20-F

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, 2022

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

Sunrise New Energy Co., Ltd.

(Exact name of Registrant as Specified in its Charter)

Cayman Islands

(Jurisdiction of Incorporation or Organization)

Room 703, West Zone, R&D Building

Zibo Science and Technology Industrial Entrepreneurship Park, No. 69
Sanying Road

Zhangdian District, Zibo City, Shandong Province 

People’s Republic of China

+861082967728

(Address of Principal Executive Offices)

Haiping Hu, Chief Executive Officer

Room 703, West Zone, R&D Building

Zibo Science and Technology Industrial Entrepreneurship Park, No. 69
Sanying Road

Zhangdian District, Zibo City, Shandong Province

People’s Republic of China

+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:

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

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

None

(Title of Class)

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

None

(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 25,361,550 ordinary shares, par value $0.0001 per share, were outstanding as of December 31, 2022.

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	☐
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

INTRODUCTION		ii
FORWARD-LOOKING INFORMATION		iv
PART I		1
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	1
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	1
ITEM 3.	KEY INFORMATION	1
ITEM 4.	INFORMATION ON THE COMPANY	38
ITEM 4A.	UNRESOLVED STAFF COMMENTS	70
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	70
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	87
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	95
ITEM 8.	FINANCIAL INFORMATION	97
ITEM 9.	THE OFFER AND LISTING	98
ITEM 10.	ADDITIONAL INFORMATION	98
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	110
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	110
PART II		111
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	111
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	111
ITEM 15.	CONTROLS AND PROCEDURES	111
ITEM 16.	[RESERVED]	112
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	112
ITEM 16B.	CODE OF ETHICS	112
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	113
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	113
ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	113
ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	113
ITEM 16G.	CORPORATE GOVERNANCE	114
ITEM 16H.	MINE SAFETY DISCLOSURE	114
ITEM 16I.	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	114
PART III		115
ITEM 17.	FINANCIAL STATEMENTS	115
ITEM 18.	FINANCIAL STATEMENTS	115
ITEM 19.	EXHIBITS	115

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 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,” “Sunrise New Energy”, or “our,” refers to Sunrise New Energy Co., Ltd., a Cayman Islands holding company, and “VIE” refers to the variable interest entity (“VIE”), Global Mentor Board (Beijing) 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 Sunrise New Energy’s subsidiaries, and the VIE and its subsidiaries;

● “APP” are to our mobile application, “Shidonghui APP;”

● “China” or the “PRC” are to the People’s Republic of China;

● “Enterprise Service Client” or “Enterprise Service Clients” are to small and medium-sized enterprises that have entered into service agreements with us for customized enterprise services;

● “Expert” or “Experts” are to individual(s) qualified and certified by us to provide services to Users and Members;

● “GIOP BJ” 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”, Sunrise New Energy’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 Linking” are to “Linking (Shanghai) Network Technology Co., Ltd., a limited liability company organized under the laws of the PRC; the 51% of its equity interest owned by the VIE was transferred to a third party in July 2021;

ii

● “HK subsidiaries” are to GMB HK and SDH New Energy; and

● “Member” or “Members” are to individual(s) and enterprise(s) who signed up for each of our three annual membership plans: Platinum, Diamond, Protégé;

● “Mentor” or “Mentors” are to individual(s) invited by us to provide services to Users and Members;

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

● “shares,” “Shares,” or “Ordinary Shares” are to the Ordinary Shares of the Company, par value US$0.0001 per share;

● “SDH” or “the VIE” are to Global Mentor Board (Beijing) Information Technology Co., Ltd., a limited liability company organized under the laws of the PRC, which we control via a series of contractual arrangements among GIOP BJ, the VIE and shareholders of the VIE;

● “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, Sunrise New Energy’s wholly-owned-subsidiary, a Hong Kong corporation.

● “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 Sunrise New Energy;

● “U.S.” are to the United States;

● “User” or “Users” are to registered users of our APP;

● “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 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 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 Chinese 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 Chinese enterprise service and knowledge sharing industries;

● impact of the novel COVID-19 outbreak on our business operations; 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 insurance 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 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,” “Sunrise New Energy,” “our Company,” and the “Company” refer to Sunrise New Energy Co., Ltd., an exempted company limited by shares incorporated under the laws of the Cayman Islands; and “SDH” or “the VIE” are to Global Mentor Board (Beijing) Information Technology Co., Ltd., a limited liability company organized under the laws of the PRC, which we control via a series of contractual arrangements among GIOP BJ, SDH and shareholders of SDH (the “VIE Agreements”).

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 company. Further, neither we nor our subsidiaries own any shares in the VIE. Instead, for accounting purposes, we control and receive the economic benefits of the VIE’s business operation through a series of contractual arrangements, also known as VIE Agreements, dated June 10, 2019. The VIE Agreements enable us to consolidate the financial results of the VIE and its subsidiaries in our consolidated financial statements under the generally accepted accounting principles in the United States (“U.S. GAAP”). 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.

We have relied and expect to continue to rely on the VIE Agreements to control and operate the business of the VIE. 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 exercise control over the VIE. We are also subject to the risks of uncertainty about any future actions of the PRC government in this regard. 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, 2022 and 2021, the VIE accounted for an aggregate of 8.79% and 51.21%, respectively, of our consolidated total assets, 13.04% and 99% respectively, of our consolidated total liabilities, and 1.61% and 100% respectively, of our consolidated total net revenues. See our consolidated financial statements and the related notes in this annual report.

1

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. Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in the PRC with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. 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 if the draft Regulations on the Network Data Security Administration (Draft for Comments) (the “Security Administration Draft”) is enacted as proposed, since (i) as companies that engage in business-oriented consulting services and manufacturing and sales of graphite anode materials, we, our PRC subsidiaries, or the VIE and its subsidiaries, are unlikely to be classified as critical information infrastructure operators (“CIIOs”) by the PRC regulatory agencies; (ii) according to the interpretation of the relevant laws by the CAC, for online platform operators who have listed in foreign countries before the effective date of Cybersecurity Review Measures, and who are not seeking a new listing (such as a secondary or dual listing) in foreign countries, a cybersecurity review is not required; and (iii) the data processed in the business of the VIE and its subsidiaries, which is a knowledge sharing and enterprise service platform business, is unlikely to have a bearing on national security. There remains uncertainty, however, as to how the Cybersecurity Review Measures and the Security Administration Draft will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Security Administration Draft. 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 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, 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. As of the date of this annual report, we are not aware of the Trial Measures or any other PRC laws or regulations currently in effect requiring that we obtain permission from any PRC government authority for our continued listing on the Nasdaq. However, since these statements and regulatory actions are newly published, however, 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.”

2

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 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, Friedman LLP, the independent registered public accounting firm that issued the audit report included in our 2021 annual report, was a PCAOB-registered public accounting firm headquartered in New York during the time it served as our independent auditor. Our current auditor, Marcum Asia CPAs LLP (“MarcumAsia”), has been our independent auditor since December 16, 2022. The change in auditor was made due to the combination of Friedman LLP with Marcum LLP, effective September 1, 2022. MarcumAsia, is a PCAOB registered public accounting firm headquartered in New York. Our current and former auditors are both subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess an auditor’s compliance with the applicable professional standards, and have been inspected by the PCAOB on a regular basis. 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. Cash is transferred among our Company, our subsidiaries, and the VIE, in the following manners: prior to the completion of our initial public offering in February 2021, the sources of funding of Sunrise New Energy, its subsidiaries and the VIE primarily consisted of capital injection by shareholders and cash generated from operations; after the completion of our initial public offering, Sunrise New Energy made capital contributions to its subsidiaries. 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.”

3

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. Cash transfers and transfers of other assets between Sunrise New Energy, its subsidiaries, and the VIE were as follows: (i) For the fiscal year ended December 31, 2022, the VIE provided interest-free loans of $6,188,307 to the Company’s subsidiaries, Zhuhai Zibo and Sunrise Guizhou for the construction costs related to the graphite anode business, and the Company’s subsidiary, GMB HK, provided interest-free loans of $310,000 to the Company for professional fees. (ii) For the fiscal year ended December 31, 2021, the Company transferred the proceeds from its initial public offering in the amount of $15,000,000 to its subsidiary, Zhuhai Zibo, and the VIE provided interest-free loans of $90,000 to the Company for professional fees related to the initial public offering. (iii) For the fiscal year ended December 31, 2020, the VIE provided interest-free loans of $128,282 to the Company for professional fees related to the initial public offering.

Permissions Required from PRC Authorities 

As of the date of this annual report, we, our PRC subsidiaries, or the VIE and its subsidiaries, (i) are not subject to additional permissions or approval requirements from any governmental agency that are required to approve the operations of our PRC subsidiaries, or the VIE and its subsidiaries, (ii) have received from PRC authorities all requisite licenses, permissions, and approvals needed to engage in the businesses currently conducted in the PRC, and (iii) no such permission or approval has been denied. These licenses, permissions, and approvals, which have been successfully obtained, are: (1) business license; (2) the ICP License for our knowledge sharing and enterprise service platform business; and (3) the approval for the Construction Land Use Planning Permit, the Construction Works Planning Permit, the Construction Permit, the Pollutant Discharge License, the filing-for-record procedures with the relevant work safety administrative department, the approval for the Environmental Impact Report and the Filing Certificate for Fire Safety Inspection and Acceptance of Construction Project for our new business of manufacturing and sales of graphite anode material. 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 online business, which could have a material adverse impact on our business, financial conditions and results of operations.” We have been closely monitoring the development in the regulatory landscape in China, particularly regarding the requirement of approvals, including on a retrospective basis, from the CSRC, the CAC, or other PRC authorities with respect to this offering, as well as other procedures that may be imposed on us. 

4

Selected Condensed Consolidating Financial Schedule

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

Name	Date of Incorporation	Place of incorporation	Percentage of effective ownership	Principal Activities
Subsidiaries
Global Mentor Board Information Technology Limited (“GMB HK”)	March 22, 2019	HK	100%	Holding company
Beijing Mentor Board Union Information Technology Co, Ltd. (“GIOP BJ”)	June 3, 2019	PRC	100%	Holding company
Shidong Cloud (Beijing) Education Technology Co., Ltd (“Shidong Cloud”)	December 22, 2021	PRC	75%	Educational Consulting
SDH (HK) New Energy Tech Co., Ltd. (“SDH New Energy”)	October 8, 2021	Hongkong	100%	Holding company
Zhuhai (Zibo) Investment Co., Ltd. (“Zhuhai Zibo”)	October 15, 2021	PRC	100%	New Energy Investment
Zhuhai (Guizhou) New Energy Investment Co., Ltd. (“Zhuhai Guizhou”)	November 23, 2021	PRC	100%	New Energy Investment
Sunrise (Guizhou) New Energy Materials Co., Ltd.  (“Sunrise Guizhou”)	November 8, 2021	PRC	39.35%	Manufacture of Lithium Battery Materials
Guizhou Sunrise Technology Co., Ltd. (“Sunrise Tech”)	September 1, 2011	PRC	39.35%	Manufacture of Lithium Battery Materials
Sunrise (Guxian) New Energy Materials Co., Ltd. (“Sunrise Guxian”)	April 26, 2022	PRC	20.07%	Manufacture of Lithium Battery Materials
Guizhou Sunrise Technology Innovation Research Co., Ltd. (“Innovation Research”)	December 13, 2022	PRC	39.35%	Research and Development
Variable Interest Entity (“VIE”) and subsidiaries of VIE
Global Mentor Board (Beijing) Information Technology Co., Ltd. (“SDH” or “VIE”)	December 5, 2014	PRC	VIE	peer-to-peer knowledge sharing and enterprise service platform provider
Global Mentor Board (Hangzhou) Technology Co., Ltd. (“GMB (Hangzhou)”)	November 1, 2017	PRC	100% by VIE	Consulting, training and tailored services provider
Global Mentor Board (Shanghai) Enterprise Management Consulting Co., Ltd. (“GMB Consulting”)	June 30, 2017	PRC	51% by VIE	Consulting services provider
Shanghai Voice of Seedling Cultural Media Co., Ltd. (“GMB Culture”)	June 22, 2017	PRC	51% by VIE	cultural and artistic exchanges and planning, conference services provider
Shidong (Beijing) Information Technology Co., LTD. (“GMB (Beijing)”)	June 19, 2018	PRC	100% by VIE	information technology services provider
Mentor Board Voice of Seeding (Shanghai) Cultural Technology Co., Ltd. (“GMB Technology”)	August 29, 2018	PRC	30.6% by VIE	Technical services provider
Shidong Zibo Digital Technology Co., Ltd. (“Zibo Shidong”)	October 16, 2020	PRC	100% by VIE	Technical services provider
Shidong Trading Service (Zhejiang) Co., Ltd. (“Shidong Trading”)	April 19, 2021	PRC	Deregistered in November 2022	Sale of Merchandise
Shanghai Jiagui Haifeng Technology Co., Ltd. (“Jiagui Haifeng”)	November 29, 2021	PRC	51% by VIE	Business Incubation Services provider
Shanghai Nanyu Culture Communication Co., Ltd. (“Nanyu Culture”)	July 27, 2021	PRC	51% by VIE	Enterprise Information Technology Integration services provider
Beijing Mentor Board Health Technology Co., Ltd (“GMB Health”)	January 7, 2022	PRC	100% by VIE	Health Services
Shanghai Yuantai Fengdeng Agricultural Technology Co., Ltd. (“Yuantai Fengdeng”)	March 4, 2022	PRC	51% by VIE	Agricultural Technology Service

5

The following tables present selected condensed consolidating financial data of Sunrise New Energy and its subsidiaries and the VIE and its subsidiaries for the fiscal years ended December 31, 2022, 2021, 2020, and balance sheet data as of December 31, 2022, 2021, and 2020.

SELECTED CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS DATA

	Year ended December 31, 2022
	Parent			Consolidated affiliated entities			VIE consolidated entities			Inter- company elimination		Group consolidated
	(US$)
Revenues, net		-			37,511,989			613,679			-		38,125,668
Total cost and operating expenses		3,586,852			39,001,736			14,346,213			-		56,934,801
Loss from operations		(3,586,852	)		(1,489,747	)		(13,732,534	)		-		(18,809,133	)
Loss before income taxes		(5,990,264	)		(1,696,242	)		(14,628,926	)		-		(22,315,432	)
Net loss		(5,990,264	)		(1,696,003	)		(15,438,135	)		-		(23,124,402	)

	Year ended December 31, 2021
	Parent			Consolidated affiliated entities			VIE consolidated entities			Inter- company elimination		Group consolidated
	(US$)
Revenues, net		-			-			7,409,272			-		7,409,272
Total cost and operating expenses		1,010,536			127,627			13,681,122			-		14,819,285
Loss from operations		(1,010,536	)		(127,627	)		(6,271,850	)		-		(7,410,013	)
Loss before income taxes		(3,021,789	)		(170,253	)		(5,865,989	)		107,118		(8,950,913	)
Net loss		(3,021,789	)		(170,253	)		(5,629,408	)		107,118		(8,714,332	)

	Year ended December 31, 2020
	Parent		Consolidated affiliated entities			VIE consolidated entities		Inter- company elimination		Group consolidated
	(US$)
Revenues, net		73,744		-			23,107,340		-		23,181,084
Total cost and operating expenses		50,000		-			8,405,024		-		8,455,024
Profit (loss) from operations		23,744		-			14,702,316		-		14,726,060
Profit (loss) before income taxes		28,203		(1,995	)		14,986,062		-		15,012,270
Net income (loss)		28,203		(1,995	)		11,931,079		-		11,957,287

6

SELECTED CONDENSED CONSOLIDATING BALANCE SHEETS DATA

	As of December 31, 2022
	Parent		Consolidated affiliated entities		VIE consolidated entities		Inter- company elimination			Group consolidated
	(US$)
Total current assets		7,330,103		33,642,263		9,713,750		(6,048,283	)		44,637,833
Total non-current assets		14,690,000		56,445,366		5,939,175		(14,690,000	)		62,384,541
Total assets		22,020,103		90,087,629		15,652,925		(20,738,283	)		107,022,374
Total current liabilities		15,550		27,666,520		4,389,658		(6,048,283	)		26,023,445
Total non-current liabilities		-		7,637,332		-		-			7,637,332
Total liabilities		15,550		35,303,852		4,389,658		(6,048,283	)		33,660,777

	As of December 31, 2021
	Parent		Consolidated affiliated entities		VIE consolidated entities		Inter- company elimination			Group consolidated
	(US$)
Total current assets		7,776,218		9,932,297		16,864,942		(227,899	)		34,345,558
Total non-current assets		17,700,060		8,244,917		13,404,549		(15,000,000	)		24,349,526
Total assets		25,476,278		18,177,214		30,269,491		(15,227,899	)		58,695,084
Total current liabilities		211,430		33,686		1,703,665		(227,899	)		1,720,882
Total non-current liabilities		-		-		-		-			-
Total liabilities		211,430		33,686		1,703,665		(227,899	)		1,720,882

	As of December 31, 2020
	Parent		Consolidated affiliated entities		VIE consolidated entities		Inter- company elimination			Group consolidated
	(US$)
Total current assets		125,386		14,360		28,246,141		(128,282	)		28,257,605
Total non-current assets		-		-		11,479,238		-			11,479,238
Total assets		125,386		14,360		39,725,379		(128,282	)		39,736,843
Total current liabilities		-		-		5,583,463		-			5,583,463
Total non-current liabilities		-		-		3,196		-			3,196
Total liabilities		-		-		5,586,659		-			5,586,659

7

SELECTED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS DATA

	Year ended December 31, 2022
	Parent			Consolidated affiliated entities			VIE consolidated entities			Inter-company elimination			Group consolidated
	(US$)
Net cash used in operating activities		(808,226	)		(5,444,733	)		(3,320,442	)		-			(9,573,401	)
Net cash used in investing activities		-			(45,299,072	)		(6,188,307	)		5,878,307			(45,609,072	)
Net cash provided by financing activities		310,000			51,328,368			-			(5,878,307	)		45,760,061

	Year ended December 31, 2021
	Parent			Consolidated affiliated entities			VIE consolidated entities			Inter-company elimination			Group consolidated
	(US$)
Net cash (used in) provided by operating activities		(1,015,145	)		(6,532,445	)		2,314,408			-			(5,233,182	)
Net cash used in investing activities		(25,825,000	)		(8,244,917	)		(3,115,281	)		15,090,000			(22,095,198	)
Net cash provided by financing activities		28,249,093			17,678,168			-			(15,090,000	)		30,837,261

	Year ended December 31, 2020
	Parent			Consolidated affiliated entities		VIE consolidated entities			Inter-company elimination			Group consolidated
	(US$)
Net cash (used in) provided by operating activities		(52,994	)		120,750		6,998,407			-			7,066,163
Net cash used in investing activities		-			-		(6,493,837	)		128,282			(6,365,555	)
Net cash provided by financing activities		128,282			-		119,996			(128,282	)		119,996

A. [Reserved]

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

8

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.

● Our historical financial results may not be indicative of our future performance.

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

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

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

Risks Related to Our Graphite Anode Manufacturing and Sales Business

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

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

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

● We may not respond quickly to continued innovations.

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

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

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

9

Risks Related to Our Corporate Structure

With regard to our knowledge sharing and enterprise service platform, we control and receive the economic benefits of the business operations of the VIE through the VIE Agreements solely because we met the conditions for consolidation of the VIE under the U.S. GAAP for accounting purpose; however, the VIE Agreements have not been tested in a court of law and are subject to significant risks, as set forth in the following risk factors. For a description of these VIE Agreements, see “ITEM 4. INFORMATION ON THE COMPANY — C. Organizational Structure”.

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

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

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

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

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

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

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

Risks Related to Doing Business in China

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

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

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

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

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

● We face risks related to health epidemics such as the COVID-19 first identified in Wuhan city at the end of 2019, which significantly disrupted our operations and may continue to adversely affect our business, financial condition and results of operations.

10

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

11

Risks Related to Our Ordinary Shares and the Trading Market

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

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

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

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

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

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

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

Risks Related to Our Business

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

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 these and the other risks described in this annual report. If we do not successfully address these risks, our business would be significantly harmed.

Our historical financial results may not be indicative of our future performance.

Our net revenue was $7,409,272 and $23,181,084 for the years ended December 31, 2021 and 2020, respectively. Our net loss was $8,714,332 for the year ended December 31, 2021 and net income was $11,957,287 for the year ended December 31, 2020, respectively. However, our net revenue was $38,125,668 and we incurred a net loss of $23,124,402 for the year ended December 31, 2022. The loss was mainly due to the material and negative impact of the COVID-19 pandemic on our business, and the large capital investment injected by us into the new business venture, Sunrise Guizhou, to enter into the manufacture and sales of lithium-ion power battery anode materials. As such, our limited history of operation makes it difficult to evaluate our future prospects.

12

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

We are expanding our operations into the graphite anode manufacturing and sales business. 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 planned expansion will also place significant demands on us to maintain the quality of our services to ensure that our brand does not suffer as a result of any deviations, whether actual or perceived, in the quality of our services. 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 quality of service may deteriorate and 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.

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. As such, we may not be able to realize our expected growth, and our business and financial results will be adversely impacted.

If we are not successful in selling inventory, we may have to sell the inventory at significantly reduced prices or may not be able to sell the inventory at all.

In late 2019, we started selling merchandises obtained through (1) fee exchange arrangements, through which we receive products in exchange for collection of membership fees and consulting fees earned from our customers, and (2) direct purchases from our customers and third parties based on market trend and demand. Our profitability in sale of merchandises depends on our ability to manage inventory levels and respond to shifts in consumer demand patterns. Overestimating customer demand for merchandises will likely result in the need to record inventory markdowns and sell excess inventory at clearance prices which would negatively impact our gross margins and operating results. Underestimating customer demand for merchandises can lead to inventory shortages, missed sales opportunities and negative customer experiences. Our gross margins could suffer if we are unable to effectively manage our inventory and sell merchandises at a significantly reduced price, which could have a material adverse effect on our results of operations and cash flows. 

Increasing competition within the enterprise service and knowledge sharing industries could have an impact on our business prospects.

The enterprise service and knowledge sharing are industries where new competitors can easily enter into since there are no significant barriers to entry. We also face many competitors in the knowledge sharing industry where a number of competitors have been in business longer than us. Competing companies may have significantly greater financial and other resources than we have and may offer services that are more attractive to prospective clients; increased competition would have a negative impact on both our revenues and our profit margins. 

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.

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 14001:2015, ISO 45001:2018, ISO 9001:2015, ISO 16949:2016. 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 operation of online services we provide on our APP, including entry into this online service industry, the scope of permissible business activities, licenses and permits for various business activities, and foreign investment.

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We currently hold an ICP License (the Administrative Measures on Internet Information Services, or the Internet Measures, promulgated by the State Council requires commercial internet content-related services operators to obtain a VATS (“value added telecommunications service”) License for internet content provision business, or the ICP License). Although we do not currently believe we are required to hold any other licenses, we may be required to obtain additional licenses, permits or approval, given the significant uncertainties of the interpretation and implementation of certain regulatory requirements applicable to our business. 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 are not aware of any other approvals, licenses, or permits that are material to our business operations that we have not, but may be required to, obtain; nor have we received any notice of warning or been subject to penalties or other disciplinary action from the relevant governmental authorities for lack of approvals and permits or noncompliance with regulations related to our current licenses. However, we cannot assure you that we will not be subject to any warning, investigations or penalties in the future. If the PRC government deems us as operating without proper approvals, licenses or permits, promulgates new laws and regulations that require additional approvals or licenses or impose additional restrictions on the operation of any part of our business, we may be required to apply for additional approvals, license or permits, or be subject to various penalties, including fines, termination or restrictions of the part of our business or revoking of our business licenses, which may materially and adversely affect our business, financial conditions and results of operations.

The successful operation of our online service depends upon the performance and reliability of the internet infrastructure and fixed telecommunication networks in China.

Our online service depends on the performance and reliability of the internet infrastructure in China. Almost all access to the internet is maintained through state-owned telecommunication operators under the administrative control and regulatory supervision of the MIIT. In addition, the national networks in China are connected to the internet through international gateways controlled by the PRC government. These international gateways are the only channels through which a domestic user can connect to the internet. It is unpredictable whether a more sophisticated internet infrastructure will be developed in China. We may not have access to alternative networks in the event of disruptions, failures or other problems with China’s internet infrastructure. In addition, the internet infrastructure in China may not support the demands associated with continued growth in internet usage.

We rely on China Telecommunications Corporation, or China Telecom, and China United Network Communications Group Company Limited, or China Unicom, to provide us with network services and data center hosting services. We have limited access to alternative services in the event of disruptions, failures or other problems with the fixed telecommunications networks of these companies, or if these companies otherwise fail to provide the services. Any unscheduled service interruption could damage our reputation and result in a decrease in our revenues. Furthermore, we have no control over the costs of the services provided by these telecommunication companies. If the prices that we pay for telecommunications and internet services rise significantly, our gross margins could be adversely affected. In addition, if internet access fees or other charges to internet users increase, our user traffic may decrease, which in turn may harm our revenues.

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.

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.

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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.

We place substantial reliance on the knowledge sharing and enterprise service industry experience and knowledge of our senior management team as well as their relationships with other industry participants. The loss of the services of one or more members of our senior management could hinder our ability to effectively manage our business and implement our growth strategies. Finding suitable replacements for our current senior management could be difficult, and competition for such personnel of similar experience is intense. If we fail to retain our senior management, 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 who have experience in consulting services and are committed to our service approach. 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.

If we fail to attract or retain qualified service providers, our business and results of operations could be materially and adversely affected.

Our core strength is the knowledge brought by our service providers, highlighted by their experiences, wisdom, industry know-how, and social connections. We rely heavily on the expertise of our service providers, including Mentors, Experts, and our consultants to maintain our core competence. As of April 30, 2023, our knowledge sharing and enterprise service ecosystem had 784 Mentors and 1,930 Experts, and a team of full-time consultants as our knowledge sharing providers. Many of our Mentors are experienced leaders of successful and well-known corporations. Likewise, our Experts are outstanding professionals in their specialized fields, and our team of consultants is professionals with industrial experiences of more than five years. As our business scope increases, we expect to continue to invest significant resources in attracting and retaining service providers. Our ability to sustain our growth will depend on our ability to attract and retain qualified service providers. If we fail to attract or retain qualified service providers, our business and results of operations could be materially and adversely affected.

If we were to lose our certification as a National High Tech Enterprise, we could face higher tax rates than we currently pay for much of our revenues.

In October 2017, the VIE was approved as a National High Tech Enterprise, which certificate was renewed in December 2020 and is valid for three years. This certification entitles the VIE to a favorable tax rates of 15%, rather than the unified rate of 25% if it was not so certified. In the event the VIE were to lose the benefit of the favorable tax rate in the future, we could see significant increases in the amount of taxes we pay, meaning that our operating results could be materially harmed, even in the absence of a decrease in our operations.

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.

Failure to maintain or enhance our brand or image could have a material and adverse effect on our business and results of operations.

We believe our SDH (“师董会”) brand is associated with a well-recognized knowledge sharing and enterprise services provider in the markets that we operate with online and offline services designed to suit our clients’ needs. Our brand is integral to our sales and marketing efforts. We have obtained trademark registrations for our brand SDH in the PRC. Our continued success in maintaining and enhancing our brand and image depends to a large extent on our ability to satisfy customer needs by further developing and maintaining quality of services across our operations, as well as our ability to respond to competitive pressures. If we are unable to satisfy clients’ needs or if our public image or reputation were otherwise diminished, our business transactions with our clients may decline, which could in turn adversely affect our results of operations.

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

We believe our key trademark, “师董会,” for which we have obtained trademark protection in China, and 35 computer software copyrights and one artwork copyright, for which we have obtained protection with the Copyright Protection Centre of China (CPCC), and other intellectual property rights are critical to our success. 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.

As internet domain name rights are not rigorously regulated or enforced in China, other companies may incorporate in their domain names elements similar in writing or pronunciation to the “师董会” trademarks or their Chinese equivalents. This may result in confusion between those companies and our company and may lead to the dilution of our brand value, which could adversely affect our business.

Risks Related to Graphite Anode Manufacturing and Sales Business

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

In 2022, Zhuhai Zibo entered into an Investment Agreement with 13 other parties to form a graphite anode manufacturing and sales joint venture, Sunrise Guizhou. As of the date of this annual report, Zhuhai Zibo has invested a total of RMB126,480,000 ($19,858,670) in Sunrise Guizhou. While we believe the joint venture could give the Company new potential growth, it may not perform as well as we expected and, as a result, could impact the Company’s financial performance.

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.

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

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.

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.

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.

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

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.

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.

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.

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.

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

For fiscal year 2022, Sunrise Guizhou had 16 customers. Sunrise Guizhou’s customers are manufacturers of industrial and consumer energy storage lithium-ion batteries, such as batteries for electric vehicles and electric ships, and smart consumer electronics. For the fiscal year ended December 31, 2022, four customers accounted for more than 10% of Sunrise Guizhou’s total sales, accounting for 28.43%, 19.54%, 19.30% and 18.87% respectively.

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, the United States, Romania, and Indonesia, in order to meet the requirements of different customers, as well as to maintain a diversified supplier base which is beneficial to a stable supply chain. 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 the manufacturing of its graphite anode products.

As of the date of this annual report, Sunrise Guizhou entrusts manufacturing of its graphite anode products to third parties contractors, who might be unable to timely manufacture its products or produce the quantity and quality required to meet its commercial needs, or may not be able to execute our manufacturing procedures appropriately, or may not perform as agreed upon, or to produce, store and distribute its products satisfactorily. 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.

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Risks Related to Our Corporate Structure

We control and receive the economic benefits of the business operations of the VIE through the VIE Agreements solely because we met the conditions for consolidation of the VIE under the U.S. GAAP for accounting purpose; however, the VIE Agreements have not been tested in a court of law and are subject to significant risks, as set forth in the following risk factors. For a description of these VIE Agreements, see “ITEM 4. INFORMATION ON THE COMPANY — C. Organizational Structure”.

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 parts of our businesses including the value-added telecommunications services, or the VATS, is subject to restrictions under current PRC laws and regulations. For example, the ultimate foreign equity ownership in a VATS provider may not exceed 50%. 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.”

In light of the above restrictions and requirements, we currently operate our knowledge sharing and enterprise service platform through SDH, a VIE entity, through a series of contractual arrangements, as a result of which, under United States generally accepted accounting principles, the assets and liabilities of the VIE are treated as our assets and liabilities and the results of operations of the VIE are treated in all aspects as if they were the results of our operations. For a description of these contractual arrangements, see “Business—Contractual Arrangements between GIOP BJ, the VIE and Its Shareholders” and “Related Party Transactions—Contractual Arrangements with GIOP BJ, the VIE and Its Shareholders.”

In the opinion of our PRC legal counsel, Jincheng Tongda & Neal Law Firm (“JT&N”), based on its understandings of the relevant PRC laws and regulations, (i) the ownership structures of the VIE in China and GIOP BJ are not in violation of applicable PRC laws and regulations currently in effect; and (ii) each of the contracts among GIOP BJ, the VIE and its shareholders is legal, valid, binding and enforceable in accordance with its terms and applicable PRC laws. 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.

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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 substantial portion of our business through the VIE in China through VIE Agreements, as a result of which, under United States generally accepted accounting principles, the assets and liabilities of the VIE are treated as our assets and liabilities and the results of operations of the VIE are treated in all respects as if they were the results of our operations. 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.

Furthermore, on July 10, 2021, the Cyberspace Administration of China (“CAC”) publicly issued the Measures for Cybersecurity Censorship (Revised Draft for Comments) aiming to, upon its enactment, replace the existing Measures for Cybersecurity Censorship. The draft measures extend the scope of cybersecurity reviews to data processing operators engaging in data processing activities that affect or may affect national security, including listing in a foreign country. If the enacted version of the draft measures mandates clearance of cybersecurity review and other specific actions to be completed by companies, we face uncertainties as to whether such clearance is required for our offerings and whether such clearance can be timely obtained, or at all.

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.

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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 ordinary shares from the Nasdaq Capital Market and a significant impairment in the market value of our 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 executive officers, directors and affiliates own a significant percentage of our shares and will be able to exert significant control over matters subject to shareholder approval. 

As of the date of this annual report, our executive officers, directors and affiliates beneficially own approximately 43.56% of our outstanding Ordinary Shares. Therefore, these stockholders will have the ability to influence us through their ownership positions. Further, our CEO and majority shareholder, Mr. Haiping Hu, has beneficial ownership of 7,324,687 Ordinary Shares. These shares represent ownership of approximately 28.88% of our outstanding Ordinary Shares as of the date of this annual report. These shareholders may be able to determine all matters requiring shareholder approval. For example, these shareholders, acting together, may be able to control elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may prevent or discourage unsolicited transaction proposals or offers for our Ordinary Shares that you may believe are in your best interest as one of our shareholders.

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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 Island company and all of our business is conducted in the PRC, you may be unable to bring an action against us or our officers and directors or to enforce any judgment you may obtain.

We are incorporated in the Cayman Islands and conduct our operations primarily in China. Substantially all of our assets are located outside of the United States. In addition, the majority of our directors and officers reside outside of the United States. 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.

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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 Ordinary Shares to significantly decline or be worthless.

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. 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.

On November 14, 2021, the CAC published draft Regulations on the Network Data Security Administration (Draft for Comments) (the “Security Administration Draft”), 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. According to the Security Administration Draft, data processing operators who possess personal data of at least one million users or collect data that affects or may affect national security must be subject to network data security review by the relevant Cyberspace Administration of the PRC. The deadline for public comments on the Security Administration Draft was December 13, 2021.

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 if the Security Administration Draft is enacted as proposed, since (i) as companies that engage in business-oriented consulting services and manufacturing and sales of graphite anode materials, we, our PRC subsidiaries, or the VIE and its subsidiaries are unlikely to be classified as 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 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 Draft will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Security Administration Draft. However, there remains uncertainty, as to how the Cybersecurity Review Measures and the Security Administration Draft will be interpreted or implemented by the authorities and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Security Administration Draft in the future. 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.

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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 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, 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 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 Ordinary Shares to significantly decline in value or become worthless.

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

Although the Chinese economy expanded well in the last two decades, 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.

We face risks related to health epidemics such as the COVID-19 coronavirus outbreak first identified in Wuhan city at the end of 2019, and other outbreaks, which significantly disrupted our operations and may continue to adversely affect our business, financial condition and results of operations.

Our business has been significantly disrupted and may continue be materially and adversely affected by health epidemics such as the COVID-19 pandemic and other outbreaks affecting the PRC. Our business operations depend on China’s overall economy and demand for our service and products, which could be disrupted by health epidemics. In fiscal years 2022 and 2021, due to the government imposed restrictions and lock-downs that were intended to contain the spread of the COVID-19 pandemic, we were prevented from arranging many of our offline activities, resulting in cancellations or postponements of study tours, forums and sponsorship advertising events, which materially and adversely impacted the performance of our knowledge sharing business. For fiscal year 2021, revenues generated from the core business of our knowledge sharing platform (member services, enterprise services and online services) decreased by approximately 76%, compared to the same period of fiscal year 2020. For the year ended December 31, 2022, the revenues generated from the core services of our knowledge sharing platform (member services, enterprise services and online services) decreased by approximately 95%, compared to that of fiscal year 2021. Although the PRC government relaxed its COVID-19 restrictions since December 2022, there still remains a possibility of further outbreaks of COVID-19 variants forcing a complete or partial suspension of our business operations in the PRC, a prolonged outbreak of the coronavirus or other adverse public health developments in China would likely have a material adverse effect on our business operations as such outbreak or other development could significantly impact the Chinese economy and our industry, disrupt our operations and adversely affect our business, financial condition and results of operations. The Company is operating in a rapidly changing environment, so the extent to which COVID-19 may impact its business, operations and financial results from this point forward will depend on numerous evolving factors that the Company cannot accurately predict. Those factors include the following: the duration and scope of the pandemic, and governmental, business and individuals’ actions that have been and continue to be taken in response to the pandemic.

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.

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.

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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.

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

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. Further, our Ordinary Shares offered by this annual report are denominated in United States dollars, we will need to convert the net proceeds we receive into RMB in order to use the funds for our business. Changes in the conversion rate between the United States dollar and the RMB will affect that amount of proceeds we will have available for our business.

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.

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 Sunrise New Energy is not a resident enterprise for PRC tax purpose. Sunrise New Energy is not controlled by a PRC enterprise or PRC enterprise group and we do not meet some of the conditions outlined in the immediately preceding paragraph. For example, as a holding company, the key assets and records of Sunrise New Energy, 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 as 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.

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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.

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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.

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 are not subject to the scrutiny of any regulatory bodies in the PRC.

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.

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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.

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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 is making plans to resume 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 auditor prior to September 29, 2022, Friedman LLP, was registered with the PCAOB and had been inspected by the PCAOB on a regular basis in the audit period. Our current auditor, MarcumAsia, is headquartered in Manhattan, New York and registered with the PCAOB. Our auditor is 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 rstandards, and has been inspected by the PCAOB on a regular basis. As such, as of the date of this annual report, our listing is not affected by the Holding Foreign Companies Accountable Act and related regulations. However, the recent developments would add uncertainties to our continued listing and 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.

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 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.

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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.

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.

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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.

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Risks Related to Our 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 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 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 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. 

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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.

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.

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 years ended December 31, 2022, 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. As a result of the above, our management has concluded that, as of December 31, 2022, our disclosure controls and procedures were not effective.

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; and (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. 

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 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.

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 Ordinary Shares if the market price of our Ordinary Shares increases. 

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

The market price of our 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.

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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 an U.S issuer.

Nasdaq listing rules require listed companies to have, among other things, a majority of its board members be independent. As a foreign private issuer, however, we are permitted to, and we may follow home country practice in lieu of the above requirements, or we may choose to comply with the above requirement within one year of listing. The corporate governance practice in our home country, the Cayman Islands, does not require a majority of our board to consist of independent directors. Thus, although a director must act in the best interests of the Company, it is possible that fewer board members will be exercising independent judgment and the level of independent board oversight of the management of our company may decrease as a result. In addition, Nasdaq listing rules also require U.S. domestic issuers to have a compensation committee, a nominating/corporate governance committee composed entirely of independent directors, and an audit committee with a minimum of three members. Furthermore, Cayman law does not require that we obtain shareholder approval to issue 20% or more of our outstanding Ordinary Shares in a private offering.

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.

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

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; and

● 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 the ability of our shareholders holding in aggregate of 10% of the outstanding voting shares to call for special meetings of shareholders.

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 Ordinary Shares are a “penny stock,” which will require brokers trading in our 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 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 present proposals before annual general meetings or extraordinary general meetings not called by shareholders.

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. Advance notice of at least twenty-one clear days is required for the convening of our annual general shareholders’ meeting and at least 14 clear days’ notice any other general meeting of our shareholders. A quorum required for a meeting of shareholders consists of at least one shareholder present or by proxy, representing not less than one-third in nominal value of the total issued voting shares in the Company. 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.

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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 control 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, Sunrise New Energy, was established under the laws of the Cayman Islands. Sunrise New Energy 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 15, 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”) of 6,720,000 Ordinary Shares. The Ordinary Shares were priced at $4.00 per share, before underwriting discounts and offering expenses, resulting in gross proceeds of $26,880,000. The offering was conducted on a firm commitment basis. The Ordinary Shares commenced trading on The Nasdaq Capital Market under the ticker symbol “SDH” on February 9, 2021.

On February 19, 2021, ViewTrade Securities, Inc., as the representative of the underwriters in the initial public offering of the Company, exercised in full its option to purchase an additional 1,008,000 Ordinary Shares at a price of $4.00 per share. As a result, the Company raised gross proceeds of approximately $4,032,000, in addition to the previously announced IPO gross proceeds of approximately $26.88 million, before deducting underwriting discounts and other related expenses.

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 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 Sunrise New Energy’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.

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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 began trading on the NASDAQ Capital Market under the new ticker symbol “EPOW” as of the opening of trading on August 15, 2022. The Company’s ordinary shares previously traded under the ticker symbol “SDH”.

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: 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. the VIE, on the other hand, is also able to, pursuant to its business scope, provide a platform for our Members to obtain practical corporate guidance, financing sources, resource joining, assistance with corporate emergencies, support with public listings and other mutual assistance services.

We control the VIE through contractual arrangements, which are described under “Business — Contractual Arrangements between GIOP BJ, the VIE and Its Shareholders.” Sunrise New Energy 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 www.sdh365.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

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,” “Sunrise New Energy,” “our Company,” and the “Company” refer to Sunrise New Energy Co., Ltd., an exempted company limited by shares incorporated under the laws of the Cayman Islands; and “SDH” or “the VIE” are to Global Mentor Board (Beijing) Information Technology Co., Ltd., a limited liability company organized under the laws of the PRC, which we control via a series of contractual arrangements among GIOP BJ, SDH and shareholders of SDH (the “VIE Agreements”).

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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 control and receive the economic benefits of the VIE’s business operation through the VIE Agreements, each of which are dated June 10, 2019, and which enable us to consolidate the financial results of the VIE and its subsidiaries in our consolidated financial statements under U.S. GAAP. See “Item 3. Key Information — Contractual Agreements among GIOP BJ, SDH the VIE and Its Shareholders” for more details.

Overview

The VIE, or SDH, started as a consulting company providing enterprise services to small and medium-sized enterprises in the PRC in December 2014, and launched a peer-to-peer knowledge sharing and enterprise service platform in May 2016. Since then, the VIE has been operating a knowledge sharing platform and provided services both online, via a mobile application “Shidonghui App” (the “APP”), and offline, through local offices directly operated by us in Beijing, Shanghai, Zibo and Guizhou in China.

When the VIE first launched its services, the aim was not only to continue providing enterprise services to PRC’s growing business communities, but also create a marketplace where qualified entities (individuals and enterprises) have opportunities to serve as providers, and receive rewards by sharing their knowledge with others on the platform. As of April 2023, our knowledge sharing and enterprise service ecosystem had 784 Mentors, 1,930 Experts, and 518,659 Users. In addition to serving Users and Members, the VIE continues to provide enterprise services to small and medium-sized enterprises in China through a dedicated team with seven full-time professional consultants, as well as Mentors and Experts. The providers (Mentors, Experts and consultants) are successful entrepreneurs, scientists, investors, and professionals with qualifications and achievements in major industries such as finance, energy, health care, technology, manufacturing and academia. Our core strength is the knowledge brought by our providers, highlighted by their experiences, wisdom, industry know-how, and social connections. The VIE offers online services to Users on the APP, which was released to the public in May 2016, and offline services to Members. The online services the VIE currently offers to Users are (1) Questions and Answers (Q &A) Sessions and (2) streaming of audio and video courses and programs. The offline services the VIE offers to Members are study tours and forums.

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. 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 approximately 260,543 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 phase the construction of (20,000 tons annual manufacturing capacity) of the manufacturing plant has been completed as of the date of this annual report, pending the requisite fire and environmental inspections by relevant government agencies. The inspections are currently ongoing and expected to be completed in June 2023. If Sunrise Guizhou passes the inspections and receives the requisite approvals from the relevant government agencies, it will start manufacturing graphite anode material on-site. The second phase of the construction of the manufacturing plant (10,000 tons annual manufacturing capacity) is ongoing and expected to be completed in June 2023, and the third phase of construction of the manufacturing plant (20,000 tons annual manufacturing capacity) was approved by the board of the directors of the Company in March 2023, and is expected to start in July 2023.

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 believe that the sales for Sunrise Guizhou’s graphite anode material products will continue to grow.

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Our Past Performance

We generated net revenue of $38,125,668, $7,409,272 for the fiscal years 2022 and 2021, respectively. For fiscal year 2022, net revenue increased by $30,716,396, or 415%, which increase was mainly driven by the sale of graphite anode material products. For fiscal year 2022, sales of graphite anode material products became a major revenue source, while revenue from knowledge sharing and enterprise services business accounted for a small portion of the total revenue.

Our revenues for fiscal years 2022 and 2021 were derived from the following sources:

REVENUES, NET	2022		2021
Graphite anode business	$	37,580,677	$	-
Peer-to-peer knowledge sharing and enterprise business		544,991		7,409,272
Member services		106,724		498,330
Enterprise services
-Comprehensive tailored services		153,658		1,433,847
-Sponsorship advertising services		-		1,734,390
-Consulting services		9,645		1,583,583
Online services		2,100		40,391
Other revenues		272,864		2,118,731
Revenues, net	$	38,125,668	$	7,409,272

For fiscal year 2022, revenue from the sale of graphite anode material products was $37,580,677, which accounted for 99% of our total revenues. Intangible assets also grew from $3,594,977 as of December 31, 2021 to $3,962,650 as of December 31, 2022, which is concurrent with us entering into and financing a joint venture.

For fiscal year 2022, revenue from the knowledge sharing and enterprise services business was $544,991, which was a 93% decline from fiscal 2021, and accounted for only 1% of our total revenues. The decline of this business was due to the material negative impact of the large-scale COVID-19 lockdowns in China, during which time the normal business operations were seriously disrupted, as the VIE relied on in-person networking and meetings in order to both conduct and promote many aspects of this business. As China relaxed its Zero-COVID policy in December 2022, the VIE has gradually resumed its normal business operations.

Graphite Anode Material Manufacturing and Sales Business

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. 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 approximately 260,543 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 phase the construction of (20,000 tons annual manufacturing capacity) of the manufacturing plant has been completed as of the date of this annual report, pending the requisite fire and environmental inspections by relevant government agencies. The inspections are currently ongoing and expected to be completed in June 2023. If Sunrise Guizhou passes the inspections and receives the requisite approvals from the relevant government agencies, it will start manufacturing graphite anode material on-site. The second phase of the construction of the manufacturing plant (10,000 tons annual manufacturing capacity) is ongoing and expected to be completed June 2023, and the third phase of construction of the manufacturing plant (20,000 tons annual manufacturing capacity) was approved by the board of the directors of the Company in March 2023, and is expected to start in July 2023.

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Products

Sunrise Guizhou’s products include various artificial graphite anode material products. As of the date of this annual report, Sunrise Guizhou outsources manufacturing to third-party contract manufacturers. 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:

Type	Product Image	Medium Particle Size (um)	Designed Capacity (mAh/g)	Compaction (g/cc)	Features	Uses
Cost-effective artificial graphite		15.5±2.5	340-348	1.50-1.60	Excellent comprehensive performance, long cycle, cost-effective	Power batteries and energy storage batteries;  cell of soft pack, square aluminum shell, and cylindrical batteries
Volumetric artificial graphite		16.5±2.5	348-355	1.60-1.65	High energy density and comprehensive performance	Multiple long-cycle square, cylindrical, polymer batteries
Multiplier rate artificial graphite		13.5±3.0	347-353	1.55-1.63	Excellent comprehensive performance, long cycle, good rate performance	Power anode material, cell of soft pack, square aluminum shell, and cylindrical batteries
High capacity and high compaction artificial graphite		16.0±2.0	353-358	1.63-1.68	High energy density, excellent comprehensive performance	Power anode material, cell of soft pack, square aluminum shell, and cylindrical batteries
Volumetric artificial graphite		13.5±3.0	350-355	1.60-1.65	High energy density and comprehensive performance	Multiple long-cycle square, cylindrical, polymer batteries
High capacity and rate artificial graphite		12.5±3.0	349-354	1.58 -1.65	High energy density and power performance, long cycle life	Multiple long cycle square and polymer batteries
Cost-effective long-cycle artificial graphite		11.0±2.5	340-345	1.45-1.55	Excellent comprehensive performance, long cycle, cost-effective	Energy storage anode material, cell of soft pack, square aluminum shell, and cylindrical batteries

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Direct Sales Channel

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

Customers

For fiscal year 2022, Sunrise Guizhou had 16 customers. Sunrise Guizhou’s customers are manufacturers of industrial and consumer energy storage lithium-ion batteries, such as batteries for electric vehicles and electric ships, and smart consumer electronics. The vast majority of Sunrise Guizhou’s customers are Chinese companies, and some of them are large well-known companies, including the following:

● Jiangsu Pylontech Battery Co., Ltd., a leading energy storage lithium battery manufacturer in China, whose products are mainly exported to Europe and the United States.

● Hangzhou Narada Power Technology Co., Ltd., one of China’s leading battery energy storage system suppliers, whose products are mainly exported to Europe and the United States;

● Henan Great Power Co., Ltd.: its lithium batteries are used in energy storage systems, light power, EV, and consumer electronics, including drones, electronic cigarettes, earphones, computers, and smart wearables; and

● Xiamen Hithium Energy Storage Technology Co., Ltd.: a company dedicated to industrial and commercial energy storage batteries.

For the fiscal year ended December 31, 2022, four customers accounted for more than 10% of Sunrise Guizhou’s total sales, with each accounting for 28.43%, 19.54%, 19.30% and 18.87% of the total sales, respectively. As Sunrise Guizhou grows its customers bases, it is expected that the concentration of sales will diminish in the future. See “Risk Factors—Risks Related to Our Business—Sunrise Guizhou depends on a few major customers with whom it does not enter into long-term contracts, the loss of any of which could cause a significant decline in its revenues.”

Raw Materials and Suppliers

Sunrise Guizhou sources raw materials, including asphalt coke, petroleum coke, needle coke, and American petroleum coke, from suppliers in China, the United States, Romania, and Indonesia, to diversify its raw material origins and stabilize its supply chain. 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 33.53% of the total costs of production for fiscal year 2022, and two suppliers accounted for more than 10% of Sunrise Guizhou’s total costs for raw materials.

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Third-party Contract Manufacturers

As of the date of this annual report, Sunrise Guizhou entrusts third-party contract manufacturers for the manufacturing of its graphite anode products. Once Sunrise Guizhou receives the requisite government approvals for its manufacturing plant, it will start manufacturing graphite anode products on-site. 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 9 third-party contract manufacturers in China.

Industry and Competition

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 Global EV Outlook, an annual publication that identifies and discusses recent developments in electric mobility across the globe, in May 2022, today’s battery supply chains are concentrated in China, which produces three-quarters of all lithium-ion batteries and is home to 70% of production capacity for cathodes and 85% of production capacity for anodes (both are key components of batteries). Over half of lithium, cobalt and graphite processing and refining capacity is located in China. 

In January 2023, research institutions EVTank, Evie Economic Research Institute and China Battery Industry Research Institute jointly released the “White Paper on the Development of China’s Anode Material Industry (2023) (the “White Paper”)”. According to the data in the White Paper, the global shipment of anode materials will reach 1.556 million tons in 2022, a year-on-year increase of 71.9%. Among them, the sales volume of China’s anode materials will increase by 84.0% year-on-year to 1.433 million tons, a year-on-year growth rate hitting a record high. It is estimated that driven by the downstream demand for lithium-ion batteries, global sales of anode materials will reach 3.317 million tons and 8.634 million tons in 2025 and 2030, respectively, of which more than 90% will be produced by Chinese companies, according to the White Paper.

Sunrise Guizhou, which was newly formed in April 2022, has already delivered approximately 6,000 tons of anode material products to its customers, as of the date of this annual report. Sunrise Guizhou’s main competitors are lithium-ion battery anode material manufacturers such as Btr New Material Group Co., Ltd, Shanghai Putailai New Energy Technology Co., Ltd., Ningbo Shanshan Co., Ltd., Shijiazhuang Shangtai Technology Co., Ltd.

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Intellectual Property

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, patent applications, trade secrets, including employee and third-party nondisclosure agreements, trademarks, and other contractual rights to establish and protect proprietary rights in intellectual property. As of the date of this annual report, Sunrise Guizhou has 11 issued patents and 22 pending patent applications, 1 registered trademark and 2 pending trademark applications in China. Set forth below is a detailed description of its registered patents:

	Country	Patent No./ Application No.	Patent Name	Patent Publication Date	Patent Type	Patent Validity Period
1	PRC	ZL2022 1 0339329.5	A kind of sulfur and phosphorus co-doped hard carbon composite material and preparation method thereof	April 01, 2022	Invention	20 years
2	PRC	ZL2022 1 0386246.1	A kind of high initial efficiency hard carbon composite material and preparation method thereof	April 13, 2022	Invention	20 years
3	PRC	ZL 2022 1 0400775.2	A kind of preparation method of negative electrode material of lithium ion battery (Already applied for international patents in the United States, Japan and South Korea )	April 17, 2022	Invention	20 years
4	PRC	ZL2022 1 0400796.4	A kind of high-energy-density fast-charging graphite composite material and preparation method thereof	April 17, 2022	Invention	20 years
5	PRC	ZL 2022 1 0400774.8	A kind of sulfur-containing fast ion conductor coated graphite composite material and preparation method thereof	April 17, 2022	Invention	20 years
6	PRC	ZL 2022 1 0400788.X	A kind of long-life fast charging lithium-ion battery negative electrode material and preparation method thereof	April 17, 2022	Invention	20 years
7	PRC	ZL 2022 1 0401382.3	A long-life and high-first-efficiency hard carbon composite material and its preparation method	April 18, 2022	Invention	20 years
8	PRC	ZL 2022 1 0851869.1	A kind of preparation method of hard carbon composite material used in sodium ion battery	July 20, 2022	Invention	20 years
9	PRC	ZL 20221 0396110.9	A fast ion conductor coated silicon-carbon composite material and its preparation method	April 15, 2022	Invention	20 years
10	PRC	ZL 2017 1 1155250.2	A kind of lithium ion battery, used silicon carbon negative electrode material and preparation method thereof	November 20, 2017	Invention	20 years
11	PRC	ZL 2017 2 1552539.3	A system for producing negative electrode coke by batch coking	November 20, 2017	Utility Model	10 years
12	PRC	ZL 2018 1 683803.1	Production device for negative electrode material multi-stage series continuous heating coating granulation	October 17, 2018	Utility Model	10 years

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Knowledge Sharing and Enterprise Service Business

The VIE, or SDH, started as a consulting company providing enterprise services to small and medium-sized enterprises in the PRC in December 2014, and launched a peer-to-peer knowledge sharing and enterprise service platform in May 2016. Since then, the VIE has been operating a knowledge sharing platform and provided services both online, via a mobile application “Shidonghui App” (the “APP”), and offline, through local offices in Beijing, Shanghai, Zibo and Guizhou in China.

When the VIE first launched its services, the aim was not only to continue providing enterprise services to PRC’s growing business communities, but also to create a marketplace where qualified entities (individuals and enterprises) have opportunities to serve as providers, and receive rewards by sharing their knowledge with others on the platform. As of April 2023, the knowledge sharing and enterprise service ecosystem had 784 Mentors, 1,930 Experts, and 518,659 Users. In addition to serving Users and Members, the VIE continues to provide enterprise services to small and medium-sized enterprises in China through a dedicated team with seven full-time professional consultants, as well as Mentors and Experts. The providers (Mentors, Experts and consultants) are successful entrepreneurs, scientists, investors, and professionals with qualifications and achievements in major industries such as finance, energy, health care, technology, manufacturing and academia. Our core strength is the knowledge brought by our providers, highlighted by their experiences, wisdom, industry know-how, and social connections. The VIE offers online services to Users on the APP, which was released to the public in May 2016, and offline services to Members. The online services the VIE currently offers to Users are (1) Questions and Answers (Q &A) Sessions and (2) streaming of audio and video courses and programs. The offline services the VIE offers to Members are study tours and forums.

In late 2019, taking advantage of our knowledge of market demand and trends, as well as access to resources afforded to us by our knowledge sharing platform, the VIE started procuring and offering merchandises for sale through its platform to clients and the general public. The merchandises are obtained through: (1) fee exchange arrangement, through which the VIE receives products in exchange for collection of membership fees and consulting fees earned from customers at the VIE’s discretion, and (2) direct purchases from customers and third parties based on market trend and demand. In fiscal year 2022, due to deteriorating consumer demand and market condition, the Company did not procure any merchandises and wrote down the cost of inventories of the merchandises to the estimated net realizable value, which was $nil, resulting in $2,711,158 impairment.

Knowledge Sharing and Enterprise Service Platform Ecosystem

Users and Members

Users

The APP is available in the PRC and elsewhere in the world where potential Users can access on the internet the http hyper-link provided for downloading/installing the APP on their mobile devices; anyone over the age of 18, with a mobile phone (IOS or Android) can download the APP and complete an online registration process to become a User. Currently, although the VIE does not charge any fee to register for the APP, the VIE does require Users to obtain a verification code via their mobile devices to register. Additionally, Users must agree to the Terms of Use in the form of a user agreement, which can be completed and submitted to us on the APP. As of April 30, 2023, the VIE had approximately 518,659 APP Users. 

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Members

Members can choose from three annual membership plans: Platinum, Diamond, and Protégé. Members enjoy services included in their respective membership plans. Due to the impact of COVID-19, SDH did not have any Members for fiscal year 2022. The following table presents the annual membership fees:

Membership Tiers	Annual Membership Fee
Platinum	RMB 16,800 (approximately US$2,435)
Diamond	RMB 98,000 (approximately US$14,203)
Protégé	RMB 500,000 (approximately US$72,464)

Mentors and Experts

Mentors

Mentors are leaders in their respective professional fields, all of them enjoy strong social influence due to their professional achievements and social status in China. The majority of Mentors are successful well-known entrepreneurs, executive officers of public companies, PE/VC partners, doctors, and artists, in a wide range of industries including academia, health care, financial service, energy, technology, manufacturing, etc. As of April 30, 2023, the VIE had 784 Mentors, and all of them were hand-picked and invited by our management to join our platform.

Experts

Experts are skilled and qualified in their specialized fields to provide advice and guidance to Users. Persons can become Experts through a certification process either on the APP or in-person at the VIE’s local offices and centers. The certification process consists of three steps: (1) an applicant is required to demonstrate his or her expertise and qualifications by submitting an application along with supporting documents such as resume, publications, and school transcripts; (2) our team reviews and verifies the applicant’s qualifications and background information, based on which we make a determination on whether to approve the application; and (3) the VIE enters into a service agreement with the approved applicant. As of April 30, 2023, the VIE had 1,930 Experts.

Service Agreements with Mentors and Experts

Each of the Mentors and Experts, as a service provider on our platform, must enter into a service agreement with us that governs the rights and obligations of each party. The term of the service agreement is open and can be terminated by either party without any cause, and the services they provide to our Users and Members must be given exclusively on our platform, either online or offline, for which the fees generated are shared between the VIE and the providers, usually at a 30/70 split, that is, we receive 30% and providers receive 70% of the fees. Under certain circumstances where providers generate additional fees such as registering new members, the providers will be entitled to a larger percentage of the fees generated, as decided between the parties on a case-by-case basis.

Enterprise Service Consultants

the VIE has a professional consulting team with seven full-time employees, who have at least five years of experience in their respective fields of professions, including finance, capital markets, marketing, public relations, sales, etc. The majority of our team previously worked in the technology or finance industries. See “Consulting” below.

Enterprise Service Clients

The majority of the Enterprise Service Clients are small and medium-sized enterprises located in the following provinces: Zhejiang, Shanxi, Guangdong, Shandong and Liaoning, as well as Shanghai City. For the fiscal year ended December 31, 2022, or 2021, no client accounted for more than 10% of our revenues.

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Services

Member Service

The chart below summarizes the services Members receive:

Membership Tier	Service
Platinum	seven organized activities (study tours and forums) per year
Diamond	seven organized activities (study tours and forum) per year, during which a Member may enjoy special seating assigned only to Diamond Members, and make presentations and sales pitches of his or her business, products and services
Protégé	seven organized activities (study tours and forum) per year, during which a Member may enjoy special seating assigned only to Protégé Members, make presentations and sales pitches of his or her business, products and services, and communicate with Mentors and Experts in person at such activities

During each of the study tours and forums, a number of Mentors and Experts, along with other business leaders, are invited to attend, give speeches and host discussion sessions at these activities. The VIE compensates the attending Mentors and Experts with fees ranging from RMB5,000 (approximately US$725) to RMB20,000 (approximately US$2,899) depending on factors such as the size of the audience, the location of the activity and qualifications of the attending Mentors and Experts.

Study Tours

Beginning in 2016, the VIE started organizing study tours for our Members. The study tours are designed to provide trainings on real world business skills for entrepreneurs and executives. Each study tour generally lasts two days, in which a day and a half are dedicated to classroom style lecturing and discussions, while the remaining half day is spent on visiting the headquarters or facilities of successful enterprises. All participants are responsible for their own food, traveling and living accommodations throughout the study tours. The VIE did not offer any study tours in 2022, which activities decreased because of restrictions imposed by the government due to the COVID-19 pandemic.

Forums

The VIE organizes large-scale forums (with more than 1,000 attendees) that last two to three days. The purpose of the forums is to share business intelligence with small and medium-sized enterprises and help them develop business plans and strategies. The themes of the forums are usually related to interpretation of newly published governmental policies, sharing of industry opportunities and perspectives on corporate transformation and growth. The VIE did not hold large-scale forums in 2022 due to COVID-19 restrictions.

Enterprise Services

In addition to providing services to Users and Members, the VIE has been providing customized enterprise service to small and medium-sized enterprises in the PRC since its inception in 2014. Enterprise service is an integral part of its platform, and a number of the Enterprise Service Clients are also Members and Users. For fiscal year 2022 and 2021, enterprise services generated $163,303, and $4,751,819 in revenues, respectively.

Below are the three main enterprise services we provide:

Comprehensive Tailored Services

Comprehensive tailored services are geared towards small and medium-sized businesses, to provide tailored packaged services, including conference and salon organizations, booth exhibition services, guidance by Mentors and Experts, and other value-added services, for the purpose of promoting and growing their businesses. Clients are required to enter into service agreements with us, which are individually negotiated based on the services and resources we provide. For 2022, the comprehensive enterprise services generated revenue in the amount of US$153,658 from 7 clients. For 2021, the comprehensive enterprise services generated revenue in the amount of US$1,433,847 from 80 clients.

Consulting

A team of professional consultants provides enterprise consulting services and develops strategies and solutions for corporate reorganization, product promotion and marketing, industry supply chain integration, corporate governance, financing and capital structure, etc. The consulting services are customized to meet each client’s specific needs and requirements. The fees and payment structures are based on the specifics of the services we provide, such as the time and efforts required, the duration of the service, and are usually in the range of RMB20,000 (approximately US$2,973) to RMB80,000 (approximately US$11,894) for a one-time service charge, or monthly fees in the amounts of RMB10,000 (approximately US$1,487) to RMB20,000 (approximately US$2,973) for continued services. For fiscal years 2022 and 2021, consulting generated $9,645, and $1,583,583 in revenues, respectively.

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Sponsorship Advertising

Sponsorship advertising is a special form of advertising, generally referring to a publicity strategy adopted by enterprises in order to enhance their corporate and product image, as well as brand awareness and influence. The VIE provides sponsorship advertising services for enterprise clients at various events, such as forums and study tours, in the following forms:

● The VIE displays the names and logos of the sponsor enterprises on the background and display boards.

● The representatives of the sponsor enterprises are assigned to the VIP seating areas with name tags displaying their company names and logos.

● The sponsor enterprises enjoy a certain number of tickets for an event, which can be used for sale or as gifts to their customers.

● The names and logos of the sponsor company are displayed in the related advertisements and promotional materials for an event.

● The VIE uses products exclusively provided by the sponsor enterprise for an event.

● The names and logos of the sponsor enterprise may also be displayed in programs and videos the VIE produces, such as “Haiping’s Meeting Room.”

The fees we charge for sponsorship advertising is in the range of RMB500,000 (approximately US$74,337) to RMB2,000,000 (approximately US$297,349) per engagement, depending on several specific factors, such as the number of the participants, the location, and popularity of an event. For fiscal years 2022 and 2021, sponsorship advertising service generated $nil, and $1,734,390 in revenues, respectively.

Sale of Merchandises

In late 2019, the VIE started procuring and offering merchandises for sale through its platform to clients and the general public. The merchandises included Chinese tea, red wine, wellness products, gift cards, and others. Some of the merchandises for sale were obtained from Members and enterprise service clients through exchange for collection of membership fees and consulting fees. Such exchanges were non-routine and made at our discretion, based on a number of factors, including but not limited to, the market trend and demand for such merchandises, the profit margin expected to be realized from the sale of such merchandises, and the credit-worthiness of and the relationship with these clients. Other merchandises were sourced and purchased from customers directly at preferred prices or from third parties, based on our knowledge of current market trends and demand generated from our platform. For fiscal years 2022 and 2021, the VIE generated $3,165 and $ $2,104,766 in revenue from sale of merchandises, respectively.

In fiscal 2022, due to deteriorating consumer demand and market conditions, the Company did not procure any merchandises and wrote down the cost of inventories of the merchandises to the estimated net realizable value, which was $nil, resulting in $2,711,158 impairment.  

Online Service

The VIE provides Users two services on the APP: (1) Question and Answer (Q&A) Sessions and (2) Online Streaming of Courses and Programs. In addition, our APP has a community building function that facilitates relationship building on our platform. For example, our APP allows Users to share their “moments,” such as pictures and videos of their life experiences, via instant messaging, with other Users on the APP. Users may also “like” and/or comment on other User’s “moments.” In addition, Users may establish their own communities by creating and inviting other Users to join his or her group. For fiscal years 2022 and 2021, the VIE generated $2,100 and $40,391 in revenue from online service, respectively.

The APP

The APP was launched in May 2016, and runs on both IOS and Android devices. The VIE strives to provide Users superb experiences on the APP and has established an in-house Information Technology team of eight employees dedicated to the development and support of our system. To date, the VIE has registered 35 computer software copyrights with the Copyright Protection Centre of China (CPCC), in connection with the development of the APP. In October 2017, as a result of its efforts, the VIE was certified by the State Intellectual Property Office (“SIPO”) as a national high-tech enterprise, which affords the VIE a favorable tax rate of 15%, rather than the unified rate of 25% for the duration of the certification. The certification lasts for three years, and was renewed in 2020. As of April 30, 2023, the APP has been downloaded by approximately 518,659 Users. The number of average monthly active Users was approximately 495 in 2022 and approximately 1,104 in 2021.

Questions and Answers (Q &A) Session

Mentors and Experts, as providers, are available to answer questions and share valuable personalized guidance and advice in a wide range of fields, including business management, health care, beauty, financial services, education, etc. Through a Q&A session, a User can submit questions on our APP to a chosen provider, who are listed on the APP under their specializing sectors, and receive a response within 72-hours. When a User submits a question on our APP, our customer service representatives and the chosen provider receive a text notification from our system immediately. Upon receipt of the text notification, a provider is required to respond within 72-hours, although most of the time the responses are provided in a much shorter time frame. If the response is delayed or unsatisfactory to the User, he or she may notify our customer service representatives who will contact the provider to follow-up with the User.

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Users must purchase top-up credits on the APP to pay for Q&A sessions. Providers set their own fees for Q&A sessions. At present, the average fee for a Q&A session is RMB31 (approximately US$4.38), which translates to 31 APP top-up credits. After each session concludes, credits are automatically awarded to the provider’s APP account and can be used for services on our APP or converted to RMB and paid out to the provider’s bank account linked with our APP. When submitting a question in a Q&A session, a User can also choose to share the Q&A session on the APP for a fee of one to five credits and earn credits when other Users access the shared Q&A session. The credits earned from the shared Q&A sessions are to be split 50/50 between the Users and us. 

Online Streaming of Video & Audio Courses and Programs

The VIE provides video and audio courses and programs on the APP for on-demand and live streaming. At present, the APP has approximately 4,806 audio and 5,279 video courses and programs available for streaming. The majority of the courses and programs are business-oriented, which cover subjects such as entrepreneurship development, financial service, corporate governance, team management, marketing strategy, etc. We also provide some focused courses and programs that target special audience groups, such as parent-child education for new parents, and business school selection programs for graduate students.

Other Services

Member activities, including study tours and forums, are also open to non-members, who pays a fixed fee of RMB3,000 (approximately US$446) for each activity. Fees are usually collected on site on the date of each activity. Other than member activities, the Company provided health services, which were charged fixed fees ranging from RMB 1,000 (approximately $149) to RMB 14,000 (approximately $2,081), according to the types of health services provided. For fiscal years 2022 and 2021, the VIE generated fees from other services in the amount of $269,699, and $13,965, respectively.

Regulations

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

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. Under the Internet Measures, commercial internet content-related services operators shall obtain a VATS License for internet content provision business, or the ICP License, from the relevant government authorities before engaging in any commercial internet content-related services operations within China.

The VIE obtained the ICP License on July 2, 2019, which will remain effective for 5 years.

Regulations Related to Foreign Investment

Guidance Catalogue of Industries for Foreign Investment

Investment activities in the PRC by foreign investors are principally governed by the Guidance Catalogue of Industries for Foreign Investment, or the Guidance Catalog, which was promulgated and is amended from time to time by Ministry of Commerce, or MOFCOM, and the National Development and Reform Commission, or NDRC. The Guidance Catalog lays out the basic framework for foreign investment in China, classifying businesses into three categories with regard to foreign investment: “encourage,” “restricted” and “prohibited.” Industries not listed in the catalog are generally deemed as falling into a fourth category “permitted” unless specifically restricted by other PRC laws.

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In addition, 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 on December 27, 2021 and effective on January 1, 2022. 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%. Moreover, 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, including demonstrating good track records and experience in operating VATS business overseas.

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 engages in business activities that are VATS, and in light of the above restrictions and requirements, the Company relies on contractual arrangements between GIOP BJ and the VIE to operate its business in China.

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.”

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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 28, 2016, and became effective on August 1, 2016. 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, the VIE obtained the ICP License on July 2, 2019, which will remain effective for 5 years, we have also 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.

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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 (approximately US$4,348); if the circumstances are serious, a punishment shall be imposed in accordance with the provision of Article 47 of the Radio and Television Administration Regulation.

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

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 online business, which could have a material adverse impact on our business, financial conditions and results of operations.”

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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 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.

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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.

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.

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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 will come into effect on May 1, 2021 and replace 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

Copyright

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.

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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.

Trademark

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.

Patent

Patents in the PRC are principally protected under the Patent Law of the PRC (2020 Revision) and its Implementation Rules (2010 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 name

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.

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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, pursuant to which, 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); (iii) granting loans to non-affiliated enterprises, except as expressly permitted in the business license; and (iv) purchasing non-self-used real estate (except for the foreign-invested real estate enterprises).

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.

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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.

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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 partially abolished on May 10, 2015. 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.

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

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 amended on April 23, 2019. 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 (collectively with the VAT Regulations, the VAT Law). 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%.

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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

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

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.

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Social Insurance and Housing Fund

Under the Social Insurance Law of the PRC that was promulgated by the SCNPC on October 28, 2010, and came into force as of July 1, 2011, and was most recently amended on December 29, 2018 (also the effective date), together with other laws and regulations, employers are required to pay basic pension insurance, unemployment insurance, basic medical insurance, employment injury insurance, maternity insurance, and other social insurance for its employees at specified percentages of the salaries of the employees, up to a maximum amount specified by the local government regulations from time to time. 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.

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^th 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.

Regulations Related to Mergers and Acquisitions and Overseas Listings

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.

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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

Foreign investors and foreign-invested enterprises investing in the PRC shall comply with the Catalog of Industries for Encouraging Foreign Investment (2022 edition), which was promulgated by the National Development and Reform Commission (the “NDRC”) and the Ministry of Commerce (the “MOFCOM”) on October 26, 2022 and took effect on January 1, 2023. Pursuant to the Catalog, the development and production of lithium-ion batteries falls within the scope of industries in which foreign investment is encouraged.

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According to the Guiding Catalog for Industrial Restructuring, which was promulgated by the NDRC on December 2, 2005, with the latest amendment on December 30, 2021, and was effective on December 30, 2021, new batteries such as lithium-ion batteries, and lithium-ion batteries use intermediate phase Anode materials such as carbon microspheres and silicon carbon fall into the state-encouraged industries.

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 on December 10, 2021, and provides guidance for all types of upstream and downstream manufacturers in the lithium-ion battery industry, including negative electrode materials, on their production scale and process technology, product quality and performance, comprehensive utilization of resources and environmental protection and safety management, etc. 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 December 10, 2021, and provides that the responsible departments of industry and information technology in each province, autonomous region and municipality directly under the central government are responsible for the acceptance, verification and submission of announcement applications for lithium battery industry enterprise in the region, and for supervising and checking the implementation of the Standardization Conditions. 

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.

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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 ISO14001, ISO45001, ISO9001 and IATF16949 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 February1991 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.

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Sunrise Guizhou obtained the approval for the Construction Land Use Planning Permit and the Construction Works Planning Permit from local urban and rural planning department in March 2022, and obtained the Construction Permit from local housing and urban-rural department in April and July 2022, for its construction of the first phase of the manufacturing plant.

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 February 25, 2022, Sunrise Guizhou obtained the approval for the Environmental Impact Report for its construction of the first phase of the manufacturing plant. And on April 25, 2022, Sunrise Guizhou obtained the Pollutant Discharge License, which will remain effective for 5 years.

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.

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C. Organizational Structure

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

Contractual Arrangements among GIOP BJ, the VIE and Its Shareholders

Neither we nor our subsidiaries own any equity interest in the VIE. Instead, we control and receive the economic benefits of the VIE’s business operation through a series of contractual arrangements. 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, GIOP BJ holds the contractual right to control and operate the business of the VIE. Therefore, pursuant to ASC 810, the VIE has been included in the Company’s consolidated financial statements since June 2019.

Each of the VIE Agreements is described in detail below:

Exclusive Technical and Consulting Services Agreement

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.

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.

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Equity Pledge Agreement

Under the Equity Pledge Agreement between GIOP BJ, and shareholders of the VIE, together holding 100% of the shares of the VIE (the “VIE Shareholders”), the VIE Shareholders pledged all of their equity interests in the VIE to GIOP BJ to guarantee the performance of the VIE’s obligations under the Exclusive Service Agreement. 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.

Exclusive Option Agreement

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 (approximately US$1.47) 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.

Powers of Attorney

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.

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Spousal Consent

Pursuant to the Spousal Consent, each spouse of the individual shareholders of the VIE irrevocably agreed that the equity interest in the VIE held by their respective spouses would be disposed of pursuant to the Equity Pledge Agreement, the Exclusive Option Agreement, and the Powers of Attorney. 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 Shanghai in the PRC. The total office space is 1,205 square meters including both leased and owned properties. The VIE leases 567 square meters of office space under a non-cancelable operating lease agreement with expiration dates through December 31, 2023. Operating lease expense amounted to $270,254, $244,045, and $352,645 for the years ended December 31, 2022, 2021, and 2020, respectively. In December 2019, the Company signed property purchase agreements to acquire four properties in Beijing with approximately an aggregate of 638 square meters of office space for a total consideration of US$2,991,492. The Company paid US$1,204,094 as a prepayment during the year ended December 31, 2019 and paid the rest of the consideration of US$1,787,398 and acquired the ownership of the properties in May 2020.

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

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

Location	Approximate Gross Land Area in Square Meters		Primary Use (Gross Floor Area in Square Meters)	Lease or Own
Yilong New Area, Qianxinan Prefecture, Guizhou Province,China		260,543	Office (3,434), Manufacturing (24,879) staff dormitory (4,919)	own

Future minimum lease payments under non-cancellable operating leases as of December 31, 2022 was nil.

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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 caution 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 peer-to-peer knowledge sharing and enterprise service platform in May 2016. Since then, SDH has continued to expand and improve its platform, where knowledge is shared and gained, and services are requested and provided. Operating its platform through its PRC operating entity, SDH and its subsidiaries, both on-line, via the mobile application “Shidonghui App” (the “APP”), and off-line, through its local offices in Beijing, Shanghai, Zibo and Guizhou in China.

Substantially all of SDH’s operations are conducted in the PRC and all of the revenues are denominated in RMB. Foreign ownership of certain parts of its businesses including the value-added telecommunications services, or the VATS, is subject to restrictions under current PRC laws and regulations. See “Regulations—Regulations Related to Foreign Investment.” We have relied and expect to continue to rely on contractual arrangements with SDH, its subsidiaries and shareholders to operate the business in China. For a description of these contractual arrangements and uncertainties regarding the interpretation and application of current or future PRC laws and regulations, see “Business—Contractual Arrangements between GIOP BJ, SDH and Its Shareholders.” and “Risks Related to Our Corporate 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.”.

When SDH launched its platform, the aim was not only to continue providing enterprise services to PRC’s growing business communities, but also create a marketplace where qualified entities (individuals and enterprises) have opportunities to serve as providers, and receive rewards by sharing their knowledge with others on the platform. As of April 2023, our knowledge sharing and enterprise service ecosystem had 784 Mentors, 1,930 Experts, and 518,659 Users. In addition to serving the Users and Members, SDH continues to provide enterprise services to small and medium-sized enterprises in China, through a dedicated team with ten full-time professional consultants, as well as the Mentors and Experts. The providers (Mentors, Experts and consultants) are successful entrepreneurs, scientists, investors, and professionals with qualifications and achievements in major industries such as finance, energy, health care, and academia. SDH’s core strength is the knowledge brought by its providers, highlighted by their experiences, knowledge, industry know-how, and social connections.

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In April 2022, the Company entered into the graphite anode material manufacturing and sales business through a joint venture, Sunrise Guizhou, of which the Company currently owns 39.35% through its wholly owned subsidiary, Zhuhai Zibo. The Company consolidates Sunrise Guizhou’s financials because it owns a majority of seats on its board of directors and control its financial and operating policies pursuant to an agreement among its funding shareholders. Sunrise Guizhou is located at Yilong New District, Xingyi City, Qian Southwest State, Guizhou Province, China. The land use of Sunrise Guizhou’s graphite anode manufacturing site is approximately 260,543 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 phase the construction of (20,000 tons annual manufacturing capacity) of the manufacturing plant has been completed as of the date of this annual report. The inspections have been scheduled to take place in Mid-March, and are expected to be completed in June 2023. The second phase of the construction of the manufacturing plant (10,000 tons annual manufacturing capacity) is ongoing and expected to be completed June 2023, and the third phase of construction of the manufacturing plant (20,000 tons annual manufacturing capacity) was approved by the board of the directors of the Company in March 2023, and is expected to start in July 2023.

Impact from COVID-19

In early January of 2020, a novel coronavirus (“COVID-19”) outbreak took place in Wuhan, China. Subsequently, it has spread rapidly to Asia and other parts of the world. The COVID-19 outbreak has resulted in widespread economic disruptions in China, as well as stringent government measures by the Chinese government to contain its transmissions including quarantines, travel restrictions, and temporary closures of non-essential businesses in China and elsewhere.

Essentially all SDH’s revenues and operations are generated in China. Consequently, the results of operations and financial performances was affected materially for the year ended December 31, 2022. Due to the government restrictions, SDH was prevented from arranging offline activities generally for the year ended December 31, 2022, resulting in cancellations or postponements of study tours, forums and sponsorship advertising events. For the year ended December 31, 2022, revenue from knowledge sharing and enterprise service business decreased by $6,864,281 or 92.64% as compared to the same period of 2021.

Sunrise Guizhou’s graphite anode material manufacturing and sales business in Guizhou Province has not been severely impacted by the COVID-19 locks downs, primarily due to its relatively remote location.

Although the PRC government relaxed its COVID-19 restrictions since December 2022, there still remains uncertainties as to the future development of the COVID-19. The Company is operating in a rapidly changing environment so the extent to which COVID-19 may impact its business, operations and financial results from this point forward will depend on numerous evolving factors that the Company cannot accurately predict.

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Results of Operations

The following table summarizes the results of the Company’s operations during the years ended December 31, 2022, 2021 and 2020, respectively, and provides information regarding the dollar and percentage increase or decrease during such periods.

	For the years ended December 31,
	2022			2021			2020
REVENUE, NET
Products	$	37,583,844		$	2,104,767		$	1,495,380
Service		541,824			5,304,505			21,685,704
Total revenues		38,125,668			7,409,272			23,181,084
COSTS OF REVENUES
Products		38,299,090			2,063,296			892,791
Service		1,176,956			1,823,358			2,087,425
Total cost of revenues		39,476,046			3,886,654			2,980,216
GROSS (LOSS) PROFIT		(1,350,378	)		3,522,618			20,200,868
OPERATING EXPENSES
Selling expenses		1,075,980			946,775			906,456
General and administrative expenses		12,678,873			7,834,291			3,897,040
Research and development expenses		1,053,882			2,151,565			671,312
Impairment of intangible assets		2,650,020			-			-
Total operating expenses		17,458,755			10,932,631			5,474,808
(LOSS) PROFIT FROM OPERATIONS		(18,809,133	)		(7,410,013	)		14,726,060
OTHER (EXPENSES) INCOME
Investment losses		(3,566,561	)		(2,118,453	)		(1,087	)
Interest (expense) income		(27,128	)		173,173			214,460
Other income, net		87,390			404,380			72,837
Total other (expenses) income		(3,506,299	)		(1,540,900	)		286,210
(LOSS) PROFIT BEFORE INCOME TAXES		(22,315,432	)		(8,950,913	)		15,012,270
Income taxes provision (benefit)		808,970			(236,581	)		3,054,983
NET (LOSS) INCOME		(23,124,402	)		(8,714,332	)		11,957,287
Less: net loss attributable to non-controlling interests		(720,036	)		(311,072	)		(130,240	)
NET (LOSS) INCOME ATTRIBUTABLE TO SUNRISE NEW ENERGY CO., LTD. ORDINARY SHAREHOLDERS	$	(22,404,366	)	$	(8,403,260	)		12,087,527
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment		(5,123,965	)		700,316			2,076,303
TOTAL COMPREHENSIVE (LOSS) INCOME		(28,248,367	)		(8,014,016	)		14,033,590
Less: comprehensive loss attributable to non-controlling interest		(2,788,650	)		(321,522	)		(91,862	)
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO ORIDNARY SHAREHOLDERS OF SUNRISE NEW ENERGY CO., LTD.	$	(25,459,716	)	$	(7,692,494	)		14,125,452
(LOSS) EARNINGS PER SHARE
Basic and diluted	$	(0.90	)	$	(0.36	)	$	0.72
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic and diluted		24,820,313			23,638,751			16,800,000

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Year Ended December 31, 2022 Compared to Year Ended December 31, 2021

Revenues, net

Revenues for the years ended December 31, 2022 and 2021 were derived from the following sources:

	For the year ended December 31,
	2022		%			2021		%			Change			%
Graphite anode material business	$	37,580,677		98.57	%	$	-		-		$	37,580,677			100.00	%
Peer-to-peer knowledge sharing and enterprise business
Member services		106,724		0.28	%		498,330		6.73	%		(391,606	)		(78.58	)%
Enterprise service
-Comprehensive tailored services		153,658		0.40	%		1,433,847		19.35	%		(1,280,189	)		(89.28	)%
-Sponsorship advertising services		-		-			1,734,390		23.41	%		(1,734,390	)		(100.00	)%
-Consulting services		9,645		0.03	%		1,583,583		21.37	%		(1,573,938	)		(99.39	)%
Online services		2,100		0.01	%		40,391		0.55	%		(38,291	)		(94.80	)%
Sales of merchandises		3,165		0.01	%		2,104,766		28.41	%		(2,101,601	)		(99.85	)%
Other services		269,699		0.71	%		13,965		0.18	%		255,734			1,831.25	%
Revenues, net	$	38,125,668		100.00	%	$	7,409,272		100.00	%	$	30,716,396			414.57	%

Revenues increased by $30,716,396, or 414.57%, from $7,409,272 for the year ended December 31, 2021, to $38,125,668 for the year ended December 31, 2022. Revenues from graphite anode material business accounted for 98.57% of net revenues for year ended December 31, 2022, as compared to nil for year ended December 31, 2021. Revenue from peer-to-peer knowledge sharing and enterprise business accounted for 1.43% and 100% of net revenues for the years ended December 31, 2022 and 2021, respectively. The change was primarily attributable to the launch of graphite anode materials business and offset by the shrink of peer-to-peer knowledge sharing and enterprise service revenue due to the impact of COVID-19 for the year ended December 31, 2022.

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 of the Company, who has more than 20 years of experience in the lithium-ion battery material industry, and has accumulated extensive business connections in this industry.

For the year ended December 31, 2022, the Company had supplied products to 16 customers. 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. For the year ended December 31, 2022, four customers accounted for more than 10% of the Company’s total sales, accounting for 28.43%, 19.54%, 19.30% and 18.87% of the total sales, respectively. As the Company grows its customers bases, it is expected that the concentration of the sales will diminish in the future.

Revenues from member services

SDH offers three tiers of membership services, Platinum, Diamond and Protégé, which differ in membership fees as well as the level of the services provided. Members pay a fixed fee for exchange of the right to participate in seven activities, including study tours and forums, within a typically one-year membership period.

Revenues from member services decreased by $391,606, or 78.58%, from $498,330 for the year ended December 31, 2021, to $106,724 for the year ended December 31, 2022. As the outbreak of the COVID-19, SDH was prevented from offering large offline activities, which resulted in a decreased demand for member services.

Revenues from comprehensive tailored services

There are four major categories of SDH’s comprehensive tailored services. The following table presents the type of tailored services as well as their respective prices:

Type of comprehensive tailored services	Pricing
Conference and salon organization	RMB50,000 (approximately US$7,434)
Booth exhibition services	RMB50,000 (approximately US$7,434)
On-site mentors’ guidance	RMB50,000-100,000 (approximately US$7,434-US$14,867)
Other additional services	RMB10,000-200,000 (approximately US$1,487 -US$29,735)

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Revenues from comprehensive tailored services decreased by $1,280,189, or 89.28%, from $1,433,847 for the year ended December 31, 2021, to $153,658 for the year ended December 31, 2022. Due to the impact of COVID-19, the comprehensive tailored service revenues from individual customers and some of the enterprise customers became unstable, and the accounts receivable of these customers also became harder to collect. In addition, due to the continuous government restrictions on public gatherings in 2022, the demand for comprehensive tailored services for large conferences and salon organizations decreased.

Revenues from sponsorship advertising service

Sponsorship advertising is a special form of advertising, generally referring to a publicity strategy adopted by enterprises in order to enhance their corporate and product image, as well as brand awareness and influence. SDH provides sponsorship advertising services for enterprise clients at events SDH holds, such as forums and study tours.

Revenues from sponsorship advertising services decreased by $1,734,390, or 100% from $1,734,390 for the year ended December 31, 2021, to $nil for the year ended December 31, 2022, primarily due to the fact that offline forums and study tours were canceled due to the continuous government restrictions on public gatherings.

Revenues from consulting services

SDH provides consulting services to small and medium-sized enterprises to develop strategies and solutions for the following: corporate reorganization, product promotion and marketing, industry supply chain integration, corporate governance, financing and capital structure, etc. Revenues from consulting services decreased by $1,573,938, or 99.39% from $1,583,583 for the year ended December 31, 2021, to $9,645 for the year ended December 31, 2022, primarily due to the fact that small forums and salons were canceled due to the continuous government restrictions on public gatherings.

Revenues from online services

SDH provides two types of online services to the Company’s APP Users, which are questions and answers (Q&A) sessions with chosen Mentors or Experts and online streaming of courses and programs. Top-up credits are paid by Users through SDH’s APP, using which Users can purchase the online services.

Revenue from online services were immaterial in terms of amount and percentage of the net revenues for the years ended December 31, 2021 and 2022.

Revenues from sales of merchandises

Revenues from the sale of merchandise decreased by $2,101,601, or 99.85% from $2,104,766 for the year ended December 31, 2021 to $3,165 for the year ended December 31, 2022. The decrease was primarily due to the fact that SDH had not organized trade conferences facilitating the sales of merchandise due to the continuous government restrictions on public gatherings.

Costs of revenues

The following table sets forth the breakdown of the cost of revenues for the years ended December 31, 2022 and 2021:

	For the years ended December 31,										Change
	2022		%			2021		%			Amount			%
Service costs	$	1,176,956		2.98	%	$	1,823,358		46.91	%	$	(646,402	)		(35.45	)%
Cost of goods sold		38,299,090		97.02	%		2,063,296		53.09	%		36,235,794			1,756.21	%
Total costs of revenues		39,476,046		100.00	%		3,886,654		100.00	%		35,589,392			915.68	%

Service costs

The service costs primarily include (1) the cost of holding activities, such as venue rental fees, conference equipment fees, (2) professional and consulting fees paid to third parties for the activities; (3) the fees paid to Mentors and Experts; (4) labor costs; and (5) amortization cost of copyright. Service costs decreased by $646,402, or 35.45% for the year ended December 31, 2022 compared to same period in 2021, mainly due to the decrease of $540,641 in service fee and consultant fee, which was mainly because the Company held less small conferences due to the government limitation on the scale of conferences in COVID-19.

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Cost of goods sold

The cost of goods sold were $38,299,090 and $2,063,296 for the years ended December 31, 2022 and 2021, respectively. The significant increase of the cost of goods sold was due to the expansion of the graphite anode materials business, which was launched in 2022. In addition, $2,711,158 impairment on inventory, including health service gift cards, learning course gift cards, Chinese tea, latex pillows and health care products which was in exchange of collection of account receivables and deferred revenue due from the customers, was recoded due to the adverse effect of COVID-19 on peer-to-peer knowledge sharing and enterprise business.

Gross (loss) profit

As a result of the foregoing, the Company reported a gross loss of $1,350,378 for the year ended December 31, 2022. The negative gross margin was due to $3,344,511 gross loss on peer-to-peer knowledge sharing and enterprise business. For the year ended December 31, 2022, $2,711,158 impairment on inventory was recorded due to the adverse effect of COVID-19 and the Company maintained the necessary cost to operate peer-to-peer knowledge sharing and enterprise business. The gross loss was partially set off by a gross profit of $1,994,133 for graphite anode material sales business.

Operating expenses

The following table sets forth the breakdown of the operating expenses for the years ended December 31, 2022 and 2021:

	For the years ended December 31,										Change
	2022		%			2021		%			Amount			%
Selling expenses	$	1,075,980		6.16	%		946,775		8.66	%		129,205			13.65	%
General and administrative expenses		12,678,873		72.62	%		7,834,291		71.66	%		4,844,582			61.84	%
Research and development expenses		1,053,882		6.04	%		2,151,565		19.68	%		(1,097,683	)		(51.02	)%
Impairment of intangible assets		2,650,020		15.18	%		-		-	%		2,650,020			100	%
Total costs and operating expenses		17,458,755		100.00	%		10,932,631		100.00	%		6,526,124			59.69	%

Selling expenses

The selling expenses increased by $129,205 or 13.65%, from $946,775 for the year ended December 31, 2021 to $1,075,980 for the year ended December 31, 2022. Such increase was primarily due to (1) an increase of travel expenses of $51,662 and entertainment expenses of $35,357, which was mainly due to increasing needs for marketing activities to the launch of graphite anode materials business; and (2) an increase of $39,301 of share-based compensation, as the Company adopted the 2022 Stock Incentive Plan for the grant of restricted share units to sales employees.

General and administrative expenses

The general and administrative expenses increased by $4,844,582, or 61.84%, from $7,834,291 for the year ended December 31, 2021 to $12,678,873 for the year ended December 31, 2022. Such increase was primarily due to (1) an increase of bad debt expenses of $ $364,346, which was mainly due to the fact that as the Company experienced a slow-down in the collection of accounts receivable resulting from impact from COVID-19 for the year ended December 31, 2022 on peer-to-peer knowledge sharing and enterprise service business; (2) an increases of $1,191,284 due to outsourced labor that due to the launch of graphite anode material business in August 2022, as the Company recruited factory workers and security personnel from labor outsourcing companies; and (3) an increase of $2,674,292 of share-based compensation as the Company adopted the 2022 Stock Incentive Plan for the grant of restricted share units to employees, directors and non-employees to provide incentive for their services.

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Research and development expenses

Research and development expenses decreased by $1,097,683 or 51.02%, from $2,151,565 for the year ended December 31, 2021 to $1,053,882 for the year ended December 31, 2022. Research and development expenses for the year ended December 31, 2022 was mainly associated with the research development activities of graphite anode material business, including technology service, technical service, purchasing laboratory chemical material collaterals, while in the year ended December 31, 2021, as SDH hired more personnel to update and support the mobile application, or the APP, to meet Users’ increasing needs.

Impairment of intangible assets

Impairment of intangible assets increased from $nil for the year ended December 31, 2021 to $2,650,020 for the year ended December 31, 2022. The impaired intangible assets for the year ended December 31, 2022 were associated with the copyrights of course videos purchased from a third party including but not limited to course videos which cover subjects such as entrepreneurship development, financial service, corporate governance, team management, marketing strategy and etc. The peer-to-peer knowledge sharing and enterprise service business was adversely affected by COVID-19 for the year ended December 31, 2022. The Company online service was $2,100 for the year ended December 31, 2022.The Company reviewed its copyright of course videos for impairment in the event of the adverse change to market conditions that would impact the future use of the copyrights. It indicated that the carrying amount of an asset might no longer be recoverable as of December 31, 2022.

Other expenses (income), net

The total net other expenses were $3,506,299 for the year ended December 31, 2022, and was $1,540,900 for the year ended December 31, 2021. The net of other expenses for the year ended December 31, 2022 was primarily consisted of the investment loss of $3,618,847 which was mainly attributed by the investment loss in a trust fund of $2,625,349 and impairment loss of $979,426 on long-term investment. The net of other expenses for the year ended December 31, 2021 primarily consisted of the investment loss of $2,118,453, which was mainly attributed to the investment loss in a trust fund of $2,038,395, which was partially offset by the government subsidies of $413,422.

Income taxes provision

Cayman Islands

Under the current tax laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains. In addition, no Cayman Islands withholding tax will be imposed upon the payment of dividends by the Company to its shareholders. 

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, 2022, 2021 and 2020, and accordingly no provision for Hong Kong profits tax has been made in these periods.

China

The Company’s subsidiaries are incorporated in the PRC, and are subject to the PRC Enterprise Income Tax Laws (“EIT Laws”) with the statutory income tax rate of 25% with the following exceptions.

In accordance with the implementation rules of EIT Laws, a qualified “High and New Technology Enterprise” (“HNTE”) is eligible for a preferential tax rate of 15%. 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 obtained its HNTE certificate on October 25, 2017, and renewed in 2021. Therefore, SDH is eligible to enjoy a preferential tax rate of 15% from 2017 to 2023 to the extent it has taxable income under the EIT Law.

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For qualified small and thin-profit enterprises, the annual taxable income up to RMB 1 million (inclusive) is subject to an effective EIT rate of 2.5% from 1 January 2021 to 31 December 2022; where the annual taxable income exceeds RMB 1 million but does not exceed RMB 3 million (inclusive), the amount in excess of RMB 1 million is subject to an effective EIT rate of 5% from 1 January 2022 to 31 December 2024. GMB Consulting was eligible to enjoy a preferential tax rate of 5% from 2018 to 2021. Shidong Health was eligible to enjoy a preferential tax rate of 2.5% in 2022.

The PRC income taxes expense was $808,970 for the year ended December 31, 2022, primarily generated by the changes in valuation allowance. The income tax benefit was $236,581 for the year ended December 31, 2021.

Net loss

As a result of the foregoing, the Company reported a net loss of $23,124,402 for the year ended December 31, 2022, compared to $8,403,260 for the year ended December 31, 2021.

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 32, 2022, for the Company’s consolidated subsidiaries, VIE and VIE’ s subsidiaries, non-controlling interests represent: a) a minority shareholder’s 49% ownership interest in GMB (Beijing), GMB Consulting, Nanyu Culture and Jiagui Haifeng; b) a minority shareholder’s 60.65% ownership interest in Sunrise Guizhou; c) a minority shareholder’s 49% ownership interest in GMB Culture, which has a subsidiary called GMB Technology; and d) a minority shareholder’s 25% ownership interest in Shidong Cloud, and 40% ownership interest in Shidong Trading.

Net loss attributable to the ordinary shareholders

Net loss attributable to the ordinary shareholders was $22,404,366 for the year ended December 31, 2022, compared to $8,403,260 for the year ended December 31, 2021.

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

Revenues, net

Revenues for the year ended December 31, 2021 and 2020 were derived from the following sources:

	For the year ended December 31,
	2021		%			2020		%			Change			%
Member services	$	498,330		6.73	%	$	872,629		3.76	%	$	(374,299	)		(42.89	)%
Enterprise service
-Comprehensive tailored services		1,433,847		19.35	%		13,345,880		57.57	%		(11,912,033	)		(89.26	)%
-Sponsorship advertising services		1,734,390		23.41	%		6,598,527		28.47	%		(4,864,137	)		(73.72	)%
-Consulting services		1,583,583		21.37	%		416,634		1.80	%		1,166,949			280.09	%
Online services		40,391		0.55	%		361,933		1.56	%		(321,542	)		(88.84	)%
Sales of merchandises		2,104,766		28.41	%		1,495,365		6.45	%		609,401			40.75	%
Other services		13,965		0.18	%		90,116		0.39	%		(76,151	)		(84.50	)%
Revenues, net	$	7,409,272		100.00	%	$	23,181,084		100.00	%	$	(15,771,812	)		(68.04	)%

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Revenues decreased by $15,771,812, or 68.04%, from $23,181,084 for the year ended December 31, 2020, to $7,409,272 for the year ended December 31, 2021. Revenues from Member services accounted for 6.73% of net revenues in the year ended December 31, 2021, as compared to 3.76% in year ended December 31, 2020. Revenue from enterprise services accounted for 64.13% and 87.84% of net revenues for the years ended December 31, 2021 and 2020, respectively. Revenue from sales of merchandise accounted for 28.41% and 6.45% of net revenues for the years ended December 31, 2021 and 2020, respectively. The decrease in revenues was primarily attributable to the decrease in the revenue generated from comprehensive tailored services, sponsorship advertising services, member services and partially offset by the increase of revenue from consulting services and sales of merchandises.

Revenues from member services

SDH offers three tiers of membership services, Platinum, Diamond and Protégé, which differ in membership fees as well as the level of the services provided. Members pay a fixed fee for exchange of the right to participate in seven activities, including study tours and forums, within a typically one-year membership period.

Revenues from member services decreased by $374,299, or 42.89%, from $872,629 for the year ended December 31, 2020, to $498,330 for the year ended December 31, 2021. Due to the COVID-19 pandemic, SDH was prevented from offering large offline activities, which resulted in a decreased demand for member services.

Revenues from comprehensive tailored services

There are four major categories of SDH’s comprehensive tailored services. The following table presents the type of tailored services as well as their respective prices:

Type of comprehensive tailored services	Pricing
Conference and salon organization	RMB50,000 (approximately US$7,249)
Booth exhibition services	RMB50,000 (approximately US$7,249)
On-site mentors’ guidance	RMB50,000-100,000 (approximately US$7,249-US$14,498)
Other additional services	RMB10,000-200,000 (approximately US$1,450 -US$28,996)

Revenues from comprehensive tailored services decreased by $11,912,033, or 89.26%, from $13,345,880 for the year ended December 31, 2020, to $1,433,847 for the year ended December 31, 2021. Due to the impact of COVID-19, the comprehensive tailored service revenues from individual customers and some of the enterprise customers became unstable, and the accounts receivable of these customers also became harder to collect. In addition, due to the continuous government restrictions on public gatherings in 2021, the demand of comprehensive tailored services for large conference and salon organization decreased.

Revenues from sponsorship advertising service

Sponsorship advertising is a special form of advertising, generally referring to a publicity strategy adopted by enterprises in order to enhance their corporate and product image, as well as brand awareness and influence. SDH provides sponsorship advertising services for enterprise clients at events SDH holds, such as forums and study tours.

Revenues from sponsorship advertising services decreased by $4,864,137, or 73.72% from $6,598,527 for the year ended December 31, 2020, to $1,734,390 for the year ended December 31, 2021, primarily due to the fact that offline forums and study tours were canceled due to the continuous government restrictions on public gatherings.

Revenues from consulting services

SDH provides consulting services to small and medium-sized enterprises to develop strategies and solutions for the following: corporate reorganization, product promotion and marketing, industry supply chain integration, corporate governance, financing and capital structure, etc. Revenues from consulting services increased by $1,166,949, or 280.09% from $416,634 for the year ended December 31, 2020, to $1,583,583 for the year ended December 31, 2021, primarily due to the fact that SDH managed to hold more small forums and salons to provide consulting services instead of large conferences.

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Revenues from online services

SDH provides two types of online services to the Company’s APP Users, which are questions and answers (Q&A) sessions with chosen Mentors or Experts and online streaming of courses and programs. Top-up credits are paid by Users through SDH’s APP, using which Users can purchase the online services.

Revenue from online services decreased by $321,542, or 88.84% from $361,933 for the year ended December 31, 2020 to $40,391 for the year ended December 31, 2021. The decrease was primarily due to the fact that SDH offered more free streaming content to attract both existing and potential clients.

Revenues from sales of merchandises

Revenues from the sale of merchandise increased by $609,401, or 40.75% from $1,495,365 for the year ended December 31, 2020 to $2,104,766 for the year ended December 31, 2021. The increase was primarily due to the fact that SDH organized more small trade conferences facilitating the sales of merchandises.

Costs of revenues

The following table sets forth the breakdown of the cost of revenues for the years ended December 31, 2021 and 2020:

	For the years ended December 31,										Change
	2021		%			2020		%			Amount			%
Service costs	$	1,823,358		46.91	%	$	2,087,425		70.04	%	$	(264,067	)		(12.65	)%
Cost of goods sold		2,063,296		53.09	%		892,791		29.96	%		1,170,505			131.11	%
Total costs of revenues		3,886,654		100.00	%		2,980,216		100.00	%		6,364,261			75.27	%

Service costs

The service costs primarily include (1) the cost of holding activities, such as venue rental fees, conference equipment fees, (2) professional and consulting fees paid to third parties for the activities; (3) the fees paid to Mentors and Experts; (4) labor costs; and (5) amortization cost of copyright. Service costs decreased by $264,067, or 12.65% for the year ended December 31, 2021 compared to same period in 2020, mainly due to: (1) the decrease of $255,000 in consulting service cost paid to third parties for the activities, which was mainly due to the fact that the cost control for outsource expenses; (2) the decrease of $253,913 in video maintenance service fee; and was partially offset by the increase in conference cost of $296,549, which was mainly because the Company held more small conferences due to the government limitation on the scale of conferences.

Cost of goods sold

The cost of goods sold were $2,063,296 and $892,791 for the years ended December 31, 2021 and 2020, respectively. Cost of goods sold is recognized when revenue from sales of merchandises is recognized. The significant increase of the cost of goods sold was due to sale of electrolytic copper, which incurred cost of goods sold of $2,000,332.

Operating expenses

The following table sets forth the breakdown of the operating expenses for the years ended December 31, 2021 and 2020:

	For the years ended December 31,										Change
	2021		%			2020		%			Amount		%
Selling expenses		946,775		8.66	%		906,456		16.56	%		40,319		4.45	%
General and administrative expenses		7,834,291		71.66	%		3,897,040		71.18	%		3,937,251		101.03	%
Research and development expenses		2,151,565		19.68	%		671,312		12.26	%		1,480,253		220.50	%
Total costs and operating expenses		10,932,631		100.00	%		5,474,808		100.00	%		6,364,261		75.27	%

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Selling expenses

The selling expenses of $946,775 for the year ended December 31, 2021 remained stable compared with $906,456 for the year ended December 31, 2020. Although the revenues for the year ended December 31, 2021 declined while compare to that for the year ended December 31, 2020, SDH spent more selling expenses to retain and attract customers.

General and administrative expenses

The general and administrative expenses increased by $3,937,251 or 101.03%, from $3,897,040 for the year ended December 31, 2020 to $7,834,291 for the year ended December 31, 2021. Such increase was primarily due to (1) an increase of bad debt expenses of $2,376,268, which was mainly due to the fact that as SDH experienced a slow-down in the collection of accounts receivable resulting from impact from COVID-19 for the year ended December 31, 2021, the bad debt expenses increased; (2) increases of directors’ and officers’ liability insurance fee of $343,611, training consulting fees of $238,704, legal fees of $131,390, independent director fees of $103,368 and miscellaneous service fees of $383,147, including training fee, business consulting services, etc. In order to meet public company reporting and corporate governance requirements to meet all of the demands associated with being a public company, audit fee, management insurance and miscellaneous service fees, including training and general consulting services, increased for the year ended December 31, 2021.

Research and development expenses

Research and development expenses for the mobile application, the APP, increased by $1,480,253 or 220.50% from $671,312 for the year ended December 31, 2020 to $2,151,565 for the year ended December 31, 2021, primarily due to the fact that SDH hired more personnel to update and support the APP to meet Users’ increasing needs.

Other expenses (income), net

The total net other expenses were $1,540,900 for the year ended December 31, 2021, and the net of other income was $286,210 for the year ended December 31, 2020. The net of other expenses for the year ended December 31, 2021 was primarily consisted of the investment loss of $2,118,453 which was mainly attributed by the investment loss in a trust fund of $2,038,395, which was partially offset by the government subsidies received in the amounted of $413,422. The total net of other income for the year ended December 31, 2020 was primarily consisted of interest income of $214,460.

Income taxes provision

The Company was incorporated in the Cayman Islands and under the laws of the Cayman Islands; the Company is not subject to tax on its income or capital gains. In addition, no Cayman Islands withholding tax will be imposed upon the payment of dividends by the Company to its shareholders.

GMB HK and New Energy HK are companies registered in Hong Kong, and are subject to income taxes within Hong Kong at the applicable tax rate on taxable income. From the years of assessment of 2019/2020 onwards, Hong Kong profit tax rates are 8.25% on assessable profits up to HK$2,000,000, (approximately US$257,874), and 16.5% on any part of assessable profits over HK$2,000,000. However, the Company did not have any assessable profits arising in or derived from Hong Kong for the years ended December 31, 2021 and 2020, therefore no provision for Hong Kong profits tax was made in these periods.

The PRC subsidiaries and VIE are subject to the PRC Enterprise Income Tax Laws (“EIT Laws”) with the statutory income tax rate of 25%. SDH obtained its “National High Tech Enterprise” (“NHTE”) certificate on October 25, 2017. SDH has completed the process of renewing the NHTE certificate in the first quarter of 2021. Therefore, SDH is eligible to enjoy a preferential tax rate of 15% from 2017 to 2023 to the extent it has taxable income under the EIT Laws.

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On January 17, 2019, the PRC State Taxation Administration issued the notice on the scope of small-scale and low-profit corporate income tax preferential policies of the Ministry of Finance and the State Administration of Taxation, [2019] No. 13. According to which, the taxable income of a small-scale and low-profit enterprise, whose annual taxable income is not more than RMB1,000,000, approximately US$155,003, is reduced by 25% income, which essentially resulted in a favorable income tax rate of 5%. The qualifications of small-scale and low-profit enterprises were examined annually by the Tax Bureau. GMB Consulting was eligible to enjoy a preferential tax rate of 5% from 2018 to 2021.

The PRC income taxes benefit was $236,581 for the year ended December 31, 2021, primarily generated by the annual taxable loss. The income tax provision was $3,054,983 for the year ended December 31, 2020. 

Net (loss) income

As a result of the foregoing, the Company reported a net loss of $8,714,332 for the year ended December 31, 2021, compared to a net income of $11,957,287 for the year ended December 31, 2020.

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, 2021, for the Company’s consolidated subsidiaries, VIE and VIE’ s subsidiaries, non-controlling interests represent: a) a minority shareholder’s 49% ownership interest in Sunrise (Guizhou), GMB (Beijing), GMB Consulting, Nanyu Culture and Jiagui Haifeng; b) a minority shareholder’s 49% ownership interest in GMB Culture, which has a subsidiary called GMB Technology; c) a minority shareholder’s 25% ownership interest in Shidong Cloud, and 40% ownership interest in Shidong Trading. Net loss attributable to non-controlling interest was $311,072 and $130,240 for the years ended December 31, 2021 and 2020, respectively, mainly due to the net loss in GMB (Beijing), GMB Culture and GMB Technology.

Net loss (income) attributable to the ordinary shareholders

Net loss attributable to the ordinary shareholders was $8,403,260 for the year ended December 31, 2021, and net income was $12,087,527 for the year ended December 31, 2020.

Liquidity and Capital Resources

As reflected in the consolidated financial statements, the Company has been incurring $23,124,402 and $8,714,332 net losses for the years ended December 31 2022 and 2021, respectively. Net cash used in operating activities were $9,573,401 and $5,233,182 for the years ended December 31, 2022 and 2021, respectively. Total cash, cash equivalents and restricted cash decreased by $10,322,198 for the year ended December 31, 2022. Management expected to continue to construct the production plant in Guizhou Sunrise. In 2022, the ongoing COVID-19 pandemic continued to negatively impact the Company’s business operations. A resurgence of the COVID-19 outbreak had given rise to economic downturns and other significant changes in regional and global economic conditions, and negatively affected the Company’s ability to execute the sales contract, fulfil customer orders, and collect customer payments timely. As a result, there was a possibility that the Company’s revenue and cash flows might underperform in the next 12 months.

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 controlling the cost and expenses within an acceptable level. The Company is in the process of transitioning peer-to-peer knowledge sharing and enterprise business to graphite anode material business. In assessing its liquidity, management monitors and analyzes the Company’s cash on-hand, its ability to generate sufficient revenue sources and ability to obtain additional financial support in the future, and its operating and capital expenditure commitments. As of December 31, 2022, the Company had cash of $1,655,549. The management believed that it would be able to make borrowings from banks based on past experience and the Company’s good credit history when necessary. As of December 31, 2022, the Company had available line of credit from Bank of Guizhou for RMB 6,500,000, approximately $933,291. On January 18, 2023, Sunrise Guizhou entered a credit facility agreement with Post Savings Bank of China (“Post Bank”) to obtain revolving fund up to RMB 30,000,000, approximately $4,307,498, for a term from January 19, 2023 to January 18, 2031. On February 7, 2023, Sunrise Guizhou entered a two-year debt financing arrangement with Zhongguancun Science and Technology Leasing Co., Ltd. to obtain a loan of RMB 20,000,000, approximately $2,871,665, for a term from February 7, 2023 to February 7, 2025.

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Currently, the Company is working to improve its liquidity and capital sources primarily through cash flows from operation, debt and equity financing, and financial support from its principal shareholder. In order to fully implement its business plan and sustain continued growth, the Company may also seek equity financing from outside investors when necessary. As of December 31, 2022, the working capital of the Company was $18,614,388. Based on the operating plan and the working capital condition, management believed that the above-mentioned measures collectively would provide sufficient liquidity for the Company to meet its future liquidity and capital requirement for at least 12 months from the date the consolidated financial statements are issued.  

If the Company experiences an adverse operating environment or incurred 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 dilutions to the existing shareholders.

Substantially all of the Company’s operations are conducted in the PRC and all of the revenues and the vast majority of expenses, cash and cash equivalents are denominated in RMB. As of December 31, 2022, 72.35% of cash, cash equivalents and restricted cash were held in China, and held by its subsidiaries, VIE and VIE’s subsidiaries and denominated in Renminbi, while 27.65% of cash, cash equivalents and restricted cash were held in Hong Kong, and held by EPOW, SDH New Energy and GMB HK and denominated in US dollars. Although the Company consolidates the results of the VIE and its subsidiaries, the Company only has the access to the assets or earnings of the VIE and their subsidiaries through the contractual arrangements with the VIE and its shareholders. 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, 2022, the following were outstanding balances of cash and cash equivalents, restricted cash and short-term investments in each jurisdiction:

	Cash and cash equivalents		Restricted cash		Short-term investments		Total
PRC	$	1,168,513	$	1,938,374	$	-	$	3,106,887
Hong Kong		201,120		-		-		201,120
Cayman Islands		285,916		700,094		3,336,256		4,322,266
Total	$	1,655,549	$	2,638,468	$	3,336,256	$	7,630,273

Cash Flows

The following table sets forth a summary of cash flows for the periods indicated:

	For the years ended December 31,
	2022			2021			2020
Net cash (used in) provided by operating activities	$	(9,573,401	)	$	(5,233,182	)	$	7,066,163
Net cash used in investing activities		(45,609,072	)		(22,095,198	)		(6,365,555	)
Net cash provided by financing activities		45,760,061			30,837,261			119,996
Effect of foreign exchange rate on cash and cash equivalents		(899,786	)		141,322			706,302
Net (decrease) increase in cash and cash equivalents	$	(10,322,198	)	$	3,650,203		$	1,526,906

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Operating Activities 

Net cash used in operating activities amounted to $9,573,401 for the year ended December 31, 2022. It was primarily due to a) a net loss of $23,124,402, adjusted by depreciation and amortization of $2,062,499, share-based compensation of $2,729,969, deferred tax expenses of $807,412, interest expenses of $213,823, investment losses of $3,618,847, bad debt expense of $2,887,754, impairment on inventory of $2,711,158, impairment on intangible assets of $2,650,020, amortization of land use rights of $126,042 and amortization of operating lease right-of-use asset of $213,063; increase in b) account receivable of $1,734,486, notes receivable of $899,481 due to sales of graphite anode products; c) inventories of $18,747,772 finished goods and purchased raw materials of graphite anode; d) prepaid expenses and other current assets of $2,894,690 due to increase on tax prepayment of $4,345,304 offset by decrease on prepaid expenses of 2,251,169; d) account payable of $12,661,801 and notes payable of $ 4,014,213 for payables to vendors of graphite business; and e) deferred government subsidy of $2,973,491 due to relocation bonus received from the government of Zibo City, Shandong Province, PRC.

Net cash used in operating activities amounted to $5,233,182 for the year ended December 31, 2021. It was primarily due to a) a net loss of $8,714,332, adjusted by depreciation and amortization of $988,672, deferred tax benefits of $232,363, investment losses of $2,118,453, bad debt expense of $3,847,426 and amortization of operating lease right-of-use asset of $90,320; b) decrease in income tax payable of $3,696,654 due to the payment of income tax; c) increase in prepaid expenses and other current assets of $678,288 due to increase of prepayment for service fee of $1,054,240; d) increase of inventories of $331,491 and right-of-use asset of $211,213; e) and partially offset by decrease in accounts receivable of $1,729,006.

Net cash provided by operating activities amounted to $7,066,163 for the year ended December 31, 2020. It was primarily due to a) a net income of $11,957,287, adjusted by depreciation and amortization of $865,426, investment losses of $1,087, bad debt expense of $1,514,559 and amortization of operating lease right-of-use asset of $359,551; b) increase in income taxes payable of $2,565,098 due to the increased taxable income for the year ended December 31, 2020; c) increase in accrued expenses and other current liabilities of $852,731 because of the IPO efforts and the expansion of the business for the year ended December 31, 2020; d) increase in inventories of $667,758 due to purchase from third parties; and partially offset by a) increase in accounts receivable of $8,385,804 because of the expansion of the business in the fiscal year 2020; b) decrease in deferred revenue of $322,534 because SDH received services fees in the fiscal year 2019 from customers for member services and comprehensive tailored services and other services have been rendered in the year ended December 31, 2020; c) increase in prepaid expenses and other current assets of $447,421.

Investing Activities

Net cash used in investing activities amounted to $45,609,072 for the year ended December 31, 2022. It was primarily due to: a) purchase of plant, property and equipment of $43,714,195; and b) consideration paid for an asset acquisition of $1,486,746. In July 2022, Sunrise Guizhou entered into purchase agreements with the 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 (approximately $5,743,331), of which RMB10,000,000 (approximately $1,486,746) was paid in July 2022. The unpaid consideration will be paid in installments from 2023 to 2026.

Net cash used in investing activities amounted to $22,095,198 for the year ended December 31, 2021. It was primarily due to a) prepayment for land use right, construction and equipment of $8,244,917; b) purchase of short-term investments of $8,000,000; c) interest-bearing loans to third party of 2,825,359; d) and purchase of long-term investments of $2,289,945. 

Net cash used in investing activities amounted to $6,365,555 for the year ended December 31, 2020. It was primarily due to purchase of property of $1,723,543, purchase of intangible asset of $2,735,433, and purchase of long-term investments of $1,678,514.

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Financing Activities

Net cash provided by financing activities amounted to $45,760,061 for the year ended December 31, 2022, representing proceeds from the following debt financing from sale and leaseback contracts, net of issuance cost, of $8,827,701 and capital contributions from the non-controlling shareholders of $ 37,024,594.

● On September 22, 2022, Sunrise Guizhou entered into a sales and leaseback contract with Far East International Financial Leasing Co., Ltd. (“Far East”). Pursuant to the contract, the Company sold its machines for RMB 20,000,000, approximately $2,871,665, and immediately leased the machines back from Far East for an eighteen-month term from September 22, 2022 to March 21, 2024, with a yearly implied interest rate of 11.98%.

● On November 4, 2022, Sunrise Guizhou entered into a sales and leaseback financing contract with China Power Investment Ronghe Financial Leasing Co., Ltd. to obtain an amount of RMB 40,000,000, approximately $5,743,331, for a three years leasing term from November 10, 2022 to November 9, 2025, with a yearly interest rate of one-year loan prime rate plus 1.55%.

Net cash provided by financing activities amounted to $30,837,261 for the year ended December 31, 2021, representing issuance of ordinary shares in connection with IPO, net of issuance cost of $27,504,639 and capital contributions from the non-controlling shareholders of $3,332,622.

Net cash provided by financing activities amounted to $119,996 for the year ended December 31, 2020, representing capital contributions from the controlling shareholders.

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 does not have any off-balance sheet arrangements as of December 31, 2022.

Contingencies

The Company may be involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. 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. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity. As of December 31, 2022, the Company did not have material litigations or lawsuits against them.

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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 Policies and Management 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 policies and practices include the following: (i) revenue recognition, (ii) lease, (iii) asset acquisition and (iv) income taxes. For further information on these accounting policies, see note 2 to our consolidated financial statements included elsewhere in this annual report.

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.

Allowance for doubtful accounts

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

The Company mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on management’s assessment of historical bad debts, creditworthiness and financial conditions of the clients, current economic trends and changes in client payment patterns. Past due accounts are generally written off against the allowance for bad debts only after all collection attempts have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts was $8,047,527, $5,744,387 and $1,808,889 for the years ended December 31, 2022, 2021 and 2020, respectively.

Allowance on inventories

The cost of inventories is calculated using the weighted average method. Any excess of the cost over the net realizable value of each item of inventories is recognized in the value of inventories. Net realizable value is estimated using selling price in the normal course of business less any costs to complete and sell products. The valuation allowance provided for the inventory was $2,711,158, $nil and $nil for the years ended December 31, 2022, 2021 and 2020.

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Impairment on long-term investments

For 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 $979,426, $nil and $nil recorded in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020.

Impairment of long-lived assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Company measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss, which is the excess of carrying amount over the fair value of the assets, using the expected future discounted cash flows. Impairments charges for intangible assets were $2,650,020, $nil and $nil recorded in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020.

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 were $3,936,504 and $1,218,319 as of December 31, 2022 and 2021, respectively.

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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.

Directors and Executive Officers	Age	Position/Title
Haiping Hu	55	Chief Executive Officer (“CEO”), Chairman of the Board of Director
Chao Liu	42	Chief Financial Officer (“CFO”)
Chenming Qi	52	Chief Operating Officer (“COO”)
Haiwei Zuo	40	Director
Ligang Lu	54	Independent Director
Xiang Luo	52	Independent Director
Jian Pei	55	Independent Director

Mr. 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. 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.

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Mr. Chenming Qi has served as our COO since February 2019, and as the COO and director of the VIE since July 2017. From May 2014 to June 2017, Mr. Qi served as the Vice President of the sales division of 360 Enterprise Security Group, which specializes in providing enterprise-level network security technologies, products and services to government, enterprises, education, finance and other institutions and organizations. He co-founded Netgod Information Technology (Beijing) Co., Ltd, which is engaged in enterprise-level network security technologies, products and services in 2006, and served as a vice president of operations from June 2006 to May 2017. He served as the deputy general manager of Lenovo Information Security Division from April 2004 to June 2006. From March 2002 to March 2004, he was the sales director of Hampoo (China) Management Consulting Company, which is engaged in management consulting, IT planning, information implementation, etc. Mr. Qi graduated from Tianjin University with a master’s degree in Precision Instrument Engineering in March 1996. We believe that Mr. Qi, with over twenty years of experience in team building and enterprise management, is qualified to serve as our COO.

Mr. Haiwei Zuo has served as our director since February 2019, and as Vice Chairman of the VIE since December 2014. From September 2013 to December 2014, he served as the Dean of Beijing Huatai Weiye Management Science and Technology Research Institute. From March 2009 to September 2013, he served as the CEO of Beijing Naked in Frontier Cultural Exchange Co., Ltd., which is engaged in producing TV program content that is in category of business and financial management. He studied business administration at the China Agricultural University and graduated in July 2019.

Mr. Xiang Luo was appointed as our director on March 11, 2022. Mr. 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.

Dr. Jian Pei was appointed as our director on May 30, 2022. He has served as a professor at the College of Chemistry and Molecular Engineering of Peking University, China, since April 2001. Dr. Pei received his undergraduate degree in 1989 and Ph.D. degree in 1995, majoring in Chemistry, from Peking University in 1995. After the completion of his postdoctoral work at the National University of Singapore in July 1997, he joined the Institute of Materials Research and Engineering in Singapore and served as a research associate from November 1997 to August 2001. From June 1998 to January 2000, Dr. Pei was a visiting scholar at the Institute of Polymer and Organic Solids, University of California at Santa Barbra. Dr. Pei is a receiver of the Changjiang Scholar award, an academic award given to an individual in higher education by the Ministry of Education of the People’s Republic of China. Dr. Pei’s research focuses on the development of organic semiconducting materials for application in optoelectronics.

Mr. Ligang Lu was appointed as our director upon the closing of our IPO. Since January 2011, Mr. Lu has been the auditor director and group supervisor of Shanshan Holdings Co. 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 2003 to January 2011, he held several positions at Hebei Hualong Riqing Noodle Industry Group Co., Ltd., which is mainly engaged in noodle manufacturing, including audit manage and chief financial officer. From September 1990 to January 2003, he was the audit office director of Sinosteel Xingji Group, which is engaged in steel productions, sales, distributions related services. Mr. Lu holds a bachelor’s degree in Financial Auditing and Accounting from Hebei University of Economics and Business (formerly Hebei University of Finance and Economics). In May 2001, Mr. Lu was certified as senior auditor and accountant by China Human Resources Bureau of Hebei Province, and became a Certified Internal Auditor (“CIA”) by International Registered Institute of Internal Auditors (USA).

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B. Compensation of Directors and Executive Officers 

The following table sets forth certain information with respect to compensation for the year ended December 31, 2022, earned by or paid to our chief executive officers.

Summary Compensation Table

Name and Principal Position	Year	Salary (US$)		Bonus (US$)	Stock Awards (US$)		Option Awards (US$)	Non-Equity Incentive Plan Compensation	Deferred Compensation Earnings	Other	Total (US$)
Haiping Hu	2022		44,778			967,600						1,012,378
CEO of the Company and the VIE
Chao Liu	2022		39,722			100,000						139,722
CFO of the Company and the VIE
Chenming Qi	2022		27,300			0						27,300
COO of the Company and the VIE
Haiwei Zuo	2022		56,333			110,000						166,333
Director of the Company
Jian Pei	2022		0			25,000						25,000
Director of the Company
Xiang Luo	2022		0			25,000						25,000
Director of the Company
Ligang Lu	2022		0			30,000						30,000
Director of the Company

For the year ended December 31, 2022, the Company paid the above compensations to our executive officers and directors.  

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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 shall be 3,679,200 Ordinary Shares.

As of the date of this annual report, we issued 833,550 Ordinary Shares to qualified persons under the 2022 Plan.

The following describes the principal terms of the 2022 Plan.

Types of awards

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

Plan Administration

Our board of directors or a committee of one or more members of the board of directors administers the 2022 Plan. 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.

Award Agreement

Each awards 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 of the grantee’s employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.

Eligibility

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

Vesting Schedule

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

Exercise of Options

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

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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

Under Cayman Islands law, our directors owe fiduciary duties at common law, including, but not limited to a duty to act honestly, in good faith and with a view to our best interests. When exercising powers or performing duties as a director, our directors also have a duty to exercise the care, diligence and skills that a reasonable director would exercise in comparable circumstances, taking into account, without limitation, the nature of the company, the nature of the decision, the position of the director and the nature of the responsibilities undertaken by him. In exercising the powers of a director, our directors must exercise their powers for a proper purpose and shall not act or agree to the company acting in a manner that contravenes our amended and restated memorandum and articles of association or the Companies Act (Revised) of the Cayman Islands.

Generally, we have the right to seek damages if a duty owed by our directors is breached.

The functions and powers of our board of directors include, among others:

● appointing officers and determining the term of office of the officers;

● exercising the borrowing powers of the company and mortgaging the property of the company; and

Terms of Directors and Executive Officers

Each of our directors holds office until a successor has been duly elected and qualified unless the director was appointed by the board of directors, in which case such director holds office until the next following annual meeting of shareholders at which time such director is eligible for reelection. 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.

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Committees of the Board of Directors

We have established three committees under the board of directors: the audit committee, the compensation committee and the corporate governance and nominating committee, and adopt a charter for each of the committees. Each committee’s members and functions are described below. 

Audit Committee. Our audit committee, formed upon the closing of our IPO, consists of Mr. Ligang Lu, Mr. Xiang Luo and Mr. Jian Pei, with Mr. Ligang Lu serving as the chairman of our audit committee. We have determined that Mr. Ligang Lu, Mr. Xiang Luo and Mr. Jian Pei satisfy the “independence” requirements of Section 5605(a)(2) of the Nasdaq Listing Rules and Rule 10A-3 under the Securities Exchange Act. Prior to our IPO, our board also determined that Ligang Lu qualifies as an audit committee financial expert within the meaning of the SEC rules or possesses financial sophistication within the meaning of the Nasdaq Listing Rules. 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. Ligang Lu and Mr. Jian Pei. Mr. Ligang Lu is the chairman of our compensation committee. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. 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.

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Corporate Governance and Nominating Committee. Our corporate governance and nominating committee, formed upon the closing of our IPO, consists of Mr. Ligang Lu and Mr. Jian Pei. Mr. Xiang Luo is the chairman of our corporate governance and nominating committee. 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 

We had a total of 134, 96, and 48 full-time employees (excluding the employees of Sunrise Guizhou), as of December 31, 2020, 2021, and 2022, respectively.  As of April 30, 2023, we had 48 full-time employees (excluding the employees of Sunrise Guizhou),. We had 4, 22, 7 and 15 employees located in Shanghai, Beijing, Hangzhou, and Zibo, respectively. The following table sets forth the numbers of our employees by areas of business as of April 30, 2023, 2023:

Department	Number of Employees
Senior Management		5
Human Resources & Administration		8
Sales & Marketing		12
Business & Consulting		1
Customer Service		2
Information Technology		2
Research & Development		10
Finance		8
Total		48

Sunrise Guizhou had 229 and 257 employees as of April 30, 2023, and December 31, 2022, respectively. The following table sets forth the numbers of Sunrise Guizhou’s employees by areas of business as of April 30, 2023

Department	Number of Employees
Senior Management		1
Human Resources & Administration		13
Research & Development		50
Manufacturing & Equipment		128
Warehouse & Operation		19
Engineering & Construction		9
Finance & Compliance		5
Sales & Marketing		4
Total		229

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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 is a member 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 May 15, 2023 by:

● each of our directors and executive officers; and

● each of our principal shareholders who beneficially own more than 5% of our total outstanding Ordinary Shares.

The calculations in the table below are based on 25,361,550 Ordinary Shares outstanding as of the date of this annual report, including 833,550 Ordinary Shares issued under the Stock Incentive Plan.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. 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*	Ordinary Shares Beneficially Owned
	Number		%
Director and Executive Officers:
Haiping Hu (1)		7,324,687		28.88	%
Chao Liu		50,000		0.20	%
Chenming Qi (3)		2,491,318		9.82	%
Haiwei Zuo (4)		1,140,282		4.50	%
Ligang Lu		15,000		0.06	%
Xiang Luo		12,500		0.05	%
Jian Pei		12,500		0.05	%
Directors and Executive Officers as a group (7 persons)		11,046,287		43.56	%
5% Beneficial Owners**
GMB Wisdom Sharing Platform Co., Ltd. (1)		6,840,887		26.97	%
GMB Information Technology Co., Ltd. (4)		1,085,282		4.28	%
GMB Culture Communication Co., Ltd. (2)		2,705,583		10.67	%
GMB Resource Services Co., Ltd (3)		2,491,318		9.82	%

* Unless otherwise indicated, the business address of each of the individuals is Room 350, 3rd Floor, Building 6,Yard 1, Shangdi 10th Street, Haidian District, Beijing, The PRC.

** The principal office of each of the 5% beneficial owners are located at Start Chambers, Wickham’s Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands.

(1) Haiping Hu, our CEO and chairman of the Board, beneficially owns 6,840,887 Ordinary Shares through his 100% ownership of GMB Wisdom Sharing Platform Co., LTD, and 483,800 Ordinary Shares held directly.

(2) Representing 2,705,583 Ordinary Shares held by GMB Culture Communication Co., Ltd, a British Virgin Islands company. Ertao Zhao, Yidong Zhang, Xiaoli Chen serve as the directors of GMB Culture Communication Co., Ltd. and share the dispositive and voting power of the shares held by GMB Culture.

(3) Representing 2,491,318 Ordinary Shares Held by GMB Resource Services Co., Ltd., a British Virgin Islands company. Our COO Chenming Qi and Cunyou Li, Jinhai Ying, Gesheng Fei, each of whom serves as a director of GMB Resource Services Co., share the dispositive and voting power of the shares held by GMB Resources.

(4) Haiwei Zuo, our director, beneficially owns 1,085,282 Ordinary Shares through his 100% ownership of GMB Information Technology Co., Ltd., a British Virgin Islands company, and 55,000 Ordinary Shares held directly.

We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

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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 Gansu QLS

See “Item 4. Information on the Company—C. Organizational Structure.”

Material Transactions with Related Parties

The following is a list of related parties which the Company had transactions with:

(a)	Ningbo Zhuhai Investment Co., Ltd. (“Zhuhai Investment”), a company controlled by Mr. Haiping Hu
(b)	Bally, Corp. (“Bally”), a company controlled by Mr. Haiping Hu
(c)	Mr. Xuanming Wang, General Manager and legal representative of GMB (Hangzhou)
(d)	Mr. Haiwei Zuo, Vice Chairman of the Board, 7.49% shareholder of GMB (Beijing)
(e)	Shanghai Hui Yang Investment Co., 9.6451% shareholder of Sunrise Guizhou and controlled by immediate family members of Mr. Haiping Hu
(f)	Shidong (Suzhou) Investment Co., Ltd., a company of which Mr. Haiping Hu is the CEO
(g)	Mr. Shousheng Guo, Director, 3.00% shareholder of GMB (Beijing)
(h)	Mr. Wenwu Zhang, Director of Sunrise Guizhou
(i)	Mr. Chenming Qi, General Manager, Director and 3.00% shareholder of GIOP BJ; Director of GMB (Hangzhou)
(j)	Ms. Jing Ji, CEO of and 46% shareholder of GMB Technology
(k)	Haicheng Shenhe, 9.6451% shareholder of Sunrise Guizhou
(l)	Guizhou Yilong New Area Industrial Development and Investment Co., Ltd., 3.0864% shareholder of Sunrise Guizhou
(m)	Beijing Yihe Business Technology Co., Ltd. (“Yihe Beijing”), a 40% shareholder of GMB (Beijing).

a. Due from related parties

As of December 31, 2022, 2021 and 2020, the balances of amount due from related parties were as follows:

		As of December 31,
		2022		2021		2020
Due from related parties
Bally			5,168		5,168		5,168
Zhuhai Investment			-		25,534		155,378
Mr. Xuanming Wang			20,102		26,664		-
Mr. Haiwei Zuo			-		7,912		-
Mr. Wenwu Zhang	(1)		337,420		-		-
Yihe Beijing			-		-		12,184
Shidong (Suzhou) Investment Co., Ltd.			37,332		-		-
Total		$	400,022	$	65,278		172,730

(1) The balance as of December 31, 2022 represented the prepaid acquisition consideration to purchase Mr. Wenwu Zhang’s equity in Haicheng Shenhe.

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b. Due to related parties

As of December 31, 2022 and 2021, the balances of amounts due to related parties were as follows:

		As of December 31,
		2022		2021		2020
Due to related parties
Mr. Haiping Hu			2,872		-		-
Mr. Chenming Qi			9,189		-		-
Ms. Jing Ji			19,923		-		-
Shanghai HuiYang Investment Co.	(1)		738,128		-		-
Haicheng Shenhe			50,395		-		-
Zhuhai Investment			64,643		-		-
Total		$	885,150	$	-		-

(1) The balance as of December 31, 2022 represented the loans from the related party, with the annual interest rate of 4.35% and was initially due on August 13, 2022 and extended to December 31, 2023.

c. Deferred revenue -related parties

As of December 31, 2022 and 2021, the balances of deferred revenue of related parties were as follows:

		As of December 31,
		2022		2021		2020
Deferred revenue of related parties
Shanghai Hui Yang Investment Co.	(1)	$	347,471	$	-	$
Total		$	347,471	$	-	$

(1) The balance as of December 31, 2022 represented the advance from the related party for tailored services.

d. Related party transactions

Related party purchase

The Company rented office spaces from Zhuhai Investment. For the years ended December 31, 2022, 2021 and 2020, total rental fee to Zhuhai Investment were $118,475, $103,411 and $96,695, respectively.

The Company purchased graphite material processing service of $450,591 and purchased raw material of $580,452 from Haicheng Shenhe for the year ended December 31, 2022.

The Company also purchased professional services from Yihe Beijing. For the year ended December 31, 2020, service costs paid to Beijing Yihe were $27,175.

Related party sales

The Company sold titanium of $205 to Mr. Shousheng Guo for the year ended December 31, 2022.

The Company sold medical wine of $666 to Zhuhai Investment for the year ended December 31, 2021.

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e. Related party guarantee

On August 4, 2022, Surnise Guizhou entered a line of credit financing contract with Bank of Guizhou for revolving credit of RMB 20,000,000, approximately $ 2,871,665, for a term from August 4, 2022 to August 3, 2023. The line of credit was in various means including bank loans, commercial note and letter of credit. As of December 31, 2022, the Company has utilized RMB 13,500,000, approximately $1,938,374, line of credit by issuing commercial notes to its vendors for amount of RMB 27,000,000, approximately $3,876,748. Pursuant to the line of credit contract, the Company was obliged to deposit fifty percent of the notes payable amount issued as restricted cash in the designated bank accounts in Bank of Guizhou. Pursuant to the contract, Mr. Haiping Hu and Guizhou Yilong New Area Industrial Development and Investment Co., Ltd., the non-controlling shareholder of Sunrise Guzhou, were the guarantor of the line of credit.

On September 22, 2022, Sunrise Guizhou entered a financing contract into an eighteen-month loan with Far East to obtain a loan of RMB 20,000,000, approximately $2,871,665, for a term from September 22, 2022 to March 21. On November 4, 2022, Sunrise Guizhou entered a sales and leaseback financing contract into a three-year financing with Ronghe to obtain an amount of RMB 40,000,000, approximately $5,743,331, for a term from November 10, 2022 to November 9, 2025. Pursuant to the financing contracts, Mr. Haiping Hu.

In July 2022, Sunrise Guizhou entered into purchase agreements with original shareholders of Sunrise to acquire 100% of Sunrise Tech’s assets and equity ownership for a gross consideration of RMB 40,000,000 (approximately $5,743,331), among of which RMB10,000,000 (approximately $1,486,746) was paid in July 2022. The unpaid consideration RMB30,000,000 (approximately $4,307,499) will be paid in installments from 2023 to 2026. The consideration payable is guaranteed by Mr. Haiping Hu.

Employment Agreements and Indemnification Agreements

See “Item 6. Directors, Senior Management and Employees—B. Compensation of Directors and Executive Officers.”

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. 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.

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ITEM 9.  THE OFFER AND LISTING 

A. Offering and Listing Details 

Our Ordinary Shares have been listed on the Nasdaq Capital Market since February 9, 2021.

B. Plan of Distribution 

Not applicable.

C. Markets 

Our Ordinary Shares have been listed on the Nasdaq Global Market since February 9, 2021. On August 5, 2022, our Ordinary Shares began trading on the NASDAQ Capital Market under the new ticker symbol “EPOW”. Our Ordinary Shares previously traded under the ticker symbol “SDH”.

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 an exempted company with limited liability incorporated under the laws of the Cayman Islands and our affairs are governed by our Amended and Restated Memorandum and Articles of Association, as amended and restated from time to time, and Companies Act (Revised) of the Cayman Islands, which we refer to as the Companies Act below, and the common law of the Cayman Islands.

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The following are summaries of material provisions of our Amended and Restated Memorandum and Articles of Association and the Companies Act insofar as they relate to the material terms of our Ordinary Shares.

Board of Directors

See “Item 6. Directors, Senior Management and Employees.”

Ordinary Shares

General

Our authorized share capital is US$50,000 divided into 500,000,000 Ordinary Shares, par value US$0.0001 per share.

Dividends

Subject to the provisions of the Companies Act and any rights attaching to any class or classes of shares under and in accordance with the Company’s shareholders may, by ordinary resolution, declare dividends but no such dividend shall exceed the amount recommended by the directors.

Subject to the requirements of the Companies Act regarding the application of a company’s share premium account and with the sanction of an ordinary resolution, dividends may also be declared and paid out of any share premium account. The directors when paying dividends to shareholders may make such payment either in cash or in specie.

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 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

Whenever our capital is divided into different classes of shares, the rights attaching to any class of share (unless otherwise provided by the terms of issue of the shares of that class) may be varied either with the consent in writing of the holders of not less than two-thirds of the issued shares of that class, or with the sanction of a resolution passed by a majority of not less than two-thirds of the holders of shares of the class present in person or by proxy at a separate general meeting of the holders of shares of that class.

Unless the terms on which a class of shares was issued state otherwise, the rights conferred on the shareholder holding shares of any class shall not be deemed to be varied by the creation or issue of further shares ranking pari passu with the existing shares of that class or the creation or issue of one or more classes of shares with or without preferred, deferred or other special rights or restrictions (including, without limitation, the creation of Shares with enhanced or weighted voting rights), whether in regard to dividend, voting, return of capital or otherwise. 

Transfer of Ordinary Shares

Subject to the restrictions contained in our articles, any shareholder 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 any Designated Stock Exchange (as defined under our articles) or in any other form approved by our board of directors and may be under hand or by electronic machine imprinted signature or by such other manner of execution as our board of directors may approve from time to time.

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Our board of directors may, in its absolute discretion, decline to register any transfer of any ordinary share which is not fully paid up or on which we have a lien. Our board of directors may also decline to register any transfer of any ordinary share unless:

● the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;

● the instrument of transfer is in respect of only one class of shares;

● the instrument of transfer is properly stamped, if required;

● in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four;

● the shares transferred are fully paid up and free of any lien in our favor; and

● a fee of such maximum sum as the Nasdaq may determine to be payable, or such lesser sum as our directors may from time to time require, is paid to us in respect thereof.

If our directors refuse to register a transfer, they are required, within three months after the date on which the instrument of transfer was lodged, to send to the transferee notice of such refusal. This, however, is unlikely to affect market transactions of the ordinary shares purchased by investors. Since our ordinary shares are listed on the Nasdaq, the legal title to such ordinary shares and the registration details of those ordinary shares in our register of members remain with DTC/Cede & Co. All market transactions with respect to those ordinary shares will then be carried out without the need for any kind of registration by the directors, as the market transactions will all be conducted through the DTC systems.

The registration of transfers of shares or of any class of shares may, after compliance with any notice requirement of any Designated Stock Exchange (as defined under our articles), be suspended and our register of members be closed at such times and for such periods (not exceeding in the whole thirty (30) days in any year) as our board of directors may determine.

Inspection of Books and Records

Holders of our Ordinary Shares will have no general right under the Companies Act to inspect or obtain copies of our register of members or our corporate records (other than the register of mortgages).

General Meeting of Shareholders

As a Cayman Islands exempted company, we are not obligated by the Companies Act to call shareholders’ annual general meetings; accordingly, we may, but shall not be obliged to, in each year hold a general meeting as an annual general meeting. Any annual general meeting held shall be held at such time and place as may be determined by our board of directors. All general meetings other than annual general meetings shall be called extraordinary general meetings.

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 10 percent of the rights to vote at such general meeting in accordance with the notice provisions in the articles, specifying the purpose of the meeting and signed by each of the shareholders making the requisition. 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 ninety days 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.

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At least 7 days’ notice of a general meeting shall be given to shareholders entitled to attend and vote at such meeting. The notice shall specify the place, the day and the hour of the meeting and the general nature of that business.

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 half an hour 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 day in the next week, at the same time and place, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting, the shareholder present shall be a quorum

The chairman may, with the consent of a meeting at which a quorum is present, adjourn the meeting. When a meeting is adjourned for ten 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 by one or more shareholders present in person or by a proxy who together hold not less than fifteen per cent of the paid up capital of the Company entitled to vote. 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, 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 three directors.

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 remuneration of the directors shall be determined by the shareholders by ordinary resolution, except that the directors shall be entitled to such remuneration as the directors may determine.

Unless removed or re-appointed, each director shall be appointed for a term expiring at the next-following annual general meeting or upon any specified event or after any specified period in a written agreement between the Company and the director, if any. Our directors will be elected by an ordinary resolution of our shareholders.

A director may be removed by ordinary resolution.

A director may at any time resign or retire from office by giving us notice in writing.

Subject to the provisions of the articles, the office of a director may be terminated forthwith if:

(a) becomes bankrupt or makes any arrangement or composition with his creditors generally;

(b) is found to be or becomes of unsound mind; or

(c) resigns his office by notice in writing to the Company.

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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 Companies Act, our amended and restated memorandum and articles, our business shall be managed by the directors, who may exercise all our powers. No prior act of the directors shall be invalidated by any subsequent alteration of our amended and restated memorandum or articles. However, to the extent allowed by the Companies Act, shareholders may by special resolution validate any prior or future act of the directors which would otherwise be in breach of their duties. 

The directors may delegate any of their powers to any committee consisting of one or more persons who need not be shareholders and may include non-directors so long as the majority of those persons are directors; any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the directors. Our board of directors has established an audit committee, compensation committee, and nomination and corporate governance committee.

The board of directors may establish any local or divisional board of directors or agency and delegate to it its powers and authorities (with power to sub-delegate) for managing any of our affairs whether in the Cayman Islands or elsewhere and may appoint any persons to be members of a local or divisional board of directors, or to be managers or agents, and may fix their remuneration.

The directors may from time to time and at any time by power of attorney or in any other manner they determine appoint any person, either generally or in respect of any specific matter, to be our agent with or without authority for that person to delegate all or any of that person’s powers.

The directors may from time to time and at any time by power of attorney or in any other manner they determine appoint any person, whether nominated directly or indirectly by the directors, to be our attorney or our authorized signatory and for such period and subject to such conditions as they may think fit. The powers, authorities and discretions, however, must not exceed those vested in, or exercisable, by the directors under the articles.

The board of directors may remove any person so appointed and may revoke or vary the delegation.

A director who is in any way, whether directly or indirectly, interested in a contract or transaction or proposed contract or transaction with the Company shall declare the nature of his interest at a meeting of the directors. A general notice given to the directors by any director to the effect that he is a member of any specified Company or firm and is to be regarded as interested in any contract or transaction which may thereafter be made with that company or firm shall be deemed a sufficient declaration of interest in regard to any contract so made or transaction so consummated. A director may vote in respect of any contract or transaction or proposed contract or transaction notwithstanding that he may be interested therein and if he does so his vote shall be counted and he may be counted in the quorum at any meeting of the directors at which any such contract or transaction or proposed contract or transaction shall come before the meeting for consideration.

Capitalization of Profits

The Company may upon the recommendation of the directors by ordinary resolution authorize the directors to capitalize any sum standing to the credit of any of the Company’s reserve accounts (including share premium account and capital redemption reserve fund) or any sum standing to the credit of the profit and loss account or otherwise available for distribution and to appropriate such sums to shareholders in the proportions in which such sum would have been divisible amongst them had the same been a distribution of profits by way of dividend and to apply such sum on their behalf in paying up in full unissued shares for allotment and distribution credited as fully paid up to and amongst them in the proportion aforesaid.

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Liquidation Rights

If we are wound up, the shareholders may, subject to the articles and any other sanction required by the Companies Act, pass a special resolution allowing the liquidator to do either or both of the following:

(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

(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 without the sanction of a resolution passed at a general meeting.

Exempted Company

We are an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except that an exempted company:

● is not required to make its register of members open to inspection by shareholders;

● does not have to hold an annual general meeting;

● may issue shares with no par value;

● may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);

● 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.

“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on that shareholder’s shares of the company, except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil.

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.

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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.

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We believe that Sunrise New Energy is not a resident enterprise for PRC tax purpose. Sunrise New Energy is not controlled by a PRC enterprise or PRC enterprise group and we do not meet some of the conditions outlined in the immediately preceding paragraph. For example, as a holding company, the key assets and records of Sunrise New Energy, 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 Sunrise New Energy 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 Sunrise New Energy 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 VAT Laws, 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. The VAT tax rates applicable to our PRC subsidiaries and consolidated affiliates are as follows: 6% on services for the VIE, GMB (Hangzhou) and Mentor Board Voice of Seeding (Shanghai) Cultural Technology Co., Ltd.; 3% for small-scale taxpayers including GMB (Beijing), GMB Culture, GMB Consulting and GMB Linking and GIOP BJ. 

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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.

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Material Tax Consequences Applicable to U.S. Holders of Our Ordinary Shares

The following sets forth the material U.S. federal income tax consequences related to the ownership and disposition of our Ordinary Shares. This 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):

1. The actual days in the United States in the current year; plus

2. One-third of his or her days in the United States in the immediately preceding year; plus

3. One-sixth of his or her days in the United States in the second preceding year.

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Taxation of Dividends and Other Distributions on our Ordinary Shares

Subject to the passive foreign investment company (PFIC) rules (defined below) discussed below, the gross amount of distributions made by us to you with respect to the Ordinary Shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). 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.”

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.

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Based upon our current and projected income and assets, including the proceeds we received from our initial public offering and the value of our Ordinary Shares, we do not expect to be a PFIC for the current taxable year or the foreseeable future. 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 the current or 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 initial 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 a U.S. Holder holds our Ordinary Shares, we generally will continue to be treated as a PFIC for all succeeding years during which such U.S. Holder holds our Ordinary Shares, unless we were to cease to be a PFIC and the U.S. Holder were to make a “deemed sale” election with respect to the Ordinary Shares.

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 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.

I. Subsidiary Information 

For a listing of our subsidiaries, see “Item 4C.  Organizational Structure” for a chart of our current structure.

109

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 

Interest Rate Risk

We are exposed to interest rate risk while we have short-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.

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

We are also exposed to liquidity risk which is risk that it we will be unable to provide sufficient capital resources and liquidity to meet our commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, we will turn to other financial institutions and related parties to obtain short-term funding to cover any liquidity shortage.

Foreign Exchange Risk

While our reporting currency is the U.S. dollar, almost all of our consolidated revenues and consolidated costs and expenses are denominated in RMB. 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.

110

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

See “Item 10. Additional Information” for a description of the rights of securities holders, which remain unchanged.

Use of Proceeds

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.

ITEM 15. CONTROLS AND PROCEDURES 

Disclosure Controls and Procedures

As of December 31, 2022, 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, 2022 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.

111

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, 2022, we identified material weaknesses and other control deficiencies in our internal control over financial reporting as of December 31, 2022. 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. Based on this evaluation, our management has concluded that our internal control over financial reporting was not effective as of December 31, 2022.

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; and (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.

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. Ligang Lu, 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://sdh365.com/IR/.

112

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,
Services	2022		2021
	US$		US$
Audit fees(1)		330,000		290,000
Audit-related fees(2)		8,400		10,000
Tax fees(3)				-
Other fees(4)				-
Total		338,400		300,000

Note:

(1) “Audit 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.

(2) “Audit-related fees” means the aggregate fees billed for professional services rendered by our principal accounting firm for the assurance and related services, which mainly included the audit and review of financial statements and are not reported under “Audit fees” above.

(3) “Tax fees” means the aggregate fees billed for professional services rendered by our principal accounting firm for tax compliance, tax advice and tax planning.

(4) “Other fees” means the aggregate fees incurred in each of the fiscal years listed for the professional tax services rendered by our principal accounting firm other than services reported under “Audit fees,” “Audit-related fees” and “Tax fees.”

The policy of our audit committee is to pre-approve all audit and non-audit services provided by MarcumAsia and Friedman LLP, our independent registered public accounting firm including audit services, audit-related services, tax services, and other services 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

There has been no change in independent accountants for our Company during the two most recent fiscal years or any subsequent interim period except as previously reported in our Form 6-K filed with the SEC on December 23, 2022. There have been no disagreements of the type required to be disclosed by Item 16F(b).

113

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. However, Nasdaq Capital Market 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 Capital Market corporate governance listing standards.

NASDAQ Listing Rule 5635 generally provides that shareholder approval is required of U.S. domestic companies listed on the NASDAQ Capital Market prior to issuance (or potential issuance) of securities (i) equaling 20% or more of the company’s common stock or voting power for less than the greater of market or book value (ii) resulting in a change of control of the company; and (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. Notwithstanding this general requirement, NASDAQ Listing Rule 5615(a)(3)(A) permits foreign private issuers to follow their home country practice rather than these shareholder approval requirements. The Cayman Islands do not require shareholder approval prior to any of the foregoing types of issuances. The Company, therefore, is not required to obtain such shareholder approval prior to entering into a transaction with the potential to issue securities as described above. Prior to the closing of our IPO, the Board of Directors of the Company elected to follow the Company’s home country rules as to such issuances and will not be required to seek shareholder approval prior to entering into such a transaction.

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.

114

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 Sunrise New Energy Co., Ltd. are included at the end of this annual report.

ITEM 19. EXHIBITS

Exhibit Number	Description
1.1	Amended and Restated Memorandum and Articles of Association (incorporated herein by reference to exhibit 4.2 to our registration statement on Form S-8 (File No. 333-267105), filed with the SEC on August 26, 2022)
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)
2.2	Description of Securities registered under Section 12 of the Exchange Act of 1934, as amended (incorporated herein by reference to exhibit 2.2 to the annual report on Form 20-F (File No. 001-40008), filed with the SEC on April 30, 2021)
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)
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)
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)
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)
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)
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)
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)
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)
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)
4.12	Intangible Assets Purchase Agreement, dated November 2, 2019, by and between Beijing Wining at the Frontlines Cultural Exchange Co., Ltd and GMB (Beijing) (incorporated herein by reference to Exhibit 10.10 to our registration statement on Form F-1 (File No. 333-233745), as amended)
4.13	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)
4.14	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)
4.15	Capital Increase Agreement (Zhejiang Wangxin Health Technology Co., Ltd.), dated February 20, 2021, by and among Zibo Shidong Digital Technology Service Co, Ltd. and other parties (incorporated herein by reference to Exhibit 4.15 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 2, 2022)

115

4.16	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)
4.17	Loan Agreement, dated May 10, 2021, by and between Global Internet of People, Inc. and Waichun Logistics Technology Limited (incorporated herein by reference to Exhibit 4.17 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 2, 2022)
4.18	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)
4.19	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 26, 2022)
4.20*	Purchase Agreement, dated July 2, 2022, between Sunrise Guizhou and former shareholders of Sunrise Tech (formerly known as Anlong Hengrui Graphite Material Co., Ltd.)
4.21*	Sales and leaseback contract, dated September 22, 2022, between Sunrise Guizhou and Far East International Financial Leasing Co., Ltd.
4.22*	Sales and leaseback contract, dated November 4, 2022, between Sunrise Guizhou and China Power Investment Ronghe Financial Leasing Co., Ltd.
8.1*	Principal subsidiaries and consolidated affiliated entities of the Registrant
11.1	Code of Business Conduct and Ethics of the Registrant (incorporated herein by reference to Exhibit 99.1 to our registration statement on Form F-1 (File No. 333-233745), as amended)
12.1*	Certification by the Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2*	Certification by the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1**	Certification by the Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2**	Certification by the Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1*	Consent by Jincheng Tongda & Neal Law Firm
101.*	The following financial statements from the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2022, 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.

116

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.

Sunrise New Energy Co., Ltd.
By:	/s/ Haiping Hu
Name:	Haiping Hu
Title:	Chairman, Chief Executive Officer, and Director
Date	May 16, 2023

117

SUNRISE NEW ENERGY CO., LTD.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

TABLE OF CONTENTS

Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (Marcum Asia CPAs LLP PCAOB ID: 5395)	F-2
Report of Independent Registered Public Accounting Firm (Friedman LLP PCAOB ID: 711)	F-3
Consolidated Balance Sheets as of December 31, 2022 and 2021	F-4
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended December 31, 2022, 2021 and 2020	F-5
Consolidated Statements of Changes in Equity for the Years Ended December 31, 2022, 2021 and 2020	F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021 and 2020	F-7
Notes to Consolidated Financial Statements	F-8

F-1

Report of Independent Registered Public Accounting Firm 

To the Board of Directors and Shareholders of

Sunrise New Energy Co., Ltd.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Sunrise New Energy Co., Ltd. and its subsidiaries (collectively, the “Company”) as of December 31, 2022, the related consolidated statements of operations and comprehensive (loss) income, changes in equity, and cash flows for the year ended December 31, 2022, 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, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

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 since 2018. (such date takes into account the acquisition of certain assets of Friedman LLP by Marcum Asia CPAs LLP effective September 1, 2022)

New York, New York
May 16, 2023

F-2

Report of Independent Registered Public Accounting Firm 

To the Board of Directors and Shareholders of

Sunrise New Energy Co., Ltd.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Sunrise New Energy Co., Ltd.(formerly known as Global Internet of People, Inc.) and its subsidiaries (collectively, the “Company”) as of December 31, 2021, the related consolidated statements of operations and comprehensive (loss) income, changes in equity, and cash flows for each of the two years in the period ended December 31, 2021 and 2020, 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, 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021 and 2020 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. 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 audits to obtain reasonable assurance about whether the consolidated 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 audits 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 consolidated 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 consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Friedman LLP

New York, New York

May 2, 2022

We served as the Company’s auditor from 2018 to 2022.

F-3

SUNRISE NEW ENERGY CO., LTD.

CONSOLIDATED BALANCE SHEETS

	As of December 31,
	2022			2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,655,549		$	13,916,155
Restricted cash		2,638,468			-
Accounts receivable, net		5,167,701			6,861,672
Notes receivable		868,679			-
Inventories, net		18,330,516			3,105,673
Due from related parties		400,022			65,278
Short-term investment		3,336,256			5,961,605
Prepaid expenses and other current assets		12,240,642			4,435,175
TOTAL CURRENT ASSETS		44,637,833			34,345,558
NON-CURRENT ASSETS
Restricted cash		-			700,060
Long term prepayments and other non-current assets		3,850,985			10,244,917
Plant, property and equipment, net		41,468,383			3,351,321
Land use rights, net		10,083,242			-
Intangible assets, net		3,962,650			3,594,977
Long-term investments		3,019,281			5,381,441
Operating lease right-of-use assets		-			224,773
Deferred tax assets		-			852,037
TOTAL NON-CURRENT ASSETS		62,384,541			24,349,526
TOTAL ASSETS		107,022,374			58,695,084
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable		12,259,772			34,486
Note payable		3,876,748			-
Deferred revenue		347,231			179,407
Deferred revenue - related parties		347,471			-
Deferred government subsidy		2,871,665			-
Due to related parties		885,150			-
Income taxes payable		506,638			1,076,518
Operating lease liabilities, current		-			99,569
Long-term payable, current		3,706,628			-
Consideration payable, current		582,381			-
Accrued expenses and other current liabilities		639,761			330,902
TOTAL CURRENT LIABILITIES		26,023,445			1,720,882
NON-CURRENT LIABILITIES
Long term payable, non-current		4,078,843			-
Consideration payable, non-current		3,358,906			-
Deferred tax liabilities, net		199,583			-
TOTAL NON-CURRENT LIABILITIES		7,637,332			-
TOTAL LIABILITES		33,660,777			1,720,882
EQUITY
Ordinary shares (500,000,000 shares authorized; $0.0001 par value, 24,528,000 shares issued and outstanding as of December 31, 2021; 25,361,550 shares issued and outstanding as of December 31, 2022)		2,536			2,453
Additional paid-in capital		34,696,702			31,966,816
Statutory reserves		2,477,940			2,473,801
(Accumulated deficits) Retained earnings		(5,148,529	)		17,259,976
Accumulated other comprehensive (loss) income		(906,444	)		2,148,906
TOTAL SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO SUNRISE NEW ENERGY CO., LTD. ORDINARY SHAREHOLDERS		31,122,205			53,851,952
Non-controlling interests		42,239,392			3,122,250
TOTAL EQUITY		73,361,597			56,974,202
TOTAL LIABILITIES AND EQUITY	$	107,022,374		$	58,695,084

The accompanying notes are an integral part of these consolidated financial statements.

F-4

SUNRISE NEW ENERGY CO., LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

	For the years ended December 31,
	2022			2021			2020
REVENUE, NET
Products	$	37,583,844		$	2,104,767		$	1,495,380
Service		541,824			5,304,505			21,685,704
Total revenues		38,125,668			7,409,272			23,181,084
COSTS OF REVENUES
Products		38,299,090			2,063,296			892,791
Service		1,176,956			1,823,358			2,087,425
Total cost of revenues		39,476,046			3,886,654			2,980,216
GROSS (LOSS) PROFIT		(1,350,378	)		3,522,618			20,200,868
OPERATING EXPENSES
Selling expenses		1,075,980			946,775			906,456
General and administrative expenses		12,678,873			7,834,291			3,897,040
Research and development expenses		1,053,882			2,151,565			671,312
Impairment of intangible assets		2,650,020			-			-
Total operating expenses		17,458,755			10,932,631			5,474,808
(LOSS) PROFIT FROM OPERATIONS		(18,809,133	)		(7,410,013	)		14,726,060
OTHER (EXPENSES) INCOME
Investment losses		(3,566,561	)		(2,118,453	)		(1,087	)
Interest (expense) income		(27,128	)		173,173			214,460
Other income, net		87,390			404,380			72,837
Total other (expenses) income		(3,506,299	)		(1,540,900	)		286,210
(LOSS) PROFIT BEFORE INCOME TAXES		(22,315,432	)		(8,950,913	)		15,012,270
Income taxes provision (benefit)		808,970			(236,581	)		3,054,983
NET (LOSS) INCOME		(23,124,402	)		(8,714,332	)		11,957,287
Less: net loss attributable to non-controlling interests		(720,036	)		(311,072	)		(130,240	)
NET (LOSS) INCOME ATTRIBUTABLE TO SUNRISE NEW ENERGY CO., LTD. ORDINARY SHAREHOLDERS	$	(22,404,366	)	$	(8,403,260	)		12,087,527
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment		(5,123,964	)		700,316			2,076,303
TOTAL COMPREHENSIVE (LOSS) INCOME		(28,248,366	)		(8,014,016	)		14,033,590
Less: comprehensive loss attributable to non-controlling interest		(2,788,650	)		(321,522	)		(91,862	)
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO ORIDNARY SHAREHOLDERS OF SUNRISE NEW ENERGY CO., LTD.	$	(25,459,716	)	$	(7,692,494	)		14,125,452
(LOSS) EARNINGS PER SHARE
Basic and diluted	$	(0.90	)	$	(0.36	)	$	0.72
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic and diluted		24,820,313			23,638,751			16,800,000

The accompanying notes are an integral part of these consolidated financial statements.

F-5

SUNRISE NEW ENERGY CO., LTD.

CONSOLIDATION STATEMENTS OF CHANGES IN EQUITY

	Ordinary shares				Additional paid-in			Statutory			Retained earnings (Accumulated			Accumulated other comprehensive			Total equity attributable to ordinary			Non-controlling			Total
	Shares		Amount		Capital			reserves			deficits)			(loss) income			shareholders			interests			equity
Balance at January 1, 2020		16,800,000	$	1,680	$	4,342,181		$	1,636,414		$	14,413,096		$	(599,786	)	$	19,793,585		$	203,013		$	19,996,598
Capital contributions from shareholders		-		-		119,996			-			-			-			119,996			-			119,996
Net income		-		-		-			-			12,087,527			-			12,087,527			(130,240	)		11,957,287
Statutory reserves		-		-		-			837,383			(837,383	)		-			-			-			-
Foreign currency translation adjustment		-		-		-			-			-			2,037,926			2,037,926			38,377			2,076,303
Balance at December 31, 2020		16,800,000	$	1,680	$	4,462,177		$	2,473,797		$	25,663,240		$	1,438,140		$	34,039,034		$	111,150		$	34,150,184
Issued shares of ordinary shares, net of offering cost		7,728,000		773		27,504,639			-			-			-			27,505,412			-			27,505,412
Capital contributions from non-controlling interests		-		-		-			-			-			-			-			3,332,622			3,332,622
Net loss		-		-		-			-			(8,403,260	)		-			(8,403,260	)		(311,072	)		(8,714,332	)
Statutory reserves		-		-		-			(13	)		13			-			-			-			-
Disposal of subsidiary		-		-		-			17			(17	)		-			-			(2,642	)		(2,642	)
Foreign currency translation adjustment		-		-		-			-			-			710,766			710,766			(7,808	)		702,958
Balance at December 31, 2021		24,528,000	$	2,453	$	31,966,816		$	2,473,801		$	17,259,976		$	2,148,906		$	53,851,952		$	3,122,250		$	56,974,202
Capital contributions from non-controlling interests		-		-		-			-			-			-			-			41,905,792			41,905,792
Net loss		-		-		-			-			(22,404,366	)		-			(22,404,366	)		(720,036	)		(23,124,402	)
Statutory reserves		-		-		-			4,139			(4,139	)		-			-			-			-
Share-based compensation		-		-		2,729,969									-			2,729,969			-			2,729,969
Settlement for vested shares		833,550		83		(83	)		-			-			-			-			-			-
Foreign currency translation adjustment		-		-		-			-			-			(3,055,350	)		(3,055,350	)		(2,068,614	)		(5,123,964	)
Balance at December 31, 2022		25,361,550	$	2,536	$	34,696,702		$	2,477,940		$	(5,148,529	)	$	(906,444	)	$	31,122,205		$	42,239,392		$	73,361,597

The accompanying notes are an integral part of these consolidated financial statements.

F-6

SUNRISE NEW ENERGY CO., LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the years ended December 31,
	2022			2021			2020
Cash flows from operating activities
Net (loss) income	$	(23,124,402	)	$	(8,714,332	)		11,957,287
Adjusted to reconcile net income to cash (used in) provided by operating activities
Depreciation and amortization		2,062,499			988,672			865,426
Amortization of land use right		126,042			-			-
Share-based compensation		2,729,969			-			-
Deferred tax expenses (benefits)		807,412			(232,363	)		(312,780	)
Interest expense		213,823			-			-
Investment losses		3,618,847			2,118,453			1,087
Bad debt expense		2,887,754			3,847,426			1,514,559
Impairment on inventory		2,711,158			-			-
Impairment on intangible assets		2,650,020			-			-
Amortization of right-of-use assets		213,063			90,320			359,551
Changes in operating assets and liabilities:
Accounts receivable, net		(1,734,486	)		1,729,006			(8,385,804	)
Note receivable		(899,481	)		-			-
Due from related parties		(376,080	)		110,184			(151,007	)
Operating lease liabilities		(94,381	)		31,145			(312,900	)
Inventories		(18,747,772	)		(331,491	)		667,758
Prepaid expenses and other current assets		(2,894,690	)		(678,288	)		(447,421	)
Accounts payable		12,661,801			-			(79,426	)
Notes payable		4,014,213			-			-
Income taxes payable		-			(3,696,654	)		2,565,098
Deferred revenue		549,274			(75,857	)		(322,534	)
Lease liabilities		-			(211,213	)		-
Due to related parties		100,053			-			-
Deferred government subsidy		2,973,491			-			-
Accrued expenses and other current liabilities		(21,528	)		(208,190	)		(852,731	)
Net cash (used in) provided by operating activities		(9,573,401	)		(5,233,182	)		7,066,163
Cash flows from investing activities
Purchase of property and equipment		(43,714,195	)		(1,372,634	)		(1,723,543	)
Disposal of property and equipment		-			-			392
Prepayment for leasehold improvement		-			-			(228,457	)
Purchase of land use right		(197,554	)		(6,947,051	)		-
Purchase of intangible assets		(174,895	)		-			(2,735,433	)
Loans to third parties		(35,682	)		(2,825,359	)		-
Prepaid for investment		-			(650,909	)		-
Purchase of long-term investments		-			(2,289,945	)		(1,678,514	)
Purchase of short-term investments		-			(8,000,000	)		-
Consideration paid for asset acquisition		(1,486,746	)		-			-
Disposal of subsidiary		-			(9,300	)		-
Net cash used in investing activities		(45,609,072	)		(22,095,198	)		(6,365,555	)
Cash flows from financing activities
Proceeds from capital contributions by controlling shareholders		-			-			119,996
Proceeds from long term payable, net of issuance cost		8,827,701			-			-
Repayment on long term payable		(887,788	)		-			-
Proceeds from issuance of ordinary shares in connection with initial public offering, net of issuance cost		-			27,504,639			-
Loans from related party		795,554			-			-
Proceeds from capital contributions by non-controlling shareholders		37,024,594			3,332,622			-
Net cash provided by financing activities		45,760,061			30,837,261			119,996
Effect of foreign exchange rate on cash and cash equivalents		(899,786	)		141,322			706,302
Net (decrease) increase in cash and cash equivalents		(10,322,198	)		3,650,203			1,526,906
Cash, cash equivalents and restricted cash, beginning of year		14,616,215			10,966,012			9,439,106
Cash, cash equivalents and restricted cash, end of year	$	4,294,017		$	14,616,215		$	10,966,012
Cash, cash equivalents and restricted cash, end of year		4,294,017			14,616,215			10,966,012
Less: restricted cash		2,638,468			700,060			-
Cash and cash equivalents, end of year		1,655,549			13,916,155			10,966,012
Supplemental disclosure of cash flow information
Cash paid for income tax	$	564,335		$	3,699,180		$	638,180
Supplemental non cash transactions
Operating lease right-of-use assets obtained in exchange of operating lease liabilities	$	-		$	311,638		$	64,402
Inventories obtained in exchange for accounts receivable	$	-		$	155,003		$	-
Inventories obtained in exchange for deferred revenue	$	-		$	-		$	30,851
Long term investment obtained in exchange for accounts receivable	$	-		$	-		$	652,401
Intangible assets obtained from capital contribution by non-controlling shareholders	$	4,881,198		$	-		$	-

The accompanying notes are an integral part of these consolidated financial statements.

F-7

SUNRISE NEW ENERGY CO., LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND BUSINESS DESCRIPTION

Sunrise New Energy Co., Ltd. (“EPOW”), previously known as Global Internet of People, Inc., or GIOP, is a limited liability company established 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 (Beijing) Information Technology Co., Ltd. (“SDH”) 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)”), Global Mentor Board (Shanghai) Enterprise Management Consulting Co., Ltd. (“GMB Consulting”), Linking (Shanghai) Network Technology Co., Ltd. (“GMB Linking”, deconsolidated in July, 2021), Shanghai Voice of Seedling Cultural Media Co., Ltd. (“GMB Culture”), which has a majority owned 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”), Zibo Shidong Digital Technology Co., Ltd. (“Zibo Shidong”) and its major owned subsidiaries, Shidong Trading Service (Zhejiang) Co., Ltd (“Shidong Trading”, deregistered in November 2022), Shanghai Jiagui Haifeng Technology Co., Ltd. (“Jiagui Haifeng”), Shanghai Nanyu Culture Communication Co., Ltd. (“Nanyu Culture”) 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 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 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.

As described below in Reorganization, EPOW, through a restructuring which is 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 U.S. GAAP. EPOW, its subsidiaries, the VIE and the VIE’s subsidiaries, are collectively hereinafter referred as the “Company”.

Reorganization

On June 10, 2019, GIOP BJ entered into a series of contractual arrangements with the owners 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. Therefore, SDH should be considered as a VIE under the Statement of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 “Consolidation”.

EPOW, together with its wholly-owned subsidiaries, GIOP BJ, VIE and VIE’s subsidiaries were effectively controlled by the same shareholders before and after the Reorganization and, therefore, the Reorganization is considered under common control. The consolidation of the Company has been accounted for at historical cost and prepared on the basis as if the Reorganization had become effective as of the beginning of the first period presented in the consolidated financial statements.  

F-8

The consolidated financial statements reflect the activities of the Company and each of the following entities:

Name	Date of Incorporation	Place of incorporation	Percentage of effective ownership	Principal Activities
Subsidiaries
Global Mentor Board Information Technology Limited (“GMB HK”)	March 22, 2019	HK	100%	Holding company
Beijing Mentor Board Union Information Technology Co, Ltd. (“GIOP BJ”)	June 3, 2019	PRC	100%	Holding company of GIOP BJ
Shidong Cloud (Beijing) Education Technology Co., Ltd (“Shidong Cloud”)	December 22, 2021	PRC	75%	Educational Consulting
SDH (HK) New Energy Tech Co., Ltd. (“SDH New Energy”)	October 8, 2021	HK	100%	Holding company
Zhuhai (Zibo) Investment Co., Ltd. (“Zhuhai Zibo”)	October 15, 2021	PRC	100%	New Energy Investment
Zhuhai (Guizhou) New Energy Investment Co., Ltd. (“Zhuhai Guizhou”)	November 23, 2021	PRC	100%	New Energy Investment
Sunrise (Guizhou) New Energy Materials Co., Ltd.  (“Sunrise Guizhou”)	November 8, 2021	PRC	39.35%	Manufacture of Lithium Battery Materials
Guizhou Sunrise Technology Co., Ltd. (“Sunrise Tech”)	September 1, 2011	PRC	39.35%	Manufacture of Lithium Battery Materials
Sunrise (Guxian) New Energy Materials Co., Ltd. (“Sunrise Guxian”)	April 26, 2022	PRC	20.07%	Manufacture of Lithium Battery Materials
Guizhou Sunrise Technology Innovation Research Co., Ltd. (“Innovation Research”)	December 13, 2022	PRC	39.35%	Research and Development
Variable Interest Entity (“VIE”) and subsidiaries of VIE
Global Mentor Board (Beijing) Information Technology Co., Ltd. (“SDH” or “VIE”)	December 5, 2014	PRC	VIE	peer-to-peer knowledge sharing and enterprise service platform provider
Global Mentor Board (Hangzhou) Technology Co., Ltd. (“GMB (Hangzhou)”)	November 1, 2017	PRC	100% by VIE	Consulting, training and tailored services provider
Global Mentor Board (Shanghai) Enterprise Management Consulting Co., Ltd. (“GMB Consulting”)	June 30, 2017	PRC	51% by VIE	Consulting services provider
Shanghai Voice of Seedling Cultural Media Co., Ltd. (“GMB Culture”)	June 22, 2017	PRC	51% by VIE	cultural and artistic exchanges and planning, conference services provider
Shidong (Beijing) Information Technology Co., LTD. (“GMB (Beijing)”)	June 19, 2018	PRC	100% by VIE	information technology services provider
Mentor Board Voice of Seeding (Shanghai) Cultural Technology Co., Ltd. (“GMB Technology”)	August 29, 2018	PRC	30.6% by VIE	Technical services provider
Shidong Zibo Digital Technology Co., Ltd. (“Zibo Shidong”)	October 16, 2020	PRC	100% by VIE	Technical services provider
Shidong Trading Service (Zhejiang) Co., Ltd. (“Shidong Trading”)	April 19, 2021	PRC	Deregistered in November 2022	Sale of Merchandise
Shanghai Jiagui Haifeng Technology Co., Ltd. (“Jiagui Haifeng”)	November 29, 2021	PRC	51% by VIE	Business Incubation Services provider
Shanghai Nanyu Culture Communication Co., Ltd. (“Nanyu Culture”)	July 27, 2021	PRC	51% by VIE	Enterprise Information Technology Integration services provider
Beijing Mentor Board Health Technology Co., Ltd (“GMB Health”)	January 7, 2022	PRC	100% by VIE	Health Services
Shanghai Yuantai Fengdeng Agricultural Technology Co., Ltd. (“Yuantai Fengdeng”)	March 4, 2022	PRC	51% by VIE	Agricultural Technology Service

The VIE contractual arrangements

Neither the Company nor the Company’s subsidiaries own any equity interest in SDH. Instead, The Company controls 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. The VIE agreements are designed to provide GIOP BJ with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of SDH, including absolute control rights and the rights to the assets, property and revenue of SDH.

F-9

Each of the VIE Agreements is described in detail below:

Exclusive Technical and Consulting Services Agreement

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.

Equity Pledge Agreement

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.

Exclusive Option Agreement

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 RMB10 (approximately US$1.45) 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.

Powers of Attorney

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.

F-10

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 agreed to be bound by the contractual arrangements.

Risks in relation to the VIE structure

EPOW believes that the contractual arrangements with its 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 VIE;

● discontinue or restrict the operations of any related-party transactions between the Company’s PRC subsidiary and 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 VIE may not be able to comply;

● require the Company or the Company’s PRC subsidiary and 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.

Total assets and liabilities presented on the Company’s consolidated balance sheets and revenue, expense, net income presented on consolidated statement of operations and comprehensive income as well as the cash flow from operating, investing and financing activities presented on the consolidated statement of cash flows are substantially the financial position, operation and cash flow of the Company’s VIE and VIE’s subsidiaries. The Company has not provided any financial support to SDH for the years ended December 31, 2022, 2021 and 2020. The following financial statements of the VIE and VIE’s subsidiaries were included in the consolidated financial statements as of December 31, 2022 and 2021 and for the year ended December 31, 2022, 2021 and 2020:

	As of December 31,
	2022		2021
Cash and cash equivalents	$	336,871	$	3,870,916
Accounts receivable, net		200,539		6,861,672
Inventories		3,590		2,865,958
Due from related parties		391,982		52,268
Prepaid expenses and other current assets		2,537,524		3,002,698
Total current assets		3,470,506		16,653,512
Long term prepayments and other non-current assets		14,358		-
Plant, property and equipment, net		2,874,500		3,351,321
Intangible assets, net		31,036		3,594,977
Long-term investments		3,019,281		5,381,441
Operating lease right-of-use assets		-		224,773
Deferred tax assets		-		852,037
Total non-current assets		5,939,175		13,404,549
Total assets	$	9,409,681	$	30,058,061
Accounts payable	$	50,953	$	34,486
Deferred revenue		222,605		179,407
Deferred revenue - related parties		347,471		-
Deferred government subsidy		2,871,665		-
Income taxes payable		506,638		1,076,518
Due to related parties		96,627		-
Operating lease liabilities, current		-		99,569
Accrued expenses and other current liabilities		293,699		313,685
Total current liabilities		4,389,658		1,703,665
Total liabilities	$	4,389,658	$	1,703,665

F-11

	For the years ended December 31,
	2022			2021			2020
Total net revenue	$	613,679		$	7,409,272		$	23,107,340
Net (loss) income	$	(15,438,135	)	$	(5,629,408	)	$	11,931,079

	For the years ended December 31,
	2022			2021			2020
Net cash (used in) provided by operating activities	$	(3,320,442	)	$	2,314,408		$	6,998,407
Net cash used in investing activities	$	-		$	(3,025,281	)	$	(6,493,837	)
Net cash provided by financing activities	$	-		$	-		$	119,996

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 (“U.S. GAAP”) and have been consistently applied.

Principles of consolidation 

The consolidated financial statements include the financial statements of the Company, its subsidiaries, 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, 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, 2022, 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, Nanyu Culture and Jiagui Haifeng; b) a non-controlling shareholder’s 60.65% 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.

As of December 31, 2021, for the Company’s consolidated subsidiaries, VIE and VIE’ s subsidiaries, non-controlling interests represent: a) a non-controlling shareholder’s 49%   ownership interest in Sunrise Guizhou, GMB (Beijing), GMB Consulting, Nanyu Culture and Jiagui Haifeng; b) a non-controlling shareholder’s 49% ownership interest in GMB Culture, which has a subsidiary called GMB Technology; c) a non-controlling shareholder’s 25% ownership interest in Shidong Cloud, and 40% ownership interest in Shidong Trading.

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) Income 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 doubtful accounts, inventory valuation, depreciable lives of property and equipment, impairment of long-lived assets and realization of deferred tax assets.   Actual results could differ from those estimates.

F-12

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) income 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) Income.

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:

	December 31, 2022	December 31, 2021	December 31, 2020
Year-end spot rate	US$1= RMB 6.9646	US$1= RMB 6.3757	US$1= RMB 6.5249
Average rate	US$1= RMB 6.7261	US$1= RMB 6.4515	US$1= RMB 6.8976

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, restricted cash, accounts receivable, notes receivable, due from related parties, advance to suppliers, prepaid expenses and other current assets, deferred revenue, income taxes payable, accounts payable, note payable, due to related parties, accrued expenses and other current liabilities approximate their fair value based on the short-term maturity of these instruments. The carrying amount of non-current long term payables and consideration payable approximates fair value as its interest rates are at the same level of current market yield for comparable loans.

The Company’s non-financial assets, such as property and equipment 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.

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. The interest incomes of highly liquid investments are reported in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income. The Company maintains the bank accounts in Mainland China and Hong Kong. Cash balances in bank accounts in Mainland China and Hong Kong are not insured by the Federal Deposit Insurance Corporation or other programs.

Restricted cash

Restricted cash represent bank deposits with designated use, which cannot be withdrawn without certain approval or notice. Restricted cash classified as a long-term asset on the Company’s consolidated balance sheets consists of cash equivalents restricted as to withdrawal or use which matures in more than twelve months after the balance sheet date. Such restricted cash relates to an escrowed fund of listing companies. The escrowed fund shall be held by the Escrow Agent for the purpose of satisfying the initial $700,000 of the indemnification obligations of the Company, with respect to the Escrowed Funds, for a period of 24 months from the closing of the Offering the Company’s initial public offering in February 2021.

F-13

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 doubtful accounts.

The Company mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on management’s assessment of historical bad debts, creditworthiness and financial conditions of the clients, current economic trends and changes in client payment patterns. Past due accounts are generally written off against the allowance for bad debts only after all collection attempts have been exhausted and the potential for recovery is considered remote. The valuation allowance provided was $8,047,527 and $5,744,387 as of December 31, 2022 and 2021, respectively.

Inventories, net

The inventories as of December 31, 2022 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. Costs include the cost of raw materials, freight, direct labor and related production overhead. The cost of inventories is calculated using the weighted average method. Any excess of the cost over the net realizable value of each item of inventories is recognized in the value of inventories. Net realizable value is estimated using selling price in the normal course of business less any costs to complete and sell products. The valuation allowance provided for the inventory was $2,711,158, $nil and $nil for the years ended December 31, 2022, 2021 and 2020.

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 of 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.

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 of a consideration. To assess whether a contract is or contains a lease, the Company assess 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.

The right-of-use assets and related lease liabilities are recognized at the lease commencement date. The Company recognizes operating lease expenses on a straight-line basis over the lease term.

Operating lease right-of-use of assets

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.

Operating lease liabilities

Lease liability is initially measured at the present value of the outstanding lease payments at the commencement date, discounted using the Company incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed lease payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee and any exercise price under a purchase option that the Company is reasonably certain to exercise.

Lease liability is measured at amortized cost using the effective interest rate method. It is remeasured when there is a change in future lease payments, if there is a change in the estimate of the amount expected to be payable under a residual value guarantee, or if there is any change in the Company assessment of option purchases, contract extensions or termination options.

Short-term leases

The Company has elected to not recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less. Lease payments associated with these leases are expensed as incurred.

Sales and leaseback contracts

The Company enters 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 has 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.

F-14

Plant, property and equipment, net

Plant, property and equipment are stated at cost less accumulated depreciation. Depreciation of property and equipment is provided using the straight-line method over their expected useful lives, as follows:

Building	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

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) Income in other income or expenses.

Land use right, net

Land use rights are recorded at cost less accumulated amortization and 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 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 loss for long-term investments of $14,072, $41,925 and $1,087 were recorded in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020, 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; 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 $979,426, $nil and $nil recorded in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020.

Impairment of long-lived assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Company measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss, which is the excess of carrying amount over the fair value of the assets, using the expected future discounted cash flows. Impairments charges for intangible assets were $2,650,020, $nil and $nil recorded in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020.

F-15

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.

Share-based compensation

Share-based compensation are 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 Group elects to recognize forfeitures when they occur.

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 income and comprehensive income 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) Income in proportion to the useful life of the related assets. Government grants received for the years ended December 31, 2022, 2021 and 2020 were $3,048,035, $458,182 and $101,485, respectively. As of December 31, 2022 and 2021, the deferred government grants were $2,871,665 and $nil, respectively.

Revenue recognition

The Company recognizes revenue under Accounting Standards Codification (“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 five kinds of services to its clients in China, sales of graphite anode materials, member services, enterprise services, online services and other services. Enterprise services include comprehensive tailored services, sponsorship advertising services, and consulting services.

Revenue recognition policies for each type of the Company’s services are discussed as follows:

Sales of graphite anode materials

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 warehouses, and then organizes the shipping and delivery of products to customers after the purchase orders are received from customers.

The Company 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, and 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 separately identifiable other 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. There is no separate rebate, discount, or volume incentive involved. Revenue is reported net of all value added taxes (“VAT”).

Member services

The Company offers three tiers of member services, Platinum, Diamond and Protégé, which differ in membership fees as well as the level of the services provided. Members pay a fixed fee for exchange of the right to participate in organized activities offered by the Company, such as study tours and forums, typically within one-year membership period. Any non-participating activities will expire and not be refunded beyond the agreed-upon period. Each member is entitled to choose from same activities offered by the Company for a total of seven times but different level of membership will receive different level of privileges at each activity, such as seating arrangement or private consultation opportunity etc. The activities for Platinum Members are also open to non-members, who pay a pre-set fee for participating in a single activity, while the Company does not offer Diamond and Protégé services to non-members separately.

Each activity represents a separate performance obligation, which is typically 5 days or less. The Company uses an expected cost plus margin approach to estimate the standalone selling prices of each activity. As Members can benefit from each activity on their own in the same way and there is no material difference in the Company’s delivering costs, such as number of staffs involved and size of each activity. Therefore, membership fees are equally allocated to seven performance obligations when the Company determines transaction price of each performance obligation.

F-16

The Company recognizes membership fees as revenue upon completion of each activity as the duration of each activity is short. Membership fees from non-participating activity will be recognized when the agreed-upon period has expired. Membership fees collected in advance are recorded as deferred revenue on the consolidated balance sheets.

Enterprise services

The Company charges its clients service fees for providing enterprise services, which mainly include comprehensive tailored services, sponsorship advertising services and consulting services.

Comprehensive tailored services

The comprehensive tailored services provide tailored packaged services to small and medium business, including conference and salon organization, booth exhibition services, on-site Mentors’ guidance, and other value-added services. The Company typically signs one-year framework agreements and a tailored services contract with the clients, which list the types of tailored services as ordered by the clients to fit their specific needs. Each tailored service is a separate performance obligation under ASC 606, as these performance obligations are distinct, the clients can benefit from each service on their own and the Company’s promises to deliver the services are separately identifiable from each other in the services contract. The performance of each tailored service is usually on a specific date designated by the clients.

The Company establishes a uniform list for the unit price of each type of tailored services with reference to quoted market prices. If no quoted market price is available, the price will be estimated by using an expected cost plus a margin approach.

The Company recognizes the price for each tailored service as revenue when the service has been provided on a specific date designated and the receipt of each tailored services is confirmed by the clients. If a client does not request certain items of the tailored services included in the services contract during the agreed-upon period, the Company will not refund the service fees and the revenue will be recognized upon expiration of service contracts. The tailored services fees collected before providing services are recorded as deferred revenue on the consolidated balance sheets.

Sponsorship advertising service

The Company provides sponsorship advertising service for its clients at certain activities it held, i.e. study tours and forums. The sponsorship advertising services are mainly to display banners with the clients’ information and distribute clients’ brochures through the activities, so that the clients can enhance their corporate and product image.

The fee the Company charges for sponsorship advertising service is depending on multiple specific factors, including number of event participants, location, public interest, etc. The Company considers all factors and determines pricing for each contract separately. The sponsorship advertising fees are recognized as revenue when services have been provided on a specific date designated and receipt of sponsorship advertising services are confirmed by clients. Sponsorship advertising fees collected before providing services are recorded as deferred revenue on the consolidated balance sheets.

Consulting services

The Company provides consulting services to small and medium-sized enterprises by helping them to develop strategies and solutions including: corporate reorganization, product promotion and marketing, industry supply chain integration, corporate governance, financing and capital structure, etc. The consulting services are tailored to meet each client’s specific needs and requirements.

Consulting fees are based on the specifics of the services provided, for instance, time and efforts required, etc. The Company considers comprehensive factors and determines prices with reference to quoted market prices. If no quoted market price is available, price will be estimated by using an expected cost plus a margin approach.

Consulting fees are recognized as revenue when services have been provided and receipt of consulting services is confirmed by clients as the duration of services is short, typically one month or less. Consulting fees collected before providing any service are presented as deferred revenue on the consolidated balance sheets.

Online services

The Company provides two types of online services to the Company’s APP Users, which are questions and answers (Q&A) session with chosen Mentors and online streaming of courses and programs. Top-up credits are paid by Users through the Company’s APP platform, using which Users can purchase the online services.

Users can raise questions to chosen Mentors or Experts with a fixed fee per Q&A session preset by Mentors or Experts. The Q&A session is usually provided by chosen Mentors or Experts within a course of a 72-hour period. The Company charges 30% of the Q&A fees as a facilitator of online services. The Q&A fees are allocated to the Company and chosen Mentors or Experts automatically by the APP on a 30%/70% split upon completion of Q&A sessions. The Company recognizes this online service fees as revenue at completion of Q&A sessions on a net basis, i.e., in the amount of 30% of allocated Q&A fees, as the Company merely provides a platform for its Users and is not the primary obligor of the Q&A session, neither has risks and rewards as principal.

The Company granted Users the access to view various online courses and programs. Users can subscribe an annual VIP at a rate of RMB299. The VIP grants Users the access right to the Company’s VIP courses and programs over the subscription period. The Company recognizes the VIP annual subscription fees as revenue on a straight-line basis over VIP subscription period. Users can also purchase à la carte courses and programs at a rate from RMB 9.9 to 299 per course or program by top-up credits through the Company’s APP platform. The payment for à la carte course and program is not refundable. After the payment is collected by the Company, the Users obtain unlimited access to the courses and programs they purchased for without limitation. The Company recognizes the fees a la carte courses and programs as revenue at the point of time that Users obtain the access to the courses and programs.

F-17

Other services fees are mainly derived from non-member participation of study tours and forums at the service level of Platinum Members. The Company charges non-members a fixed fee for each Member activity and the price for non-members is determined based on the Company’s allocated Member pricing for each activity. Fees are usually collected on site at the date of each activity and revenues are recognized at the completion of such activity.

Contract assets and liabilities

The Group’s contract liabilities consist of deferred revenues, primarily relating to the advance consideration received from customers, which include the advance member service fees and enterprise service fees received from customers. The amount from customers before provision of service is recognized as deferred revenue. The deferred revenue is recognized as revenue once the criteria for revenue recognition are met.

The Company recognized $170,061 and $253,157 in revenue for the years ended December 31, 2022 and 2021, respectively, which related to contract liabilities that existed at December 31, 2021 and 2020, respectively. The balances as of December 31, 2022 and 2021 are expected to be recognized as revenue within one year.

There was no contract asset recorded as of December 31, 2022 and 2021.

Cost of goods sold

The cost of goods sold for the year ended December 31, 2022 was primarily the cost of finished goods of graphite anode materials, including single granular coke, secondary granular coke, and mixed batches of single particle and secondary coke. The cost of goods sold for the year ended December 31, 2021 and 2020 was mainly the cost of electrolytic copper. Cost of goods sold was $38,299,090, $ 2,063,296, and $892,791 for the years ended December 31, 2022, 2021 and 2020, respectively.

Service costs

Service costs primarily include (1) the cost of holding events and activities, such as venue rental fees, conference equipment fees, (2) professional and consulting fees paid to third parties for the Company’s activity; (3) the fees paid to Mentors and Experts; and (4) labor costs. Service costs were $1,176,956, $1,823,358 and $2,087,425 for the years ended December 31, 2022, 2021 and 2020, respectively.

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.

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, 2022 and 2021, 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. Accrued interest and penalties will be included on the related tax liability line in the consolidated balance sheet.

(Loss) Earnings per share

The Company computes (loss) earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS are computed by dividing (loss) income 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. As of December 31, 2022 and 2021, the basic and diluted shares were 24,820,313 and 23,638,751, respectively.

Comprehensive (loss) income

Comprehensive (loss) income consists of two components, net (loss) income and other comprehensive (loss) income. Other comprehensive (loss) income 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) income. Other comprehensive (loss) income 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 the PRC, 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 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.

F-18

The Company maintains certain bank accounts in the PRC. 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 the PRC 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. However, the Company believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon in the PRC and the Company believes that those Chinese banks that hold the Company’s cash and cash equivalents and short-term investments are financially sound based on public available information.

Other than the deposit insurance mechanism in the PRC mentioned above, the Company’s bank accounts are not insured by Federal Deposit Insurance Corporation insurance or other insurance.

Concentration and credit risk 

Financial instruments that potentially subject the Company to the concentration of credit risks consist of cash and short-term investments. The maximum exposures of such assets to credit risk are their carrying amounts as of the balance sheet dates. The Company deposits its cash and short-term investments 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.

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 $10,837,501, $7,449,250, $7,358,181 and $7,193,849 of revenue from four client which represented 28%, 20%, 19% and 19% of the total revenues for the years ended December 31, 2022, respectively. There was $2,000,483 of revenue from one client which represented 27% of the total revenues for the years ended December 31, 2021. There was no revenue from clients which individually represented greater than 10% of the total revenues for the year ended December 31, 2020. There was $1,549,436 of account receivable from one client which represented 12% of the account receivable as of December 31, 2022. 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 advanced payment before delivery of the services but may extend unsecured credit 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, 2022 and 2021.  

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 is 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 June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses”, which will require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Further, the FASB issued ASU No. 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11 and ASU 2020-02 to provide additional guidance on the credit losses standard. For all other entities, the amendments for ASU 2016-13 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. Adoption of the ASUs is on a modified retrospective basis. The Company has adopt ASU 2016-13 from January 1, 2023. There is no effect on the Company’s consolidated financial statement of the adoption of this ASU.

F-19

In June 2022, the FASB issued ASU 2022-03, which (1) clarifies the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and (2) requires specific disclosures related to such an equity security. ASU 2022-03 clarifies that a “contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security” and is not included in the equity security’s unit of account. Accordingly, an entity should not consider the contractual sale restriction when measuring the equity security’s fair value (i.e., the entity should not apply a discount related to the contractual sale restriction, as stated in ASC 820-10-35-36B as amended by the ASU). In addition, the ASU prohibits an entity from recognizing a contractual sale restriction as a separate unit of account. For public business entities, the guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted. The Company is in the process of evaluating the effect of the adoption of this ASU.

NOTE 3 – LIQUIDITY

As reflected in the consolidated financial statements, the Company has been incurring $23,124,402 and $8,714,332 net losses for the years ended December 31 2022 and 2021, respectively. Net cash used in operating activities were $9,573,401 and $5,233,182 for the years ended December 31, 2022 and 2021, respectively. Total cash, cash equivalents and restricted cash decreased by $10,322,198 for the year ended December 31, 2022. Management expected to continue to construct the production plant in Guizhou Sunrise. In 2022, the ongoing COVID-19 pandemic continued to negatively impact the Company’s business operations. A resurgence of the COVID-19 outbreak had given rise to economic downturns and other significant changes in regional and global economic conditions, and negatively affected the Company’s ability to execute the sales contract, fulfil customer orders, and collect customer payments timely. As a result, there was a possibility that the Company’s revenue and cash flows might underperform in the next 12 months.

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 controlling the cost and expenses within an acceptable level. The Company is in the process of transitioning peer-to-peer knowledge sharing and enterprise business to graphite anode material business. In assessing its liquidity, management monitors and analyzes the Company’s cash on-hand, its ability to generate sufficient revenue sources and ability to obtain additional financial support in the future, and its operating and capital expenditure commitments. As of December 31, 2022, the Company had cash of $1,655,549. The management believes that it would be able to make borrowings from banks based on past experience and the Company’s good credit history when necessary. As of December 31, 2022, the Company had available line of credit from Bank of Guizhou for RMB 6,500,000, approximately $933,291. On January 18, 2023, Sunrise Guizhou entered a credit facility agreement with Post Savings Bank of China (“Post Bank”) to obtain revolving fund up to RMB 30,000,000, approximately $4,307,498, for a term from January 19, 2023 to January 18, 2031. On February 7, 2023, Sunrise Guizhou entered a two-year debt financing arrangement with Zhongguancun Science and Technology Leasing Co., Ltd. to obtain a loan of RMB 20,000,000, approximately $2,871,665, for a term from February 7, 2023 to February 7, 2025.

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 plan and sustain continued growth, the Company may also seek equity financing from outside investors when necessary. Based on the current operating plan, management believes that the above-mentioned measures collectively will provide sufficient liquidity for the Company to meet its future liquidity and capital requirement for at least 12 months from the date the consolidated financial statements are issued.

NOTE 4 – ACCOUNTS RECEIVABLE, NET   

Accounts and notes receivable consisted of the following: 

	As of December 31,
	2022			2021
Accounts receivable	$	13,215,228		$	12,606,059
Allowance for doubtful accounts		(8,047,527	)		(5,744,387	)
Accounts receivable, net	$	5,167,701		$	6,861,672

The movement of allowance of doubtful accounts is as follows: 

	As of December 31,
	2022			2021			2020
Balance at beginning of the year	$	5,744,387		$	1,808,889		$	194,375
Current year addition		2,887,754			3,890,827			1,514,559
Write-off		-			(43,401	)		-
Foreign currency translation adjustments		(584,614	)		88,072			99,955
Balance at end of the year	$	8,047,527		$	5,744,387		$	1,808,889

Doubtful accounts provision was $2,887,754, $3,847,426 and $1,514,559 recorded for the years ended December 31, 2022, 2021 and 2020, respectively.

F-20

NOTE 5 – INVENTORIES, NET

Inventories as of December 31, 2022 and 2021 consisted of the following:

	As of December 31,
	2022		2021
Raw materials	$	3,237,940	$	-
Finished Goods		12,842,333		3,105,673
Graphite anode materials		12,842,333		-
Healthcare service gift cards		-		1,276,550
Chinese tea		-		718,426
Learning course gift cards		-		454,852
Latex pillows		-		138,246
Healthcare products		-		207,348
Others		-		310,251
Work in process		2,246,653		-
Others		3,590		-
Total	$	18,330,516	$	3,105,673

As of December 31, 2021, other than cash purchase, a portion of the Company’s inventories were obtained through fee exchange arrangements with its customers, which are entered into at the Company’s discretion to receive inventory in exchange for collection of accounts receivable due from the customers. These inventories are all commodities available for sale. In fiscal year 2022, the Company wrote down these inventories to the estimated net realizable value, which was $nil, resulting in inventory valuation allowance of $2,711,158.

Inventory valuation allowance was $2,711,158, $nil and $nil recorded for the fiscal years ended December 31, 2022, 2021 and 2020, 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 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 private equity fund are measured at fair value with gains and losses recognized in earnings. As a practical expedient, the Company uses Net Asset Value (“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 NAV of the Fund was $3,336,256, and $5,961,605 as of December 31, 2022 and 2021. Investment loss of $2,625,349 and $2,038,395 was recorded in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022 and 2021, respectively.  

F-21

NOTE 7 – PREPAID EXPENSES AND OTHER CURRENT ASSETS 

		As of December 31,
		2022			2021
Prepaid expenses		$	211,365		$	703,281
Advance to supplier			2,820,551			1,759,253
Loans to third parties	(1)		2,873,818			840,685
Prepayment for investment	(2)		1,206,099			650,909
Other receivables			401,936			299,864
Interest receivable			365,478			171,840
Prepaid value added tax (“VAT”) and income tax	(3)		4,468,404			123,100
Deposits for operating lease			36,574			43,090
Subtotal			12,384,225			4,592,022
Less: allowance for other receivables			(143,583	)		(156,847	)
Total		$	12,240,642		$	4,435,175

(1) On March 8, 2021, the Company signed a loan contract with a third party, Waichun Logistics Technology Limited (“Waichun”), to lend $825,000, with annual interest rate of 8%, and will be due on May 10, 2022. The Company renewed the contract with Waichun on May 10, 2022 to extend the loan period to December 31, 2023; Besides, the Company signed a loan contract on March 8, 2021 and renewed it on March 6, 2022 with Waichun to lend $2,000,000 with annual interest rate of 8%, which will be due on December 31, 2023.

(2) In September 2021, the Company prepaid $650,909 to acquire 61.5% equity interest of Haicheng Shenhe Technology Co., Ltd. (“Haicheng Shenhe”) The Company and the shareholders of Haicheng Shenhe agreed on the termination of the acquisition however the acquisition fund had not been paid back as of December 31, 2022. One of the shareholders in Haicheng Shenhe, Mr. Wenwu Zhang, was nominated as the Director of Sunrise Guizhou and a balance of $337,421 was reclassified to due from related parties as of December 31, 2022.

(3) 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 property, plant and equipment for the manufacture on graphite anode materials as of December 31, 2022.

NOTE 8 – LONG TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS

		As of December 31,
		2022		2021
Prepaid for land use right	(1)		-		6,947,051
Prepaid for equipment	(2)		3,836,627		1,297,866
Loans to third party	(3)		-		2,000,000
Others			15,329		-
Total		$	3,850,985	$	10,244,917

(1) The Company’s subsidiary Sunrise Guizhou signed to purchase land use right from Qianxinan public resources trading center, with an area of 260,543 square meters and prepaid the consideration of $6,947,051. The land use right had been registered under Sunrise Guizhou on June 10, 2022.

(2)	Prepaid for equipment represented advance payment on the production line equipment by Sunrise Guizhou, which had not been shipped as of December 31, 2022.
(3)	The Company signed a loan contract on March 8, 2021 and renewed it on March 6, 2022 with Waichun to lend $2,000,000 with annual interest rate of 8%, which will be due on December 31, 2023. The loan was reclassified to current assets that its maturity was within a year.

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,
	2022			2021
Building	$	4,656,184		$	3,061,496
Machines		16,341,419			-
Vehicles		332,113			106,266
Electronic equipment		587,131			100,148
Furniture, fixtures and equipment		139,650			82,104
Leasehold improvements		405,141			442,563
Subtotal		22,461,638			3,792,577
Construction in progress		20,135,220			-
Less: accumulated depreciation		(1,128,475	)		(441,256	)
Plant, property and equipment, net	$	41,468,383		$	3,351,321

Depreciation expense was $750,220, $198,747 and $126,589 for the fiscal years ended December 31, 2022, 2021 and 2020, respectively. 

F-22

NOTE 9 – LAND USE RIGHTS, NET

Land use rights, stated at cost less accumulated amortization, consisted of the following:

	As of December 31,
	2022			2021
Land use rights - cost	$	10,204,968		$	-
Less: accumulated amortization		(121,726	)		-
Land use rights, net	$	10,083,242		$	-

For the years ended December 31, 2022, 2021 and 2020, amortization expense amounted to $126,042 and $nil and $nil, respectively. The following is a schedule of future amortization of land use rights as of December 31, 2022:

2023	$	221,617
2024		221,617
2025		221,617
2026		221,617
2027 and thereafter		9,196,774
Total	$	10,083,242

NOTE 10 – INTANGIBLE ASSETS, NET

Intangible assets, stated at cost less accumulated amortization and impairment, consisted of the following:

	As of December 31,
	2022			2021
Copyrights of course videos	$	4,876,413		$	5,326,829
Intellectual property rights		4,498,261			-
Intangible assets, cost		9,374,674			5,326,829
Less:
Accumulated amortization		(2,852,753	)		(1,731,852	)
Impairment		(2,559,271	)		-
Intangible assets, net	$	3,962,650		$	3,594,977

For the years ended December 31, 2022, 2021 and 2020, amortization expense amounted to $1,312,279 and $789,925 and $738,837, respectively. The following is a schedule of future amortization of intangible asset as of December 31, 2022:

2023	$	716,271
2024		716,271
2025		716,271
2026		716,271
2027 and thereafter		1,097,568
Total	$	3,962,650

F-23

NOTE 11 – LONG-TERM INVESTMENTS

The Company’s long-term investments consist of the following:

	As of December 31,
	2022			2021
Equity method investments:
Shidong (Suzhou) Investment Co., Ltd. (“Suzhou Investment”)	$	37,056		$	55,324
Equity investments without readily determinable fair value:
Shenzhen Jiazhong Creative Capital LLP (“Jiazhong”)		1,435,832			1,568,455
Beijing Xingshuizhixing Technology Co., Ltd. (“Xingshuizhixing”)		1,148,665			1,254,764
Zhejiang Wangxin Health Technology Co., Ltd. (“Wangxin”)		-			1,035,180
Hangzhou Zhongfei Aerospace Health Management Co., Ltd. (“Zhongfei”)		430,750			470,537
Shanghai Zhongren Yinzhirun Investment Management Partnership (“Yinzhirun”)		287,167			313,691
Jiangxi Cheyi Tongcheng Car Networking Tech Co., Ltd.(“Cheyi”)		227,970			249,027
Chengdu Zhongfuze Management LLP(“Zhongfuze”)		71,792			78,423
Shanghai Outu Home Furnishings Co., Ltd. (“Outu”)		71,792			78,423
Zhejiang Qianshier Household Co., Ltd.(“Qianshier”)		71,792			78,423
Taizhoujia Menkou Auto Greengrocer’s Delivery Technology Co., Ltd. (“Taizhoujia”)		71,792			78,423
Zhejiang Yueteng Information Technology Co., Ltd. (“Yueteng”)		71,792			78,423
Shidong Funeng(Ruzhou) Industry Development Co., Ltd.( “Funeng”)		38,767			42,348
Dongguan Zhiduocheng Car Service Co., Ltd. (“Car Service”)		25,845			28,232
Subtotal		3,991,012			5,409,673
Less: impairment		(971,731	)		(28,232	)
Total	$	3,019,281		$	5,381,441

Equity method investments 

Investment in Suzhou Investment

In December 2017, the Company acquired 17% of shareholding of Suzhou Investment with cash consideration of RMB 850,000. 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, 2022, 2021 and 2020, the Company recognized investment losses of $14,072, $14,025 and $15,585, respectively, according to its share of the post-acquisition losses of Suzhou Investment.

Equity investments without readily determinable fair value

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, approximately $1,435,832. The Company has fully paid RMB 10,000,000 as of December 31, 2020. The Company does not have significant influence or control over Jiazhong, and the partnership share investment does not have readily determinable market value, and therefore accounted for the investment of Jiazhong at cost minus impairments and plus or minus observable changes in prices. 

F-24

Investment in Xingshuizhixing

The Company signed an investment agreement with Beijing Zhitong Zhenye Technology Co., Ltd. and Li Jiyou to invest RMB8,000,000, approximately $1,148,666, to Xingshuizhixing, which is accounting for 4% of its equity interest. Xinshuizhixing mainly operates 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 Xingshuizhixing at cost minus impairments and plus or minus observable changes in prices.

Investment in Wangxin

On April 11, 2021, Zibo Shidong signed an equity transfer agreement with Wangxin, which mainly provides health consulting service, to acquire its 2.15% equity interest in the consideration of RMB6,600,000, approximately $947,650. The company has no control, joint control or significant influence on the invested units, and therefore accounted for the investment of Wangxin at cost minus impairments and plus or minus observable changes in prices. The investment fund would be refunded and reclassified as other receivable as December 31, 2022.

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 RMB3,000,000, approximately $430,750. In 2021, The Company provided it with a customized service worth of RMB3,000,000. 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 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 of Yinzhirun with cash consideration of RMB 2,000,000, approximately $287,167. 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.

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 RMB1,587,719, approximately $227,970. In 2021, the Company provided it with a membership service worth of RMB1,500,000. 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 China Construction Bank Nanchang Branch (“CCB”) 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 Zhongfuze

In September 2019, the Company acquired 11.11% of partnership share of Zhongfuze with cash consideration of RMB500,000, approximately $71,792. The Company has fully paid RMB500,000 as of December 31, 2020. The Company does not have significant influence or control over Zhongfuze, and the partnership share investment does not have readily determinable market value, and therefore accounted for the investment of Zhongfuze 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 RMB3,000,000, approximately $430,750. The Company has paid RMB 500,000, approximately $71,792, 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 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.

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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, approximately $71,792. 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 applied as dishonest entity subject to enforcement in 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 Taizhoujia

In June 2020, the Company acquired 5% of shareholding interest of Taizhoujia through nonmonetary transactions with Taizhoujia, which are entered into at the Company’s discretion to receive equity interest in exchange of collection of account receivables due from Taizhoujia of RMB500,000, approximately $71,792. 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 Taizhoujia, and the equity investment does not have readily determinable market value, and therefore accounted for the investment of Taizhoujia 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 Taizhoujia 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 Taizhoujia 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 RMB500,000, approximately $71,792. 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 Taizhoujia 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 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. 

Investment in Car Service

In November 2017, the Company acquired 1.5 % of shareholding interest of Car Service with cash consideration of RMB90,000. 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.

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NOTE 12 – 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 (approximately $5,743,331), among of which RMB10,000,000 (approximately $1,486,746) 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	$	3,654,545
Plant, property and equipment – buildings		1,853,556
Total assets acquired		5,508,101
Deferred tax liabilities		(199,813	)
Net assets acquired	$	5,308,288

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.

The unpaid consideration RMB30,000,000 (approximately $4,307,499) will be paid in installments from 2023 to 2026. 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 $582,381 and $3,358,906, respectively, as of December 31, 2022. For the year ended December 31, 2022, the Company recorded interest expense of $71,272 relating to the amortization of the discount. The consideration payable is guaranteed by Mr. Haiping Hu, CEO and Chairman of the Board of Director.

NOTE 13 – DEFERRED GOVERNMENT SUBSIDY

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. As of December 31, 2022, the Company received government subsidy of RMB20,000,000, approximately $2,871,665, was recognized as deferred government subsidy. It would be deducted from the relocation expenses when incurred. 

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NOTE 14 – LONG TERM PAYABLE

Loans payable represented the financial liabilities due to financial lease companies maturing within one or over one year. The loans payable consisted of the following:

	As of December 31,
	2022		2021
Long term payables:
Far East International Financial Leasing Co., Ltd. (“Far East”)	$	2,594,415	$	-
China Power Investment Ronghe Financial Leasing Co., Ltd. (“Ronghe”)		5,191,056		-
Total	$	7,785,471		-
Current portion		3,706,628		-
Non-current portion	$	4,078,843	$	-

On September 22, 2022, Sunrise Guizhou entered into a sales and leaseback contract with Far East. Pursuant to the contract, the Company sold its machines for RMB 20,000,000, approximately $2,871,665, and immediately leased it back from Far East for an eighteen-month period from September 22, 2022 to March 21, 2024. The Company had not transferred the control of the underlying assets to Far East and the Company evaluated that the sales transaction did not qualify as a sale in accordance with ASC 606. Therefore, the sales and leaseback contract was in essence a debt financing arrangement and did not apply sales and leaseback accounting in ASC 842. The proceeds, net of the financing costs, were financial liability with a yearly implied interest rate of 11.98%. This long-term payable was guaranteed by SDH and Mr. Haiping Hu. The Company was required to make monthly interest and principal payment. During the year ended December 31, 2022, The Company repaid RMB2,277,510, approximately $338,608. As of December 31, 2022, the Company had outstanding balance of $2,594,415, of which $1,984,684 and $609,731 were classified to current portion and 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 38,223,638, approximately $5,488,275, as of December 31, 2022.

On November 4, 2022, Sunrise Guizhou entered a sales and leaseback financing contract into a three-year financing with Ronghe to obtain an amount of RMB 40,000,000, approximately $5,743,331, for a term from November 10, 2022 to November 9, 2025. The sales and leaseback contract were a debt financing arrangement in essence, similar as the contract with Far East, 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. During the year ended December 31, 2022, The Company repaid RMB3,693,843, approximately $549,181. As of December 31, 2022, the Company had outstanding balance of $5,191,056, of which $1,721,944 and $3,469,112 were classified to current portion and 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, approximately $6,880,180, as of December 31, 2022.

NOTE 15 – TAXES 

a. VAT

The Company is subject to VAT and related surcharges in China for providing member services and other in-depth services. The applicable VAT rate is 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 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 the PRC, 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 PRC tax authorities for five years from the date of filing.

b. Income tax

Cayman Islands

Under the current tax laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains. In addition, no Cayman Islands withholding tax will be imposed upon the payment of dividends by the Company to its shareholders.

F-28

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, 2022, 2021 and 2020, and accordingly no provision for Hong Kong profits tax has been made in these periods.

China

The Company’s subsidiaries are incorporated in the PRC, and are subject to the PRC Enterprise Income Tax Laws (“EIT Laws”) with the statutory income tax rate of 25% with the following exceptions.

In accordance with the implementation rules of EIT Laws, a qualified “High and New Technology Enterprise” (“HNTE”) is eligible for a preferential tax rate of 15%. 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 obtained its HNTE certificate on October 25, 2017, and renewed in 2021. Therefore, SDH is eligible to enjoy a preferential tax rate of 15% from 2017 to 2023 to the extent it has taxable income under the EIT Law.

For qualified small and thin-profit enterprises, the annual taxable income up to RMB 1 million (inclusive) is subject to an effective EIT rate of 2.5% from 1 January 2021 to 31 December 2022; where the annual taxable income exceeds RMB 1 million but does not exceed RMB 3 million (inclusive), the amount in excess of RMB 1 million is subject to an effective EIT rate of 5% from 1 January 2022 to 31 December 2024. GMB Consulting was eligible to enjoy a preferential tax rate of 5% from 2018 to 2021. Shidong Health was eligible to enjoy a preferential tax rate of 2.5% in 2022.

The components of the income tax provision (benefit) are as follows:

	For the years ended December 31,
	2022		2021			2020
Current
China	$	1,560	$	-		$	3,367,763
Deferred
China		807,410		(236,581	)		(312,780	)
Total	$	808,970	$	(236,581	)	$	3,054,983

F-29

(Loss) profit before income taxes was attributable to the following geographic locations for the years ended December 31:

	For the years ended December 31,
	2022			2021			2020
PRC	$	(16,323,667	)	$	(6,034,466	)	$	15,150,941
Others		(5,991,765	)		(2,916,447	)		(138,671	)
(Loss) profit before income taxes	$	(22,315,432	)	$	(8,950,913	)	$	15,012,270

Reconciliation between the provision (benefit) for income taxes computed by applying the PRC EIT rate of 25% to (loss) income before income taxes and the actual provision of income taxes is as follows:

	For the years ended December 31,
	2022			2021			2020
(Loss) profit before income taxes	$	(22,315,432	)	$	(8,950,913	)		15,012,270
PRC EIT rate		25	%		25	%		25	%
Income taxes computed at statutory EIT rate	$	(5,578,858	)	$	(2,237,728	)		3,753,068
Reconciling items:
Effect of tax holiday and preferential tax rate		1,274,465			169,657			(581,434	)
Effect of tax rates in foreign jurisdictions		1,497,723			728,965			(46,330	)
Effect of non-deductible expense		13,917			4,403			5,202
Effect of non-deductible share-based compensation		682,492			-			-
Super deduction of qualified R&D expenditures		-			(107,975	)		(75,523	)
Changes in valuation allowance		2,919,231			1,206,097			-
Income tax expense (benefit)	$	808,970		$	(236,581	)		3,054,983
Effective tax rate		(3.63	)%		2.64	%		20.35	%

Deferred tax assets and liabilities

According to PRC tax regulations, net operating losses can be carried forward to offset future operating income for five years. Significant components of deferred tax assets and liabilities were as follows:

	As of December 31,
	2022			2021
Deferred tax assets
Net operating loss carry forwards	$	1,934,559		$	978,216
Provision for doubtful debts		1,439,947			1,092,140
Impairment on inventory		398,578			-
Impairment of long-lived assets		163,420			-
Deferred tax assets, gross		3,936,504			2,070,356
Less: valuation allowance		(3,936,504	)		(1,218,319	)
Deferred tax assets, net	$	-		$	852,037
Deferred tax liabilities
Assets acquired in the asset acquisition	$	199,583			-

The Company has accumulated operating loss of approximately $10,130,515 and $4,745,479 as of December 31, 2022 and 2021 for income tax purposes available for offsetting against future taxable income. The accumulated operating loss were from several PRC subsidiaries of the Company. The graphite anode business was in its start-up phase for the year ended December 31, 2022. In the meantime, peer-to-peer knowledge sharing and enterprise business continued to shrink in 2022. Considering the factors in graphite anode business and peer-to-peer knowledge sharing and enterprise 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 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. The following is a schedule of expiration of carry forward operating loss as of December 31, 2022:

For the years ending December 31,
2023	$	5,360
2024		522,780
2025		166,113
2026		12,894
2027		9,423,368
Total	$	10,130,515

The Company evaluates the level of authority for 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. For the fiscal years ended December 31, 2022 and 2021, the Company had no unrecognized tax benefits.

For the Company’s operating subsidiaries, the tax years ended December 31, 2018, through December 31, 2022 remain open for statutory examination by PRC tax authorities.

F-30

NOTE 16 – RELATED PARTY BALANCE AND TRANSACTIONS

The following is a list of related parties which the Company has transactions with:

(a)	Ningbo Zhuhai Investment Co., Ltd. (“Zhuhai Investment”), a company controlled by Mr. Haiping Hu
(b)	Bally, Corp. (“Bally”), a company controlled by Mr. Haiping Hu
(c)	Mr. Xuanming Wang, General Manager and legal representative of GMB (Hangzhou)
(d)	Mr. Haiwei Zuo, Vice Chairman of the Board, 7.49% shareholder of GMB (Beijing)
(e)	Shanghai Hui Yang Investment Co., 9.6451% shareholder of Sunrise Guizhou and controlled by immediate family members of Mr. Haiping Hu
(f)	Shidong (Suzhou) Investment Co., Ltd., a company of which Mr. Haiping Hu is the CEO
(g)	Mr. Shousheng Guo, Director, 3.00% shareholder of GMB (Beijing)
(h)	Mr. Wenwu Zhang, Director of Sunrise Guizhou
(i)	Mr. Chenming Qi, General Manager, Director and 3.00% shareholder of GIOP BJ; Director of GMB (Hangzhou)
(j)	Ms. Jing Ji, CEO of and 46% shareholder of GMB Technology
(k)	Haicheng Shenhe, 9.6451% shareholder of Sunrise Guizhou
(l)	Guizhou Yilong New Area Industrial Development and Investment Co., Ltd., 3.0864% shareholder of Sunrise Guizhou

a. Due from related parties

As of December 31, 2022 and 2021, the balances of amount due from related parties were as follows:

		As of December 31,
		2022		2021
Due from related parties
Bally			5,168		5,168
Zhuhai Investment			-		25,534
Mr. Xuanming Wang			20,102		26,664
Mr. Haiwei Zuo			-		7,912
Mr. Wenwu Zhang	(1)		337,420		-
Shidong (Suzhou) Investment Co., Ltd.			37,332		-
Total		$	400,022	$	65,278

(1) The balance as of December 31, 2022 represented the prepaid acquisition consideration to purchase Mr. Wenwu Zhang’s equity in Haicheng Shenhe. See Note 7.

b. Due to related parties

As of December 31, 2022 and 2021, the balances of amounts due to related parties were as follows:

		As of December 31,
		2022		2021
Due to related parties
Mr. Haiping Hu			2,872		-
Mr. Chenming Qi			9,189		-
Ms. Jing Ji			19,923		-
Shanghai HuiYang Investment Co.	(1)		738,128		-
Haicheng Shenhe			50,395		-
Zhuhai Investment			64,643		-
Total		$	885,150	$	-

(1) The balance as of December 31, 2022 represented the loans from the related party, with the annual interest rate of 4.35% and was initially due on August 13, 2022 and extended to December 31, 2023.

F-31

c. Deferred revenue -related parties

As of December 31, 2022 and 2021, the balances of deferred revenue of related parties were as follows:

		As of December 31,
		2022		2021
Deferred revenue of related parties
Shanghai Hui Yang Investment Co.	(1)	$	347,471	$	-
Total		$	347,471	$	-

(1) The balance as of December 31, 2022 represented the advance from the related party for tailored services.

d. Related party transactions

Related party purchase

The Company rented office spaces from Zhuhai Investment. For the years ended December 31, 2022, 2021 and 2020, total rental fee to Zhuhai Investment were $118,475, $103,411 and $96,695, respectively.

The Company purchased graphite material processing service of $450,591 and purchased raw material of $580,452 from Haicheng Shenhe for the year ended December 31, 2022.

The Company purchased professional services from Yihe Beijing. For the year ended December 31, 2020, service costs paid to Beijing Yihe were $27,175.

Related party sales

The Company sold titanium of $205 to Mr. Shousheng Guo for the year ended December 31, 2022.

The Company sold medical wine of $666 to Zhuhai Investment for the year ended December 31, 2021.

e. Related party guarantee

On August 4, 2022, Surnise Guizhou entered a line of credit financing contract with Bank of Guizhou for revolving credit of RMB 20,000,000, approximately $ 2,871,665, for a term from August 4, 2022 to August 3, 2023. The line of credit was in various means including bank loans, commercial note and letter of credit. As of December 31, 2022, the Company has utilized RMB 13,500,000, approximately $1,938,374, line of credit by issuing commercial notes to its vendors for amount of RMB 27,000,000, approximately $3,876,748. Pursuant to the line of credit contract, the Company was obliged to deposit fifty percent of the notes payable amount issued as restricted cash in the designated bank accounts in Bank of Guizhou. Pursuant to the contract, Mr. Haiping Hu and Guizhou Yilong New Area Industrial Development and Investment Co., Ltd., the non-controlling shareholder of Sunrise Guzhou, were the guarantor of the line of credit.

On September 22, 2022, Sunrise Guizhou entered a financing contract into an eighteen-month loan with Far East to obtain a loan of RMB 20,000,000, approximately $2,871,665, for a term from September 22, 2022 to March 21. On November 4, 2022, Sunrise Guizhou entered a sales and leaseback financing contract into a three-year financing with Ronghe to obtain an amount of RMB 40,000,000, approximately $5,743,331, for a term from November 10, 2022 to November 9, 2025. Pursuant to the financing contracts, Mr. Haiping Hu, CEO and Chairman of the Board of Director was the guarantor for the debt financing. See Note 14.

In July 2022, Sunrise Guizhou entered into purchase agreements with original shareholders of Sunrise to acquire 100% of Sunrise Tech’s assets and equity ownership for a gross consideration of RMB 40,000,000 (approximately $5,743,331), among of which RMB10,000,000 (approximately $1,486,746) was paid in July 2022. The unpaid consideration RMB30,000,000 (approximately $4,307,499) will be paid in installments from 2023 to 2026. The consideration payable is guaranteed by Mr. Haiping Hu. See Note 12.

F-32

NOTE 17 – 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 was 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-based compensation

The Company recorded share-based compensation expenses of $2,729,969, $nil and $nil for the years ended December 31, 2022, 2021 and 2020, respectively. The following table sets forth the allocation of share-based compensation expenses:

	For the years ended December 31,
	2022		2021		2020
Cost of revenues	$	8,188	$	-	$	-
Selling expenses		39,301		-		-
General and administrative expenses		2,674,292		-		-
Research and development expenses		8,188		-		-
Total	$	2,729,969	$	-	$	-

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.

Restricted share units

On August 26, 2022, the Company granted 3,334,200 restricted share units to its directors and employees. 25% of the restricted share units was 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.

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A summary of the restricted shares units activities is as follows:

	Number of restricted share units outstanding			Weighted average grant date fair value		Aggregate intrinsic value
Restricted share units outstanding at January 1, 2022		-			-		-
Granted		3,334,200			2.00		-
Vested		(833,550	)		2.00		-
Restricted share units outstanding at December 31, 2022		2,500,650			2.00		6,826,775

The weighted average grant date fair value of restricted share units granted during the years ended December 31, 2022, 2021 and 2020 were $2.00, $nil and $nil, respectively. The total fair value of restricted share units vested during the years ended December 31, 2022, 2021 and 2020 were $1,667,100, $nil, and $nil respectively.

The Group 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 $2,729,969 for the year ended December 31, 2022. As of December 31, 2022, total unrecognized compensation expenses relating to nonvested shares were $3,938,431, which is expected to be recognized over a weighted average period of 1.75 years.

Non-controlling interest

Non-controlling interest consists of the following:

	As of December 31,
	2022			2021
GMB (Beijing)	$	4,313		$	5,365
GMB Culture		2,997			25,613
Jiagui Haifeng		(710	)		(13	)
Shidong Trading		-			(35	)
GMB Consulting		13,270			14,477
Shidong Cloud		42,389			-
Sunrise Guxian		(39,323	)		-
GMB Technology		(186,539	)		(185,377	)
Sunrise Guizhou		42,402,995			3,262,220
Total	$	42,239,392		$	3,122,250

Jiagui Haifeng was established by Zibo Shidong and Mr. Lifeng Wang in November, 2021. 51% shares of Jiagui Haifeng was held by Zibo Shidong and 49% of shares was held by Mr. Lifeng Wang.

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 was held by GIOP BJ and 25% of shares was held by Yunqianyi.

Sunrise Guxian was established by Sunrise Guizhou and seven other companies in April 2022.

For the year ended December 31, 2022, the Company made capital contributions of $52,863 to Shidong Cloud; and the non-controlling shareholders made capital contributions of $78,851 to Shidong Cloud.

For the years ended December 31, 2022 and 2021, Zhuhai (Zibo) made capital contributions of $10,759,335 and $9,099,878 to Sunrise Guizhou; and the non-controlling shareholders made capital contributions of $41,826,941 and $3,332,622 to Sunrise Guizhou.

The actual capital contributions made by the Company and the non-controlling shareholders for the fiscal year ended 2022 and 2021 had no effect on the Company’s equity percentage in its eight subsidiaries.

F-34

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, 2022 and 2021, the statutory reserves of the Company’s subsidiaries, GIOP BJ, VIE and VIE’s subsidiaries in the PRC have not reached 50% of their respective registered capital. As of December 31, 2022 and 2021, the balances of the statutory reserves were $2,477,940 and $2,473,801, 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, 2022, the statutory reserves and the share capital amounted to $2,477,940 and $22,710,147, respectively.

NOTE 18 – COMMITMENTS AND CONTINGENCIES

Contingencies

The Company may be involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The 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. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity. As of December 31, 2022, the Company was not aware of any litigations or lawsuits against it.

NOTE 19 – 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.

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 chief operating decision maker (“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 performance of the Company.

Based on the management’s assessment, the Company determined that it has two operating segments and therefore two reportable segments as defined by ASC 280. The Company’s assets are substantially all located in the PRC and substantially all of the Company’s revenue and expense are derived in the PRC. Therefore, no geographical segments are presented.

The Company’s CODM evaluates performance based on each reporting segment’s revenue, costs of revenues and gross profit (loss). Revenues, cost of revenues and gross (loss) profits by segment are presented below. Separate financial information of operating income by segment is not available.

F-35

	For the years ended December 31,
REVENUES, NET	2022		2021		2020
Graphite anode business	$	37,580,677	$	-	$	-
Peer-to-peer knowledge sharing and enterprise business		544,991		7,409,272		23,181,084
Member services		106,724		498,330		872,629
Enterprise services
-Comprehensive tailored services		153,658		1,433,847		13,345,880
-Sponsorship advertising services		-		1,734,390		6,598,527
-Consulting services		9,645		1,583,583		416,634
Online services		2,100		40,391		361,933
Other revenues		272,864		2,118,731		1,585,481
Revenues, net	$	38,125,668	$	7,409,272	$	23,181,084

	For the years ended December 31,
COST OF REVENUES	2022		2021		2020
Graphite anode business	$	35,586,544	$	-	$	-
Peer-to-peer knowledge sharing and enterprise business		3,889,502		3,886,654		2,980,216
Member services		591,000		99,013		174,660
Enterprise services
-Comprehensive tailored services		294,759		157,563		340,783
-Sponsorship advertising services		-		34,041		255,634
-Consulting services		218,719		733,266		239,845
Online services		66,403		798,010		1,076,503
Other revenues		2,718,621		2,064,761		892,791
Cost of revenues	$	39,476,046	$	3,886,654	$	2,980,216

	For the years ended December 31,
GROSS (LOSS) PROFIT	2022			2021			2020
Graphite anode business	$	1,994,133		$	-		$	-
Peer-to-peer knowledge sharing and enterprise business		(3,344,511	)		3,522,618			20,200,868
Member services		(484,276	)		399,317			697,969
Enterprise services
-Comprehensive tailored services		(141,101	)		1,276,284			13,005,097
-Sponsorship advertising services		-			1,700,349			6,342,893
-Consulting services		(209,074	)		850,317			176,789
Online services		(64,303	)		(757,619	)		(714,570	)
Other revenues		(2,445,757	)		53,970			692,690
Gross (loss) profit	$	(1,350,378	)	$	3,522,618		$	20,200,868

NOTE 20 – SUBSEQUENT EVENTS

On January 18, 2023, Sunrise Guizhou entered a credit facility agreement with Post Savings Bank of China (“Post Bank”) to obtain revolving fund up to RMB 30,000,000, approximately $4,307,498, for a term from January 19, 2023 to January 18, 2031. This credit loan was guaranteed by Mr. Haiping Hu, CEO and Chairman of the Board of Director, and Zhuhai Zibo. The Company also needed to mortgage its plants, property and equipment to Post Bank.

On February 7, 2023, Sunrise Guizhou entered a two-year debt financing arrangement with Zhongguancun Science and Technology Leasing Co., Ltd. to obtain a loan of RMB 20,000,000, approximately $2,871,665, for a term from February 7, 2023 to February 7, 2025 with five-year loan prime rate plus 2.6%. This debt financing arrangement was guaranteed by Mr. Haiping Hu, CEO and Chairman of the Board of Director, and Zhuhai Zibo. The Company also pledged its account receivable amounted to RMB 20,000,000, approximately $2,871,665 of its customer. The Company is required to make quarterly interest and principal payments.

The Company evaluated subsequent events and transactions that occurred after the balance sheet date through May 16, 2023, the date that the audited consolidated financial statements were available to be issued.

F-36

NOTE 21 – 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 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 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 VIE and its subsidiaries. Such investment is presented on the condensed balance sheets as “Investment in subsidiaries and VIE” and the respective loss or profit as “Equity in (loss) earnings of subsidiaries and VIE” on the condensed statements of operations and comprehensive (loss) income.

The footnote disclosures contain 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 footnote 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, 2022 and 2021, 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.

F-37

SUNRISE NEW ENERGY CO., LTD.

PARENT COMPNAY BALANCE SHEETS

	As of December 31,
	2022			2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	285,916		$	784,176
Restricted cash		700,094			-
Due from related parties		5,168			5,168
Short-term investment		3,336,256			5,961,605
Advance to suppliers		7,694			13,727
Prepaid expenses and other current assets		2,994,975			1,011,542
TOTAL CURRENT ASSETS		7,330,103			7,776,218
NON-CURRENT ASSETS
Restricted cash		-			700,060
Long term prepayments and other non-current assets		-			2,000,000
Investment in subsidiaries and VIE		24,714,096			41,438,198
TOTAL NON-CURRENT ASSETS		24,714,096			44,138,258
TOTAL ASSETS		32,044,199			51,914,476
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accrued expenses and other current liabilities		15,550			211,430
TOTAL CURRENT LIABILITIES		15,550			211,430
TOTAL LIABILITES		15,550			211,430
EQUITY
Ordinary shares (500,000,000 shares authorized; $0.0001 par value, 24,528,000 shares issued and outstanding as of December 31, 2021; 25,361,550 shares issued and outstanding as of December 31, 2022)		2,536			2,453
Additional paid-in capital		34,696,702			31,966,816
Statutory reserves		2,477,940			2,473,801
(Accumulated deficits) Retained earnings		(5,148,529	)		17,259,976
TOTAL EQUITY		32,028,649			51,703,046
TOTAL LIABILITIES AND EQUITY	$	32,044,199		$	51,914,476

F-38

SUNRISE NEW ENERGY CO., LTD.

PARENT COMPNAY STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

	For the years ended December 31,
	2022			2021			2020
REVENUES, NET	$	-		$	-		$	73,744
COSTS OF REVENUES		8,188			-			-
GROSS (LOSS) PROFIT		(8,188	)		-			73,744
OPERATING EXPENSES		3,578,664			1,010,536			50,000
(LOSS) PROFIT FROM OPERATIONS		(3,586,852	)		(1,010,536	)		23,744
OTHER (EXPENSES) INCOME		(2,403,412	)		(1,904,135	)		4,459
(LOSS) PROFIT BEFORE EQUITY IN (LOSS) EARNINGS OF SUBSIDIARIES AND VIE		(5,990,264	)		(2,914,671	)		28,203
Equity in (loss) earnings of subsidiaries and VIE		(16,414,102	)		(5,488,589	)		12,059,324
NET (LOSS) INCOME ATTRIBUTABLE TO SUNRISE NEW ENERGY CO., LTD. ORDINARY SHAREHOLDERS		(22,404,366	)		(8,403,260	)		12,087,527
Foreign currency translation adjustment		-			-			-
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO SUNRISE NEW ENERGY CO., LTD. ORDINARY SHAREHOLDERS	$	(22,404,366	)	$	(8,403,260	)	$	12,087,527

F-39

SUNRISE NEW ENERGY CO., LTD.

PARENT COMPNAY STATEMENTS OF CASH FLOWS

	For the years ended December 31,
	2022			2021			2020
Net cash used in operating activities		(808,226	)		(1,015,145	)		(52,994	)
Net cash used in investing activities					(25,825,000	)		-
Net cash provided by financing activities		310,000			28,249,093			128,282
(Decrease) increase in cash and cash equivalents		(498,226	)		1,408,948			75,288
Cash, cash equivalents and restricted cash, beginning of year		1,484,236			75,288			-
Cash, cash equivalents and restricted cash, end of year	$	986,010		$	1,484,236		$	75,288
Cash, cash equivalents and restricted cash, end of year		986,010			1,484,236			75,288
Less: restricted cash		700,094			700,060			-
Cash and cash equivalents, end of year		285,916			784,176			75,288

F-40

EX-4.20

Exhibit 4.20

Equity and Assets Transfer Agreement of

Anlong Hengrui Graphite Material Co., Ltd.

Party A: Sunrise (Guizhou) New Energy Materials Co., Ltd.

Address: Group 2, Heying Village, Lutun Town, Yilong New District, Qianxinan Prefecture, Guizhou Province (next to Yilong Avenue)

Legal representative: Du Huiyu

Unified Social Credit Code: 91522320MA7BMUXCX0

Party B1: Liu Fuxuan

Address: Xinwuji Group, Xiaobaoyun Village, Dushan Town, Anlong County

ID number: 522328196306224511

Party B2: Liu Bao

Address: Xiangzikou Group, Xinjie Village, Puping Town, Anlong County

ID number: 522328197609272435

Party B3: Liu Fuhan

No. 58, Shuchangba, Zhaodi Subdistrict Office, Anlong County

ID number: 522328197110100095

Party C (target company): Anlong Hengrui Graphite Material Co., Ltd.

Address: Xinqiao Village, Xinqiao Town, Anlong County, Qianxinan Buyi and Miao Autonomous Prefecture, Guizhou Province

Legal representative: Liu Bao

Unified social credit code: 915223285806804433

Whereas:

Party C is a limited company established and legally existing in accordance with the laws of the People’s Republic of China. The company was established on September 1, 2011, with a registered capital of 40 million yuan and a paid-in registered capital of 40 million yuan. The legal representative is Liu Bao, and its business status is In order to survive, the business scope includes graphite materials processing, sales; logistics, warehousing or transportation of professional logistics enterprises.

Party C’s current registered shareholders are Party B1 (holding 50% of the shares), Party B2 (holding 25% of the shares), and Party B3 ( holding 25% of the shares). Party C has acquired all the equity and all assets of the company, and agrees to assume corresponding responsibilities according to this agreement.

Party A, Party B, and Party C have conducted friendly consultations, based on the principles of mutual benefit and common development, on the basis of equality, voluntariness, and integrity, and in accordance with relevant laws such as the Civil Code of the People’s Republic of China and the Company Law of the People’s Republic of China. With regard to Party C’s company and asset acquisition matters, the following agreement was reached in Xingyi City, Qianxinan, Guizhou Province, for mutual compliance.

1. Target company and assets

Party B sells all the equity of Party C held by Party B to Party A (the lease agreement between Party C and the driving school shall be performed by Party A, and the income during the lease period shall be belong to Party B, and Party B shall be responsible for the expenses incurred in fulfilling the agreement. The above-mentioned facilities and equipment are large cranes, cutting equipment, graphite materials piers, and sewage irrigation, which shall be dismantled and cleared by Party B). Party C’s assets include all tangible and intangible assets under the company’s name. For details of assets, see the content of the asset evaluation list, including but not limited to 20,414.35 square meters of steel structure workshops, 1,780.02 square meters of office and staff dormitories, 60,839.3 square meters real estate under Qian (2018) Dingxiao Development Zone Real Estate No. 0000306 (including 15 acres of driving school), 33909.6 square meters real estate under Qian (2018) Dingxiao Development Zone Real Property No. 0000307, 33811.3 square meters real estate under Qian (2018) Dingxiao Development Zone Real Estate No. 0000308, the above-mentioned 3 real estate property certificates totaling 127960.2 square meters of land and all structures in the factory area. And also including 128,000.64 square meters construction land planning permit of Dizi No. 520000201417787, and 90667.12 square meters construction project planning permit of Jianzi No. 520000201408618.

2. Party C’s claims and debts

The base date of this transaction is July 2, 2022. The assets of the company included in the asset evaluation list from the base date will be frozen, and Party B shall not take charge of them without authorization. Party C’s creditor’s rights and debts (including but not limited to loans, farmers’ arrears, employee wages, social security and taxes, etc.) before the base date are not included in the assets transferred under this contract, and shall be take charge of by Party B on its own, and has no relationship with Party A. If Party A assumes the responsibility to pay off the debts occurred before the base date, Party B shall compensate Party A for the losses.

3. Transfer price and payment method

3.1 In this transfer, Party A acquires all the equity of Party C held by Party B1, Party B2, and Party B3 to realize the acquisition of the target company and all assets under its name. After consensus among the three parties, the equity transfer price is determined to be RMB 40 million yuan (¥40,000,000).

2

3.2 Both Party A and Party B agree to establish a joint bank account after the signing of this contract. Before July 10, 2022, Party A shall pay RMB 10 million (¥ 10,000,000) as the first equity transfer payment (deposit). Party B shall complete the industrial and commercial registration procedures for 100% equity transfer of the target company, as well as all property certificates, land certificates, and asset mortgage cancellation registration within one month. After the above matters are completed and signed by both parties, the deposit will be paid to the designated account of Party B by the joint account. Party B must complete the items in the table below and be confirmed by both parties. The expenses related to the repayment of all debts of Party C shall be borne by Party B, including but not limited to the repayment responsibility of approximately 9 million RMB for bank mortgage loans.

No.	Date	Contents to be completed by Party B	Amount to pay upon completion
1	Before July 15	Complete the industrial and commercial registration procedures for 100% equity transfer, and transfer company information	2 million
2	Before July 21	Complete all property certificates, land certificates, and asset mortgage release registration (pay 6 million to the bank to release the mortgage)	6 million
3	Before July 31	Complete the cleaning of the factory premises, transportation and delivery of construction waste	2 million

3.3 The remaining RMB 30 million yuan equity transfer payment will be paid in 4 installments, that is, 5 million yuan will be paid before August 1, 2023; 5 million yuan will be paid before August 20, 2024; 10 million yuan will be paid before August 20, 2025, and 10 million yuan will be paid before August 20, 2026. Party B1, Party B2, and Party B3 agree that Party A’s equity transfer payment should be paid to the following account:

Party B2: Liu Bao

Account opening bank: Anlong County Branch of Bank of Guiyang

Bank account number: 6215529902001455432

Party B1, B2 and B3 shall distribute the funds by themselves in proportion.

3.4 During the payment period, if there is any remaining debt that has not been settled before the base date, Party A can use the equity transfer payable to offset the remaining debt.

4. Representations and Warranties

4.1 After the signing of this contract, Party A, Party B and Party C shall carry out the asset list and hand over the company according to the detailed list of the target assets as the annex to the contract. Personnel receive Party C’s official seal, financial seal, business seal, financial account books, business license and other certification materials. Party B shall manage the assets of the target company properly and in good faith, and shall not have any behavior that damages the target assets. Party B shall take charge of the remaining debts under the supervision of Party A., with assistance.

4.2 Party B shall be responsible to finish the following within 6 months after it receives the 10 million yuan deposit: (1) it is responsible for clearing all the structures on the site and handing them over to Party A; (2) it is responsible for coordinating the relocation of all farmhouse owners within the red line of the company’s site, and all expenses incurred shall be borne by Party B. (Party B attaches a list of houses that need to be moved out within the red line); (3) according to the needs of Party A, Party B is responsible for the capacity expansion procedures of the transformer, and Party A is responsible for the payment. Since Party C has no real estate certificate and construction permit, Party B shall provide the state-owned land real estate certificate, construction project planning permit, and construction land planning permit to Party A, but Party A shall fully bear the cost of handling the real estate certificate.

4.3 Party B guarantees to fulfill its obligations in good faith in accordance with the provisions of this contract and complete all the above contents within the agreed period, including if Party B is unable to transfer assets or complete relevant legal asset certificates or fails to complete the relevant provisions within the agreed period due to reasons attributable to Party B, it shall be deemed as a breach of contract. Party B shall bear a penalty of 20% of the total transfer price and all responsibilities.

3

4.4 If Party A fails to pay the installment payment agreed in the contract on time, if the payment due in the current period has not exceeded one year, the late payment fee shall be 0.05% per day, and if it exceeds one year, Party A shall bear 20 % of the total price as a breach of contract loss.

4.5 After Party A takes over Party C, if Party A undertakes to pay off the debts before the base date, Party B shall compensate Party A for the losses.

4.6 Party B guarantees that the information about the target company listed in this agreement is true; the ownership of the target company and all its assets and equipment belongs to Party B.

4.7 Party B is qualified to sign this agreement; for the transfer of the target company under this agreement, Party B Unanimous consent of all shareholders of the party.

5. Performance Guarantee Terms

After Party B completes the relevant industrial and commercial change registration as agreed, for Party B’s creditor’s rights under this agreement, Party A’s chairman Hu Haiping (ID number: 330106196710170432) shall undertake the repayment guarantee responsibility for the remaining installment equity transfer payment until it is paid off. At the same time, Party B designated Liu Bao (ID number: 522328197609272435) to provide a performance guarantee for this agreement.

6. Dispute and Resolution

6.1 Any dispute arising from or in connection with this contract shall be resolved through consultation between the parties. If consultation fails, a lawsuit may be filed with the people’s court in the place where the contract is performed. During the dispute resolution period, this agreement shall remain in full force and effect in all aspects except for the disputed matters. Except for the obligations related to the disputed matter, each party shall continue to fulfill its obligations and exercise its rights under this agreement.

6.2 If either Party A or Party B breaches the contract, the breaching party shall bear all reasonable expenses (including but not limited to attorney fees, travel expenses, etc.) for the non-breaching party to realize its rights.

8. Supplementary Terms

Any matters not covered in this agreement shall be separately agreed upon and agreed upon by all parties through written supplementary terms or agreements; Unless otherwise agreed in the supplementary terms or agreement, the supplementary terms and agreement shall have the same legal effect as this agreement.

9. Contract text

This contract is made in five copies, each party holds one copy, and it will take effect on the date of signature and seal, conducting the same legal validity.

(No text, signature page)

Party A: Sunrise (Guizhou) New Energy Materials Co., Ltd.

Party B1: Liu Fuxuan

Party B2: Liu Bao

Party B3: Liu Fuhan

4

EX-4.21

Exhibit 4.21

Financial Lease Contract (Sale-back)

Contract No.: IFELC22DG3QA95-L- 01

Date signed: September 22, 2022

合同编号:IFELC22DG3QA95・L-01

Contract Term Table

Lessor (hereinafter referred to as Party A): Far East International Financial Leasing Co., Ltd. Legal representative: Kong Fanxing Far East Horizon Plaza, No. 9 Yaojiang Road, Pudong New District, Shanghai Contact: Tel: (021) 38913000 Taxpayer Identification Number: 91310000604624607C	Lessee (hereinafter referred to as Party B): Sunrise (Guizhou) New Energy Materials Co., Ltd. Legal representative: Du Huiyu Judicial service address: Sunrise (Guizhou) New Energy Materials Co., Ltd., Yilong Avenue, Yilong New District, Qianxinan Prefecture, Guizhou Province Contact: Liu Chao Tel: 13811876068 E-mail: 2991653241@qq.com Taxpayer Identification Number: 91522320MA7BMUXCX0
Lease item	For details, please refer to the list of leased items attached to the ownership transfer agreement.
Setting place	Group 1, Heying Village, Lutun Town, Yilong New District, Qianxinan Prefecture, Guizhou Province (next to Yilong Avenue)
Lease principal	RMB20, 000, 000.00 ( RMB 20 million)
Starting date	The date on which Party A pays the agreed price under the ownership transfer agreement (the date of issuance/endorsement recorded on the note issued/endorsed by Party A, or the date of payment recorded on the payment certificate of Party A’s telegraphic transfer, whichever is earlier), shall not be determined by the lease Subject to actual delivery of the item.
Lease period	A total of 18 months, counting from the lease commencement date.
Please refer to the attached “Lease Payment Calculation Table” for details on the calculation of the lease day and each lease amount. The details are subject to the “Lease Start Notice”/“lease Change Notice” sent by Party A
Party A receiving account	Account name: Far East International Financial Leasing Co., Ltd. Bank of deposit: Business Department of Agricultural Bank of China Shanghai Branch Account number: 03332200040033976 Note: If the account is changed, Party A will issue an “Account Change Notice” to Party B, and Party B shall pay lease to Party A according to the notice.
Insurance agreement	Party B independently decides whether to insure the leased items.
Expiration residual value	RMB 1,000.00 (RMB one thousand yuan)

2

Guarantee	1. Hu Haiping provided joint liability guarantee and issued a guarantee letter.
Conditions for the entry into force of the contract	1. The ownership transfer agreement has been signed. 2. Party A receives the certification documents that can prove the ownership status of the leased objects provided by Party B, and it is verified and confirmed by Party A. 3. Party A receives the approval, consent and authorization involved in Party B’s signing and performance of this contract.
Early closure	Within 6 months from the lease start date, Party B shall not suspend or terminate the lease of the leased object, and shall not request to change this lease contract for any reason. Afterwards, if Party B requests to terminate the lease contract in advance, it shall notify Party A in writing one month in advance and obtain Party A’s consent. After Party A agrees, Party B shall pay Party A the early termination payment, other payables of Party B and the expenses incurred by Party A for recovering and managing the leased object (if any). After the above payments are received, Party A shall transfer the ownership of the leased object to Party B, this contract ends. The early termination payment payable by Party B includes the following payments, which shall be subject to the early termination agreement signed by both parties:
	(1)	All leases payable but unpaid up to the early end date (including interest during the period up to the early end date);
	(2)	All remaining lease principal after the early termination date;
	(3)	20% of all remaining interest after the early termination date;
	(4)	The purchase price of the leased items.
lease adjustment	The lease under this contract is fixed and will not be adjusted throughout the lease period.
Other agreements	Value-added tax is included in the calculation of lease in this contract. Value-added tax is included in the calculation of the purchase price of this contract. The lease amount in this contract includes the domestic value-added tax of RMB 1,005,500, 140, and 80 cents, and the lease excluding tax is RMB 2,100, 158,500, and 81. Dime roll points. If the value-added tax rate is adjusted, the aforementioned amount will be adjusted accordingly.
Appendix	Proof of receipt of leased items Lease Payment Calculation Form

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Contract No.: IFELC22DG3 QA95-L-01

This contract is composed of the list of contract elements, the general terms of the sale-back lease contract and various appendices, all of which are an integral part of this contract and have the same legal effect. Party B confirms that he has carefully read and understood all the terms and contents including the list of contract elements, general terms, and various appendices, and is willing to be bound by them.

The lessee confirms that the lessee has carefully read and fully understood the contents of this contract. When signing this contract, both parties have explained and discussed all the terms in detail. Both parties have no doubts about all the terms of the contract (especially the bolded terms), and have no doubts about the rights and obligations of the parties and the limitation or exemption of liabilities. have an accurate and unmistakable understanding of the legal implications.

Lessor: Far East International Financial Leasing Co., Ltd.

Lessee: Sunrise (Guizhou) New Energy Materials Co., Ltd.

signature and seal

Appendix: Proof of receipt of leased items

Far East International Financial Leasing Co., Ltd.:

According to the aforementioned “After-Sale Lease Contract” signed by your company and the lessee (hereinafter referred to as the lease contract), the lessee has completely received the leased object under the lease contract. The leased object is an asset that your company has complete ownership of. The items are complete, intact and in normal operation without any quality defects when the lessee receives them.

Hereby issue this proof of receipt.

Lessee: Sunrise (Guizhou) New Energy Materials Co., Ltd

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Appendix: Lease Payment Calculation Form

lease period	lease date	lease amount (RMB, Yuan)
1	One month after the lease commencement date corresponds to the date of the lease commencement date		759,170.00
2	The day corresponding to the start date of the lease one month after the first installment lease date		759,170.00
3	The day corresponding to the lease start date 1 month after the second installment lease date		759,170.00
4	The day corresponding to the start date of the lease 1 month after the lease date of the third installment		759, 170.00
5	1 month after the 4th installment lease date corresponds to the lease start date		759,170.00
6	1 month after the 5th installment lease date corresponds to the lease start date		759,170.00
7	1 month after the 6th installment lease date corresponds to the date of the lease start date		1,442,423.00
8	1 month after the 7th installment lease date corresponds to the date of the lease start date		1,442,423.00
9	1 month after the 8th installment lease date corresponds to the date of the lease start date		1,442,423.00
10	The day corresponding to the start date of the lease one month after the 9th installment lease date		1,442, 423.00
11	1 month after the 10th installment lease date corresponds to the date of the lease start date		1,442,423.00
12	1 month after the 11th installment lease date corresponds to the date of the lease start date		1,442, 423.00
13	1 month after the 12th installment lease date corresponds to the date of the lease start date		1,442,423.00
14	One month after the 13th installment lease date corresponds to the date of the lease start date		1,442, 423.00
15	One month after the 14th installment lease date, the day corresponding to the lease start date		1,442,423.00
16	1 month after the 15th installment lease date corresponds to the date of the lease start date		1,442,423.00
17	One month after the 16th installment lease date corresponds to the date of the lease start date		1,442,423.00
18	1 month after the 17th installment lease date corresponds to the date of the lease start date		1,442,423.00
all			21,864,096.00

Note: The actual start date, lease date and lease amount of each installment shall be subject to the lease start notice/lease change notice sent by Party A.

Among them, the amount of domestic value-added tax is RMB105,514.87, and the amount of lease excluding tax is RMB21,758,581.13; if the value - added tax rate is adjusted, the aforementioned amount will be adjusted accordingly.

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Contract No.: IFELC22DG3QA95-L.01

General terms of Financial Lease Contract (sale-back)

Article 1 Nature and purpose of sale-back lease

1.1 Party A purchases the leased items recorded in this contract from Party B according to the requirements of Party B, and leases them back to Party B for use. Party B leases and uses the leased items to Party A and pays lease to Party A.

Article 2 Definition

2.1 Lease cost: based on the agreed price of the leased object in the ownership transfer agreement and other expenses agreed by both parties.

2.2 Deposit: As a guarantee for the performance of this contract, no interest is calculated. The scope of security deposit guarantee is any lease payable by Party B under this contract (including any value-added tax and other taxes paid by Party A), interest, liquidated damages, purchase price of leased items and all other payables by Party B. Party A has the right to offset any debt owed by Party B to Party A with the security deposit. After Party A uses the security deposit to offset the debt owed by Party B to Party A, Party B shall immediately make up the security deposit to the initial amount agreed in this contract. In the case that the security deposit has not been deducted or Party B has made up the amount after it has been deducted, Party A has the right to directly use the security deposit to offset the payable amount of Party B in the following order: A. The last installment or installments of lease; B. The remaining purchase price. If there is still a surplus of the security deposit after the above-mentioned offset, Party A shall return the remaining security deposit to Party B. Except for the above-mentioned circumstances where Party A unilaterally offsets the security deposit against the payable amount of Party B, before the termination or termination of this contract, Party B has no right to demand that the security deposit be offset against any arrears.

2.3 lease change: If there is any lease adjustment according to this contract, Party A shall notify Party B with the “lease Change Notice”/ “ Payment Notice”, and Party B shall pay the lease according to the notice.

2.4 lease date: The lease date of each installment of lease that Party B shall pay as stipulated in this contract is the date when the lease is actually credited (Party A’s account), and the date recorded in the bank voucher shall prevail. If the lease date of Party B falls on a non-banking business day, the day when the lease of this period of lease is actually credited (to Party A’s account) will be postponed to the next banking day. Party B shall bear all expenses incurred during the lease payment.

2.5 Contract validity period: refers to the date from the effective date of this contract to the date when Party A receives all the lease and payables under this contract paid by Party B and issues the certificate of ownership transfer of the leased object.

2.6 Lease Start Notice: Party A issues a lease start notice to Party B, but Party B’s obligation to pay the lease on time and in full is not a prerequisite for Party A to issue a lease start notice.

2.7 Guarantor: refers to the natural person, legal person or other organization that provides guarantee (including but not limited to guarantee, mortgage, pledge, deposit, etc.) for Party B to perform its obligations under this contract.

2.8 Benchmark interest rate/baseline loan interest rate for the same period: refers to the RMB loan interest rate expressed in annual interest rate and equal to the lease period formulated, adjusted and announced by the People’s Bank of China from time to time.

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Contract No.: IFELC22DG3QA95-L.01

Article 3 Purchase and Delivery of Lease Items

3.1 For the purpose of raising funds, Party B sells to Party A its own leased items agreed in this contract, and guarantees that it enjoys complete and independent ownership and disposal rights of the leased items sold.

3.2 Party B shall provide Party A with various approvals or permits that Party A deems reasonable and necessary.

3.3 Party A shall pay Party B the agreed price of the leased object according to the ownership transfer agreement.

3.4 The ownership of the leased object shall be transferred to Party A at the same time as Party A pays the agreement price for the leased object (if the agreement price for the leased object is paid in installments, the ownership shall be transferred to Party A at the same time as Party A pays the first agreement price for the leased object), and such transfer of ownership shall be deemed as Party B delivering the leased object to Party A in its current state, or as Party B transferring the right to request a third party to return the original object to Party A.

3.5 The above-mentioned transfer of ownership shall be deemed as the delivery of the leased items by Party A to Party B at the same time.

3.6 Based on the sale and lease back, Party A shall not be liable for the quality defects and rights defects of the leased items.Article 4 Ownership and right to use of leased objects

4.1 Ownership: Prior to the transfer of ownership of the leased item to Party B in accordance with the provisions of this contract, Party A shall have complete and independent ownership of the leased item. Therefore:

4.1.1 Party A has the right to attach the logo of Party A as the owner on the leased object, and Party B is obliged to cooperate and assist Party A in attaching the logo of the owner, once Party B is obliged to maintain the logo of the owner within the validity period of the contract.

4.1.2 Party A has the right to keep abreast of the use, damage and maintenance of the leased items, and Party B shall provide cooperation and assistance.

4.1.3 Under the condition that Party B enjoys all the rights under this contract and does not affect the normal use of Party B, Party A may transfer its ownership of the leased object to any third party, or pledge the leased object as a guarantee, and this contract shall be effective Not affected. Party A undertakes not to have adverse effects on Party B’s rights (especially the performance of this contract) due to the transfer/mortgage. Party B shall perform this contract in accordance with the contract, and Party A guarantees that Party B shall enjoy the right to use the leased object and the ownership after the lease period expires in accordance with the contract.

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4.1.4 Party B shall be responsible for the registration of the leased object under this contract (if involved), and ensure that Party A is the sole owner of the leased object, and Party B shall bear the taxes and fees related to the registration.

4.2 Right to use: During the lease period, Party B has the right to use the leased items under this contract, therefore:

4.2.1 Party B has the right to install and use the leased items at the installation site. Without the written consent of Party A, Party B shall not arbitrarily change the location and use environment of the leased objects.

4.2.2 When Party B replaces the parts of the leased object due to normal needs, it shall use the same specification and model parts produced by the original manufacturer of the leased object .. Party B is responsible for all the maintenance and other matters of the leased objects, and Party A shall not be responsible for this.

4.2.3 Party B is obliged to protect the leased object reasonably and appropriately, and is obliged to compensate for the loss or damage of the leased object.

4.2.4 During the period of Party B’s possession of the leased object, if the leased object causes personal and/or property damage to a third party, Party B shall take responsibility.

4.2.5 Unless Party A agrees in writing, Party B shall not sell, transfer, sublet, or sublet the leased items; No mortgage or other security interest shall be established on the leased property; Not allowed to invest in shares with leased objects; Do not engage in any other behavior that infringes on the ownership of Party A.

4.2.6 All actions of Party B shall not damage the leased items, and shall not hinder or change the original purpose and function of the leased items.

4.3 Lease items of ships, aircraft and motor vehicles If the leased items under this contract include ships, aircrafts, motor vehicles and other leased items, Party B undertakes, represents and warrants to Party A as follows:

4.3.1 In view of: (i) According to the relevant laws and regulations, the establishment, change, transfer and extinction of the ownership of leased objects such as ships, aircrafts and motor vehicles are not marked by registration; Lease method, Party B requires Party A to register the leased object under the name of Party B or a third party designated by Party B due to its own operational needs and for the convenience of using the leased object, but Party B confirms that Party A has complete ownership of the leased object; therefore, Party B agrees And promise: Party B shall not raise any objection to Party A’s ownership of the leased object under any circumstances.

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Contract No.: IFELC22DG3QA95-L-01

4.3.2 If Party A bears the corresponding obligations and responsibilities due to failure to register the leased object, Party A has the right to seek recourse against Party B, and Party B shall assume such responsibilities and obligations; if additional registration is required, then Any taxes and fees involved, such as value-added tax, shall be borne and paid by Party B.

4.3.3 During the lease period, Party B shall keep the leased items to meet the various inspection standards announced by the leased items management agency (including but not limited to the requirements for periodic inspection, registration, modification, scrapping, etc. of the leased items) The object shall be inspected at the time of inspection, and the inspection certificate shall be obtained. Within five working days after obtaining the inspection certificate, the certificate shall be submitted to Party A or the staff for review. If the leased object does not meet the requirements of the leased object management authority during the lease period, Party B shall compensate Party A for the losses suffered thereby.

4.3.4 Without the written consent of Party A, Party B shall not modify or add or fix accessories to the leased items without authorization.

4.3.5 Party B violates laws and regulations promulgated by various levels of legislation or government agencies, local government regulations, management norms and other normative documents (including but not limited to laws and regulations on tort liability, road traffic safety, etc.) in the process of occupying and using the leased object. Laws and regulations, etc.), administrative, civil, criminal and other responsibilities and all losses incurred shall be borne by Party B, and Party A shall not bear any responsibility. If Party A suffers any losses as a result, Party A has the right to claim against Party B, and Party B shall immediately and fully compensate Party A for the aforementioned losses.

4.3.6 During the lease period, Party B shall exercise reasonable and prudent obligations to use and manage the leased items. Party B shall not hand over the leased items to personnel without permission and relevant qualifications and abilities for use. In the process of using the leased item, if any damage is caused to the driver, passengers and any property carried by them, third parties and any property carried by them due to any reason, Party B shall immediately compensate through its insurance (such as compulsory insurance and/or commercial insurance) claims process. If Party B does not have insurance or the insurance company delays, refuses to compensate, or the compensation amount is insufficient, Party B shall bear relevant responsibilities. If Party A compensates for any damages caused by any administrative, judicial or other measures, Party A has the right to recover the compensation amount from Party B, and Party B shall bear such responsibilities and obligations. Party B agrees to immediately pay Party A in full according to Party A’s requirements and pay Party A any additional expenses incurred by Party A due to the recovery.

4.3.7 When an insured accident occurs to the leased property, Party B shall:

(1) Notify Party A and the insurance company immediately and without delay, and provide all necessary preparations for the claim;

(2) Ensure that the drivers of Party B actively participate in the insured accident investigation;

(3) If the driver of Party B escapes, Party B shall immediately take relevant measures to find the driver and dispatch key management personnel of Party B to participate in the investigation and resolution of the insured accident. Party B shall be responsible for the loss and compensation caused by the escape of the driver of Party B or failure to cooperate with the investigation and settlement of the insured accident.

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Contract No.: IFELC22DG3QA95-L.01

Article 5 Loss or damage of leased items

5.1 Party B hereby confirms that the risks of loss and damage of the leased items during the effective period of this contract (including but not limited to any reason that causes the leased items to lose all or part of their functions, loss, stolen, robbed, expropriated by the government, according to the government scrapped according to regulations, and the damage that Party A deems irreparable, etc.), shall be borne by Party B.

5.2 During the effective period of the wooden contract, if the leased object is lost or damaged, Party B shall take effective measures in time to prevent the loss from expanding, and must notify Party A immediately. Party A may choose one or more of the following methods to deal with, and Party B shall bear all the expenses.

(1) Restoring or repairing the leased item to a fully normal state of use;

(2) Replacement of parts, accessories or items of the same model and performance as the leased item.

In the case of the first two items, this contract shall continue to be implemented, and Party B shall pay the lease in full and on time and other obligations under this contract shall remain unchanged.

5.3 In the case of item 5.2, the ownership of the restored/repaired leased items still belongs to Party A, and all related expenses, costs, losses, etc. incurred thereby shall be borne by Party B.

5.4 When the leased item is lost or damaged beyond repair, Party B shall pay Party A all due and undue lease under this contract (including any value-added tax paid by Party A, etc.) within the time notified by Party A. taxes), liquidated damages, other payables, and all expenses incurred by Party A for managing the leased objects, etc.

5.5 After Party B pays all the payables stipulated in 5.4 to Party A, Party A shall transfer the ownership of the leased object (in its curlease state) and the rights to the third party (if any) to Party B.

Article 6 Insurance of the Leased Items During the Lease Period

6.1 Please refer to the agreement in the contract elements table for the agreement on the insurance of the leased items under this contract.

6.2 In the event of an insurance accident, Party B shall notify Party A and the insurance company within 24 hours.

6.3. Party A has the right to handle the insurance compensation obtained according to one of the following principles:

6.3.1 If the insurance compensation is not enough to pay for the expenses required in Clause 5.2, it shall be borne by Party B.

6.3.2 As paragraph 5.4 and other amounts payable by Party B to Party A. Party B shall not be affected by any claims made by Party A to the insurance company and the results thereof, and shall pay Party A the lease under this contract (including any value-added tax paid by Party A) and other payables. If the insurance indemnity is not enough to pay Clause 5.4 and other amounts payable by Party B to Party A, Party B shall make up.

6.4 After handling in accordance with Clause 6.3, if there is still insurance compensation remaining, Party A shall pay Party B to Party B.

6.5. Party B is responsible for providing the claim documents. If Party B fails to provide or refuses to provide the required documents for some reason, Party A can provide them. If the claim is unsuccessful due to Party B’s negligence in claiming insurance, Party B shall compensate Party A for all losses, including paying Party A all due and undue lease under this contract (including any value-added tax paid by Party A, etc. fee), liquidated damages and all expenses (if any) incurred for the management of the leased property, etc.

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Contract No.: IFELC22DG3QA95-L-0 1

6.6 Whether the claim procedure to the insurance company is completed, whether the insurance company compensates, and the amount of compensation will not affect Party B’s performance of this contract, including timely and full payment of lease (including any value-added tax and other taxes paid by Party A) etc. all obligations.

6.7 If the leased item is damaged beyond the scope of insurance, Party B shall restore the leased item to its original state at its own expense, and Party B’s obligation to pay the lease on time and in full remains unchanged. If it cannot be recovered, it shall be executed with reference to Article 5 of this contract.

Article 7 Party B’s Commitments and Guarantees

7.1 Party B undertakes that it has obtained all necessary authorizations or approvals for signing and performing this contract, and that signing and performing this contract does not violate the provisions of Party B’s articles of association, internal normative documents and relevant laws and regulations, and that the obligations under other contracts signed with Party B are all No conflict.

7.2 Party B shall abide by the relevant national industry laws, regulations, policies and systems, and operate legally, including but not limited to, the business it engages in complies with the scope listed in Party B’s business license and relevant industry qualification documents, complies with national laws, regulations and rules, and obtains legal documents. Party B shall not engage in acts or businesses that are not permitted by laws, regulations, rules, policies and systems. Party B shall handle all kinds of licenses and licenses’ annual review and annual inspection in accordance with the regulations.

Article 8 Rights protection matters and remedies

8.1 If at any time after the signing of this contract,

8.1.1 Party B fails to pay Party A any period of lease and/or other payables under this contract on time and in full.

8.1.2 Party B has not performed any other obligations or responsibilities under this contract.

8.1.3 The second party sells, transfers, leases or otherwise deals with its business or assets in an abnormal and unfair manner, or all or any substantial part of the second party’s property or rights is confiscated, seized, requisitioned, sealed up, enforced or deprived, which is sufficient to affect the second party’s ability to perform this contract.

8.1.4 Party B undergoes changes such as division, merger, merger, acquisition, or ceases to operate any major part of its business, or Party B files or is sued for bankruptcy (including bankruptcy restructuring and pre restructuring), or goes out of business, or relevant departments make approval or decisions regarding the above matters, the validity of this contract shall not be affected. But if Party A believes that the occurrence of the above situation affects Party B’s ability to perform this contract.

8.1.5 Without the written consent of Party A, Party B sells significant assets and/or prepays other debts and/or waives and/or reduces other debts and/or provides any form of guarantee to third parties, which is sufficient to affect Party B’s ability to perform this contract.

8.1.6 Party B or its personnel in key positions have been or will be subject to administrative or judicial punishment (including but not limited to fines, suspension of business, rectification, compulsory measures, criminal penalties, etc.) or cannot be contacted within a reasonable time, which is enough to affect Party B’s ability to perform this contract.

8.1.7 Due to the judgments and rulings of any administrative agency and judicial agency, it is determined that the ownership of the leased object is not owned by Party A.

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Contract No.: IFELC22DG3QA95-L-01

8.1.8 In all contracts and agreements signed or to be signed between Party A and Party B and/or with other parties (including but not limited to financial lease contracts, after-sale lease contracts, sales contracts, financing agreements, etc.), partial or total breach of the contract, or other circumstances affecting Party B’s performance of its obligations under this contract.

8.1.9 Party B violates other agreements under this contract.

8.1.10 Party B or the guarantor is in breach of contract under any guarantee (including but not limited to guarantee, mortgage, pledge, deposit, etc.) issued to or signed with Party A.

8.1.11 Any material adverse change that affects the performance of guarantee obligations of any guarantor, including but not limited to the following situations:

(1) The guarantor sells, transfers, leases or otherwise deals with its business or assets abnormally and in violation of the principle of fairness, or all or any substantial part of the guarantor’s property or rights is confiscated, seized, requisitioned, seized, or enforced or be deprived.

(2) The guarantor undergoes changes such as division, merger, merger, acquisition, etc., or the guarantor ceases to operate any major part of its business, or the guarantor has or will undergo a change of actual controller, or the guarantor has filed or been filed a lawsuit or bankruptcy (including bankruptcy reorganization and pre-reorganization), bankruptcy, etc.

(3) The guarantor sells major assets and/or pays off other debts in advance and/or waives and/or reduces other claims and/or provides any form of guarantee for a third party.

(4) The guarantor or the key personnel of the guarantor have been or will be punished by administrative agencies, judicial agencies or stock exchanges (including but not limited to fines, suspension of business, rectification, compulsory measures, criminal penalties, etc.), violation of laws Statutes, party discipline violations, criminal detention, assistance in criminal investigations, immigration, incapacity, death, declaration of death, disappearance, declaration of disappearance, gambling, drug use, or inability to be contacted within a reasonable time.

(5) The guarantor has a negative impact on its financing and operation due to the high asset-liability ratio, or a sharp drop in stock price, delisting or delisting risk as a guarantor of a listed company.

(6) The guarantor has incurred large debts, fines or other payables due to external guarantees, major safety/environmental protection accidents, violations of laws and regulations, etc.

(7) All contracts and agreements that the guarantor has signed or will sign with Party A and/or with other parties (including but not limited to financial lease contracts, sale-back lease contracts, guarantee contracts, sales contracts, financing agreements etc.), any, partial or total breach of the contract, or other circumstances affecting the Guarantor’s ability to perform the contract.

8.1.12 Any mortgaged property/pledged property provided by the guarantor is confiscated, impounded, confiscated, requisitioned, sealed up, frozen, enforced, deprived, transferred, repeatedly mortgaged/pledged, Replacement of important parts, damage, loss, depreciation of value or other changes unfavorable to Party A.

8.2 Regarding the matters stipulated in Clause 8.1, Party A has the right to take one or more of the following measures:

8.2.1 Accelerate the due date, requiring Party B to immediately pay off all due and undue payable and unpaid lease (including any value-added tax and other taxes paid by Party A) and other payables under this contract, and pay the corresponding Liquidated damages, liquidated damages shall be calculated according to the provisions of this contract. In the event that Party B or the guarantor fails to pay all the accelerated due payments as required by Party A, Party A has the right to take back the leased item or to be paid prefeleaseially with the proceeds from the auction or sale of the leased item.

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Contract No .: IFELC22DG3QA95-L.01

8.2.2 Terminate this contract, take back and dispose of the leased items, and require Party B to compensate Party A for the losses suffered.

8.2.3 Under the circumstances of clauses 8.2.1 and 8.2.2, Party A has the right to dispose of the leased item by taking back and disposing of the leased item

The proceeds obtained shall be used to offset the due and unpaid lease (including any value-added tax and other taxes and fees paid by Party A) and all other payables and expenses payable by Party B to Party A under this contract; The money (if any) will be refunded to Party B, and Party A has the right to continue to pursue compensation from Party B and the guarantor for the part that cannot be compensated. When Party A disposes of the leased items, Party B shall unconditionally bear the expenses (including additional taxes to be paid, eliminate obstacles, etc.) and return the leased items (in good condition) to Party A as required by Party A, and handle the process to Party A as required by Party A. Otherwise, the necessary expenses and costs incurred by Party A to take back the leased items by itself shall be borne by Party B, and Party A has the right to deduct them from the proceeds from disposing of the leased items. During the process of disposing of the leased items, Party A has the right to hire a qualified intermediary agency to evaluate the residual value of the leased items.

8.2.4 Recover from Party B the lawyer’s fees and other reasonable expenses incurred by Party A in exercising any rights in respect of Party B’s breach of contract

Including the value-added tax and other taxes and fees of equipment, disposal costs, etc. At the same time, Party B shall also cooperate with relevant work and provide relevant documents.

8.2.5 The guarantor is required to perform joint and several guarantee responsibilities for the above obligations and dispose of the collateral and pledge (if any).

8.3 When Party A adopts the disposal method specified in the preceding paragraph, it does not exempt Party B from the obligations stipulated in this contract.

8.4 If the measures mentioned above and the funds received by Party A under this contract are insufficient to repay all the debts owed by Party B to Party A, Party B shall repay the debts in accordance with the method and order specified by Party A.

8.5 If Party A fails to perform its obligations under this contract, including when Party B performs its obligations and responsibilities in accordance with this contract, it interferes with or hinders Party B’s use of the leased items as agreed, and Party A shall bear the consequences caused to Party B. direct loss.

8.6 Party B irrevocably agrees and authorizes Party A to report to any information database (including but not limited to the basic financial credit information database of the People’s Bank of China, Zhongdeng. ) to inquire and submit any information of Party B, and has the right to print, save and use the inquired credit information of Party B, and to share relevant information (including but not limited to the information generated after both parties have made adjustments such as extensions and changes to this contract) , and negative information arising from Party B’s violation of this contract) submitted to the above database, Party B has no objection to this, and does not require Party A to notify or obtain any authorization documents from Party B. If Party B believes that there are errors or omissions in the information provided by Party A, it has the right to raise objections and request corrections to the credit reporting agency or Party A.

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Article 9 Liquidated damages

9.1 When Party B fails to pay the lease due and payable according to this contract (including any value-added tax and other taxes paid by Party A) and other payments, or fails to return any expenses advanced by Party A at the request of Party B within the time limit, during the delay period, Party B shall pay Party A the liquidated damages for the delayed payment.

9.2 Liquidated damages are calculated as 0.05% of the delayed payment amount for every more than one day. The calculation method is: amount of delayed payment X0. 05% X number of days of delayed payment.

Article 10 Disposal of leased objects after the lease period expires

10.1 Party B shall pay Party A the purchase price on the last lease date.

10.2 Party A agrees that upon the expiration of the lease period, Party B shall fully perform the obligations stipulated in this contract, including all leases (including any value-added tax and other taxes and fees paid by Party A) and the increased value-added due to circumstances stipulated in this contract (if any) After the tax and other taxes, interest and liquidated damages are paid in full and the purchase price of the leased object is paid to Party A, the ownership of the leased object will be transferred to Party B. At that time, Party A will issue to Party B a certificate of ownership transfer of the leased object.

Article 11 information disclosure

11.1 Party B shall provide Party A with the balance sheet and attached schedule, income statement and attached sheet, and cash flow statement reflecting the actual production and operation conditions at the end of each year.

11.2 When Party A visits Party B’s production and operation site to inspect the leased items, Party B shall cooperate and provide Party A with necessary documents, materials, and business data.

11. 3Changes in Party B’s name, judicial service address, legal representative, etc. will not affect the execution of this contract, but Party B shall notify Party A in writing of the change within 10 days after the change occurs.

11.4 In addition to the provisions of the first three paragraphs, Party B agrees to provide Party A with other materials and written explanations that reflect the true operation and management status of Party B as required by Party A. The second party agrees that any third party disclosed or not disclosed under this contract shall provide additional compensation for the interests of the first party for this financing.

Article 12 Resolution of Disputes and Application of Law

12.1 All disputes related to this contract shall first be resolved through friendly consultation between Party A and Party B. If negotiation fails to resolve the dispute, both parties agree to file a lawsuit with the court with jurisdiction in the place where Party A is located (Pudong New Area, Shanghai) or the place where the contract is signed (Binhai New Area, Tianjin). All expenses incurred in the litigation (including court fees, lawyer fees, execution fees, property preservation guarantee fees, and other related expenses) shall be borne by the losing party.

12.2 During the litigation process, except for the part of the ongoing litigation that is disputed by the relevant parties to the contract, other parts of the contract shall continue to be performed.

12.3 This contract shall be governed by the laws of the People’s Republic of China.

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Contract No.: IFELC22DG3QA95-L.01

Article 13 Other Terms

13.1 Unless otherwise agreed, the lease agreed under this contract shall be paid to Party A’s receiving account agreed in this contract by bank wire transfer. The lease under this contract includes value-added tax and other taxes (if applicable).

13.2 Once the handling fee/service fee (if any) under this contract is collected, it will be deemed earned by Party A and will not be refunded.

13.3 During the validity period of the contract, if there are changes in laws and policies of China, or changes in taxes and tax rates related to the export country of leased items by the government of China, or other factors, resulting in changes in the exchange based on this contract, additional taxes and/or fees will be borne by Party B.

13.4 Party A issues corresponding type of bills to Party B according to national taxation laws and regulations.

13.5 Party A has the right to transfer or pledge all or part of its rights and interests under this contract to the relevant third party, but Party A shall ensure that Party B’s rights and interests under this contract will not be affected by the transfer of contract rights.

13.6 This contract is signed by both parties (including in electronic form) and becomes effective after the effective conditions stipulated in this contract are met. If one month expires from the date of signing this contract, if all the conditions for becoming effective as stipulated in this contract are not met, then Party A has the right to decide whether to terminate this contract. If Party A decides to rescind this contract, it will not have any responsibilities and obligations to Party A due to the rescission of the contract, except that the effective conditions stipulated in this contract are not fully satisfied due to Party A’s reasons. One month from the effective date of the ownership transfer agreement, if the payment preconditions stipulated in the ownership transfer agreement are not fully satisfied, then Party A has the right to terminate this contract, the ownership transfer agreement and related agreements.

13.7 All notices required by this contract shall be in written form, delivered by hand or mailed to the judicial service address stipulated in this contract, or sent by telex, fax, telegram, email and other electronic delivery methods stipulated in this contract. is sufficient notice. If it is delivered by hand, it will be deemed delivered on the day of delivery; if it is sent by mail, it will be deemed delivered three (3) days after posting; if it is sent by electronic delivery, it will be deemed delivered when it reaches the system where the electronic delivery method is located. Da. If a party’s judicial service address and/or electronic service method changes, it shall notify the other party in a timely manner. If the judicial service address is still specified in the contract and the electronic delivery method is still notified, it is still deemed to have been delivered.

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13.8 Both parties agree that once any disputes arising from this contract go to court, the judicial service address listed in this contract will be used as their respective judicial service addresses for receiving litigation documents and other documents. Electronic methods such as mailboxes will be used as the electronic delivery method for receiving litigation documents and other documents, and any delivery method is valid delivery. The aforementioned judicial service address and electronic service method are applicable to all litigation stages including first instance, second instance, retrial, execution and supervision procedures. The agreement on the judicial service address and electronic service method in this contract has the same effect as the “Confirmation Letter of Service Address” issued by the People’s Court. If any party’s judicial service address or electronic service method is changed, the party shall perform the notification obligation and notify the court receiving the lawsuit and other relevant parties of the changed judicial service address or electronic service method in writing. If: (1) the judicial service address or electronic service method provided is inaccurate and untrue; (2) the judicial service address or electronic service method is changed and other relevant parties and the court receiving the lawsuit are not notified in writing in a timely manner; or (3) If the person to be served or the designated receiver refuses to sign for receipt, resulting in the inability to actually deliver the litigation documents or not deliver them in time, the court receiving the lawsuit shall mail or directly deliver the litigation documents to the agreed judicial delivery address, or send to The delivery of the litigation documents by the agreed electronic delivery method shall be deemed as effective delivery. If the delivery is by mail, the date of return indicated on the mailing receipt shall be deemed as the delivery date. If the delivery is by direct delivery, the The date on which the expert records the situation on the service receipt and leaves the litigation documents at the agreed judicial service address is deemed to be the date of service. The date is deemed to be the date of delivery. If either party submits a separate judicial service address confirmation letter to the court receiving the lawsuit after the dispute enters the litigation procedure, and if the content is inconsistent with the relevant content of this contract, the one submitted to the court receiving the lawsuit shall prevail.

13.9 This contract constitutes the entire rights and obligations of both parties, and replaces any previous commitments, agreements, or statements related to the transactions involved in this contract, whether oral or written, and the rights of both parties stipulated in this contract can only be Express waiver or change in writing. Party A’s failure or delay in exercising the rights under this contract and allowing Party B to delay payment shall not constitute Party A’s waiver or change of its rights, nor will it affect, reduce, limit or impair Party A’s exercise of such rights.

13.10 Party A and Party B hereby declare and guarantee that all the information and statements provided by each party are objective, true and not misleading.

13.11 Party A holds two copies of this contract, and Party B holds one copy. If notarization is required, the notary office shall keep one copy. If it is necessary for mortgage registration, the registration office shall keep the corresponding number of copies. Each contract has the same legal validity.

(no text below)

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EX-4.22

Exhibit 4.22

Financial Lease Contract

Contract number: RHZL-2022-101-0690-HYXNY
Contract signing date: November 4, 2022

Contract signing place: Pudong New Area, Shanghai

Lessor: China Power Investment Ronghe Financial Leasing Co., Ltd.

Unified social credit code: 913100000885148225

Address: 5th Floor, Building 1, Xinyuan Plaza, No. 268, Zhongshan South Road, Huangpu District, Shanghai

Zip code: 200010

Legal representative or authorized representative: Cai Ning

Tel: 021-80161002

Lessee: Sunrise (Guizhou) New Energy Materials Co., Ltd.

Unified social credit code: 91522320MA7BMUXCX0

Contact address: Group 2, Heying Village, Lutun Town, Yilong New District, Xingyi City, Qianxinan Buyi and Miao Autonomous Prefecture, Guizhou Province

Zip code: 562400

Legal representative: Du Huiyu

Tel: 010-82967728

E-mail address: 1340044281@qq.com

Core Elements of a Financial Lease Contract (sale and leaseback)
In view of the fact that the lessor and the lessee (collectively referred to as “the parties” ) carry out financial leasing in the mode of sale and leaseback; all parties agree to sign this “financial lease contract (sale and leaseback)” (hereinafter referred to “as this contract”, issued by It consists of core elements, general terms and appendices.
lease objects	See Annex 1 “List of Leased Items”
lease principal	RMB 40,000,000.00
bill payment amount	【/】Year【/】Acceptance draft
lease rate (excluding tax rate)	One-year loan market quotation rate [plus] (fill in “plus” or “minus” ) [155] basis points (1 basis point = 0.01 %)
payment Arrangements	See Annex 2: “Payment Estimated Form” and the “Payment Change Schedule” issued by the lessor
lease fee adjustment method	to adopt the General Terms and Conditions 6.6
term of lease	Starting date		The date on which the lessor actually pays the first lease principal
	term of lease		【36】months, the lease term shall be calculated from the lease commencement date.
deposit	RMB 0			Collection method	/
commission	2. 0%/ year of lease principal (The commission does not include tax, and the tax rate is the same as the lease rate tax rate)			Collection method	A5. The commission for the first year will be collected within 10 working days after the loan is released (based on the actual loan amount); the commission for 1 year will be charged on the first lease fee due date 2 years after the lease start date, and the last payment will be collected 1-year commission (based on the remaining principal)
notary fees	RMB 0			Collection method	/
other fee	RMB 0			Collection method	/
lessor bank account	Account Name: China Power Investment Ronghe Financial Leasing Co., Ltd. Bank of deposit: CCB Shanghai No. 1 Sub-branch Account number: 3100 1501 2000 5931 9319			Special account for premium advance collection	Account Name: China Power Investment Ronghe Financial Leasing Co., Ltd. Opening bank: CCB Shanghai No. 1 Sub-branch Account number: 31001501200050021310
lessee bank account	Account name: Sunrise (Guizhou) New Energy Materials Co., Ltd. Bank of deposit: Industrial and Commercial Bank of China Xingyi Dingxiao Sub- branch- Account number: 2409 0907 1920 0147 393
nominal price	Total price and tax: RMB 10,000			Collection method	Pay on the due date of the last installment of this contract or the due date of the contract in advance
necessary insurance.	V Property All Risks;  V Machine Damage Insurance;   ☐Public Liability Insurance;  ☐Construction (Installation) Engineering Insurance;   ☐Other •
	v The lessee to be responsible ☐The lessor to be responsible	Advance premium		Collection method	The lessee purchases insurance that meets the requirements of the lessor for the leased property, and the beneficiary is the lessor
				Amount received in advance	/
use of the lease	Sunrise New Energy Lithium Battery Anode Production Line Project in Qianxinan Buyi and Miao Autonomous Prefecture, Guizhou Province (hereinafter referred to as “the project”)

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	Project type:  ☐Export power generation side project;  v Non-power generation side project
Dispute Resolution	☐ Arbitration v Litigation ☐ Execution of notarized debt documents
Special terms	1. Prerequisites for the first payment (meet the following conditions, the lessor shall pay no more than RMB 20,000,000.00 (capital: twenty million rounds)): (1) Hu Haiping (a natural person) signed a guarantee contract to provide an unlimited joint liability guarantee to the lessor; (2) Zhuhai (Zibo) Investment Co., Ltd. provides unlimited joint liability guarantee to the lessor; (3) Zhuhai (Zibo) Investment Co., Ltd. issued a [Resolution of the Shareholders’ Meeting], and the resolution [100% shareholders] voted to provide the lessor with an [Unlimited Joint Liability Guarantee]; (4) The lessee mortgages the leased equipment corresponding to the project to the lessor, and handles mortgage registration; (5)  Sunrise (Guizhou) New Energy Materials Co., Ltd. issued a [Board resolution], and the resolution [passed by all directors] agreed to provide the lessor with [lease mortgage] and agreed to this financing; (6) The lessee purchases insurance that meets the requirements of the lessor for the leased property, and the beneficiary is the lessor; (7) The lessee issues a letter of commitment on the use of funds approved by the lessor for this financing; (8) The project manager and risk control manager will conduct joint inspections to review and confirm the overall construction progress and financial data of the project, and form an inspection report. (9)  Du Huiyu provided proof of debt counter-guarantee against Hu Haiping for this financing; 2. Payment conditions for progress payment (after the lessor completes the payment of RMB 20,000,000.00 (capital: two million yuan) and meets the following conditions, the total amount paid by the lessor shall not exceed RMB 40,000,000.00 (Capitalization: four million rounds)): (1) Sunrise (Guizhou) New Energy Materials Co., Ltd. issued the [Resolution of the Shareholders’ Meeting], and the resolution [passed by more than two-thirds of all shareholders, must include Guizhou New Kinetic Energy Industry Development Fund Partnership (Limited Partnership)] , agreed to provide the lessor with [Leased Property Mortgage], and agreed to this financing; (2)  Aiming at the construction progress and production volume of the graphitization process of this project, the project manager and the risk control manager will conduct a joint inspection and form an inspection report; 3. Payment terms for each payment: (1) Receive the Lease Receipt Certificate and the Lease List Schedule signed by the lessee; (2) A copy of the invoice of the leased property stamped with the official seal of the lessee corresponding to the receipt of the financing payment; (3) Receive the “Payment Notice” stamped by the lessee. After completing the first payment , within 30 working days, the lessee shall provide the resolution of the company’s shareholders’ meeting (Sunrise (Guizhou) New Energy Materials Co., Ltd. issued [the resolution of the shareholders’ meeting], and the resolution [by one-third of all shareholders] More than two shareholders voted, must include Guizhou Province New Growth Energy Industry Development Fund Partnership (Limited Partnership)], agreed to provide the lessor with [lease mortgage], and agreed to this financing), otherwise the lessee needs to make early repayment.
appendix	v Appendix 1 “List of Leased Items”; v Appendix 2 “Payment Estimation Table”; v Appendix 3 “Transfer Agreement of the Ownership of Leased Objects”; v Appendix 4 “Certificate of Transfer of Ownership of the Leasehold”; ☐ Others

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General Terms and Conditions of Financial Lease Contracts (Sale and Leaseback)

After friendly negotiation, the lessor and the lessee have entered into the general clauses in this “Sale-Leaseback Contract” (hereinafter referred to as ” this Contract”) according to the following provisions in accordance with the “Civil Code of the People’s Republic of China” and other relevant provisions, which are consistent with the core elements of this contract together with the appendices constitute this contract. If the core elements are inconsistent with the general terms, the core elements shall prevail.

Article 1 Definitions and Interpretation Clauses, unless otherwise stated in this contract, the relevant terms are defined as follows:

1.1 Lease: Refers to the movable or immovable property purchased by the lessor from the lessee and leased to the lessee in accordance with this contract. For details, please refer to the “List of Lease Items” attached to this contract and the “Lease Receipt” issued by the lessee. certificate”;

1.2 Leaseback after sale: It means that the lessor, according to the request of the lessee, signs the “Lease Ownership Transfer Agreement” with the lessee, purchases the lease with full ownership from the lessee, and then leases it to the lessee for use by the lessor, a financial lease method in which the lessee pays lease fee to the lessor;

1.3 Lease Start Date: refers to the starting date when the lessor pays the lease price. If the lessor pays the lease price in one lump sum, the lease commencement date is the date on which the lessor pays the lease price; if the lessor pays the lease price in installments, the lease commencement date is the date on which the lessor pays the first lease price. If the lease price is paid in installments, the lessor shall prepare the “Payment Change Schedule” respectively, and the lessee shall pay the lease fee to the lessor according to the corresponding “Payment Change Schedule”;

1.4 Lease term: refers to the period during which the lessee has the right to occupy and use the leased property in accordance with the provisions of this contract;

1.5 Contract term: refers to the period from the effective date of this contract to the date when the rights and obligations under this contract are fully fulfilled;

1.6 Lease principal: The lease principal of this contract is equal to the lease transfer price agreed between the lessor and the lessee;

1.7 Lease annual interest rate: when the contract is signed, the two parties agree to implement the interest rate in the core elements. The lease annual interest rate is one of the elements of lease fee calculation. If there is no special agreement, the lease annual interest rate of this contract is the tax-free interest rate;

1.8 lease fee: Refers to the consideration that the lessee should pay to the lessor determined according to the lease fee calculation method in the general clauses, including the lease principal and interest, based on the lease annual interest rate, lease principal, lease term and other conditions agreed in the core elements of the contract;

1.9 Lease deposit: refers to the amount paid by the lessee to the lessor to guarantee the performance of the obligations under this contract;

1.10 Insurance claim payment: refers to the insurance payment paid by the insurer under any insurance item;

1.11 Working days: refers to the date when commercial banks in mainland China handle general corporate business, including the date when the Chinese government temporarily stipulates that commercial banks should handle general corporate business;

1.12 Payment date: refers to the date on which the lessee shall pay the lease fee to the lessor in accordance with the stipulations of this contract. If the payment date falls on a non-working day, the payment date shall be brought forward to the nearest working day;

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1.13 Maturity date: refers to the date when the amount payable in the curlease fee period should actually reach the lessor or the bank account designated by the lessor;

1.14 Retained purchase price: the lessee pays the lessor the purchase price of the leased item to the lessor on the expiration date of the last lease fee period of this contract or the contract expires earlier;

1.15 Other payables: refers to the amount agreed in the contract that the lessee should pay to the lessor other than the lease fee, including but not limited to commissions, overdue interest (liquidated damages), damages, liquidated damages, lessor Costs incurred in controlling and disposing of the leased property, retained purchase price, legal fees paid by the lessor to realize the creditor’s rights, litigation/arbitration fees, property preservation fees, property preservation guarantee fees, notarization fees, evaluation/appraisal/auction fees, execution fees, Publicity fees, travel expenses, etc.;

1.16 Main contract: core elements, general clauses, appendices and related agreements of the financial lease contract;

1.17 Laws of the People’s Republic of China/Chinese laws: refers to the laws, administrative regulations, departmental rules, local regulations and other normative documents of general applicability in mainland China (excluding Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan);

1.18 Fees: including taxes, charges of various natures, charges and interest, fines, etc. of various natures curlease feely or in the future to be levied, withheld, and reviewed by taxation or other management agencies;

1.19 Actual controller: Refers to the legal person or natural person who can actually control the behavior of the company through equity relationship, investment relationship, agreement or other arrangements.

Note: Unless otherwise stipulated in this contract, the words lessor and lessee in this contract include the successor of their respective rights and obligations and the assignee permitted by this contract.

Article 2 Representations and Warranties

2.1 Lessor’s representations and warranties

2.1.1 The lessor is a financial leasing company registered and established in accordance with Chinese laws and regulations, has an independent legal person status and engages in leasing business As the subject of this contract, there is no defect in its operating qualifications.

2.1.2 The lessor guarantees that it has obtained the internal authorization corresponding to the signing and performance of this contract.

2.1.3 The lessor has carefully read the core elements, general clauses and all clauses in the appendix of this contract, and has fully understood the meaning of each clause. Signing this contract is an expression of its true intention.

2.1.4 The lessor warrants that all statements made to the lessee are accurate and not misleading.

2.1.5 If there are multiple lessors in this contract (referred to as the first lessor, the second lessor, etc. in turn), they are collectively referred to as lessors under this contract. If there is no specific agreement or explanation, the lessor mentioned in this contract shall include all lessors at the same time, and all parties agree that the first lessor shall exercise all the rights of the lessor on its behalf.

2.2 Lessee’s representations and warranties

2.2.1 The lessee is an enterprise established in accordance with Chinese law, and has independent legal person status and the capacity for civil conduct and civil liability commensurate with the scope of business listed in its business license. As the subject of this contract, there is no defect.

2.2.2 The lessee guarantees that it has obtained all necessary approval procedures and corresponding internal authorizations for signing and performing this contract; and guarantees the authenticity, legality and completeness of all documents related to this contract provided to the lessor Responsible.

2.2.3 Unless Chinese laws and regulations and normative documents have clear restrictions on the lessee’s information disclosure, the lessee promises to provide the lessee’s accounting statements and other information required by the lessor on a regular basis (on a monthly or quarterly basis) in accordance with the lessor’s requirements. The necessary information for various documents, including but not limited to the balance sheet, income statement, cash flow statement and its notes; and guarantee that the disclosure of the accounting statements provided to the lessor is true and sufficient, and there are no unidentified Contingent events included in the accounting statements or their notes that have a material adverse effect on the lessee’s financial position, including but not limited to guarantees and litigation.

2.2.4 The lessee has carefully read the core elements of this contract, the general terms and all the clauses in the appendix, fully understood the meaning of each clause, and signed this contract as an expression of its true meaning. Lessee warrants that all representations made to Lessor are accurate and not misleading. The lessee confirms that he has been aware of and has no objection to the terms of the lessor’s exemption or limitation of its own liability in this contract, and the lessor has taken reasonable measures to draw the lessee’s attention and explain the terms.

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2.2.5 If there are multiple lessees in this contract (referred to as the first lessee, the second lessee, etc. in turn), they are collectively referred to as lessees under this contract. Lessee shall include all lessees at the same time. Each lessee shall be jointly and severally liable for all the lessee’s obligations under this contract, and the lessor has the right to require any or all of the lessees to perform all their obligations under this contract. At the same time, the lessor shall not be liable for any agreement, dispute or dispute between the lessees. If the financial lease legal relationship between any lessee and the lessor is invalid or invalid due to any reason, the lessee irrevocably promises to assume joint and several liability guarantee for all obligations under this contract, and the lessor has the right to demand that the lessee Pay all payments under this contract (including but not limited to the principal, interest, overdue liquidated damages, commissions, liquidated damages, damages, etc.).

2.2.6 The lessee shall not use the funds under this contract for non-main business investment such as securities investment and real estate investment . The lessee promises that the use of funds under this contract does not involve hidden debts of local governments and laws, regulations, regulatory documents or Fields and industries where investment is prohibited or restricted according to the requirements of the competent authority.

Article 3 Leases, Lease Defects and Claims

3.1 The financial leasing method under this contract is sale and leaseback. For details of the leased items, please refer to the “List of Leased Items” in Annex I of this contract.

3.2 The lessee shall provide the lessor with the approval documents of the lessee and its competent authority for the sale and leaseback business, and the ownership certificate that the ownership of the leased property belongs to the lessee (including but not limited to the purchase contract of the leased property, certificate of conformity) to the lessor before signing this contract. , invoice, payment voucher, Imported equipment customs declaration form, tax payment (tax exemption) certificate (if any), etc.). The lessee shall make full compensation for losses caused to the lessor due to defects in the ownership of the leased property.

3.3 Since the leased item under this contract is transferred from the lessee to the lessor, the lessor shall not be liable for any defects of the leased item.

3.4 The lessee shall not refuse, delay or underpay the lease fee on the grounds of defect, repair or replacement, maintenance, etc. of the leased property.

3.5 During the lease term, the lessor regards the lessor as the buyer to enjoy the quality of the leased item and other related rights, including but not limited to the right to check and accept the quality of the leased item, and the right to require the original seller or manufacturer to provide repair, maintenance, and replacement services. Rights, claims, etc. are transferred to the lessee. Regarding the quality of the leased item, the lessee shall directly claim against the original seller or manufacturer or claim any rights and interests under the transaction contract, and all expenses and all legal consequences arising therefrom shall be borne by the lessee.

3.6 Under this contract, the original seller or manufacturer of the leased item is responsible for the quality assurance of the leased item. The lessor shall not bear any responsibility if the leased item cannot achieve the expected effect in actual use. If the leased item has quality defects during the installation, commissioning, operation and quality assurance period, the lessee will still file a claim against the original seller or manufacturer, and the lessee is obliged to take effective remedial measures to ensure that the lessor is responsible for the leased item. Integrity of ownership in terms of form quality and rights. The expenses and all legal consequences arising from the claim shall be borne by the lessee, and the lessor shall not be liable for it. Regardless of whether the claim is in progress or whether the lessee can obtain compensation through the claim, the lessee shall pay the lease fee and other payables to the lessor in full and on time in accordance with the provisions of this contract.

3.7 In the event of the above circumstances, including claims, return of goods and other events that affect the normal use of the leased item, the lessee cannot refuse to accept the leased item, and it will not affect the lease start date and normal performance stipulated in this contract. The obligation to pay lease fee on time remains unchanged.

Article 4 Ownership, right to use and obligations of storage, maintenance and repair of the leased property

4.1 Ownership: The lessor has complete and independent ownership of the leased property, therefore:

4.1.1 The lessor has the right to mark the ownership on a prominent position of the leased object and to check the status of the leased object at any time and conduct on-site inspections . The lessee shall provide convenience for this, and the relevant expenses incurred shall be borne by the lessee.

4.1.2 The lessee shall cooperate with the lessor to complete the registration publicity work on unified registration and publicity system of the leased property in China Movable Assets Financing (https: //ww w . zhongdengwang.org.cn) according to the requirements of the lessor.

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4.1.3 If the leased object needs to go through registration other than 4.1. 2, the lessee shall unconditionally cooperate to register the leased object to the lessor, and the registration related taxes (including but not limited to registration fee, purchase surcharge and other taxes) shall be borne by the lessee bear.

4.1.4 The intellectual property rights related to the leased object and its accessories belong to its obligee, and this contract does not affect the ownership and use of the above-mentioned intellectual property rights.

4.1.5 The lessor’s full ownership of the leased property can effectively fight against the lessee’s various creditors, including bankruptcy creditors; the lessee or any third party may not exercise the lien on the leased property by itself. If the loss to the lessor is caused by the actions of a third party on the leased item, the lessee shall be liable to the lessor for compensation.

4.2 Right to use: During the lease period, the lessee has the right to use the leased property under this contract, therefore:

4.2.1 The lessee has the right to install and use the leased item at the place where the leased item is placed as stipulated in Annex 1 “List of Leased Items”. Without the prior written consent of the lessor, the lessee shall not change the location and use environment of the leased property without authorization.

4.2. 2 The lessee is obliged to protect the leased property reasonably and appropriately, and is obliged to make compensation for the loss or damage of the leased property.

4.2.3 During the period when the lessee is in possession of the leased item , if the leased item causes personal and/or property damage to a third party, the lessee shall bear corresponding responsibilities, and the lessor shall not. If the tort caused by the leased object causes the lessor to advance the relevant expenses, the lessee shall pay the advance expenses to the lessor within three days. If the payment is overdue, the lessee shall pay the lessor a penalty of 5/10,000 of the advance payment per day to the lessor.

4.2.4 Without the written consent of the lessor, the lessee shall not sell, transfer, sublease, or sublease the leased property; shall not set any restrictive rights such as mortgage rights or other security interests on the leased property; shall not invest in the leased property as a shareholder; Shall not engage in any other acts that infringe upon the lessor’s complete ownership of the leased property.

4.2. 5 The lessee shall not damage the leased property, obstruct or change the original purpose and function of the leased property in all actions; except for normal use, the lessee shall be liable for compensation for any loss in value of the leased property.

4.3 Obligations of storage, maintenance and repair of leased items

4.3.1 The lessee is obliged to keep, maintain and repair the leased property to ensure its normal state and effectiveness, and all expenses incurred thereby shall be borne by the lessee. Except for reasonable wear and tear and the lessor agrees to modify the leased object, the lessee shall not change the physical properties of the leased object.

4.3.2 During the lease term, if the leased item leaves the possession of the lessee (unless the lessee has conclusive evidence to prove that the leased item is out of the lessee’s possession due to the lessor’s reasons), the lessee shall actively claim its rights and demand its return. All expenses incurred due to asserting rights shall be borne by the lessee. The above circumstances do not affect the lessor’s right to collect lease fee and other payables from the lessee in accordance with this contract, nor Affect the lessee’s other obligations under this contract.

4.3.3 If it is necessary to replace the main parts of the leased item, unless the original manufacturer manufactures them at a standard no lower than the replaced parts, the lessor shall obtain the written consent of the lessor. The parts installed or replaced on the leased item due to storage, maintenance, repair, etc. are an integral part of the leased item and belong to the lessor; the replacement of parts by the lessee shall not reduce the value or use value of the leased item.

4.4 When the leased item is attached to other movable or immovable property, the lessor’s rights to the leased item will not be changed.

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Article 5 Lease Term, Lease Start Date and Payment Terms

5.1 The lease term and lease start date are stipulated in the core elements of this contract.

5.2 All the purchase price of the subject matter shall be paid by the lessor, and the lessor shall make the payment according to the application of the lessee after the contract becomes effective and the payment conditions are satisfied, and the payment shall meet the following conditions:

(1) The lessor has received the commission, security deposit, lease fee, notary fee, insurance premium and other payable and unpaid items paid by the lessee in accordance with the “financial lease contract” and supporting contracts;

(2) The prerequisites for payment stipulated in the Financial Lease Contract and the elements of the supporting contract have been fulfilled;

(3) Zhongdeng.com (https://www.zhongdengwang.org.cn/) has completed the publicity and registration of financial leasing;

(4) There is no breach of contract by the lessee, such as overdue, or other circumstances that the lessor believes may affect its realization of all rights under the financial lease contract.

However, the lessor’s act of paying the purchase price of the subject matter does not mean that the lessor has recognized that all the above conditions have been met.

Article 6 lease fee

6.1 See the core elements of this contract for the lease principal amount of this contract. The lessor has the right to choose to pay the lease principal by bills, bank remittances and letters of credit.

6.2 See the core elements of this contract for the annual lease rate.

6.3 The lessor prepares the “Payment Estimation Form” (see Annex 2 for details), and the lessee guarantees to pay to the lessor’s designated account according to the payable amount, currency, frequency, and payment date stipulated in the “Payment Estimation Form”. See the core elements of this contract for account information.

6.4 The lessee hereby confirms that the lessor has the right to change the “Payment Estimated Form” according to the actual amount and date of the lease principal, and issue the “Payment Change Details”, and send the “Payment Change Details” by email. “Form” is sent to the email address of the lessee stipulated in this contract, and the “Detailed Form of Payment Change” is deemed to have been effectively delivered to the lessee from the date of sending the email. If the lessee does not submit a written opinion within 3 days from the date of receipt of the “Payment Change Schedule” and other notification documents , it is deemed that the lessee agrees to the content recorded in the notification document. If the lessor issues multiple copies of the “Payment Change Schedule”, the lessee shall perform the Payment obligation based on the latest version. If there is no “Payment Change Schedule”, the “Payment Estimated Form” shall prevail.

6.5 The lessee shall prepare the curlease fee payable amount in the corresponding account before the due date of each period agreed in this contract and pay it to the lessor’s account no less than [2] working days before the due date . The lease interest shall be equal to Calculated until the agreed due date of each lease fee; if the lessee fails to repay the lease fee in full and on time, the lessor has the right to authorize the cooperative financial institution to deduct the receivable lease fee and liquidated damages from the agreed lessee’s account.

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6.6 lease fee adjustment method: The following are three options, and the specific options can be found in the core elements of this contract.

【1 】From the lease start date to the date when the principal and interest under this contract are fully paid off, the LPR interest rate on the working day before the interest rate adjustment will be adjusted every six months. rate as well as the aforementioned plus/minus base points are adjusted once. The interest rate adjustment date is January 1 and July 1 each year.

The LPR interest rate under this contract is determined according to the following conditions: when the lessor under this contract pays the first payment, the LPR interest rate refers to the 1 -year market quotation rate of the National Interbank Funding Center (1YLPR ) o Thereafter, when the interest rate is adjusted according to the aforementioned agreement, the LPR interest rate refers to the 1-year market quotation rate of the National Interbank Funding Center on the working day before the interest rate adjustment date. If the payment is made in batches, the interest rate of the subsequent payment shall be implemented according to the curlease fee interest rate determined or adjusted in this contract, and the uniform interest rate shall be implemented under this contract.

The lessor will issue the “Payment Change Schedule” to the lessee after the interest rate adjustment, and the lessee hereby agrees to pay the lease fee to the lessor in accordance with the “Payment Change Schedule”. The lessor delays or fails to issue the “Payment Change Schedule”. The “Schedule” does not affect the lessee’s obligation to pay lease fee at the adjusted interest rate.

【2 】From the lease commencement date to the date when the principal and interest under this contract are fully repaid, it will be adjusted every six months according to the LPR interest rate on the working day before the interest rate adjustment date and the above-mentioned plus/minus base points. The interest rate adjustment date is January 1 and July 1 each year.

The LPR interest rate under this contract is determined according to the following conditions: when the lessor under this contract pays the first payment, the LPR interest rate refers to the 5-year loan market quotation rate (5YLPR) of the National Interbank Funding Center on the working day before the lease commencement date . Thereafter, when the interest rate is adjusted according to the aforementioned agreement, the LPR interest rate refers to the five -year loan market quotation rate of the National Interbank Funding Center on the working day before the interest rate adjustment date. If the payment is made in batches, the interest rate of the subsequent payment shall be implemented according to the curlease fee interest rate determined or adjusted in this contract, and the uniform interest rate shall be implemented under this contract.

The lessor will issue the “Payment Change Schedule” to the lessee after the interest rate adjustment, and the lessee hereby agrees to pay the lease fee to the lessor in accordance with the “Payment Change Schedule”. The lessor delays or fails to issue the “Payment Change Schedule”. The “Schedule” does not affect the lessee’s obligation to pay lease fee at the adjusted interest rate.

【3】The lease rate in this lease contract is a fixed interest rate during the lease period.

6.7 lease fee per period = lease principal payable in the curlease fee period + curlease fee lease interest + corresponding taxes; curlease fee lease interest = remaining lease principal in the previous period * daily interest rate * actual days of capital occupation; daily interest rate = lease year Interest rate /360 days; actual number of days = due date of the curlease fee period - due date of the previous period (for the first period, the lease commencement date, and the interest is calculated on the lease commencement date).

6.8 If the lessee fails to pay the due lease fee on time, it shall be deemed as a breach of contract and shall bear the liability for breach of contract in Article 18 of the General Provisions of this Contract.

Article 7 commission and Security Deposit

7.1 The lease fee under this contract is stipulated in the core elements of this contract. The lessee hereby confirms that the commission is considered as the lessor’s initial investment cost. Once paid, the lessor will not return it regardless of the early termination or termination of the contract for any reason.

7.2 The security deposit under this contract is stipulated in the core elements of this contract. The lessee hereby confirms that no interest will be charged on the security deposit. The lessor may use any part of the security deposit for exercising remedies or as compensation for losses if the lessee has overdue Payments or other defaults from the due date of the first installment. The lessor has the right to choose to deduct the deposit from the lease fee and other payables during the lease period or return it to the lessee without interest within 10 working days after all payments under this contract are completed . If the lessor chooses to deduct the deposit from the lease fee and other payables or use it as relief or as compensation for losses, the lessee shall make up the deposit within 3 working days of the occurrence of the above-mentioned reasons. If the payment is overdue, the lessor has the right to choose to start the second 18. Clause 5 Disposal Clause.

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Article 8 The Lessee’s Agreement on Early Repayment

If the lessee wishes to terminate this contract in advance, it shall notify the lessor in writing one month in advance and obtain the written consent of the lessor. The lessee shall pay the early termination fee to the lessor’s collection account according to the lessor’s written notice before the early termination date.

Early closing payments include:

(1) All lease fees, service charges and other payables payable but unpaid up to the early termination date;

(2) All remaining lease principal after the early termination date;

(3) The purchase price of the leased item (nominal price);

(4) If the lessee fails to notify in writing one month in advance, an additional month’s lease fee interest shall be paid as liquidated damages;

(5) No matter whether the lease term stipulated in this contract exceeds 36 months or not, if the early end date is within 36 months from the lease start date, unless the lessor obtains a written exemption notice from the lessor, the lessee shall also calculate the remaining lease principal of this contract, pay 12 months lease fee interest as liquidated damages.

After the lessor receives all the above-mentioned early termination payments, it will complete the settlement procedures in accordance with Article 14 of this contract, and this contract will be terminated.

Article 9 Delivery of the leased property, transfer of risk of damage or loss and handling of the risk after occurrence

9.1 On the date when the lessor pays the first transfer price of the leased item to the lessee or the payee designated by the lessee (if it is a one-time payment, it is the date when the entire price is paid), the ownership of the leased item will be transferred to the lessor, but The leased item does not transfer possession, the lessor leases the leased item to the lessee, and the lessee continues to occupy and use it (it is deemed that the lessor has fulfilled the delivery obligation in the curlease fee state of the leased item), that is, the delivery The method is changed to possession. On the day when the lessee or the payee designated by the lessee receives the transfer price of the leased object, the lessee shall pay to the lessor

If the lessee does not issue the “Certificate of Transfer of Ownership of the Leased Item” (see Annex 4) and the invoice for the transfer price (or the receipt of the transfer price with the official seal), it will not affect the lessor’s acquisition of the ownership of the leased item.

9.2 In addition to the transfer price of the leased item being paid by the lessor, other fees that should be paid for the transfer and use of the leased item (including but not limited to various supplier taxes, purchase surcharges, packaging fees, transportation fees, loading and unloading fees and registration fees) Registration fees, etc.) shall be borne and paid by the lessee; if the lessee needs to pay additional fees due to policies or regulations such as Chinese laws or government-related taxes and tax rates, the lessee shall bear this part by itself. If the lessor pays in advance, the lessee shall pay the relevant amount to the lessor in a timely manner according to the notice of the lessor and relevant payment vouchers.

9.3 The risk of damage or loss of the leased item will not be transferred due to the signing and performance of this contract, and will always be borne by the lessee, regardless of whether it directly owns the leased item.

9.4 If the leased property is damaged (including third party infringement, government expropriation, expropriation, forced elimination of the leased property, force majeure such as earthquake, tsunami, hail and other natural disasters that cause damage or loss of the leased property), the lessee shall immediately write The lessor is notified that the lessor has the right to choose the following methods individually or in combination, and the lessee is responsible for handling and bears all costs and losses:

9.4.1 Restoring or repairing the leased property to a state of full normal use;

9.4.2 Replace the lessor with the same condition, performance and value as the leased item approved by the lessor. The replaced equipment automatically becomes the property of the lessor, and the lessee has no objection to the ownership of the lessor, and at the same time has the obligation to ensure that the lessor’s rights to the replaced equipment will not be affected by any other third party. And the lessee’s obligations under this contract will not be affected in any way.

9.4.3 The lessor has the right to choose to terminate this contract, and the lessee shall be liable for breach of contract in accordance with Article 18.5 of the general terms of this contract .

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9.5 In the event that the damage or loss of the leased property is an insured event, in addition to the provisions of this article, the provisions of Article 10 of this contract shall also be followed. Agreed processing.

Article 10 Insurance

10.1 From the date of signing this contract, the lessee shall insure the leased property during the period of use with the necessary insurance agreed upon in the core elements, and the insurance premium shall be borne by the lessee. The insurance period shall cover the entire lease period, and the insurance amount shall not be lower than the original value of the fixed assets of the project. If the lessee refuses to change the insurance beneficiary as required by this contract, the lessor has the right to 10.4.2 Clause Processing). The lessee may entrust the lessor or a third party designated by the lessor to handle insurance, or purchase insurance by itself, subject to the agreement on the core elements. If the lessee purchases insurance by himself, the lessor has the right to require the lessee to submit a copy of the insurance policy to the lessor within 3 days after the insurance is purchased.

10.2 The insurance of the leased property should be purchased from an insurance company recognized by the lessor, and its insurance type and terms must be approved by the lessor. Purchasing other types of insurance besides the necessary type of insurance according to the needs. If the lessee entrusts the lessor to handle the insurance matters of the necessary types of insurance, it shall pay the lessor in advance the insurance premium estimated within a certain period of time (referred to as “advanced insurance premium” ) in accordance with the method stipulated in the core elements, and the lessor shall pay the insurance company on its behalf when applying for insurance. The actual insurance premium shall be subject to the amount specified in the insurance contract; when the estimated insurance premium in each estimated year exceeds the actual insurance premium, the balance will be automatically transferred to the next year; when the estimated insurance premium is lower than the actual insurance premium ((called “deficiency”), the lessee shall pay immediately after receiving the notice from the lessor; if an unexpected compensation occurs during the insurance period, resulting in a substantial increase in the premium for the next insurance year, the lessee shall bear the risk and Make up insurance premiums in time. The lessee agrees that the lessor has the right to choose and replace the insurance company. Advance premiums are free of interest. After the end of the lease term, the remaining premium collected in advance shall be returned by the lessor to the lessee.

10.3 Insurance claims shall be owned and collected by the lessor. In the event of an insurance accident of the leased property, which may lead to claims, the lessee shall immediately notify the lessor and provide the insurance company with all required relevant materials in a timely manner.

10.4 If the lessee fails to purchase the insurance approved by the lessor within 15 days after signing this contract (or before the insurance expires) , or fails to pay the lessor the prepaid insurance premium or the shortfall as agreed, the lessor may choose to deal with it as follows:

10.4.1 The lessor has the right to purchase insurance and pay the premium on its behalf, and the lessee shall bear the relevant expenses. The lessor may pay from the lessee Priority deduction from lease fee, commissions or other payments. The lessee shall immediately pay the lessor the full amount of the premium paid by the lessor. If the lessee fails to pay the premium received in advance or the shortfall as agreed, liquidated damages shall be calculated at five ten-thousandths of the daily payable amount from the date of payment.

10.4.2 If the lessee refuses to provide relevant information to cooperate with the lessor in purchasing insurance or does not change the beneficiary of the insurance to the lessor or a third party designated by the lessor, the lessor has the right to terminate this contract in advance, and the lessee shall be liable for breach of contract in accordance with Article 18.5 of the General Terms of this contract.

10.5 In the event of an accident that causes damage to the leased property, the insurance claim shall be used to pay lease fee and other payments first, and then be used to repair or replace the leased property. The lessor shall repay the lease fee and other payables to the lessor’s account on time and in full in accordance with the contract.

10.6 The progress of insurance claims settlement and insurance coverage will not affect the performance of the lessee under this contract to pay lease fee and liquidated damages on time.

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10.7 The lessor, as the beneficiary of the insurance, shall return the remaining portion of the insurance claims received to the lessee after paying all outstanding amounts payable by the lessee under this contract.

10.8 Regardless of whether the lessee chooses to purchase insurance by itself or the lessor purchases insurance on its behalf, if the leased property is damaged, lost, stolen, traffic accidents or safety accidents, etc. Or if the insurance company refuses to settle the claim due to various reasons, or if an accident occurs to the leased object between the expiration of the policy and before the renewal of the policy, all risks and consequences arising therefrom shall be borne by the lessee, and the lessor shall not be responsible for it.

Article 11 Rights and Obligations of the Lessor

11.1 The lessor has the right to organize due diligence, on-site inspections, asset management, etc., and has the right to consult relevant personnel on site or through remote communication for any legal documents, financial materials, project progress reports, government approval materials, etc. that may be required , and consult, copy relevant information, etc. The lessee shall cooperate with the lessor’s work and provide necessary convenience.

11.2 The lessor has the right to keep the lessee’s official seal, financial seal, legal representative’s name seal (if any), and the original business license. The lessor may entrust the supervisors in the project, the entrusted management party or other third parties to keep the official seal, financial seal and legal representative’s name seal on their behalf. The lessee must notify the lessor when using it, and the lessor can use it only after confirmation. The lessee shall guarantee the legitimacy and uniqueness of all seals and certificates entrusted to the lessor for safekeeping.

11.3 Without the written permission of the lessor, the lessee shall not engage in any external financing or guarantee.

11.4 Regarding the lease principal amount agreed in this contract, the lessee must complete the first payment application within 6 natural months from the date of signing this contract , and must complete the full payment within 12 natural months from the date of signing this contract Apply. Otherwise, the lessor has the right to unilaterally adjust the lease rate and commission under the remaining amount according to market changes at any time, or terminate the remaining lease principal payment amount of the contract.

11.5 The parties confirm that the lease principal under this contract is subject to the actual payment by the lessor. The lease principal stipulated in the essential clauses is not mandatory for the lessor, and the lease principal and the final amount are determined by the lessor.

11.6 There is no need to notify the lessee in advance of any breach of contract in this contract or the guarantee contract signed based on this contract, the account supervision agreement, the debt inferior agreement, the debt compensation agreement, the balance compensation agreement and other related agreements or documents (if any) , the lessor has the right to change, suspend, withdraw, cancel the paid or unpaid lease principal at its own discretion, and/or require the lessee to immediately pay all outstanding and payable items under this contract, and/or require the lessee to immediately pay The outstanding amounts payable under this contract provide a security to the satisfaction of the lessor.

Article 12 Rights and Obligations of the Lessee

12.1 The lessee is obliged to go through the relevant procedures, approvals, permits or corresponding certification documents or business qualifications required for this contract.

If the lessor incurs any expenses or affects the purchase of the leased property and all losses incurred due to the above-mentioned incomplete procedures, including but not limited to losses such as idle funds, the lessee shall bear it.

12.2 If the lessee undergoes changes in actual controller, shareholding transformation, joint venture, merger, joint venture, division, capital reduction, capital increase and share expansion, equity change, major investment, major asset transfer, external financing, external guarantees, major economic disputes, bankruptcy application, and other actions that may affect the realization of the lessor’s rights and interests, the lessee shall notify the lessor in writing at least [30] days in advance and obtain the lessor’s written consent. If the lessee violates the above agreement, the lessor has the right to demand that the lessee fulfill the replenishment obligation according to the lessor’s requirements at that time (including but not limited to, if the lessee’s capital increase leads to the dilution of the equity pledge ratio, the equity corresponding to the capital increase shall be pledged to the lessor to restore the original equity pledge ratio), or the lessee shall be required to bear the liability for breach of contract and compensate the lessor in accordance with Article 18.5 of this contract corresponding loss.

If the lessee is filed for bankruptcy or its financial situation deteriorates (such as open market bond default) and other circumstances that affect the realization of the lessor’s rights and interests, it shall notify the lessor in writing within 3 days of the occurrence of such circumstances, and the lessor has the right to require the lessee Immediately return all lease fee and other dues.

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12.3 When the lessee goes out of business, dissolves, suspends business for rectification, has its business license revoked or is revoked, it shall notify the lessee within [3] days after the occurrence of the event.

Notify the lessor in person, and promise to return all lease fee and other payables immediately.

12.4 Unless otherwise stipulated in this contract, the lessee shall not be interfered by anyone during the normal use of the leased property, and obtain the income during the period of using the leased property according to law.

Article 13 Transfer, Pledge and Mortgage of Contract Rights

13.1 The lessee hereby confirms that the lessor has the right to transfer all or part of its rights and interests under this contract to a third party without the consent of the lessee, or set up mortgages and other security rights on the leased property. lessee effective. The transferred third party will enjoy the corresponding rights of the lessor under this contract and perform corresponding obligations, but shall not prejudice the lessee’s right to occupy, use and benefit from the leased property under this contract.

13.2 The lessee shall not transfer all or part of its rights and obligations under this contract to a third party or set up pledge, mortgage and other security rights on it.

Article 14 Disposal of the leased property after the expiration of the contract

14.1 When the lease term expires, if the lessee has no breach of contract under this contract and the lessee has fully performed all the obligations in the contract, the lessee can obtain the ownership of the leased item by paying the purchase price (nominal price).

14.2 After the lessee pays the purchase price of the leased item, and the lessor issues the “Leased Item Ownership Transfer Certificate” to the lessee, the ownership of the leased item shall be transferred to the lessee.

Article 15 Guarantee

15.1 With the consent of the lessor, the lessee or a third party shall provide relevant guarantee measures to the lessor as a guarantee for the lessee to perform all obligations under this contract in accordance with the agreement. Please refer to the relevant guarantee contract for specific guarantee matters.

15.2 If the guarantor under the guarantee contract (if any) corresponding to the project corresponds to the guarantee contract, mortgage contract, pledge contract, equity pledge contract and maximum guarantee contract, there is a breach of contract, it shall be deemed as a breach of contract under this contract at the same time, and the lessee shall The party shall bear the liability for breach of contract according to the contract.

Article 16 Special Terms

The lessee shall apply different special terms according to the purpose of the leased property. If the leased property is used for the power generation side project, all parties agree to apply all the provisions of Article 16. If the leased property is used for non power generation projects, all parties agree to apply the provisions except for Articles 16.2, 16.3, and 16.4.

16.1 The owner irrevocably agrees that after the project is put into operation, the project operation data will be automatically collected and transmitted to the lessor unconditionally. If the operation data of this project cannot be automatically transmitted due to national policies or force majeure, the lessee is obliged to report the operation data to the lessor. deemed a breach of contract, The lessor has the right to require the lessee to bear the liability for breach of contract in accordance with the provisions of Article 18 of this contract. If the automatic transmission of operation data is abnormal due to equipment failure, the lessee shall coordinate with the supplier for repair or replacement in a timely manner to ensure the normal transmission of the operation data of this project, and the expenses arising therefrom shall be borne by the lessee.

16.2 During the lease period, the lessee irrevocably agrees that after the project realizes grid-connected operation, the project grid-connected information, including but not limited to grid-connected capacity, daily power generation, cumulative power generation, electricity bill settlement data and other operational data, will be automatically Take and transmit to Lessor. The lessee shall provide or coordinate with relevant suppliers to provide facilities for power generation monitoring interface, and allow the lessor’s monitoring system to connect to relevant power equipment, such as inverters, collector monitoring software, etc., until all the lessor’s claims are fully repaid. The lessee agrees that during the lease period, the lessor can use the operation data transmitted by this project free of charge.

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16.3 The carbon emission rights (that is, carbon emission reductions) generated after the project is completed and connected to the grid are given priority to the lessor; if the lessor conducts electricity sales business, the lessee has priority to conduct electricity sales business transactions with the lessor.

16.4 After the renewable energy subsidy for this project is issued by the state and paid to the designated electricity income account, the lessor has the right to unilaterally require the lessee to repay the lease principal in advance, and the specific amount is determined according to the amount and progress of the subsidy. ”

16.5 The lessee is responsible for organizing the design review, entrusted construction supervision, entrusted project management, entrusted equipment supervision and construction completion (if it is a power generation side project, full-capacity grid connection) in the construction of this project. Including the completion of the preparation of the settlement statements of various projects of the construction project, the lessee shall reach an agreement with the engineering contractor, equipment supplier and installer on the amount and payment of the project payment, equipment payment and installation fee. The lessee shall be responsible for cooperating with the audit agency to audit the prepared settlement statement.

16.6 All expenses arising from Article 16.1, Article 16.4 and Article 16.5 shall be borne by the lessee. If the lessee fails to perform the above obligations, the lessor has the right to pay the relevant amount on behalf of the lessee, requiring the lessee to pay the lessor in full immediately, and shall start from the date when the lessor advances the relevant expenses to the date when the lessee pays the lessor , the liquidated damages for the unpaid amount shall be calculated at 5/10,000 per day.

16.7 The lessee is obliged to strictly abide by the laws and regulations against commercial bribery, and shall not solicit, accept, provide, or give any benefits other than those stipulated in the contract from the lessor or its handlers or other relevant personnel (collectively referred to as “staff” ), including but It is not limited to open deductions, concealed deductions, cash, shopping cards, physical objects, securities, travel or other non-material benefits, etc. If the lessee violates this obligation, the lessor has the right to unilaterally terminate all contracts signed with it. If the lessee causes losses to the lessor, it shall also compensate the lessor for the losses. If the staff of the lessor has the aforementioned prohibited acts, the lessee shall truthfully report to the lessor through the following reporting channels: (1) Mailbox for letters and visits: xfxx@cpirhzl.com; (2) Complaint and report hotline: 021-80161029.

16.8 The lessee promises to cooperate with the lessor in anti-money laundering work, and cooperate in customer identification, suspicious transaction reporting, customer identity information and transaction record preservation and other related work in accordance with the regulations of regulatory authorities at all levels.

Article 17 Formation, entry into force and termination of the contract

17.1 In general, this contract shall take effect from the date of sealing by all parties, but if the core elements of this contract stipulate the conditions for the contract to take effect, it shall take effect when the conditions are met.

17.2 If the contract or elements registered in the relevant business system are inconsistent with this contract due to omissions in actual operation or requirements of the registration authority, etc. In case of any inconsistency with the agreement, the agreement in this contract shall prevail.

17.3 For matters not covered in this contract, the lessor and the lessee may make a supplementary agreement.

17.4 If the relevant state authorities (including but not limited to the State Council, the National Development and Reform Commission, the People’s Bank of China, the China Banking and Insurance Regulatory Commission, the State Administration of Taxation, etc.) issue new policies on the financial leasing industry or the industries involved in this contract, the contract If the performance of the new policy has a significant impact, the lessor has the right to change the contract or negotiate to terminate the contract according to the impact of the new policy.

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17.5 In the following circumstances, the lessor has the right to unilaterally terminate this contract, and the lessee shall be liable for breach of contract in accordance with Article 18.5 of the general provisions of this contract:

(1) Any guarantee contract provided by the lessee or a third party to guarantee the lessee’s debts under this contract is invalidated, revoked or terminated Equivalent defects;

(2) The lessee or its shareholders or actual controllers are subject to litigation, suspension of business, dissolution, suspension of business for rectification, revoked or revoked business license, bankruptcy, business deterioration, etc.;

(3) If the lessee or its affiliates violate other contracts signed with the lessor that have been signed before the signing of this contract or after the signing of this contract, it shall constitute a breach of contract under this contract;

(4) The Lessee violates Articles 2.2, 3.4, 4.2, 4.3, 9.4, 10.3, 10.4, 12 and 16 of the General Terms of this Contract;

(5) Other situations where the lessor believes that the lessee is unable or unwilling to perform the obligations under this contract.

Article 18 Liability for breach of contract

18.1 After the effectiveness of this contract, both the lessor and the lessee shall fulfill the obligations stipulated in this contract. If either party fails to fulfill or fails to fully fulfill the obligations stipulated in this contract, they shall bear the liability for breach of contract in accordance with the law.

18.2 If the lessee fails to pay the rent and other payable amounts to the lessor in accordance with the agreed amount, currency, time, and payment method in this contract, the lessor has the right to charge a penalty of 0.05% for each day of delay based on the rental principal of this contract (if the lessee has already repaid a portion of the rental principal, the total unpaid portion (including both due and unexpired) shall be used as the base), Until the lessee has paid the overdue penalty, loss compensation, rent and other unpaid items as agreed.

18.3 If the lessee fails to pay the rent as agreed or if there is other major breach of contract by the lessee, in addition to bearing the overdue penalty in accordance with Article 18.2 and the loss compensation in accordance with Article 18.4, the lessor has the right to comply with Article 18 of the General Terms of this contract 5 treatments.

18.4 If the lessee breaches the contract, the lessor has the right to demand compensation for losses from the lessee. The compensation for losses under this contract includes reasonable expenses incurred by the lessor in executing or protecting its rights under this contract, including but not limited to expenses incurred by the lessor in controlling or disposing of the leased property, litigation/arbitration fees, property preservation guarantee fees, appraisal fees, evaluation fees, lawyer fees, material fees, investigation fees, travel expenses, collection fees, etc; And the standard for some of the fees shall not be less than: (1) 500 yuan per payment reminder letter issued; (2) Entrust a law firm to send a lawyer’s letter of 5000 yuan/time; (3) Delegate representatives to collect 10000 yuan per visit; (4) If a third-party agency is entrusted to collect, 20% of all unpaid payments from the lessee shall be made from the date of commission.

18.5 When the lessee breaches the contract, the lessor has the right to take any one or more of the following remedial measures：

18.5.1 The lessee is required to immediately pay all due and undue lease fee, commissions, purchase price (nominal price), overdue breach of contract gold, damages and other payables related to this contract.

18.5.2 If you choose to terminate this contract, you have the right to take necessary measures to control the use of the leased item, take back the leased item and dispose of it. At the same time, the lessee shall Immediately pay the Lessor the following amounts:

(1) All expired and unpaid rent and handling fees on the termination date;

(2) Delay penalty;

(3) Compensation for losses;

(4) Other payables related to this contract

18.5.3 The lessor disposes of the leased item to pay off all the funds in Article 18.5.1 (the confirmation method and amount of the residual value of the leased item are subject to the lessor’s opinion), and the lessee shall still bear the shortfall. The lessor has the right to unilaterally determine the disposal method and price of the leased property.

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18.5.4 The lessor has the right to require the lessee or a third party to immediately assume the guarantee responsibility for all the guarantee measures provided by the lessee, and give priority to receiving compensation after directly disposing of the guarantee. If the guarantee (including the guarantee of the property provided by the lessee) and the pledge of rights, the lessor has the right to choose which guarantee measures and in what order to realize the creditor’s rights.

18.5.5 Any repayment of the lessee and its guarantor or the disposal price of the leased object shall be used to compensate the lessor’s losses in the following order: (1) Compensation for losses (2) Overdue liquidated damages (3) commissions (4) lease fee (5) Retained purchase price (6) Other payables related to this contract. The lessor may change the above sequence arbitrarily according to the circumstances.

18.5.6 The lessor shall disclose the lessee’s breach of contract , breach of contract and non-performance of the effective judgment or award.

18.6 If the contract is found to be invalid, the lessee shall return the money to the lessor in one lump sum within [3] days from the date when the contract is found to be invalid. All payments agreed in Article 18.5.1.

18.7 The parties confirm that the liquidated damages standard is determined by all parties through consultation, and the breaching party shall not request a reduction in the amount of liquidated damages under any circumstances.

Article 19 Notarization of debt documents

19.1 This clause is applicable according to the dispute resolution method of some elements. If notarized creditor’s rights document is not selected for execution, this clause will not take effect.

19.2 The lessor has the right to require the notarization of the obligatory documents for this contract, and the lessee shall cooperate.

19.3 At the request of the lessor, after the notarization of this contract with the notarization of enforcement effect in the notary department, if the lessee fails to perform or does not fully perform the obligations stipulated in this contract, the lessor has the right to directly apply to the notary institution for the issuance of an execution certificate, and submit to the notary institution The people’s court with jurisdiction applies for enforcement, and the lessee is willing to accept the court’s enforcement. The lessee has a complete and clear understanding of the meaning, content, procedure, and effectiveness of the notarization of enforcing enforcement effect. When the lessee promises that it will not perform or fully perform the obligations stipulated in this contract, according to the application of the creditor, the notary office can issue an execution certificate, and the lessee is willing to accept the compulsory execution.

Article 20 Application of Law, Dispute Resolution and Jurisdiction

20.1 This contract shall be governed by the laws of the People’s Republic of China (excluding Hong Kong, Macau and Taiwan).

20.2 For the selection of dispute resolution and jurisdiction in this contract, see the core elements.

20.2.1 Any disputes or disputes arising from or related to this contract shall be resolved through friendly negotiation between the parties. If the negotiation fails, all parties unanimously agree to submit the case to the Shanghai Arbitration Commission for arbitration in accordance with the arbitration rules in effect at that time. The place of arbitration is Shanghai. The arbitration award is final and binding on all parties. All expenses related to the arbitration, including but not limited to arbitration fees, property preservation fees, property preservation guarantee fees, enforcement fees, attorney fees, etc., shall be borne by the breaching party, unless otherwise stipulated by the arbitration award.

20.2.2 Any disputes or disputes arising from or related to this contract shall be resolved through friendly negotiation between the parties. If the negotiation fails, all parties agree to bring a lawsuit to the people’s court with jurisdiction in the place where this contract is signed. Other related expenses such as maintenance fee and preservation fee shall be borne by the breaching party, unless otherwise stipulated by the court ruling. During the litigation process, except for the part of the ongoing litigation that the parties concerned have disputes over this contract, other parts of this contract shall continue to be performed.

Article 21 Notification and Service

21.1 All notices between the parties (including but not limited to “Payment Change Schedule”, “Payment Notice”, etc.) are in written form and can be delivered by hand, registered post, express mail, email, etc. way served.

21.2 Notices shall be deemed validly delivered on the following dates:

(1) The notice delivered by hand shall be effectively delivered on the delivery date of hand delivery;

16

(2) Notices sent by registered mail (postage paid) shall be effectively delivered on the 4th day after posting;

(3) The notice sent by express mail (postage paid) shall be effectively delivered on the 3rd day after sending;

(4) Notifications sent by e-mail are effectively delivered on the date of sending.

21.3 If each party changes its name, address, contact address, business scope, legal representative, e-mail address, etc., it shall notify the lessor in writing within [51 days before the change of relevant matters, otherwise, it shall bear the legal consequences that may arise therefrom.] .

21.4 The contact address listed on the front page of this contract is the service address of written notices and judicial documents of all parties. This service address is applicable to various litigation and arbitration stages including first instance, second instance, retrial, and enforcement. If any party changes the address for service, the party shall promptly inform the other party or the judicial authority of the changed address for service. If the address for service provided is inaccurate, or the changed address for service is not notified in time, resulting in the inability to deliver the judicial documents or not delivered in time, the party will bear the legal consequences that may arise therefrom. If the judicial organ mails the litigation documents to the delivery address, the date of return indicated on the mail receipt shall be deemed as the delivery date; if it is delivered directly, the delivery date shall be deemed to be delivery on the day when the sender records the situation on the delivery receipt. The day of arrival.

21.5 The parties confirm that if the lessor chooses to send the “Payment Change Schedule”, “Payment Notice” and other documents to the lessee’s mailbox under this contract by email (zujin@cpirhzl.com) , the lessor will From the date of sending the e-mail, all parties agree to fully confirm the sent change of Payment and other matters by default; Confirm in writing to the lessor.

Article 22 Other Matters

22.1 The lessee shall be responsible for this contract and related expenses related to this contract, such as evaluation, identification, registration, storage, notarization, guarantee, etc.

22.2 The lessor shall issue a general value-added tax invoice to the lessee after the due date of each installment stated in the “Payment Estimate Form” or “Payment Change Schedule” and after receiving the lease fee, commission or other agreed effective date .

22.3 The lessee hereby irrevocably authorizes the lessor to inquire, print, and save information credit reports and credit records through the lessee’s basic credit information database and other credit investigation systems in accordance with relevant laws and regulations and the provisions of the People’s Bank of China and other relevant regulatory agencies. Relevant financial credit information basic data; the lessee irrevocably authorizes the lessor to provide the lessee’s basic information, credit information, credit information, and financial statement information to the individual/enterprise credit information basic database and other credit investigation systems in accordance with the relevant regulations of the People’s Bank of China , bad information and other information materials; the lessee is fully aware of and understands the content of this clause and authorizes the lessor for this clause. The authorization period is from the date of signing this contract to the payment of all lease principal and interest under this contract. until the date on which outstanding payments are fully settled. If the lessee is required to issue other authorization letters or sign other documents in response to the requirements of the financial credit information basic database and other relevant regulatory agencies, the lessee promises to cooperate unconditionally. At the same time, the lessee agrees that when the lessee breaches the contract signed with the lessor and any effective amendments and supplementary documents to this contract, the lessor has the right to disclose the breach information of the lessee according to the circumstances of the breach, and Relevant information can be provided to third-party institutions such as debt collection agencies, asset management companies, and outsourcing companies according to the needs of debt collection, debt transfer, and service outsourcing.

22.4 Unless otherwise specified in this contract, “day” refers to a natural day, not a working day.

Article 23 Supplementary Provisions

23.1 The annex to this contract has the same legal effect as this contract.

23.2 The lessor and the lessee each hold two copies of this contract, each of which has the same legal effect.

No text below

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Annex 1 “List of Leased Items”

serial number	device name	Specifications	manufacturer	quantity and unit	Remark
1	Graphitization box furnace	48.88m*3.14m*2.9m	Zibo Ruisheng Energy Saving New Material Co., Ltd. Lanzhou Junsheng Carbon Co., Ltd. Shanxi Danyuan New Material Technology Co., Ltd.	8 groups	/
Lease storage place		Inside Sunrise New Energy Anode Manufacturing Factory, Yilong New District, Qianxinan Prefecture, Guizhou Province
Lease purchase contract and number		See Annex III and Annex IV of this contract

18

Annex 2 “Payment Estimate Form”

Payment Estimated Table                                                Unit: RMB
Lessee (full name)	Sunrise (Guizhou) New Energy Materials Co., Ltd.			Margin	0
Starting date	2022.11.11			expiry date	2025.11.10
lease principal amount	40,000,000.00			Lease APR (tax not included, tax rate is. 6 %)	5.2%
Fee rate (excluding tax, tax rate 6 %	2. 0%			Fee collection method	A5. The commission for the first year will be collected within 10 working days after the loan is released (based on the actual loan amount); the commission for 1 year will be charged on the first lease fee due date 2 years after the lease start date, and the last payment will be collected 1-year commission (based on the remaining principal)
Number of lease rental periods	expiry date	lease principal	lease interest	commission	tax (Total of interest and commission)	should be payment amount
0	2022-11-11	0	0	800000	48000	848000
1	2022-12-20	3076923.08	231111.11	0	13866.67	3321900.86
2	2023-03-20	3076923.08	480000	0	28800	3585723.08
3	2023-06-20	3076923.8	449777.78	0	26986.67	3553687.53
4	2023-09-20	3076923.08	408888.89	0	24533.33	3510345.3
5	2023-12-20	3076923.08	364000	0	21840	3462763.08
5	2023-12-20	0	0	492307.69	29538.46	521846.15
6	2024-03-20	3076923.08	323555.56	0	19413.33	3419891.97

19

7	2024-06-20	3076923.08	286222.22	0	17173.33	3380318.63
8	2024-09-20	3076923.08	245333.33	0	14720	3336976.41
9	2024-12-20	3076923.08	202222.22		12133.33	3291278.63
9	2024-12-20	0		246153.85	14769.23	260923.08
10	2025-03-20	3076923.08	160000	0	9600	3246523.08
11	2025-06-20	3076923.08	122666.67	0	7360	3206949.75
12	2025-09-20	3076923.08	81777.78	0	4906.67	3163607.53
13	2025-11-10	3076923.04	22666.67	0	1360	3100949.71
total		40000000	3378222.23	1538461.54	295001.02	45211684.79

Remark:

1. As an attachment to the financial lease contract, this form is an indispensable part of this contract, and together with the core elements and general terms, constitute this contract;

2. The due date listed in this form refers to the date when the amount payable in the curlease fee period actually reaches the lessor or the bank account designated by the lessor;

3. The lessee needs to repay the amount payable in the curlease fee period to the lessor or the account designated by the lessor two working days in advance, and the lease fee and interest settlement date is still calculated according to the due date;

4. The lessor has the right to issue a new “Payment Change Schedule” according to the Payment cycle, lease interest rate, commission and actual lease principal amount agreed in this contract and its attachments, and send the “Payment Change Schedule” by email . Payment Change Schedule” is sent to the lessee’s email address as stipulated in this contract, and the “Payment Change Schedule” is deemed to have been effectively delivered to the lessee since the email is sent. If the lessor issues one or more “Payment Change Schedules” , the lessee shall pay the lease fee according to the latest version. If the “Payment Change Schedule” has not been issued , this form shall prevail.

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Annex 3 Leased Property Ownership Transfer Agreement

Assignee: China Power Investment Ronghe Financial Leasing Co., Ltd.

Assignor: Sunrise (Guizhou) New Energy Materials Co., Ltd.

According to the “Civil Code of the People’s Republic of China” and other relevant laws and regulations, the lessor and the lessee have agreed to transfer the ownership of the lessee’s own assets to the lessor and lease them back through financial leasing (sale and leaseback) transactions. use. The two parties hereby enter into this Leased Property Ownership Transfer Agreement (hereinafter referred to as the ” Agreement”) in accordance with the following terms .

1. The lessor shall, at the request of the lessee, transfer all the assets of the lessee for the purpose of leasing to the lessee (hereinafter referred to as “the leased item”. For the detailed list of the leased item, please refer to the “List of Leased Items” in Annex I of this contract. The lessee Guarantee that, before transferring the ownership of the leased object to the lessor, the lessee enjoys full and sufficient ownership of the leased object, and has not leased out the leased object, mortgaged it to a third party, or any other act that would impair the lessee’s enjoyment of ownership of the leased object .

2. For the relevant information of the leased property, please refer to Annex 1 “Detailed List of the Leased Property”. The transfer price of the leased property is the lease principal amount of the “Financial Lease Contract (Sale and Leaseback)”. The lessor shall pay the transfer price (or equivalent acceptance bill) to the lessee’s account after meeting all the conditions stipulated in the “Financial Lease Contract (Sale-Leaseback)”. For the above transfer price, the lessor has the right to require the lessee to issue a financial receipt stamped with the company’s official seal.

The ownership of the leased property is automatically transferred to the lessor from the day when the lessor pays the first transfer price to the lessee, and the transfer method of ownership is change of possession.

3. This Agreement is an integral part of the Financial Leasing Contract (Sale and Leaseback).

4. The lessee guarantees that it has obtained all necessary approval procedures and corresponding internal authorizations for the signing and performance of this contract, and is responsible for the authenticity, legality and completeness of all documents related to this agreement to the lessor.

21

Annex 4: “Certificate of Transfer of Ownership of the Leased Property”

Lease ownership transfer certificate

To: China Power Investment Ronghe Financial Leasing Co., Ltd.

This unit (person) confirms that since your company paid us the first transfer price of the leased property, your company and us have signed the “Financing Lease Contract (After-sale Leaseback)” The ownership of the leased property is transferred from our party to your company; the delivery method is change of possession.

Hereby certify.

22

EX-8.1

Exhibit 8.1

Principal Subsidiaries and Consolidated Affiliated Entities of the Registrant

Name	Date of Incorporation	Place of incorporation	Percentage of effective ownership	Principal Activities
Subsidiaries
Global Mentor Board Information Technology Limited (“GMB HK”)	March 22, 2019	HK	100%	Holding company
Beijing Mentor Board Union Information Technology Co, Ltd. (“GIOP BJ”)	June 3, 2019	PRC	100%	Holding company
Shidong Cloud (Beijing) Education Technology Co., Ltd (“Shidong Cloud”)	December 22, 2021	PRC	75%	Educational Consulting
SDH (HK) New Energy Tech Co., Ltd. (“SDH New Energy”)	October 8, 2021	Hongkong	100%	Holding company
Zhuhai (Zibo) Investment Co., Ltd. (“Zhuhai Zibo”)	October 15, 2021	PRC	100%	New Energy Investment
Zhuhai (Guizhou) New Energy Investment Co., Ltd. (“Zhuhai New Energy”)	November 23, 2021	PRC	100%	New Energy Investment
Sunrise (Guizhou) New Energy Materials Co., Ltd.  (“Sunrise Guizhou”)	November 8, 2021	PRC	39.35%	Manufacture of Lithium Battery Materials
Guizhou Sunrise Technology Co., Ltd. (“Sunrise Tech”)	September 1, 2011	PRC	39.35%	Manufacture of Lithium Battery Materials
Sunrise (Guxian) New Energy Materials Co., Ltd. (“Sunrise Guxian”)	April 26, 2022	PRC	20.07%	Manufacture of Lithium Battery Materials
Guizhou Sunrise Technology Innovation Research Co., Ltd. (“Innovation Research”)	December 13, 2022	PRC	39.35%	Research and Development
Variable Interest Entity (“VIE”) and subsidiaries of VIE
Global Mentor Board (Beijing) Information Technology Co., Ltd. (“SDH” or “VIE”)	December 5, 2014	PRC	VIE	Peer-to-peer knowledge sharing and enterprise service platform provider
Global Mentor Board (Hangzhou) Technology Co., Ltd. (“GMB (Hangzhou)”)	November 1, 2017	PRC	100% by VIE	Consulting, training and tailored services provider
Global Mentor Board (Shanghai) Enterprise Management Consulting Co., Ltd. (“GMB Consulting”)	June 30, 2017	PRC	51% by VIE	Consulting services provider
Shanghai Voice of Seedling Cultural Media Co., Ltd. (“GMB Culture”)	June 22, 2017	PRC	51% by VIE	Cultural and artistic exchanges and planning, conference services provider
Shidong (Beijing) Information Technology Co., LTD. (“GMB (Beijing)”)	June 19, 2018	PRC	100% by VIE	Information technology services provider
Mentor Board Voice of Seeding (Shanghai) Cultural Technology Co., Ltd. (“GMB Technology”)	August 29, 2018	PRC	30.6% by VIE	Technical services provider
Shidong Zibo Digital Technology Co., Ltd. (“GMB Zibo”)	October 16, 2020	PRC	100% by VIE	Technical services provider
Shidong Trading Service (Zhejiang) Co., Ltd. (“Shidong Trading”)	April 19, 2021	PRC	Deregistered in November 2022	Sale of Merchandise
Shanghai Jiagui Haifeng Technology Co., Ltd. (“Jiagui Haifeng”)	November 29, 2021	PRC	51% by VIE	Business Incubation Services provider
Shanghai Nanyu Culture Communication Co., Ltd. (“Nanyu Culture”)	July 27, 2021	PRC	51% by VIE	Enterprise Information Technology Integration services provider
Beijing Mentor Board Health Technology Co., Ltd (“GMB Health”)	January 7, 2022	PRC	100% by VIE	Health Services
Shanghai Yuantai Fengdeng Agricultural Technology Co., Ltd. (“Yuantai Fengdeng”)	March 4, 2022	PRC	51% by VIE	Agricultural Technology Service

EX-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 Global Internet of People, 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:

(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;

(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;

(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

(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):

(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

(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 16, 2023

By:	/s/ Haiping Hu
	Name:	Haiping Hu
	Title:	Chief Executive Officer

EX-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 Global Internet of People, 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:

(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;

(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;

(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

(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):

(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

(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 16, 2023

By:	/s/ Chao Liu
	Name:	Chao Liu
	Title:	Chief Financial Officer

EX-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 Global Internet of People, Inc. (the “Company”) on Form 20-F for the year ended December 31, 2022, 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:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(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 16, 2023

By:	/s/ Haiping Hu
	Name:	Haiping Hu
	Title:	Chief Executive Officer

EX-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 Global Internet of People, Inc. (the “Company”) on Form 20-F for the year ended December 31, 2022, 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:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(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 16, 2023

By:	/s/ Chao Liu
	Name:	Chao Liu
	Title:	Chief Financial Officer

EX-15.1

Exhibit 15.1

May 15, 2023

Sunrise New Energy Co., Ltd.

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 Sunrise New Energy Co., Ltd. on Form 20-F for the year ended December 31, 2022 (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,

 

Jincheng Tongda & Neal Law Firm

PRIVILEGED & CONFIDENTIAL

XML

Document And Entity Information	12 Months Ended
	Dec. 31, 2022 shares
Document Information Line Items
Entity Registrant Name	Sunrise New Energy Co., Ltd.
Trading Symbol	EPOW
Document Type	20-F
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	25,361,550
Amendment Flag	false
Entity Central Index Key	0001780731
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Non-accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Dec. 31, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Entity Emerging Growth Company	true
Entity Shell Company	false
Entity Ex Transition Period	false
Document Registration Statement	false
Document Annual Report	true
Document Transition Report	false
Document Shell Company Report	false
Entity File Number	001-40008
Entity Incorporation, State or Country Code	E9
Entity Address, Address Line One	Room 703, West Zone, R&D Building Zibo Science and Technology Industrial Entrepreneurship Park
Entity Address, City or Town	Zibo
Entity Address, Address Line Two	No. 69 Sanying Road
Entity Address, Country	CN
Title of 12(b) Security	ordinary share
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes
Document Accounting Standard	U.S. GAAP
Auditor Firm ID	711
Auditor Name	Friedman LLP
Auditor Location	New York
Entity Address, Postal Zip Code	000000
Business Contact
Document Information Line Items
Entity Address, Address Line One	Room 703, West Zone, R&D Building Zibo Science and Technology Industrial Entrepreneurship Park
Entity Address, City or Town	Zibo
Entity Address, Address Line Two	No. 69 Sanying Road
Entity Address, Country	CN
Contact Personnel Name	Haiping Hu
Local Phone Number	1082967728
City Area Code	+86
Entity Address, Postal Zip Code	000000

XML

Consolidated Balance Sheets - USD ($)	Dec. 31, 2022	Dec. 31, 2021
CURRENT ASSETS
Cash and cash equivalents	$ 1,655,549	$ 13,916,155
Restricted cash	2,638,468
Accounts receivable, net	5,167,701	6,861,672
Notes receivable	868,679
Inventories, net	18,330,516	3,105,673
Due from related parties	400,022	65,278
Short-term investment	3,336,256	5,961,605
Prepaid expenses and other current assets	12,240,642	4,435,175
TOTAL CURRENT ASSETS	44,637,833	34,345,558
NON-CURRENT ASSETS
Restricted cash		700,060
Long term prepayments and other non-current assets	3,850,985	10,244,917
Plant, property and equipment, net	41,468,383	3,351,321
Land use rights, net	10,083,242
Intangible assets, net	3,962,650	3,594,977
Long-term investments	3,019,281	5,381,441
Operating lease right-of-use assets		224,773
Deferred tax assets		852,037
TOTAL NON-CURRENT ASSETS	62,384,541	24,349,526
TOTAL ASSETS	107,022,374	58,695,084
CURRENT LIABILITIES
Accounts payable	12,259,772	34,486
Note payable	3,876,748
Deferred revenue	347,231	179,407
Deferred revenue - related parties	347,471
Deferred government subsidy	2,871,665
Due to related parties	885,150
Income taxes payable	506,638	1,076,518
Operating lease liabilities, current		99,569
Long-term payable, current	3,706,628
Consideration payable, current	582,381
Accrued expenses and other current liabilities	639,761	330,902
TOTAL CURRENT LIABILITIES	26,023,445	1,720,882
NON-CURRENT LIABILITIES
Long term payable, non-current	4,078,843
Consideration payable, non-current	3,358,906
Deferred tax liabilities, net	199,583
TOTAL NON-CURRENT LIABILITIES	7,637,332
TOTAL LIABILITES	33,660,777	1,720,882
EQUITY
Ordinary shares (500,000,000 shares authorized; $0.0001 par value, 24,528,000 shares issued and outstanding as of December 31, 2021; 25,361,550 shares issued and outstanding as of December 31, 2022)	2,536	2,453
Additional paid-in capital	34,696,702	31,966,816
Statutory reserves	2,477,940	2,473,801
(Accumulated deficits) Retained earnings	(5,148,529)	17,259,976
Accumulated other comprehensive (loss) income	(906,444)	2,148,906
TOTAL SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO SUNRISE NEW ENERGY CO., LTD. ORDINARY SHAREHOLDERS	31,122,205	53,851,952
Non-controlling interests	42,239,392	3,122,250
TOTAL EQUITY	73,361,597	56,974,202
TOTAL LIABILITIES AND EQUITY	$ 107,022,374	$ 58,695,084

XML

Consolidated Balance Sheets (Parentheticals) - $ / shares	Dec. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Ordinary shares, authorized	500,000,000	500,000,000
Ordinary shares, par value (in Dollars per share)	$ 0.0001	$ 0.0001
Ordinary shares, issued	25,361,550	24,528,000
Ordinary shares, outstanding	25,361,550	24,528,000

XML

Consolidated Statements of Operations and Comprehensive (Loss) Income - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
REVENUE, NET
Products	$ 37,583,844	$ 2,104,767	$ 1,495,380
Service	541,824	5,304,505	21,685,704
Total revenues	38,125,668	7,409,272	23,181,084
COSTS OF REVENUES
Products	38,299,090	2,063,296	892,791
Service	1,176,956	1,823,358	2,087,425
Total cost of revenues	39,476,046	3,886,654	2,980,216
GROSS (LOSS) PROFIT	(1,350,378)	3,522,618	20,200,868
OPERATING EXPENSES
Selling expenses	1,075,980	946,775	906,456
General and administrative expenses	12,678,873	7,834,291	3,897,040
Research and development expenses	1,053,882	2,151,565	671,312
Impairment of intangible assets	2,650,020
Total operating expenses	17,458,755	10,932,631	5,474,808
(LOSS) PROFIT FROM OPERATIONS	(18,809,133)	(7,410,013)	14,726,060
OTHER (EXPENSES) INCOME
Investment losses	(3,566,561)	(2,118,453)	(1,087)
Interest (expense) income	(27,128)	173,173	214,460
Other income, net	87,390	404,380	72,837
Total other (expenses) income	(3,506,299)	(1,540,900)	286,210
(LOSS) PROFIT BEFORE INCOME TAXES	(22,315,432)	(8,950,913)	15,012,270
Income taxes provision (benefit)	808,970	(236,581)	3,054,983
NET (LOSS) INCOME	(23,124,402)	(8,714,332)	11,957,287
Less: net loss attributable to non-controlling interests	(720,036)	(311,072)	(130,240)
NET (LOSS) INCOME ATTRIBUTABLE TO SUNRISE NEW ENERGY CO., LTD. ORDINARY SHAREHOLDERS	(22,404,366)	(8,403,260)	12,087,527
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment	(5,123,964)	700,316	2,076,303
TOTAL COMPREHENSIVE (LOSS) INCOME	(28,248,366)	(8,014,016)	14,033,590
Less: comprehensive loss attributable to non-controlling interest	(2,788,650)	(321,522)	(91,862)
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO ORIDNARY SHAREHOLDERS OF SUNRISE NEW ENERGY CO., LTD.	$ (25,459,716)	$ (7,692,494)	$ 14,125,452
(LOSS) EARNINGS PER SHARE
Basic and diluted (in Dollars per share)	$ (0.9)	$ (0.36)	$ 0.72
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic and diluted (in Shares)	24,820,313	23,638,751	16,800,000

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Consolidated Statements of Operations and Comprehensive (Loss) Income (Parentheticals) - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Statement [Abstract]
Diluted	$ (0.90)	$ (0.36)	$ 0.72
Diluted	24,820,313	23,638,751	16,800,000

XML

Consolidation Statements of Changes in Equity - USD ($)	Ordinary shares	Additional paid-in Capital	Statutory reserves	Retained earnings (Accumulated deficits)	Accumulated other comprehensive (loss) income	Total equity attributable to ordinary shareholders	Non-controlling interests	Total
Balance at Dec. 31, 2019	$ 1,680	$ 4,342,181	$ 1,636,414	$ 14,413,096	$ (599,786)	$ 19,793,585	$ 203,013	$ 19,996,598
Balance (in Shares) at Dec. 31, 2019	16,800,000
Capital contributions from shareholders		119,996				119,996		119,996
Net income (loss)				12,087,527		12,087,527	(130,240)	11,957,287
Statutory reserves			837,383	(837,383)
Foreign currency translation adjustment					2,037,926	2,037,926	38,377	2,076,303
Balance at Dec. 31, 2020	$ 1,680	4,462,177	2,473,797	25,663,240	1,438,140	34,039,034	111,150	34,150,184
Balance (in Shares) at Dec. 31, 2020	16,800,000
Issued shares of ordinary shares, net of offering cost	$ 773	27,504,639				27,505,412		27,505,412
Issued shares of ordinary shares, net of offering cost (in Shares)	7,728,000
Capital contributions from non-controlling interests							3,332,622	3,332,622
Disposal of subsidiary			17	(17)			(2,642)	(2,642)
Net income (loss)				(8,403,260)		(8,403,260)	(311,072)	(8,714,332)
Statutory reserves			(13)	13
Foreign currency translation adjustment					710,766	710,766	(7,808)	702,958
Balance at Dec. 31, 2021	$ 2,453	31,966,816	2,473,801	17,259,976	2,148,906	53,851,952	3,122,250	56,974,202
Balance (in Shares) at Dec. 31, 2021	24,528,000
Capital contributions from non-controlling interests							41,905,792	41,905,792
Share-based compensation		2,729,969				2,729,969		2,729,969
Share-based compensation (in Shares)
Settlement for vested shares	$ 83	(83)
Settlement for vested shares (in Shares)	833,550
Net income (loss)				(22,404,366)		(22,404,366)	(720,036)	(23,124,402)
Statutory reserves			4,139	(4,139)
Foreign currency translation adjustment					(3,055,350)	(3,055,350)	(2,068,614)	(5,123,964)
Balance at Dec. 31, 2022	$ 2,536	$ 34,696,702	$ 2,477,940	$ (5,148,529)	$ (906,444)	$ 31,122,205	$ 42,239,392	$ 73,361,597
Balance (in Shares) at Dec. 31, 2022	25,361,550

XML

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Cash flows from operating activities
Net (loss) income	$ (23,124,402)	$ (8,714,332)	$ 11,957,287
Adjusted to reconcile net income to cash (used in) provided by operating activities
Depreciation and amortization	2,062,499	988,672	865,426
Amortization of land use right	126,042
Share-based compensation	2,729,969
Deferred tax expenses (benefits)	807,412	(232,363)	(312,780)
Interest expense	213,823
Investment losses	3,618,847	2,118,453	1,087
Bad debt expense	2,887,754	3,847,426	1,514,559
Impairment on inventory	2,711,158
Impairment on intangible assets	2,650,020
Amortization of right-of-use assets	213,063	90,320	359,551
Changes in operating assets and liabilities:
Accounts receivable, net	(1,734,486)	1,729,006	(8,385,804)
Note receivable	(899,481)
Due from related parties	(376,080)	110,184	(151,007)
Operating lease liabilities	(94,381)	31,145	(312,900)
Inventories	(18,747,772)	(331,491)	667,758
Prepaid expenses and other current assets	(2,894,690)	(678,288)	(447,421)
Accounts payable	12,661,801		(79,426)
Notes payable	4,014,213
Income taxes payable		(3,696,654)	2,565,098
Deferred revenue	549,274	(75,857)	(322,534)
Lease liabilities		(211,213)
Due to related parties	100,053
Deferred government subsidy	2,973,491
Accrued expenses and other current liabilities	(21,528)	(208,190)	(852,731)
Net cash (used in) provided by operating activities	(9,573,401)	(5,233,182)	7,066,163
Cash flows from investing activities
Purchase of property and equipment	(43,714,195)	(1,372,634)	(1,723,543)
Disposal of property and equipment			392
Prepayment for leasehold improvement			(228,457)
Purchase of land use right	(197,554)	(6,947,051)
Purchase of intangible assets	(174,895)		(2,735,433)
Loans to third parties	(35,682)	(2,825,359)
Prepaid for investment		(650,909)
Purchase of long-term investments		(2,289,945)	(1,678,514)
Purchase of short-term investments		(8,000,000)
Consideration paid for asset acquisition	(1,486,746)
Disposal of subsidiary		(9,300)
Net cash used in investing activities	(45,609,072)	(22,095,198)	(6,365,555)
Cash flows from financing activities
Proceeds from capital contributions by controlling shareholders			119,996
Proceeds from long term payable, net of issuance cost	8,827,701
Repayment on long term payable	(887,788)
Proceeds from issuance of ordinary shares in connection with initial public offering, net of issuance cost		27,504,639
Loans from related party	795,554
Proceeds from capital contributions by non-controlling shareholders	37,024,594	3,332,622
Net cash provided by financing activities	45,760,061	30,837,261	119,996
Effect of foreign exchange rate on cash and cash equivalents	(899,786)	141,322	706,302
Net (decrease) increase in cash and cash equivalents	(10,322,198)	3,650,203	1,526,906
Cash, cash equivalents and restricted cash, beginning of year	14,616,215	10,966,012	9,439,106
Cash, cash equivalents and restricted cash, end of year	4,294,017	14,616,215	10,966,012
Cash, cash equivalents and restricted cash, end of year	4,294,017	14,616,215	10,966,012
Less: non-current restricted cash	2,638,468	700,060
Cash and cash equivalents, end of year	1,655,549	13,916,155	10,966,012
Supplemental disclosure of cash flow information
Cash paid for income tax	564,335	3,699,180	638,180
Supplemental non cash transactions
Operating lease right-of-use assets obtained in exchange of operating lease liabilities		311,638	64,402
Inventories obtained in exchange for accounts receivable		155,003
Inventories obtained in exchange for deferred revenue			30,851
Long term investment obtained in exchange for accounts receivable			652,401
Intangible assets obtained from capital contribution by non-controlling shareholders	$ 4,881,198

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Organization and Business Description

12 Months Ended

Dec. 31, 2022

Organization and Business Description [Abstract]

ORGANIZATION AND BUSINESS DESCRIPTION

NOTE 1 – ORGANIZATION AND BUSINESS DESCRIPTION

Sunrise New Energy Co., Ltd. (“EPOW”), previously known as Global Internet of People, Inc., or GIOP, is a limited liability company established 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 (Beijing) Information Technology Co., Ltd. (“SDH”) 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)”), Global Mentor Board (Shanghai) Enterprise Management Consulting Co., Ltd. (“GMB Consulting”), Linking (Shanghai) Network Technology Co., Ltd. (“GMB Linking”, deconsolidated in July, 2021), Shanghai Voice of Seedling Cultural Media Co., Ltd. (“GMB Culture”), which has a majority owned 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”), Zibo Shidong Digital Technology Co., Ltd. (“Zibo Shidong”) and its major owned subsidiaries, Shidong Trading Service (Zhejiang) Co., Ltd (“Shidong Trading”, deregistered in November 2022), Shanghai Jiagui Haifeng Technology Co., Ltd. (“Jiagui Haifeng”), Shanghai Nanyu Culture Communication Co., Ltd. (“Nanyu Culture”) 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 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 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.

As described below in Reorganization, EPOW, through a restructuring which is 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 U.S. GAAP. EPOW, its subsidiaries, the VIE and the VIE’s subsidiaries, are collectively hereinafter referred as the “Company”.

Reorganization

On June 10, 2019, GIOP BJ entered into a series of contractual arrangements with the owners 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. Therefore, SDH should be considered as a VIE under the Statement of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 “Consolidation”.

EPOW, together with its wholly-owned subsidiaries, GIOP BJ, VIE and VIE’s subsidiaries were effectively controlled by the same shareholders before and after the Reorganization and, therefore, the Reorganization is considered under common control. The consolidation of the Company has been accounted for at historical cost and prepared on the basis as if the Reorganization had become effective as of the beginning of the first period presented in the consolidated financial statements.  

The consolidated financial statements reflect the activities of the Company and each of the following entities:

Name	Date of Incorporation	Place of incorporation	Percentage of effective ownership	Principal Activities
Subsidiaries
Global Mentor Board Information Technology Limited (“GMB HK”)	March 22, 2019	HK	100%	Holding company
Beijing Mentor Board Union Information Technology Co, Ltd. (“GIOP BJ”)	June 3, 2019	PRC	100%	Holding company of GIOP BJ
Shidong Cloud (Beijing) Education Technology Co., Ltd (“Shidong Cloud”)	December 22, 2021	PRC	75%	Educational Consulting
SDH (HK) New Energy Tech Co., Ltd. (“SDH New Energy”)	October 8, 2021	HK	100%	Holding company
Zhuhai (Zibo) Investment Co., Ltd. (“Zhuhai Zibo”)	October 15, 2021	PRC	100%	New Energy Investment
Zhuhai (Guizhou) New Energy Investment Co., Ltd. (“Zhuhai Guizhou”)	November 23, 2021	PRC	100%	New Energy Investment
Sunrise (Guizhou) New Energy Materials Co., Ltd.  (“Sunrise Guizhou”)	November 8, 2021	PRC	39.35%	Manufacture of Lithium Battery Materials
Guizhou Sunrise Technology Co., Ltd. (“Sunrise Tech”)	September 1, 2011	PRC	39.35%	Manufacture of Lithium Battery Materials
Sunrise (Guxian) New Energy Materials Co., Ltd. (“Sunrise Guxian”)	April 26, 2022	PRC	20.07%	Manufacture of Lithium Battery Materials
Guizhou Sunrise Technology Innovation Research Co., Ltd. (“Innovation Research”)	December 13, 2022	PRC	39.35%	Research and Development
Variable Interest Entity (“VIE”) and subsidiaries of VIE
Global Mentor Board (Beijing) Information Technology Co., Ltd. (“SDH” or “VIE”)	December 5, 2014	PRC	VIE	peer-to-peer knowledge sharing and enterprise service platform provider
Global Mentor Board (Hangzhou) Technology Co., Ltd. (“GMB (Hangzhou)”)	November 1, 2017	PRC	100% by VIE	Consulting, training and tailored services provider
Global Mentor Board (Shanghai) Enterprise Management Consulting Co., Ltd. (“GMB Consulting”)	June 30, 2017	PRC	51% by VIE	Consulting services provider
Shanghai Voice of Seedling Cultural Media Co., Ltd. (“GMB Culture”)	June 22, 2017	PRC	51% by VIE	cultural and artistic exchanges and planning, conference services provider
Shidong (Beijing) Information Technology Co., LTD. (“GMB (Beijing)”)	June 19, 2018	PRC	100% by VIE	information technology services provider
Mentor Board Voice of Seeding (Shanghai) Cultural Technology Co., Ltd. (“GMB Technology”)	August 29, 2018	PRC	30.6% by VIE	Technical services provider
Shidong Zibo Digital Technology Co., Ltd. (“Zibo Shidong”)	October 16, 2020	PRC	100% by VIE	Technical services provider
Shidong Trading Service (Zhejiang) Co., Ltd. (“Shidong Trading”)	April 19, 2021	PRC	Deregistered in November 2022	Sale of Merchandise
Shanghai Jiagui Haifeng Technology Co., Ltd. (“Jiagui Haifeng”)	November 29, 2021	PRC	51% by VIE	Business Incubation Services provider
Shanghai Nanyu Culture Communication Co., Ltd. (“Nanyu Culture”)	July 27, 2021	PRC	51% by VIE	Enterprise Information Technology Integration services provider
Beijing Mentor Board Health Technology Co., Ltd (“GMB Health”)	January 7, 2022	PRC	100% by VIE	Health Services
Shanghai Yuantai Fengdeng Agricultural Technology Co., Ltd. (“Yuantai Fengdeng”)	March 4, 2022	PRC	51% by VIE	Agricultural Technology Service

The VIE contractual arrangements

Neither the Company nor the Company’s subsidiaries own any equity interest in SDH. Instead, The Company controls 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. The VIE agreements are designed to provide GIOP BJ with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of SDH, including absolute control rights and the rights to the assets, property and revenue of SDH.

Each of the VIE Agreements is described in detail below:

Exclusive Technical and Consulting Services Agreement

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.

Equity Pledge Agreement

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.

Exclusive Option Agreement

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 RMB10 (approximately US$1.45) 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.

Powers of Attorney

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 agreed to be bound by the contractual arrangements.

Risks in relation to the VIE structure

EPOW believes that the contractual arrangements with its 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 VIE;

● discontinue or restrict the operations of any related-party transactions between the Company’s PRC subsidiary and 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 VIE may not be able to comply;

● require the Company or the Company’s PRC subsidiary and 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.

Total assets and liabilities presented on the Company’s consolidated balance sheets and revenue, expense, net income presented on consolidated statement of operations and comprehensive income as well as the cash flow from operating, investing and financing activities presented on the consolidated statement of cash flows are substantially the financial position, operation and cash flow of the Company’s VIE and VIE’s subsidiaries. The Company has not provided any financial support to SDH for the years ended December 31, 2022, 2021 and 2020. The following financial statements of the VIE and VIE’s subsidiaries were included in the consolidated financial statements as of December 31, 2022 and 2021 and for the year ended December 31, 2022, 2021 and 2020:

	As of December 31,
	2022		2021
Cash and cash equivalents	$	336,871	$	3,870,916
Accounts receivable, net		200,539		6,861,672
Inventories		3,590		2,865,958
Due from related parties		391,982		52,268
Prepaid expenses and other current assets		2,537,524		3,002,698
Total current assets		3,470,506		16,653,512
Long term prepayments and other non-current assets		14,358		-
Plant, property and equipment, net		2,874,500		3,351,321
Intangible assets, net		31,036		3,594,977
Long-term investments		3,019,281		5,381,441
Operating lease right-of-use assets		-		224,773
Deferred tax assets		-		852,037
Total non-current assets		5,939,175		13,404,549
Total assets	$	9,409,681	$	30,058,061
Accounts payable	$	50,953	$	34,486
Deferred revenue		222,605		179,407
Deferred revenue - related parties		347,471		-
Deferred government subsidy		2,871,665		-
Income taxes payable		506,638		1,076,518
Due to related parties		96,627		-
Operating lease liabilities, current		-		99,569
Accrued expenses and other current liabilities		293,699		313,685
Total current liabilities		4,389,658		1,703,665
Total liabilities	$	4,389,658	$	1,703,665

	For the years ended December 31,
	2022			2021			2020
Total net revenue	$	613,679		$	7,409,272		$	23,107,340
Net (loss) income	$	(15,438,135	)	$	(5,629,408	)	$	11,931,079

	For the years ended December 31,
	2022			2021			2020
Net cash (used in) provided by operating activities	$	(3,320,442	)	$	2,314,408		$	6,998,407
Net cash used in investing activities	$	-		$	(3,025,281	)	$	(6,493,837	)
Net cash provided by financing activities	$	-		$	-		$	119,996

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 (“U.S. GAAP”) and have been consistently applied.

Principles of consolidation 

The consolidated financial statements include the financial statements of the Company, its subsidiaries, 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, 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, 2022, 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, Nanyu Culture and Jiagui Haifeng; b) a non-controlling shareholder’s 60.65% 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.

As of December 31, 2021, for the Company’s consolidated subsidiaries, VIE and VIE’ s subsidiaries, non-controlling interests represent: a) a non-controlling shareholder’s 49%   ownership interest in Sunrise Guizhou, GMB (Beijing), GMB Consulting, Nanyu Culture and Jiagui Haifeng; b) a non-controlling shareholder’s 49% ownership interest in GMB Culture, which has a subsidiary called GMB Technology; c) a non-controlling shareholder’s 25% ownership interest in Shidong Cloud, and 40% ownership interest in Shidong Trading.

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) Income 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 doubtful accounts, inventory valuation, depreciable lives of property and equipment, impairment of long-lived assets and realization of deferred tax assets.   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) income 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) Income.

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:

	December 31, 2022	December 31, 2021	December 31, 2020
Year-end spot rate	US$1= RMB 6.9646	US$1= RMB 6.3757	US$1= RMB 6.5249
Average rate	US$1= RMB 6.7261	US$1= RMB 6.4515	US$1= RMB 6.8976

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, restricted cash, accounts receivable, notes receivable, due from related parties, advance to suppliers, prepaid expenses and other current assets, deferred revenue, income taxes payable, accounts payable, note payable, due to related parties, accrued expenses and other current liabilities approximate their fair value based on the short-term maturity of these instruments. The carrying amount of non-current long term payables and consideration payable approximates fair value as its interest rates are at the same level of current market yield for comparable loans.

The Company’s non-financial assets, such as property and equipment 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.

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. The interest incomes of highly liquid investments are reported in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income. The Company maintains the bank accounts in Mainland China and Hong Kong. Cash balances in bank accounts in Mainland China and Hong Kong are not insured by the Federal Deposit Insurance Corporation or other programs.

Restricted cash

Restricted cash represent bank deposits with designated use, which cannot be withdrawn without certain approval or notice. Restricted cash classified as a long-term asset on the Company’s consolidated balance sheets consists of cash equivalents restricted as to withdrawal or use which matures in more than twelve months after the balance sheet date. Such restricted cash relates to an escrowed fund of listing companies. The escrowed fund shall be held by the Escrow Agent for the purpose of satisfying the initial $700,000 of the indemnification obligations of the Company, with respect to the Escrowed Funds, for a period of 24 months from the closing of the Offering the Company’s initial public offering in February 2021.

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 doubtful accounts.

The Company mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on management’s assessment of historical bad debts, creditworthiness and financial conditions of the clients, current economic trends and changes in client payment patterns. Past due accounts are generally written off against the allowance for bad debts only after all collection attempts have been exhausted and the potential for recovery is considered remote. The valuation allowance provided was $8,047,527 and $5,744,387 as of December 31, 2022 and 2021, respectively.

Inventories, net

The inventories as of December 31, 2022 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. Costs include the cost of raw materials, freight, direct labor and related production overhead. The cost of inventories is calculated using the weighted average method. Any excess of the cost over the net realizable value of each item of inventories is recognized in the value of inventories. Net realizable value is estimated using selling price in the normal course of business less any costs to complete and sell products. The valuation allowance provided for the inventory was $2,711,158, $nil and $nil for the years ended December 31, 2022, 2021 and 2020.

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 of 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.

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 of a consideration. To assess whether a contract is or contains a lease, the Company assess 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.

The right-of-use assets and related lease liabilities are recognized at the lease commencement date. The Company recognizes operating lease expenses on a straight-line basis over the lease term.

Operating lease right-of-use of assets

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.

Operating lease liabilities

Lease liability is initially measured at the present value of the outstanding lease payments at the commencement date, discounted using the Company incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed lease payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee and any exercise price under a purchase option that the Company is reasonably certain to exercise.

Lease liability is measured at amortized cost using the effective interest rate method. It is remeasured when there is a change in future lease payments, if there is a change in the estimate of the amount expected to be payable under a residual value guarantee, or if there is any change in the Company assessment of option purchases, contract extensions or termination options.

Short-term leases

The Company has elected to not recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less. Lease payments associated with these leases are expensed as incurred.

Sales and leaseback contracts

The Company enters 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 has 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 property and equipment is provided using the straight-line method over their expected useful lives, as follows:

Building	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

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) Income in other income or expenses.

Land use right, net

Land use rights are recorded at cost less accumulated amortization and 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 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 loss for long-term investments of $14,072, $41,925 and $1,087 were recorded in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020, 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; 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 $979,426, $nil and $nil recorded in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020.

Impairment of long-lived assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Company measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss, which is the excess of carrying amount over the fair value of the assets, using the expected future discounted cash flows. Impairments charges for intangible assets were $2,650,020, $nil and $nil recorded in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020.

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.

Share-based compensation

Share-based compensation are 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 Group elects to recognize forfeitures when they occur.

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 income and comprehensive income 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) Income in proportion to the useful life of the related assets. Government grants received for the years ended December 31, 2022, 2021 and 2020 were $3,048,035, $458,182 and $101,485, respectively. As of December 31, 2022 and 2021, the deferred government grants were $2,871,665 and $nil, respectively.

Revenue recognition

The Company recognizes revenue under Accounting Standards Codification (“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 five kinds of services to its clients in China, sales of graphite anode materials, member services, enterprise services, online services and other services. Enterprise services include comprehensive tailored services, sponsorship advertising services, and consulting services.

Revenue recognition policies for each type of the Company’s services are discussed as follows:

Sales of graphite anode materials

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 warehouses, and then organizes the shipping and delivery of products to customers after the purchase orders are received from customers.

The Company 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, and 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 separately identifiable other 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. There is no separate rebate, discount, or volume incentive involved. Revenue is reported net of all value added taxes (“VAT”).

Member services

The Company offers three tiers of member services, Platinum, Diamond and Protégé, which differ in membership fees as well as the level of the services provided. Members pay a fixed fee for exchange of the right to participate in organized activities offered by the Company, such as study tours and forums, typically within one-year membership period. Any non-participating activities will expire and not be refunded beyond the agreed-upon period. Each member is entitled to choose from same activities offered by the Company for a total of seven times but different level of membership will receive different level of privileges at each activity, such as seating arrangement or private consultation opportunity etc. The activities for Platinum Members are also open to non-members, who pay a pre-set fee for participating in a single activity, while the Company does not offer Diamond and Protégé services to non-members separately.

Each activity represents a separate performance obligation, which is typically 5 days or less. The Company uses an expected cost plus margin approach to estimate the standalone selling prices of each activity. As Members can benefit from each activity on their own in the same way and there is no material difference in the Company’s delivering costs, such as number of staffs involved and size of each activity. Therefore, membership fees are equally allocated to seven performance obligations when the Company determines transaction price of each performance obligation.

The Company recognizes membership fees as revenue upon completion of each activity as the duration of each activity is short. Membership fees from non-participating activity will be recognized when the agreed-upon period has expired. Membership fees collected in advance are recorded as deferred revenue on the consolidated balance sheets.

Enterprise services

The Company charges its clients service fees for providing enterprise services, which mainly include comprehensive tailored services, sponsorship advertising services and consulting services.

Comprehensive tailored services

The comprehensive tailored services provide tailored packaged services to small and medium business, including conference and salon organization, booth exhibition services, on-site Mentors’ guidance, and other value-added services. The Company typically signs one-year framework agreements and a tailored services contract with the clients, which list the types of tailored services as ordered by the clients to fit their specific needs. Each tailored service is a separate performance obligation under ASC 606, as these performance obligations are distinct, the clients can benefit from each service on their own and the Company’s promises to deliver the services are separately identifiable from each other in the services contract. The performance of each tailored service is usually on a specific date designated by the clients.

The Company establishes a uniform list for the unit price of each type of tailored services with reference to quoted market prices. If no quoted market price is available, the price will be estimated by using an expected cost plus a margin approach.

The Company recognizes the price for each tailored service as revenue when the service has been provided on a specific date designated and the receipt of each tailored services is confirmed by the clients. If a client does not request certain items of the tailored services included in the services contract during the agreed-upon period, the Company will not refund the service fees and the revenue will be recognized upon expiration of service contracts. The tailored services fees collected before providing services are recorded as deferred revenue on the consolidated balance sheets.

Sponsorship advertising service

The Company provides sponsorship advertising service for its clients at certain activities it held, i.e. study tours and forums. The sponsorship advertising services are mainly to display banners with the clients’ information and distribute clients’ brochures through the activities, so that the clients can enhance their corporate and product image.

The fee the Company charges for sponsorship advertising service is depending on multiple specific factors, including number of event participants, location, public interest, etc. The Company considers all factors and determines pricing for each contract separately. The sponsorship advertising fees are recognized as revenue when services have been provided on a specific date designated and receipt of sponsorship advertising services are confirmed by clients. Sponsorship advertising fees collected before providing services are recorded as deferred revenue on the consolidated balance sheets.

Consulting services

The Company provides consulting services to small and medium-sized enterprises by helping them to develop strategies and solutions including: corporate reorganization, product promotion and marketing, industry supply chain integration, corporate governance, financing and capital structure, etc. The consulting services are tailored to meet each client’s specific needs and requirements.

Consulting fees are based on the specifics of the services provided, for instance, time and efforts required, etc. The Company considers comprehensive factors and determines prices with reference to quoted market prices. If no quoted market price is available, price will be estimated by using an expected cost plus a margin approach.

Consulting fees are recognized as revenue when services have been provided and receipt of consulting services is confirmed by clients as the duration of services is short, typically one month or less. Consulting fees collected before providing any service are presented as deferred revenue on the consolidated balance sheets.

Online services

The Company provides two types of online services to the Company’s APP Users, which are questions and answers (Q&A) session with chosen Mentors and online streaming of courses and programs. Top-up credits are paid by Users through the Company’s APP platform, using which Users can purchase the online services.

Users can raise questions to chosen Mentors or Experts with a fixed fee per Q&A session preset by Mentors or Experts. The Q&A session is usually provided by chosen Mentors or Experts within a course of a 72-hour period. The Company charges 30% of the Q&A fees as a facilitator of online services. The Q&A fees are allocated to the Company and chosen Mentors or Experts automatically by the APP on a 30%/70% split upon completion of Q&A sessions. The Company recognizes this online service fees as revenue at completion of Q&A sessions on a net basis, i.e., in the amount of 30% of allocated Q&A fees, as the Company merely provides a platform for its Users and is not the primary obligor of the Q&A session, neither has risks and rewards as principal.

The Company granted Users the access to view various online courses and programs. Users can subscribe an annual VIP at a rate of RMB299. The VIP grants Users the access right to the Company’s VIP courses and programs over the subscription period. The Company recognizes the VIP annual subscription fees as revenue on a straight-line basis over VIP subscription period. Users can also purchase à la carte courses and programs at a rate from RMB 9.9 to 299 per course or program by top-up credits through the Company’s APP platform. The payment for à la carte course and program is not refundable. After the payment is collected by the Company, the Users obtain unlimited access to the courses and programs they purchased for without limitation. The Company recognizes the fees a la carte courses and programs as revenue at the point of time that Users obtain the access to the courses and programs.

Other services fees are mainly derived from non-member participation of study tours and forums at the service level of Platinum Members. The Company charges non-members a fixed fee for each Member activity and the price for non-members is determined based on the Company’s allocated Member pricing for each activity. Fees are usually collected on site at the date of each activity and revenues are recognized at the completion of such activity.

Contract assets and liabilities

The Group’s contract liabilities consist of deferred revenues, primarily relating to the advance consideration received from customers, which include the advance member service fees and enterprise service fees received from customers. The amount from customers before provision of service is recognized as deferred revenue. The deferred revenue is recognized as revenue once the criteria for revenue recognition are met.

The Company recognized $170,061 and $253,157 in revenue for the years ended December 31, 2022 and 2021, respectively, which related to contract liabilities that existed at December 31, 2021 and 2020, respectively. The balances as of December 31, 2022 and 2021 are expected to be recognized as revenue within one year.

There was no contract asset recorded as of December 31, 2022 and 2021.

Cost of goods sold

The cost of goods sold for the year ended December 31, 2022 was primarily the cost of finished goods of graphite anode materials, including single granular coke, secondary granular coke, and mixed batches of single particle and secondary coke. The cost of goods sold for the year ended December 31, 2021 and 2020 was mainly the cost of electrolytic copper. Cost of goods sold was $38,299,090, $ 2,063,296, and $892,791 for the years ended December 31, 2022, 2021 and 2020, respectively.

Service costs

Service costs primarily include (1) the cost of holding events and activities, such as venue rental fees, conference equipment fees, (2) professional and consulting fees paid to third parties for the Company’s activity; (3) the fees paid to Mentors and Experts; and (4) labor costs. Service costs were $1,176,956, $1,823,358 and $2,087,425 for the years ended December 31, 2022, 2021 and 2020, respectively.

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.

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, 2022 and 2021, 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. Accrued interest and penalties will be included on the related tax liability line in the consolidated balance sheet.

(Loss) Earnings per share

The Company computes (loss) earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS are computed by dividing (loss) income 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. As of December 31, 2022 and 2021, the basic and diluted shares were 24,820,313 and 23,638,751, respectively.

Comprehensive (loss) income

Comprehensive (loss) income consists of two components, net (loss) income and other comprehensive (loss) income. Other comprehensive (loss) income 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) income. Other comprehensive (loss) income 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 the PRC, 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 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 the PRC. 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 the PRC 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. However, the Company believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon in the PRC and the Company believes that those Chinese banks that hold the Company’s cash and cash equivalents and short-term investments are financially sound based on public available information.

Other than the deposit insurance mechanism in the PRC mentioned above, the Company’s bank accounts are not insured by Federal Deposit Insurance Corporation insurance or other insurance.

Concentration and credit risk 

Financial instruments that potentially subject the Company to the concentration of credit risks consist of cash and short-term investments. The maximum exposures of such assets to credit risk are their carrying amounts as of the balance sheet dates. The Company deposits its cash and short-term investments 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.

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 $10,837,501, $7,449,250, $7,358,181 and $7,193,849 of revenue from four client which represented 28%, 20%, 19% and 19% of the total revenues for the years ended December 31, 2022, respectively. There was $2,000,483 of revenue from one client which represented 27% of the total revenues for the years ended December 31, 2021. There was no revenue from clients which individually represented greater than 10% of the total revenues for the year ended December 31, 2020. There was $1,549,436 of account receivable from one client which represented 12% of the account receivable as of December 31, 2022. 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 advanced payment before delivery of the services but may extend unsecured credit 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, 2022 and 2021.  

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 is 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 June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses”, which will require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Further, the FASB issued ASU No. 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11 and ASU 2020-02 to provide additional guidance on the credit losses standard. For all other entities, the amendments for ASU 2016-13 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. Adoption of the ASUs is on a modified retrospective basis. The Company has adopt ASU 2016-13 from January 1, 2023. There is no effect on the Company’s consolidated financial statement of the adoption of this ASU.

In June 2022, the FASB issued ASU 2022-03, which (1) clarifies the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and (2) requires specific disclosures related to such an equity security. ASU 2022-03 clarifies that a “contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security” and is not included in the equity security’s unit of account. Accordingly, an entity should not consider the contractual sale restriction when measuring the equity security’s fair value (i.e., the entity should not apply a discount related to the contractual sale restriction, as stated in ASC 820-10-35-36B as amended by the ASU). In addition, the ASU prohibits an entity from recognizing a contractual sale restriction as a separate unit of account. For public business entities, the guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted. The Company is in the process of evaluating the effect of the adoption of this ASU.

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Liquidity

12 Months Ended

Dec. 31, 2022

Liquidity [Abstract]

LIQUIDITY

NOTE 3 – LIQUIDITY

As reflected in the consolidated financial statements, the Company has been incurring $23,124,402 and $8,714,332 net losses for the years ended December 31 2022 and 2021, respectively. Net cash used in operating activities were $9,573,401 and $5,233,182 for the years ended December 31, 2022 and 2021, respectively. Total cash, cash equivalents and restricted cash decreased by $10,322,198 for the year ended December 31, 2022. Management expected to continue to construct the production plant in Guizhou Sunrise. In 2022, the ongoing COVID-19 pandemic continued to negatively impact the Company’s business operations. A resurgence of the COVID-19 outbreak had given rise to economic downturns and other significant changes in regional and global economic conditions, and negatively affected the Company’s ability to execute the sales contract, fulfil customer orders, and collect customer payments timely. As a result, there was a possibility that the Company’s revenue and cash flows might underperform in the next 12 months.

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 controlling the cost and expenses within an acceptable level. The Company is in the process of transitioning peer-to-peer knowledge sharing and enterprise business to graphite anode material business. In assessing its liquidity, management monitors and analyzes the Company’s cash on-hand, its ability to generate sufficient revenue sources and ability to obtain additional financial support in the future, and its operating and capital expenditure commitments. As of December 31, 2022, the Company had cash of $1,655,549. The management believes that it would be able to make borrowings from banks based on past experience and the Company’s good credit history when necessary. As of December 31, 2022, the Company had available line of credit from Bank of Guizhou for RMB 6,500,000, approximately $933,291. On January 18, 2023, Sunrise Guizhou entered a credit facility agreement with Post Savings Bank of China (“Post Bank”) to obtain revolving fund up to RMB 30,000,000, approximately $4,307,498, for a term from January 19, 2023 to January 18, 2031. On February 7, 2023, Sunrise Guizhou entered a two-year debt financing arrangement with Zhongguancun Science and Technology Leasing Co., Ltd. to obtain a loan of RMB 20,000,000, approximately $2,871,665, for a term from February 7, 2023 to February 7, 2025.

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 plan and sustain continued growth, the Company may also seek equity financing from outside investors when necessary. Based on the current operating plan, management believes that the above-mentioned measures collectively will provide sufficient liquidity for the Company to meet its future liquidity and capital requirement for at least 12 months from the date the consolidated financial statements are issued.

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Accounts Receivable, Net

12 Months Ended

Dec. 31, 2022

Accounts receivable, Net [Abstract]

ACCOUNTS RECEIVABLE, NET

NOTE 4 – ACCOUNTS RECEIVABLE, NET   

Accounts and notes receivable consisted of the following: 

	As of December 31,
	2022			2021
Accounts receivable	$	13,215,228		$	12,606,059
Allowance for doubtful accounts		(8,047,527	)		(5,744,387	)
Accounts receivable, net	$	5,167,701		$	6,861,672

The movement of allowance of doubtful accounts is as follows: 

	As of December 31,
	2022			2021			2020
Balance at beginning of the year	$	5,744,387		$	1,808,889		$	194,375
Current year addition		2,887,754			3,890,827			1,514,559
Write-off		-			(43,401	)		-
Foreign currency translation adjustments		(584,614	)		88,072			99,955
Balance at end of the year	$	8,047,527		$	5,744,387		$	1,808,889

Doubtful accounts provision was $2,887,754, $3,847,426 and $1,514,559 recorded for the years ended December 31, 2022, 2021 and 2020, respectively.

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Inventories, Net

12 Months Ended

Dec. 31, 2022

Inventories, Net [Abstract]

INVENTORIES, NET

NOTE 5 – INVENTORIES, NET

Inventories as of December 31, 2022 and 2021 consisted of the following:

	As of December 31,
	2022		2021
Raw materials	$	3,237,940	$	-
Finished Goods		12,842,333		3,105,673
Graphite anode materials		12,842,333		-
Healthcare service gift cards		-		1,276,550
Chinese tea		-		718,426
Learning course gift cards		-		454,852
Latex pillows		-		138,246
Healthcare products		-		207,348
Others		-		310,251
Work in process		2,246,653		-
Others		3,590		-
Total	$	18,330,516	$	3,105,673

As of December 31, 2021, other than cash purchase, a portion of the Company’s inventories were obtained through fee exchange arrangements with its customers, which are entered into at the Company’s discretion to receive inventory in exchange for collection of accounts receivable due from the customers. These inventories are all commodities available for sale. In fiscal year 2022, the Company wrote down these inventories to the estimated net realizable value, which was $nil, resulting in inventory valuation allowance of $2,711,158.

Inventory valuation allowance was $2,711,158, $nil and $nil recorded for the fiscal years ended December 31, 2022, 2021 and 2020, respectively.

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Short-Term Investment

12 Months Ended

Dec. 31, 2022

Short-Term Investment [Abstract]

SHORT-TERM INVESTMENT

NOTE 6 – SHORT-TERM INVESTMENT

In February 2021, the Company entered into an investment agreement with Viner Total investment Fund (the “Fund”) to invest 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 private equity fund are measured at fair value with gains and losses recognized in earnings. As a practical expedient, the Company uses Net Asset Value (“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 NAV of the Fund was $3,336,256, and $5,961,605 as of December 31, 2022 and 2021. Investment loss of $2,625,349 and $2,038,395 was recorded in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022 and 2021, respectively.  

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Prepaid Expenses and Other Current Assets

12 Months Ended

Dec. 31, 2022

Prepaid Expenses and Other Current Assets [Abstract]

PREPAID EXPENSES AND OTHER CURRENT ASSETS

NOTE 7 – PREPAID EXPENSES AND OTHER CURRENT ASSETS 

		As of December 31,
		2022			2021
Prepaid expenses		$	211,365		$	703,281
Advance to supplier			2,820,551			1,759,253
Loans to third parties	(1)		2,873,818			840,685
Prepayment for investment	(2)		1,206,099			650,909
Other receivables			401,936			299,864
Interest receivable			365,478			171,840
Prepaid value added tax (“VAT”) and income tax	(3)		4,468,404			123,100
Deposits for operating lease			36,574			43,090
Subtotal			12,384,225			4,592,022
Less: allowance for other receivables			(143,583	)		(156,847	)
Total		$	12,240,642		$	4,435,175

(1) On March 8, 2021, the Company signed a loan contract with a third party, Waichun Logistics Technology Limited (“Waichun”), to lend $825,000, with annual interest rate of 8%, and will be due on May 10, 2022. The Company renewed the contract with Waichun on May 10, 2022 to extend the loan period to December 31, 2023; Besides, the Company signed a loan contract on March 8, 2021 and renewed it on March 6, 2022 with Waichun to lend $2,000,000 with annual interest rate of 8%, which will be due on December 31, 2023.

(2) In September 2021, the Company prepaid $650,909 to acquire 61.5% equity interest of Haicheng Shenhe Technology Co., Ltd. (“Haicheng Shenhe”) The Company and the shareholders of Haicheng Shenhe agreed on the termination of the acquisition however the acquisition fund had not been paid back as of December 31, 2022. One of the shareholders in Haicheng Shenhe, Mr. Wenwu Zhang, was nominated as the Director of Sunrise Guizhou and a balance of $337,421 was reclassified to due from related parties as of December 31, 2022.

(3) 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 property, plant and equipment for the manufacture on graphite anode materials as of December 31, 2022.

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Long Term Prepayments and Other Non-Current Assets

12 Months Ended

Dec. 31, 2022

Long Term Prepayments and Other Non-Current Assets [Abstract]

LONG TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS

NOTE 8 – LONG TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS

		As of December 31,
		2022		2021
Prepaid for land use right	(1)		-		6,947,051
Prepaid for equipment	(2)		3,836,627		1,297,866
Loans to third party	(3)		-		2,000,000
Others			15,329		-
Total		$	3,850,985	$	10,244,917

(1) The Company’s subsidiary Sunrise Guizhou signed to purchase land use right from Qianxinan public resources trading center, with an area of 260,543 square meters and prepaid the consideration of $6,947,051. The land use right had been registered under Sunrise Guizhou on June 10, 2022.

(2)	Prepaid for equipment represented advance payment on the production line equipment by Sunrise Guizhou, which had not been shipped as of December 31, 2022.
(3)	The Company signed a loan contract on March 8, 2021 and renewed it on March 6, 2022 with Waichun to lend $2,000,000 with annual interest rate of 8%, which will be due on December 31, 2023. The loan was reclassified to current assets that its maturity was within a year.

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Plant, Property and Equipment, Net

12 Months Ended

Dec. 31, 2022

Plant, Property and Equipment, Net [Abstract]

PLANT, PROPERTY AND EQUIPMENT, NET

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,
	2022			2021
Building	$	4,656,184		$	3,061,496
Machines		16,341,419			-
Vehicles		332,113			106,266
Electronic equipment		587,131			100,148
Furniture, fixtures and equipment		139,650			82,104
Leasehold improvements		405,141			442,563
Subtotal		22,461,638			3,792,577
Construction in progress		20,135,220			-
Less: accumulated depreciation		(1,128,475	)		(441,256	)
Plant, property and equipment, net	$	41,468,383		$	3,351,321

Depreciation expense was $750,220, $198,747 and $126,589 for the fiscal years ended December 31, 2022, 2021 and 2020, respectively. 

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Land Use Rights, Net

12 Months Ended

Dec. 31, 2022

Land Use Rights [Abstract]

LAND USE RIGHTS, NET

NOTE 9 – LAND USE RIGHTS, NET

Land use rights, stated at cost less accumulated amortization, consisted of the following:

	As of December 31,
	2022			2021
Land use rights - cost	$	10,204,968		$	-
Less: accumulated amortization		(121,726	)		-
Land use rights, net	$	10,083,242		$	-

For the years ended December 31, 2022, 2021 and 2020, amortization expense amounted to $126,042 and $nil and $nil, respectively. The following is a schedule of future amortization of land use rights as of December 31, 2022:

2023	$	221,617
2024		221,617
2025		221,617
2026		221,617
2027 and thereafter		9,196,774
Total	$	10,083,242

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Intangible Assets, Net

12 Months Ended

Dec. 31, 2022

Intangible Assets, Net [Abstract]

INTANGIBLE ASSETS, NET

NOTE 10 – INTANGIBLE ASSETS, NET

Intangible assets, stated at cost less accumulated amortization and impairment, consisted of the following:

	As of December 31,
	2022			2021
Copyrights of course videos	$	4,876,413		$	5,326,829
Intellectual property rights		4,498,261			-
Intangible assets, cost		9,374,674			5,326,829
Less:
Accumulated amortization		(2,852,753	)		(1,731,852	)
Impairment		(2,559,271	)		-
Intangible assets, net	$	3,962,650		$	3,594,977

For the years ended December 31, 2022, 2021 and 2020, amortization expense amounted to $1,312,279 and $789,925 and $738,837, respectively. The following is a schedule of future amortization of intangible asset as of December 31, 2022:

2023	$	716,271
2024		716,271
2025		716,271
2026		716,271
2027 and thereafter		1,097,568
Total	$	3,962,650

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Long-Term Investments

12 Months Ended

Dec. 31, 2022

Long-Term Investments [Line Items]

LONG-TERM INVESTMENTS

NOTE 11 – LONG-TERM INVESTMENTS

The Company’s long-term investments consist of the following:

	As of December 31,
	2022			2021
Equity method investments:
Shidong (Suzhou) Investment Co., Ltd. (“Suzhou Investment”)	$	37,056		$	55,324
Equity investments without readily determinable fair value:
Shenzhen Jiazhong Creative Capital LLP (“Jiazhong”)		1,435,832			1,568,455
Beijing Xingshuizhixing Technology Co., Ltd. (“Xingshuizhixing”)		1,148,665			1,254,764
Zhejiang Wangxin Health Technology Co., Ltd. (“Wangxin”)		-			1,035,180
Hangzhou Zhongfei Aerospace Health Management Co., Ltd. (“Zhongfei”)		430,750			470,537
Shanghai Zhongren Yinzhirun Investment Management Partnership (“Yinzhirun”)		287,167			313,691
Jiangxi Cheyi Tongcheng Car Networking Tech Co., Ltd.(“Cheyi”)		227,970			249,027
Chengdu Zhongfuze Management LLP(“Zhongfuze”)		71,792			78,423
Shanghai Outu Home Furnishings Co., Ltd. (“Outu”)		71,792			78,423
Zhejiang Qianshier Household Co., Ltd.(“Qianshier”)		71,792			78,423
Taizhoujia Menkou Auto Greengrocer’s Delivery Technology Co., Ltd. (“Taizhoujia”)		71,792			78,423
Zhejiang Yueteng Information Technology Co., Ltd. (“Yueteng”)		71,792			78,423
Shidong Funeng(Ruzhou) Industry Development Co., Ltd.( “Funeng”)		38,767			42,348
Dongguan Zhiduocheng Car Service Co., Ltd. (“Car Service”)		25,845			28,232
Subtotal		3,991,012			5,409,673
Less: impairment		(971,731	)		(28,232	)
Total	$	3,019,281		$	5,381,441

Equity method investments 

Investment in Suzhou Investment

In December 2017, the Company acquired 17% of shareholding of Suzhou Investment with cash consideration of RMB 850,000. 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, 2022, 2021 and 2020, the Company recognized investment losses of $14,072, $14,025 and $15,585, respectively, according to its share of the post-acquisition losses of Suzhou Investment.

Equity investments without readily determinable fair value

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, approximately $1,435,832. The Company has fully paid RMB 10,000,000 as of December 31, 2020. The Company does not have significant influence or control over Jiazhong, and the partnership share investment does not have readily determinable market value, and therefore accounted for the investment of Jiazhong at cost minus impairments and plus or minus observable changes in prices. 

Investment in Xingshuizhixing

The Company signed an investment agreement with Beijing Zhitong Zhenye Technology Co., Ltd. and Li Jiyou to invest RMB8,000,000, approximately $1,148,666, to Xingshuizhixing, which is accounting for 4% of its equity interest. Xinshuizhixing mainly operates 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 Xingshuizhixing at cost minus impairments and plus or minus observable changes in prices.

Investment in Wangxin

On April 11, 2021, Zibo Shidong signed an equity transfer agreement with Wangxin, which mainly provides health consulting service, to acquire its 2.15% equity interest in the consideration of RMB6,600,000, approximately $947,650. The company has no control, joint control or significant influence on the invested units, and therefore accounted for the investment of Wangxin at cost minus impairments and plus or minus observable changes in prices. The investment fund would be refunded and reclassified as other receivable as December 31, 2022.

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 RMB3,000,000, approximately $430,750. In 2021, The Company provided it with a customized service worth of RMB3,000,000. 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 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 of Yinzhirun with cash consideration of RMB 2,000,000, approximately $287,167. 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.

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 RMB1,587,719, approximately $227,970. In 2021, the Company provided it with a membership service worth of RMB1,500,000. 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 China Construction Bank Nanchang Branch (“CCB”) 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 Zhongfuze

In September 2019, the Company acquired 11.11% of partnership share of Zhongfuze with cash consideration of RMB500,000, approximately $71,792. The Company has fully paid RMB500,000 as of December 31, 2020. The Company does not have significant influence or control over Zhongfuze, and the partnership share investment does not have readily determinable market value, and therefore accounted for the investment of Zhongfuze 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 RMB3,000,000, approximately $430,750. The Company has paid RMB 500,000, approximately $71,792, 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 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, approximately $71,792. 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 applied as dishonest entity subject to enforcement in 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 Taizhoujia

In June 2020, the Company acquired 5% of shareholding interest of Taizhoujia through nonmonetary transactions with Taizhoujia, which are entered into at the Company’s discretion to receive equity interest in exchange of collection of account receivables due from Taizhoujia of RMB500,000, approximately $71,792. 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 Taizhoujia, and the equity investment does not have readily determinable market value, and therefore accounted for the investment of Taizhoujia 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 Taizhoujia 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 Taizhoujia 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 RMB500,000, approximately $71,792. 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 Taizhoujia 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 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. 

Investment in Car Service

In November 2017, the Company acquired 1.5 % of shareholding interest of Car Service with cash consideration of RMB90,000. 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.

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Asset Acquisition

12 Months Ended

Dec. 31, 2022

Asset Acquisition [Abstract]

ASSET ACQUISITION

NOTE 12 – 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 (approximately $5,743,331), among of which RMB10,000,000 (approximately $1,486,746) 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	$	3,654,545
Plant, property and equipment – buildings		1,853,556
Total assets acquired		5,508,101
Deferred tax liabilities		(199,813	)
Net assets acquired	$	5,308,288

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.

The unpaid consideration RMB30,000,000 (approximately $4,307,499) will be paid in installments from 2023 to 2026. 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 $582,381 and $3,358,906, respectively, as of December 31, 2022. For the year ended December 31, 2022, the Company recorded interest expense of $71,272 relating to the amortization of the discount. The consideration payable is guaranteed by Mr. Haiping Hu, CEO and Chairman of the Board of Director.

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Deferred Government Subsidy

12 Months Ended

Dec. 31, 2022

Deferred Government Subsidy [Abstract]

DEFERRED GOVERNMENT SUBSIDY

NOTE 13 – DEFERRED GOVERNMENT SUBSIDY

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. As of December 31, 2022, the Company received government subsidy of RMB20,000,000, approximately $2,871,665, was recognized as deferred government subsidy. It would be deducted from the relocation expenses when incurred. 

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Long Term Payable

12 Months Ended

Dec. 31, 2022

Long Trem Payable [Abstract]

LONG TERM PAYABLE

NOTE 14 – LONG TERM PAYABLE

Loans payable represented the financial liabilities due to financial lease companies maturing within one or over one year. The loans payable consisted of the following:

	As of December 31,
	2022		2021
Long term payables:
Far East International Financial Leasing Co., Ltd. (“Far East”)	$	2,594,415	$	-
China Power Investment Ronghe Financial Leasing Co., Ltd. (“Ronghe”)		5,191,056		-
Total	$	7,785,471		-
Current portion		3,706,628		-
Non-current portion	$	4,078,843	$	-

On September 22, 2022, Sunrise Guizhou entered into a sales and leaseback contract with Far East. Pursuant to the contract, the Company sold its machines for RMB 20,000,000, approximately $2,871,665, and immediately leased it back from Far East for an eighteen-month period from September 22, 2022 to March 21, 2024. The Company had not transferred the control of the underlying assets to Far East and the Company evaluated that the sales transaction did not qualify as a sale in accordance with ASC 606. Therefore, the sales and leaseback contract was in essence a debt financing arrangement and did not apply sales and leaseback accounting in ASC 842. The proceeds, net of the financing costs, were financial liability with a yearly implied interest rate of 11.98%. This long-term payable was guaranteed by SDH and Mr. Haiping Hu. The Company was required to make monthly interest and principal payment. During the year ended December 31, 2022, The Company repaid RMB2,277,510, approximately $338,608. As of December 31, 2022, the Company had outstanding balance of $2,594,415, of which $1,984,684 and $609,731 were classified to current portion and 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 38,223,638, approximately $5,488,275, as of December 31, 2022.

On November 4, 2022, Sunrise Guizhou entered a sales and leaseback financing contract into a three-year financing with Ronghe to obtain an amount of RMB 40,000,000, approximately $5,743,331, for a term from November 10, 2022 to November 9, 2025. The sales and leaseback contract were a debt financing arrangement in essence, similar as the contract with Far East, 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. During the year ended December 31, 2022, The Company repaid RMB3,693,843, approximately $549,181. As of December 31, 2022, the Company had outstanding balance of $5,191,056, of which $1,721,944 and $3,469,112 were classified to current portion and 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, approximately $6,880,180, as of December 31, 2022.

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Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

TAXES

NOTE 15 – TAXES 

a. VAT

The Company is subject to VAT and related surcharges in China for providing member services and other in-depth services. The applicable VAT rate is 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 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 the PRC, 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 PRC tax authorities for five years from the date of filing.

b. Income tax

Cayman Islands

Under the current tax laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains. In addition, no Cayman Islands withholding tax will be imposed upon the payment of dividends by the Company to its shareholders.

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, 2022, 2021 and 2020, and accordingly no provision for Hong Kong profits tax has been made in these periods.

China

The Company’s subsidiaries are incorporated in the PRC, and are subject to the PRC Enterprise Income Tax Laws (“EIT Laws”) with the statutory income tax rate of 25% with the following exceptions.

In accordance with the implementation rules of EIT Laws, a qualified “High and New Technology Enterprise” (“HNTE”) is eligible for a preferential tax rate of 15%. 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 obtained its HNTE certificate on October 25, 2017, and renewed in 2021. Therefore, SDH is eligible to enjoy a preferential tax rate of 15% from 2017 to 2023 to the extent it has taxable income under the EIT Law.

For qualified small and thin-profit enterprises, the annual taxable income up to RMB 1 million (inclusive) is subject to an effective EIT rate of 2.5% from 1 January 2021 to 31 December 2022; where the annual taxable income exceeds RMB 1 million but does not exceed RMB 3 million (inclusive), the amount in excess of RMB 1 million is subject to an effective EIT rate of 5% from 1 January 2022 to 31 December 2024. GMB Consulting was eligible to enjoy a preferential tax rate of 5% from 2018 to 2021. Shidong Health was eligible to enjoy a preferential tax rate of 2.5% in 2022.

The components of the income tax provision (benefit) are as follows:

	For the years ended December 31,
	2022		2021			2020
Current
China	$	1,560	$	-		$	3,367,763
Deferred
China		807,410		(236,581	)		(312,780	)
Total	$	808,970	$	(236,581	)	$	3,054,983

(Loss) profit before income taxes was attributable to the following geographic locations for the years ended December 31:

	For the years ended December 31,
	2022			2021			2020
PRC	$	(16,323,667	)	$	(6,034,466	)	$	15,150,941
Others		(5,991,765	)		(2,916,447	)		(138,671	)
(Loss) profit before income taxes	$	(22,315,432	)	$	(8,950,913	)	$	15,012,270

Reconciliation between the provision (benefit) for income taxes computed by applying the PRC EIT rate of 25% to (loss) income before income taxes and the actual provision of income taxes is as follows:

	For the years ended December 31,
	2022			2021			2020
(Loss) profit before income taxes	$	(22,315,432	)	$	(8,950,913	)		15,012,270
PRC EIT rate		25	%		25	%		25	%
Income taxes computed at statutory EIT rate	$	(5,578,858	)	$	(2,237,728	)		3,753,068
Reconciling items:
Effect of tax holiday and preferential tax rate		1,274,465			169,657			(581,434	)
Effect of tax rates in foreign jurisdictions		1,497,723			728,965			(46,330	)
Effect of non-deductible expense		13,917			4,403			5,202
Effect of non-deductible share-based compensation		682,492			-			-
Super deduction of qualified R&D expenditures		-			(107,975	)		(75,523	)
Changes in valuation allowance		2,919,231			1,206,097			-
Income tax expense (benefit)	$	808,970		$	(236,581	)		3,054,983
Effective tax rate		(3.63	)%		2.64	%		20.35	%

Deferred tax assets and liabilities

According to PRC tax regulations, net operating losses can be carried forward to offset future operating income for five years. Significant components of deferred tax assets and liabilities were as follows:

	As of December 31,
	2022			2021
Deferred tax assets
Net operating loss carry forwards	$	1,934,559		$	978,216
Provision for doubtful debts		1,439,947			1,092,140
Impairment on inventory		398,578			-
Impairment of long-lived assets		163,420			-
Deferred tax assets, gross		3,936,504			2,070,356
Less: valuation allowance		(3,936,504	)		(1,218,319	)
Deferred tax assets, net	$	-		$	852,037
Deferred tax liabilities
Assets acquired in the asset acquisition	$	199,583			-

The Company has accumulated operating loss of approximately $10,130,515 and $4,745,479 as of December 31, 2022 and 2021 for income tax purposes available for offsetting against future taxable income. The accumulated operating loss were from several PRC subsidiaries of the Company. The graphite anode business was in its start-up phase for the year ended December 31, 2022. In the meantime, peer-to-peer knowledge sharing and enterprise business continued to shrink in 2022. Considering the factors in graphite anode business and peer-to-peer knowledge sharing and enterprise 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 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. The following is a schedule of expiration of carry forward operating loss as of December 31, 2022:

For the years ending December 31,
2023	$	5,360
2024		522,780
2025		166,113
2026		12,894
2027		9,423,368
Total	$	10,130,515

The Company evaluates the level of authority for 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. For the fiscal years ended December 31, 2022 and 2021, the Company had no unrecognized tax benefits.

For the Company’s operating subsidiaries, the tax years ended December 31, 2018, through December 31, 2022 remain open for statutory examination by PRC tax authorities.

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Related Party Balance and Transactions

12 Months Ended

Dec. 31, 2022

Related Party Transactions [Abstract]

RELATED PARTY BALANCE AND TRANSACTIONS

NOTE 16 – RELATED PARTY BALANCE AND TRANSACTIONS

The following is a list of related parties which the Company has transactions with:

(a)	Ningbo Zhuhai Investment Co., Ltd. (“Zhuhai Investment”), a company controlled by Mr. Haiping Hu
(b)	Bally, Corp. (“Bally”), a company controlled by Mr. Haiping Hu
(c)	Mr. Xuanming Wang, General Manager and legal representative of GMB (Hangzhou)
(d)	Mr. Haiwei Zuo, Vice Chairman of the Board, 7.49% shareholder of GMB (Beijing)
(e)	Shanghai Hui Yang Investment Co., 9.6451% shareholder of Sunrise Guizhou and controlled by immediate family members of Mr. Haiping Hu
(f)	Shidong (Suzhou) Investment Co., Ltd., a company of which Mr. Haiping Hu is the CEO
(g)	Mr. Shousheng Guo, Director, 3.00% shareholder of GMB (Beijing)
(h)	Mr. Wenwu Zhang, Director of Sunrise Guizhou
(i)	Mr. Chenming Qi, General Manager, Director and 3.00% shareholder of GIOP BJ; Director of GMB (Hangzhou)
(j)	Ms. Jing Ji, CEO of and 46% shareholder of GMB Technology
(k)	Haicheng Shenhe, 9.6451% shareholder of Sunrise Guizhou
(l)	Guizhou Yilong New Area Industrial Development and Investment Co., Ltd., 3.0864% shareholder of Sunrise Guizhou

a. Due from related parties

As of December 31, 2022 and 2021, the balances of amount due from related parties were as follows:

		As of December 31,
		2022		2021
Due from related parties
Bally			5,168		5,168
Zhuhai Investment			-		25,534
Mr. Xuanming Wang			20,102		26,664
Mr. Haiwei Zuo			-		7,912
Mr. Wenwu Zhang	(1)		337,420		-
Shidong (Suzhou) Investment Co., Ltd.			37,332		-
Total		$	400,022	$	65,278

(1) The balance as of December 31, 2022 represented the prepaid acquisition consideration to purchase Mr. Wenwu Zhang’s equity in Haicheng Shenhe. See Note 7.

b. Due to related parties

As of December 31, 2022 and 2021, the balances of amounts due to related parties were as follows:

		As of December 31,
		2022		2021
Due to related parties
Mr. Haiping Hu			2,872		-
Mr. Chenming Qi			9,189		-
Ms. Jing Ji			19,923		-
Shanghai HuiYang Investment Co.	(1)		738,128		-
Haicheng Shenhe			50,395		-
Zhuhai Investment			64,643		-
Total		$	885,150	$	-

(1) The balance as of December 31, 2022 represented the loans from the related party, with the annual interest rate of 4.35% and was initially due on August 13, 2022 and extended to December 31, 2023.

c. Deferred revenue -related parties

As of December 31, 2022 and 2021, the balances of deferred revenue of related parties were as follows:

		As of December 31,
		2022		2021
Deferred revenue of related parties
Shanghai Hui Yang Investment Co.	(1)	$	347,471	$	-
Total		$	347,471	$	-

(1) The balance as of December 31, 2022 represented the advance from the related party for tailored services.

d. Related party transactions

Related party purchase

The Company rented office spaces from Zhuhai Investment. For the years ended December 31, 2022, 2021 and 2020, total rental fee to Zhuhai Investment were $118,475, $103,411 and $96,695, respectively.

The Company purchased graphite material processing service of $450,591 and purchased raw material of $580,452 from Haicheng Shenhe for the year ended December 31, 2022.

The Company purchased professional services from Yihe Beijing. For the year ended December 31, 2020, service costs paid to Beijing Yihe were $27,175.

Related party sales

The Company sold titanium of $205 to Mr. Shousheng Guo for the year ended December 31, 2022.

The Company sold medical wine of $666 to Zhuhai Investment for the year ended December 31, 2021.

e. Related party guarantee

On August 4, 2022, Surnise Guizhou entered a line of credit financing contract with Bank of Guizhou for revolving credit of RMB 20,000,000, approximately $ 2,871,665, for a term from August 4, 2022 to August 3, 2023. The line of credit was in various means including bank loans, commercial note and letter of credit. As of December 31, 2022, the Company has utilized RMB 13,500,000, approximately $1,938,374, line of credit by issuing commercial notes to its vendors for amount of RMB 27,000,000, approximately $3,876,748. Pursuant to the line of credit contract, the Company was obliged to deposit fifty percent of the notes payable amount issued as restricted cash in the designated bank accounts in Bank of Guizhou. Pursuant to the contract, Mr. Haiping Hu and Guizhou Yilong New Area Industrial Development and Investment Co., Ltd., the non-controlling shareholder of Sunrise Guzhou, were the guarantor of the line of credit.

On September 22, 2022, Sunrise Guizhou entered a financing contract into an eighteen-month loan with Far East to obtain a loan of RMB 20,000,000, approximately $2,871,665, for a term from September 22, 2022 to March 21. On November 4, 2022, Sunrise Guizhou entered a sales and leaseback financing contract into a three-year financing with Ronghe to obtain an amount of RMB 40,000,000, approximately $5,743,331, for a term from November 10, 2022 to November 9, 2025. Pursuant to the financing contracts, Mr. Haiping Hu, CEO and Chairman of the Board of Director was the guarantor for the debt financing. See Note 14.

In July 2022, Sunrise Guizhou entered into purchase agreements with original shareholders of Sunrise to acquire 100% of Sunrise Tech’s assets and equity ownership for a gross consideration of RMB 40,000,000 (approximately $5,743,331), among of which RMB10,000,000 (approximately $1,486,746) was paid in July 2022. The unpaid consideration RMB30,000,000 (approximately $4,307,499) will be paid in installments from 2023 to 2026. The consideration payable is guaranteed by Mr. Haiping Hu. See Note 12.

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Shareholders’ Equity

12 Months Ended

Dec. 31, 2022

Shareholders’ Equity [Abstract]

SHAREHOLDERS' EQUITY

NOTE 17 – 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 was 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-based compensation

The Company recorded share-based compensation expenses of $2,729,969, $nil and $nil for the years ended December 31, 2022, 2021 and 2020, respectively. The following table sets forth the allocation of share-based compensation expenses:

	For the years ended December 31,
	2022		2021		2020
Cost of revenues	$	8,188	$	-	$	-
Selling expenses		39,301		-		-
General and administrative expenses		2,674,292		-		-
Research and development expenses		8,188		-		-
Total	$	2,729,969	$	-	$	-

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.

Restricted share units

On August 26, 2022, the Company granted 3,334,200 restricted share units to its directors and employees. 25% of the restricted share units was 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 is as follows:

	Number of restricted share units outstanding			Weighted average grant date fair value		Aggregate intrinsic value
Restricted share units outstanding at January 1, 2022		-			-		-
Granted		3,334,200			2.00		-
Vested		(833,550	)		2.00		-
Restricted share units outstanding at December 31, 2022		2,500,650			2.00		6,826,775

The weighted average grant date fair value of restricted share units granted during the years ended December 31, 2022, 2021 and 2020 were $2.00, $nil and $nil, respectively. The total fair value of restricted share units vested during the years ended December 31, 2022, 2021 and 2020 were $1,667,100, $nil, and $nil respectively.

The Group 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 $2,729,969 for the year ended December 31, 2022. As of December 31, 2022, total unrecognized compensation expenses relating to nonvested shares were $3,938,431, which is expected to be recognized over a weighted average period of 1.75 years.

Non-controlling interest

Non-controlling interest consists of the following:

	As of December 31,
	2022			2021
GMB (Beijing)	$	4,313		$	5,365
GMB Culture		2,997			25,613
Jiagui Haifeng		(710	)		(13	)
Shidong Trading		-			(35	)
GMB Consulting		13,270			14,477
Shidong Cloud		42,389			-
Sunrise Guxian		(39,323	)		-
GMB Technology		(186,539	)		(185,377	)
Sunrise Guizhou		42,402,995			3,262,220
Total	$	42,239,392		$	3,122,250

Jiagui Haifeng was established by Zibo Shidong and Mr. Lifeng Wang in November, 2021. 51% shares of Jiagui Haifeng was held by Zibo Shidong and 49% of shares was held by Mr. Lifeng Wang.

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 was held by GIOP BJ and 25% of shares was held by Yunqianyi.

Sunrise Guxian was established by Sunrise Guizhou and seven other companies in April 2022.

For the year ended December 31, 2022, the Company made capital contributions of $52,863 to Shidong Cloud; and the non-controlling shareholders made capital contributions of $78,851 to Shidong Cloud.

For the years ended December 31, 2022 and 2021, Zhuhai (Zibo) made capital contributions of $10,759,335 and $9,099,878 to Sunrise Guizhou; and the non-controlling shareholders made capital contributions of $41,826,941 and $3,332,622 to Sunrise Guizhou.

The actual capital contributions made by the Company and the non-controlling shareholders for the fiscal year ended 2022 and 2021 had no effect on the Company’s equity percentage in its eight 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, 2022 and 2021, the statutory reserves of the Company’s subsidiaries, GIOP BJ, VIE and VIE’s subsidiaries in the PRC have not reached 50% of their respective registered capital. As of December 31, 2022 and 2021, the balances of the statutory reserves were $2,477,940 and $2,473,801, 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, 2022, the statutory reserves and the share capital amounted to $2,477,940 and $22,710,147, respectively.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 18 – COMMITMENTS AND CONTINGENCIES

Contingencies

The Company may be involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The 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. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity. As of December 31, 2022, the Company was not aware of any litigations or lawsuits against it.

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Segment Reporting

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE 19 – 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.

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 chief operating decision maker (“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 performance of the Company.

Based on the management’s assessment, the Company determined that it has two operating segments and therefore two reportable segments as defined by ASC 280. The Company’s assets are substantially all located in the PRC and substantially all of the Company’s revenue and expense are derived in the PRC. Therefore, no geographical segments are presented.

The Company’s CODM evaluates performance based on each reporting segment’s revenue, costs of revenues and gross profit (loss). Revenues, cost of revenues and gross (loss) profits by segment are presented below. Separate financial information of operating income by segment is not available.

	For the years ended December 31,
REVENUES, NET	2022		2021		2020
Graphite anode business	$	37,580,677	$	-	$	-
Peer-to-peer knowledge sharing and enterprise business		544,991		7,409,272		23,181,084
Member services		106,724		498,330		872,629
Enterprise services
-Comprehensive tailored services		153,658		1,433,847		13,345,880
-Sponsorship advertising services		-		1,734,390		6,598,527
-Consulting services		9,645		1,583,583		416,634
Online services		2,100		40,391		361,933
Other revenues		272,864		2,118,731		1,585,481
Revenues, net	$	38,125,668	$	7,409,272	$	23,181,084

	For the years ended December 31,
COST OF REVENUES	2022		2021		2020
Graphite anode business	$	35,586,544	$	-	$	-
Peer-to-peer knowledge sharing and enterprise business		3,889,502		3,886,654		2,980,216
Member services		591,000		99,013		174,660
Enterprise services
-Comprehensive tailored services		294,759		157,563		340,783
-Sponsorship advertising services		-		34,041		255,634
-Consulting services		218,719		733,266		239,845
Online services		66,403		798,010		1,076,503
Other revenues		2,718,621		2,064,761		892,791
Cost of revenues	$	39,476,046	$	3,886,654	$	2,980,216

	For the years ended December 31,
GROSS (LOSS) PROFIT	2022			2021			2020
Graphite anode business	$	1,994,133		$	-		$	-
Peer-to-peer knowledge sharing and enterprise business		(3,344,511	)		3,522,618			20,200,868
Member services		(484,276	)		399,317			697,969
Enterprise services
-Comprehensive tailored services		(141,101	)		1,276,284			13,005,097
-Sponsorship advertising services		-			1,700,349			6,342,893
-Consulting services		(209,074	)		850,317			176,789
Online services		(64,303	)		(757,619	)		(714,570	)
Other revenues		(2,445,757	)		53,970			692,690
Gross (loss) profit	$	(1,350,378	)	$	3,522,618		$	20,200,868

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Subsequent Events

12 Months Ended

Dec. 31, 2022

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 20 – SUBSEQUENT EVENTS

On January 18, 2023, Sunrise Guizhou entered a credit facility agreement with Post Savings Bank of China (“Post Bank”) to obtain revolving fund up to RMB 30,000,000, approximately $4,307,498, for a term from January 19, 2023 to January 18, 2031. This credit loan was guaranteed by Mr. Haiping Hu, CEO and Chairman of the Board of Director, and Zhuhai Zibo. The Company also needed to mortgage its plants, property and equipment to Post Bank.

On February 7, 2023, Sunrise Guizhou entered a two-year debt financing arrangement with Zhongguancun Science and Technology Leasing Co., Ltd. to obtain a loan of RMB 20,000,000, approximately $2,871,665, for a term from February 7, 2023 to February 7, 2025 with five-year loan prime rate plus 2.6%. This debt financing arrangement was guaranteed by Mr. Haiping Hu, CEO and Chairman of the Board of Director, and Zhuhai Zibo. The Company also pledged its account receivable amounted to RMB 20,000,000, approximately $2,871,665 of its customer. The Company is required to make quarterly interest and principal payments.

The Company evaluated subsequent events and transactions that occurred after the balance sheet date through May 16, 2023, the date that the audited consolidated financial statements were available to be issued.

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Condensed Financial Information of the Parent Company

12 Months Ended

Dec. 31, 2022

Condensed Financial Information Disclosure [Abstract]

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

NOTE 21 – 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 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 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 VIE and its subsidiaries. Such investment is presented on the condensed balance sheets as “Investment in subsidiaries and VIE” and the respective loss or profit as “Equity in (loss) earnings of subsidiaries and VIE” on the condensed statements of operations and comprehensive (loss) income.

The footnote disclosures contain 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 footnote 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, 2022 and 2021, 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.

PARENT COMPNAY BALANCE SHEETS

	As of December 31,
	2022			2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	285,916		$	784,176
Restricted cash		700,094			-
Due from related parties		5,168			5,168
Short-term investment		3,336,256			5,961,605
Advance to suppliers		7,694			13,727
Prepaid expenses and other current assets		2,994,975			1,011,542
TOTAL CURRENT ASSETS		7,330,103			7,776,218
NON-CURRENT ASSETS
Restricted cash		-			700,060
Long term prepayments and other non-current assets		-			2,000,000
Investment in subsidiaries and VIE		24,714,096			41,438,198
TOTAL NON-CURRENT ASSETS		24,714,096			44,138,258
TOTAL ASSETS		32,044,199			51,914,476
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accrued expenses and other current liabilities		15,550			211,430
TOTAL CURRENT LIABILITIES		15,550			211,430
TOTAL LIABILITES		15,550			211,430
EQUITY
Ordinary shares (500,000,000 shares authorized; $0.0001 par value, 24,528,000 shares issued and outstanding as of December 31, 2021; 25,361,550 shares issued and outstanding as of December 31, 2022)		2,536			2,453
Additional paid-in capital		34,696,702			31,966,816
Statutory reserves		2,477,940			2,473,801
(Accumulated deficits) Retained earnings		(5,148,529	)		17,259,976
TOTAL EQUITY		32,028,649			51,703,046
TOTAL LIABILITIES AND EQUITY	$	32,044,199		$	51,914,476

PARENT COMPNAY STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

	For the years ended December 31,
	2022			2021			2020
REVENUES, NET	$	-		$	-		$	73,744
COSTS OF REVENUES		8,188			-			-
GROSS (LOSS) PROFIT		(8,188	)		-			73,744
OPERATING EXPENSES		3,578,664			1,010,536			50,000
(LOSS) PROFIT FROM OPERATIONS		(3,586,852	)		(1,010,536	)		23,744
OTHER (EXPENSES) INCOME		(2,403,412	)		(1,904,135	)		4,459
(LOSS) PROFIT BEFORE EQUITY IN (LOSS) EARNINGS OF SUBSIDIARIES AND VIE		(5,990,264	)		(2,914,671	)		28,203
Equity in (loss) earnings of subsidiaries and VIE		(16,414,102	)		(5,488,589	)		12,059,324
NET (LOSS) INCOME ATTRIBUTABLE TO SUNRISE NEW ENERGY CO., LTD. ORDINARY SHAREHOLDERS		(22,404,366	)		(8,403,260	)		12,087,527
Foreign currency translation adjustment		-			-			-
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO SUNRISE NEW ENERGY CO., LTD. ORDINARY SHAREHOLDERS	$	(22,404,366	)	$	(8,403,260	)	$	12,087,527

PARENT COMPNAY STATEMENTS OF CASH FLOWS

	For the years ended December 31,
	2022			2021			2020
Net cash used in operating activities		(808,226	)		(1,015,145	)		(52,994	)
Net cash used in investing activities					(25,825,000	)		-
Net cash provided by financing activities		310,000			28,249,093			128,282
(Decrease) increase in cash and cash equivalents		(498,226	)		1,408,948			75,288
Cash, cash equivalents and restricted cash, beginning of year		1,484,236			75,288			-
Cash, cash equivalents and restricted cash, end of year	$	986,010		$	1,484,236		$	75,288
Cash, cash equivalents and restricted cash, end of year		986,010			1,484,236			75,288
Less: restricted cash		700,094			700,060			-
Cash and cash equivalents, end of year		285,916			784,176			75,288

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Accounting Policies, by Policy (Policies)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and have been consistently applied.

Principles of consolidation

Principles of consolidation 

The consolidated financial statements include the financial statements of the Company, its subsidiaries, 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, VIE and VIE’s subsidiaries have been eliminated upon consolidation.

Non-controlling interests

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, 2022, 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, Nanyu Culture and Jiagui Haifeng; b) a non-controlling shareholder’s 60.65% 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.

As of December 31, 2021, for the Company’s consolidated subsidiaries, VIE and VIE’ s subsidiaries, non-controlling interests represent: a) a non-controlling shareholder’s 49%   ownership interest in Sunrise Guizhou, GMB (Beijing), GMB Consulting, Nanyu Culture and Jiagui Haifeng; b) a non-controlling shareholder’s 49% ownership interest in GMB Culture, which has a subsidiary called GMB Technology; c) a non-controlling shareholder’s 25% ownership interest in Shidong Cloud, and 40% ownership interest in Shidong Trading.

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) Income to distinguish the interests from that of the Company.

Use of estimates

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 doubtful accounts, inventory valuation, depreciable lives of property and equipment, impairment of long-lived assets and realization of deferred tax assets.   Actual results could differ from those estimates.

Foreign currency translation

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) income 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) Income.

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:

	December 31, 2022	December 31, 2021	December 31, 2020
Year-end spot rate	US$1= RMB 6.9646	US$1= RMB 6.3757	US$1= RMB 6.5249
Average rate	US$1= RMB 6.7261	US$1= RMB 6.4515	US$1= RMB 6.8976

Fair value measurements

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, restricted cash, accounts receivable, notes receivable, due from related parties, advance to suppliers, prepaid expenses and other current assets, deferred revenue, income taxes payable, accounts payable, note payable, due to related parties, accrued expenses and other current liabilities approximate their fair value based on the short-term maturity of these instruments. The carrying amount of non-current long term payables and consideration payable approximates fair value as its interest rates are at the same level of current market yield for comparable loans.

The Company’s non-financial assets, such as property and equipment 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.

Cash and cash equivalents

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. The interest incomes of highly liquid investments are reported in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income. The Company maintains the bank accounts in Mainland China and Hong Kong. Cash balances in bank accounts in Mainland China and Hong Kong are not insured by the Federal Deposit Insurance Corporation or other programs.

Restricted cash

Restricted cash

Restricted cash represent bank deposits with designated use, which cannot be withdrawn without certain approval or notice. Restricted cash classified as a long-term asset on the Company’s consolidated balance sheets consists of cash equivalents restricted as to withdrawal or use which matures in more than twelve months after the balance sheet date. Such restricted cash relates to an escrowed fund of listing companies. The escrowed fund shall be held by the Escrow Agent for the purpose of satisfying the initial $700,000 of the indemnification obligations of the Company, with respect to the Escrowed Funds, for a period of 24 months from the closing of the Offering the Company’s initial public offering in February 2021.

Short-term investments

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 and notes receivable

Accounts receivable, net

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

The Company mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on management’s assessment of historical bad debts, creditworthiness and financial conditions of the clients, current economic trends and changes in client payment patterns. Past due accounts are generally written off against the allowance for bad debts only after all collection attempts have been exhausted and the potential for recovery is considered remote. The valuation allowance provided was $8,047,527 and $5,744,387 as of December 31, 2022 and 2021, respectively.

Inventories

Inventories, net

The inventories as of December 31, 2022 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. Costs include the cost of raw materials, freight, direct labor and related production overhead. The cost of inventories is calculated using the weighted average method. Any excess of the cost over the net realizable value of each item of inventories is recognized in the value of inventories. Net realizable value is estimated using selling price in the normal course of business less any costs to complete and sell products. The valuation allowance provided for the inventory was $2,711,158, $nil and $nil for the years ended December 31, 2022, 2021 and 2020.

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 of 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.

Lease

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 of a consideration. To assess whether a contract is or contains a lease, the Company assess 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.

The right-of-use assets and related lease liabilities are recognized at the lease commencement date. The Company recognizes operating lease expenses on a straight-line basis over the lease term.

Operating lease right-of-use of assets

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.

Operating lease liabilities

Lease liability is initially measured at the present value of the outstanding lease payments at the commencement date, discounted using the Company incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed lease payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee and any exercise price under a purchase option that the Company is reasonably certain to exercise.

Lease liability is measured at amortized cost using the effective interest rate method. It is remeasured when there is a change in future lease payments, if there is a change in the estimate of the amount expected to be payable under a residual value guarantee, or if there is any change in the Company assessment of option purchases, contract extensions or termination options.

Short-term leases

The Company has elected to not recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less. Lease payments associated with these leases are expensed as incurred.

Sales and leaseback contracts

The Company enters 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 has 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, net

Plant, property and equipment are stated at cost less accumulated depreciation. Depreciation of property and equipment is provided using the straight-line method over their expected useful lives, as follows:

Building	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

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) Income in other income or expenses.

Land use right, net

Land use right, net

Land use rights are recorded at cost less accumulated amortization and amortized on a straight-line basis over the remaining term of the land certificates, from 40 years to 50 years.

Intangible assets, net

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 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

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 loss for long-term investments of $14,072, $41,925 and $1,087 were recorded in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020, 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; 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 $979,426, $nil and $nil recorded in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020.

Impairment of long-lived assets

Impairment of long-lived assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Company measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss, which is the excess of carrying amount over the fair value of the assets, using the expected future discounted cash flows. Impairments charges for intangible assets were $2,650,020, $nil and $nil recorded in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020.

Asset acquisition

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.

Share-based compensation

Share-based compensation

Share-based compensation are 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 Group elects to recognize forfeitures when they occur.

Government subsidies

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 income and comprehensive income 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) Income in proportion to the useful life of the related assets. Government grants received for the years ended December 31, 2022, 2021 and 2020 were $3,048,035, $458,182 and $101,485, respectively. As of December 31, 2022 and 2021, the deferred government grants were $2,871,665 and $nil, respectively.

Revenue recognition

Revenue recognition

The Company recognizes revenue under Accounting Standards Codification (“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 five kinds of services to its clients in China, sales of graphite anode materials, member services, enterprise services, online services and other services. Enterprise services include comprehensive tailored services, sponsorship advertising services, and consulting services.

Revenue recognition policies for each type of the Company’s services are discussed as follows:

Sales of graphite anode materials

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 warehouses, and then organizes the shipping and delivery of products to customers after the purchase orders are received from customers.

The Company 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, and 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 separately identifiable other 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. There is no separate rebate, discount, or volume incentive involved. Revenue is reported net of all value added taxes (“VAT”).

Member services

The Company offers three tiers of member services, Platinum, Diamond and Protégé, which differ in membership fees as well as the level of the services provided. Members pay a fixed fee for exchange of the right to participate in organized activities offered by the Company, such as study tours and forums, typically within one-year membership period. Any non-participating activities will expire and not be refunded beyond the agreed-upon period. Each member is entitled to choose from same activities offered by the Company for a total of seven times but different level of membership will receive different level of privileges at each activity, such as seating arrangement or private consultation opportunity etc. The activities for Platinum Members are also open to non-members, who pay a pre-set fee for participating in a single activity, while the Company does not offer Diamond and Protégé services to non-members separately.

Each activity represents a separate performance obligation, which is typically 5 days or less. The Company uses an expected cost plus margin approach to estimate the standalone selling prices of each activity. As Members can benefit from each activity on their own in the same way and there is no material difference in the Company’s delivering costs, such as number of staffs involved and size of each activity. Therefore, membership fees are equally allocated to seven performance obligations when the Company determines transaction price of each performance obligation.

The Company recognizes membership fees as revenue upon completion of each activity as the duration of each activity is short. Membership fees from non-participating activity will be recognized when the agreed-upon period has expired. Membership fees collected in advance are recorded as deferred revenue on the consolidated balance sheets.

Enterprise services

The Company charges its clients service fees for providing enterprise services, which mainly include comprehensive tailored services, sponsorship advertising services and consulting services.

Comprehensive tailored services

The comprehensive tailored services provide tailored packaged services to small and medium business, including conference and salon organization, booth exhibition services, on-site Mentors’ guidance, and other value-added services. The Company typically signs one-year framework agreements and a tailored services contract with the clients, which list the types of tailored services as ordered by the clients to fit their specific needs. Each tailored service is a separate performance obligation under ASC 606, as these performance obligations are distinct, the clients can benefit from each service on their own and the Company’s promises to deliver the services are separately identifiable from each other in the services contract. The performance of each tailored service is usually on a specific date designated by the clients.

The Company establishes a uniform list for the unit price of each type of tailored services with reference to quoted market prices. If no quoted market price is available, the price will be estimated by using an expected cost plus a margin approach.

The Company recognizes the price for each tailored service as revenue when the service has been provided on a specific date designated and the receipt of each tailored services is confirmed by the clients. If a client does not request certain items of the tailored services included in the services contract during the agreed-upon period, the Company will not refund the service fees and the revenue will be recognized upon expiration of service contracts. The tailored services fees collected before providing services are recorded as deferred revenue on the consolidated balance sheets.

Sponsorship advertising service

The Company provides sponsorship advertising service for its clients at certain activities it held, i.e. study tours and forums. The sponsorship advertising services are mainly to display banners with the clients’ information and distribute clients’ brochures through the activities, so that the clients can enhance their corporate and product image.

The fee the Company charges for sponsorship advertising service is depending on multiple specific factors, including number of event participants, location, public interest, etc. The Company considers all factors and determines pricing for each contract separately. The sponsorship advertising fees are recognized as revenue when services have been provided on a specific date designated and receipt of sponsorship advertising services are confirmed by clients. Sponsorship advertising fees collected before providing services are recorded as deferred revenue on the consolidated balance sheets.

Consulting services

The Company provides consulting services to small and medium-sized enterprises by helping them to develop strategies and solutions including: corporate reorganization, product promotion and marketing, industry supply chain integration, corporate governance, financing and capital structure, etc. The consulting services are tailored to meet each client’s specific needs and requirements.

Consulting fees are based on the specifics of the services provided, for instance, time and efforts required, etc. The Company considers comprehensive factors and determines prices with reference to quoted market prices. If no quoted market price is available, price will be estimated by using an expected cost plus a margin approach.

Consulting fees are recognized as revenue when services have been provided and receipt of consulting services is confirmed by clients as the duration of services is short, typically one month or less. Consulting fees collected before providing any service are presented as deferred revenue on the consolidated balance sheets.

Online services

The Company provides two types of online services to the Company’s APP Users, which are questions and answers (Q&A) session with chosen Mentors and online streaming of courses and programs. Top-up credits are paid by Users through the Company’s APP platform, using which Users can purchase the online services.

Users can raise questions to chosen Mentors or Experts with a fixed fee per Q&A session preset by Mentors or Experts. The Q&A session is usually provided by chosen Mentors or Experts within a course of a 72-hour period. The Company charges 30% of the Q&A fees as a facilitator of online services. The Q&A fees are allocated to the Company and chosen Mentors or Experts automatically by the APP on a 30%/70% split upon completion of Q&A sessions. The Company recognizes this online service fees as revenue at completion of Q&A sessions on a net basis, i.e., in the amount of 30% of allocated Q&A fees, as the Company merely provides a platform for its Users and is not the primary obligor of the Q&A session, neither has risks and rewards as principal.

The Company granted Users the access to view various online courses and programs. Users can subscribe an annual VIP at a rate of RMB299. The VIP grants Users the access right to the Company’s VIP courses and programs over the subscription period. The Company recognizes the VIP annual subscription fees as revenue on a straight-line basis over VIP subscription period. Users can also purchase à la carte courses and programs at a rate from RMB 9.9 to 299 per course or program by top-up credits through the Company’s APP platform. The payment for à la carte course and program is not refundable. After the payment is collected by the Company, the Users obtain unlimited access to the courses and programs they purchased for without limitation. The Company recognizes the fees a la carte courses and programs as revenue at the point of time that Users obtain the access to the courses and programs.

Other services fees are mainly derived from non-member participation of study tours and forums at the service level of Platinum Members. The Company charges non-members a fixed fee for each Member activity and the price for non-members is determined based on the Company’s allocated Member pricing for each activity. Fees are usually collected on site at the date of each activity and revenues are recognized at the completion of such activity.

Contract assets and liabilities

The Group’s contract liabilities consist of deferred revenues, primarily relating to the advance consideration received from customers, which include the advance member service fees and enterprise service fees received from customers. The amount from customers before provision of service is recognized as deferred revenue. The deferred revenue is recognized as revenue once the criteria for revenue recognition are met.

The Company recognized $170,061 and $253,157 in revenue for the years ended December 31, 2022 and 2021, respectively, which related to contract liabilities that existed at December 31, 2021 and 2020, respectively. The balances as of December 31, 2022 and 2021 are expected to be recognized as revenue within one year.

There was no contract asset recorded as of December 31, 2022 and 2021.

Cost of goods sold

Cost of goods sold

The cost of goods sold for the year ended December 31, 2022 was primarily the cost of finished goods of graphite anode materials, including single granular coke, secondary granular coke, and mixed batches of single particle and secondary coke. The cost of goods sold for the year ended December 31, 2021 and 2020 was mainly the cost of electrolytic copper. Cost of goods sold was $38,299,090, $ 2,063,296, and $892,791 for the years ended December 31, 2022, 2021 and 2020, respectively.

Service costs

Service costs

Service costs primarily include (1) the cost of holding events and activities, such as venue rental fees, conference equipment fees, (2) professional and consulting fees paid to third parties for the Company’s activity; (3) the fees paid to Mentors and Experts; and (4) labor costs. Service costs were $1,176,956, $1,823,358 and $2,087,425 for the years ended December 31, 2022, 2021 and 2020, respectively.

Income taxes

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.

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, 2022 and 2021, 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. Accrued interest and penalties will be included on the related tax liability line in the consolidated balance sheet.

(Loss) Earnings per share

(Loss) Earnings per share

The Company computes (loss) earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS are computed by dividing (loss) income 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. As of December 31, 2022 and 2021, the basic and diluted shares were 24,820,313 and 23,638,751, respectively.

Comprehensive (loss) income

Comprehensive (loss) income

Comprehensive (loss) income consists of two components, net (loss) income and other comprehensive (loss) income. Other comprehensive (loss) income 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) income. Other comprehensive (loss) income 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 the PRC, 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 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 the PRC. 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 the PRC 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. However, the Company believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon in the PRC and the Company believes that those Chinese banks that hold the Company’s cash and cash equivalents and short-term investments are financially sound based on public available information.

Other than the deposit insurance mechanism in the PRC mentioned above, the Company’s bank accounts are not insured by Federal Deposit Insurance Corporation insurance or other insurance.

Concentration and credit risk 

Financial instruments that potentially subject the Company to the concentration of credit risks consist of cash and short-term investments. The maximum exposures of such assets to credit risk are their carrying amounts as of the balance sheet dates. The Company deposits its cash and short-term investments 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.

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 $10,837,501, $7,449,250, $7,358,181 and $7,193,849 of revenue from four client which represented 28%, 20%, 19% and 19% of the total revenues for the years ended December 31, 2022, respectively. There was $2,000,483 of revenue from one client which represented 27% of the total revenues for the years ended December 31, 2021. There was no revenue from clients which individually represented greater than 10% of the total revenues for the year ended December 31, 2020. There was $1,549,436 of account receivable from one client which represented 12% of the account receivable as of December 31, 2022. 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 advanced payment before delivery of the services but may extend unsecured credit 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, 2022 and 2021.  

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 is 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

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 June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses”, which will require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Further, the FASB issued ASU No. 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11 and ASU 2020-02 to provide additional guidance on the credit losses standard. For all other entities, the amendments for ASU 2016-13 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. Adoption of the ASUs is on a modified retrospective basis. The Company has adopt ASU 2016-13 from January 1, 2023. There is no effect on the Company’s consolidated financial statement of the adoption of this ASU.

In June 2022, the FASB issued ASU 2022-03, which (1) clarifies the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and (2) requires specific disclosures related to such an equity security. ASU 2022-03 clarifies that a “contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security” and is not included in the equity security’s unit of account. Accordingly, an entity should not consider the contractual sale restriction when measuring the equity security’s fair value (i.e., the entity should not apply a discount related to the contractual sale restriction, as stated in ASC 820-10-35-36B as amended by the ASU). In addition, the ASU prohibits an entity from recognizing a contractual sale restriction as a separate unit of account. For public business entities, the guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted. The Company is in the process of evaluating the effect of the adoption of this ASU.

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Organization and Business Description (Tables)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Schedule of subsidiaries and variable interest entities

Name	Date of Incorporation	Place of incorporation	Percentage of effective ownership	Principal Activities
Subsidiaries
Global Mentor Board Information Technology Limited (“GMB HK”)	March 22, 2019	HK	100%	Holding company
Beijing Mentor Board Union Information Technology Co, Ltd. (“GIOP BJ”)	June 3, 2019	PRC	100%	Holding company of GIOP BJ
Shidong Cloud (Beijing) Education Technology Co., Ltd (“Shidong Cloud”)	December 22, 2021	PRC	75%	Educational Consulting
SDH (HK) New Energy Tech Co., Ltd. (“SDH New Energy”)	October 8, 2021	HK	100%	Holding company
Zhuhai (Zibo) Investment Co., Ltd. (“Zhuhai Zibo”)	October 15, 2021	PRC	100%	New Energy Investment
Zhuhai (Guizhou) New Energy Investment Co., Ltd. (“Zhuhai Guizhou”)	November 23, 2021	PRC	100%	New Energy Investment
Sunrise (Guizhou) New Energy Materials Co., Ltd.  (“Sunrise Guizhou”)	November 8, 2021	PRC	39.35%	Manufacture of Lithium Battery Materials
Guizhou Sunrise Technology Co., Ltd. (“Sunrise Tech”)	September 1, 2011	PRC	39.35%	Manufacture of Lithium Battery Materials
Sunrise (Guxian) New Energy Materials Co., Ltd. (“Sunrise Guxian”)	April 26, 2022	PRC	20.07%	Manufacture of Lithium Battery Materials
Guizhou Sunrise Technology Innovation Research Co., Ltd. (“Innovation Research”)	December 13, 2022	PRC	39.35%	Research and Development
Variable Interest Entity (“VIE”) and subsidiaries of VIE
Global Mentor Board (Beijing) Information Technology Co., Ltd. (“SDH” or “VIE”)	December 5, 2014	PRC	VIE	peer-to-peer knowledge sharing and enterprise service platform provider
Global Mentor Board (Hangzhou) Technology Co., Ltd. (“GMB (Hangzhou)”)	November 1, 2017	PRC	100% by VIE	Consulting, training and tailored services provider
Global Mentor Board (Shanghai) Enterprise Management Consulting Co., Ltd. (“GMB Consulting”)	June 30, 2017	PRC	51% by VIE	Consulting services provider
Shanghai Voice of Seedling Cultural Media Co., Ltd. (“GMB Culture”)	June 22, 2017	PRC	51% by VIE	cultural and artistic exchanges and planning, conference services provider
Shidong (Beijing) Information Technology Co., LTD. (“GMB (Beijing)”)	June 19, 2018	PRC	100% by VIE	information technology services provider
Mentor Board Voice of Seeding (Shanghai) Cultural Technology Co., Ltd. (“GMB Technology”)	August 29, 2018	PRC	30.6% by VIE	Technical services provider
Shidong Zibo Digital Technology Co., Ltd. (“Zibo Shidong”)	October 16, 2020	PRC	100% by VIE	Technical services provider
Shidong Trading Service (Zhejiang) Co., Ltd. (“Shidong Trading”)	April 19, 2021	PRC	Deregistered in November 2022	Sale of Merchandise
Shanghai Jiagui Haifeng Technology Co., Ltd. (“Jiagui Haifeng”)	November 29, 2021	PRC	51% by VIE	Business Incubation Services provider
Shanghai Nanyu Culture Communication Co., Ltd. (“Nanyu Culture”)	July 27, 2021	PRC	51% by VIE	Enterprise Information Technology Integration services provider
Beijing Mentor Board Health Technology Co., Ltd (“GMB Health”)	January 7, 2022	PRC	100% by VIE	Health Services
Shanghai Yuantai Fengdeng Agricultural Technology Co., Ltd. (“Yuantai Fengdeng”)	March 4, 2022	PRC	51% by VIE	Agricultural Technology Service

Schedule of balance sheets

	As of December 31,
	2022		2021
Cash and cash equivalents	$	336,871	$	3,870,916
Accounts receivable, net		200,539		6,861,672
Inventories		3,590		2,865,958
Due from related parties		391,982		52,268
Prepaid expenses and other current assets		2,537,524		3,002,698
Total current assets		3,470,506		16,653,512
Long term prepayments and other non-current assets		14,358		-
Plant, property and equipment, net		2,874,500		3,351,321
Intangible assets, net		31,036		3,594,977
Long-term investments		3,019,281		5,381,441
Operating lease right-of-use assets		-		224,773
Deferred tax assets		-		852,037
Total non-current assets		5,939,175		13,404,549
Total assets	$	9,409,681	$	30,058,061
Accounts payable	$	50,953	$	34,486
Deferred revenue		222,605		179,407
Deferred revenue - related parties		347,471		-
Deferred government subsidy		2,871,665		-
Income taxes payable		506,638		1,076,518
Due to related parties		96,627		-
Operating lease liabilities, current		-		99,569
Accrued expenses and other current liabilities		293,699		313,685
Total current liabilities		4,389,658		1,703,665
Total liabilities	$	4,389,658	$	1,703,665

Schedule of income statement

	For the years ended December 31,
	2022			2021			2020
Total net revenue	$	613,679		$	7,409,272		$	23,107,340
Net (loss) income	$	(15,438,135	)	$	(5,629,408	)	$	11,931,079

Schedule of cash flow

	For the years ended December 31,
	2022			2021			2020
Net cash (used in) provided by operating activities	$	(3,320,442	)	$	2,314,408		$	6,998,407
Net cash used in investing activities	$	-		$	(3,025,281	)	$	(6,493,837	)
Net cash provided by financing activities	$	-		$	-		$	119,996

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Schedule of currency exchange rates

	December 31, 2022	December 31, 2021	December 31, 2020
Year-end spot rate	US$1= RMB 6.9646	US$1= RMB 6.3757	US$1= RMB 6.5249
Average rate	US$1= RMB 6.7261	US$1= RMB 6.4515	US$1= RMB 6.8976

Schedule of property and equipment are stated at cost less accumulated depreciation

Building	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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Accounts Receivable, Net (Tables)

12 Months Ended

Dec. 31, 2022

Accounts receivable, Net [Abstract]

Schedule of accounts receivable

	As of December 31,
	2022			2021
Accounts receivable	$	13,215,228		$	12,606,059
Allowance for doubtful accounts		(8,047,527	)		(5,744,387	)
Accounts receivable, net	$	5,167,701		$	6,861,672

Schedule of movement of allowance of doubtful accounts

	As of December 31,
	2022			2021			2020
Balance at beginning of the year	$	5,744,387		$	1,808,889		$	194,375
Current year addition		2,887,754			3,890,827			1,514,559
Write-off		-			(43,401	)		-
Foreign currency translation adjustments		(584,614	)		88,072			99,955
Balance at end of the year	$	8,047,527		$	5,744,387		$	1,808,889

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Inventories, Net (Tables)

12 Months Ended

Dec. 31, 2022

Inventories, Net [Abstract]

Schedule of inventories

	As of December 31,
	2022		2021
Raw materials	$	3,237,940	$	-
Finished Goods		12,842,333		3,105,673
Graphite anode materials		12,842,333		-
Healthcare service gift cards		-		1,276,550
Chinese tea		-		718,426
Learning course gift cards		-		454,852
Latex pillows		-		138,246
Healthcare products		-		207,348
Others		-		310,251
Work in process		2,246,653		-
Others		3,590		-
Total	$	18,330,516	$	3,105,673

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Prepaid Expenses and Other Current Assets (Tables)

12 Months Ended

Dec. 31, 2022

Prepaid Expenses and Other Current Assets [Abstract]

Schedule of prepaid expenses and other current assets

		As of December 31,
		2022			2021
Prepaid expenses		$	211,365		$	703,281
Advance to supplier			2,820,551			1,759,253
Loans to third parties	(1)		2,873,818			840,685
Prepayment for investment	(2)		1,206,099			650,909
Other receivables			401,936			299,864
Interest receivable			365,478			171,840
Prepaid value added tax (“VAT”) and income tax	(3)		4,468,404			123,100
Deposits for operating lease			36,574			43,090
Subtotal			12,384,225			4,592,022
Less: allowance for other receivables			(143,583	)		(156,847	)
Total		$	12,240,642		$	4,435,175

(1) On March 8, 2021, the Company signed a loan contract with a third party, Waichun Logistics Technology Limited (“Waichun”), to lend $825,000, with annual interest rate of 8%, and will be due on May 10, 2022. The Company renewed the contract with Waichun on May 10, 2022 to extend the loan period to December 31, 2023; Besides, the Company signed a loan contract on March 8, 2021 and renewed it on March 6, 2022 with Waichun to lend $2,000,000 with annual interest rate of 8%, which will be due on December 31, 2023.

(2) In September 2021, the Company prepaid $650,909 to acquire 61.5% equity interest of Haicheng Shenhe Technology Co., Ltd. (“Haicheng Shenhe”) The Company and the shareholders of Haicheng Shenhe agreed on the termination of the acquisition however the acquisition fund had not been paid back as of December 31, 2022. One of the shareholders in Haicheng Shenhe, Mr. Wenwu Zhang, was nominated as the Director of Sunrise Guizhou and a balance of $337,421 was reclassified to due from related parties as of December 31, 2022.

(3) 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 property, plant and equipment for the manufacture on graphite anode materials as of December 31, 2022.

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Long Term Prepayments and Other Non-Current Assets (Tables)

12 Months Ended

Dec. 31, 2022

Long Term Prepayments and Other Non Current Assets [Abstract]

Schedule of long term prepayments and other non-current assets

		As of December 31,
		2022		2021
Prepaid for land use right	(1)		-		6,947,051
Prepaid for equipment	(2)		3,836,627		1,297,866
Loans to third party	(3)		-		2,000,000
Others			15,329		-
Total		$	3,850,985	$	10,244,917

(1) The Company’s subsidiary Sunrise Guizhou signed to purchase land use right from Qianxinan public resources trading center, with an area of 260,543 square meters and prepaid the consideration of $6,947,051. The land use right had been registered under Sunrise Guizhou on June 10, 2022.

(2)	Prepaid for equipment represented advance payment on the production line equipment by Sunrise Guizhou, which had not been shipped as of December 31, 2022.
(3)	The Company signed a loan contract on March 8, 2021 and renewed it on March 6, 2022 with Waichun to lend $2,000,000 with annual interest rate of 8%, which will be due on December 31, 2023. The loan was reclassified to current assets that its maturity was within a year.

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Plant, Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Schedule of plants, property and equipment, stated at cost less accumulated depreciation

	As of December 31,
	2022			2021
Building	$	4,656,184		$	3,061,496
Machines		16,341,419			-
Vehicles		332,113			106,266
Electronic equipment		587,131			100,148
Furniture, fixtures and equipment		139,650			82,104
Leasehold improvements		405,141			442,563
Subtotal		22,461,638			3,792,577
Construction in progress		20,135,220			-
Less: accumulated depreciation		(1,128,475	)		(441,256	)
Plant, property and equipment, net	$	41,468,383		$	3,351,321

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Land Use Rights, Net (Tables)

12 Months Ended

Dec. 31, 2022

Land Use Rights Abstract

Schedule of land use rights, stated at cost less accumulated amortization

	As of December 31,
	2022			2021
Land use rights - cost	$	10,204,968		$	-
Less: accumulated amortization		(121,726	)		-
Land use rights, net	$	10,083,242		$	-

Schedule of amortization expense

2023	$	221,617
2024		221,617
2025		221,617
2026		221,617
2027 and thereafter		9,196,774
Total	$	10,083,242

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Intangible Assets, Net (Tables)

12 Months Ended

Dec. 31, 2022

Intangible Assets, Net [Abstract]

Schedule of intangible assets stated at cost less accumulated amortization

	As of December 31,
	2022			2021
Copyrights of course videos	$	4,876,413		$	5,326,829
Intellectual property rights		4,498,261			-
Intangible assets, cost		9,374,674			5,326,829
Less:
Accumulated amortization		(2,852,753	)		(1,731,852	)
Impairment		(2,559,271	)		-
Intangible assets, net	$	3,962,650		$	3,594,977

Schedule of future amortization of intangible asset

2023	$	716,271
2024		716,271
2025		716,271
2026		716,271
2027 and thereafter		1,097,568
Total	$	3,962,650

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Long-Term Investments (Tables)

12 Months Ended

Dec. 31, 2022

Short-Term Investment [Abstract]

Schedule of long-term investments

	As of December 31,
	2022			2021
Equity method investments:
Shidong (Suzhou) Investment Co., Ltd. (“Suzhou Investment”)	$	37,056		$	55,324
Equity investments without readily determinable fair value:
Shenzhen Jiazhong Creative Capital LLP (“Jiazhong”)		1,435,832			1,568,455
Beijing Xingshuizhixing Technology Co., Ltd. (“Xingshuizhixing”)		1,148,665			1,254,764
Zhejiang Wangxin Health Technology Co., Ltd. (“Wangxin”)		-			1,035,180
Hangzhou Zhongfei Aerospace Health Management Co., Ltd. (“Zhongfei”)		430,750			470,537
Shanghai Zhongren Yinzhirun Investment Management Partnership (“Yinzhirun”)		287,167			313,691
Jiangxi Cheyi Tongcheng Car Networking Tech Co., Ltd.(“Cheyi”)		227,970			249,027
Chengdu Zhongfuze Management LLP(“Zhongfuze”)		71,792			78,423
Shanghai Outu Home Furnishings Co., Ltd. (“Outu”)		71,792			78,423
Zhejiang Qianshier Household Co., Ltd.(“Qianshier”)		71,792			78,423
Taizhoujia Menkou Auto Greengrocer’s Delivery Technology Co., Ltd. (“Taizhoujia”)		71,792			78,423
Zhejiang Yueteng Information Technology Co., Ltd. (“Yueteng”)		71,792			78,423
Shidong Funeng(Ruzhou) Industry Development Co., Ltd.( “Funeng”)		38,767			42,348
Dongguan Zhiduocheng Car Service Co., Ltd. (“Car Service”)		25,845			28,232
Subtotal		3,991,012			5,409,673
Less: impairment		(971,731	)		(28,232	)
Total	$	3,019,281		$	5,381,441

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Asset Acquisition (Tables)

12 Months Ended

Dec. 31, 2022

Asset Acquisition [Abstract]

Schedule of purchase prices of the assets

Land use rights	$	3,654,545
Plant, property and equipment – buildings		1,853,556
Total assets acquired		5,508,101
Deferred tax liabilities		(199,813	)
Net assets acquired	$	5,308,288

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Long Term Payable (Tables)

12 Months Ended

Dec. 31, 2022

Long Trem Payable Abstract

Schedule of loans payable represented the financial liabilities amount due to financial lease

	As of December 31,
	2022		2021
Long term payables:
Far East International Financial Leasing Co., Ltd. (“Far East”)	$	2,594,415	$	-
China Power Investment Ronghe Financial Leasing Co., Ltd. (“Ronghe”)		5,191,056		-
Total	$	7,785,471		-
Current portion		3,706,628		-
Non-current portion	$	4,078,843	$	-

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Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule income tax (benefit) provision

	For the years ended December 31,
	2022		2021			2020
Current
China	$	1,560	$	-		$	3,367,763
Deferred
China		807,410		(236,581	)		(312,780	)
Total	$	808,970	$	(236,581	)	$	3,054,983

Schedule of (Loss) profit before income taxes

	For the years ended December 31,
	2022			2021			2020
PRC	$	(16,323,667	)	$	(6,034,466	)	$	15,150,941
Others		(5,991,765	)		(2,916,447	)		(138,671	)
(Loss) profit before income taxes	$	(22,315,432	)	$	(8,950,913	)	$	15,012,270

Schedule of income before income taxes and the actual provision of income taxes

	For the years ended December 31,
	2022			2021			2020
(Loss) profit before income taxes	$	(22,315,432	)	$	(8,950,913	)		15,012,270
PRC EIT rate		25	%		25	%		25	%
Income taxes computed at statutory EIT rate	$	(5,578,858	)	$	(2,237,728	)		3,753,068
Reconciling items:
Effect of tax holiday and preferential tax rate		1,274,465			169,657			(581,434	)
Effect of tax rates in foreign jurisdictions		1,497,723			728,965			(46,330	)
Effect of non-deductible expense		13,917			4,403			5,202
Effect of non-deductible share-based compensation		682,492			-			-
Super deduction of qualified R&D expenditures		-			(107,975	)		(75,523	)
Changes in valuation allowance		2,919,231			1,206,097			-
Income tax expense (benefit)	$	808,970		$	(236,581	)		3,054,983
Effective tax rate		(3.63	)%		2.64	%		20.35	%

Schedule of deferred tax assets

	As of December 31,
	2022			2021
Deferred tax assets
Net operating loss carry forwards	$	1,934,559		$	978,216
Provision for doubtful debts		1,439,947			1,092,140
Impairment on inventory		398,578			-
Impairment of long-lived assets		163,420			-
Deferred tax assets, gross		3,936,504			2,070,356
Less: valuation allowance		(3,936,504	)		(1,218,319	)
Deferred tax assets, net	$	-		$	852,037
Deferred tax liabilities
Assets acquired in the asset acquisition	$	199,583			-

Schedule of expiration of carry forward operating loss

For the years ending December 31,
2023	$	5,360
2024		522,780
2025		166,113
2026		12,894
2027		9,423,368
Total	$	10,130,515

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Related Party Balance and Transactions (Tables)

12 Months Ended

Dec. 31, 2022

Related Party Transactions [Abstract]

Schedule of balances of amount due from related parties

		As of December 31,
		2022		2021
Due from related parties
Bally			5,168		5,168
Zhuhai Investment			-		25,534
Mr. Xuanming Wang			20,102		26,664
Mr. Haiwei Zuo			-		7,912
Mr. Wenwu Zhang	(1)		337,420		-
Shidong (Suzhou) Investment Co., Ltd.			37,332		-
Total		$	400,022	$	65,278

(1) The balance as of December 31, 2022 represented the prepaid acquisition consideration to purchase Mr. Wenwu Zhang’s equity in Haicheng Shenhe. See Note 7.

Schedule of due to related parties

		As of December 31,
		2022		2021
Due to related parties
Mr. Haiping Hu			2,872		-
Mr. Chenming Qi			9,189		-
Ms. Jing Ji			19,923		-
Shanghai HuiYang Investment Co.	(1)		738,128		-
Haicheng Shenhe			50,395		-
Zhuhai Investment			64,643		-
Total		$	885,150	$	-

(1) The balance as of December 31, 2022 represented the loans from the related party, with the annual interest rate of 4.35% and was initially due on August 13, 2022 and extended to December 31, 2023.

Schedule of balances of deferred revenue of related parties

		As of December 31,
		2022		2021
Deferred revenue of related parties
Shanghai Hui Yang Investment Co.	(1)	$	347,471	$	-
Total		$	347,471	$	-

(1) The balance as of December 31, 2022 represented the advance from the related party for tailored services.

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Shareholders’ Equity (Tables)

12 Months Ended

Dec. 31, 2022

Shareholders’ Equity [Abstract]

Schedule of share-based compensation expenses

	For the years ended December 31,
	2022		2021		2020
Cost of revenues	$	8,188	$	-	$	-
Selling expenses		39,301		-		-
General and administrative expenses		2,674,292		-		-
Research and development expenses		8,188		-		-
Total	$	2,729,969	$	-	$	-

Schedule of restricted shares units

	Number of restricted share units outstanding			Weighted average grant date fair value		Aggregate intrinsic value
Restricted share units outstanding at January 1, 2022		-			-		-
Granted		3,334,200			2.00		-
Vested		(833,550	)		2.00		-
Restricted share units outstanding at December 31, 2022		2,500,650			2.00		6,826,775

Schedule of non-controlling interest

	As of December 31,
	2022			2021
GMB (Beijing)	$	4,313		$	5,365
GMB Culture		2,997			25,613
Jiagui Haifeng		(710	)		(13	)
Shidong Trading		-			(35	)
GMB Consulting		13,270			14,477
Shidong Cloud		42,389			-
Sunrise Guxian		(39,323	)		-
GMB Technology		(186,539	)		(185,377	)
Sunrise Guizhou		42,402,995			3,262,220
Total	$	42,239,392		$	3,122,250

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Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Schedule of revenue by major revenue

	For the years ended December 31,
REVENUES, NET	2022		2021		2020
Graphite anode business	$	37,580,677	$	-	$	-
Peer-to-peer knowledge sharing and enterprise business		544,991		7,409,272		23,181,084
Member services		106,724		498,330		872,629
Enterprise services
-Comprehensive tailored services		153,658		1,433,847		13,345,880
-Sponsorship advertising services		-		1,734,390		6,598,527
-Consulting services		9,645		1,583,583		416,634
Online services		2,100		40,391		361,933
Other revenues		272,864		2,118,731		1,585,481
Revenues, net	$	38,125,668	$	7,409,272	$	23,181,084

	For the years ended December 31,
COST OF REVENUES	2022		2021		2020
Graphite anode business	$	35,586,544	$	-	$	-
Peer-to-peer knowledge sharing and enterprise business		3,889,502		3,886,654		2,980,216
Member services		591,000		99,013		174,660
Enterprise services
-Comprehensive tailored services		294,759		157,563		340,783
-Sponsorship advertising services		-		34,041		255,634
-Consulting services		218,719		733,266		239,845
Online services		66,403		798,010		1,076,503
Other revenues		2,718,621		2,064,761		892,791
Cost of revenues	$	39,476,046	$	3,886,654	$	2,980,216

	For the years ended December 31,
GROSS (LOSS) PROFIT	2022			2021			2020
Graphite anode business	$	1,994,133		$	-		$	-
Peer-to-peer knowledge sharing and enterprise business		(3,344,511	)		3,522,618			20,200,868
Member services		(484,276	)		399,317			697,969
Enterprise services
-Comprehensive tailored services		(141,101	)		1,276,284			13,005,097
-Sponsorship advertising services		-			1,700,349			6,342,893
-Consulting services		(209,074	)		850,317			176,789
Online services		(64,303	)		(757,619	)		(714,570	)
Other revenues		(2,445,757	)		53,970			692,690
Gross (loss) profit	$	(1,350,378	)	$	3,522,618		$	20,200,868

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Condensed Financial Information of the Parent Company (Tables)

12 Months Ended

Dec. 31, 2022

Condensed Financial Information Disclosure [Abstract]

Schedule of parent compnay balance sheets

	As of December 31,
	2022			2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	285,916		$	784,176
Restricted cash		700,094			-
Due from related parties		5,168			5,168
Short-term investment		3,336,256			5,961,605
Advance to suppliers		7,694			13,727
Prepaid expenses and other current assets		2,994,975			1,011,542
TOTAL CURRENT ASSETS		7,330,103			7,776,218
NON-CURRENT ASSETS
Restricted cash		-			700,060
Long term prepayments and other non-current assets		-			2,000,000
Investment in subsidiaries and VIE		24,714,096			41,438,198
TOTAL NON-CURRENT ASSETS		24,714,096			44,138,258
TOTAL ASSETS		32,044,199			51,914,476
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accrued expenses and other current liabilities		15,550			211,430
TOTAL CURRENT LIABILITIES		15,550			211,430
TOTAL LIABILITES		15,550			211,430
EQUITY
Ordinary shares (500,000,000 shares authorized; $0.0001 par value, 24,528,000 shares issued and outstanding as of December 31, 2021; 25,361,550 shares issued and outstanding as of December 31, 2022)		2,536			2,453
Additional paid-in capital		34,696,702			31,966,816
Statutory reserves		2,477,940			2,473,801
(Accumulated deficits) Retained earnings		(5,148,529	)		17,259,976
TOTAL EQUITY		32,028,649			51,703,046
TOTAL LIABILITIES AND EQUITY	$	32,044,199		$	51,914,476

Schedule of parent compnay statements of operations and comprehensive (loss) income

	For the years ended December 31,
	2022			2021			2020
REVENUES, NET	$	-		$	-		$	73,744
COSTS OF REVENUES		8,188			-			-
GROSS (LOSS) PROFIT		(8,188	)		-			73,744
OPERATING EXPENSES		3,578,664			1,010,536			50,000
(LOSS) PROFIT FROM OPERATIONS		(3,586,852	)		(1,010,536	)		23,744
OTHER (EXPENSES) INCOME		(2,403,412	)		(1,904,135	)		4,459
(LOSS) PROFIT BEFORE EQUITY IN (LOSS) EARNINGS OF SUBSIDIARIES AND VIE		(5,990,264	)		(2,914,671	)		28,203
Equity in (loss) earnings of subsidiaries and VIE		(16,414,102	)		(5,488,589	)		12,059,324
NET (LOSS) INCOME ATTRIBUTABLE TO SUNRISE NEW ENERGY CO., LTD. ORDINARY SHAREHOLDERS		(22,404,366	)		(8,403,260	)		12,087,527
Foreign currency translation adjustment		-			-			-
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO SUNRISE NEW ENERGY CO., LTD. ORDINARY SHAREHOLDERS	$	(22,404,366	)	$	(8,403,260	)	$	12,087,527

Schedule of parent compnay statements of cash flows

	For the years ended December 31,
	2022			2021			2020
Net cash used in operating activities		(808,226	)		(1,015,145	)		(52,994	)
Net cash used in investing activities					(25,825,000	)		-
Net cash provided by financing activities		310,000			28,249,093			128,282
(Decrease) increase in cash and cash equivalents		(498,226	)		1,408,948			75,288
Cash, cash equivalents and restricted cash, beginning of year		1,484,236			75,288			-
Cash, cash equivalents and restricted cash, end of year	$	986,010		$	1,484,236		$	75,288
Cash, cash equivalents and restricted cash, end of year		986,010			1,484,236			75,288
Less: restricted cash		700,094			700,060			-
Cash and cash equivalents, end of year		285,916			784,176			75,288

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Organization and Business Description (Details)	12 Months Ended
	Dec. 31, 2022 $ / shares	Dec. 31, 2022 ¥ / shares	Jul. 02, 2022
Organization and Business Description [Abstract]
Percentage of shareholders	100.00%	100.00%	100.00%
Option price | (per share)	$ 1.45	¥ 10

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Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities	12 Months Ended
	Dec. 31, 2022
Global Mentor Board Information Technology Limited (“GMB HK”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Mar. 22, 2019
Place of incorporation	HK
Percentage of effective ownership	100%
Principal Activities	Holding company
Beijing Mentor Board Union Information Technology Co, Ltd. (“GIOP BJ” or “WFOE”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Jun. 03, 2019
Place of incorporation	PRC
Percentage of effective ownership	100%
Principal Activities	Holding company of GIOP BJ
Shidong Cloud (Beijing) Education Technology Co., Ltd (“Shidong Cloud”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Dec. 22, 2021
Place of incorporation	PRC
Percentage of effective ownership	75%
Principal Activities	Educational Consulting
SDH (HK) New Energy Tech Co., Ltd. (“SDH New Energy”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Oct. 08, 2021
Place of incorporation	HK
Percentage of effective ownership	100%
Principal Activities	Holding company
Zhuhai (Zibo) Investment Co., Ltd. (“Zhuhai Zibo”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Oct. 15, 2021
Place of incorporation	PRC
Percentage of effective ownership	100%
Principal Activities	New Energy Investment
Zhuhai (Guizhou) New Energy Investment Co., Ltd. (“Zhuhai Guizhou”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Nov. 23, 2021
Place of incorporation	PRC
Percentage of effective ownership	100%
Principal Activities	New Energy Investment
Sunrise (Guizhou) New Energy Materials Co., Ltd. (“Sunrise Guizhou”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Nov. 08, 2021
Place of incorporation	PRC
Percentage of effective ownership	39.35%
Principal Activities	Manufacture of Lithium Battery Materials
Guizhou Huiyang Technology Co., Ltd. (“Huiyang Tech”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Sep. 01, 2011
Place of incorporation	PRC
Percentage of effective ownership	39.35%
Principal Activities	Manufacture of Lithium Battery Materials
Sunrise (Guxian) New Energy Materials Co., Ltd. (“Sunrise Guxian”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Apr. 26, 2022
Place of incorporation	PRC
Percentage of effective ownership	20.07%
Principal Activities	Manufacture of Lithium Battery Materials
Guizhou Huiyang Technology Innovation Research Co., Ltd. (“Innovation Research”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Dec. 13, 2022
Place of incorporation	PRC
Percentage of effective ownership	39.35%
Principal Activities	Research and Development
Global Mentor Board (Beijing) Information Technology Co., Ltd. (“SDH” or “VIE”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Dec. 05, 2014
Place of incorporation	PRC
Percentage of effective ownership	VIE
Principal Activities	peer-to-peer knowledge sharing and enterprise service platform provider
Global Mentor Board (Hangzhou) Technology Co., Ltd. [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Nov. 01, 2017
Place of incorporation	PRC
Percentage of effective ownership	100% by VIE
Principal Activities	Consulting, training and tailored services provider
Global Mentor Board (Shanghai) Enterprise Management Consulting Co., Ltd. [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Jun. 30, 2017
Place of incorporation	PRC
Percentage of effective ownership	51% by VIE
Principal Activities	Consulting services provider
Shanghai Voice of Seedling Cultural Media Co.,Ltd. (“GMB Culture”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Jun. 22, 2017
Place of incorporation	PRC
Percentage of effective ownership	51% by VIE
Principal Activities	cultural and artistic exchanges and planning, conference services provider
Shidong(Beijing)Information Technology Co., LTD. (“GMB (Beijing)”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Jun. 19, 2018
Place of incorporation	PRC
Percentage of effective ownership	100% by VIE
Principal Activities	information technology services provider
Mentor Board Voice of Seeding (Shanghai) Cultural Technology Co., Ltd. [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Aug. 29, 2018
Place of incorporation	PRC
Percentage of effective ownership	30.6% by VIE
Principal Activities	Technical services provider
Shidong Zibo Digital Technology Co., Ltd. (“Zibo Shidong”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Oct. 16, 2020
Place of incorporation	PRC
Percentage of effective ownership	100% by VIE
Principal Activities	Technical services provider
Shidong Trading Service (Zhejiang) Co., Ltd. (“Shidong Trading”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Apr. 19, 2021
Place of incorporation	PRC
Percentage of effective ownership	Deregistered in November 2022
Principal Activities	Sale of Merchandise
Shanghai Jiagui Haifeng Technology Co., Ltd. (“Jiagui Haifeng”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Nov. 29, 2021
Place of incorporation	PRC
Percentage of effective ownership	51% by VIE
Principal Activities	Business Incubation Services provider
Shanghai Nanyu Culture Communication Co., Ltd. (“Nanyu Culture”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Jul. 27, 2021
Place of incorporation	PRC
Percentage of effective ownership	51% by VIE
Principal Activities	Enterprise Information Technology Integration services provider
Beijing Mentor Board Health Technology Co., Ltd (“GMB Health”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Jan. 07, 2022
Place of incorporation	PRC
Percentage of effective ownership	100% by VIE
Principal Activities	Health Services
Shanghai Yuantai Fengdeng Agricultural Technology Co., Ltd. (“Yuantai Fengdeng”) [Member]
Organization and Business Description (Details) - Schedule of subsidiaries and variable interest entities [Line Items]
Date of Incorporation	Mar. 04, 2022
Place of incorporation	PRC
Percentage of effective ownership	51% by VIE
Principal Activities	Agricultural Technology Service

XML

Organization and Business Description (Details) - Schedule of balance sheets	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Nov. 30, 2017 CNY (¥)
Schedule Of Balance Sheets Abstract
Cash and cash equivalents	$ 336,871	$ 3,870,916	¥ 90,000
Accounts receivable, net	200,539	6,861,672
Inventories	3,590	2,865,958
Due from related parties	391,982	52,268
Prepaid expenses and other current assets	2,537,524	3,002,698
Total current assets	3,470,506	16,653,512
Long term prepayments and other non-current assets	14,358
Plant, property and equipment, net	2,874,500	3,351,321
Intangible assets, net	31,036	3,594,977
Long-term investments	3,019,281	5,381,441
Operating lease right-of-use assets		224,773
Deferred tax assets		852,037
Total non-current assets	5,939,175	13,404,549
Total assets	9,409,681	30,058,061
Accounts payable	50,953	34,486
Deferred revenue	222,605	179,407
Deferred revenue - related parties	347,471
Deferred government subsidy	2,871,665
Income taxes payable	506,638	1,076,518
Due to related parties	96,627
Operating lease liabilities, current		99,569
Accrued expenses and other current liabilities	293,699	313,685
Total current liabilities	4,389,658	1,703,665
Total liabilities	$ 4,389,658	$ 1,703,665

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Organization and Business Description (Details) - Schedule of income statement - VIP [Member] - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Condensed Income Statements, Captions [Line Items]
Total net revenue	$ 613,679	$ 7,409,272	$ 23,107,340
Net (loss) income	$ (15,438,135)	$ (5,629,408)	$ 11,931,079

XML

Organization and Business Description (Details) - Schedule of cash flow - VIP [Member] - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Organization and Business Description (Details) - Schedule of cash flow [Line Items]
Net cash (used in) provided by operating activities	$ (3,320,442)	$ 2,314,408	$ 6,998,407
Net cash used in investing activities		(3,025,281)	(6,493,837)
Net cash provided by financing activities			$ 119,996

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Summary of Significant Accounting Policies (Details)	1 Months Ended		12 Months Ended
	May 31, 2019	Nov. 30, 2017	Dec. 31, 2022 USD ($) $ / shares	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 USD ($) $ / shares	Dec. 31, 2020 USD ($)	Dec. 31, 2022 CNY (¥) ¥ / shares
Summary of Significant Accounting Policies (Details) [Line Items]
Ownership interest percentage	0.98%	1.50%
Restricted cash			$ 700,000
Allowance amount			8,047,527		$ 5,744,387
Inventory valuation allowance			2,711,158
Long-term investments			14,072		41,925	1,087
Impairment charges			979,426
Impairments charges for intangible assets			2,650,020
Deferred government grants			3,048,035		458,182	101,485
Deferred government			$ 2,871,665
Q&A session fees description			The Q&A session is usually provided by chosen Mentors or Experts within a course of a 72-hour period. The Company charges 30% of the Q&A fees as a facilitator of online services. The Q&A fees are allocated to the Company and chosen Mentors or Experts automatically by the APP on a 30%/70% split upon completion of Q&A sessions. The Company recognizes this online service fees as revenue at completion of Q&A sessions on a net basis, i.e., in the amount of 30% of allocated Q&A fees, as the Company merely provides a platform for its Users and is not the primary obligor of the Q&A session, neither has risks and rewards as principal.	The Q&A session is usually provided by chosen Mentors or Experts within a course of a 72-hour period. The Company charges 30% of the Q&A fees as a facilitator of online services. The Q&A fees are allocated to the Company and chosen Mentors or Experts automatically by the APP on a 30%/70% split upon completion of Q&A sessions. The Company recognizes this online service fees as revenue at completion of Q&A sessions on a net basis, i.e., in the amount of 30% of allocated Q&A fees, as the Company merely provides a platform for its Users and is not the primary obligor of the Q&A session, neither has risks and rewards as principal.
Annual rate (in Yuan Renminbi) | ¥				¥ 299
Revenue			$ 170,061		253,157
Service costs			$ 1,176,956		$ 1,823,358	2,087,425
Diluted shares (in Dollars per share) | $ / shares			$ 24,820,313		$ 23,638,751
Aggregate deposits (in Yuan Renminbi) | ¥							¥ 500,000
Revenue			$ 39,476,046		$ 3,886,654	$ 2,980,216
Total revenues, percentage						10.00%
Minimum [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Land use rights, useful lives			40 years	40 years
Estimated useful lives			5 years	5 years
Price per share relating to course of program (in Yuan Renminbi per share) | ¥ / shares							¥ 9.9
Maximum [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Land use rights, useful lives			50 years	50 years
Estimated useful lives			10 years	10 years
Price per share relating to course of program (in Yuan Renminbi per share) | ¥ / shares							¥ 299
Electrolytic Copper [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Cost of goods sold			$ 38,299,090		$ 2,063,296	$ 892,791
GMB (Beijing) [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Ownership interest percentage			49.00%	49.00%
Guizhou New Energy [Member]`
Summary of Significant Accounting Policies (Details) [Line Items]
Ownership interest percentage			60.65%	60.65%	49.00%
GMB Culture [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Ownership interest percentage			49.00%	49.00%	49.00%
Shidong Cloud [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Ownership interest percentage			25.00%	25.00%	25.00%
Shidong Trading [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Ownership interest percentage			40.00%	40.00%	40.00%
Client One [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Revenue			$ 10,837,501		$ 2,000,483
Total revenues, percentage			28.00%		27.00%		28.00%
Account receivable			$ 1,549,436
Account receivable, percentage			12.00%	12.00%
Client Two [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Revenue			$ 7,449,250
Total revenues, percentage			19.00%				19.00%
Client Three [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Revenue			$ 7,358,181
Total revenues, percentage			19.00%				19.00%
Client Four [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Revenue			$ 7,193,849
Total revenues, percentage			20.00%				20.00%
Guizhou New Energy [Member]`
Summary of Significant Accounting Policies (Details) [Line Items]
Equity interest percentage			39.35%				39.35%

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Summary of Significant Accounting Policies (Details) - Schedule of currency exchange rates	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Schedule of Currency Exchange Rates [Abstract]
Year-end spot rate	US$1= RMB 6.9646	US$1= RMB 6.3757	US$1= RMB 6.5249
Average rate	US$1= RMB 6.7261	US$1= RMB 6.4515	US$1= RMB 6.8976

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Summary of Significant Accounting Policies (Details) - Schedule of property and equipment are stated at cost less accumulated depreciation	12 Months Ended
	Dec. 31, 2022
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment are stated at cost less accumulated depreciation [Line Items]
Expected useful lives	10 years
Building [Member]
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment are stated at cost less accumulated depreciation [Line Items]
Expected useful lives	30 years
Electronic equipment [Member]
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment are stated at cost less accumulated depreciation [Line Items]
Expected useful lives	3 years
Furniture, fixtures and equipment [Member]
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment are stated at cost less accumulated depreciation [Line Items]
Expected useful lives	3 years
Vehicle [Member]
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment are stated at cost less accumulated depreciation [Line Items]
Expected useful lives	3 years
Leasehold improvements [Member]
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment are stated at cost less accumulated depreciation [Line Items]
Expected useful lives	The shorter of useful life and lease term

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Liquidity (Details)			1 Months Ended		12 Months Ended
	Feb. 07, 2023 USD ($)	Feb. 07, 2023 CNY (¥)	Jan. 18, 2023 USD ($)	Jan. 18, 2023 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 USD ($)
Liquidity [Abstract]
Net losses					$ 23,124,402		$ 8,714,332
Net cash used in operating activities					9,573,401		$ 5,233,182
Cash equivalents and restricted cash					10,322,198
Cash					1,655,549
Line of credit from Bank					$ 933,291	¥ 6,500,000
Subsequent Event [Member]
Liquidity [Abstract]
Credit facility agreement			$ 4,307,498	¥ 30,000,000
Debt financing arrangement	$ 2,871,665	¥ 20,000,000

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Accounts Receivable, Net (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Accounts receivable, Net [Abstract]
Doubtful accounts provision	$ 2,887,754	$ 3,847,426	$ 1,514,559

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Accounts Receivable, Net (Details) - Schedule of accounts receivable - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Schedule of Accounts Receivable [Abstract]
Accounts receivable	$ 13,215,228	$ 12,606,059
Allowance for doubtful accounts	(8,047,527)	(5,744,387)
Accounts receivable, net	$ 5,167,701	$ 6,861,672

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Accounts Receivable, Net (Details) - Schedule of movement of allowance of doubtful accounts - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Schedule of Movement of Allowance of Doubtful Accounts [Abstract]
Balance at beginning of the year	$ 5,744,387	$ 1,808,889	$ 194,375
Current year addition	2,887,754	3,890,827	1,514,559
Write-off		(43,401)
Foreign currency translation adjustments	(584,614)	88,072	99,955
Balance at end of the year	$ 8,047,527	$ 5,744,387	$ 1,808,889

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Inventories, Net (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Inventories, Net (Details) [Line Items]
Estimated net realizable value
Inventory valuation allowance	2,711,158
Accounts Receivable [Member]
Inventories, Net (Details) [Line Items]
Inventory valuation allowance	$ 2,711,158

XML

Inventories, Net (Details) - Schedule of inventories - Inventories [Member] - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Inventory [Line Items]
Raw materials	$ 3,237,940
Finished Goods	12,842,333	3,105,673
Total	18,330,516	3,105,673
Work in process	2,246,653
Others	3,590
Graphite anode materials [Member]
Inventory [Line Items]
Total	12,842,333
Healthcare service gift cards [Member]
Inventory [Line Items]
Total		1,276,550
Chinese tea [Member]
Inventory [Line Items]
Total		718,426
Learning course gift cards [Member]
Inventory [Line Items]
Total		454,852
Latex pillows [Member]
Inventory [Line Items]
Total		138,246
Healthcare products [Member]
Inventory [Line Items]
Total		207,348
Others [Member]
Inventory [Line Items]
Total		$ 310,251

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Short-Term Investment (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Feb. 28, 2021
Short-Term Investment [Abstract]
Total investment			$ 8,000,000
Net asset value	$ 3,336,256	$ 5,961,605
Investment loss	$ 2,625,349	$ 2,038,395

XML

Prepaid Expenses and Other Current Assets (Details) - USD ($)	Mar. 06, 2022	Sep. 30, 2021	Mar. 08, 2021	Dec. 31, 2022
Prepaid Expenses and Other Current Assets [Abstract]
Annual payment			$ 825,000
Interest rate			8.00%
Due date			May 10, 2022
Lend amount	$2,000,000
Prepaid expenses	$ 8
Prepaid service fee		$ 650,909
Equity interest rate		61.50%
Related parties				$ 337,421

XML

Prepaid Expenses and Other Current Assets (Details) - Schedule of prepaid expenses and other current assets - USD ($)		12 Months Ended
		Dec. 31, 2022	Dec. 31, 2021
Schedule Of Prepaid Expenses And Other Current Assets Abstract
Prepaid expenses		$ 211,365	$ 703,281
Advance to supplier		2,820,551	1,759,253
Loans to third parties	[1]	2,873,818	840,685
Prepayment for investment	[2]	1,206,099	650,909
Other receivables		401,936	299,864
Interest receivable		365,478	171,840
Prepaid value added tax (“VAT”) and income tax	[3]	4,468,404	123,100
Deposits for operating lease		36,574	43,090
Subtotal		12,384,225	4,592,022
Less: allowance for other receivables		(143,583)	(156,847)
Total		$ 12,240,642	$ 4,435,175

[1] On March 8, 2021, the Company signed a loan contract with a third party, Waichun Logistics Technology Limited (“Waichun”), to lend $825,000, with annual interest rate of 8%, and will be due on May 10, 2022. The Company renewed the contract with Waichun on May 10, 2022 to extend the loan period to December 31, 2023; Besides, the Company signed a loan contract on March 8, 2021 and renewed it on March 6, 2022 with Waichun to lend $2,000,000 with annual interest rate of 8%, which will be due on December 31, 2023.

[2] In September 2021, the Company prepaid $650,909 to acquire 61.5% equity interest of Haicheng Shenhe Technology Co., Ltd. (“Haicheng Shenhe”) The Company and the shareholders of Haicheng Shenhe agreed on the termination of the acquisition however the acquisition fund had not been paid back as of December 31, 2022. One of the shareholders in Haicheng Shenhe, Mr. Wenwu Zhang, was nominated as the Director of Sunrise Guizhou and a balance of $337,421 was reclassified to due from related parties as of December 31, 2022.

[3] 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 property, plant and equipment for the manufacture on graphite anode materials as of December 31, 2022.

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Long Term Prepayments and Other Non-Current Assets (Details)	12 Months Ended
	Dec. 31, 2022 USD ($) m²
Long Term Prepayments and Other Non-Current Assets (Details) [Line Items]
Loan contract, description	The Company signed a loan contract on March 8, 2021 and renewed it on March 6, 2022 with Waichun to lend $2,000,000 with annual interest rate of 8%, which will be due on December 31, 2023.
Guizhou New Energy [Member]
Long Term Prepayments and Other Non-Current Assets (Details) [Line Items]
Area of square meters | m²	260,543
Prepaid consideration | $	$ 6,947,051

XML

Long Term Prepayments and Other Non-Current Assets (Details) - Schedule of long term prepayments and other non-current assets - USD ($)		Dec. 31, 2022		Dec. 31, 2021
Schedule of Long Term Prepayments and Other Non Current Assets [Abstract]
Prepaid for land use right	[1]			$ 6,947,051
Prepaid for equipment	[2]	3,836,627		1,297,866
Loans to third party			[3]	2,000,000
Others		15,329
Total		$ 3,850,985		$ 10,244,917

[1] The Company’s subsidiary Sunrise Guizhou signed to purchase land use right from Qianxinan public resources trading center, with an area of 260,543 square meters and prepaid the consideration of $6,947,051. The land use right had been registered under Sunrise Guizhou on June 10, 2022.

[2] Prepaid for equipment represented advance payment on the production line equipment by Sunrise Guizhou, which had not been shipped as of December 31, 2022.

[3] The Company signed a loan contract on March 8, 2021 and renewed it on March 6, 2022 with Waichun to lend $2,000,000 with annual interest rate of 8%, which will be due on December 31, 2023. The loan was reclassified to current assets that its maturity was within a year.

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Plant, Property and Equipment, Net (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Plant, Property and Equipment, Net [Abstract]
Depreciation expense	$ 750,220	$ 198,747	$ 126,589

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Plant, Property and Equipment, Net (Details) - Schedule of plants, property and equipment, stated at cost less accumulated depreciation - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Plants, property and equipment, gross	$ 22,461,638	$ 3,792,577
Construction in progress	20,135,220
Less: accumulated depreciation	(1,128,475)	(441,256)
Property and equipment, net	41,468,383	3,351,321
Building [Member]
Property, Plant and Equipment [Line Items]
Plants, property and equipment, gross	4,656,184	3,061,496
Machines [Member]
Property, Plant and Equipment [Line Items]
Plants, property and equipment, gross	16,341,419
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Plants, property and equipment, gross	332,113	106,266
Electronic equipment [Member]
Property, Plant and Equipment [Line Items]
Plants, property and equipment, gross	587,131	100,148
Furniture, fixtures and equipment [Member]
Property, Plant and Equipment [Line Items]
Plants, property and equipment, gross	139,650	82,104
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Plants, property and equipment, gross	$ 405,141	$ 442,563

XML

Land Use Rights, Net (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Land Use Rights, Net [Abstract]
Amortization	$ 126,042

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Land Use Rights, Net (Details) - Schedule of land use rights, stated at cost less accumulated amortization - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Schedule of Land Use Rights Stated At Cost Less Accumulated Amortization [Abstract]
Land use rights - cost	$ 10,204,968
Less: accumulated amortization	(121,726)
Land use rights, net	$ 10,083,242

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Land Use Rights, Net (Details) - Schedule of amortization expense	Dec. 31, 2022 USD ($)
Schedule of Amortization Expense [Abstract]
2023	$ 221,617
2024	221,617
2025	221,617
2026	221,617
2027 and thereafter	9,196,774
Total	$ 10,083,242

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Intangible Assets, Net (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Intangible Assets, Net [Abstract]
Amortization expense	$ 1,312,279	$ 789,925	$ 738,837

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Intangible Assets, Net (Details) - Schedule of intangible assets stated at cost less accumulated amortization - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Intangible assets, cost	$ 9,374,674	$ 5,326,829
Less:
Accumulated amortization	(2,852,753)	(1,731,852)
Impairment	(2,559,271)
Intangible assets, net	3,962,650	3,594,977
Copyrights of Course Videos [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, cost	4,876,413	5,326,829
Land Use Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, cost	$ 4,498,261

XML

Intangible Assets, Net (Details) - Schedule of future amortization of intangible asset	Dec. 31, 2021 USD ($)
Schedule of Future Amortization of Intangible Asset [Abstract]
2023	$ 716,271
2024	716,271
2025	716,271
2026	716,271
2027 and thereafter	1,097,568
Total	$ 3,962,650

XML

Long-Term Investments (Details)			1 Months Ended										12 Months Ended
	Apr. 11, 2021 USD ($)	Apr. 11, 2021 CNY (¥)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 CNY (¥)	Nov. 30, 2019 USD ($)	Nov. 30, 2019 CNY (¥)	Aug. 31, 2019 CNY (¥)	May 31, 2019	Dec. 31, 2017 CNY (¥)	Nov. 30, 2017 CNY (¥)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Nov. 30, 2020 USD ($)	Nov. 30, 2020 CNY (¥)	Jun. 30, 2020 USD ($)	Jun. 30, 2020 CNY (¥)
Long-Term Investments (Details) [Line Items]
Recognized investment losses													$ 14,072	$ 14,025	$ 15,585
Paid consideration | ¥																¥ 10,000,000
Equity interest percentage													4.35%				4.35%
Impairment for investment														27,900
Membership service amount (in Yuan Renminbi) | ¥																		¥ 1,500,000
Provided for investment														236,053
Shareholding interest								0.98%		1.50%
Cash consideration (in Yuan Renminbi)										¥ 90,000			$ 336,871	$ 3,870,916
Suzhou Investment [Member]
Long-Term Investments (Details) [Line Items]
Percentage of acquired shareholding									17.00%
Investment in Jiazhong [Member]
Long-Term Investments (Details) [Line Items]
Percentage of acquired shareholding															33.00%				33.00%
Zhongfei [Member]
Long-Term Investments (Details) [Line Items]
Percentage of acquired shareholding																				3.00%	3.00%
Yinzhirun [Member]
Long-Term Investments (Details) [Line Items]
Percentage of acquired shareholding											0.45%	0.45%
Cheyi [Member]
Long-Term Investments (Details) [Line Items]
Percentage of acquired shareholding																				0.50%	0.50%
Investment in Car Service [Member]
Long-Term Investments (Details) [Line Items]
Percentage of acquired shareholding					11.11%	11.11%
Yunshang E-commerce [Member]
Long-Term Investments (Details) [Line Items]
Percentage of acquired shareholding			15.00%	15.00%
Qianshier [Member]
Long-Term Investments (Details) [Line Items]
Percentage of acquired shareholding															5.00%				5.00%
Taizhoujia [Member]
Long-Term Investments (Details) [Line Items]
Percentage of acquired shareholding																						5.00%	5.00%
Yueteng [Member]
Long-Term Investments (Details) [Line Items]
Percentage of acquired shareholding																						5.00%	5.00%
Funeng [Member]
Long-Term Investments (Details) [Line Items]
Percentage of acquired shareholding							19.00%
Suzhou Investment [Member]
Long-Term Investments (Details) [Line Items]
Cash consideration | ¥									¥ 850,000
Investment in Jiazhong [Member]
Long-Term Investments (Details) [Line Items]
Paid consideration															$ 1,435,832	10,000,000
Investment in Xingshuizhixing [Member]
Long-Term Investments (Details) [Line Items]
Invest amount													$ 1,148,666				¥ 8,000,000
Equity interest percentage													4.00%				4.00%
Impairment for investment													$ 74,337
Cash paid (in Yuan Renminbi) | ¥																	¥ 500,000
Cash paid													71,792
Investment in Wangxin [Member]
Long-Term Investments (Details) [Line Items]
Cash consideration	$ 947,650	¥ 6,600,000
Equity interest percentage	2.15%	2.15%
Zhongfei [Member]
Long-Term Investments (Details) [Line Items]
Equity interest percentage														3.00%				3.00%
Account receivables due																				$ 430,750	¥ 3,000,000
Customized service amount (in Yuan Renminbi) | ¥																		¥ 3,000,000
Impairment for investment													446,025
Yinzhirun [Member]
Long-Term Investments (Details) [Line Items]
Cash consideration											$ 287,167	¥ 2,000,000
Cheyi [Member]
Long-Term Investments (Details) [Line Items]
Equity interest percentage														0.50%				0.50%
Account receivables due																				$ 227,970	¥ 1,587,719
Investment in Car Service [Member]
Long-Term Investments (Details) [Line Items]
Cash consideration					$ 71,792	¥ 500,000
Investment in Zhongfuze [Member]
Long-Term Investments (Details) [Line Items]
Paid consideration | ¥																500,000
Yunshang E-commerce [Member]
Long-Term Investments (Details) [Line Items]
Cash consideration			$ 430,750	¥ 3,000,000
Qianshier [Member]
Long-Term Investments (Details) [Line Items]
Account receivables due															$ 71,792				¥ 500,000
Impairment for investment													74,337
Taizhoujia [Member]
Long-Term Investments (Details) [Line Items]
Account receivables due																						$ 71,792	¥ 500,000
Impairment for investment													74,337
Yueteng [Member]
Long-Term Investments (Details) [Line Items]
Account receivables due																						$ 71,792	¥ 500,000
Impairment for investment													$ 74,337
Funeng [Member]
Long-Term Investments (Details) [Line Items]
Cash consideration | ¥							¥ 570,000
Paid consideration | ¥																¥ 270,000

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Long-Term Investments (Details) - Schedule of long-term investments - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Equity method investments:
Sub total	$ 3,991,012	$ 5,409,673
Less: impairment	(971,731)	(28,232)
Total	3,019,281	5,381,441
Shidong (Suzhou) Investment Co., Ltd. (“Suzhou Investment”) [Member]
Equity method investments:
Sub total	37,056	55,324
Shenzhen Jiazhong Creative Capital LLP (“Jiazhong”) [Member]
Equity method investments:
Sub total	1,435,832	1,568,455
Beijing Yunshang E-commerce Co., Ltd. (“Yunshang E-commerce”) [Member]
Equity method investments:
Sub total	1,148,665	1,254,764
Zhejiang Wangxin Health Technology Co., Ltd. (“Wangxin”) [Member]
Equity method investments:
Sub total		1,035,180
Hangzhou Zhongfei Aerospace Health Management Co., Ltd. (“Zhongfei”) [Member]
Equity method investments:
Sub total	430,750	470,537
Shanghai Zhongren Yinzhirun Investment Management Partnership (“Yinzhirun”) [Member]
Equity method investments:
Sub total	287,167	313,691
Jiangxi Cheyi Tongcheng Car Networking Tech Co., Ltd.(“Cheyi”) [Member]
Equity method investments:
Sub total	227,970	249,027
Chengdu Zhongfuze Management LLP(“Zhongfuze”) [Member]
Equity method investments:
Sub total	71,792	78,423
Shanghai Outu Home Furnishings Co., Ltd. (“Outu”) [Member]
Equity method investments:
Sub total	71,792	78,423
Zhejiang Qianshier Household Co., Ltd.(“Qianshier”) [Member]
Equity method investments:
Sub total	71,792	78,423
Taizhoujia Menkou Auto Greengrocer’s Delivery Technology Co., Ltd. (“Taizhoujia”) [Member]
Equity method investments:
Sub total	71,792	78,423
Zhejiang Yueteng Information Technology Co., Ltd. (“Yueteng”) [Member]
Equity method investments:
Sub total	71,792	78,423
Shidong Funeng(Ruzhou) Industry Development Co., Ltd.( “Funeng”) [Member]
Equity method investments:
Sub total	38,767	42,348
Dongguan Zhiduocheng Car Service Co., Ltd. (“Car Service”) [Member]
Equity method investments:
Sub total	$ 25,845	$ 28,232

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Asset Acquisition (Details)	1 Months Ended		12 Months Ended
	Jul. 31, 2022 USD ($)	Jul. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 USD ($)
Asset Acquisition [Abstract]
Ownership percentage	100.00%	100.00%
Gross consideration	$ 5,743,331	¥ 40,000,000
Paid amount	$ 1,486,746	¥ 10,000,000
Unpaid consideration			$ 4,307,499	¥ 30,000,000
Consideration payable current			582,381
Consideration payable noncurrent			3,358,906
Interest expense			$ 71,272

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Asset Acquisition (Details) - Schedule of purchase prices of the assets	Dec. 31, 2022 USD ($)
Schedule Of Purchase Prices Of The Assets Abstract
Land use rights	$ 3,654,545
Plant, property and equipment – buildings	1,853,556
Total assets acquired	5,508,101
Deferred tax liabilities	(199,813)
Net assets acquired	$ 5,308,288

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Deferred Government Subsidy (Details) - 12 months ended Dec. 31, 2022	CNY (¥)	USD ($)
Deferred Government Subsidy (Details) [Line Items]
Government subsidy	¥ 20,000,000
Deferred government subsidy (in Dollars) | $		$ 2,871,665
GMB BJ planned [Member]
Deferred Government Subsidy (Details) [Line Items]
Future incremental costs	¥ 21,926,900

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Long Term Payable (Details)	12 Months Ended
	Dec. 31, 2022 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 CNY (¥)	Nov. 04, 2022 USD ($)	Nov. 04, 2022 CNY (¥)	Sep. 22, 2022 USD ($)	Sep. 22, 2022 CNY (¥)
Long Term Payable (Details) [Line Items]
Loan amount						$ 2,871,665	¥ 20,000,000
Convertible Notes Payable, Current						11.98
Repaid amount	$ 887,788
Outstanding long term facility				$ 5,743,331	¥ 40,000,000
Far East [Member]
Long Term Payable (Details) [Line Items]
Loan amount						$ 5,743,331	¥ 40,000,000
Repaid amount	338,608	¥ 2,277,510
Outstanding balance	2,594,415
Current portion	1,984,684
Non-current portion	609,731
Outstanding long term facility	5,488,275		¥ 38,223,638
Ronghe [Member]
Long Term Payable (Details) [Line Items]
Repaid amount	549,181	¥ 3,693,843
Outstanding balance	5,191,056
Current portion	1,721,944
Non-current portion	3,469,112
Outstanding long term facility	$ 6,880,180		¥ 47,917,699
Interest rate				1.55%	1.55%

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Long Term Payable (Details) - Schedule of loans payable represented the financial liabilities amount due to financial lease - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Long term payables:
Long term payables	$ 3,019,281	$ 5,381,441
Total	7,785,471
Current portion	3,706,628
Non-current portion	4,078,843
Far East International Financial Leasing Co., Ltd. (“Far East”) [Member]
Long term payables:
Long term payables	2,594,415
China Power Investment Ronghe Financial Leasing Co., Ltd. (“Ronghe”) [Member]
Long term payables:
Long term payables	$ 5,191,056

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Taxes (Details) - USD ($)		6 Months Ended	12 Months Ended
	Jan. 17, 2019	Jun. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Taxes (Details) [Line Items]
Description of income tax			The applicable VAT rate is 6% for general taxpayers and 3% for small-scale taxpayer.
Statutory income tax rate, percentage	5.00%		2.50%
Preferential tax rate			15.00%
Description of income tax law			Therefore, SDH is eligible to enjoy a preferential tax rate of 15% from 2017 to 2023 to the extent it has taxable income under the EIT Law.
Annual taxable income description		the annual taxable income up to RMB 1 million (inclusive) is subject to an effective EIT rate of 2.5% from 1 January 2021 to 31 December 2022; where the annual taxable income exceeds RMB 1 million but does not exceed RMB 3 million (inclusive), the amount in excess of RMB 1 million is subject to an effective EIT rate of 5% from 1 January 2022 to 31 December 2024
PRC EIT rate			25.00%
Accumulated operating loss (in Dollars)			$ 10,130,515	$ 4,745,479
Hong Kong [Member]
Taxes (Details) [Line Items]
Rate of income tax, description			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.
China [Member]
Taxes (Details) [Line Items]
Statutory income tax rate, percentage			25.00%

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Taxes (Details) - Schedule income tax (benefit) provision - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Deferred
Total	$ 808,970	$ (236,581)	$ 3,054,983
China [Member]
Current
Current	1,560		3,367,763
Deferred
Deferred	$ 807,410	$ (236,581)	$ (312,780)

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Taxes (Details) - Schedule of (Loss) profit before income taxes - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Schedule Of Loss Profit Before Income Taxes Abstract
PRC	$ (16,323,667)	$ (6,034,466)	$ 15,150,941
Others	(5,991,765)	(2,916,447)	(138,671)
(Loss) profit before income taxes	$ (22,315,432)	$ (8,950,913)	$ 15,012,270

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Taxes (Details) - Schedule of income before income taxes and the actual provision of income taxes - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Schedule Of Income Before Income Taxes And The Actual Provision Of Income Taxes Abstract
(Loss) profit before income taxes	$ (22,315,432)	$ (8,950,913)	$ 15,012,270
PRC EIT rate	25.00%	25.00%	25.00%
Income taxes computed at statutory EIT rate	$ (5,578,858)	$ (2,237,728)	$ 3,753,068
Reconciling items:
Effect of tax holiday and preferential tax rate	1,274,465	169,657	(581,434)
Effect of tax rates in foreign jurisdictions	1,497,723	728,965	(46,330)
Effect of non-deductible expense	13,917	4,403	5,202
Effect of non-deductible share-based compensation	682,492
Super deduction of qualified R&D expenditures		(107,975)	(75,523)
Changes in valuation allowance	2,919,231	1,206,097
Income tax expense (benefit)	$ 808,970	$ (236,581)	$ 3,054,983
Effective tax rate	(3.63%)	2.64%	20.35%

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Taxes (Details) - Schedule of deferred tax assets - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Deferred tax assets
Net operating loss carry forwards	$ 1,934,559	$ 978,216
Provision for doubtful debts	1,439,947	1,092,140
Impairment on inventory	398,578
Impairment of long-lived assets	163,420
Deferred tax assets, gross	3,936,504	2,070,356
Less: valuation allowance	(3,936,504)	(1,218,319)
Deferred tax assets, net		852,037
Deferred tax liabilities
Assets acquired in the asset acquisition	$ 199,583

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Taxes (Details) - Schedule of expiration of carry forward operating loss	Dec. 31, 2022 USD ($)
Schedule Of Expiration Of Carry Forward Operating Loss Abstract
2023	$ 5,360
2024	522,780
2025	166,113
2026	12,894
2027	9,423,368
Total	$ 10,130,515

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Related Party Balance and Transactions (Details)					12 Months Ended
	Sep. 22, 2022 USD ($)	Sep. 22, 2022 CNY (¥)	Aug. 04, 2022 USD ($)	Aug. 04, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2022 CNY (¥)	Nov. 04, 2022 USD ($)	Nov. 04, 2022 CNY (¥)
Related Party Balance and Transactions (Details) [Line Items]
Annual interest rate percentage					4.35%				4.35%
Processing service					$ 450,591
Purchased graphite material					580,452
Service costs paid								$ 27,175
Revolving credit			$ 2,871,665	¥ 20,000,000
Utilized amount					1,938,374	¥ 13,500,000
Commercial notes					$ 3,876,748				¥ 27,000,000
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party	$ 2,871,665	¥ 20,000,000
Obtained credit amount										$ 5,743,331	¥ 40,000,000
Assets and equity ownership percent					100.00%	100.00%
Gross consideration					$ 5,743,331	¥ 40,000,000
Paid consideration					1,486,746	10,000,000
Unpaid consideration					$ 4,307,499	¥ 30,000,000
Vice Chairman [Member]
Related Party Balance and Transactions (Details) [Line Items]
Shareholder equity, percentage					7.49%	7.49%
Shanghai Hui Yang Investment Co [Member]
Related Party Balance and Transactions (Details) [Line Items]
Shareholder equity, percentage					9.6451%	9.6451%
Mr. Sousheng Guo [Member]
Related Party Balance and Transactions (Details) [Line Items]
Shareholder equity, percentage					3.00%	3.00%
Sold amount					$ 205
Mr. Chenming Qi [Member]
Related Party Balance and Transactions (Details) [Line Items]
Shareholder equity, percentage					3.00%	3.00%
Ms. Jing Ji [Member]
Related Party Balance and Transactions (Details) [Line Items]
Shareholder equity, percentage					46.00%	46.00%
Sunrise Guizhou [Member]
Related Party Balance and Transactions (Details) [Line Items]
Shareholder equity, percentage					9.6451%	9.6451%
Guizhou Yilong [Member]
Related Party Balance and Transactions (Details) [Line Items]
Shareholder equity, percentage					3.0864%	3.0864%
Zhuhai Investment [Member]
Related Party Balance and Transactions (Details) [Line Items]
Rental fee					$ 118,475		$ 103,411	$ 96,695
Sold amount							$ 666

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Related Party Balance and Transactions (Details) - Schedule of balances of amount due from related parties - USD ($)		Dec. 31, 2022	Dec. 31, 2021
Due from related parties
Due from related parties		$ 400,022	$ 65,278
Bally [Member]
Due from related parties
Due from related parties		5,168	5,168
Zhuhai Investment [Member]
Due from related parties
Due from related parties			25,534
Mr. Xuanming Wang [Member]
Due from related parties
Due from related parties		20,102	26,664
Mr. Haiwei Zuo [Member]
Due from related parties
Due from related parties			7,912
Mr. Wenwu Zhang [Member]
Due from related parties
Due from related parties	[1]	337,420
Shidong (Suzhou) Investment Co., Ltd.[Member]
Due from related parties
Due from related parties		$ 37,332

[1] The balance as of December 31, 2022 represented the prepaid acquisition consideration to purchase Mr. Wenwu Zhang’s equity in Haicheng Shenhe. See Note 7.

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Related Party Balance and Transactions (Details) - Schedule of due to related parties - USD ($)		Dec. 31, 2022	Dec. 31, 2021
Related Party Balance and Transactions (Details) - Schedule of due to related parties [Line Items]
Due to related parties		$ 885,150
Mr. Haiping Hu [Member]
Related Party Balance and Transactions (Details) - Schedule of due to related parties [Line Items]
Due to related parties		2,872
Mr. Chenming Qi [Member]
Related Party Balance and Transactions (Details) - Schedule of due to related parties [Line Items]
Due to related parties		9,189
Ms. Jing Ji [Member]
Related Party Balance and Transactions (Details) - Schedule of due to related parties [Line Items]
Due to related parties		19,923
Shanghai HuiYang Investment Co. [Member]
Related Party Balance and Transactions (Details) - Schedule of due to related parties [Line Items]
Due to related parties	[1]	738,128
Haicheng Shenhe [Member]
Related Party Balance and Transactions (Details) - Schedule of due to related parties [Line Items]
Due to related parties		50,395
Zhuhai Investment [Member]
Related Party Balance and Transactions (Details) - Schedule of due to related parties [Line Items]
Due to related parties		$ 64,643

[1] The balance as of December 31, 2022 represented the loans from the related party, with the annual interest rate of 4.35% and was initially due on August 13, 2022 and extended to December 31, 2023.

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Related Party Balance and Transactions (Details) - Schedule of balances of deferred revenue of related parties - USD ($)		12 Months Ended
		Dec. 31, 2022	Dec. 31, 2021
Related Party Balance and Transactions (Details) - Schedule of balances of deferred revenue of related parties [Line Items]
Deferred revenue of related parties		$ 347,471
Shanghai Hui Yang Investment Co.[Member]
Related Party Balance and Transactions (Details) - Schedule of balances of deferred revenue of related parties [Line Items]
Deferred revenue of related parties	[1]	$ 347,471

[1] The balance as of December 31, 2022 represented the advance from the related party for tailored services.

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Shareholders’ Equity (Details) - USD ($)								1 Months Ended	12 Months Ended
	Aug. 26, 2022	Nov. 30, 2021	Sep. 30, 2021	Feb. 11, 2021	Apr. 24, 2020	Apr. 02, 2020	Aug. 08, 2019	Feb. 22, 2019	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Apr. 03, 2020
Shareholders’ Equity (Details) [Line Items]
Ordinary shares, authorized (in Shares)									500,000,000	500,000,000
Ordinary shares, par value (in Dollars per share)									$ 0.0001	$ 0.0001
First reverse stock split, description					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.	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.
Ordinary shares issued (in Shares)					24,640,000				3,679,200			28,000,000
Ordinary shares outstanding (in Shares)					24,640,000							28,000,000
Ordinary shares reduced (in Shares)					16,800,000							24,640,000
Ordinary shares, par value (in Dollars per share)									$ 0.0001
Share-based compensation expenses									$ 2,729,969
Granted restricted share (in Shares)	3,334,200
Restricted share percentage	25.00%
Nonvested percentage	75.00%
Vested term	3 years
Restricted share, par value (in Dollars per share)	$ 2
Total share-based compensation	$ 6,668,400
Service period term	3 years
Weighted average grant date fair value (in Dollars per share)									$ 2
Total fair value of restricted									$ 1,667,100
Share-based compensation expenses to restricted share									2,729,969
Unrecognized compensation expenses									$ 3,938,431
Term of weighted average									1 year 9 months
Equity interest, percentage			61.50%
Shareholders capital contributions									$ 41,826,941	3,332,622
Statutory reserves, percentage									50.00%
Statutory reserves									$ 2,477,940
Statutory reserves									2,477,940
Share capital amount									$ 22,710,147
Osiris International Cayman Limited [Member]
Shareholders’ Equity (Details) [Line Items]
Price per share (in Dollars per share)								$ 0.0001
Jiagui Haifeng [Member]
Shareholders’ Equity (Details) [Line Items]
Equity interest, percentage		51.00%
Mr. Lifeng Wang [Member]
Shareholders’ Equity (Details) [Line Items]
Equity interest, percentage		49.00%
IPO [Member]
Shareholders’ Equity (Details) [Line Items]
Ordinary share issued (in Shares)				1,008,000
Price per share (in Dollars per share)				$ 4
Ordinary shares, par value (in Dollars per share)				$ 0.0001
Gross proceeds				$ 4,032,000
Net proceeding				$ 27,504,639
IPO [Member] | Ordinary Shares [Member]
Shareholders’ Equity (Details) [Line Items]
Ordinary shares, authorized (in Shares)				6,720,000
Price per share (in Dollars per share)				$ 4
Ordinary shares, par value (in Dollars per share)				$ 0.0001
Gross proceeds				$ 26,880,000
Statutory reserves [Member]
Shareholders’ Equity (Details) [Line Items]
Statutory reserves										$ 2,473,801
GIOP [Member]
Shareholders’ Equity (Details) [Line Items]
Ordinary shares, authorized (in Shares)								500,000,000
Ordinary shares, par value (in Dollars per share)								$ 0.0001
Ordinary share issued (in Shares)							27,000,000	999,999
Price per share (in Dollars per share)							$ 0.0001
Total consideration							$ 2,800
Statutory reserves [Member]
Shareholders’ Equity (Details) [Line Items]
After-tax profits percentage									10.00%
Statutory reserves, percentage									50.00%	50.00%
EPOW BJ [Member]
Shareholders’ Equity (Details) [Line Items]
Equity interest, percentage									75.00%
Yunqianyi [Member]
Shareholders’ Equity (Details) [Line Items]
Equity interest, percentage									25.00%
Shidong Cloud [Member]
Shareholders’ Equity (Details) [Line Items]
Capital contributions									$ 52,863
Shareholders capital contributions									78,851
Sunrise Guizhou [Member]
Shareholders’ Equity (Details) [Line Items]
Shareholders capital contributions									$ 10,759,335	$ 9,099,878

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Shareholders’ Equity (Details) - Schedule of share-based compensation expenses - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Schedule of Share-Based Compensation Expenses [Abstract]
Cost of revenues	$ 8,188
Selling expenses	39,301
General and administrative expenses	2,674,292
Research and development expenses	8,188
Total	$ 2,729,969

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Shareholders’ Equity (Details) - Schedule of restricted shares units	12 Months Ended
	Dec. 31, 2022 USD ($) $ / shares shares
Schedule of non-controlling interest [Abstract]
Number of restricted share units outstanding, beginning balance
Weighted average grant date fair value, beginning balance (in Dollars per share) | $ / shares
Aggregate intrinsic value, beginning balance (in Dollars) | $
Number of restricted share units outstanding, Granted	3,334,200
Weighted average grant date fair value, Granted (in Dollars per share) | $ / shares	$ 2
Aggregate intrinsic value, Granted (in Dollars) | $
Number of restricted share units outstanding, Vested	(833,550)
Weighted average grant date fair value, Vested	2
Aggregate intrinsic value, Vested (in Dollars) | $
Number of restricted share units outstanding, ending balance	2,500,650
Weighted average grant date fair value, ending balance (in Dollars per share) | $ / shares	$ 2
Aggregate intrinsic value, ending balance (in Dollars) | $	$ 6,826,775

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Shareholders’ Equity (Details) - Schedule of non-controlling interest - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Schedule of non-controlling interest [Abstract]
Total	$ 42,239,392	$ 3,122,250
GMB (Beijing) [Member]
Schedule of non-controlling interest [Abstract]
Total	4,313	5,365
GMB Culture [Member]
Schedule of non-controlling interest [Abstract]
Total	2,997	25,613
Jiagui Haifeng [Member]
Schedule of non-controlling interest [Abstract]
Total	(710)	(13)
Shidong Trading [Member]
Schedule of non-controlling interest [Abstract]
Total		(35)
GMB Consulting [Member]
Schedule of non-controlling interest [Abstract]
Total	13,270	14,477
Shidong Cloud [Member]
Schedule of non-controlling interest [Abstract]
Total	42,389
Sunrise Guxian [Member]
Schedule of non-controlling interest [Abstract]
Total	(39,323)
GMB Technology [Member]
Schedule of non-controlling interest [Abstract]
Total	(186,539)	(185,377)
Sunrise Guizhou [Member]
Schedule of non-controlling interest [Abstract]
Total	$ 42,402,995	$ 3,262,220

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Segment Reporting (Details)	12 Months Ended
	Dec. 31, 2022
Segment Reporting [Abstract]
Operating segment	2
Reportable segment	2

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Segment Reporting (Details) - Schedule of revenue by major revenue - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Revenue, Major Customer [Line Items]
Cost of revenues	$ 39,476,046	$ 3,886,654	$ 2,980,216
Gross (loss) profit	(1,350,378)	3,522,618	20,200,868
Graphite anode business [Member]
Revenue, Major Customer [Line Items]
Revenue, net	37,580,677
Cost of revenues	35,586,544
Gross (loss) profit	1,994,133
Peer-to-peer knowledge sharing and enterprise business [Member]
Revenue, Major Customer [Line Items]
Revenue, net	544,991	7,409,272	23,181,084
Cost of revenues	3,889,502	3,886,654	2,980,216
Gross (loss) profit	(3,344,511)	3,522,618	20,200,868
Member Service [Member]
Revenue, Major Customer [Line Items]
Revenue, net	106,724	498,330	872,629
Cost of revenues	591,000	99,013	174,660
Gross (loss) profit	(484,276)	399,317	697,969
Comprehensive Tailored Services [Member]
Revenue, Major Customer [Line Items]
Revenue, net	153,658	1,433,847	13,345,880
Cost of revenues	294,759	157,563	340,783
Gross (loss) profit	(141,101)	1,276,284	13,005,097
Sponsorship Advertising Services [Member]
Revenue, Major Customer [Line Items]
Revenue, net		1,734,390	6,598,527
Cost of revenues		34,041	255,634
Gross (loss) profit		1,700,349	6,342,893
Consulting Services [Member]
Revenue, Major Customer [Line Items]
Revenue, net	9,645	1,583,583	416,634
Cost of revenues	218,719	733,266	239,845
Gross (loss) profit	(209,074)	850,317	176,789
Online Services [Member]
Revenue, Major Customer [Line Items]
Revenue, net	2,100	40,391	361,933
Cost of revenues	66,403	798,010	1,076,503
Gross (loss) profit	(64,303)	(757,619)	(714,570)
Other Services [Member]
Revenue, Major Customer [Line Items]
Revenue, net	272,864	2,118,731	1,585,481
Cost of revenues	2,718,621	2,064,761	892,791
Gross (loss) profit	(2,445,757)	53,970	692,690
Revenue, net [Member]
Revenue, Major Customer [Line Items]
Revenue, net	$ 38,125,668	$ 7,409,272	$ 23,181,084

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Subsequent Events (Details) - Subsequent Event [Member]	Feb. 07, 2023 USD ($)	Feb. 07, 2023 CNY (¥)	Jan. 18, 2023 USD ($)	Jan. 18, 2023 CNY (¥)	Feb. 07, 2023 CNY (¥)
Subsequent Events (Details) [Line Items]
Credit facility agreement			$ 4,307,498	¥ 30,000,000
Loan amount	$ 2,871,665				¥ 20,000,000
Prime rate plus	2.60%				2.60%
Account receivable	$ 2,871,665	¥ 20,000,000

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Condensed Financial Information of the Parent Company (Details)	Dec. 31, 2022
Condensed Financial Information Disclosure [Abstract]
Percentage of the consolidated net assets	25.00%

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Condensed Financial Information of the Parent Company (Details) - Schedule of parent compnay balance sheets - Parent Company [Member] - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	$ 285,916	$ 784,176
Restricted cash	700,094
Due from related parties	5,168	5,168
Short-term investment	3,336,256	5,961,605
Advance to suppliers	7,694	13,727
Prepaid expenses and other current assets	2,994,975	1,011,542
TOTAL CURRENT ASSETS	7,330,103	7,776,218
Restricted cash		700,060
Long term prepayments and other non-current assets		2,000,000
Investment in subsidiaries and VIE	24,714,096	41,438,198
TOTAL NON-CURRENT ASSETS	24,714,096	44,138,258
TOTAL ASSETS	32,044,199	51,914,476
Accrued expenses and other current liabilities	15,550	211,430
TOTAL CURRENT LIABILITIES	15,550	211,430
TOTAL LIABILITES	15,550	211,430
Ordinary shares (500,000,000 shares authorized; $0.0001 par value, 24,528,000 shares issued and outstanding as of December 31, 2021; 25,361,550 shares issued and outstanding as of December 31, 2022)	2,536	2,453
Additional paid-in capital	34,696,702	31,966,816
Statutory reserves	2,477,940	2,473,801
(Accumulated deficits) Retained earnings	(5,148,529)	17,259,976
TOTAL EQUITY	32,028,649	51,703,046
TOTAL LIABILITIES AND EQUITY	$ 32,044,199	$ 51,914,476

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Condensed Financial Information of the Parent Company (Details) - Schedule of parent compnay balance sheets (Parentheticals) - Parent Company [Member] - $ / shares	Dec. 31, 2022	Dec. 31, 2021
Condensed Balance Sheet Statements, Captions [Line Items]
Ordinary shares, authorized	500,000,000	500,000,000
Ordinary shares, par value (in Dollars per share)	$ 0.0001	$ 0.0001
Ordinary shares, issued	25,361,550	24,528,000
Ordinary shares, outstanding	25,361,550	24,528,000

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Condensed Financial Information of the Parent Company (Details) - Schedule of parent compnay statements of operations and comprehensive (loss) income - Parent Company [Member] - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Condensed Statement of Income Captions [Line Items]
REVENUES, NET			$ 73,744
COSTS OF REVENUES	8,188
GROSS (LOSS) PROFIT	(8,188)		73,744
OPERATING EXPENSES	3,578,664	1,010,536	50,000
(LOSS) PROFIT FROM OPERATIONS	(3,586,852)	(1,010,536)	23,744
OTHER (EXPENSES) INCOME	(2,403,412)	(1,904,135)	4,459
(LOSS) PROFIT BEFORE EQUITY IN (LOSS) EARNINGS OF SUBSIDIARIES AND VIE	(5,990,264)	(2,914,671)	28,203
Equity in (loss) earnings of subsidiaries and VIE	(16,414,102)	(5,488,589)	12,059,324
NET (LOSS) INCOME ATTRIBUTABLE TO SUNRISE NEW ENERGY CO., LTD. ORDINARY SHAREHOLDERS	(22,404,366)	(8,403,260)	12,087,527
Foreign currency translation adjustment
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO SUNRISE NEW ENERGY CO., LTD. ORDINARY SHAREHOLDERS	$ (22,404,366)	$ (8,403,260)	$ 12,087,527

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Condensed Financial Information of the Parent Company (Details) - Schedule of parent compnay statements of cash flows - Parent Company [Member] - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Condensed Cash Flow Statements, Captions [Line Items]
Net cash used in operating activities	$ (808,226)	$ (1,015,145)	$ (52,994)
Net cash used in investing activities		(25,825,000)
Net cash provided by financing activities	310,000	28,249,093	128,282
(Decrease) increase in cash and cash equivalents	(498,226)	1,408,948	75,288
Cash, cash equivalents and restricted cash, beginning of year	1,484,236	75,288
Cash, cash equivalents and restricted cash, end of year	986,010	1,484,236	75,288
Cash, cash equivalents and restricted cash, end of year	986,010	1,484,236	75,288
Less: restricted cash	700,094	700,060
Cash and cash equivalents, end of year	$ 285,916	$ 784,176	$ 75,288