-ion battery | June 1, 2023 | patent | 20 years |
| 35 | PRC | 2023112135009 | A Preparation Method for a Molybdenum Sulfide-Doped Hard Carbon Composite Material | September 20, 2023 | patent | 20 years |
| 36 | PRC | 2024224376449 | A positive pressure anti-corrosion and dustproof system for an overhead crane | October 10, 2024 | utility model | 10 years |
| 37 | PRC | 202411167789X | A method for improving the fast-charging performance of silicon-carbon composite materials | August 23, 2024 | patent | 20 years |

| 39 | PRC | 2024225142477 | A lightweight upper smoke hood for a graphitization furnace | October 17, 2024 | utility model | 10 years |
| 40 | USA | US17973232 | A preparation method for a lithium-ion battery anode material | October 25, 2022 | patent | 20 years |
| 41 | KOR | KR1020220139180 | A preparation method for a lithium-ion battery anode material | October 26, 2022 | patent | 20 years |

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**<u>Knowledge Sharing and Enterprise Service Business</u>**

The VIE, or SDH, started as a consulting company providing enterprise services to small and medium-sized enterprises in the PRC in December 2014, and launched a knowledge sharing and enterprise service platform in May 2016. Revenue generated from the knowledge sharing and enterprise service business has declined beginning in 2022 when the Company transitioned its core business to graphite anode material manufacturing and sales business. For fiscal years 2025 and 2024, the Company mainly generated revenues from consulting services and other services, which included various miscellaneous ad-hoc services. As of the date of this annual report, the Company operates and maintains a legacy mobile application "Shidonghui App" (the "APP"), mainly for the purpose of enabling access to historical data and legacy user accounts.

<u>Other Services</u>

Other services include the following various miscellaneous ad-hoc services: (i) health services, such as comprehensive health management consulting solutions for high-net-worth individuals and families, (ii) rental services, such as providing its own facilities to customers who require short-term rentals, and (iii) study tours and forum services provided to entrepreneurs and small businesses. For fiscal years ended December 31, 2025, 2024 and 2023, the VIE generated fees from other services in the amount of $73,978, $116,721 and $175,812, respectively.

**Regulations**

This section sets forth a summary of the principal PRC laws and regulations relevant to our business and operations in China.

**Regulations Related to Internet Information Services**

Among all of the applicable laws and regulations, the *Telecommunications Regulations of the PRC*, or the Telecom Regulations, promulgated by the PRC State Council on September 25, 2000 and most recently amended on February 6, 2016, is the primary governing law, which sets out the general framework for the provision of telecommunications services by domestic PRC companies. Under the Telecom Regulations, telecommunications service providers are required to procure operating licenses prior to their commencement of operations. The Telecom Regulations distinguish "basic telecommunications services" from VATS. VATS are defined as telecommunications and information services provided through public networks. The *Telecom Catalogue* was issued as an attachment to the Telecom Regulations to categorize telecommunications services as either basic or value-added. In February 2003, December 2015, and June 2019, the Telecom Catalogue was updated respectively, categorizing information services provided via fixed network, mobile network among others, as VATS.

The *Administrative Measures on Telecommunications Business Operating Licenses* was promulgated by the Ministry of Industry and Information Technology on March 1, 2009 and most recently amended on July 3, 2017, which set forth more specific provisions regarding the types of licenses required to operate VATS, the qualifications and procedures for obtaining such licenses and the administration and supervision of such licenses. Under these regulations, a commercial operator of VATS must first obtain a VATS License, from the MIIT or its provincial level counterparts, otherwise such operator might be subject to sanctions including corrective orders and warnings from the competent administration authority, fines and confiscation of illegal gains and, in the case of significant infringements, the websites may be ordered to close.

In September 2000, the State Council promulgated the *Administrative Measures on Internet Information Services*, or the Internet Measures, which was most recently amended on January 8, 2011 and December 6, 2024. Under the Internet Measures, commercial internet content-related services operators shall obtain a VATS License for internet content provision business, or the ICP License, and the non-commercial internet content-related services operators shall complete the filing-for-record procedures from the relevant government authorities before engaging in any internet content-related services operations within China.

In response to the daily consultations received by relevant competent authorities, several competent authorities, such as Zhejiang Communications Administration in April 2021 and March 2024, and Guangdong Communications Administration April 2022, issued the notices regarding the issues on VATS License respectively, which clarified that if an enterprise directly sells its own or other party's goods or services through its self-operated website, without other parties conducting sales under their own names on the website, such operations shall not constitute VATS and shall not require the acquisition of a VATS License.

The VIE obtained the ICP License on July 2, 2019, which was effective for 5 years and expired on July 2, 2024. Our new ICP license, which was approved on May 27, 2025, is valid until May 27, 2030.

**Regulations Related to Foreign Investment**

***Regulations Related to Foreign Investment in Telecommunications***

In June 2018 the MOFCOM and the NDRC promulgated the *Special Management Measures (Negative List) for the Access of Foreign Investment*, or the Negative List, which was most recently amended in September 2024. The value-added telecommunications services (except for e-commerce, domestic conferencing, store-and-forward, and call center services), or the VATS, fall within the Negative List.

Pursuant to the *Provisions on Administration of Foreign-Invested Telecommunications Enterprises* promulgated by the State Council in December 2001 and most recently amended in March 29, 2022, or the FITE Regulations, the ultimate foreign equity ownership in a VATS provider may not exceed 50%.

In July 2006, Ministry of Information Industry, or the MII (the predecessor of the MIIT), released the *Notice on Strengthening the Administration of Foreign Investment in and the Operation of Value-added Telecommunications Business*, or the MII Notice, which requires foreign investors to set up foreign-invested enterprises and obtain a relevant telecommunications business operating license, to conduct any VATS business in China. Furthermore, under the MII Notice, domestic telecommunication enterprises may not rent, transfer or sell a telecommunications business operating license to foreign investors in any form, nor may they provide any resources, premises, facilities and other assistance in any form to foreign investors for their illegal operation of any telecommunications business in China. In addition, under the MII Notice, the relevant trademarks and domain names used by a foreign-invested VATS operator shall be legally owned by that operator (or its shareholders).

The Company previously engaged in business activities that were VATS, and in light of the above restrictions and requirements, the Company relied on contractual arrangements between GIOP BJ and the VIE to operate its business in China. As of the date of this annual report, the Company no longer engages in business activities that are VATS.

***Foreign Investment Law***

 ****

On March 15, 2019, the National People's Congress approved the *Foreign Investment Law of the PRC,* or the Foreign Investment Law, which came into effect on January 1, 2020 and replaced the trio of existing laws regulating foreign investment in China, namely, the *Sino-foreign Equity Joint Venture Enterprise Law of the PRC*, the *Sino-foreign Cooperative Joint Venture Enterprise Law of the PRC* and the *Wholly Foreign-invested Enterprise Law of the PRC*, together with their implementation rules and ancillary regulations. The organization form, organization and activities of foreign-invested enterprises shall be governed, among others, by the *PRC Company Law* and *the PRC Partnership Enterprise Law.* Foreign-invested enterprises established before the implementation of the Foreign Investment Law may retain the original business organization and so on within five years after the implementation of this Law.

The Foreign Investment Law is formulated to further expand opening-up, vigorously promote foreign investment and protect the legitimate rights and interests of foreign investors. According to the Foreign Investment Law, foreign investments are entitled to pre-entry national treatment and are subject to negative list management system. The pre-entry national treatment means that the treatment given to foreign investors and their investments at the stage of investment access shall not be less favorable than that of domestic investors and their investments. The negative list management system means that the state implements special administrative measures for access of foreign investment in specific fields. The Foreign Investment Law does not mention the relevant concept and regulatory regime of VIE structures. However, since it is relatively new, uncertainties still exist in relation to its interpretation and implementation. See "Risk Factors—Risks Related to Our Corporate Structure—Uncertainties exist with respect to the interpretation and implementation of the newly enacted PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations."

Foreign investors' investment, earnings and other legitimate rights and interests within the territory of China shall be protected in accordance with the law, and all national policies on supporting the development of enterprises shall equally apply to foreign-invested enterprises. Among others, the state guarantees that foreign-invested enterprises participate in the formulation of standards in an equal manner and that foreign-invested enterprises participate in government procurement activities through fair competition in accordance with the law. Further, the state shall not expropriate any foreign investment except under special circumstances. In special circumstances, the state may levy or expropriate the investment of foreign investors in accordance with the law for the needs of the public interest. The expropriation and requisition shall be conducted in accordance with legal procedures and timely and reasonable compensation shall be given. In carrying out business activities, foreign-invested enterprises shall comply with relevant provisions on labor protection.

The Implementation Regulations of Foreign Investment Law of the PRC, adopted by the State Council on December 26, 2019 and came into effect on January 1, 2020, provides implementing measures and detailed rules to ensure the effective implementation of the Foreign Investment Law.

**Regulations Related to Mobile Internet Applications Information Services**

In addition to the telecommunications regulations and other regulations above, mobile Internet applications and application stores are specifically regulated by the *Administrative Provisions on Mobile Internet Applications Information Services*, or the App Provisions, which were promulgated by the Cyberspace Administration of China, or the CAC, on June 14, 2022, and became effective on August 1, 2022. Pursuant to the App Provisions, application information service providers shall obtain the relevant qualifications prescribed by laws and regulations, strictly implement their information security management responsibilities and carry out certain duties, including establishing and completing user information security protection mechanism and information content inspection and management mechanisms, protect users' right to know and to choose in the process of usage, and to record and preserve users' daily usage information for at least 60 days. Furthermore, internet application store service providers and internet application information service providers shall sign service agreements to determinate both sides' rights and obligations.

In addition, on December 16, 2016, the MIIT promulgated the *Interim Measures on the Administration of Pre-Installation and Distribution of Applications for Mobile Smart Terminals*, or the App Interim Measures, which took effect on July 1, 2017. The App Interim Measures requires, among others, that internet information service providers must ensure that a mobile application, as well as its ancillary resource files, configuration files and user data can be uninstalled by a user on a convenient basis, unless it is a basic function software, which refers to a software that supports the normal functioning of hardware and operating system of a mobile smart device.

Neither the App Provisions nor the App Interim Measures, however, has further clarified the scope of "information services," neither do they specify what "relevant qualification(s)" that an app owner/operator must obtain. In practice, operational activities of a company conducted through an app is currently subject to the supervisions of local departments of the Information Communications Administration, and often, the local departments differentiate the operational activities conducted through websites and through apps.

To comply with these laws and regulations, we have adopted and implemented strict information security policies and measures to protect our cyber security systems and customer information.

**Regulations Related to Online Transmission of Audio-Visual Programs**

On April 13, 2005, the State Council promulgated the *Certain Decisions on the Entry of the Non-state-owned Capital into the Cultural Industry*. On July 6, 2005, five PRC governmental authorities, including the Ministry of Culture, or the MOC, the State Administration of Radio, Film and Television, or the SARFT (the predecessor of the National Radio and Television Administration, or NRTA), the General Administration of Press and Publication, or the GAPP, the China Securities Regulatory Commission, or the CSRC and the MOFCOM, jointly adopted the *Several Opinions on Canvassing Foreign Investment into the Cultural Sector*. Under these provisions, non-state owned capital and foreign investors are prohibited from engaging in the business of distributing audio-visual programs through information networks.

To further regulate the provision of audio-visual program services to the public via the internet, including through mobile networks, within the territory of the PRC, the SARFT and the MIIT jointly promulgated the *Administrative Provisions on Internet Audio-Visual Program Service*, or the Audio-Visual Program Provisions, on December 20, 2007, which took effect on January 31, 2008 and subsequently amended on August 28, 2015. Pursuant to the Audio-Visual Program Provisions, Internet audio-visual program services refer to activities of making, redacting and integrating audio-visual programs, providing them to the general public via the Internet, and providing platforms for uploading and spreading audio-visual programs. Providers of internet audio-visual program services are required to obtain the Audio-Visual License issued by SARFT, or complete certain registration procedures with SARFT. In general, providers of internet audio-visual program services must be either state-owned or state-controlled entities, and the business to be carried out by such providers must satisfy the overall planning and guidance catalog for internet audio-visual program service determined by SARFT. The VIE is neither state-owned nor state-controlled, therefore it is unlikely that it will be able to obtain the Audio-Visual License if required to do so. Whoever engages in Internet audio-visual program service without the license or registration, the competent authorities shall give it/him an admonition and order it/him to correct, and may impose a fine of not more than RMB30,000 (US$4,110); if the circumstances are serious, a punishment shall be imposed in accordance with the provision of Article 47 of the *Radio and Television Administration Regulation*.

On May 21, 2008, SARFT issued a *Notice on Relevant Issues Concerning Application and Approval of License for the Online Transmission of Audio-Visual Programs*, as amended on August 28, 2015, which further set out detailed provisions concerning the application and approval process regarding the Audio-Visual License. Further, on March 31, 2009, SARFT promulgated the *Notice on Strengthening the Administration of the Content of Internet Audio-Visual Programs*, which reiterates the pre-approval requirements for the audio-visual programs transmitted via the internet, including through mobile networks, where applicable, and prohibits certain types of internet audio-visual programs containing violence, pornography, gambling, terrorism, superstition or other similarly prohibited elements.

On March 17, 2010, the SARFT issued the *Internet Audio-visual Program Services Categories (Provisional)*, or the Provisional Categories, as amended on March 10, 2017. According to the Provisional Categories, there are four categories of internet audio-visual program services which are further divided into seventeen sub-categories. The third sub-category to the second category covers the making and editing of certain specialized audio-visual programs concerning, among other things, finance and educational content, and broadcasting such content to the general public online. However, there are still significant uncertainties relating to the interpretation and implementation of the Audio-Visual Program Provisions, in particular, the scope of "internet audio-visual programs".

On March 16, 2018, the SAPPRFT issued the *Notice on Further Regulating the Transmission Order of Internet Audio-Visual Programs*, which requires that, among others, audio-visual platforms shall: (i) not produce or transmit programs intended to parody or denigrate classic works, (ii) not re-edit, re-dub, re-caption or otherwise, (iii) not broadcast films or television dramas without proper licenses, online original audio-visual programs that have not been duly filed, or any radio, television, or online audio-visual programs that have been publicly notified or sanctioned by the competent radio and television authorities, including their trailers and previews, and (iv) not engage in any form of cooperation with entities that have not obtained the Information Network Dissemination of Audio-Visual Programs License and are illegally providing online audio-visual program services, including but not limited to live streaming, title sponsorship, advertising, or sponsorship.

On July 22, 2019, in the Beijing Municipal Radio and Television Bureau's Q&A section of its official website, the Bureau responded to an inquiry submitted by an online education service provider, and confirmed that the offering of online audio and video courses or programs on websites or mobile applications for the purpose of improving the professional qualifications/skills of target audiences, does not fall into the activities regulated by the PRC Administrative Provisions on Internet Audio-Visual Program Services; therefore, the service provider is not required to obtain an Audio-Visual License. Currently, all of our online content on our APP are educational and training video and audio courses targeting specific groups of audiences, such as small and medium enterprise owners and graduate students, who use our online courses and programs to improve their professional qualifications and skills. Accordingly, based on the Bureau's published interpretation, we believe we are not required to obtain an Audio-Visual License. However, given the significant uncertainties of the interpretation and implementation of Internet related regulations in the PRC, we cannot assure you that the competent PRC authorities will not ultimately take a view contrary to our opinion. See "Risk Factors—Risks Related to Our Business— We may be required to obtain and maintain additional approvals, licenses or permits applicable to our business, including our graphite anode manufacturing and sales business and our knowledge share platform, which could have a material adverse impact on our business, financial conditions and results of operations."

**Regulations Related to Information Security**

Internet content in China is regulated and restricted from a state security standpoint. The Standing Committee of the National People's Congress, or the SCNPC, enacted the *Decisions on the Maintenance of Internet Security* on December 28, 2000, which was amended on August 27, 2009, that may subject persons to criminal liabilities in China for any attempt to: (i) gain improper entry to a computer or system of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe upon intellectual property rights. In 1997, Ministry of Public Security, or the MPS, issued the *Administration Measures on the Security Protection of Computer Information Network with International Connections*, which were amended by the State Council on January 8, 2011 and prohibit using the Internet in ways which, among others, result in a leakage of state secrets or a spread of socially destabilizing content. The MPS has supervision and inspection powers in this regard, and relevant local security bureaus may also have jurisdiction. On December 13, 2005, the MPS promulgated *Regulations on Technological Measures for Internet Security Protection*, or the Internet Protection Measures, which took effect on March 1, 2006 and requires internet service providers to take proper measures including anti-virus, data back-up and other related measures, to keep records of certain information about its users (including user registration information, log-in and log-out time, IP address, content and time of posts by users) for at least 60 days, and to detect illegal information, stop transmission of such information, and keep relevant records. If an ICP License holder violates these measures, the PRC government may revoke its ICP License and shut down its websites.

In November 2016, the SCNPC promulgated the *Cyber Security Law of the PRC*, or the Cyber Security Law, which became effective on June 1, 2017 and was amended on October 28, 2025. The Cyber Security Law requires network operators to perform certain functions related to cyber security protection and the strengthening of network information management. For instance, under the Cyber Security Law, network operators of key information infrastructure shall store within the territory of the PRC all the personal information and important data collected and produced within the territory of PRC and their purchase of network products and services that may affect national securities shall be subject to national cybersecurity review. On April 13, 2020, the CAC and other 11 Commissions, Ministries and Administrations, jointly issued the *Measures for Cybersecurity Review,* which took effect on June 1, 2020, to provide for more detailed rules regarding cybersecurity review requirements.

On March 13, 2019, the SAMR and the CAC jointly promulgated the *Announcement on the Implementation of App Security Certification*, or the Implementation Announcement, according to which, the China Cyber Security Review Technology and Certification Center shall be responsible for app security certification work, and app operators are encouraged to undergo such security certification voluntarily; search engines, app stores, among others, are encouraged to clearly mark and give priority to recommend certified apps. As an attachment to the Implementation Announcement, the *Implementation Rules of App Security Certification*, which came into effect on March 15, 2019, stipulated specific certification procedures, post-certification supervision and management of app security certifications.

On June 10, 2021, the SCNPR promulgated the *Data Security Law of the PRC*, or the Data Security Law, which took effect on September 1, 2021. Under the Data Security Law, data refers to any record of information that is kept electronically or otherwise, and data processing includes the collection, storage, use, processing, transmission, provision, and disclosure of data. Pursuant to the Data Security Law, any individual or entity shall only collect data in a legitimate and proper manner. A data security review mechanism will be established by the State, and any data processing activity that endangers or may endanger national security shall be subject to national security review. The security management for the cross-border transfer of important data collected and produced during operation by CIIOs or other data processors within the territory of the PRC shall be subject to the Cyber Security Law and other regulations and rules that promulgated by the CAC and the State Council. In case of any non-compliance under the Data Security Law, a data processor may be ordered to make corrections, and under certain serious circumstances, such as severe data divulgence, may be subject to penalties, including the revocation of business license or other permits.

On December 28, 2021, 13 PRC authorities, including the NDRC, the MOFCOM, the MIIT, the CAC, and several other authorities jointly promulgated the revised *Cybersecurity Review Measures*, which came into effect on February 15, 2022. The Cybersecurity Review Measures provide that, in addition to CIIOs that intend to purchase Internet products and services, online platform operators engaging in data processing activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity Review Office of the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security risks that may be brought about by any procurement, data processing, or overseas listing. The Cybersecurity Review Measures require that an online platform operator which possesses the personal information of at least one million users must apply for a cybersecurity review by the CAC if it intends to be listed in foreign countries. In addition, the Regulations on the Network Data Security Administration (the "Security Administration Regulation") was effective on January 1, 2025, which requires that network data processors who carry out network data processing activities that affect or may affect national security shall undergo a national security review in accordance with relevant national regulations.

To comply with these laws and regulations, we have adopted security policies and measures to protect our cyber system and customer information.

**Regulations Related to Internet Privacy Protection**

Pursuant to the Internet Protection Measures, Internet services providers are prohibited from unauthorized disclosure of users' information to any third parties unless such disclosure is required by the laws and regulations. They are further required to establish management systems and take technological measures to safeguard the freedom and secrecy of the users' correspondences.

On December 28, 2012, the SCNPC promulgated the *Decision on Strengthening Network Information Protection*, which took into effect on the same date, to enhance the legal protection of information security and privacy on the internet. On July 16, 2013, the MIIT promulgated the *Provisions on Protection of Personal Information of Telecommunication and Internet Users*, which took into effect on September 1, 2013, to regulate the collection and use of users' personal information in the provision of telecommunication services and internet information services in China and the personal information includes a user's name, birth date, identification card number, address, phone number, account name, password and other information that can be used independently or in combination with other information for identifying a user.

On December 29, 2011, the MIIT promulgated the *Several Provisions on Regulation of the Order of Internet Information Service Market*, which took into effect on March 15, 2012. The Provisions stipulate that without the consent of users, internet information service providers shall not collect information relevant to the users that can lead to the recognition of the identity of the users independently or in combination with other information, nor shall they provide the information to others, unless otherwise provided by laws and administrative regulations.

On May 8, 2017, the Supreme People's Court and the Supreme People's Procuratorate released the *Interpretations of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Application of Law in the Handling of Criminal Cases Involving Infringement of Citizens' Personal Information*, or the Interpretations, which took into effect on June 1, 2017. The Interpretations clarify several concepts regarding the crime of "infringement of citizens' personal information" stipulated by Article 253A of the Criminal Law of the PRC, including "citizen's personal information", "provision", and "unlawful acquisition". Also, the Interpretations specify the standards for determining "serious circumstances" and "particularly serious circumstances" of this crime.

On January 23, 2019, the CAC, the MIIT, the MPS and the SAMR jointly issued the *Notice on Special Governance of Illegal Collection and Use of Personal Information via Apps*, which restates the requirement of legal collection and use of personal information, encourages app operators to conduct security certifications, and encourages search engines and app stores to clearly mark and recommend those certified apps.

On November 28, 2019, the CAC, MIIT, MPS and SAMR jointly issued the *Measures to Identify Illegal Collection and Usage of Personal Information by APPs*, which lists six types of illegal collection and usage of personal information, including "not publishing rules on the collection and usage of personal information" and "not providing privacy rules."

On May 28, 2020, the NPC adopted the *Civil Code of the PRC*, or the Civil Code, which became effective on January 1, 2021 and abolished the *General Rules of the Civil Law of the PRC*. Pursuant to the Civil Code, the collection, storage, use, process, transmission, provision and disclosure of personal information should follow the principles of legitimacy, properness and necessity.

On March 12, 2021, the CAC, the MIIT, the MPS and the SAMR jointly promulgated the *Regulations on the Scope of Necessary Personal Information for Common Types of Mobile Internet Apps*, which will become effective on May 1, 2021. According to these regulations, an app may not refuse a user from using its basic functional services if the user disagrees to provide unnecessary personal information. In particular, basic functional services of job hunting and recruitment applications are the "exchange of job hunting and recruitment information," and the necessary personal information includes mobile phone numbers of registered users and resumes provided by job seekers. Additionally, the regulations also apply to mini programs, which are apps developed and based on open platform interfaces and available to users without installation.

On August 20, 2021, the SCNPC adopted the *Personal Information Protection Law of the PRC*, or the PIP Law, which took effect on November 1, 2021. The PIP Law includes the basic rules for personal information processing, the rules for cross-border provision of personal information, the rights of individuals in personal information processing activities, the obligations of personal information processors, and the legal responsibilities for illegal collection, processing, and use of personal information. As the first systematic and comprehensive law specifically for the protection of personal information in the PRC, the PIP Law provides, among others, that (i) an individual's consent shall be obtained to use sensitive personal information, such as biometric characteristics and individual location tracking, (ii) personal information operators using sensitive personal information shall notify individuals of the necessity of such use and impact on the individual's rights, and (iii) where personal information operators reject an individual's request to exercise his or her rights, the individual may file a lawsuit with a People's Court.

To comply with these laws and regulations, we have required our customers to consent to our collecting and using of their personal information in order to receive our services, and established information security systems to protect customers' privacy.

**Regulations Related to Consumer Rights Protection**

The *Consumer Rights and Interests Protection Law of the PRC*, or the Consumer Protection Law, promulgated by the SCNPC on October 31, 1993 and most recently amended on October 25, 2013 (effective as of March 15, 2014), and the *Online Trading Measures* issued by the SAIC on January 26, 2014 (effective as of March 15, 2014), set out the obligations of business operators and the rights and interests of the customers. For example, business operators must guarantee the quality, function, usage, term of validity, personal or property safety requirement of the goods and services and provide customers with authentic information about the goods and services. Consumer whose legitimate rights and interests are harmed in the purchase of goods or receipt of services rendered through an online trading platform may seek compensation from the seller or the service provider.

On March 15, 2021, the SAMR promulgated the *Measures for the Supervision and Administration of Online Trading*, or New Online Trading Measures, which was amended on March 18, 2025 and replaced the above original Online Trading Measure. The New Online Trading Measures also apply to all online commerce business conducted through information networks in general, with particular emphasis on transactions through online social networking and online live streaming. Under the New Online Trading Measures, online trading operators shall perform relevant compliance obligations, such as registration with the SAMR, protection of customers' personal information and fair competition.

Additionally, the Civil Code, which became effective on January 1, 2021 and replaced the *Tort Liability Law of the PRC*, provides that both internet users and internet service providers may be liable for the wrongful acts of users who infringe the lawful rights of other parties. If an internet user utilizes internet services to commit a tortious act, the party whose rights are infringed may request the internet service provider to take measures, such as removing or blocking the content, or disabling the links thereto, to prevent or stop the infringement. If the internet service provider does not take necessary measures after receiving such notice, it shall be jointly liable for any further damages suffered by the rights holder. Furthermore, if an internet service provider fails to take necessary measures when it knows that an internet user utilizes its internet services to infringe the lawful rights and interests of other parties, it shall be jointly liable with the internet user for damages resulting from the infringement.

**Regulations Related to Intellectual Property Rights**

***Copyrights***

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The *Copyright Law of the PRC*, or the Copyright Law, which took effect on June 1, 1991, was amended in 2001, 2010 and 2020. The latest version will come into effect on June 1, 2021. Under the currently effective Copyright Law and its implementing regulations adopted in 2002 and amended in 2011 and 2013, Chinese citizens, legal persons, or other organizations will, whether published or not, enjoy copyright provides that Chinese citizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works of literature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right of publication, right of authorship and right of reproduction. The Copyright Law extends copyright protection to Internet activities, products disseminated over the Internet and software products. In addition, the Copyright Law provides for a voluntary registration system administered by the China Copyright Protection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasing infringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/or administrative or criminal liabilities in severe situations.

Pursuant to the *Computer Software Copyright Protection Regulations* promulgated by the State Council in 1991 and amended in 2001, 2011 and 2013 respectively, Chinese citizens, legal persons and other organizations shall enjoy copyright on software they develop, regardless of whether the software is released publicly. Software copyright commences from the date on which the development of the software is completed. The protection period for software copyright of a legal person or other organizations shall be 50 years, concluding on December 31 of the 50th year after the software's initial release. The software copyright owner may go through the registration formalities with a software registration authority recognized by the State Council's copyright administrative department. The software copyright owner may authorize others to exercise that copyright, and is entitled to receive remuneration.

***Trademarks***

Trademarks are protected by the *Trademark Law of the PRC*, which was adopted in 1982 and subsequently amended in 1993, 2001, 2013 and 2019 as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 1983 and as most recently amended on April 29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a 10-year term to registered trademarks and the term may be renewed for another 10-year period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party by entering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a first-to-file principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subject to a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any person applying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark that has already been used by another party and has already gained a "sufficient degree of reputation" through such party's use.

***Patents***

Patents in the PRC are principally protected under the *Patent Law of the PRC* (2020 Revision) and its Implementation Rules (2023 Revision), collectively the Patent Laws. According to the Patent Laws, patents in the PRC are classified into three categories, namely, inventions, utility models and designs. The protection period of a patent right is ten (10) years for utility models, fifteen (15) years for designs, and twenty (20) years for inventions upon the date of application. The Patent Administration Office under the State Council is responsible for receiving, reviewing and approving patent applications. After a patent right is granted for an invention or utility model, except otherwise provided for in the Patent Laws, no entity or individual may, without the permission of the patent owner, exploit the patent, that is, manufacture, use, offer to sell, sell or import the patented product, or use the patented method, or use, offer to sell, sell or import any product which is a direct result of the use of the patented method, for production or business purposes. And after a patent right is granted for a design, no entity or individual shall, without the permission of the patent owner, exploit the patent, that is, manufacture, offer to sell, sell, or import any product containing the patented design for production or business purposes.

***Domain names***

The domain names are protected under the *Administrative Measures on the Internet Domain Names*, or the Domain Name Measures, which was promulgated by the MIIT and became effective in November 2017. The MIIT is the major regulatory body responsible for the administration of the PRC internet domain names, under supervision of which China Internet Network Information Center, or the CNNIC, is responsible for the daily administration of CN domain names and PRC domain names. Pursuant to the Domain Name Measures, the registration of domain names adopts the "first to file" principle and the registrant shall complete the registration via the domain name registration service institutions. In the event of a domain name dispute, the disputed parties may lodge a complaint to the designated domain name dispute resolution institution to trigger the domain name dispute resolution procedure in accordance with the CNNIC Measures on Resolution of the Domain Name Disputes, file a suit to the People's Court, or initiate an arbitration procedure.

**Regulations Related to Foreign Exchange** 

The principal regulations governing foreign currency exchange in China are the *Foreign Exchange Administration Regulations*, promulgated by the State Council in 1996 and most recently amended in 2008. Under the PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from State Administration of Foreign Exchange or SAFE by complying with certain procedural requirements. By contrast, approval from or registration with appropriate governmental authorities is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of foreign currency-denominated loans.

In November 2012, SAFE promulgated the *Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment,* or SAFE Circular 59, which was most recently amended in 2015 and substantially amends and simplifies the current foreign exchange procedures. Pursuant to SAFE Circular 59, the opening of various special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts, and guarantee accounts, the reinvestment of Renminbi proceeds derived by foreign investors in China, and remittance of foreign exchange profits and dividends by a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible previously.

In February 2015, SAFE promulgated the *Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment,* or SAFE Circular 13, pursuant to which, instead of applying for approval regarding foreign exchange registrations of foreign direct investment and overseas direct investment from SAFE, entities and individuals may apply for such foreign exchange registrations from qualified banks. The qualified banks, under the supervision of SAFE, may directly review the applications and conduct the registration.

In March 2015, SAFE issued the *Circular of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises,* or SAFE Circular 19. Pursuant to SAFE Circular 19, a foreign-invested enterprise may, according to its actual business needs, settle with a bank the portion of the foreign exchange capital in its capital account for which the relevant foreign exchange administration has confirmed monetary capital contribution rights and interests (or for which the bank has registered the injection of the monetary capital contribution into the account). In addition, for the time being, foreign-invested enterprises are allowed to settle 100% of their foreign exchange capital on a discretionary basis. A foreign-invested enterprise shall truthfully use its capital for its own operational purposes within the scope of business. Where an ordinary foreign-invested enterprise makes domestic equity investment with the amount of foreign exchanges settled, the invested enterprise must first go through domestic re-investment registration and open a corresponding account for foreign exchange settlement pending payment with the foreign exchange administration or the bank at the place where it is registered.

In June 2016, SAFE promulgated the *Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts,* or SAFE Circular 16, which was amended in December 2023 and September 2025. Pursuant to SAFE Circular 16, in addition to foreign currency capital, enterprises registered in China may also convert their foreign debts, as well as repatriated fund raised through overseas listing, from foreign currency to Renminbi on a discretional basis. SAFE Circular 16 also reiterates that the use of capital so converted shall follow "the principle of authenticity and self-use" within the business scope of the enterprise. According to SAFE Circular 16, the Renminbi funds so converted shall not be used for the purposes of, whether directly or indirectly, (i) paying expenditures beyond the business scope of the enterprises or prohibited by laws and regulations; (ii) making securities investment or other investments (except for banks' principal-secured products); and (iii) granting loans to non-affiliated enterprises, except as expressly permitted in the business license.

In January 2017, SAFE promulgated the *Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification,* or SAFE Circular 3, which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including (i) under the principle of genuine transaction, banks shall check board resolutions regarding profit distribution, the original version of tax filing records, and audited financial statements; and (ii) domestic entities shall hold income to account for previous years' losses before remitting the profits. Further, pursuant to SAFE Circular 3, domestic entities shall make detailed explanations of the sources of capital and utilization arrangements, and provide board resolutions, contracts and other proof when completing the registration procedures in connection with an outbound investment.

On October 23, 2019, SAFE issued the *Circular of the State Administration of Foreign Exchange on Further Promoting the Facilitation of Cross-border Trade and Investment*, or SAFE Circular 28, which allows non-investment foreign-invested enterprises to make domestic equity investment with their capital funds in accordance with the law under the premise that such investment does not violate the existing special administrative measures (negative list) for foreign investment and the project invested in China is authentic and compliant. Pursuant to SAFE Circular 28, upon receiving the payment of consideration from a foreign investor for the equity transfer under foreign direct investment, the domestic transferor, with relevant registration certificates, can process the formalities for account opening, fund receipt, and foreign exchange settlement and use directly at the bank. The foreign investor's deposit remitted from overseas or transferred from domestic accounts can be directly used for its lawful domestic capital contribution as well as domestic and overseas payment after the transaction is concluded.

On April 10, 2020, SAFE issued the *Circular on Optimizing Administration of Foreign Exchange to Support the Development of Foreign-related Business*, or SAFE Circular 8, pursuant to which, eligible enterprises are allowed to use the income under capital account, from such sources as capital funds, foreign debt and overseas listing, for domestic payment without having to provide supporting authentication materials to the banks for every transaction in advance, but the use of funds shall be true and compliant as well as conform to the existing administration regulations regarding use of income under capital account. The concerned bank shall conduct spot checking in accordance with the relevant requirements.

**Regulations Related to Dividend Distribution**

The principal regulations governing the distribution of dividends paid by the wholly foreign owned subsidiaries of the Company (the "WFOEs") include the *Company Law of PRC,* which applies to both PRC domestic companies and foreign-invested companies, and the Foreign Investment Law and its implementing rules, which apply to foreign-invested companies. Under these regulations, WFOEs in China may pay dividends only out of their accumulated profits, if any, as determined in accordance with PRC accounting standards and regulations. In addition, WFOEs in China are required to set aside at least 10% of its after-tax profits based on PRC accounting standards each year to its general reserves until its cumulative total reserve funds reaches 50% of its registered capital. These reserve funds, however, may not be distributed as cash dividends.

**Regulations Related to Foreign Exchange Registration of Offshore Investment by PRC Residents**

In July 2014, SAFE issued the *Circular of the State Administration of Foreign Exchange on Issues concerning Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles*, or SAFE Circular 37 which was most recently amended on June 15, 2018 and has replaced the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents' Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles (known as Circular 75). SAFE Circular 37 regulates foreign exchange matters in relation to the use of special purpose vehicles, or "SPVs," by PRC residents or entities to seek offshore investment and financing or conduct round trip investment in China. Under SAFE Circular 37, an SPV refers to an offshore entity established or controlled, directly or indirectly, by PRC residents or entities for the purpose of seeking offshore financing or making offshore investment, using legitimate domestic or offshore assets or interests, while "round trip investment" refers to the direct investment in China by PRC residents or entities through SPVs, namely, establishing foreign-invested enterprises to obtain the ownership, control rights and management rights. Circular 37 requires that, before making contribution into an SPV, PRC residents or entities are required to complete foreign exchange registration with SAFE or its local branch.

In February 2015, SAFE promulgated the SAFE Circular 13. SAFE Circular 13 has amended SAFE Circular 37 by requiring PRC residents or entities to register with qualified banks instead of SAFE or its local branch in connection with their establishment of an SPV.

In addition, pursuant to SAFE Circular 37, an amendment to registration or subsequent filing with qualified banks by such PRC resident is also required if there is a material change with respect to the capital of the offshore company, such as any change of basic information (including change of such PRC residents, change of name and operation term of the SPV), increases or decreases in investment amount, transfers or exchanges of shares, or mergers or divisions. Failure to comply with the registration requirements as set forth in SAFE Circular 37 and SAFE Circular 13, misrepresent on or failure to disclose controllers of foreign-invested enterprises that are established by round-trip investment may result in bans on the foreign exchange activities of the relevant onshore company, including the payment of dividends and other distributions to its offshore parent or affiliates, and may also subject relevant PRC residents to penalties under the Foreign Exchange Administration Regulations of the PRC.

**Regulations Related to Foreign Debt**

As an offshore holding company, we may make additional capital contributions to WFOEs subject to approval from the local department of commerce and the SAFE, with no limitation on the amount of capital contributions. We may also make loans to WFOEs subject to the approval from SAFE or its local office and the limitation on the amount of loans.

By means of making loans, WFOEs are subject to the relevant PRC laws and regulation relating to foreign debts. On January 8, 2003, the State Development Planning Commission, SAFE, and Ministry of Finance, or MOF, jointly promulgated the Circular on the Interim Provisions on the Management of Foreign Debts, or the Foreign Debts Provisions, which became effective on March 1, 2003, and was most recently amended on July 26, 2022. Pursuant to Foreign Debts Provisions, the total amount of foreign loans received by a foreign-invested company shall not exceed the difference between the total investment in projects as approved by the MOFCOM or its local counterpart and the amount of registered capital of such foreign-invested company. In addition, on January 12, 2017, the People's Bank of China, or PBOC, issued the Circular on Full-Coverage Macro-Prudent Management of Cross-Border Financing, or the PBOC Circular 9, which sets out the statutory upper limit on the foreign debts for PRC non-financial entities, including both foreign-invested companies and domestic-invested companies, and the macro-prudential adjustment parameter is 1. Pursuant to the PBOC Circular 9, the foreign debt upper limit for both foreign-invested companies and domestic-invested companies is calculated as twice the net asset of such companies. As to net assets, the companies shall take the net assets value stated in their latest audited financial statement. On March 11, 2020, the PBOC and SAFE promulgated the Circular of the People's Bank of China and the State Administration of Foreign Exchange on Adjusting the Macro-prudential Regulation Parameter for Full-covered Cross-border Financing, which provides that based on the current macro economy and international balance of payments, the macro-prudential regulation parameter as set forth in the PBOC Circular 9 is updated from 1 to 1.25. Since the promulgation of the PBOC Circular 9, the upper limit undergone several adjustments. On January 13, 2025, the PBOC and the SAFE issued the Notice of the People's Bank of China and the State Administration of Foreign Exchange Raising the Macro-prudential Adjustment Parameter for Cross-border Financing. Pursuant to this notice, the macro-prudential adjustment parameter for cross-border financing for enterprises and financial institutions is updated to 1.75.

The PBOC Circular 9 does not supersede the Foreign Debts Provisions. It provides a one-year transitional period from January 11, 2017, for foreign-invested companies, during which foreign-invested companies, such as WFOEs, could adopt their calculation method of foreign debt upper limit based on either the Foreign Debts Provisions or the PBOC Circular 9. The transitional period ended on January 11, 2018. Upon its expiry, pursuant to the PBOC Circular 9, PBOC and SAFE shall reevaluate the calculation method for foreign-invested companies and determine what the applicable calculation method would be. As of the date of this annual report, neither the PBOC nor SAFE has promulgated and made public any further rules, regulations, notices, or circulars in this regard.

**Regulations Related to Tax**

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***Enterprise Income Tax***

On March 16, 2007, the SCNPC promulgated the EIT Law, which was recently amended on December 29, 2018. On December 6, 2007, the State Council enacted the Regulations for the Implementation of the Enterprise Income Tax Law, which was last amended on December 6, 2024, and was effective on January 1, 2025. Under the EIT Law and relevant implementation regulations, both resident enterprises and non-resident enterprises are subject to the enterprise income tax so long as their income is generated within the territory of PRC. "Resident enterprises" are defined as enterprises that are established in China in accordance with PRC laws, or that are established in accordance with the laws of foreign countries but are actually or in effect controlled from within the PRC. "Non-resident enterprises" are defined as enterprises that are organized under the laws of foreign countries and whose actual management is conducted outside the PRC, but have established institutions or premises in the PRC, or have no such established institutions or premises but have income generated from inside the PRC. Under the EIT Law and relevant implementing regulations, a uniform corporate income tax rate of 25% is applied. If non-resident enterprises have not formed permanent establishments or premises in the PRC, or if they have formed permanent establishment or premises in the PRC but there is no actual relationship between the relevant income derived in the PRC and the established institutions or premises set up by them, however, enterprise income tax is set at the rate of 10% with respect to their income sourced from inside the PRC.

The EIT Law and its implementation rules permit certain "high and new technology enterprises strongly supported by the state" that independently own core intellectual property and meet statutory criteria, to enjoy a reduced 15% enterprise income tax rate.

According to the Administrative Rules for the Certification of High Tech Enterprises, effective on January 1, 2008 and amended on January 29, 2016 (effective as of January 1, 2016), for each entity accredited as High Tech Enterprise, such status is valid for three years if it meets the qualifications for High Tech Enterprise on a continuing basis during such period.

**Value-Added Tax ("VAT")**

The Provisional Regulations of the PRC on Value-added Tax was promulgated by the State Council on December 13, 1993, and most recently amended on November 19, 2017. The Detailed Rules for the Implementation of the Provisional Regulations of the PRC on Value-added Tax (Revised in 2011) were promulgated by the MOF on December 25, 1993, and were recently amended on October 28, 2011. On April 4, 2018, MOF and SAT jointly promulgated the Circular on Adjustment of Value-Added Tax Rates, or MOF and SAT Circular 32. On March 20, 2019, MOF, SAT and General Administration of Customs, or GAC, jointly issued a Circular on Relevant Polices for Deepening Value-added Tax Reform, or MOF, SAT and GAC Circular 39, which became effective from April 1, 2019. According to the abovementioned laws and circulars, all enterprises and individuals engaged in the sale of goods, the provision of processing, repair and replacement services, sales of services, intangible assets, real property and the importation of goods within the territory of the PRC are the taxpayers of VAT. The VAT tax rates generally applicable are simplified as 13%, 9%, 6% and 0%, and the VAT tax rate applicable to the small-scale taxpayers is 3%.

On December 25, 2024, the Standing Committee of the National People's Congress promulgated the Value-added Tax Law of the PRC (the "VAT Law"), which became effective on January 1, 2026 and replaced the Provisional Regulations of the PRC on Value-Added Tax. The VAT Law of the PRC provides that VAT rates generally applicable are simplified as 13%, 9% and 6%, and the VAT rate for the simplified tax calculation method is 3%. To refine and implement the provisions of the VAT Law, the Regulations for the Implementation of the Value-Added Tax Law of the PRC was promulgated on December 25, 2025 and became effective on January 1, 2026.

***Withholding Tax***

The Enterprise Income Tax Law of the PRC provides that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident investors which do not have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within the PRC.

Pursuant to an Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Incomes, or the Double Tax Avoidance Arrangement, and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions and requirements under such Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5%. Based on the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, or the SAT Circular 81, issued on February 20, 2009, by the SAT, however, if the relevant PRC tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment. According to the Circular on Several Questions regarding the "Beneficial Owner" in Tax Treaties, which was issued on February 3, 2018, by the SAT and took effect on April 1, 2018, when determining the applicant's status of the "beneficial owner" regarding tax treatments in connection with dividends, interests or royalties in the tax treaties, several factors, including without limitation, whether the applicant is obligated to pay more than 50% of his or her income in 12 months to residents in third country or region, whether the business operated by the applicant constitutes the actual business activities, and whether the counterparty country or region to the tax treaties does not levy any tax or grant tax exemption on relevant incomes or levy tax at an extremely low rate, will be taken into account, and it will be analyzed according to the actual circumstances of the specific cases. This circular further provides that applicants who intend to prove his or her status of the "beneficial owner" shall submit the relevant documents to the relevant tax bureau according to the Announcement on Issuing the Measures for the Administration of Non-Resident Taxpayers' Enjoyment of the Treatment under Tax Agreements.

***Tax on Indirect Transfer***

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On February 3, 2015, the SAT issued the Circular on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC Resident Enterprises, or SAT Circular 7. Pursuant to SAT Circular 7, an "indirect transfer" of assets, including equity interests in a PRC resident enterprise, by non-PRC resident enterprises, may be re-characterized and treated as a direct transfer of PRC taxable assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax. When determining whether there is a "reasonable commercial purpose" of the transaction arrangement, features to be taken into consideration include, inter alia, whether the main value of the equity interest of the relevant offshore enterprise derives directly or indirectly from PRC taxable assets; whether the assets of the relevant offshore enterprise mainly consist of direct or indirect investment in China or if its income is mainly derived from China; and whether the offshore enterprise and its subsidiaries directly or indirectly holding PRC taxable assets have real commercial nature which is evidenced by their actual function and risk exposure. According to SAT Circular 7, where the transferee fails to withhold any or sufficient tax, the transferor shall declare and pay such tax to the tax authority by itself within the statutory time limit. Late payment of applicable tax will subject the transferor to default interest. SAT Circular 7 does not apply to transactions of sale of shares by investors through a public stock exchange where such shares were acquired on a public stock exchange. On October 17, 2017, the SAT issued the Circular on Issues of Tax Withholding regarding Non-PRC Resident Enterprise Income Tax, or SAT Circular 37, which further elaborates the relevant implemental rules regarding the calculation, reporting and payment obligations of the withholding tax by the non-resident enterprises. Nonetheless, there remain uncertainties as to the interpretation and application of SAT Circular 7. SAT Circular 7 may be determined by the tax authorities to be applicable to our offshore transactions or sale of our shares or those of our offshore subsidiaries where non-resident enterprises, being the transferors, were involved.

**Regulations Related to Employment and Social Welfare**

***Employment***

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The Labor Law of the PRC, which was promulgated on July 5, 1994, effective since January 1, 1995, and most recently amended on December 29, 2018, the Labor Contract Law of the PRC, which was promulgated on June 29, 2007, and amended on December 28, 2012, and the Implementation Regulations of the Labor Contract Law of the PRC, which was promulgated on September 18, 2008, are the principal regulations that govern employment and labor matters in the PRC. Under the above regulations, labor contracts shall be concluded in writing if labor relationships are to be or have been established between employers and the employees. Employers are prohibited from forcing employees to work above certain time limit and employers shall pay employees for overtime work in accordance to national regulations. In addition, wages may not be lower than the local minimum wage. Employers must establish a system for labor safety and sanitation, strictly abide by state standards, and provide relevant education to its employees. Employees are also required to work in safe and sanitary conditions.

***Social Insurance and Housing Fund***

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Under the Social Insurance Law of the PRC that was promulgated by the SCNPC on October 28, 2010, and came into force as of July 1, 2011, and was most recently amended on December 29, 2018 (also the effective date), together with other laws and regulations, employers are required to pay basic pension insurance, unemployment insurance, basic medical insurance, employment injury insurance, maternity insurance, and other social insurance for its employees at specified percentages of the salaries of the employees, up to a maximum amount specified by the local government regulations from time to time. When an employer fails to fully pay social insurance premiums, relevant social insurance collection agency shall order it to make up for any shortfall within a prescribed time limit, and may impose a late payment fee at the rate of 0.05% per day of the outstanding amount from the due date. If such employer still fails to make up for the shortfalls within the prescribed time limit, the relevant administrative authorities shall impose a fine of one to three times the outstanding amount upon such employer.

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In accordance with the Regulations on the Management of Housing Fund which was promulgated by the State Council in 1999 and most recently amended in March 2019 (which became effective as of March 24, 2019), employers must register at the designated administrative centers and open bank accounts for depositing employees' housing funds. Employer and employee are also required to pay and deposit housing funds, with an amount no less than 5% of the monthly average salary of the employee in the preceding year in full and on time.

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**Regulations Related to Mergers and Acquisitions and Overseas Listings**

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On August 8, 2006, six PRC governmental and regulatory agencies, including MOFCOM and the China Securities Regulatory Commission, or the CSRC, promulgated the Rules on Acquisition of Domestic Enterprises by Foreign Investors, or the M&A Rules, governing the mergers and acquisitions of domestic enterprises by foreign investors that became effective on September 8, 2006, and was amended on June 22, 2009. The M&A Rules, among other things, requires that offshore SPVs that are controlled by PRC companies or individuals and that have been formed for overseas listing purposes through acquisitions of PRC domestic interest held by such PRC companies or individuals, to obtain the approval of the CSRC prior to publicly listing their securities on an overseas stock exchange.

Our PRC counsel has advised us that, based on its understanding of current PRC laws, rules, and regulations, and the M&A Rules, the CSRC approval is not required in the context of this offering because: (i) our PRC subsidiaries were established by means of direct investment rather than by mergers with or acquisitions of any PRC domestic companies as defined under the M&A Rules, and (ii) no explicit provision in the M&A Rules classifies the respective contractual arrangements among GIOP BJ, SDH and its shareholders as a type of acquisition transaction falling under the M&A Rules. Notwithstanding the above opinion, our PRC counsel has further advised us that uncertainties still exist as to how the M&A Rules will be interpreted and implemented and its opinions summarized above are subject to any new laws, rules, and regulations or detailed implementations and interpretations in any form relating to the M&A Rules. If the CSRC or other PRC regulatory agencies subsequently determine that prior CSRC approval was required, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. See "Risk Factors—Risks Related to Doing Business in China—The failure to comply with PRC regulations relating to mergers and acquisitions of domestic entities by offshore special purpose vehicles may subject us to severe fines or penalties and create other regulatory uncertainties regarding our corporate structure."

On February 17, 2023, the CSRC released the Trial Measures and five supporting guidelines, which took effect on March 31, 2023. Pursuant to the Trial Measures, PRC domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of relevant applications or its completion of subsequent offerings. If a domestic company fails to complete required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines.

The Trial Measures outline the circumstances where domestic companies are prohibited from offering and listing securities overseas, if such overseas offering and listing made by domestic companies (i) are explicitly prohibited by laws; (ii) may endanger national security as determined by relevant competent departments under the State Council; (iii) involve criminal offenses that disrupting PRC economy such as corruption, bribery, embezzlement, or misappropriation of property by such domestic company, the controlling shareholder, and/or actual controller in the recent three years; (iv) involve such domestic company in investigations for suspicion of criminal offenses or major violations of laws and regulations; or (v) involve material ownership disputes over the shares held by the controlling shareholder or by other shareholders that are controlled by the controlling shareholder and/or actual controller. We believe that our listing on Nasdaq does not fall under the circumstance that such overseas listing is prohibited by the Trial Measures.

On the same day, the CSRC also held a press conference for the release of the Trial Measures and issued the CSRC Notice, which, among others, clarifies that PRC domestic companies that have already been listed overseas before the effective date of the Trial Measures, which is March 31, 2023, shall be deemed as Existing Issuers, and Existing Issuers are not required to complete the filing procedures with the CSRC immediately, and they shall be required to file with the CSRC for any subsequent offerings. We are an Existing Issuer, based on the foregoing, we are not required to complete the filing procedures with the CSRC immediately, and shall be required to file with the CSRC for any subsequent offerings.

On February 24, 2023, the CSRC, together with the MOF, the National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions, which were issued by the CSRC and National Administration of State Secrets Protection and National Archives Administration of China in 2009. The revised Provisions were issued under the title the "Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies," and came into effect on March 31, 2023, together with the Trial Measures. One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, among other things, (i) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities, including securities companies, securities service providers, and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (ii) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities, including securities companies, securities service providers, and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations. Any failure or perceived failure by our Company, our subsidiaries or the VIE and its subsidiaries to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities being held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime.

The Trial Measures and the revised Provisions that recently issued by the PRC authorities may subject us to additional compliance requirements in the future. See "Risk Factors — Risks Related to Doing Business in China — The Trial Measures and the revised Provisions recently issued by the PRC authorities may subject us to additional compliance requirements in the future."

**The following section sets forth a summary of the principal PRC laws and regulations relevant to graphite anode material manufacturing and sales business operations in China.**

**Industrial Polices**

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Foreign investors and foreign-invested enterprises investing in the PRC shall comply with the Catalog of Industries for Encouraging Foreign Investment (2025 edition), which was most recently amended by the National Development and Reform Commission (the "NDRC") and the Ministry of Commerce (the "MOFCOM") on December 15, 2025 and took effect on January 1, 2023 (the "Catalog"). Pursuant to the Catalog, the development and production of lithium-ion batteries falls within the scope of industries in which foreign investment is encouraged.

According to the Guiding Catalog for Industrial Restructuring, which was promulgated by the NDRC on December 2, 2005, with the latest amendment on December 1, 2023, and was effective on February 1, 2024, new batteries such as lithium-ion batteries, and lithium-ion batteries use intermediate phase Anode materials such as carbon microspheres and silicon carbon fall into the state-encouraged industries.

According to the Guiding Catalog for Key Products and Services for Strategic Emerging Industries promulgated by the NDRC on January 25, 2017, high-power graphite electrodes, graphite for negative electrodes of lithium-ion batteries, mesocarbon microspheres, Synthetic diamond etc. are key products and services for strategic emerging industries.

According to the Guiding Opinions on Accelerating the Development of New Energy Storage jointly promulgated by the NDRC and the National Energy Administration on July 15, 2021, the PRC will strive to build a clean, low-carbon, safe and efficient energy system, and seek to drive down the cost and advance the commercial-scale application of more mature new energy storage technologies such as lithium-ion batteries, in an effort to achieve carbon peak and carbon neutrality.

In order to encourage and guide the technological progress and normative development of lithium-ion battery industry, the Ministry of Industry and Information Technology (the "MIIT") enacted the Conditions on the Standardization of Lithium Battery Industry (the "Standardization Conditions") on August 31, 2015, which was latest amended onJune 18, 2024, and was effective on June 20, 2024, and provides guidance for all types of upstream and downstream manufacturers in the lithium-ion battery industry, including negative electrode materials, on their production scale and process technology, product quality and performance, comprehensive utilization of resources and environmental protection and safety management, etc. However, the Standardization Conditions is not pre-emptive and mandatory for administrative approval.

The MIIT further enacted the Management Measures of Standardization Announcement of Lithium Battery Industry according to the Standardization Conditions on January 16, 2019, which was latest amended on June 18, 2024, and was effective on June 20, 2024, and provides that the responsible departments of industry and information technology in each province, autonomous region and municipality directly under the central government are responsible for the acceptance, verification and submission of announcement applications for lithium battery industry enterprise in the region, and for supervising and checking the implementation of the Standardization Conditions.

**Regulations Related to Production Safety**

According to the Production Safety Law of the PRC (the "Production Safety Law")latest amended by the Standing Committee of the National People's Congress (the "SCNPC") on June 10, 2021 and came into effect on September 1, 2021, an enterprise shall (i) provide production safety conditions as stipulated in the Production Safety Law and other relevant laws, administrative regulations, national and industry standards, (ii) establish a comprehensive production safety accountability system and production safety rules, and (iii) develop production safety standards to ensure production safety. Any entity that fails to provide required production safety conditions is prohibited from engaging in production activities. The person-in-charge of an enterprise shall be fully responsible for the safety of production of the enterprise. An enterprise having more than 100 employees shall establish a production safety management institution or be equipped with dedicated production safety management personnel.

According to the Measures for the Supervision and Administration of "Three Simultaneities" for the Safety Facilities of Construction Projects promulgated by the former State Administration of Work Safety (currently known as the Ministry of Emergency Management) on December 14, 2010 and amended on April 2, 2015, the safety facilities in a newly built, reconstructed or expanded construction project must be designed, constructed and put into use in production simultaneously with the main body of the project. The enterprises shall demonstrate and pre-assess the safety conditions of its construction projects, make a safety design chapter, submit to the relevant work safety administrative department for examination or filing, and apply to the work safety administrative department for the completion and acceptance or the filing of its projects. If an enterprise violates the relevant requirements, it may be warned and be ordered to make corrections within a specified time limit. Failure to make correction within the specified time limit may result in the enterprise being ordered to discontinue the construction process or suspend its production and business operation for rectification, and being imposed a fine.

On July 5, 2022, Sunrise Guizhou completed the filing-for-record procedures with local work safety administrative department for its construction of the first phase of the manufacturing plant.

**Regulations Related to Product Quality**

According to the Product Quality Law of the PRC (the "Product Quality Law"), promulgated on February 22, 1993 and last amended on December 29, 2018 by the SCNPC, producers and sellers shall establish a sound internal product quality control system and strictly adhere to a job responsibility system in relation to quality standards and quality liabilities together with implementing corresponding examination and inspection measures. The counterfeiting or imitation of quality marks such as certification marks is prohibited; falsifying the place of origin of product, and falsifying or imitating the name or address of another factory is prohibited; adulteration of, or mixing of improper elements with products under manufacturing or on sale, passing off the sham as the genuine or passing off the inferior as the superior is prohibited. Any manufacturer or seller who violates the Product Quality Law may be subject to (i) administrative penalties including suspension of production or sale, ordered correction of illegal activities, confiscation of products subject to illegal production or sale, imposition of fines, confiscation of illegal gains and, in severe cases, revocation of business license; and (ii) criminal liabilities if the illegal activity constitutes crime.

As of the date of this annual report, Sunrise Guizhou has passed the ISO 14001, ISO 45001, ISO 9001, ISO 27001, GB/T 29490-2023 and IATF 16949 quality management system certification for its development and manufacturing of graphite anode materials for lithium-ion batteries.

**Regulations Related to Real Properties**

***Land***

Pursuant to the Land Administration Law of the PRC, which became effective from 1 January 1987 and was last amended on 26 August 2019, and the Regulation on the Implementation of the Land Administration Law of the PRC, which became effective from 1 February 1991 and was last amended on 2 July 2021, issues related to the ownership of land, land use right, the overall planning of land use, the protection of cultivated land and the construction land in the PRC are all subject to the supervision of the above laws and regulations.

**Property Rights**

Pursuant to the Civil Code of the PRC, civil relationships arising from the possession and the use of property (including ownership, usufructuary right, security rights to the property and possession) are subject to the law, of which a holder of the land use right of the construction land enjoys the rights to possess, use and seek proceeds from the state-owned land as prescribed by the laws and the rights to build buildings, structures and their accessory facilities on such land. A mortgage can be set up on the land use right of the construction land, buildings and other land affiliated items as prescribed by the laws.

***Construction Under Progress***

Pursuant to the Law of Urban and Rural Planning of the PRC, which became effective from 1 January 2008 and was last amended on 23 April 2019, Construction Law of the PRC, which became effective from 1 March 1998 and was last amended on 23 April 2019, Administrative Measures for Construction Permits of Construction Projects, which became effective on 25 October 2014 and was last amended on 30 March 2021 and the Regulations on the Administration of Construction Project Quality, which became effective from 30 January 2000 and was last amended on 23 April 2019, construction activities carried out in the preoccupied areas of cities, towns and villages and in areas subject to planning control due to the needs of urban and rural construction and development shall comply with the relevant requirements of the Law of Urban and Rural Planning of the PRC, under which the construction enterprises shall obtain the Construction Land Use Planning Permit and Construction Works Planning Permit from the competent urban and rural planning department of the City and County People's Government and apply for the Construction Permit with the competent housing and urban-rural department of the People's Government above county level at places where the construction projects are located before construction commences as prescribed by the laws. Upon receiving the completion report of the construction project, the construction enterprise shall organize the acceptance inspection by the relevant design, construction and supervision enterprises.

Sunrise Guizhou obtained the Construction Land Use Planning Permit for construction projects in March 2022 and December 2023, Construction Works Planning Permit from local urban and rural planning department for construction projects in March 2022, June 2023 and November 2023, and obtained Construction Permit from local housing and urban-rural department for construction projects in March and April 2022 .

**Regulations Related to Environmental Protection**

According to the Environmental Protection Law of the PRC (the "Environmental Protection Law") promulgated by the SCNPC on December 26, 1989 and last amended on April 24, 2014, any entity that discharges or will discharge pollutants in the course of operation or other activities must implement effective environmental protection measures to control and properly handle of hazardous substances such as waste gas, waste water, waste residues, dust, malodorous gases, radioactive substances, noise, vibration and electromagnetic radiation generated in the course of such activities. The State implements a pollutant discharge permit management system in accordance with the law. According to the Environmental Protection Law and the Regulations on the Administration of Pollutant Discharge Licensing, which was promulgated by the State Council on January 24, 2021 and came into effect on March 1, 2021, enterprises, business units and other producers and operators that implement the pollutant discharge licensing management shall discharge pollutants according to the requirements of the pollutant discharge license, and shall not discharge pollutants without obtaining the pollutant discharge license. The competent environmental protection authorities impose various administrative penalties on individuals or enterprises in violation of the Environmental Protection Law, for example, if an entity discharges pollutant in violation of the pollutant discharge standards or volume control requirement, the entity would be subject to administrative penalties, including order to suspend business for rectification, and even order to terminate or close down business under severe circumstances.

Pursuant to the Regulations on the Administration of Environmental Protection of Construction Projects promulgated by the State Council on November 29, 1998 and amended on July 16, 2017 and the Interim Measures for Environmental Protection Acceptance Examination Upon Completion of Construction Projects promulgated by the former Ministry of Environmental Protection on November 20, 2017, the PRC implements a system to appraise the environmental impact of construction projects. The construction entity shall submit an environmental impact report or an environmental impact statement for approval prior to the commencement of the construction project, or an environmental impact registration form as required by the environmental protection administrative department of the State Council for record. In addition, after the completion of a construction project for which an environmental impact report or an environmental impact statement has been prepared, the construction entity shall, in accordance with the standards and procedures prescribed by the competent administrative department of environmental protection under the State Council, conduct acceptance checks on the supporting environmental protection facilities and prepare an acceptance report. For construction projects that are constructed in phases or put into production or use in phases, the corresponding environmental protection facilities shall be inspected and accepted in phases. The construction project can only be put into production or use after the completed supporting environmental protection facilities have passed the acceptance inspection. Facilities that have not been carried out or have not passed the acceptance examination shall not be put into production or use.

According to the Environmental Protection Tax Law of the PRC promulgated by the SCNPC on December 25, 2016, amended on October 26, 2018 and implemented on the same day, and the Regulations for the Implementation of the Environmental Protection Tax Law of the PRC came into effective on January 1, 2018, (i) enterprises, public institutions and other producers and operators that directly discharge pollutants to the environment within the territory of the PRC and other sea areas under the jurisdiction of the PRC are taxpayers of environmental pollution tax, and shall pay environmental pollution tax in accordance with the aforementioned laws and regulations, (ii) the Administrative Regulations on the Collection and Use of Pollutant Discharge Fees was repealed and no more pollutant discharge fees shall be collected.

On March 12, 2026, The Ecological Environment Code of the PRC was adopted by the National People's Congress and will come into force on August 15, 2026. This Code integrates multiple existing single-method laws in the field of environmental protection. Under the current legal framework, upon the effectiveness of this Code, ten laws, including the Environmental Protection Law, will be concurrently repealed.

On February 25, 2022 and December 12, 2023, Sunrise Guizhou obtained the approval for the Environmental Impact Report for its construction of the first phase of the manufacturing plant. On April 25, 2022, Sunrise Guizhou obtained the Pollutant Discharge License, which will remain effective for 5 years. On January 5, 2024, Sunrise Guizhou submitted the Filing for Environmental Protection Acceptance upon Completion of the Construction Project.

**Regulations Related to Fire Control**

According to the Fire Control Law of the PRC promulgated by the SCNPC on April 29, 1998 and last amended on April 29, 2021, the fire control design and construction of a construction project shall comply with the national fire control technical standards for construction projects. Upon completion of construction of a development project which is required to apply for fire safety inspection and acceptance as stipulated by the housing and urban-rural development authority of the State Council, the developer shall apply to the housing and urban-rural development authority for fire safety inspection and acceptance. For development projects other than those stipulated in the preceding paragraph, the developer shall complete filing formalities with the housing and urban-rural development authority following the inspection and acceptance, the housing and urban-rural development department shall conduct spot check. Where a development project which is required by law to undergo fire safety inspection and acceptance does not undergo fire safety inspection and acceptance, or does not pass fire safety inspection and acceptance, the project shall not be put into use; the use of other development projects which do not pass inspection in spot checks carried out pursuant to the law shall be suspended.

On March 16, 2023, Sunrise Guizhou obtained the Filing Certificate for Fire Safety Inspection and Acceptance of Construction Project from local urban and rural development authority for its construction of the first phase of the manufacturing plant.

**C. Organizational Structure**

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The following diagram illustrates our current corporate structure, which includes our significant subsidiaries as of the date of this annual report:

![](ea028883401_img19.jpg)

**Contractual Arrangements among GIOP BJ, the VIE and Its Shareholders**

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Neither we nor our subsidiaries own any equity interest in the VIE. GIOP BJ, the VIE and its shareholders entered into a series of contractual arrangements, also known as VIE Agreements, in June 2019. Pursuant to the VIE Agreements, for accounting purposes only, we are the primary beneficiary of the VIE to the extent that we consolidate the financial results of the VIE in our consolidated statements under U.S. GAAP.

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Each of the VIE Agreements is described in detail below:

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<u>Exclusive Technical and Consulting Services Agreement</u>

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Pursuant to the Exclusive Technical and Consulting Services Agreement between the VIE and GIOP BJ (the "Exclusive Service Agreement"), GIOP BJ provides the VIE with technical support, consulting services, business support and other management services relating to its day-to-day business operations and management, on an exclusive basis, utilizing its advantages in technology, human resources, and information. For services rendered to the VIE by GIOP BJ under the Exclusive Service Agreement, GIOP BJ is entitled to collect a service fee approximately equal to the VIE's earnings before corporate income tax, i.e., the VIE's revenue after deduction of operating costs, expenses and other taxes, subject to adjustment based on services rendered and the VIE's operation needs.

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This agreement became effective on June 10, 2019 and will remain effective unless otherwise terminated as required by laws or regulations, or by relevant governmental or regulatory authorities. Nevertheless, this agreement shall be terminated after all the equity interest in the VIE held by its shareholders and/or all the assets of the VIE have been legally transferred to GIOP BJ and/or its designee in accordance with the Exclusive Option Agreement.

The CEO of GIOP BJ, Mr. Haiping Hu, is currently managing the VIE pursuant to the terms of the Exclusive Service Agreement. The Exclusive Service Agreement does not prohibit related party transactions. The Company's audit committee is required to review and approve in advance any related party transactions, including transactions involving GIOP BJ or the VIE.

<u>Equity Pledge Agreement</u>

Under the Equity Pledge Agreement between GIOP BJ, and shareholders of the VIE, together holding 100% of the shares of the VIE (the "VIE Shareholders"), the VIE Shareholders pledged all of their equity interests in the VIE to GIOP BJ to guarantee the performance of the VIE's obligations under the Exclusive Service Agreement. Under the terms of the Equity Pledge Agreement, in the event that the VIE or the VIE Shareholders breach their respective contractual obligations under the Exclusive Service Agreement, GIOP BJ, as pledgee, will be entitled to certain rights, including, but not limited to, the right to collect dividends generated by the pledged equity interests. The VIE Shareholders also agreed that upon occurrence of any event of default, as set forth in the Equity Pledge Agreement, GIOP BJ is entitled to dispose of the pledged equity interests in accordance with applicable PRC laws. The VIE Shareholders further agreed not to dispose of the pledged equity interests or take any actions that would prejudice GIOP BJ's interests without the prior written consent of GIOP BJ.

The Equity Pledge Agreement is effective until: (1) the secured debt in the scope of pledge is cleared off; and (2) Pledgers transfer all the pledged equity interests to Pledgees according to the Exclusive Option Agreement, or other entity or individual designated by it.

The purposes of the Equity Pledge Agreement are to (1) guarantee the performance of the VIE's obligations under the Exclusive Service Agreement; (2) make sure the VIE Shareholders do not transfer or assign the pledged equity interests, or create or allow any encumbrance that would prejudice GIOP BJ's interests without GIOP BJ's prior written consent. In the event the VIE breaches its contractual obligations under the Exclusive Service Agreement, GIOP BJ will be entitled to dispose of the pledged equity interests.

<u>Exclusive Option Agreement</u>

Under the Exclusive Option Agreement, the VIE Shareholders irrevocably granted GIOP BJ (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, once or at multiple times, at any time, part or all of their equity interests in the VIE or the assets of the VIE. The option price to be paid by GIOP BJ to each shareholder of the VIE is RMB10 (US$1.37) or the minimum amount to the extent permitted under PRC law at the time when such transfer occurs.

Under the Exclusive Option Agreement, GIOP BJ may at any time under any circumstances, purchase, or have its designee purchase, at its discretion, to the extent permitted under PRC law, all or part of the VIE Shareholders' equity interests in the VIE or the assets of the VIE. The Exclusive Option Agreement, together with the Equity Pledge Agreement, the Exclusive Service Agreement, and Powers of Attorney, enable GIOP BJ to exercise effective control over the VIE.

The Exclusive Option Agreement remains effective until all the equity or assets of the VIE is legally transferred under the name of GIOP BJ and/or other entity or individual designated by it, or unilaterally terminated by GIOP BJ with a 30-day written notice.

<u>Powers of Attorney</u>

Under each of the Powers of Attorney, the VIE Shareholders authorized GIOP BJ to act on their behalf as their exclusive agent and attorney with respect to all rights as shareholders, including, but not limited to: (a) attending shareholders' meetings; (b) exercising all the shareholder's rights, including voting, that shareholders are entitled to under the laws of China and the Articles of Association, including, but not limited to, the sale or transfer or pledge or disposition of shares in part or in whole; and (c) designating and appointing on behalf of shareholders the legal representative, the executive director, supervisor, the chief executive officer, and other senior management members of the VIE.

The Powers of Attorney are irrevocable and continuously valid from the date of execution of the Powers of Attorney, so long as the VIE Shareholders own the equity interests of the VIE.

<u>Spousal Consent</u>

Pursuant to the Spousal Consent, each spouse of the individual shareholders of the VIE irrevocably agreed that the equity interest in the VIE held by their respective spouses would be disposed of pursuant to the Equity Pledge Agreement, the Exclusive Option Agreement, and the Powers of Attorney. Each spouse of the shareholders agreed not to assert any rights over the equity interest in the VIE held by their respective spouses. In addition, in the event that any spouse obtains any equity interest in the VIE through the respective shareholder for any reason, he or she agreed to be bound by the contractual arrangements.

**D. Property, Plants and Equipment**

I. The VIE currently maintains offices in Beijing and Zibo in the PRC. The total office space is 891 square meters, including both leased and owned properties. The VIE leases 639 square meters of office space under a non-cancelable operating lease agreement with an expiration date through December 31, 2025. Operating lease expense amounted to $22,148, $21,495 and $17,653 for the fiscal years ended December 31, 2025, 2024 and 2023, respectively.

Future minimum lease payments under non-cancellable operating leases as of December 31, 2025 were in the aggregate amount of $24,286.

The following table sets forth the location, approximate size and primary use of major offices:

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| | | | |
|:---|:---|:---|:---|
| **Location** | **Approximate <br> Gross Land Area <br> in Square Meters** | **Primary Use <br> (Gross Floor<br> Area<br> in Square Meters)** | **Lease or Own** |
| 5-11-1116, Complex 1, Shangdi Ten Street, Haidian District, Beijing, China | 109 | Office (109) | Lease |
| 1306 & 1307, Qimei Building, North East Corner of Xinhuan Road East and Ronger Road, Zhangdian District, Zibo City, Shandong Province, China | 143 | Office (144) | Lease |
| 6-3-350, Complex 1, Shangdi Ten Street, Haidian District, Beijing, China | 639 | Office (639) | Own |

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II. Sunrise Guizhou maintains the below corporate office space and manufacturing properties in China.

The following table sets forth the location, approximate size and primary use of Sunrise Guizhou's corporate office space and manufacturing properties:

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| | | | |
|:---|:---|:---|:---|
| **Location** | **Approximate <br> Gross Land Area <br> in Square Meters** | **Primary Use <br> (Gross Floor<br> Area<br> in Square Meters)** | **Lease or Own** |
| Yilong New Area, Qianxinan Prefecture, Guizhou Province, China | 401545 | Office (3434), <br> Manufacturing (24879) <br> Staff dormitory (4919) | Own |
| East of Tianneng Avenue (Nandu Road), South of Huaxin Avenue, North of Pangzhuang Road, Jieshou City, Anhui Province, China | 116814 | Under construction | Own |

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**ITEM 4. A. UNRESOLVED STAFF COMMENTS**

None.

**ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS**

*The following discussion of the Company's financial condition and results of operations is based upon and should be read in conjunction with the Company's consolidated financial statements and their related notes included elsewhere in this annual report. This annual report contains forward-looking statements. See "Forward-Looking Information" in this annual report. In evaluating our business, you should carefully consider the information provided under the caption "Item 3. Key Information—D. Risk Factors" in this annual report. The Company cautions you that its businesses and financial performance are subject to substantial risks and uncertainties.*

**Overview**

The VIE, or SDH, started operating as a consulting company providing enterprise services to small and medium-sized enterprises in the PRC in December 2014, and launched its knowledge sharing and enterprise service platform in May 2016.

Beginning in fiscal year 2022, the Company commenced the transition of its core business from knowledge sharing and enterprise services to sales of graphite anode material products. In April 2022, the Company entered into the graphite anode material manufacturing and sales business through a joint venture, Sunrise Guizhou, of which the Company currently owns 39.35% through Zhuhai Zibo, the Company's wholly owned subsidiary. The Company consolidates Sunrise Guizhou's financial statement because it owns a majority of seats on its board of directors and controls its financial and operating policies pursuant to an agreement among its funding shareholders. Sunrise Guizhou is located at Yilong New District, Xingyi City, Qian Southwest State, Guizhou Province, China. The land use of Sunrise Guizhou's graphite anode manufacturing site is 401,545 square meters. Sunrise Guizhou began construction of the manufacturing plant in April 2022, and the first and second phase construction of (30,000 tons annual manufacturing capacity) of the manufacturing plant has been completed. The third phase of construction of the manufacturing plant (20,000 tons annual manufacturing capacity) was approved by the board of the directors of the Company in March 2023, and remains under construction.

**Results of Operations**

The following table summarizes the results of the Company's operations during the years ended December 31, 2025, 2024 and 2023, respectively, and provides information regarding the amounts in U.S. dollar and percentage increase or decrease during such periods.

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| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **REVENUES, NET** |  |  |  |
| &nbsp;&nbsp;&nbsp;Products | $46342154 | $64365362 | $44384004 |
| &nbsp;&nbsp;&nbsp;Services | 73978 | 632379 | 666401 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total revenues** | 46416132 | 64997741 | 45050405 |
| **COSTS OF REVENUES** |  |  |  |
| &nbsp;&nbsp;&nbsp;Products | 52252338 | 70782649 | 57172626 |
| &nbsp;&nbsp;&nbsp;Services | 11278 | 12672 | 281030 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total cost of revenues** | 52263616 | 70795321 | 57453656 |
| **GROSS LOSS** | (5847484) | (5797580) | (12403251) |
| **OPERATING EXPENSES** |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling expenses | 895099 | 899760 | 742167 |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 7329317 | 7391664 | 13040038 |
| &nbsp;&nbsp;&nbsp;Research and development expenses | 1955588 | 2507324 | 1193082 |
| &nbsp;&nbsp;&nbsp;Impairment of intangible assets | - | - | 3151467 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total operating expenses** | 10180004 | 10798748 | 18126754 |
| **LOSS FROM OPERATIONS** | (16027488) | (16596328) | (30530005) |
| **OTHER (EXPENSES) INCOME** |  |  |  |
| &nbsp;&nbsp;&nbsp;Investment income (losses) | 146361 | 198176 | (1170974) |
| &nbsp;&nbsp;&nbsp;Interest expense, net | (4566816) | (2018680) | (2162109) |
| &nbsp;&nbsp;&nbsp;Share subscription discount expenses | (6534936) |  |  |
| &nbsp;&nbsp;&nbsp;Other income, net | 323111 | 441231 | 942138 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total other expenses, net** | (10632280) | (1379273) | (2390945) |
| **LOSS BEFORE INCOME TAXES** | (26659768) | (17975601) | (32920950) |
| Income taxes provision (benefit) | (387) | 5563 | (226) |
| **NET LOSS** | (26659381) | (17981164) | (32920724) |
| &nbsp;&nbsp;&nbsp;Less: net loss attributable to non-controlling interests | (10023801) | (6204728) | (8688144) |
| **NET LOSS ATTRIBUTABLE TO E-POWER INC. ORDINARY SHAREHOLDERS** | $(16635580) | $(11776436) | (24232580) |
| **OTHER COMPREHENSIVE LOSS** |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment | 656394 | (962919) | (1165807) |
| **TOTAL COMPREHENSIVE LOSS** | (26002987) | (18944083) | (34086531) |
| Less: comprehensive loss attributable to non-controlling interests | (9562787) | (6579590) | (9220222) |
| **COMPREHENSIVE LOSS ATTRIBUTABLE TO ORIDNARY SHAREHOLDERS OF E-POWER INC.** | $(16440200) | $(12364493) | (24866309) |
| **LOSS PER SHARE** |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted - Class A and Class B ordinary shares | $(0.57) | $(0.48) | $(1.08) |
| **WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING** |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted - Class A and Class B ordinary shares | 29043280 | 26404589 | 25622195 |

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***<u>Year Ended December 31, 2025 Compared to Year Ended December 31, 2024</u>***

 

***Revenues, net***

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Revenues for the years ended December 31, 2025 and 2024, expressed in U.S. dollars, were derived from the following sources:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **Change** | **Change** |
|  | **2025** | **%** | **2024** | **%** | **Amount** | **%** |
|  | **US$** | **US$** | **US$** | **US$** | **US$** | **US$** |
| Graphite anode material business | $46342154 | 99.84% | $64365362 | 99.03% | $(18023208) | (28.00)% |
| Knowledge sharing and enterprise business | 73978 | 0.16% | 632379 | 0.97% | (558401) | (88.30)% |
| **Revenues, net** | $46416132 | 100.00% | $64997741 | 100.00% | $(18581609) | (28.59)% |

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Revenues decreased by $18,581,609, or 28.59%, from $64,997,741 for the year ended December 31, 2024, to $46,416,132 for the year ended December 31, 2025. Revenues from graphite anode material sales business accounted for 99.84% and 99.03% of net revenues for the year ended December 31, 2025 and 2024, respectively. Revenue from knowledge sharing and enterprise business accounted for 0.16% and 0.97% of net revenues for the years ended December 31, 2025 and 2024, respectively.

*Revenues from graphite anode material sales*

 

The Company's products include various artificial graphite anode material products. Artificial graphite is made of petroleum coke, needle coke and pitch coke as the main material, and formed after crushing, shaping, granulation and graphitization. The Company markets its graphite anode products through a direct sales channel, through its sales department consists of five experienced employees, who report directly to the CEO. The Company's customers were manufacturers of industrial and consumer energy storage lithium-ion batteries, such as batteries for electric vehicles and electric ships, and smart consumer electronics.

Revenues decreased by $18,023,208, or 28.00%, from $64,365,362 for the year ended December 31, 2024, to $46,342,154 for the year ended December 31, 2025. For the year ended December 31, 2025, we had supplied 37,065 tons of products to 35 customers , as compared to 37,065 tons to 26 customers for the year ended December 31, 2024. However, the average selling price of the graphite anode materials decreased by RMB 7,426 per ton, or 45.24% from RMB 16,412 per ton for the year ended December 31, 2024, to RMB 8,986 per ton for the year ended December 31, 2025.

 

*Revenues from knowledge sharing and enterprise business*

 

Revenues from knowledge sharing and enterprise business decreased by $558,401, or 88.30%, from $632,379 for the year ended December 31, 2024, to $73,978 for the year ended December 31, 2025.

The revenue decrease of knowledge sharing and enterprise business for the year ended December 31, 2025 was due to the decrease in the revenue of other services, which included rental and consultation services. Revenues from other services decreased by $558,401, or 88.30% from $632,379 for the year ended December 31, 2024, to $73,978 for the year ended December 31, 2025, primarily due to decreased demand for such services.

***Costs of revenues***

The following table sets forth the breakdown of the cost of revenues, expressed in U.S. dollars, for the years ended December 31, 2025 and 2024:

 

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **Change** | **Change** |
|  | **2025** | **%** | **2024** | **%** | **Amount** | **%** |
|  | **US$** | **US$** | **US$** | **US$** | **US$** | **US$** |
| Cost of goods sold | $52252338 | 99.98% | $70782649 | 99.98% | $(18530311) | (26.18)% |
| Service costs | 11278 | 0.02% | 12672 | 0.02% | (1394) | (11.00)% |
| **Total costs of revenues** | $52263616 | 100.00% | $70795321 | 100.00% | $(18531705) | (26.18)% |

---

 

 

*Cost of goods sold*

 

The cost of goods sold decreased by $18,530,311, or 26.18%, from $70,782,649 for the year ended December 31, 2024, to $52,252,338 for the year ended December 31, 2025. The decrease of the cost of goods sold was mainly due to the decreased sale of the graphite anode materials. In the meantime, the average cost per ton of the graphite anode materials decreased by $1,096 per ton, or 46.30% from $2,368 per ton for the year ended December 31, 2024 to $1,272 per ton for the year ended December 31, 2025. Moreover, the impairment of inventory increased by $1,160,102, or 29.30%, from $3,959,304 for the year ended December 31, 2024, to $5,119,406 for the year ended December 31, 2025.

*Service costs* 

 

The service costs for knowledge sharing and enterprise business primarily included (1) labor costs; (2) depreciation; and (3) professional and consulting fees paid to third parties for the consulting services. Service costs decreased by $1,394, or 11.00%, for the year ended December 31, 2025 compared to the same period in 2024, which was immaterial.

 

***Gross loss***

As a result of the foregoing, we reported a gross loss of $5,847,484 for the year ended December 31, 2025 and a negative gross margin. The negative gross margin was due to the $5,910,184 gross loss of the graphite anode material sales business, mainly due to the decrease in the sales price of our products, attributing to manufacturing overcapacity and a high level of competition in the industry. Furthermore, the raw material costs and graphitization outsourcing cost did not decrease proportionately to the decrease in the sales prices of graphite anode material. Additionally, a $5,119,406 impairment of inventory of graphite anode material was recorded due to decreasing sales prices. The gross loss was partially offset by a gross profit of $62,700 from the knowledge sharing and enterprise business.

 **

***Operating expenses***

 **

The following table sets forth the breakdown of the operating expenses, expressed in U.S. dollars, for the years ended December 31, 2025 and 2024:

 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **Change** | **Change** |
|  | **2025** | **%** | **2024** | **%** | **Amount** | **%** |
|  | **US$** | **US$** | **US$** | **US$** | **US$** | **US$** |
| Selling expenses | $895099 | 8.79% | $899760 | 8.33% | $(4661) | (0.52)% |
| General and administrative expenses | 7329317 | 72.00% | 7391664 | 68.45% | (62347) | (0.84)% |
| Research and development expenses | 1955588 | 19.21% | 2507324 | 23.22% | (551736) | (22.00)% |
| **Total operating expenses** | $10180004 | 100.00% | $10798748 | 100.00% | $(618744) | (5.73)% |

---

*Selling expenses* 

 

The selling expenses decreased by $4,661 or 0.52%, from $899,760 for the year ended December 31, 2024, to $895,099 for the year ended December 31, 2025. The decrease was immaterial.

*General and administrative expenses* 

 

The general and administrative expenses decreased by $62,347, or 0.84%, from $7,391,664 for the year ended December 31, 2024 to $7,329,317 for the year ended December 31, 2025. Such decrease was primarily due to (1) a decrease in share-based compensation of $649,090, as more share-based compensation expenses were recorded in the earlier vesting periods in a cliff vesting schedule; (2) a decrease in operation tax expenses of $258,626 as the Company had tax planning on property tax, which was charged less based on the rental income model; offset by (3) an increase in professional service fees of $455,184 for more legal, consultation and advisory services; (4) an increase in depreciation and amortization expenses of $218,034, as the administrative and dormitory buildings were recorded in plant, property and equipment in the year ended December 31, 2024 and depreciated more months in the year ended December 31, 2025; (5) an increase in travel expenses of $127,609 as the management incurred more international travel expenses to expand the Company's business in the United States.

*Research and development expenses*

 

Research and development expenses decreased by $551,736, or 22.00%, from $2,507,324 for the year ended December 31, 2024 to $1,955,588 for the year ended December 31, 2025. Research and development expenses for the year ended December 31, 2025 and 2024 were mainly associated with the research development activities of graphite anode material business and knowledge sharing and enterprise business, including technology service, technical service, purchasing laboratory chemical material collaterals. The decrease was primarily due to (1) a decrease in a technology development service fee of $972,803 which was associated with the ongoing development and upgrade of Shidong APP commenced in the year ended December 31, 2024; offset by (2) an increase in material input of $412,924 for more research and development programs in the year ended December 31, 2025.

***Other expenses, net***

The total net other expenses were $10,632,280 for the year ended December 31, 2025. Such expenses for the year ended December 31, 2025 primarily consisted of share subscription discount expenses of $6,534,936, and interest expense of $4,566,816, which was partially offset by investment income of $146,361 and the other income of $323,111.

When ordinary shares are issued for cash in an arm's-length financing transaction with an unrelated party, the Company evaluates transactions in which the issuance date fair value of the equity instruments issued exceeds the value of the consideration received if there are no other transaction elements. In absence of (i) a share-based payment for goods or services received, (ii) a payment for an asset or (iii) a dividend to existing shareholders, any difference between the fair value and the gross proceeds is attributable to an expense. The share subscription discount expenses were $6,534,936 for the year 2025; Interest expense was mainly attributable to various debt financings of the graphite anode material sales business; investment income of $146,361 was attributed to the equity pickup of equity method investment; the other income of $323,111 was mainly $671,383 from wasted residual sales, offset by $318,664 of fine and late payment fee on litigation charges, social security and land use right and property tax.

The total net other expenses were $1,379,273 for the year ended December 31, 2024. Such expenses for the year ended December 31, 2024 primarily consisted of interest expense of $2,018,680, which was partially offset by investment income of $198,176 and the other income of $441,231. Interest expense was mainly attributable to various debt financings of the graphite anode material sales business; investment income of $198,176 was attributed to the equity pickup of equity method investment; the other income of $441,231 was mainly $542,001 for inventory count surplus and $326,338 from wasted residual sales, offset by $467,194 of fine and late payment fee on social security and land use right and property tax.

 ****

 **

***Income taxes provision***

 **

*Cayman Islands* 

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains, or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the Government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. No stamp duty is payable in the Cayman Islands on the issue of shares by, or any transfers of shares of, Cayman Islands companies (except those which hold interests in land in the Cayman Islands). There are no exchange control regulations or currency restrictions in the Cayman Islands.

Payments of dividends and capital in respect of our Ordinary Shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our ordinary shares, as the case may be, nor will gains derived from the disposal of our ordinary shares be subject to Cayman Islands income or corporation tax.

*The United States*

The Company's subsidiary, Alchemistica, was incorporated in the U.S. and is subject to federal income tax rate of 21%. Net operating losses incurred in taxable years beginning after December 31, 2017, may be carried forward indefinitely but are subject to an 80% taxable income limitation.

*Hong Kong* 

In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. From year of assessment of 2019/2020 onwards, Hong Kong profit tax rates are 8.25% on assessable profits up to HK$2,000,000, and 16.5% on any part of assessable profits over HK$2,000,000. However, the Company's HK subsidiary did not generate any assessable profits arising in or derived from Hong Kong for the fiscal years ended December 31, 2025, 2024 and 2023, and accordingly no provision for Hong Kong profits tax has been made in these periods.

*Mainland China*

The Company's PRC subsidiaries were incorporated in Mainland China, and are subject to the Mainland China Enterprise Income Tax Laws ("EIT Laws") with the statutory income tax rate of 25% with the following exceptions.

In accordance with the implementation rules of EIT Laws, a qualified "High and New Technology Enterprise" ("HNTE") is eligible for a preferential tax rate of 15%. The HNTE certificate is effective for a period of three years. An entity could re-apply for the HNTE certificate when the prior certificate expires. SDH was eligible to enjoy a preferential tax rate of 15% from 2021 to 2023, to the extent it had taxable income under the EIT Law. Sunrise Guizhou is eligible to enjoy a preferential tax rate of 15% from 2024 to 2026, to the extent it has taxable income under the EIT Law.

For qualified small and low-profit enterprises, from January 1, 2023 to December 31, 2027, 25% of the first RMB 3.0 million of the assessable profit before tax is subject to the tax rate of 20%. For the years ended December 31, 2025, 2024 and 2023, some PRC subsidiaries are qualified small and low-profit enterprises as defined, and thus are eligible for the above preferential tax rates for small and low-profit enterprises.

***Net loss***

 ****

As a result of the foregoing, the Company reported a net loss of $26,659,381 for the year ended December 31, 2025, compared to $17,981,164 for the year ended December 31, 2024.

***Net loss attributable to non-controlling interest***

Non-controlling interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling shareholder. As of December 31, 2025, for the Company's consolidated subsidiaries, the VIE and VIE' s subsidiaries, non-controlling interests represent: a) a non-controlling shareholder's 49% ownership interest in GMB (Beijing), GMB Consulting and Shidong Yike; b) a non-controlling shareholder's 59.20% ownership interest in Sunrise Guizhou; c) a non-controlling shareholder's 49% ownership interest in GMB Culture, which has a subsidiary called GMB Technology; d) a non-controlling shareholder's 25% ownership interest in Shidong Cloud, and e) a non-controlling shareholder's 29% ownership interest in Alchemistica.

 ****

***<u>Year Ended December 31, 2024 Compared to Year Ended December 31, 2023</u>***

 

***Revenues, net***

 ****

Revenues for the years ended December 31, 2024 and 2023, expressed in U.S. dollars, were derived from the following sources:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **Change** | **Change** |
|  | **2024** | **%** | **2023** | **%** | **Amount** | **%** |
|  | **US$** | **US$** | **US$** | **US$** | **US$** | **US$** |
| Graphite anode material business | $64365362 | 99.03% | $44384004 | 98.52% | $19981358 | 45.02% |
| Knowledge sharing and enterprise business | 632379 | 0.97% | 666401 | 1.48% | (34022) | (5.11)% |
| **Revenues, net** | $64997741 | 100.00% | $45050405 | 100.00% | $19947336 | 44.28% |

---

Revenues increased by $19,947,336, or 44.28%, from $45,050,405 for the year ended December 31, 2023, to $64,997,741 for the year ended December 31, 2024. Revenues from graphite anode material sales business accounted for 99.03% and 98.52% of net revenues for the year ended December 31, 2024 and 2023, respectively. Revenue from knowledge sharing and enterprise business accounted for 0.97% and 1.48% of net revenues for the years ended December 31, 2024 and 2023, respectively.

*Revenues from graphite anode material sales*

 

The Company's products include various artificial graphite anode material products. Artificial graphite is made of petroleum coke, needle coke and pitch coke as the main material, and formed after crushing, shaping, granulation and graphitization. The Company markets its graphite anode products through a direct sales channel, through its sales department consists of five experienced employees, who report directly to the CEO. The Company's customers were manufacturers of industrial and consumer energy storage lithium-ion batteries, such as batteries for electric vehicles and electric ships, and smart consumer electronics.

Revenues increased by $19,981,358, or 45.02%, from $44,384,004 for the year ended December 31, 2023, to $64,365,362 for the year ended December 31, 2024. For the year ended December 31, 2024, we had supplied 28,221 tons of products to 26 customers , as compared to 12,513 tons to 23 customers for the year ended December 31, 2023. However, the average selling price of the graphite anode materials decreased by RMB 8,588 per ton, or 34.35% from RMB 25,000 per ton for the year ended December 31, 2023, to RMB 16,412 per ton for the year ended December 31, 2024.

 

*Revenues from knowledge sharing and enterprise business*

 

Revenues from knowledge sharing and enterprise business decreased by $34,022, or 5.11%, from $666,401 for the year ended December 31, 2023, to $632,379 for the year ended December 31, 2024.

The revenue decrease of knowledge sharing and enterprise business for the year ended December 31, 2024 was brought by the decrease in the revenue of other services, which included health services and rental services. Revenues from other services decreased by $59,091, or 33.61% from $175,812 for the year ended December 31, 2023, to $116,721 for the year ended December 31, 2024, primarily due to decreased demand for such services.

***Costs of revenues***

The following table sets forth the breakdown of the cost of revenues, expressed in U.S. dollars, for the years ended December 31, 2024 and 2023:

 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **Change** | **Change** |
|  | **2024** | **%** | **2023** | **%** | **Amount** | **%** |
|  | **US$** | **US$** | **US$** | **US$** | **US$** | **US$** |
| Cost of goods sold | $70782649 | 99.98% | $57172626 | 99.51% | $13610023 | 23.81% |
| Service costs | 12672 | 0.02% | 281030 | 0.49% | (268358) | (95.49)% |
| **Total costs of revenues** | $70795321 | 100.00% | $57453656 | 100.00% | $13341665 | 23.22% |

---

 

 

*Cost of goods sold*

 

The cost of goods sold increased by $13,610,023, or 23.81%, from $57,172,626 for the year ended December 31, 2023, to $70,782,649 for the year ended December 31, 2024. The increase of the cost of goods sold was mainly due to the increased sale of the graphite anode materials. In the meantime, the average cost per ton of the graphite anode materials decreased by $1,623 per ton, or 40.67% from $3,991 per ton for the year ended December 31, 2023 to $2,368 per ton for the year ended December 31, 2024. Moreover, the impairment of inventory decreased by $3,279,515, or 45.30%, from $7,238,819 for the year ended December 31, 2023, to $3,959,304 for the year ended December 31, 2024.

*Service costs* 

 

The service costs for knowledge sharing and enterprise business primarily included (1) labor costs; (2) depreciation; and (3) professional and consulting fees paid to third parties for the consulting services. Service costs decreased by $268,358, or 95.49% for the year ended December 31, 2024 compared to the same period in 2023, mainly due to the decrease in staff headcounts and associated expenditure.

 

***Gross loss***

As a result of the foregoing, we reported a gross loss of $5,797,580 for the year ended December 31, 2024 and a negative gross margin. The negative gross margin was due to the $6,417,287 gross loss of the graphite anode material sales business mainly due to the decrease in the sales price of our products, attributing to manufacturing overcapacity and a high level of competition in the industry. Furthermore, the raw material costs and graphitization outsourcing cost did not decrease proportionately to the decrease in the sales prices of graphite anode material. Additionally, a $3,959,304 impairment of inventory of graphite anode material was recorded due to decreasing sales prices. The gross loss was partially offset by a gross profit of $619,707 from the knowledge sharing and enterprise business.

 **

***Operating expenses***

 **

The following table sets forth the breakdown of the operating expenses, expressed in U.S. dollars, for the years ended December 31, 2024 and 2023:

 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **Change** | **Change** |
|  | **2024** | **%** | **2023** | **%** | **Amount** | **%** |
| Selling expenses | $899760 | 8.33% | $742167 | 4.09% | $157593 | 21.23% |
| General and administrative expenses | 7391664 | 68.45% | 13040038 | 71.94% | (5648374) | (43.32)% |
| Research and development expenses | 2507324 | 23.22% | 1193082 | 6.58% | 1314242 | 110.16% |
| Impairment of intangible assets | - | - | 3151467 | 17.39% | (3151467) | (100.00)% |
| **Total costs and operating expenses** | $10798748 | 100.00% | $18126754 | 100.00% | $(7328006) | (40.43)% |

---

*Selling expenses* 

 

The selling expenses increased by $157,593 or 21.23%, $742,167 for the year ended December 31, 2023, to $899,760 for the year ended December 31, 2024. The increase was primarily due to the expansion of graphite anode material business.

*General and administrative expenses* 

 

The general and administrative expenses decreased by $5,648,374, or 43.32%, from $13,040,038 for the year ended December 31, 2023 to $7,391,664 for the year ended December 31, 2024. Such decrease was primarily due to (1) an decrease in credit loss of $3,314,179, which was mainly due to lower provision on credit loss in the knowledge sharing and enterprise service business for the year ended December 31, 2024; (2) a decrease in share-based compensation of $1,170,868 as more share-based compensation expenses were recorded in the earlier vesting periods in a cliff vesting schedule in 2023; (3) a decrease in salary and welfare expenses of $1,061,790 as the Company reduced staff number in knowledge sharing and enterprise service business.

*Research and development expenses*

 

Research and development expenses increased by $1,314,242 or 110.16%, from $1,193,082 for the year ended December 31, 2023 to $2,507,324 for the year ended December 31, 2024. Research and development expenses for the year ended December 31, 2024 and 2023 were mainly associated with the research development activities of graphite anode material business, including technology service, technical service, purchasing laboratory chemical material collaterals. The increase was primarily due to (1) an increase in technology development service fee of $972,803; (2) an increase in salary and welfare of $141,500 for research and development personnels; and (3) an increase of $238,891 in office miscellaneous expenses and depreciation expense of plant, property and equipment associated with research and development.

*Impairment of intangible assets*

 

Impairment of intangible assets decreased by $3,151,467, or 100%, from $3,151,467 for the year ended December 31, 2023 to $nil for the year ended December 31, 2024. The impaired intangible assets for the year ended December 31, 2023 was associated with certain copyrights of graphite anode material business. The Company reviewed its copyright of graphite anode material business for impairment as the copyrights became obsolete, which indicated that the carrying amount of copyrights might no longer be recoverable as of December 31, 2023.

***Other expenses, net***

The total net other expenses were $1,379,273 for the year ended December 31, 2024. Such expenses for the year ended December 31, 2024 primarily consisted of interest expense of $2,018,680, which was partially offset by investment income of $198,176 and the other income of $441,231. Interest expense was mainly attributable to various debt financings of the graphite anode material sales business; investment income of $198,176 was attributed to the equity pickup of equity method investment; the other income of $441,231 was mainly $542,001 for inventory count surplus and $326,338 from wasted residual sales, offset by $467,194 of fine and late payment fee on social security and land use right and property tax.

The total net other expenses were $2,390,945 for the year ended December 31, 2023. Such expenses for the year ended December 31, 2023 primarily consisted of investment loss of $1,170,974 and interest expense of $2,162,109, which was partially offset by the other income of $942,138. Investment loss of $1,170,974 was mainly attributed to the impairment loss of $1,450,381 on long-term investments that do not have readily determinable fair values. Interest expense was mainly attributable to various means of debt financing on the graphite anode material sales business. Other income of $942,138 was mainly $380,164 for government subsidy and $390,714 for wasted residual sales.

 **

***Income taxes provision***

 **

*Cayman Islands* 

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains, or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the Government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. No stamp duty is payable in the Cayman Islands on the issue of shares by, or any transfers of shares of, Cayman Islands companies (except those which hold interests in land in the Cayman Islands). There are no exchange control regulations or currency restrictions in the Cayman Islands.

Payments of dividends and capital in respect of our ordinary shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our ordinary shares, as the case may be, nor will gains derived from the disposal of our ordinary shares be subject to Cayman Islands income or corporation tax.

*Hong Kong* 

In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. From year of assessment of 2019/2020 onwards, Hong Kong profit tax rates are 8.25% on assessable profits up to HK$2,000,000, and 16.5% on any part of assessable profits over HK$2,000,000. However, the Company's HK subsidiary did not generate any assessable profits arising in or derived from Hong Kong for the fiscal years ended December 31, 2024, 2023 and 2022, and accordingly no provision for Hong Kong profits tax has been made in these periods.

*China*

The Company's subsidiaries are incorporated in Mainland China, and are subject to the Mainland China Enterprise Income Tax Laws ("EIT Laws") with the statutory income tax rate of 25% with the following exceptions.

In accordance with the implementation rules of EIT Laws, a qualified "High and New Technology Enterprise" ("HNTE") is eligible for a preferential tax rate of 15%. The HNTE certificate is effective for a period of three years. An entity could re-apply for the HNTE certificate when the prior certificate expires. SDH is eligible to enjoy a preferential tax rate of 15% from 2021 to 2023, to the extent it has taxable income under the EIT Law. Sunrise Guizhou is eligible to enjoy a preferential tax rate of 15% from 2024 to 2026, to the extent it has taxable income under the EIT Law.

For qualified small and low-profit enterprises, from January 1, 2022 to December 31, 2022, 12.5% of the first RMB 1.0 million of the assessable profit before tax is subject to a preferential tax rate of 20% and the 25% of the assessable profit before tax exceeding RMB 1.0 million but not exceeding RMB 3.0 million is subject to a preferential tax rate of 20%. From January 1, 2023 to December 31, 2027, 25% of the first RMB 3.0 million of the assessable profit before tax is subject to the tax rate of 20%. For the years ended December 31, 2024, 2023 and 2022, some PRC subsidiaries are qualified small and low-profit enterprises as defined, and thus are eligible for the above preferential tax rates for small and low-profit enterprises.

***Net loss***

 ****

As a result of the foregoing, the Company reported a net loss of $17,981,164 for the year ended December 31, 2024, compared to $32,920,724 for the year ended December 31, 2023.

***Net loss attributable to non-controlling interest***

Non-controlling interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling shareholder. As of December 31, 2024, for the Company's consolidated subsidiaries, the VIE and VIE' s subsidiaries, non-controlling interests represent: a) a non-controlling shareholder's 49% ownership interest in GMB (Beijing), GMB Consulting and Shidong Yike; b) a non-controlling shareholder's 59.20% ownership interest in Sunrise Guizhou; c) a non-controlling shareholder's 49% ownership interest in GMB Culture, which has a subsidiary called GMB Technology; and d) a non-controlling shareholder's 25% ownership interest in Shidong Cloud, and 40% ownership interest in Shidong Trading.

 ****

***Net loss attributable to ordinary shareholders***

Net loss attributable to shareholders was $11,776,436 for the year ended December 31, 2024, compared to $24,232,580 for the year ended December 31, 2023.

**Liquidity and Capital Resources**

As reflected in the consolidated financial statements, the Company incurred net loss of $26,659,381 for the year ended December 31, 2025. Net cash used in operating activities was $25,160,584 for the year ended December 31, 2025. The working capital deficit was $28,422,197 as of December 31, 2025.

As of December 31, 2025, GIOP BJ didn't comply with the financial covenants as required by a short-term loan agreement in the principal amount of $1,000,987 with Industrial Bank Co., Ltd. ("Industrial Bank"). The term of the loan was from June 25, 2025 to June 24, 2026. The financial covenants of the loan agreement required GIOP BJ to maintain: (1) current assets of not less than RMB25,000,000; (2) net assets of not less than RMB8,000,000; (3) an asset liability ratio of not more than 80%; and (4) a current ratio of not less than 100%. As of December 31, 2025, GIOP BJ did not meet the above requirements; however, Industrial Bank had not declared the agreement in default as a result of the breach of the financial covenants, nor has it done so as of the date of this annual report.

In addition, as of December 31, 2025, Sunrise Guizhou didn't comply with the financial covenants as required by three long-term loan agreements in an aggregate amount of $68,917,581 with China Construction Bank ("CCB") Qianxinan Branch. The financial covenants of the long-term loan agreements required Sunrise Guizhou to maintain an asset liability ratio of not more than 70% and continuous profitability during the loan periods pursuant to certain conditions designated in the loan agreements. Sunrise Guizhou obtained a written consent and the waiver of the financial covenants on September 30, 2024 and December 8, 2025, respectively. As of the date of this annual report, CCB has not declared the agreement in default as a result of the breaches of the financial covenants.

These adverse conditions and events raised substantial doubt about the Company's ability to continue as a going concern. For the next 12 months from the issuance date of this report, the Company plans to continue implementing various measures to boost revenue and control cost and expenses. In assessing its liquidity, management monitors and analyzes the Company's cash on-hand, its ability to generate sufficient revenue sources and ability to obtain additional financial support in the future, and its operating and capital expenditure commitments. The Company intends to finance its future working capital requirements and capital expenditures from financing activities for the cash shortfalls and the negative operating cash flows. The Company expects continued capital financing through debt or equity issuances to support its working capital requirements.

As of December 31, 2025, the Company had cash, cash equivalents and restricted cash of $28,150,101. The management believes that it may be able to continue to borrow from banks based on past experiences and the Company's credit history when necessary.

Currently, the Company is working to improve its liquidity and capital sources primarily through cash flows from operation, debt financing, and financial support from its principal shareholder. In order to fully implement its business plans and sustain continued growth, the Company may also seek equity financing from outside investors when necessary.

On March 30, 2026, Sunrise Guizhou entered into a line of credit financing contract with Bank of China ("Bank of China") Xingren Branch for a revolving line credit of RMB 7,000,000 ($1,000,987) for a term from March 30, 2026 to March 30, 2029. Sunrise Guizhou fully utilized the line of credit for a short term loan with the interest rate of one year loan prime rate from March 30, 2026 to March 29, 2027. Mr. Haiping Hu was the guarantor of the revolving line of credit. Sunrise Guizhou also pledged its manufacturing facilities of RMB 13,901,944, or $1,987,952 for guaranty and secure the revolving line of credit.

In January, 2026, Sunrise Guizhou entered into a factoring agreement, which is in essence of loan, with CCB Qianxinan Branch and CCB's affiliates for supplier payment for a period from January 2026 to January 2027. The loan was guaranteed by Mr. Haiping Hu and Zhuhai Zibo. Sunrise Guizhou also pledged its buildings and land use rights of its manufacturing facilities to CCB. As of the date of this annual report, the loan balance is RMB 97,000,000, or $13,870,816.

The Company can make no assurances that required financings will be available for the amounts needed, or on terms commercially acceptable to the Company, if at all. If one or all of these events does not occur or subsequent capital raises are insufficient to bridge financial and liquidity shortfall, there would likely be a material adverse effect on the Company and its consolidated financial statements.

The consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.

If the Company experiences an adverse operating environment or incurs unanticipated capital expenditure requirements, or if the Company accelerates its growth, then additional financing may be required. No assurance can be given, however, that additional financing, if required, would be on favorable terms or available at all. Such financing may include the use of additional debt or the sale of additional equity securities. Any financing which involves the sale of equity securities or instruments that are convertible into equity securities could result in immediate and possibly significant dilution to the existing shareholders.

Substantially all of the Company's operations are conducted in the PRC and all of the revenues and the vast majority of expenses, cash and cash equivalents are denominated in RMB. As of December 31, 2025, 75.27% of cash, cash equivalents and restricted cash were held in China, and held by its subsidiaries, the VIE and the VIE's subsidiaries and denominated in Renminbi, while 23.61% of cash, cash equivalents and restricted cash were held in Hong Kong by the Company, SDH New Energy and GMB HK in US dollars. Although the Company consolidates the results of the VIE and its subsidiaries, the Company only has access to the assets or earnings of the VIE and their subsidiaries through the contractual arrangements with the VIE and its shareholders. See "Business — Contractual Arrangements between GIOP BJ, SDH and Its Shareholders."

A majority of the future revenues are likely to continue to be in the form of Renminbi. Under existing PRC foreign exchange regulations, Renminbi may be converted into foreign exchange for current account items, including profit distributions, interest payments and trade-and service-related foreign exchange transactions, can be made in foreign currencies without prior SAFE approval as long as certain routine procedural requirements are fulfilled. Therefore, PRC subsidiaries are allowed to pay dividends in foreign currencies to the Company without prior SAFE approval by following certain routine procedural requirements. However, approval from or registration with competent government authorities is required where the Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future.

As of December 31, 2025, the following amounts, expressed in U.S. dollars, were outstanding balances of cash, cash equivalents and restricted cash in each jurisdiction:

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| | | | |
|:---|:---|:---|:---|
|  | **Cash and cash equivalents** | **Restricted cash** | **Total** |
| Mainland China | $14877066 | $6311630 | $21188696 |
| Hong Kong | 6647378 |  | 6647378 |
| The United States | 314027 | - | 314027 |
| **Balance at end of the year** | $21838471 | $6311630 | $28150101 |

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***Cash Flows***

The following table sets forth a summary of cash flows, expressed in U.S. dollars, for the periods indicated:

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| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| Net cash used in operating activities | $(25160584) | $(5352157) | $(7282995) |
| Net cash (used in) provided by investing activities | (11221084) | 632461 | (7003035) |
| Net cash provided by financing activities | 54460285 | 10631669 | 13679267 |
| Effect of foreign exchange rate on cash, cash equivalents and restricted cash | 710900 | (172056) | (66587) |
| Net increase (decrease) in cash, cash equivalents and restricted cash | $18789517 | $5739917 | $(673350) |

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***Operating Activities***

Net cash used in operating activities amounted to $25,160,584 for the year ended December 31, 2025. It was primarily due to the following: a) net loss of $26,659,381, adjusted by depreciation and amortization of $5,683,727, interest expenses of $1,117,115, impairment of inventory of $5,119,406, and share subscription discount expenses of $6,534,936; increased by b) accounts receivable of $19,043,753, due to the collection of accounts receivable for sales of graphite anode products; offset by c) accounts payable of $12,490,727 and notes payable of $10,732,066 for purchasing raw materials of graphite anode business; d) inventories of $10,638,275 for more inventory purchases of raw materials, work in progress and finished goods; and e) prepaid expenses and other current assets of $1,810,711, due to an increase in input VAT of $1,598,961.

Net cash used in operating activities amounted to $5,352,157 for the year ended December 31, 2024. It was primarily due to the following: a) net loss of $17,981,164, adjusted by depreciation and amortization of $5,096,445, share-based compensation of $972,743, interest expenses of $166,999, impairment of inventory of $3,959,304, and amortization of finance lease right-of-use asset of $622,203; increased by b) accounts payable of $17,837,613 for raw materials of graphite anode business; c) notes payable of $12,230,606 for raw materials of graphite anode business; and d) deferred revenue of $1,154,441 for the consideration received prior to the goods sold; offset by e) accounts receivable of $20,706,075 due to the expansion on sales of graphite anode products; f) inventories of $6,241,347 for more inventory purchase on raw materials, work in progress and finished goods due to expansion of graphite anode business; and g) prepaid expenses and other current assets of $1,309,420 due to increase on advance to supplier of $1,624,412.

Net cash used in operating activities amounted to $7,282,995 for the year ended December 31, 2023. It was primarily due to the following: a) net loss of $32,920,724, adjusted by depreciation and amortization of $3,953,328, share-based compensation of $2,145,801, interest expenses of $575,075, investment losses of $1,170,974, bad debt expense of $3,428,033, impairment of inventory of $7,238,819, impairment of intangible assets of $3,151,467, and amortization of finance lease right-of-use asset of $338,627; increased by b) prepaid expenses and other current assets of $6,157,166 due to decrease on tax prepayment of $2,495,656 and advance to supplier of $2,314,788; c) accounts payable of $6,133,132 for finished goods and raw materials of graphite anode business; offset by d) accounts receivable of $4,074,715 due to sales of graphite anode products; and e) inventories of $5,095,430 for raw materials, work in progress and finished goods of the graphite anode sales business.

***Investing Activities***

Net cash used in investing activities amounted to $11,221,084 for the year ended December 31, 2025. It was primarily due to purchase of plant, property and equipment of $6,392,748 and land use right of $3,677,693.

Net cash provided by investing activities amounted to $632,461 for the year ended December 31, 2024. It was primarily due to the following: a) redemption of the short-term investment in the Viner Total Investment Fund for a cash collection of $2,371,942; and b) redemption of the prepayment for investment in the Zhejiang Wangxin Health Technology Co., Ltd. for a cash collection of $708,757; partially offset by c) purchase of plant, property and equipment of $2,464,915.

Net cash used in investing activities amounted to $7,003,035 for the year ended December 31, 2023. It was primarily due to the following: a) purchase of plant, property and equipment of $5,472,778; b) consideration installment paid for the prior year's asset acquisition of $706,125, and c) prepayment for finance lease right-of-use assets of $1,029,195 and deposit paid for finance lease of $655,990, both of which were associated with a finance lease contract for graphite anode material manufacturing facilities; offset by d) redemption of the short-term investment Viner Total Investment Fund for a cash collection of $878,000.

***Financing Activities***

Net cash provided by financing activities amounted to $54,460,285 for the year ended December 31, 2025, representing: a) proceeds from short-term and long-term loans of $5,704,348 and $41,133,113, respectively; b) proceeds from the issuance of Class A ordinary shares and the November 2025 Warrants of $7,643,162; c) proceeds from an advance capital subscription of $9,739,130 from a non-controlling interest investor in Sunrise Guizhou; and d) proceeds of loans from related parties of $918,261; partially offset by e) repayments on short-term and long-term loans of $1,669,565 and $632,239, respectively; f) repayments on the debt financing from sale and leaseback contracts of $3,278,572; g) repayments on loans from related parties of $3,252,870; and h) repayments on finance lease liabilities of $1,944,483 associated with finance lease contracts for graphite anode material manufacturing facilities.

Net cash provided by financing activities amounted to $10,631,669 for the year ended December 31, 2024, representing: a) proceeds from a short-term and a long-term loan of $1,667,663 and $27,876,982, respectively; and b) proceeds of loans from related parties of $9,145,337; partially offset by c) repayments on a short-term and a long-term loan of $6,948,594 and $4,526,391, respectively; d) prepayment on acquisition cost of long-term loans from CCB for $1,255,027; e) repayments on the debt financing from sale and leaseback contracts of $4,692,271; f) repayments on loans from related parties of $8,797,497; and g) repayments on finance lease liabilities of $2,571,592 associated with finance lease contracts for graphite anode material manufacturing facilities.

Net cash provided by financing activities amounted to $13,679,267 for the year ended December 31, 2023, representing a) proceeds from a short-term and a long-term loan of $7,061,249 and $4,236,750, respectively; b) proceeds from the debt financing from sale and leaseback contracts, net of issuance cost, of $4,825,658; and c) proceeds of loans from related parties of 3,867,883; offset by d) repayments on the debt financing from sale and leaseback contracts of $4,782,564; and e) repayments on finance lease liabilities of $1,282,358 associated with a finance lease contract for graphite anode material manufacturing facilities.

**Trend Information**

Other than as disclosed elsewhere in this annual report, the Company is not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on net revenues, incomes from operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.

**Off-Balance Sheet Arrangements**

The Company did not have any off-balance sheet arrangements as of December 31, 2025.

**Contingencies**

The Company may from time to time be involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The following are legal proceedings for the fiscal year ended December 31, 2025 for which the Company has determined material.

On March 17, 2025, Beijing Xindahang Technology Co., Ltd. ("Xindahang") brought a claim against Sunrise Guizhou in the Daxing's People's Court of Beijing City, alleging breach of contract arising from Sunrise Guizhou's alleged failure to pay financial advisory service fees of RMB2,145,000 (or $306,731). The financial advisory service was associated with Sunrise Guizhou's share issuance to Xinyang Partnership and the fee was 3% of the total proceeds received. On December 26, 2025, a judgment was made by the Court, which ruled in Xindahang's favor. Sunrise Guizhou filed an appeal with Beijing Second Intermediate People's Court on January 7, 2026. On April 30, 2026, the court made the decision that the appeal was rejected and the original judgement was upheld.

On August 22, 2025, the supplier of Sunrise Guizhou, Hubei Jinhua New Material Technology Co., Ltd. ("Hubei Jinhua") brought a claim for a breach of contract against Sunrise Guizhou in the Xianfeng's People's Court of (the "Hubei Province Court"), alleging that Sunrise Guizhou failed to pay the goods purchased with an aggregated price of RMB20,541,007 ($2,867,414). RMB20,978,100 ($2,928,430) in a bank account of Sunrise Guizhou was frozen by Hubei Jinhua for the unpaid purchase price, its interests, legal fees, and litigation charges. On November 27, 2025, a judgment was made by the Hubei Province Court, which ruled in Hubei Jinhua's favor. On January 23, 2026, Sunrise Guizhou appealed to the Enshi Tujia and Miao Autonomous Prefecture Intermediate People's Court. On March 4, 2026, Sunrise Guizhou's appeal was rejected and the original judgment was upheld. Sunrise Guizhou has paid Hubei Jinhua as of the date of this annual report, and the freeze on the bank account has been lifted.

On September 8, 2025, Zibo Caijin Holding Group Co., Ltd. ("Zibo Caijin") brought a civil claim against the VIE in Zhangdian District People's Court of Zibo City ("Zhangdian District Court"), Shandong Province, alleging that the VIE failed to relocate its address to Zibo City and should return the government relocation subsidy and its interest for a total amount of RMB 23,813,452 ($3,405,278). Zibo Caijin also alleged that Mr. Haiping Hu and Zhuhai Investment should assume joint and several liability pursuant to a personal guaranty. The Company disputed the Zibo Caijin's claim, as the VIE has been relocated to Zibo City and registered with the local bureau. No judgment has been made by Zhangdian District Court as of the date of this annual report. The VIE's portion in the investment of Jiazhong and Jinshuibanlv had been frozen by Zibo Caijin on January 19, 2026 for a period of three years. The Company cannot predict the outcome or impact from the foregoing proceeding.

On September 29, 2025, Sunrise Guizhou brought a civil claim in Anlong County People's Court against Ms. Huiyu Du, the former legal representative of Sunrise Guizhou, for a loss of RMB 43,930,640 ($6,281,998) that resulted from her misconduct and decision-making mistakes during her employment. Regarding the former management officials' misconduct, Sunrise Guizhou also filed a criminal complaint with the local public security authorities. On February 9, 2026, the case was accepted by the Anlong County Public Security Bureau. Since the case was suspected of involving a criminal offense and had been accepted by the Anlong County Public Security Bureau for investigation, the Anlong County People's Court made the decision to dismiss the lawsuit on April 20, 2026. This case is still under criminal investigation as of the date of this annual report. Sunrise Guizhou intends to vigorously claim its rights in these matters; however, the Company cannot predict the outcome or impact from such proceedings.

On November 17, 2025, Zibo Caijin brought another civil claim against the VIE in Zhangdian District People's Court of Zibo City, Shandong Province, alleging that the VIE should compensate Zibo Caijin's losses by returning the consultation service revenue of RMB 50,000,000 ($7,149,905). The consultation revenue was associated with services provided to Zibo Caijin on investment referrals, initial public offering consultations, investment and financing consultation services during the fiscal year ended December 31, 2020. Zibo Caijin also alleged that Mr. Haiping Hu and Zhuhai Investment should assume joint and several liability, as Mr. Haiping Hu and Zhuhai Investment guaranteed that the VIE and its subsidiaries in Zibo City would be able to pay local taxes for an aggregate amount of RMB 50,000,000 from the year 2021 to 2026. The VIE disputed Zibo Caijin's claim, as Zibo Caijin had acknowledged the services and confirmed the receipt of the services in writing during the year 2020. The title to the VIE's building, with a cost of RMB 19,519,182, or $2,791,206, had been frozen by Zibo Caijin, and the VIE is prohibited from transferring the title commencing on January 19, 2026 for a period of three years. No judgement has been made by the Zhangdian District People's Court as of the date of this annual report. The Company cannot predict the outcome or impact from the foregoing proceeding.

In addition to the aforementioned lawsuits, the Company is also a party to several legal proceedings or claims that the Company believes are immaterial. Litigation liabilities in an aggregate amount of $726,580 with respect to such legal proceedings and claims have been recorded in accrued expenses and other current liabilities as of December 31, 2025. The outcomes of such legal proceedings cannot be predicted as of the date of this annual report and the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity.

**Inflation**

Inflation does not materially affect the Company's business or the results of its operations.

**Seasonality**

The nature of the Company's business does not appear to be affected by seasonal variations.

**Critical Accounting Estimates**

The Company prepares the consolidated financial statements in accordance with U.S. GAAP. These accounting principles require the Company to make judgments, estimates and assumptions on the reported amounts of assets and liabilities at the end of each fiscal period, and the reported amounts of revenues and expenses during each fiscal period. The Company continually evaluate these judgments and estimates based on the own historical experience, knowledge and assessment of current business and other conditions, the expectations regarding the future based on available information and assumptions that the Company believe to be reasonable.

The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing the Company's financial statements. Our critical accounting policy and practice for the year ended December 31, 2025 is the warrant recognition. Our critical accounting policies and practices for the year ended December 31, 2024 and 2023 include the following: (i) revenue recognition, (ii) leases, (iii) asset acquisition, (iv) income taxes, (v) the accretion to the redemption value of redeemable non-controlling interests, and (vi) extinguishment of redeemable non-controlling interests. For further information on these accounting policies, see Note 2 to our consolidated financial statements included elsewhere in this annual report.

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. Such critical estimates are discussed below.

***Critical Accounting Estimates for the years ended December 31, 2025, 2024 and 2023***

*Impairment of long-lived assets*

Long-lived assets, including plant, property and equipment, intangible asset, land use rights and finance lease right-of-use assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset or asset group may not be recoverable. When these events occur, the Company measures impairment by comparing the carrying value of the long-lived assets or assets group to the estimated undiscounted future cash flows expected to result from the use of the assets or asset group and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets or assets group, the Company would recognize an impairment loss based on the fair value of the assets or assets group, which is the excess of carrying amount over the fair value of the assets, using the expected future discounted cash flows. Impairments charges for long-lived assets were $nil, $nil, and $3,151,467 recorded in the Company's consolidated statements of operations and comprehensive loss for the years ended December 31, 2025, 2024 and 2023, respectively.

***Critical Accounting Estimates for the years ended December 31, 2024 and 2023***

*Allowance for credit loss*

Accounts receivables mainly represent amounts due from clients in the ordinary course of business and are recorded net of allowance for doubtful accounts.

On January 1, 2023, the Company adopted ASC 326 Financial Instruments – Credit Losses ("ASC 326") using the modified retrospective approach through a cumulative-effect adjustment to the accumulated deficit. Upon adoption, the Company changed its impairment model to utilize a current expected credit losses model in place of the incurred loss methodology for financial instruments measured at amortized cost. The Company had not recorded an adjustment to the opening accumulated deficit as of January 1, 2023 due to immaterial cumulative impact of adopting ASC 326.

The Company used an expected credit loss model for the impairment of financial instruments mentioned above as of period ends. For the allowance of the accounts receivable, the Company believes the aging of accounts receivable is a reasonable parameter to estimate expected credit loss, and determines expected credit losses for accounts receivables using an aging schedule as of period ends. The expected credit loss rates under each aging schedule were developed on the basis of the average historical loss rates from previous years, and adjusted to reflect the effects of those differences in current conditions and forecasted changes. The Company measured the expected credit losses of accounts receivable on a collective basis. When an accounts receivable does not share risk characteristics with other accounts receivables, management will evaluate such accounts receivable for expected credit loss on an individual basis. Doubtful accounts balances are written off and deducted from allowance for credit loss, when receivables are deemed uncollectible, after all collection efforts have been exhausted and the potential for recovery is considered remote. The allowance for credit loss was $7,909,571 and $8,016,322, as of December 31, 2024 and 2023, respectively.

*Impairment of inventories*

The cost of inventories is calculated using the weighted average method. Inventory shall be measured at the lower of cost and net realizable value. Net realizable value is estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. When evidence exists that the net realizable value of inventory is lower than its cost, the difference shall be recognized as a loss in earnings in the period in which it occurs. The impairment of inventories provided for lower of cost and net realizable value was $3,959,304 and $7,238,819 for the years ended December 31, 2024 and 2023, respectively.

*Impairment of long-term investments*

For other equity investments that do not have readily determinable fair values and over which the Company has neither significant influence nor control through investments in common stock or in-substance common stock, the Company accounts for these investments at cost minus any impairment, if necessary.

The Company continually reviews its investments in equity investees to determine whether a decline in fair value below the carrying value is other than temporary. The primary factors the Company considers in its determination are the length of time that the fair value of the investment is below the Company's carrying value; the financial condition, operating performance and the prospects of the equity investee. If the decline in fair value is deemed to be other than temporary, the carrying value of the equity investee is written down to fair value. Impairment charges for long-term investments were $nil and $1,450,381 recorded in the Company's consolidated statements of operations and comprehensive loss for the years ended December 31, 2024 and 2023, respectively.

*Valuation allowance on deferred tax assets*

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Valuation allowance on deferred tax assets was $10,693,306 as of December 31, 2024.

*Accretion to the redemption value of redeemable non-controlling interests*

 

On June 13, 2022, New Kinetic Partnership subscribed 22.8395% of the preferred shares of Sunrise Guizhou, at total cash consideration of RMB200,000,000, $29,467,667. The preferred shares held by the non-controlling shareholder of Sunrise Guizhou could be redeemed by the non-controlling shareholder upon the occurrence of certain events that are not solely within the control of the Company, due to the probability of being redeemed, the Company adjusts the carrying amount of the mezzanine equity to equal the redemption value at the end of each reporting period as if it was the redemption date for the redeemable non-controlling interest. These shares are accounted for as redeemable non-controlling interests. The redeemable non-controlling interests will be recorded at redemption value. The Company accounts for the changes in accretion to the redemption value in accordance with ASC 480, Distinguishing Liabilities from Equity. Accretion on redeemable non-controlling interest was $983,927 and $3,314,857 for the years ended December 31, 2024 and 2023, respectively.

*Extinguishment of redeemable non-controlling interests*

The Company assesses whether an amendment to the terms of its redeemable non-controlling interests is an extinguishment or a modification based on a qualitative evaluation of the amendment. If the amendment adds, removes, significantly changes to a substantive contractual term or to the nature of the overall instrument, the amendment results in an extinguishment of the redeemable non-controlling interests. The Company also assesses if the change in terms results in value transfer between redeemable non-controlling interests and ordinary shareholders. When redeemable non-controlling interests are extinguished, the difference between the carrying amount and the fair value of the redeemable non-controlling interests is recorded against equity.

On June 18, 2024, the New Kinetic Partnership amended the terms of the investment agreement to waive their preferential rights in dividend and liquidation, and remove the redemption events related to completion of an IPO and meeting performance commitment. In addition, the Company, including Zhuhai Zibo, the controlling shareholder of Sunrise Guizhou, is excluded from the redemption obligor and certain shareholders of Sunrise Guizhou become the sole obligor of the redemption. As a result of the amendments, the Company reclassified the equity interest held by New Kinectic Partnership from mezzanine equity to non-controlling interests.

**ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES**

**A. Directors and Executive Officers**

The following table sets forth information regarding our directors and executive officers as of the date of this annual report.

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| | | |
|:---|:---|:---|
| **Directors and Executive Officers** | **Age** | **Position/Title** |
| Haiping Hu | 58 | Chief Executive Officer ("CEO"), Chairman of the Board of Director ("Chairman") |
| Chao Liu | 45 | Chief Financial Officer ("CFO"), Director |
| Xiang Luo | 55 | Independent Director |
| Mang Wong<sup>(1)</sup> | 47 | Independent Director |
| Xin Zhang | 37 | Independent Director |

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(1) Mr. Mang Wong was appointed as an independent director, effective March 11, 2026. The above table does
not include Mr. Jian Pei, who resigned as an independent director of the Company and as a member of each of the audit committee, the compensation
committee, and the nominating and corporate governance committee of the board of directors, effective March 11, 2026. The board of directors
appointed Mr. Mang Wong to serve as an independent director of the Company and as a member of each of the audit committee, the compensation
committee, and the nominating and corporate governance committee, effective March 11, 2026.

**Mr. Haiping Hu** has been our CEO and Chairman since February 2019, and he has served as CEO and Chairman of the VIE since December 2014. From August 2004 to January 2018, he was CEO and Vice Chairman of Shanshan Holdings Co., Ltd, which is mainly engaged in the production of lithium-ion battery parts, such as lithium-ion capacitors, battery pack, and charging pile, and providing new energy services such as new energy vehicle operation and energy management services, etc. From January 1996 to July 2004, he served as Vice President of Shanshan Group Co., Ltd. Since 2002, Shanshan Holdings Co., Ltd. has ranked among the top 500 Chinese companies in successive years. Mr. Hu holds a bachelor's degree in Chemical Automation and a master's degree in Chemical Engineering from Zhejiang University. Nicknamed "General Hu Haiping on Horseback," Mr. Hu has more than 20 years of experience as founder and executive, and is a well-known entrepreneur in China.

**Ms. Chao Liu** has served as our CFO since February 2019, and as the CFO of the VIE since January 2016. She has also served as our director since June 8, 2023. From June 2012 to June 2015, she was the head of the accounting department of Beijing Meanfang Institute of Physics and Technology, which is engaged in manufacturing gas instruments that are widely used in petrochemical, cement, chemical fertilizer, agriculture, military, medical, environmental protection, scientific research and other fields, Beijing Meanfang Spectrum Technology Co., Ltd., which is engaged in manufacturing and selling spectrum instruments, and Beijing Zhongchuang Technology Co., Ltd., which is engaged in providing interactive marketing technology solutions for brand customers and advertising agents. From May 2008 to December 2015, she was the comptroller of Beijing Hongri Dongsheng Decoration Co., Ltd., which provides decoration services to customers and Beijing Sunshine Season Network Technology Company, which provides network maintenance services to its customers. From November 2003 to November 2014, she served as supervisor of the accounting department of Beijing Haixinyuan Food Co., Ltd. which is engaged in the manufacture and sale of cold candies, pastries and cold drinks and Beijing Haixinyuan Guest House Co., Ltd., which provides hoteling services to its customers. Ms. Liu studied finance at Beijing Language and Culture University and graduated in January 2016. She has a strong understanding of international accounting and tax policies.

**Mr. Xiang Luo** was appointed as our director on March 11, 2022. Mr. Luo holds a PhD in Business Administration from Bulacan State University in Philippines, and has over twenty years of experience working at various senior positions at the United Nations and other international organizations, including the International Economic Development Council. Since June 2020, Mr. Luo has served as the co-chair of Global Steering Committee of Carbon Neutral Action (GSCCNA), an international non-governmental organization that provides strategic advice on special purpose financing, green technical and systematic solutions to achieving the Sustainable Development Goals (SDG) under the United Nations' sustainable development agenda and climate change planning. From November 2014 to December 2019, Mr. Lou served as the head of the China Office of the United Nations Office for Project Services (UNOPS), responsible for the overall coordination of strategic planning, project financing and management, team capacity building, public advocacy, risk management and performance evaluation, of various projects.

**Mr. Mang Wong** was appointed as our director on March 11, 2026. He has served as the research and development director of Shenzhen Harding Energy Co., Ltd. since October 2013, where he is responsible for operations, research and development, and production management. Mr. Wong obtained a college diploma in mechatronics from Hong Kong Commerce College in 1996.

**Mr. Xin Zhang** has served as our director since February 8, 2024. He has served as the Director of Risk Control at Albamen Capital Partners since June 2020. Mr. Xin Zhang served as the Risk Control Manager at CPE Capital Partners (London/ Paris) from March 2017 to May 2020, and served as the Head of Investment Team (UK) at CGN Europe Energy (London/Paris) from January 2013 to January 2017. Mr. Xin Zhang holds a Bachelor of Science from Zhejiang University in PRC, an MBA from the Freeman School of Business, Tulane University in USA, and a Master in Finance from the London Business School in London, UK.

Board Diversity

The table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.

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| | |
|:---|:---|
| **Board Diversity Matrix** | **Board Diversity Matrix** |
| Country of Principal Executive Offices | China |
| Foreign Private Issuer | Yes |
| Disclosure Prohibited under Home Country Law | No |
| Total Number of Directors | 5 |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Female** | **Female** | **Male** | **Male** | **Non- Binary** | **Did Not <br> Disclose<br> Gender** |
| **Part I: Gender Identity** |  |  |  |  |  |  |
| Directors |  | 1 |  | 4 |  |  |
| **Part II: Demographic Background** |  |  |  |  |  |  |
| Underrepresented Individual in Home Country Jurisdiction |  |  |  |  |  |  |
| LGBTQ+ |  |  |  |  |  |  |
| Did Not Disclose Demographic Background |  |  |  |  |  |  |

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**Family Relationships**

None of our directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K.

**B. Compensation of Directors and Executive Officers**

The following table sets forth certain information with respect to compensation for the fiscal year ended December 31, 2025, earned by or paid to our chief executive officers.

**Summary Compensation Table**

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name and Principal Position** | **Year** | **Salary**<br> **(US$)** | **Bonus<br> (US$)** | **Stock**<br> **Awards<br> (US$)** | **Option<br> Awards<br> (US$)** | **Non-Equity<br> Incentive Plan<br> Compensation** | **Deferred<br> Compensation<br> Earnings** | **Other** | **Total<br> (US$)** |
| Haiping Hu | 2025 | 92084 |  | 210118 |  |  |  |  | 302202 |
| &nbsp;&nbsp;&nbsp;CEO of the Company and the VIE |  |  |  |  |  |  |  |  |  |
| Chao Liu | 2025 | 40263 |  | 21715 |  |  |  |  | 61978 |
| &nbsp;&nbsp;&nbsp;CFO and Director of the Company and the VIE |  |  |  |  |  |  |  |  |  |
| Jian Pei | 2025 |  |  | 5429 |  |  |  |  | 5429 |
| &nbsp;&nbsp;&nbsp;Independent Director of the Company |  |  |  |  |  |  |  |  |  |
| Xiang Luo | 2025 |  |  | 5429 |  |  |  |  | 5429 |
| &nbsp;&nbsp;&nbsp;Independent Director of the Company |  |  |  |  |  |  |  |  |  |
| Xin Zhang | 2025 |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Independent Director of the Company |  |  |  |  |  |  |  |  |  |

---

**2022 Share Incentive Plan**

Our board of directors adopted the 2022 Stock Incentive Plan (the "2022 Plan") in July 2022, effective as of July 11, 2022, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business. Under the 2022 Plan, the maximum aggregate number of shares that may be issued pursuant to all awards is 3,679,200 Class A Ordinary Shares.

As of the date of this annual report, we have issued 3,097,950 Class A Ordinary Shares to qualified persons under the 2022 Plan.

The following describes the principal terms of the 2022 Plan.

<u>Types of awards</u>

The 2022 Plan permits the awards of cash, restricted stock units, share options, or any similar securities with a value derived from the value of or related to the Class A Ordinary Shares and/or returns thereon.

<u>Plan Administration</u>

Our board of directors or a committee of one or more members of the board of directors administers the 2022 Plan. The committee or the full board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award grant.

<u>Award Agreement</u>

Each award granted under the 2022 Plan is evidenced by an award agreement that sets forth terms, conditions and limitations, which may include the provisions applicable in the event the grantee's employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.

<u>Eligibility</u>

We may grant awards to our employees, directors and consultants of our Company, and other individuals, as determined by the plan administrator.

<u>Vesting Schedule</u>

In general, the plan administrator determines the vesting schedule, which is specified in the award agreement.

<u>Exercise of Options</u>

The plan administrator determines the exercise price for each award, which is stated in the award agreement.

**2024 Share Incentive Plan**

Our board of directors and shareholders adopted the 2024 Stock Incentive Plan (the "2024 Plan") in February 2024, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business. Under the 2024 Plan, the maximum aggregate number of shares that may be issued pursuant to all awards is 2,613,000 Class A Ordinary Shares.

As of the date of this annual report, we have not issued any awards under the 2024 Plan.

The following describes the principal terms of the 2024 Plan.

<u>Types of awards</u>

The 2024 Plan permits the awards of cash, restricted stock units, share options, or any similar securities with a value derived from the value of or related to the Class A Ordinary Shares and/or returns thereon.

<u>Plan Administration</u>

Our board of directors or a committee of one or more members of the board of directors administers the 2024 Plan. The committee or the full board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award grant.

<u>Award Agreement</u>

Each award granted under the 2024 Plan is evidenced by an award agreement that sets forth terms, conditions and limitations, which may include the provisions applicable in the event of the grantee's employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.

<u>Eligibility</u>

We may grant awards to our employees, directors and consultants of our Company, and other individuals, as determined by the plan administrator.

<u>Vesting Schedule</u>

In general, the plan administrator determines the vesting schedule, which is specified in the award agreement.

<u>Exercise of Options</u>

The plan administrator determines the exercise price for each award, which is stated in the award agreement.

**Agreements with Named Executive Officers**

We enter into employment agreements with our executive officers. Pursuant to employment agreements, we agree to employ each of our executive officers for a specified time period, which will be renewed upon both parties' agreement thirty days before the end of the current employment term. We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive officer, including but not limited to the commitments of any serious or persistent breach or non-observance of the terms and conditions of the employment, conviction of a criminal offense, willful disobedience of a lawful and reasonable order, fraud or dishonesty, receipt of bribery, or severe neglect of his or her duties. An executive officer may terminate his or her employment at any time with a two-month prior written notice. Each executive officer has agreed to hold, both during and after the employment agreement expires, in strict confidence and not to use or disclose to any person, corporation or other entity without written consent, any confidential information.

**C. Board Practices**

**Board of Directors**

Our board of directors consists of five directors.

**Duties of Directors**

As a matter of Cayman Islands law, a director owes three types of duties to the company: (i) statutory duties, (ii) fiduciary duties, and (iii) common law duties. The Companies Act (Revised) of the Cayman Islands (the "Companies Act") imposes a number of statutory duties on a director. A Cayman Islands director's fiduciary duties are not codified, however the courts of the Cayman Islands have held that a director owes the following fiduciary duties (a) a duty to act in what the director bona fide considers to be in the best interests of the company, (b) a duty to exercise their powers for the purposes they were conferred, (c) a duty to avoid fettering his or her discretion in the future and (d) a duty to avoid conflicts of interest and of duty. The common law duties owed by a director are those to act with skill, care and diligence that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and, also, to act with the skill, care and diligence in keeping with a standard of care commensurate with any particular skill they have which enables them to meet a higher standard than a director without those skills. In fulfilling their duty of care to us, our directors must ensure compliance with our amended articles of association, as amended and restated from time to time. We have the right to seek damages where certain duties owed by any of our directors are breached.

**Terms of Directors and Executive Officers**

The Company may by ordinary resolution elect any person to be a director either to fill a casual vacancy or as an addition to the existing board of directors. Any director so appointed shall hold office until his death, resignation or removal. All of our executive officers are appointed by and serve at the discretion of our board of directors.

**Qualification**

There is currently no shareholding qualification for directors.

**Insider Participation Concerning Executive Compensation**

Our board of directors, which was comprised of five directors, with the assistance of the Compensation Committee, makes all determinations regarding executive officer compensation.

**Committees of the Board of Directors** 

We have established three committees under the board of directors: the audit committee, the compensation committee and the corporate governance and nominating committee, and have adopted a charter for each of the committees. Each committee's members and functions as of the date of this annual report are described below.

***Audit Committee.*** Our audit committee, formed upon the closing of our IPO, consists of Mr. Xin Zhang, Mr. Xiang Luo and Mr. Mang Wong, with Mr. Xin Zhang serving as the chairman of our audit committee. We have determined that Mr. Xin Zhang, Mr. Xiang Luo and Mr. Mang Wong satisfy the "independence" requirements of Section 5605(a)(2) of the Nasdaq Listing Rules and Rule 10A-3 under the Securities Exchange Act. Prior to our IPO, our board also determined that Xin Zhang qualifies as an audit committee financial expert within the meaning of the SEC rules or possesses financial sophistication within the meaning of the Nasdaq Listing Rules. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible for, among other things:

● selecting the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors;

● reviewing with the independent auditors any audit problems or difficulties and management's response;

● reviewing and approving all proposed related-party transactions, as defined in Item 404 of Regulation S-K under the Securities Act;

● discussing the annual audited financial statements with management and the independent auditors;

● reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies;

● annually reviewing and reassessing the adequacy of our audit committee charter;

● such other matters that are specifically delegated to our audit committee by our board of directors from time to time;

● meeting separately and periodically with management and the independent auditors; and

● reporting regularly to the full board of directors.

***Compensation Committee.*** Our compensation committee, formed upon the closing of our IPO, consists of Mr. Xiang Luo, Mr. Xin Zhang and Mr. Mang Wong. Mr. Xin Zhang is the chairman of our compensation committee. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated. The compensation committee is responsible for, among other things:

● reviewing and recommending to the board with respect to the total compensation package for our chief executive officer;

● approving and overseeing the total compensation package for our executives other than the chief executive officer;

● reviewing and making recommendations to the board with respect to the compensation of our directors; and

● reviewing periodically and approving any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans.

***Corporate Governance and Nominating Committee***. Our corporate governance and nominating committee, formed upon the closing of our IPO, consists of Mr. Xin Zhang and Mr. Mang Wong. Mr. Xiang Luo is the chairman of our corporate governance and nominating committee. The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees. The nominating and corporate governance committee is responsible for, among other things:

● identifying and recommending to the board nominees for election or re-election to the board, or for appointment to fill any vacancy;

● reviewing annually with the board the current composition of the board in light of the characteristics of independence, skills, experience and availability of service to us;

● identifying and recommending to the board the names of directors to serve as members of the audit committee and the compensation committee, as well as the corporate governance and nominating committee itself;

● advising the board periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any corrective action to be taken; and

● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.

**D. Employees**

SDH had 25, 17 and 17 full-time employees as of December 31, 2023, 2024 and 2025, respectively. As of May 14, 2026, SDH had 17 full-time employees. SDH had 7 and 10 employees located in Zibo and Beijing, respectively. The following table sets forth the numbers of our employees by areas of business as of May 14, 2026:

---

| | |
|:---|:---|
| **Department** | **Number of Employees** |
| Senior Management | 5 |
| Human Resources & Administration | 4 |
| Business & Consulting | 1 |
| Customer Service | 1 |
| Information Technology | 1 |
| Research & Development | 1 |
| Finance | 4 |
| Total | 17 |

---

Sunrise Guizhou had 273, 270 and 254 employees as of December 31, 2023, 2024 and 2025 respectively. As of May 14, 2026, Sunrise Guizhou had 249 full-time employees. The following table sets forth the numbers of Sunrise Guizhou's employees by areas of business as of May 14, 2026.

---

| | |
|:---|:---|
| **Department** | **Number of Employees** |
| Senior Management | 7 |
| Human Resources & Administration | 13 |
| Research Development & Analysis | 28 |
| Manufacturing & Equipment | 125 |
| Quality Control | 17 |
| Warehouse & Operation | 38 |
| Engineering & Construction | 10 |
| Supply Chain | 4 |
| Information Technology | 4 |
| Sales & Marketing | 3 |
| Total | 249 |

---

Generally, we enter into standard employment contracts with our officers, managers, and other employees. According to these contracts, all of our employees are prohibited from engaging in any other employment during the period of their employment with us. None of our employees are members of a labor union and we consider our relationship with our employees to be good.

**E. Share Ownership**

Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our Ordinary Shares as of the date of this annual report by:

● each of our directors and executive officers; and

● each of our principal shareholders who beneficially own more than 5% of our total outstanding Ordinary Shares.

The calculations in the table below are based on 38,729,250 Ordinary Shares outstanding as of the date of this annual report, including 32,161,978 Class A Ordinary Shares and 6,567,272 Class B Ordinary Shares.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentage ownership of any other person.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name and Address of Beneficial Owner\*** | **Class A Ordinary Shares Beneficially Owned\*** | **Class B <br> Ordinary <br> Shares<br> Beneficially<br> Owned\*** | **Total Ordinary Shares Beneficially Owned\*** | **% of Total Ordinary Shares** | **% of Aggregate Voting Power** |
| **Director and Executive Officers:** | | | | | |
| Haiping Hu (1) | 2540789 | 6567272 | 9108061 | 23.52 | 81.88 |
| Chao Liu | 272176 |  | 272176 | 0.70 | 0.17 |
| Mang Wong |  |  |  |  |  |
| Xiang Luo | 50000 |  | 50000 | 0.13 | 0.03 |
| Xin Zhang |  |  |  |  |  |
| Directors and Executive Officers as a group (5 persons) | 2862965 | 6567272 | 9430237 | 24.35 | 82.08 |
| **5% Beneficial Owners\*\*** |  |  |  |  |  |
| Haiping Hu, GMB Wisdom Sharing Platform Co., Ltd. (1) | 2540789 | 6567272 | 9108061 | 23.52 | 81.88 |
| GMB Culture Communication Co., Ltd. (2) | 2213988 |  | 2213988 | 5.72 | 1.35 |
| GMB Resource Services Co., Ltd (3) | 2018586 |  | 2018586 | 5.21 | 1.23 |

---

\* Unless otherwise indicated, the business address of each of the individuals is Room 703, West Zone, R&D Building, Zibo Science and Technology Industrial Entrepreneurship Park, No. 69, Sanying Road, Zhangdian District, Zibo City, Shandong Province, The PRC.

\*\* The principal office of each of the 5% beneficial owners are located at Start Chambers, Wickham's Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands.

(1) Haiping Hu, our CEO and chairman of the Board, beneficially owns 9,108,061 Ordinary Shares, including 2,540,789 Class A Ordinary Shares and 6,567,272 Class B Ordinary Shares. 1,935,200 Class A Ordinary shares are directly held by Mr. Hu, while 605,589 Class A Ordinary Shares and 6,567,272 Class B Ordinary Shares are held through his 100% ownership of GMB Wisdom Sharing Platform Co., Ltd.

(2) Representing 2,213,988 Class A Ordinary Shares held by GMB Culture Communication Co., Ltd, a British Virgin Islands company. Ertao Zhao, Yidong Zhang, Xiaoli Chen serve as the directors of GMB Culture Communication Co., Ltd. and share the dispositive and voting power of the shares held by GMB Culture.

(3) Representing 2,018,586 Class A Ordinary Shares Held by GMB Resource Services Co., Ltd., a British Virgin Islands company. Chenming Qi and Cunyou Li, Jinhai Ying, Gesheng Fei, each of whom serves as a director of GMB Resource Services Co., share the dispositive and voting power of the shares held by GMB Resources.

We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

**ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**

**A.** **Major Shareholders** 

See "Item 6. Directors, Senior Management and Employees—E. Share Ownership."

**B.** **Related Party Transactions** 

**Contractual Arrangements between GIOP BJ and SDH** 

 

See "Item 4. Information on the Company—C. Organizational Structure."

**Material Transactions with Related Parties**

Our jurisdiction of organization prescribes certain procedures for related party transactions with directors, and our articles of association mandate that directors with a direct or indirect personal interest in any transaction that conflicts with the Company's interest shall make that interest known and recorded in the board minutes and shall not participate in discussing or voting on such transaction.

The following is a list of related parties with which the Company had transactions in the fiscal year ended December 31, 2025:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Ningbo Zhuhai Investment Co., Ltd. ("Zhuhai Investment"), a company controlled by Mr. Haiping Hu.

(b) Bally Corp. ("Bally"), a company formerly controlled by Mr. Haiping Hu.

(c) Zhongna Times (Shenzhen) New Energy Technology Co., Ltd. ("Zhongna Times"), a company controlled by Mr. Haiping Hu.

(d) Shanghai Huiyang
 Investment Co. ("Shanghai Huiyang"), a company controlled by immediate family members of Mr. Haiping Hu and a 5.40% shareholder of Sunrise Guizhou.

(e) Shidong (Suzhou) Investment Co., Ltd. ("Suzhou Investment"), a company of which Mr. Haiping Hu is the CEO.

(f) Mr. Yong Sun, Director of Sunrise Guizhou.

(g) Mr. Wenwu Zhang, Director of Sunrise Guizhou.

(h) Mr.
 Jianfeng Zhu, General Manager, Director and a 14.19% shareholder of Zhongna Times.

(i) Ms.
 Jing Ji, CEO of and a 46% shareholder of GMB Technology.

(j) Haicheng Shenhe, a 9.6451%
 shareholder of Sunrise Guizhou.

(k) Ms. Chao Liu, Chief Financial Officer of the Company.

(l) GMB Internet Technology Co., Ltd., one of the shareholders of the Company.

(m) GMB Business Communication Co., Ltd. one of the shareholders of the Company.

(n) GMB Enterprise Cooperation Development Co., Ltd., one of the shareholders of the Company.

(o) GMB Information Technology Co., Ltd., one of the shareholders of the Company.

(p) GMB Wisdom Sharing Platform Co., Ltd., one of the shareholders of the Company.

(q) GMB Technology Co., Ltd., one of the shareholders of the Company.

(r) GMB Project Incubation Services Co., Ltd., one of the shareholders of the Company.

(s) Guizhou Yilong New Area
 Industrial Development and Investment Co., Ltd., a 3.0864% shareholder of Sunrise Guizhou.

(t) Ms. Fangfei Liu, the
 spouse of Mr. Haiping Hu.

(u) Mr. Huiyu Du, the former legal representative of Sunrise Guizhou.

(v) Beijing Huatai Zhonghe
 Venture Capital Center (Limited Partnership) ("Huatai Zhonghe"), a limited partnership controlled by Mr. Shousheng
 Guo.

(w) Ningbo Meishan Bonded Port Zone Zhihai Yuncheng Investment Management Partnership Enterprise (Limited Partnership) ("Zhihai Yuncheng"), a limited partnership controlled by Mr. Haiping Hu.

(x) Shenzhen Zhuhai New Energy Co., Ltd. ("Shenzhen Zhuhai"), a company ultimately controlled by Mr. Haiping Hu.

***a.***  ***Due from related parties*** 

As of December 31, 2025, 2024 and 2023, the balances of amounts due from related parties were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | | **2025** | **2024** | **2023** |
| **Due from related parties** |  |  |  |  |
| Bally |  | $- | $5172 | $5172 |
| Mr. Yong Sun | (3) | 404279 |  |  |
| Mr. Jianfeng Zhu | (4) | 285996 |  |  |
| Zhongna Times | (2) | 71499 |  |  |
| Mr. Shousheng Guo |  |  |  | 100000 |
| Mr. Wenwu Zhang | (1) |  | 321949 | 330991 |
| Ms. Chao Liu |  |  |  | 141024 |
| Shidong Suzhou |  |  |  | 39437 |
| Shenzhen Zhuhai | (5) |  | 150699 |  |
| Zhihai Yuncheng |  |  | 63588 |  |
| Others |  | 700 | 700 | 700 |
| **Total** |  | $762474 | $542108 | $617324 |

---

(1) The balance as of December 31, 2024 represented the prepaid acquisition
consideration to purchase Mr. Wenwu Zhang's equity interest in Haicheng Shenhe, for which a full allowance for credit losses of
$326,957 was recorded for the year ended December 31, 2025.

(2) The Company loaned RMB 500,000 ($69,565) to Zhongna Times for its operation
for the year ended December 31, 2025. The balance from Zhongna Times as of December 31, 2025 was fully repaid on January 23, 2026.

(3) The Company loaned RMB 3,725,000 ($518,261) to Mr. Yong Sun as a staff
advance for the year ended December 31, 2025. Mr. Yong Sun repaid RMB 897,835 ($124,916) for the year ended December 31, 2025. The outstanding
balance from Mr. Yong Sun as of December 31, 2025 was fully repaid in full by May 11, 2026.

(4) The Company loaned RMB 2,000,000 ($278,261) to Mr. Jianfeng Zhu to
support the operation of Zhong Times for the year ended December 31, 2025. The balance from Mr. Jianfeng Zhu as of December 31, 2025 was
fully repaid in full by May 11, 2026.

(5) Shenzhen Zhuhai returned RMB 1,100,000 ($153,044) to the Company for
the year ended December 31, 2025.

***b.***  ***Due to related parties*** 

As of December 31, 2025, 2024 and 2023, the balances of amounts due to related parties were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  |  | **2025** | **2024** | **2023** |
| **Due to related parties** |  |  |  |  |
| Mr. Haiping Hu |  | $&nbsp;&nbsp;&nbsp;&nbsp; | $- | $903789 |
| Mr. Chenming Qi |  |  |  | 5476 |
| Ms. Jing Ji |  | 19841 | 19009 | 19543 |
| Shanghai Huiyang | (2) |  | 235001 | 800785 |
| Haicheng Shenhe |  | 2618 | 1029 | 451871 |
| Zhuhai Investment | (1)/(2) | 2136309 | 3442663 | 2183911 |
| Zhongna Times | (3) |  | 493198 |  |
| Huatai Zhonghe |  |  |  | 98593 |
| Others |  | 5909 | 5905 | 197 |
| **Total** |  | $2164677 | $4196805 | $4464165 |

---

(1) The balance as of December 31, 2025 represented the loans from Zhuhai Investment, with the annual interest rate of 4% and due on December 31, 2026.

(2) Mr. Haiping Hu's affiliated companies loaned RMB 1,600,000 ($222,609)
to the Company for the year ended December 31, 2025; The Company repaid the loan of RMB 14,780,000 ($2,056,348, to Mr. Haiping Hu's
affiliated companies for the year ended December 31, 2025. The interest accrued was RMB 1,382,627 ($192,366) for the year ended
December 31, 2025.

(3) Zhongna Times loaned RMB 5,000,000 ($695,652) to the Company
for the year ended December 31, 2025; The Company repaid the loan of RMB 8,600,000 ($1,196,522) to Zhongna Times for the year ended December
31, 2025.

***c.***  ***Deferred revenue -related parties*** 

As of December 31, 2025, 2024 and 2023, the balances of deferred revenue of related parties were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  |  | **2025** | **2024** | **2023** |
| **Deferred revenue of related parties** |  |  |  |  |
| Shanghai Huiyang | (1) | $- | $- | $340850 |
| **Total** |  | $- | $- | $340850 |

---

(1) The balance as of December 31, 2023 represented the advance from the related party for tailored services.

***d.***  ***Related party transactions*** 

<u>Related party purchase</u>

The Company purchased consulting services for knowledge sharing and enterprise business from Zhuhai Investment. For the years ended December 31, 2025, 2024, and 2023, the consulting fee to Zhuhai Investment was $nil, $12,376 and $nil, respectively.

The Company purchased maintenance services for the Company's APP related to knowledge sharing and enterprise business from Zhihai Yuncheng. For the years ended December 31, 2025, 2024, and 2023, the maintenance fee to Zhihai Yuncheng was $59,065, $32,776 and $nil, respectively.

The Company purchased raw materials for graphite anode material manufacturing from Haicheng Shenhe. For the years ended December 31, 2025, 2024 and 2023, total purchases were $1,330, $nil, and $221,207, respectively.

***e.***  ***Related party guarantee*** 

On August 4, 2022, Sunrise Guizhou entered into a line of credit financing contract with Bank of Guizhou for a revolving line credit of RMB 20,000,000 ($2,859,962) for a term from August 4, 2022 to August 3, 2023. Pursuant to the contract, Mr. Haiping Hu and Guizhou Yilong New Area Industrial Development and Investment Co., Ltd., the non-controlling shareholder of Sunrise Guizhou, were the guarantors of the revolving line of credit.

In July 2022, Sunrise Guizhou entered into purchase agreements with original shareholders of Sunrise to acquire 100% of Sunrise Tech's assets and equity ownership for a gross consideration of RMB 40,000,000, among of which RMB 10,000,000 and RMB 5,000,000 were paid in July 2022 and August 2023, respectively. For the year ended December 31, 2024, the Company and the original shareholders agreed that the RMB 5,000,000 consideration due on August 20, 2024 would be offset by the unpaid RMB 8,960,000 land use rights and property taxes and their associated fines and late payment fees prior to the asset acquisition. For the year ended December 31, 2025, the Company had paid RMB 6,430,000 to the original shareholders of Sunrise Tech. The unpaid consideration RMB 10,000,000 ($1,429,981) will be paid in 2026. The consideration payable is guaranteed by Mr. Haiping Hu.

On September 22, 2022, Sunrise Guizhou entered into an eighteen-month loan with Far East to obtain a loan of RMB 20,000,000 ($2,859,962) for a term from September 22, 2022 to March 21, 2024. On November 4, 2022, Sunrise Guizhou entered into a sale and leaseback financing contract for a three-year financing with Ronghe to obtain an amount of RMB 40,000,000 ($5,719,924) for a term from November 10, 2022 to November 9, 2025. On February 7, 2023, Sunrise Guizhou entered into a sales and leaseback financing contract for a two-year financing with Zhongguancun to obtain an amount of RMB 20,000,000 ($2,859,962) for a term from February 7, 2023 to February 6, 2025. On October 27, 2023, Sunrise Guizhou entered into a sale and leaseback financing contract for a two-year financing with Guomao for RMB 15,000,000 ($2,144,971) for a term from October 27, 2023 to October 26, 2025; On October 14, 2024, Sunrise Guizhou entered into a sale and leaseback financing contract for a thirty two-month financing with Risheng for RMB 6,000,000 ($857,989) for a term from October 14, 2024 to June 15, 2027. Pursuant to these financing contracts, Mr. Haiping Hu, CEO and Chairman of the Board of Directors, was the guarantor for all of such the debts.

On May 16, 2023, Sunrise Guizhou entered into a credit facility agreement with Everbright Bank to obtain a revolving line of credit of up to RMB 100,000,000 ($14,299,810) for a term from June 1, 2023 to May 31, 2024. For the years ended December 31, 2024 and 2023, the Company had been able to utilize the line of credit for RMB 50,000,000, or $7,149,905 , with interest rates from 2% to 4.5% which had matured from June 4, 2024 to September 25, 2024, collateralized by the pledge of land use right of Sunrise Tech for RMB 50,000,000. This line credit was guaranteed by Mr. Haiping Hu, Ms. Fangfei Liu and Ms. Huiyu Du.

On January 18, 2023, Sunrise Guizhou entered into a credit facility agreement with Post Bank to obtain revolving line of credit for up to RMB 30,000,000 ($4,289,943) for a term from January 19, 2023 to January 18, 2031. For the years ended December 31, 2024 and 2023, the Company utilized the line of credit with Post Bank for RMB 28,300,000, or $4,046,846, which had matured from July 2023 to April 2024. In March 2024, the Company repaid the loan. This revolving line of credit loan was guaranteed by Mr. Haiping Hu.

On June 13, 2023, Sunrise Guizhou entered into a finance lease agreement with Chongqing Xingyu Finance Lease Co., Ltd. to lease graphite anode materials production facilities. The principal of the contract was RMB 29,257,844 ($4,183,816), with an interest rate of 5.8%. Payment due on such finance lease was guaranteed by Mr. Haiping Hu and Ms. Fangfei Liu.

On October 26, 2023, Sunrise Guizhou entered into a three-year debt arrangement with SPD Bank to obtain line of credit of up to RMB 50,000,000 ($7,149,905) for a term from November 17, 2023 to November 17, 2026. The Company pledged its intellectual property and patents for the line of credit. Sunrise Guizhou utilized the line of credit by issuing a banker's acceptance note of up to RMB 20,000,000 ($2,859,962) from SPD. Pursuant to the banker's acceptance note contract, the Company was obliged to deposit fifty percent of the note payable amount issued as restricted cash in the designated bank account in SPD Bank. Therefore, the line of credit for issuance of acceptance note was RMB 10,000,000 ($1,429,981). As of December 31, 2025, the banker's acceptance note was RMB 8,770,472 ($1,254,161) and the deposit for commercial note issuance was RMB 4,710,236 ($673,555). Other than the pledge of the Company's intellectual property and patents, the otherwise unsecured amount of the banker's acceptance note, which was RMB 4,060,236 ($580,606) was guaranteed by Mr. Haiping Hu.

On March 8, 2024, Sunrise Guizhou obtained a bank loan of RMB 100,000,000 ($14,299,810) from CCB Qianxinan Branch with an interest rate of 9.504% for a term from March 8, 2024 to March 8, 2026. On June 28, 2024, Sunrise Guizhou obtained a bank loan of RMB 100,000,000 ($14,299,810) from CCB Qianxinan Branch for a term from June 28, 2024 to June 28, 2026. These loans were guaranteed by Mr. Haiping Hu.

On April 26, 2024, the Company obtained a loan for RMB 900,000 ($128,698) from WeBank with an interest rate of 9.504% for a term from April 26, 2024 to April 26, 2026. This loan was guaranteed by Ms. Huiyu Du, the former legal representative of Sunrise Guizhou. As of the date of this annual report, the Company has fully repaid this loan.

On June 19, 2024, GIOP BJ entered into a line of credit facility agreement with Industrial Bank to obtain revolving line of credit of up to RMB 7,000,000 ($1,000,987). On July 23, 2024, GIOP BJ obtained a loan for RMB 7,000,000 with an interest rate of one-year loan prime rate plus 0.05% for a term from August 29, 2024 to August 28, 2025. On June 25, 2025, Sunrise Guizhou repaid the loan in full and renewed the line of credit for RMB 7,000,000 with an interest rate of one-year loan prime rate minus 0.2% for a term from June 26, 2025 to June 25, 2026. This loan was guaranteed by Mr. Haiping Hu and Ms. Fangfei Liu.

On July 31, 2024, Sunrise Guizhou entered into a banker's acceptance note contract with Everbright Bank for issuing banker's acceptance note to the suppliers of Sunrise Guizhou. Pursuant to the contract, the Company was obliged to deposit fifty percent of the note payable amount issued as restricted cash in the designated bank account in Everbright Bank. As of December 31, 2025 and 2024, the deposit for the note issuance was $1,804,798 and $6,853,541, respectively. Pursuant to the contract, Mr. Haiping Hu and Ms. Fangfei Liu were the guarantors of the unsecured commercial notes for $2,707,198 and $6,853,541 as of December 31, 2025 and 2024, respectively.

On January 9, 2025, Sunrise Guizhou obtained a bank loan of RMB 300,000,000 ($42,899,429) from CCB Qianxinan Branch with a variable interest rate of the loan prime rate plus 0.7%, for a term from January 9, 2025 to January 9, 2039. The loan was guaranteed by Mr. Haiping Hu, Zhuhai Zibo, and Zhuhai Investment.

On March 27, 2025, Sunrise Guizhou entered into a loan agreement for RMB2 9,000,000 ($4,146,945), with an interest rate of 4% for a term from March 31, 2025 to March 30, 2026. This credit loan was guaranteed by Mr. Haiping Hu and Ms. Fangfei Liu. As of the date of this annual report, the Company has fully repaid this loan.

**C. Interests of Experts and Counsel**

Not applicable.

**ITEM 8. FINANCIAL INFORMATION**

**A. Consolidated Statements and Other Financial Information**

See Item 18 for our audited consolidated financial statements.

**Legal Proceedings**

We are not currently involved in any material legal or administrative proceedings, other than those disclosed in "Item 5. Operating and Financial Review and Prospects— Contingencies." From time to time, we may be subject to various legal or administrative claims and proceedings arising in the ordinary course of business. Such legal or administrative claims and proceedings, even if without merit, could result in the expenditure of financial and management resources and potentially result in civil liability for damages.

**Dividend Policy**

We do not have any present plan to pay any cash dividends on our Ordinary Shares in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

We are a holding company incorporated in the Cayman Islands. We rely principally on dividends from our PRC subsidiaries for our cash requirements, including any payment of dividends to our shareholders. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us.

Our board of directors has discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. Under Cayman Islands law, a Cayman Islands company may pay a dividend out of either profit or share premium account, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that our board of directors may deem relevant.

**B. Significant Changes**

Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.

**ITEM 9. THE OFFER AND LISTING**

**A. Offering and Listing Details**

Our Class A Ordinary Shares are listed on the Nasdaq Capital Market.

**B. Plan of Distribution**

Not applicable.

**C. Markets**

Our Class A Ordinary Shares are listed on the NASDAQ Capital Market under the new ticker symbol "EPOW".

**D. Selling Shareholders**

Not applicable.

**E. Dilution**

Not applicable.

**F. Expenses of the Issue**

Not applicable.

**ITEM 10. ADDITIONAL INFORMATION**

**A. Share Capital**

Not Applicable.

**B. Memorandum and Articles of Association**

We are a Cayman Islands exempted company with limited liability and our affairs are governed by our amended and restated memorandum and articles of association (the "Memorandum and Articles"), the Companies Act, the common law of the Cayman Islands, our corporate governance documents and rules and regulations of the stock exchange on which our shares are traded. The Memorandum and Articles are filed herein as Exhibit 1.1 to this annual report and are hereby incorporated by reference into this annual report. You may refer to Exhibit 2.3 for a detailed disclosure of description of our securities registered under Section 12 of the Exchange Act of 1934, as amended, of the Memorandum and Articles.

As of the date of this annual report, our authorized share capital is US$500,000 divided into 3,500,000,000 Class A Ordinary Share of par value US$0.0001 each and 1,500,000,000 Class B Ordinary Share of par value US$0.0001 each. All of our issued and outstanding Ordinary Shares are fully paid and non-assessable. Our Ordinary Shares are issued in registered form, and are issued when registered in our register of members. Unless the board of directors determine otherwise, each holder of our Ordinary Shares will not receive a certificate in respect of such Ordinary Shares. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their Ordinary Shares. We may not issue shares or warrants to bearer.

**C. Material Contracts**

We have not entered into any material contracts other than in the ordinary course of business and other than those described in "Item 4. Information on the Company," "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions" or elsewhere in this annual report.

**D. Exchange Controls**

See "Item 4. Information on the Company—B. Business Overview—Regulation— Regulations Relating to Foreign Exchange."

**E. Taxation**

The following summary of the Cayman Islands, PRC and U.S. federal income tax considerations of an investment in the Ordinary Shares is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change. This summary does not deal with all possible tax considerations relating to an investment in the Ordinary Shares, such as the tax considerations under U.S. state and local tax laws or under the tax laws of jurisdictions other than the Cayman Islands, the People's Republic of China and the United States.

**Cayman Islands Taxation**

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation, and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us or holders of our Ordinary Shares levied by the government of the Cayman Islands, except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the Cayman Islands. The Cayman Islands are not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.

Payments of dividends and capital in respect of Ordinary Shares will not be subject to taxation in the Cayman Islands and no Cayman Islands withholding will be required on the payment of a dividend or capital to any holder of Ordinary Shares, nor will gains derived from the disposal of Ordinary Shares be subject to Cayman Islands income or corporation tax.

As an exempted company, the Company has received a tax exemption certificate from the Financial Secretary of the Cayman Islands pursuant to the Tax Concessions Law (Revised) of the Cayman Islands, containing an undertaking that in the event of any change to the foregoing, the Company, for a period of twenty years from the date of the grant of the undertaking (such date of grant being 1 August 2019), will not be chargeable to tax in the Cayman Islands on its income or its capital gains arising in the Cayman Islands or elsewhere.

**People's Republic of China Taxation**

*Enterprise Income Tax and Withholding Tax*

We are a holding company incorporated in the Cayman Islands and we gain substantial income by way of dividends paid to us from our PRC subsidiaries. The EIT Law and its implementation rules provide that China-sourced income of foreign enterprises, such as dividends paid by a PRC subsidiary to its equity holders that are non-resident enterprises, will normally be subject to PRC withholding tax at a rate of 10%, unless any such foreign investor's jurisdiction of incorporation has a tax treaty with China that provides for a preferential tax rate or a tax exemption.

Under the EIT Law, an enterprise established outside of China with a "de facto management body" within China is considered a "resident enterprise," which means that it is treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. Although the implementation rules of the EIT Law define "de facto management body" as a managing body that actually, comprehensively manage and control the production and operation, staff, accounting, property and other aspects of an enterprise, the only official guidance for this definition currently available is set forth in SAT Circular 82, which provides guidance on the determination of the tax residence status of a Chinese-controlled offshore incorporated enterprise. Although this circular only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the criteria set forth in the circular may reflect the SAT's general position on how the "de facto management body" text should be applied in determining the tax resident status of all offshore enterprises.

According to SAT Circular 82 (the Circular on Issues Concerning the Identification of Chinese-Controlled Overseas Registered Enterprises as Resident Enterprises in Accordance With the Actual Standards of Organizational Management), a Chinese-controlled offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a "de facto management body" in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following criteria are met: (i) the places where senior management and senior management departments that are responsible for daily production, operation and management of the enterprise perform their duties are mainly located within the territory of China; (ii) financial decisions (such as money borrowing, lending, financing and financial risk management) and personnel decisions (such as appointment, dismissal and salary and wages) are made or need to be made by organizations or persons located within the territory of China; (iii) main property, accounting books, corporate seal, the board of directors and files of the minutes of shareholders' meetings of the enterprise are located or preserved within the territory of China; and (iv) half (or more) of the directors or senior management staff having the right to vote habitually reside within the territory of China.

We believe that E-Power Inc. is not a resident enterprise for PRC tax purpose. E-Power Inc. is not controlled by a PRC enterprise or PRC enterprise group and we do not meet some of the conditions outlined in the immediately preceding paragraph. For example, as a holding company, the key assets and records of E-Power Inc., including the resolutions and meeting minutes of our board of directors and the resolutions and meeting minutes of our shareholders, are located and maintained outside the PRC. In addition, we are not aware of any offshore holding companies with a corporate structure similar to ours that has been deemed a PRC "resident enterprise" by the PRC tax authorities. However, as the tax residency status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term "de facto management body" as applicable to our offshore entities, we will continue to monitor our tax status.

If the PRC tax authorities determine that E-Power Inc. is a PRC resident enterprise for enterprise income tax purposes, we would be subject to PRC enterprise income on our worldwide income at the rate of 25%. Furthermore, we may be required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises. In addition, non-resident enterprise shareholders may be subject to a 10% PRC withholding tax on gains realized on the sale or other disposition of our ordinary shares, if such income is treated as sourced from within the PRC. It is unclear whether our non-PRC individual shareholders would be subject to any PRC tax on dividends or gains obtained by such non-PRC individual shareholders in the event we are determined to be a PRC resident enterprise. If any PRC tax were to apply to dividends or gains realized by non-PRC individuals, it would generally apply at a rate of 20% unless a reduced rate is available under an applicable tax treaty. However, it is also unclear whether non-PRC shareholders of the Company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that E-Power Inc. is treated as a PRC resident enterprise.

See "Risk Factors — Risks Related to Doing Business in China — Under the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified as a "resident enterprise" of China, which could result in unfavorable tax consequences to us and our non-PRC shareholders."

*Value-added Tax*

According to the Provisional Regulations of the PRC on Value-Added Tax, the Detailed Rules for the Implementation of the Provisional Regulations of the PRC on Value-added Tax, the MOF and SAT Circular 32 (the Circular of the Ministry of Finance and the State Administration of Taxation on Adjustment of Value-Added Tax Rates), and MOF, SAT and GAC Circular 39 (the Announcement on Policies for Deepening the VAT Reform), all enterprises and individuals engaged in the sale of goods, the provision of processing, repair and replacement services, sales of services, intangible assets, real property and the importation of goods within the territory of the PRC are the taxpayers of VAT. The VAT tax rates generally applicable are simplified as 13%, 9%, 6% and 0%, and the VAT tax rate of 3% is applicable to small-scale taxpayers. On December 25, 2024, the Standing Committee of the National People's Congress promulgated the VAT Law, which became effective on January 1, 2026 and replaced the Provisional Regulations of the PRC on Value-Added Tax. The VAT Law of the PRC provides that VAT rates generally applicable are simplified as 13%, 9% and 6%, and the VAT rate for simplified tax calculation method is 3%. To refine and implement the provisions of the VAT Law, the Regulations for the Implementation of the Value-Added Tax Law of the PRC was promulgated on December 25, 2025 and became effective on January 1, 2026. The VAT tax rates applicable to our PRC subsidiaries and consolidated affiliates are as follows: 13% on graphite anode material sales for Sunrise Guizhou, Zibo Shidong, Sunrise Chenhui and Sunrise Anhui; 6% on services for Shidong Cloud and the VIE and its subsidiaries, including Zibo Shidong and GMB (Hangzhou); 3% for small-scale taxpayers including and GIOP BJ.

**United States Federal Income Tax Considerations**

The following does not address the tax consequences to any particular investor or to persons in special tax situations such as:

● banks;

● financial institutions;

● insurance companies;

● regulated investment companies;

● real estate investment trusts;

● broker-dealers;

● persons that elect to mark their securities to market;

● U.S. expatriates or former long-term residents of the U.S.;

● governments or agencies or instrumentalities thereof;

● tax-exempt entities;

● persons liable for alternative minimum tax;

● persons holding our Ordinary Shares as part of a straddle, hedging, conversion or integrated transaction;

● persons that actually or constructively own 10% or more of our voting power or value (including by reason of owning our Ordinary Shares);

● persons who acquired our Ordinary Shares pursuant to the exercise of any employee share option or otherwise as compensation;

● persons holding our Ordinary Shares through partnerships or other pass-through entities;

● beneficiaries of a Trust holding our Ordinary Shares; or

● persons holding our Ordinary Shares through a Trust.

***Material Tax Consequences Applicable to U.S. Holders of Our Ordinary Shares***

The following brief summary sets forth the material U.S. federal income tax consequences related to the ownership and disposition of our Ordinary Shares. This brief description does not deal with all possible tax consequences relating to ownership and disposition of our Ordinary Shares or U.S. tax laws, other than the U.S. federal income tax laws, such as the tax consequences under non-U.S. tax laws, state, local and other tax laws.

The following brief description applies only to U.S. Holders (defined below) that hold Ordinary Shares as capital assets and that have the U.S. dollar as their functional currency. This brief description is based on the federal income tax laws of the United States in effect as of the date of this annual report and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this annual report, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the tax consequences described below.

The brief description below of the U.S. federal income tax consequences to "U.S. Holders" will apply to you if you are a beneficial owner of Ordinary Shares and you are, for U.S. federal income tax purposes,

● an individual who is a citizen or resident of the United States;

● a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia;

● an estate whose income is subject to U.S. federal income taxation regardless of its source; or

● a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

If a partnership (or other entities treated as a partnership for United States federal income tax purposes) is a beneficial owner of our Ordinary Shares, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of the partnership. Partnerships and partners of a partnership holding our Ordinary Shares are urged to consult their tax advisors regarding an investment in our Ordinary Shares.

An individual is considered a resident of the U.S. for federal income tax purposes if he or she meets either the "Green Card Test" or the "Substantial Presence Test" described as follows:

The Green Card Test: You are a lawful permanent resident of the United States, at any time, if you have been given the privilege, according to the immigration laws of the United States, of residing permanently in the United States as an immigrant. You generally have this status if the U.S. Citizenship and Immigration Services issued you an alien registration card, Form I-551, also known as a "green card."

The Substantial Presence Test: If an alien is present in the United States on at least 31 days of the current calendar year, he or she will (absent an applicable exception) be classified as a resident alien if the sum of the following equals 183 days or more (*See* §7701(b)(3)(A) of the Internal Revenue Code and related Treasury Regulations):

&nbsp;&nbsp;&nbsp;&nbsp;1. The actual days in the United States in the current year; plus

&nbsp;&nbsp;&nbsp;&nbsp;2. One-third of his or her days in the United States in the immediately preceding year; plus

&nbsp;&nbsp;&nbsp;&nbsp;3. One-sixth of his or her days in the United States in the second preceding year.

***Taxation of Dividends and Other Distributions on our Ordinary Shares***

Subject to the passive foreign investment company (PFIC) rules discussed below, the gross amount of distributions made by us to you with respect to the Ordinary Shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations.

With respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend income, provided that (1) the Ordinary Shares are readily tradable on an established securities market in the United States, or we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange of information program, (2) we are not a PFIC (defined below) for either our taxable year in which the dividend is paid or the preceding taxable year, and (3) certain holding period requirements are met. Because there is no income tax treaty between the United States and the Cayman Islands, clause (1) above can be satisfied only if the Ordinary Shares are readily tradable on an established securities market in the United States. Under U.S. Internal Revenue Service authority, Ordinary Shares are considered for purpose of clause (1) above to be readily tradable on an established securities market in the United States if they are listed on certain exchanges, which presently include the Nasdaq. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to our Ordinary Shares, including the effects of any change in law after the date of this annual report.

Dividends will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will be limited to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us with respect to our Ordinary Shares will constitute "passive category income" but could, in the case of certain U.S. Holders, constitute "general category income." The Company did not declare or pay any dividends with respect to its Ordinary Shares for the fiscal year ended December 31, 2025.

To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated first as a tax-free return of your tax basis in your Ordinary Shares, and to the extent the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above.

***Taxation of Dispositions of Ordinary Shares***

Subject to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a share equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in the Ordinary Shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who has held the Ordinary Shares for more than one year, you will generally be eligible for reduced tax rates. The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize will generally be treated as United States source income or loss for foreign tax credit limitation purposes which will generally limit the availability of foreign tax credits.

***Passive Foreign Investment Company Considerations***

A non-U.S. corporation, such as our company, will be classified as a PFIC for U.S. federal income tax purposes for any taxable year if, applying applicable look-through rules, either (i) 75% or more of its gross income for such year consists of certain types of "passive" income or (ii) 50% or more of the value of its assets (generally determined on the basis of a quarterly average) during such year is attributable to assets that produce or are held for the production of passive income (the "asset test"). For this purpose, cash and assets readily convertible into cash are categorized as passive assets and the company's goodwill and other unbooked intangibles not reflected on its balance sheet are taken into account. Passive income generally includes, among other things, dividends, interest, income equivalent to interest, rents, royalties, and gains from the disposition of passive assets. We will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation in which we own, directly or indirectly, 25% or more (by value) of the stock.

Based upon our current and projected income and assets, including the proceeds we received from our initial public offering and the value of our Ordinary Shares, it is believed we are not a PFIC for the current taxable year. However, no assurance can be given in this regard because the determination of whether we are or will become a PFIC for any taxable year is a factual determination made annually that will depend, in part, upon the composition and classification of our income and assets. Furthermore, fluctuations in the market price of our Ordinary Shares may cause us to be classified as a PFIC for any future taxable years because the value of our assets for purposes of the asset test, including the value of our goodwill and other unbooked intangibles, may be determined by reference to the market price of our Ordinary Shares from time to time (which may be volatile). In addition, the composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets and the cash raised in our prior public offering. Under circumstances where our revenue from activities that produce passive income significantly increases relative to our revenue from activities that produce non-passive income, or where we determine not to deploy significant amounts of cash for active purposes, our risk of becoming classified as a PFIC may substantially increase.

If we are a PFIC for any year during which you hold Ordinary Shares, we will continue to be treated as a PFIC for all succeeding years during which you hold Ordinary Shares. If we cease to be a PFIC and you did not previously make a timely "mark-to-market" election as described below, you may avoid some of the adverse effects of the PFIC regime by making a "purging election" (as described below) with respect to the Ordinary Shares.

If we are a PFIC for your taxable year(s) during which you hold Ordinary Shares, you will be subject to special tax rules with respect to any "excess distribution" that you receive and any gain you realize from a sale or other disposition (including a pledge) of the Ordinary Shares, unless you make a "mark-to-market" election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the Ordinary Shares will be treated as an excess distribution. Under these special tax rules:

● the excess distribution or gain will be allocated ratably over your holding period for the Ordinary Shares;

● the amount allocated to your current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and

● the amount allocated to each of your other taxable year(s) will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

The tax liability for amounts allocated to years prior to the year of disposition or "excess distribution" cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the Ordinary Shares cannot be treated as capital, even if you hold the Ordinary Shares as capital assets.

A U.S. Holder of "marketable stock" (as defined below) in a PFIC may make a mark-to-market election under Section 1296 of the U.S. Internal Revenue Code for such stock to elect out of the tax treatment discussed above. If you make a mark-to-market election for first taxable year which you hold (or are deemed to hold) Ordinary Shares and for which we are determined to be a PFIC, you will include in your income each year an amount equal to the excess, if any, of the fair market value of the Ordinary Shares as of the close of such taxable year over your adjusted basis in such Ordinary Shares, which excess will be treated as ordinary income and not capital gain. You are allowed an ordinary loss for the excess, if any, of the adjusted basis of the Ordinary Shares over their fair market value as of the close of the taxable year. Such ordinary loss, however, is allowable only to the extent of any net mark-to-market gains on the Ordinary Shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Ordinary Shares, are treated as ordinary income. Ordinary loss treatment also applies to any loss realized on the actual sale or disposition of the Ordinary Shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such Ordinary Shares. Your basis in the Ordinary Shares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election, the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by us, except that the lower applicable capital gains rate for qualified dividend income discussed above under "— Taxation of Dividends and Other Distributions on our Ordinary Shares" generally would not apply.

The mark-to-market election is available only for "marketable stock", which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter ("regularly traded") on a qualified exchange or other market (as defined in applicable U.S. Treasury regulations), including the Nasdaq Capital Market. If the Ordinary Shares are regularly traded on the Nasdaq Capital Market and if you are a holder of Ordinary Shares, the mark-to-market election would be available to you were we to be or become a PFIC.

Alternatively, a U.S. Holder of stock in a PFIC may make a "qualified electing fund" election under Section 1295(b) of the U.S. Internal Revenue Code with respect to such PFIC to elect out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross income for a taxable year such holder's pro rata share of the corporation's earnings and profits for the taxable year. The qualified electing fund election, however, is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that would enable you to make a qualified electing fund election. If you hold Ordinary Shares in any taxable year in which we are a PFIC, you will be required to file U.S. Internal Revenue Service Form 8621 in each such year and provide certain annual information regarding such Ordinary Shares, including regarding distributions received on the Ordinary Shares and any gain realized on the disposition of the Ordinary Shares.

If you do not make a timely "mark-to-market" election (as described above), and if we were a PFIC at any time during the period you hold the Ordinary Shares, then such Ordinary Shares will continue to be treated as stock of a PFIC with respect to you even if we cease to be a PFIC in a future year, unless you make a "purging election" for the year we cease to be a PFIC. A "purging election" creates a deemed sale of such Ordinary Shares at their fair market value on the last day of the last year in which we are treated as a PFIC. The gain recognized by the purging election will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result of the purging election, you will have a new basis (equal to the fair market value of the Ordinary Shares on the last day of the last year in which we are treated as a PFIC) and holding period (which new holding period will begin the day after such last day) in your Ordinary Shares for tax purposes.

IRC Section 1014(a) provides for a step-up in basis to the fair market value for the Ordinary Shares when inherited from a decedent that was previously a holder of the Ordinary Shares. However, if we are determined to be a PFIC and a decedent that was a U.S. Holder did not make either a timely qualified electing fund election for our first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) the Ordinary Shares, or a mark-to-market election and ownership of those Ordinary Shares are inherited, a special provision in IRC Section 1291(e) provides that the new U.S. Holder's basis should be reduced by an amount equal to the Section 1014 basis minus the decedent's adjusted basis just before death. As such if we are determined to be a PFIC at any time prior to a decedent's passing, the PFIC rules will cause any new U.S. Holder that inherits the Ordinary Shares from a U.S. Holder to not get a step-up in basis under Section 1014 and instead will receive a carryover basis in those Ordinary Shares.

You are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in the Ordinary Shares and the elections discussed above.

***Information Reporting and Backup Withholding***

Dividend payments with respect to our Ordinary Shares and proceeds from the sale, exchange or redemption of our Ordinary Shares may be subject to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding under Section 3406 of the US Internal Revenue Code with at a current flat rate of 24%. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification on U.S. Internal Revenue Service Form W-9 or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the U.S. Internal Revenue Service and furnishing any required information. We do not intend to withhold taxes for individual shareholders. However, transactions effected through certain brokers or other intermediaries may be subject to withholding taxes (including backup withholding), and such brokers or intermediaries may be required by law to withhold such taxes.

Under the Hiring Incentives to Restore Employment Act of 2010, certain U.S. Holders are required to report information relating to our Ordinary Shares, subject to certain exceptions (including an exception for Ordinary Shares held in accounts maintained by certain financial institutions), by attaching a complete Internal Revenue Service Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold Ordinary Shares. Failure to report such information could result in substantial penalties.

**F. Dividends and Paying Agents**

Not applicable.

**G. Statement by Experts**

Not applicable.

**H. Documents on Display**

We previously filed with the SEC registration statement on Form F-1 (File Number 333-233745), as amended, to register our Class A Ordinary Shares in relation to our initial public offering, which was completed on February 11, 2021.

We are subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we are required to file reports, including annual reports on Form 20-F, and other information with the SEC. All information filed with the SEC can be obtained over the internet at the SEC's website at www.sec.gov or inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information regarding the Washington, D.C. Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC using its EDGAR system. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. Nevertheless, our directors and officers are required to file Section 16(a) reports (Forms 3, 4, and 5) with the SEC to report beneficial ownership interests in us.

**I. Subsidiary Information**

For a listing of our subsidiaries, see "Item 4C. Organizational Structure" for a chart of our current structure.

**ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

***Interest Rate Risk***

 ****

We are exposed to interest rate risk while we have short-term and long-term bank loans outstanding. Although interest rates for our short-term loans are typically fixed for the terms of the loans, the terms are typically twelve months and interest rates are subject to change upon renewal. Interest rate on long-terms loans is subject to the change of loan prime rate designated by the People's Bank of China.

 **

***Credit Risk***

 **

Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. We manage credit risk through in-house research and analysis of the Chinese economy and the underlying obligors and transaction structures. We identify credit risk collectively based on industry, geography and customer type. In measuring the credit risk of our sales to our customers, we mainly reflect the "probability of default" by the customer on its contractual obligations and consider the current financial position of the customer and the current and likely future exposures to the customer.

***Liquidity Risk***

The Company is exposed to liquidity risk, which is a risk that the Company will be unable to provide sufficient capital resources and liquidity to meet commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, the Company will turn to other financial institutions and related parties to obtain short-term and long-term funding to cover any liquidity shortage.

On January 9, 2025, Sunrise Guizhou obtained a bank loan of RMB300,000,000 from China Construction Bank ("CCB"), which was exclusively for construction payment of manufacturing facilities and machine purchase. CCB transferred the loan funds to the Company's bank account opened in CCB ("CCB account"). The Company initiates payment to its supplier from CCB account and will be responsible for the authenticity and accuracy of the transaction. CCB shall subsequently perform a formality review on whether the payment is consistent with the loan purpose. The formality review includes checking transaction information, payment amount, payee and payee's bank information. When CCB completes the formality review and believes that the payment meets the loan purpose, the payment will be transferred to the payee's bank account. As of December 31, 2025, cash and cash equivalents in CCB account which would be subject to payment formality review was RMB 96,847,349, or $13,848,987.

 **

***Foreign Exchange Risk***

 **

While our reporting currency is the U.S. dollar, almost all of our consolidated revenues, costs and expenses are denominated in RMB. Almost all of our assets are denominated in RMB. As a result, we are exposed to foreign exchange risk as our revenues and results of operations may be affected by fluctuations in the exchange rate between the U.S. dollar and RMB. If the RMB depreciates against the U.S. dollar, the value of our RMB revenues, earnings and assets as expressed in our U.S. dollar financial statements will decline. We have not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk.

**ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES**

**A. Debt Securities**

Not applicable.

**B. Warrants and Rights**

Not applicable.

**C. Other Securities**

Not applicable.

**D. American Depositary Shares**

Not applicable.

**PART II**

**ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES**

None.

**ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS**

**Material Modifications to the Rights of Security Holders**

On February 8, 2024, our shareholders approved the re-designation and re-classification of the Ordinary Shares into Class A Ordinary Shares and Class B Ordinary Shares. For further information, please refer to our current reports on Form 6-K dated January 5, 2024 and February 12, 2024, which are incorporated herein by reference.

**Use of Proceeds**

**<u>Initial Public Offering</u>**

The following "Use of Proceeds" information relates to the registration statement on Form F-1, as amended (File Number: 333-233745) in relation to the initial public offering of 6,720,000 Ordinary Shares at an initial public offering price of $4.00 per Ordinary Share. Our initial public offering closed on February 11, 2021. The registration statement was declared effective by the SEC on February 5, 2021. ViewTrade Securities, Inc. was the representative of the underwriters for our initial public offering. On February 19, 2021, Network 1 Financial Securities, Inc. exercised the over-allotment option in full to purchase an additional 1,008,000 Ordinary Shares.

We received net proceeds of approximately $24.61 million, after deducting underwriting discounts and estimated offering expenses payable by us. The total expense incurred for our Company's account in connection with our initial public offering was approximately $2.28 million, which included approximately $2.02 million in underwriting discounts for the initial public offering and approximately $0.26 million in other costs and expenses for our initial public offering. None of the transaction expenses included payments to directors or officers of our Company or their associates, persons owning more than 10% or more of our equity securities or our affiliates. None of the net proceeds we received from the initial public offering were paid, directly or indirectly, to any of our directors or officers or their associates, persons owning 10% or more of our equity securities or our affiliates. As of the date of this annual report, we have used $10.76 million from our initial public offering as the registered capital for our newly established JV, Sunrise Guizhou. We intend to use the remaining proceeds from our initial public offering as disclosed in our registration statement on Form F-1. Our management, however, will have significant flexibility and discretion to apply the net proceeds from our initial public offering. If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as disclosed previously.

**<u>July 2025 Registered Direct Offering</u>**

On July 31, 2025, the Company entered into a securities purchase agreement with the investor named therein, pursuant to which the Company agreed to issue and sell, in the July 2025 Registered Direct Offering, 1,000,000 Class A ordinary shares of the Company, par value $0.0001 per share. The purchase price for each share was $0.55. The July 2025 Registered Direct Offering closed on September 23, 2025. None of the transaction expenses incurred in respect of the July 2025 Registered Direct Offering included payments to directors or officers of the Company or their associates, or any persons owning 10% or more of the equity securities of the Company or its affiliates. None of the net proceeds the Company received from the July 2025 Registered Direct Offering were paid, directly or indirectly, to any of the directors or officers of the Company or their associates, or any persons owning 10% or more of the equity securities of the Company or its affiliates. The Company received approximately $550,000 in gross proceeds from the July 2025 Registered Direct Offering and has used the net proceeds from the July 2025 Registered Direct Offering for working capital and general corporate purposes.

**<u>August 2025 Registered Direct Offering</u>**

On August 8, 2025, the Company entered into a securities purchase agreement with the investor named therein, pursuant to which the Company agreed to issue and sell, in the August 2025 Registered Direct Offering, 3,000,000 Class A ordinary shares of the Company, par value $0.0001 per share. The purchase price for each share was $0.55. The August 2025 Registered Direct Offering closed on October 3, 2025. None of the transaction expenses incurred in respect of the August 2025 Registered Direct Offering included payments to directors or officers of the Company or their associates, or any persons owning 10% or more of the equity securities of the Company or its affiliates. None of the net proceeds the Company received from the August 2025 Registered Direct Offering were paid, directly or indirectly, to any of the directors or officers of the Company or their associates, or any persons owning 10% or more of the equity securities of the Company or its affiliates. The Company received approximately $1,650,000 in gross proceeds from the registered direct offering and has used the net proceeds from the August 2025 Registered Direct Offering for working capital and general corporate purposes.

**<u>November 2025 Offering</u>**

On November 3, 2025, the Company entered into subscription agreements with three purchasers, pursuant to which the purchasers agreed to subscribe for and purchase from the Company, and the Company agreed to issue and sell to the purchasers, an aggregate of 7,000,000 Class A ordinary shares, par value US$0.0001 per share, of the Company, together with the November 2025 Warrants to purchase up to 3,500,000 Class A ordinary shares, at a combined purchase price of $0.80 per unit, each unit consisting of one Class A ordinary share and one-half of one warrant, for an aggregate purchase price of $5,600,000. The November 2025 Warrants have an exercise price of $0.80 per share, were initially exercisable immediately upon issuance, and expire one year from the date of issuance. The transaction was closed on November 19, 2025. None of the transaction expenses incurred in respect of the November 2025 Offering included payments to directors or officers of the Company or their associates, or any persons owning 10% or more of the equity securities of the Company or its affiliates. None of the net proceeds the Company received from the November 2025 Offering were paid, directly or indirectly, to any of the directors or officers of the Company or their associates, or any persons owning 10% or more of the equity securities of the Company or its affiliates. The Company has used $2,550,116 from the November 2025 Offering for working capital and general corporate purposes and intends to use the remaining net proceeds of $3,049,884 for the same purposes.

**ITEM 15. CONTROLS AND PROCEDURES**

**Disclosure Controls and Procedures**

As of December 31, 2025, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). There are inherent limitations to the effectiveness of any disclosure controls and procedures system, including the possibility of human error and circumventing or overriding them. Even if effective, disclosure controls and procedures can provide only reasonable assurance of achieving their control objectives.

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2025 and as of the date that the evaluation of the effectiveness of our disclosure controls and procedures was completed, failed to provide reasonable assurance that the information we are required to disclose in the reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (2) accumulated and communicated to our management to allow timely decisions regarding required disclosures.

Our conclusion is based on (i) the fact that we lack formal internal control policies and internal independent supervision functions to establish formal risk assessment process and internal control framework over financing reporting; and (ii) we lack accounting staff and resources with appropriate knowledge of generally accepted U.S. accounting principles ("U.S. GAAP") and SEC reporting and compliance requirements to design and implement formal period-end financial reporting policies and procedures to address complex U.S. GAAP technical accounting issues in accordance with U.S. GAAP and the SEC requirements. Our management is currently in the process of evaluating the steps necessary to remediate the ineffectiveness, such as (i) hiring additional qualified accounting and financial personnel with appropriate knowledge and experience in U.S. GAAP accounting and SEC reporting; and (ii) organizing regular training for our accounting staff, especially training related to U.S. GAAP and SEC reporting requirements.

**Management's Annual Report on Internal Control Over Financial Reporting**

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in "Internal Control - Integrated Framework (2013)" issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In the course of preparing our consolidated financial statements for the year ended December 31, 2025, we identified material weaknesses and other control deficiencies in our internal control over financial reporting as of December 31, 2025. The material weaknesses identified included: (1) a lack of formal internal controls policies over financial closing and reporting processes, which may increase risk of error, fraud, misstatement of financial reporting, or even non-compliance with related regulations for a U.S. listed Group; (2) a lack of accounting staff and resources with appropriate knowledge of U.S. GAAP and SEC reporting and compliance requirements, and accounting policies and procedures manual that covers U.S. GAAP and SEC financial reporting requirements to complete relate US GAAP and SEC reporting; and (3) a lack of appropriately restricted to privileged level access to employees. Based on this evaluation, our management has concluded that our internal control over financial reporting was not effective as of December 31, 2025.

We are taking a number of measures to tackle the control deficiencies identified, including: (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework; (ii) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel; (iii) preparing a comprehensive accounting policies and procedures manual that covers financial closing and reporting processes, U.S. GAAP and SEC financial reporting requirements, and ensuring that accounting personnel are familiar with and follow the manual; and (iv) reinforcing the implementation of IT authorization limits matrix and segregation of duties systems to ensure the appropriateness of all approvals, authorizations, and confirmations granted.

However, we cannot assure you that we will remediate our control deficiencies in a timely manner. The process of designing and implementing an effective financial reporting system is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a financial reporting system that is adequate to satisfy our reporting obligation. See "Item 3. Key Information—D. Risk Factors—We have identified several control deficiencies in our internal control over financial reporting. If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results or prevent fraud." Additionally, we cannot assure you that we have identified all, or that we will not in the future have additional, material weaknesses.

**Attestation Report of the Registered Public Accounting Firm**

As a company with less than $1.235 billion in revenue for our last fiscal year, we qualify as an "emerging growth company" pursuant to the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002, in the assessment of the emerging growth company's internal control over financial reporting. This annual report on Form 20-F does not include an attestation report of our registered public accounting firm because we are an emerging growth company.

**Changes in Internal Control**

Other than as described above, there were no changes in our internal controls over financial reporting that occurred during the period covered by this annual report on Form 20-F that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**ITEM 16. [RESERVED]**

Not applicable.

**ITEM 16. A. AUDIT COMMITTEE FINANCIAL EXPERT**

Our board of directors determined that Mr. Xin Zhang, chairman of our audit committee and an independent director (under the standards set forth in Nasdaq Stock Market Rule 5605(a)(2) and Rule 10A-3 under the Exchange Act), is an audit committee financial expert.

**ITEM 16. B. CODE OF ETHICS**

Our board of directors adopted a code of business conduct and ethics that applies to all of our directors, officers, employees, including certain provisions that specifically apply to our principal executive officer, principal financial officer or controller and any other persons who perform similar functions for us. A copy of our code of business conduct and ethics can be accessed at http:// sunrisenewenergy.com/IR/.

**ITEM 16. C. PRINCIPAL ACCOUNTANT FEES AND SERVICES**

The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by our independent registered public accounting firm, for the periods indicated.

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| <br>**Services** | **2025** | **2024** |
|  | **US$** | **US$** |
| Audit fees | $300000 | $230000 |
| **Total fees<sup>(1)</sup>** | $300000 | $230000 |

---

Note:

(1) "Total fees" means the aggregate fees billed for professional services rendered by our principal accounting firm for the audit of our annual financial statements and the review of our comparative interim financial statements.

The policy of our audit committee is to pre-approve all audit services provided by WW, our independent registered public accounting firm as described above.

**ITEM 16. D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES**

Not applicable.

**ITEM 16. E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS**

None.

**ITEM 16. F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT**

On March 3, 2025, the Company appointed WW as its independent registered public accounting firm, effective immediately. WW replaced MarcumAsia, the former independent registered public accounting firm, which the Company dismissed on the same day. For further information, please see our current report on Form 6-K dated March 5, 2025, which is incorporated herein by reference.

**ITEM 16. G. CORPORATE GOVERNANCE**

As a Cayman Islands company listed on the Nasdaq Capital Market, we are subject to the Nasdaq Capital Market corporate governance listing standards. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq Capital Market corporate governance listing standards. NASDAQ Listing Rule 5615(a)(3)(A) permits foreign private issuers like us to follow their home country practice in lieu of the requirements of Listing Rule 5600 Series with the exception of those Listing Rules which are required to be followed pursuant to the provisions of Listing Rule 5615(a)(3).

NASDAQ Listing Rule 5635 generally provides that shareholder approval is required of U.S. domestic companies listed on the NASDAQ prior to issuance (or potential issuance) of securities (i) equaling 20% or more of the company's common stock or voting power in connection with the acquisition of the stock or assets of another company or for less than the greater of market or book value in transactions other than public offerings, (ii) resulting in a change of control of the company, or (iii) which is being issued pursuant to a stock option or purchase plan to be established or materially amended or other equity compensation arrangement made or materially amended. The laws of Cayman Islands do not require shareholder approval prior to any of the foregoing types of issuances.

NASDAQ Listing Rule 5640 provides rules relating to voting rights of companies listed on NASDAQ, and specifies that a company cannot create a new class of security that votes at a higher rate than an existing class of securities or take any other action that has the effect of restricting or reducing the voting rights of an existing class of securities. The laws of Cayman Islands do not prohibit the creation of a new class of securities that votes at a higher rate than an existing class of securities or take any other action that has the effect of restricting or reducing the voting rights of an existing class of securities.

Listing Rule 5620(a), pursuant to which companies listing common stock or voting preferred stock, and their equivalents on NASDAQ are required to hold an annual shareholder meeting no later than one year after the end of the company's fiscal year-end, unless such company is a limited partnership that meets certain requirements. The laws of Cayman Islands do not require companies to hold annual shareholder meetings.

The Board of Directors of the Company elected to follow the Company's home country rules in lieu of NASDAQ Listing Rule 5635, 5640, and 5620(a). The Company, therefore, (1) is not required to obtain shareholder approval prior to entering into a transaction with the potential to issue securities, (2) is not subject to the voting rights rules under NASDAQ Listing Rule 5640, and (3) is not required to hold annual shareholder meetings.

Other than those described above, there are no significant differences between our corporate governance practices and those followed by U.S. domestic companies under Nasdaq Capital Market corporate governance listing standards.

**ITEM 16. H. MINE SAFETY DISCLOSURE**

Not applicable.

**ITEM 16. I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS**

Not applicable.

**ITEM 16. J. INSIDER TRADING POLICIES**

Our board of directors has adopted an insider trading policy governing the purchase, sale, and other dispositions of our securities by directors, senior management and employees. A copy of our insider trading policy is included as an exhibit to this annual report.

**ITEM 16. K. CYBERSECURITY**

We have established cybersecurity risk management to identify, assess, and mitigate cybersecurity risks alongside other business risks. The process is in alignment with our strategic objectives and risk appetite. We may engage assessors, consultants, auditors, or other third parties to enhance our cyber security risk management processes. Any cybersecurity incidents are closely monitored for their potential impact on our business strategy, operations, and financial condition. As of the date of this annual report, we have not experienced any cybersecurity incidents that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition. We continuously adapt our business strategy to enhance resilience, strengthen defenses and ensure the sustainability of our operations.

**PART III**

**ITEM 17. FINANCIAL STATEMENTS**

We have elected to provide financial statements pursuant to Item 18.

**ITEM 18. FINANCIAL STATEMENTS**

The consolidated financial statements of E-Power Inc. are included at the end of this annual report.

**ITEM 19. EXHIBITS**

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| | |
|:---|:---|
| **Exhibit<br> Number** | **Description** |
| 1.1\* | [Fourth Amended and Restated Memorandum and Articles of Association.](ea028883401ex1-1.htm) |
| 2.1 | [Registrant's Specimen Certificate for Ordinary Shares (incorporated herein by reference to Exhibit 4.1 to our registration statement on Form F-1 (File No. 333-233745), as amended)](http://www.sec.gov/Archives/edgar/data/1780731/000121390019021043/ff12019a2ex4-1_global.htm) |
| 2.3\* | [Description of Securities](ea028883401ex2-3.htm) |
| 4.1 | [Form of Employment Agreement by and between executive officers and the Registrant (incorporated herein by reference to Exhibit 10.1 to our registration statement on Form F-1 (File No. 333-233745), as amended)](http://www.sec.gov/Archives/edgar/data/1780731/000121390019017971/ff12019ex10-1_global.htm) |
| 4.2 | [Form of Indemnification Agreement by and between executive officers, directors and the Registrant (incorporated herein by reference to Exhibit 10.2 to our registration statement on Form F-1 (File No. 333-233745), as amended)](http://www.sec.gov/Archives/edgar/data/1780731/000121390019017971/ff12019ex10-2_global.htm) |
| 4.4 | [Equity Pledge Agreement dated June 10, 2019, by and among GIOP BJ, SDH, and shareholders of SDH (incorporated herein by reference to Exhibit 10.3 to our registration statement on Form F-1 (File No. 333-233745), as amended)](http://www.sec.gov/Archives/edgar/data/1780731/000121390019017971/ff12019ex10-3_global.htm) |
| 4.5 | [Exclusive Technical and Consulting Services Agreement, dated June 10, 2019, by and between GIOP BJ and SDH (incorporated herein by reference to Exhibit 10.5 to our registration statement on Form F-1 (File No. 333-233745), as amended)](http://www.sec.gov/Archives/edgar/data/1780731/000121390019017971/ff12019ex10-5_global.htm) |
| 4.6 | [Form of Power of Attorney, by and among GIOP BJ, SDH, and shareholders of SDH (incorporated herein by reference to Exhibit 10.6 to our registration statement on Form F-1 (File No. 333-233745), as amended)](http://www.sec.gov/Archives/edgar/data/1780731/000121390019017971/ff12019ex10-6_global.htm) |
| 4.7 | [Form of Spousal Consent, by and among GIOP BJ, SDH, and certain spouses of shareholders of SDH (incorporated herein by reference to Exhibit 10.7 to our registration statement on Form F-1 (File No. 333-233745), as amended)](http://www.sec.gov/Archives/edgar/data/1780731/000121390019017971/ff12019ex10-7_global.htm) |
| 4.9 | [Exclusive Option Agreement, dated June 10, 2019, by and among GIOP BJ, SDH, and shareholders of SDH (incorporated herein by reference to Exhibit 10.4 to our registration statement on Form F-1 (File No. 333-233745), as amended)](http://www.sec.gov/Archives/edgar/data/1780731/000121390019017971/ff12019ex10-4_global.htm) |
| 4.10 | [Strategic Cooperation Agreement, dated May 30, 2016, by and between Beijing Winning at the Frontlines Cultural Exchange Co., Ltd. and GMB (Beijing) (incorporated herein by reference to Exhibit 10.8 to our registration statement on Form F-1 (File No. 333-233745), as amended)](http://www.sec.gov/Archives/edgar/data/1780731/000121390019017971/ff12019ex10-8_global.htm) |
| 4.11 | [Copyright Authorization Agreement, dated May 30, 2016 by and between Beijing Winning at the Frontlines Cultural Exchange Co., Ltd. and GMB (Beijing) (incorporated herein by reference to Exhibit 10.9 to our registration statement on Form F-1 (File No. 333-233745), as amended)](http://www.sec.gov/Archives/edgar/data/1780731/000121390019017971/ff12019ex10-9_global.htm) |
| 4.12 | [Investment Agreement, dated April 2, 2022, by and among Zhuhai (Zibo) Investment Co., Ltd and other parties (incorporated herein by reference to Exhibit 4.13 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 2, 2022)](http://www.sec.gov/Archives/edgar/data/1780731/000121390022023204/f20f2021ex4-13_globalinter.htm) |
| 4.13 | [State-owned Construction Land Right Use Assignment, dated December 24, 2021, by and between Natural Resources Bureau of Qianxinan Prefecture, Yilong New District Branch and Sunrise (Guizhou) New Energy Materials Co., Ltd. (incorporated herein by reference to Exhibit 4.14 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 2, 2022)](http://www.sec.gov/Archives/edgar/data/1780731/000121390022023204/f20f2021ex4-14_globalinter.htm) |

---

---

| | |
|:---|:---|
| 4.14 | [Investment Agreement, dated April 11, 2021, by and among Global Mentor Board (Beijing) Information Technology Co, Ltd., Beijing Tax Star Technology Co., Ltd., Beijing Zhitong Zhenye Technology Co., Ltd., and Li Jiyou (incorporated herein by reference to Exhibit 4.16 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 2, 2022)](http://www.sec.gov/Archives/edgar/data/1780731/000121390022023204/f20f2021ex4-16_globalinter.htm) |
| 4.15 | [Shenzhen Jiazhong Innovation Investment Enterprise (Limited Partnership) Partnership Agreement, dated June 1, 2021, by and among Global Mentor Board (Beijing) Information Technology Co., Ltd and other parties (incorporated herein by reference to Exhibit 4.18 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 2, 2022)](http://www.sec.gov/Archives/edgar/data/1780731/000121390022023204/f20f2021ex4-18_globalinter.htm) |
| 4.16 | [Agreement of Action in Concert, dated April 12, 2022, among Zhuhai Zibo and twelve original shareholders of Sunrise Guizhou (incorporated herein by reference to Exhibit 10.2 to our report on Form 6-K, filed with the SEC on June 23, 2022)](http://www.sec.gov/Archives/edgar/data/1780731/000121390022034642/ea161972ex10-2_globalinter.htm) |
| 4.17 | [Purchase Agreement, dated July 2, 2022, between Sunrise Guizhou and former shareholders of Sunrise Tech (formerly known as Anlong Hengrui Graphite Material Co., Ltd.) (incorporated herein by reference to Exhibit 4.20 to our annual report on Form 20-F, filed with the SEC on May 16, 2023)](http://www.sec.gov/Archives/edgar/data/1780731/000121390023040481/f20f2022ex4-20_sunrisenew.htm) |
| 4.18 | [Securities Purchase Agreement, dated July 31, 2025, by and between E-Power Inc., formerly known as Sunrise New Energy Co., Ltd., and the purchaser named therein. (incorporated by reference to Exhibit 10.1 of the Form 6-K, filed with the SEC on September 26, 2025)](http://www.sec.gov/Archives/edgar/data/1780731/000121390025092343/ea025862401ex10-1_sunrise.htm) |
| 4.19 | [Joint Venture Agreement, dated August 5, 2025, by and among E-Power Inc., formerly known as Sunrise New Energy Co., Ltd., SDH (HK), Kekecely Ltd., and Simple Cloud Technology. (incorporated by reference to Exhibit 10.1 of the Form 6-K, filed with the SEC on August 8, 2025)](http://www.sec.gov/Archives/edgar/data/1780731/000121390025073325/ea025210801ex10-1_sunrise.htm) |
| 4.20 | [Securities Purchase Agreement, dated August 8, 2025, by and between E-Power Inc., formerly known as Sunrise New Energy Co., Ltd., and the purchaser named therein. (incorporated by reference to Exhibit 10.1 of the Form 6-K filed with the SEC on October 3, 2025)](http://www.sec.gov/Archives/edgar/data/1780731/000121390025092343/ea025862401ex10-1_sunrise.htm) |
| 4.21 | [Subscription Agreements, dated November 3, 2025, by and among E-Power Inc., formerly known as Sunrise New Energy Co., Ltd., and the three purchasers named therein. (incorporated by reference to Exhibit 10.1 of the Form 6-K filed with the SEC on November 6, 2025)](http://www.sec.gov/Archives/edgar/data/1780731/000121390025107156/ea026425301ex10-1_sunrise.htm) |
| 4.22 | [Sales and leaseback contract, dated September 22, 2022, between Sunrise Guizhou and Far East International Financial Leasing Co., Ltd. (incorporated herein by reference to Exhibit 4.21 to our annual report on Form 20-F, filed with the SEC on May 16, 2023)](http://www.sec.gov/Archives/edgar/data/1780731/000121390023040481/f20f2022ex4-21_sunrisenew.htm) |
| 4.23 | [Sales and leaseback contract, dated November 4, 2022, between Sunrise Guizhou and China Power Investment Ronghe Financial Leasing Co., Ltd. (incorporated herein by reference to Exhibit 4.22 to our annual report on Form 20-F, filed with the SEC on May 16, 2023)](http://www.sec.gov/Archives/edgar/data/1780731/000121390023040481/f20f2022ex4-22_sunrisenew.htm) |
| 4.24 | [English translation of Working Capital Loan Contract (RMB 100 million) between Sunrise (Guizhou) New Energy Materials Co., Ltd. and China Construction Bank Co., Ltd. Qianxinan Prefecture Branch, dated March 8, 2024 (incorporated herein by reference to Exhibit 4.20 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 16, 2024)](http://www.sec.gov/Archives/edgar/data/1780731/000121390024043843/ea020415801ex4-20_sunrise.htm) |
| 4.25 | [English translation of Comprehensive Credit Agreement (RMB 100 million) between Sunrise (Guizhou) New Energy Materials Co., Ltd. and Guiyang Branch of China Everbright Bank Co., Lt, dated May 16, 2023 (incorporated herein by reference to Exhibit 4.21 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 16, 2024)](http://www.sec.gov/Archives/edgar/data/1780731/000121390024043843/ea020415801ex4-21_sunrise.htm) |
| 4.26 | [English translation of Lease Sale Contract (RMB 15M) between Sunrise (Guizhou) New Energy Materials Co., Ltd. and Xiamen Guomao Chuangcheng Financial Leasing Co., dated October 26, 2023 (incorporated herein by reference to Exhibit 4.22 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 16, 2024)](http://www.sec.gov/Archives/edgar/data/1780731/000121390024043843/ea020415801ex4-22_sunrise.htm) |
| 4.27 | [English Translation of Sale and Leasback Agreement between Sunrise (Guizhou) New Energy Materials Co., Ltd. and Zhongguancun Technology Leasing Co., Ltd.., dated February 7, 20 (incorporated herein by reference to Exhibit 4.23 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 16, 2024)](http://www.sec.gov/Archives/edgar/data/1780731/000121390024043843/ea020415801ex4-23_sunrise.htm) |
| 4.28 | [English translation of loan Contract of Small Business Credit (RMB 30M) between Sunrise (Guizhou) New Energy Materials Co., Ltd. and Posal Savings Bank of China, dated January 8, 2023 (incorporated herein by reference to Exhibit 4.24 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 16, 2024)](http://www.sec.gov/Archives/edgar/data/1780731/000121390024043843/ea020415801ex4-24_sunrise.htm) |
| 4.29 | [English translation of Subscription Agreement between E-Power Inc. and Chong Ee Chang, dated October 18, 2024 (incorporated herein by reference to Exhibit 4.24 of the Form 6-K, filed with the SEC on October 21, 2024)](http://www.sec.gov/Archives/edgar/data/1780731/000121390024089309/ea021817701ex10-1_sunrise.htm) |
| 4.30 | [English translation of Fixed Asset Loan Agreement between Sunrise (Guizhou) New Energy Materials Co., Ltd. and China Construction Bank Corporation, Qianxinan Prefecture Branch, dated December 26, 2024 (incorporated herein by reference to Exhibit 4.26 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 15, 2025)](http://www.sec.gov/Archives/edgar/data/1780731/000121390025044226/ea024004601ex4-26_sunrise.htm) |

---

---

| | |
|:---|:---|
| 4.31 | [English translation of Working Capital Loan Contract (RMB 100 million) between Sunrise (Guizhou) New Energy Materials Co., Ltd. and Qianxinan Branch of China Construction Bank Corporation, dated March 8, 2024 (incorporated herein by reference to Exhibit 4.27 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 15, 2025)](http://www.sec.gov/Archives/edgar/data/1780731/000121390025044226/ea024004601ex4-27_sunrise.htm) |
| 4.32 | [English translation of Bill Acceptance Agreement between Sunrise (Guizhou) New Energy Materials Co., Ltd. and Guiyang Branch of China Everbright Bank Co., Ltd., dated July 3, 2024 (incorporated herein by reference to Exhibit 4.28 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 15, 2025)](http://www.sec.gov/Archives/edgar/data/1780731/000121390025044226/ea024004601ex4-28_sunrise.htm) |
| 4.33 | [English translation of Working Capital Loan Contract (RMB 29 million) between Sunrise (Guizhou) New Energy Materials Co., Ltd. and Guiyang Branch of China Everbright Bank Co., Ltd., dated March 31, 2025 (incorporated herein by reference to Exhibit 4.29 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 15, 2025)](http://www.sec.gov/Archives/edgar/data/1780731/000121390025044226/ea024004601ex4-29_sunrise.htm) |
| 4.34 | [English translation of Working Capital Loan Contract (RMB 100 million) between Sunrise (Guizhou) New Energy Materials Co., Ltd. and Guiyang Branch of China Everbright Bank Co., Ltd., dated June 28, 2024 (incorporated herein by reference to Exhibit 4.30 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 15, 2025)](http://www.sec.gov/Archives/edgar/data/1780731/000121390025044226/ea024004601ex4-30_sunrise.htm) |
| 4.35 | [English translation of Capital Increase Agreement among Jieshou Xinyang Zhanxin Equity Investment Fund Partnership, Sunrise (Guizhou) New Energy Materials Co., Ltd., and certain shareholders, dated December 3, 2024 (incorporated herein by reference to Exhibit 4.31 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 15, 2025)](http://www.sec.gov/Archives/edgar/data/1780731/000121390025044226/ea024004601ex4-31_sunrise.htm) |
| 8.1\* | [Principal subsidiaries and consolidated affiliated entities of the Registrant](ea028883401ex8-1.htm) |
| 11.1 | [Code of Business Conduct and Ethics of the Registrant (incorporated herein by reference to Exhibit 11.1 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 15, 2025)](http://www.sec.gov/Archives/edgar/data/1780731/000121390025044226/ea024004601ex11-1_sunrise.htm) |
| 11.2 | [Insider Trading Policy (incorporated herein by reference to Exhibit 11.2 to our annual report on Form 20-F (File No. 001-40008) for the fiscal year ended December 31, 2023, filed with the SEC on May 16, 2024)](http://www.sec.gov/Archives/edgar/data/1780731/000121390024043843/ea020415801ex11-2_sunrise.htm) |
| 12.1\* | [Certification by the Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea028883401ex12-1.htm) |
| 12.2\* | [Certification by the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea028883401ex12-2.htm) |
| 13.1\*\* | [Certification by the Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea028883401ex13-1.htm) |
| 13.2\*\* | [Certification by the Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea028883401ex13-2.htm) |
| 15.1\* | [Consent of Jincheng Tongda & Neal Law Firm](ea028883401ex15-1.htm) |
| 15.2\* | [Consent of Marcum Asia CPAs LLP](ea028883401ex15-2.htm) |
| 15.3\* | [Consent of Wei, Wei & Co., LLP](ea028883401ex15-3.htm) |
| 97.1 | [Clawback Policy (incorporated herein by reference to Exhibit 97.1 to our annual report on Form 20-F (File No. 001-40008) for the fiscal year ended December 31, 2023, filed with the SEC on May 16, 2024)](http://www.sec.gov/Archives/edgar/data/1780731/000121390024043843/ea020415801ex97-1_sunrise.htm) |
| 101.\* | The following financial statements from the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2025, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) Consolidated Statements of Changes in Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags |
| 104.\* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

\* Filed herewith.

\*\* Furnished herewith.

**SIGNATURES**

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

---

| | |
|:---|:---|
| E-Power Inc. | E-Power Inc. |
| By: | /s/ Haiping Hu |
| **Name:** | Haiping Hu |
| **Title:** | Chairman, Chief Executive Officer, and Director |
| **Date:** | May 14, 2026 |

---

**E-POWER INC.**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| **Consolidated Financial Statements** |  |
| [Report of Independent Registered Public Accounting Firm (Wei, Wei & Co., LLP PCAOB ID: 2388)](#fin_001) | F-2 |
| [Report of Independent Registered Public Accounting Firm (Marcum Asia CPAs LLP PCAOB ID: 5395)](#fin_002) | F-3 |
| [Consolidated Balance Sheets as of December 31, 2025 and 2024](#fin_003) | F-4 |
| [Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2025, 2024 and 2023](#fin_004) | F-5 |
| [Consolidated Statements of Changes in Equity for the Years Ended December 31, 2025, 2024 and 2023](#fin_005) | F-6 |
| [Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024 and 2023](#fin_006) | F-7 |
| [Notes to Consolidated Financial Statements](#fin_007) | F-8 |

---

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the shareholders and the Board of Directors of E-Power Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of E-Power Inc. (formerly known as "Sunrise New Energy Co., Ltd."), and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, changes in equity, and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the year in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 3, the Company has a significant working capital deficiency, has incurred significant recurring operating losses and negative cash flows from operating activities and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Wei, Wei & Co., LLP

We have served as the Company's auditor since 2025.

Flushing, New York

May 14, 2026

![](ea028883401_img20.jpg)

**Report of Independent Registered Public Accounting Firm**

To the Shareholders and Board of Directors of

E-Power Inc. (Formerly known as Sunrise New Energy Co., Ltd.)

**Opinion on the Financial Statements**

We have audited the accompanying consolidated statements of operations and comprehensive loss**,** changes in equity and cash flows of E-Power Inc. (the "Company") for the year ended December 31, 2023, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the results of its operations and its cash flows of the Company for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the change in accounting due to the adoption of ASU No. 2023-07, Segment Reporting discussed in Note 26 to the financial statements, and accordingly, we do not express an opinion or any form of assurance about whether such adjustments is appropriate or properly applied. The adjustments were audited by other auditors.

**Explanatory Paragraph – Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 3, the Company has a significant working capital deficiency, has incurred significant recurring operating losses and negative cash flows from operating activities and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

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

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

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

/s/ Marcum Asia CPAs LLP

Marcum Asia CPAs LLP

We have served as the Company's auditor from 2018 (such date takes into account the acquisition of certain assets of Friedman LLP by Marcum Asia CPAs LLP effective September 1, 2022) to 2025

New York, New York

May 15, 2024

NEW YORK OFFICE • 7 Penn Plaza • Suite 830 • New York, New York • 10001

Phone 646.442.4845 • Fax 646.349.5200 • www.marcumasia.com

**E-POWER INC.**

**CONSOLIDATED BALANCE SHEETS**

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| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2024** |
| **ASSETS** |  |  |
| **CURRENT ASSETS** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $21838471 | $1264463 |
| &nbsp;&nbsp;&nbsp;Restricted cash | 6311630 | 8096121 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 9941071 | 28992149 |
| &nbsp;&nbsp;&nbsp;Notes receivable | 3309930 | 2381940 |
| &nbsp;&nbsp;&nbsp;Inventories, net | 24110221 | 17660390 |
| &nbsp;&nbsp;&nbsp;Due from related parties | 762474 | 542108 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 5969432 | 4073702 |
| &nbsp;&nbsp;&nbsp;**TOTAL CURRENT ASSETS** | 72243229 | 63010873 |
| **NON-CURRENT ASSETS** |  |  |
| &nbsp;&nbsp;&nbsp;Long-term prepayments and other non-current assets | 2639707 | 3039185 |
| &nbsp;&nbsp;&nbsp;Plant, property and equipment, net | 63945861 | 60503274 |
| &nbsp;&nbsp;&nbsp;Land use rights, net | 13118020 | 9197978 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 217303 | 71909 |
| &nbsp;&nbsp;&nbsp;Long-term investments, net | 2246308 | 2007957 |
| &nbsp;&nbsp;&nbsp;Finance lease right-of-use assets | 2026021 | 5191856 |
| &nbsp;&nbsp;&nbsp;**TOTAL NON-CURRENT ASSETS** | 84193220 | 80012159 |
| **TOTAL ASSETS** | 156436449 | 143023032 |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
| **CURRENT LIABILITIES** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | 36814691 | 49959735 |
| &nbsp;&nbsp;&nbsp;Note payable | 5766157 | 16091959 |
| &nbsp;&nbsp;&nbsp;Short-term loan | 5862922 | 1643993 |
| &nbsp;&nbsp;&nbsp;Deferred revenue | 1525314 | 1809366 |
| &nbsp;&nbsp;&nbsp;Deferred government subsidy | 3645737 | 3049607 |
| &nbsp;&nbsp;&nbsp;Due to related parties | 2164677 | 4196805 |
| &nbsp;&nbsp;&nbsp;Income taxes payable | 505150 | 491745 |
| &nbsp;&nbsp;&nbsp;Finance lease liabilities, current | 336191 | 1603694 |
| &nbsp;&nbsp;&nbsp;Long-term loan, current | 29375697 | 485556 |
| &nbsp;&nbsp;&nbsp;Long-term payable, current | 298996 | 3231126 |
| &nbsp;&nbsp;&nbsp;Consideration payable, current | 1397337 | 801866 |
| &nbsp;&nbsp;&nbsp;Advance of subscription payment | 9709571 | - |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 3262986 | 3391157 |
| &nbsp;&nbsp;&nbsp;**TOTAL CURRENT LIABILITIES** | 100665426 | 86756609 |
| **NON-CURRENT LIABILITIES** |  |  |
| &nbsp;&nbsp;&nbsp;Long-term loan, non-current | 39559052 | 26410701 |
| &nbsp;&nbsp;&nbsp;Finance lease liabilities, non-current | - | 629053 |
| &nbsp;&nbsp;&nbsp;Long term payable, non-current | 122409 | 403726 |
| &nbsp;&nbsp;&nbsp;Consideration payable, non-current | - | 1338719 |
| &nbsp;&nbsp;&nbsp;Deferred tax liabilities, net | 197392 | 189551 |
| &nbsp;&nbsp;&nbsp;**TOTAL NON-CURRENT LIABILITIES** | 39878853 | 28971750 |
| **TOTAL LIABILITES** | 140544279 | 115728359 |
| **COMMITMENTS AND CONTINGENCIES (Note 25)** |  |  |
| **EQUITY** |  |  |
| &nbsp;&nbsp;&nbsp;Class A ordinary shares\* (3,500,000,000 shares authorized; $0.0001 par value, 32,161,978 and 20,419,678 shares issued and outstanding as of December 31, 2025 and 2024, respectively) | 3215 | 2041 |
| &nbsp;&nbsp;&nbsp;Class B ordinary shares\* (1,500,000,000 shares authorized; $0.0001 par value, 6,567,272 shares issued and outstanding as of December 31, 2025 and 2024) | 657 | 657 |
| &nbsp;&nbsp;&nbsp;Subscription receivable | - | (100000) |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 45764415 | 32175698 |
| &nbsp;&nbsp;&nbsp;Warrant | 910593 | - |
| &nbsp;&nbsp;&nbsp;Statutory reserves | 2481963 | 2477940 |
| &nbsp;&nbsp;&nbsp;Accumulated deficits | (58883066) | (42243463) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (2381764) | (2577144) |
| &nbsp;&nbsp;&nbsp;**TOTAL SHAREHOLDERS' DEFICIT ATTRIBUTABLE TO E-POWER INC. ORDINARY SHAREHOLDERS** | (12103987) | (10264271) |
| &nbsp;&nbsp;&nbsp;Non-controlling interests | 27996157 | 37558944 |
| &nbsp;&nbsp;&nbsp;**TOTAL EQUITY** | 15892170 | 27294673 |
| **TOTAL LIABILITIES AND EQUITY** | $156436449 | $143023032 |

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\* Retrospectively restated for effect of share re-designation on April 8, 2024 (see Note 23).

The accompanying notes are an integral part of these consolidated financial statements.

**E-POWER INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **REVENUES, NET** |  |  |  |
| &nbsp;&nbsp;&nbsp;Products | $46342154 | $64365362 | $44384004 |
| &nbsp;&nbsp;&nbsp;Service | 73978 | 632379 | 666401 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total revenues** | 46416132 | 64997741 | 45050405 |
| **COSTS OF REVENUES** |  |  |  |
| &nbsp;&nbsp;&nbsp;Products | 52252338 | 70782649 | 57172626 |
| &nbsp;&nbsp;&nbsp;Service | 11278 | 12672 | 281030 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total cost of revenues** | 52263616 | 70795321 | 57453656 |
| **GROSS LOSS** | (5847484) | (5797580) | (12403251) |
| **OPERATING EXPENSES** |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling expenses | 895099 | 899760 | 742167 |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 7329317 | 7391664 | 13040038 |
| &nbsp;&nbsp;&nbsp;Research and development expenses | 1955588 | 2507324 | 1193082 |
| &nbsp;&nbsp;&nbsp;Impairment of intangible assets | - | - | 3151467 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total operating expenses** | 10180004 | 10798748 | 18126754 |
| **LOSS FROM OPERATIONS** | (16027488) | (16596328) | (30530005) |
| **OTHER (EXPENSES) INCOME** |  |  |  |
| &nbsp;&nbsp;&nbsp;Investment income (losses) | 146361 | 198176 | (1170974) |
| &nbsp;&nbsp;&nbsp;Interest expense, net | (4566816) | (2018680) | (2162109) |
| &nbsp;&nbsp;&nbsp;Share subscription discount expenses | (6534936) | - | - |
| &nbsp;&nbsp;&nbsp;Other income, net | 323111 | 441231 | 942138 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total other expenses, net** | (10632280) | (1379273) | (2390945) |
| **LOSS BEFORE INCOME TAXES** | (26659768) | (17975601) | (32920950) |
| Income taxes (benefit) provision | (387) | 5563 | (226) |
| **NET LOSS** | (26659381) | (17981164) | (32920724) |
| &nbsp;&nbsp;&nbsp;Less: net loss attributable to non-controlling interests | (10023801) | (6204728) | (8688144) |
| **NET LOSS ATTRIBUTABLE TO E-POWER INC. ORDINARY SHAREHOLDERS** | $(16635580) | $(11776436) | (24232580) |
| **OTHER COMPREHENSIVE LOSS** |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment | 656394 | (962919) | (1165807) |
| **TOTAL COMPREHENSIVE LOSS** | (26002987) | (18944083) | (34086531) |
| Less: comprehensive loss attributable to non-controlling interests | (9562787) | (6579590) | (9220222) |
| **COMPREHENSIVE LOSS ATTRIBUTABLE TO ORIDNARY SHAREHOLDERS OF E-POWER INC.** | $(16440200) | $(12364493) | (24866309) |
| **LOSS PER SHARE** |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted - Class A and Class B ordinary shares | $(0.57) | $(0.48) | $(1.08) |
| **WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING** |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted - Class A and Class B ordinary shares | 29043280 | 26404589 | 25622195 |

---

The accompanying notes are an integral part of these consolidated financial statements.

**E-POWER INC.**

**CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY**

---

| | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Ordinary shares\*** | **Ordinary shares\*** | **Ordinary shares\*** | **Ordinary shares\*** | | | | | | | | | |
|  | **Class A<br> ordinary shares** | **Class A<br> ordinary shares** | **Class B<br> ordinary shares** | **Class B<br> ordinary shares** | | | | | | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** |<br>**Subscription**<br>**receivable** |<br>**Additional<br> paid-in**<br>**capital** |<br>**Warrant** |<br>**Statutory**<br>**reserves** |<br>**Accumulated**<br>**deficits** | **Accumulated**<br>**other<br> comprehensive**<br>**loss** | **Total equity (deficit)**<br>**attributable<br> to ordinary**<br>**shareholders** |<br>**Non-<br> controlling**<br>**interests** |<br>**Total**<br>**equity** |
| Balance as of December 31, 2022 | 18794278 | $1879 | 6567272 | $657 | $- | $33789702 | $- | $2477940 | $(6234447) | $(1355358) | $28680373 | $13452895 | $42133268 |
| Capital contributions from non-controlling interests |  |  |  |  |  |  |  |  |  |  |  | 3910897 | 3910897 |
| Accretion to the redemption value of redeemable non-controlling interests |  |  |  |  |  | (3314857) |  |  |  |  | (3314857) |  | (3314857) |
| Net loss |  |  |  |  |  |  |  |  | (24232580) |  | (24232580) | (8688144) | (32920724) |
| Share-based compensation |  |  |  |  |  | 2145801 |  |  |  |  | 2145801 |  | 2145801 |
| Settlement for vested shares | 779800 | 78 |  |  |  | (78) |  |  |  |  |  |  |  |
| Foreign currency translation adjustment | - | - | - | - | - | - | - | - | - | (633729) | (633729) | (532078) | (1165807) |
| Balance as of December 31, 2023 | 19574078 | $1957 | 6567272 | $657 | $- | $32620568 | $- | $2477940 | $(30467027) | $(1989087) | $2645008 | $8143570 | $10788578 |
| Issuance of ordinary shares | 103300 | 10 |  |  | (100000) | 99990 |  |  |  |  |  |  |  |
| Acquisition of non-controlling interests |  |  |  |  |  | (533602) |  |  |  |  | (533602) | 467851 | (65751) |
| Accretion to the redemption value of redeemable non-controlling interests |  |  |  |  |  | (983927) |  |  |  |  | (983927) |  | (983927) |
| Derecognition of redeemable non-controlling interests |  |  |  |  |  |  |  |  |  |  |  | 35527113 | 35527113 |
| Net loss |  |  |  |  |  |  |  |  | (11776436) |  | (11776436) | (6204728) | (17981164) |
| Share-based compensation |  |  |  |  |  | 972743 |  |  |  |  | 972743 |  | 972743 |
| Settlement for vested shares | 742300 | 74 |  |  |  | (74) |  |  |  |  |  |  |  |
| Foreign currency translation adjustment | - | - | - | - | - | - | - | - | - | (588057) | (588057) | (374862) | (962919) |
| Balance as of December 31, 2024 | 20419678 | $2041 | 6567272 | $657 | $(100000) | $32175698 | $- | $2477940 | $(42243463) | $(2577144) | $(10264271) | $37558944 | $27294673 |
| Issuance of ordinary shares and warrants | 11000000 | 1100 |  | -  |  | 13266405 | 910593 |  |  |  | 14178098 |  | 14178098 |
| Collection of subscription receivable |  |  |  |  | 100000 |  |  |  |  |  | 100000 |  | 100000 |
| Surplus reserve |  |  |  |  |  |  |  | 4023 | (4023) |  |  |  |  |
| Net loss |  |  |  |  |  |  |  |  | (16635580) |  | (16635580) | (10023801) | (26659381) |
| Share-based compensation |  |  |  |  |  | 322386 |  |  |  |  | 322386 |  | 322386 |
| Settlement for vested shares | 742300 | 74 |  |  |  | (74) |  |  |  |  |  |  |  |
| Foreign currency translation adjustment | - | - | - | - | - | - | - | - | - | 195380 | 195380 | 461014 | 656394 |
| Balance as of December 31, 2025 | 32161978 | $3215 | 6567272 | $657 | $- | $45764415 | $910593 | $2481963 | $(58883066) | $(2381764) | $(12103987) | $27996157 | $15892170 |

---

\* Retrospectively restated for effect of share re-designation on April 8, 2024 (see Note 23).

The accompanying notes are an integral part of these consolidated financial statements.

**E-POWER INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Cash flows from operating activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(26659381) | $(17981164) | $(32920724) |
| &nbsp;&nbsp;&nbsp;Adjusted to reconcile net loss to cash used in operating activities |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 5683727 | 4881946 | 3953328 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of land use right | 255526 | 214499 | 217977 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation | 322386 | 972743 | 2145801 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred tax benefits | (446) | (446) | (454) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | 1117115 | 166999 | 575075 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment (income) losses | (146361) | (198176) | 1170974 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for credit loss | 210686 | 113854 | 3428033 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment of inventory | 5119406 | 3959304 | 7238819 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment of intangible assets | - | - | 3151467 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share subscription discount expenses | 6534936 | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of finance lease right-of-use assets | 444348 | 622203 | 338627 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 19043753 | (20706075) | (4074715) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note receivable | (801416) | (1592262) | 17080 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due from related parties | 219750 | (89314) | (225160) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (10638275) | (6241347) | (5095430) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (1810711) | (1309420) | 6157166 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (12490727) | 17837613 | 6133132 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes payable | (10732066) | 12230606 | 63504 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable | (7906) | 19537 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | (18175) | 1154441 | 8724 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred government subsidy | 537739 | 314076 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to related parties | (506166) | (544274) | (295728) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | (838326) | 822500 | 729509 |
| **Net cash used in operating activities** | (25160584) | (5352157) | (7282995) |
| **Cash flows from investing activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of plant, property and equipment | (6392748) | (2464915) | (5472778) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans to third parties | (194783) | - | (16947) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans repayment by third party | 69565 | 16677 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepayment for finance lease right-of-use assets | - | - | (1029195) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deposit paid for finance lease | - | - | (655990) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Collection of deposit paid for sales and leaseback financing and finance lease | 473043 | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of land use right | (3677693) | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of intangible assets | (78122) | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans to related parties | (866087) | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of loan to related party | 277960 | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Redemption of prepayment for investment | - | 708757 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Redemption of short-term investment | - | 2371942 | 878000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consideration paid for asset acquisition | (832219) | - | (706125) |
| **Net cash (used in) provided by investing activities** | (11221084) | 632461 | (7003035) |
| **Cash flows from financing activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from short-term loan | 5704348 | 1667663 | 7061249 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment on short-term loan | (1669565) | (6948594) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from long-term loan, net of issuance cost | 41133113 | 27876982 | 4236750 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment on long-term loan | (632239) | (4526391) | (240082) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepayment of acquisition cost of long-term borrowings | - | (1255027) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from long term payable, net of issuance cost | - | 798810 | 4825658 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment on long term payable | (3278572) | (4692271) | (4782564) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from short-term borrowings from third parties | - | - | 2118375 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayments on short-term borrowings to third parties | - | - | (2118375) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans from related parties | 918261 | 9145337 | 3867883 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment on loans from related parties | (3252870) | (8797497) | (155347) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment on finance lease liabilities | (1944483) | (2571592) | (1282358) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Collection of subscription receivable | 100000 | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of ordinary shares and warrants, net of issuance cost | 7643162 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisition of non-controlling interests | - | (65751) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from advance capital subscripiton | 9739130 | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from capital contributions by non-controlling shareholders | - | - | 148078 |
| **Net cash provided by financing activities** | 54460285 | 10631669 | 13679267 |
| **Effect of foreign exchange rate on cash, cash equivalents and restricted cash** | 710900 | (172056) | (66587) |
| **Net increase (decrease) in cash, cash equivalents and restricted cash** | 18789517 | 5739917 | (673350) |
| **Cash, cash equivalents and restricted cash, beginning of year** | 9360584 | 3620667 | 4294017 |
| **Cash, cash equivalents and restricted cash, end of year** | $28150101 | $9360584 | $3620667 |
| **Cash, cash equivalents and restricted cash, end of year** | 28150101 | 9360584 | 3620667 |
| **Less: restricted cash** | 6311630 | 8096121 | 2224722 |
| **Cash and cash equivalents, end of year** | 21838471 | 1264463 | 1395945 |
| **Supplemental disclosure of cash flow information** |  |  |  |
| Cash paid for income tax | $7847 | - | $42 |
| Cash paid for interest | $3449701 | $1868263 | 1377302 |
| **Supplemental non cash transactions** |  |  |  |
| &nbsp;&nbsp;&nbsp;Finance lease right-of-use assets obtained in exchange of finance lease liabilities | - | - | $5457510 |
| &nbsp;&nbsp;&nbsp;Plant, property and equipment obtained from account payable | - | - | $15771926 |
| &nbsp;&nbsp;&nbsp;Plant, property and equipment obtained from capital contribution by non-controlling shareholders | - | - | $3762819 |
| &nbsp;&nbsp;&nbsp;Consideration payable offset by land use right and property tax payable by Sunrise Tech original shareholder before the asset acquisition (Note 13) | - | $1060422 | - |
| &nbsp;&nbsp;&nbsp;Plant, property and equipment obtained from finance lease right-of-use assets at the end of the lease term | $2857043 | - | - |

---

The accompanying notes are an integral part of these consolidated financial statements.

**E-POWER INC.** 

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 1 – ORGANIZATION AND BUSINESS DESCRIPTION**

E-Power Inc. ("EPOW"), previously known as Global Internet of People, Inc., Sunrise New Energy Co. Ltd., or GIOP, is an exempted company with limited liability incorporated under the laws of the Cayman Islands on February 22, 2019. It is a holding company with no business operation.

On March 22, 2019, EPOW incorporated Global Mentor Board Information Technology Limited ("GMB HK"), a limited liability company formed in accordance with laws and regulations of Hong Kong. GMB HK is currently not engaging in any active business and is merely acting as a holding company of Beijing Mentor Board Union Information Technology Co, Ltd. ("GIOP BJ"). GIOP BJ was incorporated by GMB HK as a Foreign Enterprise in China on June 3, 2019.

GIOP BJ incorporated Global Mentor Board (Zibo) Information Technology Co., Ltd. ("SDH", formerly known as Global Mentor Board (Beijing) Information Technology Co., Ltd.) and Shidong Cloud (Beijing) Education Technology Co., Ltd. ("Shidong Cloud") on December 5, 2014 and December 22, 2021, respectively.

SDH is a limited liability company incorporated on December 5, 2014 under the laws of China. Since 2017, SDH established several subsidiaries in China, including Global Mentor Board (Hangzhou) Technology Co., Ltd. ("GMB Hangzhou") and its subsidiary Guizhou Yuanneng Zhihui Enterprise Management Partnership Enterprise (Limited Partnership) ("Guizhou Yuanneng"), Global Mentor Board (Shanghai) Enterprise Management Consulting Co., Ltd. ("GMB Consulting"), Shanghai Voice of Seedling Cultural Media Co., Ltd. ("GMB Culture"), which has a subsidiary, Mentor Board Voice of Seedling (Shanghai) Cultural Technology Co., Ltd. ("GMB Technology"), Shidong (Beijing) Information Technology Co., Ltd. ("GMB (Beijing)"), and, Beijing Mentor Board Health Technology Co., Ltd. ("GMB Health") and its subsidiary Shidong Yike (Beijing) Technology Co., Ltd. ("Shidong Yike"), Zibo Shidong Digital Technology Co., Ltd. ("Zibo Shidong") and its subsidiaries, Shanghai Jiagui Haifeng Technology Co., Ltd. ("Jiagui Haifeng", disposal in March 2023), Shanghai Nanyu Culture Communication Co., Ltd. ("Nanyu Culture", deregistered in July 2023) and Shanghai Yuantai Fengdeng Agricultural Technology Co., Ltd. ("Yuantai Fengdeng", deregistered in April 2023). SDH and its subsidiaries are primarily engaged in providing peer-to-peer knowledge sharing and enterprise services to clients in the People's Republic of China ("PRC").

On October 8, 2021, EPOW incorporated SDH (HK) New Energy Tech Co., Ltd. ("SDH New Energy"), a limited liability company formed in accordance with laws and regulations of Hong Kong. SDH New Energy is acting as a holding company of Zhuhai (Zibo) Investment Co., Ltd ("Zhuhai Zibo") and Zhuhai (Guizhou) New Energy Investment Co., Ltd. ("Zhuhai Guizhou"). Zhuhai Zibo and Zhuhai Guizhou were incorporated by SDH New Energy as Foreign Enterprises in China on October 15, 2021 and November 23, 2021, respectively. On August 5, 2025, EPOW and SDH New Energy entered into a joint venture agreement with Kekecely Ltd and Simple Cloud Technology to establish Alchemistica Inc. under the laws of the State of Delaware, to support the expansion of the Company's operations into the United States. EPOW and SDH New Energy would collectively contribute a total of $710,000 and would hold a combined 71% equity interest in Alchemistica Inc.

On August 26, 2022, GMB HK transferred its equity interest in GIOP BJ to Zhuhai Zibo. GIOP BJ eventually became the wholly owned subsidiary of Zhuhai Zibo.

On November 8, 2021, Zhuhai Zibo incorporated Sunrise (Guizhou) New Energy Materials Co., Ltd. ("Sunrise Guizhou"). Sunrise Guizhou incorporated Sunrise (Guxian) New Energy Materials Co., Ltd. ("Sunrise Guxian") and Guizhou Sunrise Technology Innovation Research Co., Ltd. ("Innovation Research") on April 26, 2022 and December 13, 2022, respectively. On July 2, 2022, Sunrise Guizhou entered into purchase agreements with original shareholders of Guizhou Sunrise Technology Co., Ltd. ("Sunrise Tech", formerly as Anlong Hengrui Graphite Material Co., Ltd.) to acquire 100% of Sunrise Tech's assets and equity ownership. On July 7, 2022, Sunrise Tech became the wholly owned subsidiary of Sunrise Guizhou. Sunrise Guizhou and its subsidiaries are primarily engaged in manufacturing lithium battery materials to clients in the PRC. Sunrise Tech several subsidiaries, including Guizhou Chenhui Trading Co., Ltd. ("Sunrise Chenhui") on March 25, 2024, Shenzhen Sunrise Yitan New Energy Technology Co., Ltd. ("Sunrise Yitan") and Shenzhen Sunrise Suiyuan New Materials Technology Co., Ltd. ("Sunrise Suiyuan") on June 24, 2024, Guizhou Yihui New Energy Co., Ltd. on October 10, 2024 (disposal in January 2026) and Sunrise Anhui New Energy Materials Co., Ltd. on January 21, 2025.

As described below, EPOW, through a restructuring which was accounted for as a reorganization of entities under common control (the "Reorganization"), became the ultimate parent entity of its subsidiaries, and the primary beneficiary of the variable interest entity (the "VIE"), SDH, and the VIE's subsidiaries for accounting purposes under accounting principles generally accepted in the United States of America ("U.S. GAAP") to the extent that SDH's the financials results of is consolidated to the consolidated statements under U.S. GAAP. EPOW, its subsidiaries, the VIE and the VIE's subsidiaries, are collectively hereinafter referred as the "Company".

On June 10, 2019, GIOP BJ entered into a series of contractual arrangements with SDH and shareholders of SDH. These agreements include an Exclusive Technical and Consulting Service Agreement, an Exclusive Service Agreement, an Exclusive Option Agreement and Powers of Attorney (collectively "VIE Agreements"). Pursuant to the above VIE Agreements, GIOP BJ has the exclusive right to provide SDH with comprehensive technical support, consulting services and other services in relation to the principal business during the term the VIE Agreement. All the above contractual arrangements obligate GIOP BJ to absorb a majority of the risk of loss from business activities of SDH and entitle GIOP BJ to receive a majority of their residual returns. In essence, GIOP BJ is the primary beneficiary of SDH for accounting purpose under U.S. GAAP. EPOW, together with its wholly owned subsidiaries, GIOP BJ, VIE and VIE's subsidiaries were effectively under common control by the same shareholders before and after the Reorganization. Therefore, SDH is considered as a VIE under the Statement of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 810 "Consolidation".

The consolidated financial statements reflect the activities of the Company and each of the following entities:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name** | **Date of <br> Incorporation** | **Place of <br> incorporation** | **Percentage of <br> effective <br> ownership** | **Principal Activities** |
| **Subsidiaries** |  |  |  |  |
| Global Mentor Board Information Technology Limited ("GMB HK") | March 22, 2019 | HK | 100% by the Company | Holding company |
| Alchemistica Inc. ("Alchemistica") | August 5, 2025 | The U.S. | 71% by the Company | Business development on lithium battery materials |
| Beijing Mentor Board Union Information Technology Co, Ltd. ("GIOP BJ") | June 3, 2019 | PRC | 100% by the Company | Holding company of GIOP BJ |
| Shidong Cloud (Beijing) Education Technology Co., Ltd ("Shidong Cloud") | December 22, 2021 | PRC | 75% by the Company | Educational consulting |
| SDH (HK) New Energy Tech Co., Ltd. ("SDH New Energy") | October 8, 2021 | HK | 100% by the Company | Holding company |
| Zhuhai (Zibo) Investment Co., Ltd. ("Zhuhai Zibo") | October 15, 2021 | PRC | 100% by the Company | New energy investment |
| Zhuhai (Guizhou) New Energy Investment Co., Ltd. ("Zhuhai Guizhou") | November 23, 2021 | PRC | 100% by the Company | New energy investment |
| Sunrise (Guizhou) New Energy Materials Co., Ltd. ("Sunrise Guizhou") | November 8, 2021 | PRC | 39.35% by the Company, and 1.45% by the VIE | Manufacture of lithium battery materials |
| Guizhou Sunrise Technology Co., Ltd. ("Sunrise Tech") | September 1, 2011, acquired through an asset acquisition on<br> July 7, 2022 | PRC | 39.35% by the Company, and 1.45% by the VIE | Manufacture of lithium battery materials |
| Sunrise (Guxian) New Energy Materials Co., Ltd. ("Sunrise Guxian") | April 26, 2022 | PRC | 20.07% by the Company, and 0.74% by the VIE | Manufacture of lithium battery materials |
| Guizhou Sunrise Technology Innovation Research Co., Ltd. ("Innovation Research") | December 13, 2022 | PRC | 39.35% by the Company, and 1.45% by the VIE | Research and development |
| Shenzhen Sunrise Yitan New Energy Technology Co., Ltd. ("Sunrise Yitan") | June 24, 2024 | PRC | 25.58% by the Company, and 0.94% by the VIE | Research and development of Sodium-ion battery |
| Shenzhen Sunrise Suiyuan New Materials Technology Co., Ltd. ("Sunrise Suiyuan") | June 24, 2024 | PRC | 25.58% by the Company, and 0.94% by the VIE | Research and development of silicon carbon battery |
| Guizhou Chenhui Trading Co., Ltd. ("Sunrise Chenhui") | March 25, 2024 | PRC | 39.35% by the Company and 1.45% by the VIE | Sales of lithium battery materials |
| Guizhou Yihui New Energy Co., Ltd. | October 10, 2024 | PRC | 39.35% by the Company, and 1.45% by the VIE, disposal in January 2026 | Sales of lithium battery materials |
| Sunrise Anhui New Energy Materials Co., Ltd. (Sunrise Anhui)&nbsp;&nbsp;&nbsp;&nbsp; | January 21, 2025 | PRC | 39.35% by the Company, and 1.45% by the VIE | Production of lithium battery materials |
| **Variable Interest Entity ("VIE") and subsidiaries of VIE** |  |  |  |  |
| Global Mentor Board (Zibo) Information Technology Co., Ltd. ("SDH" or "VIE") | December 5, 2014 | PRC | N/A | Knowledge sharing and enterprise service platform provider |
| Global Mentor Board (Hangzhou) Technology Co., Ltd. ("GMB (Hangzhou)") | November 1, 2017 | PRC | 100% by the VIE | Consulting, training and tailored services provider |
| Global Mentor Board (Shanghai) Enterprise Management Consulting Co., Ltd. ("GMB Consulting") | June 30, 2017 | PRC | 51% by the VIE | Consulting services provider |
| Shanghai Voice of Seedling Cultural Media Co., Ltd. ("GMB Culture") | June 22, 2017 | PRC | 51% by the VIE | Cultural and artistic exchanges and planning, conference services provider |
| Shidong (Beijing) Information Technology Co., LTD. ("GMB (Beijing)") | June 19, 2018 | PRC | 51% by the VIE | Information technology services provider |
| Mentor Board Voice of Seeding (Shanghai) Cultural Technology Co., Ltd. ("GMB Technology") | August 29, 2018 | PRC | 30.6% by the VIE | Technical services provider |
| Shidong Zibo Digital Technology Co., Ltd. ("Zibo Shidong") | October 16, 2020 | PRC | 100% by the VIE | Technical services provider |
| Shanghai Jiagui Haifeng Technology Co., Ltd. ("Jiagui Haifeng") | November 29, 2021 | PRC | Disposed in March 2023 | Business incubation services provider |
| Shanghai Nanyu Culture Communication Co., Ltd. ("Nanyu Culture") | July 27, 2021 | PRC | Deregistered in July 2023 | Enterprise information technology integration services provider |
| Beijing Mentor Board Health Technology Co., Ltd ("GMB Health") | January 7, 2022 | PRC | 100% by the VIE | Health services |
| Shidong Yike (Beijing) Technology Co., Ltd. ("Shidong Yike") | July 16, 2021 | PRC | 100% by the VIE | Health services |
| Shanghai Yuantai Fengdeng Agricultural Technology Co., Ltd. ("Yuantai Fengdeng") | March 4, 2022 | PRC | Deregistered in April 2023 | Agricultural technology service |
| Guizhou Yuanneng Zhihui Enterprise Management Partnership Enterprise (Limited Partnership) ("Guizhou Yuanneng") | April 1, 2024 | PRC | 94% by the VIE | Holding company |

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*The VIE contractual arrangements*

Neither the Company nor the Company's subsidiaries own any equity interest in SDH. Instead, The Company directs the activities and receives the economic benefits of SDH's business operation through a series of contractual arrangements. GIOP BJ, SDH and its shareholders entered into a series of contractual arrangements, also known as VIE Agreements, in June 2019.

Each of the VIE Agreements is described in detail below:

<u>Exclusive Technical and Consulting Services Agreement</u>

Pursuant to the Exclusive Technical and Consulting Services Agreement between SDH and GIOP BJ (the "Exclusive Service Agreement"), GIOP BJ provides SDH with technical support, consulting services, business support and other management services relating to its day-to-day business operations and management, on an exclusive basis, utilizing its advantages in technology, human resources, and information. For services rendered to SDH by GIOP BJ under the Exclusive Service Agreement, GIOP BJ is entitled to collect a service fee approximately equal to SDH's earnings before corporate income tax, i.e., SDH's revenue after deduction of operating costs, expenses and other taxes, subject to adjustment based on services rendered and SDH's operation needs.

This agreement became effective on June 10, 2019 and will remain effective unless otherwise terminated as required by laws or regulations, or by relevant governmental or regulatory authorities otherwise terminated earlier in accordance with the provisions of this agreement or relevant agreements separately executed between the parties. Nevertheless, this agreement shall be terminated after all the equity interest in SDH held by its shareholders and/or all the assets of SDH have been legally transferred to GIOP BJ and/or its designee in accordance with the Exclusive Option Agreement (described below).

The Chief Executive Officer ("CEO") of GIOP BJ, Mr. Haiping Hu, is currently managing SDH pursuant to the terms of the Exclusive Service Agreement. The Exclusive Service Agreement does not prohibit related party transactions. The Company's audit committee will be required to review and approve in advance any related party transactions, including transactions involving GIOP BJ or SDH.

<u>Equity Pledge Agreement</u>

Under the Equity Pledge Agreement between GIOP BJ, and shareholders of SDH, together holding 100% of the shares of SDH ("SDH Shareholders"), the SDH Shareholders pledged all of their equity interests in SDH to GIOP BJ to guarantee the performance of SDH's obligations under the Exclusive Service Agreement. Under the terms of the Equity Pledge Agreement, in the event that SDH or the SDH Shareholders breach their respective contractual obligations under the Exclusive Service Agreement, GIOP BJ, as pledgee, will be entitled to certain rights, including, but not limited to, the right to collect dividends generated by the pledged equity interests. The SDH Shareholders also agreed that upon occurrence of any event of default, as set forth in the Equity Pledge Agreement, GIOP BJ is entitled to dispose of the pledged equity interests in accordance with applicable PRC laws. The SDH Shareholders further agreed not to dispose of the pledged equity interests or take any actions that would prejudice GIOP BJ's interests without the prior written consent of GIOP BJ.

The Equity Pledge Agreement is effective until: (1) the secured debt in the scope of pledge is cleared off; and (2) Pledgers transfer all the pledged equity interests to Pledgees according to the Equity Pledge Agreement, or other entity or individual designated by it.

The purposes of the Equity Pledge Agreement are to (1) guarantee the performance of SDH's obligations under the Exclusive Service Agreement; (2) make sure the SDH Shareholders do not transfer or assign the pledged equity interests, or create or allow any encumbrance that would prejudice GIOP BJ's interests without GIOP BJ's prior written consent. In the event SDH breaches its contractual obligations under the Exclusive Service Agreement, GIOP BJ will be entitled to dispose of the pledged equity interests.

<u>Exclusive Option Agreement</u>

Under the Exclusive Option Agreement, the SDH Shareholders irrevocably granted GIOP BJ (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, once or at multiple times, at any time, part or all of their equity interests in SDH or the assets of SDH. The option price to be paid by GIOP BJ to each shareholder of SDH is RMB 10 (US$1.37) or the minimum amount to the extent permitted under PRC law at the time when such transfer occurs.

Under the Exclusive Option Agreement, GIOP BJ may at any time under any circumstances, purchase, or have its designee purchase, at its discretion, to the extent permitted under PRC law, all or part of the SDH Shareholders' equity interests in SDH or the assets of SDH. The Equity Pledge Agreement, together with the Equity Pledge Agreement, the Exclusive Service Agreement, and Powers of Attorney, enable GIOP BJ to be the primary beneficiary of SDH.

The Exclusive Option Agreement remains effective until all the equity or assets of SDH is legally transferred under the name of GIOP BJ and/or other entity or individual designated by it, or unilaterally terminated by GIOP BJ within 30-day prior written notice.

<u>Powers of Attorney</u>

Under each of the Powers of Attorney, the SDH Shareholders authorized GIOP BJ to act on their behalf as their exclusive agent and attorney with respect to all rights as shareholders, including, but not limited to: (a) attending shareholders' meetings; (b) exercising all the shareholder's rights, including voting, that shareholders are entitled to under the laws of China and the Articles of Association, including, but not limited to, the sale or transfer or pledge or disposition of shares in part or in whole; and (c) designating and appointing on behalf of shareholders the legal representative, the executive director, supervisor, the chief executive officer, and other senior management members of SDH.

The Powers of Attorney are irrevocable and continuously valid from the date of execution of the Powers of Attorney, so long as the SDH Shareholders own the equity interests of SDH.

Spousal Consent

Pursuant to the Spousal Consent, each spouse of the individual shareholders of SDH irrevocably agreed that the equity interest in SDH held by their respective spouses would be disposed of pursuant to the Equity Interest Pledge Agreement, the Exclusive Option Agreement, and the Powers of Attorney. Each spouse of the shareholders agreed not to assert any rights over the equity interest in SDH held by their respective spouses. In addition, in the event that any spouse obtains any equity interest in SDH through the respective shareholder for any reason, he or she agrees to be bound by the contractual arrangements.

*Risks in relation to the VIE structure*

EPOW believes that the contractual arrangements among GIOP BJ, the VIE and their respective shareholders are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the EPOW's ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could:

● revoke the business and operating licenses of the Company's PRC subsidiary and the VIE;

● discontinue or restrict the operations of any related-party transactions between the Company's PRC subsidiary and the VIE;

● limit the Company's business expansion in China by way of entering into contractual arrangements;

● impose fines or other requirements with which the Company's PRC subsidiary and the VIE may not be able to comply;

● require the Company or the Company's PRC subsidiary and the VIE to restructure the relevant ownership structure or operations; or

● restrict or prohibit the Company's use of the proceeds of the additional public offering to finance.

The Company's ability to conduct its wisdom sharing and enterprise consulting business may be negatively affected if the PRC government were to carry out any of the aforementioned actions. As a result, the Company may not be able to consolidate its VIE in its consolidated financial statements as it may lose the ability to receive economic benefits from the VIE. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company, its PRC subsidiary and VIE.

For the year ended December 31, 2025, Zibo Shidong provided an interest-free loan of $427,687 to GIOP BJ; Sunrise Guizhou repaid a loan of $139,130 to Zibo Shidong, bearing interest rate at 4%; Sunrise Chenhui provided an interest-free loan of $278,261 to Zibo Shidong; (iv) Sunrise Guizhou repaid a loan of $166,957, bearing interest rate at 4% to GMB Hangzhou and (v) Zibo Shidong paid $42,002 on behalf of the Company for legal fees associated with the 2025 Series A Ordinary Share issuance.

For the year ended December 31, 2024, the Company provided $1,300,000 interest free loans to a VIE subsidiary, Zibo Shidong; VIE provided interest free loans of $77,268 to GIOP BJ; Zibo Shidong provided interest free loans of 150,880 to GIOP BJ; Sunrise Guizhou provided loans of $166,766 with 4% interest rate to GMB (Hangzhou); and Sunrise Guizhou provided loans of $347,430 with 4% interest rate to Zibo Shidong.

The Company had provided interest free loans of $400,000 to Zibo Shidong for the year ended December 31, 2023.

The following financial statements of the VIE and VIE's subsidiaries were included in the consolidated financial statements as of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023:

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| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2024** |
| Cash and cash equivalents | $66439 | $176235 |
| Restricted cash | 5639 | - |
| Accounts receivable, net | 2778887 | 232652 |
| Notes receivable | - | 1933 |
| Inventories | 4862 | 4658 |
| Due from related parties | 690275 | 385537 |
| Prepaid expenses and other current assets | 1641308 | 526676 |
| **Total current assets** | 5187410 | 1327691 |
| Long-term prepayments and other non-current assets |  | - |
| Plant, property and equipment, net | 2394098 | 2440004 |
| Intangible assets, net | 21399 | 23539 |
| Long-term investments | 2246307 | 2007957 |
| **Total non-current assets** | 4661804 | 4471500 |
| **Total assets** | $9849214 | $5799191 |
| Accounts payable | $510514 | $2744054 |
| Deferred revenue | 841219 | 1763831 |
| Deferred government subsidy | 2859962 | 2739989 |
| Income taxes payable | 500820 | 488626 |
| Due to related parties | 163426 | 170270 |
| Accrued expenses and other current liabilities | 406554 | 357733 |
| **Total current liabilities** | 5282495 | 8264503 |
| **Total liabilities** | $5282495 | $8264503 |

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| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| Total net revenues | $284133 | $683414 | $656113 |
| Net loss | $(1194100) | $(1362215) | $(3697384) |

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| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| Net cash (used in) provided by operating activities | $(1349922) | $2305030 | $(423730) |
| Net cash (used in) provided by investing activities | $(789312) | $693138 |  |
| Net cash (used in) provided by financing activities | $(13913) | $(199832) | $400000 |

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**NOTE 2** – **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Basis of presentation***

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and have been consistently applied.

The consolidated financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of going concern uncertainty.

***Principles of consolidation***

The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIE and VIE's subsidiaries for which the Company is the ultimate primary beneficiary for accounting purpose only under U.S. GAAP.

A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. The Company owns 39.35% equity interest in Sunrise Guizhou, but has the power to cast a majority of votes at the meeting of the board of directors and governs the financial and operating policies of Sunrise Guizhou under an agreement among the shareholders.

All transactions and balances between the Company, its subsidiaries, the VIE and VIE's subsidiaries have been eliminated upon consolidation.

***Non-controlling interests***

Non-controlling interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling shareholder. As of December 31, 2025, for the Company's consolidated subsidiaries, the VIE and VIE' s subsidiaries, non-controlling interests represent: a) a non-controlling shareholder's 49% ownership interest in GMB (Beijing), GMB Consulting and Shidong Yike; b) a non-controlling shareholder's 59.20% ownership interest in Sunrise Guizhou; c) a non-controlling shareholder's 49% ownership interest in GMB Culture, which has a subsidiary called GMB Technology; d) a non-controlling shareholder's 25% ownership interest in Shidong Cloud, and e) a non-controlling shareholder's 29% ownership interest in Alchemistica.

As of December 31, 2024, for the Company's consolidated subsidiaries, the VIE and VIE' s subsidiaries, non-controlling interests represent: a) a non-controlling shareholder's 49% ownership interest in GMB (Beijing), GMB Consulting and Shidong Yike; b) a non-controlling shareholder's 59.20% ownership interest in Sunrise Guizhou; c) a non-controlling shareholder's 49% ownership interest in GMB Culture, which has a subsidiary called GMB Technology; and d) a non-controlling shareholder's 25% ownership interest in Shidong Cloud.

Non-controlling interests are presented as a separate line item in the equity section of the Company's consolidated balance sheets and have been separately disclosed in the Company's consolidated statements of operations and comprehensive loss to distinguish the interests from that of the Company.

***Use of estimates***

The preparation of consolidated financial statements in conformity with U.S. GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and judgments are based on historical information, information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Significant estimates required to be made by management, include, but are not limited to, the assessment of the allowance for credit loss, inventory valuation, depreciable lives of property and equipment, impairment of long-lived assets, impairment of long-term investments that do not have readily determinable fair values, realization of deferred tax assets, accretion to redemption value of redeemable non-controlling interests extinguishment of the redeemable non-controlling interests, and fair value of the detachable warrant. Actual results could differ from those estimates.

***Foreign currency translation***

The Company's principal country of operations is the PRC. The financial position and results of its operations are determined using RMB , the local currency, as the functional currency. The Company's consolidated financial statements are reported using the U.S. Dollars ("US$" or "$"). The results of operations and the consolidated statements of cash flows denominated in foreign currency are translated at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive loss included in consolidated statements of changes in shareholders' equity. Gains and losses from foreign currency transactions are included in the Company's consolidated statements of operations and comprehensive loss.

The value of RMB against US$ and other currencies may fluctuate and is affected by, among other things, changes in the PRC's political and economic conditions. Any significant revaluation of RMB may materially affect the Company's financial condition in terms of US$ reporting. The following table outlines the currency exchange rates that were used in preparing the consolidated financial statements:

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| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
| Year-end spot rate | US$1= RMB 6.9931 | US$1= RMB 7.2993 | US$1= RMB 7.0999 |
| Average rate | US$1= RMB 7.1875 | US$1= RMB 7.1957 | US$1= RMB 7.0809 |

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 **

***Fair value measurements***

 **

The Company follows the provisions of ASC 820, Fair Value Measurements and Disclosures. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2 - Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3 - Inputs are unobservable inputs which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts reported in the balance sheets for cash and cash equivalents, restricted cash, accounts receivable, notes receivable, due from related parties, prepaid expenses and other current assets, short-term loan, deferred revenue, income taxes payable, accounts payable, notes payable, due to related parties, advance of subscription payment, accrued expenses and other current liabilities approximate their fair value based on the short-term maturity of these instruments. The carrying amount of long-term loans, financial lease liabilities, long-term payables and consideration payable approximates fair value as its interest rates are at the same level as the current market yield for comparable loans.

The Company's non-financial assets, such as plant, property and equipment, land use rights and financial lease right-of-use assets would be measured at fair value only if they were determined to be impaired.

As a practical expedient, the Company uses Net Asset Value ("NAV") or its equivalent to measure the fair value of its certain fund investment. NAV is primarily determined based on information provided by external fund administrators. The Group's investments valued at NAV as a practical expedient are private equity funds, which represent the short-term investment on the balance sheet. Investment loss of $nil, $nil and $86,314 was recorded in the Company's consolidated statements of operations and comprehensive loss for the years ended December 31, 2025, 2024 and 2023, respectively.

***Cash and cash equivalents***

Cash and cash equivalents include cash on hand and demand deposits in accounts maintained with commercial banks, as well as highly liquid investments which are unrestricted as to withdrawal or use and are readily convertible to known amounts of cash within three months. The interest incomes of highly liquid investments are reported in the Company's consolidated statements of operations and comprehensive loss.

***Restricted cash***

Restricted cash represents bank deposits with designated use, which cannot be withdrawn without certain approval or notice. Such restricted cash mainly relates to the deposit for commercial note issuance and the bank balances frozen by People's Court in Mainland China for property preservation requested by certain plaintiffs in legal cases in which the Company is a defendant.

On December 14, 2023, Sunrise Guizhou entered into a banker's acceptance note contract with Shanghai Pudong Development Bank Co., Ltd. ("SPD Bank") for issuing banker's acceptance note to the suppliers of Sunrise Guizhou. Pursuant to the contract, the Company was obliged to deposit fifty percent of the note payable amount issued as restricted cash in the designated bank account in SPD Bank. As of December 31, 2025 and 2024, the deposit for note issuance was $673,555 and $1,183,671, respectively.

On July 31, 2024, Sunrise Guizhou entered into a banker's acceptance note contract with China Everbright Bank Company Limited ("Everbright Bank") for issuing banker's acceptance note to the suppliers of Sunrise Guizhou. Pursuant to the contract, the Company was obliged to deposit fifty percent of the note payable amount issued as restricted cash in the designated bank account in Everbright Bank. As of December 31, 2025 and 2024, the deposit for note issuance was $1,804,798 and $6,853,541, respectively.

As of December 31, 2025 and 2024, bank balances frozen in legal cases were $3,833,277 and $58,910, respectively.

***Short-term investments***

The Company evaluates whether an investment is other-than-temporarily impaired based on the specific facts and circumstances. Factors that are considered in determining whether an other-than-temporary decline in value has occurred include the market value of the security in relation to its cost basis, the financial condition of the investee, and the intent and ability to retain the investment for a sufficient period of time to allow for recovery in the market value of the investment.

***Accounts receivable, net***

Accounts receivables mainly represent amounts due from clients in the ordinary course of business and are recorded net of allowance for credit loss.

On January 1, 2023, the Company adopted ASC 326 Financial Instruments – Credit Losses ("ASC 326") using the modified retrospective approach through a cumulative-effect adjustment to the accumulated deficit. Upon adoption, the Company changed its impairment model to utilize a current expected credit losses model in place of the incurred loss methodology for financial instruments measured at amortized cost. The Company had not recorded an adjustment to the opening accumulated deficit as of January 1, 2023 due to immaterial cumulative impact of adopting ASC 326.

The Company used an expected credit loss model for the impairment of financial instruments mentioned above as of period ends. For the allowance of the accounts receivable, the Company believes the aging of accounts receivables is a reasonable parameter to estimate expected credit loss, and determines expected credit losses for accounts receivables using an aging schedule as of period ends. The expected credit loss rates under each aging schedule were developed on the basis of the average historical loss rates from previous years, and adjusted to reflect the effects of those differences in current conditions and forecasted changes. The Company measured the expected credit losses of accounts receivables on a collective basis. When an accounts receivable does not share risk characteristics with other accounts receivables, management will evaluate such accounts receivable for expected credit loss on an individual basis. Doubtful accounts balances are written off and deducted from allowance for credit loss, when receivables are deemed uncollectible, after all collection efforts have been exhausted and the potential for recovery is considered remote. The allowance for credit loss of accounts receivable was $8,136,400 and $7,909,571 as of December 31, 2025 and 2024, respectively.

***Inventories, net***

The inventories as of December 31, 2025 and 2024 consisted of raw materials, materials in transit, work in process and finished goods. Finished goods were mainly graphite anode materials, health service gift cards, learning course gift cards, Chinese tea, latex pillows and health care products.

Part of the Company's finished goods, such as health service gift cards, learning course gift cards, Chinese tea, latex pillows and health care products, were obtained through fee exchange arrangements with its customers prior to 2022. These arrangements were entered into at the Company's discretion to receive inventory in exchange for collection of account receivables and deferred revenue due from the customers. The Company accounted for these nonmonetary exchanges based on the fair values of the assets involved. The cost of inventories acquired in exchange was initially measured at the fair value of the accounts receivable the Company surrendered to obtain them.

The impairment of inventories provided for lower of cost and net realizable value was $5,119,406, $3,959,304 and $7,238,819 for the years ended December 31, 2025, 2024 and 2023, respectively.

***Lease***

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for a consideration. To assess whether a contract is or contains a lease, the Company assesses whether the contract involves the use of an identified asset, whether it has the right to obtain substantially all the economic benefits from the use of the asset and whether it has the right to control the use of the asset.

A lease arrangement is being evaluated for classification as operating or financing upon lease commencement. The right-of-use assets and related lease liabilities are recognized at the lease commencement date.

Lease liabilities, which represent the Company's obligation to make lease payments arising from the lease, and corresponding right of-use assets, which represent the Company's right to use an underlying asset for the lease term, are recognized at the commencement date of the lease based on the present value of fixed future payments, calculated using the discount rate implicit in the lease, if available, or the Company's incremental borrowing rate.

The right-of-use of asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and less any lease incentive received.

*Finance lease*

Finance leases are generally those leases that transfer ownership to the Company or allow the Company to purchase assets at a nominal amount by the end of the lease term. Assets acquired under finance leases are recorded as finance lease right-of-use, or ROU, assets.

The Company's leases have initial terms ranging from 2 to 3 years for the Company. The lease term includes the lessee's option to purchase assets at a nominal amount by the end of the lease term. As the lease transfers ownership of the underlying asset to the Company and the Company is reasonably certain to exercise an option to purchase the underlying asset, the Company amortizes the finance lease right-of-use asset to the end of the useful life of the underlying asset.

For finance lease, lease expense is generally front-loaded as the finance lease ROU asset is depreciated on a straight-line basis over the amortization period, but interest expense on the lease liability is recognized in interest expense using the effective interest method which results in more expense during the early years of the lease.

*Operating lease*

For operating leases, lease expense relating to fixed payments is recognized on a straight-line basis over the lease term. Additionally, the Company elected not to recognize leases with lease terms of 12 months or less at the commencement date. Lease payments on short-term leases are recognized as an expense on a straight-line basis over the lease term, not included in lease liabilities.

*Sales and leaseback contracts* 

 

The Company enters into sale and leaseback transactions. The Company acts as the seller-lessee, transfers its assets to a third-party entity (the buyer-lessor) and then leases the transferred assets back from the buyer-lessor at a contract designated rental price. The Company evaluates if sales of the underlying assets in the sale and leaseback contract have occurred in accordance with ASC 606. When a sale and leaseback transaction does not qualify for sale accounting, the transaction is accounted for as a financing transaction by the seller-lessee and a lending transaction by the buyer-lessor. The seller-lessee shall not derecognize the transferred asset and shall account for any amounts received as a financial liability.

***Plant, property and equipment, net***

Plant, property and equipment are stated at cost less accumulated depreciation. Depreciation of plant, property and equipment is provided using the straight-line method over their expected useful lives, as follows:

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| | |
|:---|:---|
| Building | 22 to 30 years |
| Machines | 10 years |
| Electronic equipment | 3 years |
| Furniture, fixtures and equipment | 3 years |
| Vehicle | 3 years |
| Leasehold improvements | The shorter of useful life and lease term |

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Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of operation and comprehensive loss in other income or expenses.

***Land use right, net***

Land use rights are recorded at cost less accumulated amortization Land use rights are amortized on a straight-line basis over the remaining term of the land certificates, from 40 years to 50 years.

***Intangible assets, net***

The Company's intangible assets represent intellectual property rights on manufacturing graphite anode materials from capital injection by a non-controlling shareholder of Sunrise Guizhou and the copyright of course videos purchased from a third party including but not limited to course videos which cover subjects such as entrepreneurship development, financial service, corporate governance, team management, marketing strategy and etc. Intangible assets are stated at cost less accumulated amortization and impairment. Intangible assets are amortized on a straight-line basis over their estimated useful lives. The estimated useful lives of intangible assets are determined to be 5 to 10 years in accordance with the period the Company estimates to generate economic benefits from such intellectual property rights and copyright.

***Long-term investments***

Equity method investments in investees represent the Company's investments in privately held companies, over which it has significant influence but does not own a majority equity interest or otherwise control. The Company applies the equity method to account for an equity investment, in common stock or in-substance common stock, according to ASC 323 "Investment — Equity Method and Joint Ventures".

An investment in in-substance common stock is an investment in an entity that has risk and reward characteristics that are substantially similar to that entity's common stock. The Company considers subordination, risks and rewards of ownership and obligation to transfer value when determining whether an investment in an entity is substantially similar to an investment in that entity's common stock.

Under the equity method, the Company's share of the post-acquisition profits or losses of the equity investee is recognized in the consolidated income statements and its share of post-acquisition movements in accumulated other comprehensive income is recognized in shareholders' equity. When the Company's share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee. Investment income for long-term investments of $146,361, $198,176 and $365,721 were recorded in the Company's consolidated statements of operations and comprehensive loss for the years ended December 31, 2025, 2024 and 2023, respectively.

For other equity investments that do not have readily determinable fair values and over which the Company has neither significant influence nor control through investments in common stock or in-substance common stock, the Company accounts for these investments at cost minus any impairment, if necessary.

The Company continually reviews its investments in equity investees to determine whether a decline in fair value below the carrying value is other than temporary. The primary factors the Company considers in its determination are the length of time that the fair value of the investment is below the Company's carrying value, and the financial condition, operating performance and the prospects of the equity investee. If the decline in fair value is deemed to be other than temporary, the carrying value of the equity investee is written down to fair value. Impairment charges for long-term investments were $nil, $nil, and $1,450,381 recorded in the Company's consolidated statements of operations and comprehensive loss for the years ended December 31, 2025, 2024 and 2023, respectively.

***Impairment of long-lived assets***

Long-lived assets, including plant, property and equipment, intangible asset, land use rights and finance lease right-of-use assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset or asset group may not be recoverable. When these events occur, the Company measures impairment by comparing the carrying value of the long-lived assets or assets group to the estimated undiscounted future cash flows expected to result from the use of the assets or asset group and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets or assets group, the Company would recognize an impairment loss based on the fair value of the assets or assets group, which is the excess of carrying amount over the fair value of the assets, using the expected future discounted cash flows.

***Asset acquisition***

When the Company acquires other entities, if the assets acquired and liabilities assumed do not constitute a business, the transaction is accounted for as an asset acquisition. Assets are recognized based on the cost, which generally includes the transaction costs of the asset acquisition, and no gain or loss is recognized unless the fair value of noncash assets given as consideration differs from the assets' carrying amounts on the Company's consolidated financial statements. The cost of a group of assets acquired in an asset acquisition is allocated to the individual assets acquired or liabilities assumed based on their relative fair value and does not give rise to goodwill.

***Redeemable non-controlling interests***

Redeemable non-controlling interests represent redeemable preferred shares financing in Sunrise Guizhou from a non-controlling shareholder. As the preferred shares could be redeemed by the shareholder upon the occurrence of certain events that are not solely within the control of the Company, these shares are accounted for as redeemable non-controlling interests. The Company assesses the probability of redemption by the holder of the redeemable non-controlling interests. Due to the probability of being redeemed, the Company adjusts the carrying amount of the mezzanine equity to the redemption value at the end of each reporting period as if it was the redemption date for the redeemable non-controlling interest. The Company accounts for the changes in accretion to the redemption value in accordance with ASC 480, Distinguishing Liabilities from Equity. The redeemable non-controlling interests are recorded at redemption value. The Company adopts equity classification method to classify the ASC 480 offsetting entry as an adjustment to retained earnings (or additional paid-in capital in the absence of retained earnings).

The Company assesses whether an amendment to the terms of its redeemable non-controlling interests is an extinguishment or a modification based on a qualitative evaluation of the amendment. If the amendment adds, removes, significantly changes to a substantive contractual term or to the nature of the overall instrument, the amendment results in an extinguishment of the redeemable non-controlling interests. The Company also assesses if the change in terms results in value transfer between redeemable non-controlling interests and ordinary shareholders. When redeemable non-controlling interests are extinguished, the difference between the carrying amount and the fair value of the redeemable non-controlling interests is recorded against equity.

***Share-based compensation***

Share-based compensation is measured based on the grant date fair value of the equity instrument. Share-based compensation expenses are recognized over the requisite service period based on the graded vesting attribution method with corresponding impact reflected in additional paid-in capital. When no future services are required to be performed by grantees in exchange for an award of equity instruments, the cost of the award is expensed on the grant date. The Company elects to recognize forfeitures when they occur.

***Warrant***

In conjunction with the issuance of Series A Ordinary Shares, the Company also issued to the Series A Ordinary Shares investors a stock purchase warrant providing for the rights to purchase fixed Series A Ordinary Shares of the Company at a fixed purchase price. These warrants are classified as equity instruments because they meet the equity transaction classification criteria under ASC 815-40 (i.e. they are indexed to the Company's own Series A Ordinary Shares and do not provide for cash settlement). The fair value of the warrant is estimated using the Black-Scholes option pricing model. The proceeds received were allocated between the Series A Ordinary Shares and the warrants on a relative fair value basis.

***Government subsidies***

The Company's PRC based subsidiary received government subsidies from local government. Government subsidies are recognized when there is reasonable assurance that the attached conditions will be complied with. When the government subsidy relates to an expense item, it is net against the expense and recognized in the consolidated statements of operations and comprehensive loss over the period necessary to match the subsidy on a systematic basis to the related expenses. Where the subsidy relates to an asset acquisition, it is recognized as income in the consolidated statements of operations and comprehensive loss in proportion to the useful life of the related assets. Government grants received for the years ended December 31, 2025, 2024 and 2023 were $537,739, $391,900 and $380,164, respectively. As of December 31, 2025 and 2024, the deferred government grants were $3,645,737 and $3,049,607, respectively.

***Revenue recognition***

The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

Step 1: Identify the contract with the customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract

Step 5: Recognize revenue when the company satisfies a performance obligation

The Company mainly offers and generates revenue from sales of graphite anode materials and other services.

Revenue recognition policies for sales of graphite anode materials are discussed as follows:

The Company's major business is to sell graphite anode materials to its customers. The Company's major customers are manufacturers of industrial and consumer energy storage lithium-ion batteries, such as batteries for electric vehicles and electric ships, and smart consumer electronics. The Company examines the availability of the inventory, takes control of products in its own and third-party warehouses, and then organizes the shipping and delivery of products to customers after the purchase orders are received from customers.

The Company is the principal in the transactions and accounts for revenue from sales of graphite anode materials on a gross basis as the Company is responsible for fulfilling the promise to provide the desired products to customers. The Company is subject to inventory risk before the product ownership and risk are transferred and has the discretion in establishing prices. All of the Company's contracts and purchase orders are fixed prices and have one single performance obligation as the promise is to transfer the products to customers, and there are no other separately identifiable promises in the contracts. The Company's revenue from sales of graphite anode materials is recognized at a point in time when title and risk of loss passes and the customer accepts the goods, which generally occurs at delivery. The credit period is usually within six months. There is no separate rebate, discount, or volume incentive involved. Revenue is reported net of all value added taxes ("VAT").

Contract assets and liabilities

The Company's contract liabilities consist of deferred revenues, primarily relating to the advance consideration received from customers, which include the advanced graphite anode material sales and consulting service fees received from customers. The amount from customers before provision of goods and service is recognized as deferred revenue. The deferred revenue is recognized as revenue once the criteria for revenue recognition are met.

The Company recognized $1,837,510, $680,975 and $341,528 in revenue for the years ended December 31, 2025, 2024 and 2023, respectively, which related to contract liabilities that existed as of December 31, 2024, 2023 and 2022, respectively. The balances as of December 31, 2025 are expected to be recognized as revenue within one year.

There was no contract asset recorded as of December 31, 2025 and 2024.

***Cost of goods sold***

The cost of goods sold for the year ended December 31, 2025, 2024 and 2023 was primarily the cost of finished goods of graphite anode materials, including single granular coke, secondary granular coke, mixed batches of single particle and secondary coke, depreciation and amortization, labor cost, outsourcing fee and freight. Cost of goods sold was $52,252,338, $70,782,649, and $57,172,626 for the years ended December 31, 2025, 2024 and 2023, respectively.

***Service costs***

Service costs primarily include (1) professional and consulting fees paid to third parties for the Company's activity; and (2) labor costs. Service costs were $11,278, $12,672 and $281,030 for the years ended December 31, 2025, 2024 and 2023, respectively.

***Selling expenses***

Selling expenses comprise primarily of expenses relating to marketing and brand promotion activities, employee-related cost for personnel engaged in marketing and business development.

***General and administrative expenses***

General and administrative expenses consist of employee-related cost for personnel related to the general corporate functions, including accounting, finance, legal and human relations, costs associated with use by these functions of facilities and equipment, such as depreciation expenses, rental and other general corporate related expenses.

***Research and development expenses***

Research and development expenses are principally related to technology of graphite anode products which consists mainly of employee-related cost for research and development personnel, third-party service fee incurred for research and development purposes and depreciation expenses associated with the equipment used for research and development functions.

***Share subscription discount expenses***

When ordinary shares are issued for cash in an arm's-length financing transaction with an unrelated party, the Company evaluates transactions in which the issuance date fair value of the equity instruments issued exceeds the value of the consideration received if there are no other transaction elements. In absence of (i) a share-based payment for goods or services received, (ii) a payment for an asset or (iii) a dividend to existing shareholders, any difference between the fair value and the gross proceeds is attributable to an expense. The share subscription discount expenses were $6,534,936 for the year ended December 31, 2025.

***Income taxes***

The Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In December 2023, FASB issued Accounting Standards Update ("ASU") No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as additional information on income taxes paid. We adopted this ASU on a prospective basis effective January 1, 2025. Refer to Note 20 for the inclusion of new disclosures required.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The provisions of ASC 740-10-25, "Accounting for Uncertainty in Income Taxes," prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures.

The Company believes there were no uncertain tax positions as of December 31, 2025 and 2024, respectively. The Company does not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months. The Company is not currently under examination by an income tax authority, nor has been notified that an examination is contemplated. The Company will recognize interest and penalties, if any, related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations and comprehensive loss. Accrued interest and penalties will be included on the related tax liability line in the consolidated balance sheet. Interest and penalties incurred related to underpayment of income tax are classified as income tax expense in the period incurred.

***Loss per share***

The Company computes loss per share ("EPS") in accordance with ASC 260, "Earnings per Share". ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS are computed by dividing the loss available to ordinary shareholders of the Company by the weighted average ordinary shares outstanding during the period. Diluted EPS takes into account the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised and converted into ordinary shares.

The Company has determined that the redeemable non-controlling interests are participating securities as the preferred shares participate in retained earnings of Sunrise Guizhou. The Company treats the entire measurement adjustment to redemption value of the redeemable non-controlling interest under ASC 480-10-S99-3A as being akin to a dividend, which affected in the calculation of loss available to ordinary shareholders of the Company used in the loss per share calculation.

***Comprehensive loss***

Comprehensive loss income consists of two components, net loss and other comprehensive loss. Other comprehensive loss refers to revenue, expenses, gains and losses that under U.S. GAAP are recorded as an element of shareholders' equity but are excluded from net loss. Other comprehensive loss consists of foreign currency translation adjustment resulting from the Company translating its financial statements from functional currency into reporting currency.

***Risks and uncertainties***

 ****

*Currency risk*

 

A majority of the Company's expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries' assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In Mainland China, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People's Bank of China ("PBOC"). Remittances in currencies other than RMB by the Company in Mainland China must be processed through the PBOC or other Company foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.

The Company maintains certain bank accounts in Mainland China. On May 1, 2015, China's new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in Mainland China are required to purchase deposit insurance for deposits in RMB and in foreign currency placed with them. Such Deposit Insurance Regulation would not be effective in providing complete protection for the Company's accounts, as its aggregate deposits are much higher than the compensation limit, which is RMB 500,000 for one bank. As of December 31, 2025, cash, cash equivalents and restricted cash not insured by Deposit Insurance Regulation in Mainland China was RMB 144,048,739, or $20,598,696. However, the Company believes that the risk of failure of any of these Mainland China banks is remote. Bank failure is uncommon in Mainland China and the Company believes that those Mainland China banks that hold the Company's cash and cash equivalents are financially sound based on public available information.

The Company also maintains certain bank accounts in Hong Kong. The Hong Kong Deposit Protection Scheme insures eligible deposits up to HK$800,000 per depositor per bank. As of December 31, 2025, cash and cash equivalents not insured by Hong Kong Deposit Protection Scheme was $6,468,006.

Other than the deposit insurance mechanism in Mainland China and Hong Kong mentioned above, the Company's bank account balances of $64,027 are not insured by the U.S. Federal Deposit Insurance Corporation insurance.

*Liquidity Risk*

The Company is exposed to liquidity risk, which is a risk that the Company will be unable to provide sufficient capital resources and liquidity to meet commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, the Company will turn to other financial institutions and related parties to obtain short-term and long-term funding to cover any liquidity shortage.

On January 9, 2025, Sunrise Guizhou obtained a bank loan of RMB300,000,000 from China Construction Bank ("CCB"), which was exclusively for construction payment of manufacturing facilities and machine purchase (See Note 17). CCB transferred the loan funds to the Company's bank account opened in CCB ("CCB account"). The Company initiates payment to its supplier from CCB account and will be responsible for the authenticity and accuracy of the transaction. CCB shall subsequently perform a formality review on whether the payment is consistent with the loan purpose. The formality review includes checking transaction information, payment amount, payee and payee's bank information. When CCB completes the formality review and believes that the payment meets the loan purpose, the payment will be transferred to the payee's bank account. As of December 31, 2025, cash and cash equivalents in CCB account which would be subject to payment formality review was RMB 96,847,349, or $13,848,987.

*Concentration and credit risk*

Financial instruments that potentially subject the Company to the concentration of credit risks consist of cash, cash equivalents and restricted cash. The maximum exposures of such assets to credit risk are their carrying amounts as of the balance sheet dates. The Company deposits its cash, cash equivalents and restricted cash with financial institutions located in jurisdictions where the subsidiaries are located. The Company believes that no significant credit risk exists as these financial institutions have high credit quality. As of December 31, 2025, the followings were outstanding balances of cash, cash equivalents and restricted cash in each jurisdiction:

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| | | | |
|:---|:---|:---|:---|
|  | **Cash and cash equivalents** | **Restricted cash** | **Total** |
| Mainland China | $14877066 | $6311630 | $21188696 |
| Hong Kong | 6647378 | - | 6647378 |
| The United States | 314027 | - | 314027 |
| **Balance at end of the year** | $21838471 | $6311630 | $28150101 |

---

The Company's exposure to credit risk associated with its trading and other activities is measured on an individual counterparty basis, as well as by group of counterparties that share similar attributes. There were $24,335,123 and $5,754,407 of revenue from two clients which represented 52% and 12% of the total revenues for the years ended December 31, 2025, respectively. There was $43,794,051 of revenue from one client which represented 67% of the total revenues for the year ended December 31, 2024. There were $16,977,973, $11,100,114 and $4,766,496 of revenue from three clients which represented 38%, 25% and 11% of the total revenues for the years ended December 31, 2023, respectively.

There were $1,920,934 and $1,815,172 of account receivable from two clients which represented 11% and 10% of the total account receivable as of December 31, 2025, respectively. There were $23,472,843 and $3,115,577 of account receivable from two clients which represented 81% and 11% of the account receivable as of December 31, 2024, respectively.

Concentrations of credit risk can be affected by changes in political, industry, or economic factors. To reduce the potential for risk concentration, The Company generally requires either advanced payment before delivery of the goods or a payment within the existing credit term to its clients in the ordinary course of business. Credit limits are established and exposure is monitored in light of changing counterparty and market conditions. The Company did not have any material concentrations of credit risk outside the ordinary course of business as of December 31, 2025 and 2024.

*Interest rate risk*

 

Fluctuations in market interest rates may negatively affect the financial condition and results of operations. The Company is exposed to floating interest rate risk on cash deposit and floating rate borrowings, and the risks due to changes in interest rates are not material. The Company has not used any derivative financial instruments to manage its interest risk exposure.

*Other uncertainty risk*

The Company's major operations are conducted in the PRC. Accordingly, the political, economic, and legal environments in the PRC, as well as the general state of the PRC's economy may influence the Company's business, financial condition, and results of operations.

The Company's major operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic, and legal environment. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations, including its organization and structure disclosed in Note 1, this may not be indicative of future results.

***Recently issued accounting pronouncements***

 ****

The Company considers the applicability and impact of all accounting standards updates ("ASUs"). Management periodically reviews new accounting standards that are issued. The Company is an "emerging growth company" ("EGC") as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). Under the JOBS Act, EGC can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), and in January 2025, the FASB issued ASU No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date ("ASU 2025-01"). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. This ASU may be applied either prospectively to financial statements issued for reporting periods after its effective date or retrospectively to all prior periods presented in the financial statements. The Company is in the process of evaluating the potential impact of the new guidance on its consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current classified accounts receivable and contract assets. This update is effective for annual periods beginning after December 15, 2025, including interim periods within those fiscal years. Adoption of this ASU can be applied prospectively for reporting periods after its effective date. Early adoption is permitted. The Company is currently evaluating the provisions of this ASU and does not expect this ASU to have a material impact on our consolidated financial statements.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU simplifies the capitalization guidance by removing all references to prescriptive and sequential software development stages (referred to as "project stages") throughout ASC 350-40. The ASU is effective for annual periods beginning after December 15, 2027, and interim periods within those fiscal years. Adoption of this ASU can be applied prospectively for reporting periods after its effective date; or follow a modified transition approach that is based on the status of the respective projects and whether software costs were capitalized before the date of adoption; or retrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is permitted. The Company is currently evaluating the provisions of this ASU and does not expect this ASU to have a material impact on our consolidated financial statements.

In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The ASU establishes authoritative guidance in GAAP about accounting for government grants received by business entities, clarifies the appropriate accounting, in an effort to reduce diversity in practice, and increase consistency of application across business entities. The ASU is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Adoption of this ASU can be applied a modified prospective approach, a modified retrospective approach, or a retrospective approach. Early adoption is permitted. The Company is currently evaluating the provisions of this ASU and does not expect this ASU to have a material impact on our consolidated financial statements.

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The ASU clarifies interim disclosure requirements and the applicability of Topic 270. The objective of the amendments is to provide further clarity about the current interim disclosure requirements. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Adoption of this ASU can be applied either a prospective or a retrospective approach. Early adoption is permitted. The Company is currently evaluating the provisions of this ASU and does not expect this ASU to have a material impact on our consolidated financial statements.

**NOTE 3 – GOING CONCERN**

As reflected in the consolidated financial statements, the Company incurred net loss of $26,659,381 for the year ended December 31, 2025. Net cash used in operating activities was $25,160,584 for the year ended December 31, 2025. The working capital deficit was $28,422,197 as of December 31, 2025.

As of December 31, 2025, GIOP BJ didn't comply with the financial covenants as required by a short-term loan agreement in the principal amount of $1,000,987 with Industrial Bank Co., Ltd. ("Industrial Bank"). The term of the loan was from June 25, 2025 to June 24, 2026. The financial covenants of the loan agreement required GIOP BJ to maintain: (1) current assets of not less than RMB25,000,000; (2) net assets of not less than RMB8,000,000; (3) an asset liability ratio of not more than 80%; and (4) a current ratio of not less than 100%. As of December 31, 2025, GIOP did not meet the above requirements; however, Industrial Bank had not declared the agreement in default as a result of the breach of the financial covenants, nor has it done so as of the date of this consolidated financial statement.

In addition, as of December 31, 2025, Sunrise Guizhou didn't comply with the financial covenants as required by three long-term loan agreements in an aggregate amount of $68,917,581 with CCB Qianxinan Branch. The financial covenants of the long-term loan agreements required Sunrise Guizhou to maintain an asset liability ratio of not more than 70% and continuous profitability during the loan periods pursuant to certain conditions designated in the loan agreements. Sunrise Guizhou obtained a written consent and the waiver of the financial covenants on September 30, 2024 and December 8, 2025, respectively. As the date of this consolidated financial statement, CCB has not declared the agreement in default as a result of the breaches of the financial covenants.

These adverse conditions and events raised substantial doubt about the Company's ability to continue as a going concern. For the next 12 months from the issuance date of this report, the Company plans to continue implementing various measures to boost revenue and control cost and expenses. In assessing its liquidity, management monitors and analyzes the Company's cash on-hand, its ability to generate sufficient revenue sources and ability to obtain additional financial support in the future, and its operating and capital expenditure commitments. The Company intends to finance its future working capital requirements and capital expenditures from financing activities for the cash shortfalls and the negative operating cash flows. The Company expects continued capital financing through debt or equity issuances to support its working capital requirements.

As of December 31, 2025, the Company had cash, cash equivalents and restricted cash of $28,150,101. The management believes that it may be able to continue to borrow from banks based on past experiences and the Company's good credit history when necessary.

Currently, the Company is working to improve its liquidity and capital sources primarily through cash flows from operation, debt financing, and financial support from its principal shareholder. In order to fully implement its business plans and sustain continued growth, the Company may also seek equity financing from outside investors when necessary.

The Company can make no assurances that required financings will be available for the amounts needed, or on terms commercially acceptable to the Company, if at all. If one or all of these events does not occur or subsequent capital raises are insufficient to bridge financial and liquidity shortfall, there would likely be a material adverse effect on the Company and its consolidated financial statements.

The consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.

**NOTE 4 – ACCOUNTS RECEIVABLE, NET** 

Accounts receivable consisted of the following:

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| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2024** |
| Accounts receivable | $18077471 | $36901720 |
| Allowance for credit loss | (8136400) | (7909571) |
| **Accounts receivable, net** | $9941071 | $28992149 |

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The movement of allowance of credit loss is as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2024** | **2023** |
| Balance at beginning of the year | $7909571 | $8016322 | $8047527 |
| Current year addition | - | 113854 | 196717 |
| Reversed | (116271) | - | (74564) |
| Foreign currency translation adjustments | 343100 | (220605) | (153358) |
| **Balance at end of the year** | $8136400 | $7909571 | $8016322 |

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Addition to allowance for credit loss was $nil, $113,854 and $196,717 recorded for the years ended December 31, 2025, 2024 and 2023, respectively.

**NOTE 5 – INVENTORIES, NET**

Inventories consisted of the following:

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| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2024** |
| Raw materials | $3682637 | $2620813 |
| Finished goods | 2964114 | 3299796 |
| Work in process | 17458608 | 11735123 |
| Others | 4862 | 4658 |
| **Total** | $24110221 | $17660390 |

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The impairment of inventories was $5,119,406, $3,959,304 and $7,238,819 for the years ended December 31, 2025, 2024 and 2023, respectively.

**NOTE 6 – SHORT-TERM INVESTMENT**

In February 2021, the Company entered into an investment agreement with Viner Total investment Fund (the "Fund") to invest in the Fund with the total investment consideration of $8,000,000. The Fund is an exempted company incorporated in the Cayman Islands and managed by Mainstream Fund Services (HK). The Fund is invested in a wide range of instruments with no specific limitations. The redemption of such shares for cash can be made with a one-month advanced written notice (such advanced written notice period can be extended by the administrator).

The value of a private fund is measured at fair value with gains and losses recognized in earnings. As a practical expedient, the Company uses NAV or its equivalent to measure the fair value of the Fund. NAV is primarily determined based on information provided by external fund administrators. The Company redeemed the Fund with a redemption value of $3,282,770 on August 2, 2023. Investment loss of $nil, $nil and $86,314 was recorded in the Company's consolidated statements of operations and comprehensive loss for the years ended December 31, 2025, 2024 and 2023, respectively.

**NOTE 7 – PREPAID EXPENSES AND OTHER CURRENT ASSETS**

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| | | | |
|:---|:---|:---|:---|
|  | | **As of December 31,** | **As of December 31,** |
|  | | **2025** | **2024** |
| Advance to supplier | (1) | $2609778 | $2130175 |
| Loans to third parties |  | 128698 | - |
| Prepayment for investment |  | 257397 | 246599 |
| Other receivables |  | 455921 | 772252 |
| Prepaid VAT and income tax | (3) | 2660636 | 1061675 |
| **Subtotal** |  | 6112430 | 4210701 |
| Less: allowance for prepaid expenses and other current assets |  | (142998) | (136999) |
| **Total** |  | $5969432 | $4073702 |

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(1) The Company prepaid its vendors for electricity and graphite anode materials, including single granular coke, secondary granular coke, and mixed batches of single particle and secondary coke and etc.

(2) The amount of VAT payable is determined by applying the applicable tax rate to the invoiced amount of services provided (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). The Company's input VAT exceeded output VAT as the Company purchased inventory and plant, property and equipment for manufacturing graphite anode materials as of December 31, 2025 and 2024.

**NOTE 8 – LONG-TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS**

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| | | | |
|:---|:---|:---|:---|
|  | | **As of December 31,** | **As of December 31,** |
|  | | **2025** | **2024** |
| Prepayment for equipment | (1) | $2461674 | $1165608 |
| Finance lease deposit |  | 178033 | 636362 |
| Prepayment for long-term loan acquisition cost | (2) | - | 1237215 |
| **Total** |  | $2639707 | $3039185 |

---

(1) Prepaid for equipment represented advance payment on the production line equipment by Sunrise Guizhou, which had not been shipped as of December 31, 2025 and 2024.

(2) CCB and Sunrise Guizhou entered into a long-term loan agreement on January 9, 2025 to finance the construction of Sunrise Guizhou's additional manufacturing facilities. See Note 17.

**NOTE 9 – PLANT, PROPERTY AND EQUIPMENT, NET** 

Plant, property and equipment, stated at cost less accumulated depreciation, consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2024** |
| Building | $32649379 | $28882829 |
| Machines | 41084085 | 35486639 |
| Vehicles | 483836 | 461813 |
| Electronic equipment | 1215641 | 983675 |
| Furniture, fixtures and equipment | 338730 | 327961 |
| Leasehold improvements | 430022 | 400264 |
| **Subtotal** | 76201693 | 66543181 |
| Construction in progress | 3012275 | 2994832 |
| Less: |  |  |
| &nbsp;&nbsp;&nbsp;Accumulated depreciation | (15268107) | (9034739) |
| **Plant, property and equipment, net** | $63945861 | $60503274 |

---

Depreciation expense was $5,679,880, $4,875,028 and $3,249,396 for the fiscal years ended December 31, 2025, 2024 and 2023, respectively. There was no impairment loss on plant, property and equipment for the years ended December 31, 2025, 2024 and 2023.

**NOTE 10 – LAND USE RIGHTS, NET**

Land use rights, stated at cost less accumulated amortization, consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2024** |
| Land use rights - cost | $13943307 | $9737032 |
| Less: |  |  |
| &nbsp;&nbsp;&nbsp;Accumulated amortization | (825287) | (539054) |
| **Land use rights, net** | $13118020 | $9197978 |

---

For the years ended December 31, 2025, 2024 and 2023, amortization expense amounted to $255,526 and $214,499 and $217,977, respectively. The following is a schedule of future amortization of land use rights as of December 31, 2025:

---

| | |
|:---|:---|
| **Year ending December 31,** | **Amount** |
| 2026 | $296312 |
| 2027 | 296312 |
| 2028 | 296312 |
| 2029 | 296312 |
| 2030 and thereafter | 11932772 |
| **Total** | $13118020 |

---

**NOTE 11 – INTANGIBLE ASSETS, NET**

Intangible assets, stated at cost less accumulated amortization and impairment, consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2024** |
| Copyrights of course videos | $4856539 | $4652811 |
| Intellectual property rights | 4675726 | 4329823 |
| **Intangible assets, cost** | 9532265 | 8982634 |
| Less: |  |  |
| &nbsp;&nbsp;&nbsp;Accumulated amortization | (3503370) | (3342924) |
| &nbsp;&nbsp;&nbsp;Impairment | (5811592) | (5567801) |
| **Intangible assets, net** | $217303 | $71909 |

---

The Company recorded impairment loss on intangible assets of $nil, $nil and $3,151,467 for the years ended December 31, 2025, 2024 and 2023, respectively.

For the years ended December 31, 2025, 2024 and 2023, amortization expense amounted to $3,847 and $6,918, and $703,932, respectively. The following is a schedule of future amortization of intangible asset as of December 31, 2025:

---

| | |
|:---|:---|
| **Year ending December 31,** | **Amount** |
| 2026 | $14072 |
| 2027 | 14072 |
| 2028 | 14072 |
| 2029 | 14072 |
| 2030 and thereafter | 161015 |
| **Total** | $217303 |

---

**NOTE 12 – LONG-TERM INVESTMENTS**

Long-term investments consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2024** |
| **Equity method investments:** |  |  |
| Shidong (Suzhou) Investment Co., Ltd. ("Suzhou Investment") | $37240 | $37076 |
| Shenzhen Jiazhong Creative Capital LLP ("Jiazhong") | 2137569 | 1902381 |
| **Equity investments without readily determinable fair value:** |  |  |
| Beijing Jinshuibanlv Technology Co., Ltd. ("Jinshuibanlv") | 1143985 | 1095996 |
| Hangzhou Zhongfei Aerospace Health Management Co., Ltd. ("Zhongfei") | 428994 | 410998 |
| Shanghai Zhongren Yinzhirun Investment Management Partnership ("Yinzhirun") | 285996 | 273999 |
| Jiangxi Cheyi Tongcheng Car Networking Tech Co., Ltd. ("Cheyi") | 227041 | 217517 |
| Chengdu Wanchang Enterprise Management Consulting Partnership (Limited Partnership) ("Wanchang") | 71499 | 68500 |
| Shanghai Outu Home Furnishings Co., Ltd. ("Outu") | 71499 | 68500 |
| Zhejiang Qianshier Household Co., Ltd. ("Qianshier") | 71499 | 68500 |
| Taizhou Jiamenkou Auto Greengrocer's Delivery Technology Co., Ltd. ("Jiamenkou") | 71499 | 68500 |
| Zhejiang Yueteng Information Technology Co., Ltd. ("Yueteng") | 71499 | 68500 |
| Shidong Funeng (Ruzhou) Industry Development Co., Ltd. ("Funeng") | 38609 | 36990 |
| Dongguan Zhiduocheng Car Service Co., Ltd. ("Car Service") | 25740 | 24660 |
| **Subtotal** | 4682669 | 4342117 |
| Less: impairment | (2436361) | (2334160) |
| **Total** | $2246308 | $2007957 |

---

**<u>Equity method investments</u>**

*Investment in Suzhou Investment*

 

In December 2017, the Company acquired 17% of the shareholding of Suzhou Investment with cash consideration of RMB 850,000, or $121,548. As the Company's CEO, Mr. Haiping Hu is Suzhou Investment's director and the Company can exercise significant influence on Suzhou Investment's business operation, the Company therefore accounted for this investment under equity methods from December 2017 and share the profit or loss of Suzhou Investment accordingly. For the years ended December 31, 2025, 2024 and 2023, the Company recognized investment (losses) income of $(1,420), $1,135 and $619, respectively, according to its share of the post-acquisition gains and losses of Suzhou Investment.

 

*Investment in Jiazhong*

 

In December 2020, the Company acquired 33% of partnership share of Jiazhong as a limited partner with cash consideration of RMB 10,000,000, or $1,429,981. The Company has fully paid RMB 10,000,000 as of December 31, 2020. Since the Company owns 33% of the partnership share of Jiazhong as a limited partner, therefore it accounts for the investment of Jiazhong under equity method and shares the profit or loss of Jiazhong accordingly. For the years ended December 31, 2025, 2024 and 2023, the Company recognized investment income of $147,781, $197,041 and $365,102, respectively, according to its share of the post-acquisition gains of Jiazhong. The Company's investment in Jiazhong had been frozen by Zibo Caijin Holding Group Co., Ltd. on January 19, 2026 for a period of three years. See Note 25.

 

**Equity investments without readily determinable fair value**

*Investment in Jinshuibanlv* 

In April 2021, the Company signed an investment agreement with Beijing Zhitong Zhenye Technology Co., Ltd. and Li Jiyou to invest RMB 8,000,000, or $1,143,985, to Jinshuibanlv, which accounts for 4% of its equity interest. Jinshuibanlv mainly operates an online tax management system. The Company has no control, joint control or significant influence on the invested units, and therefore accounted for the investment of Jinshuibanlv at cost minus impairments and plus or minus observable changes in prices. In 2023, the Company noticed that Jinshuibanlv had encountered a going-concern issue due to the fact that it incurred significant loss and had insufficient bank and cash to support its operations. Therefore, the Company determined that the impairment on investment was other-than-temporary. Full impairment of $1,129,800 was recognized for investment of Jinshuibanlv for the year ended December 31, 2023. The Company's investment in Jinshuibanlv had been frozen by Zibo Caijin Holding Group Co., Ltd. on January 19, 2026 for a period of three years. See Note 25.

*Investment in Zhongfei*

 

In November 2020, the Company acquired 3% of shareholding interest of Zhongfei through nonmonetary transactions, with which are entered into at the Company's discretion to receive equity interest in exchange of collection of account receivables due from Zhongfei of RMB 3,000,000, or $428,994. In 2021, The Company provided it with a customized service worth of RMB 3,000,000. The service has been completed and Zhongfei has decided to transfer 3% of the equity according to its fair value to the Company. The registration change was completed as of December 31, 2021. The Company does not have significant influence or control over Zhongfei, and the equity investment does not have readily determinable market value, and therefore accounted for the investment of Zhongfei at cost minus impairments and plus or minus observable changes in prices. The cost of equity interest acquired in exchange is initially measured at the fair value of the account receivables the Company surrendered to obtain them. In 2022, the Company noticed that Zhongfei had encountered a going-concern issue and determined that the impairment on investment was other-than-temporary. Full impairment of $446,025 was provided for investment of Zhongfei for the year ended December 31, 2022.

*Investment in Yinzhirun*

 

In December 2016, the Company acquired 0.45% of shareholding interest of Yinzhirun with cash consideration of RMB 2,000,000, or $285,996. The Company does not have significant influence or control over Yinzhirun, and the equity investment does not have readily determinable market value, and therefore accounted for the investment of Yinzhirun at cost minus impairments and plus or minus observable changes in prices. Yinzhirun is the intermediate holding company for Shanghai PeopleNet Security Technology Co., Ltd. ("PeopleNet"). The Company noticed that PeopleNet was involved in legal proceedings for bankruptcy initiated by its debtor, and its accounts receivable, intellectual properties, brand name have been subject to the judicial auction since February 2024, all of which raised significant concerns about the Yinzhirun's ability to continue as a going concern. Full impairment of $282,450 was recognized for investment of Yinzhirun for the year ended December 31, 2023.

 

*Investment in Cheyi*

 

In November 2020, the Company acquired 0.5% of shareholding interest of Cheyi through nonmonetary transactions, with which are entered into at the Company's discretion to receive equity interest in exchange of collection of account receivables due from Cheyi of RMB 1,587,719, or $227,041. In 2021, the Company provided it with a membership service worth of RMB 1,500,000. This service has been completed. Cheyi has a poor capital turnover, it has decided to transfer 0.5% of the equity according to its fair value to the Company and registration change was completed as of December 31, 2021. The Company accounts for these non-monetary exchanges based on the fair values of the assets involved. The Company does not have significant influence or control over Cheyi, and the equity investment does not have readily determinable market value, and therefore accounted for the investment of Cheyi at cost minus impairments and plus or minus observable changes in prices. The cost of equity interest acquired in exchange is initially measured at the fair value of the account receivables the Company surrendered to obtain them.

The Company noticed that Industry and Commerce Administration of Nanchang Xihu Branch was not able to perform on-site inspection on Cheyi's subsidiary Nanchang Qingchong Technology Co., Ltd. ("Qingchong") in August 2022; Another Cheyi's subsidiary, Jiangxi Cheyi Tongcheng Vehicle Networking Technology Co., Ltd. ("Cheyi Tongcheng") had a legal dispute with CCB Nanchang Branch on March 9, 2023. The Company noticed the above factors that raise significant concerns about the investee's ability to continue as a going concern. Full impairment of $236,053 was provided for investment of Cheyi for the year ended December 31, 2022.

*Investment in Wanchang*

In September 2019, the Company initially acquired 11.11% of partnership share of Chengdu Zhongfuze Investment LLP ("Zhongfuze") with cash consideration of RMB 500,000, or $71,499.. The Company has fully paid RMB 500,000 as of December 31, 2020. On December 6, 2022, the asset under Zhongfuze was transferred to Wanchang and the Company's partnership share in Zhongfuze was simultaneously transferred to Wanchang. As a result, the Company owned 0.64% of the partnership share in Wanchang. The Company does not have significant influence or control over Wanchang, and the partnership share investment does not have readily determinable market value, and therefore accounted for the investment of Wanchang at cost minus impairments and plus or minus observable changes in prices.

*Investment in Outu*

 

In December 2019, the Company acquired 15% of shareholding interest of Outu with cash consideration of RMB 3,000,000. The Company has paid RMB 500,000, or $71,499, as of December 31, 2022. The Company does not have significant influence or control over Outu, and the equity investment does not have readily determinable market value, and therefore accounted for the investment of Outu at cost minus impairments and plus or minus observable changes in prices. In 2022, the Company noticed that Qutu had encountered a going-concern issue and determined that the impairment on investment was other-than-temporary. Full impairment of $74,337 was provided for investment of Outu for the year ended December 31, 2022.

*Investment in Qianshier*

 

In December 2020, the Company acquired 5% of shareholding interest of Qiansier through nonmonetary transactions with, which are entered into at the Company's discretion to receive equity interest in exchange of collection of account receivables due from Qianshier of RMB 500,000, or $71,499. The Company accounts for these nonmonetary exchanges based on the fair values of the assets involved. The Company does not have significant influence or control over Qianshier, and the equity investment does not have readily determinable market value, and therefore accounted for the investment of Qianshier at cost minus impairments and plus or minus observable changes in prices. The cost of equity interest acquired in exchange is initially measured at the fair value of the account receivables the Company surrendered to obtain them.

In 2022, the Company noticed Qianshier had been subject to enforcement proceedings associated with a rental dispute, which raised significant concerns about the investee's ability to continue as a going concern. Full impairment of $74,337 was provided for investment of Qianshier for the year ended December 31, 2022.

*Investment in Jiamenkou*

 

In June 2020, the Company acquired 5% of shareholding interest of Jiamenkou through nonmonetary transactions with Jiamenkou, which are entered into at the Company's discretion to receive equity interest in exchange of collection of account receivables due from Jiamenkou of RMB 500,000, or $71,499. The Company accounts for these nonmonetary exchanges based on the fair values of the assets involved. The Company does not have significant influence or control over Jiamenkou, and the equity investment does not have readily determinable market value, and therefore accounted for the investment of Jiamenkou at cost minus impairments and plus or minus observable changes in prices. The cost of equity interest acquired in exchange is initially measured at the fair value of the account receivables the Company surrendered to obtain them. In 2022, the Company noticed Jiamenkou was involved in legal proceedings as respondent to its debt guarantor, which raised significant concerns about the investee's ability to continue as a going concern. Full impairment of $74,337 was provided for investment of Jiamenkou for the year ended December 31, 2022.

*Investment in Yueteng*

In June 2020, the Company acquired 5% of shareholding interest of Yueteng through nonmonetary transactions with Yueteng, which are entered into at the Company's discretion to receive equity interest in exchange of collection of account receivables due from Yueteng of RMB 500,000, or $71,499. The Company accounts for these nonmonetary exchanges based on the fair values of the assets involved. The Company does not have significant influence or control over Yueteng, and the equity investment does not have readily determinable market value, and therefore accounted for the investment of Yueteng at cost minus impairments and plus or minus observable changes in prices. The cost of equity interest acquired in exchange is initially measured at the fair value of the account receivables the Company surrendered to obtain them. In 2022, the Company determined that the investment was impaired and the impairment was other-than-temporary. Full impairment of $74,337 was provided for investment of Yueteng for the year ended December 31, 2022.

 

*Investment in Funeng*

 

In August 2019, the Company subscribed capital with cash consideration of RMB 570,000 and acquired 19% of shareholding interest of Funeng. The Company has paid RMB 270,000, or $38,609, as of December 31, 2020. The Company does not have significant influence or control over Funeng, and the equity investment does not have readily determinable market value, and therefore accounted for the investment of Funeng at cost minus impairments and plus or minus observable changes in prices. In 2023, the Company noticed that Funeng had encountered a going-concern issue due to the fact that it did not have sufficient bank deposits and cash to support its operation. Therefore, the Company determined that the impairment on investment was other-than-temporary. Full impairment of $38,131 was provided for investment of Funeng for the year ended December 31, 2023.

 

*Investment in Car Service*

 

In November 2017, the Company acquired 1.5% of shareholding interest of Car Service with cash consideration of RMB 90,000. In May 2019, the shareholding interest the Company held was diluted to 0.98% after Car Service received capital from a new shareholder. The Company does not have significant influence or control over Car Service, and the equity investment does not have readily determinable market value, and therefore accounted for the investment of Car Service at cost minus impairments and plus or minus observable changes in prices. In 2021, the Company noticed that with the adverse impact of COVID-19, Car Service failed to publish the annual report of 2020 in accordance with the time limit to the Industry and Commerce Administration of Dongguan Nancheng Branch, which was factors that raise significant concerns about the investee's ability to continue as a going concern. Full impairment of $27,900 was provided for investment of Car Service for the year ended December 31, 2021.

**NOTE 13 – ASSET ACQUISITION**

In July 2022, Sunrise Guizhou entered into purchase agreements with original shareholders of Sunrise Tech (formerly known as Anlong Hengrui Graphite Material Co., Ltd.) to acquire 100% of Sunrise Tech's assets and equity ownership for a gross consideration of RMB 40,000,000, among which RMB 10,000,000 was paid in July 2022. In July 2022, the Group completed the acquisition. Sunrise Tech held three land use rights and two buildings.

The Company evaluated the acquisition of the purchased assets under ASC 805-Business Combination (ASC 805), and concluded that as substantially all of the fair value of the gross assets acquired is concentrated in an identifiable group of similar assets, the transaction did not meet the requirements to be accounted for as a business combination and therefore was accounted for as an asset acquisition.

The purchase prices of the assets as of the acquisition date are as follows:

---

| | |
|:---|:---|
| Land use rights | $3654545 |
| Plant, property and equipment – buildings | 1853556 |
| **Total assets acquired** | 5508101 |
| Deferred tax liabilities | (199813) |
| **Net assets acquired** | $5308288 |

---

The Company recognized any excess consideration transferred over the fair value of the net assets acquired on a relative fair value basis to the identifiable net assets. The Company determined the estimated fair values using Level 3 inputs after review and consideration of relevant quoted market prices of comparable companies and relevant information.

For the year ended December 31, 2023, the Company had paid RMB 5,000,000 to the original shareholders of Sunrise Tech. For the year ended December 31, 2024, the Company and the original shareholder agreed that RMB 5,000,000 consideration due on August 20, 2024 would be offset by the unpaid RMB 8,960,000 land use right and property taxes and their associated fines and late payment fee prior to the asset acquisition. Any remaining unpaid land use right and property tax and their associated fine and late payment fee would be deducted from the consideration of the asset acquisition due on August 20, 2025. For the year ended December 31, 2025, the Company had paid RMB 6,430,000 ($894,609) to the original shareholders of Sunrise Tech.

These consideration payables were interest free, and the present value was discounted using the incremental borrowing rate. The current and non-current portion of the consideration payable was $1,397,337 and $nil, respectively, as of December 31, 2025. The current and non-current portion of the consideration payable was $801,866 and $1,338,719, respectively, as of December 31, 2024. The Company recorded interest expense of $80,270, $111,363 and $133,310 relating to the amortization of the discount for the year ended December 31, 2025, 2024 and 2023, respectively. The consideration payable is guaranteed by Mr. Haiping Hu, the CEO of the Company and Chairman of the Board of Directors.

**NOTE 14 – FINANCE LEASES**

The Company's leases are mainly related to graphite anode material manufacturing equipment leases from financial lease companies. Finance lease contracts offer the Company an option to purchase assets at a nominal amount by the end of the lease term and it is reasonably certain the Company will exercise that option. The Company amortizes the finance lease right-of-use asset to the end of the useful life of the underlying asset.

As of December 31, 2025, the Company's finance leases had a weighted average remaining lease term of 0.37 years and a weighted average discount rate of 8.04%.

The components of lease expense for the years ended December 31, 2025, 2024 and 2023 were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **Statement of**<br>**Income Location** | **2025** | **2024** | **2023** |
| **Lease costs** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Finance lease expense | &nbsp;&nbsp;Cost of goods sold | $444348 | $622203 | $338627 |

---

Maturity of lease liabilities under the finance leases as of December 31, 2025 were as follows:

---

| | |
|:---|:---|
| **For the years ending December 31,** | **Amount** |
| 2026 | $353362 |
| **Total lease payments** | 353362 |
| Less: interest | (17171) |
| **Present value of finance lease liabilities** | $336191 |
| Finance lease liabilities, current | $336191 |
| Finance lease liabilities, non-current | $- |

---

**NOTE 15 – DEFERRED GOVERNMENT SUBSIDY**

Deferred government subsidy consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2024** |
| Deferred subsidy on relocation | $2859962 | $2739989 |
| Others | 785775 | 309618 |
| **Total** | $3645737 | $3049607 |

---

In November 2021, GMB BJ planned to relocate the Company address from Beijing to Zibo city, and it applied for subsidy of RMB 21,926,900 to compensate for the future incremental costs arising from the relocation, which was approved by the Finance Bureau of Zibo. In January 2022, the Company received a government subsidy of RMB 20,000,000, or $2,859,962. The Company relocated to Zibo in November 2023, however the expenditures related to relocation had not been audited and acknowledged by the government of Zibo as of December 31, 2025. Therefore, the cash received was recognized as a deferred government subsidy.

**NOTE 16 – LONG-TERM PAYABLE**

Long-term payable represented the financial liabilities due to financial lease companies maturing within one or over one year. The long-term payable consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2024** |
| **Long-term payables:** |  |  |
| China Power Investment Ronghe Financial Leasing Co., Ltd. ("Ronghe") | $- | $1658984 |
| Zhongguancun Science and Technology Leasing Co., Ltd. ("Zhongguancun") | - | 363525 |
| Xiamen Guomao Chuangcheng Financial Leasing Co., Ltd. ("Guomao") | - | 879062 |
| Risheng International Finance Leasing Co., Ltd. ("Risheng") | 421405 | 733281 |
| **Total** | $421405 | $3634852 |
| Current portion | $298996 | $3231126 |
| Non-current portion | $122409 | $403726 |

---

On November 4, 2022, Sunrise Guizhou entered into a sales and leaseback financing contract a three-year financing with Ronghe to obtain an amount of RMB 40,000,000 for a term from November 10, 2022 to November 9, 2025. The sales and leaseback contract was a debt financing arrangement in essence, with a yearly interest rate of one-year loan prime rate plus 1.55%. This long-term payable is guaranteed by Mr. Haiping Hu and Zhuhai Zibo. The Company is required to make quarterly interest and principal payment. For the years ended December 31, 2025, 2024 and 2023, The Company repaid RMB 12,701,795, RMB 13,647,079 and RMB 14,634,365, or $1,767,206, $1,896,560 and $2,066,738, respectively. The Company had repaid the long-term payable to Ronghe in full as of December 31, 2025. As of December 31, 2024, the Company had outstanding balance of $1,658,984, of which $1,658,984 and $nil were classified to the current portion and the non-current portion, respectively. The total outstanding balance of this long-term facility was collateralized by certain plant and equipment at the original cost of RMB 47,917,699, or $6,852,140, as of December 31, 2024.

On February 7, 2023, Sunrise Guizhou entered into a sales and leaseback financing contract for a two-year financing with Zhongguancun to obtain an amount of RMB 20,000,000 for a term lasting from February 7, 2023 to February 6, 2025. The sales and leaseback contract were a debt financing arrangement in essence, with a yearly implied interest rate of 9.61%. This long-term payable is guaranteed by Mr. Haiping Hu and Zhuhai Zibo. The Company is required to make quarterly interest and principal payments. For the year ended December 31, 2025, 2024 and 2023, the Company repaid RMB 2,694,379, RMB 10,791,732 and RMB 8,124,466, or $374,870, $1,499,747 and $1,147,378, respectively. The Company had repaid the long-term payable to Zhongguancun in full as of December 31, 2025. As of December 31, 2024, the Company had an outstanding balance of $363,525, of which $363,525 and $nil were classified to the current portion and the non-current portion, respectively. The total outstanding balance of this long-term facility was collateralized by certain plant and equipment at the original cost of RMB 20,917,392, or $2,991,147, as of December 31, 2024. Other than the aforementioned plant and equipment as collateral assets, the Company has pledged any existing and future accounts receivable from a sales contract with Liyang Zichen New Materials Technology Co., Ltd. ("Liyang Zichen") for the amount up to RMB 20,000,000. The accounts receivable from Liyang Zichen were $nil as of December 31, 2024.

On October 27, 2023, Sunrise Guizhou entered into a sales and leaseback financing contract for a two-year financing with Guomao for RMB 15,000,000, or $2,144,971, for a term from October 27, 2023 to October 26, 2025. The sales and leaseback contract was a debt financing arrangement in essence, with a yearly implied interest rate of 9.13%. For the year ended December 31, 2025, 2024 and 2023, the Company repaid RMB 6,677,190, RMB 8,012,628 and RMB 1,335,438, or $929,000, $1,113,530 and $188,597, respectively. The Company had repaid the long-term payable to Guomao in full as of December 31, 2025. As of December 31, 2024, the Company had outstanding balance of $879,062, of which $879,062 and $nil were classified to the current portion and the non-current portion, respectively. This debt financing arrangement was guaranteed by Mr. Haiping Hu, Sunrise Tech and Zhuhai Zibo. The total outstanding balance of this long-term facility was collateralized by certain plant and equipment at the original cost of RMB 15,000,000, or $2,144,971, as of December 31, 2024.

On October 14, 2024, Sunrise Guizhou entered into a sales and leaseback financing contract for a thirty two-month financing with Risheng for RMB 6,000,000, or $857,989, for a term from October 14, 2024 to June 15, 2027. The sales and leaseback contract was a debt financing arrangement in essence, with a yearly implied interest rate of 12.15%. For the year ended December 31, 2025 and 2024, the Company repaid RMB 2,892,000 and RMB 756,000, or $402,365 and $105,063. As of December 31, 2025, the Company had outstanding balance of $421,405, of which $298,996 and $122,409 were classified to the current portion and the non-current portion, respectively. As of December 31, 2024, the Company had outstanding balance of $733,281, of which $329,555 and $403,726 were classified to the current portion and the non-current portion, respectively. This debt financing arrangement was guaranteed by Mr. Haiping Hu and Zhuhai Zibo. The total outstanding balance of this long-term facility was collateralized by certain plant and equipment at the original cost of RMB 7,600,000, or $1,086,786, as of December 31, 2025.

**NOTE 17 – LOANS**

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2024** |
| **Short-term loans:** |  |  |
| Everbright Bank | $4146945 | $- |
| Post Savings Bank of China | 714990 | 684997 |
| Industrial Bank | 1000987 | 958996 |
| Total | 5862922 | 1643993 |
| **Long-term loans:** |  |  |
| China Construction Bank | 68917581 | 26809352 |
| WeBank Co., Ltd. | 17168 | 86905 |
| Current portion | $29375697 | $485556 |
| Non-current portion | $39559052 | $26410701 |

---

*Short-term loan*

 

<u>Everbright Bank</u>

On March 27, 2025, Sunrise Guizhou entered into a loan agreement for RMB29,000,000 with an interest rate of 4% for a term from March 31, 2025 to March 30, 2026. The loan was for the expenditure on raw material and electricity. This credit loan was guaranteed by Mr. Haiping Hu and Ms. Fangfei Liu, spouse of Mr. Haiping Hu. Sunrise Guizhou pledged RMB70,469,923 ($10,077,065) accounts receivable from its customer for the short-term loan. Sunrise Tech also pledged its land use right for Sunrise Guizhou for the loan.

<u>Post Bank</u>

On June 19, 2024, Sunrise Guizhou entered into a line of credit facility agreement with Post Savings Bank of China ("Post Bank") to obtain revolving fund up to RMB 5,000,000 for a term from June 19, 2024 to June 18, 2028. On July 27, 2023, the Company obtained a credit loan for RMB 5,000,000 with an interest rate of 4.66% for a term from June 20, 2024 to June 19, 2025. On June 4, 2025, Sunrise Guizhou repaid the loan in full and renew the credit loan for RMB 5,000,000 with an interest rate of 5.35% for a term from June 5, 2025 to June 4, 2026.

<u>Industrial Bank</u>

On June 19, 2024, GIOP BJ entered into a line of credit facility agreement with Industrial Bank to obtain revolving fund up to RMB 7,000,000. On July 23, 2024, GIOP BJ obtained a loan for RMB 7,000,000 with an interest rate of one-year loan prime rate plus 0.05% for a term from August 29, 2024 to August 28, 2025. On June 25, 2025, Sunrise Guizhou repaid the loan in full and renew the credit loan for RMB 7,000,000 with an interest rate of one-year loan prime rate minus 0.2% for a term from June 26, 2025 to June 25, 2026. This loan was guaranteed by Mr. Haiping Hu, Ms. Fangfei Liu, SDH and Zhuhai Zibo. The Company also pledged its buildings of SDH to Industrial Bank.

Although GIOP BJ has been timely making interest payments to Industrial Bank in accordance with the agreement, GIOP BJ didn't comply with the financial covenants as required by the agreement as of December 31, 2025 and 2024. Specifically, the financial covenants of the agreement required GIOP BJ to maintain: (1) current assets of not less than RMB25,000,000; (2) net assets of not less than RMB8,000,000; (3) an asset liability ratio of not more than 80%; and (4) a current ratio of not less than 100%. As of December 31, 2025 and 2024, GIOP BJ did not meet the above requirements; however, Industrial Bank had not declared the agreement in default as a result of the breach of the financial covenants, nor has it done so as of the date of this consolidated financial statement.

*Long-term loan*

 

<u>China Construction Bank</u> 

 

On March 8, 2024, Sunrise Guizhou obtained bank loan of RMB 100,000,000 from CCB Qianxinan Branch with an interest rate of 9.504% for a term from March 8, 2024 to March 8, 2026; On June 28, 2024, Sunrise Guizhou obtained bank loan of RMB 100,000,000 from CCB Qianxinan Branch for a term from June 28, 2024 to June 28, 2026. These loans were guaranteed by Mr. Haiping Hu, CEO and Chairman of the Board of Director, and Zhuhai Zibo. Sunrise Guizhou also pledged its buildings and land use rights of its manufacturing facilities to CCB.

 

On January 9, 2025, Sunrise Guizhou obtained a bank loan of RMB300,000,000 from CCB Qianxinan Branch with a variable interest rate of loan prime rate plus 0.7%, for a term from January 9, 2025 to January 9, 2039. The loan was for the construction of additional manufacturing facilities of Sunrise Guizhou. See liquidity risk in Note 2. This loan was guaranteed by Mr. Haiping Hu, Zhuhai Zibo, and Zhuhai Investment.

 

Although Sunrise Guizhou has been timely repaying the CCB in accordance with the respective terms of the loan agreements, Sunrise Guizhou didn't comply with the financial covenants under the loan agreements as of December 31, 2025 and 2024. Specifically, the financial covenants of the loan agreements required Sunrise Guizhou to maintain: (1) an asset liability ratio of not more than 70%; (2) a current ratio of not less than 100%; (3) contingent liabilities not exceeding the net assets; (4) profitability; (5) long-term investments not exceeding the net assets. For the years ended December 31, 2025 and 2024, the net loss of Sunrise Guizhou was $16,604,644 and $10,607,939, respectively. Therefore, Sunrise Guizhou did not meet the profitability requirement. In addition, Sunrise Guizhou did not meet the requirement of asset liability ratio, since the ratio was 90.83% and 78.22% as of December 31, 2025 and 2024, respectively. The Company obtained written consents for the waiver of the financial covenants on September 30, 2024 and December 8, 2025. CCB had not declared the agreement in default as a result of the breach of the financial covenants as the date of this consolidated financial statement.

 

<u>WeBank</u>

 

On April 26, 2024, the Company obtained a loan for RMB 900,000 from WeBank Co., Ltd. ("WeBank") with an interest rate of 9.504% for a term from April 26, 2024 to April 26, 2026. This credit loan was guaranteed by Ms. Huiyu Du, the former legal representative of Sunrise Guizhou.

 

**NOTE 18 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES**

 

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,** | **As of<br> December 31,** |
|  | **2025** | **2024** |
| Payroll and social security payable | $1593435 | $1307716 |
| Other tax payable | 203725 | 1565140 |
| Other payable | 357799 | 181668 |
| Staff payable | 131888 | 126906 |
| Litigation liabilities (Note 25) | 726580 | - |
| Others | 249559 | 209727 |
| **Total** | $3262986 | $3391157 |

---

 

**NOTE 19 – ADVANCE OF SUBSCRIPTION PAYMENT**

 

On December 31, 2024, the shareholders of Sunrise Guizhou entered into a capital increase agreement with Jieshou Xinyang Equity Investment Fund Partnership Enterprise (Limited Partnership) ("Xinyang Partnership"), pursuant to which, Xinyang Partnership agreed to subscribe for 10% of the shares of Sunrise Guizhou for a total consideration of RMB200,000,000. The payment is to be made in installments, contingent upon the fulfillment of certain conditions precedent for the capital increase, as determined by Xinyang Partnership. On January 17, 2025, Sunrise Guizhou received the first installment of the subscription proceeds of RMB50,000,000, or $6,956,522. On October 16, 2025, Sunrise Guizhou received the second installment of the subscription proceeds of RMB 20,000,000, or $2,782,609. On February 5, 2026, Sunrise Guizhou received the third installment of the subscription proceeds of RMB 40,000,000. The issuance cost directly associated with equity transaction was 3% of the subscription proceeds. As of December 31, 2025 and the date of this consolidated financial statement, the conditions precedent has not been met and therefore the advanced capital contributions, net of issuance cost, are classified as liabilities.

 

**NOTE 20 – TAXES**

 

***a. VAT***

 

The Company is subject to VAT and related surcharges in Mainland China for sales of graphite anode materials and providing member services and other in-depth services. The applicable VAT rate is 13% and 6% for general taxpayers and 3% for small-scale taxpayer. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold and services provided (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). VAT liability is recorded in the line item of accrued expenses and other current liabilities on the consolidated balance sheets. Under the commercial practice of Mainland China, the Company pays VAT based on tax invoices issued.

 

All of the tax returns of the Company have been and remain subject to examination by the Mainland China tax authorities for five years from the date of filing.

***b. Income tax***

*Cayman Islands* 

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains, or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the Government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. No stamp duty is payable in the Cayman Islands on the issue of shares by, or any transfers of shares of, Cayman Islands companies (except those which hold interests in land in the Cayman Islands). There are no exchange control regulations or currency restrictions in the Cayman Islands.

Payments of dividends and capital in respect of our ordinary shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our ordinary shares, as the case may be, nor will gains derived from the disposal of our ordinary shares be subject to Cayman Islands income or corporation tax.

*The United States*

The Company's subsidiary incorporated in the U.S. and is subject to federal income tax rate of 21%. Net operating losses incurred in taxable years beginning after December 31, 2017, may be carried forward indefinitely but are subject to an 80% taxable income limitation.

*Hong Kong* 

In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. From year of assessment of 2019/2020 onwards, Hong Kong profit tax rates are 8.25% on assessable profits up to HK$2,000,000, and 16.5% on any part of assessable profits over HK$2,000,000. However, the Company's HK subsidiary did not generate any assessable profits arising in or derived from Hong Kong for the fiscal years ended December 31, 2025, 2024 and 2023, and accordingly no provision for Hong Kong profits tax has been made in these periods.

*Mainland China*

The Company's subsidiaries are incorporated in Mainland China, and are subject to the Mainland China Enterprise Income Tax Laws ("EIT Laws") with the statutory income tax rate of 25% with the following exceptions.

In accordance with the implementation rules of EIT Laws, a qualified "High and New Technology Enterprise" ("HNTE") is eligible for a preferential tax rate of 15%. The HNTE certificate is effective for a period of three years. An entity could re-apply for the HNTE certificate when the prior certificate expires. SDH is eligible to enjoy a preferential tax rate of 15% from 2021 to 2023 to the extent it has taxable income under the EIT Law. Sunrise Guizhou is eligible to enjoy a preferential tax rate of 15% from 2024 to 2026 to the extent it has taxable income under the EIT Law.

For qualified small and low-profit enterprises, from January 1, 2023 to December 31, 2027, 25% of the first RMB 3.0 million of the assessable profit before tax is subject to the tax rate of 20%. For the years ended December 31, 2025, 2024 and 2023, some PRC subsidiaries are qualified small and low-profit enterprises as defined, and thus are eligible for the above preferential tax rates for small and low-profit enterprises.

The components of the income tax provision (benefit) were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Current** |  |  |  |
| Mainland China | $59 | $6009 | $228 |
| **Deferred** |  |  |  |
| Mainland China | (446) | (446) | (454) |
| **Total** | $(387) | $5563 | $(226) |

---

Loss before income taxes was attributable to the following geographic locations for the years ended December 31:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| Mainland China | $(18428196) | $(16127911) | $(26296232) |
| Others | (8231572) | (1847690) | (6624718) |
| **Loss before income taxes** | $(26659768) | $(17975601) | $(32920950) |

---

Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 2, the reconciliation of taxes at the Mainland China EIT rate to our income tax expense for the year ended December 31, 2025 was as follows:

---

| | | |
|:---|:---|:---|
|  | **Amount** | **Percent** |
| Mainland China EIT rate | $(6664942) | 25% |
| Foreign tax effects |  |  |
| &nbsp;&nbsp;&nbsp;Cayman Island |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statutory tax rate difference between Mainland China and Cayman Island | 238143 | (0.89)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation | 80597 | (0.30)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share subscription discount expenses | 1633734 | (6.13)% |
| &nbsp;&nbsp;&nbsp;Hong Kong |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statutory tax rate difference between Mainland China and Hong Kong | 35809 | (0.13)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in valuation allowances | 69512 | (0.26)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other jurisdiction | 2511 | (0.01)% |
| Effect of changes in rates enacted in the current period | 77600 | (0.29)% |
| Tax credits |  |  |
| &nbsp;&nbsp;&nbsp;Research and development tax credits | (289302) | 1.09% |
| &nbsp;&nbsp;&nbsp;HNTE tax rate credits | 1666203 | (6.25)% |
| Changes in valuation allowances | 1512384 | (5.69)% |
| Nontaxable or nondeductible items |  |  |
| &nbsp;&nbsp;&nbsp;Non-deductible expense | 53140 | (0.20)% |
| Effect of true up on net operating loss in the tax returns | 1352834 | (5.07)% |
| Effect of expired net operating loss | 231390 | (0.87)% |
| **Effective tax rate** | $(387) | $0.00% |

---

The reconciliation of taxes at the Mainland China EIT rate to our provision for (benefit from) income taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows:

---

| | | |
|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2024** | **2023** |
| Loss before income taxes | $(17975601) | $(32920950) |
| Mainland China EIT rate | 25% | 25% |
| Income taxes computed at statutory EIT rate | $(4493900) | $(8230238) |
| **Reconciling items:** |  |  |
| Effect of tax holiday and preferential tax rate | 1040003 | (338) |
| Effect of changes in tax rate | 2123753 | (1194103) |
| Effect of tax rates in foreign jurisdictions | 218737 | 1117727 |
| Effect of non-deductible share-based compensation | 243186 | 536450 |
| Effect of true up on net operating loss in the tax returns | 696285 | 687460 |
| Effect of non-deductible expense | 44535 | 6277 |
| Super deduction of qualified R&D expenditures | (231020) | - |
| Changes in valuation allowance | 363984 | 7076539 |
| **Income tax (benefit) expense** | $5563 | $(226) |
| **Effective tax rate** | (0.03)% | 0.00% |

---

Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 2, cash paid for income taxes during the year ended December 31, 2025 was as follows:

---

| | |
|:---|:---|
| Mainland China | $7847 |
| **Total** | $7847 |

---

<u>Deferred tax assets and liabilities</u>

Significant components of deferred tax assets and liabilities were as follows:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2024** |
| **Deferred tax assets** |  |  |
| Net operating loss carry forwards | $8403413 | $6893492 |
| Provision for expected credit loss | 2150488 | 1996852 |
| Finance lease liabilities | 50429 | 334895 |
| Impairment on inventory | 1435636 | 1204730 |
| Impairment of intangible assets | 423172 | 458576 |
| Impairment of long-term investment | 609090 | 583539 |
| **Deferred tax assets, gross** | 13072228 | 11472084 |
| Less: valuation allowance | (12768325) | (10693306) |
| **Total deferred tax assets, net** | $303903 | $778778 |
| **Deferred tax liabilities** |  |  |
| Finance lease right-of-use assets | $303903 | $778778 |
| Assets acquired in the asset acquisition | 197392 | 189551 |
| **Total deferred tax liabilities** | $501295 | $968329 |
| **Deferred tax assets, net** | $- | $- |
| **Deferred tax liabilities, net** | $197392 | $189551 |

---

The movement of valuation allowance was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2024** | **2023** |
| Balance at beginning of the year | $10693306 | $10605326 | $3936504 |
| Current year addition | 1581896 | 363984 | 7076539 |
| Foreign currency translation adjustments | 493123 | (276004) | (407717) |
| **Balance at end of the year** | $12768325 | $10693306 | $10605326 |

---

For entities incorporated in Mainland China, net operating loss can be carried forward for five years, while the net operating loss of HNTEs can be carried forward for ten years. As of December 31, 2025, the Company had net operating loss carrying forwards of $44,858,585 from the Company's PRC subsidiaries, which will expire by in calendar years 2026 through 2035, if not utilized. The graphite anode business was in a competitive environment for the year ended December 31, 2025. Considering the factors in graphite anode business, management believed that there was substantial doubt on realization of the benefits from these losses as they were not able to estimate if the business would start to make profits in the near future. In making as of such determination, the Company considered factors including (i) future reversals of existing taxable temporary differences, (ii) future taxable income exclusive of reversing temporary differences and carry forwards, and (iii) tax planning strategies. Therefore, the Company believes that it is more likely than not that the results of future operations will not generate sufficient taxable income to realize the deferred tax assets as of December 31, 2025 and 2024. Accordingly, as of December 31, 2025 and 2024, $12,768,325 and $10,693,306 valuation allowance has been provided, respectively. The following is a schedule of expiration of carry forward operating loss as of December 31, 2025:

---

| | |
|:---|:---|
| **For the years ending December 31,** | **Amount** |
| 2026 | $50998 |
| 2027 | 1213573 |
| 2028 | 670347 |
| 2029 | 3094098 |
| 2030 | 2433218 |
| 2031 | - |
| 2032 | 3531458 |
| 2033 | 8856396 |
| 2034 | 8340974 |
| 2035 | 16667523 |
| **Total** | $44858585 |

---

 

As of December 31, 2025, the Company had net operating loss carrying forwards of $511,057 from the Company's Hong Kong subsidiaries, which will be carried forward indefinitely to offset future profits of the Company's Hong Kong subsidiaries.

 

The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of December 31, 2025 and 2024, the Company did not have any unrecognized uncertain tax positions and the Company does not believe that its unrecognized tax benefits will change over the next twelve months. For the years ended December 31, 2025, 2024 and 2023, the Company did not incur any interest and penalties related to any potential underpaid income tax expenses.

For the Company's operating subsidiaries, as of December 31, 2025, the tax years ended December 31, 2020, through December 31, 2025 remain open for statutory examination by PRC tax authorities.

**NOTE 21 – RELATED PARTY BALANCE AND TRANSACTIONS**

The following is a list of related parties which the Company has transactions with:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Ningbo Zhuhai Investment Co., Ltd. ("Zhuhai Investment"), a company controlled by Mr. Haiping Hu.

(b) Bally Corp. ("Bally"), a company formerly controlled by Mr. Haiping Hu.

(c) Zhongna Times (Shenzhen) New Energy Technology Co., Ltd. ("Zhongna Times"), a company controlled by Mr. Haiping Hu.

(d) Shanghai Huiyang Investment Co. ("Shanghai Huiyang"), a
company controlled by immediate family members of Mr. Haiping Hu and a 5.40% shareholder of Sunrise Guizhou.

(e) Suzhou Investment, a company of which Mr. Haiping Hu is the CEO.

(f) Mr. Yong Sun, Director of Sunrise Guizhou.

(g) Mr. Wenwu Zhang, Director of Sunrise Guizhou.

(h) Mr. Jianfeng Zhu, General Manager, Director and a 14.19% shareholder
of Zhongna Times.

(i) Ms. Jing Ji, CEO of and a 46% shareholder of GMB Technology.

(j) Haicheng Shenhe, a 9.6451% shareholder of Sunrise Guizhou.

(k) Ms. Chao Liu, Chief Financial Officer of the Company.

(l) GMB Internet Technology Co., Ltd., one of the shareholders of the Company.

(m) GMB Business Communication Co., Ltd. one of the shareholders of the Company.

(n) GMB Enterprise Cooperation Development Co., Ltd., one of the shareholders of the Company.

(o) GMB Information Technology Co., Ltd., one of the shareholders of the Company.

(p) GMB Wisdom Sharing Platform Co., Ltd., one of the shareholders of the Company.

(q) GMB Technology Co., Ltd., one of the shareholders of the Company.

(r) GMB Project Incubation Services Co., Ltd., one of the shareholders of the Company.

(s) Guizhou Yilong New Area Industrial Development and Investment Co.,
Ltd., a 3.0864% shareholder of Sunrise Guizhou.

(t) Ms. Fangfei Liu, the spouse of Mr. Haiping Hu.

(u) Mr. Huiyu Du, the former legal representative of Sunrise Guizhou.

(v) Beijing Huatai Zhonghe Venture Capital Center (Limited Partnership)
("Huatai Zhonghe"), a limited partnership controlled by Mr. Shousheng Guo.

(w) Ningbo Meishan Bonded Port Zone Zhihai Yuncheng Investment Management Partnership Enterprise (Limited Partnership) ("Zhihai Yuncheng"), a limited partnership controlled by Mr. Haiping Hu.

&nbsp;&nbsp;&nbsp;&nbsp;(x) Shenzhen Zhuhai New Energy
 Co., Ltd. ("Shenzhen Zhuhai"), a company ultimately controlled by Mr. Haiping Hu.

***a.***  ***Due from related parties*** 

As of December 31, 2025 and 2024, the balances of amount due from related parties were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  |  | **As of December 31,** | **As of December 31,** |
|  |  | **2025** | **2024** |
| **Due from related parties** |  |  |  |
| Bally |  | $- | $5172 |
| Mr. Wenwu Zhang | (1) | - | 321949 |
| Zhongna Times | (2) | 71499 | - |
| Shenzhen Zhuhai | (5) | - | 150699 |
| Zhihai Yuncheng |  | - | 63588 |
| Mr. Yong Sun | (3) | 404279 | - |
| Mr. Jianfeng Zhu | (4) | 285996 | - |
| Others |  | 700 | 700 |
| Total |  | $762474 | $542108 |

---

(1) The balance as of December 31, 2024 represented the prepaid acquisition
consideration to purchase Mr. Wenwu Zhang's equity interest in Haicheng Shenhe, for which a full allowance for credit losses of
$326,957 was recorded for the year ended December 31, 2025.

(2) The Company loaned RMB 500,000, or $69,565, to Zhongna Times for its
operation for the year ended December 31, 2025. The balance from Zhongna Times as of December 31, 2025 was fully repaid on January 23,
2026. (3) The Company loaned RMB 3,725,000, or $518,261, to Mr. Yong Sun as a
staff advance for the year ended December 31, 2025. Mr. Yong Sun repaid RMB 897,835, or $124,916, for the year ended December 31, 2025.
The outstanding balance from Mr. Yong Sun as of December 31, 2025 was fully repaid in full by May 11, 2026.

(4) The Company loaned RMB 2,000,000, or $278,261, to Mr. Jianfeng Zhu
to support the operation of Zhong Times for the year ended December 31, 2025. The balance from Mr. Jianfeng Zhu as of December 31, 2025
was fully repaid in full by May 11, 2026.

(5) Shenzhen Zhuhai returned RMB 1,100,000, or $153,044, to the Company
for the year ended December 31, 2025.

***b.***  ***Due to related parties*** 

As of December 31, 2025 and 2024, the balances of amounts due to related parties were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  |  | **As of December 31,** | **As of December 31,** |
|  |  | **2025** | **2024** |
| **Due to related parties** |  |  |  |
| Ms. Jing Ji |  | $19841 | $19009 |
| Shanghai Huiyang | (2) | - | 235001 |
| Haicheng Shenhe |  | 2618 | 1029 |
| Zhuhai Investment | (1)/(2) | 2136309 | 3442663 |
| Zhongna Times | (3) | - | 493198 |
| Others |  | 5909 | 5905 |
| Total |  | $2164677 | $4196805 |

---

(1) The balance as of December 31, 2025 represented the loans from Zhuhai Investment, with the annual interest rate of 4% and due on December 31, 2026.

(2) Mr. Haiping Hu's affiliated companies loaned RMB 1,600,000, or
$222,609, to the Company for the year ended December 31, 2025; The Company repaid the loan of RMB 14,780,000, or $2,056,348, to Mr. Haiping
Hu's affiliated companies for the year ended December 31, 2025. The interest accrued was RMB 1,382,627, or $192,366, for the
year ended December 31, 2025.

(3) Zhongna Times loaned RMB 5,000,000, or $695,652, to the
Companies for the year ended December 31, 2025; The Company repaid the loan of RMB 8,600,000, or $1,196,522, to Zhongna Times for the
year ended December 31, 2025.

***c.***  ***Related party transactions*** 

<u>Related party purchase</u>

The Company purchased consulting services for knowledge sharing and enterprise business from Zhuhai Investment. For the years ended December 31, 2025, 2024 and 2023, the consulting fee to Zhuhai Investment was $nil, $12,376 and $nil, respectively.

The Company purchased maintenance services for the Company's APP related to knowledge sharing and enterprise business from Zhihai Yuncheng. For the years ended December 31, 2025, 2024 and 2023, the maintenance fee to Zhihai Yuncheng were $59,065, $32,776 and $nil, respectively.

The Company purchased raw materials for graphite anode material manufacturing from Haicheng Shenhe. For the years ended December 31, 2025, 2024 and 2023, total purchases were $1,330, $nil, and $221,207, respectively.

***d.***  ***Related party guarantee*** 

On August 4, 2022, Sunrise Guizhou entered into a line of credit financing contract with Bank of Guizhou for a revolving line of credit of RMB 20,000,000, or $2,859,962, for a term from August 4, 2022 to August 3, 2023. Pursuant to the contract, Mr. Haiping Hu and Guizhou Yilong New Area Industrial Development and Investment Co., Ltd., the non-controlling shareholder of Sunrise Guizhou, were the guarantor of the revolving line of credit.

In July 2022, Sunrise Guizhou entered into purchase agreements with original shareholders of Sunrise to acquire 100% of Sunrise Tech's assets and equity ownership for a gross consideration of RMB 40,000,000, among of which RMB 10,000,000 and RMB 5,000,000 were paid in July 2022 and August 2023, respectively. For the year ended December 31, 2024, the Company and the original shareholders agreed that the RMB 5,000,000 consideration due on August 20, 2024 would be offset by the unpaid RMB 8,960,000 land use rights and property taxes and their associated fines and late payment fees prior to the asset acquisition. For the year ended December 31, 2025, the Company had paid RMB 6,430,000 to the original shareholders of Sunrise Tech. The unpaid consideration RMB 10,000,000, or $1,429,981 will be paid in 2026. The consideration payable is guaranteed by Mr. Haiping Hu. See Note 13.

On September 22, 2022, Sunrise Guizhou entered into a financing contract into an eighteen-month loan with Far East to obtain a loan of RMB 20,000,000, or $2,859,962, for a term from September 22, 2022 to March 21, 2024; On November 4, 2022, Sunrise Guizhou entered into a sales and leaseback financing contract for a three-year financing with Ronghe to obtain an amount of RMB 40,000,000, or $5,719,924, for a term from November 10, 2022 to November 9, 2025; On February 7, 2023, Sunrise Guizhou entered into a sales and leaseback financing contract for a two-year financing with Zhongguancun to obtain an amount of RMB 20,000,000, or $2,859,962, for a term from February 7, 2023 to February 6, 2025; On October 27, 2023, Sunrise Guizhou entered into a sales and leaseback financing contract for a two-year financing with Guomao for RMB 15,000,000, or $2,144,971, for a term from October 27, 2023 to October 26, 2025. On October 14, 2024, Sunrise Guizhou entered into a sales and leaseback financing contract for a thirty two-month financing with Risheng for RMB 6,000,000, or $857,989, for a term from October 14, 2024 to June 15, 2027. Pursuant to these financing contracts, Mr. Haiping Hu, CEO and Chairman of the Board of Director, was the guarantor for all of such debts. See Note 16.

On May 16, 2023, Sunrise Guizhou entered into a credit facility agreement with Everbright Bank to obtain a revolving line of credit for up to RMB 100,000,000, or $14,299,810, for a term from June 1, 2023 to May 31, 2024. For the year ended December 31, 2024 and 2023, the Company had been able to utilize the line of credit for RMB 50,000,000, or $7,149,905, with interest rates from 2% to 4.5% which had matured from June 4, 2024 to September 25, 2024, collateralized by the pledge of land use right of Sunrise Tech for RMB 50,000,000. This revolving line of credit loan was guaranteed by Mr. Haiping Hu, Ms. Fangfei Liu and Ms. Huiyu Du. See Note 17.

On January 18, 2023, Sunrise Guizhou entered into a credit facility agreement with Post Bank to obtain revolving line of credit for fund up to RMB 30,000,000, or $4,289,943, for a term from January 19, 2023 to January 18, 2031. For the year ended December 31, 2024 and 2023, the Company utilized the line of credit with Post Bank for RMB 28,300,000, or $4,046,846, which had matured from July 2023 to April 2024. In March 2024, the Company early repaid the long-term loan. This revolving line of credit loan was guaranteed by Mr. Haiping Hu. See Note 17.

On June 13, 2023, Sunrise Guizhou entered into a finance lease agreement with Chongqing Xingyu Finance Lease Co., Ltd. to lease graphite anode materials production facilities. The principal of the contract was RMB 29,257,844, or $4,183,816, with an interest rate of 5.8%. Payment due on such finance lease payment was guaranteed by Mr. Haiping Hu and Ms. Fangfei Liu.

On October 26, 2023, Sunrise Guizhou entered into a three-year debt arrangement with SPD Bank to obtain line of credit of up to RMB 50,000,000, or $7,149,905, for a term from November 17, 2023 to November 17, 2026. The Company pledged its intellectual property and patent for the line of credit. Sunrise Guizhou utilized the line of credit by issuing banker's acceptance notes up to RMB 20,000,000, or $2,859,962 from SPD. Pursuant to the banker's acceptance note contract, the Company was obliged to deposit fifty percent of the note payable amount issued as restricted cash in the designated bank account in SPD Bank. Therefore, the line of credit for issuance of acceptance note was RMB 10,000,000, or $1,429,981. As of December 31, 2025, the banker's acceptance note was RMB 8,770,472, or $1,254,161 and the deposit for commercial note issuance was RMB 4,710,236, or $673,555. Other than the pledge of the Company's intellectual property and patents, the otherwise unsecured amount of the banker's acceptance note, which was RMB 4,060,236, or $580,606, was also guaranteed by Mr. Haiping Hu.

On March 8, 2024, Sunrise Guizhou obtained a bank loan of RMB 100,000,000, or $14,299,810 from CCB Qianxinan Branch with an interest rate of 9.504% for a term from March 8, 2024 to March 8, 2026; On June 28, 2024, Sunrise Guizhou obtained a bank loan of RMB 100,000,000, or $14,299,810, from CCB Qianxinan Branch for a term from June 28, 2024 to June 28, 2026. These loans were guaranteed by Mr. Haiping Hu. See Note 17.

On April 26, 2024, the Company obtained a loan for RMB 900,000, or $128,698, from WeBank with an interest rate of 9.504% for a term from April 26, 2024 to April 26, 2026. This credit loan was guaranteed by Ms. Huiyu Du, the former legal representative of Sunrise Guizhou. See Note 17.

On June 19, 2024, GIOP BJ entered into a line of credit facility agreement with Industrial Bank to obtain revolving line of credit of fund up to RMB 7,000,000, or $1,000,987. On July 23, 2024, GIOP BJ obtained a loan for RMB 7,000,000 with an interest rate of one-year loan prime rate plus 0.05% for a term from August 29, 2024 to August 28, 2025. On June 25, 2025, Sunrise Guizhou repaid the loan in full and renewed the line of credit loan for RMB 7,000,000 with an interest rate of one-year loan prime rate minus 0.2% for a term from June 26, 2025 to June 25, 2026. This loan was guaranteed by Mr. Haiping Hu and Ms. Fangfei Liu. See Note 17.

On July 31, 2024, Sunrise Guizhou entered into a banker's acceptance note contract with Everbright Bank for issuing banker's acceptance note to the suppliers of Sunrise Guizhou. Pursuant to the contract, the Company was obliged to deposit fifty percent of the note payable amount issued as restricted cash in the designated bank account in Everbright Bank. As of December 31, 2025 and 2024, the deposit for the note issuance was $1,804,798 and $6,853,541, respectively. Pursuant to the contract, Mr. Haiping Hu and Ms. Fangfei Liu were the guarantors of the unsecured commercial notes for $2,707,198 and $6,853,541 as of December 31, 2025 and 2024, respectively.

On January 9, 2025, Sunrise Guizhou obtained a bank loan of RMB300,000,000, or $42,899,429, from CCB Qianxinan Branch with a variable interest rate of the loan prime rate plus 0.7%, for a term from January 9, 2025 to January 9, 2039. The loan was guaranteed by Mr. Haiping Hu, Zhuhai Zibo, and Zhuhai Investment. See Note 17.

On March 27, 2025, Sunrise Guizhou entered into a loan agreement for RMB29,000,000, or $4,146,945, with an interest rate of 4% for a term from March 31, 2025 to March 30, 2026. This credit loan was guaranteed by Mr. Haiping Hu and Ms. Fangfei Liu.

**NOTE 22 – REDEEMABLE NON-CONTROLLING INTERESTS**

On June 13, 2022, Guizhou Province New Kinetic Industry Development Fund Partnership ("New Kinetic Partnership") subscribed 22.8395% of the preferred shares of Sunrise Guizhou, at total cash consideration of RMB 200,000,000, or $29,467,667.

In addition to the preferential rights in dividend and liquidation, the New Kinetic Partnership has a right to require Sunrise Guizhou and its shareholders to redeem New Kinetic Partnership's shares, at any time and from time to time on or after the date of the earliest to occurrence of the certain events, including but not limited to: (i) Sunrise Guizhou fails to complete a qualified initial public offering ("IPO") thirty-six months post-closing; (ii) Sunrise Guizhou fails to complete the profit commitment for consecutive two years; (iii) Sunrise Guizhou's conviction of breaches or violation of criminal laws and/or applicable regulations which may have a material adverse effect on the Company's business; (iv) the occurrence of the change of business of Sunrise Guizhou; (v) the net assets of Sunrise Guizhou is less than the net assets as of the date of the investment; (vi) the account receivable of Sunrise Guizhou exceeds RMB 200,000,000 and the aging of the account receivable is over five months; and (vii) Sunrise Guizhou fails to complete manufacturing infrastructure construction by December 31, 2023.

The redemption value on the investment by the New Kinetic Partnership is higher of (i) 100% of the investment amount plus the aggregated amount of 65% of the profit commitment attributable to New Kinetic Partnership for the following six years post-closing multiplied by the days elapsed divided by (6\*365).

On June 18, 2024, the New Kinetic Partnership amended the terms of the investment agreement to waive their preferential rights in dividend and liquidation, and remove the redemption events related to completion of an IPO and meeting performance commitment. In addition, the Company, including Zhuhai Zibo, the controlling shareholder of Sunrise Guizhou, is excluded from the redemption obligor and certain shareholders of Sunrise Guizhou become the sole obligor of the redemption. As a result of the amendments, the Company reclassified the equity interest held by New Kinect Partnership from mezzanine equity to non-controlling interests.

The movement of redeemable non-controlling interests was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| Balance at beginning of the year | $&nbsp;&nbsp;&nbsp;&nbsp; - | $34543186 | $31228329 |
| Accretion to redemption value of redeemable non-controlling interests | - | 1792027 | 3920454 |
| Reclassification of the redeemable non-controlling interests to permanent equity | - | (35527113) |  |
| Foreign exchange effect | - | (808100) | (605597) |
| Balance at end of the year | $- | $- | $34543186 |

---

**NOTE 23 – SHAREHOLDERS' EQUITY**

**Ordinary shares**

EPOW was established under the laws of the Cayman Islands on February 22, 2019. The authorized number of ordinary shares was 500,000,000 with par value of $0.0001 per share. On February 22, 2019, EPOW issued 999,999 new shares to the controlling shareholders and one share to Osiris International Cayman Limited at par $0.0001 per share. On August 8, 2019, EPOW issued an aggregate of 27,000,000 ordinary shares at a price of US$0.0001 per share with total consideration of US$2,800, pro-rata to the shareholders of EPOW as of such date.

On April 2, 2020, the shareholders of the Company unanimously authorize a one-for-0.88 reverse stock split of the Company's outstanding and issued ordinary shares (the "First Reverse Stock Split"), which became effective on April 3, 2020. Any fractional ordinary share that would have otherwise resulted from the First Reverse Stock Split were rounded up to the nearest full share. The First Reverse Stock Split did not change the par value of the ordinary shares and had no effect on the number of authorized ordinary shares of the Company. As a result of the First Reverse Stock Split, 28,000,000 ordinary shares that were issued and outstanding at April 3, 2020 were reduced to 24,640,000 ordinary shares (taking into account the rounding of fractional shares).

On April 24, 2020, the shareholders of the Company unanimously authorize another one-for-0.68 reverse stock split of the Company's issued and outstanding ordinary shares (the "Second Reverse Stock Split"), which became effective on April 24, 2020. Any fractional ordinary share that would have otherwise resulted from the Second Reverse Stock Split were rounded up to the nearest full share. The Second Reverse Stock Split did not change the par value of the ordinary shares and had no effect on the number of authorized ordinary shares of the Company. As a result of the Second Reverse Stock Split, 24,640,000 ordinary shares that were issued and outstanding at April 24, 2020 was reduced to 16,800,000 ordinary shares (taking into account the rounding of fractional shares).

On February 11, 2021, the Company closed its initial public offering ("IPO") on Nasdaq. The Company offered 6,720,000 ordinary shares, par value $0.0001 per share, at a price of $4.00 per share and received total gross proceed of $26,880,000. Besides, the Company offered 1,008,000 ordinary shares, par value $0.0001 per share, as part of the representative of the underwriters' over-allotment option, at a price of $4.00 per share and received total gross proceed of $4,032,000. Total net proceeding amounted to $27,504,639 after deducting underwriting discounts and other related expenses.

***Share capital increase and re-designation***

On February 8, 2024, the 2023 annual general meeting of shareholders (the "Meeting") of the Company was held. At the Meeting, the shareholders of the Company approved the increase and re-designation of the Company share capital.

The Company increased its authorized share capital from US$50,000 consisting of 500,000,000 ordinary shares of par value $0.0001 each to $500,000 consisting of 5,000,000,000 ordinary shares of par value US$0.0001 each (the "Share Capital Increase").

Immediately following the Share Capital Increase, the Company re-designated and re-classified its authorized share capital so that the afore-mentioned authorized share capital of $500,000 comprise 3,500,000,000 Class A ordinary shares of par value US$0.0001 each and 1,500,000,000 Class B ordinary shares of par value US$0.0001 each. Pursuant to the Second Amended and Restated Memorandum and Articles of Association of the Company, on a poll at any general meeting every shareholder shall have one (1) vote for every Class A ordinary share and twenty (20) votes for every Class B ordinary share held.

The Company believes that the re-designation should be accounted for on a retroactive basis pursuant to ASC 260. The Company has retroactively restated all shares data for all periods presented.

***Share consolidation***

On September 16, 2024, the extraordinary general meeting of shareholders of the Company was held. At the extraordinary general meeting, the shareholders adopted an ordinary resolution on consolidation of every ten (10) Class A and Class B ordinary shares with a par value of US$0.0001 each into one (1) Class A and Class B ordinary share with a par value of US$0.001 each. The share consolidation is conditional upon the approval of the Board of Directors of the Company in its sole discretion, with effect as of the date the Board may determine (the "Effective Date"). The Effective Date must be a date within twelve months following the date of this ordinary resolution. The share consolidation is not yet effective as of the date of the Company's consolidated financial statements.

***2024 subscription agreement and subscription receivable***

On October 18, 2024, the Company entered into a subscription agreement with Chong Ee Chang, a Malaysian citizen. Pursuant to the subscription agreement, Chong Ee Chang agreed to subscribe for and purchase from the Company, and the Company agreed to issue and sell to Chong Ee Chang an aggregate of 103,300 Class A ordinary shares of the Company, par value US$0.0001 per share, for an aggregate purchase price of $100,000. The Company received the subscription proceeds on February 25, 2025.

***2025 subscription agreement and share subscription discount expenses***

On July 31, 2025, the Company entered into a subscription agreement with Cloud Alliance Inc. Pursuant to the subscription agreement, the Company agreed to issue and sell to Cloud Alliance Inc. 1,000,000 Class A ordinary shares for $550,000. The net proceeds from the subscription was $469,940, after deducting the issuance cost of $80,060. The purchase price for each share was $0.55, which was lower than the closing share price $0.815 as of the offering closing on September 23, 2025. Such difference was recorded as an expense in the amount of $265,000.

On August 8, 2025, the Company entered into a subscription agreement with Fibonacci Capital, Inc. Pursuant to the subscription agreement, the Company agreed to issue and sell to Fibonacci Capital, Inc. 3,000,000 Class A ordinary shares for $1,650,000. The proceeds from the subscription was $1,630,095, after deducting the issuance cost of $19,905. The purchase price for each share was $0.55, which was lower than the closing share price $1.33 as of the offering closing on October 3, 2025. Such difference was recorded as an expense in the amount of $2,340,000.

On November 6, 2025, the Company entered into several subscription agreements with three purchasers. Pursuant to the subscription agreement, the Company agreed to issue and sell to with three purchasers for an aggregate of 7,000,000 Class A ordinary shares and warrants to purchase up to 3,500,000 Class A Ordinary Share for $5,600,000.

The proceeds from the share subscription and warrant were $5,543,127, after deducting the issuance cost of $56,873. The proceeds received in the subscription were allocated between Class A Ordinary Share and the warrants on a relative fair value basis.

When the warrants were taken into consideration and after a portion of the issuance price was allocated to the warrants, the issuance price of Class A Ordinary Share in this offering decreased to $0.669, which was lower than the closing share price $1.23 as of the offering closing on November 19, 2025. Such difference was recorded as an expense in the amount of $3,929,936.

**Warrant**

In conjunction with the issuance of 7,000,000 Class A Ordinary Shares to three purchasers that closed on November 19, 2025, the Company also issued to the purchasers a stock purchase warrant providing for the rights to purchase 3,500,000 Class A Ordinary Shares of the Company at $0.80 per share. The stock purchase warrant will expire one year from the date of grant. The fair value and the allocated value of the warrants were $1,692,423 and $919,936 at the grant date, respectively. After the deduction of issuance cost of $9,343 allocated to the warrant, the carrying amount of the warrant was $910,593. The fair value of the warrant was estimated using the Black-Scholes option pricing model with the following assumptions:

---

| | |
|:---|:---|
| Expected volatility | 60.19% |
| Risk-free interest rate | 3.70% |
| Expected dividend | - |
| Contractual life of the warrant | 1 |

---

**Share-based compensation**

The Company adopted the 2022 Stock Incentive Plan for the grant of restricted share units to employees, directors and non-employees to provide incentive for their services. The maximum number of ordinary shares that may be delivered pursuant to compensatory awards granted to the employees, directors and non-employees under the 2022 Stock Incentive Plan should not exceed 3,679,200 ordinary shares of par value $0.0001 per share.

On February 8, 2024, the 2023 annual general meeting of shareholders of the Company was held. At the Meeting, the shareholders of the Company approved the 2024 Employee Share Incentive Plan. The Company adopted the 2024 Employee Share Incentive Plan for the grant of restricted share units to employees, directors and non-employees to provide incentive for their services. The maximum number of ordinary shares that may be delivered pursuant to compensatory awards granted to the eligible persons under the 2024 Stock Incentive Plan may not exceed 2,613,000 ordinary shares of par value $0.0001 per share. The Company had not granted any compensatory awards under the 2024 Employee Share Incentive Plan to its employees, directors and non-employees as of the date of the consolidated financial statements.

On March 1, 2025, the Board of Directors of the Company approved the 2025 Employee Share Incentive Plan, in which certain restricted share units or share option would be granted to the Company's directors, employees and consultants to provide incentive for their services. The maximum number of ordinary shares that may be delivered pursuant to compensatory awards granted to the eligible persons under the 2025 Stock Incentive Plan may not exceed 4,000,000 ordinary shares of par value $0.0001 per share. 2025 Employee Share Incentive Plan is subject to shareholders' approval by an ordinary resolution at the annual general meeting.

The Company recorded share-based compensation expenses of $322,386, $972,743 and $2,170,801 for the years ended December 31, 2025, 2024 and 2023, respectively. The following table sets forth the allocation of share-based compensation expenses:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| Cost of revenues | $543 | $1651 | $4617 |
| Selling expenses | 2823 | 8592 | 19784 |
| General and administrative expenses | 319020 | 968110 | 2138978 |
| Research and development expenses | - | (5610) | 7422 |
| Total | $322386 | $972743 | $2170801 |

---

<u>Restricted share units</u>

On August 26, 2022, the Company granted 3,334,200 restricted share units to its directors and employees under 2022 Stock Incentive Plan. 25% of the restricted share units were immediately vested on August 26, 2022. 75% of the restricted share units will be vested in three years with equal yearly installments after August 26, 2022. The grant date fair value of the restricted share units was $2.00 per share, which was the closing price of the Company's ordinary share on NASDAQ on August 26, 2022. This grant resulted in a total share-based compensation of $6,668,400 to be recognized ratably over the requisite service period of 3 years.

A summary of the restricted shares units' activities was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Number of<br> restricted<br> share units<br> outstanding** | **Weighted<br> average<br> grant date<br> fair value** | **Aggregate<br> intrinsic<br> value** |
| Restricted share units outstanding as of January 1, 2023 | 2500650 | 2.00 | 6826775 |
| Vested | (779800) | 2.00 |  |
| Forfeited | (228750) | 2.00 |  |
| Restricted share units outstanding as of December 31, 2023 | 1492100 | 2.00 | 1611468 |
| Vested | (742300) | 2.00 |  |
| Forfeited | (7500) | 2.00 |  |
| Restricted share units outstanding as of December 31, 2024 | 742300 | 2.00 | 640976 |
| Vested | (742300) | 2.00 |  |
| Restricted share units outstanding as of December 31, 2025 | - | - | - |

---

The weighted average grant date fair value of restricted share units granted during the years ended December 31, 2025, 2024 and 2023 were $2.00, $2.00 and $2.00, respectively. The total fair value of restricted share units vested during the years ended December 31, 2025, 2024 and 2023 were $1,484,600, $1,484,600, and $1,559,600 respectively.

The Company recognized compensation expense over the requisite service period for each separately vesting portion of the award as if the award is in substance, multiple awards. The Company recorded share-based compensation expenses relating to restricted share units of $322,386, $972,743 and $2,170,801 for the year ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, there were no unrecognized compensation expenses relating to nonvested shares.

 ****

 ****

**Non-controlling interests**

Non-controlling interests consist of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2024** |
| GMB (Beijing) | $(4730) | $2598 |
| GMB Culture | (3357) | (418) |
| Sunrise Tech | (245687) | (216195) |
| GMB Consulting | 12274 | 12695 |
| Shidong Cloud | 36679 | 37952 |
| Sunrise Guxian | (199262) | (178849) |
| Sunrise Chenhui | (94226) | (74081) |
| GMB Technology | (197757) | (192638) |
| Alchemistica | (2797) | - |
| Sunrise Anhui | (62141) | - |
| Innovation Research | (16493) | - |
| Sunrise Guizhou | 28773654 | 38167880 |
| **Total** | $27996157 | $37558944 |

---

Sunrise Guizhou was established by Zhuhai (Zibo) Investment and five other companies in November, 2021. Shidong Cloud was established by GIOP BJ and Beijing Yunqianyi Information Technology Co., Ltd. ("Yunqianyi") in December 2022. 75% shares of Shidong Cloud were held by GIOP BJ and 25% of shares was held by Yunqianyi.

Sunrise Guxian was established by Zhuhai Guizhou and seven other companies in April, 2022. Sunrise Chenhui was established by Sunrise Tech on March 25, 2024.

EPOW and SDH New Energy entered into a joint venture agreement with Kekecely Ltd and Simple Cloud Technology to establish Alchemistica Inc. on August 5, 2025.

For the years ended December 31, 2023, the non-controlling shareholders made capital contributions of $3,910,897 to Sunrise Guizhou.

For the year ended December 31, 2024, GMB (Hangzhou) acquired 1.45% non-controlling interests in Sunrise Guizhou from Sunrise Guizhou's non-controlling shareholders for a consideration of $65,751.

For the year ended December 31, 2024, the Company reclassified the redeemable non-controlling interest of $35,527,113 held by New Kinect Partnership from mezzanine equity to non-controlling interests due to the extinguishment of the preferred shares. See Note 22.

The actual capital contributions made by the Company and the non-controlling shareholders for the years ended December 31, 2025, 2024 and 2023 had no effect on the Company's percentage of interest in its subsidiaries and VIE's subsidiaries.

**Statutory reserves**

In accordance with the Regulations on Enterprises of PRC, the Company's subsidiaries, GIOP BJ, VIE and VIE's subsidiaries in the PRC are required to provide for statutory reserves, which are appropriated from net profit as reported in the Company's PRC statutory accounts. They are required to allocate 10% of their after-tax profits to fund statutory reserves until such reserves have reached 50% of their respective registered capital. These reserve funds, however, may not be distributed as cash dividends.

As of December 31, 2025 and 2024, the statutory reserves of the Company's subsidiaries, GIOP BJ, the VIE and VIE's subsidiaries in the PRC have not reached 50% of their respective registered capital. As of December 31, 2025 and 2024, the balances of the statutory reserves were $2,481,963 and $2,477,940, respectively.

**Restricted net assets**

 ****

The Company's PRC subsidiaries and the VIE and VIE's subsidiaries are restricted in their ability to transfer a portion of their net assets, equivalent to their statutory reserves and their share capital to the Company in the form of loans, advances, or cash dividends. The payment of dividends by entities organized in China is subject to limitations, procedures, and formalities. Regulations in the PRC currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China. As of December 31, 2025 and 2024, the statutory reserves and the share capital amounted to $2,481,963 and $2,477,940, respectively.

**NOTE 24 – LOSS PER SHARE**

On February 8, 2024, the Company adopted dual class ordinary share structure. Pursuant to the Second Amended and Restated Memorandum and Articles of Association of the Company, at any general meeting every Member shall have one (1) vote for every Class A ordinary share and twenty (20) votes for every Class B ordinary share. Each Class B ordinary share shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share, at the office of the Company or any transfer agent for such shares, into one fully paid and non-assessable Class A ordinary share. Holders of Class A ordinary shares and Class B ordinary shares have the same rights, except for voting rights and conversion rights. Therefore, the two-class method of computing the loss per share is not applicable.

Basic and diluted loss per ordinary share is computed using the weighted average number of ordinary shares outstanding during the year. The Company has determined that the redeemable non-controlling interests are participating securities as the preferred shares participate in retained earnings of Sunrise Guizhou.

The Company treats the entire measurement adjustment to redemption value of the redeemable non-controlling interest under ASC 480-10-S99-3A as being akin to a dividend, which affected in the calculation of loss available to ordinary shareholders of the Company used in the EPS calculation.

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Numerator:** |  |  |  |
| Net loss | $(26659381) | $(17981164) | $(32920724) |
| Less: accretion to redemption value of redeemable non-controlling interests | - | 1792027 | 3920454 |
| &nbsp;&nbsp;&nbsp;foreign currency effect on redemption value of redeemable non-controlling interests | - | (808100) | (605597) |
| &nbsp;&nbsp;&nbsp;net loss attributable to non-controlling interests | (10023801) | (6204728) | (8688144) |
| Net loss attributable to ordinary shareholders | $(16635580) | $(12760363) | $(27547437) |
| **Denominator:** |  |  |  |
| Weighted average number of shares outstanding – basic and diluted | 29043280 | 26404589 | 25622195 |
| Loss per share – basic and diluted | (0.57) | (0.48) | (1.08) |

---

The potentially dilutive securities that were not included in the calculation of dilutive net loss per share in those periods where their inclusion would be anti-dilutive include (i) restricted share units of 128,804, 184,133 and 813,609, and (ii) warrants of 149,028, nil and nil for the years ended December 31, 2025, 2024 and 2023, respectively.

**NOTE 25 – COMMITMENTS AND CONTINGENCIES**

***<u>Contingencies</u>***

The Company may from time to time be involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The following are legal proceedings for the fiscal year ended December 31, 2025 for which the Company has determined material.

On March 17, 2025, Beijing Xindahang Technology Co., Ltd. ("Xindahang") brought a claim against Sunrise Guizhou in the Daxing's People's Court of Beijing City, alleging breach of contract arising from Sunrise Guizhou's alleged failure to pay financial advisory service fees of RMB2,145,000, or $306,731. The financial advisory service was associated with Sunrise Guizhou's share issuance to Xinyang Partnership and the fee was 3% of the total proceeds received. On December 26, 2025, a judgment was made by the Court, which ruled in Xindahang's favor. Sunrise Guizhou filed an appeal with Beijing Second Intermediate People's Court on January 7, 2026. On April 30, 2026, the court made the decision that the appeal was rejected and the original judgement was upheld.

On August 22, 2025, the supplier of Sunrise Guizhou, Hubei Jinhua New Material Technology Co., Ltd. ("Hubei Jinhua") brought a claim for a breach of contract against Sunrise Guizhou in the Xianfeng's People's Court of (the "Hubei Province Court"), alleging that Sunrise Guizhou failed to pay the goods purchased with an aggregated price of RMB20,541,007, or $2,867,414. RMB20,978,100, or $2,928,430 in a bank account of Sunrise Guizhou was frozen by Hubei Jinhua for the unpaid purchase price, its interests, legal fees, and litigation charges. As of the date of this consolidated financial statement, the freeze on the bank account has been lifted. On November 27, 2025, a judgment was made by the Hubei Province Court, which ruled in Hubei Jinhua's favor. On January 23, 2026, Sunrise Guizhou appealed to the Enshi Tujia and Miao Autonomous Prefecture Intermediate People's Court. On March 4, 2026, Sunrise Guizhou's appeal was rejected and the original judgment was upheld. Sunrise Guizhou has paid Hubei Jinhua as of the date of this consolidated financial statement, and the freeze on the bank account has been lifted.

On September 8, 2025, Zibo Caijin Holding Group Co., Ltd. ("Zibo Caijin") brought a civil claim against the VIE in Zhangdian District People's Court of Zibo City ("Zhangdian District Court"), Shandong Province, alleging that the VIE failed to relocate its address to Zibo City and should return the government relocation subsidy and its interest for a total amount of RMB 23,813,452, or $3,405,278. Zibo Caijin also alleged that Mr. Haiping Hu and Zhuhai Investment should assume joint and several liability pursuant to the guaranty. The Company disputed the Zibo Caijin's claim, as the VIE has been relocated to Zibo City and registered with the local bureau. No judgment has been made by Zhangdian District Court as of the date of this consolidated financial statement. The VIE's portion in the investment of Jiazhong and Jinshuibanlv had been frozen by Zibo Caijin on January 19, 2026 for a period of three years. The Company cannot predict the outcome or impact from the foregoing proceeding.

On September 29, 2025, Sunrise Guizhou brought a civil claim in Anlong County People's Court against Ms. Huiyu Du, the former legal representative of Sunrise Guizhou, for a loss of RMB 43,930,640, or $6,281,998, that resulted from her misconduct and decision-making mistakes during her employment. Regarding the former management officials' misconduct, Sunrise Guizhou also filed a criminal complaint with the local public security authorities. On February 9, 2026, the case was accepted by the Anlong County Public Security Bureau. Since the case was suspected of involving a criminal offense and had been accepted by the Anlong County Public Security Bureau for investigation, the Anlong County People's Court made the decision to dismiss the lawsuit on April 20, 2026. This case is still under criminal investigation as of the date of this consolidated financial statement. Sunrise Guizhou intends to vigorously claim its rights in these matters; however, the Company cannot predict the outcome or impact from such proceedings.

On November 17, 2025, Zibo Caijin brought another civil claim against the VIE in Zhangdian District People's Court of Zibo City, Shandong Province, alleging that the VIE should compensate Zibo Caijin's losses by returning the consultation service revenue of RMB 50,000,000, or $7,149,905. The consultation revenue was associated with services provided to Zibo Caijin on investment referrals, initial public offering consultations, investment and financing consultation services during the fiscal year ended December 31, 2020. Zibo Caijin also alleged that Mr. Haiping Hu and Zhuhai Investment should assume joint and several liability, as Mr. Haiping Hu and Zhuhai Investment guaranteed that the VIE and its subsidiaries in Zibo City would be able to pay local taxes for an aggregate amount of RMB 50,000,000 from the year 2021 to 2026. The VIE disputed Zibo Caijin's claim, as Zibo Caijin had acknowledged the services and confirmed the receipt of the services in writing during the year 2020. The title to the VIE's building, with a cost of RMB 19,519,182, or $2,791,206, had been frozen by Zibo Caijin and the VIE is prohibited from transferring the title commencing on January 19, 2026 for a period of three years. No judgement has been made by the Zhangdian District People's Court as of the date of this consolidated financial statement. The Company cannot predict the outcome or impact from the foregoing proceeding.

In addition to the aforementioned lawsuits, the Company is also a party to several legal proceedings or claims that the Company believes are immaterial. Litigation liabilities in an aggregate amount of $726,580 with respect to such legal proceedings and claims have been recorded in accrued expenses and other current liabilities as of December 31, 2025. The outcomes of such legal proceedings cannot be predicted as of the date of this consolidated financial statement and the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity.

**NOTE 26 – SEGMENT REPORTING**

ASC 280, "Segment Reporting", establishes standards for reporting information about operating segments on a basis consistent with the Company's internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company's business segments.

In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker ("CODM") and included within each reported measure of a segment's profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment's profit or loss in assessing segment performance and deciding how to allocate resources. The Company adopted this ASU on December 31, 2024 and the adoption of the ASU does not have a material effect on its consolidated financial statements.

The Company uses the management approach to determine reportable operating segments. The management approach considers the internal organization and reporting used by the Company's CODM for making decisions, allocating resources and assessing performance. The Company's CODM has been identified as the CEO, who reviews consolidated results when making decisions about allocating resources and assessing the performance of the Company.

Based on the management's assessment, the Company determined that it had two operating segments and therefore two reportable segments as defined by ASC 280, which were graphite anode business and knowledge sharing and enterprise business. The Company's long-lived assets were all located in the PRC and substantially all of the Company's revenue and expense were derived in the PRC. Therefore, no geographical segments were presented.

The Company's CODM evaluates performance based on each reporting segment's revenues and costs of revenues. Revenues, cost of revenues and gross (loss) profits by segment were presented below.

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **REVENUES, NET** |  |  |  |
| &nbsp;&nbsp;&nbsp;Graphite anode business | $46342154 | $64365362 | $44384004 |
| &nbsp;&nbsp;&nbsp;Knowledge sharing and enterprise business | 73978 | 632379 | 666401 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total revenues** | 46416132 | 64997741 | 45050405 |
| **COSTS OF REVENUES** |  |  |  |
| &nbsp;&nbsp;&nbsp;Graphite anode business | 52252338 | 70782649 | 57172626 |
| &nbsp;&nbsp;&nbsp;Knowledge sharing and enterprise business | 11278 | 12672 | 281030 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total cost of revenues** | 52263616 | 70795321 | 57453656 |
| **GROSS (LOSS) PROFIT** |  |  |  |
| &nbsp;&nbsp;&nbsp;Graphite anode business | (5910184) | (6417287) | (12788622) |
| &nbsp;&nbsp;&nbsp;Knowledge sharing and enterprise business | 62700 | 619707 | 385371 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total gross loss** | (5847484) | (5797580) | (12403251) |
| **RECONCILIATION OF LOSS (SEGMENT OF GROSS LOSS)** |  |  |  |
| **UNALLOCATED AMOUNTS** |  |  |  |
| **OPERATING EXPENSES** |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling expenses | 895099 | 899760 | 742167 |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 7329317 | 7391664 | 13040038 |
| &nbsp;&nbsp;&nbsp;Research and development expenses | 1955588 | 2507324 | 1193082 |
| &nbsp;&nbsp;&nbsp;Impairment of intangible assets | - | - | 3151467 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total operating expenses** | 10180004 | 10798748 | 18126754 |
| **LOSS FROM OPERATIONS** | (16027488) | (16596328) | (30530005) |
| **OTHER (EXPENSES) INCOME** |  |  |  |
| &nbsp;&nbsp;&nbsp;Investment income (losses) | 146361 | 198176 | (1170974) |
| &nbsp;&nbsp;&nbsp;Interest expense, net | (4566816) | (2018680) | (2162109) |
| &nbsp;&nbsp;&nbsp;Share subscription discount expenses | (6534936) | - |  |
| &nbsp;&nbsp;&nbsp;Other income, net | 323111 | 441231 | 942138 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total other expenses, net** | (10632280) | (1379273) | (2390945) |
| **LOSS BEFORE INCOME TAXES** | $(26659768) | $(17975601) | $(32920950) |

---

**NOTE 27 – SUBSEQUENT EVENTS**

On March 30, 2026, Sunrise Guizhou entered into a line of credit financing contract with Bank of China ("Bank of China") Xingren Branch for a revolving line credit of RMB 7,000,000, or $1,000,987, for a term from March 30, 2026 to March 30, 2029. Sunrise Guizhou fully utilized the line of credit for a short term loan with the interest rate of one year loan prime rate from March 30, 2026 to March 29, 2027. Mr. Haiping Hu was the guarantor of the revolving line of credit. Sunrise Guizhou also pledged its manufacturing facilities of RMB 13,901,944, or $1,987,952 for guarantee to secure the revolving line of credit.

In January, 2026, Sunrise Guizhou entered into a factoring agreement, which is in essence of loan, with CCB Qianxinan Branch and CCB's affiliates for supplier payment for a period from January 2026 to January 2027. The loan was guaranteed by Mr. Haiping Hu and Zhuhai Zibo. Sunrise Guizhou also pledged its buildings and land use rights of its manufacturing facilities to CCB. As the date of this consolidated financial statement, the loan balance is RMB 97,000,000, or $13,870,816.

The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the consolidated financial statements were available to be issued, and determined that that no subsequent events have occurred that would require recognition or disclosure in these financial statements, except as disclosed in this Note 27 or elsewhere in the notes to the consolidated financial statements.

**SCHEDULE – UNAUDITED CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY**

Rule 12-04(a), 5-04(c) and 4-08(e)(3) of Regulation S-X require the condensed financial information of the parent company to be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. The Company performed a test on the restricted net assets of consolidated subsidiaries in accordance with such requirement and concluded that it was applicable to the Company as the restricted net assets of the Company's PRC subsidiaries and the VIE and its subsidiaries exceeded 25% of the consolidated net assets of the Company, therefore, the condensed financial information for the parent company are included herein.

For purposes of the above test, restricted net assets of consolidated subsidiaries and VIE and its subsidiaries shall mean that amount of the Company's proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries and VIE and its subsidiaries in the form of loans, advances or cash dividends without the consent of a third party.

The unaudited condensed financial information of the parent company has been prepared using the same accounting policies as set out in the Company's consolidated financial statements except that the parent company used the equity method to account for investment in its subsidiaries and the VIE and its subsidiaries. Such investment is presented on the condensed balance sheets as "Equity loss in subsidiaries and VIE" and the respective loss as "Equity in loss of subsidiaries and VIE" on the condensed statements of operations and comprehensive loss.

This schedule contains supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Company. Certain information and disclosures normally included in financial statements prepared in accordance with U.S GAAP have been condensed or omitted.

The Company did not pay any dividend for the periods presented. As of December 31, 2025 and 2024, there were no material contingencies, significant provisions for long-term obligations, or guarantees of the Company, except for those which have been separately disclosed in the consolidated financial statements, if any.

**E-POWER INC.**

**PARENT COMPANY BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2024** |
| **ASSETS** |  |  |
| **CURRENT ASSETS** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $6570829 | $39 |
| &nbsp;&nbsp;&nbsp;Due from related parties | 150700 | 155872 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 1950356 | 2091888 |
| &nbsp;&nbsp;&nbsp;**TOTAL CURRENT ASSETS** | 8671885 | 2247799 |
| **TOTAL ASSETS** | 8671885 | 2247799 |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
| **CURRENT LIABILITIES** |  |  |
| &nbsp;&nbsp;&nbsp;Amounts due to related companies | 5858 | 5858 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 84015 | 51518 |
| &nbsp;&nbsp;&nbsp;**TOTAL CURRENT LIABILITIES** | 89873 | 57376 |
| **NON-CURRENT LIABILITIES** |  |  |
| Equity loss in subsidiaries and VIE | 11711186 | 3284501 |
| &nbsp;&nbsp;&nbsp;**TOTAL NON-CURRENT LIABILITIES** | 11711186 | 3284501 |
| **TOTAL LIABILITES** | 11801059 | 3341877 |
| **DEFICIT** |  |  |
| &nbsp;&nbsp;&nbsp;Class A ordinary shares\* (3,500,000,000 shares authorized; $0.0001 par value, 32,161,978 and 20,419,678 shares issued and outstanding as of December 31, 2025 and 2024, respectively) | 3215 | 2041 |
| &nbsp;&nbsp;&nbsp;Class B ordinary shares\* (1,500,000,000 shares authorized; $0.0001 par value, 6,567,272 shares issued and outstanding as of December 31, 2025 and 2024) | 657 | 657 |
| &nbsp;&nbsp;&nbsp;Subscription receivable | - | (100000) |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 51503802 | 37915085 |
| &nbsp;&nbsp;&nbsp;Warrant | 910593 | - |
| &nbsp;&nbsp;&nbsp;Statutory reserves | 2481963 | 2477940 |
| &nbsp;&nbsp;&nbsp;Accumulated deficits | (58029404) | (41389801) |
| &nbsp;&nbsp;&nbsp;**TOTAL DEFICIT** | (3129174) | (1094078) |
| **TOTAL LIABILITIES AND DEFICIT** | $8671885 | $2247799 |

---

\* Retrospectively restated for effect of share re-designation on April 8, 2024 (see Note 23).

**E-POWER INC. PARENT COMPANY STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**

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| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| REVENUES, NET | $- | $- | $- |
| COSTS OF REVENUES | 543 | 1652 | 184617 |
| **GROSS LOSS** | (543) | (1652) | (184617) |
| OPERATING EXPENSES | 1272962 | 1774494 | 6339405 |
| **LOSS FROM OPERATIONS** | (1273505) | (1776146) | (6524022) |
| OTHER EXPENSES | (6536390) | (5039) | (87468) |
| **LOSS BEFORE EQUITY LOSS IN SUBSIDIARIES AND VIE** | (7809895) | (1781185) | (6611490) |
| Equity loss in subsidiaries and VIE | (8825685) | (9995251) | (17621090) |
| **NET LOSS ATTRIBUTABLE TO E-POWER INC. ORDINARY SHAREHOLDERS** | (16635580) | (11776436) | (24232580) |
| **COMPREHENSIVE LOSS ATTRIBUTABLE TO E-POWER INC. ORDINARY SHAREHOLDERS** | $(16635580) | $(11776436) | $(24232580) |

---

**E-POWER INC. PARENT COMPANY STATEMENTS OF CASH FLOWS**

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| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| Net cash used in operating activities | $(773372) | $(1269634) | $(1516279) |
| Net cash (used in) provided by investing activities | (399000) | 1071942 | 878000 |
| Net cash provided by (used in) financing activities | 7743162 | (150000) | - |
| **Increase (Decrease) in cash and cash equivalents** | 6570790 | (347692) | (638279) |
| **Cash and cash equivalents, beginning of year** | 39 | 347731 | 986010 |
| **Cash and cash equivalents, end of year** | $6570829 | $39 | $347731 |

---

## Exhibit 1.1

**Exhibit 1.1**

The Companies Act (Revised)

Company Limited by Shares

AMENDED AND RESTATED

MEMORANDUM AND ARTICLES OF ASSOCIATION

OF

**E-Power Inc.** 

(adopted by a Special Resolution of the Shareholders of the Company dated 5 January 2026)

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| | |
|:---|:---|
| *www.verify.gov.ky File#: 348404* | ![](ea028883401_ex1-1img1.jpg) |

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**THE COMPANIES ACT (REVISED)** 

**EXEMPTED COMPANY LIMITED BY SHARES** 

**AMENDED AND RESTATED** 

**MEMORANDUM OF ASSOCIATION** 

**OF**

**E-Power Inc.**

**(adopted by a Special Resolution of the Shareholders of the Company dated 5 January 2026)** 

1. The
 name of the Company is **E-Power Inc.**.

2. The
 Registered Office of the Company shall be at the offices of Conyers Trust Company (Cayman)
 Limited at SIX, Cricket Square, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands.

3. Subject
 to the following provisions of this Memorandum, the objects for which the Company is established
 are unrestricted.

4. Subject
 to the following provisions of this Memorandum, the Company shall have and be capable of
 exercising all the functions of a natural person of full capacity irrespective of any question
 of corporate benefit, as provided by Section 27(2) of the Companies Act.

5. Nothing
 in this Memorandum shall permit the Company to carry on a business for which a licence is
 required under the laws of the Cayman Islands unless duly licensed.

6. The
 Company shall not trade in the Cayman Islands with any person, firm or corporation except
 in furtherance of the business of the Company carried on outside the Cayman Islands; provided
 that nothing in this clause shall be construed as to prevent the Company effecting and concluding
 contracts in the Cayman Islands, and exercising in the Cayman Islands all of its powers necessary
 for the carrying on of its business outside the Cayman Islands.

7. The
 liability of each member is limited to the amount from time to time unpaid on such member's
 shares.

8. The
share capital of the Company is US$500,000 divided into 3,500,000,000 Class A Ordinary Shares of US$0.0001 each and 1,500,000,000 Class
B Ordinary Shares of US$0.0001 each, with the power for the Company, insofar as is permitted by law, to redeem or purchase any of its
shares and to increase or reduce the said share capital subject to the provisions of the Companies Act (Revised) and the Articles of
Association of the Company and to issue any part of its capital, whether original, redeemed or increased, with or without any preference,
priority or special privilege or subject to any postponement of rights or to any conditions or restrictions; and so that, unless the
conditions of issue shall otherwise expressly declare, every issue of shares, whether declared to be preference or otherwise, shall be
subject to the power hereinbefore contained.

9. The
 Company may exercise the power contained in the Companies Act to deregister in the Cayman
 Islands and be registered by way of continuation in another jurisdiction.

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| | |
|:---|:---|
| *www.verify.gov.ky File#: 348404* | ![](ea028883401_ex1-1img1.jpg) |

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**THE COMPANIES ACT (REVISED)** 

**EXEMPTED COMPANY LIMITED BY SHARES** 

**AMENDED AND RESTATED** 

**ARTICLES OF ASSOCIATION** 

**OF**

**E-Power Inc.** 

**(adopted by a Special Resolution of the Shareholders of the Company dated 5 January 2026)** 

<u>TABLE A</u>

1. The regulations in Table A in the Schedule to the Companies Act (Revised) do not apply to the Company.

<u>INTERPRETATION</u>

2. (1) In these Articles, unless the context otherwise requires, the words standing in the first column of the following table shall bear the meaning set opposite them respectively in the second column.

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| | | |
|:---|:---|:---|
| **WORD** | **<u> </u>** | **MEANING** |
| "Affiliate" |  | in respect of a person or entity, any other person or entity that, directly or indirectly (including through one or more intermediaries), controls, is controlled by, or is under common control with, such person or entity, and (i) in the case of a natural person, shall include, without limitation, such person's spouse, parents, children, siblings, mother-in-law and father-in-law and brothers and sisters-in-law, a trust solely for the benefit of any of the foregoing, a company, partnership or entity wholly owned by one or more of the foregoing, and (ii) in the case of an entity, shall include a partnership, a corporation or any natural person or entity which directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such entity. The term "control" in this definition shall mean the ownership, directly or indirectly, of securities possessing more than fifty percent (50%) of the voting power of the corporation, or the partnership or other entity (other than, in the case of corporation, securities having such power only by reason of the happening of a contingency not within the reasonable control of such partnership, corporation, natural person or entity), or having the power to control the management or elect a majority of members to the board of directors or equivalent decision-making body of such corporation, partnership or other entity. |

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|:---|:---|
| *www.verify.gov.ky File#: 348404* | ![](ea028883401_ex1-1img1.jpg) |

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|:---|:---|
| "Audit Committee" | the audit committee of the Company formed by the Board pursuant to Article 105) hereof, or any successor audit committee. |
| "Auditor" | the independent auditor of the Company which shall be an internationally recognized firm of independent accountants. |
| "Articles" | these Articles in their present form or as supplemented or amended or substituted from time to time. |
| "Board" or "Directors" | the board of directors of the Company or the directors present at a meeting of directors of the Company at which a quorum is present. |
| "capital" | the share capital from time to time of the Company. |
| "Class A Ordinary Share" | a share in the capital of the Company having the rights set out in these Articles and designated by the directors as a Class A Ordinary Share. |
| "Class B Ordinary Share" | a share in the capital of the Company having the rights set out in these Articles and designated by the directors as a Class B Ordinary Share. |
| "clear days" | in relation to the period of a notice, that period excluding the day when the notice is given or deemed to be given and the day for which it is given or on which it is to take effect. |
| "clearing house" | a clearing house recognised by the laws of the jurisdiction in which the shares of the Company (or depositary receipts therefor) are listed or quoted on a stock exchange or interdealer quotation system in such jurisdiction. |
| "Company" | E-Power Inc. |
| "Compensation Committee" | the compensation committee of the Company formed by the Board pursuant to Article 105 hereof, or any successor audit committee. |
| "competent regulatory authority" | a competent regulatory authority in the territory where the shares of the Company (or depositary receipts therefor) are listed or quoted on a stock exchange or interdealer quotation system in such territory. |
| "debenture" and "debenture holder" | include debenture stock and debenture stockholder respectively. |

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|:---|:---|
| *www.verify.gov.ky File#: 348404* | ![](ea028883401_ex1-1img1.jpg) |
| 2 |  |

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| | |
|:---|:---|
| "Designated Stock "Exchange" | the NASDAQ Stock Market. |
| "dollars" and "$" | dollars, the legal currency of the United States of America. |
| "Exchange Act" | the United States Securities Exchange Act of 1934, as amended. |
| "Electronic" | as that term defined in the Electronic Transactions Act (Revised). |
| "Electronic Record" | as that term defined in the Electronic Transactions Act (Revised). |
| "Electronic Signature" | as that term defined in the Electronic Transactions Act (Revised). |
| "FINRA" | Financial Industry Regulatory Authority. |
| "FINRA Rules" | the rules set forth by FINRA. |
| "head office" | such office of the Company as the Directors may from time to time determine to be the principal office of the Company. |
| "Law" | The Companies Act, Cap. 22 (Act 3 of 1961, as consolidated and revised) of the Cayman Islands. |
| "Member" | a duly registered holder from time to time of the shares in the capital of the Company. |
| "month" | a calendar month. |
| "Nomination Committee" | the nomination committee of the Company formed by the Board pursuant to Article 105 hereof, or any successor audit committee. |
| "Notice" | written notice unless otherwise specifically stated and as further defined in these Articles. |
| "Office" | the registered office of the Company for the time being. |
| "ordinary resolution" | a resolution shall be an ordinary resolution when it has been passed by a simple majority of votes cast by such Members as, being entitled so to do, vote in person or, in the case of any Member being a corporation, by its duly authorised representative or, where proxies are allowed, by proxy at a general meeting duly called and held in accordance with these Articles. |
| "Ordinary Share" | an ordinary share in the capital of the Company having the rights set out in these Articles and issued as either a Class A Ordinary Share or as a Class B Ordinary Share. In these Articles the term Ordinary Share shall embrace all classes of Ordinary Share except where reference is made to a specific class. |

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|:---|:---|
| *www.verify.gov.ky File#: 348404* | ![](ea028883401_ex1-1img1.jpg) |
| 3 |  |

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| | |
|:---|:---|
| "paid up" | paid up or credited as paid up. |
| "Register" | the principal register and where applicable, any branch register of Members of the Company to be maintained at such place within or outside the Cayman Islands as the Board shall determine from time to time. |
| "Registration Office" | in respect of any class of share capital such place as the Board may from time to time determine to keep a branch register of Members in respect of that class of share capital and where (except in cases where the Board otherwise directs) the transfers or other documents of title for such class of share capital are to be lodged for registration and are to be registered. |
| "SEC" | the United States Securities and Exchange Commission. |
| "Seal" | common seal or any one or more duplicate seals of the Company (including a securities seal) for use in the Cayman Islands or in any place outside the Cayman Islands. |
| "Secretary" | any person, firm or corporation appointed by the Board to perform any of the duties of secretary of the Company and includes any assistant, deputy, temporary or acting secretary. |
| "special resolution" | a resolution shall be a special resolution when it has been passed by a majority of not less than two-thirds of votes cast by such Members as, being entitled so to do, vote in person or, in the case of such Members as are corporations, by their respective duly authorised representative or, where proxies are allowed, by proxy at a general meeting duly called and held in accordance with these Articles.<br>a special resolution shall be effective for any purpose for which an ordinary resolution is expressed to be required under any provision of these Articles or the Statutes. |
| "Statutes" | the Law and every other law of the Legislature of the Cayman Islands for the time being in force applying to or affecting the Company, its Memorandum of Association and/or these Articles. |
| "year" | a calendar year. |

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(2) In these Articles, unless there is something within the subject or context inconsistent with such construction:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) words
 importing the singular include the plural and vice versa;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) words
 importing a gender include both gender and the neuter;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) words
 importing persons include companies, associations and bodies of persons whether corporate
 or not;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the
 words:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "may"
 shall be construed as permissive;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) "shall"
 or "will" shall be construed as imperative;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) expressions referring to
 writing shall, unless the contrary intention appears, be construed as including printing, lithography, photography and other modes
 of representing words or figures in a visible form, and including where the representation takes the form of electronic display,
 provided that both the mode of service of the relevant document or notice and the Member's election comply with all applicable
 Statutes, rules and regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) references
 to any law, ordinance, statute or statutory provision shall be interpreted as relating to
 any statutory modification or re-enactment thereof for the time being in force;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) save
 as aforesaid words and expressions defined in the Statutes shall bear the same meanings in
 these Articles if not inconsistent with the subject in the context;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) references
 to a document being executed include references to it being executed under hand or under
 seal or by Electronic Signature or by any other method and references to a notice or document
 include a notice or document recorded or stored in any digital, electronic, electrical, magnetic
 or other retrievable form or medium and information in visible form whether having physical
 substance or not.

<u>SHARE CAPITAL</u>

3. (1) The share capital of the Company at the date on which these Articles come into effect shall be divided into Ordinary Shares of a par value of US$0.0001 each.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Subject to the Law, the Company's Memorandum and Articles of Association and, where applicable, the rules of the Designated Stock Exchange and/or any competent regulatory authority, the Company shall have the power to purchase or otherwise acquire its own shares and such power shall be exercisable by the Board in such manner, upon such terms and subject to such conditions as it in its absolute discretion thinks fit and any determination by the Board of the manner of purchase shall be deemed authorised by these Articles for purposes of the Law.

&nbsp;&nbsp;&nbsp;&nbsp;(3) No share shall be issued to bearer.

<u>ALTERATION OF CAPITAL</u>

4. The Company may from time to time by ordinary resolution in accordance with the Law alter the conditions of its Memorandum of Association to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) increase
 its capital by such sum, to be divided into shares of such amounts, as the resolution shall
 prescribe;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) consolidate
 and divide all or any of its capital into shares of larger amount than its existing shares;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) without
prejudice to the powers of the Board under Article 12, divide its shares into several classes and without prejudice to any special rights
previously conferred on the holders of existing shares attach thereto respectively any preferential, deferred, qualified or special
rights, privileges, conditions or such restrictions which in the absence of any such determination by the Company in general meeting,
as the Directors may determine provided always that, for the avoidance of doubt, where a class of shares has been authorized by the Company
no resolution of the Company in general meeting is required for the issuance of shares of that class and the Directors may issue shares
of that class and determine such rights, privileges, conditions or restrictions attaching thereto as aforesaid, and further provided
that where the Company issues shares which do not carry voting rights, the words "nonvoting" shall appear in the designation
of such shares and where the equity capital includes shares with different voting rights, the designation of each class of shares, other
than those with the most favourable voting rights, must include the words "restricted voting" or "limited voting";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) sub-divide
 its shares, or any of them, into shares of smaller amount than is fixed by the Company's
 Memorandum of Association (subject, nevertheless, to the Law), and may by such resolution
 determine that, as between the holders of the shares resulting from such sub-division, one
 or more of the shares may have any such preferred, deferred or other rights or be subject
 to any such restrictions as compared with the other or others as the Company has power to
 attach to unissued or new shares; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) cancel
 any shares which, at the date of the passing of the resolution, have not been taken, or agreed
 to be taken, by any person, and diminish the amount of its capital by the amount of the shares
 so cancelled or, in the case of shares, without par value, diminish the number of shares
 into which its capital is divided.

5. The Board may settle as it considers expedient any difficulty which arises in relation to any consolidation and division under the last preceding Article and in particular but without prejudice to the generality of the foregoing may issue certificates in respect of fractions of shares or arrange for the sale of the shares representing fractions and the distribution of the net proceeds of sale (after deduction of the expenses of such sale) in due proportion amongst the Members who would have been entitled to the fractions, and for this purpose the Board may authorise some person to transfer the shares representing fractions to their purchaser or resolve that such net proceeds be paid to the Company for the Company's benefit. Such purchaser will not be bound to see to the application of the purchase money nor will his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale.

6. The Company may from time to time by special resolution, subject to any confirmation or consent required by the Law, reduce its share capital or any capital redemption reserve or other undistributable reserve in any manner permitted by law.

7. Except so far as otherwise provided by the conditions of issue, or by these Articles, any capital raised by the creation of new shares shall be treated as if it formed part of the original capital of the Company, and such shares shall be subject to the provisions contained in these Articles.

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<u>SHARE RIGHTS</u>

8. Subject to the provisions of the Law, the rules of the Designated Stock Exchange and the Company's Memorandum and Articles of Association and to any special rights conferred on the holders of any shares or class of shares, and without prejudice to Article 12 hereof, any share in the Company (whether forming part of the present capital or not) may be issued with or have attached thereto such rights or restrictions whether in regard to dividend, voting, return of capital or otherwise as the Board may determine, including without limitation on terms that they may be, or at the option of the Company or the holder are, liable to be redeemed on such terms and in such manner, including out of capital, as the Board may deem fit. The Board may make calls on the Members in respect of any monies unpaid on their shares including any premium and each Member shall (subject to receiving at least fourteen (14) clear days' notice specifying when and where payment is to be made), pay to the Company the amount called on his shares. Members registered as the joint holders of a share shall be jointly and severally liable to pay all calls in respect of the share. If a call remains unpaid after it has become due and payable the person from whom it is due and payable shall pay interest on the amount unpaid from the day it became due and payable until it is paid at the rate fixed by the terms of allotment of the share or in the notice of the call or if no rate is fixed, at the rate of ten (10) percent per annum. The directors may, at their discretion, waive payment of the interest wholly or in part.

9. Subject to the Law, any preferred shares may be issued or converted into shares that, at a determinable date or at the option of the Company or the holder, are liable to be redeemed on such terms and in such manner as the Company before the issue or conversion may by ordinary resolution of the Members determine. Where the Company purchases for redemption a redeemable share, purchases not made through the market or by tender shall be limited to a maximum price as may from time to time be determined by the Board, either generally or with regard to specific purchases. If purchases are by tender, tenders shall comply with applicable laws.

9A. For the avoidance of doubt and subject to Articles 31, 32, 37, 38, 39 and 50, the Class A Ordinary Shares and Class B Ordinary Shares otherwise rank pari passu with one another and shall have the same rights, preferences, privileges and restrictions.

<u>VARIATION OF RIGHTS</u>

10. Subject to the Law and without prejudice to Article 8, all or any of the special rights for the time being attached to the shares or any class of shares may, unless otherwise provided by the terms of issue of the shares of that class, from time to time (whether or not the Company is being wound up) be varied, modified or abrogated with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class. To every such separate general meeting all the provisions of these Articles relating to general meetings of the Company shall, *mutatis mutandis*, apply, but so that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the
 necessary quorum (whether at a separate general meeting or at its adjourned meeting) shall
 be a person or persons or (in the case of a Member being a corporation) its duly authorized
 representative together holding or representing by proxy not less than one-third in nominal
 value of the issued voting shares of that class;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) every
 holder of shares of the class shall be entitled on a poll to one vote for every such share
 held by him; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any
 holder of shares of the class present in person or by proxy or authorised representative
 may demand a poll.

11. The special rights conferred upon the holders of any shares or class of shares shall not, unless otherwise expressly provided in the rights attaching to or the terms of issue of such shares, be deemed to be varied, modified or abrogated by the creation or issue of further shares ranking *pari passu* therewith.

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<u>SHARES</u>

12. (1) Subject to the Law, these Articles and, where applicable, the rules of the Designated Stock Exchange and without prejudice to any special rights or restrictions for the time being attached to any shares or any class of shares, the unissued shares of the Company (whether forming part of the original or any increased capital) shall be at the disposal of the Board, which may offer, allot, grant options over or otherwise dispose of them to such persons, at such times and for such consideration and upon such terms and conditions as the Board may in its absolute discretion determine but so that no shares shall be issued at a discount, except in accordance with the provisions of Law. In particular and without prejudice to the generality of the foregoing, the Board is hereby empowered to authorize by resolution or resolutions from time to time the issuance of one or more classes or series of preferred shares and to fix the designations, powers, preferences and relative, participating, optional and other rights, if any, and the qualifications, limitations and restrictions thereof, if any, including, without limitation, the number of shares constituting each such class or series, dividend rights, conversion rights, redemption privileges, voting powers, full or limited or no voting powers, and liquidation preferences, and to increase or decrease the size of any such class or series (but not below the number of shares of any class or series of preferred shares then outstanding) to the extent permitted by Law. Without limiting the generality of the foregoing, the resolution or resolutions providing for the establishment of any class or series of preferred shares may, to the extent permitted by law, provide that such class or series shall be superior to, rank equally with or be junior to the preferred shares of any other class or series.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Neither the Company nor the Board shall be obliged, when making or granting any allotment of, offer of, option over or disposal of shares, to make, or make available, any such allotment, offer, option or shares to Members or others with registered addresses in any particular territory or territories being a territory or territories where, in the absence of a registration statement or other special formalities, this would or might, in the opinion of the Board, be unlawful or impracticable. Members affected as a result of the foregoing sentence shall not be, or be deemed to be, a separate class of members for any purpose whatsoever.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Board may issue options, warrants or convertible securities or securities of similar nature conferring the right upon the holders thereof to subscribe for, purchase or receive any class of shares or securities in the capital of the Company on such terms as it may from time to time determine.

13. The Company may in connection with the issue of any shares exercise all powers of paying commission and brokerage conferred or permitted by the Law. Subject to the Law, the commission may be satisfied by the payment of cash or by the allotment of fully or partly paid shares or partly in one and partly in the other.

14. Except as required by law, no person shall be recognised by the Company as holding any share upon any trust and the Company shall not be bound by or required in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any share or any fractional part of a share or (except only as otherwise provided by these Articles or by law) any other rights in respect of any share except an absolute right to the entirety thereof in the registered holder.

15. Subject to the Law and these Articles, the Board may at any time after the allotment of shares but before any person has been entered in the Register as the holder, recognise a renunciation thereof by the allottee in favour of some other person and may accord to any allottee of a share a right to effect such renunciation upon and subject to such terms and conditions as the Board considers fit to impose.

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<u>SHARE CERTIFICATES</u>

16. Every share certificate shall be issued under the Seal or a facsimile thereof or with the Seal printed thereon and shall specify the number and class and distinguishing numbers (if any) of the shares to which it relates, and the amount paid up thereon and may otherwise be in such form as the Directors may from time to time determine. No certificate shall be issued representing shares of more than one class. The Board may by resolution determine, either generally or in any particular case or cases, that any signatures on any such certificates (or certificates in respect of other securities) need not be autographic but may be affixed to such certificates by some mechanical means or may be printed thereon.

17. (1) In the case of a share held jointly by several persons, the Company shall not be bound to issue more than one certificate therefor and delivery of a certificate to one of several joint holders shall be sufficient delivery to all such holders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Where a share stands in the names of two or more persons, the person first named in the Register shall as regards service of notices and, subject to the provisions of these Articles, all or any other matters connected with the Company, except the transfer of the shares, be deemed the sole holder thereof.

18. Every person whose name is entered, upon an allotment of shares, as a Member in the Register shall be entitled, upon payment of such fee as the Directors may from time to time determine, to receive one certificate for all such shares of any one class or several certificates each for one or more of such shares of such class upon payment for every certificate of such fee as the Directors may from time to time determine.

19. Where applicable, share certificates shall be issued within the relevant time limit as prescribed by the Law or as the Designated Stock Exchange may from time to time determine, whichever is the shorter, after allotment or, except in the case of a transfer which the Company is for the time being entitled to refuse to register and does not register, after lodgment of a transfer with the Company.

20. Upon every transfer of shares the certificate (if any) held by the transferor shall be given up to be cancelled, and shall forthwith be cancelled accordingly, and, subject to Article 18, a new certificate shall be issued to the transferee in respect of the shares transferred to him. If any of the shares included in the certificate so given up shall be retained by the transferor a new certificate for the balance shall be issued to him at the aforesaid fee payable by the transferor to the Company in respect thereof.

21. If a share certificate shall be damaged or defaced or alleged to have been lost, stolen or destroyed a new certificate representing the same shares may be issued to the relevant Member upon request and on payment of such fee as the Company may determine and, subject to compliance with such terms (if any) as to evidence and indemnity and to payment of the costs and reasonable out-of-pocket expenses of the Company in investigating such evidence and preparing such indemnity as the Board may think fit and, in case of damage or defacement, on delivery of the old certificate to the Company provided always that where share warrants have been issued, no new share warrant shall be issued to replace one that has been lost unless the Board has determined that the original has been destroyed.

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<u>REGISTER OF MEMBERS</u>

22. (1) The Company shall keep in one or more books a Register of its Members and shall enter therein the following particulars, that is to say:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the
 name and address of each Member, the number and class of shares held by him and the amount
 paid or agreed to be considered as paid on such shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the
 date on which each person was entered in the Register; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the
 date on which any person ceased to be a Member.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Company may keep an overseas or local or other branch register of Members resident in any place, and the Board may make and vary such regulations as it determines in respect of the keeping of any such register and maintaining a Registration Office in connection therewith.

23. The Register and branch register of Members, as the case may be, shall be open to inspection for such times and on such days as the Board shall determine by Members without charge or by any other person, upon a maximum payment of $2.50 or such other sum specified by the Board, at the Office or Registration Office or such other place at which the Register is kept in accordance with the Law. The Register including any overseas or local or other branch register of Members may, subject to compliance with any notice requirement of the Designated Stock Exchange, be closed at such times or for such periods not exceeding in the whole thirty (30) days in each year as the Board may determine and either generally or in respect of any class of shares.

<u>RECORD DATES</u>

24. For the purpose of determining the Members entitled to notice of or to vote at any general meeting, or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of shares or for the purpose of any other lawful action, the Board may fix, in advance, a date as the record date for any such determination of Members, which date shall not be more than sixty (60) days nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other such action.

If the Board does not fix a record date for any general meeting, the record date for determining the Members entitled to a notice of or to vote at such meeting shall be at the close of business on the day next preceding the day on which notice is given, or, if in accordance with these Articles notice is waived, at the close of business on the day next preceding the day on which the meeting is held. If corporate action without a general meeting is to be taken, the record date for determining the Members entitled to express consent to such corporate action in writing, when no prior action by the Board is necessary, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Company by delivery to its head office. The record date for determining the Members for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.

A determination of the Members of record entitled to notice of or to vote at a meeting of the Members shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.

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<u>TRANSFER OF SHARES</u>

25. Subject to these Articles and the requirements of the Designated Stock Exchange, any Member may transfer all or any of his shares by an instrument of transfer in the usual or common form or in a form prescribed by the Designated Stock Exchange or in any other form approved by the Board and may be under hand or, if the transferor or transferee is a clearing house or a central depository house or its nominee(s), by hand or by machine imprinted signature or by Electronic Signature or by such other manner of execution as the Board may approve from time to time.

26. The instrument of transfer shall be executed by or on behalf of the transferor and the transferee provided that the Board may dispense with the execution of the instrument of transfer by the transferee in any case which it thinks fit in its discretion to do so. Without prejudice to the last preceding Article, the Board may also resolve, either generally or in any particular case, upon request by either the transferor or transferee, to accept mechanically executed transfers. The transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the Register in respect thereof. Nothing in these Articles shall preclude the Board from recognising a renunciation of the allotment or provisional allotment of any share by the allottee in favour of some other person.

27. (1) The Board may, in its absolute discretion, and without giving any reason therefor, refuse to register a transfer of any share made in accordance with Article 25 but only where such share is not a fully paid up share (and being transferred to a person of whom it does not approve), or any share issued under any share incentive scheme for employees or pursuant to any other agreement, contract or other such arrangement, upon which a restriction on transfer imposed thereby still subsists, and it may also, without prejudice to the foregoing generality, refuse to register a transfer of any share to more than four joint holders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Board in so far as permitted by any applicable law may, in its absolute discretion, at any time and from time to time transfer any share upon the Register to any branch register or any share on any branch register to the Register or any other branch register. In the event of any such transfer, the shareholder requesting such transfer shall bear the cost of effecting the transfer unless the Board otherwise determines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Unless the Board otherwise agrees (which agreement may be on such terms and subject to such conditions as the Board in its absolute discretion may from time to time determine, and which agreement the Board shall, without giving any reason therefore, be entitled in its absolute discretion to give or withhold), no shares upon the Register shall be transferred to any branch register nor shall shares on any branch register be transferred to the Register or any other branch register and all transfers and other documents of title shall be lodged for registration, and registered, in the case of any shares on a branch register, at the relevant Registration Office, and, in the case of any shares on the Register, at the Office or such other place at which the Register is kept in accordance with the Law.

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28. Without limiting the generality of the last preceding Article, the Board may decline to recognise any instrument of transfer unless:-

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a
 fee of such maximum sum as the Designated Stock Exchange may determine to be payable or such
 lesser sum as the Board may from time to time require is paid to the Company in respect thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the
 instrument of transfer is in respect of only one class of share;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the
 instrument of transfer is lodged at the Office or such other place at which the Register
 is kept in accordance with the Law or the Registration Office (as the case may be) accompanied
 by the relevant share certificate(s) and such other evidence as the Board may reasonably
 require to show the right of the transferor to make the transfer (and, if the instrument
 of transfer is executed by some other person on his behalf, the authority of that person
 so to do);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) if
 applicable, the instrument of transfer is duly and properly stamped; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the
 transfer is not to more than four joint holders;

29. If the Board refuses to register a transfer of any share, it shall, within one month after the date on which the transfer was lodged with the Company, send to each of the transferor and transferee notice of the refusal.

30. The registration of transfers of shares or of any class of shares may, on fourteen (14) days' calendar notice being given by advertisement in such one or more newspapers or by electronic means, be suspended and the register closed at such times and for such periods as the Board may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than thirty (30) calendar days in any year.

31. Upon any sale, transfer, assignment or disposition of any Class B Ordinary Share by a holder thereof to any person or entity which is not an Affiliate of such holder, each such Class B Ordinary Share shall be automatically and immediately converted into one Class A Ordinary Share upon the effectiveness of such transfer such that the recipient receives one Class A Ordinary Share for every one Class B Ordinary Share attempted to be transferred.

32. For the avoidance of doubt, (i) a sale, transfer, assignment or disposition of any shares shall be effective upon the Company's registration of such sale, transfer, assignment or disposition in the Company's register of members; and (ii) the creation of any pledge, charge, encumbrance or other third party right of whatever description on any Class B Ordinary Shares to secure a Member's contractual or legal obligations shall not be deemed as a sale, transfer, assignment or disposition unless and until any such pledge, charge, encumbrance or other third party right is enforced and such sale, transfer, assignment or disposition is reflected in the Company's register of members, at which point all such Class B Ordinary Shares shall be automatically converted into the same number of Class A Ordinary Shares in accordance with Article 31.

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<u>TRANSMISSION OF SHARES</u>

33. If a Member dies, the survivor or survivors where the deceased was a joint holder, and his legal personal representatives where he was a sole or only surviving holder, will be the only persons recognised by the Company as having any title to his interest in the shares; but nothing in this Article will release the estate of a deceased Member (whether sole or joint) from any liability in respect of any share which had been solely or jointly held by him.

34. Any person becoming entitled to a share in consequence of the death or bankruptcy or winding-up of a Member may, upon such evidence as to his title being produced as may be required by the Board, elect either to become the holder of the share or to have some person nominated by him registered as the transferee thereof. If he elects to become the holder he shall notify the Company in writing either at the Registration Office or Office, as the case may be, to that effect. If he elects to have another person registered he shall execute a transfer of the share in favour of that person. The provisions of these Articles relating to the transfer and registration of transfers of shares shall apply to such notice or transfer as aforesaid as if the death or bankruptcy of the Member had not occurred and the notice or transfer were a transfer signed by such Member.

35. A person becoming entitled to a share by reason of the death or bankruptcy or winding-up of a Member shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share. However, the Board may, if it thinks fit, withhold the payment of any dividend payable or other advantages in respect of such share until such person shall become the registered holder of the share or shall have effectually transferred such share, but, subject to the requirements of Article 59(2) being met, such a person may vote at meetings.

<u>UNTRACEABLE MEMBERS</u>

36. (1) Without prejudice to the rights of the Company under paragraph (2) of this Article, the Company may cease sending cheques for dividend entitlements or dividend warrants by post if such cheques or warrants have been left uncashed on two consecutive occasions. However, the Company may exercise the power to cease sending cheques for dividend entitlements or dividend warrants after the first occasion on which such a cheque or warrant is returned undelivered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Company shall have the power to sell, in such manner as the Board thinks fit, any shares of a Member who is untraceable, but no such sale shall be made unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all
 cheques or warrants in respect of dividends of the shares in question, being not less than
 three in total number, for any sum payable in cash to the holder of such shares in respect
 of them sent during the relevant period in the manner authorised by the Articles have remained
 uncashed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) so
 far as it is aware at the end of the relevant period, the Company has not at any time during
 the relevant period received any indication of the existence of the Member who is the holder
 of such shares or of a person entitled to such shares by death, bankruptcy or operation of
 law; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the
 Company, if so required by the rules governing the listing of shares on the Designated Stock
 Exchange, has given notice to, and caused advertisement in newspapers to be made in accordance
 with the requirements of, the Designated Stock Exchange of its intention to sell such shares
 in the manner required by the Designated Stock Exchange, and a period of three (3) months
 or such shorter period as may be allowed by the Designated Stock Exchange has elapsed since
 the date of such advertisement.

For the purpose of the foregoing, the "relevant period" means the period commencing twelve (12) years before the date of publication of the advertisement referred to in paragraph (c) of this Article and ending at the expiry of the period referred to in that paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) To give effect to any such sale the Board may authorise some person to transfer the said shares and an instrument of transfer signed or otherwise executed by or on behalf of such person shall be as effective as if it had been executed by the registered holder or the person entitled by transmission to such shares, and the purchaser shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale. The net proceeds of the sale will belong to the Company and upon receipt by the Company of such net proceeds it shall become indebted to the former Member for an amount equal to such net proceeds. No trust shall be created in respect of such debt and no interest shall be payable in respect of it and the Company shall not be required to account for any money earned from the net proceeds which may be employed in the business of the Company or as it thinks fit. Any sale under this Article shall be valid and effective notwithstanding that the Member holding the shares sold is dead, bankrupt or otherwise under any legal disability or incapacity.

<u>CONVERSION RIGHTS</u>

37. Each Class B Ordinary Share shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share, at the office of the Company or any transfer agent for such shares, into one fully paid and non-assessable Class A Ordinary Share.

38. The Directors shall at all times reserve and keep available out of the Company's authorised but unissued Class A Ordinary Shares, solely for the purpose of effecting the conversion of the Class B Ordinary Shares, such number of its Class A Ordinary Shares as shall from time to time be sufficient to effect the conversion of all outstanding Class B Ordinary Shares; and if at any time the number of authorised but unissued Class A Ordinary Shares shall not be sufficient to effect the conversion of all then outstanding Class B Ordinary Shares, in addition to such other remedies as shall be available to the holders of such Class B Ordinary Shares, the Directors will take such action as may be necessary to increase its authorised but unissued Class A Ordinary Shares to such number of Shares as shall be sufficient for such purposes.

39. All conversions of Class B Ordinary Shares to Class A Ordinary Shares shall be effected by way of redemption or repurchase by the Company of the relevant Class B Ordinary Shares and the simultaneous issue of Class A Ordinary Shares in consideration for such redemption or repurchase. The Members and the Company will procure that any and all necessary corporate actions are taken to effect such conversion.

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<u>GENERAL MEETINGS</u>

40. The Company may, but shall not be obligated to, in each year hold a general meeting as an annual general meeting of the, which, if held, shall be convened by the Board, in accordance with these Articles.

41. Each general meeting, other than an annual general meeting, shall be called an extraordinary general meeting. Extraordinary general meetings may be held at such times and in any location in the world as may be determined by the Board. To the extent that Members hold in aggregate less than thirty percent (30%) of the outstanding voting shares in the Company, they cannot:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Call
 general meetings or annual general meetings; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Include
 matters for consideration at shareholder meetings.

42. (1) Only a majority of the Board may call extraordinary general meetings, which extraordinary general meetings shall be held at such times and locations (as permitted hereby) as such person or persons shall determine.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Board shall, on the requisition of Members holding at the date of the deposit of the requisition not less than one-tenth of such of the paid-up share capital of the Company as at the date of the deposit carries the right to vote at general meetings, forthwith proceed to convene an extraordinary general meeting. To be effective the requisition shall state the objects of the meeting, shall be in writing, signed by the requisitionists, and shall be deposited at the registered office. The requisition may consist of several documents in like form each signed by one or more requisitionists.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If the Board does not, within twenty-one days from the date of the requisition, duly proceed to call an extraordinary general meeting, the requisitionists, or any of them representing more than one half of the total voting rights of all of them, may themselves convene an extraordinary general meeting; but any meeting so called shall not be held more than ninety days after the requisition. An extraordinary general meeting called by requisitionists shall be called in the same manner, as nearly as possible, as that in which general meetings are to be called by the Board.

<u>NOTICE OF GENERAL MEETINGS</u>

43. (1) Any general meeting (whether an annual general meeting or an extraordinary general meeting) may be called by not less than (i) twenty-one (21) clear days' Notice in the case of an annual general meeting or (ii) fourteen (14) clear days' Notice in the case of an extraordinary general meeting, save that any such annual or extraordinary general meeting may be called by shorter notice, subject to the Law, if it is so agreed:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) in
 the case of a meeting called as an annual general meeting, by all the Members entitled to
 attend and vote thereat; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in
 the case of any other meeting, by a majority in number of the Members having the right to
 attend and vote at the meeting, being a majority together holding not less than ninety five
 per cent (95%) in nominal value of the issued shares giving that right.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Notice shall specify the time and place of the meeting and, in the case of special business, the general nature of the business to be conducted and further, in the case of any matter for which approval by special resolution shall be required, the intention to propose such a special resolution. The Notice convening an annual general meeting shall specify the meeting as such. Notice of every general meeting shall be given to all Members other than to such Members as, under the provisions of these Articles or the terms of issue of the shares they hold, are not entitled to receive such notices from the Company, to all persons entitled to a share in consequence of the death or bankruptcy or winding-up of a Member and to each of the Directors and the Auditors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) A Member may give notice to the Company of business proposed to be brought before an annual general meeting provided that such notice of proposal of business must be delivered to, or mailed and received at the principal executive offices of the Company not later than the tenth (10th) day following the day on which "public disclosure" of the date of such meeting was first made by the Company (such notice within such time periods, "<u>Timely Notice</u>"). In no event shall any adjournment or postponement of an annual general meeting, or the announcement thereof, commence a new time period (or extend any time period) for the giving of Timely Notice as described above. For purposes of these Articles, "<u>public disclosure</u>" shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Company with the SEC pursuant to Sections 13, 14 or 15(d) of the Exchange Act or publicly filed according to applicable law.

44. The accidental omission to give Notice of a meeting or (in cases where instruments of proxy are sent out with the Notice) to send such instrument of proxy to, or the non-receipt of such Notice or such instrument of proxy by, any person entitled to receive such Notice shall not invalidate any resolution passed or the proceedings at that meeting.

<u>PROCEEDINGS AT GENERAL MEETINGS</u>

45. (1) All business shall be deemed special that is transacted at an extraordinary general meeting, and also all business that is transacted at an annual general meeting, with the exception of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the
 declaration and sanctioning of dividends;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) [INTENTIONALLY
 LEFT BLANK]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the
 election of Directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) appointment
 of officers; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the
 voting of remuneration or extra remuneration to the Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) No business other than the appointment of a chairman of a meeting shall be transacted at any general meeting unless a quorum is present at the commencement of the business. At any general meeting of the Company, one (1) Member entitled to vote and present in person or by proxy or (in the case of a Member being a corporation) by its duly authorised representative representing not less than one-third in nominal value of the total issued voting shares in the Company throughout the meeting shall form a quorum for all purposes.

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46. If within fifteen (15) minutes from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of shareholders, shall be cancelled. In any other case it shall stand adjourned to the same time and place seven days or to such other time or place as is determined by the Directors. If at such adjourned meeting a quorum is not present within half an hour from the time appointed for holding the meeting, the meeting shall be dissolved. The Chairman may, with the consent of a meeting at which a quorum is present, adjourn the meeting. When a meeting is adjourned for seven (7) days or more, notice of the adjourned meeting shall be given in accordance with the articles.

47. The chairman of the Board shall preside as chairman at every general meeting. If at any meeting the chairman is not present within fifteen (15) minutes after the time appointed for holding the meeting, or is not willing to act as chairman, the Directors present shall choose one of their number to act, or if one Director only is present he shall preside as chairman if willing to act. If no Director is present, or if each of the Directors present declines to take the chair, or if the chairman chosen shall retire from the chair, the Members present in person or (in the case of a Member being a corporation) by its duly authorised representative or by proxy and entitled to vote shall elect one of their number to be chairman.

48. The chairman may adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business which might lawfully have been transacted at the meeting had the adjournment not taken place. When a meeting is adjourned for fourteen (14) days or more, at least seven (7) clear days' notice of the adjourned meeting shall be given specifying the time and place of the adjourned meeting but it shall not be necessary to specify in such notice the nature of the business to be transacted at the adjourned meeting and the general nature of the business to be transacted. Save as aforesaid, it shall be unnecessary to give notice of an adjournment.

49. If an amendment is proposed to any resolution under consideration but is in good faith ruled out of order by the chairman of the meeting, the proceedings on the substantive resolution shall not be invalidated by any error in such ruling. In the case of a resolution duly proposed as a special resolution, no amendment thereto (other than a mere clerical amendment to correct a patent error) may in any event be considered or voted upon.

<u>VOTING</u>

50. Subject to any special rights or restrictions as to voting for the time being attached to any shares by or in accordance with these Articles, at any general meeting on a show of hands every Member present in person (or being a corporation, is present by a duly authorised representative), or by proxy shall have one vote and on a poll every Member present in person or by proxy or, in the case of a Member being a corporation, by its duly authorised representative shall have one vote for every Class A Ordinary Share of which he is the holder and twenty (20) votes for every Class B Ordinary Share of which he is the holder but so that no amount paid up or credited as paid up on a share in advance of calls or instalments is treated for the foregoing purposes as paid up on the share. Notwithstanding anything contained in these Articles, where more than one proxy is appointed by a Member which is a clearing house or a central depository house (or its nominee(s)), each such proxy shall have one vote on a show of hands. A resolution put to the vote of a meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) by
 the chairman of such meeting; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) by
 at least three Members present in person or (in the case of a Member being a corporation)
 by its duly authorised representative or by proxy for the time being entitled to vote at
 the meeting; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) by
 a Member or Members present in person or (in the case of a Member being a corporation) by
 its duly authorised representative or by proxy and representing not less than one-tenth of
 the total voting rights of all Members having the right to vote at the meeting; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) by
 a Member or Members present in person or (in the case of a Member being a corporation) by
 its duly authorised representative or by proxy and holding shares in the Company conferring
 a right to vote at the meeting being shares on which an aggregate sum has been paid up equal
 to not less than one-tenth of the total sum paid up on all shares conferring that right;
 or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) if
 required by the rules of the Designated Stock Exchange, by any Director or Directors who,
 individually or collectively, hold proxies in respect of shares representing five per cent.
 (5%) or more of the total voting rights at such meeting.

A demand by a person as proxy for a Member or in the case of a Member being a corporation by its duly authorised representative shall be deemed to be the same as a demand by a Member.

51. Unless a poll is duly demanded and the demand is not withdrawn, a declaration by the chairman that a resolution has been carried, or carried unanimously, or by a particular majority, or not carried by a particular majority, or lost, and an entry to that effect made in the minute book of the Company, shall be conclusive evidence of the facts without proof of the number or proportion of the votes recorded for or against the resolution.

52. If a poll is duly demanded the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. There shall be no requirement for the chairman to disclose the voting figures on a poll.

53. A poll demanded on the election of a chairman, or on a question of adjournment, shall be taken forthwith. A poll demanded on any other question shall be taken in such manner (including the use of ballot or voting papers or tickets) and either forthwith or at such time (being not later than thirty (30) days after the date of the demand) and place as the chairman directs. It shall not be necessary (unless the chairman otherwise directs) for notice to be given of a poll not taken immediately.

54. The demand for a poll shall not prevent the continuance of a meeting or the transaction of any business other than the question on which the poll has been demanded, and, with the consent of the chairman, it may be withdrawn at any time before the close of the meeting or the taking of the poll, whichever is the earlier.

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55. On a poll votes may be given either personally or by proxy.

56. A person entitled to more than one vote on a poll need not use all his votes or cast all the votes he uses in the same way.

57. All questions submitted to a meeting shall be decided by a simple majority of votes except where a greater majority is required by these Articles or by the Law. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of such meeting shall be entitled to a second or casting vote in addition to any other vote he may have.

58. Where there are joint holders of any share any one of such joint holders may vote, either in person or by proxy, in respect of such share as if he were solely entitled thereto, but if more than one of such joint holders be present at any meeting the vote of the senior holder who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register in respect of the joint holding. Several executors or administrators of a deceased Member in whose name any share stands shall for the purposes of this Article be deemed joint holders thereof.

59. (1) A Member who is a patient for any purpose relating to mental health or in respect of whom an order has been made by any court having jurisdiction for the protection or management of the affairs of persons incapable of managing their own affairs may vote, whether on a show of hands or on a poll, by his receiver, committee, *curator bonis* or other person in the nature of a receiver, committee or *curator bonis* appointed by such court, and such receiver, committee, *curator bonis* or other person may vote on a poll by proxy, and may otherwise act and be treated as if he were the registered holder of such shares for the purposes of general meetings, provided that such evidence as the Board may require of the authority of the person claiming to vote shall have been deposited at the Office, head office or Registration Office, as appropriate, not less than forty-eight (48) hours before the time appointed for holding the meeting, or adjourned meeting or poll, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Any person entitled under Article 33 to be registered as the holder of any shares may vote at any general meeting in respect thereof in the same manner as if he were the registered holder of such shares, provided that forty-eight (48) hours at least before the time of the holding of the meeting or adjourned meeting, as the case may be, at which he proposes to vote, he shall satisfy the Board of his entitlement to such shares, or the Board shall have previously admitted his right to vote at such meeting in respect thereof.

60. No Member shall, unless the Board otherwise determines, be entitled to attend and vote and to be reckoned in a quorum at any general meeting unless he is duly registered and all calls or other sums presently payable by him in respect of shares in the Company have been paid.

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61. If:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any
 objection shall be raised to the qualification of any voter; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any
 votes have been counted which ought not to have been counted or which might have been rejected;
 or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any
 votes are not counted which ought to have been counted;

the objection or error shall not vitiate the decision of the meeting or adjourned meeting on any resolution unless the same is raised or pointed out at the meeting or, as the case may be, the adjourned meeting at which the vote objected to is given or tendered or at which the error occurs. Any objection or error shall be referred to the chairman of the meeting and shall only vitiate the decision of the meeting on any resolution if the chairman decides that the same may have affected the decision of the meeting. The decision of the chairman on such matters shall be final and conclusive.

<u>PROXIES</u>

62. Any Member entitled to attend and vote at a meeting of the Company shall be entitled to appoint another person as his proxy to attend and vote instead of him. A Member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at a general meeting of the Company or at a class meeting. A proxy need not be a Member. In addition, a proxy or proxies representing either a Member who is an individual or a Member which is a corporation shall be entitled to exercise the same powers on behalf of the Member which he or they represent as such Member could exercise.

63. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer, attorney or other person authorised to sign the same. In the case of an instrument of proxy purporting to be signed on behalf of a corporation by an officer thereof it shall be assumed, unless the contrary appears, that such officer was duly authorised to sign such instrument of proxy on behalf of the corporation without further evidence of the facts.

64. The instrument appointing a proxy and (if required by the Board) the power of attorney or other authority (if any) under which it is signed, or a certified copy of such power or authority, shall be delivered to such place or one of such places (if any) as may be specified for that purpose in or by way of note to or in any document accompanying the notice convening the meeting (or, if no place is so specified at the Registration Office or the Office, as may be appropriate) not less than forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote or, in the case of a poll taken subsequently to the date of a meeting or adjourned meeting, not less than twenty-four (24) hours before the time appointed for the taking of the poll and in default the instrument of proxy shall not be treated as valid. No instrument appointing a proxy shall be valid after the expiration of twelve (12) months from the date named in it as the date of its execution, except at an adjourned meeting or on a poll demanded at a meeting or an adjourned meeting in cases where the meeting was originally held within twelve (12) months from such date. Delivery of an instrument appointing a proxy shall not preclude a Member from attending and voting in person at the meeting convened and in such event, the instrument appointing a proxy shall be deemed to be revoked.

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65. Instruments of proxy shall be in any common form or in such other form as the Board may approve (provided that this shall not preclude the use of the two-way form) and the Board may, if it thinks fit, send out with the notice of any meeting forms of instrument of proxy for use at the meeting. The instrument of proxy shall be deemed to confer authority to demand or join in demanding a poll and to vote on any amendment of a resolution put to the meeting for which it is given as the proxy thinks fit. The instrument of proxy shall, unless the contrary is stated therein, be valid as well for any adjournment of the meeting as for the meeting to which it relates.

66. A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal, or revocation of the instrument of proxy or of the authority under which it was executed, provided that no intimation in writing of such death, insanity or revocation shall have been received by the Company at the Office or the Registration Office (or such other place as may be specified for the delivery of instruments of proxy in the notice convening the meeting or other document sent therewith) two (2) hours at least before the commencement of the meeting or adjourned meeting, or the taking of the poll, at which the instrument of proxy is used.

67. Anything which under these Articles a Member may do by proxy he may likewise do by his duly appointed attorney and the provisions of these Articles relating to proxies and instruments appointing proxies shall apply *mutatis mutandis* in relation to any such attorney and the instrument under which such attorney is appointed.

<u>CORPORATIONS ACTING BY REPRESENTATIVES</u>

68. (1) Any corporation which is a Member may by resolution of its directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of the Company or at any meeting of any class of Members. The person so authorised shall be entitled to exercise the same powers on behalf of such corporation as the corporation could exercise if it were an individual Member and such corporation shall for the purposes of these Articles be deemed to be present in person at any such meeting if a person so authorised is present thereat.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) If a clearing house (or its nominee(s)) or a central depository, being a corporation, is a Member, it may authorise such persons as it thinks fit to act as its representatives at any meeting of the Company or at any meeting of any class of Members provided that the authorisation shall specify the number and class of shares in respect of which each such representative is so authorised. Each person so authorised under the provisions of this Article shall be deemed to have been duly authorised without further evidence of the facts and be entitled to exercise the same rights and powers on behalf of the clearing house or central depository (or its nominee(s)) as if such person was the registered holder of the shares of the Company held by the clearing house or central depository (or its nominee(s)) including the right to vote individually on a show of hands.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Any reference in these Articles to a duly authorised representative of a Member being a corporation shall mean a representative authorised under the provisions of this Article.

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<u>ACTION BY WRITTEN RESOLUTIONS OF MEMBERS</u>

69. Members may pass a resolution in writing without holding a meeting if the following conditions are met:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) all Members entitled to vote are given notice of the resolution as if the same were being proposed at a meeting of Members;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) all Members entitled so to vote :

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) sign
 a document; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) sign
 several documents in the like form each signed by one or more of those Members; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) the signed document or documents is or are delivered to the Company, including, if the Company so nominates, by delivery of an Electronic Record by Electronic means to the address specified for that purpose.

Such written resolution shall be as effective as if it had been passed at a meeting of the Members entitled to vote duly convened and held.

<u>BOARD OF DIRECTORS</u>

70. (1) Unless otherwise determined by the Company in general meeting, the number of Directors shall not be less than two (2). There shall be no maximum number of Directors unless otherwise determined from time to time by the Members in general meeting. The Directors shall be elected or appointed in the first place by the subscribers to the Memorandum of Association or by a majority of them and thereafter in accordance with Article 70(3) or 70(4). At any one time, at least majority of the Board of Directors shall be Independent Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) [INTENTIONALLY LEFT BLANK]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Subject to the Articles and the Law, the Company may by ordinary resolution elect any person to be a Director either to fill a casual vacancy or as an addition to the existing Board. Any Director so appointed shall hold office only until his death, resignation or removal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The Directors by the affirmative vote of a simple majority of the remaining Directors present and voting at a Board meeting, shall have the power from time to time and at any time to appoint any person as a Director to fill a casual vacancy on the Board or as an addition to the existing Board, whether or not that person has previously served on the Board, subject to these Articles, applicable law and the listing rules of the Designated Stock Exchange. Any Director so appointed shall hold office until his death, resignation or removal.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) No Director shall be required to hold any shares of the Company by way of qualification and a Director who is not a Member shall be entitled to receive notice of and to attend and speak at any general meeting of the Company and of all classes of shares of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Subject to any provision to the contrary in these Articles, a Director may be removed by way of a special resolution of the Members at any time before the expiration of his period of office notwithstanding anything in these Articles or in any agreement between the Company and such Director (but without prejudice to any claim for damages under any such agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) The Company may from time to time in general meeting by ordinary resolution increase or reduce the number of Directors but so that the number of Directors shall never be less than two (2).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) The Directors shall, as soon as may be after each appointment or election of Directors, elect amongst the Directors a chairman (the "Chairman") and if more than one Director is proposed for this office, the election to such office shall take place in such manner as the Directors may determine.

<u>RETIREMENT OF DIRECTORS</u>

71. (1) Notwithstanding any other provisions in the Articles, the Directors of each Class shall retire from office once they have come to terms, provided that notwithstanding anything herein, the chairman of the Board shall not, whilst holding such office, be subject to retirement or be taken into account in determining the number of Directors to retire.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) A retiring Director shall be eligible for re-election and shall continue to act as a Director throughout the meeting at which he retires. The Directors to retire shall include (so far as necessary to ascertain the number of directors to retire) any Director who wishes to retire and not to offer himself for re-election. Any further Directors so to retire shall be those of the other Directors subject to retirement who have been longest in office since their last reelection or appointment and so that as between persons who became or were last reelected Directors on the same day those to retire shall (unless they otherwise agree among themselves) be determined by lot and, without limitation, the Directors to retire at the first annual general meeting shall be so determined.

72. No person other than a Director retiring at the meeting shall, unless recommended by the Directors for election, be eligible for election as a Director at any general meeting unless a Notice signed by a Member (other than the person to be proposed) duly qualified to attend and vote at the meeting for which such notice is given of his intention to propose such person for election and also a Notice signed by the person to be proposed of his willingness to be elected shall have been lodged at the head office or at the Registration Office provided that the minimum length of the period, during which such Notice(s) are given, shall be at least seven (7) days and that the period for lodgment of such Notice(s) shall commence no earlier than the day after the despatch of the notice of the general meeting appointed for such election and end no later than seven (7) days prior to the date of such general meeting.

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<u>DISQUALIFICATION OF DIRECTORS</u>

73. The office of a Director shall be vacated if the Director:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) resigns his office by notice in writing delivered to the Company at the Office or tendered at a meeting of the Board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) becomes of unsound mind or dies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) without special leave of absence from the Board, is absent from meetings of the Board for six consecutive months and the Board resolves that his office be vacated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his creditors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) is prohibited by law from being a Director; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) ceases to be a Director by virtue of any provision of the Statutes or is removed from office pursuant to these Articles.

<u>ALTERNATE DIRECTORS</u>

74. Any Director may at any time by Notice delivered to the Office or head office or at a meeting of the Directors appoint any person (including another Director) to be his alternate Director. Any person so appointed shall have all the rights and powers of the Director or Directors for whom such person is appointed in the alternative provided that such person shall not be counted more than once in determining whether or not a quorum is present. An alternate Director may be removed at any time by the body which appointed him and, subject thereto, the office of alternate Director shall continue until the happening of any event which, if we were a Director, would cause him to vacate such office or if his appointer ceases for any reason to be a Director. Any appointment or removal of an alternate Director shall be effected by Notice signed by the appointor and delivered to the Office or head office or tendered at a meeting of the Board. An alternate Director may also be a Director in his own right and may act as alternate to more than one Director. An alternate Director shall, if his appointor so requests, be entitled to receive notices of meetings of the Board or of committees of the Board to the same extent as, but in lieu of, the Director appointing him and shall be entitled to such extent to attend and vote as a Director at any such meeting at which the Director appointing him is not personally present and generally at such meeting to exercise and discharge all the functions, powers and duties of his appointor as a Director and for the purposes of the proceedings at such meeting the provisions of these Articles shall apply as if he were a Director save that as an alternate for more than one Director his voting rights shall be cumulative.

75. An alternate Director shall only be a Director for the purposes of the Law and shall only be subject to the provisions of the Law insofar as they relate to the duties and obligations of a Director when performing the functions of the Director for whom he is appointed in the alternative and shall alone be responsible to the Company for his acts and defaults and shall not be deemed to be the agent of or for the Director appointing him. An alternate Director shall be entitled to contract and be interested in and benefit from contracts or arrangements or transactions and to be repaid expenses and to be indemnified by the Company to the same extent *mutatis mutandis* as if he were a Director but he shall not be entitled to receive from the Company any fee in his capacity as an alternate Director except only such part, if any, of the remuneration otherwise payable to his appointor as such appointor may by Notice to the Company from time to time direct.

76. Every person acting as an alternate Director shall have one vote for each Director for whom he acts as alternate (in addition to his own vote if he is also a Director). If his appointor is for the time being absent from the People's Republic of China or otherwise not available or unable to act, the signature of an alternate Director to any resolution in writing of the Board or a committee of the Board of which his appointor is a member shall, unless the notice of his appointment provides to the contrary, be as effective as the signature of his appointor.

77. An alternate Director shall ipso facto cease to be an alternate Director if his appointor ceases for any reason to be a Director, however, such alternate Director or any other person may be re-appointed by the Directors to serve as an alternate Director PROVIDED always that, if at any meeting any Director retires but is re-elected at the same meeting, any appointment of such alternate Director pursuant to these Articles which was in force immediately before his retirement shall remain in force as though he had not retired.

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<u>DIRECTORS' FEES AND EXPENSES</u>

78. The Directors shall receive such remuneration as the Board may from time to time determine. Each Director shall be entitled to be repaid or prepaid all traveling, hotel and incidental expenses reasonably incurred or expected to be incurred by him in attending meetings of the Board or committees of the board or general meetings or separate meetings of any class of shares or of debenture of the Company or otherwise in connection with the discharge of his duties as a Director. The ordinary remuneration of the Directors shall from time to time be determined by the Company in general meeting and shall (unless otherwise directed by the resolution by which it is voted) be divided amongst the Board in such proportions and in such manner as the Board may agree or, failing agreement, equally, except that any Director who shall hold office for part only of the period in respect of which such remuneration is payable shall be entitled only to rank in such division for a proportion of remuneration related to the period during which he has held office. Such remuneration shall be deemed to accrue from day to day.

79. Each Director shall be entitled to be repaid or prepaid all travelling, hotel and incidental expenses reasonably incurred or expected to be incurred by him in attending meetings of the Board or committees of the Board or general meetings or separate meetings of any class of shares or of debentures of the Company or otherwise in connection with the discharge of his duties as a Director.

80. Any Director who, by request, goes or resides abroad for any purpose of the Company or who performs services which in the opinion of the Board go beyond the ordinary duties of a Director may be paid such extra remuneration (whether by way of salary, commission, participation in profits or otherwise) as the Board may determine and such extra remuneration shall be in addition to or in substitution for any ordinary remuneration provided for by or pursuant to any other Article.

<u>DIRECTORS' INTERESTS</u>

81. A Director may:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) hold
 any other office or place of profit with the Company (except that of Auditor) in conjunction
 with his office of Director for such period and upon such terms as the Board may determine.
 Any remuneration (whether by way of salary, commission, participation in profits or otherwise)
 paid to any Director in respect of any such other office or place of profit shall be in addition
 to any remuneration provided for by or pursuant to any other Article;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) act
 by himself or his firm in a professional capacity for the Company (otherwise than as Auditor)
 and he or his firm may be remunerated for professional services as if he were not a Director;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) continue
 to be or become a director, managing director, joint managing director, deputy managing director,
 executive director, manager or other officer or member of any other company promoted by the
 Company or in which the Company may be interested as a vendor, shareholder or otherwise and
 (unless otherwise agreed) no such Director shall be accountable for any remuneration, profits
 or other benefits received by him as a director, managing director, joint managing director,
 deputy managing director, executive director, manager or other officer or member of or from
 his interests in any such other company. Subject as otherwise provided by these Articles
 the Directors may exercise or cause to be exercised the voting powers conferred by the shares
 in any other company held or owned by the Company, or exercisable by them as Directors of
 such other company in such manner in all respects as they think fit (including the exercise
 thereof in favour of any resolution appointing themselves or any of them directors, managing
 directors, joint managing directors, deputy managing directors, executive directors, managers
 or other officers of such company) or voting or providing for the payment of remuneration
 to the director, managing director, joint managing director, deputy managing director, executive
 director, manager or other officers of such other company and any Director may vote in favour
 of the exercise of such voting rights in manner aforesaid notwithstanding that he may be,
 or about to be, appointed a director, managing director, joint managing director, deputy
 managing director, executive director, manager or other officer of such a company, and that
 as such he is or may become interested in the exercise of such voting rights in manner aforesaid.

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Notwithstanding the foregoing, no "Independent Director" as defined in FINRA Rules or in Rule 10A-3 under the Exchange Act, and with respect of whom the Board has determined constitutes an "Independent Director" for purposes of compliance with applicable law or the Company's listing requirements, shall without the consent of the Audit Committee take any of the foregoing actions or any other action that would reasonably be likely to affect such Director's status as an "Independent Director" of the Company.

82. Subject to the Law and to these Articles, no Director or proposed or intending Director shall be disqualified by his office from contracting with the Company, either with regard to his tenure of any office or place of profit or as vendor, purchaser or in any other manner whatsoever, nor shall any such contract or any other contract or arrangement in which any Director is in any way interested be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company or the Members for any remuneration, profit or other benefits realised by any such contract or arrangement by reason of such Director holding that office or of the fiduciary relationship thereby established provided that such Director shall disclose the nature of his interest in any contract or arrangement in which he is interested in accordance with Article 83 herein. Any such transaction that would reasonably be likely to affect a Director's status as an "Independent Director", or that would constitute a "related party transaction" as defined by Item 7.N of Form 20F promulgated by the SEC, shall require the approval of the Audit Committee.

83. A Director who to his knowledge is in any way, whether directly or indirectly, interested in a contract or arrangement or proposed contract or arrangement with the Company shall declare the nature of his interest at the meeting of the Board at which the question of entering into the contract or arrangement is first considered, if he knows his interest then exists, or in any other case at the first meeting of the Board after he knows that he is or has become so interested. For the purposes of this Article, a general Notice to the Board by a Director to the effect that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) he
 is a member or officer of a specified company or firm and is to be regarded as interested
 in any contract or arrangement which may after the date of the Notice be made with that company
 or firm; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) he
 is to be regarded as interested in any contract or arrangement which may after the date of
 the Notice be made with a specified person who is connected with him;

shall be deemed to be a sufficient declaration of interest under this Article in relation to any such contract or arrangement, provided that no such Notice shall be effective unless either it is given at a meeting of the Board or the Director takes reasonable steps to secure that it is brought up and read at the next Board meeting after it is given.

84. Following a declaration being made pursuant to the last preceding two Articles, subject to any separate requirement for Audit Committee approval under applicable law or the listing rules of the Company's Designated Stock Exchange, and unless disqualified by the chairman of the relevant Board meeting, a Director may vote in respect of any contract or proposed contract or arrangement in which such Director is interested and may be counted in the quorum at such meeting.

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<u>GENERAL POWERS OF THE DIRECTORS</u>

85. (1) The business of the Company shall be managed and conducted by the Board, which may pay all expenses incurred in forming and registering the Company and may exercise all powers of the Company (whether relating to the management of the business of the Company or otherwise) which are not by the Statutes or by these Articles required to be exercised by the Company in general meeting, subject nevertheless to the provisions of the Statutes and of these Articles and to such regulations being not inconsistent with such provisions, as may be prescribed by the Company in general meeting, but no regulations made by the Company in general meeting shall invalidate any prior act of the Board which would have been valid if such regulations had not been made. The general powers given by this Article shall not be limited or restricted by any special authority or power given to the Board by any other Article.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Any person contracting or dealing with the Company in the ordinary course of business shall be entitled to rely on any written or oral contract or agreement or deed, document or instrument entered into or executed as the case may be by any two of the Directors acting jointly on behalf of the Company and the same shall be deemed to be validly entered into or executed by the Company as the case may be and shall, subject to any rule of law, be binding on the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Without prejudice to the general powers conferred by these Articles it is hereby expressly declared that the Board shall have the following powers:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) to
 give to any person the right or option of requiring at a future date that an allotment shall
 be made to him of any share at par or at such premium as may be agreed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) to
 give to any Directors, officers or employees of the Company an interest in any particular
 business or transaction or participation in the profits thereof or in the general profits
 of the Company either in addition to or in substitution for a salary or other remuneration;
 and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) to
 resolve that the Company be deregistered in the Cayman Islands and continued in a named jurisdiction
 outside the Cayman Islands subject to the provisions of the Law.

86. Reserved.

87. The Board may by power of attorney appoint any company, firm or person or any fluctuating body of persons, whether nominated directly or indirectly by the Board, to be the attorney or attorneys of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board under these Articles) and for such period and subject to such conditions as it may think fit, and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Board may think fit, and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions vested in him. Such attorney or attorneys may, if so authorised under the Seal of the Company, execute any deed or instrument under their personal seal with the same effect as the affixation of the Company's Seal.

88. The Board may entrust to and confer upon a managing director, joint managing director, deputy managing director, an executive director or any Director any of the powers exercisable by it upon such terms and conditions and with such restrictions as it thinks fit, and either collaterally with, or to the exclusion of, its own powers, and may from time to time revoke or vary all or any of such powers but no person dealing in good faith and without notice of such revocation or variation shall be affected thereby.

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89. All cheques, promissory notes, drafts, bills of exchange and other instruments, whether negotiable or transferable or not, and all receipts for moneys paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as the Board shall from time to time by resolution determine. The Company's banking accounts shall be kept with such banker or bankers as the Board shall from time to time determine.

90. (1) The Board may establish or concur or join with other companies (being subsidiary companies of the Company or companies with which it is associated in business) in establishing and making contributions out of the Company's moneys to any schemes or funds for providing pensions, sickness or compassionate allowances, life assurance or other benefits for employees (which expression as used in this and the following paragraph shall include any Director or ex-Director who may hold or have held any executive office or any office of profit under the Company or any of its subsidiary companies) and ex-employees of the Company and their dependants or any class or classes of such person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Board may pay, enter into agreements to pay or make grants of revocable or irrevocable pensions or other benefits to employees and ex-employees and their dependants, or to any of such persons, including pensions or benefits additional to those, if any, to which such employees or ex-employees or their dependants are or may become entitled under any such scheme or fund as mentioned in the last preceding paragraph. Any such pension or benefit may, as the Board considers desirable, be granted to an employee either before and in anticipation of or upon or at any time after his actual retirement, and may be subject or not subject to any terms or conditions as the Board may determine.

<u>BORROWING POWERS</u>

91. The Board may exercise all the powers of the Company to raise or borrow money and to mortgage or charge all or any part of the undertaking, property and assets (present and future) and uncalled capital of the Company and, subject to the Law, to issue debentures, bonds and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.

92. Debentures, bonds and other securities may be made assignable free from any equities between the Company and the person to whom the same may be issued.

93. Any debentures, bonds or other securities may be issued at a discount (other than shares (with the exception of any share discount conducted in accordance with Law)), premium or otherwise and with any special privileges as to redemption, surrender, drawings, allotment of shares, attending and voting at general meetings of the Company, appointment of Directors and otherwise.

94. (1) Where any uncalled capital of the Company is charged, all persons taking any subsequent charge thereon shall take the same subject to such prior charge, and shall not be entitled, by notice to the Members or otherwise, to obtain priority over such prior charge.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Board shall cause a proper register to be kept, in accordance with the provisions of the Law, of all charges specifically affecting the property of the Company and of any series of debentures issued by the Company and shall duly comply with the requirements of the Law in regard to the registration of charges and debentures therein specified and otherwise.

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<u>PROCEEDINGS OF THE DIRECTORS</u>

95. The Board may meet for the despatch of business, adjourn and otherwise regulate its meetings as it considers appropriate. Questions arising at any meeting shall be determined by a majority of votes. In the case of any equality of votes the chairman of the meeting shall have an additional or casting vote.

96. A meeting of the Board may be convened by the Secretary on request of a Director or by any Director. The Secretary shall convene a meeting of the Board. Notice of a meeting of the Board shall be deemed to be duly given to a Director if it is given to such Director in writing or verbally (including in person or by telephone) or via electronic mail or by telephone or in such other manner as the Board may from time to time determine.

97. (1) The quorum necessary for the transaction of the business of the Board may be fixed by the Board and, unless so fixed at any other number, shall be two (2). An alternate Director shall be counted in a quorum in the case of the absence of a Director for whom he is the alternate provided that he shall not be counted more than once for the purpose of determining whether or not a quorum is present.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Directors may participate in any meeting of the Board by means of a conference telephone or other communications equipment through which all persons participating in the meeting can communicate with each other simultaneously and instantaneously and, for the purpose of counting a quorum, such participation shall constitute presence at a meeting as if those participating were present in person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Any Director who ceases to be a Director at a Board meeting may continue to be present and to act as a Director and be counted in the quorum until the termination of such Board meeting if no other Director objects and if otherwise a quorum of Directors would not be present.

98. The continuing Directors or a sole continuing Director may act notwithstanding any vacancy in the Board but, if and so long as the number of Directors is reduced below the minimum number fixed by or in accordance with these Articles, the continuing Directors or Director, notwithstanding that the number of Directors is below the number fixed by or in accordance with these Articles as the quorum or that there is only one continuing Director, may act for the purpose of filling vacancies in the Board or of summoning general meetings of the Company but not for any other purpose.

99. The Chairman of the Board shall be the chairman of all meetings of the Board. If the Chairman of the Board is not present at any meeting within five (5) minutes after the time appointed for holding the same, the Directors present may choose one of their number to be chairman of the meeting.

100. A meeting of the Board at which a quorum is present shall be competent to exercise all the powers, authorities and discretions for the time being vested in or exercisable by the Board.

101. (1) The Board may delegate any of its powers, authorities and discretions to committees (including, without limitation, the Audit Committee), consisting of such Director or Directors and other persons as it thinks fit, and they may, from time to time, revoke such delegation or revoke the appointment of and discharge any such committees either wholly or in part, and either as to persons or purposes. Any committee so formed shall, in the exercise of the powers, authorities and discretions so delegated, conform to any regulations which may be imposed on it by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) All acts done by any such committee in conformity with such regulations, and in fulfilment of the purposes for which it was appointed, but not otherwise, shall have like force and effect as if done by the Board, and the Board (or if the Board delegates such power, the committee) shall have power to remunerate the members of any such committee, and charge such remuneration to the current expenses of the Company.

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102. The meetings and proceedings of any committee consisting of two or more members shall be governed by the provisions contained in these Articles for regulating the meetings and proceedings of the Board so far as the same are applicable and are not superseded by any regulations imposed by the Board under the last preceding Article, indicating, without limitation, any committee charter adopted by the Board for purposes or in respect of any such committee.

103. A resolution in writing signed by all the Directors except such as are temporarily unable to act through ill-health or disability shall (provided that such number is sufficient to constitute a quorum and further provided that a copy of such resolution has been given or the contents thereof communicated to all the Directors for the time being entitled to receive notices of Board meetings in the same manner as notices of meetings are required to be given by these Articles) be as valid and effectual as if a resolution had been passed at a meeting of the Board duly convened and held. Such resolution may be contained in one document or in several documents in like form each signed by one or more of the Directors and for this purpose a facsimile signature of a Director shall be treated as valid.

104. All acts bona fide done by the Board or by any committee or by any person acting as a Director or members of a committee, shall, notwithstanding that it is afterwards discovered that there was some defect in the appointment of any member of the Board or such committee or person acting as aforesaid or that they or any of them were disqualified or had vacated office, be as valid as if every such person had been duly appointed and was qualified and had continued to be a Director or member of such committee.

<u>COMMITTEES</u>

105. Without prejudice to the freedom of the Directors to establish any other committees, for so long as the shares of the Company (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, the Board shall establish and maintain an Audit Committee, a Compensation Committee and a Nomination Committee as committees of the Board, the composition and responsibilities of which shall comply with the FINRA Rules, the rules and regulations of the SEC and the rules and regulations of the Designated Stock Exchange, as appropriate.

106. (1) The Board shall adopt a formal written audit committee charter, a formal written compensation committee charter and review and a formal written Nomination Committee Charter and assess the adequacy of each formal written charter on an annual basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The compensation committee shall meet at least once every financial year, or more frequently as circumstances dictate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The nomination committee shall meet at least once every financial year, or more frequently as circumstances dictate.

107. For so long as the shares of the Company (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, the Company shall conduct an appropriate review of all related party transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interest. Specifically, the Audit Committee shall approve any transaction or transactions between the Company and any of the following parties: (i) any Member owning an interest in the voting power of the Company or any subsidiary of the Company that gives such Member significant influence over the Company or any subsidiary of the Company, (ii) any director or executive officer of the Company or any subsidiary of the Company and any relative of such director or executive officer, (iii) any person in which a substantial interest in the voting power of the Company is owned, directly or indirectly, by any person described in (i) or (ii) or over which such a person is able to exercise significant influence, and (iv) any affiliate (other than a subsidiary) of the Company.

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108. The Board may, from time to time, appoint such other committees as may be permitted by Law. Such other committees appointed by the Board shall consist of one (1) or more members of the Board and shall have such powers and perform such duties as may be provided in a resolution of the Board.

<u>OFFICERS</u>

109. (1) The officers of the Company shall consist of the chief executive officer, the chief financial officer, the Directors and Secretary, and such additional officers (who may or may not be Directors) as the Board may from time to time determine, all of whom shall be deemed to be officers for the purposes of the Law and these Articles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The officers shall receive such remuneration as the Directors may from time to time determine.

110. (1) The Secretary and additional officers, if any, shall be appointed by the Board and shall hold office on such terms and for such period as the Board may determine. If thought fit, two or more persons may be appointed as joint Secretaries. The Board may also appoint from time to time on such terms as it thinks fit one or more assistant or deputy Secretaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Secretary shall attend all meetings of the Members and shall keep correct minutes of such meetings and enter the same in the proper books provided for the purpose. He shall perform such other duties as are prescribed by the Law or these Articles or as may be prescribed by the Board.

111. The officers of the Company shall have such powers and perform such duties in the management, business and affairs of the Company as may be delegated to them by the Directors from time to time.

112. A provision of the Law or of these Articles requiring or authorising a thing to be done by or to a Director and the Secretary shall not be satisfied by its being done by or to the same person acting both as Director and as or in place of the Secretary.

<u>REGISTER OF DIRECTORS AND OFFICERS</u>

113. The Company shall cause to be kept in one or more books at its Office a Register of Directors and Officers in which there shall be entered the full names and addresses of the Directors and Officers and such other particulars as required by the Law or as the Directors may determine. The Company shall send to the Registrar of Companies in the Cayman Islands a copy of such register, and shall from time to time notify to the said Registrar of any change that takes place in relation to such Directors and Officers as required by the Law.

<u>MINUTES</u>

114. (1) The Board shall cause minutes to be duly entered in books provided for the purpose:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) of
 all elections and appointments of officers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) of
 the names of the Directors present at each meeting of the Directors and of any committee
 of the Directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) of
 all resolutions and proceedings of each general meeting of the Members, meetings of the Board
 and meetings of committees of the Board and where there are managers, of all proceedings
 of meetings of the managers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2) Minutes shall be kept by the Secretary at the Office.

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<u>SEAL</u>

115. (1) The Company shall have one or more Seals, as the Board may determine. For the purpose of sealing documents creating or evidencing securities issued by the Company, the Company may have a securities seal which is a facsimile of the Seal of the Company with the addition of the word "Securities" on its face or in such other form as the Board may approve. The Board shall provide for the custody of each Seal and no Seal shall be used without the authority of the Board or of a committee of the Board authorised by the Board in that behalf. Subject as otherwise provided in these Articles, any instrument to which a Seal is affixed shall be signed autographically by one Director and the Secretary or by two Directors or by such other person (including a Director) or persons as the Board may appoint, either generally or in any particular case, save that as regards any certificates for shares or debentures or other securities of the Company the Board may by resolution determine that such signatures or either of them shall be dispensed with or affixed by some method or system of mechanical signature or by Electronic Signature. Every instrument executed in manner provided by this Article shall be deemed to be sealed and executed with the authority of the Board previously given.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Where the Company has a Seal for use abroad, the Board may by writing under the Seal appoint any agent or committee abroad to be the duly authorised agent of the Company for the purpose of affixing and using such Seal and the Board may impose restrictions on the use thereof as may be thought fit. Wherever in these Articles reference is made to the Seal, the reference shall, when and so far as may be applicable, be deemed to include any such other Seal as aforesaid.

<u>AUTHENTICATION OF DOCUMENTS</u>

116. Any Director or the Secretary or any person appointed by the Board for the purpose may authenticate any documents affecting the constitution of the Company and any resolution passed by the Company or the Board or any committee, and any books, records, documents and accounts relating to the business of the Company, and to certify copies thereof or extracts therefrom as true copies or extracts, and if any books, records, documents or accounts are elsewhere than at the Office or the head office the local manager or other officer of the Company having the custody thereof shall be deemed to be a person so appointed by the Board. A document purporting to be a copy of a resolution, or an extract from the minutes of a meeting, of the Company or of the Board or any committee which is so certified shall be conclusive evidence in favour of all persons dealing with the Company upon the faith thereof that such resolution has been duly passed or, as the case may be, that such minutes or extract is a true and accurate record of proceedings at a duly constituted meeting.

<u>DESTRUCTION OF DOCUMENTS</u>

117. (1) The Company shall be entitled to destroy the following documents at the following times:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any
 share certificate which has been cancelled at any time after the expiry of one (1) year from
 the date of such cancellation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any
 dividend mandate or any variation or cancellation thereof or any notification of change of
 name or address at any time after the expiry of two (2) years from the date such mandate
 variation cancellation or notification was recorded by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any
 instrument of transfer of shares which has been registered at any time after the expiry of
 seven (7) years from the date of registration;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any
 allotment letters after the expiry of seven (7) years from the date of issue thereof; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) copies
 of powers of attorney, grants of probate and letters of administration at any time after
 the expiry of seven (7) years after the account to which the relevant power of attorney,
 grant of probate or letters of administration related has been closed;

and it shall conclusively be presumed in favour of the Company that every entry in the Register purporting to be made on the basis of any such documents so destroyed was duly and properly made and every share certificate so destroyed was a valid certificate duly and properly cancelled and that every instrument of transfer so destroyed was a valid and effective instrument duly and properly registered and that every other document destroyed hereunder was a valid and effective document in accordance with the recorded particulars thereof in the books or records of the Company. Provided always that: (1) the foregoing provisions of this Article shall apply only to the destruction of a document in good faith and without express notice to the Company that the preservation of such document was relevant to a claim; (2) nothing contained in this Article shall be construed as imposing upon the Company any liability in respect of the destruction of any such document earlier than as aforesaid or in any case where the conditions of proviso (1) above are not fulfilled; and (3) references in this Article to the destruction of any document include references to its disposal in any manner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Notwithstanding any provision contained in these Articles, the Directors may, if permitted by applicable law, authorise the destruction of documents set out in sub-paragraphs (a) to (e) of paragraph (1) of this Article and any other documents in relation to share registration which have been microfilmed or electronically stored by the Company or by the share registrar on its behalf provided always that this Article shall apply only to the destruction of a document in good faith and without express notice to the Company and its share registrar that the preservation of such document was relevant to a claim.

<u>DIVIDENDS AND OTHER PAYMENTS</u>

118. Subject to the Law, the Company in general meeting or the Board may from time to time declare dividends in any currency to be paid to the Members but no dividend shall be declared in excess of the amount recommended by the Board.

119. Dividends may be declared and paid out of the profits of the Company, realised or unrealised, or from any reserve set aside from profits which the Directors determine is no longer needed. The Board may also declare and pay dividends out of share premium account or any other fund or account which can be authorised for this purpose in accordance with the Law.

120. Except in so far as the rights attaching to, or the terms of issue of, any share otherwise provide:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all
 dividends shall be declared and paid according to the amounts paid up on the shares in respect
 of which the dividend is paid, but no amount paid up on a share in advance of calls shall
 be treated for the purposes of this Article as paid up on the share; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) all
 dividends shall be apportioned and paid pro rata according to the amounts paid up on the
 shares during any portion or portions of the period in respect of which the dividend is paid.

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121. The Board may from time to time pay to the Members such interim dividends as appear to the Board to be justified by the profits of the Company and in particular (but without prejudice to the generality of the foregoing) if at any time the share capital of the Company is divided into different classes, the Board may pay such interim dividends in respect of those shares in the capital of the Company which confer on the holders thereof deferred or non-preferential rights as well as in respect of those shares which confer on the holders thereof preferential rights with regard to dividend and provided that the Board acts bona fide the Board shall not incur any responsibility to the holders of shares conferring any preference for any damage that they may suffer by reason of the payment of an interim dividend on any shares having deferred or non-preferential rights and may also pay any fixed dividend which is payable on any shares of the Company half-yearly or on any other dates, whenever such profits, in the opinion of the Board, justifies such payment.

122. The Board may deduct from any dividend or other moneys payable to a Member by the Company on or in respect of any shares all sums of money (if any) presently payable by him to the Company on account of calls or otherwise.

123. No dividend or other moneys payable by the Company on or in respect of any share shall bear interest against the Company.

124. Any dividend, interest or other sum payable in cash to the holder of shares may be paid by cheque or warrant sent through the post addressed to the holder at his registered address or, in the case of joint holders, addressed to the holder whose name stands first in the Register in respect of the shares at his address as appearing in the Register or addressed to such person and at such address as the holder or joint holders may in writing direct. Every such cheque or warrant shall, unless the holder or joint holders otherwise direct, be made payable to the order of the holder or, in the case of joint holders, to the order of the holder whose name stands first on the Register in respect of such shares, and shall be sent at his or their risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to the Company notwithstanding that it may subsequently appear that the same has been stolen or that any endorsement thereon has been forged. Any one of two or more joint holders may give effectual receipts for any dividends or other moneys payable or property distributable in respect of the shares held by such joint holders.

125. All dividends or bonuses unclaimed for one (1) year after having been declared may be invested or otherwise made use of by the Board for the benefit of the Company until claimed. Any dividend or bonuses unclaimed after a period of six (6) years from the date of declaration shall be forfeited and shall revert to the Company. The payment by the Board of any unclaimed dividend or other sums payable on or in respect of a share into a separate account shall not constitute the Company a trustee in respect thereof.

If a Member fails to pay any call the Board may give to such Member not less than fourteen (14) clear days' notice requiring payment and specifying the amount unpaid including any interest which may have accrued, any expenses which have been incurred by the Company due to that person's default and the place where payment is to be made. The notice shall also contain a warning that if the notice is not complied with, the shares in respect of which the call is made will be liable to be forfeited. If such notice is not complied with, the Board may, before the payment required by the notice has been received, resolve that any share the subject of that notice be forfeited (which forfeiture shall include all dividends or other monies payable in respect of the forfeited share and not paid before such forfeiture).

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A forfeited share may be sold, re-allotted or otherwise disposed of on such terms and in such manner as the directors determine and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms as the directors think fit. A person whose shares have been forfeited shall cease to be a Member in respect of the forfeited shares, but shall, notwithstanding such forfeit, remain liable to pay to the Company all monies which at the date of forfeiture were payable to the Company in respect of the shares, together with all expenses and interest from the date of forfeiture or surrender until payment, but his liability shall cease if and when the Company receives payment in full of the unpaid amount.

A declaration, whether statutory or under oath, made by a Director or the Secretary shall be conclusive evidence that the person making the declaration is a Director or Secretary of the Company and that the particular shares have been forfeited or surrendered on a particular date.

Subject to the execution of an instrument of transfer, if necessary, the declaration shall constitute good title to the shares.

126. Whenever the Board or the Company in general meeting has resolved that a dividend be paid or declared, the Board may further resolve that such dividend be satisfied wholly or in part by the distribution of specific assets of any kind and in particular of paid up shares, debentures or warrants to subscribe securities of the Company or any other company, or in any one or more of such ways, and where any difficulty arises in regard to the distribution the Board may settle the same as it thinks expedient, and in particular may issue certificates in respect of fractions of shares, disregard fractional entitlements or round the same up or down, and may fix the value for distribution of such specific assets, or any part thereof, and may determine that cash payments shall be made to any Members upon the footing of the value so fixed in order to adjust the rights of all parties, and may vest any such specific assets in trustees as may seem expedient to the Board and may appoint any person to sign any requisite instruments of transfer and other documents on behalf of the persons entitled to the dividend, and such appointment shall be effective and binding on the Members. The Board may resolve that no such assets shall be made available to Members with registered addresses in any particular territory or territories where, in the absence of a registration statement or other special formalities, such distribution of assets would or might, in the opinion of the Board, be unlawful or impracticable and in such event the only entitlement of the Members aforesaid shall be to receive cash payments as aforesaid. Members affected as a result of the foregoing sentence shall not be or be deemed to be a separate class of Members for any purpose whatsoever.

127. (1) Whenever the Board or the Company in general meeting has resolved that a dividend be paid or declared on any class of the share capital of the Company, the Board may further resolve either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) that
 such dividend be satisfied wholly or in part in the form of an allotment of shares credited
 as fully paid up, provided that the Members entitled thereto will be entitled to elect to
 receive such dividend (or part thereof if the Board so determines) in cash in lieu of such
 allotment. In such case, the following provisions shall apply:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the
 basis of any such allotment shall be determined by the Board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the
 Board, after determining the basis of allotment, shall give not less than ten (10) days'
 Notice to the holders of the relevant shares of the right of election accorded to them and
 shall send with such notice forms of election and specify the procedure to be followed and
 the place at which and the latest date and time by which duly completed forms of election
 must be lodged in order to be effective;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the
 right of election may be exercised in respect of the whole or part of that portion of the
 dividend in respect of which the right of election has been accorded; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the
 dividend (or that part of the dividend to be satisfied by the allotment of shares as aforesaid)
 shall not be payable in cash on shares in respect whereof the cash election has not been
 duly exercised ("the non-elected shares") and in satisfaction thereof shares
 of the relevant class shall be allotted credited as fully paid up to the holders of the nonelected
 shares on the basis of allotment determined as aforesaid and for such purpose the Board shall
 capitalise and apply out of any part of the undivided profits of the Company (including profits
 carried and standing to the credit of any reserves or other special account, share premium
 account or capital redemption reserve) as the Board may determine, such sum as may be required
 to pay up in full the appropriate number of shares of the relevant class for allotment and
 distribution to and amongst the holders of the non-elected shares on such basis; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) that
 the Members entitled to such dividend shall be entitled to elect to receive an allotment
 of shares credited as fully paid up in lieu of the whole or such part of the dividend as
 the Board may think fit. In such case, the following provisions shall apply:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the
 basis of any such allotment shall be determined by the Board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the
 Board, after determining the basis of allotment, shall give not less than ten (10) days'
 Notice to the holders of the relevant shares of the right of election accorded to them and
 shall send with such notice forms of election and specify the procedure to be followed and
 the place at which and the latest date and time by which duly completed forms of election
 must be lodged in order to be effective;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the
 right of election may be exercised in respect of the whole or part of that portion of the
 dividend in respect of which the right of election has been accorded; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the
 dividend (or that part of the dividend in respect of which a right of election has been accorded)
 shall not be payable in cash on shares in respect whereof the share election has been duly
 exercised ("the elected shares") and in lieu thereof shares of the relevant class
 shall be allotted credited as fully paid up to the holders of the elected shares on the basis
 of allotment determined as aforesaid and for such purpose the Board shall capitalise and
 apply out of any part of the undivided profits of the Company (including profits carried
 and standing to the credit of any reserves or other special account, share premium account
 or capital redemption reserve) as the Board may determine, such sum as may be required to
 pay up in full the appropriate number of shares of the relevant class for allotment and distribution
 to and amongst the holders of the elected shares on such basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) (a) The shares allotted pursuant to the provisions of paragraph (1) of this Article shall rank *pari passu* in all respects with shares of the same class (if any) then in issue save only as regards participation in the relevant dividend or in any other distributions, bonuses or rights paid, made, declared or announced prior to or contemporaneously with the payment or declaration of the relevant dividend unless, contemporaneously with the announcement by the Board of their proposal to apply the provisions of sub-paragraph (a) or (b) of paragraph (2) of this Article in relation to the relevant dividend or contemporaneously with their announcement of the distribution, bonus or rights in question, the Board shall specify that the shares to be allotted pursuant to the provisions of paragraph (1) of this Article shall rank for participation in such distribution, bonus or rights.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Board may do all acts and things considered necessary or expedient to give effect to any capitalisation pursuant to the provisions of paragraph (1) of this Article, with full power to the Board to make such provisions as it thinks fit in the case of shares becoming distributable in fractions (including provisions whereby, in whole or in part, fractional entitlements are aggregated and sold and the net proceeds distributed to those entitled, or are disregarded or rounded up or down or whereby the benefit of fractional entitlements accrues to the Company rather than to the Members concerned). The Board may authorise any person to enter into on behalf of all Members interested, an agreement with the Company providing for such capitalisation and matters incidental thereto and any agreement made pursuant to such authority shall be effective and binding on all concerned.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Company may upon the recommendation of the Board by ordinary resolution resolve in respect of any one particular dividend of the Company that notwithstanding the provisions of paragraph (1) of this Article a dividend may be satisfied wholly in the form of an allotment of shares credited as fully paid up without offering any right to shareholders to elect to receive such dividend in cash in lieu of such allotment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The Board may on any occasion determine that rights of election and the allotment of shares under paragraph (1) of this Article shall not be made available or made to any shareholders with registered addresses in any territory where, in the absence of a registration statement or other special formalities, the circulation of an offer of such rights of election or the allotment of shares would or might, in the opinion of the Board, be unlawful or impracticable, and in such event the provisions aforesaid shall be read and construed subject to such determination. Members affected as a result of the foregoing sentence shall not be or be deemed to be a separate class of Members for any purpose whatsoever.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Any resolution declaring a dividend on shares of any class, whether a resolution of the Company in general meeting or a resolution of the Board, may specify that the same shall be payable or distributable to the persons registered as the holders of such shares at the close of business on a particular date, notwithstanding that it may be a date prior to that on which the resolution is passed, and thereupon the dividend shall be payable or distributable to them in accordance with their respective holdings so registered, but without prejudice to the rights inter se in respect of such dividend of transferors and transferees of any such shares. The provisions of this Article shall *mutatis mutandis* apply to bonuses, capitalisation issues, distributions of realised capital profits or offers or grants made by the Company to the Members.

<u>RESERVES</u>

128. (1) The Board shall establish an account to be called the share premium account and shall carry to the credit of such account from time to time a sum equal to the amount or value of the premium paid on the issue of any share in the Company. Unless otherwise provided by the provisions of these Articles, the Board may apply the share premium account in any manner permitted by the Law. The Company shall at all times comply with the provisions of the Law in relation to the share premium account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Before recommending any dividend, the Board may set aside out of the profits of the Company such sums as it determines as reserves which shall, at the discretion of the Board, be applicable for any purpose to which the profits of the Company may be properly applied and pending such application may, also at such discretion, either be employed in the business of the Company or be invested in such investments as the Board may from time to time think fit and so that it shall not be necessary to keep any investments constituting the reserve or reserves separate or distinct from any other investments of the Company. The Board may also without placing the same to reserve carry forward any profits which it may think prudent not to distribute.

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<u>CAPITALISATION</u>

129. The Company may, upon the recommendation of the Board, at any time and from time to time pass an ordinary resolution to the effect that it is desirable to capitalise all or any part of any amount for the time being standing to the credit of any reserve or fund (including a share premium account and capital redemption reserve and the profit and loss account) whether or not the same is available for distribution and accordingly that such amount be set free for distribution among the Members or any class of Members who would be entitled thereto if it were distributed by way of dividend and in the same proportions, on the footing that the same is not paid in cash but is applied either in or towards paying up the amounts for the time being unpaid on any shares in the Company held by such Members respectively or in paying up in full unissued shares, debentures or other obligations of the Company, to be allotted and distributed credited as fully paid up among such Members, or partly in one way and partly in the other, and the Board shall give effect to such resolution provided that, for the purposes of this Article, a share premium account and any capital redemption reserve or fund representing unrealised profits, may be applied only in paying up in full unissued shares of the Company to be allotted to such Members credited as fully paid.

130. The Board may settle, as it considers appropriate, any difficulty arising in regard to any distribution under the last preceding Article and in particular may issue certificates in respect of fractions of shares or authorise any person to sell and transfer any fractions or may resolve that the distribution should be as nearly as may be practicable in the correct proportion but not exactly so or may ignore fractions altogether, and may determine that cash payments shall be made to any Members in order to adjust the rights of all parties, as may seem expedient to the Board. The Board may appoint any person to sign on behalf of the persons entitled to participate in the distribution any contract necessary or desirable for giving effect thereto and such appointment shall be effective and binding upon the Members.

<u>ACCOUNTING RECORDS</u>

131. The Board shall cause true accounts to be kept of the sums of money received and expended by the Company, and the matters in respect of which such receipt and expenditure take place, and of the property, assets, credits and liabilities of the Company and of all other matters required by the Law or necessary to give a true and fair view of the Company's affairs and to explain its transactions.

132. The accounting records shall be kept at the Office or, at such other place or places as the Board decides and shall always be open to inspection by the Directors. No Member (other than a Director) shall have any right of inspecting any accounting record or book or document of the Company except as conferred by law or authorised by the Board or the Company in general meeting.

133. [INTENTIONALLY LEFT BLANK]

134. [INTENTIONALLY LEFT BLANK]

135. [INTENTIONALLY LEFT BLANK]

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<u>AUDIT</u>

136. Subject to applicable law and rules of the Designated Stock Exchange:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Directors may appoint an Auditor to audit the accounts of the Company who shall hold office on such terms as the Directors determine until his resignation or removal by the Directors or Members in accordance with Article 136(2)). Such Auditor may be a Member but no Director or officer or employee of the Company shall, during his continuance in office, be eligible to act as an Auditor of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) [INTENTIONALLY LEFT BLANK]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Members may, at any general meeting convened and held in accordance with these Articles, by ordinary resolution remove the Auditor at any time before the expiration of his term of office and shall by ordinary resolution at that meeting appoint another Auditor in his stead for the remainder of his term.

137. Subject to the Law the accounts of the Company shall be audited at least once in every year. The financial year end of the Company shall be 31st December in each year but, subject to any direction of the Company in general meeting, the Board may from time to time prescribe some other period to be the financial year.

138. [INTENTIONALLY LEFT BLANK]

139. [INTENTIONALLY LEFT BLANK]

140. The Auditor shall at all reasonable times have access to all books kept by the Company and to all accounts and vouchers relating thereto; and he may call on the Directors or officers of the Company for any information in their possession relating to the books or affairs of the Company.

141. The financial statements of the Company shall be audited by the Auditor in accordance with generally accepted auditing standards. The Auditor shall, if so requested by the Directors or any general meeting of the Company, make a written report thereon in accordance with generally accepted auditing standards. The generally accepted auditing standards referred to herein may be those of a country or jurisdiction other than the Cayman Islands. If so, the financial statements and the report of the Auditor should disclose this fact and name such country or jurisdiction.

<u>NOTICES</u>

142. Any Notice or document, whether or not, to be given or issued under these Articles from the Company to a Member shall be in writing or by cable, telex or facsimile transmission message or other form of electronic transmission or communication and any such Notice and document may be served or delivered by the Company on or to any Member either personally or by sending it through the post in a prepaid envelope addressed to such Member at his registered address as appearing in the Register or at any other address supplied by him to the Company for the purpose or, as the case may be, by transmitting it to any such address or transmitting it to any telex or facsimile transmission number or electronic number or address or website supplied by him to the Company for the giving of Notice to him or which the person transmitting the notice reasonably and bona fide believes at the relevant time will result in the Notice being duly received by the Member or may also be served by advertisement in appropriate newspapers in accordance with the requirements of the Designated Stock Exchange or, to the extent permitted by the applicable laws, by placing it on the Company's website and giving to the member a notice stating that the notice or other document is available there (a "notice of availability"). The notice of availability may be given to the Member by any of the means set out above. In the case of joint holders of a share all notices shall be given to that one of the joint holders whose name stands first in the Register and notice so given shall be deemed a sufficient service on or delivery to all the joint holders.

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143. Any Notice or other document:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) if
 served or delivered by post, shall where appropriate be sent by airmail and shall be deemed
 to have been served or delivered on the day following that on which the envelope containing
 the same, properly prepaid and addressed, is put into the post; in proving such service or
 delivery it shall be sufficient to prove that the envelope or wrapper containing the notice
 or document was properly addressed and put into the post and a certificate in writing signed
 by the Secretary or other officer of the Company or other person appointed by the Board that
 the envelope or wrapper containing the Notice or other document was so addressed and put
 into the post shall be conclusive evidence thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) if
 sent by electronic communication, shall be deemed to be given on the day on which it is transmitted
 from the server of the Company or its agent. A Notice placed on the Company's website
 is deemed given by the Company to a Member on the day following that on which a notice of
 availability is deemed served on the Member;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) if
 served or delivered in any other manner contemplated by these Articles, shall be deemed to
 have been served or delivered at the time of personal service or delivery or, as the case may be, at the time of the relevant despatch or transmission; and in proving such service or delivery
a certificate in writing signed by the Secretary or other officer of the Company or other person appointed by the Board as to the act
and time of such service, delivery, despatch or transmission shall be conclusive evidence thereof; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) may
 be given to a Member in the English language or such other language as may be approved by
 the Directors, subject to due compliance with all applicable Statutes, rules and regulations.

144. (1) Any Notice or other document delivered or sent by post to or left at the registered address of any Member in pursuance of these Articles shall, notwithstanding that such Member is then dead or bankrupt or that any other event has occurred, and whether or not the Company has notice of the death or bankruptcy or other event, be deemed to have been duly served or delivered in respect of any share registered in the name of such Member as sole or joint holder unless his name shall, at the time of the service or delivery of the Notice or document, have been removed from the Register as the holder of the share, and such service or delivery shall for all purposes be deemed a sufficient service or delivery of such Notice or document on all persons interested (whether jointly with or as claiming through or under him) in the share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) A Notice may be given by the Company to the person entitled to a share in consequence of the death, mental disorder or bankruptcy of a Member by sending it through the post in a prepaid letter, envelope or wrapper addressed to him by name, or by the title of representative of the deceased, or trustee of the bankrupt, or by any like description, at the address, if any, supplied for the purpose by the person claiming to be so entitled, or (until such an address has been so supplied) by giving the notice in any manner in which the same might have been given if the death, mental disorder or bankruptcy had not occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Any person who by operation of law, transfer or other means whatsoever shall become entitled to any share shall be bound by every Notice in respect of such share which prior to his name and address being entered on the Register shall have been duly given to the person from whom he derives his title to such share.

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<u>SIGNATURES</u>

145. For the purposes of these Articles, a cable or telex or facsimile or electronic transmission message purporting to come from a holder of shares or, as the case may be, a Director, or, in the case of a corporation which is a holder of shares from a director or the secretary thereof or a duly appointed attorney or duly authorised representative thereof for it and on its behalf, shall in the absence of express evidence to the contrary available to the person relying thereon at the relevant time be deemed to be a document or instrument in writing signed by such holder or Director in the terms in which it is received.

<u>WINDING UP</u>

146. A resolution that the Company be wound up by the court or be wound up voluntarily shall be a special resolution.

147. (1) Subject to any special rights, privileges or restrictions as to the distribution of available surplus assets on liquidation for the time being attached to any class or classes of shares (i) if the Company shall be wound up and the assets available for distribution amongst the Members of the Company shall be more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, the excess shall be distributed *pari passu* amongst such members in proportion to the amount paid up on the shares held by them respectively and (ii) if the Company shall be wound up and the assets available for distribution amongst the Members as such shall be insufficient to repay the whole of the paidup capital such assets shall be distributed so that, a nearly as may be, the losses shall be borne by the Members in proportion to the capital paid up, or which ought to have been paid up, at the commencement of the winding up on the shares held by them respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) If the Company shall be wound up (whether the liquidation is voluntary or by the court) the liquidator may, with the authority of a special resolution and any other sanction required by the Law, divide among the Members in specie or kind the whole or any part of the assets of the Company and whether or not the assets shall consist of properties of one kind or shall consist of properties to be divided as aforesaid of different kinds, and may for such purpose set such value as he deems fair upon any one or more class or classes of property and may determine how such division shall be carried out as between the Members or different classes of Members. The liquidator may, with the like authority, vest any part of the assets in trustees upon such trusts for the benefit of the Members as the liquidator with the like authority shall think fit, and the liquidation of the Company may be closed and the Company dissolved, but so that no contributory shall be compelled to accept any shares or other property in respect of which there is a liability.

<u>INDEMNITY</u>

148. (1) The Directors, Secretary and other officers for the time being of the Company and the liquidator or trustees (if any) for the time being acting in relation to any of the affairs of the Company and everyone of them, and everyone of their heirs, executors and administrators, shall be indemnified and secured harmless out of the assets and profits of the Company from and against all actions, costs, charges, losses, damages and expenses which they or any of them, their or any of their heirs, executors or administrators, shall or may incur or sustain by or by reason of any act done, concurred in or omitted in or about the execution of their duty, or supposed duty, in their respective offices or trusts; and none of them shall be answerable for the acts, receipts, neglects or defaults of the other or others of them or for joining in any receipts for the sake of conformity, or for any bankers or other persons with whom any moneys or effects belonging to the Company shall or may be lodged or deposited for safe custody, or for insufficiency or deficiency of any security upon which any moneys of or belonging to the Company shall be placed out on or invested, or for any other loss, misfortune or damage which may happen in the execution of their respective offices or trusts, or in relation thereto; PROVIDED THAT this indemnity shall not extend to any matter in respect of any fraud or dishonesty which may attach to any of said persons.

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| *www.verify.gov.ky File#: 348404* | ![](ea028883401_ex1-1img1.jpg) |
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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Each Member agrees to waive any claim or right of action he might have, whether individually or by or in the right of the Company, against any Director on account of any action taken by such Director, or the failure of such Director to take any action in the performance of his duties with or for the Company; PROVIDED THAT such waiver shall not extend to any matter in respect of any fraud or dishonesty which may attach to such Director.

<u>AMENDMENT TO MEMORANDUM AND ARTICLES OF ASSOCIATION AND NAME OF COMPANY</u>

149. No Article shall be rescinded, altered or amended and no new Article shall be made until the same has been approved by a special resolution of the Members. A special resolution shall be required to alter the provisions of the Memorandum of Association or to change the name of the Company.

<u>INFORMATION</u>

150. No Member shall be entitled to require discovery of or any information respecting any detail of the Company's trading or any matter which is or may be in the nature of a trade secret or secret process which may relate to the conduct of the business of the Company and which in the opinion of the Directors it will be inexpedient in the interests of the members of the Company to communicate to the public.

<u>MERGERS AND CONSOLIDATIONS</u>

151. Subject to the Law and these Articles, the Company shall, with the approval of a special resolution, have the power to merge or consolidate with one or more constituent companies (as defined in the Law) upon such terms as the Directors may determine.

<u>TRANSFERS BY WAY OF CONTINUATION</u>

152. Subject to the Law and these Articles, the Company shall, with the approval of a special resolution, have the power to register by way of continuation as a body corporate under the laws of a jurisdiction outside of the Cayman Islands and be deregistered in the Cayman Islands.

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## Exhibit 2.3

**Exhibit 2.3**

Description of Securities registered under

Section 12 of the Exchange Act of 1934, as amended

The following securities are registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended:

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| | | |
|:---|:---|:---|
| **Title of Each Class** | **Trading Symbol** | **Name of Each Exchange on Which Registered** |
| **Class A ordinary share, par value US$0.0001 per share** | **EPOW** | **NASDAQ Capital Market** |

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Capitalized terms used but not defined herein have the meanings given to them in Company's annual report on Form 20-F.

**ORDINARY SHARES**

The following description of our share capital and provisions of our amended and restated memorandum and articles of association (the "Memorandum and Articles") are summaries and do not purport to be complete. Reference is made to our amended and restated memorandum and articles of association, a copy of which is filed as an exhibit to this annual report.

We were incorporated as an exempted company with limited liability under the Companies Act (Revised), as amended, of the Cayman Islands, or the "Cayman Companies Act," on February 22, 2019. A Cayman Islands exempted company:

● is a company that conducts its business mainly outside the Cayman Islands;

● is prohibited from trading in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the exempted company carried on outside the Cayman Islands (and for this purpose can effect and conclude contracts in the Cayman Islands and exercise in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands);

● does not have to hold an annual general meeting;

● does not have to make its register of members open to inspection by shareholders of that company;

● may obtain an undertaking against the imposition of any future taxation enacted in the Cayman Islands;

● may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

● may register as a limited duration company; and

● may register as a segregated portfolio company.

**Shares**

Our Ordinary Shares are issued in registered form, and are issued when registered in our register of members. Unless the Board of Directors determine otherwise, each holder of our Ordinary Shares will not receive a certificate in respect of such Ordinary Shares. We may not issue shares or warrants to bearer.

Our authorized share capital is US$500,000 divided into 3,500,000,000 Class A Ordinary Shares of par value US$0.0001 each (the "Class A Ordinary Shares") and 1,500,000,000 Class B ordinary shares of par value US$0.0001 each (the "Class B Ordinary Shares", and together with the Class A Ordinary Shares, the "Ordinary Shares" or "shares"). Subject to the provisions of the Cayman Companies Act, the rules of the Nasdaq Stock Market, our Memorandum and Articles, and any special rights conferred on the holders of any shares or class of shares, the unissued shares of the Company (whether forming part of the original or any increased capital) shall be at the disposal of the board of directors of the Company (the "Board"), which may offer, allot, grant options over or otherwise dispose of them to such persons, at such times and for such consideration and upon such terms and conditions as the Board may in its absolute discretion determine but so that no shares shall be issued at a discount, except in accordance with the provisions of Cayman Companies Act. In particular and without prejudice to the generality of the foregoing, the Board is empowered to authorize the issuance of one or more classes or series of preferred shares and to fix the designations, powers, preferences and relative, participating, optional and other rights, if any, and the qualifications, limitations and restrictions thereof, if any, including, without limitation, the number of shares constituting each such class or series, dividend rights, conversion rights, redemption privileges, voting powers, full or limited or no voting powers, and liquidation preferences, and to increase or decrease the size of any such class or series (but not below the number of shares of any class or series of preferred shares then outstanding) to the extent permitted by Cayman Companies Act. Such authority could be exercised by the directors to allot shares which carry rights and privileges that are preferential to the rights attaching to Class A Ordinary Shares or Class B Ordinary Shares. The directors may refuse to accept any application for shares, and may accept any application in whole or in part, for any reason or for no reason.

**Transfer Agent and Registrar**

The transfer agent and registrar for the Ordinary Shares is Transhare Corporation.

**Dividends**

Subject to the provisions of the Cayman Companies Act and any rights attaching to any class or classes of shares under and in accordance with the Articles:

&nbsp;&nbsp;&nbsp;&nbsp;(a) the directors may declare dividends or distributions out of
our funds which are lawfully available for that purpose; and

&nbsp;&nbsp;&nbsp;&nbsp;(b) the Company's shareholders may, by ordinary resolution,
declare dividends but no such dividend shall exceed the amount recommended by the directors.

Dividends may be declared and paid out of the profits of the Company, realized or unrealized, or from any reserve set aside from profits which the Directors determine is no longer needed. The Board may also declare and pay dividends out of share premium account or any other fund or account which can be authorized for this purpose in accordance with the Cayman Companies Act.

Unless provided by the rights attached to a share, no dividend shall bear interest.

**Voting Rights**

Subject to any rights or restrictions as to voting attached to any shares, unless any share carries special voting rights, on a show of hands every shareholder who is present in person and every person representing a shareholder by proxy shall have one vote. On a poll, every shareholder who is present in person and every person representing a shareholder by proxy shall have one vote for each Class A Ordinary Share and 20 votes for every Class B Ordinary Share of which he or the person represented by proxy is the holder. In addition, all shareholders holding shares of a particular class are entitled to vote at a meeting of the holders of that class of shares. Votes may be given either personally or by proxy.

**Variation of Rights of Shares**

All or any of the special rights for the time being attached to the shares or any class of shares may, unless otherwise provided by the terms of issue of the shares of that class, from time to time (whether or not the Company is being wound up) be varied, modified or abrogated with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class. To every such separate general meeting all the provisions of our Memorandum and Articles relating to general meetings of the Company shall, mutatis mutandis, apply, but so that:

&nbsp;&nbsp;&nbsp;&nbsp;(a) the necessary quorum (whether at a separate general meeting or at its adjourned meeting) shall be a person or persons or (in the case of a shareholder being a corporation) its duly authorized representative together holding or representing by proxy not less than one third in nominal value of the issued voting shares of that class;

&nbsp;&nbsp;&nbsp;&nbsp;(b) every holder of shares of the class shall be entitled on a poll to one vote for every such share held by him; and

&nbsp;&nbsp;&nbsp;&nbsp;(c) any holder of shares of the class present in person or by proxy or authorised representative may demand a poll.

The special rights conferred upon the holders of any shares or class of shares shall not, unless otherwise expressly provided in the rights attaching to or the terms of issue of such shares, be deemed to be varied, modified or abrogated by the creation or issue of further shares ranking pari passu therewith.

**Alteration of share capital**

Subject to the Cayman Companies Act, our shareholders may, by ordinary resolution:

&nbsp;&nbsp;&nbsp;&nbsp;(a) increase the Company's share capital by such sum, to be divided into shares of such amounts, as the resolution shall prescribe;

&nbsp;&nbsp;&nbsp;&nbsp;(b) consolidate and divide all or any of our share capital into shares of larger amount than our existing shares;

&nbsp;&nbsp;&nbsp;&nbsp;(c) divide its shares into several classes and without prejudice to any special rights previously conferred on the holders of existing shares attach thereto respectively any preferential, deferred, qualified or special rights, privileges, conditions or such restrictions which in the absence of any such determination by the Company in general meeting, as the directors may determine provided always that, for the avoidance of doubt, where a class of shares has been authorized by the Company no resolution of the Company in general meeting is required for the issuance of shares of that class and the directors may issue shares of that class and determine such rights, privileges, conditions or restrictions attaching thereto as aforesaid, and further provided that where the Company issues shares which do not carry voting rights, the words "non voting" shall appear in the designation of such shares and where the equity capital includes shares with different voting rights, the designation of each class of shares, other than those with the most favourable voting rights, must include the words "restricted voting" or "limited voting".

&nbsp;&nbsp;&nbsp;&nbsp;(d) sub-divide its shares, or any of them, into shares of smaller amount than is fixed by the Company's Memorandum of Association (subject, nevertheless, to the Cayman Companies Act), and may by such resolution determine that, as between the holders of the shares resulting from such sub-division, one or more of the shares may have any such preferred, deferred or other rights or be subject to any such restrictions as compared with the other or others as the Company has power to attach to unissued or new shares; and

&nbsp;&nbsp;&nbsp;&nbsp;(e) cancel shares which, at the date of the passing of that ordinary resolution, have not been taken or agreed to be taken by any person and diminish the amount of our share capital by the amount of the shares so cancelled or, in the case of shares without nominal par value, diminish the number of shares into which our capital is divided.

The Company may from time to time by special resolution, subject to any confirmation or consent required by the Cayman Companies Act, reduce its share capital or any capital redemption reserve or other undistributable reserve in any manner permitted by law.

**Cayman Companies Act** 

**Calls on shares and forfeiture**

Subject to the terms of allotment, the directors may make calls on the shareholders in respect of any monies unpaid on their shares including any premium and each shareholder shall (subject to receiving at least 14 clear days' notice specifying when and where payment is to be made), pay to us the amount called on his shares. Shareholders registered as the joint holders of a share shall be jointly and severally liable to pay all calls in respect of the share. If a call remains unpaid after it has become due and payable the person from whom it is due and payable shall pay interest on the amount unpaid from the day it became due and payable until it is paid at the rate fixed by the terms of allotment of the share or in the notice of the call or if no rate is fixed, at the rate of ten percent per annum. The directors may, at their discretion, waive payment of the interest wholly or in part.

**Unclaimed dividend**

All dividends or bonuses unclaimed for one (1) year after having been declared may be invested or otherwise made use of by the Board for the benefit of the Company until claimed. Any dividend or bonuses unclaimed after a period of six (6) years from the date of declaration shall be forfeited and shall revert to the Company. The payment by the Board of any unclaimed dividend or other sums payable on or in respect of a share into a separate account shall not constitute the Company a trustee in respect thereof.

**Forfeiture or surrender of shares**

If a shareholder fails to pay any call the directors may give to such shareholder not less than 14 clear days' notice requiring payment and specifying the amount unpaid including any interest which may have accrued, any expenses which have been incurred by us due to that person's default and the place where payment is to be made. The notice shall also contain a warning that if the notice is not complied with, the shares in respect of which the call is made will be liable to be forfeited.

If such notice is not complied with, the directors may, before the payment required by the notice has been received, resolve that any share the subject of that notice be forfeited (which forfeiture shall include all dividends or other monies payable in respect of the forfeited share and not paid before such forfeiture).

A forfeited share may be sold, re-allotted or otherwise disposed of on such terms and in such manner as the directors determine and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms as the directors think fit.

A person whose shares have been forfeited shall cease to be a shareholder in respect of the forfeited shares, but shall, notwithstanding such forfeit, remain liable to pay to us all monies which at the date of forfeiture were payable by him to us in respect of the shares, together with all expenses and interest from the date of forfeiture or surrender until payment, but his liability shall cease if and when we receive payment in full of the unpaid amount.

A declaration, whether statutory or under oath, made by a director or the secretary shall be conclusive evidence that the person making the declaration is a director or secretary of us and that the particular shares have been forfeited or surrendered on a particular date.

Subject to the execution of an instrument of transfer, if necessary, the declaration shall constitute good title to the shares.

**Share premium account**

The directors shall establish a share premium account and shall carry the credit of such account from time to time to a sum equal to the amount or value of the premium paid on the issue of any share or capital contributed or such other amounts required by the Cayman Companies Act.

**Redemption and purchase of own shares**

Subject to the Cayman Companies Act and any rights for the time being conferred on the shareholders holding a particular class of shares, we may by our directors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) issue shares that are to be redeemed or liable to be redeemed, on such terms and in such manner, including out of capital, as the Board may deem fit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) with the consent by special resolution passed at a separate general meeting of the shareholders holding shares of a particular class, vary the rights attaching to that class of shares so as to provide that those shares are to be redeemed or are liable to be redeemed at our option on the terms and in the manner which the directors determine at the time of such variation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) purchase or otherwise acquire its own shares, with such power to be exercisable by the Board in such manner, upon such terms and subject to such conditions as it in its absolute discretion thinks fit and any determination by the Board of the manner of purchase shall be deemed authorised by the Articles for purposes of the Cayman Companies Act.

Where the Company purchases for redemption a redeemable share, purchases not made through the market or by tender shall be limited to a maximum price as may from time to time be determined by the Board, either generally or with regard to specific purchases. If purchases are by tender, tenders shall comply with applicable laws.

We may make a payment in respect of the redemption or purchase of its own shares in any manner authorized by the Cayman Companies Act, including out of any combination of capital, our profits and the proceeds of a fresh issue of shares.

When making a payment in respect of the redemption or purchase of shares, the directors may make the payment in cash or in specie (or partly in one and partly in the other) if so authorized by the terms of the allotment of those shares or by the terms applying to those shares, or otherwise by agreement with the shareholder holding those shares.

**Conversion of Shares**

Each Class B Ordinary Share issued is convertible, at the option of the holder thereof, at any time after the date of issuance of such share, at the office of the Company or any transfer agent for such shares, into one fully paid and non-assessable Class A Ordinary Share.

Upon any sale, transfer, assignment or disposition of any Class B Ordinary Share by a holder thereof to any person or entity which is not an affiliate of such holder, each such Class B Ordinary Share shall be automatically and immediately converted into one Class A Ordinary Share upon the effectiveness of such transfer such that the recipient receives one Class A Ordinary Share for every one Class B Ordinary Share attempted to be transferred.

All conversions of Class B Ordinary Shares to Class A Ordinary Shares shall be effected by way of redemption or repurchase by the Company of the relevant Class B Ordinary Shares and the simultaneous issue of Class A Ordinary Shares in consideration for such redemption or repurchase. The shareholders and the Company are required to procure that any and all necessary corporate actions are taken to effect such conversion.

**Transfer of Shares**

Subject to the restrictions contained in our Articles and the requirements of the Nasdaq Stock Exchange, any of our shareholders may transfer all or any of his or her Ordinary Shares by an instrument of transfer in any usual or common form or any other form approved by our board of directors or the Nasdaq Stock Exchange. The instrument of transfer must be executed by or on behalf of the transferor and the transferee provided that the Board may dispense with the execution of the instrument of transfer by the transferee in any case which it thinks fit in its discretion to do so.

Our board of directors may, in its absolute discretion, decline to recognize any instrument of transfer unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a fee of such maximum sum as the Designated Stock Exchange may determine to be payable or such lesser sum as the Board may from time to time require is paid to the Company in respect thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the instrument of transfer is in respect of only one class of Ordinary Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the instrument of transfer is lodged at the registered office of the Company or such other place at which the Company's register of members (or branch register) is kept in accordance with the Cayman Companies Act accompanied by the relevant share certificate(s) and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer (and, if the instrument of transfer is executed by some other person on his behalf, the authority of that person so to do);;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) if applicable, the instrument of transfer is duly and properly stamped;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the transfer is not to more than four joint holders.

If our directors refuse to register a transfer, they are required, within one month after the date on which the instrument of transfer was lodged, to send to each of the transferor and the transferee notice of such refusal.

The registration of transfers may, on 14 calendar days' notice being given by advertisement in such one or more newspapers or by electronic means, be suspended and our register of members closed at such times and for such periods as our board of directors may from time to time determine. However, the registration of transfers may not be suspended, and the register may not be closed, for more than 30 calendar days in any year.

**Inspection of Books and Records**

Shareholders of Cayman Islands exempted companies have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of lists of shareholders of these companies (other than copies of our memorandum and articles of association, register of mortgages and charges, and any special resolutions passed by our shareholders). Under Cayman Islands law, the names of our current directors can be obtained from a search conducted at the Registrar of Companies. Pursuant to our articles of association, shareholders will not have any right to inspect any account or book or document of the Company except as conferred by Companies Act or as authorized by our directors or by ordinary resolution of our shareholders.

**General Meetings**

Our Articles require the Company to hold an annual general meeting each year at such time and place as may be determined by the Board.

All general meetings other than annual general meetings shall be called extraordinary general meetings. Extraordinary general meetings may be held at such times and in any location in the world as may be determined by the Board.

The directors may convene general meetings whenever they think fit. General meetings shall also be convened on the written requisition of one or more of the shareholders entitled to attend and vote at our general meetings who (together) hold not less than ten percent of the rights to vote at general meetings. To be effective the requisition shall state the objects of the meeting, shall be in writing, signed by the requisitionists, and shall be deposited at the Company's registered office. If the directors do not convene such meeting for a date not later than 21 clear days' after the date of receipt of the written requisition, those shareholders who requested the meeting may convene the general meeting themselves within three months after the end of such period of 21 clear days in which case reasonable expenses incurred by them as a result of the directors failing to convene a meeting shall be reimbursed by us.

To the extent that shareholders hold in aggregate less than thirty percent (30%) of the outstanding voting shares in the Company, they cannot: (a) call general meetings or annual general meetings; and (b) include matters for consideration at shareholder meetings.

A shareholder may give notice to the Company of business proposed to be brought before an annual general meeting provided that such notice of proposal of business must be delivered to, or mailed and received at the principal executive offices of the Company not later than the tenth (10th) day following the day on which "public disclosure" of the date of such meeting was first made by the Company (such notice within such time periods, "Timely Notice"). In no event shall any adjournment or postponement of an annual general meeting, or the announcement thereof, commence a new time period (or extend any time period) for the giving of Timely Notice as described above. For purposes of our Memorandum and Articles, "public disclosure" shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Company with the SEC pursuant to Sections 13, 14 or 15(d) of the Exchange Act or publicly filed according to applicable law.

At least 14 days' notice of an extraordinary general meeting and 21 days' notice of an annual general meeting shall be given to shareholders entitled to attend and vote at such meeting. The notice shall specify the time and place of the meeting and, in the case of special business, the general nature of the business to be conducted and further, in the case of any matter for which approval by special resolution shall be required, the intention to propose such a special resolution. Notice of every general meeting shall also be given to the directors and our auditors.

Subject to the Cayman Companies Act, any annual or extraordinary general meeting may be called by shorter notice, if it is so agreed: (a) in the case of a meeting called as an annual general meeting, by all the shareholders entitled to attend and vote thereat, and (b) in the case of any other meeting, by a majority in number of the shareholders having the right to attend and vote at the meeting, being a majority together holding not less than ninety five per cent. (95%) in nominal value of the issued shares giving that right..

A quorum shall consist of the presence (whether in person or represented by proxy) of one or more shareholders holding shares that represent not less than one-third of the outstanding shares carrying the right to vote at such general meeting.

If, within 15 minutes from the time appointed for the general meeting, or at any time during the meeting, a quorum is not present, the meeting, if convened upon the requisition of shareholders, shall be cancelled. In any other case it shall stand adjourned to the same time and place seven days or to such other time or place as is determined by the directors. If at such adjourned meeting a quorum is not present within half an hour from the time appointed for holding the meeting, the meeting shall be dissolved.

The chairman may, with the consent of a meeting at which a quorum is present, adjourn the meeting. When a meeting is adjourned for seven days or more, notice of the adjourned meeting shall be given in accordance with the Articles.

At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before, or on, the declaration of the result of the show of hands) demanded (a) by the chairman of the meeting; (b) by at least three shareholders present in person, by its duly authorised representative or by proxy for the time being entitled to vote at the meeting; (c) by a shareholder or shareholders present in person, by its duly authorised representative or by proxy and representing not less than one-tenth of the total voting rights of all shareholders having the right to vote at the meeting; (d) by a shareholder or shareholders present in person, by its duly authorised representative or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all shares conferring that right; or (e) if required by the rules of the Nasdaq Stock Exchange, by any director or directors who, individually or collectively, hold proxies in respect of shares representing five per cent. (5%) or more of the total voting rights at such meeting. Unless a poll is so demanded, a declaration by the chairman as to the result of a resolution and an entry to that effect in the minutes of the meeting, shall be conclusive evidence of the outcome of a show of hands, without proof of the number or proportion of the votes recorded in favor of, or against, that resolution.

If a poll is duly demanded it shall be taken in such manner as the chairman directs and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded.

In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded, shall be entitled to a second or casting vote.

**Directors**

We may by ordinary resolution passed at a general meeting, from time to time, fix the maximum and minimum number of directors to be appointed. Under the Articles, we are required to have a minimum of two director and the maximum number of Directors shall be unlimited.

A director may be appointed by ordinary resolution or by the directors. Any appointment may be to fill a vacancy or as an additional director.

The directors shall be entitled to such remuneration as the Board may determine.

No Director shall be required to hold any shares of the Company by way of qualification and a Director who is not a shareholder shall be entitled to receive notice of and to attend and speak at any general meeting of the Company and of all classes of shares of the Company.

A director may be removed by ordinary resolution.

The office of a director shall be vacated if the director:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) resigns his office by notice in writing delivered to the Company at the registered office or tendered at a meeting of the board of directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) becomes of unsound mind or dies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) without special leave of absence from the board of directors, is absent from meetings of the board of directors for six (6) consecutive months and the board of directors resolves that his office be vacated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his creditors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) is prohibited by law from being a director; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) ceases to be a director by virtue of any provision of the Cayman Islands Companies Law is removed from office pursuant to the Articles.

Each of the compensation committee and the nominating and corporate governance committee shall consist of at least three directors and the majority of the committee members shall be independent within the meaning of Section 5605(a)(2) of the Nasdaq Listing Rules. The audit committee shall consist of at least three directors, all of whom shall be independent within the meaning of Section 5605(a)(2) of the Nasdaq Listing Rules and will meet the criteria for independence set forth in Rule 10A-3 of the Exchange Act.

**Powers and duties of directors**

Subject to the provisions of the Cayman Companies Act, our Memorandum and Articles, our business shall be managed by the directors, who may exercise all our powers which are not by the Cayman Companies Act, any other law applicable to the Company or the Articles, or by the Articles required to be exercised by the Company in general meeting.

Without prejudice to the general powers conferred by our Articles to the Board, our Articles expressly provide the Board with the following powers:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) to give to any person the right or option of requiring at a future date that an allotment shall be made to him of any share at par or at such premium as may be agreed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) to give to any Directors, officers or employees of the Company an interest in any particular business or transaction or participation in the profits thereof or in the general profits of the Company either in addition to or in substitution for a salary or other remuneration; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) to resolve that the Company be deregistered in the Cayman Islands and continued in a named jurisdiction outside the Cayman Islands subject to the provisions of the Cayman Companies Act.

The Board may by power of attorney appoint any company, firm or person or any fluctuating body of persons, whether nominated directly or indirectly by the Board, to be the attorney or attorneys of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board under the Articles) and for such period and subject to such conditions as it may think fit, and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Board may think fit, and may also authorize any such attorney to sub-delegate all or any of the powers, authorities and discretions vested in him. Such attorney or attorneys may, if so authorised under the seal of the Company, execute any deed or instrument under their personal seal with the same effect as the affixation of the Company's seal.

Without prejudicing the freedom of the Directors to establish any other committees, for so long as the shares of the Company (or depositary receipts therefor) are listed or quoted on the Nasdaq Stock Exchange, the Board shall establish and maintain an Audit Committee, a Compensation Committee and a Nomination Committee as committees of the Board, the composition and responsibilities of which shall comply with the FINRA Rules, the rules and regulations of the SEC and the rules and regulations of the Nasdaq Stock Exchange, as appropriate.

The directors may exercise all of our powers to borrow money and to mortgage or charge its undertaking, property and assets both present and future and uncalled capital or any part thereof, to issue debentures and other securities whether outright or as collateral security for any debt, liability or obligation of ours or our parent undertaking (if any) or any subsidiary undertaking of us or of any third party.

A Director who to his knowledge is in any way, whether directly or indirectly, interested in a contract or arrangement or proposed contract or arrangement with the Company must declare the nature of his interest at the meeting of the Board at which the question of entering into the contract or arrangement is first considered, if he knows his interest then exists, or in any other case at the first meeting of the Board after he knows that he is or has become so interested. Following a declaration being made, subject to any separate requirement for Audit Committee approval under applicable law or the listing rules of the Nasdaq Stock Exchange, and unless disqualified by the chairman of the relevant Board meeting, a Director may vote in respect of any contract or proposed contract or arrangement in which such Director is interested and may be counted in the quorum at such meeting.

**Capitalization of profits**

The Company may, upon the recommendation of the Board, at any time and from time to time pass an ordinary resolution to the effect that it is desirable to capitalise all or any part of any amount for the time being standing to the credit of any reserve or fund (including a share premium account and capital redemption reserve and the profit and loss account) whether or not the same is available for distribution and accordingly that such amount be set free for distribution among the shareholders or any class of shareholders who would be entitled thereto if it were distributed by way of dividend and in the same proportions, on the footing that the same is not paid in cash but is applied either in or towards paying up the amounts for the time being unpaid on any shares in the Company held by such shareholders respectively or in paying up in full unissued shares, debentures or other obligations of the Company, to be allotted and distributed credited as fully paid up among such shareholders, or partly in one way and partly in the other, and the Board shall give effect to such resolution provided that, for the purposes of this Article, a share premium account and any capital redemption reserve or fund representing unrealised profits, may be applied only in paying up in full unissued shares of the Company to be allotted to such shareholders credited as fully paid.

**Liquidation Rights**

If we are wound up, the shareholders may, subject to the Articles and any other sanction required by the Cayman Companies Act, pass a special resolution allowing the liquidator to do either or both of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) to divide in specie among the shareholders the whole or any part of our assets and, for that purpose, to value any assets and to determine how the division shall be carried out as between the shareholders or different classes of shareholders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) to vest the whole or any part of the assets in trustees for the benefit of shareholders and those liable to contribute to the winding up.

The directors have the authority to present a petition for our winding up to the Grand Court of the Cayman Islands on our behalf with the sanction of a resolution.

**Register of Members**

Under the Cayman Companies Act, we must keep a register of members which contains the following:

&nbsp;&nbsp;&nbsp;&nbsp;(a) the names and addresses of the members of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;(b) a statement of the shares held by each member, which:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) distinguishes each share by its number (so long as the share has a number);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) confirms the amount paid, or agreed to be considered as paid, on the shares of each member;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) confirms the number and category of shares held by each member; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) confirms whether each relevant category of shares held by a member carries voting rights under the Articles, and if so, whether such voting rights are conditional;

&nbsp;&nbsp;&nbsp;&nbsp;(c) the date on which the name of any person was entered on the register as a member; and

&nbsp;&nbsp;&nbsp;&nbsp;(d) the date on which any person ceased to be a member.

Under Cayman Islands law, the register of members of our Company is prima facie evidence of the matters directed or authorized to be inserted therein by the Cayman Companies Act (that is, the register of members will raise a presumption of fact on the matters referred to above unless rebutted) and a shareholder registered in the register of members is deemed as a matter of the Cayman Islands law to have legal title to the shares as set against its name in the register of members.

However, there are certain limited circumstances where an application may be made to a Cayman Islands court for a determination on whether the register of members reflects the correct legal position. Further, the Cayman Islands court has the power to order that the register of members maintained by the company should be rectified, where it considers that the register of members does not reflect the correct legal position. If an application for an order for rectification of the register of members were made in respect of our ordinary shares, then the validity of such shares may be subject to re-examination by a Cayman Islands courts.

**Differences in Corporate Law**

The Cayman Companies Act is derived, to a large extent, from the older Companies Acts of England and Wales but does not follow recent United Kingdom statutory enactments, and accordingly there are significant differences between the Cayman Companies Act and the current Companies Act of the United Kingdom. In addition, the Cayman Companies Act differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of certain significant differences between the provisions of the Cayman Companies Act applicable to us and the comparable laws applicable to companies incorporated in the State of Delaware in the United States.

*Mergers and Similar Arrangements*

The Cayman Companies Act permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these purposes, (a) "merger" means the merging of two or more constituent companies and the vesting of their undertaking, property, and liabilities in one of such companies as the surviving company, and (b) a "consolidation" means the combination of two or more constituent companies into a combined company and the vesting of the undertaking, property and liabilities of such companies in the consolidated company. In order to effect such a merger or consolidation, among other things, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be authorized by (a) a special resolution of the shareholders of each constituent company, and (b) such other authorization, if any, as may be specified in such constituent company's articles of association. The written plan of merger or consolidation must be filed with the Registrar of Companies of the Cayman Islands together with, among other documents, a declaration as to the solvency of the consolidated or surviving company, a declaration of the assets and liabilities of each constituent company, and (unless the surviving or consolidated company is to be a non-Cayman Islands company) an undertaking that a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and that notification of the merger or consolidation will be published in the Cayman Islands Gazette. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.

A merger between a Cayman Islands parent company and its Cayman Islands subsidiary or subsidiaries does not require authorization by a resolution of shareholders if a copy of the plan of merger is given to every member of each subsidiary company to be merged unless the member agrees otherwise. For this purpose, a subsidiary is a company of which at least 90% of the issued shares entitled to vote are owned by the parent company.

The consent of each holder of a fixed or floating security interest of a constituent company is required unless this requirement is waived by a court in the Cayman Islands.

Except in certain limited circumstances, a shareholder of a Cayman Islands constituent company who dissents from the merger or consolidation is entitled to payment of the fair value of his or her shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) upon dissenting from a merger or consolidation, providing the dissenting shareholder complies strictly with the procedures set out in the Cayman Companies Act. The exercise of such dissenter rights will preclude the exercise by the dissenting shareholder of any other rights to which he or she might otherwise be entitled by virtue of holding shares, except for the right to seek relief on the grounds that the merger or consolidation is void or unlawful.

Separate from the statutory provisions relating to mergers and consolidations, the Cayman Companies Act also contains statutory provisions that facilitate the reconstruction and amalgamation of companies by way of schemes of arrangement. Any such arrangement must be approved by (a) a majority in number of the creditors or each class of creditors, as the case may be, with whom the arrangement is to be made, and who must, in addition, represent seventy-five percent in value of the creditors or each such class of creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose and (b) seventy-five percent in value of the shareholders of each class of shareholders, as the case may be, with whom the arrangement is to be made that are present and voting either in person or by proxy at a meeting, convened for that purpose, as applicable. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:

&nbsp;&nbsp;&nbsp;&nbsp;(a) the court's directions and the statutory provisions as
to the required majority vote have been met;

&nbsp;&nbsp;&nbsp;&nbsp;(b) the shareholders have been fairly represented at the meeting
in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of
the class;

&nbsp;&nbsp;&nbsp;&nbsp;(c) the arrangement is such that may be reasonably approved by an
intelligent and honest man of that class acting in respect of his interest; and

&nbsp;&nbsp;&nbsp;&nbsp;(d) the arrangement is not one that would more properly be sanctioned
under some other provision of the Cayman Companies Act.

The Cayman Companies Act also contains a statutory power of compulsory acquisition which may facilitate the "squeeze out" of dissentient minority shareholders upon a tender offer. When a tender offer is made and accepted by holders of not less than 90% in value of the shares for which the offer has been made, the offeror may, within a two-month period after the approval by the said holders, require the holders of the remaining shares to transfer such shares to the offeror on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed in the case of an offer which has been so approved unless there is evidence of fraud, bad faith or collusion.

If an arrangement and reconstruction by way of scheme of arrangement is thus approved and sanctioned, or if a tender offer is made and accepted, in accordance with the foregoing statutory procedures, a dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive payment in cash for the judicially determined value of the shares.

*Shareholders' Suits*

In principle, we will normally be the proper plaintiff to sue for a wrong done to us as a company, and as a general rule, a derivative action may not be brought by a minority shareholder. However, based on English law authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, the Cayman Islands courts can be expected to follow and apply the common law principles (namely the rule in Foss v. Harbottle and the exceptions thereto, which limits the circumstances in which a shareholder may bring a derivative action on behalf of the company or personal action to claim loss which is reflective of loss suffered by the company) which permit a minority shareholder to commence a class action against, or derivative actions in the name of, a company to challenge the following:

&nbsp;&nbsp;&nbsp;&nbsp;(a) a company act or proposes to act illegally or ultra vires and is therefore incapable of ratification by the shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;(b) an irregularity in the passing of a resolution which requires a qualified majority;

&nbsp;&nbsp;&nbsp;&nbsp;(c) an act purporting to abridge or abolish the individual rights of a member; and

&nbsp;&nbsp;&nbsp;&nbsp;(d) an act which constitutes a "fraud on the minority" where the wrongdoers are themselves in control of the company.

*Indemnification of Directors and Executive Officers and Limitation of Liability*

Cayman Islands law does not limit the extent to which a company's memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against the consequences of committing a crime, or against the indemnified person's own fraud or dishonesty.

Our amended and restated articles of association provide that the directors, secretary and other officers for the time being of the Company and the liquidator or trustees (if any) for the time being acting in relation to any of the affairs of the Company and everyone of them, and everyone of their heirs, executors and administrators, shall be indemnified and secured harmless out of the assets and profits of the Company from and against all actions, costs, charges, losses, damages and expenses which they or any of them, their or any of their heirs, executors or administrators, shall or may incur or sustain by or by reason of any act done, concurred in or omitted in or about the execution of their duty, or supposed duty, in their respective offices or trusts; and none of them shall be answerable for the acts, receipts, neglects or defaults of the other or others of them or for joining in any receipts for the sake of conformity, or for any bankers or other persons with whom any moneys or effects belonging to the Company shall or may be lodged or deposited for safe custody, or for insufficiency or deficiency of any security upon which any moneys of or belonging to the Company shall be placed out on or invested, or for any other loss, misfortune or damage which may happen in the execution of their respective offices or trusts, or in relation thereto; provided that this indemnity shall not extend to any matter in respect of any fraud or dishonesty which may attach to any of said persons.

This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation. In addition, we intend to enter into indemnification agreements with our directors and executive officers that will provide such persons with additional indemnification beyond that provided in our amended and restated articles of association.

*Anti-Takeover Provisions in Our Articles*

Some provisions of our Memorandum and Articles may discourage, delay, or prevent a change in control of our Company or management that shareholders may consider favorable, including provisions that authorize our board of directors to issue shares at such times and on such terms and conditions as the board of directors may decide without any further vote or action by our shareholders.

Our directors have fiduciary duties to only exercise the rights and powers granted to them under our amended and restated articles of association for what they believe in good faith to be in the best interests of our Company and for a proper purpose.

*Directors' Fiduciary Duties*

Under the Delaware General Corporation Law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he or she reasonably believes to be in the best interests of the corporation. He or she must not use his or her corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interests of the corporation and its shareholders take precedence over any interest possessed by a director, officer, or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.

As a matter of Cayman Islands law, a director owes three types of duties to the company: (i) statutory duties, (ii) fiduciary duties, and (iii) common law duties. The Cayman Companies Act imposes a number of statutory duties on a director. A Cayman Islands director's fiduciary duties are not codified, however the courts of the Cayman Islands have held that a director owes the following fiduciary duties (a) a duty to act in what the director bona fide considers to be in the best interests of the company, (b) a duty to exercise their powers for the purposes they were conferred, (c) a duty to avoid fettering his or her discretion in the future, and (d) a duty to avoid conflicts of interest and of duty. The common law duties owed by a director are those to act with skill, care, and diligence that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and, also, to act with the skill, care, and diligence in keeping with a standard of care commensurate with any particular skill they have which enables them to meet a higher standard than a director without those skills. In fulfilling their duty of care to us, our directors must ensure compliance with our articles of association. We have the right to seek damages where certain duties owed by any of our directors are breached.

*Shareholder Proposals*

Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. The Delaware General Corporation Law does not provide shareholders an express right to put any proposal before the annual meeting of shareholders, but in keeping with common law, Delaware corporations generally afford shareholders an opportunity to make proposals and nominations provided that they comply with the notice provisions in the certificate of incorporation or bylaws. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.

Cayman Islands law provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company's articles of association. Our Memorandum and Articles provide that general meetings may be convened on the written requisition of one or more of the shareholders entitled to attend and vote at our general meetings who (together) hold not less than ten percent of the rights to vote at general meetings. A shareholder may also give notice to the Company of business proposed to be brought before an annual general meeting provided that such notice of proposal of business must be delivered to, or mailed and received at the principal executive offices of the Company not later than the tenth (10th) day following the day on which "public disclosure" of the date of such meeting was first made by the Company (such notice within such time periods, "Timely Notice"). In no event shall any adjournment or postponement of an annual general meeting, or the announcement thereof, commence a new time period (or extend any time period) for the giving of Timely Notice as described above. For purposes of our Memorandum and Articles, "public disclosure" shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Company with the SEC pursuant to Sections 13, 14 or 15(d) of the Exchange Act or publicly filed according to applicable law

*Voting Requirements*

For the protection of shareholders, certain matters must be approved by special resolution of the shareholders as a matter of Cayman Islands law, including alteration of the memorandum or articles of association, appointment of inspectors to examine company affairs, reduction of share capital (subject, in certain circumstances, to court approval), change of name, authorization of a plan of merger (other than a merger between a parent and a subsidiary), authorization of a transfer by way of continuation to another jurisdiction or consolidation or voluntary winding up of the company.

The Cayman Companies Act requires that a special resolution be passed by a majority of at least two-thirds or such higher percentage as set forth in the memorandum and articles of association, of shareholders being entitled to vote and do vote in person or by proxy at a general meeting, or by unanimous written consent of shareholders entitled to vote at a general meeting. The Cayman Companies Act defines "special resolutions" only. A company's memorandum and articles of association can therefore tailor the definition of "ordinary resolutions" as a whole, or with respect to specific provisions. Under our amended and restated articles of association an ordinary resolution must be passed at a general meeting by a simple majority of shareholders who (being entitled to do so) vote in person or by proxy at that meeting. The expression includes a unanimous written resolution. In computing the majority needed to pass a special or ordinary resolution when a poll is demanded, regard shall be had to the number of votes to which each member is entitled by the regulations of the company.

For the protection of shareholders, certain matters must be approved by special resolution of the shareholders as a matter of Cayman Islands law and our articles of association, including alteration of the memorandum or articles of association, reduction of share capital, change of name, authorization of a plan of merger or (other than a merger between a parent and a subsidiary), authorization of a transfer by way of continuation to another jurisdiction and the voluntary winding up of the company.

*Cumulative Voting*

Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation's certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder's voting power with respect to electing such director. There are no prohibitions in relation to cumulative voting under the Cayman Companies Act, but our amended and restated articles of association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.

*Removal of Directors*

Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise.

Subject to the provisions of our Memorandum and Articles (which include the removal of a director by ordinary resolution), the office of a director may be terminated forthwith if the director:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) resigns his office by notice in writing delivered to the Company at the registered office or tendered at a meeting of the board of directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) becomes of unsound mind or dies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) without special leave of absence from the board of directors, is absent from meetings of the board of directors for six (6) consecutive months and the board of directors resolves that his office be vacated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his creditors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) is prohibited by law from being a director; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) ceases to be a director by virtue of any provision of the Cayman Islands Companies Law is removed from office pursuant to the Articles.

*Transactions with Interested Shareholders*

The Delaware General Corporation Law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation or bylaws that is approved by its shareholders, it is prohibited from engaging in certain business combinations with an "interested shareholder" for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target's outstanding voting stock or who or which is an affiliate or associate of the corporation and owned 15% or more of the corporation's outstanding voting stock within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target's board of directors.

The Cayman Companies Act has no comparable provisions. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although the Cayman Companies Act does not regulate transactions between a company and its significant shareholders, under Cayman Islands law, our directors owe fiduciary duties to our Company to act in the best interests of the company and exercise their powers for a proper purpose when considering and approving such transactions.

*Dissolution; Winding Up*

Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation's outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board of directors.

Under Cayman Islands law and our Memorandum and Articles, the company may be wound up by a special resolution of our shareholders, or, if our Company is unable to pay its debts as they fall due, by an ordinary resolution of our members. In addition, a company may be wound up by an order of the courts of the Cayman Islands. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.

*Variation of Rights of Shares*

Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under our Memorandum and Articles, all or any of the special rights for the time being attached to the shares or any class of shares may, unless otherwise provided by the terms of issue of the shares of that class, from time to time (whether or not the Company is being wound up) be varied, modified or abrogated with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class. To every such separate general meeting all the provisions of our Memorandum and Articles relating to general meetings of the Company shall, mutatis mutandis, apply, but so that:

&nbsp;&nbsp;&nbsp;&nbsp;(a) the necessary quorum (whether at a separate general meeting
or at its adjourned meeting) shall be a person or persons or (in the case of a shareholder being a corporation) its duly authorized representative
together holding or representing by proxy not less than one third in nominal value of the issued voting shares of that class;

&nbsp;&nbsp;&nbsp;&nbsp;(b) every holder of shares of the class shall be entitled on a poll
to one vote for every such share held by him; and

&nbsp;&nbsp;&nbsp;&nbsp;(c) any holder of shares of the class present in person or by proxy
or authorised representative may demand a poll.

The special rights conferred upon the holders of any shares or class of shares shall not, unless otherwise expressly provided in the rights attaching to or the terms of issue of such shares, be deemed to be varied, modified or abrogated by the creation or issue of further shares ranking pari passu therewith.

*Amendment of Governing Documents*

Under the Delaware General Corporation Law, a corporation's certificate of incorporation may be amended only if adopted and declared advisable by the board of directors and approved by a majority of the outstanding shares entitled to vote, and the bylaws may be amended with the approval of a majority of the outstanding shares entitled to vote and may, if so provided in the certificate of incorporation, also be amended by the board of directors. Under the Cayman Companies Act, our articles of association may only be amended by special resolution of our shareholders.

## Exhibit 8.1

**Exhibit 8.1**

**<u>Principal Subsidiaries and Consolidated Affiliated Entities of the Registrant</u>**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name** | **Date of <br> incorporation** | **Place of <br> incorporation** | **Percentage of <br> effective <br> ownership** | **Principal Activities** |
| **Subsidiaries** |  |  |  |  |
| Global Mentor Board Information Technology Limited ("GMB HK") | March 22, 2019 | HK | 100% by E-Power Inc. (the "Company") | Holding company |
| Alchemistica Inc. ("Alchemistica") | August 5, 2025 | U.S. | 71% by the Company | Business development on lithium battery materials |
| Beijing Mentor Board Union Information Technology Co, Ltd. ("GIOP BJ") | June 3, 2019 | PRC | 100% by the Company | Holding company |
| Shidong Cloud (Beijing) Education Technology Co., Ltd ("Shidong Cloud") | December 22, 2021 | PRC | 75% by the Company | Educational consulting |
| SDH (HK) New Energy Tech Co., Ltd. ("SDH New Energy") | October 8, 2021 | HK | 100% by the Company | Holding company |
| Zhuhai (Zibo) Investment Co., Ltd. ("Zhuhai Zibo") | October 15, 2021 | PRC | 100% by the Company | New energy investment |
| Zhuhai (Guizhou) New Energy Investment Co., Ltd. ("Zhuhai Guizhou") | November 23, 2021 | PRC | 100% by the Company | New energy investment |
| Sunrise (Guizhou) New Energy Materials Co., Ltd. ("Sunrise Guizhou") | November 8, 2021 | PRC | 39.35% by the Company | Manufacture of lithium battery materials |
| Guizhou Sunrise Technology Co., Ltd. ("Sunrise Tech") | September 1, 2011, acquired through an asset acquisition on July 7, 2022 | PRC | 39.35% by the Company | Manufacture of lithium battery materials |
| Sunrise (Guxian) New Energy Materials Co., Ltd. ("Sunrise Guxian") | April 26, 2022 | PRC | 20.07% by the Company | Manufacture of lithium battery materials |
| Guizhou Sunrise Technology Innovation Research Co., Ltd. ("Innovation Research") | December 13, 2022 | PRC | 39.35% by the Company | Research and development |
| Shenzhen Sunrise Yitan New Energy Technology Co., Ltd. ("Sunrise Yitan") | June 24, 2024 | PRC | 25.58% by the Company | Research and development of Sodium-ion battery |
| Shenzhen Sunrise Suiyuan New Materials Technology Co., Ltd. ("Sunrise Suiyuan") | June 24, 2024 | PRC | 25.58% by the Company | Research and development of silicon carbon battery |
| Guizhou Chenhui Trading Co., Ltd. ("Sunrise Chenhui") | March 25, 2024 | PRC | 39.35% by the Company | Sales of lithium battery materials |
| Sunrise Anhui New Energy Materials Co., Ltd. (Sunrise Anhui) | January 21, 2025 | PRC | 39.35% by the Company | Production of lithium battery materials |
| **Variable Interest Entity ("VIE") and subsidiaries of VIE** |  |  |  |  |
| Global Mentor Board (Zibo) Information Technology Co., Ltd. ("SDH" or "VIE") | December 5, 2014 | PRC | N/A | Knowledge sharing and enterprise service platform provider |
| Global Mentor Board (Hangzhou) Technology Co., Ltd. ("GMB (Hangzhou)") | November 1, 2017 | PRC | 100% by the VIE | Consulting, training and tailored services provider |
| Global Mentor Board (Shanghai) Enterprise Management Consulting Co., Ltd. ("GMB Consulting") | June 30, 2017 | PRC | 51% by the VIE | Consulting services provider |
| Shanghai Voice of Seedling Cultural Media Co., Ltd. ("GMB Culture") | June 22, 2017 | PRC | 51% by the VIE | Cultural and artistic exchanges and planning, conference services provider |
| Shidong (Beijing) Information Technology Co., LTD. ("GMB (Beijing)") | June 19, 2018 | PRC | 51% by the VIE | Information technology services provider |
| Mentor Board Voice of Seeding (Shanghai) Cultural Technology Co., Ltd. ("GMB Technology") | August 29, 2018 | PRC | 30.6% by the VIE | Technical services provider |
| Shidong Zibo Digital Technology Co., Ltd. ("Zibo Shidong") | October 16, 2020 | PRC | 100% by the VIE | Technical services provider |
| Beijing Mentor Board Health Technology Co., Ltd ("GMB Health") | January 7, 2022 | PRC | 100% by the VIE | Health services |
| Shidong Yike (Beijing) Technology Co., Ltd. ("Shidong Yike") | July 16, 2021 | PRC | 100% by the VIE | Health services |
| Guizhou Yuanneng Zhihui Enterprise Management Partnership Enterprise (Limited Partnership) ("Guizhou Yuanneng") | April 1, 2024 | PRC | 94% by the VIE | Holding company |

---

## Exhibit 12.1

**Exhibit 12.1**

**CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE**

**SARBANES-OXLEY ACT OF 2002**

I, Haiping Hu, certify that:

1. I have
 reviewed this annual report on Form 20-F of E-Power Inc. (the "Company");

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this
 report;

4. The Company's
 other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
 Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
 and 15d-15(f)) for the Company and have:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated
 the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the
 effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed
 in this report any change in the Company's internal control over financial reporting that occurred during the period covered
 by the annual report that has materially affected, or is reasonably likely to materially affect, the Company's internal control
 over financial reporting; and

5. The Company's
 other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
 to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent
 functions):

&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant
 deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
 likely to adversely affect the Company's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud,
 whether or not material, that involves management or other employees who have a significant role in the Company's internal
 control over financial reporting.

Date: May 14, 2026

---

| | | |
|:---|:---|:---|
| By: | /s/ Haiping Hu | /s/ Haiping Hu |
|  | Name: | Haiping Hu |
|  | Title: | Chief Executive Officer |

---

## Exhibit 12.2

**Exhibit 12.2**

**CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE**

**SARBANES-OXLEY ACT OF 2002**

I, Chao Liu, certify that:

1. I have
 reviewed this annual report on Form 20-F of E-Power Inc. (the "Company");

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this
 report;

4. The Company's
 other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
 Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
 and 15d-15(f)) for the Company and have:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated
 the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the
 effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed
 in this report any change in the Company's internal control over financial reporting that occurred during the period covered
 by the annual report that has materially affected, or is reasonably likely to materially affect, the Company's internal control
 over financial reporting; and

5. The Company's
 other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
 to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent
 function):

&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant
 deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
 likely to adversely affect the Company's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud,
 whether or not material, that involves management or other employees who have a significant role in the Company's internal
 control over financial reporting.

Date: May 14, 2026

---

| | | |
|:---|:---|:---|
| By: | /s/ Chao Liu | /s/ Chao Liu |
|  | Name: | Chao Liu |
|  | Title: | Chief Financial Officer |

---

## Exhibit 13.1

**Exhibit 13.1**

**CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF**

**THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report of E-Power Inc. (the "Company") on Form 20-F for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Haiping Hu, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report
 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;(2) The information
 contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 14, 2026

---

| | | |
|:---|:---|:---|
| By: | /s/ Haiping Hu | /s/ Haiping Hu |
|  | Name: | Haiping Hu |
|  | Title: | Chief Executive Officer |

---

## Exhibit 13.2

**Exhibit 13.2**

**CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF**

**THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report of E-Power Inc. (the "Company") on Form 20-F for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Chao Liu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report
 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;(2) The information
 contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 14, 2026

---

| | | |
|:---|:---|:---|
| By: | /s/ Chao Liu | /s/ Chao Liu |
|  | Name: | Chao Liu |
|  | Title: | Chief Financial Officer |

---

## Exhibit 15.1

**Exhibit 15.1**

![](ea028883401_ex15-1img1.jpg)

May 14, 2026

**E-Power Inc.**

Room 703, West Zone, R&D Building

Zibo Science and Technology Industrial Entrepreneurship Park, No. 69 Sanying Road

Zhangdian District, Zibo City, Shandong Province

The People's Republic of China

---

| | |
|:---|:---|
| **RE:** | **Consent of the People's Republic of China Counsel** |

---

Dear Sirs/Madams,

We consent to the references to our name under the captions "Item 3. Key Information" and "Item 4. Information on the Company—B. Business—Regulations" in the annual report of E-Power Inc. (formerly known as Sunrise New Energy Co., Ltd.) on Form 20-F for the year ended December 31, 2025 (the "**Annual Report**"), which is filed with the U.S. Securities and Exchange Commission (the "**SEC**") on the date hereof. We also consent to the filing with the SEC of this consent letter as an exhibit to the Annual Report.

In giving such consent, we do not thereby admit that we fall within the category of the person whose consent is required under Section 7 of the U.S. Securities Act of 1933, or under the Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.

Yours faithfully,

---

| |
|:---|
| /s/Jincheng Tongda & Neal Law Firm |
| Jincheng Tongda & Neal Law Firm |

---

![](ea028883401_ex15-1img2.jpg)

***PRIVILEGED & CONFIDENTIAL***

## Exhibit 15.2

**Exhibit 15.2**

**<u>Independent Registered Public Accounting Firm's Consent</u>**

We consent to the incorporation by reference in the Registration Statement on Form F-3 (File No. 333-272386) and Form S-8 (File No. 333-267105) of our report dated May 15, 2024, with respect to our audit of the consolidated financial statements of E-Power Inc. (Formerly known as Sunrise New Energy Co., Ltd.) for the year ended December 31, 2023, which is included in this Annual Report on Form 20-F of E-Power Inc. for the year ended December 31, 2025, filed with the Securities and Exchange Commission.

/s/ Marcum Asia CPAs LLP

Marcum Asia CPAs LLP

New York, NY

May 14, 2026

## Exhibit 15.3

**Exhibit 15.3**

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the incorporation by reference in the Registration Statements of E-Power Inc. (formerly known as Sunrise New Energy Co., Ltd.) (the "Company") on Form F-3 (File No. 333-272386) and Form S-8 (File No. 333-267105) of our report dated May 14, 2026, which includes an explanatory paragraph as to the Company's ability to continue as a going concern, with respect to our audit of the consolidated financial statements of E-Power Inc. as of December 31, 2025 and 2024, and for each of the years in the two-year period ended December 31, 2025 appearing in the Annual Report on Form 20-F of E-Power Inc. .

We also consent to the reference to us under the heading "Experts" in such Registration Statements.

/s/ Wei, Wei & Co., LLP

Flushing, New York

May 14, 2026