Greenland Technologies Holding Corp 10-K for FY2024
Greenland Technologies Holding Corp. (GTEC)
About this 10-K
Greenland Technologies Holding Corp filed this 10-K on March 26, 2025, covering the fiscal year ended December 31, 2024 (FY2024).
Headline figures
Fiscal year ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $83.94M
- down 7.1% from $90.33M a year earlier
- Net income
- $14.07M
- compared with a net loss of $15.88M a year earlier
- Diluted EPS
- $1.03
- compared with -$1.20 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
FOR THE FISCAL YEAR ENDED
FOR THE TRANSITION PERIOD FROM ______ TO ______
COMMISSION FILE NUMBER
(Exact name of Registrant as specified in its charter)
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AREA CODE:
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
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SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
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If an emerging growth company, 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. ☐
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is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and
asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter
was approximately $
As of March 26, 2025, there were
TABLE OF CONTENTS
i
Cautionary Note Regarding Forward Looking Statements
This Annual Report on Form 10-K, or this Report, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements, which express management’s current views concerning future business, events, trends, contingencies, financial performance, or financial condition, appear at various places in this report and use words like “aim,” “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “goal,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “see,” “seek,” “should,” “strategy,” “strive,” “target,” “will,” and “would” and similar expressions, and variations or negatives of these words. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. These risks and uncertainties include the following:
| ● | the availability and adequacy of our cash flow to meet our requirements; | |
| ● | economic, competitive, demographic, business, and other conditions in our local and regional markets; | |
| ● | changes or developments in laws, regulations, or taxes in our industry; | |
| ● | actions taken or omitted to be taken by third parties including our suppliers and competitors, as well as legislative, regulatory, judicial, and other governmental authorities; | |
| ● | competition in our industry; | |
| ● | the loss of or failure to obtain any license or permit necessary or desirable in the operation of our business; | |
| ● | changes in our business strategy, capital improvements, or development plans; | |
| ● | the Company’s ability to devise and implement effective internal controls and procedures; | |
| ● | the availability of additional capital to support capital improvements and development; | |
| ● | global or national health concerns, including the outbreak of epidemic or contagious diseases; and | |
| ● | other risks identified in this Report and in our other filings with the U.S. Securities and Exchange Commission, or the SEC. |
This Report should be read completely and with the understanding that actual future results may be materially different from what we expect. The forward-looking statements included in this Report are made as of the date of this Report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
ii
PART I
ITEM 1. BUSINESS
General
Greenland Technologies Holding Corporation (the “Company” or “Greenland”) designs, develops, manufactures and sells components and products for the global material handling industries.
Through its subsidiaries in the People’s Republic of China (the “PRC” or “China”), Greenland offers transmission products, which are key components for forklift trucks used in manufacturing and logistic applications, such as factories, workshops, warehouses, fulfilment centers, shipyards, and seaports. Forklifts play an important role in the logistic systems of many companies across different industries in China and globally. Generally, industries with the largest demand for forklifts include the transportation, warehousing logistics, electrical machinery, and automobile industries.
Greenland’s transmission products are used in 1-ton to 15-tons forklift trucks, some with mechanical shift and some with automatic shift. Greenland sells these transmission products directly to forklift-truck manufacturers. In the fiscal years ended December 31, 2024 and 2023, Greenland sold an aggregate of 149,597 and 149,543 sets of transmission products, respectively, to more than 100 forklift manufacturers in the PRC.
In January 2020, Greenland formed HEVI Corp. (“HEVI”) to focus on the production and sale of electric industrial vehicles to meet the increasing demand for electric industrial vehicles and machinery powered by sustainable energy in order to reduce air pollution and lower carbon emissions. HEVI is a wholly owned subsidiary of Greenland incorporated under the laws of the State of Delaware. HEVI’s electric industrial vehicle products currently include GEF-series electric forklifts, a series of lithium powered forklifts with three models ranging in size from 1.8 tons to 3.5 tons, GEL-1800, a 1.8 ton rated load lithium powered electric wheeled front loader, GEX-8000, an all-electric 8.0 ton rated load lithium powered wheeled excavator, and GEL-5000, an all-electric 5.0 ton rated load lithium wheeled front loader. In addition, HEVI introduced a line of mobile DC battery chargers that support DC powered EV applications in the North America market. These products are available for purchase in the United States (“U.S.”) market. In August 2022, Greenland launched a 54,000 square foot industrial electric vehicle assembly site in Baltimore, Maryland to support local services, assembly and distribution of its electric industrial heavy equipment products line. In July 2024, HEVI announced a partnership with Lonking Holdings Limited to develop and distribute heavy electric machinery and related technology specialized for the U.S. market. In August 2024, HEVI launched its H55L all-electric wheeled front-end loader, which can lift up to six tons in indoor and outdoor applications without the mess and emissions of diesel, and the H65L all-electric wheeled front-end loader, the largest lithium battery powered electric wheel loader commercially available in North America.
Greenland serves as the parent company of HEVI and Greenland Holding Enterprises Inc. (“Greenland Holding”), a holding company formed in the State of Delaware on August 28, 2023, which in turn acts as the holding company for Zhongchai Holding (Hong Kong) Limited, a holding company formed under the laws of the Hong Kong Special Administrative Region (“Hong Kong”) on April 23, 2009 (“Zhongchai Holding”). Zhongchai Holding’s subsidiaries include Zhejiang Zhongchai Machinery Co. Ltd., an operating company formed under the laws of the PRC in 2005, Hangzhou Greenland Energy Technologies Co., Ltd. (“Hangzhou Greenland”), an operating company formed under the laws of the PRC in 2019, and Hengyu Capital Limited, a company formed in Hong Kong on August 16, 2022 (“Hengyu Capital”). Through Zhongchai Holding and its subsidiaries, Greenland develops and manufactures traditional transmission products for material handling machineries in the PRC.
Greenland was incorporated on December 28, 2017 as a British Virgin Islands company with limited liability. Following the Business Combination (as described and defined below) in October 2019, the Company changed its name from Greenland Acquisition Corporation to Greenland Technologies Holding Corporation.
As of December 31, 2024, Cenntro Holding Limited owned 45.69% of our outstanding ordinary shares. Cenntro Holding Limited is controlled and beneficially owned by Mr. Peter Zuguang Wang, the chairman of the board of directors of the Company.
1
Significant Activities since Inception
Initial Public Offering
On July 27, 2018, we consummated our initial public offering of 4,400,000 units, including a partial exercise by the underwriters of their over-allotment option in the amount of 400,000 units. Each unit consisted of one ordinary share, no par value, one warrant to purchase one-half of one ordinary share and one right to receive one-tenth of one ordinary share upon the consummation of our Business Combination, pursuant to a registration statement on Form S-1. Warrants must be exercised in multiples of two warrants, and each two warrants are exercisable for one ordinary share at an exercise price of $11.50 per share. The units were sold in our initial public offering at an offering price of $10.00 per unit, which generated $44,000,000 (before underwriting discounts and offering expenses) in gross proceeds.
Simultaneously with the consummation of our initial public offering, we completed a private placement of 282,000 units at a price of $10.00 per unit to Greenland Asset Management Corporation (the “Sponsor”) and Chardan Capital Markets, LLC (“Chardan”), which generated $2,820,000 in gross proceeds. We also sold to Chardan (and its designees), for $100, an option to purchase up to 240,000 units exercisable at $11.50 per unit (or an aggregate exercise price of $2,760,000) commencing on consummation of the Business Combination (as defined below). The unit purchase option may be exercised for cash or on a cashless basis, at the holder’s option, and expired on July 24, 2023. On February 18, 2021, Chardan exercised its option to purchase 120,000 units.
Business Combination
On October 24, 2019, we consummated our business combination with Zhongchai Holding (the “Business Combination”) after a special meeting, where the shareholders of Greenland considered and approved, among other matters, a proposal to adopt a share exchange agreement (the “Share Exchange Agreement”), dated as of July 12, 2019, among (i) Greenland, (ii) Zhongchai Holding, (iii) the Sponsor, in the capacity as the purchaser representative (the “Purchaser Representative”), and (iv) Cenntro Holding Limited, the sole member of Zhongchai Holding (the “Zhongchai Equity Holder” or the “Seller”).
Pursuant to the Share Exchange Agreement, Greenland acquired from the Seller all of the issued and outstanding equity interests of Zhongchai Holding in exchange for 7,500,000 newly issued ordinary shares, no par value, of Greenland, to the Seller (the “Exchange Shares”). As a result, the Seller became the controlling shareholder of Greenland, and Zhongchai Holding became a directly and wholly owned subsidiary of Greenland. The Business Combination was accounted for as a reverse merger effected by the Share Exchange Agreement, where Zhongchai Holding is considered the acquirer for accounting and financial reporting purposes.
The Business Combination was accounted for as a reverse recapitalization (the “Recapitalization Transaction”) in accordance with Accounting Standard Codification (“ASC”) 805, Business Combinations. For accounting and financial reporting purposes, Zhongchai Holding is considered the acquirer based on the following facts and circumstances:
| ● | Zhongchai Holding’s operations comprise the ongoing operations of the combined entity; | |
| ● | The officers of the newly combined company consist of Zhongchai Holding’s executives, including the Chief Executive Officer, Chief Financial Officer, and General Counsel; and | |
| ● | The former shareholders of Zhongchai Holding own a majority voting interests in the combined entity. |
As a result of Zhongchai Holding being the accounting acquirer, the financial reports filed with the SEC by the Company subsequent to the Business Combination are prepared “as if” Zhongchai Holding is the predecessor and legal successor to the Company. The historical operations of Zhongchai Holding are deemed to be those of the Company. Thus, the financial statements included in this Report reflect (i) the historical operating results of Zhongchai Holding prior to the Business Combination; (ii) the combined results of Zhongchai Holding and Greenland following the Business Combination in October 2019; (iii) the assets and liabilities of Zhongchai Holding at their historical cost, and (iv) Greenland’s equity structure for all periods presented. Zhongchai Holding received 7,500,000 shares of Greenland in exchange for all the share capital, which is reflected retroactively to December 31, 2017 and will be utilized for calculating earnings per share in all prior periods. No step-up basis of intangible assets or goodwill was recorded in the Business Combination transaction, which is consistent with the treatment of the transaction as a reverse recapitalization of Zhongchai Holding.
2
Incorporation of HEVI Corp.
On January 14, 2020, HEVI Corp., formerly known as Greenland Technologies Corp. prior to May 2022, was incorporated under the laws of the state of Delaware. HEVI is a wholly owned subsidiary of the Company and promotes sales of sustainable alternative products for the heavy industrial equipment industry, including electric industrial vehicles, in the North American market.
June 2021 Public Offering
On June 28, 2021, the Company entered into an underwriting agreement with Aegis Capital Corp., pursuant to which the Company agreed to sell to Aegis Capital Corp. in a firm commitment public offering 857,884 ordinary shares of the Company, for an offering price of $8.16 per share. The Company received $7.0 million in gross proceeds from this offering, before deducting underwriting discounts and other related offering expenses.
At-the-market Offering Agreement
On November 19, 2021, the Company entered into an at the market offering agreement with H.C. Wainwright & Co., LLC, to create at an the market equity program pursuant to which the Company may offer and sell, from time to time, through or to H.C. Wainwright & Co., LLC, the Company’s ordinary shares, no par value per share, having an aggregate gross offering price of up to $7.72 million. As of the date of this Report, no ordinary shares of the Company have been sold under the at the market offering agreement.
July 2022 Registered Direct Offering
On July 25, 2022, the Company entered into a securities purchase agreement with an investor, pursuant to which the Company agreed to issue and sell 1,250,000 ordinary shares and 398,974 pre-funded warrants (the “RD pre-funded warrants”), with each RD pre-funded warrant exercisable for one ordinary share of the Company, for an offering price of $4.17 per share and $4.169 per RD pre-funded warrant. The Company received $6.88 million in gross proceeds from that registered direct offering, before deducting placement agent fees and other related offering expenses.
July 2022 Private Placement
On July 25, 2022, the Company entered into another securities purchase agreement with an investor for a private placement offering of 616,026 pre-funded warrants and 4,530,000 common warrants. Each ordinary share and accompanying common warrants were sold together at a combined offering price of $5.089 per unit, with an exercise price per pre-funded warrant of $0.001 per share. The Company received $3.14 million in gross proceeds from that private placement, before deducting placement agent fees and other related offering expenses.
Formation of Hengyu Capital Limited
On August 16, 2022, Hengyu Capital Limited was formed in Hong Kong as a subsidiary of Zhongchai Holding (Hong Kong) Limited, which owns 62.5% equity interests in Hengyu Capital Limited. The remaining 37.5% of the equity interests of Hengyu Capital Limited are owned by the chairman of our board of directors, Mr. Peter Zuguang Wang. Hengyu Capital Limited does not have any business activities at this time.
Dissolution of Shanghai Hengyu Business Management Consulting Co., Ltd.
From the consummation of the Business Combination to July 2023, Shanghai Hengyu Business Management Consulting Co., Ltd. (“Shanghai Hengyu”), a company formed in the PRC, was an indirect subsidiary of the Company, in which the Company owns 62.5% equity interests. On July 10, 2023, Shanghai Hengyu was dissolved under the laws of the PRC.
Formation of Greenland Holding
On August 28, 2023, Greenland Holding was formed in the State of Delaware with no shares issued. On March 26, 2024, the Company entered into a share exchange agreement with Greenland Holding and Zhongchai Holding (the “2024 Share Exchange Agreement”), pursuant to which, on March 27, 2024, the Company transferred all the equity interests it held in Zhongchai Holding to Greenland Holding, and in return, Greenland Holding issued 100 shares to the Company, representing 100% of the issued and outstanding shares of Greenland Holding. As a result, Greenland Holding has become a wholly owned subsidiary of the Company, which in turn holds 100% of the equity interests in Zhongchai Holding.
3
Corporate Structure
The following diagram illustrates the current corporate structure of Greenland, including the jurisdiction of formation and ownership interest of each of its subsidiaries.
Greenland was incorporated on December 28, 2017 as a British Virgin Islands company with limited liability. As a result of the consummation of the Business Combination, Greenland serves as the ultimate holding company of its subsidiaries.
Greenland Holding was incorporated in the State of Delaware on August 28, 2023. Upon consummation of the share exchange as contemplated by the 2024 Share Exchange Agreement, Greenland Holding became a wholly owned subsidiary of the Company, and holds 100% equity interests in Zhongchai Holding. As of the date of this Report, Greenland Holding has no business operations and acts as a holding company.
Zhongchai Holding was incorporated in Hong Kong on April 23, 2009. From April 23, 2009 to November 1, 2011, Zhongchai Holding was a subsidiary of Equicap, Inc., a Nevada corporation, with its stock quoted on the OTC Markets until July 29, 2011.
HEVI was incorporated in the state of Delaware on January 14, 2020 as a wholly owned subsidiary of Greenland. HEVI promotes sales of sustainable alternative products for the heavy industrial equipment industry, including electric industrial vehicles, in the North American market.
Zhejiang Zhongchai, an 89.47% owned subsidiary of Zhongchai Holding, was formed in the PRC on November 21, 2005 and engages in the business of designing, manufacturing, and selling transmission products mainly for forklift trucks. The remaining 10.53% of Zhejiang Zhongchai’s capital stock is owned by Xinchang County Jiuxin Investment Management Partnership (LP) (“Jiuxin”), an entity owned by Mengxing He, director and general manager of Zhejiang Zhongchai.
Hangzhou Greenland, formerly known as Hangzhou Greenland Robotic Co., Ltd. prior to November 6, 2020 (“Hangzhou Greenland”), a wholly owned subsidiary of Zhongchai Holding, was formed in the PRC on August 9, 2019 and engages in the business of research and development of electric engineering vehicles, including electric forklifts, electric loading vehicles, electric digging vehicles, and other products. Hangzhou Greenland is also committed to product supply chain integration and overseas sales.
Hengyu Capital Limited, a 62.5% owned subsidiary of Zhongchai Holding, was formed in Hong Kong on August 16, 2022. Hengyu Capital Limited does not have any business activities at this time and will be engaging in the business of investing. The remaining 37.5% of the capital stock of Hengyu Capital Limited is owned by Peter Zuguang Wang, the chairman of our board of directors.
Products
Greenland manufactures transmission systems and integrated powertrains for the various industries, particularly for material handling machineries. In addition, Greenland is a provider of high tech sustainable heavy machineries including all-electric construction machinery and related charging accessories.
4
Transmission products for material handling machineries
Transmission Systems. For 15 years, Greenland, along with its subsidiaries, specializes in designing, developing, and manufacturing a wide range of transmission systems for material handling machineries, in particular forklift trucks. The range of the transmission systems covers machineries from one ton to fifteen tons. Most transmission systems contain auto transmission features. This feature allows for easy machine operations. In addition, Greenland provides transmission system for internal combustion powered machineries as well as for electrical powered machineries. Greenland has recently experienced an increasing demand for electric powered transmission systems. These transmission systems are key components for material handling machinery assembly. To meet this increasing demand, Greenland is able to providing these transmission systems to major forklift truck original equipment manufacturers (“OEMs”) as well as certain global branded manufacturers.
Integrated Powertrain. Through its PRC subsidiaries, Greenland designs and develops new and distinctive powertrains, which integrates electric motor, speed reduction gearbox, and driving axles into a combined integral module, in order to meet a growing demand for advanced electric forklift trucks. This integrated powertrain will enable the OEMs to significantly shorten design cycle, improve machinery efficiency, and simplify manufacturing process. There is a new trend that OEMs would rather use an integrated powertrain than separate electric motor, speed reduction gearbox, and driving axles, particularly in electric forklift trucks. Currently, Greenland makes two tons to three and a half-tons integrated powertrains for few electric forklift truck OEMs. Greenland is in the process of adding more integrated powertrain products for electric forklift truck OEMs with different sizes.
Electric Industrial Heavy Equipment
GEL-5000 Electric Wheel Loader
Offering all-electric clean and sustainable alternatives to traditional heavy-emission systems in the industrial heavy equipment industry, HEVI sells equipment that produce no operating emissions and reduced noise pollution while offering the strength and power for many applications. Assembled in Maryland, HEVI’s first product line includes the GEL-5000 and GEL-1800 electric wheeled front loader, the GEX-8000 electric excavator and the GEF-series of electric lithium forklifts.
5
GEL-5000
The GEL-5000 is a 39,683 lb. lithium powered all-electric wheeled front loader capable of supporting a 5.0-ton rated load. Its 282 kWh 620V lithium battery sourced from Contemporary Amperex Technology Co., Limited (“CATL”) produces the power to support eight hours of operation time and can be charged in as little as two hours.
GEL-1800
The GEL-1800 is a 11,464 lb. lithium powered all-electric wheeled front loader capable of supporting a 1.8-ton rated load. Its 141 kWh 620V CATL-sourced lithium battery produces the power to support nine hours of operation time and can be charged in as little as one and a half hours.
GEX-8000
The GEX-8000 is a 18,739 lb. lithium powered all-electric excavator capable of supporting an 8.0-ton rated load. Its 141 kWh 620V CATL-sourced lithium battery produces the power to support nine hours of operation time and can be charged in as little as one and a half hours.
The GEL-5000, GEL-1800 and GEX-8000 come standard with advanced systems such as an intelligent system diagnostic display, quick-hitch attachment system with a wide range of attachments and quality-of-life operation features that further add value to our customers.
H55L
The H55L is a lithium powered all-electric wheeled front loader which can lift up to six tons in indoor and outdoor applications without the mess and emissions of diesel.
H65L
The H65L is a lithium powered all-electric wheeled front loader and HEVI’s flagship loader at an operating weight of nearly 50,000 pounds.
GEF-Series Forklifts
HEVI offers the GEF-series of lithium powered electric forklifts that range in power from 1.5-ton to 3.5-ton rated load.
Charging Solutions
DCH-480-30 Mobile Direct Current (“DC”) Charger
HEVI has developed a line of DC mobile charging solutions that are designed for easy, flexible and cost-effective charging integration to support a DC-powered electric vehicle (“EV”) fleet at any powered work site. These solutions create a seamless adoption of HEVI’s electric heavy equipment or any compatible DC-powered EV into any existing fleet operation while creating another revenue stream for the HEVI business.
6
Recent Regulatory Developments
We are a holding company incorporated in the British Virgin Islands and not a Chinese operating company. As a holding company with no material operations of our own, we conduct our operations through our U.S. subsidiary, HEVI, and our PRC subsidiaries. We hold equity interests in our subsidiaries and do not currently use a variable interest entity (“VIE”) structure. Investors in our ordinary shares are purchasing equity interest in a British Virgin Islands holding company. As used in this Report, “we,” “us,” “our company,” or “our” refers to Greenland Technologies Holding Corporation and when describing the consolidated financial results of Greenland Technologies Holding Corporation and its subsidiaries, also includes its subsidiaries.
We and our PRC subsidiaries are subject to certain legal and operational risks associated with our PRC subsidiaries’ operations in China. PRC laws and regulations governing our PRC subsidiaries’ current business operations are sometimes vague and uncertain and, as a result, these risks may result in material changes in the operations of our PRC subsidiaries, significant depreciation of the value of our ordinary shares, or a complete hindrance of our ability to offer or continue to offer our securities to investors. For instance, except for fulfilling the filing procedure with the China Securities Regulatory Commission, or the CSRC, in connection with future offerings, we believe that we and our PRC subsidiaries are currently not required to obtain any permission or approval from the CSRC and the Cyberspace Administration of China, or the CAC, in the PRC to offer securities to foreign investors. However, there is no guarantee that this will continue to be the case in the future in relation to a follow-on offering or the continued listing of our securities on a U.S. securities exchange, or even in the event such permission or approval is required and obtained, it will not be subsequently revoked or rescinded. In the event that such approval is required in the future and we and/or our PRC subsidiaries do not receive or maintain such approval, our ordinary shares may significantly decline in value or become worthless, and our ability to offer or continue to offer securities to investors may be significantly limited or completely hindered.
In addition, we and our PRC subsidiaries are subject to risks and uncertainties of the interpretations and applications of PRC laws and regulations, including but not limited to, those imposing limitations on foreign ownership in the industry our PRC subsidiaries operate. We and our PRC subsidiaries are also subject to the risks and uncertainties about any future actions of the PRC government. If any future actions of the PRC government result in a material change in our PRC subsidiaries’ operations, the value of our ordinary shares may depreciate significantly or become worthless. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties with respect to the PRC legal system could adversely affect us and our PRC subsidiaries.”
Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in China, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As of the date of this Report, our Company and our PRC 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 of the date of this Report, we and our PRC subsidiaries have not received any inquiry, notice, warning, or sanctions from the CSRC or any other PRC governmental authorities regarding the offering of our securities outside of the PRC.
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On February 17, 2023, the CSRC published the Regulations of Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”) and its accompanying guidelines and instructions, which came into effect on March 31, 2023, and will apply if a domestic enterprise issues shares, depositary receipts, corporate bonds convertible into shares, or other securities of an equity nature outside of the PRC, or lists its securities for trading outside of the PRC. According to such regulations, a domestic enterprise that issues and lists its securities outside of the PRC shall comply with the filing procedures and report the relevant information to the CSRC. A domestic enterprise shall not be listed on an overseas stock exchange if any of the following circumstances exists: (i) where such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations and relevant state rules; (ii) where the intended securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (iii) where the domestic company intending to make the securities offering and listing, or its controlling shareholders and the actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (iv) where the domestic company intending to make the securities offering and listing is suspected of committing crimes or major violations of laws and regulations, and is under investigation according to law, and no conclusion has yet been made thereof; (v) where there are material ownership disputes over equity held by the domestic company’s controlling shareholder or by other shareholders that are controlled by the controlling shareholder and/or actual controller. The Trial Measures changes the management of licensing to record management, strengthen the supervision in the aftermath, create a more transparent and predictable institutional environment, and support the standardized development of enterprises using the overseas capital market. As such, we will be required to complete filing procedures with CSRC in connection with our future offerings. Additionally, we may be prohibited from continued listing if we fit into any of the five scenarios as discussed above. Furthermore, in the event that an approval from Chinese authorities is required for our future offerings or continued listing on Nasdaq, if we and/or our PRC subsidiaries do not receive or maintain required approvals, or we inadvertently conclude that such approvals are not required, or applicable laws, regulations, or interpretations change such that we and/or our PRC subsidiaries are required to obtain approval in the future, we and/or our PRC subsidiaries may be subject to an investigation by Chinese regulators, fines or penalties, or an order prohibiting us from conducting an offering, and these risks could result in a material adverse change in our operations and the value of our ordinary shares, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless. In addition, since these statements and regulatory actions are newly published, and 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 our subsidiaries’ daily business operation, the ability to accept foreign investments and our ability to continue our listing on a U.S. exchange. See “Risk Factors — Risks Related to Doing Business in China — Our PRC subsidiaries may be liable for improper use or appropriation of personal information provided by their customers and any failure to comply with PRC laws and regulations over data security could result in materially adverse impact on our business, results of operations, and our continued listing on Nasdaq.”
Although we are not currently owned or controlled by a governmental entity in any foreign jurisdiction, the PRC government has exercised, and continues to exercise, substantial control over virtually every sector of the Chinese economy through regulation and state ownership, including the steel sector where our PRC subsidiaries have been conducting their business. Any government decisions or actions to change the steel production, or any decisions the government might make to cut spending, could adversely impact our PRC subsidiaries’ business and our results of operations. We believe that our PRC subsidiaries’ operations in China are in material compliance with all applicable legal and regulatory requirements. However, the central or local governments of the jurisdictions in which our PRC subsidiaries operate may impose new, stricter regulations or interpretations of existing regulations with little advance notice that could require additional expenditures and efforts on our part to ensure our and our PRC subsidiaries’ compliance with such regulations or interpretations. Furthermore, the PRC government authorities may continue to strengthen oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers like us. Such actions taken by the PRC government authorities may intervene or influence the operations of our PRC subsidiaries at any time, which may be beyond our control. Therefore, any such action may adversely affect the operations of our PRC subsidiaries and significantly limit or hinder our ability to offer or continue to offer securities to you and reduce the value of such securities or cause the value of such securities to be completely worthless. See “Risk Factors — Risks Related to Doing Business in China — The PRC government exerts substantial influence over the manner in which our PRC subsidiaries must conduct their business activities. If the Chinese government significantly regulates the business operations of our PRC subsidiaries in the future and our PRC subsidiaries are not able to substantially comply with such regulations, the business operations of our PRC subsidiaries may be materially and adversely affected and the value of our ordinary shares may significantly decrease.”
Trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act, or the HFCA Act, if Public Company Accounting Oversight Board (United States) (the “PCAOB”) determines that it cannot inspect or fully investigate our auditor, and that as a result, an exchange may determine to delist our securities. The PCAOB has been able to inspect our auditor, Enrome LLP, an independent registered public accounting firm with its headquarters in Singapore. See “Risk Factors — Risks Related to Doing Business in China — A recent joint statement by the SEC and the PCAOB, proposed rule changes submitted by Nasdaq, and the HFCA Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB.”
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Trading in our securities may be prohibited under the HFCA Act if the PCAOB determines that it cannot inspect or fully investigate our auditor, and that as a result, an exchange may determine to delist our securities. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act and on December 29, 2022, a legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”) was signed into law by President Biden, which contained, among other things, an identical provision to Accelerating Holding Foreign Companies Accountable Act and amended the Holding Foreign Companies Accountable Act by requiring 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 before our securities may be prohibited from trading or delisted. The PCAOB has been able to inspect our auditor, Enrome LLP, an independent registered public accounting firm with its headquarters in Singapore. On December 16, 2021, the PCAOB issued a report to notify the SEC of its determinations that it is unable to inspect or investigate completely registered public accounting firms headquartered in Mainland China and Hong Kong, respectively, and identifies the registered public accounting firms in Mainland China and Hong Kong that are subject to such determinations. Our auditor is not subject to the determinations announced by the PCAOB on December 16, 2021. On August 26, 2022, the CSRC, the Ministry of Finance (the “MOF”), and the PCAOB signed the Protocol, governing inspections and investigations of audit firms based in China and Hong Kong. The Protocol remains unpublished and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. 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. See “Risk Factors — Risks Related to Doing Business in China — A recent joint statement by the SEC and the PCAOB, proposed rule changes submitted by Nasdaq, and the HFCA Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB.”
Dividend Policy and Cash Transfers
We intend to retain all of our available funds and any future earnings to fund the development and growth of our business. As such, we do not expect to pay any cash dividends in the foreseeable future. We are permitted under PRC laws and regulations to provide funding to our PRC subsidiaries only through loans or capital contributions, and only if we satisfy the applicable government registration and approval requirements.
Our PRC subsidiaries are permitted to pay dividends only out of their retained earnings. However, each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profits each year, after making up for previous year’s accumulated losses, if any, to fund certain statutory reserves, until the aggregate amount of such funds reaches 50% of registered capital. This portion of our PRC subsidiaries’ respective net assets are prohibited from being distributed to their shareholders as dividends. However, none of our PRC subsidiaries has made any dividends or distributions to our holding company or any U.S. investors as of the date of this Report. See “Risk Factors — Risks Related to Doing Business in China — We may rely on dividends paid by our subsidiaries for our cash needs, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on our ability to conduct business.”
In addition, the PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. 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. See “Risk Factors — Risks Related to Doing Business in China — Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.”
A 10% PRC withholding tax is applicable to dividends payable to investors that are non-resident enterprises. Any gain realized on the transfer of ordinary shares by such investors is also subject to PRC tax at a current rate of 10%, which in case of dividends will be withheld at source if such gain is regarded as income derived from sources within the PRC. See “Risk Factors — Risks Related to Doing Business in China — Under the PRC EIT Law, we may be classified as a ‘Resident Enterprise’ of China. Any classification as such will likely result in unfavorable tax consequences to us and our non-PRC shareholders.”
Under Delaware law, our Delaware subsidiary may issue dividends to the Company only if its total assets exceed its total liabilities plus the par value of its issued stock, or if it has net profits for the current or prior fiscal year. Any such dividend must also comply with the subsidiary’s certificate of incorporation and bylaws.
We have adopted written cash management policies and procedures that dictate how funds are transferred within our organization. According to such policies and procedures, each subsidiary of the Company may initiate a cash transfer request by timely filling out a fund application form, which shall be signed by the financial principal and the principal of the subsidiary and then submitted to the financial department of the Company for approval. After a cash transfer request is approved by the financial department, the relevant subsidiary may proceed to initiate such transfer. Our Company distributed cash as loans to our subsidiaries. Several cash transfers have been made between our Company and our subsidiaries. As of December 31, 2024, our Company provided a loan of $4,287,589 to Zhongchai Holding.
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Competitive Strengths
Greenland believes that it is in the right position and the right time to supply a new generation of industrial heavy equipment, including electric industrial vehicles, that is green, safe, and cost-effective. The following is a summary of Greenland’s competitive strengths.
Favorable Market Trends
Greenland believes that a number of key industry trends in the PRC will continue to benefit Greenland and its subsidiaries and continue to drive its growth, including:
| ● | increasingly stringent regulations over carbon emission, which urge market participants to adopt low or zero-emission material handling and construction equipment; | |
| ● | increasing demand for a safer work environment and better healthy worker’s condition will drive growth of electric material handling equipment or industry vehicle, which generates no exhausts and a low level of noise in operation; | |
| ● | increasing labor cost, which accelerates labor substitution with machinery in material handling and logistic activities; | |
| ● | strong competitiveness of U.S. branded products in the U.S., in which the next generation of electric industrial vehicles will be assembled and sold; | |
| ● | increasing government support for improving efficiency in the PRC’s logistics industry, which is a key market for material handling machinery such as forklifts and loaders; and | |
| ● | increasing government support for logistic mechanization, including in the form of subsidies. |
As a result of these favorable industry trends, Greenland believes that it is well-positioned to capitalize on the increasing market demand for transmission products in the PRC as well as on the growing demand for emission-free and labor substitution by electric vehicles in the United States.
Well-Developed Manufacturing Capabilities Leading to Higher Efficiency
Greenland’s well-developed manufacturing process contributes to manufacturing efficiency and cost-effectiveness. Specifically, a combination of modern operational and management systems, advanced manufacturing equipment, experienced manufacturing know-hows, skilled workforce, and flexible manufacturing system allows Greenland to shorten the “time to market” for its new products. Moreover, the combination allows Greenland to timely adjust its lines of products in anticipation of changes in market demands.
Robust Research and Product Development Capabilities
Research and product development capabilities have been critical to Greenland’s historical growth and current market position. Greenland’s research and development team is comprised of more than 17 professionals, or over 5% of Greenland’s employees. Greenland’s research and development facilities consist of a transmission technology center and an electric industry vehicle center. The transmission technology center is accredited by the Zhejiang provincial government. The technology center is made up of a product development and design department, a research center, three research departments that focuses on design, application, and manufacturing of internal combustion engines, and a post-doctoral workstation certified by the PRC Ministry of Human Resource and Social Security.
Strategic Service Network
The ability to provide timely after-sales services is critical in building and maintaining a loyal and solid customer base. We have strategically established an after-sales service network in locations with developed economies. For example, the eastern provinces of the PRC generally have significant demand for logistics services. Accordingly, Greenland, through its subsidiaries, has operated an in-house service center and retained service providers that conduct businesses predominantly in these regions. Users of Greenland’s products are able to reach Greenland through a service line, through which Greenland is able to provide prompt on-site technical services.
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Experienced Management Team with Successful Track Records
Greenland’s senior management team is comprised of individuals who have operational experience, market knowledge, international management skill, and technical expertise. In addition, each member of the senior management team has a proven track record in building and turning companies into successful enterprises.
| ● | Peter Zuguang Wang has served as our director and the chairman of our board of directors since October 2019, and as the sole director of Zhongchai Holding since April 2009 and the chairman of the board of directors of Zhejiang Zhongchai since September 2017. He has over 30 years of experience in technology and management, along with a unique background in research and development, operation, finance and management. Mr. Wang is the chief executive officer of Cenntro Electric Group Limited (Nasdaq: CENN) and the co-founder of Unitech Telecom (now a part of UTStarcom, Nasdaq: UTSI). | |
| ● | Raymond Z. Wang has served as our chief executive officer since October 2019, the chief executive officer of Zhongchai Holding since April 2019, and the chief executive officer of HEVI Corp since January 2020. From February 2019 to November 2020, Mr. Wang served as Chairman of the board of ONE Project, a non-profit organization that unifies local communities to collectively tackle social issues such as hunger. From November 2017 to March 2019, Mr. Wang was the President of Devirra Corporation, a warehousing management and logistic company. From August 2007 to July 2017, Mr. Wang worked as the Vice President at Bank of America Merrill Lynch, developing a client acquisition channel for an online platform. From December 2005 to March 2007, Mr. Wang served as the Financial Advisor at Cowan Financial Group, a full-service financial planning and consulting firm, in New York. Mr. Wang received his Bachelor’s degree in Economics from Rutgers University. | |
| ● | Jing Jin has served as our chief financial officer since October 2019. Mr. Jin is a Certified Public Account and has over 10 years of experience in accounting, budgeting, and financial planning across operations in the PRC and overseas. Prior to August 2019, Mr. Jin has also served as the chief financial officer of Tantech Holdings Ltd. (Nasdaq: TANH), manufacturer of bamboo-based charcoal products in the PRC, from May 2016 to June 2019. From January 2014 to February 2015, Mr. Jin served as Senior Adviser for AAIC (Shanghai) Co., Ltd., a consulting company in the PRC, responsible for overseeing M&A transactions. From September 2011 to November 2013, he worked as a senior financial adviser in CanAccess Int’l Financial Consultants Ltd. in Vancouver, Canada, responsible for small-medium enterprises’ financing both in private and public sectors. From December 2008 to August 2011, Mr. Jin was an audit associate at MaloneBailey, LLP, an accounting firm, in its offices in Canada and the PRC. Mr. Jin graduated from Simon Fraser University in June 2008 in Burnaby, Canada with a Bachelor of Business Administration degree. |
Customers
Greenland, through its subsidiaries, sells most of its transmission products in the PRC and electric industrial heavy equipment in the U.S. Its customer bases are primarily in the businesses of material handling equipment and forklift trucks. Greenland believes that its customers include some of the leading manufacturers in their respective market segments. Greenland also supplies transmission products to the PRC subsidiaries of a number of blue-chip international brands based in Europe and Asia.
During the years ended December 31, 2024 and 2023, Greenland’s five largest customers contributed 40.60% and 45.06%, respectively, of its total revenues. For the years ended December 31, 2024 and 2023, Greenland’s single largest customer, Hangcha Group, accounted for 14.19% and 14.98%, respectively, of Greenland’s total revenue, and Greenland’s second largest customer, Longgong Forklift Truck, accounted for 11.94% and 11.75%, respectively, of Greenland’s total revenue.
Suppliers
Greenland purchases its raw materials from various suppliers for use in the manufacture of its products.
The key raw materials used to manufacture its products are processed metal-based parts and components, including iron castings and gears, which are purchased from our domestic suppliers in the PRC. Most of our suppliers are located within close proximity to our manufacturing facilities, which reduces our transportation and inventory costs.
The prices for iron and steel and other raw materials have historically fluctuated significantly in the PRC, which in turn has affected the Company’s business and operation results. Greenland closely monitors changes in raw material prices and seeks to adjust its inventory of raw materials during inflation periods. In addition, Greenland seeks to minimize the impact of fluctuations in raw material prices by adopting bidding processes in its raw material procurement process Greenland also seeks to price its products to reflect the expected fluctuations in raw material prices to the extent possible. However, there can be no assurance that Greenland could precisely estimate any increase in raw material price or pass on such increase to its customers.
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HEVI purchases components, electronics, battery systems and metal-based parts for use in the assembly of its electric industrial heavy equipment from various suppliers based in the PRC. These items are transported to the United States for assembly of the final products.
HEVI seeks to price its products to reflect expected increases in the component prices and transportation costs to the extent possible. However, there can be no assurance that HEVI could precisely estimate any increase in components or pass on such increase to its customers.
Production
Greenland’s transmission products are comprised of a number of major parts and components, including gearbox housing, gears, bearings, oil pumps, gear shafts, hydraulics, electric forklifts, wheeled excavators, and electrical components. The gearbox housing and gears parts are processed in-house at its manufacturing facility in Xinchang County, Zhejiang Province, the PRC. Components of such products, in general, are sourced, from third parties, assembled, and integrated to form finished products. The finished products then undergo further adjustments, fine tunings, testing, and quality inspections. At the end of the inspection process and prior to shipment to our warehouses for storage and distribution, the finished products are coated and painted.
Greenland’s electric industrial heavy equipment is manufactured and assembled in its 54,000 square foot industrial electric vehicle assembly site in Baltimore, Maryland.
Inventory and Warehousing
Greenland undertakes inventory control in order to reduce the risks of under and over-stocking. On average, Greenland typically maintains a 30-day stock piles for production needs. It generally increases its inventories toward the end of the year in order to meet any production demand, in anticipation of any demands increase, from the second quarter of the following year. Furthermore, Greenland maintains higher inventories at year-end because Chinese New Year typically falls in January or February, which affects production and transportation of raw materials. Greenland has installed an enterprise resource planning (“ERP”) system, which provides real-time information about purchases, production schedules, and supplies of the raw materials. The ERP system has substantially improved Greenland’s inventory controls, providing the Company with quick access to various data and easy formulation of operating models, and allowing the Company to keep its inventory at an appropriable level to facilitate the manufacturing process.
Research and Development
Greenland’s research and development team selects research or development projects or both and draws up preliminary project proposals based on various factors, such as industry and market trends, customer feedback, and input from other departments (i.e. finance and manufacturing departments).
Greenland’s management, including the heads and lead managers of various internal departments, such as sales and marketing and finance departments, as well as its chief executive officer and chief technology officer, reviews the preliminary project proposals and its research and development team formulates a final plan for each approved project after considering suggestions and comments by its management. The final plans will include detailed schedules and budgets for the projects. Greenland’s finance department monitors budget overruns. Any increase in the original budget must be reviewed and approved by management before the relevant project can continue.
Greenland has also focused on research and development with respect to its electric industrial equipment and related products. Greenland’s electric industrial heavy equipment products currently include GEF-series electric forklifts, a series of lithium powered forklifts with three models ranging in size from 1.8 tons to 3.5 tons, and GEL-1800, a 1.8 ton rated load lithium powered electric wheeled front loader and GEX-8000, an all-electric 8.0 ton rated load lithium powered wheeled excavator. These products have become available for purchase in the U.S. market.
Greenland, through HEVI, continues to focus its research and development efforts on its next generation of electric industrial heavy equipment along with supporting products such as mobile charging units and attachments that will increase the value of its portfolio.
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Intellectual Property
Greenland relies on a combination of trademark, copyright, patent, software registration, and trade secret laws to protect its intellectual property rights. Despite these precautions, it may be possible for third parties to infringe our Company’s intellectual property rights.
Patents
As of December 31, 2024, Greenland held 141 registered patents with the PRC National Intellectual Property Administration (“CNIPA”), 124 of which are utility patents and 17 of which are invention patents. These patents relate to the manufacturing of products.
Trademarks
As of December 31, 2024, Greenland had been granted two trademarks registered with the CNIPA.
Copyrights
As of December 31, 2024, Greenland had registered two copyrights in China with the CNIPA.
As of the date of this Report, Greenland has not registered any intellectual properties in the U.S.
Greenland’s intellectual property also includes technical data such as test results and operating data from projects, drawings, designs, and machinery and manufacturing techniques it developed in-house.
Sales and Marketing
Greenland sells its products through its sales and marketing teams. To promote Greenland’s brand, sales employees also attend trade shows and exhibitions to showcase our products.
As of December 31, 2024, Greenland’s sales and marketing team consisted of 16 employees, with thirteen (13) members in the PRC and three (3) in the U.S. Members of Greenland’s sales and marketing teams have extensive experience and knowledge in the material handling equipment sector of the manufacturing industry. They are primarily responsible for identifying business opportunities, promoting products, collecting customer feedback and market information, bidding for or negotiating orders, and collecting payments.
Competition
Transmission Industry
The transmission industry is fragmented and highly competitive in the PRC. Under the current market trend, domestically produced transmissions account for the largest share of the PRC market. International brand manufacturers equipped with better technology and capital resources are also aiming to expand into the PRC. As a result, it is expected that the PRC transmission market will become more competitive.
The typical competitive criteria are quality, price, technology, after-sales service, product offering, and performance record. The transmissions market is capital intensive. In addition, the manufacturing process requires technical expertise and significant research and development budgets. As a result, companies entering the market must have significant financial and technical resources. Moreover, the time and cost required to establish a proven track record, necessary for general market acceptance, are substantial. An extensive after-sales service network is essential for a company to gain general market acceptance.
Greenland believes that it is able to compete based on its market position, strong research and development capabilities, high quality products, integrated service systems, and strong relationships with its customers.
Our key competitors are Shaoxing Advance Gearbox Co., Ltd., Changsha Zhongchuan Transmission Machinery Co. Ltd., and Ganzhou Wuhuan Machine Co., Ltd.
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Electric Industrial Heavy Equipment Industry
Utilizing Greenland’s expertise in manufacturing and R&D, it established HEVI in January 2020 to create clean and sustainable products and services in the heavy industrial equipment industry that help organizations pursue a carbon neutral operation. HEVI designs, develops, and manufactures electric heavy industrial equipment and accessories and sells them directly to the end consumers in various markets in the United States. HEVI’s product line available for purchase includes the GEL-5000 all-electric lithium 5.0-ton rated load wheeled front loader, GEL-1800 all-electric lithium 1.8-ton rated load wheeled front loader, the GEX-8000 all-electric lithium 8.0-ton rated load excavator, and the GEF-series of electric lithium forklifts. In August 2022, HEVI launched a 54,000 square foot industrial electric vehicle assembly site in Baltimore, Maryland to support local assembly, services and distribution of its product line. In July 2024, HEVI announced a partnership with Lonking Holdings Limited to develop and distribute heavy electric machinery and related technology specialized for the US market. In August 2024, HEVI launched its H55L all-electric wheeled front-end loader, which can lift up to six tons in indoor and outdoor applications without the mess and emissions of diesel, and the H65L all-electric wheeled front-end loader, the largest lithium battery powered electric wheel loader commercially available in North America.
Fast Growing Market. The global construction equipment market is anticipated to grow at a compound annual growth rate (“CAGR”) of 3.9% from 2024 to 2030, reaching US$187 billion, according to a February 2025 report published by MarketsandMarkets. The North American market is projected to exhibit one of the fastest growth rates during the forecast period. Consequently, we believe this growth will increase with the introduction of the United State infrastructure overhaul program. Should the program be implemented, then it will be a powerful driver of growth in the engineering and construction industry that will proliferate the demand for industrial equipment.
Call for Carbon Emission Reduction. Global efforts to reduce greenhouse gas and carbon emissions continue to grow with proposals such as the current U.S. administration seeking a target of net zero emission by 2050. These strategies will result in government and public support for the adoption of emission zero technologies and equipment across industries thus boosting the demand for eco-friendly electric powered industrial heavy equipment. As such, we expect that the demand for electric industrial heavy equipment will increase rapidly.
Highly Fragmented and Emerging Market. The electric industrial heavy equipment market is highly fragmented with few, if any, dominant local market participants. Although a few conventional industrial heavy equipment and construction equipment makers are in the process of electric products development, a majority are years away from product deployment. This is to avoid cannibalization with the mature fossil fuel-powered equipment product lines which results in the lack of incentive to launch the full-electric industrial heavy equipment at the near term. As a result, with the early mover advantage together with Greenland’s strong research and development capability, we believe that Greenland is well-positioned to secure a meaningful role in the electric industrial heavy equipment market.
High Technology Barriers for New Entrants. To compete in the electric industrial heavy equipment market, enterprises need a high-level of core technologies and capabilities in order to successfully develop a commercial product. The investment and expertise required create a high barrier of entry for new market players. Greenland’s success in the material handling industry and its achievements in research and development milestones gives Greenland the opportunity and the competitive edge to successfully compete in the industrial heavy equipment market.
Distribution Barriers for Market Leaders. Traditional OEMs in the industrial heavy equipment industry sell through established dealership models which have been proven to be difficult to adapt to electric alternatives. These dealerships rely heavily on service/maintenance revenue. As electric products require over 40% less of maintenance costs, it is challenging for OEMs to motivate their dealers to promote and service the new technology. Without a dealer network to cater to, we believe Greenland is well-positioned to establish a meaningful role in the electric industrial heavy equipment market.
Our key competitors in the industrial heavy equipment industry are the traditional diesel-powered industrial heavy equipment manufacturers such as Caterpillar, Volvo CE and John Deere.
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Employees
As of December 31, 2024, the total number of full-time employees employed at Greenland and its subsidiaries was 345, with 337 employees located in the PRC and 8 employees located in the U.S. The following table sets forth the number of its full-time employees by function as of December 31, 2024:
| Function | Number | |||
| Management | 9 | |||
| Administration | 12 | |||
| Production | 283 | |||
| Research and development | 17 | |||
| Sales and marketing | 16 | |||
| Other | 8 | |||
| Total | 345 | |||
Greenland maintains mandatory social security insurance for its employees pursuant to Chinese laws. Furthermore, it contributes mandatory social security funds for employees with respect to retirement, medical, work-related injury, maternity, and unemployment benefits. Greenland has also included retirement plans for its employees in the U.S., including social security and pension along with medical, vision, dental, workers compensation, work-related injury and maternity benefits.
Greenland believes that its success and continued growth depend on its ability to attract, retain, and motivate qualified employees. Greenland offers its employees competitive salaries, comprehensive training, and other fringe benefits and incentives. None of our employees are represented by labor unions, and no collective bargaining agreement has been put in place. Greenland has not had any labor strikes or other labor disturbances that have materially interfaced with its operations, and it believes that it has maintained a good work relationship with its employees.
Regulations
PRC Law and Regulation
Policy Relating to the Foreign Invested General Equipment Manufacturing Industry
The PRC implements its guidance on foreign investment in different industries through the Catalogue for the Guidance of Foreign Investment Industries and the Special Administrative Measures (Negative List) for Foreign Investment Access jointly amended and promulgated by the National Development and Reform Commission and the Ministry of Commerce from time to time. According to the Catalogue of Encouraged Industries for Foreign Investment (Edition 2022) and the Special Administrative Measures (Negative List) for Foreign Investment Access (Edition 2024) currently in force, the business activities that we engage in are not classified as “prohibited” or “restricted” foreign invested industries.
Law and Regulation Relating to Product Quality
Pursuant to the Product Quality Law of the PRC which was promulgated on February 22, 1993 and amended on December 29, 2018, it is prohibited to produce or sell products that do not meet the standards or requirement for safeguarding human health and ensuring human and property safety.
Where a defective product causes physical injury to a person or damage to property, the aggrieved party may claim compensation against the producer or the seller of such product. Where the responsibility for product defects lies with the producer, the seller shall, after settling compensation, have the right to recover such compensation from the producer, and vice versa. Violations of the Product Quality Law may result in the imposition of fines. In addition, the seller or the producer may be ordered to suspend operation and its business license may be revoked. Criminal liability may be incurred in serious cases.
Law and Regulation Relating to Production Safety
Pursuant to the Production Safety Law of the PRC (the “Production Safety Law”) promulgated by the Standing Committee of the National People’s Congress on June 29, 2002, last amended on June 10, 2021 and effective on September 1, 2021, enterprises and institutions shall be equipped with the conditions for safe production as provided in the Production Safety Law and other relevant laws, administrative regulations, national standards and industrial standards. Any entity that is not equipped with such conditions is not allowed to engage in production and business operation activities.
The law also requires manufacturers to offer education and training programs to their employees regarding production safety and to hire qualified employees who have completed special trainings to engage in specialized operations. Manufacturers are required to provide protection equipment that meets the national or industry standards to employees and to supervise and educate them regarding the use of such equipment. In addition, the design, manufacture, installation, use, inspection and maintenance of safety equipment are required to conform to applicable national or industry standards. Furthermore, emergency measures shall be established by an enterprise to prepare for the occurrence of any accidents threatening safe production.
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Law and Regulation Relating to Environmental Protection
The laws and regulations governing the environmental requirements for all units that cause environmental pollution and other public hazards in the PRC include, but are not limited to, the Environmental Protection Law of the People’s Republic of China, the Environmental Impact Assessment Law of the People’s Republic of China, and the Administrative Regulations on Environmental Protection for Construction Projects. Pursuant to these laws and regulations, depending on the impacts on the environment caused by the project, environmental impact assessment documents shall be submitted by a developer for approval or record at the required time. In addition, a construction project for which an environment impact report or environment impact statement is formulated shall be put into production or use only when its complementary environmental protection facilities pass acceptance inspection.
Law and Regulation Relating to Labor Protection
Pursuant to the Labor Law of the PRC and the Labor Contract Law of the PRC which came into effect on January 1, 1995 (amended on December 29, 2018) and January 1, 2008 (amended on December 28, 2012), respectively, labor contracts shall be concluded if labor relationships are to be established between the employer and the employees.
Pursuant to the Social Insurance Law of the PRC which was promulgated on October 28, 2010 and last amended on December 29, 2018, employees shall participate in basic pension insurance, basic medical insurance and unemployment insurance. Basic pension, medical and unemployment insurance contributions shall be paid by both employers and employees. Employees shall also participate in work-related injury insurance and maternity insurance. Work-related injury insurance and maternity insurance contributions shall be paid by employers rather than employees. An employer shall make registration with the local social insurance agency in accordance with the provisions of the Social Insurance Law of PRC. Moreover, an employer shall declare and make social insurance contributions in full and on time. Pursuant to the Regulations on Management of Housing Provident Fund which was promulgated on April 3, 1999 and amended on March 24, 2019, employers shall undertake registration at the competent administrative center of housing provident fund and then, undergo the procedures of opening the account of housing provident fund for their employees. Enterprises are also obliged to timely pay and deposit housing provident fund for their employees in full amount.
Law and Regulation Relating to Tax
Enterprise Income Tax
On March 16, 2007 and December 6, 2007 respectively, the National People’s Congress of China and the State Council of the PRC (the “State Council”) enacted the Enterprise Income Tax Law of the PRC and the Implementation Regulations of Enterprise Income Tax Law of the PRC (collectively the “PRC EIT Law”), both of which became effective on January 1, 2008 (amended successively from 2017 to 2024). The PRC EIT Law imposes a uniform enterprise income tax rate of 25% on all residence enterprises, including foreign-invested enterprises, and terminates most of the tax exemptions, reductions and preferential treatments available under previous tax laws and regulations.
However, the PRC EIT Law and its implementation rules permit certain “high-technology enterprises strongly supported by the state” which hold independent ownership of core intellectual property and simultaneously meet a list of other criteria, financial or non-financial, as stipulated in the Implementation Rules, to enjoy a 15% enterprise income tax rate subject to certain new qualification criteria. The State Administration of Taxation (the “SAT”), the PRC Ministry of Science and Technology and the MOF jointly issued the Administrative Rules for the Certification of High and New Technology Enterprise delineating the specific criteria and procedures for “high and new technology enterprises” certification.
Under the PRC EIT Law, enterprises are classified as either “resident enterprises” or “non-resident enterprises.” Pursuant to PRC EIT Law and its implementation rules, besides enterprises established within the PRC, enterprises established outside PRC whose “de facto management bodies” are located in PRC are considered “resident enterprises” for PRC enterprise income tax purposes and subject to the uniform 25% enterprise income tax rate for their global income. According to the implementation rules of the PRC EIT Law, “de facto management body” refers to a managing body that exercises, in substance, overall management and control over the manufacture and business, personnel, accounting and assets of an enterprise.
Withholding Tax
The PRC EIT Law removes the prior tax exemption and imposes a 10% withholding tax on dividends paid by foreign-invested enterprises to foreign investors. However, for foreign investors whose home countries or regions have signed bilateral tax agreements with PRC, the withholding tax rate may be reduced to as low as 5% depending on the terms of the applicable tax treaty. In accordance with the Arrangement between Mainland PRC and Hong Kong for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income signed on August 21, 2006, the 5% withholding tax rate applies to dividends paid by a PRC company to a Hong Kong tax resident, provided that the recipient is a company that holds directly at least 25% of the interest of the PRC company, otherwise, the applicable withholding tax rate should be 10%. Further, pursuant to the Notice on the Issues concerning the Application of the Dividend Clauses of Tax Agreements issued by the SAT on February 20, 2009, the preferential tax rate under the relevant tax treaties shall only apply to a tax resident from the other side that directly holds at least 25% of the interest of a PRC company for a period of consecutive 12 months prior to receiving the dividends.
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Value Added Tax
The Provisional Regulations of the PRC Concerning Value Added Tax (the “VAT Regulations”) was promulgated on December 13, 1993 and amended by the State Council and became effect on November 19, 2017. Under the VAT Regulations and its implementation regulations, value added tax, or the VAT, is imposed on the sales of goods and provision of processing, repair and replacement services within the PRC and the importation of goods into the PRC. The VAT standard rates had been 17% for taxpayers who have VAT taxable sales activities and 11% for taxpayers who imported goods until April 30, 2018, after which date the rates were reduced to 16% and 10%, respectively. The VAT rates was further reduced to 13% and 9%, respectively, starting from April 1, 2019.
Regulations of Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies
On February 17, 2023, the CSRC published the Regulations of Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”) and its accompanying guidelines and instructions, which came into effect on March 31, 2023, and will apply if a domestic enterprise issues shares, depositary receipts, corporate bonds convertible into shares, or other securities of an equity nature outside of the PRC, or lists its securities for trading outside of the PRC. According to such regulations, a domestic enterprise that issues and lists its securities outside of the PRC shall comply with the filing procedures and report the relevant information to the CSRC. Where a domestic company fails to fulfill filing procedure, offers and lists securities in an overseas market in violation of the Trial Measures, or the filing documents contain misrepresentation, misleading statement or material omission, the CSRC shall order rectification, issue warning to such domestic company, and impose a fine.
Law and Regulation Relating to Intellectual Property Rights
Copyright Law
According to the Copyright Law of the PRC, which was amended on November 11, 2020 and became effective on June 1, 2021, Chinese citizens, legal entities or other organizations shall enjoy the copyright in their works, whether published or not, which include original intellectual achievements in the fields of literature, art and science which can be expressed in a certain form. Copyright owners shall enjoy various kinds of rights, including the right of publication, right of authorship and right of reproduction.
Patent Law
Pursuant to the Patent Law of the PRC which was amended on October 17, 2020 and became effective on June 1, 2021, the patent administration departments of the State Council are responsible for the administration of patents across the nation. The patent administration departments of provincial, autonomous region or municipal governments are responsible for administering patents within their respective jurisdictions. The PRC patent system adopts a “first come, first file” principle, which means where more than one person files a patent application for the same invention, a patent will be granted to the person who files the application first. To be patentable, invention or utility models must meet three criteria: novelty, inventiveness and practicability. Invention patents are valid for 20 years, while utility model patents are valid for 10 years and design patents are valid for 15 years, commencing from the date of application. The patentee shall pay annual fees commencing from the year when the parent right is granted. If the patentee does not pay annual fees according to the requirements, the patent will be terminated prior to its expiry. Other person must obtain consent or a proper license from the patent owner to use the patent. Otherwise, the use constitutes an infringement of the patent rights. The infringer must, in accordance with the applicable regulations, undertake to cease the infringement, take remedial action and/or pay damages.
Trademark Law
Pursuant to the Trademark Law of the PRC which was amended on April 23, 2019 and became effective on November 1, 2019, the right to exclusive use of a registered trademark shall be limited to trademarks which have been approved for registration and to commodities for which the use of trademark has been approved. The period of validity of a registered trademark shall be 10 years, counted from the day the registration is approved. If a trademark registrant wishes to use a trademark after the expiration of the duration of the trademark registration, according to the requirements, a registration renewal application should be filed within 12 months prior to the expiration. Each registration renewal is valid for 10 years. Using a trademark that is identical with a registered trademark on the same commodities without the licensing of the registrant of the registered trademark; or using a trademark that is similar to a registered trademark on the same commodities, or using a trademark that is identical with or similar to the registered trademark on similar commodities without the licensing of the registrant of the registered trademark, which is likely to cause confusion; selling commodities that infringe upon the exclusive right to use a registered trademark; forging, manufacturing a registered trademark which was registered by others without authorization, or selling a registered trademark forged or manufactured without authorization; changing a registered trademark and putting the commodities with the changed trademark into the market without the consent of the registrant of the registered trademark; providing, intentionally, convenience for activities infringing upon others’ exclusive right to use a registered trademark, and facilitating others to commit infringement on the exclusive right to use a registered trademark, constitutes an infringement of the exclusive right to use a registered trademark. The infringer must undertake to cease the infringement, take remedial action and pay damages. The infringer also may be subject to fines or even criminal punishment.
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Domain Names
The domain names are protected under the Administrative Measures for Internet Domain Names promulgated by Ministry of Industry and Information Technology, or the MIIT, on August 24, 2017, the effective date of which was November 1, 2017. MIIT is the major regulatory body responsible for the administration of the PRC Internet domain names, under supervision of which PRC Internet Network Information Center, or CNNIC, is responsible for the daily administration of CN domain names and Chinese domain names On June 18, 2019, CNNIC promulgated the Implementing Rules for the Registration of National Top-level Domain Names, the Measures for the Resolution of Disputes over National Top-level Domain Names and the Procedures for the Resolution of Disputes over National Top-level Domain Names in accordance with the Administrative Measures for Internet Domain Names. Pursuant to such rules, 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 Top-Level Domains Disputes, file a suit to the People’s Court or initiate an arbitration procedure.
Law and Regulation Relating to Foreign Currency Exchange
The principal regulations governing foreign currency exchange in the PRC are the Foreign Exchange Administrative Regulations (the “SAFE Regulations”) which was promulgated by the State Council and last amended on August 5, 2008. Under the SAFE Regulations, the RMB is generally freely convertible for current account items, including the distribution of dividends, trade and service-related foreign exchange transactions, but not for capital account items, such as direct investment, loan, repatriation of investment and investment in securities outside the PRC, unless the prior approval of the State Administration of Foreign Exchange is obtained.
U.S. Laws and Regulations
Battery Safety and Testing
Our battery packs of electric industrial heavy equipment will be subject to various U.S. regulations that govern transport of “dangerous goods,” defined to include lithium batteries, which may present a risk in transportation. We expect to use lithium battery packs in our electric industrial heavy equipment. The use, storage and disposal of our battery packs are regulated under existing laws and are the subject of ongoing regulatory changes that may add additional requirements in the future.
Product Liability Law
U.S. state law generally imposes liability on all manufacturers and retailers (and parties in the supply chain) for injuries that result from unsafe, defective, and dangerous products sold to consumers. Product liability claims in the United States are typically based on three theories of law: (1) strict liability, (2) negligence and (3) breach of warranty. In addition, as noted above, U.S. laws and regulations can also obligate manufacturers and retailers (and parties in the supply chain) to remedy product defects, which can include safety recall campaigns.
Parties involved in manufacturing, distributing, or selling a product may be subject to liability for harm caused by a defect in that product. There are three types of product defects, namely, design defects, manufacturing defects and defects in marketing. In a negligence claim, a defendant may be held liable for personal injury or property damage caused by the failure to use due care. Strict liability claims, however, do not depend on the degree of carefulness by the defendant. A defendant is liable when it is shown that an injury (personal or to property) occurred as the result of a product’s defect. Breach of warranty is also a form of strict liability in the sense that a showing of fault is not required. The plaintiff need only establish the warranty was breached, regardless of how that came about. Companies that manufacture, distribute or sell a product in a particular state may be subject to the jurisdiction of such state’s product liability laws, whether the company’s jurisdiction of incorporation or principal place of business is in that state, in another U.S. state or in a non-U.S. jurisdiction.
Product liability legal actions and recall campaigns in the United States (“Product Liability Matters”) could involve personal injury and property damage and could involve claims for substantial monetary damages. The results of any future litigation and claims involving product liability in the United States are inherently unpredictable.
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Employment and Labor Law
Private businesses operating in the United States are subject to employment laws of the federal governments, state government, and, to a lesser extent, local counties or municipalities. These laws govern many aspects of the workplace as set forth herein and failure to comply can result in fines and penalties from relevant oversight agencies and liability to employees, which can include a multiple of actual damages, counsel fees, and punitive damages for certain violations.
Businesses that operate in New Jersey must comply with governing federal laws and New Jersey State laws (together, “US-NJ Employment Laws”). The default rule in New Jersey is that, in the absence of a labor agreement or contract for employment for a specified term, employment is terminable at will. Employers have a right to discharge an employee at any time, for any reason, or for no reason, provided the termination is not for a reason prohibited by law.
Broadly, our obligation to comply with applicable US-NJ Employment Laws, includes laws and rules relating to:
| (i) | Wage and hour standards, such as paying required overtime for employees who do not meet exemption requirements and work in excess of 40 hours in a week, paying minimum wage, and paying wages when due; |
| (ii) | Providing leave and leave benefits to eligible employees, including requirements that unpaid family leave and unpaid leave for reasons including domestic violence or sexual assault shall be provided by covered employers; |
| (iii) | Non-discrimination and anti-retaliation; |
| (iv) | Providing reasonable accommodations to and engaging in the interactive process with employees with disabilities, religious needs, or other protected characteristics; |
| (v) | Ensuring employees are eligible to be employed in the United States; and |
| (vi) | Occupational safety. |
Failure to comply with the US-NJ Employment Laws may, in some instances, expose us to civil liability to employees or former employees for compensatory damages, statutory damages, as well as punitive damages and counsel fees. We could also be subject to fines, penalties, and assessments from various regulatory authorities.
ITEM 1A. RISK FACTORS
The following is a summary of certain risks that should be carefully considered along with the other information contained or incorporated by reference in this Report and the documents incorporated by reference, as updated by our subsequent filings under the Exchange Act. If any of the following events actually occurs, our business, operating results, prospects, or financial condition could be materially and adversely affected. The risks described below are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also significantly impair our business operations and could result in a complete loss of your investment.
Summary of Risk Factors
An investment in our ordinary shares is subject to a number of risks, including risks related to our business and industry, risks related to our corporate structure, risks related to doing business in China and risks related to our ordinary shares. You should carefully consider all of the information in this Report before making an investment in the ordinary shares. The following list summarizes some, but not all, of these risks. Please read the information in this section for a more thorough description of these and other risks.
Risks Related to Our Business and Industry
For more detailed discussions of the following risks, see “Risk Factors—Risks Related to our Business and Industry” on pages 21 through 27.
| ● | Our subsidiaries’ business operations are cash intensive, and our subsidiaries’ business could be adversely affected if we fail to maintain sufficient levels of liquidity and working capital; |
| ● | We grant relatively long payment terms for accounts receivable which can adversely affect our cash flow; |
| ● | Our subsidiaries face short lead-times for delivery of products to customers. Failure to meet delivery deadlines could result in the loss of customers and damage to our reputation and goodwill; |
| ● | Our subsidiaries face intense competition, and if we are unable to compete effectively, we may not be able to maintain profitability; |
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| ● | Our revenues are highly dependent on a limited number of customers and the loss of any one of our subsidiaries’ major customers could materially and adversely affect our growth and revenues; |
| ● | As our subsidiaries expand their operations, they may need to establish a more diverse supplier network for raw materials. The failure to secure a more diverse supplier network could have an adverse effect on our financial condition; |
| ● | To remain competitive, our subsidiaries are introducing new lines of business, including the production and sale of electric industrial heavy equipment. If these efforts are not successful, our results of operations may be materially and adversely affected; |
| ● | New lines of business, including the production and sale of electric industrial heavy equipment, may subject us and our subsidiaries to additional risks; |
| ● | Volatile steel prices can cause significant fluctuations in our operating results. Our revenues and operating income could decrease if steel prices increase or if our subsidiaries are unable to pass price increases on to their customers; and |
| ● | We are subject to various risks and uncertainties that may affect our subsidiaries’ ability to procure raw materials. |
Risks Related to Doing Business in China
For more detailed discussions of the following risks, see “Risk Factors—Risks Related to Doing Business in China” on pages 27 through 35.
| ● | Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations; |
| ● | Uncertainties arising from the legal system in China, including uncertainties regarding the interpretation and enforcement of PRC laws and the possibility that regulations and rules can change quickly with little advance notice, could hinder our ability to offer or continue to offer our securities, result in a material adverse change to our business operations, and damage our reputation, which could materially and adversely affect our financial condition and results of operations and cause our securities to significantly decline in value or become worthless. See “Risk Factors—Risks Related to Doing Business in China—The PRC government exerts substantial influence over the manner in which we must conduct our business activities. If the Chinese government significantly regulates the business operations of our PRC subsidiaries in the future and our PRC subsidiaries are not able to substantially comply with such regulations, our business operations may be materially adversely affected and the value of our ordinary shares may significantly decrease” and “Risk Factors—Risks Related to Doing Business in China—Uncertainties with respect to the PRC legal system could adversely affect us and our PRC subsidiaries”; |
| ● | The Chinese government may intervene or influence our operations at any time or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers. Any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless. See “Risk Factors—Risks Related to Doing Business in China—The PRC government exerts substantial influence over the manner in which we must conduct our business activities. If the Chinese government significantly regulates the business operations of our PRC subsidiaries in the future and our PRC subsidiaries are not able to substantially comply with such regulations, our business operations may be materially adversely affected and the value of our ordinary shares may significantly decrease”; | |
| ● | Our future offerings will need to be filed with the CSRC, along with compliance with any other applicable PRC rules, policies and regulations, in connection with any future offering of our securities. Any failure to filing, or delay in filing, or failure to complying with any other applicable PRC requirements for an offering, may subject us to sanctions imposed by the relevant PRC regulatory authority. In addition, if applicable laws, regulations, or interpretations change such that we are required to obtain approval in the future and we fail to obtain such approvals, we may be subject to an investigation by competent regulators, fines or penalties, or an order prohibiting us from conducting an offering, and these risks could result in a material adverse change in our operations and the value of our ordinary shares, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless. See “Risk Factors—Risks Related to Doing Business in China—We are required under PRC laws to submit filings to CSRC for our future offerings. However, we believe that we are not currently required to obtain the approval and/or comply with other requirements of the CSRC, the CAC, or other PRC governmental authorities under PRC rules, regulations or policies in connection with our continued listing on Nasdaq. In the event that any such approval is required or that there are other requirements we are obligated to comply with, we cannot predict whether or how soon we will be able to obtain such approvals and/or comply with such requirements.” and “Risk Factors—Risks Related to Doing Business in China—We may be liable for improper use or appropriation of personal information provided by our customers and any failure to comply with PRC laws and regulations over data security could result in materially adverse impact on our business, results of operations, and our continued listing on Nasdaq”; |
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| ● | Our subsidiaries may be liable for improper use or appropriation of personal information provided by their customers and any failure to comply with PRC laws and regulations over data security could result in materially adverse impact on our business, results of operations, and our continued listing on Nasdaq; |
| ● | You may have difficulty enforcing judgments against us; |
| ● | Under the PRC Enterprise Income Tax Law, we may be classified as a “Resident Enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders; |
| ● | PRC regulation of loans to, and direct investments in, PRC entities by offshore holding companies may delay or prevent us from using proceeds from our future financing activities to make loans or additional capital contributions to our PRC subsidiaries; |
| ● | We may rely on dividends paid by our subsidiaries for our cash needs, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on our ability to conduct business; |
| ● | Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment; | |
| ● | U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China; and |
| ● | Our securities may be delisted and prohibited from being traded under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditor in the future. Any future delisting and cessation of trading of our securities, or the threat of their being delisted and prohibited from being traded, may materially and adversely affect the value of your investment. Additionally, any inability of the PCAOB to conduct inspections of our auditor in the future would deprive our investors of the benefits of such inspections. See “Risk Factors—Risks Related to Doing Business in China—Our ordinary shares may be delisted and prohibited from being traded under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors. The delisting and the cessation of trading of our ordinary shares, or the treat of their being delisted and prohibited from being traded, may materially and adversely affect the value of your investment. Additionally, any inability of the PCAOB to conduct inspections deprives our investors with the benefits of such inspections.” |
Risks Related to Our Ordinary Shares
For more detailed discussions of the following risks, see “Risk Factors—Risks Related to Our Ordinary Shares” on pages 34 through 35.
| ● | Future sales of our ordinary shares, whether by us or our shareholders, could cause the price of our ordinary shares to decline; |
| ● | Because we do not expect to pay dividends in the foreseeable future, you must rely on the price appreciation of our ordinary shares for return on your investment; and |
| ● | Techniques employed by short sellers may drive down the market price of our ordinary shares. |
Risks Related to our Business and Industry
Our subsidiaries’ business operations are cash intensive, and our subsidiaries’ business could be adversely affected if we fail to maintain sufficient levels of liquidity and working capital.
As of December 31, 2024, we had approximately $29.08 million of cash and cash equivalents. Historically, we have spent a significant amount of cash on our operational activities, principally to procure raw materials for our subsidiaries’ products. Our short-term loans are from Chinese banks and are generally secured by a portion of our fixed assets, land use rights and/or guarantees by related parties. Certain of these loans are secured against a portion of the shares of our PRC subsidiaries. The term of a majority of such loans is one year. Historically, we rolled over such loans on an annual basis. However, we may not have sufficient funds available to pay all of our borrowings upon maturity in the future. Failure to roll over our short-term borrowings at maturity or to service our debt could result in a transfer of the ownership of a portion of the shares of our PRC subsidiaries to secured lenders, the imposition of penalties, including increases in interest rates, legal actions against us by our creditors, and even insolvency.
Although we have been able to maintain adequate working capital primarily through cash from operations and short-term and long-term borrowings, any failure by our customers to settle outstanding accounts receivable, or our inability to borrow sufficient capital from local banks in the future could materially and adversely affect our cash flow, financial condition and results of operations.
We grant relatively long payment terms for accounts receivable which can adversely affect our cash flow.
As is customary in China, for competitive reasons, we grant relatively long payment terms to most of our subsidiaries’ customers. The allowances we establish for our receivables may not be adequate. We are subject to the risk that we may be unable to collect accounts receivable in a timely manner. If the accounts receivable cannot be collected in time, or at all, a significant amount of expected credit losses will occur, and our business, financial condition and results of operation will likely be materially and adversely affected.
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Our subsidiaries face short lead-times for delivery of products to customers. Failure to meet delivery deadlines could result in the loss of customers and damage to our reputation and goodwill.
Most of our subsidiaries’ customers are large manufacturers, who generally place large orders for our subsidiaries’ products and require prompt delivery. Our subsidiaries’ product sale agreements typically contain short lead-times for the delivery of products and tight production and manufacturer supply schedules that can reduce our profit margins on the products procured from our subsidiaries’ suppliers. Our subsidiaries’ suppliers may lack sufficient capacity at any given time to meet all of the demands from our subsidiaries’ customers if orders exceed their production capacity. Our subsidiaries strive for rapid response to customer demands, which can lead to reduced purchasing efficiency, increased procurement costs and low profit margins. If our subsidiaries are unable to meet the customer demands, they may lose customers. Moreover, failure to meet customer demands may damage our reputation and goodwill.
Our subsidiaries face intense competition, and, if our subsidiaries are unable to compete effectively, we may not be able to maintain profitability.
Our subsidiaries compete with many other companies located in the PRC and internationally that manufacture similar products. Many of our subsidiaries’ competitors are larger companies with greater financial resources. Intense competition in a challenging economic environment in the PRC has, in the past, put pressure on our margins and may adversely affect our future financial performance. Moreover, intense competition may result in potential or actual litigation between our subsidiaries and their competitors relating to such activities as competitive sales practices, relationships with key suppliers and customers or other matters.
It is likely that our subsidiaries’ competitors will seek to develop similar competing products in the near future. Some of our subsidiaries’ competitors may have more resources than our subsidiaries do, operate in greater scale, be more capitalized than our subsidiaries are, have access to cheaper raw materials than our subsidiaries do, or offer products at a more competitive price. There can be no assurance that our initial competitive advantage will be retained and that one or more competitors will not develop products that are equal or superior in quality and are better priced than our subsidiaries’ products. If our subsidiaries are unable to compete effectively, our results of operations and financial position may be materially and adversely affected.
Our revenues are highly dependent on a limited number of customers and the loss of any one of our subsidiaries’ major customers could materially and adversely affect our growth and revenues.
During the fiscal years ended December 31, 2024 and 2023, our subsidiaries’ five largest customers contributed 40.60% and 45.06% of our revenues, respectively. For the years ended December 31, 2024 and 2023, Greenland’s single largest customer, Hangcha Group, accounted for 14.19% and 14.98%, respectively, of Greenland’s total revenue, and Greenland’s second largest customer, Longgong Forklift Truck, accounted for 11.94% and 11.75%, respectively, of Greenland’s total revenue. As a result of our subsidiaries’ reliance on a limited number of customers, our subsidiaries may face pricing and other competitive pressures, which may have a material adverse effect on our profits and our revenues. The volume of products sold for specific customers varies from year to year, especially since our subsidiaries are not the exclusive provider for any customers. In addition, there are a number of factors that could cause the loss of a customer or a substantial reduction in the products that our subsidiaries provide to any customer that may not be predictable. For example, our subsidiaries’ customers may decide to reduce spending on our subsidiaries’ products or a customer may no longer need our subsidiaries’ products following the completion of a project. The loss of any one of our subsidiaries’ major customers, a decrease in the volume of sales to our subsidiaries’ customers or a decrease in the price at which our subsidiaries sell their products to customers could materially adversely affected our profits and revenues.
In addition, this customer concentration may subject our subsidiaries to perceived or actual leverage that our subsidiaries’ customers may have in negotiations, given their relative size and importance to our subsidiaries. If our subsidiaries’ customers seek to negotiate their agreements on terms less favorable to our subsidiaries and our subsidiaries accept such terms, such unfavorable terms may have a material adverse effect on our subsidiaries’ business and our financial condition and results of operations. Accordingly, unless and until our subsidiaries diversify and expand their customer base, our future success will significantly depend upon the timing and volume of business from our subsidiaries’ largest customers and the financial and operational success of these customers.
As our subsidiaries expand their operations, they may need to establish a more diverse supplier network for raw materials. The failure to secure a more diverse supplier network could have an adverse effect on our financial condition.
In the event that our subsidiaries need to diversify their supplier network, our subsidiaries may not be able to procure a sufficient supply of raw materials at a competitive price, which could have an adverse effect on our results of operations, financial condition and cash flows. Furthermore, despite our subsidiaries’ efforts to control their supply of raw materials and maintain good relationships with their existing suppliers, our subsidiaries could lose one or more of their existing suppliers at any time. The loss of one or more key suppliers could increase our subsidiaries’ reliance on higher cost or lower quality supplies, which could negative affect our profitability. Any interruptions to, or decline in, the amount or quality of our subsidiaries’ raw materials supply could materially disrupt our subsidiaries’ production and adversely affect our subsidiaries’ business and our financial condition and financial prospects.
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To remain competitive, our subsidiaries have introduced new lines of business, including the production and sale of electric industrial heavy equipment. If these efforts are not successful, our results of operations may be materially and adversely affected.
Prior to December 2020, through Zhongchai Holding and its PRC subsidiaries, our products mainly included transmission systems and integrated powertrains for material handling machineries, particularly for electric forklift trucks. In December 2020, through HEVI, we launched a new division to focus on the production and sale of electric industrial heavy equipment—a division that Greenland intends to develop to diversify its product offerings. HEVI’s electric industrial heavy equipment products currently include GEF-series electric forklifts, a series of lithium powered forklifts with three models ranging in size from 1.8 tons to 3.5 tons, GEL-1800, a 1.8 ton rated load lithium powered electric wheeled front loader, GEX-8000, an all-electric 8.0 ton rated load lithium powered wheeled excavator, and GEL-5000, an all-electric 5.0 ton rated load lithium wheeled front loader. HEVI also introduced mobile DC battery chargers to support a growing market of EV applications requiring DC charging capabilities in the North America market. These products are available for purchase in the U.S. market. In August 2022, HEVI launched a 54,000 square foot industrial electric vehicle assembly site in Baltimore, Maryland to support local services, assembly and distribution of its electric industrial heavy equipment product line. In July 2024, HEVI announced a partnership with Lonking Holdings Limited to develop and distribute heavy electric machinery and related technology specialized for the U.S. market. In August 2024, HEVI launched its H55L all-electric wheeled front-end loader, which can lift up to six tons in indoor and outdoor applications without the mess and emissions of diesel, and the H65L all-electric wheeled front-end loader, the largest lithium battery powered electric wheel loader commercially available in North America.
There are risks in connection with this new line of business. HEVI may experience difficulties in the development and launch of electric industrial heavy equipment, and HEVI’s products may not be well-accepted by the market. As we have limited experience in the electric industrial heavy equipment business, our efforts in developing such business may not succeed and we may not be able to generate sufficient revenue to cover our investment and become profitable. During such process, our results of operations and financial conditions may not be improved in a timely manner, or at all. We cannot assure you that we will successfully transition our business focus and it is possible that we remain in such transition period for an extended period of time. During such period, our revenue may be very limited and we may continue to experience material and adverse effects to our results of operations, financial condition and business prospects.
New lines of business, including the production and sale of electric industrial heavy equipment, may subject us and our subsidiaries to additional risks.
From time to time, we may implement new lines of business or offer new products within our subsidiaries’ existing lines of business. Currently, we plan to offer additional models of electric industrial heavy equipment through HEVI. As such, we face significant challenges, uncertainties and risks, including, among others, with respect to our subsidiaries’ ability to:
| ● | build a well-recognized and respected brand; |
| ● | establish and expand our customer base; |
| ● | improve and maintain our operational efficiency for new lines of business; |
| ● | maintain a reliable, secure, high-performance and scalable technology infrastructure for our new lines of business; |
| ● | anticipate and adapt to changing market conditions, including technological development and changes in competitive landscape; |
| ● | navigate an evolving and complex regulatory environment, such as licensing and compliance requirements; and |
| ● | manage the resources and attention of management between our current core business and new lines of business. |
Moreover, there can be no assurance that the introduction and development of new lines of business or new products and services would not encounter significant difficulties or delay or would achieve the profitability as we expect. Failure to successfully manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse effect on our subsidiaries’ business and our results of operations and prospects. For example, HEVI may experience difficulties in developing and launching additional models of electric industrial heavy equipment, or may not be able to develop them at reasonable costs. Due to HEVI’s limited experience with electric industrial heavy equipment, HEVI also face challenges and uncertainties relating to the possibility of success of this new business.
As our subsidiaries enter into new business sectors, our subsidiaries are also subject to competition from such industries. There can be no assurance that our subsidiaries will be able to compete effectively with respect to their new businesses. If our subsidiaries fail to establish their strengths or maintain their competitiveness in those industries, our business prospects, results of operations and financial condition may be materially and adversely affected.
Volatile steel prices can cause significant fluctuations in our operating results. Our revenues and operating income could decrease if steel prices increase or if our subsidiaries are unable to pass price increases on to their customers.
Our subsidiaries’ principal raw materials are processed metal parts and components which are made of carburizing steel. The steel industry as a whole is cyclical and, at times, pricing and availability of steel can be volatile due to numerous factors beyond our subsidiaries’ control, including general domestic and international economic conditions, labor costs, sales levels, competition, levels of inventory, consolidation of steel producers, higher raw material costs for steel producers, import duties and tariffs and currency exchange rates. This volatility can significantly affect the availability and cost of raw materials.
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Our subsidiaries’ suppliers, like many other processed metal parts and components manufacturers, maintain substantial inventories of steel to accommodate the short lead times and just-in-time delivery requirements of customers. Accordingly, our subsidiaries’ suppliers purchase steel in an effort to maintain their inventory at levels that they believe to be appropriate to satisfy the anticipated needs of customers based upon historic buying practices, supply agreements with customers and market conditions. When steel prices increase, competitive conditions will influence how much of the price increase suppliers would pass on to our subsidiaries and how much our subsidiaries can pass on to their customers. To the extent our subsidiaries are unable to pass on future price increases in raw materials to their customers, the revenues and profitability of our business could be adversely affected.
We are subject to various risks and uncertainties that might affect our subsidiaries’ ability to procure raw materials.
Our performance depends upon our subsidiaries’ ability to procure low cost, high quality raw materials on a timely basis from their suppliers. Our subsidiaries’ suppliers are subject to certain risks, including the availability of raw materials, labor disputes, inclement weather, natural disasters, and general economic and political conditions, which might limit the ability of our subsidiaries’ suppliers to provide low-cost, high-quality merchandise on a timely basis. Furthermore, for these or other reasons, one or more of our subsidiaries’ suppliers might not adhere to our subsidiaries’ quality control standards, and our subsidiaries might not identify the deficiency. Any failure by our subsidiaries’ suppliers to supply quality materials at a reasonable cost on a timely basis could reduce our net sales or profits, damage our reputation and have an adverse effect on our financial condition.
Our subsidiaries may lose their competitive advantage, and their operations may suffer, if they fail to prevent the loss or misappropriation of, or disputes over, their intellectual property.
Our subsidiaries rely on a combination of patents, trademarks, trade secrets and confidentiality agreements to protect their intellectual property rights. While our subsidiaries are not currently aware of any infringement on their intellectual property rights, our subsidiaries’ ability to compete successfully and to achieve future revenue growth will depend, in significant part, on their ability to protect their proprietary technology. Despite many laws and regulations promulgated, as well as other efforts made, by China over the past several years in an attempt to protect intellectual property rights, intellectual property rights are not as certain in China as they would be in many Western countries, including the United States. Furthermore, enforcement of such laws and regulations in China has not been fully developed. Neither the administrative agencies nor the court systems in China are as equipped as their counterparts in developed countries to deal with violations or handle the nuances and complexities between compliant technological innovation and non-compliant infringement.
Our subsidiaries’ transmission technology is protected through a combination of patents, trade secrets, confidentiality agreements and other methods. However, our subsidiaries’ competitors may independently develop similar proprietary methodologies or duplicate our products, or develop alternatives, which could have a material adverse effect on our subsidiaries’ business and our results of operations and financial condition. The misappropriation or duplication of our subsidiaries’ intellectual property could disrupt their ongoing business, distract our management and employees, reduce our revenues and increase our expenses. Our subsidiaries may need to litigate to enforce their intellectual property rights. Any such litigation could be time consuming and costly and the outcome of any such litigation cannot be guaranteed.
Our PRC subsidiaries have limited insurance coverage for their operations in China and may incur losses resulting from product liability claims, business interruption or natural disasters.
HEVI, an operating subsidiary of ours in the U.S., maintains commercial general liability insurance for its business operations. However, our PRC subsidiaries have limited insurance coverage for their operations in China, and our PRC subsidiaries are therefore exposed to risks associated with product liability claims against our PRC subsidiaries or otherwise against their operations in the PRC in the event that the use of our PRC subsidiaries’ products results in property damage or personal injury. Since our subsidiaries’ transmission products are ultimately incorporated into forklifts, it is possible that users of forklifts or people installing these products could be injured or killed, whether as a result of defects, improper installation or other causes. We are unable to predict whether product liability claims will be brought against our PRC subsidiaries in the future or to predict the impact of any resulting adverse publicity on our PRC subsidiaries’ business. The successful assertion of product liability claims against our PRC subsidiaries could result in potentially significant monetary damages and require us to make significant payments. Our subsidiaries do not carry product liability insurance and may not have adequate resources to satisfy a judgment in the event of a successful claim against us. In addition, our subsidiaries do not currently, and may not in the future, maintain business interruption insurance coverage. As such, our subsidiaries may suffer losses that result from interruptions in their operations as a result of inability to operate or failures of equipment and infrastructure at our subsidiaries’ facilities. Our subsidiaries also do not currently maintain catastrophe insurance. As such, any natural disaster or man-made disaster could result in substantial losses and diversion of our subsidiaries’ resources to address the effects of such an occurrence, which could materially and adversely affect our subsidiaries’ business and our financial condition and results of operations.
Failure to make adequate contributions to various employee benefit plans as required by PRC regulations may subject us to penalties.
Our PRC subsidiaries are required under PRC laws to participate in various government sponsored employee benefit plans, including social security insurance, housing funds and other welfare-oriented payments, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of their employees up to a maximum amount specified by the local government from time to time at locations where our PRC subsidiaries operate their businesses. Our PRC subsidiaries have not made adequate employee benefit payments to the social security insurance and the housing fund. As a result, they may be required to make up the contributions for these plans within a stipulated period of time. In addition, our PRC subsidiaries may be required to pay late fees equal to 0.05% of the shortage of the contributions to the social security fund for each day our PRC subsidiaries fail to make up the contributions and may be imposed fines up to three times of such shortage if our PRC subsidiaries fail to make up the difference within the time frame prescribed by relevant government authorities. The maximum amount of such penalties that we anticipate could be imposed on our PRC subsidiaries with respect such employee benefits payments is approximately US$200,000. If our PRC subsidiaries are subject to late fees or fines in relation to the underpaid employee benefits, our financial condition and results of operations may be adversely affected. As of the date of this Report, our PRC subsidiaries have not been ordered to pay outstanding contributions or related penalties.
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If labor costs in the PRC increase substantially, our PRC subsidiaries’ business and our costs of operations may be adversely affected.
In recent years, the Chinese economy has experienced inflation and labor cost increases. Average wages are projected to continue to increase. Further, under PRC law an employer is required to pay various statutory employee benefits, including pensions, housing funds, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit of its employees. The relevant government agencies may examine whether an employer has made adequate payments to the statutory employee benefits, and those employers who fail to make adequate payments may be subject to late payment fees, fines and/or other penalties. We expect that our labor costs, including wages and employee benefits, will continue to increase based on the past trends. If we are unable to control our labor costs or pass such increased labor costs on to our subsidiaries’ customers, our financial condition and results of operations may be adversely affected.
We may not be able to effectively protect our intellectual property from unauthorized use by others.
Through its subsidiaries, we hold patents, trademarks and other intellectual properties that are critical to our business in the PRC. Any of our intellectual property rights could be challenged, invalidated, circumvented or misappropriated, or such intellectual property may not be sufficient to provide us with competitive advantages. We cannot assure you that (i) all of the intellectual property rights we owned will be adequately protected, or (ii) our intellectual property rights will not be challenged by third parties or found by a judicial authority to be invalid or unenforceable. Moreover, there can be no assurance that we will obtain such trademarks and any other trademarks that are crucial to our business in the future. Thus, third parties may also take the position that we are infringing their rights, and we may not be successful in defending these claims. Additionally, we may not be able to enforce and defend its proprietary rights or prevent infringement or misappropriation, without incurring substantial expenses to us and a significant diversion of management time and attention from our business strategy.
To protect our parents, trademarks and other proprietary rights, we reply on and expect to continue to rely on a combination of physical and electronic security measures and trademark, patent and trade secret protection laws. If the measures we have taken to protect our proprietary rights are inadequate to prevent the use or misappropriation by third parties or such rights are diminished due to successful challenges, the value of our brand and other intangible assets may be diminished and our ability to attract and retain customers may be adversely affected.
Competition for our and our subsidiaries’ employees is intense, and we and our subsidiaries may not be able to attract and retain the highly skilled employees needed to support our subsidiaries’ business.
As we continue to experience growth, our future success depends on our and our subsidiaries’ ability to attract, develop, motivate and retain highly qualified and skilled employees, including engineers, financial personnel and marketing professionals. Competition for highly skilled engineering, sales, technical and financial personnel is extremely intense. We and our subsidiaries may not be able to hire and retain these personnel at compensation levels consistent with our existing compensation and salary structure. Many of the companies with which we and our subsidiaries compete for experienced employees have greater resources than we and our subsidiaries have and may be able to offer more attractive terms of employment.
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In addition, we and our subsidiaries invest significant time and expense in training our employees, which increases their value to competitors who may seek to recruit them. If we and our subsidiaries fail to retain our employees, we could incur significant expenses in hiring and training their replacements, and the quality of our products could decrease, resulting in a material adverse effect on our subsidiaries’ business.
Our business depends on the continued efforts of our senior management. If one or more of our key executives were unable or unwilling to continue in their present positions, our business may be severely disrupted.
Our business operations depend on the continuing services of our senior management. While we have provided different incentives to our management, we cannot assure you that we can continue to retain their services. If one or more of our key executives were unable or unwilling to continue in their present positions, we may not be able to replace them easily or at all, our future growth may be constrained, business may be severely disrupted and our financial condition and results of operations may be materially and adversely affected, and we may incur additional expenses to recruit, train and retain qualified personnel. In addition, although we have entered into a non-competition agreement with Mr. Peter Zuguang Wang, the chairman of our board of directors, there is no assurance that Mr. Wang will not join our competitors or form a competing business. If any dispute arises between us and Mr. Wang, we may incur substantial costs and expenses in order to enforce the non-competition agreement in China, and we may be unable to enforce it at all.
We do not maintain “key person” insurance, and as a result, we may incur losses if any of our directors, executive officers, senior manager or other key employees chooses to terminate his or her services with us.
We do not maintain “key person” insurance for our directors, executive officers, senior management or other key employees. If any of our key employees terminate his or her services or otherwise becomes unable to provide continuous services to us, our business, financial condition and results of operations may be materially and adversely affected and we may incur additional expenses to recruit, train and retain qualified personnel. If any of our executive officers or key employees joins a competitor or forms a competing company, we may lose customers, operational know-how and key professionals and staff members.
We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing invasion of Ukraine by Russia and conflicts between Israel and Hamas.
U.S. and global markets are experiencing volatility and disruption as a result of the outbreak or escalation of wards including Russia’s launch of a full-scale military invasion of Ukraine, conflicts between Israel and Hamas. Although the length and impact of these ongoing conflicts are highly unpredictable, these conflicts have led to market disruptions, including significant volatility in commodity prices, credit, and capital markets. In addition, as a result of the ongoing conflicts around the world, we may experience other risks, difficulties and challenges in the way we conduct our business and operations generally. For example, the conflict could adversely affect supply chains and impact our ability to control raw material costs. A protracted conflict between Ukraine and Russia or between Israel and Hamas, any escalation of either conflict, and the wider global economy and market conditions could, in turn, have a material adverse impact on our business, financial condition, cash flows and results of operations and could cause the market value of our ordinary shares to decline.
High inflation rates may adversely affect us by increasing costs beyond what we can recover through price increases and limit our ability to enter into future traditional debt financing.
Inflation can adversely affect us by increasing costs of critical materials, equipment, labor, and other services. In addition, inflation is often accompanied by higher interest rates. Continued inflationary pressures could impact our profitability. Inflation may also affect our ability to enter into future traditional debt financing, as high inflation may result in an increase in cost.
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The outcome of litigation, inquiries, investigations, examinations, or other legal proceedings in which we are involved, in which we may become involved, or in which our clients or competitors are involved could distract management, increase our expenses, or subject us to significant monetary damages or restrictions on our ability to do business.
From time to time, we are subject to litigations or legal proceedings in connection with our business operations. The scope and outcome of these proceedings is often difficult to assess or quantify. Plaintiffs in lawsuits may seek recovery of large amounts, and the cost to defend such litigation may be significant.
For example, on April 26, 2024, all of the Company’s current directors, the Company’s chief executive officer, and the Company’s controlling shareholder, Cenntro Holding Limited, were named as defendants (collectively, the “Defendants”), and the Company was named as a nominal defendant in a shareholder derivate action filed in the United States District Court for the District of New Jersey. The complaint assets, inter alia, that Defendants breached their fiduciary duties owed to the Company, committed waste and violated Section 16(a) of the Securities and Exchange Act of 1934, as amended. The complainant seeks: (i) on behalf of the Company, monetary damages of no less than $38,060,365; (ii) to restrict Mr. Peter Wang, the chairman of the Company’s board of directors from selling ordinary shares of the Company until Cenntro Holding Limited has paid off its amount due to the Company and setting up a trust over any future funds from sales of the Company’s ordinary shares by Mr. Peter Wang or Cenntro Holding Limited; (iii) that the Defendants disgorge profits obtained as a result of their wrongful conduct; (iv) to enjoin of the Company’s proposed spin-off transaction; (v) attorney fees and costs; and (vi) any other relief the court may deem just and proper.
On June 28, 2024, the Company’s board of directors held a board meeting, during which the directors of the Company unanimously approved a decision to terminate its previously announced plan of spinning off its drivetrain systems segment. After due diligence review, the Company’s board of directors has identified that the spin-off would likely not generate significant value to its shareholders due to changing market conditions. On July 8, 2024, the Defendants filed a motion to dismiss the shareholder derivative action. On February 28, 2025, the court granted the Defendants’ motion to dismiss, and the complainant’s complaint was dismissed without prejudice.
Any negative outcomes from above material litigation or any other regulatory actions or litigation or claims, including monetary penalties or damages or injunctive provisions regulating or restricting how we conduct our business could have a material adverse effect on our business, financial condition, results of operations and reputation. Regardless of whether any current or future claims in which we are involved have merit, or whether we are ultimately held liable or subject to payment of penalties, such investigations and claims have been and may continue to be expensive to defend, may divert management’s time away from our operations and may result in changes to our business practices that adversely affect our results of operations.
Risks Related to Doing Business in China
Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations.
A substantial majority of our assets and operations are located in China. Accordingly, our business, financial condition, results of operations and prospects may be influenced to a significant degree by political, economic and social conditions in China generally. The PRC economy differs from the economies of most developed countries in many respects, including with regard to the level of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Although the PRC government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in China is still owned by the government. In addition, the PRC government continues to play a significant role in regulating industry development by imposing industrial policies.
The PRC government also exercises significant control over China’s economic growth through allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, and providing preferential treatment to particular industries or companies.
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While the PRC economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy, and the rate of growth has been slowing since 2012. Any adverse changes in economic conditions in China, in the policies of the PRC government or in the laws and regulations in China could have a material adverse effect on the overall economic growth of China. Such developments could adversely affect our business and operating results, lead to reduction in demand for our subsidiaries’ products and adversely affect our subsidiaries’ competitive position. The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall PRC economy, but may have a negative effect on us and our subsidiaries. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. In addition, in the past the PRC government has implemented certain measures, including interest rate adjustment, to control the pace of economic growth. These measures may cause decreased economic activity in China, which may adversely affect our business and operating results.
Uncertainties with respect to the PRC legal system could adversely affect us and our PRC subsidiaries.
The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have limited precedential value. Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and the enforcement of these laws, regulations and rules involves uncertainties.
In addition, we and our PRC subsidiaries are subject to risks and uncertainties of the interpretations and applications of PRC laws and regulations, including, but not limited to, limitations on foreign ownership in the industry our PRC subsidiaries operate. We and our PRC subsidiaries are also subject to the risks and uncertainties about any future actions of the PRC government. If any future actions of the PRC government result in a material change in our operations, and the value of our ordinary shares may depreciate significantly or become worthless.
The PRC government exerts substantial influence over the manner in which our PRC subsidiaries must conduct their business activities. If the Chinese government significantly regulates the business operations of our PRC subsidiaries in the future and our PRC subsidiaries are not able to substantially comply with such regulations, the business operations of our PRC subsidiaries may be materially and adversely affected and the value of our ordinary shares may significantly decrease.
The PRC government has exercised, and continues to exercise, substantial control over virtually every sector of the Chinese economy through regulation and state ownership, including steel sector where our PRC subsidiaries have been doing their business. Any government decisions or actions to change the way steel production is regulated, or any decisions the government might make to cut spending, could adversely impact our PRC subsidiaries’ business and our results of operations. In addition, the ability of our PRC subsidiaries to operate in China may be harmed by changes in PRC laws and regulations, including those relating to taxation, environmental conditions, 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 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.
We believe that our PRC subsidiaries’ operations in China are in material compliance with all applicable legal and regulatory requirements. However, the central or local governments of the jurisdictions in which our PRC subsidiaries operate may impose new, stricter regulations or interpretations of existing regulations with little advance notice that would require additional expenditures and efforts on their part to ensure our subsidiaries’ compliance with such regulations or interpretations.
Our PRC subsidiaries may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. In the event that our PRC subsidiaries are not able to substantially comply with any existing or newly adopted laws and regulations, our business operations may be materially adversely affected and the value of our ordinary shares may significantly decrease.
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Furthermore, the PRC government authorities may strengthen oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers like us. Such actions taken by the PRC government authorities may intervene or influence the operations of our PRC subsidiaries at any time, which may be beyond our control. Therefore, any such action may adversely affect the operations of our PRC subsidiaries and substantially limit or hinder our ability to offer or continue to offer securities to you and significantly reduce the value of such securities or cause the value of such securities to be completely worthless.
We are required under PRC laws to submit filings to CSRC for our future offerings. However, we believe that we and our PRC subsidiaries are not currently required to obtain the approval and/or comply with other requirements of the CSRC, the CAC, or other PRC governmental authorities under PRC rules, regulations or policies in connection with our continued listing on Nasdaq. In the event that any such approval is required or that there are other requirements we and/or our PRC subsidiaries are obligated to comply with, we cannot predict whether or how soon we and/or our PRC subsidiaries will be able to obtain such approvals and/or comply with such requirements.
The PRC government authorities may strengthen future oversight over offerings that are conducted overseas. For instance, on July 6, 2021, the relevant PRC governmental authorities promulgated the Opinions on Strictly Cracking Down on Illegal Securities Activities, which emphasized the need to strengthen the PRC government’s supervision over overseas listings by PRC companies. Pursuant to the Opinions, effective measures, such as promoting the construction of relevant regulatory systems, are to be taken to deal with the risks of China-based overseas-listed companies, cybersecurity and data privacy protection requirements and similar matters. The Cybersecurity Review Measures (Decree No. 8 of the Cybersecurity Administration of the PRC), or the revised Cybersecurity Review Measures, enacted on December 28, 2021 and came into effect on February 15, 2022, also require online platform operators holding over one million users’ personal information to apply for a cybersecurity review before any public offering on a foreign stock exchange. These statements and regulations are recently issued, and there remain substantial uncertainties about their interpretation and implementation. See also “—Our PRC subsidiaries may be liable for improper use or appropriation of personal information provided by their customers and any failure to comply with PRC laws and regulations over data security could result in materially adverse impact on our business, results of operations, and our continued listing on Nasdaq.”
On February 17, 2023, the CSRC published the Regulations of Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”) and its accompanying guidelines and instructions, which came into effect on March 31, 2023, and will apply if a domestic enterprise issues shares, depositary receipts, corporate bonds convertible into shares, or other securities of an equity nature outside of the PRC, or lists its securities for trading outside of the PRC. According to such regulations, a domestic enterprise that issues and lists its securities outside of the PRC shall comply with the filing procedures and report the relevant information to the CSRC. A domestic enterprise shall not be listed on an overseas stock exchange if any of the following circumstances exists: (i) where such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations and relevant state rules; (ii) where the intended securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (iii) where the domestic company intending to make the securities offering and listing, or its controlling shareholders and the actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (iv) where the domestic company intending to make the securities offering and listing is suspected of committing crimes or major violations of laws and regulations, and is under investigation according to law, and no conclusion has yet been made thereof; (v) where there are material ownership disputes over equity held by the domestic company’s controlling shareholder or by other shareholders that are controlled by the controlling shareholder and/or actual controller. The Trial Measures changes the management of licensing to record management, strengthen the supervision in the aftermath, create a more transparent and predictable institutional environment, and support the standardized development of enterprises using the overseas capital market.
According to the Notice on Filing Management Arrangements for Overseas Listings of Domestic Enterprises issued and implemented by the CSRC on February 17, 2023, since the date of effectiveness of the Trial Measures, the domestic enterprises falling within the scope of filing that have been listed overseas or met the following circumstances are existing enterprises: Before the effectiveness of the Trial Measures, the application for indirect overseas issuance and listing has been agreed by the overseas regulators or overseas stock exchanges (such as having passed the hearing on the Hong Kong market or registration become effective as agreed on the U.S. market, etc.), and it is not required to perform issuance and listing supervision procedures of the overseas regulators or overseas stock exchanges (such as rehearing on the Hong Kong market, etc.), and the overseas issuance and listing shall have been completed by September 30, 2023. According to the above regulations, the Company is an existing enterprise, which do not be required to file immediately, and filing should be made as required if they involve refinancing and other filing matters.
As of the date of this Report, we believe we and our PRC subsidiaries are not required to obtain any permission from PRC authorities (including the CSRC and the CAC) to operate our PRC subsidiaries’ business as presently conducted or continue being listed on Nasdaq. Therefore, as of the date of this Report, we and our PRC subsidiaries have not applied for any permission or approval from any PRC governmental authority in connection with our offshore listing or offering and, as such, no such permission or approval has been granted or denied. However, if it fails to comply with the Trial Measures during future issuance of securities or listing on other stock exchanges outside of China, we may be subjected sanctions imposed by the PRC regulatory authorities, and our reputation, financial condition, and results of operations may be materially and adversely affected.
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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 or our subsidiaries by the PRC government to transfer cash.
Relevant mainland PRC laws and regulations permit the companies in mainland China to pay dividends only out of their respective retained earnings, if any, as determined in accordance with mainland China accounting standards and regulations. Additionally, each of the companies in mainland China are required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. These reserves are not distributable as cash dividends. Furthermore, in order for us to pay dividends to our shareholders, we may rely on payments made from our mainland PRC subsidiaries to their respective shareholders and then to our Company. If our these entities incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us.
Our cash dividends, if any, will be paid in U.S. dollars. If we are considered a tax resident enterprise of mainland China for tax purposes, any dividends we pay to our overseas shareholders may be regarded as mainland China-sourced income and as a result may be subject to mainland PRC withholding tax. See “— Risks Related to Doing Business in China — Under the PRC Enterprise Income Tax Law, we may be classified as a ‘Resident Enterprise’ of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.” The PRC government also imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of mainland China. Shortages in foreign currencies may restrict our ability to pay dividends or other payments, or otherwise satisfy our foreign currency denominated obligations, if any. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions, can be made in foreign currencies without prior approval from the State Administration of Foreign Exchange as long as certain procedural requirements are met. Approval from appropriate government authorities is required if Renminbi is converted into foreign currency and remitted out of mainland China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may, at its discretion, impose restrictions on access to foreign currencies for current account transactions and if this occurs in the future, we may not be able to pay dividends in foreign currencies to our shareholders.
As of the date of this Report, there are no restrictions or limitations imposed by the Hong Kong government on the transfer of capital within, into, and out of Hong Kong (including funds from Hong Kong to mainland China), except for the transfer of funds involving money laundering and criminal activities. However, there is no guarantee that the Hong Kong government will not promulgate new laws or regulations that may impose such restrictions in the future. If there is a significant change to current political arrangements between mainland China and Hong Kong, or the applicable laws, regulations, or interpretations change, our Hong Kong subsidiary may become subject to PRC laws or authorities. As a result, our Hong Kong subsidiary could be subject to similar government controls on the convertibility of foreign currency and the remittance of currency out of Hong Kong as described above.
As a result of the above, to the extent cash in the business is in the PRC/Hong Kong or a PRC/Hong Kong entity, such funds or assets 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 us or our subsidiaries by the competent government to the transfer of cash.
Our PRC subsidiaries may be liable for improper use or appropriation of personal information provided by their customers and any failure to comply with PRC laws and regulations over data security could result in materially adverse impact on our business, results of operations, and our continued listing on Nasdaq.
Our PRC subsidiaries’ business involves collecting and retaining certain internal and customer data. Our PRC subsidiaries also maintain information about various aspects of their operations. The integrity and protection of customer and company data is critical to our business. Our subsidiaries’ customers expect that our subsidiaries will adequately protect their personal information. Our PRC subsidiaries are required by applicable laws to keep strictly confidential the personal information that they collect, and to take adequate security measures to safeguard such information.
The PRC Criminal Law, as amended by its Amendment 7 (effective on February 28, 2009) and Amendment 9 (effective on November 1, 2015), prohibits institutions, companies and their employees from selling or otherwise illegally disclosing a citizen’s personal information obtained in performing duties or providing services or obtaining such information through theft or other illegal ways. On November 7, 2016, the Standing Committee of the PRC National People’s Congress issued the Cyber Security Law of the PRC, or Cyber Security Law, which became effective on June 1, 2017. Pursuant to the Cyber Security Law, network operators must not, without users’ consent, collect their personal information, and may only collect users’ personal information necessary to provide their services. Providers are also obliged to provide security maintenance for their products and services and shall comply with provisions regarding the protection of personal information as stipulated under the relevant laws and regulations.
The Civil Code of the PRC (issued by the PRC National People’s Congress on May 28, 2020 and effective from January 1, 2021) provides the legal basis for privacy and personal information infringement claims under the Chinese civil laws. PRC regulators, including the CAC, the Ministry of Industry and Information Technology, and the Ministry of Public Security, have been increasingly focused on regulation in data security and data protection.
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The PRC regulatory requirements regarding cybersecurity are evolving. For instance, various regulatory bodies in China, including the CAC, the Ministry of Public Security and the State Administration for Market Regulation, have enforced data privacy and protection laws and regulations with varying and evolving standards and interpretations. In April 2020, the Chinese government promulgated Cybersecurity Review Measures, which came into effect on June 1, 2020. According to the Cybersecurity Review Measures, operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services which do or may affect national security.
In December 2021, the CAC and other related authorities promulgated the revised Cybersecurity Review Measures, which came into effect on February 15, 2022. The revised Cybersecurity Review Measures propose the following key changes:
| ● | online platform operators who are engaged in data processing are also subject to the regulatory scope; |
| ● | the CSRC is included as one of the regulatory authorities for purposes of jointly establishing the state cybersecurity review working mechanism; |
| ● | the online platform operators holding more than one million users’ individual information and seeking a listing outside China shall file for cybersecurity review with the Cybersecurity Review Office; and |
| ● | the risks of core data, material data or large amounts of personal information being stolen, leaked, destroyed, damaged, illegally used or transmitted to overseas parties and the risks of critical information infrastructure, core data, material data or large amounts of personal information being influenced, controlled or used maliciously shall be collectively taken into consideration during the cybersecurity review process. |
Certain internet platforms in China have reportedly become subject to heightened regulatory scrutiny in relation to cybersecurity matters. As of the date of this Report, we have not been included within the definition of “operator of critical information infrastructure” by a competent authority, nor have we been informed by any PRC governmental authority of any requirement that we file for a cybersecurity review. However, if we are deemed to be a critical information infrastructure operator or an online platform operator that is engaged in data processing and holds personal information of more than one million users, we could be subject to PRC cybersecurity review in the future.
As there remains significant uncertainty in the interpretation and enforcement of relevant PRC cybersecurity laws and regulations, we could be subject to cybersecurity review. In addition, we could become subject to enhanced cybersecurity review or investigations launched by PRC regulators in the future. Any failure or delay in the completion of the cybersecurity review procedures or any other non-compliance with the related laws and regulations may result in fines or other penalties, including suspension of business, website closure and revocation of prerequisite licenses, as well as reputational damage or legal proceedings or actions against us and/or our PRC subsidiaries, which may have material adverse effect on our business, financial condition or results of operations. As of the date of this Report, we and our PRC subsidiaries have not been involved in any investigations on cybersecurity review initiated by the CAC or related governmental regulatory authorities, and we and our PRC subsidiaries have not received any inquiry, notice, warning, or sanction in such respect.
On June 10, 2021, the Standing Committee of the National People’s Congress of China, or the SCNPC, promulgated the PRC Data Security Law, which took effect in September 2021. The PRC Data Security Law imposes data security and privacy obligations on entities and individuals carrying out data activities, and introduces a data classification and hierarchical protection system based on the importance of data in economic and social development, and the degree of harm it will cause to national security, public interests, or legitimate rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked, illegally acquired or used. The PRC Data Security Law also provides for a national security review procedure for data activities that may affect national security and imposes export restrictions on certain data an information.
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As of the date of this Report, we do not expect that the current PRC laws on cybersecurity or data security would have a material adverse impact on our business operations. However, as the scope of the PRC Data Security Law is broad and includes the collection, storage, use, processing, transmission, availability and disclosure of data, among others, and uncertainties remain regarding the interpretation and implementation of these laws and regulations, we cannot assure you that we and our PRC subsidiaries will comply with such regulations in all respects and we and/or our PRC subsidiaries may be ordered to rectify or terminate any actions that are deemed illegal by regulatory authorities. Any directly liable person within our Company for violations or alleged violations of the PRC Data Security Law may become subject to fines. We and/or our PRC subsidiaries may also become subject to fines and/or other sanctions that may have material adverse effect on our business, operations and financial condition.
On September 24, 2024, the CAC released the Administrative Regulations on the Network Data Security, or the Data Security Regulations, which became effective on January 1, 2025. The Data Security Regulations may apply to the use of networks to carry out data processing activities and the supervision and administration of network data security within the territory of the PRC and apply to activities outside the territory of the PRC to process personal information of any natural persons within the territory of the PRC under any of the following circumstances: (i) for the purpose of providing products or services to domestic natural persons; (ii) analyze and evaluate the behavior of domestic natural persons; and (iii) other circumstances stipulated by laws and administrative regulations. The Data Security Regulations further stipulate that where it is indeed necessary to transfer “important data” collected and generated by a network data processor during its operation within the territory of the PRC to overseas parties, it shall pass the security assessment for cross-border data transfer organized by the CAC. Network data processors should identify and declare “important data” in accordance with the relevant provisions, but they are not required to conduct security assessment for outbound data transfer for data that has not been notified or published as “important data” by relevant departments or regions. In addition, the Data Security Regulations provides that data processors that process “important data” must conduct an annual data security assessment with regard to the data process activities, and submit the assessment report to relevant competent authorities at or above the provincial level. Since the Data Security Regulations is newly promulgated, there remains uncertainty as to how it will be implemented and interpreted by the competent authorities and whether the PRC regulatory agencies, including the CAC, will adopt new laws, regulations, rules, or detailed implementation and interpretation related to security assessment. We cannot predict the impact of the Data Security Regulations on us, if any, at this stage, and we will closely monitor and assess any development in the implementation and interpretation of the Data Security Regulations. Even though we do not believe our business activities fall under the scope of Data Security Regulations, in the event that a competent PRC governmental authority concludes otherwise, we face uncertainties as to whether such clearance can be timely obtained, or at all.
A severe or prolonged downturn in the PRC or global economy could materially and adversely affect our business and our financial condition.
The global macroeconomic environment is facing challenges. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world’s leading economies, including the United States and China. There have been concerns over unrest and terrorist threats in the Middle East, Europe and Africa and over the conflicts involving Ukraine, Syria, Russia and North Korea. There have also been concerns on the relationship among China and other Asian countries, which may result in, or intensify potential conflicts in relation to, territorial disputes, and the trade disputes between China and other countries. It is unclear whether these challenges and uncertainties will be contained or resolved, and what effects they may have on the global political and economic conditions in the long term.
Economic conditions in China are sensitive to global economic conditions, changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. While the economy in China has grown significantly over the past decades, growth has been uneven, both geographically and among various sectors of the economy, and the rate of growth has been slowing in recent years. Although growth of China’s economy remained relatively stable, there is a possibility that China’s economic growth may materially decline in the near future. Any severe or prolonged slowdown in the global or PRC economy may materially and adversely affect our business, results of operations and financial condition.
You may have difficulty enforcing judgments against us.
A significant portion of our assets are located, and a substantial amount of our subsidiaries’ operations are conducted, in the PRC. In addition, some of our directors and officers are nationals or residents of the PRC, including our chief financial officer, Mr. Jing Jin, and independent directors, Mr. Ming Zhao and Mr. Zheng He, and a substantial majority of their assets are located outside the United States. As a result, it may be difficult to effect service of process within the United States upon these persons. In addition, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts because China does not have any treaties or other arrangements that provide for the reciprocal recognition and enforcement of foreign judgments with the United States. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates basic principles of PRC law or national sovereignty, security, or the public interest.
Under the PRC Enterprise Income Tax Law, we may be classified as a “Resident Enterprise” of China. Any classification as such will likely result in unfavorable tax consequences to us and our non-PRC shareholders.
Under the PRC EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a “resident enterprise,” meaning that it can be subject to an enterprise income tax, or EIT, rate of 25.0% on its global income. In April 2009, the SAT promulgated a circular, known as Circular 82, and partially amended by Circular 9 promulgated in January 2014, to clarify the certain criteria for the determination of the “de facto management bodies” for foreign enterprises controlled by PRC enterprises or PRC enterprise groups. Under Circular 82, a foreign enterprise is considered a PRC resident enterprise if all of the following apply: (1) the senior management and core management departments in charge of daily operations are located mainly within China; (2) decisions relating to the enterprise’s financial and human resource matters are made or subject to approval by organizations or personnel in China; (3) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholders’ meeting minutes are located or maintained in China; and (4) 50.0% or more of voting board members or senior executives of the enterprise habitually reside in China. Further to Circular 82, the SAT issued a bulletin, known as Bulletin 45, effective in September 2011 and amended on June 1, 2015 and October 1, 2016, to provide more guidance on the implementation of Circular 82 and clarify the reporting and filing obligations of such “Chinese controlled offshore incorporated resident enterprises.” Bulletin 45 provides for, among other matters, procedures for the determination of resident status and administration of post-determination matters. Although Circular 82 and Bulletin 45 explicitly provide that the above standards apply to enterprises that are registered outside China and controlled by PRC enterprises or PRC enterprise groups, Circular 82 may reflect the SAT’s criteria for determining the tax residence of foreign enterprises in general.
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If the PRC tax authorities determine that we are a “resident enterprise” for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. In our case, this would mean that income such as non-China source income would be subject to PRC enterprise income tax at a rate of 25%. Second, under the PRC EIT Law, dividends paid to us from our PRC subsidiaries would be deemed as “qualified investment income between resident enterprises” and therefore qualify as “tax-exempt income” pursuant to the clause 26 of the PRC EIT Law. Finally, it is possible that future guidance issued with respect to the new “resident enterprise” classification could result in a situation in which the dividends we pay with respect to our ordinary shares, or the gain our non-PRC shareholders may realize from the transfer of our ordinary shares, may be treated as PRC-sourced income and may therefore be subject to a 10% PRC withholding tax. The PRC EIT Law is, however, relatively new and ambiguities exist with respect to the interpretation and identification of PRC-sourced income, and the application and assessment of withholding taxes. If we are required under the PRC EIT Law to withhold PRC income tax on dividends payable to our non-PRC shareholders, should there be a determination in the future to pay dividends, or if non-PRC shareholders are required to pay PRC income tax on gains on the transfer of their ordinary shares, our business could be negatively impacted and the value of your investment may be materially reduced. Further, if we were treated as a “resident enterprise” by PRC tax authorities, we would be subject to taxation in both China and such countries in which we have taxable income, and our PRC tax may not be creditable against such other taxes.
PRC regulation of loans to, and direct investments in, PRC entities by offshore holding companies may delay or prevent us from using proceeds from our future financing activities to make loans or additional capital contributions to our PRC subsidiaries.
As an offshore holding company with PRC subsidiaries, we may transfer funds to our PRC subsidiaries or finance our PRC entities by means of loans or capital contributions. Any capital contributions or loans that we, as an offshore entity, make to our PRC subsidiaries, are subject to PRC regulations. Any loans to our PRC subsidiaries, which are foreign-invested enterprises, cannot exceed statutory limits based on the difference between the amount of our investments and registered capital in such subsidiaries, and shall be registered with State Administration of Foreign Exchange, or SAFE, or its local counterparts. Furthermore, any capital increase contributions we make to our PRC subsidiaries, which are foreign-invested enterprises, are subject to the requirement of making necessary reports in Foreign Investment Comprehensive Management Information System, and registration with other government authorities in China. We may not be able to obtain these government registrations or approvals on a timely basis, if at all. If we fail to obtain such approvals or make such registration, our ability to make equity contributions or provide loans to our PRC subsidiaries or to fund their operations may be negatively affected, which may adversely affect their liquidity and ability to fund their working capital and expansion projects and meet their obligations and commitments. As a result, our liquidity and our ability to fund and expand our business may be negatively affected.
We may rely on dividends paid by our subsidiaries for our cash needs, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on our ability to conduct business.
As a holding company, we conduct a substantial amount of our business through our subsidiaries in China. We may rely on dividends paid by these PRC subsidiaries for our cash needs, including the funds necessary to pay any dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses. The payment of dividends by entities established in China is subject to limitations. Regulations in China currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China. In accordance with the Article 210, 214 of the Company Law of the PRC (Revised in 2023), each of our PRC subsidiaries is required to allocate 10% of their profits to their statutory common reserve when they distribute their after-tax profits for the current year. A company shall no longer be required to make allocations to their statutory common reserve once the aggregate amount of such reserve exceeds 50% of their registered capital. The statutory common reserve fund of a company may only be used to cover the losses of the company, expand the business and production of the company or be converted into additional capital. As a result, our PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to us in the form of dividends. In addition, if any of our PRC subsidiaries incurs debt on its own behalf in the future, the instruments governing the debt may restrict such subsidiary’s ability to pay dividends or make other distributions to us. Any limitations on the ability of our PRC subsidiaries to transfer funds to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends and otherwise fund and conduct our business.
You may be subject to PRC income tax on dividends from us or on any gain realized on the transfer of our ordinary shares.
Under the PRC EIT Law, subject to any applicable tax treaty or similar arrangement between the PRC and your jurisdiction of residence that provides for a different income tax arrangement, PRC withholding tax at the rate of 10.0% is normally applicable to dividends from PRC sources payable to investors that are non-PRC resident enterprises, which do not have an establishment or place of business in China, or which have such establishment or place of business if the relevant income is not effectively connected with the establishment or place of business. Any gain realized on the transfer of shares by such investors is subject to 10.0% PRC income tax if such gain is regarded as income derived from sources within China unless a treaty or similar arrangement otherwise provides. Under the Individual Income Tax Law of the PRC and its implementation rules, dividends from sources within China paid to foreign individual investors who are not PRC residents are generally subject to a PRC withholding tax at a rate of 20% and gains from PRC sources realized by such investors on the transfer of shares are generally subject to 20% PRC income tax, in each case, subject to any reduction or exemption set forth in applicable tax treaties and PRC laws.
There is a risk that we will be treated by the PRC tax authorities as a PRC tax resident enterprise. In that case, any dividends we pay to our shareholders may be regarded as income derived from sources within China and we may be required to withhold a 10.0% PRC withholding tax for the dividends we pay to our investors who are non-PRC corporate shareholders, or a 20.0% withholding tax for the dividends we pay to our investors who are non-PRC individual shareholders, including the holders of our Shares. In addition, our non-PRC shareholders may be subject to PRC tax on gains realized on the sale or other disposition of our ordinary shares, if such income is treated as sourced from within China. It is unclear whether our non-PRC shareholders would be able to claim the benefits of any tax treaties between their tax residence and China in the event that we are considered as a PRC resident enterprise. If PRC income tax is imposed on gains realized through the transfer of our ordinary shares or on dividends paid to our non-resident investors, should there be a determination in the future to pay dividends, the value of your investment in our ordinary shares may be materially and adversely affected. Furthermore, our shareholders whose jurisdictions of residence have tax treaties or arrangements with China may not qualify for benefits under such tax treaties or arrangements.
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We may be unable to complete a business combination transaction efficiently or on favorable terms due to complicated merger and acquisition regulations and certain other PRC regulations.
On August 8, 2006, six PRC regulatory authorities, including Ministry of Commerce, the State Assets Supervision and Administration Commission, the SAT, the Administration for Industry and Commerce, the CSRC and SAFE, jointly issued the M&A Rules, which became effective on September 8, 2006 and were amended in June 2009. The M&A Rules, governing the approval process by which a PRC company may participate in an acquisition of assets or equity interests by foreign investors, requires the PRC parties to make a series of applications and supplemental applications to the government agencies, depending on the structure of the transaction. In some instances, the application process may require presentation of economic data concerning a transaction, including appraisals of the target business and evaluations of the acquirer, which are designed to allow the government to assess the transaction. Accordingly, due to the M&A Rules, our ability to engage in business combination transactions has become significantly more complicated, time-consuming and expensive, and we may not be able to negotiate a transaction that is acceptable to our shareholders or sufficiently protective of their interests in a transaction.
The M&A Rules allow PRC government agencies to assess the economic terms of a business combination transaction. Parties to a business combination transaction may have to submit to Ministry of Commerce and other relevant government agencies an appraisal report, an evaluation report and the acquisition agreement, all of which form part of the application for approval, depending on the structure of the transaction. The M&A Rules also prohibit a transaction at an acquisition price obviously lower than the appraised value of the business or assets in China and in certain transaction structures, require that consideration must be paid within defined periods, generally not in excess of a year. In addition, the M&A Rules also limit our ability to negotiate various terms of the acquisition, including aspects of the initial consideration, contingent consideration, holdback provisions, indemnification provisions and provisions relating to the assumption and allocation of assets and liabilities. Transaction structures involving trusts, nominees and similar entities are prohibited. Therefore, such regulations may impede our ability to negotiate and complete a business combination transaction on legal and/or financial terms that satisfy our investors and protect our shareholders’ economic interests.
Fluctuations in exchange rates could have a material adverse impact on our results of operations and the value of your investment.
The conversion of Renminbi into foreign currencies, including U.S. dollars, is based on rates set by the People’s Bank of China. The Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably. The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions in China and by China’s foreign exchange policies, among other things. We cannot assure you that Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the future. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the Renminbi and the U.S. dollar in the future.
Significant fluctuation of the Renminbi may have a material adverse effect on your investment. For example, to the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive from the conversion. Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount available to us.
Very limited hedging options are available in China to reduce our exposure to exchange rate fluctuations. As of the date of this Report, we have not entered into any material hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all. In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert Renminbi into foreign currency.
Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.
The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive a significant portion of our revenues in Renminbi. Under our current corporate structure, our British Virgin 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, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval of SAFE, by complying with certain procedural requirements. Specifically, under the existing exchange restrictions, without prior approval of SAFE, cash generated from the operations of our PRC subsidiaries in China may be used to pay dividends to our Company. However, approval from or registration with appropriate government 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 loans denominated in foreign currencies. As a result, we need to obtain SAFE approval to use cash generated from the operations of our PRC subsidiaries to pay off their respective debt in a currency other than Renminbi owed to entities outside China, or to make other capital expenditure payments outside China in a currency other than Renminbi. If such approval is withheld or the PRC government imposes other restrictions on the convertibility of Renminbi into foreign currencies, we may not be able to utilize our revenues effectively, and as a result, our business and results of operations may be materially adversely affected, and the value of our ordinary shares may decrease.
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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. 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 an 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 outside of China.
Our ordinary shares may be delisted and prohibited from being traded under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors. The delisting and the cessation of trading of our ordinary shares, or the treat of their being delisted and prohibited from being traded, may materially and adversely affect the value of your investment. Additionally, any inability of the PCAOB to conduct inspections deprives our investors with the benefits of such inspections.
Pursuant to the Holding Foreign Companies Accountable Act, as amended by the Consolidated Appropriations Act 2023, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the PCAOB for two consecutive years, the SEC will prohibit our Ordinary Shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
Our auditor, Enrome LLP, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards and was not identified in PCAOB’s determination report as a firm subject to the PCAOB’s determination. Our current auditor, Enrome LLP, is headquartered in Singapore and subject to inspect by the PCAOB.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year. In accordance with the Holding Foreign Companies Accountable Act, our securities would be prohibited from being traded on a national securities exchange or in the over-the-counter trading market in the United States if we are identified as a Commission-Identified Issuer for two consecutive years in the future. A prohibition of being able to trade in the United States would substantially impair or completely hinder your ability to sell or purchase our ordinary shares when you wish to do so, and the risk and uncertainty associated with delisting would have a negative impact on the price of our ordinary shares or render them worthless. Also, such a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and prospects.
Additionally, we cannot assure you whether the national securities exchange we are listed on 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 it relates to our audit.
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Risks Related to Our Ordinary Shares
Future sales of our ordinary shares, whether by us or our shareholders, could cause the price of our ordinary shares to decline.
If our existing shareholders sell, or indicate an intent to sell, substantial amounts of our ordinary shares in the public market, the trading price of our ordinary shares could decline significantly. Similarly, the perception in the public market that our shareholders might sell our ordinary shares could also depress the market price of our shares. A decline in the price of our ordinary shares might impede our ability to raise capital through the issuance of additional ordinary shares or other equity securities. In addition, the issuance and sale by us of additional ordinary shares, or securities convertible into or exercisable for our ordinary shares, or the perception that we will issue such securities, could reduce the trading price for our ordinary shares as well as make future sales of equity securities by us less attractive or not feasible. The sale of ordinary shares issued upon the exercise of our outstanding warrants could further dilute the holdings of our then existing shareholders.
We do not know whether a market for the ordinary shares will be sustained or what the trading price of the ordinary shares will be and as a result it may be difficult for you to sell your ordinary shares.
Although our ordinary shares trade on Nasdaq, an active trading market for the ordinary shares may not be sustained. It may be difficult for you to sell your ordinary shares without depressing the market price for the ordinary shares. As a result of these and other factors, you may not be able to sell your ordinary shares. Further, an inactive market may also impair our ability to raise capital by selling ordinary shares, or may impair our ability to enter into strategic partnerships or acquire companies or products by using our ordinary shares as consideration.
Securities analysts may not cover our ordinary shares and this may have a negative impact on the market price of our ordinary shares.
The trading market for our ordinary shares will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over independent analysts (provided that we have engaged various non-independent analysts). We do not currently have and may never obtain research coverage by independent securities and industry analysts. If no independent securities or industry analysts commence coverage of us, the trading price for our ordinary shares would be negatively impacted. If we obtain independent securities or industry analyst coverage and if one or more of the analysts who covers us downgrades our ordinary shares, changes their opinion of our shares or publishes inaccurate or unfavorable research about our business, the price of our ordinary shares would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our ordinary shares could decrease and we could lose visibility in the financial markets, which could cause the price and trading volume of our ordinary shares to decline.
Because we do not expect to pay dividends in the foreseeable future, you must rely on the price appreciation of our ordinary shares for a return on your investment.
We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our ordinary shares as a source for any future dividend income.
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Our board of directors has complete discretion as to whether to distribute dividends, subject to certain requirements of British Virgin Islands law. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors. Under British Virgin Islands law, a British Virgin 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 declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions, and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our ordinary shares will likely depend entirely upon any future price appreciation of our ordinary shares. There is no guarantee that our ordinary shares will appreciate in value or even maintain the price at which you purchased the ordinary shares. You may not realize a return on your investment in our ordinary shares and you may even lose your entire investment in our ordinary shares.
Techniques employed by short sellers may drive down the market price of our ordinary shares.
Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is in the short seller’s interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in the market.
Other public companies listed in the United States that have substantial operations in China have been the subject of short selling. Much of the scrutiny and negative publicity has centered on allegations of a lack of effective internal control over financial reporting resulting in financial and accounting irregularities and mistakes, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result, many of these companies are now conducting internal and external investigations into the allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions.
We may in the future be the subject of unfavorable allegations made by short sellers. Any such allegations may be followed by periods of instability in the market price of our ordinary shares and negative publicity. If and when we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we could be required to expend a significant amount of resources to investigate such allegations and/or defend ourselves. While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable federal or state law or issues of commercial confidentiality. Such a situation could be costly and time- consuming and could distract our management from growing our business. Even if such allegations are ultimately proven to be groundless, allegations against us could severely impact our business operations and shareholder’s equity, and the value of any investment in our ordinary shares could be greatly reduced or rendered worthless.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 1C. CYBERSECURITY
Cybersecurity Risk Management and Strategy
We have processes for assessing, identifying and
managing cybersecurity risks, which are an
We do not believe that any risks from cybersecurity threats, nor any previous cybersecurity incidents, have materially affected us. However, the sophistication of cyber threats continues to increase, and the preventative actions that we have taken and continues to take to reduce the risk of cyber incidents and protect its systems and information may not successfully protect against all cyber incidents. For more information on how cybersecurity risk may materially affect our business strategy, results of operations, or financial condition, please refer to Item 1A Risk Factors.
Cybersecurity Governance
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ITEM 2. PROPERTIES
The address of our principal executive offices and corporate offices is 50 Millstone Road, Building 400, Suite 130, East Windsor, NJ 08512, USA.
Our office in China is located at 11-F, Building #12, Sunking Plaza, Gaojiao Road, Hangzhou, Zhejiang Province, China, 311122. Our manufacturing and R&D facilities are all located in Xinchang County, Zhejiang Province, China.
Properties Owned by us
As of December 31, 2024, Greenland held land use rights of four parcels of land with an aggregate site area of approximately 81,171 square meters, located in Xinchang County, Zhejiang Province, PRC. The terms of these land use rights are due to expire on November 14, 2062.
As of December 31, 2024, Greenland held three building ownership certificates for three buildings with an aggregate gross floor area of approximately 44,751 square meters. These properties are primarily used for production and office purposes.
Properties Leased by us
As of December 31, 2024, Greenland leased an office space with an aggregate floor area of approximately 1,440 square feet in New Jersey and a monthly rent of $2,910.
As of December 31, 2024, Greenland leased an assembly space with an aggregate floor area of approximately 54,121 square feet in Maryland and a monthly rent of $48,292.
Greenland will continue to pursue additional properties to further support the expansion of its HEVI business in the United States.
ITEM 3. LEGAL PROCEEDINGS
On April 26, 2024, all of the Company’s current directors, the Company’s chief executive officer, and the Company’s controlling shareholder, Cenntro Holding Limited, were named as defendants (collectively, the “Defendants”), and the Company was named as a nominal defendant in a shareholder derivate action filed in the United States District Court for the District of New Jersey. The complaint assets, inter alia, that Defendants breached their fiduciary duties owed to the Company, committed waste and violated Section 16(a) of the Securities and Exchange Act of 1934, as amended. The complainant seeks: (i) on behalf of the Company, monetary damages of no less than $38,060,365; (ii) to restrict Mr. Peter Wang, the chairman of the Company’s board of directors from selling ordinary shares of the Company until Cenntro Holding Limited has paid off its amount due to the Company and setting up a trust over any future funds from sales of the Company’s ordinary shares by Mr. Peter Wang or Cenntro Holding Limited; (iii) that the Defendants disgorge profits obtained as a result of their wrongful conduct; (iv) to enjoin of the Company’s proposed spin-off transaction; (v) attorney fees and costs; and (vi) any other relief the court may deem just and proper.
On June 28, 2024, the Company’s board of directors held a board meeting, during which the directors of the Company unanimously approved a decision to terminate its previously announced plan of spinning off its drivetrain systems segment. After due diligence review, the Company’s board of directors has identified that the spin-off would likely not generate significant value to its shareholders due to changing market conditions. On July 8, 2024, the Defendants filed a motion to dismiss the shareholder derivative action. On February 28, 2025, the court granted the Defendants’ motion to dismiss, and the complainant’s complaint was dismissed without prejudice.
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. There are currently no legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results, except the following matter.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information for Ordinary Shares
Our ordinary shares are traded on the Nasdaq Capital Market under the symbol “GTEC.” Our ordinary shares commenced public trading on August 8, 2018.
The market price of our ordinary shares is subject to significant fluctuations in response to variations in our quarterly operating results, general trends in the market, and other factors, over many of which we have little or no control. In addition, broad market fluctuations, as well as general economic, business, and political conditions, may adversely affect the market for our ordinary shares, regardless of our actual or projected performance. We cannot assure you that there will be a market for our ordinary shares in the future.
As of March 25, 2025, the last sale price reported on the Nasdaq Capital Market for our ordinary shares was approximately $1.29 per share.
Dividend Policy
We intend to retain all of our available funds and any future earnings to fund the development and growth of our subsidiaries’ business. As such, we do not expect to pay any cash dividends in the foreseeable future.
Shareholders of Record
As of March 26, 2025, we had 10 recorded holders of our ordinary shares. This number excludes any estimate by us of the number of beneficial owners of shares held in street name, the accuracy of which cannot be guaranteed.
Transfer Agent
The transfer agent for our ordinary shares is Continental Stock Transfer & Trust Company, located at 1 State Street 30th Floor, New York, NY 10004-1561. The telephone number of Continental Stock Transfer & Trust Company is (212) 509-4000.
Equity Compensation Plan Information
For information on the securities authorized for issuance under our equity compensation plan, please see “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.”
Recent Sales of Unregistered Securities
During the fiscal years ended December 31, 2024 and 2023, we did not have sales of unregistered securities other than those already disclosed in the quarterly reports on Form 10-Q and the current reports on Form 8-K.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
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ITEM 6. [RESERVED]
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF GREENLAND TECHNOLOGIES HOLDING CORPORATION
The following discussion and analysis of financial condition and results of operations relates to the operations and financial condition reported in the consolidated financial statements of the Company thereto, which appear elsewhere in this Report, and should be read in conjunction with such financial statements and related notes included in this Report. Except for the historical information contained herein, the following discussion, as well as other information in this Report, contain “forward-looking statements,” within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act, and are subject to the “safe harbor” created by those sections. Actual results and the timing of the events may differ materially from those contained in these forward-looking statements due to many factors, including those discussed in the “Cautionary Note Regarding Forward-Looking Statements” set forth elsewhere in this Report.
Overview
Greenland Technologies Holding Corporation (the “Company” or “Greenland”) designs, develops, manufactures and sells components and products for the global material handling industries.
Through its PRC subsidiaries, Greenland offers transmission products, which are key components for forklift trucks used in manufacturing and logistic applications, such as factories, workshops, warehouses, fulfilment centers, shipyards, and seaports. Forklifts play an important role in the logistic systems of many companies across different industries in China and globally. Generally, industries with the largest demand for forklifts include the transportation, warehousing logistics, electrical machinery, and automobile industries. Greenland’s revenue decreased from approximately $90.33 million for the fiscal year ended December 31, 2023 to $83.94 million for the fiscal year ended December 31, 2024. The decrease in revenue was primarily the result of a decrease of approximately $6.17 million in the Company’s sales volume of transmission products for the fiscal year ended December 31, 2024. Nevertheless, based on the revenues for the fiscal years ended December 31, 2024 and 2023, Greenland believes that it is one of the major developers and manufacturers of transmission products for small and medium-sized forklift trucks in China.
Greenland’s transmission products are used in 1-ton to 15-tons forklift trucks, some with mechanical shift and some with automatic shift. Greenland sells these transmission products directly to forklift-truck manufacturers. In the fiscal years ended December 31, 2024 and 2023, Greenland sold an aggregate of 149,597 and 149,543 sets of transmission products, respectively, to more than 100 forklift manufacturers in the PRC.
In January 2020, Greenland formed HEVI to focus on the production and sale of electric industrial vehicles to meet the increasing demand for electric industrial vehicles and machinery powered by sustainable energy in order to reduce air pollution and lower carbon emissions. HEVI is a wholly owned subsidiary of Greenland incorporated under the laws of the State of Delaware. HEVI’s electric industrial vehicle products currently include GEF-series electric forklifts, a series of lithium powered forklifts with three models ranging in size from 1.8 tons to 3.5 tons, GEL-1800, a 1.8 ton rated load lithium powered electric wheeled front loader, GEX-8000, an all-electric 8.0 ton rated load lithium powered wheeled excavator, and GEL-5000, an all-electric 5.0 ton rated load lithium wheeled front loader. In addition, HEVI introduced a line of mobile DC battery chargers that support DC powered EV applications in the North America market. These products are available for purchase in the United States (“U.S.”) market. In August 2022, Greenland launched a 54,000 square foot industrial electric vehicle assembly site in Baltimore, Maryland to support local services, assembly and distribution of its electric industrial heavy equipment products line. In July 2024, HEVI announced a partnership with Lonking Holdings Limited to develop and distribute heavy electric machinery and related technology specialized for the U.S. market. In August 2024, HEVI launched its H55L all-electric wheeled front-end loader, which can lift up to six tons in indoor and outdoor applications without the mess and emissions of diesel, and the H65L all-electric wheeled front-end loader, the largest lithium battery powered electric wheel loader commercially available in North America.
Greenland serves as the parent company of HEVI and Greenland Holding Enterprises Inc. (“Greenland Holding”), a company incorporated in the State of Delaware and a wholly-owned subsidiary of Greenland, which in turns holds 100% of the equity interests in Zhongchai Holding (Hong Kong) Limited, a holding company formed under the laws of the Hong Kong Special Administrative Region (“Hong Kong”) on April 23, 2009 (“Zhongchai Holding”). Zhongchai Holding’s subsidiaries include Zhejiang Zhongchai Machinery Co. Ltd., an operating company formed under the laws of the People’s Republic of China (the “PRC” or “China”) in 2005, Hangzhou Greenland Energy Technologies Co., Ltd. (“Hangzhou Greenland”), an operating company formed under the laws of the PRC in 2019, and Hengyu Capital Limited, a company formed in Hong Kong on August 16, 2022 (“Hengyu Capital”). Through Zhongchai Holding and its subsidiaries, Greenland develops and manufactures traditional transmission products for material handling machineries in the PRC.
Greenland was incorporated on December 28, 2017 as a British Virgin Islands company with limited liability. Following the Business Combination (as described and defined below) in October 2019, the Company changed its name from Greenland Acquisition Corporation to Greenland Technologies Holding Corporation.
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Results of Operations
For the fiscal years ended December 31, 2024 and 2023
Overview
| For the Fiscal Years Ended December 31, | ||||||||||||||||
| 2024 | 2023 | $ Change | % Variance | |||||||||||||
| Revenues | $ | 83,944,661 | $ | 90,333,240 | $ | (6,388,579 | ) | (7.1 | ) | |||||||
| Cost of Goods Sold | 61,411,693 | 65,757,237 | (4,345,544 | ) | (6.6 | ) | ||||||||||
| Gross Profit | 22,532,968 | 24,576,003 | (2,043,035 | ) | (8.3 | ) | ||||||||||
| Selling expenses | 2,148,659 | 2,319,835 | (171,176 | ) | (7.4 | ) | ||||||||||
| General and administrative expenses | 4,853,768 | 6,052,541 | (1,198,773 | ) | (19.8 | ) | ||||||||||
| Research and development expenses | 2,936,399 | 5,424,400 | (2,488,001 | ) | (45.9 | ) | ||||||||||
| Total Operating Expenses | 9,938,826 | 13,796,776 | (3,857,950 | ) | (28.0 | ) | ||||||||||
| Income from operations | 12,594,142 | 10,779,227 | 1,814,915 | 16.8 | ||||||||||||
| Interest income | 864,390 | 143,094 | 721,296 | 504.1 | ||||||||||||
| Interest expenses | (84,243 | ) | (250,410 | ) | 166,167 | (66.4 | ) | |||||||||
| Loss (gain) on disposal of property and equipment | 5,863 | (31,072 | ) | 36,935 | (118.9 | ) | ||||||||||
| Impairment for investments | - | (300,000 | ) | 300,000 | (100.0 | ) | ||||||||||
| Change in fair value of the warrant liability | 1,746,382 | 1,398,774 | 347,608 | 24.9 | ||||||||||||
| Allowance for expected credit loss-related parties receivable | - | (34,462,992 | ) | 34,462,992 | (100.0 | ) | ||||||||||
| Remeasurement gain from change in functional currency | - | (2,490,646 | ) | 2,490,646 | (100.0 | ) | ||||||||||
| Government subsidies income | 881,175 | 692,443 | 188,732 | 27.3 | ||||||||||||
| Other income | 659,204 | 1,212,354 | (553,150 | ) | (45.6 | ) | ||||||||||
| Income(Loss) before income tax | 16,666,913 | (23,309,228 | ) | 39,976,141 | (171.5 | ) | ||||||||||
| Income tax | 1,512,758 | 1,708,262 | (195,504 | ) | (11.4 | ) | ||||||||||
| Net income(Loss) | $ | 15,154,155 | $ | (25,017,490 | ) | $ | 40,171,645 | (160.6 | ) | |||||||
Components of Results of Operations
For the Fiscal Years ended December 31, | ||||||||
| Component of Results of Operations | 2024 | 2023 | ||||||
| Revenues | $ | 83,944,661 | $ | 90,333,240 | ||||
| Cost of Goods Sold | 61,411,693 | 65,757,237 | ||||||
| Gross Profit | 22,532,968 | 24,576,003 | ||||||
| Operating Expenses | 9,938,826 | 13,796,776 | ||||||
| Net Income(Loss) | $ | 15,154,155 | $ | (25,017,490 | ) | |||
Revenue
Greenland’s revenue decreased by approximately $6.39 million, or approximately 7.1%, to approximately $83.94 million for the fiscal year ended December 31, 2024, from approximately $90.33 million for the fiscal year ended December 31, 2023. However, excluding the impact of exchange rate fluctuation, our revenue for the fiscal year ended December 31, 2024 decreased by approximately 5.6% compared to the fiscal year ended December 31, 2023. The decrease in revenue was primarily a result of the decrease of approximately $6.17 million in the Company’s sales volume of transmission products for the year ended December 31, 2024.
Cost of Goods Sold
Greenland’s cost of goods sold consists primarily of material costs, freight charges, purchasing and receiving costs, inspection costs, warehousing costs, internal transfer costs, wages, employee compensation, amortization, depreciation and related costs, which are directly attributable to Greenland’s production activities. The write down of inventory using net realizable value impairment test is also recorded in cost of goods sold. The total cost of goods sold decreased by approximately $4.35 million, or approximately 6.6%, to approximately $61.41 million for the fiscal year ended December 31, 2024, from approximately $65.76 million for the fiscal year ended December 31, 2023. Cost of goods sold decreased in fiscal year 2024 compared to fiscal year 2023 due to the decrease in our sales volume.
Gross Profit
Greenland’s gross profit decreased by approximately $2.04 million, or 8.3%, to approximately $22.53 million for the fiscal year ended December 31, 2024, from approximately $24.58 million for the fiscal year ended December 31, 2023. For the fiscal years ended December 31, 2024 and 2023, Greenland’s gross margin was approximately 26.8% and 27.2%, respectively. The decrease in gross profit in fiscal year 2024 compared to fiscal year 2023 was primarily due to the decrease in our sales volume.
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Operating Expense
Greenland’s operating expenses consist of selling expenses, general and administrative expenses and research and development expenses. Greenland’s operating expenses were $9.94 million for the fiscal year ended December 31, 2024, representing a decrease of 28.0% from $13.80 million for the fiscal year ended December 31, 2023. The decrease in operating expenses was primarily due to a decrease in the after-sales service fees, research and development expenses and allowance for credit losses in fiscal year 2024 compared to fiscal year 2023.
Selling Expenses
Greenland’s selling expenses mainly include operating expenses such as sales staff payroll, traveling expenses and transportation expenses. Selling expenses decreased by $0.17 million, or 7.4%, to approximately $2.15 million for the fiscal year ended December 31, 2024, from approximately $2.32 million for the fiscal year ended December 31, 2023. The decrease in selling expenses was mainly due to a decrease in the after-sales service fees and advertising and marketing expenses for the year ended December 31, 2024 compared to the year ended December 31, 2023.
General and Administrative Expenses
Greenland’s general and administrative expenses include management and office staff salaries and employee benefits, depreciation for office facility and office furniture and equipment, travel and entertainment, legal and accounting, consulting fees and other office expenses. General and administrative expenses decreased by approximately $1.20 million, or approximately 19.8%, to approximately $4.85 million for the fiscal year ended December 31, 2024, from approximately $6.05 million for the fiscal year ended December 31, 2023. The decrease in general and administrative expenses was mainly due to the decrease of approximately $0.98 million in allowance for credit losses for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
Research and Development Expenses
R&D expenses consist of R&D personnel compensation, costs of materials used in R&D projects, and depreciation costs for research-related equipment. R&D expenses decreased by approximately $2.49 million, or 45.9%, to approximately $2.94 million for the fiscal year ended December 31, 2024, from approximately $5.42 million for the fiscal year ended December 31, 2023. Such decrease was primarily attributable to a significant decrease in the Company’s R&D activities for the fiscal year ended December 31, 2024.
Income from Operations
As a result of the foregoing, income from operations for the fiscal year ended December 31, 2024 was approximately $12.59 million, representing an increase of approximately $1.81 million, from approximately $10.78 million for the fiscal year ended December 31, 2023.
Interest Income and Interest Expenses
Greenland’s interest income was approximately $0.86 million for the fiscal year ended December 31, 2024, representing an increase of approximately $0.72 million, or 504.1%, from approximately $0.14 million for the fiscal year ended December 31, 2023. The increase in interest income was because more cash was deposited in banks during the fiscal year ended December 31, 2024 as compared to the fiscal year ended December 31, 2023.
Greenland’s interest expenses were approximately $0.08 million for the fiscal year ended December 31, 2024, a decrease of approximately $0.17 million, or 66.4%, as compared to approximately $0.25 million for the fiscal year ended December 31, 2023. The decrease was primarily due to a decrease of our short-term loans for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
Change in fair value of the warrant liability
Greenland recognized a gain of approximately $1.75 million for the investor warrant from a change in fair value of the warrant liability for the fiscal year ended December 31, 2024, as compared to a gain of approximately $1.40 million for the investor warrant, from a change in fair value of the warrant liability for the fiscal year ended December 31, 2023.
Impairment for investments
Impairment for investments for the year ended December 31, 2024 was nil, representing a decrease of approximately $0.30 million, as compared to $0.30 million for the year ended December 31, 2023. The loss is related to the HEVI’s investment in Princeton Nuenergy Inc and Learn EV. HEVI held a low percentage of equity interests in the invested company, and we recorded fully impairment of the investment for the year ended December 31, 2023.
Allowance for expected credit loss-related parties receivable
Allowance for expected credit loss-related parties receivable for the year ended December 31, 2024 was nil, representing a decrease of approximately $34.46 million, as compared to $34.46 million for the year ended December 31, 2023. As of December 31, 2023, Cenntro Holding Limited owed Greenland an aggregate of $34.46 million. Greenland does not expect the amount of $34.46 million due from Cenntro Holding Limited will be repaid. As a result, Greenland recorded a full provision for expected credit loss for the year ended December 31, 2023.
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Remeasurement loss from change in functional currency
Greenland’s remeasurement loss from change in functional currency was nil for the fiscal year ended December 31, 2024, a decrease of approximately $2.49 million, as compared to $2.49 million of remeasurement loss from change in functional currency for the fiscal year ended December 31, 2023. On July 10, 2023, the Company’s former subsidiary, Shanghai Hengyu, was dissolved under the laws of the PRC, and we recorded a remeasurement loss from change in functional currency of approximately $2.49 million, due to Shanghai Hengyu’s main assets due from related party in the amount of $36.46 million transferred to Hengyu Capital, which was originally denominated in RMB in Shanghai Hengyu, transferred to Hengyu Capital and denominated in USD.
Government subsidies income
Greenland’s government subsidies income was approximately $0.88 million for the fiscal year ended December 31, 2024, an increase of approximately $0.19 million, as compared to approximately $0.69 million of government subsidies income for the fiscal year ended December 31, 2023. The increase was primarily due to an increase in policy incentive income for the fiscal year ended December 31, 2024 as compared to the fiscal year ended December 31, 2023.
Other Income
Greenland’s other income was approximately $0.66 million for the fiscal year ended December 31, 2024, a decrease of approximately $0.55 million, or 45.6%, as compared to approximately $1.21 million of other income for the fiscal year ended December 31, 2023. The decrease was primarily due to a decrease of deduction in value-added taxes (“VAT”) for the fiscal year ended December 31, 2024 as compared to the fiscal year ended December 31, 2023.
Income Taxes
Greenland’s income tax was approximately $1.51 million for the fiscal year ended December 31, 2024, compared to approximately $1.71 million for the fiscal year ended December 31, 2023.
Zhejiang Zhongchai obtained a “high-tech enterprise” status near the end of the fiscal year of 2022. Such status allows Zhejiang Zhongchai to enjoy a reduced statutory income tax rate of 15%, rather than the standard PRC corporate income tax rate of 25%. Income tax for both fiscal years 2024 and 2023 were calculated based on a rate of 15%. The “high-tech enterprise” status is reevaluated by relevant Chinese government agencies every three years. Zhejiang Zhongchai’s current “high-tech enterprise” will be reevaluated near the end of 2025.
Greenland’s other PRC subsidiaries are subject to different income tax rates. Hangzhou Greenland, the wholly owned subsidiary of Zhongchai Holding, is subject to the 25% standard income tax rate Greenland is a holding company registered in the British Virgin Islands and is not subject to tax on income or capital gains under the current British Virgin Islands law. In addition, upon payment of dividends to its shareholders, the Company will not be subject to any British Virgin Islands withholding tax.
On January 14, 2020, Greenland established HEVI, its wholly owned subsidiary in the state of Delaware. HEVI promotes sales of sustainable alternative products for the heavy industrial equipment industry, including electric industrial vehicles, in the North American market. On December 22, 2017, the U.S. federal government enacted the 2017 Tax Act. The 2017 Tax Act includes a number of changes in existing tax law impacting businesses, including the transition tax, a one-time deemed repatriation of cumulative undistributed foreign earnings and a permanent reduction in the U.S. federal statutory rate from 35% to 21%, effective on January 1, 2018. ASC 740 requires companies to recognize the effect of tax law changes in the period of enactment, and accordingly, the effects must be recognized on companies’ calendar year-end financial statements, even though the effective date for most provisions is January 1, 2018. Since HEVI was established in 2020, the one-time transition tax did not have any impact on the Company’s tax provision and there was no undistributed accumulated earnings and profits as of December 31, 2024.
On March 26, 2024, the Company entered into a share exchange agreement with Greenland Holding Enterprises Inc. and Zhongchai Holding (the “2024 Share Exchange Agreement”). Pursuant to the 2024 Share Exchange Agreement, Greenland Holding Enterprises Inc. issued 100 shares of common stock to the Company, par value $0.01 per share, representing all issued and outstanding share capital of Greenland Holding Enterprises Inc., in exchange for 100% of the equity interest of Zhongchai Holding. Greenland Holding Enterprises Inc. is a holding company registered on August 28, 2023 in the State of Delaware with no material operations. Since Greenland Holding Enterprises Inc. was established in 2023, the one-time transition tax did not have any impact on the Company’s tax provision and there was no undistributed accumulated earnings and profits as of December 31, 2024.
Net Income (Loss)
As a result of the foregoing, Greenland’s net income was approximately $15.15 million for the fiscal year ended December 31, 2024, representing an increase of approximately $40.17 million, from the net loss of approximately $25.02 million for the fiscal year ended December 31, 2023.
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Liquidity and Capital Resources
Greenland is a holding company incorporated in the British Virgin Islands. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, our PRC subsidiaries are required to set aside at least 10% of their respective accumulated profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of their respective registered capital. Our PRC subsidiaries may also allocate a portion of their after-tax profits based on PRC accounting standards to employee welfare and bonus funds at their discretion. These reserves are not distributable as cash dividends.
We have funded working capital and other capital requirements primarily by equity contributions, cash flow from operations, short-term bank loans and bank acceptance notes, and long-term bank loans. Cash is required primarily to purchase raw materials, repay debts and pay salaries, office expenses, income taxes and other operating expenses.
For the fiscal year ended December 31, 2024, a PRC subsidiary of ours, Zhejiang Zhongchai, paid off approximately $8.56 million in bank loans and maintained $31.03 million cash on hand. We plan to maintain the current debt structure and rely on governmentally supported loans with lower cost, if necessary.
Government subsidies mainly consist of an incentive granted by the Chinese government to encourage transformation of fixed assets in China and other miscellaneous subsidies from the Chinese government. Government subsidies are recognized when there is reasonable assurance that the subsidy will be received, and all conditions be completed. Total government subsidies recorded under long-term liabilities were $1.26 million and $1.53 million as of December 31, 2024 and 2023, respectively.
The Company currently plans to fund its operations mainly through cash flow from its operations, renewal of bank borrowings, additional equity financing, and continuation of financial support from its shareholders and affiliates controlled by its principal shareholders, if necessary. The Company might implement a stricter policy on sales to less creditworthy customers and plans to continue to improve its collection efforts on accounts with outstanding balances. The Company is actively working with customers and suppliers and expects to fully collect the remaining balance.
We believe that the Company has sufficient cash, even with uncertainty in the Company’s manufacturing and sale of electric industrial heavy equipment in the future and decline on sale of transmission products. However, our capital contribution from existing funding sources, to operate for the next 12 months will be sufficient. We remain confident and expect to continue to generate positive cash flow from our operations.
We may need additional cash resources in the future, if the Company experiences failure in collecting account receivables, changes in business condition, changes in financial condition, or other developments. We may also need additional cash resources, if the Company wishes to pursue opportunities for investment, acquisition, strategic cooperation, or other similar actions. If the Company’s management and its board of directors determine that the cash required for specific corporate activities exceed Greenland’s cash and cash equivalents on hand, the Company may issue debt or equity securities to raise cash.
Historically, we have expended considerable resources on building a new factory and paid off a considerable amount of debt, resulting in less available cash. However, we anticipate that our cash flow will continue to improve for the remainder of fiscal year 2025. More specifically, Zhejiang Zhongchai can pledge the deed of its factory as a collateral to banks in order to obtain loans, refinance expiring loans, restructure short-term loans, and fund other working capital needs upon acceptable terms to Greenland.
Cash and Cash Equivalents
Cash equivalents refers to all highly liquid investments purchased with original maturity of three months or less. As of December 31, 2024, Greenland had approximately $6.66 million of cash and cash equivalents, a decrease of approximately $16.32 million, or 71.02%, as compared to approximately $22.98 million as of December 31, 2023. The decrease of cash and cash equivalents was mainly due to an increase in short term investment, as compared to that as of December 31, 2023.
Restricted Cash
Restricted cash represents the amount held by a bank as security for bank acceptance notes and therefore is not available for use until the bank acceptance notes are fulfilled or expired, which typically takes less than twelve months. As of December 31, 2024, Greenland had approximately $1.95 million of restricted cash, a decrease of approximately $3.26 million, or 62.51%, as compared to approximately $5.21 million as of December 31, 2023. The decrease of restricted cash was due to a decrease in notes payable.
Accounts Receivable
As of December 31, 2024, Greenland had approximately $15.80 million of accounts receivables, a decrease of approximately $1.55 million, or 8.96%, as compared to approximately $17.35 million as of December 31, 2023. The decrease in accounts receivables was due to the decrease in our sales volume.
Greenland recorded approximately nil million and $0.87 million of allowance for expected credit losses as of December 31, 2024 and 2023, respectively. Greenland conducted an aging analysis of each customer’s delinquent payments to determine whether allowance for expected credit losses is adequate. In establishing the allowance for expected credit losses, Greenland considers historical experience, economic environment, and expected collectability of past due receivables. An estimate of expected credit losses is recorded when collection of the full amount is no longer probable. When bad debts are identified, such debts are written off against the allowance for expected credit losses. Greenland will continuously assess its expected credit losses based on the credit history of and relationships with its customers on a regular basis to determine whether its allowance for expected credit losses on its accounts receivables is adequate. Greenland believes that its collection policies are generally in line with the transmissions industry’s standard in the PRC.
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Due from Related Party
Due from related party was $0.24 million and $0.23 million as of December 31, 2024 and December 31, 2023, respectively. The balance of due from related parties as of December 31, 2024 and December 31, 2023 consisted primarily of other receivable from Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership) of $0.24 million and $0.23 million as of December 31, 2024 and December 31, 2023, respectively, representing a loan to the related party with an annual interest rate of 4.785%.
Notes Receivable
As of December 31, 2024, Greenland had approximately $22.74 million of notes receivables, which will be collected by us within twelve months. The decrease was approximately $4.40 million, or 16.21%, as compared to approximately $27.14 million as of December 31, 2023.
Working Capital
Our working capital was approximately $35.11 million as of December 31, 2024, as compared to $27.27 million as of December 31, 2023. The increase in working capital of $7.84 million was primarily contributed to a decrease in notes payable.
Cash Flow
For the Fiscal Year Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Net cash provided by operating activities | $ | 13,341,886 | $ | 2,449,040 | ||||
| Net cash provided by(used in) investing activities | $ | (1,868,246 | ) | $ | 1,070,907 | |||
| Net cash provided by(used in) financing activities | $ | (30,900,924 | ) | $ | 2,865,814 | |||
| Net increase(decrease) in cash and cash equivalents and restricted cash | $ | (19,427,284 | ) | $ | 6,385,761 | |||
| Effect of exchange rate changes on cash and cash equivalents | $ | (150,308 | ) | $ | 2,074,570 | |||
| Cash and cash equivalents and restricted cash at beginning of year | $ | 28,189,387 | $ | 19,729,056 | ||||
| Cash and cash equivalents and restricted cash at end of year | $ | 8,611,795 | $ | 28,189,387 | ||||
Operating Activities
Greenland’s net cash provided by operating activities was approximately $13.34 million and $2.45 million for the fiscal years ended December 31, 2024 and 2023, respectively.
In the fiscal year ended December 31, 2024, the main sources of cash inflow from operating activities were the increase in net income of $15.15, due to related parties of $5.27 million, notes receivable of $3.71 million and depreciation and amortization of $2.25 million. The main causes of changes in cash outflow were accounts payable of approximately $1.52 million, changes in other current and noncurrent assets of approximately $11.14 million and changes in fair value of warrant liability of approximately $1.75 million.
In the fiscal year ended December 31, 2023, the main sources of cash inflow from operating activities were the increase in allowance for expected credit loss and related parties receivable of $34.46 million, and depreciation and amortization of $2.19 million. The main causes of changes in cash outflow were net loss of approximately $25.02 million, change in fair value of warrant liability of approximately $1.40 million, changes in other current and noncurrent assets of approximately $6.34 million and changes in accounts receivable of $2.39 million.
Investing Activities
Investing activities resulted a cash outflow of approximately $1.87 million for the fiscal year ended December 31, 2024. Cash provided by investing activities for the fiscal year ended December 31, 2024 was mainly due to approximately $0.44 million in repayment of loans lent to third parties, offset by approximately $1.96 million used for purchases of long-term assets.
Investing activities resulted a cash inflow of approximately $1.07 million for the fiscal year ended December 31, 2023. Cash provided by investing activities for the fiscal year ended December 31, 2023 was mainly due to approximately $0.44 million in proceeds from sale of short-term investment and approximately $1.84 million repayment of loans lent to third parties, offset by approximately $0.74 million used for purchases of long-term assets.
Financing Activities
Financing activities resulted a cash outflow of approximately $30.90 million for the fiscal year ended December 31, 2024, which was mainly attributable to approximately $16.58 million in notes payable and approximately $8.56 million in repayment of short-term bank loans. Such amounts were further offset by approximately $5.56 million in proceeds from short-term bank loans.
45
Financing activities resulted a cash inflow of approximately $2.87 million for the fiscal year ended December 31, 2023, which was mainly attributable to approximately $6.72 million in proceeds from short-term bank loans and approximately $9.27 million in notes payable. Such amounts were further offset by approximately $12.42 million in repayment of short-term bank loans.
Credit Risk
Credit risk is one of the most significant risks for Greenland’s business. Accounts receivable are typically unsecured and derived from revenues earned from customers, thereby exposing Greenland to credit risk. Credit risk is controlled by the application of credit approvals, limits, and monitoring procedures. Greenland identifies credit risk collectively based on industry, geography, and customer type. This information is monitored regularly by the Company’s management. In measuring the credit risk of sales to customers, Greenland mainly reflects the “probability of default” by the customer on its contractual obligations and considers the current financial position of the customer and the exposures to the customer and its future development.
Liquidity Risk
Greenland is exposed to liquidity risk when it is unable to provide sufficient capital resources and liquidity to meet its commitments and/or business needs. Liquidity risk is managed by the application of financial position analysis to test if Greenland is in danger of liquidity issues and also by application of monitoring procedures to constantly monitor its conditions and movements. When necessary, Greenland resorts to other financial institutions to obtain additional short-term funding to meet the liquidity shortage.
Inflation Risk
Greenland is also exposed to inflation risk. Inflationary factors, such as increases in raw material and overhead costs, could impair Greenland’s operating results. Although Greenland does not believe that inflation has had a material impact on its financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on its ability to maintain current levels of gross margin and operating expenses as a percentage of sales revenues if the selling prices of its products do not increase with such increased costs.
Critical Accounting Policies and Estimates
We prepare our consolidated financial statements in accordance with U.S. GAAP. In applying accounting principles, it is often required to use estimates. These estimates consider the facts, circumstances and information available, and may be based on subjective inputs, assumptions and information known and unknown to us. Material changes in certain of the estimates that we use could potentially affect, by a material amount, our consolidated financial position and results of operations. Although results may vary, we believe our estimates are reasonable and appropriate. See Note 2 to our consolidated financial statements included in “Item 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” for a summary of our significant accounting policies. The following describes certain of our significant accounting policies that involve more subjective and complex judgments where the effect on our consolidated financial position and operating performance could be material.
Revenue Recognition
In accordance with ASC Topic 606, “Revenue from Contracts with Customers,” the Company recognizes revenues when goods or services are transferred to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. In determining when and how revenues are recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contract with customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations, and (v) recognition of revenues when (or as) the Company satisfies each performance obligation. The Company derives revenues from the processing, distribution and sale of its products. The Company recognizes its revenues net of VAT. The Company is subject to VAT which had been levied at the rate of 17% on the invoiced value of sales until April 30, 2018, after which date the rate was reduced to 16%. VAT rate was further reduced to 13% starting from April 1, 2019. Output VAT is borne by customers in addition to the invoiced value of sales and input VAT is borne by the Company in addition to the invoiced value of purchases to the extent not refunded for export sales.
Revenues are recognized at a point in time once the Company has determined that the customer has obtained control over the product. Control is typically deemed to have been transferred to the customer when the performance obligation is fulfilled, usually at the time of customers’ acceptance or consumption, at the net sales price (transaction price) and each of the criteria under ASC 606 have been met. Contract terms may require the Company to deliver the finished goods to the customers’ location or the customer may pick up the finished goods at the Company’s factory. International sales are recognized when shipment clears customs and leaves the port.
The Company adopted ASC 606 on January 1, 2018, using the transition method of Modified-Retrospective Method (“MRM”). The adoption of ASC 606 had no impact on the Company’s beginning balance of retained earnings.
46
The Company’s contracts are all short-term in nature with a contract term of one year or less. Receivables are recorded when the Company has an unconditional right to consideration.
Business Combination
On October 24, 2019, we consummated our Business Combination with Zhongchai Holding following a special meeting of the shareholders, where the shareholders of Greenland considered and approved, among other matters, a proposal to adopt and entered into the Share Exchange Agreement, dated as of July 12, 2019, among (i) Greenland, (ii) Zhongchai Holding, (iii) the Sponsor in the capacity as the Purchaser Representative, and (iv) Cenntro Holding Limited, the sole member of Zhongchai Holding.
Pursuant to the Share Exchange Agreement, Greenland acquired from Cenntro Holding Limited all of the issued and outstanding equity interests of Zhongchai Holding in exchange for 7,500,000 newly issued ordinary shares, no par value of Greenland, to Cenntro Holding Limited. As a result, Cenntro Holding Limited became the then controlling shareholder of Greenland, and Zhongchai Holding became a directly and wholly owned subsidiary of Greenland. The Business Combination was accounted for as a reverse merger effected by a share exchange, wherein Zhongchai Holding is considered the acquirer for accounting and financial reporting purposes.
Pursuant to that certain finder agreement with Hanyi Zhou dated May 29, 2019 (the “Finder Agreement”), 50,000 newly issued ordinary shares issued to Hanyi Zhou as a finder fee for the Business Combination.
Inventories
Inventories are stated at the lower of cost or net realizable value, which is based on estimated selling prices less any further costs expected to be incurred for completion and disposal. Cost of raw materials is calculated using the weighted average method and is based on purchase cost. Work-in-progress and finished goods costs are determined using the weighted average method and comprise direct materials, direct labor and an appropriate proportion of overhead.
Income Taxes
The Company accounts for income taxes following the liability method pursuant to FASB ASC 740 “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized in income in the period that includes the enactment date.
The Company also follows FASB ASC 740, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of December 31, 2024, the Company did not have any liability for unrecognized tax benefits. It is the Company’s policy to include penalties and interest expense related to income taxes as a component of other expense and interest expense, respectively, as necessary. The Company’s historical tax years will remain open for examination by the local authorities until the statute of limitations has passed.
Off Balance Sheet Arrangements
None.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Certain information regarding this Item is contained in Item 7 under the headings “Credit Risk,” “Liquidity Risk,” and “Inflation Risk.”
47
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
GREENLAND TECHNOLOGIES HOLDING CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 and 2023
INDEX
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Greenland Technologies Holding Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Greenland Technologies Holding Corporation and its subsidiaries. (the “Company”) as of December 31, 2024, the related consolidated statements of operations and comprehensive income (loss), changes in shareholders’ equity and cash flows for the year ended December 31,2024, 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 31,2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
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 consolidated 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 audit provides a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) related to accounts or disclosures that were material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which they relate.
F-2
As described in Notes 17 to the consolidated financial statements, the Company’s warrant liability was $2.3million as of December 31, 2024, which amount was material to the consolidated financial statements as a whole. Management applies significant judgments in estimating fair values of warrant liability including selection of valuation methods and significant assumptions used in valuation such as Black–Scholes model and significant inputs into the model.
Our principal audit procedures performed to address this critical audit matter included the following:
| ● | We obtained an understanding of the controls and processes surrounding the evaluation, initial measurement and revaluation of the warrant liability. | |
| ● | We evaluated management’s assessment and the conclusions reached to ensure these instruments were recorded in accordance with the relevant accounting guidance. | |
| ● | We evaluated the value of these warrant liability by vouching the related agreement. | |
| ● | We reviewed and tested the significant assumption and recalculated related underlying data used in the valuation model used by the management to verify the reasonableness of valuation models used. | |
| ● | We performed research to determine that the model was appropriate to the facts and circumstances. |
The accounts relevant to this critical audit matter include the value of the warrant liabilities and the related disclosures in the accompanying Note 17 to the financial statements.
/s/
We have served as the Company’s auditor since 2024
March 26, 2025
F-3
Report of Independent Registered Public Accounting Firm
| To: | Shareholders and Board of Directors |
| Greenland Technologies Holding Corporation |
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Greenland Technologies Holding Corporation and its subsidiaries (the “Company”) as of December 31, 2023, and the related consolidated statements of operations and comprehensive income (loss), changes in shareholders’ equity, and cash flows for the year ended December 31, 2023 and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Emphasis of Matters
We draw your attention to Note 23(b), where the Company recorded a full provision for expected credit losses with an aggregate amount in $34.46 million for the year ended December 31, 2023, as the Company does not expect the amount due from Cenntro Holding Limited will be repaid.
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 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our 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 financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
F-4
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Valuation of Warrant Liability
As described in Notes 17 to the consolidated financial statements, the Company’s warrant liability was $4.1million as of December 31,2023, which the amount were material to the financial statements as a whole. Management applies significant judgments in estimating fair values of warrant liability including selection of valuation methods and significant assumptions used in valuation such as Black–Scholes model and significant inputs into the model.
Our principal audit procedures performed to address this critical audit matter included the following:
| ● | We obtained an understanding of the controls and processes surrounding the evaluation, initial measurement and revaluation of the warrant liability. | |
| ● | We evaluated management’s assessment and the conclusions reached to ensure these instruments were recorded in accordance with the relevant accounting guidance. | |
| ● | We evaluated the value of these warrant liability by vouching the related agreement. | |
| ● | We reviewed and tested the significant assumption and recalculated related underlying data used in the valuation model used by the management to verify the reasonableness of valuation models used. | |
| ● | We performed research to determine that the model was appropriate to the facts and circumstances. |
The accounts relevant to this critical audit matter include the value of the warrant liabilities and the related disclosures in the accompanying notes 17 to the financial statements.
| /s/ WWC, P.C. | |
| WWC, P.C. | |
| Certified Public Accountants |
We have served as the Company’s auditor since November 16, 2020.
San Mateo, California
(PCAOB ID # 1171)
April 16, 2024
F-5
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2024 AND 2023
(AUDITED, IN U.S. DOLLARS)
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Short Term Investment | ||||||||
| Notes receivable | ||||||||
| Accounts receivable, net | ||||||||
| Inventories, net | ||||||||
| Due from related parties-current, net | ||||||||
| Advance to suppliers | ||||||||
| Prepayments and other current assets | ||||||||
| Total Current Assets | $ | $ | ||||||
| Non-current asset | ||||||||
| Property, plant, equipment and construction in progress, net | ||||||||
| Land use rights, net | ||||||||
| Intangible assets | ||||||||
| Deferred tax assets | ||||||||
| Right-of-use assets | ||||||||
| Fixed deposit | ||||||||
| Other non-current assets | ||||||||
| Total non-current assets | $ | $ | ||||||
| TOTAL ASSETS | $ | $ | ||||||
F-6
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2024 AND 2023 (Continued)
(AUDITED, IN U.S. DOLLARS)
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Current Liabilities | ||||||||
| Short-term bank loans | $ | $ | ||||||
| Notes payable-bank acceptance notes | ||||||||
| Accounts payable | ||||||||
| Taxes payables | ||||||||
| Customer deposits | ||||||||
| Due to related parties | ||||||||
| Other current liabilities | ||||||||
| Lease liabilities | ||||||||
| Total current liabilities | $ | $ | ||||||
| Non-current liabilities | ||||||||
| Lease liabilities | ||||||||
| Deferred revenue | ||||||||
| Warrant liability | ||||||||
| Total non-current liabilities | $ | $ | ||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| Shareholders’ equity | ||||||||
| Additional paid-in capital | ||||||||
| Statutory reserves | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total shareholders’ equity | $ | $ | ||||||
| Non-controlling interest | ( | ) | ||||||
| TOTAL SHAREHOLDERS’ EQUITY | $ | $ | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | $ | ||||||
See accompanying notes to the consolidated financial statements.
F-7
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
(AUDITED, IN U.S. DOLLARS)
| For the years ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Revenues | $ | $ | ||||||
| Cost of goods sold | ||||||||
| Gross profit | ||||||||
| Selling expenses | ||||||||
| General and administrative expenses | ||||||||
| Research and development expenses | ||||||||
| Total operating expenses | $ | $ | ||||||
| INCOME FROM OPERATIONS | $ | $ | ||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Loss (gain) on disposal of property, plant, equipment | ( | ) | ||||||
| Impairment for investments | ( | ) | ||||||
| Change in fair value of the warrant liability | ||||||||
| Allowance for expected credit loss-related parties receivable | ( | ) | ||||||
| Remeasurement loss from change in functional currency | ( | ) | ||||||
| Government subsidies income | ||||||||
| Other income | ||||||||
| INCOME (LOSS) BEFORE INCOME TAX | $ | $ | ( | ) | ||||
| INCOME TAX EXPENSE | ||||||||
| NET INCOME (LOSS) | $ | $ | ( | ) | ||||
| LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST | ( | ) | ||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES | $ | $ | ( | ) | ||||
| OTHER COMPREHENSIVE INCOME (LOSS): | ( | ) | ||||||
| Unrealized foreign currency translation income (loss) attributable to Greenland Technologies Holding Corporation and subsidiaries | ( | ) | ||||||
| Unrealized foreign currency translation income (loss) attributable to non-controlling interest | ( | ) | ||||||
| Total comprehensive income (loss) attributable to Greenland technologies holding corporation and subsidiaries | ( | ) | ||||||
| Total comprehensive income (loss) attributable to noncontrolling interest | ( | ) | ||||||
| WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING: | ||||||||
| Basic and diluted | ( | ) | ||||||
See accompanying notes to the consolidated financial statements.
F-8
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGE IN SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
(AUDITED, IN U.S. DOLLARS)
| Ordinary Shares | Additional | Accumulated Other | Non- | |||||||||||||||||||||||||||||
| No Par Value | Paid-in | Comprehensive | Statutory | Retained | controlling | |||||||||||||||||||||||||||
| Shares | Amount | Capital | Income/(loss) | Reserve | Earnings | Interest | Total | |||||||||||||||||||||||||
| Balance as of December 31, 2022 | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||
| Cashless exercise of warrants | ||||||||||||||||||||||||||||||||
| Cancellation of subsidiary | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Dividend | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Net income | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Foreign currency translation adjustment | - | |||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||
| Capital reduction for non-controlling interests | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Net income | - | |||||||||||||||||||||||||||||||
| Dividend | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||||
See accompanying notes to the consolidated financial statements.
F-9
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
(AUDITED, IN U.S. DOLLARS)
| For the years ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of deferred subsidy | ( | ) | ( | ) | ||||
| Loss (gain) on disposal of property, plant, equipment | ( | ) | ||||||
| Increase (Decrease) in allowance for credit losses | ( | ) | ||||||
| Increase (Decrease) in provision for inventories | ( | ) | ||||||
| Change in fair value of warrant liability | ( | ) | ( | ) | ||||
| Increase in allowance for expected credit loss-related parties receivable | ||||||||
| Deferred tax assets | ( | ) | ( | ) | ||||
| Non-cash lease expenses | ||||||||
| Impairment for investments | ||||||||
| Loss on disposal of short term investment | ||||||||
| Accrued interest income derived from loan to related parties | ( | ) | ( | ) | ||||
| Accrued expense | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Increase (Decrease) In: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Notes receivable | ||||||||
| Inventories | ( | ) | ||||||
| Advance to suppliers | ( | ) | ||||||
| Other current and noncurrent assets | ( | ) | ( | ) | ||||
| Increase (Decrease) In: | ||||||||
| Accounts payable | ( | ) | ||||||
| Customer deposits | ( | ) | ||||||
| Other current liabilities | ( | ) | ||||||
| Income tax payables | ||||||||
| Due to related parties | ||||||||
| Lease liabilities | ( | ) | ( | ) | ||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | $ | $ | ||||||
See accompanying notes to the consolidated financial statements.
F-10
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (Continued)
(AUDITED, IN U.S. DOLLARS)
| For the years ended December 31 | ||||||||
| 2024 | 2023 | |||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchases of property, plant, equipment | $ | ( | ) | $ | ( | ) | ||
| Loan lent to third parties | ( | ) | ( | ) | ||||
| Repayment of loans lend to third parties | ||||||||
| Proceeds from sale of property, plant and equipment | ||||||||
| Proceeds from sale of short-term investment | ||||||||
| Investment in a joint venture | ( | ) | ||||||
| NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITES | $ | ( | ) | $ | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from short-term bank loans | $ | $ | ||||||
| Repayments of short-term bank loans | ( | ) | ( | ) | ||||
| Notes payable | ( | ) | ||||||
| Dividend paid | ( | ) | ( | ) | ||||
| Capital reduction for non-controlling interests | ( | ) | ||||||
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITES | $ | ( | ) | $ | ||||
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | $ | ( | ) | $ | ||||
| Effect of exchange rate changes on cash | ( | ) | ||||||
| CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR | ||||||||
| CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | $ | $ | ||||||
| Bank balances and cash | ||||||||
| Bank balances and cash included in assets classified as restricted cash | ||||||||
| Supplemental Disclosure of Cash Flow Information | ||||||||
| Income taxes paid | ||||||||
| Interest paid | ||||||||
See accompanying notes to the consolidated financial statements.
F-11
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES
Greenland Technologies Holding Corporation (the “Company” or “Greenland”) designs, develops, manufactures and sells components and products for the global material handling industries.
Through its subsidiaries in People’s Republic of China (the “PRC” or “China”), Greenland offers transmission products, which are key components for forklift trucks used in manufacturing and logistic applications, such as factories, workshops, warehouses, fulfilment centers, shipyards, and seaports. Forklifts play an important role in the logistic systems of many companies across different industries in China and globally. Generally, industries with the largest demand for forklifts include the transportation, warehousing logistics, electrical machinery, and automobile industries.
Greenland’s transmission products are used
in
In January 2020, Greenland formed HEVI Corp.
(“HEVI”) to focus on the production and sale of electric industrial vehicles to meet the increasing demand for electric industrial
vehicles and machinery powered by sustainable energy in order to reduce air pollution and lower carbon emissions. HEVI is a wholly owned
subsidiary of Greenland incorporated under the laws of the State of Delaware.
Greenland serves as the parent company of HEVI
and Greenland Holding Enterprises Inc. (“Greenland Holding”), a company incorporated in the State of Delaware and a wholly-owned
subsidiary of Greenland, which in turns holds
Greenland was incorporated on December 28, 2017 as a British Virgin Islands company with limited liability. Following the Business Combination (as described and defined below) in October 2019, the Company changed its name from Greenland Acquisition Corporation to Greenland Technologies Holding Corporation.
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GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)
The Company’s Shareholders
As of December 31, 2024, Cenntro Holding Limited
owned
The Company’s Subsidiaries
Zhongchai Holding, the wholly owned subsidiary
of the Company, owned
Zhejiang Zhongchai
Zhejiang Zhongchai, a limited liability company
registered on November 21, 2005, is the direct operating subsidiary of Zhongchai Holding in the PRC. On April 5, 2007, Usunco Automotive
Limited (“Usunco”), a British Virgin Islands limited liability company, invested US$
Through Zhejiang Zhongchai, the Company has been engaging in the manufacturing and sales of transmission systems mainly for forklift trucks since 2006. These forklift trucks are used in manufacturing and logistics applications, such as factory, workshop, warehouse, fulfilment centers, shipyards and seaports. The transmission systems are the key components for forklift trucks. The Company supplies transmission systems to forklift truck manufacturers. Its transmission systems fit for forklift trucks ranging from 1 to 15 tons, with either mechanical shift or automatic shift. All the products are currently manufactured at the Company’s facility in Xinchang, Zhejiang Province, the PRC and are sold to both domestic and oversea markets.
Hangzhou Greenland
Hangzhou Greenland is a limited liability company registered on August 9, 2019 in Hangzhou Sunking Plaza, Zhejiang, the PRC. Hangzhou Greenland engages in the business of trading construction engineering machinery, electronic components, hardware, and others.
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GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)
HEVI
HEVI was incorporated on January 14, 2020 under the laws of the State of Delaware. HEVI is a wholly owned subsidiary of Greenland and promotes sales of sustainable alternative products for the heavy industrial equipment industry, including electric industrial vehicles, in the North American market.
Shanghai Hengyu
Shanghai Hengyu is a limited liability company registered on September 10, 2015 in Shanghai Free Trade Zone, Shanghai, the PRC, which dissolved on July 10, 2023.
Hengyu Capital
Hengyu Capital is a limited liability company registered on August 16, 2022 in Hong Kong. The main business of Hengyu Capital is to engage in investment management and consulting services.
Details of the Company’s subsidiaries, which are included in these consolidated financial statements as of December 31, 2024, are as follows:
| Name | Domicile and Date of Incorporation | Paid-in Capital | Ownership Percentage | Principal Activities | ||||||||||
| Zhongchai Holding (Hong Kong) Limited | Hong Kong | HKD | % | |||||||||||
| Zhejiang Zhongchai Machinery Co., Ltd. | PRC | RMB | % | |||||||||||
| Hangzhou Greenland Energy Technologies Co., Ltd. | PRC | RMB | % | |||||||||||
| HEVI Corp. | Delaware | USD | % | |||||||||||
| Hengyu Capital, Ltd | Hong Kong | HKD | % | |||||||||||
| Greenland Holding Enterprises Inc. | Delaware | USD | % | |||||||||||
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the U.S. Securities and Exchange Commission.
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GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Principles of Consolidation
The consolidated financial statements are prepared in accordance with U.S. GAAP. The consolidated financial statements include the financial statements of the Company and its subsidiaries, which include Hong Kong-registered entities and PRC-registered entities directly or indirectly owned by the Company. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. The results of subsidiaries acquired or disposed of are recorded in the consolidated income statements from the effective date of acquisition or up to the effective date of disposal, as appropriate.
A subsidiary is an entity in which (i) the Company
directly or indirectly controls more than
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. Actual results could differ from those estimates. Significant estimates in the years ended December 31, 2024 and 2023 include allowance for expected credit losses, reserve for inventories, fair value of warrant liability, useful life of property, plant and equipment, assumptions used in assessing impairment of long-term assets, estimates used in accounting for leases in accordance with FASB ASC 842, Leases and valuation of deferred tax assets and accruals for taxes due.
Non-controlling Interest
Non-controlling interests in the Company’s subsidiaries are recorded in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 810 Consolidation (“ASC 810”) and are reported as a component of equity, separate from the parent’s equity. Purchase or sale of equity interests that do not result in a change of control are accounted for as equity transactions. Results of operations attributable to the non-controlling interest are included in our consolidated results of operations and, upon loss of control, the interest sold, as well as interest retained, if any, will be reported at fair value with any gain or loss recognized in earnings.
Foreign Currency Translation
Since the Company operates primarily in the PRC, the Company’s functional currency is the Renminbi (“RMB”). The Company’s financial statements have been translated into the reporting currency of the United States Dollar (“USD”, “US$” or “$”). Assets and liabilities of the Company are translated at the exchange rate at each reporting period end date. Equity is translated at the historical exchange rate when the transaction occurs. Income and expense accounts are translated at the average rate of exchange during the reporting period. The resulting translation adjustments are reported under other comprehensive income (loss). Gains and losses resulting from the translation of foreign currency transactions and balances are reflected in the results of operations.
The exchange rates used to translate amounts in RMB into USD for the purposes of preparing the audited consolidated financial statements or otherwise disclosed in this report were as follows:
| As of | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Period end RMB: US$ exchange rate | ||||||||
| For the years ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Period average RMB: US$ exchange rate | ||||||||
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GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations.
Cash and Cash Equivalents
For financial reporting purposes, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company maintains its bank accounts with various financial institutions primarily in mainland China and the U.S. The Company has not experienced any losses in bank accounts.
Restricted Cash
Restricted cash represents amounts held by a bank as security for bank acceptance bills, as well as the financial product secured for the short-term bank loan and therefore is not available for the Company’s use until such time as the bank acceptance notes and bank loans have been fulfilled or expired, normally within a twelve-month period.
Fair Value of Financial Instruments
The Company applies the provisions of ASC 820, Fair Value Measurements and Disclosures, to the financial instruments that are required to be carried at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company uses a three-tier fair value hierarchy based upon observable and non-observable inputs that prioritizes the information used to develop our assumptions regarding fair value. Fair value measurements are separately disclosed by level within the fair value hierarchy.
| ● | Level 1—defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; |
| ● | Level 2—defined as inputs other than quoted prices in active markets, that are either directly or indirectly observable; and |
| ● | Level 3—defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
The Company’s financial assets and liabilities, which include financial instruments as defined by FASB ASC 820, include cash, cash equivalents and restricted cash, short term investment, accounts receivable, notes receivables, due from related party, fixed deposit, short term bank loans, accounts payable, other payable, notes payable and warrant liability. As of December 31, 2024 and 2023, the carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, notes receivables, notes payables and accounts payable were approximation of their fair value due to the short-term nature. As of December 31, 2024 and 2023, fixed deposits and bank loans were measured at amortized cost.
The following table summarizes the fair value measurements of assets and liabilities that are measured at fair value on a recurring basis at December 31, 2024:
| (amount in absolute value) | Active Market for Identical Assets (Level 1) | Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | Total Carrying Value | ||||||||||||
| Short term investment | $ | $ | ||||||||||||||
| Warrants liability | ||||||||||||||||
| Total | $ | $ | ||||||||||||||
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GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Accounts Receivable and Allowance for Expected Credit Losses
Accounts receivable are stated at the historical carrying amount net of allowance for expected credit losses.
The Company adopted ASU No. 2016-13, “Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments” on January 1, 2023 using a modified retrospective approach. The Company also adopted this guidance to notes receivable and due from related parties.
To estimate expected credit losses, the Company has identified the relevant risk characteristics of its customers and the related receivables. The Company considers the past collection experience, current economic conditions, future economic conditions (external data and macroeconomic factors) and changes in the Company’s customer collection trends. The allowance for expected credit losses and corresponding receivables were written off when they are determined to be uncollectible.
Inventories
Inventories are stated at the lower of cost or net realizable value, which is based on estimated selling prices less any further costs expected to be incurred for completion and disposal. Cost of raw materials is calculated using the weighted average method and is based on purchase cost. Work-in-progress and finished goods costs are determined using the weighted average method and comprise direct materials, direct labor and an appropriate proportion of overhead.
Advance to Suppliers
Advance to suppliers represents interest-free
cash paid in advance to suppliers for purchases of parts and/or raw materials. The balance of advance to suppliers was $
Property, Plant, and Equipment
Property, plant, and equipment are stated at cost less accumulated depreciation, and include expenditure that substantially increases the useful lives of existing assets. Expenditures for repairs and maintenance, which do not extend the useful life of the assets, are expensed as incurred.
Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives are as follows:
| Buildings | ||||
| Machinery | ||||
| Motor vehicles | ||||
| Electronic equipment |
When assets are sold or retired, their costs and accumulated depreciation are eliminated from the consolidated financial statements and any gain or loss resulting from their disposal is recognized in the period of disposition as an element of other income. The cost of maintenance and repairs is charged to income as incurred, whereas significant renewals and betterments are capitalized.
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GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Construction in process
Property, plant, and equipment that are purchased or constructed which require a period of time before the assets are ready for their intended use are accounted for as construction-in-progress. Construction-in-progress is recorded at acquisition cost, including installation costs. Construction-in-progress is transferred to specific property and equipment accounts and commences depreciation when these assets are ready for their intended use.
Land Use Rights
According to the PRC laws, the government owns all the land in the PRC. Companies or individuals are authorized to possess and use the land only through land use rights granted by the Chinese government. The land use rights granted to the Company are being amortized using the straight-line method over the lease term of fifty years.
Impairment of Long-Lived Assets
Long-lived assets are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying amounts may not be recoverable in accordance with FASB ASC 360, “Property, Plant and Equipment”.
In evaluating long-lived assets for recoverability, the Company uses its best estimate of future cash flows expected to result from the use of the asset and eventual disposition in accordance with FASB ASC 360-10-15. To the extent that estimated future, undiscounted cash inflows attributable to the asset, less estimated future, undiscounted cash outflows, are less than the carrying amount, an impairment loss is recognized in an amount equal to the difference between the carrying value of such asset and its fair value. Assets to be disposed of and for which there is a committed plan of disposal, whether through sale or abandonment, are reported at the lower of carrying value or fair value less costs to sell. There was no impairment loss recognized for the years ended December 31, 2024 and 2023.
Lease
ASC 842 supersedes the lease requirements in ASC 840 “Leases,” and generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. Leases that transfer substantially all of the benefits and risks incidental to the ownership of assets are accounted for as finance leases as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases.
A sale-leaseback transaction occurs when an entity sells an asset it owns and immediately leases the asset back from the buyer. The seller then becomes the lessee and the buyer becomes the lessor. Under ASC 842, both parties must assess whether the buyer-lessor has obtained control of the asset and a sale has occurred.
The Company has leased premises for its assembly
site under non-cancellable operating leases since June 2022. Operating lease payments are expensed over the term of lease using straight
line method. The Company’s lease of its assembly site has a
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GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue Recognition
In accordance with ASC Topic 606, “Revenue
from Contracts with Customers,” the Company recognizes revenues when goods or services are transferred to customers in an amount
that reflects the consideration which the Company expects to receive in exchange for those goods or services. In determining when and
how revenues are recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification
of contract with customer; (ii) determination of performance obligations; (iii) measurement of the transaction price;
(iv) allocation of the transaction price to the performance obligations and (v) recognition of revenues when (or as) the Company satisfies
each performance obligation. The Company derives revenues from the processing, distribution and sale of its products. The Company recognizes
its revenues net of value-added taxes (“VAT”). The Company is subject to VAT which had been levied at the rate of
Revenues are recognized at a point in time once the Company has determined that the customer has obtained control over the product. Control is typically deemed to have been transferred to the customer when the performance obligation is fulfilled, usually at the time of customers’ acceptance or consumption, at the net sales price (transaction price) and each of the criteria under ASC 606 have been met. Contract terms may require the Company to deliver the finished goods to the customers’ location or the customer may pick up the finished goods at the Company’s factory. International sales are recognized when shipment clears customs and leaves the port. Payments due within two months after customers’ acceptance or consumption.
The Company adopted ASC 606 on January 1, 2018, using the transition method of Modified-Retrospective Method (“MRM”). The adoption of ASC 606 had no impact on the Company’s beginning balance of retained earnings.
The Company’s contracts are all short-term in nature with a contract term of one year or less. Receivables are recorded when the Company has an unconditional right to consideration.
Contracts do not offer any price protection,
but allow for the return of certain goods if there is a quality problem, which is standard warranty. The Company’s product
returns and recorded reserve for sales returns were minimal for the years ended December 31, 2024 and 2023. The total sales return amount
accounted for around
The following table sets forth disaggregation of revenue:
| For the years ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Major Product | ||||||||
| Transmission boxes for Forklift | $ | $ | ||||||
| Transmission boxes for Non-Forklift (EV, etc.) | ||||||||
| Total | $ | $ | ||||||
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GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cost of Goods Sold
Cost of goods sold consists primarily of material costs, freight charges, purchasing and receiving costs, inspection costs, internal transfer costs, wages, employee compensation, amortization, depreciation and related costs, which are directly attributable to the production of products. Write-down of inventory to lower of cost or net realizable value is also recorded in cost of goods sold.
Selling Expenses
Selling expenses include operating expenses such as payroll and traveling and transportation expenses.
General and Administrative Expenses
General and administrative expenses include management and office salaries and employee benefits, depreciation for office facility and office equipment, travel and entertainment, legal and accounting, consulting fees and other office expenses.
Research and Development
Research and development costs are expensed as
incurred and totaled approximately $
Government Subsidies
Government subsidies are recognized when there
is reasonable assurance that the subsidy will be received and all attaching conditions will be complied with. When the subsidy relates
to an expense item, it is recognized as income over the periods necessary to match the subsidy on a systematic basis to the costs that
it is intended to compensate. Where the subsidy relates to an asset, it is recognized as other long-term liabilities and is released
to the statement of operations over the expected useful life in a consistent manner with the depreciation method for the relevant asset.
Total government subsidies were $
Income Taxes
The Company accounts for income taxes following the liability method pursuant to FASB ASC 740 “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized in income in the period that includes the enactment date.
The Company also follows FASB ASC 740, which
addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial
statements. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax
position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits
recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than
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GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Value-Added Tax
Enterprises or individuals, who sell commodities,
engage in repair and maintenance or import or export goods in the PRC are subject to a value added tax in accordance with PRC Laws. The
VAT standard rate had been
Statutory Reserve
In accordance with the PRC Regulations on Enterprises
with Foreign Investment, an enterprise established in the PRC with foreign investment is required to provide for certain statutory reserves,
namely (i) a General Reserve Fund, (ii) an Enterprise Expansion Fund and (iii) a Staff Welfare and Bonus Fund, which are appropriated
from net profit as reported in the enterprise’s PRC statutory accounts. A wholly owned foreign enterprise is required to allocate
at least
Comprehensive Income (Loss)
Comprehensive income (loss) is defined as the change in equity during the year from transactions and other events, excluding the changes resulting from investments by owners and distributions to owners, and is not included in the computation of income tax expense or benefit. Accumulated comprehensive income consists of foreign currency translation. The Company presents comprehensive income (loss) in accordance with ASC Topic 220, “Comprehensive Income”.
Earnings per share
The Company calculates earnings per share in accordance with ASC Topic 260 “Earnings per Share.” Basic earnings per share is computed by dividing the net income(loss) attributable to Greenland Technologies Holding Corporation, by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional ordinary shares that would have been outstanding if the potential ordinary shares equivalents had been issued and if the additional ordinary shares were dilutive.
Segments and Related Information
ASC 280 “Segment reporting” establishes
standards for reporting information on operating segments in interim and annual financial statements. All of the Company’s operations
are considered by the chief operating decision maker to be aggregated in
The Company is engaged in the business of manufacturing and selling various transmission boxes. The Company’s manufacturing process is essentially the same for the entire Company and is performed in-house at the Company’s facilities in the PRC. The Company’s customers primarily consist of entities in the automotive, construction machinery or warehousing equipment industries. The distribution of the Company’s products is consistent across the entire Company. In addition, the economic characteristics of each customer arrangement are similar in that the Company maintains policies at the corporate level.
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GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Commitments and contingencies
In the normal course of business, the Company is subject to contingencies, including legal proceedings and environmental claims arising out of the normal course of businesses that relate to a wide range of matters, including among others, contracts breach liability. The Company records accruals for such contingencies based upon the assessment of the probability of occurrence and, where determinable, an estimate of the liability. Management may consider many factors in making these assessments including past history, scientific evidence and the specifics of each matter. The Company’s management has evaluated all such proceedings and claims that existed as of December 31, 2024 and 2023. Normal course of businesses that relate to a wide range of matters, including among others, contracts breach liability. The Company records accruals for such contingencies based upon the assessment of the probability of occurrence and, where determinable, an estimate of the liability. Management may consider many factors in making these assessments including past history, scientific evidence and the specifics of each matter. The Company’s management has evaluated all such proceedings and claims that existed as of December 31, 2024 and 2023.
Related Party
In general, related parties exist when there
is a relationship that offers the potential for transactions at less than arm’s-length, favorable treatment, or the ability to
influence the outcome of events different from that outcome which might result in the absence of that relationship. A related party may
be any of the following: a) an affiliate, which is a party that directly or indirectly controls, is controlled by, or is under common
control with another party; b) a principle owner, owner of record or known beneficial owner of more than
Uncertainty and risks
Political, Social and Economic Risks
A significant portion of the Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy.
The Company’s 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 and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.
Currency Exchange Risk
The Company cannot guarantee that the current exchange rate will remain steady. Therefore, there is a possibility that the Company could post the same amount of profit for two comparable periods and yet, because of the fluctuating exchange rate, record higher or lower profit depending on exchange rate of RMB converted to U.S. dollars on the relevant dates. The exchange rate could fluctuate depending on changes in the political and economic environment without notice.
Concentration of Credit Risk
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash in bank and accounts receivable.
The Company places its
cash with financial institutions in the PRC and the U.S. Balances at financial institutions and state-owned banks within the PRC are
covered by insurance up to RMB
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GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Company’s bank deposits in the U.S.
are insured to the maximum extent permitted by the Deposit Insurance Fund in the U.S. Dodd-Frank permanently increased the maximum amount
of deposit insurance to $
The Company conducts credit evaluations of customers, and generally does not require collateral or other security from its customers. The Company establishes an allowance for expected credit losses primarily based upon the factors surrounding the credit risk of specific customers.
Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in the ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). Management’s assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period-end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, they are recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, they are recorded as warrant liability at their initial fair value on the date of issuance and subject to remeasurement each balance sheet date with changes in the estimated fair value of the warrants to be recognized as a non-cash gain or loss in the statement of operations.
Recently Issued Accounting Pronouncements
Recent accounting pronouncements that the Company has adopted or may be required to adopt in the future are summarized below:
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments will be applied retrospectively to all prior periods presented in the financial statements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective adoption. Early adoption is permitted. The Company adopted ASU 2023-07 on January 1, 2024. The adoption of the ASU 2023-07 did not have a material impact on financial disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the requirements for income tax disclosures in order to provide greater transparency. The amendments are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments may be applied prospectively or retrospectively. Management is currently evaluating this ASU to determine its impact on the Company’s disclosures, and intends to apply the amendments prospectively upon adoption.
In March 2024, the FASB issued ASU 2024-02, “Codification Improvements — Amendments to Remove References to the Concepts Statements”. This update contains amendments to the Codification that remove references to various FASB Concepts Statements. These changes remove references to various Concepts Statements and the amendments apply to all reporting entities within the scope of the affected accounting guidance. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2024. Early application of the amendments in this Update is permitted for any fiscal year or interim period for which financial statements have not yet been issued (or made available for issuance). The Company believes the future adoption of this ASU is not expected to have a material impact on its financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires incremental disclosures about specific expense categories, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization and selling expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted and the amendments may be applied either prospectively or retrospectively. Management is currently evaluating this ASU to determine its impact on the Company’s disclosures.
In January 2025, the FASB issued ASU 2025-01 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The FASB issued ASU 2024-03 on November 4, 2024. ASU 2024-03 states that the amendments are effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Following the issuance of ASU 2024-03, the FASB was asked to clarify the initial effective date for entities that do not have an annual reporting period that ends on December 31 (referred to as non-calendar year-end entities). Because of how the effective date guidance was written, a non-calendar year-end entity may have concluded that it would be required to initially adopt the disclosure requirements in ASU 2024-03 in an interim reporting period, rather than in an annual reporting period. The FASB’s intent in the basis for conclusions of ASU 2024-03 is clear that all public business entities should initially adopt the disclosure requirements in the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.
Other accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on, or are unrelated to, its consolidated financial condition, results of operations, cash flows or disclosures.
F-23
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 – SHORT TERM INVESTMENT
As of December 31, 2024 and 2023, the Company’s
short term investment amounted to $
NOTE 4 – CONCENTRATION ON REVENUES AND COST OF GOODS SOLD
Concentration of major customers and suppliers:
| For the years ended December 31, | ||||||||||||||||
| 2024 | 2023 | |||||||||||||||
| Major customers representing more than 10% of the Company’s revenues | ||||||||||||||||
| Company A | $ | % | $ | % | ||||||||||||
| Company B | % | % | ||||||||||||||
| Total Revenue | $ | % | $ | % | ||||||||||||
| As of | ||||||||||||||||
| December 31, 2024 | December 31, 2023 | |||||||||||||||
| Major customers of the Company’s accounts receivable, net | ||||||||||||||||
| Company A | % | % | ||||||||||||||
| Company B | % | % | ||||||||||||||
| Company C | % | % | ||||||||||||||
| Company D | % | % | ||||||||||||||
| Company E | % | % | ||||||||||||||
| Company F | % | % | ||||||||||||||
| Company G | % | % | ||||||||||||||
| Company H | % | % | ||||||||||||||
| Company I | % | % | ||||||||||||||
| Total | $ | % | $ | % | ||||||||||||
Accounts receivable from the Company’s
major customers accounted for
There was no supplier representing more than 10% of the Company’s total purchases for the years ended December 31, 2024 and 2023, respectively.
NOTE 5 – ACCOUNTS RECEIVABLE
Accounts receivable is net of allowance for expected credit losses.
| As of | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Accounts receivable | $ | $ | ||||||
| Less: allowance for expected credit losses | ( | ) | ||||||
| Accounts receivable, net | $ | $ | ||||||
F-24
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – ACCOUNTS RECEIVABLE (CONTINUED)
Changes in the allowance for expected credit losses are as follows:
| As of | ||||||||
December 31, 2024 | December 31, 2023 | |||||||
| Beginning balance | $ | $ | ||||||
| Additional provision charged to expense | ||||||||
Reversal of provision charged to expense | ( | ) | ||||||
| Effect of foreign exchange change | ( | ) | ( | ) | ||||
| Ending balance | $ | $ | ||||||
NOTE 6 – INVENTORIES, NET
As of December 31, 2024 and 2023, inventories consisted of the following
| As of | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Raw materials | $ | $ | ||||||
| Revolving material | ||||||||
| Consigned processing material | ||||||||
| Work-in-progress | ||||||||
| Finished goods | ||||||||
| Less: inventory impairment | ( | ) | ( | ) | ||||
| Inventories, net | $ | $ | ||||||
Changes in the inventory reserves are as follows:
| As of | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Beginning balance | $ | $ | ||||||
| (Carry forward) inventory write-downs | ( | ) | ||||||
| Effect of foreign exchange change | ( | ) | ( | ) | ||||
| Ending balance | $ | $ | ||||||
NOTE 7 – NOTES RECEIVABLE
| As of | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Bank notes receivable: | $ | $ | ||||||
| Commercial notes receivable | ||||||||
| Total | $ | $ | ||||||
Bank notes and commercial notes are means of
payment from customers for the purchase of the Company’s products and are issued by financial institutions or business entities,
respectively, that entitle the Company to receive the full nominal amount from the issuers at maturity, which bear no interest and generally
range from three to nine months from the date of issuance. As of December 31, 2024, the Company pledged notes receivable for an aggregate
amount of $
Due to the short term, high-quality credit rating of these commercial banks and no losses have occurred in history, for the years ended December 31, 2024 and 2023, the Company had no allowance for expected credit losses for notes receivable.
F-25
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 – PROPERTY, PLANT AND EQUIPMENT AND CONSTRUCTION IN PROGRESS
| (a) |
| As of | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Buildings | $ | $ | ||||||
| Machinery | ||||||||
| Motor vehicles | ||||||||
| Electronic equipment | ||||||||
| Total property plant and equipment, at cost | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Property, plant and equipment, net | $ | $ | ||||||
| Construction in process | ||||||||
| Total | $ | $ | ||||||
For the years ended December 31, 2024 and 2023,
depreciation expense amounted to $
For the years ended December 31, 2024 and 2023,
$
NOTE 9 – LAND USE RIGHTS, NET
Land use rights consisted of the following:
| As of | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Land use rights, cost | $ | $ | ||||||
| Less: Accumulated amortization | ( | ) | ( | ) | ||||
| Land use rights, net | $ | $ | ||||||
Estimated future amortization expense is as follows as of December 31, 2024:
| Years ending December 31, | Amortization expense |
|||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | |
|||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total | $ | |
||
F-26
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 – FIXED DEPOSIT
As of December 31, 2024 and 2023, fixed deposit consisted of the following:
| As of | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Three-year bank deposit | $ | $ | ||||||
| Total | $ | $ | ||||||
All fixed deposit were deposited in local banks
in the PRC and the deposit term is
NOTE 11 – NOTES PAYABLE
| As of | ||||||||
| December 31, 2024 |
December 31, 2023 |
|||||||
| Bank acceptance notes | $ | $ | ||||||
| Total | $ | $ | ||||||
The interest-free notes payable, ranging from
All the notes payable are subject to bank charges
of
NOTE 12 – ACCOUNTS PAYABLE
Accounts payable are summarized as follow:
| As of | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Procurement of Materials | $ | $ | ||||||
| Infrastructure& Equipment | ||||||||
| Freight fee | ||||||||
| Total | $ | $ | ||||||
NOTE 13 – SHORT TERM BANK LOANS
Short-term loans are summarized as follow:
| As of | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Collateralized bank loans | $ | $ | ||||||
| Unsecured bank loans | ||||||||
| Total | $ | $ | ||||||
F-27
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 – SHORT TERM BANK LOANS (CONTINUED)
Short-term loans as of December 31, 2023 are as follow:
| Maturity Date | Type | Bank Name | Interest Rate per Annum (%) | December 31, 2023 | ||||||||
| $ | ||||||||||||
| $ | ||||||||||||
| Total | $ | |||||||||||
All short-term bank loans were obtained from local banks in the PRC
and are repayable within
The average annual interest rate of the short-term
bank loans was
NOTE 14 – OTHER CURRENT LIABILITIES
Other current liabilities are summarized as follow:
| As of | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Employee payables | ||||||||
| Other tax payables | ||||||||
| Other payable* | ||||||||
| Accrued expenses | ||||||||
| Accrued after-sales service fee | ||||||||
| Total | $ | $ | ||||||
| * |
NOTE 15 – DEFERRED REVENUE
Deferred revenue is summarized as follow:
| As of | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Subsidy | ||||||||
| Total | $ | $ | ||||||
Subsidy mainly consists of an incentive granted
by the Chinese government to encourage transformation of fixed assets in China and other miscellaneous subsidy from the Chinese government. As
of December 31, 2024, grant income decreased by $
NOTE 16 – LEASES
The Company leases its assembly site under operating
leases, with initial terms of
F-28
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16 – LEASES (CONTINUED)
Supplemental balance sheet information related to leases as of December 31, 2024 and 2023 is as follows:
| As of | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Assets: | ||||||||
| Right-of-use assets | $ | $ | ||||||
| Liabilities: | ||||||||
| Lease liabilities | $ | $ | ||||||
| Lease liabilities | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
| Lease term and discount rate | ||||||||
| Weighted average remaining lease term (in years) | ||||||||
| Weighted average discount rate | ||||||||
The following summarizes the components of operating lease expense and provides supplemental cash flow information for operating leases:
For the years ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Components of lease expense: | ||||||||
| Operating lease expense | $ | $ | ||||||
| Total lease expense | $ | $ | ||||||
The following table summarizes the maturity of lease liabilities under operating leases as of December 31, 2024:
| For the years ending December 31, | Operating Leases | |||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| Total lease payments | $ | |||
| Less: imputed interest | ( | ) | ||
| Present value of lease liabilities | ||||
NOTE 17 – WARRANT LIABILITY
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASBASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations.
F-29
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 17 – WARRANT LIABILITY (CONTINUED)
In connection with the registered direct offering
closed on July 27, 2022, the Company issued to an investor a warrant to purchase up to
The warrants meet the definition of a derivative
under FASB ASC 815, as the Company cannot avoid a net cash settlement under certain circumstances.
| Ordinary Share Warrants | Ordinary Share Warrants | |||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Share price | $ | $ | ||||||
| Exercise price | $ | $ | ||||||
| Expected term (years) | ||||||||
| Risk-free interest rate | % | % | ||||||
| Expected volatility | % | % | ||||||
The warrants outstanding and fair values at each of the respective valuation dates are summarized below:
| As of | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Number of ordinary share warrants | ||||||||
| Fair value of the warrants | $ | $ | ||||||
The fair value of the warrants was classified
as a liability of $
NOTE 18 – SHAREHOLDERS’ EQUITY
Preferred Shares — The Company is authorized to issue an unlimited number of par value preferred shares, divided into five classes, Class A through Class E, each with such designation, rights and preferences as may be determined by a resolution of the Company’s board of directors to amend the Memorandum and Articles of Association to create such designations, rights and preferences. The Company has five classes of preferred shares to give the Company flexibility as to the terms on which each class is issued. All shares of a single class must be issued with the same rights and obligations. Accordingly, starting with five classes of preferred shares will allow the Company to issue shares at different times on different terms. As of December 31, 2024 and December 31, 2023, there were preferred shares designated, issued or outstanding.
Ordinary Shares — The Company
is authorized to issue an unlimited number of ordinary shares with par value each. Holders of the Company’s ordinary shares
are entitled to
F-30
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 18 – SHAREHOLDERS’ EQUITY (CONTINUED)
Warrants — Redeemable warrants sold
as part of the units in the Company’s initial public offering, or the Public Warrants (together with the Private Warrants (as defined
below), the “Warrants”) may only be exercised for a whole number of shares. No fractional shares were issued upon exercise
of the Public Warrants. The Public Warrants were exercisable from October 24, 2019 to October 24, 2024, a total of
Private warrants included (i) the
As of December 31, 2024, there were no warrants outstanding.
NOTE 19 – EARNINGS PER SHARE
The Company reports earnings per share in accordance with the provisions of the FASB’s related accounting standard. This standard requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution, but includes vested restricted stocks and is computed by dividing income available to shareholders by the weighted average ordinary shares outstanding during the period. Diluted earnings per share 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.
F-31
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19 – EARNINGS PER SHARE (CONTINUED)
The following is a reconciliation of the basic and diluted earnings per share computation:
| Year ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Net income (loss) attributable to the Greenland Technologies Holding Corporation and subsidiaries | $ | $ | ( | ) | ||||
| Weighted average basic and diluted computation shares outstanding: | ||||||||
| Weighted average shares used in basic computation | ||||||||
| Diluted effect of stock options and warrants | ||||||||
| Weighted average shares used in diluted computation | ||||||||
| Basic and diluted net income (loss) per share | $ | $ | ( | ) | ||||
For the years ended December 31, 2024 and 2023,
NOTE 20 – GEOGRAPHICAL SALES AND SEGMENTS
All of the Company’s operations are considered
by the chief operating decision maker to be aggregated in
Information for the Company’s sales by geographical area for the years ended December 31, 2024 and 2023 are as follows:
| For the years ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Domestic Sales | $ | $ | ||||||
| International Sales | ||||||||
| Total | $ | $ | ||||||
NOTE 21 – INCOME TAXES
The Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled.
British Virgin Islands
Greenland was incorporated in the British Virgin Islands and is not subject to tax on income or capital gains under current British Virgin Islands law. In addition, upon payments of dividends by these entities to their stockholders, no British Virgin Islands withholding tax will be imposed.
United States
HEVI is subject to U.S. federal tax laws. On
December 22, 2017, the “Tax Cuts and Jobs Act” was enacted. Under its provisions, the U.S. corporate tax rate decreased from
Hong Kong
Zhongchai Holding and Hengyu Capital was incorporated
in Hong Kong and is subject to Hong Kong profits tax at a tax rate of
F-32
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 21 – INCOME TAXES (CONTINUED)
PRC
Zhejiang Zhongchai and Hangzhou Greenland are
governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable
tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Hangzhou
Greenland, the wholly owned subsidiary of Zhongchai Holding, is subject to the
For the years ended December 31, 2024 and 2023, the components of income tax expense consist of the following:
| For the years ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Current income tax | $ | $ | ||||||
| Deferred income tax | ( | ) | ( | ) | ||||
| Total Income tax | $ | $ | ||||||
Below is a reconciliation of the statutory tax rate to the effective tax rate:
For the years ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| PRC statutory income tax rates* | % | % | ||||||
| Permanent difference | % | ( | )% | |||||
| Super deduction on eligible R&D expenditure | ( | )% | % | |||||
| “High-tech enterprise” tax deduction | ( | )% | % | |||||
| Effect of different tax jurisdiction | ( | )% | ( | )% | ||||
| Effect of adjusting income tax for prior periods | ( | )% | % | |||||
| Effect of internal withholding of income tax and internal offsetting | ( | )% | ||||||
| Change in valuation allowance | % | ( | )% | |||||
| Actual income tax rate | % | ( | )% | |||||
| * |
Deferred tax assets consist of the following:
| As of | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Allowance | $ | $ | ||||||
| Accrued expense | ||||||||
| Net operating losses carried forward in the PRC | ||||||||
| Net operating losses carried forward in the U.S. | ||||||||
| Net operating losses carried forward in the HK | ||||||||
| Totals | ||||||||
| Less: Valuation allowance | ( | ) | ( | ) | ||||
| Deferred tax assets, net | $ | $ | ||||||
The Company has recorded unrecognized benefit as of December 31, 2024 and December 31, 2023, respectively. On the information currently available, the Company does not anticipate a significant increase or decrease to its unrecognized benefit within the next 12 months.
F-33
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 22 – COMMITMENTS AND CONTINGENCIES
Lease Commitments
The Company has leased premises for its assembly site under non-cancellable operating leases since June 2022. See further discussion in NOTE 16 – LEASES.
Rent expense is recognized on a straight-line basis over the terms of the operating leases accordingly and the Company records the difference between cash rent payments and the recognition of rent expense as a deferred rent liability.
The following are the aggregate non-cancellable future minimum lease payments under operating and financing leases as of December 31, 2024:
| For the year ending December 31, | Operating Leases | |||
| 2025 | $ | |||
| Total lease payments | $ | |||
F-34
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 23 – RELATED PARTY TRANSACTIONS
| (a) |
| Existing Relationship with the Company | ||
| Cenntro Holding Limited | ||
| Cenntro Smart Manufacturing Tech. Co., Ltd. | ||
| Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership) | ||
| Peter Zuguang Wang | ||
| Xinchang County Jiuhe Investment Management Partnership (LP) |
| (b) |
| As of | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Due to related parties: | ||||||||
| Cenntro Smart Manufacturing Tech. Co., Ltd.1 | $ | $ | ||||||
| Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership)2 | ||||||||
| Cenntro Holding Limited3 | ||||||||
| Peter Zuguang Wang4 | ||||||||
| Xinchang County Jiuhe Investment Management Partnership (LP)5 | ||||||||
| Total | $ | $ | ||||||
All balances of due to related parties as of December 31, 2024 and 2023 were unsecured, interest-free and had no fixed terms of repayments.
The balance of due to related parties as of December 31, 2024 and December 31, 2023 consisted of:
| 1 |
| 2 |
| 3 |
| 4 |
| 5 |
| As of | ||||||||
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Due from related parties-current, net: | ||||||||
| Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership) | ||||||||
| Total | $ | $ | ||||||
The balance of due from related parties as of December 31, 2024 and December 31, 2023 consisted of:
Other receivable from Zhuhai Hengzhong Industrial
Investment Fund (Limited Partnership) was $
F-35
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 23 – RELATED PARTY TRANSACTIONS (CONTINUED)
| (c) | Summary of Related Party dividend payment: |
A summary of dividend payment declared by Zhejiang Zhongchai to related parties for the years ended December 31, 2024 and 2023 are listed below:
| For
the years ended December 31, |
||||||||
| 2024 | 2023 | |||||||
| Dividend payment to related parties: | ||||||||
| Xinchang County Jiuxin Investment Management Partnership (LP) | ||||||||
| Xinchang County Jiuhe Investment Management Partnership (LP) | ||||||||
NOTE 24 –FINANCIAL STATEMENT RECLASSIFICATION
Certain balances in the prior period consolidated financial statements have been reclassified for comparison purposes to conform to the presentation in the current period consolidated financial statements. These reclassifications had no effect on the reported results of operations or financial position.
NOTE 25 – SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date that the financial statements were available to be issued, which is March 26, 2025. All subsequent events requiring recognition as of December 31, 2024 have been incorporated into these financial statements and there are no other subsequent events that require disclosure in accordance with FASB ASC Topic 855.
F-36
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls, as under Rule 13a-15(e) and 15d-15(e) promulgated under the Exchange Act, defined are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
As of December 31, 2024, the end of the fiscal year covered by this Report, our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures.
Based on the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2024, our disclosure controls and procedures were ineffective. They reached this conclusion due to the presence of material weakness in internal controls over financial reporting as described below. Greenland’s management anticipates that the Company’s disclosure controls and procedures will remain ineffective until such material weaknesses are remediated.
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 item is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Under the supervision and with the participation of our Chief Executive Officer, we conducted an evaluation on the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the framework set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the evaluation under this framework, Greenland’s management concluded that the Company’s internal control over financial reporting was ineffective as of the evaluation date due to the following material weakness:
| ● | The lack of sufficient and competent financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements to prepare consolidated financial statements and related disclosures in accordance with U.S. GAAP and SEC reporting requirements. |
Based on the above factors, management concluded that our insufficient knowledge of U.S. GAAP and SEC rules represents a material weakness in the Company’s internal control over financial reporting as of December 31, 2024.
As a result, the Company has developed a remedial plan to strengthen its accounting and financial reporting functions. To strengthen the Company’s internal control over financial reporting, the Company expects to implement the following remedial actions during fiscal year ending December 31, 2025:
| ● | developing and formalizing of key accounting and financial reporting policies and procedures; | |
| ● | recruiting more financial reporting and accounting personnel who have adequate U.S. GAAP knowledge; |
48
| ● | training key position staff by U.S. accountant with U.S. corporate accounting experiences, and gaining additional knowledge and professional skills about SEC regulations and U.S. GAAP; | |
| ● | planning to acquire additional resources to strengthen the financial reporting function and set up a financial and system control framework; and | |
| ● | establishing effective oversight and clarifying reporting requirements for non-recurring and complex transactions to ensure consolidated financial statements and related disclosures are accurate, complete and in compliance with U.S. GAAP and SEC reporting requirements. |
Inherent Limitations on Disclosure Controls and Procedures and Internal Control over Financial Reporting
The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.
Notwithstanding the material weakness in our internal control over financial reporting, the consolidated financial statements included in this Report fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America.
Attestation Report of the Registered Public Accounting Firm
This Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting because we do not qualify as either a large accelerated filer nor an accelerated filer. Our management’s report was not subject to attestation by our independent registered public accounting firm pursuant to the rules of the SEC that permit us to provide only management’s report in this Report.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting during the fiscal year ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not Applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following table sets forth information regarding each of our current directors and executive officers:
| Name | Age | Position | ||
| Peter Zuguang Wang(5) | 70 | Chairman of the Board of Directors | ||
| Raymond Z. Wang | 41 | Chief Executive Officer and President | ||
| Jing Jin | 41 | Chief Financial Officer | ||
| Ming Zhao(1)(4) | 48 | Independent Director | ||
| Charles Athle Nelson(1)(2)(3)(4) | 72 | Independent Director | ||
| Zheng He(2)(3)(4) | 56 | Independent Director | ||
| Frank Shen(1)(2)(3)(5) | 55 | Independent Director |
| (1) | Member of the audit committee |
| (2) | Member of the compensation committee |
| (3) | Member of the nominating and corporate governance committee |
| (4) | Class I director |
| (5) | Class II director |
Mr. Peter Zuguang Wang has served as the chairman of the board of directors of the Company since October 24, 2019. In addition, Mr. Wang has served as Zhongchai Holding’s sole director since its inception in April 2009. He has also served as the Chief Executive Officer of Cenntro Automotive Group, a company that designs and manufactures all-electric utility vehicles for sale in the United States, Europe and the PRC, since February 2013. Mr. Peter Wang has served as the president of Shangri-La Plantation LLC since August 2002. Mr. Peter Wang has served as the chief executive officer and chairman of the board of directors of Cenntro Electric Group Limited, a Nasdaq listed company (Nasdaq: CENN) since its inception in May 2017. Mr. Wang has also served as the managing director of Cenntro Holding Limited and Cenntro Enterprises Limited since December 2005 and October 2020, respectively. Mr. Wang earned his dual Bachelor of Science degrees in Mathematics and Computer Science and Master of Science degree in Electrical Engineering from University of Illinois at Chicago in 1983. He received a Master of Business Administration degree in Marketing from Nova South-eastern University.
Mr. Raymond Z. Wang has served as our chief executive officer and president since October 2019, the chief executive officer of Zhongchai Holding since April 2019, and the chief executive officer of HEVI Corp since January 2020. From February 2019 to November 2020, Mr. Wang served as Chairman of the board of ONE Project, a non-profit organization that unifies local communities to collectively tackle social issues such as hunger. From November 2017 to March 2019, Mr. Wang was the President of Devirra Corporation, a warehousing management and logistic company. From August 2007 to July 2017, Mr. Wang worked as the Vice President at Bank of America Merrill Lynch, developing a client acquisition channel for an online platform. From December 2005 to March 2007, Mr. Wang served as the Financial Advisor at Cowan Financial Group, a full-service financial planning and consulting firm, in New York. Mr. Wang received his Bachelor’s degree in Economics from Rutgers University.
Mr. Jing Jin has served as our chief financial officer since October 24, 2019. He has also served as the Chief Financial Officer of Zhongchai Holding since August 2019. Prior to that, Mr. Jin served as the Chief Financial Officer of Tantech Holdings Ltd. (Nasdaq: TANH), a manufacturer of bamboo-based charcoal products in the PRC, from May 2016 to June 2019. From January 2014 to February 2015, Mr. Jin served as Senior Adviser for AAIC (Shanghai) Co., Ltd., a consulting company in the PRC, responsible for overseeing M&A transactions. From September 2011 to November 2013, he worked as a senior financial adviser in CanAccess Int’l Financial Consultants Ltd. in Vancouver, Canada, responsible for small-medium enterprises’ financing both in private and public sectors. From December 2008 to August 2011, Mr. Jin was an audit associate at MaloneBailey LLP, an accounting firm, in its offices in Canada and the PRC. Mr. Jin graduated from Simon Fraser University in June 2008 in Burnaby, Canada with a Bachelor of Business Administration degree.
Mr. Ming Zhao has served as our independent director since December 2020. Mr. Zhao has served as the chief financial officer at China Jo-Jo Drugstores Inc (Nasdaq: CJJD) since August 2011. Mr. Zhao is a licensed certified public accountant. He received his bachelor’s degree in accounting from Central University of Finance and Economic in Beijing in July 1999 and his master’s degree in professional accounting from the University of Washington in December 2002.
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Mr. Charles Athle Nelson has served as our independent director since December 2020. Mr. Nelson has been active in the capital markets for the past 35 years. He began his financial career as a market representative with American International Group and in 1979 joined Dean Witter Reynolds as a Financial Advisor, working with high net worth and institutional clients. In 1980, he joined Drexel Burnham and Lambert, and subsequently, at Ladenberg, Thalmann and then at Auerbach Pollack and Richardson originated equity and investment banking transactions. Over the last 20 years, Mr. Nelson has been involved with financing companies in the fintech, healthcare and bio-pharma spaces through private equity and public financing including listings on the Nasdaq and the NYSE. Mr. Nelson holds a bachelor’s degree in arts from Villanova University and an MBA from Rutgers University.
Mr. Zheng He has served as our director since December 2024. Since April 2018, Mr. Zheng He has served as the vice precedent of Hengyuan Technology Group in China, responsible for overseeing the company’s asset management practices, mergers and acquisitions, and project investments. Currently, Mr. Zheng He also serves as the director of Jiangsu Tuniu New Energy Co., Ltd. and Hangzhou Zhaoheng Intelligent Vehicles Co., Ltd., companies specializing in the manufacture and sale of electric vehicles in China. Mr. Zheng He received his bachelor’s degree in Industrial and Civil Architecture from Zhejiang University of Technology in China in 1990, and received his master’s degree in business administration from Zhejiang University in China in 1999.
Mr. Frank Shen has served as our independent director since December 2020. Mr. Shen has more than 20 years of research and development and operation experience in telecommunication and networking technology. Since March 2013, Mr. Shen has served as an engineer at Mitel Networks, a well-known telecommunications company. Mr. Shen received his bachelor’s degree in electrical & computer engineering in 1991 and his master of telecommunication from Zhejiang University.
Board Diversity Matrix
| Board Diversity Matrix as of December 31, 2024 | ||||||||||||||||||||
| Total Number of Directors | 5 | |||||||||||||||||||
| Female | Male | Non-Binary | Did
Not Disclose Gender |
|||||||||||||||||
| Part I: Gender Identity | — | — | ||||||||||||||||||
| Directors | — | 5 | — | — | ||||||||||||||||
| Part II: Demographic Background | — | — | — | — | ||||||||||||||||
| African American or Black | — | — | — | — | ||||||||||||||||
| Alaskan Native or Native American | — | — | — | — | ||||||||||||||||
| Asian | — | 4 | — | — | ||||||||||||||||
| Hispanic or Latinx | — | — | — | — | ||||||||||||||||
| Native Hawaiian or Pacific Islander | — | — | — | — | ||||||||||||||||
| White | — | 1 | — | — | ||||||||||||||||
| Two or More Races or Ethnicities | — | — | — | — | ||||||||||||||||
| LGBTQ+ | — | |||||||||||||||||||
| Did Not Disclose Demographic Background | — | |||||||||||||||||||
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Family Relationships
Mr. Peter Zuguang Wang and Mr. Raymond Z. Wang are father and son, respectively. None of our other directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or executive officers has, during the past ten years:
| ● | been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); | |
| ● | had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time; | |
| ● | been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity | |
| ● | been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; |
| ● | been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or | |
| ● | been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a) (26) of the Exchange Act), any registered entity (as defined in Section 1(a) (29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
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Director Independence
Rule 5605 of the Nasdaq Listing Rules requires a majority of a listed company’s board of directors to be comprised of independent directors within one year of listing. In addition, the Nasdaq Listing Rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and nominating and corporate governance committees be independent, that audit committee members also satisfy independence criteria set forth in Rule 10A-3 under the Exchange Act, and that compensation committee members also satisfy heightened independence requirements contained in the Nasdaq Listing Rules as well as Rule 10C-1 under the Exchange Act.
Under Nasdaq Rule 5605(a) (2), a director will only qualify as an “independent director” if, in the opinion of our board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In order to be considered independent for purposes of 10A-3 under the Exchange Act, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries or otherwise be an affiliated person of the listed company or any of its subsidiaries. When determining the independence of the members of our compensation committee under the heightened independence requirements contained in the Nasdaq Listing Rules and Rule 10C-1 under the Exchange Act, our board of directors is required to consider all factors specifically relevant to determining whether a director has a relationship with us that is material to that director’s ability to be independent from management in connection with the duties of a compensation committee member, including, but not limited to: (1) the source of compensation of that director, including any consulting, advisory, or other compensatory fee paid by us to that director; and (2) whether that director is affiliated with our Company, a subsidiary of our Company, or an affiliate of a subsidiary of our Company.
Our board of directors has reviewed the composition of our board of directors and its committees and the independence of each director. Based upon information requested from and provided by each director concerning his or her background, employment, and affiliations, including family relationships, our board of directors has determined that Mr. Ming Zhao, Mr. Charles Athle Nelson, Mr. Zheng He and Mr. Frank Shen are “independent directors” as defined under Rule 5605(a) (2) of the Nasdaq Listing Rules.
Our board of directors also determined that Mr. Ming Zhao, Mr. Charles Athle Nelson, and Mr. Frank Shen, who comprise our audit committee, and Mr. Zheng He, Mr. Charles Athle Nelson and Mr. Frank Shen, who comprise our compensation committee, satisfy the independence standards for such committees established by the SEC and the Nasdaq Listing Rules, as applicable. In making such determinations, our board of directors considered the relationships that each such non-employee director has with our Company and all other facts and circumstances our board of directors deemed relevant in determining independence, including the beneficial ownership of our share capital by each non-employee director.
Number and Terms of Office of Officers and Directors
The directors of the board of directors consist of two classes, being the class I directors (the “Class I Directors”) and the class II directors (the “Class II Directors”). The term of office of the first class of directors, consisting of Mr. Ming Zhao, Mr. Charles Athle Nelson, and Mr. Zheng He, will expire at the annual general meeting in 2026. The term of office of the second class of directors, consisting of Mr. Peter Zuguang Wang and Mr. Frank Shen, will expire at the annual general meeting in 2025. Directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the second annual meeting following their election. Except as the BVI Business Companies Act, 2004 (the “Act”) or any applicable law may otherwise require, in the interim between an annual general meeting, or general meeting called for the election of directors, and the removal of one or more directors, any vacancy on the board of directors may be filled by the majority vote of the remaining directors.
Each director holds office for the term, if any, fixed by the Resolution of Members or Resolution of Directors appointing him or pursuant to Regulation 9.1 or 9.8 of our amended and restated Memorandum of Association and Articles of Association, or until his earlier death, resignation or removal. If no term is fixed on the appointment of a director, the director serves indefinitely until his earlier death, resignation or removal.
The minimum number of directors shall be one and there shall be no maximum number of directors.
Board Meetings
Our board of directors held one meeting during the fiscal year ended December 31, 2024. All directors attended the meeting of the board of directors.
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Committees of the Company’s Board of Directors
Our board of directors has three standing committees: an audit committee, a compensation committee, and a corporate governance committee. All the directors consisting of the audit committee, the compensation committee, and the corporate governance committee are independent.
Audit Committee
We have established an audit committee of the board of directors. Mr. Ming Zhao, Mr. Frank Shen and Mr. Charles Athle Nelson serve as members of our audit committee. Mr. Ming Zhao serves as chairman of the audit committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have three members of the audit committee all of whom must be independent. Mr. Ming Zhao, Mr. Frank Shen and Mr. Charles Athle Nelson are independent.
Each member of the audit committee is financially literate, and our board of directors has determined that Mr. Ming Zhao qualifies as an “audit committee financial expert” as defined in applicable SEC rules.
The Company’s audit committee will be responsible for, among other things:
| ● | selecting a qualified firm to serve as the independent registered public accounting firm to audit the Company’s financial statements; | |
| ● | helping to ensure the independence and performance of the independent registered public accounting firm; | |
| ● | discussing the scope and results of the audit with the independent registered public accounting firm and reviewing, with management and the independent registered public accounting firm, the Company’s interim and year-end financial statements; | |
| ● | developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters; | |
| ● | reviewing the Company’s policies on and oversees risk assessment and risk management, including enterprise risk management; | |
| ● | reviewing the adequacy and effectiveness of internal control policies and procedures and the Company’s disclosure controls and procedures; | |
| ● | reviewing related person transactions; and | |
| ● | approving or, as required, pre-approving, all audit and all permissible non-audit services, other than de minimis non-audit services, to be performed by the independent registered public accounting firm. |
Compensation Committee
Subject to the requirement of law or the Nasdaq listing rules, we have established a compensation committee of the board of directors. The members of our compensation committee are Mr. Zheng He, Mr. Frank Shen and Mr. Charles Athle Nelson. Mr. Charles Athle Nelson serves as chairman of the compensation committee. The Company’s compensation committee will be responsible for, among other things:
| ● | reviewing, approving and determining the compensation of the Company’s officers and key employees; | |
| ● | reviewing, approving and determining compensation and benefits, including equity awards, to directors for service on the board of directors or any committee thereof; | |
| ● | administering the Company’s equity compensation plans; | |
| ● | reviewing, approving and making recommendations to the board of directors regarding incentive compensation and equity compensation plans; and | |
| ● | establishing and reviewing general policies relating to compensation and benefits of the Company’s employees. |
Compensation Committee Interlocks and Insider Participation
None of the Company’s officers currently serves, and in the past year has not served, (i) as a member of the compensation committee or the board of another entity, one of whose officers served on the Company’s compensation committee, or (ii) as a member of the compensation committee of another entity, one of whose officers served on our board of directors.
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Nominating and Corporate Governance Committee
Subject to the requirement of law or the Nasdaq listing rules, we have established a nominating and corporate governance committee of the board of directors. The members of our nominating and corporate governance committee are Mr. Zheng He, Mr. Frank Shen and Mr. Charles Athle Nelson. Mr. Frank Shen serves as chairman of the nominating and corporate governance committee. We have adopted a nominating and corporate governance committee charter, which details the principal functions of the nominating and corporate governance committee.
Each of the members of the nominating and corporate governance committee will meet the requirements for independence under the applicable rules and regulations of the SEC and rules of Nasdaq. The nominating and corporate governance committee is responsible for, among other things:
| ● | identifying, evaluating and selecting, or making recommendations to the board of directors regarding, nominees for election to the board of directors and its committees; | |
| ● | evaluating the performance of the board of directors and of individual directors; | |
| ● | considering, and making recommendations to the board of directors regarding, the composition of the board of directors and its committees; | |
| ● | reviewing developments in corporate governance practices; | |
| ● | evaluating the adequacy of the corporate governance practices and reporting; | |
| ● | reviewing related person transactions; and | |
| ● | developing, and making recommendations to the board of directors regarding, corporate governance guidelines and matters. |
Code of Ethics
We have adopted a code of ethics that applies to all of our executive officers, directors and employees. The code of ethics codifies the business and ethical principles that govern all aspects of our business. Our code of ethics is filed as an exhibit attached to the Form 8-K we filed with the SEC on October 30, 2019. If we amend or grant a waiver of one or more of the provisions of our code of ethics, we intend to satisfy the requirements under Item 5.05 of Form 8-K regarding the disclosure of amendments to or waivers from provisions of our code of ethics that apply to our principal executive officer, principal financial officer and principal accounting officer by posting the required information on our website at the above address.
Compensation Recovery Policy
We have adopted a compensation recovery policy to provide for the recovery of erroneously-awarded incentive compensation, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, final SEC rules and applicable listing standards.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors, executive officers, and greater than 10% beneficial owners of our ordinary shares to file reports of ownership and changes in ownership with the SEC. Directors, executive officers, and greater than 10% shareholders are required by the rules and regulations of the SEC to furnish us with copies of all Section 16(a) reports they file.
Based solely on the Company’s review of the copies of such forms it has received and written representations from certain reporting persons, the Company believes that all of its officers, directors and greater than 10% beneficial owners, complied with all Section 16(a) filing requirements applicable to them during the Company’s most recently completed fiscal year.
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ITEM 11. EXECUTIVE COMPENSATION
Compensation of Executive Officers
The following table presents summary information concerning compensation that was paid for services rendered by our named executive officers during the fiscal years ended December 31, 2024 and 2023.
| Name and Principal Position | Year | Salary ($) |
Bonus ($) |
Stock Awards ($) |
Option
Awards ($) |
Non-Equity Incentive Plan Compensation ($) |
Nonqualified
deferred compensation earnings ($) |
All
Other Compensation ($) |
Total
($) |
|||||||||||||||||||||||||||
| Raymond Z. Wang, | 2024 | 200,000 | 200,000 | |||||||||||||||||||||||||||||||||
Chief Executive Officer and President(1) |
2023 | 200,000 | - | - | - | - | - | - | 200,000 | |||||||||||||||||||||||||||
| Jing Jin, | 2024 | 200,000 | 200,000 | |||||||||||||||||||||||||||||||||
| Chief Financial Officer(2) | 2023 | 200,000 | - | - | - | - | - | - | 200,000 | |||||||||||||||||||||||||||
| (1) | Mr. Wang has served as the Chief Executive Officer and President of the Company since October 24, 2019. |
| (2) | Mr. Jin has served as the Chief Financial Officer of the Company since October 24, 2019. |
Employment Agreements
On October 24, 2019, the Company entered into employment agreements (each an “Employment Agreement,” collectively, the “Employment Agreements”) with Mr. Raymond Z. Wang and Mr. Jing Jin (each an “officer,” collectively, “Officers”), all of which are filed as exhibits to the form 8-K we filed with the SEC on October 30, 2019.
Under the Employment Agreements, each Officer is employed for a term of three years. Our Employment Agreements with each Officer will be automatically extended for additional one-year terms unless we or such Officer provides a three-month prior notice to the other party prior to the expiration of the applicable term. We may terminate the employment with any Officer for cause, at any time, without advance notice or remuneration, for certain acts of the Officer, including, but not limited to, conviction or plea of guilty to a crime, gross negligence, dishonest act that has caused detriment to the Company, or a failure to perform agreed duties. The Company may terminate the employment with the Officer without cause, at any time, upon one-month prior written notice. Upon termination without cause, the Company shall provide certain severance payments and benefits to the executive specified in the Employment Agreements. The Officer may terminate the Employment at any time with a one-month prior written notice to the Company, if (1) there is a material reduction in the Officer’s authority, duties and responsibilities, or (2) there is a material reduction in the Officer’s annual salary.
Each of the Officers agreed, at all times during the term of the employment and after his termination, to hold in the strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, corporation or other entity without prior written consent of the Company, any confidential information defined therein.
Outstanding Equity Awards at Fiscal Year-End
None.
Option Exercise and Stock Vested Table
In the fiscal year ended December 31, 2024, there was no exercise of share options, share appreciation rights or similar instruments, or vesting of shares, including restricted shares, restricted share units and similar instruments by our executive officers.
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Pension Benefits
We do not offer our executive officers or employees any pension plan or similar plan that provides for payments or other benefits at, following or in connection with retirement.
Potential Payments Upon Termination or Change in Control
None.
Compensation of Directors
We do not pay our directors in connection with attending individual board meetings, but we reimburse our directors for expenses incurred in connection with such meetings. In addition to reimbursement for reasonable expenses incurred in connection with serving on the board of directors, we paid our directors who served during the fiscal year ended December 31, 2024 compensation as follows:
| Director Compensation Table | ||||||||||||||||||||||||||||
| Name | Fees earned or paid in cash ($) | Stock awards ($) | Option awards ($) | Non-equity incentive plan compensation ($) | Nonqualified deferred compensation earnings ($) | All other compensation ($) | Total ($) | |||||||||||||||||||||
| Peter Zuguang Wang | - | - | - | - | - | - | - | |||||||||||||||||||||
| Ming Zhao | - | - | - | - | - | - | - | |||||||||||||||||||||
| Charles Athle Nelson | - | - | - | - | - | - | - | |||||||||||||||||||||
| Everett Xiaolin Wang | - | - | - | - | - | - | - | |||||||||||||||||||||
| Frank Shen | - | - | - | - | - | - | - | |||||||||||||||||||||
| Zheng He | - | - | - | - | - | - | - | |||||||||||||||||||||
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
The following table sets forth the beneficial ownership of our ordinary shares by:
| ● | each person known to us to beneficially own more than 5% of any class of our outstanding voting securities based on our review of filings with the SEC; | |
| ● | each of our directors, persons chosen to become a director and named executive officers; and | |
| ● | our directors and named executive officers as a group. |
The numbers of ordinary shares outstanding and the percentage of beneficial ownership are based on 13,594,530 ordinary shares issued and outstanding as of March 26, 2025. Beneficial ownership is in each case determined in accordance with the rules of the SEC, and includes equity securities of which that person has the right to acquire beneficial ownership within 60 days. These securities, however, are not included in the computation of the percentage ownership of any other person. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed a beneficial owner of securities as to which he has no economic interest.
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| Title of Class | Name and Address of Beneficial Owner**† | Amount | Percent of Class | |||||||
| Directors and named Executive Officers | ||||||||||
| Ordinary Shares | Peter Zuguang Wang(1) | 6,214,240 | 45.71 | % | ||||||
| Ordinary Shares | Raymond Z. Wang | 186,500 | 1.37 | % | ||||||
| Ordinary Shares | Jing Jin | - | - | |||||||
| Ordinary Shares | Ming Zhao | 2,500 | * | |||||||
| Ordinary Shares | Charles Athle Nelson | 2,500 | * | |||||||
| Ordinary Shares | Everett Xiaolin Wang | 2,500 | * | |||||||
| Ordinary Shares | Frank Shen | 2,500 | * | |||||||
| Ordinary Shares | All Directors and executive officers as a group: | 6,410,740 | 47.16 | % | ||||||
| Principle Shareholders: | ||||||||||
| Ordinary Shares | Peter Zuguang Wang and his affiliated entity(1) | 6,214,240 | 45.71 | % | ||||||
| * | Aggregate number of shares accounts for less than 1% of our total ordinary shares outstanding as of the date of this Report. |
| ** | Except as otherwise indicated, the persons named in this table have sole voting and investment power with respect to all ordinary shares shown as beneficially owned by them, subject to community property laws where applicable and to the information contained in the footnotes to this table. |
| † | The business address of such individual is 50 Millstone Road, Building 400, Suite 130, East Windsor, NJ 08512. |
| (1) | Represents 2,500 ordinary shares directly owned by Peter Zuguang Wang and 6,211,740 ordinary shares held by Cenntro Holding Limited, a company incorporated in Hong Kong and wholly owned by Peter Zuguang Wang. |
Securities Authorized for Issuance under Equity Compensation Plans
The following table provides certain information about ordinary shares that may be issued under our exiting equity compensation plans as of December 31, 2024.
| Plan Category | (a) Number of securities to be issued upon the exercise of outstanding options, warrants and rights | (b) Weighted- average exercise price of outstanding options, warrants and rights | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
| Equity compensation plans approved by security holders | — | $ | — | 3,799,696 | (1) | |||||||
| Equity compensation plans not approved by security holders | — | — | — | |||||||||
| Total | — | $ | — | |||||||||
| (1) | Includes 997,300 ordinary shares available for future issuance under the 2020 Equity Incentive Plan and 2,802,396 ordinary shares available for future issuance under the 2021 Share Incentive Plan. |
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Certain Relationships and Related Transactions
(a) Names and Relationship of Related Parties:
| Existing Relationship with the Company | ||
| Cenntro Holding Limited | Controlling shareholder of the Company | |
| Cenntro Smart Manufacturing Tech. Co., Ltd. | Under common control of Peter Zuguang Wang | |
| Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership) | Under common control of Peter Zuguang Wang | |
| Peter Zuguang Wang | Chairman of the Board of Directors of the Company | |
| Xinchang County Jiuhe Investment Management Partnership (LP) | Under control of Mr. Mengxing He, the General Manger of Zhejiang Zhongchai |
(b) Summary of Balances with Related Parties :
| As of | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Due to related parties: | ||||||||
| Cenntro Smart Manufacturing Tech. Co., Ltd.1 | $ | 2,534 | $ | 2,606 | ||||
| Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership)2 | 94,442 | 94,442 | ||||||
| Cenntro Holding Limited3 | 1,341,627 | 1,341,627 | ||||||
| Peter Zuguang Wang4 | 2,392,961 | 2,392,961 | ||||||
| Xinchang County Jiuhe Investment Management Partnership (LP)5 | 5,205,979 | - | ||||||
| Total | $ | 9,037,543 | $ | 3,831,636 | ||||
All balances of due to related parties as of December 31, 2024 and 2023 were unsecured, interest-free and had no fixed terms of repayments.
The balance of due to related parties as of December 31, 2024 and December 31, 2023 consisted of:
| 1 | Employee wages paid by Cenntro Smart Manufacturing Tech. Co., Ltd. on the Company’s behalf; |
| 2 | Temporary borrowings from Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership); |
| 3 | Total dividend payment of $7.6 million declared by Zhongchai Holding to Cenntro Holding Limited. As of December 31, 2019, the balance was $1.34 million, and no further payments had been made since then; |
| 4 | Payable to Peter Zuguang Wang for capital reduction due to the dissolution of Shanghai Hengyu Business Management Consulting Co., Ltd. on July 10, 2023; |
| 5 | Total dividend payment of $4.7 million declared by Zhejiang Zhongchai to Xinchang County Jiuhe Investment Management Partnership (LP) and refund by Zhejiang Zhongchai to Xinchang County Jiuhe Investment Management Partnership (LP) of $5.85 million due to its termination of investment in Zhejiang Zhongchai. As of December 31, 2024, the balance was $5.21 million. |
| As of | ||||||||
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Due from related parties-current, net: | ||||||||
| Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership) | 235,497 | 225,927 | ||||||
| Total | $ | 235,497 | $ | 225,927 | ||||
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The balance of due from related parties as of December 31, 2024 and December 31, 2023 consisted of:
Other receivable from Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership) was $0.24 million and $0.23 million as of December 31, 2024 and December 31, 2023, respectively. The receivable was a loan to the related party with annual interest rate of 4.785%.
(c) Summary of Related Party dividend payment:
A summary of dividend payment declared by Zhejiang Zhongchai to related parties for the years ended December 31, 2024 and 2023 are listed below:
| For the years ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Dividend payment to related parties: | ||||||||
| Xinchang County Jiuxin Investment Management Partnership (LP) | - | 208,524 | ||||||
| Xinchang County Jiuhe Investment Management Partnership (LP) | 5,934,100 | 495,071 | ||||||
Director Independence
See “Item 10. Directors, Executive Officers and Corporate Governance—Director Independence” for details.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The following table provides information about the fees billed to us for professional services rendered by external accounting firms during fiscal years ended December 31, 2024 and 2023:
Enrome LLP
| Year ended December 31, 2024 | Year ended December 31, 2023 | |||||||
| Audit Fees (1) | $ | 280,000 | $ | - | ||||
| Audit-Related Fees (2) | - | - | ||||||
| Tax Fees (3) | - | - | ||||||
| All Other Fees (4) | - | - | ||||||
| Total | $ | 280,000 | $ | - | ||||
WWC, P.C.
| Year ended December 31, 2024 | Year ended December 31, 2023 | |||||||
| Audit Fees (1) | $ | - | $ | 275,000 | ||||
| Audit-Related Fees (2) | - | - | ||||||
| Tax Fees (3) | - | - | ||||||
| All Other Fees (4) | - | - | ||||||
| Total | $ | - | $ | 275,000 | ||||
| (1) | Audit Fees. Audit fees consist of fees for the audit of our annual financial statements or services that are normally provided in connection with statutory and regulatory annual and quarterly filings or engagements. |
| (2) | Audit-Related Fees. Audit-related fees consist of fees for accounting, assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported as Audit Fees. |
| (3) | Tax Fees. Tax fees consist of fees for tax compliance services, tax advice and tax planning. |
| (4) | All Other Fees. Any other fees not included in Audit Fees, Audit-Related Fees, or Tax Fees. |
Pre-Approval Policy
Pursuant to audit committee charter, our audit committee has approved in advance all audit and non-audit related services to be provided by our independent registered public accounting firm in accordance with the audit and non-audit related services pre-approval policy.
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements
We have filed the financial statements in Item 8. Financial Statements and Supplementary Data as a part of this Annual Report on Form 10-K.
(b) Exhibits
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| * | Filed herewith. |
| ** | Furnished herewith. |
ITEM 16. FORM 10-K SUMMARY
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 26, 2025.
| GREENLAND TECHNOLOGIES HOLDING CORPORATION | ||
| By: | /s/ Raymond Z. Wang | |
| Name: | Raymond Z. Wang | |
| Title: | Chief Executive Officer | |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
| Signatures | Title | Date | ||
| /s/ Raymond Z. Wang | Chief Executive Officer and President | March 26, 2025 | ||
| Raymond Z. Wang | (Principal Executive Officer) | |||
| /s/ Jing Jin | Chief Financial Officer and Corporate Secretary | March 26, 2025 | ||
| Jing Jin | (Principal Financial Officer and Principal Accounting Officer) | |||
| /s/ Peter Zuguang Wang | Chairman of the Board and Director | March 26, 2025 | ||
| Peter Zuguang Wang | ||||
| /s/ Zheng He | Director | March 26, 2025 | ||
| Zheng He | ||||
| /s/ Ming Zhao | Director | March 26, 2025 | ||
| Ming Zhao | ||||
| /s/ Charles Athle Nelson | Director | March 26, 2025 | ||
| Charles Athle Nelson | ||||
| /s/ Frank Shen | Director | March 26, 2025 | ||
| Frank Shen |
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Exhibit 10.6
LEASE AGREEMENT
THIS LEASE AGREEMENT (“Lease”) dated as of April 1, 2021, between SFA 50 Millstone Road, LLC, a New Jersey limited liability company, with offices at 312 Route 38 West, Suite 100, Moorestown, NJ 08057 (“Landlord”), and Greenland Technologies Corporation, with its principal office at Sunking Plaza Gaojiao Road, Building No.12, 11th floor, Hangzhou 311122 China (“Tenant”).
In consideration of the rents, covenants, and agreements hereinafter set forth, the sufficiency of which is hereby acknowledged and agreed, Landlord and Tenant covenant, warrant, and agree as follows:
1. Definitions. For purposes of this Lease, the following terms shall have the following meanings:
“Alterations” shall have the meaning set forth in Section 8(a) hereof.
“Additional Rent” shall mean all amounts payable by Tenant under this Lease, other than the payment of Fixed Rent, including those items set forth in Section 4 and Section 151 hereof.
“Broker” shall mean N/A.
“Base Year” shall be 2021 calendar year.
“Building” shall mean the building known as Building 400 having the street address of 50 Millstone Road, East Windsor, New Jersey.
“Building Systems” shall mean the HVAC Systems and the other mechanical, electrical, plumbing and life safety systems of the Building.
“Common Areas” shall mean the roadways, parking areas and landscaped areas on the Property, and the entrances, lobby, access ways, hallways, lavatories and other areas located within the Building or otherwise on the Property that are intended for the common use of all tenants of the Building and their invitees.
“Default Rate” shall have the meaning set forth in Section 4(i) hereof.
“Extension Conditions” shall mean, as a condition to Tenant exercising each Extension Option: (a) Tenant gives Landlord written notice no less than four (4) months prior to the commencement of the First Extension Term or Second Extension Term, as applicable, that Tenant is exercising the Extension Option; (b) at the date the applicable Extension Option is exercised, and at the commencement of the First Extension Term or the Second Extension Term, as applicable, no Event of Default has occurred and is continuing; and (c) Tenant has not been more than ten (10) business days late in the payment of any or all Rent more than a total of two(2) times for all periods prior to the commencement of the applicable Extension Term.
“Extension Option” shall have the meaning set forth in Section 3(b) hereof.
“First Extension Term” shall have the meaning set forth in Section 3(b) hereof.
“Fixed Rent” shall mean the payments specified in Section 4.
“Hazardous Materials” shall mean any chemical, compound, material, substance, or other matter that: (a) is defined as a hazardous substance, hazardous material or waste, or toxic substance under any Hazardous Materials Law; (b) is regulated, controlled, or governed by any Hazardous Materials Law or other laws; (c) is petroleum or a petroleum product; or (d) is asbestos, formaldehyde, radioactive material, drug, bacteria, virus, or other injurious or potentially injurious material (by itself or in combination with other materials).
“Hazardous Materials Laws” shall mean and include any and all present and future federal, state, or local laws, ordinances, rules, decrees, orders, regulations, or court decisions relating to hazardous substances, hazardous materials, hazardous waste, toxic substances, environmental conditions on, under, or about the Premises, the Building, or the Property, or soil and ground water conditions, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), the Resource Conservation and Recovery Act (RCRA), the Hazardous Materials Transportation Act, the Clean Air Act, the Clean Water Act, the New Jersey Spill Compensation and Control Act, the New Jersey Industrial Site Recovery Act, the New Jersey Site Remediation Reform Act, the New Jersey Brownfield and Contaminated Site Remediation Act, the New Jersey Environmental Rights Act, the New Jersey Air Pollution Control Act, the New Jersey Water Pollution Control Act, and any other law or legal requirement concerning hazardous or toxic substances, and any amendments to the foregoing.
“HVAC Systems” shall mean the heating, air conditioning, and ventilating systems of the Building.
“Landlord’s Address for Notices” shall mean 312 Route 38 West, Suite 100, Moorestown, NJ 08057.
“Lease Commencement Date” shall mean the date the Premises is delivered to Tenant in broom clean condition (May 3rd, 2021).
“Lease Expiration Date” shall mean the last day of the month in which the Twelfth (12th) Month anniversary of the Lease Commencement Date occurs, as same may be extended pursuant to Section 3 hereof, or such earlier date on which the Term shall sooner end under any of the terms, covenants, or conditions of this Lease or by law.
“Permitted Use” shall mean General Office.
“Premises” shall mean approximately One Thousand Four Hundred and Forty (1,440) square feet of rentable area designated as Suite 130 located on the First (1st) floor of the Building, as more particularly shown on Exhibit “A” attached hereto.
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“Property” shall mean the Building together with the parking lot and all appurtenances thereto on which the Building is located, together with all other improvements which may hereafter be constructed on such parcel of land.
“Rent” shall mean Fixed Rent and Additional Rent, collectively.
“Security Deposit” shall mean a security deposit in the amount of Two Thousand Eight Hundred and Twenty ($2,820).
“Second Extension Term” shall have the meaning set forth in Section 31 hereof.
“Tenant Owned Property” shall have the meaning set forth in Section 8(c) hereof.
“Tenant Parties” shall have the meaning set forth in Section 6(b) hereof.
“Tenant’s Address for Notices” shall mean Greenland Technologies Corporation 50 Millstone Road, Building 400, Suite 130, East Windsor, NJ 08512.
“Tenant’s Share” shall be 0.49%, which is the number, expressed as a percentage, that is derived by dividing the rentable square feet of the Premises (1,440) by the rentable square feet of the Building (291,550), which Tenant’s Share may increase or decrease as the Building or Premises size increases or decreases.
“Term” shall mean a term of one (1) year commencing on the Lease Commencement Date and ending on the Lease Expiration Date.
2. Premises.
(a) Landlord hereby leases to Tenant, and Tenant hereby rents from Landlord, the Premises for the Term.
(b) Tenant shall have the non-exclusive right to use the Common Areas of the Building. Except as may be otherwise provided expressly in this Lease, Tenant shall not have the right to use the roof, electrical closets, janitorial closets, mechanical rooms, telephone rooms, or any other non-common or non-public area of the Building and the Property.
3. Term.
(a) The Term shall commence on the Lease Commencement Date and shall expire on the Lease Expiration Date.
(b) Tenant is granted the option (“Extension Option”) to extend the initial Term of this Lease for an additional term of one (1) year (“First Extension Term”) with a $.25 increase upon all the terms and conditions of this Lease and provided all of the Extension Conditions are met.
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(c) Tenant is granted an additional Extension Option to extend the Term of this Lease for an additional term of one (1) year (“Second Extension Term”) with a $.25 increase upon all the terms and conditions of this Lease and provided all of the Extension Conditions are met.
4. Fixed Rent.
(a) Tenant covenants and agrees to pay Fixed Rent in advance on the first (1st) day of each calendar month during the Term and without notice, demand, abatement, deduction, counterclaim, setoff, defense or otherwise, in lawful money of the United States, to Landlord at Landlord’s Address for Notices throughout the Term of this Lease in accordance with the rent schedule on Exhibit “B” which is attached hereto and incorporated herein by reference.
Tenant shall pay Landlord, as Additional Rent, an amount equal to Tenant’s Share of expenses in excess of the amount of Expenses for the Base Year, as follows:
(a) Tenant covenants and agrees to pay, as Additional Rent in equal monthly installments payable on the first day of each calendar month throughout the term of this Lease, the sum of $1.75 per rentable square foot per annum (i.e. $2,520 per annum) (the “Electricity Amount”), to compensate Landlord for the electrical wiring and other installations necessary for, and for its obtaining and redistribution of, electric current as an additional service. If the cost to Landlord of electricity shall have been, or shall be, increased subsequent to the date of this Lease, by change in Landlord’s electric rates, charges, fuel adjustment, or service classifications, or by taxes or charges of any kind imposed thereon, or for any other such reason, then the Electricity Amount shall be increased in the same percentage, but no higher than $2.50 per rentable square foot per annum during the Term of the Lease.
(b) Within one hundred twenty (120) days after the end of each calendar year, Landlord shall endeavor to provide a statement (“Operating Statement”) to Tenant showing, in reasonable detail: (i) the amount Expenses for such calendar year, (ii) any payments of Estimated Additional Rent by Tenant during such calendar year, and (iii) any revision of the amount of Estimated Additional Rent for the then current calendar year. The failure of Landlord to timely submit an Operating Statement for any year shall not be a waiver of Landlord’s right to collect any Rent described under this Lease. If Landlord does not send an Operating Statement within three hundred sixty-five (365) days following the end of a calendar year, then Tenant shall not be liable for any underpayments for the prior calendar year (other than, with respect to Taxes, to the extent that the amount of Taxes is changed by a municipal taxing authority for any prior year, but in no event later than three hundred sixty-five (365) days following the expiration of the Term).
(c) If an Operating Statement shows that Tenant’s actual Estimated Additional Rent payments were less than Tenant’s actual obligations for Tenant’s Share of Expenses for the applicable year, then Tenant shall pay the shortfall within thirty (30) days after Tenant’s receipt of the Operating Statement.
(d) If an Operating Statement shows an increase in the amount of Estimated Additional Rent for the current calendar year, Tenant shall: (i) pay the difference between the new and former estimates for the period from the date of the last adjustment of Estimated Additional Rent through the month in which the Operating Statement is dated, which payment shall be made within thirty (30) days after Tenant’s receipt of the Operating Statement, and (ii) thereafter pay the new Estimated Additional Rent amount until any subsequent adjustment thereof.
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(e) If an Operating Statement shows that Tenant’s payments of Estimated Additional Rent exceeded Tenant’s actual obligations for Expenses, Landlord shall credit the excess against payment of Estimated Additional Rent next due. If the Term shall have expired and no further Rent shall be due or if the credit exceeds the amount of Estimated Additional Rent due for the remainder of the Term, Landlord shall provide a refund or a credit against unpaid Base Rent of such excess at the time Landlord sends the Operating Statement.
(f) Landlord reserves the right to reasonably change or update the Estimated Additional Rent (based on Landlord’s reasonable analysis that the Estimated Additional Rent has changed), from time to time, the manner and timing of the computation of Additional Rent, provided that the timing of Tenant’s payments of Additional Rent shall not materially change. In lieu of providing one Operating Statement covering all items of Expenses, Landlord may provide separate statements, at the same or different times.
(g) Concurrently with Tenant’s execution of this Lease, Tenant shall pay to Landlord an amount equal to one (1) monthly installment of Fixed Rent payable under this Lease for the first full calendar month of the Lease Term.
(h) If the Lease Commencement Date is a day other than the first day of a month, then the Fixed Rent from the Lease Commencement Date until the first day of the following month shall be pro-rated on a per diem basis at the rate of one-thirtieth (1/30th) of the monthly installment of Fixed Rent payable.
(i) In addition to the Fixed Rent to be paid as herein provided, Tenant shall pay, as Additional Rent, the cost of any late charges and interest charges as set forth in subsection (i) below, any insufficient fund charges for bounced checks, any court costs and attorney’s fees for enforcing Tenant’s obligations under this Lease, and other costs and expenses as specified in Section 151. Tenant’s obligations to make the payments required by this Section 4(d) as Additional Rent shall survive any termination of this Lease by lapse of time or otherwise.
(j) Any Rent payable by Tenant to Landlord under this Lease that is not paid within ten (10) business days after the same is due will be automatically subject to a late payment charge of ten percent (10%) of the delinquent amount, in each instance, to cover Landlord’s additional administrative costs. In addition to the late charge set forth above, Tenant shall also be required to pay interest on all such unpaid sums, at a per annum rate equal to the maximum rate permitted by applicable law (“Default Rate”) on all such outstanding charges of Rent, with said interest charges, as applicable, to be payable on the first (1st) day of each month throughout the Term of this Lease, without further notice or demand therefor by Landlord. Such late charges and interest will be due and payable as set forth herein and will accrue from the date that such Rent (including late charges and interest) sums are payable under the provisions of this Lease until actually paid by Tenant. The right of Landlord to charge a late charge and interest with respect to past due installments of Rent is in addition to Landlord’s rights and remedies upon an Event of Default.
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5. Preparation for Occupancy. Prior to the Lease Commencement Date, Landlord, at its sole cost and expense, shall prepare the Premises for Tenant’s occupancy in accordance with the work letter attached hereto and incorporated herein as Exhibit “C”.
6. Use of Premises; Compliance with Laws; Hazardous Materials.
(a) The Premises shall be used only for the Permitted Use and for no other purpose.
(b) Tenant, and Tenant’s contractors, agents, servants, employees, attorneys, invitees and licensees (collectively “Tenant Parties”), shall comply with the Lease. Landlord may at any time or times hereafter adopt new rules and regulations or modify or eliminate existing rules and regulations.
(c) Tenant, at Tenant’s sole cost and expense, shall comply with and shall cause all of Tenant Parties to comply with all applicable laws, statutes, ordinances, rules, orders, codes, directives, requirements, and regulations of federal, state, county, or municipal governmental and quasi-governmental authorities, including, without limitation, the Americans with Disabilities Act of 1990, as amended by the Americans with Disabilities Act Amendments Act of 2008 (and the regulations promulgated thereunder) applicable to the use or occupancy of the Premises. The foregoing obligation of Tenant shall not however permit Tenant to make, without Landlord’s prior written approval, any Alterations to the Premises which otherwise would require Landlord’s approval under this Lease, and Tenant shall comply with all of the requirements of this Lease in making any such Alterations.
(d) Tenant shall not cause or permit any Hazardous Materials to be generated, used, released, stored, or disposed of in or about the Premises, the Building, or the Property; provided, however, Tenant may use and store reasonable quantities of cleaning and office supplies and other similar materials as may be reasonably necessary for Tenant to conduct normal business operations in the Premises. Tenant shall indemnify and hold Landlord, its employees, and agents, harmless from and against any damage, injury, loss, liability, charge, demand, or claim based on or arising out of the presence or removal of, or failure to remove, Hazardous Materials generated, used, released, stored, or disposed of by Tenant or any Tenant Party in or about the Premises, the Building, or the Property, whether before or after the Lease Commencement Date.
(e) Tenant agrees to comply with all Hazardous Materials Laws, including but not limited to the Industrial Site Recovery Act (N.J.S.A. 13:1k-6 et seq.), as same may be amended (ISRA). Tenant shall not conduct any operations that shall be deemed an “industrial establishment” as defined in ISRA. Tenant also agrees to execute such documents Landlord reasonably deems necessary and to make such applications as Landlord reasonably requires to assure compliance with ISRA. Tenant shall bear all costs and expenses incurred by Landlord associated with any required ISRA compliance resulting from Tenant’s use of the Premises, the Property, or the Building including but not limited to state agency fees, engineering fees, clean-up costs, filing fees, and suretyship expenses. As used in this Lease, ISRA compliance shall include a negative declaration or a de mimimis quantity exemption by the appropriate governmental authority. The foregoing undertaking shall survive the termination or sooner expiration of the Lease and surrender of the Premises and shall also survive sale, lease, or assignment of the Premises, the Property, or the Building by Landlord. Tenant shall immediately provide Landlord with copies of all correspondence, reports, notices, orders, findings, declarations, and other materials pertinent to Tenant’s compliance and the New Jersey Department of Environmental Protection’s requirements under ISRA as they are issued or received by Tenant.
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7. Building and Equipment; Maintenance and Repairs. At its expense, Landlord shall keep the Premises, Building, Building Systems, and the Property in good repair and condition. Landlord shall supply the following services and utilities:
(a) Elevator service to the Premises during normal business hours, except on holidays during which the Building is closed.
(b) Heat, ventilating, and air conditioning during normal business hours, except on holidays during which the Building is closed.
(c) Cleaning and janitorial services, including removal of rubbish and furnishing washroom supplies.
(d) Hot and cold, running, potable water reasonably adequate for Tenant’s purposes.
(e) Electricity for lighting and operating computers, facsimile machines, scanners, and other business equipment.
(f) Providing, installing, and replacing all necessary light bulbs and tubes.
(g) Illuminating and maintaining the parking area, walks, and driveways.
(h) Removing ice, snow and litter from walks, driveways, and parking areas.
(i) Access to the Premises and the parking area from during normal business hours, except on holidays during which the Building is closed.
8. Alterations.
(a) Tenant shall not make or allow to be made any alterations, additions, or improvements in or to the Premises (collectively, “Alterations”) without first obtaining Landlord’s written consent, which consent shall be granted or denied in Landlord’s sole discretion.
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(b) Tenant agrees that all such work shall be done at Tenant’s sole cost and expense and in a good and workmanlike manner, that the structural integrity of the Building shall not be impaired, and that no liens shall attach to all or any part of the Premises, the Building, or the Property by reason thereof. Tenant shall obtain, at its sole expense, all permits required for such work.
(c) Unless otherwise elected by Landlord as hereinafter provided, all Alterations made by Tenant shall become the property of Landlord and shall be surrendered to Landlord on or before the Lease Expiration Date except as otherwise set forth in this Lease. Notwithstanding the foregoing, movable equipment, trade fixtures, personal property, furniture, or any other items that can be removed without material harm to the Premises will remain Tenant’s property (collectively, “Tenant Owned Property”) and shall not become the property of Landlord but shall be removed by Tenant, at Tenant’s sole cost and expense, not later than the Lease Expiration Date. Tenant shall repair at its sole cost and expense all damage caused to the Premises or the Building by the removal of any Alterations that Tenant is required to remove or Tenant Owned Property. Landlord may remove any Tenant Owned Property or Alterations that Tenant is required but fails to remove at the Lease Expiration Date and Tenant shall pay to Landlord the reasonable cost of removal. Tenant’s obligations under this Section 8 shall survive the expiration or earlier termination of this Lease.
9. Insurance.
(a) Tenant shall procure at its cost and expense, and keep in effect during the Term, insurance coverage for all risks of physical loss or damage insuring the full replacement value of Alterations and all items of Tenant-Owned Property. Landlord shall not be liable for any damage or damages of any nature whatsoever to persons or property caused by explosion, fire, vandalism, theft or breakage, by falling plaster, by sprinkler, drainage, or plumbing systems, by air conditioning equipment, by the interruption of any public utility or service, by steam, gas, electricity, water, rain, or other substances leaking, issuing, or flowing into any part of the Premises, by natural occurrence, acts of the public enemy, riot, strike, insurrection, war, court order, requisition, or order of governmental body or authority, or by anything done or omitted to be done by any tenant, occupant, or person in the Building, it being agreed that Tenant shall be responsible for obtaining appropriate insurance to protect its interests.
(b) Tenant shall procure at its cost and expense, and maintain throughout the Term, comprehensive commercial general liability insurance applicable to the Premises with a minimum combined single limit of liability of One Million Dollars ($1,000,000.00), statutory worker’s compensation insurance, and employer’s liability insurance covering all of Tenant’s employees. Such liability insurance shall include, without limitation, products and completed operations liability insurance, fire and legal liability insurance, and such other coverage as Landlord may reasonably require from time to time. During the Lease Term at Landlord’s request, Tenant shall increase such insurance coverage to a level that is commercially reasonably required by Landlord.
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(c) Tenant’s insurance shall be issued by companies authorized to do business in the State of New Jersey. Tenant shall have the right to provide insurance coverage pursuant to blanket policies obtained by Tenant if the blanket policies expressly afford the coverage required by this Section 9. All insurance policies required to be carried by Tenant under this Lease (except for worker’s compensation insurance) shall: (i) name Landlord, and any other reasonable number of parties designated by Landlord as additional insureds; (ii) as to liability coverage, be written on an “occurrence” basis; (iii) provide that Landlord shall receive fifteen (15) days’ notice from the insurer before any cancellation or change in coverage; and (iv) contain a provision that no act or omission of Tenant shall affect or limit the obligation of the insurer to pay the amount of any loss sustained. Each such policy shall contain a provision that such policy and the coverage evidenced thereby shall be primary and non-contributing with respect to any policies carried by Landlord. Tenant shall deliver reasonably satisfactory evidence of such insurance to Landlord on or before the date Tenant first enters or occupies the Premises, and thereafter at least thirty (30) days before the expiration dates of expiring policies. Notwithstanding the foregoing, if any such insurance expires without having been renewed by Tenant, Landlord shall have the option, in addition to Landlord’s other remedies, to procure such insurance for the account of Tenant, immediately and without notice to Tenant, and the cost thereof shall be paid to Landlord. The limits of the insurance required under this Lease shall not limit Tenant’s liability.
(d) Landlord, at its cost and expense, has purchased and maintained or will purchase and maintain: (i) a standard policy of “all risk” insurance with customary exclusions covering the Building in the full replacement cost of the Building, together with rent loss insurance and windstorm coverage (on a full replacement cost basis); and (ii) broad form commercial general liability insurance with a minimum combined single limit of liability of at least One Million Dollars ($1,000,000.00) written by companies authorized to do business in the State of New Jersey.
10. Indemnification.
(a) Tenant shall indemnify, defend, and hold Landlord harmless from and against any and all claims, losses, costs, liabilities, damages, and expenses including, without limitation, penalties, fines, and reasonable attorneys’ fees, to the extent incurred in connection with or arising from the use or occupancy or manner of use or occupancy of the Premises or any injury or damage caused by Tenant, Tenant Parties, or any person occupying the Premises through Tenant.
(b) Landlord shall indemnify, defend, and hold Tenant harmless from and against any and all claims, losses, costs, liabilities, damages, and expenses including, without limitation, penalties, fines, and reasonable attorneys’ fees, to the extent incurred in connection with or arising from: (i) any injury or damage caused by any grossly negligent or willful acts of Landlord; or (ii) a default by Landlord under this Lease.
(c) The terms of this Section 10 shall survive the expiration or termination of this Lease.
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11. Damage and Destruction.
(a) If the Premises or any of the Common Areas are destroyed or damaged by fire or other casualty so that Tenant is unable to occupy the Premises for its Permitted Use and, in Landlord’s judgment reasonably exercised within thirty (30) days after the destruction or damage, repairs cannot be made within ninety (90) days after the date of the damage or destruction, Landlord may terminate this Lease effective as of the date of the damage or destruction by giving Tenant written notice within thirty (30) days of the date of the damage or destruction.
(b) If Landlord does not terminate this Lease as provided in Section 11(a) above, Landlord shall promptly rebuild, repair, and restore the Premises and the Building to their former condition, provided, however, that if Landlord has not completed such restoration within one hundred eighty (180) days after the date of the damage or destruction, Tenant may, at its option, terminate this Lease upon written notice to Landlord.
(c) If the damage or destruction renders all or part of the Premises uninhabitable or unusable, Fixed Rent shall proportionately abate commencing on the date of the damage or destruction and ending on the date the Premises are delivered to Tenant with Landlord’s restoration obligation substantially complete. The extent of the abatement shall be based upon the portion of the Premises rendered uninhabitable or unusable, inaccessible, or unfit for the Permitted Use.
(d) Notwithstanding anything to the contrary in this Lease, Landlord and Tenant mutually waive their respective rights of recovery against each other and each other’s officers, directors, constituent partners, agents, and employees, and Tenant waives such rights against each lessor under any ground or underlying lease and each lender under any mortgage or deed of trust or other lien encumbering the Property or any portion thereof or interest therein, to the extent any loss is or would be covered by fire, extended coverage, or other property insurance policies required to be carried under this Lease or otherwise carried by the waiving party, and the rights of the insurance carriers of such policy or policies are to be subrogated to the rights of the insured under the applicable policy. Each party shall cause its insurance policy to be endorsed to evidence compliance with such waiver.
12. Condemnation.
(a) If all of the Premises is condemned or taken in any permanent manner before or during the Term for any public or quasi-public use, or any permanent transfer of the Premises is made in avoidance of an exercise of the power of eminent domain (each of which events shall be referred to as a “taking”), this Lease shall automatically terminate as of the date of the vesting of title due to such taking. If a part of the Premises is so taken, this Lease shall automatically terminate as to the portion of the Premises so taken as of the date of the vesting of title as a result of such taking. If such portion of the Property is taken as to render the balance of the Premises unusable by Tenant for the Permitted Use, as reasonably determined by either Landlord or Tenant, this Lease may be terminated by Landlord or Tenant, as of the date of the vesting of title as a result of such taking, by written notice to the other party given within fifteen (15) days following notice to Landlord of the date on which said vesting will occur. If this Lease is not terminated as a result of any taking, Landlord shall restore the Building to an architecturally whole unit; provided, however, that Landlord shall not be obligated to expend on such restoration more than the amount of condemnation proceeds actually received by Landlord.
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(b) Landlord shall be entitled to the entire award for any taking, including, without limitation, any award made for the value of the leasehold estate created by this Lease. No award for any partial or entire taking shall be apportioned, and Tenant hereby assigns to Landlord any award that may be made in any taking, together with any and all rights of Tenant now or hereafter arising in or to such award or any part thereof; provided, however, that nothing contained herein shall be deemed to give Landlord any interest in or to require Tenant to assign to Landlord any separate award made to Tenant for its relocation expenses, the taking of personal property and fixtures belonging to Tenant, the unamortized value of improvements made or paid for by Tenant, or the interruption of or damage to Tenant’s business.
(c) In the event of a partial taking that does not result in a termination of this Lease as to the entire Premises, Fixed Rent shall be equitably adjusted in relation to the portions of the Premises and Building taken or rendered unusable by such taking.
(d) If all or any portion of the Premises is taken for a limited period of time before or during the Term, this Lease shall remain in full force and effect; provided, however, that Fixed Rent shall abate during such limited period in proportion to the portion of the Premises taken by such taking. Landlord shall be entitled to receive the entire award made in connection with any such temporary taking; provided, however, that nothing contained herein shall be deemed to give Landlord any interest in or to require Tenant to assign to Landlord any separate award made to Tenant for its relocation expenses, the taking of personal property and fixtures belonging to Tenant, the unamortized value of improvements made or paid for by Tenant, or the interruption of or damage to Tenant’s business. Any temporary taking of all or a portion of the Premises which continues for six (6) months shall be deemed a permanent taking of the Premises or such portion.
13. Assignment and Subletting.
(a) Neither Tenant nor any sublessee or assignee of Tenant, directly or indirectly, voluntarily or by operation of law, shall sell, assign, encumber, mortgage, pledge, or otherwise transfer or hypothecate all or any part of the Premises or Tenant’s leasehold estate hereunder (each such act is referred to as an “Assignment”), or sublet the Premises or any portion thereof or permit the Premises to be occupied by anyone other than Tenant (each such act is referred to as a “Sublease”), without Landlord’s prior written consent in each instance, which consent may be withheld or granted in Landlord’s sole discretion. Any Assignment or Sublease that is not in compliance with this Section 13 shall be void. The acceptance of rental payments by Landlord from a proposed assignee, sublessee, or occupant of the Premises shall not constitute consent to such Assignment or Sublease by Landlord.
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(b) Any request by Tenant for Landlord’s consent to a specific Assignment or Sublease shall include: (i) the name of the proposed assignee, sublessee, or occupant; (ii) the nature of the proposed assignee’s, sublessee’s, or occupant’s business to be carried on in the Premises; (iii) a copy of the proposed Assignment or Sublease; and (iv) such financial information (in the event of an Assignment) and such other information as Landlord may reasonably request concerning the proposed assignee, sublessee, or occupant or its business. Landlord shall respond in writing, stating the reasons for any disapproval, within fifteen (15) days after receipt of all information reasonably necessary to evaluate the proposed Assignment or Sublease.
(c) No consent by Landlord to any Assignment or Sublease by Tenant, and no specification in this Lease of a right of Tenant to make any Assignment or Sublease, shall relieve Tenant of any obligation to be performed by Tenant under this Lease, whether arising before or after: (i) the Assignment or Sublease; or (ii) any extension of the Term (pursuant to exercise of an option granted in this Lease). The consent by Landlord to any Assignment or Sublease shall not relieve Tenant or any successor of Tenant from the obligation to obtain Landlord’s express written consent to any other Assignment or Sublease. No Assignment or Sublease shall be valid or effective unless the assignee or sublessee or Tenant shall deliver to Landlord a fully executed counterpart of the Assignment or Sublease and an instrument that contains a covenant of assumption by the assignee or agreement of the sublessee, reasonably satisfactory in substance and form to Landlord.
(d) Tenant shall pay to Landlord the reasonable amount of Landlord’s cost of processing every proposed Assignment or Sublease, including without limitation reasonable legal review fees and expenses, together with the reasonable amount of all direct and indirect expenses incurred by Landlord arising from any assignee, occupant, or sublessee taking occupancy (including, without limitation, security service, janitorial and cleaning service, and rubbish removal service).
(e) Notwithstanding the foregoing, provided that: (i) no Event of Default has occurred and is continuing; and (ii) no such transaction is undertaken with the intent of circumventing Tenant’s liability under this Lease, Tenant may assign this Lease to any affiliate or subsidiary of Tenant or in connection with a merger or other consolidation of Tenant and may sublease all or some portion of the Premises to an affiliate or subsidiary of Tenant without Landlord’s consent provided: (w) Tenant shall remain liable hereunder; (x) Tenant provides reasonable prior written notice to Landlord of such Assignment or Sublease; (y) after such transaction is effected, the tangible net worth (excluding goodwill) of the new tenant under this Lease is equal to or greater than the tangible net worth of Tenant as of the date of this Lease; and (z) Landlord shall have received an executed copy of all documentation effecting such transfer on or before its effective date.
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14. Tenant’s Default. Each of the following events shall be an “Event of Default” hereunder:
(a) Tenant’s failure to pay when due any installment of Rent.
(b) Tenant’s failure to perform, obey, or observe the rules and regulations and any covenant, condition, agreement, or other obligation of Tenant and such failure continues for a period of three (3) days after Landlord gives Tenant written notice thereof.
(c) The Premises become vacant and abandoned (other than in connection with a casualty under Section 11 or a condemnation under Section 12).
(d) Tenant’s disorderly conduct that destroys the peace and quiet of the Landlord or the other tenants or occupants at the Premises or in the neighborhood and such conduct continues for a period of three (3) days after Landlord gives Tenant written notice thereof.
(e) Tenant’s willful acts causing destruction, damage, or injury to the Premises.
(f) At Landlord’s option, the occurrence of any of the following:
(i) the appointment of a receiver to take possession of all or substantially all of the assets of Tenant or the Premises;
(ii) an assignment by Tenant for the benefit of creditors;
(iii) the filing of any voluntary petition in bankruptcy by Tenant, or the filing of any involuntary petition by Tenant’s creditors, which involuntary petition remains undischarged for a period of thirty (30) days;
(iv) the attachment, execution or other judicial seizure of all or substantially all of Tenant’s assets or the Premises, if such attachment or other seizure remains undismissed or undischarged for a period of thirty (30) days after the levy thereof;
(v) the admission of Tenant in writing of its inability to pay its debts as they become due;
(vi) the filing by Tenant of any answer admitting or failing timely to contest a material allegation of a petition filed against Tenant in any proceeding seeking reorganization, arrangement, composition, readjustment, liquidation, or dissolution of Tenant or similar relief;
(vii) if within thirty (30) days after the commencement of any proceeding against Tenant seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any present or future statute, law, or regulation, such proceeding shall not have been dismissed; or
(viii) the occurrence of any of the foregoing with respect to any guarantor of Tenant’s obligations under this Lease.
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15. Landlord’s Remedies. Upon the occurrence of an Event of Default by Tenant that is not cured by Tenant within the applicable grace periods specified in Section 14 above, Landlord shall have all of the following rights and remedies in addition to all other rights and remedies available to Landlord at law or in equity:
(a) The right to terminate the Lease and Tenant’s right to possession of the Premises. If Landlord elects to terminate this Lease, everything contained in this Lease on the part of Landlord to be done and performed shall cease without prejudice, however, to the right of Landlord to recover from Tenant: (i) all Rent and other sums accrued up to the time of termination or recovery of possession by Landlord, whichever is later; (ii) all broker commissions; (iii) the cost of all improvements to the Premises incurred by Landlord in connection with the Lease; (iv) all Rent remaining to be paid under this Lease; and (v) any other amount necessary to compensate Landlord for all the damages caused by Tenant’s failure to perform its obligations under this Lease which amounts shall be considered Additional Rent (in addition to those costs set out in Section 4(h), Additional Rent shall include, without limitation, reasonable attorneys’ and accountants’ fees, costs of alterations of the Premises, interest costs, and brokers’ fees and any other costs and expenses incurred upon any reletting of the Premises). Landlord shall have all the rights and remedies for the collection of Additional Rent as are available to Landlord for the collection of the Fixed Rent pursuant to the terms of this Lease and as permitted by law.
(b) The right to accelerate and declare immediately due and payable the balance of all Rent and other charges that become due throughout the Term hereof, and Landlord may in its own name, but as agent for Tenant, assign, sublet or relet the Premises for any period equal to or greater or less than the remainder of the Term hereof for any sum which Landlord may deem reasonable to any lessee Landlord may select, and for any use or purpose which Landlord may designate. With or without terminating this Lease, Landlord may re-enter and take possession of the Premises and the provisions of this Section 15 shall operate as a notice to quit, any other notice to quit or of Landlord’s intention to re-enter the Premises being hereunder expressly waived. If necessary, Landlord may proceed to recover possession of the Premises under and by virtue of the laws of the State of New Jersey or by such other proceedings, including re-entry and possession, as may be applicable.
(c) The right to continue the Lease in effect after Tenant’s breach and recover Rent as it becomes due. Acts of maintenance or preservation, efforts to relet the Premises, or the appointment of a receiver upon Landlord’s initiative to protect its interest under this Lease shall not of themselves constitute a termination of Tenant’s right to possession.
(d) The right and power to enter the Premises and remove therefrom all persons and property, to store such property in a public warehouse or elsewhere at the cost of and for the account of Tenant, and to sell such property and apply the proceeds therefrom pursuant to applicable law.
(e) The right to have a receiver appointed for Tenant, upon application by Landlord, to take possession of the Premises, to apply any rental collected from the Premises, and to exercise all other rights and remedies granted to Landlord pursuant to this Section.
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(f) The right to specific performance of any or all of Tenant’s obligations under this Lease and to damages for delay in or failure of such performance.
(g) Whether or not this Lease is terminated at the option of Landlord by reason of Tenant’s Event of Default, Landlord shall take all reasonable steps to mitigate damages. If the full rental provided herein plus the costs, expenses and damages hereafter described shall not be realized by Landlord, Tenant shall be liable for all damages sustained by Landlord, including, without limitation, deficiency in Fixed Rent and Additional Rent, reasonable attorneys’ fees, brokerage fees, and the expense of placing the Premises in first-class rentable condition. Landlord shall in no way be responsible or liable for any failure to relet the Premises or any part thereof, or any failure to collect any Rent due and/or accrued from such reletting, to the end and intent that Landlord may elect to hold Tenant liable for the Fixed Rent, Additional Rent, and any and all other items of cost and expense which Tenant shall have been obligated to pay throughout the remainder of the Term. Any damages or loss of Rent sustained by Landlord may be immediately recovered by Landlord, at Landlord’s option, at the time of the reletting, or in separate actions, from time to time, as said damages shall have been made more easily ascertainable by successive relettings, or, at Landlord’s option, may be deferred until the expiration of the Term, in which event Tenant hereby agrees that the cause of action shall not be deemed to have accrued until the date of expiration of the Term. The provisions contained in this Section 15(g) shall be in addition to, and shall not prevent the enforcement of, any claim Landlord may have against Tenant for anticipatory breach of this Lease.
(h) All rights and remedies available to Landlord hereunder or at law or in equity are expressly declared to be cumulative. The exercise by Landlord of any such right or remedy shall not prevent the concurrent or subsequent exercise of any such right or remedy. No delay in the enforcement or exercise of any such right or remedy shall constitute a waiver of any default by Tenant hereunder or of any of Landlord’s rights or remedies in connection therewith. Landlord shall not be deemed to have waived any default by Tenant hereunder unless such waiver is set forth in a written instrument signed by Landlord. If Landlord waives in writing any default by Tenant, such waiver shall not be construed as a waiver of any covenant, condition or agreement set forth in this Lease except as to the specific circumstances described in such written waiver. The rights hereunder granted to Landlord shall also be the rights of Tenant in the same manner as hereinabove provided for Landlord.
16. Subordination; Estoppel Certificates.
(a) This Lease shall be subject and subordinate at all times to: (i) all ground leases or underlying leases that may now exist or hereafter be executed affecting the Property or any portion thereof; (ii) the lien of any mortgage or other security instrument that may now exist or hereafter be executed in any amount for which the Property or any portion thereof, any ground leases or underlying leases, or Landlord’s interest or estate therein is specified as security; and (iii) all modifications, renewals, supplements, consolidations, and replacements thereof. The provisions of this Section shall be self-operative and no further instrument shall be required to effect the provisions of this Section.
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(b) If any ground lease or underlying lease terminates for any reason or any mortgage, deed of trust, or other security instrument is foreclosed or a conveyance in lieu of foreclosure is made for any reason, Tenant, notwithstanding any subordination, shall attorn to and become the tenant of the successor in interest to Landlord at the option of such successor in interest. If any mortgage, deed of trust, or other security agreement is foreclosed, or Landlord’s interest under this Lease is conveyed or transferred in lieu of foreclosure, neither the mortgagee, beneficiary, nor any person or entity acquiring title to the Property as a result of foreclosure or trustee’s sale, nor any successor or assign of either of the foregoing, shall be: (i) liable for any default by Landlord; (ii) bound by or liable for any payment of Rent which may have been made more than five (5) days before the due date of such installment; (iii) subject to any defense or offset which Tenant may have to the payment of Rent or other performance under this Lease arising from any default by Landlord; or (iv) bound by any amendment or modification to this Lease made without the consent of such mortgagee if the consent of such mortgagee or beneficiary thereto is required.
(c) Within three (3) business days following a request by Landlord, Tenant agrees to execute any documents reasonably required to effectuate the foregoing subordination or such other reasonable and customary subordination, non-disturbance, and attornment agreement submitted by Landlord to Tenant, which documents may contain such other terms as any mortgagee or prospective mortgagee may reasonably require, or to make this Lease prior to the lien of any mortgage, deed of trust, or underlying lease, as the case may be.
(d) Tenant agrees to simultaneously give to any party holding a mortgage, deed of trust, or other security agreement encumbering the Property, by registered or certified mail, a copy of any notice of default served upon Landlord, provided Tenant has been notified in writing of the names and addresses of such mortgagee(s) and such parties shall have the same cure rights as Landlord has under this Lease.
(e) Tenant, at any time and from time to time, within seven (7) days after written request from the Landlord, shall execute, acknowledge and deliver to the other party, addressed to the other party and any prospective purchaser, ground or underlying lessor, or mortgagee or beneficiary of any part of the Property, an estoppel certificate in form and substance reasonably designated by the other party. It is intended that any such certificate may be relied upon by the party receiving same and any prospective purchaser, investor, ground or underlying lessor, or mortgagee or deed of trust beneficiary of all or any part of the Property.
17. End of Term; Holding Over.
(a) No later than the Lease Expiration Date, Tenant shall remove its Tenant-Owned Property (except as otherwise provided herein) and will peaceably yield up the Premises in broom clean condition. Notwithstanding the foregoing, Tenant shall not be responsible: (i) to repair the effects of normal wear and tear; (ii) for damage which is Landlord’s responsibility to repair; (iii) for damage by fire, the elements, or casualty (not caused by Tenant or any Tenant Party); and (iv) for damage which is the result of the misconduct or gross negligence of Landlord, its contractors, agents, employees, or invitees.
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(b) If Tenant shall hold over after the Lease Expiration Date, Tenant shall pay Two Hundred percent (200%) of the Rent payable during the final full month of the Term (exclusive of abatements, if any) and Tenant’s occupancy shall otherwise be on the terms and conditions herein specified so far as applicable (but expressly excluding all renewal or extension rights). No holding over by Tenant after the Term shall operate to extend the Term. Any holding over with Landlord’s written consent shall be construed as a tenancy at sufferance or from month to month, at Landlord’s option. Any holding over without Landlord’s written consent shall entitle Landlord to re-enter the Premises as provided in Section 15, and to enforce all other rights and remedies provided by law or this Lease.
18. Security Deposit.
(a) Simultaneously with Tenant’s execution of this Lease, Tenant shall deposit with Landlord the Security Deposit as security for the performance by Tenant of all of Tenant’s obligations, covenants, conditions, and agreements under this Lease. Landlord shall not be required to maintain the Security Deposit in a separate account. If an Event of Default occurs under this Lease by Tenant, Landlord shall have the right, but not the obligation, to use, apply, or retain all or any portion of the Security Deposit for the payment of: (i) Fixed Rent, Additional Rent, or any other sum as to which Tenant is in default; or (ii) the amount Landlord spends or may become obligated to spend, or to compensate Landlord for any losses incurred by reason of Tenant’s default. If any portion of the Security Deposit is so used or applied, then within five (5) days after Landlord gives Tenant written notice, Tenant shall deposit with Landlord cash in an amount sufficient to restore the Security Deposit to the original amount. Tenant’s failure to do so shall constitute an Event of Default under this Lease.
(b) If Landlord transfers the Security Deposit to any purchaser or other transferee of Landlord’s interest in the Property, then Tenant shall look only to such purchaser or transferee for the return of the Security Deposit and Landlord shall be released from all liability to Tenant for the return of the Security Deposit.
19. Signs. Tenant may place its standard signs within the Premises. Landlord shall place Tenant’s name on the Building directory and shall install Tenant’s standard sign on the entrance doors to the Premises.
20. Parking. Landlord shall provide and maintain unreserved, self-park parking, illuminated spaces on the paved parking area adjacent to the Building for the exclusive use of Tenant’s employees and its invitees.
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21. Notices. All notices or other communications required hereunder shall be in writing and shall be deemed duly given: (a) when delivered in person (with receipt therefor); (b) on the next business day after deposit with a recognized overnight delivery service; or (c) on the third (3rd) business day after being sent by certified or registered mail, return receipt requested, postage prepaid, to addresses of Landlord and Tenant set forth in Section 1. Either party may change its address for the giving of notices by notice given in accordance with this Section 21. A party’s refusal to accept delivery of any notice or communication sent by the other party shall not render such notice ineffective. Notwithstanding the foregoing, all bills, statements, invoices, consents, requests, or other communications from Landlord to Tenant with respect to Rent may be sent to Tenant by regular United States mail.
22. Miscellaneous Provisions.
(a) Landlord and Tenant each represent and warrant to the other that neither of them has employed or dealt with any broker, agent, or finder, other than Broker, in connection with this Lease. Tenant and Landlord shall each indemnify and hold harmless the other from and against any claim or claims for any broker’s fee or commission asserted by any broker, agent, or finder employed by Tenant, other than Broker. The provisions of this Section 22(a) shall survive the expiration or other termination of this Lease.
(b) Landlord, its agents, employees, and independent contractors shall have the right to enter the Premises upon not less than twenty-four (24) hours’ notice to (Except in an emergency): (i) inspect the Premises; (ii) supply any service or repair to be provided or performed by Landlord to Tenant; (iii) show the Premises to prospective purchasers, mortgagees, beneficiaries, or tenants; (iv) post notices of non-responsibility; (v) determine whether Tenant is complying with its obligations under this Lease; and (vi) alter, improve, or repair the Premises or any other portion of the Building. Notwithstanding the foregoing, Landlord shall not be required to provide prior notice to Tenant in the event of an emergency. Except to the extent caused by Landlord’s gross negligence or willful misconduct, Tenant waives any claim for damages for any injury or inconvenience to or interference with Tenant’s business, any loss of occupancy or quiet enjoyment of the Premises, any right to abatement of Rent, or any other loss occasioned by Landlord’s exercise of any of its rights under this Section 22(b). To the extent reasonably practicable, any entry shall occur during normal business hours.
(c) The terms, covenants, and conditions contained in this Lease shall bind and inure to the benefit of Landlord and Tenant and, except as otherwise expressly provided herein, their respective personal representatives and successors and assigns; provided, however, that upon the sale, assignment, or transfer by Landlord (or by any subsequent Landlord) of its interest in the Building or Property as owner or lessee, including, without limitation, any transfer upon or in lieu of foreclosure or by operation of law, Landlord (or subsequent Landlord) shall be relieved from all subsequent obligations or liabilities under this Lease, and all obligations subsequent to such sale, assignment, or transfer (but not any obligations or liabilities that have accrued prior to the date of such sale, assignment, or transfer) shall be binding upon the grantee, assignee, or other transferee of such interest. Any such grantee, assignee, or transferee, by accepting such interest, shall be deemed to have assumed such subsequent obligations and liabilities.
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(d) If any provision of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such provision to persons or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each provision of this Lease shall remain in effect and shall be enforceable to the full extent permitted by law.
(e) The terms of this Lease (including, without limitation, the Exhibits and Schedules to this Lease) are intended by the parties as a final expression of their agreement with respect to such terms as are included in this Lease and may not be contradicted by evidence of any prior or contemporaneous agreement, arrangement, understanding, or negotiation (whether oral or written). The parties further intend that this Lease constitutes the complete and exclusive statement of its terms, and no extrinsic evidence whatsoever may be introduced in any judicial proceeding involving this Lease. Neither Landlord nor Landlord’s agents have made any representations or warranties with respect to the Premises, the Building, the Property, or this Lease except as expressly set forth herein. The language in all parts of this Lease shall in all cases be construed as a whole and in accordance with its fair meaning and not construed for or against any party by reason of such party having drafted such language.
(f) Upon Tenant paying the Rent and performing all of Tenant’s obligations under this Lease, Tenant may peacefully and quietly enjoy the Premises during the Term as against all persons or entities claiming by, through, or under Landlord, subject, however, to the provisions of this Lease and to the priority of any mortgages or deeds of trust or ground or underlying leases referred to in Section 16.
(g) All of Tenant’s and Landlord’s covenants and obligations contained in this Lease which by their nature might not be fully performed or capable of performance before the expiration or earlier termination of this Lease shall survive such expiration or earlier termination. No provision of this Lease providing for termination in certain events shall be construed as a limitation or restriction of Landlord’s or Tenant’s rights and remedies at law or in equity available upon a breach by the other party of this Lease.
(h) The Laws of the State of New Jersey shall govern the validity, performance, and enforcement of this Lease. Tenant consents to personal jurisdiction and venue in the state and judicial district in which the Building is located. The courts of the state where the Building is located will have exclusive jurisdiction and Tenant hereby agrees to such exclusive jurisdiction.
(i) This Lease may only be amended, modified, or supplemented by an agreement in writing duly executed by both Landlord and Tenant.
(j) This Lease shall not be recorded in whole or in memorandum form by either party hereto without the prior written consent of the other. At the request of either party, and subject to the reasonable consent of the non-requesting party, Landlord and Tenant may execute a memorandum of lease and record it in the public land records.
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(k) Landlord to allow tenant to use the existing workstations that are currently in the Premises. The furniture shall remain Landlord’s property through the lease term.
(l) Tenant to have access to both the fitness center and auditorium. Tenant must coordinate usage with SFA on-site management.
(m) LANDLORD AND TENANT KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING BROUGHT BY EITHER PARTY AGAINST THE OTHER IN ANY MATTER ARISING OUT OF THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT’S USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF INJURY OR DAMAGE.
(n) DELIVERY OF THE LEASE TO EITHER PARTY SHALL NOT BIND ANY PARTY IN ANY MANNER, AND NO LEASE OR OBLIGATIONS OF LANDLORD OR TENANT SHALL ARISE UNTIL THIS INSTRUMENT IS SIGNED BY BOTH LANDLORD AND TENANT AND DELIVERY IS MADE TO EACH PARTY.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
| LANDLORD | ||
| SFA 50 Millstone Road, LLC | ||
| By: | /s/ Jeff Schneider | |
| Name: | Jeff Schneider | |
| Title: | Managing Principal | |
| TENANT | ||
| Greenland Technologies Corporation | ||
| By: | /s/ Raymond Wang | |
| Name: | Raymond Wang | |
| Title: | CEO | |
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EXHIBIT “A”
FLOOR PLAN
EXHIBIT “B”
RENT SCHEDULE
| Rate (per | ||||||||||||
| rentable | ||||||||||||
| square | Annual | Monthly | ||||||||||
| Period | foot) | Base Rent | Base Rent | |||||||||
| Months 1-12 | $ | 23.50 | $ | 33,840 | $ | 2,820 | ||||||
TENANT TO PAY TENANT ELECTRIC AT A RATE OF $1.75 PSF PER ANNUM ($210 PER MONTH) AS ADDITIONAL RENT.
EXHIBIT “C”
LANDLORD’S WORK
1. Landlord (subject to the terms and provisions of Section 2 below) shall perform improvements to the Premises in accordance with Exhibit A, using Building standard methods, materials and finishes (collectively the “Landlord’s Work”). Landlord’s Work shall not include (a) wiring the Premises for telephone or data lines, (b) Tenant’s internal security or entry access system, and (c) any furniture, office equipment or appliances, even if depicted on any of the plans.
2. Landlord and Tenant agree that Landlord’s obligation to pay for the cost of Landlord’s Work (inclusive of the cost of preparing plans, obtaining permits, any work required by a governmental agency, and other related costs) shall be limited to Section 6 below (the “Maximum Budget Amount”). If Landlord’s Work exceeds the Maximum Budget Amount, Tenant shall pay to Landlord such excess costs, plus any applicable state sales or use tax thereon, within ten (10) days of demand therefor. If Tenant requests any other upgrades to Landlord’s Work, subject to Landlord’s approval, such upgrades shall be at Tenant’s sole cost and expense, including, without limitation, any expenditure incurred by Landlord as a result of governmental requirements due to or arising from said construction work, and Tenant shall pay to Landlord such excess costs, plus any applicable state sales or use tax thereon, within ten (10) days of demand therefor.
3. “Substantial Completion” means Landlord’s Work in the Premises is substantially completed (as reasonably determined by Landlord). Substantial Completion shall have occurred even though minor details of construction, decoration, and mechanical adjustments remain to be completed by Landlord, which Landlord agrees to complete within thirty (30) days thereafter.
4. “Tenant Delay Days” means each day of delay in the performance of Landlord’s Work that occurs (a) because Tenant fails to timely furnish any information or deliver or approve any required documents such as the plans (whether preliminary, interim revisions or final), pricing estimates, construction bids, and the like, (b) because of any change by Tenant to the plans, (c) because Tenant fails to attend any meeting with Landlord, the architect, any design professional, or any contractor, or their respective employees or representatives, as may be required or scheduled hereunder or otherwise necessary in connection with the preparation or completion of any construction documents, such as the plans, or in connection with the performance of Landlord’s Work, (d) because of any specification by Tenant of materials or installations in addition to or other than Landlord’s standard finish-out materials, or (e) because Tenant otherwise delays completion of Landlord Work.
5. This Exhibit shall not be deemed applicable to any additional space added to the Premises at any time or from time to time, whether by any options under this Lease or otherwise, or to any portion of the original Premises or any additions to the Premises in the event of a renewal or extension of the term of this Lease, whether by any options under this Lease or otherwise, unless expressly so provided in this Lease or any amendment or supplement to this Lease.
6. See Below:
SFA to Provide:
| 1. | Building standard materials and finishes. |
| a. | Paint the reception area with Sherwin Williams, “Direct Green” paint color, selected by Tenant. |
| b. | Paint remainder of space building standard white. |
Tenant Responsibility:
| 1. | Any non-building standard upgrades. |
FIFTH ADDENDUM OF LEASE
THIS FIFTH ADDENDUM OF LEASE (this “Amendment”) dated October , 2024, is made by and between SFA 50 Millstone Road, LLC, A New Jersey Limited Liability Company, successor to RREF Windsor-Loan, LLC, having an address at 312 Route 38 West, Suite 100, Moorestown, NJ 08057 (“Landlord”), and Greenland Technologies Corporation, with its principal office at 5301 Nottingham Drive Suite 120, White Marsh, MD 21162 (“Tenant”).
Whereas, Tenant entered into a Lease dated April 1, 2021 for the office space of approximately 1,440 rentable square feet at 50 Millstone Road, Building 400, Suite 130, East Windsor, New Jersey 08512 at a rental rate and upon other terms and conditions more fully set forth in said Lease.
Whereas, the parties wish to amend and extend the Lease in respects herein acknowledged, and of mutual agreements herein contained, the parties agree as follows:
| 1. | The renewal term shall be effective 05/03/2023 to 05/02/2024. The monthly Base Rental Rate shall be as follows: |
| Period of Term | RSF | Base Rent PSF | Total Yearly Base Rent | Total Monthly Base Rent | ||||||||||||
| 11/03/24 – 05/02/25 | 1,440 | $ | 24.25 | $ | 34,920 | $ | 2,910 | |||||||||
| 2. | Additional Rent: In addition to Base Rent, Tenant shall pay, as Additional Rent, (i) Tenant Electric, and (ii) increases in Real Estate Taxes and Operating Expenses over the Base Year. |
| 3. | Landlord address for Notices is hereby changed to reflect SFA 50 Millstone Road, LLC, 312 Route 38 West, Suite 100, Moorestown, NJ 08057. |
This Fifth Addendum to Lease shall and does become a part of the original Lease and shall be in full force and effect. Except as herein expressly modified, all the provisions, covenants and conditions of the aforesaid Lease and previous Addendums shall continue in full force and effect.
IN WITNESS WHEREOF the parties have executed this Fifth Addendum to Lease the day and year first above written.
[SIGNATURES ON FOLLOWING PAGE]
| LANDLORD: | |
| SFA 50 Millstone Road, LLC | |
| A New Jersey limited liability company | |
| By: | |
| TENANT: | |
| Greenland Technologies Corporation | |
| By: | |
Exhibit 10.8
Product purchase contract
| Date of contract signing: June 01, 2024 | Supplier code: 11101288 | Contract No.: CGB / 2017-08-2024 |
| The Buyer (as “Party A”) |
| Longgong (Jiangxi) Machinery Co., Ltd |
| Longgong (Shanghai) Forklift Co., Ltd |
| The Seller (hereinafter referred to as “Party B”) |
| Zhejiang Zhongchai Machinery Co., LTD |
This contract is agreed upon by both parties through friendly negotiation.
| I. | Principles, Methods and Scope of cooperation: The buyer and the seller shall carry out business cooperation in accordance with the principle of “equality and mutual benefit”, and may voluntarily choose to establish it according to the cooperation situation. |
Long-term strategic partnership, the buyers and sellers of the common commitment: keep promises, abide by the contract, clean business.
Party B’s products shall be supplied to Party A by means of direct supply. The products required by Party A in the production process may be within the coverage range of Party B’s products and have a cost-effective advantage.
Priority procurement; Party B undertakes to ensure Party A’s production demand and give Party A the most favorable price policy in the same region or industry.
| II. | Party B shall supply the products to Party A according to the name, drawing number or specification listed in the following table (see the attached table of the Contract for details). The random spare parts, tools, maintenance parts and brochures of Party B’s products shall be provided simultaneously with the products according to the contents of the technical agreement signed by both parties. |
| order number |
product code |
product
name |
Figure specification |
measurement unit |
quantity | Untaxed |
Product Weight (KG) |
Brand |
| 1 | see attachment | |||||||
| Total amount (in words): | ¥ yuan | |||||||
| Main technical parameters of the product: according to the technical agreement signed by both parties (No.: SHCCO29-2024.T, SHCC404-2024.T) and the technical drawings of Party A. | ||||||||
| III. | Product quality standards, technology and service requirements: The quality of the products provided by Party B shall conform to the national, industrial and enterprise standards, and shall comply with the technical agreement signed (No.: SHCCO29-2024.T, SHCC404-2024.T by both parties ) And Party A’s technical drawings are required for production and manufacturing; Party B shall provide products and services and meet the requirements of the quality assurance agreement and after-sales service agreement signed by both parties. The supplier integrity Agreement, technical Agreement, quality assurance Agreement, After-sales Service Agreement, Supplier Product Quality Commitment Agreement, Supplier Occupational Health, Safety and Environment Commitment Letter and Party A’s order signed by Party A and Party B are an integral part of this Contract and have the same legal effect as this Contract. In case of any change of the agreement and drawings involved in this clause, the latest valid date agreement and drawings signed by both parties shall prevail. |
| IV. | Requirements for Occupational Health and Safety and Environment: In providing products and processes, Party B shall actively take effective measures to reduce the risks of occupational health and safety and protect the public environment. Party B’s products shall comply with the national and industrial laws, regulations and normative documents on safety and environmental protection, as well as industry and enterprise standards. |
The provisions of. Party B undertakes and guarantees that it has complete ownership of the products and there is no right burden, the prior rights of a third party, and does not infringe the rights or interests of other third parties.
| V. | Product packaging requirements, cost burden and treatment of packaging materials: The packaging of Party B’s products shall be implemented in accordance with the provisions of national and industrial standards or technical agreements, and party A’s registered trademarks and graphics shall not be used without authorization, and the product packaging of Party A’s accessories company shall be implemented in accordance with the packaging standards required by Party A. The packaging materials and packaging expenses shall be borne by Party B, and the packaging materials shall not be recycled. Party B shall take necessary protection measures against moisture, rust, corrosion and shock to protect the products. |
The certified products can withstand multiple transportation and loading and unloading, and party B shall bear the responsibility for the damage, loss risk or refund of the goods caused by any factor in the transportation.
| VI. | Delivery time and specific quantity: The delivery time and quantity of Party B’s products shall be based on the purchase order of Party A (including, but not limited to, through the Longgong Works SRM system and electronics Email, etc.), the requirements shall prevail. Upon receipt of the purchase order from Party A, Party B shall sign and confirm and reply to Party A within 3 working days. The parties agree that the delivery period (ordering period) of Party B’s products shall be 10 working days, and Party A shall assess the delivery of Party B’s orders and participate. Punishment shall be imposed according to item 1 of Article 13 hereof. |
| VII. | Delivery place, method and cost burden: Party B shall be responsible for delivering the goods to Party A’s warehouse or the place designated by Party A as required by party A’s order, and the transportation expenses (including goods insurance premium) shall be borne by Party B. |
| VIII. | Delivery of goods: Whatever Party B supplies to Party A, it shall issue the delivery list or the accompanying order of the delivery order, indicate the purchase order number and batch number (for return), and notify Party A by Longgong SRM system or email before delivery. Party A shall check the quantity and sign for the receipt with the delivery list, otherwise, Party A shall have the right to reject or accept the quantity according to the actual quantity. The acceptance quantity shall be subject to the quantity determined by Party A or the third-party inspection agency entrusted by Party A, and Party B shall bear the responsibility for the lack of goods. |
| IX. | Definition of ownership of the goods: Party B’s goods shall be delivered to Party A in Party A’s warehouse or the delivery place designated by Party A. Immediately, the ownership of the goods shall be transferred to Party A after the receipt by Party A. The previous ownership of the goods shall be owned by Party B, and Party B shall be responsible for the damage and loss before the transfer of the ownership of the goods. |
| X. | Acceptance of goods: The acceptance methods of Party B’s products shall be routine inspection, sampling inspection, comprehensive inspection, weight counting, actual weighing, etc., and the acceptance standards shall be determined in accordance with the national and industrial standards and the technical agreements signed by both parties. At the same time, Party B shall provide the product quality guarantee certificate or the product qualification certificate, and Party A shall complete the acceptance of the specified inspection contents of party B’s products within 5 days after confirming the receipt of the goods. Based on the professionalism of Party B’s products, the acceptance results of Party A are independent of the quality of Party B’s products, and Party A’s acceptance of the products is not exempt from any obligation or responsibility hereunder of Party B. |
In case of delayed delivery due to unqualified products provided by Party B, Party B shall pay a penalty of no less than 0.05% of the amount of the delayed goods for each day delayed. If Party A suffers other losses, Party B shall compensate Party A for other losses; if Party B delays delivering relevant materials, it shall bear the same liability for breach of contract as the delayed delivery.
Party b products commissioned by party a or party a third party inspection determine unqualified, party a has the right to return the products to party b, and by party b or party a agent return (return list with the goods, and to dragon SRM system or email check, party b after the list check and seal, back to party a), party b shall unconditionally accept the return, and bear the third party inspection costs, product disassembly labor and freight, etc.
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The quality guarantee period of the products provided by Party B shall be 1-2 months from the date of sales of party A’s complete products or party A’s complete machine works _ 2000 hours, subject to first come: if the warranty period of Party B’s products is lower than that stipulated in the national and industrial standards, it shall comply with the national and industrial standards. During the warranty period, for the quality problems not caused by Party A’s unreasonable use, Party B shall be responsible for the “three guarantees” of the products according to the national product quality regulations. If the quality problem of the products cannot be solved by Party B, Party A shall have the right to return the batch of products. The return method shall be implemented according to the above unqualified acceptance procedures, and Party B shall unconditionally return the purchase cost of the batch of products to Party A.
| XI. | Settlement method: After the goods reach acceptance, Party A shall confirm the actual quantity in the Longgong SRM system or notify in writing to Party B, and Party B shall issue a VAT invoice with a tax rate of 13% according to the product quantity and untaxed price confirmed by Party A. The invoice shall be issued in batches according to the timing of arrival and sent within 15 days from the date of invoice issuing (Send) to Party A. Party B agrees to pay Party A the base price of RMB 100,000. Beyond the amount of the base shop, Party A shall meet the payment issued by Party B. |
Party A shall pay the corresponding VAT invoice to Party B for more than 6-0 days after the local tax department of Party A.
Payment (the 15th and 25th day of each month are the registration date, and the invoice received after the 26th day shall be transferred to the 15th day of the next month), otherwise, Party A has the right to refuse to pay the corresponding payment and shall not affect Party B’s continuation to perform the corresponding obligations hereunder. Party A shall pay for the goods by bill of acceptance, and the amount of payment shall be subject to Party A’s financial accounts.
If party b during the cooperation (including but not limited to during the execution of this contract), issued to party a VAT invoice is false, tax risk, resulting in party a tax loss or tax, public security departments to administrative punishment, party a has the right to ask party b to compensate for losses, fines and reputation, also has the right to the same amount of false invoice to party b. Party A shall have the right to directly deduct the corresponding compensation, fine or liquidated damages from the payment due to Party B. If the remaining payment of Party B is insufficient to deduct, Party B shall, within three days after receiving the payment notice from Party A, pay the difference to Party A in full by telegraphic transfer.
| XII. | Other agreed matters: |
| 1. | In this contract, the products of Party B are mainly made of/as
the main raw material, and the benchmark price of raw materials at the time of signing this contract is ¥/yuan/ton. When signing
this contract or related agreements, both parties agree to use the monthly or quarterly average price of raw materials published on the
Baichuan Information website as the reference basis and confirm the monthly or quarterly price of the product. During the validity period of the contract, if there is a significant fluctuation in raw material prices, both parties may determine the settlement price of N (monthly or quarterly) based on the agreed product price linkage formula:/and the average price of N -1 (monthly or quarterly) as the cycle. However, the party proposing to adjust the determined price shall provide relevant basis and application. Both parties may also agree that when the benchmark price of raw materials fluctuates beyond the range of soil/(yuan/ton or%), the product settlement price during the confirmation period shall be determined in accordance with the product linkage interval price adjustment table formulated at the time of signing this contract. |
| 2. | Party B shall strictly comply with the requirements of Party A’s Supplier 4M Change Management System, strengthen the monitoring and management of product process changes, and avoid or reduce product quality and delivery problems caused by changes in production related characteristics in the product process. At the same time, Party B shall formulate effective control methods for internal 4M process change. When the production process changes, it shall take control and timely deliver the change information to Party A. If not, Party B shall bear the product quality consequences caused thereby and all losses caused to Party A. |
| 3. | Party B shall follow the principle of good faith and promise to give Party A the best price of the products in the same industry or other customers and the market on the premise of ensuring the same quality of the products. Party A and Party B must check accounts once a quarter to ensure the current accounts of both parties. In case of any difference or dispute between the two parties, Party B shall unconditionally provide the current accounts to cooperate with Party A for verification, and the verification result shall be subject to Party A’s account. |
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| 4. | In order to protect the interests of both parties, Party B shall make a traceable permanent identification and product serial number on the product body. If required by Party A, Party B’s products shall paste the material QR code label on the product body or packaging during the delivery, and Party B shall unconditionally accept and meet the technical requirements of Party A’s. |
| 5. | When the delivery vehicle arranged by Party B enters the unloading designated area by Party A, it shall abide by party A’s relevant safety management system and the letter of occupational health and safety and environmental commitment signed by Party B, and bear the responsibilities and economic losses caused by the violation of Party A’s safety system and relevant regulations. |
| 6. | Party B shall respond quickly to Party A’s technical changes and inform Party A in writing of the inventory quantity of products before the technical changes upon receipt of the notice of technical changes. If party B fails to provide the products in time, Party A shall have the right to reject the products before the technical changes. For the sluggish products caused by party A’s technical change and quality improvement, Party A shall only be responsible for digesting the quantity of the next month by the planned quantity of the current month after deducting the actual delivery quantity of the current month. At the same time, Party B shall maintain appropriate product reserve and production capacity for the suspended products, so as to meet party A’s assembly or accessories requirements for at least 5 years at any time. |
| 7. | Party B shall make up the goods in time in various ways agreed by both parties, and finish the work within one month after receiving the return of the goods from Party A. If party B fails to handle the matter in time, Party A shall have the right to reject the invoice issued by Party B from the month of the return until Party B has processed the returned products. If Party B does not cooperate with Party A’s request for the return of goods, Party A shall have the right to invoice the payment receivable by Party B according to the actual quantity and amount of the returned goods. If party B’s failure to timely return the goods affects Party A’s production and sales, Party B shall bear the compensation liability equal to twice the price of the batch of products. |
| 8. | If Party B’s goods fail to meet the technical requirements after acceptance by Party A, but can meet the quality requirements through rework and repair, Party B agrees to settle the goods with Party A at a 10% discount of the contract price. If the actual cost of rework and repair by Party A exceeds 10% of the contract price, Party A shall settle with Party B according to the actual cost incurred. |
| 9. | While ensuring the supply of party A’s main engine, Party B shall guarantee the supply and quality of parts of Fujian Longyan Longgong Machinery Parts Co., Ltd. and other sales departments of Dragon parts (equivalent to the accessories). Party B shall unconditionally obey Fujian Longyan Longgong Machinery Parts Co., Ltd. and other unified management of accessories market sales, and strictly follow the “Longgong” trademark license agreement signed between Party A and Party B, shall not shoddy or use the “Longgong” trademark or logo to any third party, otherwise, Party A has the right to immediately terminate the contract and cancel the supplier qualification, and Party A has the right to demand Party B to compensate all losses caused to Party A due to infringement. |
Party B’s products shall be delivered according to the arrival place required by Fujian Longyan Longgong Machinery Parts Co., Ltd. and other Longgong parts sales department. However, for the products directly delivered to Longgong sales channels (including but not limited to longgong agents at all levels, parts sellers, etc.) as agreed, both parties shall jointly maintain the market benefits However, if Party B conducts direct business transactions with Longgong agents and Longgong parts sellers, Party B shall pay the market management fee of 5% of the total direct transaction amount to Party A and settle the settlement regularly.
When party a and b both contract termination or stop cooperation, party b has party a authorized “longgong” trademark or logo license is terminated, party b shall not continue to use or sales to any third party of “longgong” trademark or logo products, otherwise, party a can according to the relevant laws and pursue for party b infringement all losses caused to party a.
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| 10. | when the two sides suspend or terminate-cooperation, party b agrees to party a can reserve enough amount of payment as product warranty, such as party a’s machine in the three packets of party b products without quality defects or quality defects caused by other infringement, compensation, party a agreed to 1 months from the date of the expiration of the warranty or the balance according to no interest paid to party b. |
| 11. | if party a to party b’s product brand or manufacturer, party b to provide products must be in accordance with the contract details schedule or technical agreement in the brand and original imported products, party a found that party b products for the brand or original imported products, party a has the right to terminate the contract and according to the contract has purchase amount 10 times fine to party b, and shall be investigated for other responsibilities. |
If Party B’s product quality affects Party A’s production or batch return, Party A shall have the provisions of the agreement, and notify Party B of the quality claim notice and pay the corresponding fee within 3 working days to Party B. For the loss caused to the end user of Party B’s products, Party B shall also bear all expenses of the end users (including but not limited to maintenance, delayed work, etc.).
| 12. | party a or its entrusted third party returned to party b assembly class 3 packets of products, the quantity, party b shall according to the agreement of the agreement, party b product 3 packets of claims amount confirmed by party a in writing to party b, but party b not confirmed claims within 5 working days, party a has the right to directly deduct the corresponding amount in the payment for goods. After-sales claims of Party B’s products shall not be replaced by physical accessories or other gifts, but shall be settled by transfer or offset against the payment payable. The three guarantees of claims paid by Party B must be paid to Party A’s company account and shall not be remitted to personal account or cash to individuals; otherwise, Party A has the right to impose a fine of 5 times of the claim amount on Party B and directly deduct the corresponding amount from the current account of both parties. |
| 13. | During the performance period of this Contract, if party B causes but is not limited to advance payment, mold payment, service fee, etc.), Party B shall unconditionally return it to Party A within 10 days from the date of termination or termination of this Contract. |
| 14. | Party A shall supervise Party B on the production site and product quality management irregularly during the cooperation period. If the inspection results do not meet Party A’s requirements for product quality management, Party A shall have the right to cancel Party B’s supply qualification or terminate this Contract, and all losses caused thereby to Party A shall be borne by Party B. |
| Xiii. | Liability for breach of contract: |
| 1. | Party B shall deliver the goods in strict accordance with the confirmed purchase order (including but not limited to, SRM, E-mail, etc.), and Party A has the right to reject the products beyond the contract (order) (i. e. no contract, no price), and Party B shall bear the freight and other losses caused. If Party A adjusts the production plan, Party A shall notify Party B in advance of the Dragon Works SRM system or other forms, and Party B shall deliver the goods according to the adjustment plan. |
If Party B fails to deliver the goods according to the time confirmed by both parties, the overdue delivery is not more than 1 week, all products in the batch order shall be reduced by the contract price, and Party A shall have the right to delay the payment of the current period; if the delay exceeds 1 week, Party A shall have the right to unilaterally cancel the batch purchase or terminate the Contract. In any case of the above circumstances, if party B’s delay in delivery causes production losses to Party A, Party B shall bear the corresponding liability for breach of contract.
| 2. | If party B is unable to deliver the goods due to Party B, Party B shall notify Party A within 5 working days upon receipt of the purchase order from Party A and bear the liquidated damages of 5% of the payment for the goods that cannot be supplied. If the product specifications, model and quality provided by Party B do not conform to the provisions of this Contract and technical agreement, and Party B refuses to accept the return of goods, Party A shall have the right to reject party B’s invoice, and party B shall be unable to supply, and Party A shall have the right to deal with the liability for breach of contract if unable to supply . |
| 3. | If Party B delivers the goods in advance, it shall bear the storage expenses during the early delivery period, and Party A shall calculate the payment period according to the arrival time agreed in the order. |
| 4. | If the product quality of Party B fails to meet the requirements of this contract and the technical agreement signed by both parties after inspection for 3 times, or if Party B fails to deliver the goods within the time required by the order confirmed by both parties for 3 times, Party A has the right to terminate this contract, and Party B shall bear corresponding breach of contract liability. |
| 5. | During the period of cooperation between Party A and Party B, both parties shall abide by the principle of confidentiality, and prohibit Party B from selling or providing Party A’s special products, procurement contracts, Party A’s product drawings and technical documents to other users or industry markets. If so, Party A shall have the right to require Party B to immediately stop selling or providing, and at the same time, Party A shall have the right to terminate the cooperation between the two parties and impose economic penalties on Party B according to the degree of infringement . |
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| XIV. | Confidentiality Liability and Intellectual Property Rights: In order to guarantee the interests of both parties, both parties hereby confirm the confidentiality of the confidential information and materials exchanged by both parties and the cooperation relationship, and Party B shall only have the right to use Party A’s confidential information within the scope specified by Party A. Party b shall not disclose any content of party a’s confidential information to any third party, all contains party A’s confidential information notice, data, memorandum, business contract, relevant agreements, technical drawings or other tangible table, description, including but not limited to oral or written information, electronic, stored in the computer disk or otherwise preserved data, shall be owned by party a. At the request of Party A, Party B shall immediately return the tangible expressions and photocopies of the Confidential Information owned by it or its staff to Party A, delete the electronic documents of the Confidential Information immediately, and shall not keep the sub-copies in any form. Party A is the owner of the Confidential Information, and Party B and its staff shall not consider it to own or acquire any ownership or permission to use the Confidential Information for their performance of this Contract or other reasons. Party B shall not use party A’s drawings and agreements and other technical materials, or the products jointly designed by both parties and produced by Party B, or the supporting special products designed and produced as entrusted by Party A. |
If sold externally, otherwise, Party A shall have the right to immediately terminate the contract and cancel its supplier qualification, and at the same time, Party A shall have the right to demand Party B to compensate for all losses to Party A caused due to the infringement.
Party B’s products provided by Party A shall guarantee that there are no any defects in intellectual property rights, and if any, it shall bear all losses caused to Party A.
| XV. | Matters not covered in this Contract and relevant agreements may be negotiated by both parties, but a supplementary contract or agreement must be signed. The supplementary contract or agreement is an integral part of this Contract and shall have the same legal effect as this Contract. |
| XVI. | Settlement of Contract Disputes: Any dispute arising from this Contract may be settled by both parties through friendly negotiation. If the negotiation fails, either party may file a lawsuit with the people’s court with jurisdiction in the place where the performance of this contract is conducted. The contract is performed as follows: |
| first party | Place of contract with Party B |
| Longgong (Jiangxi) Machinery Co., Ltd | Gao’an, Jiangxi Province |
| Longgong (Shanghai) Forklift Co., Ltd | Songjiang District, Shanghai |
| VII. | Term of Performance: The term of this Contract is from June 1,2024 to May 31,2025. If either party proposes to terminate the contract during the contract period, it shall, at least 90 days in advance and notify the other party in writing to settle the settlement through negotiation, otherwise, it shall bear the economic losses caused to the other party. The unit price in the attached schedule to this Contract shall apply to the products of Party B before June 1,2024. The original contract of party A and Party B shall terminate automatically from the date of signing. In case of any objection, the content stipulated in this contract shall prevail. |
| VIII. | Notices or other communications sent in accordance with the requirements of this Contract shall be written in Chinese and delivered by registered mail or express mail. The fax and legal addresses of both parties shall be subject to the signature. If the place of service needs to be changed, one party shall notify the other party in writing on the next day after the change, otherwise the other party of the document served at the confirmed place as above, whether received or not, shall be deemed to be served. |
| XIX. | This contract is made in duplicate, with each party holding one copy and each copy having the same legal effect. This contract shall be affixed with the company seal or the contract seal, |
It shall come into force only after the signature of the legal representatives or authorized representatives of both parties.
The terms and contents agreed herein shall be subject to the printed form, and any alteration by hand or other means shall be regarded as invalid by both parties. If either party changes the agent, it shall notify the other party in writing in advance.
| Party A’s business agent: | Chen Fuming, | Tel: 021-37602000-8209 | ||
| Party B’s business operator: | Zhang Zhengchao, | Tel: 1138195688022 |
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| The full name of party a | Party A’s address | zip code | Unified social credit code |
bank of deposit | account number |
| (Jiangxi) machine Limited company | No.1, Longgong Avenue, Gao’an City | 330800 | 91360900754207 69XE |
Industrial and Commercial Bank of China, Gao’an City Sub-branch | 15082501190000 19981 |
| Longgong (Shanghai) fork Car Co., LTD | Area B, Building 5, No.66, Xinrun Road, Xinqiao Town, Songjiang District, Shanghai | 201612 | 91310000785154 500D |
CCB, Shanghai Xinqiao Sub-branch |
31001937713059 003339 |
| Party A’s legal representative | Party A authorizes the agent | ||||
| The full name of party b | Address of Party B | zip code | Unified
social credit code |
bank of deposit | account number |
| Zhejiang Zhongchai Machinery Co., LTD | No.1, Meixi Road, Meizhu Town, Xinchang County, Zhejiang Province | 312500 | 913306007818152 018 |
Agricultural Bank of China, Xinchang County Sub-branch |
19525201040098 980 |
| Party B’s legal representative | Party B’s authorized agent | ||||
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Contract Attachment: Product details
| order number |
product code |
product name | Figure
number or specification |
measurement unit |
Untaxed unit price (yuan) |
Product Weight (KG) |
Brand / Remarks |
| 1 | 60200000789 | Drive bridge assembly | L0025BVI.02.02~ assembly | Pcs | 5088.5 | 250 | HDQX25AVI |
| 2 | 60200000802 | Drive bridge assembly | L0015BVI.02.02~ assembly | Pcs | 5000 | 220 | HDQX15AIII |
| 3 | 60200010037 | transmission assembly | CPD30EFHL.02.03~ assembly | Pcs | 2460.18 | 110 | HDCS35L |
| 4 | 60100012433 | transmission assembly | CPD30N2FL.02‘I: 01 to the assembly | Pcs | 2460.18 | 110 | HDCS35LII |
| 5 | 60200010453 | transmission assembly | CPD30N2FL.02.02~ assembly | Pcs | 2530.97 | 110 | HDCS35LIII |
| 6 | 60200010449 | transmission assembly | BYQXD30-C to the assembly | Pcs | 4931 | 185 | YQXD30-C |
| 7 | 60100012701 | Transmission assembly (electric control / large torque converter) | CPCD100LQ28.02.02~ assembly | Pcs | 10359.36 | 305 | YQXD100III-Hl |
| 8 | 60100012859 | transmission assembly | CPCD35NR22Y2.02.02~ assembly | Pes | 11061.95 | 230 | 2WY35-1 |
| 9 | 60200000285 | transmission assembly | L0030DIII.02.03 | Pes | 2775.5 | 160 | JDS30II-1 |
| 10 | 30002020330 | transmission assembly | 30T-0211000 to the assembly | cover | 4310.35 | 180 | YQX30A |
| 11 | 60200009183 | transmission assembly | L0030BSL.02.04~ assembly | Pcs | 2185.84 | 118 | HDCS35A |
| 12 | 30002020325 | transmission assembly | L0030BG.02.01~ assembly | Pcs | 2465.34 | 130 | HDCS25B |
| 13 | 30002020305 | transmission assembly | L0016BJ.02.04~ assembly | Pcs | 1681.42 | 75 | DCS15H4 |
| 14 | 60200008394 | transmission assembly | L0050BVI.02.03~ assembly | Pcs | 4442.48 | 170 | HDCS50 |
| 15 | 30002020308 | transmission assembly | L0020BJ.02.01~ assembly | Pcs | 1746.26 | 100 | DCS25H3 |
| 16 | 60200009264 | transmission assembly | LG0025BSL.02.01~ assembly | Pcs | 2920.354 | 118 | HDCS35AIⅡ |
| 17 | 60200000367 | transmission assembly | L0050DTGAIII.02.01. 01~ the assembly | Pcs | 8946.9 | 300 | YQX100-1 |
| 18 | 60200000390 | transmission assembly | L0050DTIV.02.02~ assembly | Pcs | 12079.65 | 450 | YQXD45-1 |
| 19 | 60200000309 | transmission assembly | L0120DT.02.03. 01~ the assembly | Pcs | 18985.52 | 350 | YQXD120K |
| 20 | 60200000459 | transmission assembly | L0120DTGB.02.02. 01~ the assembly | Pcs | 18942.16 | 350 | YQXD120CA |
| 21 | 60200000369 | transmission assembly | L0050DTGAIII.02.01. 02~ to the assembly | Pcs | 9513.28 | 300 | YQXD100-1 |
| 22 | 30002020300 | transmission assembly | 20B-0202000 to the assembly | Pcs | 1858.41 | 100 | DCS25H |
| 23 | 30002020335 | transmission assembly | L0030DTIH.02.01~ assembly | Pcs | 4601.77 | 180 | YQXD30 |
| 24 | 30002020334 | transmission assembly | L0030DTIG.02.01~ assembly | Pes | 4362.83 | 180 | YQX30 |
| 25 | 30002020366 | transmission assembly | L0075DTG.02.03.05 | Pcs | 9734.51 | 300 | YQXD100A-1 |
| 26 | 60200009504 | gear-box | L0135DT5.02.03.01~ assembly | Pcs | 23557.4 | 340 | YQXD135CA-1 |
| 27 | 30002020318 | transmission assembly | L0100DT.02.03. 03~ As for the assembly | Pcs | 9856.04 | 300 | YQX100 |
| 28 | 30002020351 | transmission assembly | L0045DXC.02.03. 01~ the assembly | Pcs | 4646.02 | 190 | JDS45 |
| 29 | 30002020379 | transmission assembly | L0040DTDC.02.02~ assembly | Pcs | 5021.76 | 180 | YQX37A |
| 30 | 30002020381 | transmission assembly | L0040DXB.02.02~ assembly | Pcs | 3012.26 | 160 | JDS37II-3 |
8
| 31 | 60100011405 | transmission assembly | CPYD30LHY01.02.01~ assembly | Pcs | 6540.03 | 210 | YDPA30E1 |
| 32 | 60200000370 | transmission assembly | L0015DTIH.02:01~ assembly | Pcs | 4646.02 | 160 | YQXD18 |
| 33 | 60200000372 | transmission assembly | L0015D.02.03. 02~ to the assembly | Pcs | 2911.67 | 135 | JDS18II-3 |
| 34 | 60200000383 | transmission assembly | L0030DIE.02.01. 02~ to the assembly | Pcs | 3142.8 | 160 | JDS30IIA-3 |
| 35 | 60200000455 | transmission assembly | L0050DTHBIV.02.01~ assembly | Pcs | 13442.48 | 460 | YQXD45IIS |
| 36 | 60200000603 | transmission assembly | L0050DTHBI.02.01. 01~ the assembly | Pcs | 10504.42 | 315 | YQXD100S-1 |
| 37 | 60200000699 | transmission assembly | YQXD37A~ Assembly | Pcs | 5568.44 | 180 | YQXD37A |
| 38 | 60200000764 | transmission assembly | L0100DTBIII.02.03. 01~ the assembly | Pcs | 10415.88 | 300 | YQXD100-4 |
| 39 | 60200000830 | transmission assembly | L0050DTSDIII.02.01. 01~ the assembly | Pcs | 10606.87 | 300 | YQXD100K-2 |
| 40 | 60200000907 | transmission assembly | 35 DZ-0211000~ assembly | Pcs | 2775.5 | 160 | JDS30IIS-1 |
| 41 | 60200008302 | transmission assembly | L0050DTGIV.02.01~ assembly | Pcs | 13082.67 | 450 | YQX45-1 |
| 42 | 60700010198 | transmission assembly | 5S35I to the assembly | Pcs | 4839.14 | 190 | 5S35II-1 |
| 43 | 30002020347 | Transmission Assembly (YQXD18A) | L0015DT.02.03 | Pcs | 4646.02 | 160 | YQXD18A |
| 44 | 30002020339 | Transmission Assembly (YQXD30A) | L0030DTXB.02.01 | Pcs | 4601.77 | 180 | YQXD30A |
| 45 | 30002020368 | transmission assembly | L0060DT.02.03.04~(YQXD100H4) | Pcs | 10294.1 | 300 | YQXD100 |
| 46 | 60200000393 | transmission assembly | L0100DTKDIII.02.03. 01~ the assembly | Pcs | 10312.49 | 300 | YQXD100P-1 |
| 47 | 60200008643 | transmission assembly | L0100DTII.02.02. 01~ the assembly | Pcs | 10775.07 | 300 | YQX100III-H |
| 48 | 30002020365 | transmission assembly | L0075DTG.02.03.01 | Pcs | 10259.92 | 300 | YQX100A-1 |
| 49 | 60200000625 | transmission assembly | L0050DRCIV.02,01.01~ assembly | Pcs | 5523.17 | 190 | JDS45II |
| 50 | 60200000382 | transmission assembly | L0030DDAIII.02.02~ assembly | Pcs | 3125.28 | 160 | JDS30IIB1-3 |
| 51 | 60100002556 | transmission assembly | L0025GLTHGIII.02.02~ assembly | Pcs | 7448.84 | 220 | SDT30 |
| 52 | 60200009005 | Transmission (3t / hydraulic / speed sensor) | YQXD30A-5 to the assembly | Pcs | 4882.54 | 180 | YQXD30A-5 |
| 53 | 60200009519 | Transmission assembly (with bracket) | L0050D5.02A.01.01~ assembly | Pcs | 4703.13 | 190 | JDS45V |
| 54 | 60100012168 | transmission assembly | L0030D5.02.04~ assembly | Pcs | 2775.5 | 160 | JDS30ⅡS3-1 |
| 55 | 60200010321 | Steering bridge assembly | CPCD35NR20Y4.03.01.01~ assembly | Pcs | 13155.12 | 360 | QZL35 |
| 56 | 60200010328 | Drive bridge assembly | CPCD35NR20Y4.02.01.01~ assembly | Pcs | 14835.15 | 360 | QL35 |
| 57 | 60200010324 | transmission assembly | CPCD35NR20Y4.02.02.01~ assembly | Pes | 12900.69 | 195 | FSDT35I-2 |
| 58 | 60200010325 | Transmission box assembly | CPCD35NR20Y4.02.03~ assembly | Pcs | 2913.57 | 30 | FSDT35II |
| 59 | 60200010308 | transmission assembly | CPD30EHL.02.03~ assembly | Pcs | 2504.42 | 110 | HDCS35DIII |
| 60 | 60200010366 | transmission assembly | CPCD50LQ30.02.01~ assembly | Pes | 12566.37 | 450 | YQXD45-3 (12) |
| 61 | 60100012432 | transmission assembly | CPCD50LX31.02.01~ assembly | Pcs | 13204.85 | 450 | YQXD45-8 (12) |
| 62 | 60800008463 | Transmission assembly (fluid control / large torque converter) | CPCD1005Q34.02.03.01~ Stent | Pcs | 9500 | 305 | YQX100III-HI |
9
| 63 | 60200010802 | Transmission assembly (waterproof connector) | CPCD30ER15.02.01~ assembly | Pcs | 4727.91 | 180 | YQXD30A-F |
| 64 | 68000000162 | gasket ring | YQX100.020 | Pcs | 20.35 | ||
| 65 | 68000000161 | Oil supply pump liner | Y30H-05002 | Pcs | 2.65 | ||
| 66 | 60900016560 | Right brake assembly (HDQX30 | L0025BIII.02.02 Parts of the drive axle assembly) ~ CPCD20R^ - | Pcs | 390.27 | ||
| 67 | 60900016559 | Left-hand brake assembly (HDQX30 | L0025BII.02.02? Drive axle assembly fittings) ~CPCD20L~ - | Pcs | 390.27 | ||
| 68 | 60900006591 | External coarse filter case (30T-0211000) |
Y30H-01101A~ transmission assembly accessories | Pcs | 35.4 | ||
| 69 | 60900016779 | 24 (30T-0211000) | GB893.1-86^ Transmission assembly accessories | Pcs | 0.88 | ||
| 70 | 68051011609 | thrust collar (B) | YDS30.012 | Pcs | 7.08 | ||
| 71 | 60900016608 | 0-ring 40 * 3.5 (YQX 30) | GB1235-76 ^ -Transmission accessories | Pcs | 0.88 | ||
| 72 | 68051011598 | grease seal | Y30H-03007 | Pcs | 17.69 | ||
| 73 | 60100002186 | Spline sleeve (LG0016B.02.04) | DCS 15-00015 Transmission Assembly Parts | Pcs | 48.67 | ||
| 74 | 60100002174 | Output gear (30T-0211000) | Y30H-03002~ transmission assembly accessories | Pcs | 64.6 | ||
| 75 | 52198021001 | Bearing 6207 | GB / T276~ assembly | Pcs | 13.27 | ||
| 76 | 60900007178 | Partition piece (YQX 30 transmission accessories) | YQX30-1012A | Pcs | 10.61 | ||
| 77 | 60900007210 | Plug-up (transmission assembly LG0030DTIH.02.01) | Y30H-02202 | Pcs | 1.06 | ||
| 78 | 60900007209 | Elastic gear 40 (transmission assembly LG0030DTIH.02.01) | GB894.1-86 | Pcs | 1.06 | ||
| 79 | 60900001523 | snap ring | Y30H-02011 | Pcs | 5.3 | ||
| 80 | 60900007213 | Control valve assembly (transmission assembly LG0030DTIH.02.01) | Y30H-07000 | Pcs | 336.28 | ||
| 81 | 60900007211 | Needle roller bearing K354220 (transmission assembly LG0030DTIH.02.01) | JB/T7918-97 | Pcs | 7.07 | ||
| 82 | 60900007214 | Push-off ring B (transmission assembly LG0030DTIH.02.01 Accessories) | Y30H-02006 | Pcs | 6.19 | ||
| 83 | 60912010093 | Reverse gear gear (YQX 30 transmission accessories) | YDS30.008 | Pcs | 57.52 | ||
| 84 | 60304000665 | Microdynamic valve liner | YDS30.047 | Pcs | 1.76 | ||
| 85 | 68051011606 | Forward gear gear (YQX 30 transmission accessories) | YDS30.007 | Pcs | 57.52 | ||
| 86 | 60100002181 | Oil seal (30T-0211000 transmission assembly accessories) | GB9877.1-88/B50*68*8 | Pcs | 17.69 | ||
| 87 | 60900003956 | Input board assembly (YQx 30 Isuzu transmission accessories) | Y30H-06200-1 | Pcs | 61.94 | ||
| 88 | 60900001522 | spring seat | Y30H-02004 | Pcs | 3.53 | ||
| 89 | 60900005482 | Parking brake assembly (medium diesel fittings) | YQX100-08200 | Pcs | 265.48 |
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| 90 | 60900006967 | Rear cover (China diesel transmission assembly LG0100DTKD Ⅲ. 02.03.01 Accessories) | YQX100-06003 | Pcs | 88.49 | ||
| 91 | 60900004281 | Oil filter pad (YQX100 transmission assembly accessories) | YQX100-01003 | Pcs | 2.65 | ||
| 92 | 60900004302 | Seal ring D (YQX100 transmission assembly accessories) | YQX100-06002 | Pcs | 5.3 | ||
| 93 | 60980005661 | parting slip | YDS30.014 | Pcs | 10.61 | ||
| 94 | 60900007255 | gasket ring C | YQX100-02017 | Pcs | 6.19 | ||
| 95 | 60900004280 | Output shaft gasket (YQX100 transmission assembly accessory) | YQX100-04004 | Pcs | 3.09 | ||
| 96 | 60900004301 | Oil seal (YQX100 transmission assembly accessories) | YQX100-06009 | Pcs | 115.04 | ||
| 97 | 60900004303 | Torque converter housing ket (r9X100 reference assembly accessories) | YQX100-03010 | Pes | 8.84 | ||
| 98 | 60900004279 | Brake axle pad (YQX100 transmission assembly accessories) | YQX100-08005 | Pcs | 2.65 | ||
| 99 | 60912010046 | Rectifier connection board | Y30H-06200 | individual | 79.64 | ||
| 100 | 68080790978 | Transmission repair kit (hydraulic force) | Y30H-00008 | piece | 12.38 | ||
| 101 | 60200000251 | Clutch cover assembly XL0150Y (MF 275) | L0030DIE.02.01.01.01 | Pcs | 247.78 | ||
| 102 | 60900006459 | Solenoid valve (transmission assembly LG0050DTGA Ⅲ I.02.01. 02 Accessories) | SWM-G02-C4-D24-30-S(H)006 | Pcs | 424.77 | ||
| 103 | 60301000361 | Oil supply pump assembly | YDS30.906 | piece | 309.73 | ||
| 104 | 68051011624 | clutch assembly | YDS30.901 | piece | 734.51 | ||
| 105 | 60900007348 | Oil seal (YQX30A accessories) | Y30H-05004 | Pcs | 17.69 | ||
| 106 | 60900006954 | Oil seal 40 * 25 * 12 (transmission assembly LG0030DII.02.03 accessories) | J30H-02008 | Pcs | 6.19 | ||
| 107 | 68051011618 | locking plate | YDS30.078 | Pcs | 1.06 | ||
| 108 | 60900006584 | electromagnetic valve | SWM-G02-C4-D24-30-H226 | Pcs | 424.77 | ||
| 109 | 32003122700 | gear wheel | L0020DR.03.02-001~40Cr | Pcs | 128.31 | ||
| 110 | 68051011628 | External friction sheet | YQX100.066 | Pcs | 17.69 | ||
| 111 | 60900006956 | Elastic gear 47 (transmission assembly LG0030D Ⅲ. 02.03 Accessories) | GB893.1-86 | Pcs | 1.32 | ||
| 112 | 60900006957 | Elastic retaining ring 25 (transmission assembly LG0030D Ⅲ. 02.03 Accessories) | GB894.1-86 | Pcs | 0.88 | ||
| 113 | 60900006953 | 0-ring 42 * 3.5 (Transmission assembly LG0030DIII.02.03 accessories) | GB1235-76 | Pcs | 0.88 | ||
| 114 | 60900006955 | 6005 (Transmission assembly LG0030DIII.02.03 accessories) | GB276-94 | Pcs | 8.84 | ||
| 115 | 60900006952 | Bearing frame (transmission assembly LG0030D Ⅲ. 02.03 Accessories) | J30H-02003-1 | Pcs | 39.82 | ||
| 116 | 68051011547 | Across the set | JDS30.038 | Pcs | 4.42 | ||
| 117 | 68051011541 | collar | JDS30.026 | Pcs | 4.42 | ||
| 118 | 68051011546 | Input gear | JDS30.037 | Pcs | 57.52 | ||
| 119 | 60900005231 | collar | YQX30-0003/Y30H-03008 | Pcs | 4.42 | ||
| 120 | 60900007008 | Gasket (LC0100DT.02.03.03 Transmission Accessories) | YQX100-08002 | Pcs | 5.3 |
11
| 121 | 60980005555 | friction disk | 11243-82141 | piece | 12.38 | ||
| 122 | 80606500333 | release bearing | 9688211 | Pcs | 19.46 | ||
| 123 | 68051011629 | oil filter | YQX100.803 | Pcs | 48.67 | ||
| 124 | 60912010050 | pilot valve | YQX100.905 | Pcs | 752.21 | ||
| 125 | 60912010071 | gear shaft (I) | YQX30-2008 | Pcs | 44.24 | ||
| 126 | 52198020801 | Bearing 6206 | GB / T276~ assembly | Pcs | 8.84 | ||
| 127 | 60980005722 | Piston assembly | Y30H-02200 | Pcs | 24.77 | ||
| 128 | 60900002237 | Return spring (30T-02-11000 transmission assembly accessory) | Y30H-02003 | Pcs | 4.95 | ||
| 129 | 60100002175 | Filter screen (30T-0211000 transmission assemblyaccessories) | Y30H-01102 | Pcs | 15.04 | ||
| 130 | 60911013996 | bed down the livestock | YQX30-2007 | Pcs | 8.84 | ||
| 131 | 68051011611 | gasket ring (A) | YDS30,015 | Pcs | 6.19 | ||
| 132 | 60912010047 | Rectifier assembly | YQX100-6000 | Pes | 2566.37 | ||
| 133 | 60208000140 | F-shaft assembly (clutch I) | YQX100-2000 | Pcs | 2300.88 | ||
| 134 | 60100002101 | Clutch II (LG0100DT.02.03. 03 Transmission assembly accessories) | YQX100-1000~0~0 | Pcs | 2300.88 | ||
| 135 | 60900003914 | Clutch pressure plate assembly 4C45DXC transmission accessories) | XL0111YP2 | Pes | 336.28 | ||
| 136 | 60200000143 | release yoke | L0045DXAII.02.03.02-006~ZG310-570 | Pcs | 44.24 | ||
| 137 | 68051011528 | bell housing | J30H-07001 | Pcs | 221.23 | ||
| 138 | 60900005987 | Shell (Zhongchai transmission accessories) | YQX25-01001 | Pcs | 1017.69 | ||
| 139 | 68051011636 | gasket ring B | YQX100-1008 | Pcs | 14.15 | ||
| 140 | 68051011626 | gasket ring | YQX100.057 | Pcs | 6.19 | ||
| 141 | 68051011644 | Parking brake gear (5-10T transmission) | YQX100C.008(YQX100-5002) | Pcs | 159.29 | ||
| 142 | 60200000149 | bead flange | L0045DXAIII.02.03. 02-007~Carbon spring steel wire | Pcs | 1.76 | ||
| 143 | 60900006704 | Partier ac01000T.02.03.03 Transmission assembly accessories) | YQX100.021 | Pcs | 88.49 | ||
| 144 | 60980002833 | Oil pump drive gear | YQX100-0005 | Pcs | 185.84 | ||
| 145 | 68051011657 | Internal rise manipulator brake | ZY3507 | Pcs | 265.48 | ||
| 146 | 60900004105 | Electro-hydraulic control valve (YQX 30 transmission accessories) | Y30H-D07100 | Pcs | 318.58 | ||
| 147 | 68051011627 | Internal friction sheet | YQX100.065 | Pcs | 22.12 | ||
| 148 | 60900006333 | clutch disc | JDS37-07500 | Pcs | 106.19 | ||
| 149 | 60911014007 | header | YQX100-1005 | Pcs | 48.67 | ||
| 150 | 60900002800 | Transmission oil filter (LG250DT transmission assembly accessories) | 4209440 | Pcs | 13.27 |
12
| 151 | 60301000382 | Oil pump assembly | YQX100-3000 | Pcs | 663.71 | ||
| 152 | 60900004305 | Supply pump gasket (YQX100 transmission assembly accessories) | YQX100-05005 | Pcs | 4.42 | ||
| 153 | 60900006721 | Solenoid valve (speed / 5-7.5T medium diesel transmission accessories) | SV08-33-0-V-24DL | Pcs | 212.38 | ||
| 154 | 60200000146 | carrying bolt | L0045DXAIII.02.03.02-010~40Cr | Pcs | 4.42 | ||
| 155 | 60900004391 | Reverse gear gear (LG0045DXC.02.03. 01 Transmission assembly accessories) | JDS45-03004 | Pcs | 199.11 | ||
| 156 | 60900007339 | Clutch slave dis cassembly (accessories in diesel gearbox) | J30H-07500A | Pcs | 110.61 | ||
| 157 | 60900007444 | Electro-hydraulic control valve (LG0050DTIV.02.02 Zhongnan transmission assembly accessories) | YDS45.911 | Pcs | 752.21 | ||
| 158 | 60900001530 | Differential assembly | YQX30-2000 | Pcs | 973.45 | ||
| 159 | 60900006951 | Active shaft (transmission assembly LG0030D Ⅲ. 02.03 Accessories) | J30H-02001 | Pcs | 57.52 | ||
| 160 | 60900002609 | Output gear (3T transmission accessories) | JDS30.023/J30H-04002 | Pcs | 64.6 | ||
| 161 | 60911014012 | idler shaft | JDS30.006 | Pcs | 15.92 | ||
| 162 | 60912010080 | Tooth shaft | YDS30.070 | Pcs | 101.76 | ||
| 163 | 60912010065 | bush | JDS30.034 | Pcs | 17.69 | ||
| 164 | 60900002611 | Output shaft bushing () (3T transmission accessories) | JDS30.036A/J30H-04005 | Pcs | 4.42 | ||
| 165 | 60900002605 | Inler axle bushing (3T transmission accessories) | JDS30.009/J30H-05003 | Pcs | 4.42 | ||
| 166 | 60900002612 | Double coupling gear (3T transmission accessories) | JDS30.035/J30H-04004 | Pcs | 84.07 | ||
| 167 | 60900002604 | Inler wheel (3T transmission accessories) | JDS30.008/J30H-05002 | Pcs | 76.1 | ||
| 168 | 68051011596 | Output axis YDS30.DY, 002 | Y30H-03001 | Pcs | 247.78 | ||
| 169 | 68051011615 | spiral bevel gear | YDS30.071 | Pcs | 247.78 | ||
| 170 | 60912010072 | gear shaft (IⅡ) | YQX30-2005 | Pcs | 44.24 | ||
| 171 | 68051010859 | shifting fork | JDS30.044 | Pcs | 22.12 | ||
| 172 | 60900002610 | Output shaft / spiral bgear (3T transmission accessories) | JDS30.041(071)/J30H-04001(09005) | Pcs | 389.38 | ||
| 173 | 60900004304 | Control valve insert (YQX100 transmission assembly accessories) | YQX100-07032 | Pcs | 5.3 | ||
| 174 | 60900005787 | bush | YQX30-0019 YDS30.086 | Pes | 8.84 | ||
| 175 | 60900009968 | Second gear gear (LG0060DT.02.03. 04 ZJZC Transmission Assembly Parts YQXD100H4) | YQX100-02018 | Pcs | 292.03 | ||
| 176 | 60900007515 | Control valve assembly (Zhongchai LG0050DTGA Ⅲ. 02.01.01 Transmission Assembly Parts) | YQX100-07000/CCT6 | Pcs | 707.96 | ||
| 177 | 60900007409 | Friction plate (LG0050DTGA Ⅲ. 02.01.02 Accessories) | YQX100-02019 | Pcs | 22.12 | ||
| 178 | 60900007406 | Partition piece (Zhongchai gearbox LG0050DTGA I Ⅲ I.02.01. 02 Accessories) | YQX100-02006 | Pcs | 17.69 | ||
| 179 | 60900007311 | header | YQX100-02005 | Pcs | 48.67 | ||
| 180 | 60900009966 | Transmission gear (LG0060DT.02.03. 04 ZJZC Transmission Assembly Parts YQXD100H4) | YQX100-02016 | Pcs | 212.38 |
13
| 181 | 60900007256 | Hydraulic transmission repair kit | YQX100-00008 | Pcs | 40.7 | ||
| 182 | 60900009967 | Second gear gear (LG0060DT.02.03. 04 ZJZC Transmission Assembly Parts YQXD100H4) | YQX100-02003 | Pcs | 309.73 | ||
| 183 | 60900007428 | clutch assembly R | YQX100-02000R | Pcs | 2300.88 | ||
| 184 | 60900009958 | Taper tooth shaft / spiral bevel gear (Zhongchai LG0016BJ.02.04 Transmission Accessories) | DCS15-00002-1/DCS15-00013-1 | Pcs | 221.23 | ||
| 185 | 60900007412 | Hydraulic transmission full vehicle cushion (Zhongchai transmission LG0050ODTGAIII. 02.01. 02 Accessories) | YQX100-00007 | Pcs | 40.7 | ||
| 186 | 60900005605 | Oil seal: 406211 | YQX100-08009 | Pcs | 35.39 | ||
| 187 | 60900007824 | Separate bearing sleeve | J3OH-07004 | Pcs | 26.54 | ||
| 188 | 60202000007 | torque-converter | YJH265 | individual | 884.95 | ||
| 189 | 60900010113 | Idler wheel support (transmission assembly LG0050DTGA Ⅲ. 02.01.02 ZJZC Accessories) | YQX100-03003 | Pcs | 75.22 | ||
| 190 | 60911014011 | idler | YQX100-0006 | Pcs | 185.84 | ||
| 191 | 68051011599 | Shell cover liner | Y30H-07015 | Pcs | 2.65 | ||
| 192 | 60900006964 | Oil supply pump assembly (LG50ODTGAII transmission accessories) | YQX100-05000 | Pcs | 619.46 | ||
| 193 | 60900006887 | connecting flange | YQX100-01400 | Pcs | 132.74 | ||
| 194 | 60200000147 | release bearing | L0045DXAIII.02.03. 02.03 to the assembly | Pcs | 19.46 | ||
| 195 | 60980005553 | inching valve | YDS30.910 | piece | 159.29 | ||
| 196 | 60900007033 | output axis | YQX100-04001 | Pcs | 247.78 | ||
| 197 | 60900003668 | With the flange (LG0100DT.02.03. 03 Transmission assembly accessories) | YQX100-08003 | Pcs | 115.04 | ||
| 198 | 60900007254 | Oil seal: 527512 | YQX100-04009 | Pcs | 48.67 | ||
| 199 | 60900007430 | Pressure disc and cover assembly | J3OH-07300A | Pcs | 247.78 | ||
| 200 | 68051011293 | release bearing | 13453-12031 | Pcs | 19.46 | ||
| 201 | 60405020388 | back-up lamp siwthc | JK208 | Pcs | 18.58 | ||
| 202 | 60208000090 | Lasso assembly | L0060DT.07.02 | Pcs | 30.97 | ||
| 203 | 68051011597 | Oil seal holder | >Y30H-03003 | Pcs | 15.92 | ||
| 204 | 60900005655 | Disc spring (transmission accessories) | YQX18-02013 | Pcs | 30.97 | ||
| 205 | 60900007379 | Synchronizer assembly (LG0045DXC.02.03. 01 Transmission Accessories) | JDS45-03100 | Pcs | 115.04 | ||
| 206 | 60900007814 | Input shaft (Zhongchai LG0045DXC.02.03. 01 Transmission assembly accessories) | JDS45-02011 | Pcs | 115.04 | ||
| 207 | 60900007815 | Forward gear gear (Zhongchai LC0045DXC.02.03. 01 Transmission assembly accessories) | JDS45-03003 | Pcs | 203.53 | ||
| 208 | 60900005660 | Solenoid valve (transmission accessories) | Y30H-D07300 | Pcs | 398.23 | ||
| 209 | 60912010039 | Half shaft gasket | Y30H-10006 | Pcs | 15.92 | ||
| 210 | 60304000663 | Control valve liner | YDS30.065 | Pcs | 2.65 |
14
| 211 | 60100002173 | Inidler (30T-0211000 transmission assembly accessories) | Y30H-04002 | Pcs | 59.29 | ||
| 212 | 60100002180 | Tshaft (30T-0211000 transmission assembly accessories) | Y30H-09003 | Pcs | 110.61 | ||
| 213 | 60900001521 | Idler shaft YDS30.025 (30T-0211000 transmission accessories) | Y30H-04001 | Pcs | 70.79 | ||
| 214 | 60900007682 | Electro-hydraulic control valve (LG0030DTIH.02.01 accessories) | Y30H-D07200 | individual | 336.28 | ||
| 215 | 60900007683 | Half shaft gear (medium diesel transmission assembly LG0030DTIH.02.01 accessories) | Y30H-10007 | individual | 53.09 | ||
| 216 | 60900007684 | Planetary washer (LG0030DTIH.02.01 accessories) | Y30H-10004 | individual | 8.84 | ||
| 217 | 60900007685 | Cross shaft (China diesel transmission assembly LG0030DTIH.02.01 accessories) | Y30H-10003 | individual | 44.24 | ||
| 218 | 60900007686 | Helical bevel gear (LG0030DTIH. 0 diesel transmission assembly 2.01 accessories) | Y30H-09005 | individual | 221.23 | ||
| 219 | 60911013994 | pad | YDS30.038 | piece | 2.65 | ||
| 220 | 60912010082 | Tooth shaft liner | Y30H-09004 | Pcs | 8.84 | ||
| 221 | 60900007602 | Pump drive gear (Zhongchai LG0050DTGA Ⅲ. 02.01.02 Transmission assembly accessories) | YQX100-05006 | Pcs | 185.84 | ||
| 222 | 60980005712 | Transmission full car cushion | 3 T of liquid force | Pcs | 12.389 | ||
| 223 | 60900006965 | Guide wheel seat cushion (China diesel transmission assembly LG0100DTKDIII.02.03. 01 Accessories) | YQX100-06004 | Pcs | 3.53 | ||
| 224 | 60100002177 | Mad (30T-0211000 transmission assembly accessories) | Y30H-03006A | Pcs | 5.3 | ||
| 225 | 60100002185 | Gasket (30T-0211000 transmission assembly accessories) | Y30H-D07016 | Pcs | 2.65 | ||
| 226 | 60900010325 | flange | YQX100-01401-2 | Pcs | 146.01 | ||
| 227 | 60900002613 | Lock piece (3T transmission accessories) | YDS30.082/Y30H-01008 | Pcs | 1.15 | ||
| 228 | 60900010334 | Padding (transmission assembly LG0030BG.02.01ZC Accessories) | 01.03.108/HDCS25-01003 | Pcs | 9.73 | ||
| 229 | 60300000415 | YQX30AS-0510 | Filter assembly | piece | 15.04 | ||
| 230 | 60900010344 | Differential assembly (Zhongchai LG0016BJ.02.04 transmission assembly accessories) | DCS15-10000 | Pcs | 884.95 | ||
| 231 | 60900007486 | Hub nut (HDQX30 Zhongchai LG0025B Ⅲ. 02.02 Parts of the drive axle assembly) | M18×1.5 | Pcs | 15.04 | ||
| 232 | 60304000664 | Control valve assembly | YDS30.904 | Pes | 283.18 | ||
| 233 | 60900006323 | Electro-hydraulic control valve (medium diesel transmission LG0050DTGAIIL.02.01. 02 Accessories) | YQX100-D07000 | Pcs | 707.96 | ||
| 234 | 60100002176 | Gasket (30T-0211000 transmission assembly accessories) | Y30H+01013 | Pcs | 5.3 |
15
| 235 | 60900007484 | Ball nut (HDQX30 Zhongchai LG0026B Ⅲ .02.02 Parts of the drive axle assembly) | HDQX25-01018 | Pcs | 1.76 | ||
| 236 | 60900007485 | Wheel-like double-head bolt (HDQX30 zhongchai LG0025B Ⅲ. 02.02 Parts of the drive axle assembly) | HDQX25-01008 | Pcs | 34.51 | ||
| 237 | 60912010095 | back-up lamp siwthc | JK611T | Pes | 18.58 | ||
| 238 | 60100002178 | 0-shaped
seal beauty (30T-0211000 transmission assembly accessories) |
GB1235-76/75*3.1 | Pcs | 0.88 | ||
| 239 | 60911013995 | bed down the livestock | YDS30.079 | Pcs | 17.69 | ||
| 240 | 60900007195 | Seal ring (YQX 30 transmission accessories) | YQX30-1011 | Pcs | 10.61 | ||
| 241 | 60900010983 | Fuel iling cover (7 ton ZC accessories for transmission assembly) | YQX100-01300 | Pes | 9.73 | ||
| 242 | 60900007177 | Pistons (YQX 30 Transmission Parts) | YQX30-1002B | Pcs | 24.77 | ||
| 243 | 60900007179 | Seal ring (YQX 30 transmission accessories) | YQX30-1006 | Pcs | 3.53 | ||
| 244 | 60900007157 | Friction plate (YQX 30 transmission accessories) | YQX30-1013B | Pcs | 14.15 | ||
| 245 | 60900010997 | Hydraulic transmission overhaul package (transmission assembly LG0050DTIV.02.02ZC accessories) | YQX45-00007 | Pcs | 44.24 | ||
| 246 | 68051011623 | oil filter (I) | YDS30.808 | Pcs | 15.04 | ||
| 247 | 68051011651 | thrust washer | YQX30-2004 | Pcs | 9.73 | ||
| 248 | 60900007023 | Input shaft (LG0030BG.02.01 transmission accessories) | HDCS25-02001-1 | Pcs | 253.09 | ||
| 249 | 60912010094 | back-up lamp siwthc | J30H-01004 | Pes | 18.58 | ||
| 250 | 68051011634 | Connect flange components (LG0100DT.02.03. 03 Transmission Accessories) | YQX100-0700 | Pcs | 146.01 | ||
| 251 | 68051011504 | Tone shaft | DCS25-0006 | Pcs | 5428.31 | ||
| 252 | 60911014003 | Butterfly plate | YDS18.001 | Pcs | 35.39 | ||
| 253 | 68051011607 | Na closure (30T-0211000 Chai YQX30A transmission accessories) | YDS30.010 | Pcs | 5.3 | ||
| 254 | 60900012067 | Rotary lever (transmission assembly LG0045DXC.02.03. 01 ZC accessories) | J30H-06001 | Pcs | 18.58 | ||
| 255 | 60900012094 | Nut M201.5 (transmission assembly LG0050DTIV.02.02JD accessories) | GB/T9457 | Pcs | 5.3 | ||
| 256 | 60900012147 | Output gear (transmission assembly LG0045DXC.02.03. 01 Accessories) | JDS45-04002 | Pcs | 325.66 | ||
| 257 | 60900004392 | Needle roller bearing K606630 | JB/T7918 | Pcs | 30.97 | ||
| 258 | 60900004393 | Bearing bushing (LG0045DXC.02.03. 01 Transmission assembly accessories) | JDS45-03001 | Pcs | 25.66 | ||
| 259 | 60900012238 | Push-off plate (transmission assembly LG0045DXC.02.03. 01 ZC accessories) | JDS45-03007 | Pcs | 20.35 | ||
| 260 | 60900012239 | Synchronizer gear ring (transmission assembly LG0045DXC.02.03. 01 ZC accessories) | JDS45-03008 | Pcs | 40.7 |
16
| 261 | 60900012240 | Full vehicle mat (transmission assembly LG0045DXC.02.03. 01 ZC accessories) | Pcs | 37.16 | |||
| 262 | 60900012241 | Deep groove ball bearing (transmission assembly LG0045DXC.02.03. 01 ZC accessories) 6209 | GB/T276 | Pcs | 20.35 | ||
| 263 | 60900012242 | Push-off friction plate (transmission assembly LG0045DXC.02.03. 01 ZC accessories) | JDS45-03009 | Pcs | 15.04 | ||
| 264 | 60900011772 | Output shaft (Zhongchai LG0045DXC.02.03. 01 Transmission assembly accessories) | JDS45-02001 | Pcs | 183.18 | ||
| 265 | 60900007380 | Separate the fork (LC0045DXC.02.03.01 Transmission Accessories) | JDS45-07003 | Pcs | 51.32 | ||
| 266 | 60900013008 | High and low speed Synchronizer 0.C0045DXC.02.03. 01 zc transmission assembly accessories) | 02.03.01 | Pcs | 153.09 | ||
| 267 | 60900013009 | Synchronization ring (LG0045DXC.02.03. 01 ZC transmission assembly accessories) | 02.03.01 | Pes | 40.7 | ||
| 268 | 60900013010 | Forward and backward speed synchronizer 0LC0045DXC.02.03.01 ZC transmission assembly accessories) | 02.03.01 | Pcs | 153.09 | ||
| 269 | 68051011548 | bearing washer | JDS30.039 | Pes | 5.3 | ||
| 270 | 68051011552 | Box cover gasket | JDS30.049 | Pcs | 4.42 | ||
| 271 | 60980002834 | R axis assembly | YQX100-1000 | Pcs | 2300.88 | ||
| 272 | 60900013039 | Spindle Assembly (LG0045DXC.02.03. 01 Transmission ZC accessories) | JDS45-03000 | Pcs | 1712.38 | ||
| 273 | 60900013038 | Mechanical box (LG0045DXC.02.03. 01 Transmission ZC accessories) | JDS45-01001 | Pcs | 1663.71 | ||
| 274 | 60900012294 | Shift shift fork (transmission assembly LG0045DXC.02.03. 01 ZC accessories) | JDS45-06002 | Pcs | 40.7 | ||
| 275 | 51453220107 | Fender 22 | GB/T894.1~65Mn | Pcs | 0.88 | ||
| 276 | 60900012292 | Half cle key 57.519 (transmission assembly LG0045DXC.02.03. 01 ZC accessories) | GB/T1099.1-2003 | Pcs | 0.88 | ||
| 277 | 60900007212 | Piston (Transmission assembly LG0030DTIH.02.01) | Y30H-02201 | Pcs | 25.66 | ||
| 278 | 60911014006 | header | YDS30.018 | Pcs | 23 | ||
| 279 | 60900013231 | Clutch housing (with Isuzu engine) | J30H-07001A | Pcs | 274.33 | ||
| 280 | 60200000142 | Separate bearing sleeve Jane | L0045DXA Ⅲ. 02.03.02-005 ~ ZG 310-570 (fine) | Pcs | 51.32 |
17
| 281 | 60911014001 | adjust nut | 13073-12011 | Pcs | 25.66 | ||
| 282 | 60900011761 | Electro-hydraulic control valve (LG0050DT IV.02.02 assembly accessories) | YQX45-D07200-1 | Pcs | 796.46 | ||
| 283 | 60900012440 | Torque converter assembly (transmission assembly LG0120DT.02.03. 01 China wood accessories) | YJH340H-1 | Pcs | 3982.3 | ||
| 284 | 80390409666 | 0-ring 75 * 3.1 | GB1235-76~ None | Pcs | 2.65 | ||
| 285 | 80390409665 | Gasket (LG0030DTXB.02.01 gearbox medium diesel fittings) | J30H-03011~ None | Pcs | 1.76 | ||
| 286 | 68051011652 | epicyclic gear | YQX30-2006 | Pcs | 26.54 | ||
| 287 | 60912010055 | Differential case assembly | YQX30-2100 | Pcs | 295.57 | ||
| 288 | 60912010036 | axle shaft gear | YQX30-2009 | Pcs | 61.06 | ||
| 289 | 60900010009 | Transmission box body (Zhongchai transmission assembly LGO050DTGAIII.02.01. 02 Accessories) | YQX100-01001/-1 | Pcs | 1849.55 | ||
| 290 | 60900013849 | gear ring | Y30H-10012 | Pcs | 325.66 | ||
| 291 | 52906001401 | Bearing K354220 | JB / T7918~ assembly | Pcs | 8.14 | ||
| 292 | 60100010933 | Oil filter (transmission assembly | L0120DTGB.02.02. 01~ Accessory ZC) ~YQX100-01200 | Pcs | 61.06 | ||
| 293 | 68051011663 | thrust collar (A) | Pcs | 6.19 | |||
| 294 | 60912010078 | gear ring | YDS30.073 | Pcs | 325.66 | ||
| 295 | 60980005554 | Input shaft assembly | Y30H-2100-1 | piece | 284.95 | ||
| 296 | 68051011620 | Stop return gasket | YDS30:084 | Pcs | 10.17 | ||
| 297 | 68051011619 | epicyclic gear | YDS30.083 | Pcs | 25.66 | ||
| 298 | 60900013411 | 8=0.5mm (Transmission Assembly LG0030BG.02.01 Parts) | Y30H-09002A | Pcs | 0.88 | ||
| 299 | 60900013412 | δ =0.2mm (LG0030BG.02.01 accessories) | Y30H-09002B | Pcs | 0.88 | ||
| 300 | 68051011279 | release yoke | 10113-10122 | Pcs | 30.97 | ||
| 301 | 60900012293 | 0-ring 222.4 (transmission assembly LG0045DXC.02.03. 01 ZC accessories) | GB1235-76 | Pcs | 0.88 | ||
| 302 | 60900012452 | Inler wheel shaft (transmission assembly LG0045DXC.02.03. 01 ZC accessories) | JDS45-05001 | Pcs | 81.41 |
18
| 303 | 60900012449 | Deep groove ball bearing 6208 (transmission assembly LG0045DXC.02.03. 01 ZC accessories) | GB/T276 | Pcs | 20.35 | ||
| 304 | 60900012450 | Idler shaft bushing (transmission assembly LG0045DXC.02.03. 01 ZC accessories) | JDS45-05003 | Pcs | 15.04 | ||
| 305 | 60900012451 | Inler wheel (transmission assembly LG0045DXC.02.03. 01 ZC accessories) | JDS45-05002 | Pcs | 315.48 | ||
| 306 | 60900012453 | Flat key 14990 (transmission assembly LG0045DXC.02.03. 01 ZC accessories) | GB/T1096-2003 | Pcs | 1.76 | ||
| 307 | 60900002238 | Solenoid valve (30T- 0211000 transmission assembly accessories) | CWM-G02-C04-D12-30-S006 | Pcs | 424.77 | ||
| 308 | 60900005606 | thrust collar C | YQX100-08008 | Pcs | 10.61 | ||
| 309 | 60980005698 | Rectifier connection board (LG0100DT.02.03. 03 Transmission Accessories) | YQX100H1-YJH315 | Pes | 159.29 | ||
| 310 | 60900015330 | Piston assembly (Zhongdiesel transmission LG0050DTGA Ⅲ. 02.01.02 Accessories) | YQX100-02200 | Pcs | 76.1 | ||
| 311 | 60900015328 | Spring (LG0050DTGA Ⅲ. 02.01.02 Accessories) | YQX100-03008 | Pcs | 10.61 | ||
| 312 | 60900015332 | Elastic retaining ring 50 (medium diesel gearbox LG0050DTGAIII.02.01. 02 Accessories) | GB894:1-86 | Pcs | 1.32 | ||
| 313 | 60920011477 | gasket ring | YQX100.068 | Pcs | 15.92 | ||
| 314 | 60912010089 | spring seat | YQX100-1012 | Pcs | 8.84 | ||
| 315 | 68051011515 | Needle roller bearing K505820 | GB/5846-86 | Pcs | 35.39 | ||
| 316 | 60900015327 | Adjustment pad (China diesel transmission LG0050DTGA Ⅲ. 02.01.02 Accessories) | YQX100-03004B | Pcs | 1.32 | ||
| 317 | 60900007411 | Press plate (China diesel gearbox LG0050DTGA Ⅲ. 02.01.02 Accessories) | YQX100-02010 | Pcs | 59.29 | ||
| 318 | 68051011536 | principal axis | JDS30.003 | Pcs | 96.46 | ||
| 319 | 68051011242 | bearing | 7211 | Pcs | 81.41 | ||
| 320 | 60900015329 | Spring (LG0050DTGA Ⅲ. 02.01.02 Accessories) | YQX100-03009 | Pcs | 10.61 | ||
| 321 | 68051011696 | thrust collar B | YQX100-1001 | Pes | 10.61 | ||
| 322 | 60900015326 | Articulated bolt (medium diesel transmission LG0050DTGA Ⅲ. 02.01.02 Accessories) | YQX100-01500 | Pcs | 53.09 |
19
| 323 | 52195007601 | Bearing, 6208N | GB / T276~ assembly | cover | 20.35 | ||
| 324 | 60900015055 | Guide wheel seat sealing ring (transmission assembly L0100DT.02.03. 03 ZC Accessories) | YQX100-0041 | Pcs | 21.23 | ||
| 325 | 60900015054 | Deep groove ball bearing (transmission assembly L0100DT.02.03. 03 ZC Accessories) | 6209 | Pcs | 20.35 | ||
| 326 | 68051011505 | spline housing | DCS25H.005 | Pes | 100 | ||
| 327 | 60304000662 | control valve | YDS30.907 | Pcs | 336.28 | ||
| 328 | 68051011612 | gasket ring (B) | YDS30.016 | Pes | 13.27 | ||
| 329 | 60900015331 | Spring (Zhongchai gearbox LG0050DTGA ⅢL.02.01. 02 Accessories) | YQX100-02011 | Pcs | 10.61 | ||
| 330 | 60912010048 | Variant filter screen | YQX100-0200 | Pcs | 61.06 | ||
| 331 | 60900002602 | Bearing Z-32207 (3T transmission accessories) | GB/T297 | Pcs | 30.97 | ||
| 332 | 60900015450 | Fork (L0030DTXB.02.01ZC transmission assembly accessories) | JDS30-0003 | Pcs | 23.89 | ||
| 333 | 60900015449 | Helical bevel gear (L0030DTXB.02.01ZC transmission assembly accessories) | YQX30-0020 | Pcs | 389.38 | ||
| 334 | 60900015334 | Deep groove ball bearing 6309 (Zhongchai gearbox LG0050DTGAIII.02.01. 02 Accessories) | GB/T2766309 | Pcs | 42.47 | ||
| 335 | 60900010982 | Differential assembly (transmission assembly LG0040DXB.02.02ZC accessories) | Y30H-10000 | Pcs | 973.45 | ||
| 336 | 60900007429 | clutch assembly F | YQX100-02000F | Pcs | 2300.88 | ||
| 337 | 52198021301 | Bearing 6210 | GB / T276~ assembly | Pcs | 20.35 | ||
| 338 | 60900015445 | Inler shaft (L0030DTXB.02.01ZC transmission assembly accessories) | YQX30-0015 | Pcs | 76.1 | ||
| 339 | 68000000138 | needle bearing K455325(LG0100DT.02.03. 03 Transmission assembly accessories) | GB/T5846-86 | Pcs | 20.35 | ||
| 340 | 60900015448 | Output gear (L0030DTXB.02.01ZC transmission assembly accessories) | YQX30-0012 | Pcs | 64.6 | ||
| 341 | 60900015447 | Gear shaft (L0030DTXB.02.01ZC transmission assembly accessories) | YQX30-0018 | Pcs | 110.61 | ||
| 342 | 60900015446 | Output shaft (L0030DTXB.02.01ZC transmission assembly accessories) | YQX30-0011 | Pcs | 389.38 | ||
| 343 | 60980002595 | needle roller thrust bearing | GB4605-84/889109 | Pcs | 31.85 | ||
| 344 | 68051011631 | turboshaft | YQX100-0013 | Pcs | 117.69 | ||
| 345 | 60900015333 | Push ring A (LG0050DTGA Ⅲ. 02.01.02 Accessories) | YQX100-02001 | Pcs | 10.61 | ||
| 346 | 60900007435 | Control valve assembly (medium diesel transmission LG0050DTGAIII.02.01. 02 Accessories) | YQX100-07000 | Pcs | 707.96 | ||
| 347 | 60900015766 | elastic collar | J30H-07005 | Pcs | 1.76 | ||
| 348 | 68051011630 | filler cap | YQX100.904 | Pcs | 10.61 |
20
| 349 | 60900006524 | Separate the bearing sleeve (Zhongchai LG0045 DXC.02.03 . 01 Transmission assembly accessories) | JDS45-07004 | Pcs | 51.33 | ||
| 350 | 60900015767 | Separate the fork spherical strut | J30H-07006A | Pcs | 5.31 | ||
| 351 | 60900018460 | Shift shift fork (30T-0211000 Transmission assembly accessory ZC) | J30H-06002~/ | Pcs | 22.12 | ||
| 352 | 60900018461 | Fork spring (30T-0211000 Transmission Assembly Parts ZC) | J30H-06006~/ | Pcs | 1.77 | ||
| 353 | 60900018462 | Steel Ball 10.000G200b (30T- 0211000 Transmission Assembly Parts ZC) | GB308-89~/ | Pcs | 0.88 | ||
| 354 | 60900018463 | Turning bar (30T-0211000 Transmission Assembly Parts ZC) | J30H-06001~/ | Pcs | 16.45 | ||
| 355 | 60900018464 | 519 (30T-0211000 Transmission Assembly Parts ZC) | GB1099-79~/ | Pcs | 0.88 | ||
| 356 | 60900018465 | Elastic gear 22 (30T-0211000 transmission assembly accessory ZC) | GB894.1-86~/ | Pcs | 0.88 | ||
| 357 | 60900018777 | Torque converter assembly (medium diesel transmission assembly LG0050DTIV.02.02 accessories) | YJH315A2~/ | Pcs | 2566.37 | that | |
| 358 | 60900018778 | Torque converter introduction seat gasket (Zhongchai transmission assembly LG0050DTIV.02.02 accessories) | YQX45V-0001 | Pcs | 5.31 | ||
| 359 | 60900018779 | 0-shaped sealing ring (medium diesel transmission assembly LG0050DTIV.02.02 accessories) | YQX100-0011~/ | Pes | 12.39 | ||
| 360 | 60900018780 | Oil seal (LG0050DT IV.02.02 accessories) 13016015 | YQX100-060097 | Pcs | 115.04 | ||
| 361 | 60900018781 | Oil seal (ZhongChai transmission assembly LG0050DT IV.02.02 accessories) | YQX45-08009’/ | Pcs | 25.66 | ||
| 362 | 60912010044 | Rectifier shell liner | Y3H-01004 | Pcs | 5.31 | ||
| 363 | 68051011635 | snap ring | YQX100-1004 | Pcs | 7.08 | ||
| 364 | 60900011013 | Torque converter housing (transmission assembly LGO100DT.02.03. 03 ZC Accessories) | YQX100-03001 | Pcs | 1663.72 | ||
| 365 | 60900005786 | locknut | YQX30-0014/Y30H-03009 | Pcs | 5.31 | ||
| 366 | 68051011555 | jam nut | JDS30.075 | Pcs | 5.31 | ||
| 367 | 60900019211 | Differential assembly (drive axle assembly LGO025B VI. 02.02 ZJZC accessories) | HDQX25-05000-3 | Pcs | 1221.24 | ||
| 368 | 60900016998 | Torque converter housing (LG0050DTIV.02.02 Transmission assembly ZC accessories) | YQX45-04001 | Pcs | 3053.1 | ||
| 369 | 60200000762 | transmission assembly | L0035DTN.02.01~ assembly | Pcs | 5896.37 | YQXD37A1X- 2 | |
| 370 | 68051000000 | spiral bevel gear | YDS30.07 | Pcs | 244.25 |
Note: The following blank
21
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (File No. 333-237321 and File No. 333-256509) and Registration Statement on Form S-8 (File No. 333-285640) of our report, dated April 16, 2024, which appears in the Annual Report on Form 10-K filed with the U.S. Securities Exchange Commission (“SEC”) on March 26, 2025 relating to the audit of the consolidated balance sheet of Greenland Technologies Holding Corporation and its subsidiaries (the “Company”) as of December 31, 2023, and the related statements of income and comprehensive incomes, changes in shareholders’ equity, and cash flows for the year ended December 31, 2023, and the related notes (collectively referred to as the financial statements).
We also consent to the Company’s reference to WWC, P.C., Certified Public Accountants, as experts in accounting and auditing
| /s/ WWC, P.C. | |
| San Mateo, California | WWC, P.C. |
| March 26, 2025 | Certified Public Accountants |
| PCAOB ID: 1171 |
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (File No. 333-237321 and File No. 333-256509) and Registration Statement on Form S-8 (File No. 333-285640) of our report, dated March 26, 2025, which appears in the Annual Report on Form 10-K filed with the U.S. Securities Exchange Commission (“SEC”) on March 26, 2025 relating to the audit of the consolidated balance sheet of Greenland Technologies Holding Corporation and its subsidiaries as of December 31, 2024, and the related statements of operations and comprehensive income (loss), changes in shareholders’ equity, and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the financial statements).
Singapore
March 26, 2025
Exhibit 31.1
Certification by the Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Raymond Z. Wang, certify that:
| 1. | I have reviewed this annual report on Form 10-K of Greenland Technologies Holding Corporation; | |
| 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(s) 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(s) 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: | March 26, 2025 | |
| /s/ Raymond Z. Wang | ||
| Name: | Raymond Z. Wang | |
| Title: |
Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
Certification by the Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Jing Jin, certify that:
| 1. | I have reviewed this annual report on Form 10-K of Greenland Technologies Holding Corporation; | |
| 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(s) 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(s) 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: | March 26, 2025 | |
| /s/ Jing Jin | ||
| Name: | Jing Jin | |
| Title: |
Chief Financial Officer (Principal Financial Officer) |
Exhibit 32.1
Certification by the Principal Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to U.S.C. Section 1350 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), I, Raymond Z. Wang, Chief Executive Officer of Greenland Technologies Holding Corporation (the “Company”), hereby certify to my knowledge that:
The annual report on Form 10-K for the fiscal year ended December 31, 2024 of the Company fully complies, in all material respects, with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: March 26, 2025
| /s/ Raymond Z. Wang | |
| Raymond Z. Wang | |
|
Chief Executive Officer (Principal Executive Officer) |
Exhibit 32.2
Certification by the Principal Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to U.S.C. Section 1350 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), I, Jing Jin, Chief Financial Officer of Greenland Technologies Holding Corporation (the “Company”), hereby certify to my knowledge that:
The annual report on Form 10-K for the fiscal year ended December 31, 2024 of the Company fully complies, in all material respects, with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: March 26, 2025
| /s/ Jing Jin | |
| Jing Jin | |
|
Chief Financial Officer (Principal Financial Officer) |