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</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>UNITED
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SECURITIES
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D.C. 20549</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>OR</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>For
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>OR</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>For
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Securities
registered or to be registered pursuant to Section 12(b) of the Act:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Securities
registered or to be registered pursuant to Section 12(g) of the Act:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span style="text-decoration:underline">None</span></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Title
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span style="text-decoration:underline">None</span></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Title
of Class)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="margin: 0pt">&#160;</p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
the number of outstanding shares of each of the issuer&#8217;s classes of capital stock as of the close of the period covered by the
annual report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">An aggregate of <ix:nonFraction contextRef="c2" decimals="INF" format="ixt:num-dot-decimal" name="dei:EntityCommonStockSharesOutstanding" scale="0" unitRef="shares">25,361,550</ix:nonFraction> ordinary shares, par
value $0.0001 per share, were outstanding as of December 31, 2022.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes&#160;&#9744;&#160;&#160;<ix:nonNumeric contextRef="c0" name="dei:EntityWellKnownSeasonedIssuer">No</ix:nonNumeric>&#160;&#9746;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934. Yes &#9744;&#160; <ix:nonNumeric contextRef="c0" name="dei:EntityVoluntaryFilers">No</ix:nonNumeric> &#9746;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. <ix:nonNumeric contextRef="c0" name="dei:EntityCurrentReportingStatus">Yes</ix:nonNumeric> &#9746; No &#9744;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (&#167;232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). <ix:nonNumeric contextRef="c0" name="dei:EntityInteractiveDataCurrent">Yes</ix:nonNumeric> &#9746; No &#9744;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
&#8220;large accelerated filer, &#8216;accelerated filer&#8221; and &#8220;emerging growth company&#8221; in Rule 12b-2 of the Exchange
Act. (Check one):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 25%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Large accelerated filer</span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 25%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;&#160;</span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 30%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accelerated filer</span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;&#160;</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><ix:nonNumeric contextRef="c0" format="ixt-sec:entityfilercategoryen" name="dei:EntityFilerCategory"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-accelerated filer</span></ix:nonNumeric></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746;&#160;</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Emerging growth company</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonNumeric contextRef="c0" format="ixt:fixed-true" name="dei:EntityEmergingGrowthCompany">&#9746;</ix:nonNumeric>&#160;</span></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards&#8224; provided
pursuant to Section 13(a) of the Exchange Act.&#160;<ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:EntityExTransitionPeriod">&#9744;</ix:nonNumeric></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">If securities are registered pursuant
to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect
the correction of an error to previously issued financial statements.&#160;&#9744;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant&#8217;s executive
officers during the relevant recovery period pursuant to &#167;240.10D-1(b). &#9744;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 3%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746;&#160;</span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 15%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="-sec-ix-hidden: hidden-fact-2">U.S. GAAP</span></span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 3%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 46%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">International Financial Reporting Standards as issued by the International Accounting Standards Board</span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 3%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;&#160;</span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 30%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other </span></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
&#8220;Other&#8221; has been checked in response to the previous question, indicate by check mark which financial statement item the
registrant has elected to follow: Item 17&#160;&#9744;&#160; Item 18&#160;&#9744;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes &#9744;&#160;No&#160;<ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:EntityShellCompany">&#9746;</ix:nonNumeric></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark whether the registrant has filed a report on and attestation to its management&#8217;s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. &#9744;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="font-size: 1pt; border-top: Black 1pt solid; border-bottom: Black 2pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="margin: 0pt">&#160;</p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>TABLE
OF CONTENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 8pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#s_001"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">INTRODUCTION</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ii</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#s_002"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FORWARD-LOOKING
    INFORMATION</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">iv</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#s_003"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PART
    I</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 10%"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 80%"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    1.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_004"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">IDENTITY
    OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">1<span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    2.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#s_005">OFFER
    STATISTICS AND EXPECTED TIMETABLE</a></span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    3.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_006"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">KEY
    INFORMATION</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    4.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_007"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">INFORMATION
    ON THE COMPANY</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">38</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    4A.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_008"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">UNRESOLVED
    STAFF COMMENTS</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">70</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    5.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_009"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">OPERATING
    AND FINANCIAL REVIEW AND PROSPECTS</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">70</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    6.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_010"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DIRECTORS,
    SENIOR MANAGEMENT AND EMPLOYEES</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">87</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    7.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_011"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MAJOR
    SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">95</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    8.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_012"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FINANCIAL
    INFORMATION</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">97</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    9.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_013"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">THE
    OFFER AND LISTING</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">98</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    10.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_014"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ADDITIONAL
    INFORMATION</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">98</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    11.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_015"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">110</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    12.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_016"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DESCRIPTION
    OF SECURITIES OTHER THAN EQUITY SECURITIES</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">110</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#s_017">PART
    II</a></span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">111</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    13.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_018"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DEFAULTS,
    DIVIDEND ARREARAGES AND DELINQUENCIES</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">111</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    14.</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_019"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MATERIAL
    MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">111</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    15.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_020"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONTROLS
    AND PROCEDURES</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">111</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_021"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">[RESERVED]</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">112</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16A.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_022"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">AUDIT
    COMMITTEE FINANCIAL EXPERT</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">112</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16B.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_023"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CODE
    OF ETHICS</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">112</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16C.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_024"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRINCIPAL
    ACCOUNTANT FEES AND SERVICES</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">113</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16D.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_025"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">EXEMPTIONS
    FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">113</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16E.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_026"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PURCHASES
    OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">113</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16F.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_027"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CHANGE
    IN REGISTRANT&#8217;S CERTIFYING ACCOUNTANT</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">113</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16G.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_028"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CORPORATE
    GOVERNANCE</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">114</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16H.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#s_029">MINE
    SAFETY DISCLOSURE</a></span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">114</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16I.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_030"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DISCLOSURE
    REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">114</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#s_031"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PART
    III</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">115&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    17.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_032"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FINANCIAL
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    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">115</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    18.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_033"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FINANCIAL
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    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">115</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    19.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><a href="#s_034"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">EXHIBITS</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">115</span></td></tr>
  </table><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->i<!-- Field: /Sequence --></span></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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</div><div><a id="s_001"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>INTRODUCTION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a holding company incorporated in the Cayman Islands with no material operations of our own. We are not a Chinese operating company.
Investors of our Ordinary Shares do not own any equity interests in the VIE, but instead own shares of a Cayman Islands holding company.
Unless otherwise stated, as used in this annual report and in the context of describing our operations and consolidated financial information,
&#8220;we,&#8221; &#8220;us,&#8221; &#8220;Company,&#8221; &#8220;Sunrise New Energy&#8221;, or &#8220;our,&#8221; refers to Sunrise
New Energy Co., Ltd., a Cayman Islands holding company, and &#8220;VIE&#8221; refers to the variable interest entity (&#8220;VIE&#8221;),
Global Mentor Board (Beijing) Information Technology Co., Ltd., or SDH.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unless
the context otherwise requires, in this annual report on Form 20-F, references to:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Affiliated
    Entities&#8221; are to Sunrise New Energy&#8217;s subsidiaries, and the VIE and its subsidiaries;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;APP&#8221;
    are to our mobile application, &#8220;Shidonghui APP;&#8221;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;China&#8221;
    or the &#8220;PRC&#8221; are to the People&#8217;s Republic of China;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
    </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Enterprise
    Service Client&#8221; or &#8220;Enterprise Service Clients&#8221; are to small and medium-sized enterprises that have entered into
    service agreements with us for customized enterprise services; </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Expert&#8221;
    or &#8220;Experts&#8221; are to individual(s) qualified and certified by us to provide services to Users and Members; </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#8220;GIOP BJ&#8221; are to Beijing Mentor Board Union
    Information Technology Co, Ltd., a limited liability company organized under the laws of the PRC, Zhuhai Zibo&#8217;s wholly owned
    subsidiary;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;GMB
    HK&#8221; are to &#8220;Global Mentor Board Information Technology Limited&#8221;, Sunrise New Energy&#8217;s wholly-owned-subsidiary,
    a Hong Kong corporation.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;GMB
    (Hangzhou)&#8221; are to Global Mentor Board (Hangzhou) Technology Co., Ltd., a limited liability company organized under the laws
    of the PRC, the VIE&#8217;s wholly owned subsidiary; </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;GMB
    (Beijing)&#8221; are to Shidong (Beijing) Information Technology Co., Ltd., a limited liability company organized under the laws
    of the PRC and 51% of its equity interest is owned by the VIE; </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;GMB
    Culture&#8221; are to Shanghai Voice of Seedling Cultural Media Co., Ltd., a limited liability company organized under the laws of
    the PRC and 51% of its equity interest is owned by the VIE;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;GMB
    Consulting&#8221; are to Global Mentor Board (Shanghai) Enterprise Management Consulting Co. Ltd., a limited liability company organized
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;GMB
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    of the PRC;&#160;the 51% of its equity interest owned by the VIE was transferred to a third party in July 2021;</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 4; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->ii<!-- Field: /Sequence --></span></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 24px">&#160;</td>
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#8220;HK subsidiaries&#8221; are to GMB HK and SDH New
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Member&#8221;
    or &#8220;Members&#8221; are to individual(s) and enterprise(s) who signed up for each of our three annual membership plans: Platinum,
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Mentor&#8221;
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#8220;PRC subsidiaries&#8221; are to GIOP BJ, Zhuhai Zibo,
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;shares,&#8221;
    &#8220;Shares,&#8221; or &#8220;Ordinary Shares&#8221; are to the Ordinary Shares of the Company, par value US$0.0001 per share;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
    </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;SDH&#8221;
    or &#8220;the VIE&#8221; are to Global Mentor Board (Beijing) Information Technology Co., Ltd., a limited liability company organized
    under the laws of the PRC, which we control via a series of contractual arrangements among GIOP BJ, the VIE and shareholders of the
    VIE; </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;SDH
    Cloud&#8221; are to Global Mentor Cloud (Beijing) Education Technology Co., Ltd.; 75% of the shares of SDH Cloud are held by GIOP
    BJ and the remaining 25% shares are held by Beijing Yunqianyi Information Technology Co., Ltd.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;SDH
    New Energy&#8221; are to SDH (HK) New Energy Tech Co., Limited, Sunrise New Energy&#8217;s wholly-owned-subsidiary, a Hong Kong corporation.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Sunrise
    Guizhou&#8221; are to Sunrise (Guizhou) New Energy Material Co., Ltd, a limited liability company organized under the laws of the
    PRC and 39.3519% of its equity interest is owned by Sunrise New Energy;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;U.S.&#8221;
    are to the United States;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;User&#8221;
    or &#8220;Users&#8221; are to registered users of our APP;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
    </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;VIE&#8221;
    are to variable interest entity; </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Zhuhai
                                            Zibo&#8221; are to Zhuhai (Zibo) Investment Co., Ltd.,&#160;&#160;a limited liability company
                                            organized under the laws of the PRC, SDH New Energy&#8217;s wholly owned subsidiary;</span></p></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Zhuhai
    Guizhou&#8221; are to Zhuhai (Guizhou) New Energy Investment Co., Ltd., a limited liability company organized under the laws of the
    PRC, SDH New Energy&#8217;s wholly owned subsidiary;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
    </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Zibo
    Shidong&#8221; are to Zibo Shidong Digital Technology Service Co., Ltd., a limited liability company organized under the laws of
    the PRC, the VIE&#8217;s wholly owned subsidiary; </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this annual report, substantially all of the Company&#8217;s business is conducted by (1) Sunrise Guizhou, a joint venture
formed by the Company and certain other shareholders in 2022, and (2) SDH, the Company&#8217;s VIE entity, in the PRC, using RMB, the
currency of China. Our consolidated financial statements are presented in United States dollars or US$. In this annual report, we refer
to assets, obligations, commitments and liabilities in our consolidated financial statements in United States dollars or US$. These US$
references are based on the exchange rate of RMB to United States dollars, determined as of a specific date or for a specific period.
Changes in the exchange rate will affect the amount of our obligations and the value of our assets in terms of United States dollars
which may result in an increase or decrease in the amount of our obligations and the value of our assets, including accounts receivable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unless
expressly indicated herein to the contrary, all references to share amounts in this annual report give retroactive effect to share consolidations,
the last of which was effected on April 24, 2020.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 5; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->iii<!-- Field: /Sequence --></span></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>FORWARD-LOOKING
INFORMATION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
annual report on Form 20-F contains &#8216;forward-looking statements&#8217; within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties.
Known and unknown risks, uncertainties and other factors, including those listed under &#8220;Item 3. Key Information&#8212;D. Risk Factors,&#8221;
may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking
statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance
or achievements to be materially different from those expressed or implied by the forward-looking statements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">You
can identify some of these forward-looking statements by words or phrases such as &#8220;may,&#8221; &#8220;will,&#8221; &#8220;expect,&#8221;
&#8220;anticipate,&#8221; &#8220;aim,&#8221; &#8220;estimate,&#8221; &#8220;intend,&#8221; &#8220;plan,&#8221; &#8220;believe,&#8221;
&#8220;is/are likely to,&#8221; &#8220;potential,&#8221; &#8220;continue&#8221; or other similar expressions. We have based these forward-looking
statements largely on our current expectations and projections about future events that we believe may affect our financial condition,
results of operations, business strategy and financial needs. These forward-looking statements include statements relating to:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">future
    financial and operating results, including revenues, income, expenditures, cash balances and other financial items;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
    </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    ability to execute our growth and expansion, including our ability to meet our goals; </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">current
    and future economic and political conditions;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    future growth of the Chinese knowledge sharing and enterprise service industries;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    ability to continue to operate through the VIE structure;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
    </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    capital requirements and our ability to raise any additional funds which we may require; </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
    </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    ability to attract clients and further enhance our brand recognition; </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    ability to hire and retain qualified management personnel and key employees in order to enable us to develop our business;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
    </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">trends
    and competition in Chinese enterprise service and knowledge sharing industries; </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">impact
    of the novel COVID-19 outbreak on our business operations; and </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">other
    assumptions described in this annual report underlying or relating to any forward-looking statements.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking
statements are reasonable, our expectations may later be found to be incorrect. Our actual results could be materially different from
our expectations. Other sections of this annual report include additional factors that could adversely impact our business and financial
performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not
possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business
or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any
forward-looking statements. You should read thoroughly this annual report and the documents that we refer to with the understanding that
our actual future results may be materially different from, or worse than, what we expect. We qualify all of our forward-looking statements
by these cautionary statements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
annual report contains certain data and information that we obtained from various government and private publications. Statistical data
in these publications also include projections based on a number of assumptions. The insurance industry may not grow at the rate projected
by market data, or at all. Failure of this market to grow at the projected rate may have a material and adverse effect on our business
and the market price of the Ordinary Shares. In addition, the rapidly evolving nature of this industry results in significant uncertainties
for any projections or estimates relating to the growth prospects or future condition of our market. Furthermore, if any one or more
of the assumptions underlying the market data are later found to be incorrect, actual results may differ from the projections based on
these assumptions. You should not place undue reliance on these forward-looking statements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are
made in this annual report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements,
whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the
occurrence of unanticipated events. You should read this annual report and the documents that we refer to in this annual report and exhibits
to this annual report completely and with the understanding that our actual future results may be materially different from what we expect.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 6; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->iv<!-- Field: /Sequence --></span></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_003"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>PART
I</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_004"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_005"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
2. OFFER STATISTICS AND EXPECTED TIMETABLE</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
Applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_006"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
3. KEY INFORMATION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a Cayman Islands holding company conducting a substantial portion of our operations in China through our PRC operating entities.
Unless otherwise stated, as used in this annual report, the terms &#8220;we,&#8221; &#8220;us,&#8221; &#8220;our,&#8221; &#8220;Sunrise
New Energy,&#8221; &#8220;our Company,&#8221; and the &#8220;Company&#8221; refer to Sunrise New Energy Co., Ltd., an exempted company
limited by shares incorporated under the laws of the Cayman Islands; and &#8220;SDH&#8221; or &#8220;the VIE&#8221; are to Global Mentor
Board (Beijing) Information Technology Co., Ltd., a limited liability company organized under the laws of the PRC, which we control via
a series of contractual arrangements among GIOP BJ, SDH and shareholders of SDH (the &#8220;VIE Agreements&#8221;).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this annual report, substantially all of our business is conducted by (1) Sunrise Guizhou, a joint venture established
by Zhuhai Zibo (a wholly owned subsidiary of the Company) and certain other partners, as a limited company pursuant to PRC laws for the
purpose of manufacturing and sales of graphite anode materials; and (2) SDH, the Company&#8217;s VIE entity that operates a knowledge
sharing platform in China. Investors of our Ordinary Shares do not hold shares in the PRC operating entities, but instead hold shares
of a Cayman Islands company. Further, neither we nor our subsidiaries own any shares in the VIE. Instead, for accounting purposes, we
control and receive the economic benefits of the VIE&#8217;s business operation through a series of contractual arrangements, also known
as VIE Agreements, dated June 10, 2019. The VIE Agreements enable us to consolidate the financial results of the VIE and its subsidiaries
in our consolidated financial statements under the generally accepted accounting principles in the United States (&#8220;U.S. GAAP&#8221;).
Pursuant to the VIE Agreements, which have not been tested in a court of law, under, the assets and liabilities of the VIE are treated
as our assets and liabilities and the results of operations of the VIE are treated as if they were the results of our operations. See
&#8220;Item 3. Key Information &#8212; Contractual Agreements among GIOP BJ, the VIE and Its Shareholders&#8221; for a summary of these
VIE Agreements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have relied and expect to continue to rely on the VIE Agreements to control and operate the business of the VIE. The VIE Agreements,
however, may not be as effective in providing us with the necessary control over the VIE and its operations. For example, the VIE and
its shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations in an
acceptable manner or taking other actions that are detrimental to our interests. If we had direct ownership of the VIE, we would be able
to exercise our rights as a shareholder to effect changes in the board of directors of the VIE, which in turn could implement changes,
subject to any applicable fiduciary obligations, at the management and operational level. Under the current VIE Agreements, however,
we rely on the performance by the VIE and its shareholders of their respective obligations under the contracts to exercise control over
the VIE. We are also subject to the risks of uncertainty about any future actions of the PRC government in this regard. Because of our
corporate structure, we are subject to risks due to uncertainty of the interpretation and the application of the PRC laws and regulations,
including but not limited to the validity and enforcement of the VIE Agreements. The VIE Agreements may not be effective in providing
control over the VIE. We may be also&#160;subject to sanctions imposed by PRC regulatory agencies including Chinese Securities Regulatory
Commission if we fail to comply with their rules and regulations.&#160;See &#8220;Risk Factors&#8212;Risks Related to Doing Business
in China,&#8221; and &#8220;Risk Factors&#8212;Risks Related to Our Corporate Structure.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2022 and 2021, the VIE accounted for an aggregate of 8.79% and 51.21%, respectively, of our consolidated total assets,
13.04% and 99% respectively, of our consolidated total liabilities, and 1.61% and 100% respectively, of our consolidated total net revenues.
See our consolidated financial statements and the related notes in this annual report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are subject to legal and operational risks associated with being based in the PRC, which could result in a material change in our PRC
operating entities and the VIE&#8217;s operations and/or the value of the securities we are registering for sale, or could significantly
limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to
significantly decline or be worthless. PRC laws and regulations governing our current business operations are sometimes vague and uncertain.
Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in the PRC
with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the
scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. For example, the General Office of the Central
Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severely Cracking
Down on Illegal Securities Activities According to Law, or the Opinions, which were made available to the public on July 6, 2021. The
Opinions emphasized the need to strengthen the administration over illegal securities activities and the need to strengthen the supervision
over overseas listings by Chinese companies. As of the date of this annual report, we, our PRC subsidiaries, or the VIE and its subsidiaries
have not been involved in any investigations on cybersecurity review initiated by any PRC regulatory authority, nor has any of them received
any inquiry, notice, or sanction.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
confirmed by our PRC counsel, Jincheng Tongda &amp; Neal Law Firm (&#8220;JT&amp;N&#8221;), as of the date of this annual report, we
are not subject to cybersecurity review with the Cyberspace Administration of China, or the CAC, under the Cybersecurity Review Measures
that became effective on February 15, 2022, or if the draft Regulations on the Network Data Security Administration (Draft for Comments)
(the &#8220;Security Administration Draft&#8221;) is enacted as proposed, since (i) as companies that engage in business-oriented consulting
services and manufacturing and sales of graphite anode materials, we, our PRC subsidiaries, or the VIE and its subsidiaries, are unlikely
to be classified as critical information infrastructure operators (&#8220;CIIOs&#8221;) by the PRC regulatory agencies; (ii) according
to the interpretation of the relevant laws by the CAC, for online platform operators who have listed in foreign countries before the
effective date of Cybersecurity Review Measures, and who are not seeking a new listing (such as a secondary or dual listing) in foreign
countries, a cybersecurity review is not required; and (iii) the data processed in the business of the VIE and its subsidiaries, which
is a knowledge sharing and enterprise service platform business, is unlikely to have a bearing on national security. There remains uncertainty,
however, as to how the Cybersecurity Review Measures and the Security Administration Draft will be interpreted or implemented and whether
the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation
related to the Cybersecurity Review Measures and the Security Administration Draft. See &#8220;Risk Factors&#8212;Risks Relating to Doing
Business in the PRC&#8212;Recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign
exchange, could adversely impact our business and our offering.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
on February 17, 2023, the China Securities Regulatory Commission (the &#8220;CSRC&#8221;) released the Trial Administrative Measures
of Overseas Securities Offering and Listing by Domestic Companies (the &#8220;Trial Measures&#8221;) and five supporting guidelines,
which took effect on March 31, 2023. Pursuant to the Trial Measures, PRC domestic companies that seek to offer or list securities overseas,
both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within
three working days following its submission of relevant applications or its completion of subsequent offerings. If a domestic company
fails to complete required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such
domestic company may be subject to administrative penalties, such as an order to rectify, warnings, fines, and its controlling shareholders,
actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties,
such as warnings and fines. On the same day, the CSRC also held a press conference for the release of the Trial Measures and issued the
<i>Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies</i>, or the CSRC Notice, which, among
others, clarifies that PRC domestic companies that have already been listed overseas before the effective date of the Trial Measures,
which is March 31, 2023, shall be deemed as Existing Issuers, and Existing Issuers are not required to complete the filing procedures
with the CSRC immediately, and they shall be required to file with the CSRC for any subsequent offerings. We are an Existing Issuer,
based on the foregoing, and we are not, therefore, required to complete the filing procedures with the CSRC immediately, and shall be
required, however, to file with the CSRC for any subsequent offerings. As of the date of this annual report, we are not aware of the
Trial Measures or any other PRC laws or regulations currently in effect requiring that we obtain permission from any PRC government authority
for our continued listing on the Nasdaq. However, since these statements and regulatory actions are newly published, however, official
guidance and related implementation rules have not been issued. It is highly uncertain what the potential impact such modified or new
laws and regulations will have on the daily business operations of our subsidiaries and the VIE, our ability to accept foreign investments,
and our listing on an U.S. exchange. See &#8220;<i>Risk Factors&#8212;Risks Relating to Doing Business in the PRC&#8212;The Trial Measures
and the revised Provisions recently issued by the PRC authorities may subject us to additional compliance requirements in the future.</i>&#8221;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Since
2021, the Chinese government has strengthened its anti-monopoly supervision, mainly in three aspects: (i) establishing the National Anti-Monopoly
Bureau; (ii) revising and promulgating anti-monopoly laws and regulations, including: the Anti-Monopoly Law of the PRC (amended on June
24, 2022 and effective on August 1, 2022), the anti-monopoly guidelines for various industries, and the Detailed Rules for the Implementation
of the Fair Competition Review System; and (iii) expanding the anti-monopoly law enforcement targeting Internet companies and large enterprises.
As of the date of this annual report, the Chinese government&#8217;s recent statements and regulatory actions related to anti-monopoly
concerns have not impacted our or our PRC subsidiaries, or the VIE and its subsidiaries&#8217; ability to conduct business, our ability
to accept foreign investments or issue our securities to foreign investors because neither we and our subsidiaries, nor our PRC subsidiaries,
or the VIE and its subsidiaries engage in monopolistic behaviors that are subject to these statements or regulatory actions.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, our Ordinary Shares may be prohibited
from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable Act (the &#8220;HFCA Act&#8221;)
and related regulations, if the Public Company Accounting Oversight Board (United States) (the &#8220;PCAOB&#8221;) is unable to inspect
our auditor for two consecutive years beginning in 2022. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies
Accountable Act, and on December 29, 2022, legislation entitled &#8220;Consolidated Appropriations Act, 2023&#8221; (the &#8220;Consolidated
Appropriations Act&#8221;) was signed into law, which included an identical provision of the Accelerating Holding Foreign Companies Accountable
Act and amended the HFCA Act by requiring the U.S. Securities and Exchange Commission (the &#8220;SEC&#8221;) to prohibit an issuer&#8217;s
securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead
of three, thus reducing the time period for triggering the delisting of our Company and the prohibition of trading in our securities if
the PCAOB is unable to inspect our accounting firm at such future time. On December 16, 2021, the PCAOB issued a report on its determinations
that it was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in
Hong Kong, because of positions taken by PRC authorities in those jurisdictions. On December 15, 2022, the PCAOB Board determined that
the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China
and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail
to facilitate the PCAOB&#8217;s access in the future, the PCAOB Board will consider the need to issue a new determination. Our former
auditor, Friedman LLP, the independent registered public accounting firm that issued the audit report included in our 2021 annual report,
was a PCAOB-registered public accounting firm headquartered in New York during the time it served as our independent auditor. Our current
auditor, Marcum Asia CPAs LLP (&#8220;MarcumAsia&#8221;), has been our independent auditor since December 16, 2022. The change in auditor
was made due to the combination of Friedman LLP with Marcum LLP, effective September 1, 2022. MarcumAsia, is a PCAOB registered public
accounting firm headquartered in New York. Our current and former auditors are both subject to laws in the United States pursuant to which
the PCAOB conducts regular inspections to assess an auditor&#8217;s compliance with the applicable professional standards, and have been
inspected by the PCAOB on a regular basis. As such, as of the date of this annual report, our listing is not affected by the HFCA Act
and related regulations. See &#8220;Risk Factors&#8212;Risks Relating to Doing Business in the PRC&#8212;The Holding Foreign Companies
Accountable Act and related regulations, all call for additional and more stringent criteria to be applied to emerging market companies
upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments
could add uncertainties to our continued listing on the Nasdaq, and Nasdaq may determine to delist our securities if the PCAOB determines
that it cannot inspect or fully investigate our auditor.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this annual report, our Company, our subsidiaries, and the VIE have not distributed any earnings or settled any amounts
owed under the VIE Agreements, nor do they have any plan to distribute earnings or settle amounts owed under the VIE Agreements in the
foreseeable future. As of the date of this annual report, none of our subsidiaries or the VIE have made any dividends or distributions
to our Company and our Company has not made any dividends or distributions to our shareholders. We intend to keep any future earnings
to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future. If
we determine to pay dividends on any of our Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds
from our operating entities, pursuant to the VIE Agreements. Cash is transferred among our Company, our subsidiaries, and the VIE, in
the following manners: prior to the completion of our initial public offering in February 2021, the sources of funding of Sunrise New
Energy, its subsidiaries and the VIE primarily consisted of capital injection by shareholders and cash generated from operations; after
the completion of our initial public offering, Sunrise New Energy made capital contributions to its subsidiaries. To the extent cash
in the business is in the PRC, the funds may not be available to fund operations or for other use outside of the PRC due to interventions
in or the imposition of restrictions and limitations on the ability of our Company, our subsidiaries, or the VIE by the PRC government
to transfer cash. See &#8220;Risk Factors&#8212;Risks Relating to Our Corporate Structure&#8212;To the extent cash in the business is
in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds may not be available to fund operations or for other use outside of the PRC/Hong
Kong due to interventions in or the imposition of restrictions and limitations on the ability of our Company, our subsidiaries, or the
VIE by the PRC government to transfer cash.&#8221;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s management is directly supervising cash management. Our finance department is responsible for establishing the cash management
policies and procedures among our subsidiaries and departments and our PRC subsidiaries, or the VIE and its subsidiaries. Each subsidiary,
department, or PRC operating entity initiates a cash request by putting forward a cash demand plan, which explains the specific amount
and timing of cash requested, and submitting it to designated management members of the Company, based on the amount and the use of cash
requested. The designated management member examines and approves the allocation of cash based on the sources of cash and the priorities
of the needs, and submit it to the cashier specialists of our finance department for a second review. Other than the above, we currently
do not have other cash management policies or procedures that dictate how funds are transferred. Prior to the completion of our initial
public offering in February 2021, the sources of funding of the Company, its subsidiaries and the VIE primarily consisted of capital
injections by shareholders and cash generated from operations. Cash transfers and transfers of other assets between Sunrise New Energy,
its subsidiaries, and the VIE were as follows: (i) For the fiscal year ended December 31, 2022, the VIE provided interest-free loans
of $6,188,307 to the Company&#8217;s subsidiaries, Zhuhai Zibo and Sunrise Guizhou for the construction costs related to the graphite
anode business, and the Company&#8217;s subsidiary, GMB HK, provided interest-free loans of $310,000 to the Company for professional
fees. (ii) For the fiscal year ended December 31, 2021, the Company transferred the proceeds from its initial public offering in the
amount of $15,000,000 to its subsidiary, Zhuhai Zibo, and the VIE provided interest-free loans of $90,000 to the Company for professional
fees related to the initial public offering. (iii) For the fiscal year ended December 31, 2020, the VIE provided interest-free loans
of $128,282 to the Company for professional fees related to the initial public offering.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Permissions
Required from PRC Authorities</i></b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this annual report, we, our PRC subsidiaries, or the VIE and its subsidiaries, (i) are not subject to additional permissions
or approval requirements from any governmental agency that are required to approve the operations of our PRC subsidiaries, or the VIE
and its subsidiaries, (ii) have received from PRC authorities all requisite licenses, permissions, and approvals needed to engage in
the businesses currently conducted in the PRC, and (iii) no such permission or approval has been denied. These licenses, permissions,
and approvals, which have been successfully obtained, are: (1) business license; (2) the ICP License for our knowledge sharing and enterprise
service platform business; and (3) the approval for the Construction Land Use Planning Permit, the Construction Works Planning Permit,
the Construction Permit, the Pollutant Discharge License, the filing-for-record procedures with the relevant work safety administrative
department, the approval for the Environmental Impact Report and the Filing Certificate for Fire Safety Inspection and Acceptance of
Construction Project for our new business of manufacturing and sales of graphite anode material. However, we cannot assure you that any
of these entities will be able to receive clearance of such compliance requirements in a timely manner, or at all. Any failure of these
entities to fully comply with such compliance requirements may cause our PRC subsidiaries, or the VIE and its subsidiaries to be unable
to begin their new businesses or operations in the PRC, subject them to fines, relevant new businesses or operations suspension for rectification,
or other sanctions. See &#8220;Item 3. Key Information&#8212;D. Risk Factors&#8212;Risks Related to Our Business&#8212;We may be required
to obtain and maintain additional approvals, licenses or permits applicable to our business, including our online business, which could
have a material adverse impact on our business, financial conditions and results of operations.&#8221; We have been closely monitoring
the development in the regulatory landscape in China, particularly regarding the requirement of approvals, including on a retrospective
basis, from the CSRC, the CAC, or other PRC authorities with respect to this offering, as well as other procedures that may be imposed
on us.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Selected
Condensed Consolidating Financial Schedule</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a holding company with no material operations of our own, we conduct our operations through Sunrise Guizhou, the VIE and its subsidiaries
in the PRC. Our subsidiaries and the VIE and its subsidiaries as of the date of this annual report are described below:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: black 1.5pt solid; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Name</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Date
    of <br/>
    Incorporation</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Place
    of <br/>
    incorporation</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Percentage&#160;of
    <br/>
    effective <br/>
    ownership</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Principal<br/>
                                            Activities</b></span></p></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Subsidiaries</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 32%; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Global
    Mentor Board <br/>
    Information Technology Limited <br/>
    (&#8220;GMB HK&#8221;)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">March
    22, 2019</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 11%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100%</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 26%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Holding
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Beijing
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    Information Technology Co, Ltd.<br/>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100%</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Holding
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shidong
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">75%</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Educational
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">SDH
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">October
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hongkong</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100%</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Holding
    company</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Zhuhai
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">October
    15, 2021</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100%</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">New
    Energy Investment</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Zhuhai
    (Guizhou) New Energy Investment Co., Ltd. (&#8220;Zhuhai Guizhou&#8221;)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">November
    23, 2021</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100%</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">New
    Energy Investment</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sunrise
    (Guizhou) New Energy Materials Co., Ltd. &#160;(&#8220;Sunrise Guizhou&#8221;)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">November
    8, 2021</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">39.35%</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Manufacture
    of Lithium Battery Materials</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Guizhou
    Sunrise Technology Co., Ltd. (&#8220;Sunrise Tech&#8221;)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">September
    1, 2011</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">39.35%</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Manufacture
    of Lithium Battery Materials</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sunrise
    (Guxian) New Energy Materials Co., Ltd. (&#8220;Sunrise Guxian&#8221;)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">April
    26, 2022</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">20.07%</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Manufacture
    of Lithium Battery Materials</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Guizhou
    Sunrise Technology Innovation Research Co., Ltd. (&#8220;Innovation Research&#8221;)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December
    13, 2022</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">39.35%</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Research
    and Development</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Variable
    Interest Entity (&#8220;VIE&#8221;) and subsidiaries of VIE</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Global
    Mentor Board (Beijing) <br/>
    Information Technology Co., <br/>
    Ltd. (&#8220;SDH&#8221; or &#8220;VIE&#8221;)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December&#160;5,
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">VIE</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">peer-to-peer
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Global
    Mentor Board (Hangzhou) <br/>
    Technology Co., Ltd. <br/>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">November
    1, 2017</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100%
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consulting,
    training and tailored services provider</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Global
    Mentor Board (Shanghai) <br/>
    Enterprise Management Consulting <br/>
    Co., Ltd. (&#8220;GMB Consulting&#8221;)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">June
    30, 2017</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">51%
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consulting
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shanghai
    Voice of Seedling <br/>
    Cultural Media Co., Ltd. <br/>
    (&#8220;GMB Culture&#8221;)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">June
    22, 2017</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
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    Technology Co., LTD.<br/>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">information
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
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    Cultural Technology Co., Ltd.<br/>
    (&#8220;GMB Technology&#8221;)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Technical
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shidong
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Technical
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;Business
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shanghai
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    by VIE</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Enterprise
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; ">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Beijing
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 11 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following tables present selected condensed consolidating
financial data of Sunrise New Energy and its subsidiaries and the VIE and its subsidiaries for the fiscal years ended December 31, 2022,
2021, 2020, and balance sheet data as of December 31, 2022, 2021, and 2020.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SELECTED
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS DATA</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="18" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year ended December 31, 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Consolidated<br/> affiliated<br/> entities</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">VIE<br/> consolidated<br/> entities</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 40%; text-align: left">Revenues, net</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;-</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,489,747</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(13,732,534</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    affiliated<br/>
    entities</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(170,253</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(5,865,989</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">107,118</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(8,950,913</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">Net loss</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(3,021,789</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(170,253</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(5,629,408</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">107,118</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="18" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year ended December 31, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Parent</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Consolidated<br/>
    affiliated<br/>
    entities</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">VIE<br/>
    consolidated<br/>
    entities</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Inter-<br/>
    company<br/>
    elimination</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    consolidated</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
<tr style="vertical-align: bottom">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">23,181,084</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">50,000</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">23,744</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">14,726,060</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">28,203</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">14,986,062</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">15,012,270</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">28,203</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">11,931,079</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SELECTED
CONDENSED CONSOLIDATING BALANCE SHEETS DATA</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="18" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31, 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Parent</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">VIE<br/> consolidated<br/> entities</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: justify">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="18" style="font-weight: bold; text-align: center">(US$)</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 40%; text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Total current assets</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">7,330,103</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">33,642,263</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">9,713,750</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
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    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">44,637,833</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Total non-current assets</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">14,690,000</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">56,445,366</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,939,175</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(14,690,000</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">62,384,541</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Total assets</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">22,020,103</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">90,087,629</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">15,652,925</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(20,738,283</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">107,022,374</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total current liabilities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">15,550</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">27,666,520</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">4,389,658</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(6,048,283</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">26,023,445</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Total non-current liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">7,637,332</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">7,637,332</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Total liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">15,550</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">35,303,852</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">4,389,658</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(6,048,283</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">33,660,777</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="18" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31, 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Parent</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Consolidated<br/>
    affiliated<br/>
    entities</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">VIE<br/>
    consolidated<br/>
    entities</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Inter-<br/>
    company<br/>
    elimination</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Group<br/>
    consolidated</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 40%; text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Total current assets</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">7,776,218</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">9,932,297</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">16,864,942</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">(227,899</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">34,345,558</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Total non-current assets</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">17,700,060</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">8,244,917</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">13,404,549</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(15,000,000</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">24,349,526</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Total assets</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">25,476,278</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">18,177,214</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">30,269,491</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(15,227,899</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">58,695,084</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">211,430</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">33,686</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,703,665</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(227,899</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,720,882</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Total non-current liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Total liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">211,430</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">33,686</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,703,665</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(227,899</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,720,882</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Parent</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Consolidated<br/>
    affiliated<br/>
    entities</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">VIE<br/>
    consolidated<br/>
    entities</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Inter-<br/>
    company<br/>
    elimination</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Group<br/>
    consolidated</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">125,386</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
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    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">28,246,141</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
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    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">28,257,605</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Total non-current assets</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">11,479,238</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">11,479,238</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Total assets</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">125,386</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">14,360</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">39,725,379</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(128,282</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">39,736,843</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Total current liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,583,463</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,583,463</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Total non-current liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">3,196</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">3,196</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Total liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,586,659</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,586,659</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


</div><!-- Field: Page; Sequence: 13 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->7<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SELECTED
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS DATA</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="18" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year ended December 31, 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Parent</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Consolidated affiliated entities</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">VIE consolidated entities</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Inter-company elimination</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Group consolidated</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="18" style="font-weight: bold; text-align: center">(US$)</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 40%; text-align: left; padding-bottom: 1.5pt">Net cash used in operating activities</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">(808,226</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">(5,444,733</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">(3,320,442</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">(9,573,401</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">Net cash used in investing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(45,299,072</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(6,188,307</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,878,307</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(45,609,072</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">Net cash provided by financing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">310,000</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">51,328,368</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(5,878,307</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">45,760,061</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="18" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year ended December 31, 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Parent</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Consolidated affiliated entities</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">VIE consolidated entities</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Inter-company elimination</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Group consolidated</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="18" style="font-weight: bold; text-align: center">(US$)</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 40%; text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Net cash (used in) provided
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    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">(6,532,445</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">2,314,408</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">&#160;&#160;&#160;-</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Net cash used in investing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(8,244,917</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Net cash provided by financing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">17,678,168</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"><p style="margin-top: 0; margin-bottom: 0">&#160;</p></td><td style="border-bottom: Black 1.5pt solid; text-align: right">30,837,261</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="18" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year ended December 31, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 40%; text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Net cash (used in) provided
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    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Net cash used in investing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(6,493,837</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">128,282</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(6,365,555</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Net cash provided by financing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">128,282</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">119,996</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(128,282</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">119,996</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.
[Reserved]</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.
Capitalization and Indebtedness</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="text-indent: 0pt; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="text-indent: 0pt; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.
Reasons for the Offer and Use of Proceeds</b></span></p><div>

</div><p style="text-indent: 0pt; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 14 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->8<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.
Risk Factors</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>An
investment in our Ordinary Shares involves a high degree of risk. Before deciding whether to invest in our Ordinary Shares, you should
consider carefully the risks described below, together with all of the other information set forth in this annual report. If any of these
risks actually occurs, our business, financial condition, results of operations or cash flow could be materially and adversely affected,
which could cause the trading price of our Ordinary Shares to decline, resulting in a loss of all or part of your investment. The risks
described below are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may
also affect our business. You should only consider investing in our Ordinary Shares if you can bear the risk of loss of your entire investment.</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Our Business</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Risks
and uncertainties related to our business include, but are not limited to, the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">We
                                            have a limited operating history and are subject to the risks encountered by development-stage
                                            companies.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                         </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Our
                                            historical financial results may not be indicative of our future performance.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                           </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">If
                                            we cannot manage our growth effectively and efficiently, our results of operations or profitability
                                            could be adversely affected.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                                                     </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">We
                                            may not be successful in implementing important new strategic initiatives, which may have
                                            an adverse impact on our business and financial results.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                                                                   </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">We
                                            may be required to obtain and maintain additional approvals, licenses or permits applicable
                                            to our business, including our graphite anode manufacturing and sales business and our knowledge
                                            share platform, which could have a material adverse impact on our business, financial conditions
                                            and results of operations.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Risks
Related to Our Graphite Anode Manufacturing and Sales Business</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Risks
and uncertainties related to our graphite anode manufacturing and sales business include, but are not limited to, the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Our
                                            graphite anode manufacturing and sales joint venture may not perform as well as we expected.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Joint
                                            venture with which we engage for developing graphite anode manufacturing and sales business
                                            presents a number of challenges that could have a material adverse effect on our business
                                            and results of operations and cash flows.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                          </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">We
                                            may not respond quickly to continued innovations.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                                                                                                                                                                                                                         </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Complying
                                            with numerous health, safety and environmental regulations is both complex and costly.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                        </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Sunrise
                                            Guizhou depends on a few major customers, and the loss of any of which could cause a significant
                                            decline in our revenues.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                                                </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Sunrise
                                            Guizhou may need additional capital to pursue business objectives and respond to business
                                            opportunities, challenges or unforeseen circumstances, and financing may not be available
                                            on acceptable terms or at all.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 15 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->9<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Risks
Related to Our Corporate Structure</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">With
regard to our knowledge sharing and enterprise service platform, we control and receive the economic benefits of the business operations
of the VIE through the VIE Agreements solely because we met the conditions for consolidation of the VIE under the U.S. GAAP for accounting
purpose; however, the VIE Agreements have not been tested in a court of law and are subject to significant risks, as set forth in the
following risk factors. For a description of these VIE Agreements, see &#8220;ITEM 4. INFORMATION ON THE COMPANY &#8212; C. Organizational
Structure&#8221;.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Risks
and uncertainties related to our corporate structure include, but are not limited to, the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">If
                                            the PRC government finds that the agreements that establish the structure for operating our
                                            businesses in China do not comply with PRC regulations relating to the relevant industries,
                                            or if these regulations or the interpretation of existing regulations change in the future,
                                            we could be subject to severe penalties or be forced to relinquish our interests in those
                                            operations.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                           </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">We
                                            rely on contractual arrangements with the VIE and its subsidiaries, and shareholders for
                                            our China operations, which may not be as effective in providing operational control as direct
                                            ownership.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                  </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
                                            contractual arrangements we have entered into with the VIE and its shareholders, and any
                                            other arrangements and transactions among related parties that we currently have or will
                                            have in future may be subject to scrutiny by the PRC tax authorities and they may determine
                                            that we owe additional taxes, which could substantially reduce our consolidated net income
                                            and the value of your investment.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                                                   </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
                                            shareholders of the VIE may have potential conflicts of interest with us, which may materially
                                            and adversely affect our business and financial condition.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                                                                               </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">We
                                            may lose the ability to use and enjoy assets held by the VIE that are material to the operation
                                            of certain portion of our business if the VIE goes bankrupt or become subject to a dissolution
                                            or liquidation proceeding.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                       </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">As
                                            an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain
                                            home country practices in relation to corporate governance matters that differ significantly
                                            from the Nasdaq listing standards; these practices may afford less protection to shareholders
                                            than they would enjoy if we complied fully with such corporate governance listing standards.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Risks
Related to Doing Business in China </b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Risks
and uncertainties related to doing business in China include, but are not limited to, the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
                                            Chinese government exerts substantial influence over the manner in which we must conduct
                                            our business, and may intervene or influence our operations at any time, which could result
                                            in a material change in our operations, significantly limit or completely hinder our ability
                                            to offer or continue to offer securities to investors and, and cause the value of our Ordinary
                                            Shares to significantly decline or be worthless.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                                                                    </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Recent
                                            greater oversight by the Cyberspace Administration of China over data security, particularly
                                            for companies seeking to list on a foreign exchange, could adversely impact our business
                                            and our securities.</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
                                            Trial Measures and the revised Provisions recently issued by the PRC authorities may subject
                                            us to additional compliance requirements in the future.</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">A
                                            severe or prolonged downturn in the global or Chinese economy could materially and adversely
                                            affect our business and our financial condition.</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">We
                                            face risks related to health epidemics such as the COVID-19 first identified in Wuhan city
                                            at the end of 2019, which significantly disrupted our operations and may continue to adversely
                                            affect our business, financial condition and results of operations.</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><p style="margin-top: 0; margin-bottom: 0"></p><div>

</div><!-- Field: Page; Sequence: 16 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->10<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Because
                                            our business is dependent upon government policies that encourage a market-based economy,
                                            change in the political or economic climate in the PRC may impair our ability to operate
                                            profitably, if at all. </span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">PRC
                                            laws and regulations governing our current business operations are sometimes vague and uncertain
                                            and any changes in such laws and regulations may materially and adversely affect our business
                                            and impede our ability to continue our operations.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                                </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Because
                                            our business is conducted in RMB and the price of our Ordinary Shares is quoted in United
                                            States dollars, changes in currency conversion rates may affect the value of your investments.
                                            </span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Under
                                            the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified as a &#8220;resident
                                            enterprise&#8221; of China, which could result in unfavorable tax consequences to us and
                                            our non-PRC shareholders. </span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                               </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">There
                                            are significant uncertainties under the EIT Law relating to the withholding tax liabilities
                                            of our PRC subsidiaries, and dividends payable by our PRC subsidiaries to our offshore subsidiaries
                                            may not qualify to enjoy certain treaty benefits.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                               </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">PRC
                                            regulation of loans to and direct investment in PRC entities by offshore holding companies
                                            and governmental control of currency conversion may delay or prevent us from making loans
                                            or additional capital contributions to our PRC subsidiaries, the VIE and its subsidiaries,
                                            which could materially and adversely affect our liquidity and our ability to fund and expand
                                            our business. &#160;</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                                      </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Government
                                            control in currency conversion may adversely affect our financial condition, our ability
                                            to remit dividends, and the value of your investment. </span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                                                                             </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">If
                                            we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed
                                            Chinese companies, we may have to expend significant resources to investigate and resolve
                                            the matter which could harm our business operations, stock price and reputation. </span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                                                          </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
                                            disclosures in our reports and other filings with the SEC and our other public pronouncements
                                            are not subject to the scrutiny of any regulatory bodies in the PRC. </span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                                                                                       </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top; text-align: justify">
<td style="width: 24px"></td><td style="width: 24px; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Holding Foreign Companies Accountable Act and related regulations all call for additional and more stringent criteria to be applied to
emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected
by the PCAOB. These developments could add uncertainties to our continued listing on the Nasdaq, and Nasdaq may determine to delist our
securities if the PCAOB determines that it cannot inspect or fully investigate our auditor.</span></td>
</tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Our
                                            contractual arrangements with the VIE are governed by the laws of the PRC and we may have
                                            difficulty in enforcing any rights we may have under these contractual arrangements. </span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                                                                                                      </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
                                            failure to comply with PRC regulations relating to mergers and acquisitions of domestic entities
                                            by offshore special purpose vehicles may subject us to severe fines or penalties and create
                                            other regulatory uncertainties regarding our corporate structure. </span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                                          </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">PRC
                                            regulations relating to the establishment of offshore special purpose companies by PRC residents
                                            may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties,
                                            limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries&#8217;
                                            ability to increase its registered capital or distribute profits to us, or may otherwise
                                            adversely affect us.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                                                      </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Increases
                                            in labor costs in the PRC may adversely affect our business and our profitability.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                           </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">U.S.
                                            regulatory bodies may be limited in their ability to conduct investigations or inspections
                                            of our operations in China.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 17 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->11<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>Risks
Related to Our Ordinary Shares and the Trading Market</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Risks
and uncertainties related to our Ordinary Shares and the trading market include, but are not limited to, the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">If
                                            we are a passive foreign investment company for United States federal income tax purposes
                                            for any taxable year, United States holders of our Ordinary Shares could be subject to adverse
                                            United States federal income tax consequences.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                               </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">We
                                            have identified several control deficiencies in our internal control over financial reporting.
                                            If we fail to maintain an effective system of internal controls over financial reporting,
                                            we may not be able to accurately report our financial results or prevent fraud.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                                                                </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">We
                                            do not intend to pay dividends for the foreseeable future.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                        </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
                                            market price of our Ordinary Shares may be volatile or may decline regardless of our operating
                                            performance, and you may not be able to resell your shares at or above the initial public
                                            offering price.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                       </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">As
                                            a foreign private issuer, we are not subject to certain U.S. securities law disclosure requirements
                                            that apply to a domestic U.S. issuer, and are exempt from certain Nasdaq corporate governance
                                            standards applicable to U.S. issuers, which may limit the information publicly available
                                            to our investors and afford them less protection than if we were an U.S issuer.</span></td></tr><tr style="vertical-align: top">
<td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
                                                          </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 24px"></td><td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">If
                                            we cannot satisfy the listing requirements and other rules of Nasdaq Capital Market, our
                                            securities may be delisted, which could negatively impact the price of our securities and
                                            your ability to sell them.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risks
Related to Our Business</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
have a limited operating history and are subject to the risks encountered by development-stage companies.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
PRC operating entities have been in business since 2014 as a consulting company. In 2022, we entered into a new business, manufacturing
and sales of graphite anode materials, by forming a joint venture (Sunrise Guizhou) in Guizhou Province, China. As a development-stage
company, our business strategies and model are constantly being tested by the market and operating results, and we adjust the allocation
of our resources accordingly. As such, our business may be subject to significant fluctuations in operating results in terms of amounts
of revenues and percentages of total with respect to the business segments.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are, and expect for the foreseeable future to be, subject to all the risks and uncertainties, inherent in a development-stage business.
As a result, we must establish many functions necessary to operate a business, including expanding our managerial and administrative
structure, assessing and implementing our marketing program, implementing financial systems and controls and personnel recruitment. Accordingly,
you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by companies with
a limited operating history. These risks and challenges are, among other things:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
    </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we
    operate in industries that are or may in the future be subject to increasing regulation by various governmental agencies in China;
    </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we
    may require additional capital to develop and expand our operations which may not be available to us when we require it;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    marketing and growth strategy may not be successful;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    business may be subject to significant fluctuations in operating results; and</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we
    may not be able to attract, retain and motivate qualified professionals.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
future growth will depend substantially on our ability to address these and the other risks described in this annual report. If we do
not successfully address these risks, our business would be significantly harmed.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Our
historical financial results may not be indicative of our future performance.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
net revenue was $7,409,272 and $23,181,084 for the years ended December 31, 2021 and 2020, respectively. Our net loss was $8,714,332
for the year ended December 31, 2021 and net income was $11,957,287 for the year ended December 31, 2020, respectively. However, our
net revenue was $38,125,668 and we incurred a net loss of $23,124,402 for the year ended December 31, 2022. The loss was mainly due to
the material and negative impact of the COVID-19 pandemic on our business, and the large capital investment injected by us into the new
business venture, Sunrise Guizhou, to enter into the manufacture and sales of lithium-ion power battery anode materials. As such, our
limited history of operation makes it difficult to evaluate our future prospects.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 18 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->12<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>If
we cannot manage our growth effectively and efficiently, our results of operations or profitability could be adversely affected.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are expanding our operations into the graphite anode manufacturing and sales business. In April 2022, we entered into an investment agreement
with certain partners to form a joint venture, Sunrise Guizhou, which is dedicated to the production of lithium-ion power battery anode
materials. As of the date of this annual report, we have made substantial investment into the new venture. Such expansion has placed,
and will continue to place, substantial demands on our financial, managerial, operational, technological and other resources. Our planned
expansion will also place significant demands on us to maintain the quality of our services to ensure that our brand does not suffer
as a result of any deviations, whether actual or perceived, in the quality of our services. In order to manage and support our growth,
we must continue to improve our existing operational and administrative systems and our quality control, and recruit, train and retain
additional qualified professionals as well as other administrative and sales and marketing personnel, particularly as we expand into
new business ventures and launch new business initiatives. We may not be able to effectively and efficiently manage the growth of our
operations, recruit and retain qualified personnel and integrate new expansion into our operations. As a result, our quality of service
may deteriorate and our results of operations or profitability could be adversely affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
may not be successful in implementing important new strategic initiatives, which may have an adverse impact on our business and financial
results.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
is no assurance that we will be able to implement important strategic initiatives in accordance with our expectations, which may result
in an adverse impact on our business and financial results. For example, our latest strategic initiative, establishing our graphite anode
manufacturing and sales joint venture, Sunrise Guizhou, is designed to create growth, improve our results of operations and drive long-term
shareholders value; however, our management may lack required experience, knowledge, insight, or human and capital resources to carry
out the effective implementation to expand into new spaces outside of our current focuses. As such, we may not be able to realize our
expected growth, and our business and financial results will be adversely impacted.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>If
we are not successful in selling inventory, we may have to sell the inventory at significantly reduced prices or may not be able to sell
the inventory at all.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
late 2019, we started selling merchandises obtained through (1) fee exchange arrangements, through which we receive products in exchange
for collection of membership fees and consulting fees earned from our customers, and (2) direct purchases from our customers and third
parties based on market trend and demand. Our profitability in sale of merchandises depends on our ability to manage inventory levels
and respond to shifts in consumer demand patterns. Overestimating customer demand for merchandises will likely result in the need to
record inventory markdowns and sell excess inventory at clearance prices which would negatively impact our gross margins and operating
results. Underestimating customer demand for merchandises can lead to inventory shortages, missed sales opportunities and negative customer
experiences. Our gross margins could suffer if we are unable to effectively manage our inventory and sell merchandises at a significantly
reduced price, which could have a material adverse effect on our results of operations and cash flows.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Increasing
competition within the enterprise service and knowledge sharing industries could have an impact on our business prospects.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
enterprise service and knowledge sharing are industries where new competitors can easily enter into since there are no significant barriers
to entry. We also face many competitors in the knowledge sharing industry where a number of competitors have been in business longer
than us. Competing companies may have significantly greater financial and other resources than we have and may offer services that are
more attractive to prospective clients; increased competition would have a negative impact on both our revenues and our profit margins.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
may be required to obtain and maintain additional approvals, licenses or permits applicable to our business, including our graphite anode
manufacturing and sales business and our knowledge share platform, which could have a material adverse impact on our business, financial
conditions and results of operations.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Before
we develop certain new products in our graphite anode manufacturing and sales business, we must obtain a variety of approvals from local
and municipal governments in the PRC for the operating of our graphite anode manufacturing and sales business. We have obtained the following
in relation to our graphite anode manufacturing and sales business: construction permits, fire acceptance record certificate, sewage
discharge permit, environmental impact statements, and product quality system certification, including: ISO 14001:2015, ISO 45001:2018,
ISO 9001:2015, ISO 16949:2016. There is no assurance that we will be able to obtain all required licenses, permits, or approvals from
government authorities. If we fail to obtain all required licenses, permits or approvals, we may be unable to expand our operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
operation of our knowledge sharing platform is subject to governmental supervision and regulation by the relevant PRC governmental authorities,
including the Ministry of Commerce, or MOFCOM, the Ministry of Industry and Information Technology, or MIIT, the National Radio and Television
Administration or NRTA, and other governmental authorities in charge of the relevant categories of services offered by us. Together,
these government authorities promulgate and enforce regulations that cover many aspects of the operation of online services we provide
on our APP, including entry into this online service industry, the scope of permissible business activities, licenses and permits for
various business activities, and foreign investment.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
currently hold an ICP License (the Administrative Measures on Internet Information Services, or the Internet Measures, promulgated by
the State Council requires commercial internet content-related services operators to obtain a VATS (&#8220;value added telecommunications
service&#8221;) License for internet content provision business, or the ICP License). Although we do not currently believe we are required
to hold any other licenses, we may be required to obtain additional licenses, permits or approval, given the significant uncertainties
of the interpretation and implementation of certain regulatory requirements applicable to our business. See &#8220;<i>Regulations&#8212;
Regulations Related to Online Transmission of Audio-Visual Programs</i>.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are uncertainties with respect to the interpretation and implementation of existing and future laws and regulations governing our business
activities. As of the date of this annual report, we are not aware of any other approvals, licenses, or permits that are material to
our business operations that we have not, but may be required to, obtain; nor have we received any notice of warning or been subject
to penalties or other disciplinary action from the relevant governmental authorities for lack of approvals and permits or noncompliance
with regulations related to our current licenses. However, we cannot assure you that we will not be subject to any warning, investigations
or penalties in the future. If the PRC government deems us as operating without proper approvals, licenses or permits, promulgates new
laws and regulations that require additional approvals or licenses or impose additional restrictions on the operation of any part of
our business, we may be required to apply for additional approvals, license or permits, or be subject to various penalties, including
fines, termination or restrictions of the part of our business or revoking of our business licenses, which may materially and adversely
affect our business, financial conditions and results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
successful operation of our online service depends upon the performance and reliability of the internet infrastructure and fixed telecommunication
networks in China.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
online service depends on the performance and reliability of the internet infrastructure in China. Almost all access to the internet
is maintained through state-owned telecommunication operators under the administrative control and regulatory supervision of the MIIT.
In addition, the national networks in China are connected to the internet through international gateways controlled by the PRC government.
These international gateways are the only channels through which a domestic user can connect to the internet. It is unpredictable whether
a more sophisticated internet infrastructure will be developed in China. We may not have access to alternative networks in the event
of disruptions, failures or other problems with China&#8217;s internet infrastructure. In addition, the internet infrastructure in China
may not support the demands associated with continued growth in internet usage.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
rely on China Telecommunications Corporation, or China Telecom, and China United Network Communications Group Company Limited, or China
Unicom, to provide us with network services and data center hosting services. We have limited access to alternative services in the event
of disruptions, failures or other problems with the fixed telecommunications networks of these companies, or if these companies otherwise
fail to provide the services. Any unscheduled service interruption could damage our reputation and result in a decrease in our revenues.
Furthermore, we have no control over the costs of the services provided by these telecommunication companies. If the prices that we pay
for telecommunications and internet services rise significantly, our gross margins could be adversely affected. In addition, if internet
access fees or other charges to internet users increase, our user traffic may decrease, which in turn may harm our revenues.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Cyber-attacks
or other failures in our telecommunications or information technology systems, or those of our collaborators, third-party logistics providers,
distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption of our
business operations.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We,
our programs, our collaborators, third-party logistics providers, distributors and other contractors and consultants utilize information
technology, or IT, systems and networks to process, transmit and store electronic information, including but not limited to intellectual
property, proprietary business information and personal information, in connection with our business activities. Our internal IT systems
and those of current and future third parties on which we rely may fail and are vulnerable to breakdown, breach, interruption or damage
from cyber incidents, employee error or malfeasance, theft or misuse, sophisticated nation-state and nation-state-supported actors, unauthorized
access, natural disasters, terrorism, war, telecommunication and electrical failures or other compromises. As use of digital technologies
has increased, cyber incidents, including third parties gaining access to employee accounts using stolen or inferred credentials, computer
malware, viruses, spamming, phishing attacks, denial-of-service attacks or other means, and deliberate attacks and attempts to gain unauthorized
access to computer systems and networks, have increased in frequency, intensity, and sophistication. These threats pose a risk to the
security of our, our programs&#8217;, our collaborators&#8217;, third-party logistics providers&#8217;, distributors&#8217; and other
contractors&#8217; and consultants&#8217; systems and networks, and the confidentiality, availability and integrity of our data. There
can be no assurance that we will be successful in preventing cyber-attacks or successfully mitigating their effects. We may not be able
to anticipate all types of security threats, and we may not be able to implement preventive measures effective against all such security
threats. The techniques used by cyber criminals change frequently, may not be recognized until launched, and can originate from a wide
variety of sources, including outside groups such as external service providers, organized crime affiliates, terrorist organizations
or hostile foreign governments or agencies. Similarly, there can be no assurance that our collaborators, third-party logistics providers,
distributors and other contractors and consultants will be successful in protecting our clinical and other data that is stored on their
systems. Any loss of clinical trial data from our completed or ongoing clinical trials for any of our product candidates could result
in delays in our development and regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Although
to our knowledge we have not experienced any such material system failure or material security breach to date, if such an event were
to occur and cause interruptions in our operations, it could result in a material disruption of development programs and business operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
cyber-attack that leads to unauthorized access, use, or disclosure of personal information, data breach or destruction or loss of data
could result in a violation of applicable U.S. and international privacy, data protection and other laws and regulations, subject us
to litigation and governmental investigations, proceedings and regulatory actions by federal, state and local regulatory entities in
the United States and by international regulatory entities, resulting in exposure to material civil and/or criminal liability, cause
us to breach our contractual obligations, which could result in significant legal and financial exposure and reputational damages. As
cyber threats continue to evolve, we may be required to incur significant additional expenses in order to implement further data protection
measures or to remediate any information security vulnerability. Further, our general liability insurance and corporate risk program
may not cover all potential claims to which we are exposed and may not be adequate to indemnify us for all liability that maybe imposed,
which could have a material adverse effect on our business and prospects. There can be no assurance that the limitations of liability
in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages as a result of the events
referenced above.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>If
we fail to hire, train or retain qualified managerial and other employees, our business and results of operations could be materially
and adversely affected.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
place substantial reliance on the knowledge sharing and enterprise service industry experience and knowledge of our senior management
team as well as their relationships with other industry participants. The loss of the services of one or more members of our senior management
could hinder our ability to effectively manage our business and implement our growth strategies. Finding suitable replacements for our
current senior management could be difficult, and competition for such personnel of similar experience is intense. If we fail to retain
our senior management, our business and results of operations could be materially and adversely affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
personnel are critical to maintaining the quality and consistency of our services, brand and reputation. It is important for us to attract
qualified managerial and other employees who have experience in consulting services and are committed to our service approach. There
may be a limited supply of such qualified individuals. We must hire and train qualified managerial and other employees on a timely basis
to keep pace with our rapid growth while maintaining consistent quality of services across our operations. We must also provide continuous
training to our managerial and other employees so that they are equipped with up-to-date knowledge of various aspects of our operations
and can meet our demand for high-quality services. If we fail to do so, the quality of our services may decrease, which in turn, may
cause a negative perception of our brand and adversely affect our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>If
we fail to attract or retain qualified service providers, our business and results of operations could be materially and adversely affected.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
core strength is the knowledge brought by our service providers, highlighted by their experiences, wisdom, industry know-how, and social
connections. We rely heavily on the expertise of our service providers, including Mentors, Experts, and our consultants to maintain our
core competence. As of April 30, 2023, our knowledge sharing and enterprise service ecosystem had 784 Mentors and 1,930 Experts, and
a team of full-time consultants as our knowledge sharing providers. Many of our Mentors are experienced leaders of successful and well-known
corporations. Likewise, our Experts are outstanding professionals in their specialized fields, and our team of consultants is professionals
with industrial experiences of more than five years. As our business scope increases, we expect to continue to invest significant resources
in attracting and retaining service providers. Our ability to sustain our growth will depend on our ability to attract and retain qualified
service providers. If we fail to attract or retain qualified service providers, our business and results of operations could be materially
and adversely affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>If
we were to lose our certification as a National High Tech Enterprise, we could face higher tax rates than we currently pay for much of
our revenues.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
October 2017, the VIE was approved as a National High Tech Enterprise, which certificate was renewed in December 2020 and is valid for
three years. This certification entitles the VIE to a favorable tax rates of 15%, rather than the unified rate of 25% if it was not so
certified. In the event the VIE were to lose the benefit of the favorable tax rate in the future, we could see significant increases
in the amount of taxes we pay, meaning that our operating results could be materially harmed, even in the absence of a decrease in our
operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may be involved from time to time in
legal proceedings and commercial or contractual disputes, which could have a material adverse effect on our business, results of operations
and financial condition.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="text-align: justify; margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">From time to time, we may be involved in legal proceedings and commercial
disputes. Such proceedings or disputes are typically claims that arise in the ordinary course of business, including, without limitation,
commercial or contractual disputes, and other disputes with customers and suppliers, intellectual property matters, tax matters and employment
matters. There can be no assurance that such proceedings and claims, should they arise, will not have a material adverse effect on our
business, results of operations and financial condition.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Failure
to maintain or enhance our brand or image could have a material and adverse effect on our business and results of operations.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe our SDH (&#8220;&#24072;&#33891;&#20250;&#8221;) brand is associated with a well-recognized knowledge sharing and enterprise
services provider in the markets that we operate with online and offline services designed to suit our clients&#8217; needs. Our brand
is integral to our sales and marketing efforts. We have obtained trademark registrations for our brand SDH in the PRC. Our continued
success in maintaining and enhancing our brand and image depends to a large extent on our ability to satisfy customer needs by further
developing and maintaining quality of services across our operations, as well as our ability to respond to competitive pressures. If
we are unable to satisfy clients&#8217; needs or if our public image or reputation were otherwise diminished, our business transactions
with our clients may decline, which could in turn adversely affect our results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 20pt"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 20pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Any
failure to protect our trademarks and other intellectual property rights could have a negative impact on our business.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 20pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0in">We
believe our key trademark, &#8220;&#24072;&#33891;&#20250;,&#8221; for which we have obtained trademark protection in China, and 35 computer
software copyrights and one artwork copyright, for which we have obtained protection with the Copyright Protection Centre of China (CPCC),
and other intellectual property rights are critical to our success. Any unauthorized use of our trademarks or other intellectual property
rights could harm our competitive advantages and business. Historically, China has not protected intellectual property rights to the
same extent as the United States, and infringement of intellectual property rights continues to pose a serious risk of doing business
in China. Monitoring and preventing unauthorized use are difficult. The measures we take to protect our intellectual property rights
may not be adequate. Furthermore, the application of laws governing intellectual property rights in China and abroad is uncertain and
evolving, and could involve substantial risks to us. If we are unable to adequately protect our brand, trademarks and other intellectual
property rights, we may lose these rights and our business may suffer materially.

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 20pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
internet domain name rights are not rigorously regulated or enforced in China, other companies may incorporate in their domain names
elements similar in writing or pronunciation to the &#8220;&#24072;&#33891;&#20250;&#8221; trademarks or their Chinese equivalents. This
may result in confusion between those companies and our company and may lead to the dilution of our brand value, which could adversely
affect our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risks
Related to Graphite Anode Manufacturing and Sales Business</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Our
graphite anode manufacturing and sales joint venture may not perform as well as we expected.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In 2022, Zhuhai Zibo entered into an Investment
Agreement with 13 other parties to form a graphite anode manufacturing and sales joint venture, Sunrise Guizhou. As of the date of this
annual report, Zhuhai Zibo has invested a total of RMB126,480,000 ($19,858,670) in Sunrise Guizhou. While we believe the joint venture
could give the Company new potential growth, it may not perform as well as we expected and, as a result, could impact the Company&#8217;s
financial performance.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Joint
venture with which we engage for developing graphite anode manufacturing and sales business presents a number of challenges that could
have a material adverse effect on our business and results of operations and cash flows.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
success of our overall development plans for our graphite anode manufacturing and sales business depends on our relationships with our
joint venture partners. Transactions included in developing a joint venture typically involve a number of risks and present financial,
managerial and operational challenges, including the existence of unknown potential disputes, liabilities or contingencies that arise
after entering into the joint venture related to the counterparties to such joint venture. We could experience financial or other setbacks,
if transactions encounter unanticipated problems due to challenges, including problems related to execution or integration. Any of these
risks could reduce our revenues or increase our expenses, which could adversely affect our results of operations and cash flows.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
require cooperation from our joint venture partners to establish and operate the graphite anode manufacturing and sales business.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To successfully establish and operate the graphite
anode manufacturing and sales business, in addition to capital contributions, we need our partner&#8217;s expertise in a number of areas,
such as advanced technology R&amp;D, marketing and sales.In the event that we cannot maintain our cooperative relationships with our joint
venture partners, on terms favorable to us or at all, we will need to source other business partners, and we may lose access to key strategic
assets, which could result in material and adverse effects on our business and results of operations.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may not respond quickly to continued
innovations in the graphene products industry.</i></b></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that technological advances in graphite manufacture will continue to evolve and new technologies will continue to develop. Advances
in the manufacture of graphite could allow our competitors to develop products faster or produce more efficiently or at lower cost than
we can. If we are unable to adapt or incorporate technological advances into our operations, our production facilities could become less
competitive. Further, it may be necessary for us to incur significant expenditures to acquire any new technologies and retrofit our current
processes to remain competitive.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
must continuously invest in research and development.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
remain competitive, we must continuously invest in research and development which can be costly. Much of our technology and intellectual
property portfolio is at an early stage of development, and we may not be able to continue to identify, develop, exploit, market and,
in certain cases, secure regulatory approval for, innovative products in a timely manner or at all.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Risks
of relationships with third parties in respect of research and development.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Although
we have resources and staff dedicated to research and development, market conditions and other factors such as management efficiencies
may make it required or preferable for us to enter into arrangements with third parties for the development, production and commercialization
of graphite. If we are unable to negotiate favorable terms for such arrangements with respect to intellectual property or otherwise or
disagreements arise between us and any partner or potential partner, our business, financial condition, and results of operations may
be adversely affected. Further, there can be no assurance that any otherwise successful collaborations will generate products or intellectual
property which can be commercialized or will result in any revenue or cash flow.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Government
support of electric vehicles and renewable energy may be reduced.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Demand
for and development of the products that incorporate our graphite products, including electric vehicles, renewable energy technologies,
and power storage technologies, are significantly affected by government policies, support, and subsidies. Any reduction in government
support for relevant industries or technologies may adversely affect our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Price
volatility of our finished goods.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Whether
due to the entry into the market of new manufacturers, the development of new graphite products manufacturing technologies, changes in
downstream technologies, or other causes, there may be an increase in the availability of graphite products in the market relative to
the demand for those products. In the event that production exceeds demand, we may not be able to negotiate favorable pricing for the
sale of our products, and there is no assurance that we will maintain or achieve growth in revenue, profitability or cash flow from our
graphite products.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Complying
with numerous health, safety and environmental regulations is both complex and costly.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sunrise
Guizhou&#8217;s graphite manufacturing business is subject to numerous health, safety, and environmental requirements in the PRC. Such
laws and regulations govern, among other matters, air emissions, wastewater discharges, solid and hazardous waste management and the
use, composition, handling, distribution, and transportation of hazardous materials. Many such laws and regulations are becoming increasingly
stringent (and may impose strict liability) and the cost of compliance with these requirements can be expected to increase over time.
Although we believe that our operations will comply with applicable regulations, any failure to comply with these laws and regulations
could result in us incurring costs and/or liabilities, including as a result of regulatory enforcement, personal injury, property damage
and claims and litigation resulting from such events, which could adversely affect our results of operations and financial condition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Industrial
operations can be hazardous.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accidents
involving the mishandling of heavy equipment or hazardous substances could cause severe or critical damage or injury to property and
human health. Such an event could result in civil lawsuits and/or regulatory enforcement proceedings, both of which could lead to significant
liabilities. Any damage to persons, equipment or property or other disruption of our business could result in significant additional
costs to replace, repair and insure assets, which could negatively affect our business, prospects, operating results and financial condition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Sunrise Guizhou depends on a few major customers,
and the loss of any of which could cause a significant decline in our revenues.</i></b></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For fiscal year 2022, Sunrise Guizhou had 16 customers.
Sunrise Guizhou&#8217;s customers are manufacturers of industrial and consumer energy storage lithium-ion batteries, such as batteries
for electric vehicles and electric ships, and smart consumer electronics. For the fiscal year ended December 31, 2022, four customers
accounted for more than 10% of Sunrise Guizhou&#8217;s total sales, accounting for 28.43%, 19.54%, 19.30% and 18.87% respectively.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
any of its key customers reduces, delays or cancels its orders for any reason, or the financial condition of any of its key
customers deteriorates, Sunrise Guizhou&#8217;s business could be seriously harmed. Similarly, a failure to manufacture sufficient
quantities of products to meet the demands of these customers may cause Sunrise Guizhou to lose business. Furthermore, if Sunrise
Guizhou experiences difficulties in the collection of its accounts receivables from its key customers, the results of our operation
may be materially and adversely affected.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Sunrise
Guizhou faces the risk of fluctuations in the cost, availability, and quality of raw materials, which could adversely affect our results
of operations.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
cost, availability, and quality of the principle raw materials, such as asphalt coke, petroleum coke, needle coke, and American petroleum
coke, are essential to Sunrise Guizhou&#8217;s operations. It purchases these raw materials from suppliers in China, the United States,
Romania, and Indonesia, in order to meet the requirements of different customers, as well as to maintain a diversified supplier base
which is beneficial to a stable supply chain. Lack of availability of raw materials, whether due to shortages in supply, delays or interruptions
in processing, failure of timely delivery, or otherwise, could interrupt Sunrise Guizhou&#8217;s operations and adversely affect our
financial results. If the costs of raw materials increases due to policy changes, significant market price fluctuation, or any other
causes that generally cannot be controlled by Sunrise Guizhou, Sunrise Guizhou&#8217;s business and results of operations could be adversely
affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Further,
defective raw materials or raw materials with quality deficiencies could subject Sunrise Guizhou to product liability claims or legal
actions, which circumstances could adversely affect Sunrise Guizhou&#8217;s financial conditions and results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Sunrise
Guizhou entrusts third-party contract manufacturers for the manufacturing of its graphite anode products.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of the date of this annual report, Sunrise Guizhou
entrusts manufacturing of its graphite anode products to third parties contractors, who might be unable to timely manufacture its products
or produce the quantity and quality required to meet its commercial needs, or may not be able to execute our manufacturing procedures
appropriately, or may not perform as agreed upon, or to produce, store and distribute its products satisfactorily. Any of the above could
adversely affect the business results of operations and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Sunrise
Guizhou may need additional capital to pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances,
and financing may not be available on acceptable terms or at all.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
Sunrise Guizhou intends to continue to make investments to support the growth of its business, it may require additional capital to pursue
its business objectives and respond to business opportunities, challenges or unforeseen circumstances, including expanding manufacturing
capacities, developing new products and service offerings, increasing sales and marketing expenditures, and engage customers through
expanded channels, enhancing its operating infrastructure and acquiring complementary businesses and technologies. Accordingly, Sunrise
Guizhou may need to engage in equity or debt financing to secure additional funds. However, additional funds may not be available when
needed, on terms that are acceptable, or at all. Repayment of any such debt may divert a substantial portion of cash flow to repay principal
and interest on such debt, which would reduce the funds available for expenses, capital expenditures, acquisitions and other general
corporate purposes. Sunrise Guizhou may suffer as a result of any default and foreclosure on assets pledged to secure any such financing,
if the operating cash flow is insufficient to service debt obligations, which could in turn result in acceleration of obligations to
repay the indebtedness and limit sources of financing.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Volatility
in the credit markets may also have an adverse effect on Sunrise Guizhou&#8217;s ability to obtain debt financing. If it raises additional
funds through further issuance of equity or convertible debt securities, our existing shareholders could suffer significant dilution,
and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our ordinary shares.
If Sunrise Guizhou is unable to obtain adequate financing or financing on terms satisfactory to it when required, our ability to continue
to pursue our business objectives and to respond to business opportunities, challenges or unforeseen circumstances could be significantly
limited, and our business, financial condition, results of operations and prospects could be adversely affected.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 20pt"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risks
Related to Our Corporate Structure</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
control and receive the economic benefits of the business operations of the VIE through the VIE Agreements solely because we met the
conditions for consolidation of the VIE under the U.S. GAAP for accounting purpose; however, the VIE Agreements have not been tested
in a court of law and are subject to significant risks, as set forth in the following risk factors. For a description of these VIE Agreements,
see &#8220;ITEM 4. INFORMATION ON THE COMPANY &#8212; C. Organizational Structure&#8221;.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>If
the PRC government finds that the agreements that establish the structure for operating our businesses in China do not comply with PRC
regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the
future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign
ownership of certain parts of our businesses including the value-added telecommunications services, or the VATS, is subject to restrictions
under current PRC laws and regulations. For example, the ultimate foreign equity ownership in a VATS provider may not exceed 50%. Also,
for a foreign investor contemplating to acquire any equity interest in a VATS business in China, it must satisfy a number of stringent
performance and operational experience requirements. In addition, to conduct any VATS business in China, foreign investors have to set
up foreign-invested enterprises and obtain a relevant telecommunications business operating license. See &#8220;<i>Regulations&#8212;Regulations
Related to Foreign Investment</i>.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
light of the above restrictions and requirements, we currently operate our knowledge sharing and enterprise service platform through
SDH, a VIE entity, through a series of contractual arrangements, as a result of which, under United States generally accepted accounting
principles, the assets and liabilities of the VIE are treated as our assets and liabilities and the results of operations of the VIE
are treated in all aspects as if they were the results of our operations. For a description of these contractual arrangements, see &#8220;<i>Business&#8212;Contractual
Arrangements between GIOP BJ, the VIE and Its Shareholders</i>&#8221; and &#8220;<i>Related Party Transactions&#8212;Contractual Arrangements
with GIOP BJ, the VIE and Its Shareholders.</i>&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the opinion of our PRC legal counsel, Jincheng Tongda &amp; Neal Law Firm (&#8220;JT&amp;N&#8221;), based on its understandings of the
relevant PRC laws and regulations, (i) the ownership structures of the VIE in China and GIOP BJ are not in violation of applicable PRC
laws and regulations currently in effect; and (ii) each of the contracts among GIOP BJ, the VIE and its shareholders is legal, valid,
binding and enforceable in accordance with its terms and applicable PRC laws. However, our PRC legal counsel has also advised us that
there are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations. Accordingly,
the PRC regulatory authorities may ultimately take a view contrary to the opinion of our PRC legal counsel. It is uncertain whether any
new PRC laws or regulations relating to variable interest entity structures will be adopted or if adopted, what they would provide. If
we or the VIE are found to be in violation of any PRC laws or regulations, if the contractual arrangements among GIOP BJ, the VIE and
its shareholders are determined to be illegal or invalid by a PRC court, arbitral tribunal or regulatory authorities, or if we or the
VIE fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion
to take action in dealing with such violations or failures, including:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">revoking
    the business and/or operating licenses of GIOP BJ or the VIE;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">discontinuing
    or restricting the operations of GIOP BJ or the VIE;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">imposing
    conditions or requirements with which we, GIOP BJ, or the VIE may not be able to comply;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">requiring
    us, GIOP BJ, or the VIE to restructure the relevant ownership structure or operations which may significantly impair the rights of
    the holders of our Ordinary Shares in the equity of the VIE;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">restricting
    or prohibiting our use of the proceeds from our initial public offering to finance our business and operations in China; and\or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">imposing
    fines.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
imposition of any of these penalties would result in a material and adverse effect on our ability to conduct our business. In addition,
it is unclear what impact the PRC government actions would have on us and on our ability to consolidate the financial results of the
VIE in our consolidated financial statements, if the PRC government authorities were to find our legal structure and contractual arrangements
to be in violation of PRC laws and regulations. If the imposition of any of these government actions causes us to lose our right to direct
the activities of the VIE or our right to receive substantially all of the economic benefits and residual returns from the VIE and we
are not able to restructure our ownership structure and operations in a satisfactory manner, we would no longer be able to consolidate
the financial results of the VIE in our consolidated financial statements. Either of these results, or any other significant penalties
that might be imposed on us in this event, would have a material adverse effect on our financial condition and results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
rely on contractual arrangements with the VIE and its subsidiaries, and shareholders for our China operations, which may not be as effective
in providing operational control as direct ownership.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have relied and expect to continue to rely on contractual arrangements with the VIE, its subsidiaries and shareholders to operate our
business in China. For a description of these contractual arrangements, see &#8220;<i>Business&#8212;Contractual Arrangements between
GIOP BJ, the VIE and Its Shareholders</i>&#8221; and &#8220;<i>Related Party Transactions&#8212; Contractual Arrangements with GIOP BJ,
the VIE and Its Shareholders</i>.&#8221; These contractual arrangements may not be as effective in providing us with control over the
VIE and its subsidiaries as direct ownership. We have no direct or indirect equity interests in the VIE or any of its subsidiaries.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify; text-indent: -0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we had direct ownership of the VIE and its subsidiaries, we would be able to exercise our rights as a shareholder to effect changes in
the board of directors of the VIE and its subsidiaries, which in turn could effect changes, subject to any applicable fiduciary obligations,
at the management level. But under the current contractual arrangements, as a legal matter, if the VIE or any of its subsidiaries and
shareholders fails to perform their obligations under these contractual arrangements, we may have to incur substantial costs and resources
to enforce such arrangements and rely on legal remedies under PRC law, including seeking specific performance or injunctive relief and
claiming damages, which may not be effective. For example, if the shareholders of the VIE were to refuse to transfer their equity interest
in the VIE to us or our designee when we exercise the call option pursuant to these contractual arrangements, or if they were otherwise
to act in bad faith toward us, then we may have to take legal action to compel them to fulfill their contractual obligations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Many
of these contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC.
Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC
legal procedures. The legal environment in the PRC is not as developed as in some other jurisdictions, such as the United States. As
a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements. In the event we are
unable to enforce these contractual arrangements, we may not be able to exert effective control over our affiliated entities, and our
ability to conduct our business may be negatively affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
contractual arrangements we have entered into with the VIE and its shareholders, and any other arrangements and transactions among related
parties that we currently have or will have in future may be subject to scrutiny by the PRC tax authorities and they may determine that
we owe additional taxes, which could substantially reduce our consolidated net income and the value of your investment.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the
PRC tax authorities within ten years after the taxable year when the transactions are conducted. We could face material and adverse tax
consequences if the PRC tax authorities determine that the VIE contractual arrangements were not entered into on an arm&#8217;s-length
basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and adjust
the income of the VIE in the form of a transfer pricing adjustment. A transfer pricing adjustment could, among other things, result in
a reduction of expense deductions recorded by the VIE for PRC tax purposes, which could in turn increase its tax liabilities without
reducing GIOP BJ&#8217;s tax expenses. In addition, the PRC tax authorities may impose late payment fees and other penalties on the VIE
for the adjusted but unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected
if the VIE&#8217;s tax liabilities increase or if it is required to pay late payment fees and other penalties.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Because
we are a Cayman Islands holding company and conduct a knowledge sharing platform through the VIE in China, if we fail to comply with
applicable PRC law, we could be subject to severe penalties and our business could be adversely affected.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a Cayman Islands holding company and operate a substantial portion of our business through the VIE in China through VIE Agreements,
as a result of which, under United States generally accepted accounting principles, the assets and liabilities of the VIE are treated
as our assets and liabilities and the results of operations of the VIE are treated in all respects as if they were the results of our
operations. There are uncertainties regarding the interpretation and application of PRC laws, rules and regulations, including but not
limited to the laws, rules and regulations governing the validity and enforcement of the VIE Agreements between GIOP BJ and the VIE.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Provisions Regarding Mergers and Acquisitions of Domestic Projects by Foreign Investors (the &#8220;M&amp;A Rules&#8221;) requires an
overseas special purpose vehicle that are controlled by PRC companies or individuals formed for the purpose of seeking a public listing
on an overseas stock exchange through acquisitions of PRC domestic companies using shares of such special purpose vehicle or held by
its shareholders as considerations to obtain the approval of the&#160;China&#160;Securities&#160;Regulatory&#160;Commission, or the CSRC,
prior to the listing and trading of such special purpose vehicle&#8217;s securities on an overseas stock exchange. However, the application
of the M&amp;A Rules remains unclear. If CSRC approval is required, it is uncertain whether it would be possible for us to obtain the
approval. Any failure to obtain or delay in obtaining CSRC approval for such an offering would subject us to sanctions imposed by the
CSRC and other PRC regulatory agencies.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
on July 10, 2021, the Cyberspace Administration of China (&#8220;CAC&#8221;) publicly issued the Measures for Cybersecurity Censorship
(Revised Draft for Comments) aiming to, upon its enactment, replace the existing Measures for Cybersecurity Censorship. The draft measures
extend the scope of cybersecurity reviews to data processing operators engaging in data processing activities that affect or may affect
national security, including listing in a foreign country. If the enacted version of the draft measures mandates clearance of cybersecurity
review and other specific actions to be completed by companies, we face uncertainties as to whether such clearance is required for our
offerings and whether such clearance can be timely obtained, or at all.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
GIOP BJ, the VIE or their ownership structure or the VIE Agreements are determined to be in violation of any existing or future PRC laws,
rules or regulations, or GIOP BJ or the VIE fail to obtain or maintain any of the required governmental permits or approvals, the relevant
PRC regulatory authorities would have broad discretion in dealing with such violations, including:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">revoking
    the business and operating licenses of GIOP BJ or the VIE;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">discontinuing
    or restricting the operations of GIOP BJ or the VIE;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">imposing
    conditions or requirements with which we, GIOP BJ, or the VIE may not be able to comply;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">requiring
    us, GIOP BJ, or the VIE to restructure the relevant ownership structure or operations which may significantly impair the rights of
    the holders of our ordinary shares in the equity of the VIE; and\or&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">imposing
    fines.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
cannot assure you that the PRC courts or regulatory authorities may not determine that our corporate structure and VIE Agreements violate
PRC laws, rules or regulations. If the PRC courts or regulatory authorities determine that our contractual arrangements are in violation
of applicable PRC laws, rules or regulations, the VIE Agreements will become invalid or unenforceable, and the VIE will not be treated
as VIE entities and we will not be entitled to treat the VIE&#8217;s assets, liabilities and results of operations as our assets, liabilities
and results of operations, which could effectively eliminate the assets, revenue and net income of the VIE from our balance sheet, which
would most likely require us to cease conducting our business and would result in the delisting of our ordinary shares from the Nasdaq
Capital Market and a significant impairment in the market value of our ordinary shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
shareholders of the VIE may have potential conflicts of interest with us, which may materially and adversely affect our business and
financial condition.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Almost
all of our beneficiary owners hold equity interests in the VIE. They may have conflicts of interest with us. Conflicts of interest may
arise between the dual roles of them who are both shareholders of our Company and shareholders of SDH, the VIE. These shareholders may
breach, or cause the VIE to breach, or refuse to renew, the existing contractual arrangements we have with them and SDH, which would
have a material and adverse effect on our ability to effectively control the VIE and receive economic benefits from it. For example,
the shareholders may be able to cause our agreements with the VIE to be performed in a manner adverse to us by, among other things, failing
to remit payments due under the contractual arrangements to us on a timely basis. We cannot assure you that when conflicts of interest
arise any or all of these shareholders will act in the best interests of our Company or such conflicts will be resolved in our favor.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currently,
we do not have any arrangements to address potential conflicts of interest between these shareholders and our Company, except that we
could exercise our purchase option under the exclusive option agreements with these shareholders to request them to transfer all of their
equity interests in the VIE to a PRC entity or individual designated by us, to the extent permitted by PRC law. If we cannot resolve
any conflicts of interest or disputes between us and those individuals, we would have to rely on legal proceedings, which may materially
disrupt our business. There is also substantial uncertainty as to the outcome of any such legal proceeding.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Uncertainties
exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of our
current corporate structure, corporate governance and business operations.</i></b> &#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 15, 2019, the National People&#8217;s Congress approved the Foreign Investment Law, which has come into effect on January 1, 2020
and replaced the trio of existing laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise
Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation
rules and ancillary regulations. The Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment
regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements
for both foreign and domestic investments. However, since it is relatively new, uncertainties still exist in relation to its interpretation
and implementation. For instance, under the Foreign Investment Law, &#8220;foreign investment&#8217;&#8217; refers to the investment
activities directly or indirectly conducted by foreign individuals, enterprises or other entities in China. Though it does not explicitly
classify VIE Agreements as a form of foreign investment, there is no assurance that operation conducted by foreign investors or foreign-invested
enterprises via contractual arrangement would not be interpreted as a type of indirect foreign investment activities under the definition
in the future. In addition, the definition contains a catch-all provision which includes investments made by foreign investors through
means stipulated in laws or administrative regulations or other methods prescribed by the State Council. Therefore, it still leaves leeway
for future laws, administrative regulations or provisions promulgated by the Stale Council to provide for VIE Agreements as a form of
foreign investment. In any of these cases, it will be uncertain whether the VIE Agreements will be deemed to be in violation of the market
access requirements for foreign investment under the PRC laws and regulations. Furthermore, if future laws, administrative regulations
or provisions prescribed by the State Council mandate further actions to be taken by companies with respect to existing VIE Agreements,
we may face substantial uncertainties as to whether we can complete such actions in a timely manner, or at all. Failure to take timely
and appropriate measures to cope with any of these or similar regulatory compliance challenges could materially and adversely affect
our current corporate structure, corporate governance and business operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Our
executive officers, directors and affiliates own a significant percentage of our shares and will be able to exert significant control
over matters subject to shareholder approval.</i></b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this annual report, our executive officers, directors and affiliates beneficially own approximately 43.56% of our outstanding
Ordinary Shares. Therefore, these stockholders will have the ability to influence us through their ownership positions. Further, our
CEO and majority shareholder, Mr. Haiping Hu, has beneficial ownership of 7,324,687 Ordinary Shares. These shares represent ownership
of approximately 28.88% of our outstanding Ordinary Shares as of the date of this annual report. These shareholders may be able to determine
all matters requiring shareholder approval. For example, these shareholders, acting together, may be able to control elections of directors,
amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may
prevent or discourage unsolicited transaction proposals or offers for our Ordinary Shares that you may believe are in your best interest
as one of our shareholders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
may lose the ability to use and enjoy assets held by the VIE that are material to the operation of certain portion of our business if
the VIE goes bankrupt or become subject to a dissolution or liquidation proceeding.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
part of our contractual arrangements with the VIE, the VIE and its subsidiaries hold certain assets that are material to the operation
of certain portion of our business, including intellectual property and licenses. If the VIE goes bankrupt and all or part of its assets
become subject to liens or rights of third-party creditors, we may be unable to continue some or all of our business activities, which
could materially and adversely affect our business, financial condition and results of operations. Under the contractual arrangements,
the VIE may not, in any manner, sell, transfer, mortgage or dispose of their assets or legal or beneficial interests in the business
without our prior consent. If the VIE undergoes a voluntary or involuntary liquidation proceeding, independent third-party creditors
may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could materially and adversely
affect our business, financial condition and results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Because
we are a Cayman Island company and all of our business is conducted in the PRC, you may be unable to bring an action against us or our
officers and directors or to enforce any judgment you may obtain.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are incorporated in the Cayman Islands and conduct our operations primarily in China. Substantially all of our assets are located outside
of the United States. In addition, the majority of our directors and officers reside outside of the United States. As a result, it may
be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that
you believe we have violated your rights, either under United States federal or state securities laws or otherwise, or if you have a
claim against us. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of China may not
permit you to enforce a judgment against our assets or the assets of our directors and officers.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
SEC, the U.S. Department of Justice and other U.S. authorities may also have difficulties in bringing and enforcing actions against us
or our directors or executive officers in the PRC. The SEC has stated that there are significant legal and other obstacles to obtaining
information needed for investigations or litigation in China. China has recently adopted a revised securities law, and Article 177 of
which provides, among other things, that no overseas securities regulator is allowed to directly conduct investigation or evidence collection
activities within the territory of the PRC. Accordingly, without governmental approval in China, no entity or individual in China may
provide documents and information relating to securities business activities to overseas regulators when it is under direct investigation
or evidence discovery conducted by overseas regulators, which could present significant legal and other obstacles to obtaining information
needed for investigations and litigation conducted in China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>As
an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate
governance matters that differ significantly from the Nasdaq listing standards; these practices may afford less protection to shareholders
than they would enjoy if we complied fully with such corporate governance listing standards.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a Cayman Islands exempted company listed on the Nasdaq Stock Market, we are subject to the Nasdaq listing standards. However, the Nasdaq
Stock Market Rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Currently,
we rely on home country practice with respect to certain aspects of our corporate governance. See &#8220;<i>Item 16G. Corporate Governance</i>.&#8221;
Our shareholders may be afforded less protection than they would otherwise enjoy under the Nasdaq listing standards applicable to U.S.
domestic issuers given our reliance on the home country practice exception.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risks
Related to Doing Business in China </b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
Chinese government exerts substantial influence over the manner in which we must conduct our business, and may intervene or influence
our operations at any time, which could result in a material change in our operations, significantly limit or completely hinder our ability
to offer or continue to offer securities to investors and, and cause the value of our Ordinary Shares to significantly decline or be
worthless.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through
regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those
relating to taxation, environmental regulations, land use rights, property and other matters. The central or local governments of these
jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures
and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future,
including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional
or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular
regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
given recent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted
overseas, although we are currently not required to obtain permission from any of the PRC federal or local government authorities and
have not received any denial to list on the U.S. exchange, it is uncertain when and whether we will be required to obtain permission
from the PRC government to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied
or rescinded, which could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors
and cause the value of our securities to significantly decline or be worthless.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Recent
greater oversight by the Cyberspace Administration of China over data security, particularly for companies seeking to list on a foreign
exchange, could adversely impact our business and our securities.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 28, 2021, 13 governmental departments of the PRC, including the Cyberspace Administration of China, or the CAC, issued the Cybersecurity
Review Measures, which became effective on February 15, 2022. The Cybersecurity Review Measures provide that, in addition to critical
information infrastructure operators (&#8220;CIIOs&#8221;) that intend to purchase Internet products and services, online platform operators
engaging in data processing activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity
Review Office of the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security
risks that may be brought about by any procurement, data processing, or overseas listing. The Cybersecurity Review Measures require that
an online platform operator which possesses the personal information of at least one million users must apply for a cybersecurity review
by the CAC if it intends to be listed in foreign countries.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November 14, 2021, the CAC published draft Regulations on the Network Data Security Administration (Draft for Comments) (the &#8220;Security
Administration Draft&#8221;), which provides that data processing operators engaging in data processing activities that affect or may
affect national security must be subject to network data security review by the relevant Cyberspace Administration of the PRC. According
to the Security Administration Draft, data processing operators who possess personal data of at least one million users or collect data
that affects or may affect national security must be subject to network data security review by the relevant Cyberspace Administration
of the PRC. The deadline for public comments on the Security Administration Draft was December 13, 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
confirmed by our PRC counsel, JT&amp;N, as of the date of this annual report, we are not subject to cybersecurity review with the CAC,
under the Cybersecurity Review Measures that became effective on February 15, 2022, or if the Security Administration Draft is enacted
as proposed, since (i) as companies that engage in business-oriented consulting services and manufacturing and sales of graphite anode
materials, we, our PRC subsidiaries, or the VIE and its subsidiaries are unlikely to be classified as CIIOs by the PRC regulatory agencies;
(ii) according to the interpretation of the relevant laws by the CAC, for online platform operators who have listed in foreign countries
before the effective date of Cybersecurity Review Measures, and who are not seeking a new listing (such as a secondary or dual listing)
in foreign countries, a cybersecurity review is not required; and (iii) the data processed in the business of the VIE and its subsidiaries,
which is knowledge sharing and enterprise service platform business, is unlikely to have a bearing on national security. There remains
uncertainty, however, as to how the Cybersecurity Review Measures and the Security Administration Draft will be interpreted or implemented
and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation
related to the Cybersecurity Review Measures and the Security Administration Draft. However, there remains uncertainty, as to how the
Cybersecurity Review Measures and the Security Administration Draft will be interpreted or implemented by the authorities and whether
the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation
related to the Cybersecurity Review Measures and the Security Administration Draft in the future. If any such new laws, regulations,
rules, or implementation and interpretation come into effect, we will take all reasonable measures and actions to comply with and to
mitigate any adverse effect of such new laws, regulations, rules, or implementation and interpretation on us. We cannot guarantee, however,
that we will not be subject to cybersecurity review and network data security review in the future. During such reviews, if required,
our operations could be suspended or experience other disruptions. Further, cybersecurity review and network data security review could
also result in negative publicity with respect to our Company and diversion of our managerial and financial resources, which could materially
and adversely affect our business, financial conditions, and results of operations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
Trial Measures and the revised Provisions recently issued by the PRC authorities may subject us to additional compliance requirements
in the future.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 17, 2023, the CSRC promulgated the Trial Measures and five supporting guidelines, which took effect on March 31, 2023. Pursuant
to the Trial Measures, PRC domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete
filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission
of relevant applications or its completion of subsequent offerings. If a domestic company fails to complete required filing procedures
or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative
penalties, such as an order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in
charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. On the same day,
the CSRC also held a press conference for the release of the Trial Measures and issued the <i>Notice on Administration for the Filing
of Overseas Offering and Listing by Domestic Companies</i>, or the CSRC Notice, which, among others, clarifies that PRC domestic companies
that have already been listed overseas before the effective date of the Trial Measures, which is March 31, 2023, shall be deemed as Existing
Issuers, and Existing Issuers are not required to complete the filing procedures with the CSRC immediately, and they shall be required
to file with the CSRC for any subsequent offerings. We are an Existing Issuer, based on the foregoing, and we are not, therefore, required
to complete the filing procedures with the CSRC immediately, and shall be required, however, to file with the CSRC for any subsequent
offerings.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 24, 2023, the CSRC, together with the MOF, the National Administration of State Secrets Protection and National Archives Administration
of China, revised the <i>Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and
Listing</i>, which were issued by the CSRC and National Administration of State Secrets Protection and National Archives Administration
of China in 2009, or the Provisions. The revised Provisions were issued under the title the &#8220;<i>Provisions on Strengthening Confidentiality
and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies</i>,&#8221; and came into effect on March
31, 2023, together with the Trial Measures. One of the major revisions to the revised Provisions is expanding their application to cover
indirect overseas offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, among other things,
(i) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide
to relevant individuals or entities, including securities companies, securities service providers, and overseas regulators, any documents
and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities
according to law, and file with the secrecy administrative department at the same level; and (ii) a domestic company that plans to, either
directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities, including
securities companies, securities service providers, and overseas regulators, any other documents and materials that, if leaked, will
be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national
regulations. Any failure or perceived failure by our Company, our subsidiaries or the VIE and its subsidiaries to comply with the above
confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in
the relevant entities being held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal
liability if suspected of committing a crime. See &#8220;<i>Regulations&#8212;Regulations Related to Mergers and Acquisitions and Overseas
Listings</i>.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Trial Measures and the revised Provisions that recently issued by the PRC authorities may subject us to additional compliance requirements
in the future, as there are still uncertainties regarding the interpretation and implementation of such regulatory guidance, and we cannot
assure you that we will be able to comply with all the new regulatory requirements of the Trial Measures, the revised Provisions, or
any future implementing rules on a timely basis, or at all. Any failure by us to fully comply with the new regulatory requirements, including
but not limited to the failure to complete the filing procedures with the CSRC if required, may significantly limit or completely hinder
our ability to offer or continue to offer our Ordinary Shares, cause significant disruption to our business operations, and severely
damage our reputation, which would materially and adversely affect our financial condition and results of operations and cause our Ordinary
Shares to significantly decline in value or become worthless.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>A
severe or prolonged downturn in the global or Chinese economy could materially and adversely affect our business and our financial condition.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Although
the Chinese economy expanded well in the last two decades, the rapid growth of the Chinese economy has slowed down since 2012, and there
is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the People&#8217;s
Bank of China and financial authorities of some of the world&#8217;s leading economies, including the United States and China. There
have been concerns over unrest and terrorist threats in the Middle East, Europe and Africa, which have resulted in volatility in oil
and other markets. There have also been concerns on the relationship among China and other Asian countries, which may result in or intensify
potential conflicts in relation to territorial disputes. Economic conditions in China are sensitive to global economic conditions, as
well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any
severe or prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results of operations
and financial condition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
face risks related to health epidemics such as the COVID-19 coronavirus outbreak first identified in Wuhan city at the end of 2019, and
other outbreaks, which significantly disrupted our operations and may continue to adversely affect our business, financial condition
and results of operations.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
business has been significantly disrupted and may continue be materially and adversely affected by health epidemics such as the COVID-19
pandemic and other outbreaks affecting the PRC. Our business operations depend on China&#8217;s overall economy and demand for our service
and products, which could be disrupted by health epidemics. In fiscal years 2022 and 2021, due to the government imposed restrictions
and lock-downs that were intended to contain the spread of the COVID-19 pandemic, we were prevented from arranging many of our offline
activities, resulting in cancellations or postponements of study tours, forums and sponsorship advertising events, which materially and
adversely impacted the performance of our knowledge sharing business. For fiscal year 2021, revenues generated from the core business
of our knowledge sharing platform (member services, enterprise services and online services) decreased by approximately 76%, compared
to the same period of fiscal year 2020. For the year ended December 31, 2022, the revenues generated from the core services of our knowledge
sharing platform (member services, enterprise services and online services) decreased by approximately 95%, compared to that of fiscal
year 2021. Although the PRC government relaxed its COVID-19 restrictions since December 2022, there still remains a possibility of further
outbreaks of COVID-19 variants forcing a complete or partial suspension of our business operations in the PRC, a prolonged outbreak of
the coronavirus or other adverse public health developments in China would likely have a material adverse effect on our business operations
as such outbreak or other development could significantly impact the Chinese economy and our industry, disrupt our operations and adversely
affect our business, financial condition and results of operations. The Company is operating in a rapidly changing environment, so the
extent to which COVID-19 may impact its business, operations and financial results from this point forward will depend on numerous evolving
factors that the Company cannot accurately predict. Those factors include the following: the duration and scope of the pandemic, and
governmental, business and individuals&#8217; actions that have been and continue to be taken in response to the pandemic.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Because
our business is dependent upon government policies that encourage a market-based economy, change in the political or economic climate
in the PRC may impair our ability to operate profitably, if at all. </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Although
the PRC government has been pursuing a number of economic reform policies for more than two decades, the PRC government continues to
exercise significant control over economic growth in the PRC. Because of the nature of our business, we are dependent upon the PRC government
pursuing policies that encourage private ownership of businesses. We cannot assure you that the PRC government will pursue policies favoring
a market-oriented economy or that existing policies will not be significantly altered, especially in the event of a change in leadership,
social or political disruption, or other circumstances affecting political, economic and social life in the PRC.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>PRC
laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations
may materially and adversely affect our business and impede our ability to continue our operations.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are substantial uncertainties regarding the interpretation and application of PRC laws and regulations including, but not limited to,
the laws and regulations governing our business and the enforcement and performance of our arrangements with customers in certain circumstances.
The laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement
may involve substantial uncertainty. In fact, the PRC legal system is evolving rapidly, and the interpretations of many laws, regulations
and rules may contain inconsistencies and enforcement of these laws, regulations and rules involves uncertainties. The effectiveness
and interpretation of newly enacted laws or regulations, including amendments to existing laws and regulations, may be delayed, and our
business may be affected if we rely on laws and regulations which are subsequently adopted or interpreted in a manner different from
our understanding of these laws and regulations. New laws and regulations that affect existing and proposed future businesses may also
be applied retroactively. Furthermore, if China adopts more stringent standards with respect to environmental protection or social issues,
which are increasingly becoming the focus globally, we may incur increased compliance cost or become subject to additional restrictions
in our operations. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. Since PRC administrative and
court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult
to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy in the PRC legal system than
in more developed legal systems. Furthermore, the PRC legal system is based in part on government policies and internal rules (some of
which are not published in a timely manner or at all) that may have retroactive effect. As a result, we may not be aware of our violation
of these policies and rules until sometime after the violation. Such uncertainties, including uncertainties over the scope and effect
of our contractual, property (including intellectual property) and procedural rights, and any failure to respond to changes in the regulatory
environment in China could materially and adversely affect our business and impede our ability to continue our operations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
example, on July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council
jointly issued an announcement to crack down on illegal activities in the securities market and promote the high-quality development
of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight
of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and
improve the system of extraterritorial application of the PRC securities laws. Since this announcement is relatively new, uncertainties
still exist in relation to how soon legislative or administrative regulation making bodies will respond and what existing or new laws
or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such
modified or new laws and regulations will have on companies like us.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Because
our business is conducted in RMB and the price of our Ordinary Shares is quoted in United States dollars, changes in currency conversion
rates may affect the value of your investments. </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
business is conducted in the PRC, our books and records are maintained in RMB, which is the currency of the PRC, and the financial statements
that we file with the SEC and provide to our shareholders are presented in United States dollars. Changes in the exchange rate between
the RMB and dollar affect the value of our assets and the results of our operations in United States dollars. The value of the RMB against
the United States dollar and other currencies may fluctuate and is affected by, among other things, changes in the PRC&#8217;s political
and economic conditions and perceived changes in the economy of the PRC and the United States. Any significant revaluation of the RMB
may materially and adversely affect our cash flows, revenue and financial condition. Further, our Ordinary Shares offered by this annual
report are denominated in United States dollars, we will need to convert the net proceeds we receive into RMB in order to use the funds
for our business. Changes in the conversion rate between the United States dollar and the RMB will affect that amount of proceeds we
will have available for our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Under
the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified as a &#8220;resident enterprise&#8221; of China, which could
result in unfavorable tax consequences to us and our non-PRC shareholders. </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
EIT Law and its implementing rules provide that enterprises established outside of China whose &#8220;de facto management bodies&#8221;
are located in China are considered &#8220;resident enterprises&#8221; under PRC tax laws. The implementing rules promulgated under the
EIT Law define the term &#8220;de facto management bodies&#8221; as a management body which substantially manages, or has control over
the business, personnel, finance and assets of an enterprise. In April 2009, the State Administration of Taxation, or SAT, issued the
Circular on Issues Concerning the Identification of Chinese-Controlled Overseas Registered Enterprises as Resident Enterprises in Accordance
With the Actual Standards of Organizational Management, known as SAT Circular 82, which has been revised by the Decision of the State
Administration of Taxation on Issuing the Lists of Invalid and Abolished Tax Departmental Rules and Taxation Normative Documents on December
29, 2017 and by the Decision of the State Council on Cancellation and Delegation of a Batch of Administrative Examination and Approval
Items on November 8, 2013. Circular 82 has provided certain specific criteria for determining whether the &#8220;de facto management
bodies&#8221; of a PRC-controlled enterprise that is incorporated offshore is located in China. Although this circular only applies to
offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the
criteria set forth in the circular may reflect the SAT&#8217;s general position on how the &#8220;de facto management body&#8221; text
should be applied in determining the tax resident status of all offshore enterprises. According to SAT Circular 82, a Chinese-controlled
offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a &#8220;de facto management body&#8221;
in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following criteria are met: (i)
the places where senior management and senior management departments that are responsible for daily production, operation and management
of the enterprise perform their duties are mainly located within the territory of China; (ii) financial decisions (such as money borrowing,
lending, financing and financial risk management) and personnel decisions (such as appointment, dismissal, salary and wages) are made
or need to be made by organizations or persons located within the territory of China; (iii) main property, accounting books, corporate
seal, the board of directors and files of the minutes of shareholders&#8217; meetings of the enterprise are located or preserved within
the territory of China; and (iv) one half (or more) of the directors or senior management staff having the right to vote habitually reside
within the territory of China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that Sunrise New Energy is not a resident enterprise for PRC tax purpose. Sunrise New Energy is not controlled by a PRC enterprise
or PRC enterprise group and we do not meet some of the conditions outlined in the immediately preceding paragraph. For example, as a
holding company, the key assets and records of Sunrise New Energy, including the resolutions and meeting minutes of our board of directors
and the resolutions and meeting minutes of our shareholders, are located and maintained outside the PRC. In addition, we are not aware
of any offshore holding companies with a corporate structure similar to ours that has been deemed a PRC &#8220;resident enterprise&#8221;
by the PRC tax authorities. However, as the tax residency status of an enterprise is subject to determination by the PRC tax authorities
and uncertainties remain with respect to the interpretation of the term &#8220;de facto management body&#8221;.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we are deemed as a PRC &#8220;resident enterprise&#8221; by PRC tax authorities, we will be subject to PRC enterprise income tax on our
worldwide income at a uniform tax rate of 25%, although dividends distributed to us from our existing PRC subsidiaries and any other
PRC subsidiaries which we may establish from time to time could be exempt from the PRC dividend withholding tax due to our PRC &#8220;resident
recipient&#8221; status. This could have a material and adverse effect on our overall effective tax rate, our income tax expenses and
our net income. Furthermore, dividends, if any, paid to our shareholders may be decreased as a result of the decrease in distributable
profits. In addition, if we were considered a PRC &#8220;resident enterprise&#8221;, any dividends we pay to our non-PRC investors, and
the gains realized from the transfer of our Ordinary Shares may be considered income derived from sources within the PRC and be subject
to PRC tax, at a rate of 10% in the case of non-PRC enterprises or 20% in the case of non-PRC individuals (in each case, subject to the
provisions of any applicable tax treaty). It is unclear whether holders of our Ordinary Shares would be able to claim the benefits of
any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. This
could have a material and adverse effect on the value of your investment in us and the price of our Ordinary Shares.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>There
are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiaries, and dividends payable
by our PRC subsidiaries to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the EIT Law and its implementation rules, the profits of a foreign invested enterprise generated through operations, which are distributed
to its immediate holding company outside the PRC, will be subject to a withholding tax rate of 10%. Pursuant to the <i>Arrangement between
the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income</i>,
or the Double Tax Avoidance Arrangement, a withholding tax rate of 10% may be lowered to 5% if the PRC enterprise is at least 25% held
by a Hong Kong enterprise for at least 12 consecutive months prior to distribution of the dividends and is determined by the relevant
PRC tax authority to have satisfied other conditions and requirements under the Double Tax Avoidance Arrangement and other applicable
PRC laws.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">However,
based on the <i>Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties</i>, or the SAT Circular
81, which became effective on February 20, 2009, if the relevant PRC tax authorities determine, in their discretion, that a company benefits
from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust
the preferential tax treatment. According to <i>Circular on Several Issues regarding the &#8220;Beneficial Owner&#8221; in Tax Treaties</i>,
which became effective as of April 1, 2018, when determining an applicant&#8217;s status as the &#8220;beneficial owner&#8221; regarding
tax treatments in connection with dividends, interests, or royalties in the tax treaties, several factors will be taken into account.
Such factors include whether the business operated by the applicant constitutes actual business activities, and whether the counterparty
country or region to the tax treaties does not levy any tax, grant tax exemption on relevant incomes, or levy tax at an extremely low
rate. This circular further requires any applicant who intends to be proved of being the &#8220;beneficial owner&#8221; to file relevant
documents with the relevant tax authorities. Our PRC subsidiaries is wholly owned by their respective HK based parent companies. However,
we cannot assure you that our determination regarding our qualification to enjoy the preferential tax treatment will not be challenged
by the relevant PRC tax authority or we will be able to complete the necessary filings with the relevant PRC tax authority and enjoy
the preferential withholding tax rate of 5% under the Double Tax Avoidance Arrangement with respect to dividends to be paid by our PRC
subsidiaries to our HK subsidiaries, in which case, we would be subject to the higher withdrawing tax rate of 10% on dividends received.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>PRC
regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion
may delay or prevent us from making loans or additional capital contributions to our PRC subsidiaries, the VIE and its subsidiaries,
which could materially and adversely affect our liquidity and our ability to fund and expand our business. </i></b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are an offshore holding company conducting our operations in China through Sunrise Guizhou, the VIE and its subsidiaries. We may make
loans to Sunrise Guizhou, the VIE and its subsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any
capital contributions or loans that we, as an offshore entity, make to our PRC subsidiaries, are subject to PRC regulations. For example,
loans to our PRC subsidiaries cannot exceed statutory limits and are subject to foreign exchange loan registrations. Our capital contributions
to our PRC subsidiaries must be registered with the MOFCOM or its local counterpart. For more details, <i>see &#8220;Regulation&#8212;Regulations
Related to Foreign Debt.&#8221;</i> and <i>&#8220;Regulation&#8212;Regulations Related to Foreign Exchange.&#8221;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
light of the various requirements imposed by of PRC regulations on loans to and direct investment in PRC entities by offshore holding
companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government
approvals or filings on a timely basis, if at all, with respect to future loans by us to our PRC subsidiaries or the VIE or with respect
to future capital contributions by us to our PRC subsidiaries. If we fail to complete such registrations or obtain such approvals on
a timely basis or at all, our ability to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially
and adversely affect our liquidity and our ability to fund and expand our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Government
control in currency conversion may adversely affect our financial condition, our ability to remit dividends, and the value of your investment.
</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of
currency out of China. We receive substantially all of our revenues in Renminbi. Under our current corporate structure, our Cayman Islands
holding company may rely on dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
existing PRC foreign exchange regulations, Renminbi cannot be freely converted into any foreign currency, and conversion and remittance
of foreign currencies are subject to PRC foreign exchange regulations. It cannot be guaranteed that under a certain exchange rate, we
will have sufficient foreign exchange to meet our foreign exchange requirements. Under the current PRC foreign exchange control system,
foreign exchange transactions under the current account conducted by us, including the payment of dividends, do not require advance approval
from SAFE, but we are required to present documentary evidence of such transactions and conduct such transactions at designated foreign
exchange banks within China that have the licenses to carry out foreign exchange business. Foreign exchange transactions under the capital
account conducted by us, however, must be approved in advance by SAFE.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
existing foreign exchange regulations, we will be able to pay dividends in foreign currencies without prior approval from SAFE by complying
with certain procedural requirements. However, we cannot assure you that these foreign exchange policies regarding payment of dividends
in foreign currencies will continue in the future.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
fact, in light of the flood of capital outflows of China in 2016 due to the weakening Renminbi, the PRC government has imposed more restrictive
foreign exchange policies and stepped up scrutiny of major outbound capital movement including overseas direct investment. More restrictions
and substantial vetting process are put in place by SAFE to regulate cross-border transactions falling under the capital account. If
any of our shareholders regulated by such policies fails to satisfy the applicable overseas direct investment filing or approval requirement
timely or at all, it may be subject to penalties from the relevant PRC authorities. The PRC government may at its discretion further
restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents
us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign
currencies to our shareholders, including holders of the Ordinary Shares. Our capital expenditure plans and our business, operating results
and financial condition may be materially and adversely affected.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>If
we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to
expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation.
</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">U.S.
public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism and negative
publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative
publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial
accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result
of the scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese companies sharply decreased
in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC
enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide
scrutiny, criticism and negative publicity will have on us, our business and our stock price. If we become the subject of any unfavorable
allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such
allegations and/or defend our company. This situation will be costly and time consuming and distract our management from growing our
business. If such allegations are not proven to be groundless, we and our business operations will be severely affected and you could
sustain a significant decline in the value of our stock.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
disclosures in our reports and other filings with the SEC and our other public pronouncements are not subject to the scrutiny of any
regulatory bodies in the PRC. </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are regulated by the SEC and our reports and other filings with the SEC are subject to SEC review in accordance with the rules and regulations
promulgated by the SEC under the Securities Act and the Exchange Act. Our SEC reports and other disclosures and public pronouncements
are not subject to the review or scrutiny of any PRC regulatory authority. For example, the disclosure in our SEC reports and other filings
are not subject to the review by the CSRC, a PRC regulator that is responsible for oversight of the capital markets in China. However,
on February 17, 2023, with the approval of the State Council, the CSRC released the Trial Measures and five supporting guidelines, which
took effect on March 31, 2023. According to the Trial Measures, PRC domestic companies that seek to offer or list securities overseas,
both directly and indirectly, should fulfill the filing procedures and submit relevant documents, including the prospectus and other
listing documents submitted to overseas regulatory authorities, to the CSRC. However, as the laws and regulations are relatively new,
substantial uncertainties exist with respect to its interpretation and implementation regarding such laws and regulations. It is not
clear how the CSRC may review and scrutinize these listing documents and we cannot assure you whether and how such scrutiny may affect
our listing on an U.S. exchange.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The Holding Foreign Companies Accountable
Act and related regulations all call for additional and more stringent criteria to be applied to emerging market companies upon assessing
the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add
uncertainties to our continued listing on the Nasdaq, and Nasdaq may determine to delist our securities if the PCAOB determines that it
cannot inspect or fully investigate our auditor.</i></b></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint
statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including
China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers
in China and higher risks of fraud in emerging markets.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating
in &#8220;Restrictive Market&#8221;, (ii) adopt a new requirement relating to the qualification of management or board of director for
Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications
of the company&#8217;s auditors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 18, 2020, the &#8220;Holding Foreign Companies Accountable Act&#8221; was signed by President Donald Trump and became law. This
legislation requires certain issuers of securities to establish that they are not owned or controlled by a foreign government. Specifically,
an issuer must make this certification if the PCAOB is unable to audit specified reports because the issuer has retained a foreign public
accounting firm not subject to inspection by the PCAOB. Furthermore, if the PCAOB is unable to inspect the issuer&#8217;s public accounting
firm for three consecutive years beginning in 2021, the issuer&#8217;s securities are banned from trade on a national exchange or through
other methods.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 22, 2021, the U.S. Senate passed the
&#8220;Accelerating Holding Foreign Companies Accountable Act&#8221;, which proposed to decrease the number of non-inspection years for
foreign companies to comply with PCAOB audits from three to two years, thus reducing the time period before their securities may be prohibited
from trading or delisted.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 16, 2021, the PCAOB issued a report on its determinations that the Board was unable to inspect or investigate completely PCAOB-registered
public accounting firms headquartered in mainland China and in Hong Kong, a Special Administrative Region of the People&#8217;s Republic
of China (PRC), because of positions taken by PRC authorities in those jurisdictions (the &#8220;Determination&#8221;). The Board made
these determinations pursuant to PCAOB Rule 6100, which provides a framework for how the PCAOB fulfills its responsibilities under the
Holding Foreign Companies Accountable Act (HFCAA).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On August 26, 2022, the CSRC, the MOF, and the
PCAOB signed a Protocol, governing inspections and investigations of audit firms based in mainland China and Hong Kong. Pursuant to the
fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits
for inspection or investigation and has the unfettered ability to transfer information to the SEC.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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&#8217;s access in the future, the PCAOB Board will
consider the need to issue a new determination.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 29, 2022, the provisions of the Accelerating
Holding Foreign Companies Accountable Act were signed into law by President Biden as part of the Consolidated Appropriations Act, amending
the HFCAA and requiring the SEC to prohibit an issuer&#8217;s securities from trading on any U.S. stock exchange if its auditor is not
subject to PCAOB inspections for two consecutive years instead of three consecutive years. The PCAOB continues to demand complete access
in mainland China and Hong Kong moving forward and is making plans to resume regular inspections in early 2023 and beyond, as well as
to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has also indicated that it will act
immediately to issue new determinations with the HFCAA, if needed. &#160;&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our auditor prior to September 29, 2022, Friedman
LLP, was registered with the PCAOB and had been inspected by the PCAOB on a regular basis in the audit period. Our current auditor, MarcumAsia,
is headquartered in Manhattan, New York and registered with the PCAOB. Our auditor is subject to laws in the United States pursuant to
which the PCAOB conducts regular inspections to assess our auditor&#8217;s compliance with the applicable professional rstandards, and
has been inspected by the PCAOB on a regular basis.&#160;As such, as of the date of this annual report, our listing is not affected by
the Holding Foreign Companies Accountable Act and related regulations. However, the recent developments would add uncertainties to our
continued listing and we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria
to us after considering the effectiveness of our auditor&#8217;s audit procedures and quality control procedures, adequacy of personnel
and training, or sufficiency of resources, geographic reach or experience as related to the audit of our financial statements. Furthermore,
there is a risk that our auditor cannot be inspected by the PCAOB in the future. The lack of inspection could cause trading in our securities
to be prohibited under the Holding Foreign Companies Accountable Act, and, as a result, Nasdaq may determine to delist our securities,
which may cause the value of our securities to decline or become worthless.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
failure to comply with PRC regulations relating to mergers and acquisitions of domestic entities by offshore special purpose vehicles
may subject us to severe fines or penalties and create other regulatory uncertainties regarding our corporate structure. </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 8, 2006, MOFCOM, joined by the CSRC, the State-owned Assets Supervision and Administration Commission of the State Council, the
SAT, the State Administration for Industry and Commerce (the &#8220;SAIC&#8221;, currently known as the PRC State Administration for
Market Regulation, or the SAMR), and State Administration of Foreign Exchange (&#8220;SAFE&#8221;), jointly promulgated regulations entitled
the Provisions Regarding Mergers and Acquisitions of Domestic Entities by Foreign Investors (the &#8220;M&amp;A Rules&#8221;), which
took effect as of September 8, 2006, and as amended on June 22, 2009. These regulations, among other things, have certain provisions
that require offshore special purpose vehicles formed for the purpose of acquiring PRC domestic companies and controlled directly or
indirectly by PRC individuals and companies, to obtain the approval of MOFCOM prior to engaging in such acquisitions and to obtain the
approval of the CSRC prior to publicly listing their securities on an overseas stock market. On September 21, 2006, the CSRC published
on its official website a notice specifying the documents and materials that are required to be submitted for obtaining CSRC approval.
The application of the M&amp;A Rules with respect to our corporate structure remains unclear, with no current consensus existing among
leading PRC law firms regarding the scope and applicability of the M&amp;A Rules.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the CSRC, MOFCOM, or another PRC regulatory agency determines that government approval was required for the VIE arrangement between GIOP
BJ and the VIE, or if prior CSRC approval for overseas financings is required and not obtained, we may face severe regulatory actions
or other sanctions from MOFCOM, the CSRC or other PRC regulatory agencies. In such event, these regulatory agencies may impose fines
or other penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the
proceeds from overseas financings into the PRC, restrict or prohibit payment or remittance of dividends to us or take other actions that
could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as
the trading price of our Ordinary Shares. The CSRC or other PRC regulatory agencies may also take actions requiring us, or making it
advisable for us, to delay or cancel overseas financings, to restructure our current corporate structure, or to seek regulatory approvals
that may be difficult or costly to obtain.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>PRC
regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial
owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC
subsidiaries&#8217; ability to increase its registered capital or distribute profits to us, or may otherwise adversely affect us.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 4, 2014, SAFE issued the Circular on Issues Concerning Foreign Exchange Control over the Overseas Investment and Financing and Round-trip
Investment by Domestic Residents via Special Purpose Vehicles, or SAFE Circular 37, which became effective as of July 4, 2014 and has
replaced the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents&#8217; Financing and Roundtrip
Investment Through Offshore Special Purpose Vehicles (&#8220;SAFE Circular 75&#8221;). According to SAFE Circular 37, prior registration
with the local SAFE branch is required for PRC residents, including PRC individuals and PRC corporate entities as well as foreign individuals
that are deemed as PRC residents for foreign exchange administration purpose, in connection with their direct or indirect contribution
of domestic assets or interests to offshore companies, known as SPVs. SAFE Circular 37 further requires amendment to the SAFE registrations
in the event of any changes with respect to the basic information of the offshore special purpose vehicle, such as change of a PRC individual
shareholder, name and operation term, or any significant changes with respect to the offshore special purpose vehicle, such as increase
or decrease of capital contribution, share transfer or exchange, or mergers or divisions. SAFE Circular 37 is applicable to our shareholders
who are PRC residents and may be applicable to any offshore acquisitions that we make in the future. In February 2015, SAFE promulgated
a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, effective
June 2015. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas
direct investments, including those required under SAFE Circular 37, will be filed with qualified banks instead of SAFE. The qualified
banks will directly examine the applications and accept registrations under the supervision of SAFE.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to SAFE Circular 37 and SAFE Notice 13, our ability to conduct foreign exchange activities in China may be subject to the interpretation
and enforcement of the Implementation Rules of the Administrative Measures for Individual Foreign Exchange promulgated by SAFE in January
2007 (as amended and supplemented, the &#8220;Individual Foreign Exchange Rules&#8221;). Under the Individual Foreign Exchange Rules,
any PRC individual seeking to make a direct investment overseas or engage in the issuance or trading of negotiable securities or derivatives
overseas must make the appropriate registrations in accordance with SAFE provisions, the failure of which may subject such PRC individual
to warnings, fines or other liabilities.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
of our shareholders who are subject to the SAFE Circular 37 and Individual Foreign Exchange Rules have completed the initial registrations
with the qualified banks as required by the regulations. However, we may not be informed of the identities of all the PRC residents holding
direct or indirect interest in our company, and we have no control over any of our beneficial owners. Thus, we cannot provide any assurance
that our current or future PRC resident beneficial owners will comply with our request to make or obtain any applicable registrations
or continuously comply with all registration procedures set forth in these SAFE regulations. Such failure or inability of our PRC residents
beneficial owners to comply with these SAFE regulations may subject us or our PRC residents beneficial owners to fines and legal sanctions,
restrict our cross-border investment activities, or limit our PRC subsidiaries&#8217; ability to distribute dividends to, or obtain foreign-exchange-dominated
loans from, our company, or prevent us from being able to make distributions or pay dividends, as a result of which our business operations
and our ability to distribute profits to you could be materially adversely affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Our
contractual arrangements with the VIE are governed by the laws of the PRC and we may have difficulty in enforcing any rights we may have
under these contractual arrangements. </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
all of our contractual arrangements with the VIE are governed by the PRC laws and provide for the resolution of disputes through arbitration
in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures.
Disputes arising from these contractual arrangements between us and the VIE will be resolved through arbitration in China, although these
disputes do not include claims arising under the United States federal securities law and thus do not prevent you from pursuing claims
under the United States federal securities law. The legal environment in the PRC is not as developed as in the United States. As a result,
uncertainties in the PRC legal system could further limit our ability to enforce these contractual arrangements, through arbitration,
litigation and other legal proceedings remain in China, which could limit our ability to enforce these contractual arrangements and exert
effective control over the VIE. Furthermore, these contracts may not be enforceable in China if PRC government authorities or courts
take a view that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the
event we are unable to enforce these contractual arrangements, we may not be able to exert effective control over the VIE, and our ability
to conduct our business may be materially and adversely affected.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Increases
in labor costs in the PRC may adversely affect our business and our profitability.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">China&#8217;s
economy has experienced increases in labor costs in recent years, which is expected to continue to grow. The average wage level for our
employees has also increased in recent years. We expect that our labor costs, including wages and employee benefits, will continue to
increase. Unless we are able to pass on these increased labor costs to our customers by increasing prices for our products or services,
our profitability and results of operations may be materially and adversely affected.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, we have been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees and paying
various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment
insurance and childbearing insurance to designated government agencies for the benefits of our employees. Pursuant to the PRC Labor Contract
Law, or the Labor Contract Law, that became effective in January 2008 and its implementing rules that became effective in September 2008
and its amendments that became effective in July 2013, employers are subject to stricter requirements in terms of signing labor contracts,
minimum wages, paying remuneration, determining the term of employees&#8217; probation and unilaterally terminating labor contracts.
In the event that we decide to terminate some of our employees or otherwise change our employment or labor practices, the Labor Contract
Law and its implementation rules may limit our ability to effect those changes in a desirable or cost-effective manner, which could adversely
affect our business and results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
the interpretation and implementation of labor-related laws and regulations are still evolving, we cannot assure you that our employment
practice does not and will not violate labor-related laws and regulations in China, which may subject us to labor disputes or government
investigations. If we are deemed to have violated relevant labor laws and regulations, we could be required to provide additional compensation
to our employees and our business, financial condition and results of operations could be materially and adversely affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>U.S.
regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
SEC, the U.S. Department of Justice and other U.S. authorities may also have difficulties in bringing and enforcing actions against us
or our directors or executive officers in the PRC. The SEC has stated that there are significant legal and other obstacles to obtaining
information needed for investigations or litigation in China. Although the authorities in China may establish a regulatory cooperation
mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration,
such cooperation with the securities regulatory authorities in Hong Kong or other jurisdictions may not be efficient in the absence of
mutual and practical cooperation mechanism. Furthermore, China has recently adopted a revised securities law that became effective on
March 1, 2020, Article 177 of which provides, among other things, that no overseas securities regulator is allowed to directly conduct
investigation or evidence collection activities within the territory of the PRC. Accordingly, without governmental approval in China,
no entity or individual in China may provide documents and information relating to securities business activities to overseas regulators
when it is under direct investigation or evidence discovery conducted by overseas regulators. While detailed interpretation of or implementation
rules under Article 177 have yet to be promulgated, it could present significant legal and other obstacles to obtaining information needed
for investigations and litigation conducted outside of China, which may further increase difficulties faced by you in protecting your
interests.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risks
Related to Our Ordinary Shares and the Trading Market</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>If
we are a passive foreign investment company for United States federal income tax purposes for any taxable year, United States holders
of our Ordinary Shares could be subject to adverse United States federal income tax consequences.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
non-United States corporation will be a passive foreign investment company, or PFIC, for United States federal income tax purposes for
any taxable year if either (i) at least 75% of its gross income for such taxable year is passive income or (ii) at least 50% of the value
of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce or
are held for the production of passive income. Based on the current and anticipated value of our assets and the composition of our income
and assets, we do not expect to be a PFIC for United States federal income tax purposes for our current taxable year or in the foreseeable
future. However, the determination of whether or not we are a PFIC according to the PFIC rules is made on an annual basis and will depend
on the composition of our income and assets and the value of our assets from time to time. Therefore, changes in the composition of our
income or assets or the value of our assets may cause us to become a PFIC. The determination of the value of our assets (including goodwill
not reflected on our balance sheet) may be based, in part, on the quarterly market value of our Ordinary Shares, which is subject to
change and may be volatile. It is possible that, for any subsequent year, more than 50% of our assets may be assets which produce passive
income. We will make this determination following the end of any particular tax year.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Although
the U.S. tax law with regards to VIEs is unclear, we are treating the VIE as being owned by us for United States federal income tax purposes,
not only because we control their management decisions, but also because we are entitled to the economic benefits associated with the
VIE, and as a result, we are treating the VIE as our wholly-owned subsidiary for U.S. federal income tax purposes. For purposes of the
PFIC analysis, in general, according to Section 1297(c) of the Internal Revenue Code of 1986, as amended (the &#8220;Internal Revenue
Code&#8221;), a non-U.S. corporation is deemed to own its pro rata share of the gross income and assets of any entity in which it is
considered to own at least 25% of the equity by value. Although our Company does not technically own any stock in the VIE there are numerous
factors that give rise to a strong conclusion that its control of management decisions, the entitlement to economic benefits associated
with the VIE, and the inclusion of the VIE as part of the consolidated group (Under Accounting Standards Codification (ASC) Topic 810,
&#8220;Consolidation,&#8221; VIEs are generally consolidated with other related entities under common control) is so akin to our Company
holding a stock interest in the VIE that it is reasonable and consistent to consider our Company&#8217;s interest in the VIE as a deemed
stock interest. Therefore, the income and assets of the VIE should be included in the determination of whether or not we are a PFIC in
any taxable year. It is important to emphasize that there is little to no guidance other than the statute itself (Internal Revenue Code
Section 1297(c)) and analogous portions of the code, treasury regulations and other accepted authorities and as such it is possible for
the IRS to challenge the argument that the look through rule would apply in this case, especially since the statute explicitly says &#8220;stock&#8221;.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
classification of certain of our income as active or passive, and certain of our assets as producing active or passive income, and hence
whether we are or will become a PFIC, depends on the interpretation of certain United States Treasury Regulations as well as certain
IRS guidance relating to the classification of assets as producing active or passive income. Such regulations and guidance are potentially
subject to different interpretations. If due to different interpretations of such regulations and guidance the percentage of our passive
income or the percentage of our assets treated as producing passive income increases, we may be a PFIC in one or more taxable years.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we are a PFIC for any taxable year during which a United States person holds Ordinary Shares, certain adverse United States federal income
tax consequences could apply to such United States person.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were or are determined
to be a PFIC, see &#8220;Taxation&#8212;U.S. Federal Income Taxation&#8212;Passive Foreign Investment Company.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">U.S.
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISERS ABOUT THE PFIC RULES, THE POTENTIAL APPLICABILITY OF THESE RULES TO THE COMPANY CURRENTLY
AND IN THE FUTURE, AND THEIR FILING OBLIGATIONS IF THE COMPANY IS A PFIC.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->34<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
have identified several control deficiencies in our internal control over financial reporting. If we fail to maintain an effective system
of internal controls over financial reporting, we may not be able to accurately report our financial results or prevent fraud.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Securities and Exchange Commission, as required by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring every public
company to include a management report on such company&#8217;s internal controls over financial reporting in its annual report, which
contains management&#8217;s assessment of the effectiveness of the company&#8217;s internal controls over financial reporting. In addition,
an independent registered public accounting firm must attest to and report on management&#8217;s assessment of the effectiveness of the
company&#8217;s internal controls over financial reporting when the Company no longer qualifies as an emerging company. Our reporting
obligations as a public company place a significant strain on our management, operational and financial resources and systems for the
foreseeable future.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our independent registered public accounting
firm has not conducted an audit of our internal control over financial reporting. During the course of preparing our consolidated financial
statements as of and for the years ended December 31, 2022, we identified material weaknesses and other control deficiencies in our internal
control over financial reporting. Many of the deficiencies noted below were communicated to us from our independent registered public
accounting firm as observations, which stemmed from their audit. The material weaknesses identified included: (1) a lack of formal internal
controls policies over financial closing and reporting processes, which may increase risk of error, fraud, misstatement of financial
reporting, or even non-compliance with related regulations for a U.S. listed Group; (2) a lack of accounting staff and resources with
appropriate knowledge of U.S. GAAP and SEC reporting and compliance requirements, and accounting policies and procedures manual that
covers U.S. GAAP and SEC financial reporting requirements to complete relate US GAAP and SEC reporting. As a result of the above, our
management has concluded that, as of December 31, 2022, our disclosure controls and procedures were not effective.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are taking a number of measures to tackle
the control deficiencies identified, including: (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting
experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework;
(ii) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial
reporting personnel; and (iii) preparing a comprehensive accounting policies and procedures manual that covers financial closing and
reporting processes, U.S. GAAP and SEC financial reporting requirements, and ensuring that accounting personnel are familiar with and
follow the manual.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
internal controls over financial reporting are necessary for us to produce reliable financial reports and are important to help prevent
fraud. As a result, our failure to achieve and maintain effective internal controls over financial reporting could result in the loss
of investor confidence in the reliability of our financial statements, which in turn could harm our business and negatively impact the
trading price of our Ordinary Shares. Furthermore, we anticipate that we will incur considerable costs and devote significant management
time and efforts and other resources to comply with Section 404 of the Sarbanes-Oxley Act.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
do not intend to pay dividends for the foreseeable future.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare
or pay any dividends in the foreseeable future. As a result, you may only receive a return on your investment in our Ordinary Shares
if the market price of our Ordinary Shares increases.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
market price of our Ordinary Shares may be volatile or may decline regardless of our operating performance, and you may not be able to
resell your shares at or above the initial public offering price.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
market price of our Ordinary Shares may fluctuate significantly in response to numerous factors, many of which are beyond our control,
including:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">actual
    or anticipated fluctuations in our revenue and other operating results;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">actions
    of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow
    our company, or our failure to meet these estimates or the expectations of investors;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">announcements
    by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint
    ventures, or capital commitments;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">price
    and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">lawsuits
    threatened or filed against us; and</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">other
    events or factors, including those resulting from war or incidents of terrorism, or responses to these events.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 41 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->35<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market
prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate
to the operating performance of those companies. In the past, shareholders have filed securities class action litigation following periods
of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources
and the attention of management from our business, and adversely affect our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>As
a foreign private issuer, we are not subject to certain U.S. securities law disclosure requirements that apply to a domestic U.S. issuer,
and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, which may limit the information publicly
available to our investors and afford them less protection than if we were an U.S issuer.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nasdaq
listing rules require listed companies to have, among other things, a majority of its board members be independent. As a foreign private
issuer, however, we are permitted to, and we may follow home country practice in lieu of the above requirements, or we may choose to
comply with the above requirement within one year of listing. The corporate governance practice in our home country, the Cayman Islands,
does not require a majority of our board to consist of independent directors. Thus, although a director must act in the best interests
of the Company, it is possible that fewer board members will be exercising independent judgment and the level of independent board oversight
of the management of our company may decrease as a result. In addition, Nasdaq listing rules also require U.S. domestic issuers to have
a compensation committee, a nominating/corporate governance committee composed entirely of independent directors, and an audit committee
with a minimum of three members. Furthermore,&#160;Cayman law does not require that we obtain shareholder approval to issue 20% or more
of our outstanding Ordinary Shares in a private offering.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a foreign private issuer we are not required to comply with all of the periodic disclosure and current reporting requirements of the
Exchange Act and therefore there may be less publicly available information about us than if we were a U.S. domestic issuer. We are exempt
from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered
    under the Exchange Act;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability
    for insiders who profit from trades made in a short period of time; and the selective disclosure rules by issuers of material non-public
    information under Regulation FD.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are required to file an annual report on Form 20-F within four months of the end of each fiscal year. However, the information we are
required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC
by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you
were you investing in a U.S. domestic issuer.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Anti-takeover
provisions in our memorandum and articles of association may discourage, delay or prevent a change in control.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Some
provisions in our memorandum and articles of association, may discourage, delay or prevent a change in control of our company or management
that shareholders may consider favorable, including, among other things, the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">provisions
    that permit our board of directors by resolution to issue classes of shares with preferred, deferred or other special rights or restrictions
    as the board of directors determine in their discretion, without any further vote or action by our shareholders. If issued, the rights,
    preferences, designations and limitations of any class of preferred shares could operate to the disadvantage of the outstanding ordinary
    shares the holders of which would not have any pre-emption rights in respect of such an issue of preferred shares. Such terms could
    include, among others, preferences as to dividends and distributions on liquidation, or could be used to prevent possible corporate
    takeovers; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">provisions
    that restrict the ability of our shareholders holding in aggregate less than thirty percent (30%) of the outstanding voting shares
    in the company to call general meetings or annual general meetings and to include matters for consideration at shareholder meetings
    and the ability of our shareholders holding in aggregate of 10% of the outstanding voting shares to call for special meetings of
    shareholders.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>If
we cannot satisfy the listing requirements and other rules of Nasdaq Capital Market, our securities may be delisted, which could negatively
impact the price of our securities and your ability to sell them.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
order to maintain our listing on the Nasdaq Capital Market, we are required to comply with certain rules of Nasdaq Capital Market, including
those regarding minimum stockholders&#8217; equity, minimum share price and certain corporate governance requirements. Even if we initially
meet the listing requirements and other applicable rules of the Nasdaq Capital Market, we may not be able to continue to satisfy these
requirements and applicable rules. If we are unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our securities
could be subject to delisting.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the Nasdaq Capital Market delists our securities from trading, we could face significant consequences, including:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
    limited availability for market quotations for our securities;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reduced
    liquidity with respect to our securities;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
    determination that our Ordinary Shares are a &#8220;penny stock,&#8221; which will require brokers trading in our Ordinary Shares
    to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for
    our Ordinary Shares;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">limited
    amount of news and analyst coverage; and</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
    decreased ability to issue additional securities or obtain additional financing in the future.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>You
may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cayman
Islands law provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any
right to put any proposal before a general meeting. However, these rights may be provided in a company&#8217;s articles of association
and have been provided for in the amended articles and memorandum of association of the Company, subject to the restrictions described
therein. Advance notice of at least twenty-one clear days is required for the convening of our annual general shareholders&#8217; meeting
and at least 14 clear days&#8217; notice any other general meeting of our shareholders. A quorum required for a meeting of shareholders
consists of at least one shareholder present or by proxy, representing not less than one-third in nominal value of the total issued voting
shares in the Company. To the extent that shareholders hold in aggregate less than thirty percent (30%) of the outstanding voting shares
in the Company, they cannot (a) call general meetings or annual general meetings; and (b) Include matters for consideration at shareholder
meetings.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 43 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->37<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_007"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;4.</b>&#160;<b>INFORMATION
ON THE COMPANY</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b>&#160;<b>History
and Development of the Company</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are a holding company incorporated in the
Cayman Islands. As a holding company with no material operations of our own, we primarily operate our businesses through PRC operating
entities. In 2022, Sunrise Guizhou was established by our wholly owned subsidiary, Zhuhai Zibo, and certain other joint venture partners,
as a limited company pursuant to PRC laws, for the purpose of manufacturing and sales of graphite anode materials. Zhuhai Zibo currently
owns a 39.35% equity interest in Sunrise Guizhou, but has the power to cast a majority of votes at the meeting of the board of directors
and governs the financial and operating policies of Sunrise Guizhou under an agreement among the shareholders. We operate a knowledge
sharing platform through the VIE, of which we do not own any equity interest; rather we control the VIE via a series of contractual arrangements
between GIOP BJ and the VIE. The VIE (formerly known as Beijing Huatai Yihe Co., Ltd.) was established in 2014 as a limited company pursuant
to PRC laws for the purpose of providing corporate consulting services.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
VIE established a wholly owned subsidiary, GMB Hangzhou, on November 1, 2017 pursuant to PRC laws.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2017 and 2018, the VIE also established three subsidiaries pursuant to PRC laws, which were GMB (Beijing), GMB Culture, and GMB Consulting.
The VIE owns 51% of the equity interest of each of these three subsidiaries. Additionally, GMB Culture has a subsidiary, Mentor Board
Voice of Seeding (Shanghai) Cultural Technology Co., Ltd., and owns 60% of its equity interest.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 22, 2019, the holding company, Sunrise New Energy, was established under the laws of the Cayman Islands. Sunrise New Energy
owns 100% of GMB HK, a Hong Kong company incorporated on March 22, 2019.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 3, 2019, GIOP BJ was incorporated pursuant to PRC laws as a wholly foreign owned enterprise. GMB HK holds 100% of the equity interest
in GIOP BJ. On August 26, 2022, GMB HK transferred its equity interest in GIOP BJ to Zhuhai Zibo, and GIOP BJ became a wholly owned subsidiary
of Zhuhai Zibo.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 15, 2020, the VIE established another wholly owned subsidiary, Zibo Shidong, pursuant to PRC laws. See &#8220;<i>Item 4C.
Organizational Structure </i>for a chart of our current structure.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 11, 2021, the Company closed its
initial public offering (&#8220;IPO&#8221;) of 6,720,000 Ordinary Shares. The Ordinary Shares were priced at $4.00 per share, before
underwriting discounts and offering expenses, resulting in gross proceeds of $26,880,000. The offering was conducted on a firm commitment
basis. The Ordinary Shares commenced trading on The Nasdaq Capital Market under the ticker symbol &#8220;SDH&#8221; on February 9, 2021.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 19, 2021, ViewTrade Securities, Inc.,
as the representative of the underwriters in the initial public offering of the Company, exercised in full its option to purchase an
additional 1,008,000 Ordinary Shares at a price of $4.00 per share. As a result, the Company raised gross proceeds of approximately $4,032,000,
in addition to the previously announced IPO gross proceeds of approximately $26.88 million, before deducting underwriting discounts and
other related expenses.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 8, 2021, the Company established a
wholly-owned-subsidiary, SDH New Energy, pursuant to Hong Kong laws.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 15, 2021, SDH New Energy established a wholly-owned-subsidiary, Zhuhai Zibo, pursuant to PRC laws.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November 23, 2021, SDH New Energy established a wholly-owned-subsidiary, Zhuhai Guizhou, pursuant to PRC laws.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 2, 2022, Zhuhai Zibo entered into an investment agreement (the &#8220;Agreement&#8221;) with certain parties to form Sunrise Guizhou,
a joint venture (the &#8220;JV&#8221;) dedicated to the production of high-grade lithium-ion power battery anode materials. Pursuant
to the Agreement, Zhuhai Zibo owned 51% equity interest in the JV. The Agreement and related transactions were approved by Sunrise New
Energy&#8217;s shareholders at an extraordinary general meeting of shareholders held on April 1, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 13, 2022, Zhuhai Zibo and the other thirteen founding shareholders of Sunrise Guizhou (the &#8220;Original Shareholders&#8221;)
entered into an investment agreement (the &#8220;Investment Agreement&#8221;) with Guizhou Province New Kinetic Industry Development
Fund Partnership (the &#8220;Investor&#8221;). Pursuant to the Investment Agreement, the Investor invested RMB 200 million in Sunrise
in exchange for 22.8395% of Sunrise Guizhou&#8217;s equity interest (the &#8220;Capital Increase&#8221;), and the Original Shareholders
have agreed to waive their pre-emptive rights and accept the Investor as a new shareholder of Sunrise. As a result of the Capital Increase,
each Original Shareholder&#8217;s equity interest in Sunrise was reduced by the same ratio. Zhuhai Zibo&#8217;s equity share in Sunrise
Guizhou was reduced from 51% to 39.3519%. On April 12, 2022, Zhuhai Zibo entered into an &#8220;Agreement of Action in Concert&#8221;
with twelve of the thirteen Original Shareholders, who agreed to act in concert with Zhuhai Zibo in matters relating to the corporate
governance of Sunrise, including voting on shareholder proposals and nominating directors of Sunrise Guizhou. The Agreement of Action
in Concert ensures that Zhuhai Zibo controls 74.0743% of Sunrise Guizhou&#8217;s voting rights after the Capital Increase took effect
pursuant to the Investment Agreement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 11, 2022, the Company relocated its principal executive offices from Room 208, Building 1, No. 28 Houtun Road, Haidian District,
Beijing, PRC, to Room 703, West Zone, R&amp;D Building, Zibo Science and Technology Industrial Entrepreneurship Park, No. 69 Sanying
Road, Zhangdian District, Zibo City, Shandong Province, PRC.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 5, 2022, at the 2022 annual general meeting of shareholders of the Company, the shareholders of the Company approved to change
the Company&#8217;s name from Global Internet of People, Inc. to Sunrise New Energy Co., Ltd. The name change of the Company became effective
on August 10, 2022. In conjunction with the name change, the Company&#8217;s ordinary shares began trading on the NASDAQ Capital Market
under the new ticker symbol &#8220;EPOW&#8221; as of the opening of trading on August 15, 2022. The Company&#8217;s ordinary shares previously
traded under the ticker symbol &#8220;SDH&#8221;.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to PRC laws, each entity formed under PRC law shall have certain business scopes as submitted to the Administration of Industry and Commerce
or its local counterpart. Pursuant to specific business scopes, approval by the relevant competent regulatory agencies may be required
prior to commencement of business operations. As such, GIOP BJ&#8217;s business scope is to primarily engage in: technology development,
technology promotion, technology transfer, technical consultation, technical services; sales of self-developed products; business management
consulting; corporate planning; conference services, organization of cultural and artistic exchange activities (excluding commercial
performances); economic and trade consulting. Since the sole business of GIOP BJ is to provide the VIE with technical support, consulting
services and other management services relating to its day-to-day business operations and management in exchange for a service fee approximately
equal to the VIE&#8217;s earnings before corporate income tax, i.e., the VIE&#8217;s revenue after deduction of operating costs, expenses
and other taxes, subject to adjustment based on services rendered and the VIE&#8217;s operation needs, such business scope is necessary
and appropriate under PRC laws. the VIE, on the other hand, is also able to, pursuant to its business scope, provide a platform for our
Members to obtain practical corporate guidance, financing sources, resource joining, assistance with corporate emergencies, support with
public listings and other mutual assistance services.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
control the VIE through contractual arrangements, which are described under &#8220;<i>Business &#8212; Contractual Arrangements between
GIOP BJ, </i>the VIE <i>and Its Shareholders.</i>&#8221; Sunrise New Energy is a holdings company with no business operation other than
holding the shares in GMB HK, which is also a pass-through entity with no business operation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
principal executive offices are located at Room 703, West Zone, R&amp;D Building, Zibo Science and Technology Industrial Entrepreneurship
Park, No. 69 Sanying Road, Zhangdian District, Zibo City, Shandong Province, PRC, and our phone number is +86 10-82967728. Our registered
office in the Cayman Islands is located at Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands, and the
phone number of our registered office is +1 345 945 3901. We maintain a corporate website at www.sdh365.com.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investor
inquiries should be directed to us at the address and telephone number of our principal executive offices set forth above. Our agent
for service of process in the United States is Cogency Global Inc., 122 East 42nd Street, 18th Floor, New York, NY 10168.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
SEC maintains a website at <i>www.sec.gov </i>that contains reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC using its EDGAR system.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;<i>Item 5. Operating and Financial Review and Prospects&#8212;B. Liquidity and Capital Resources&#8212;Capital Expenditures</i>&#8221;
for a discussion of our capital expenditures.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.
Business </b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a Cayman Islands holding company conducting a substantial portion of our operations in China through our PRC operating entities.
Unless otherwise stated, as used in this annual report, the term&#8217;s &#8220;we,&#8221; &#8220;us,&#8221; &#8220;our,&#8221; &#8220;Sunrise
New Energy,&#8221; &#8220;our Company,&#8221; and the &#8220;Company&#8221; refer to Sunrise New Energy Co., Ltd., an exempted company
limited by shares incorporated under the laws of the Cayman Islands; and &#8220;SDH&#8221; or &#8220;the VIE&#8221; are to Global Mentor
Board (Beijing) Information Technology Co., Ltd., a limited liability company organized under the laws of the PRC, which we control via
a series of contractual arrangements among GIOP BJ, SDH and shareholders of SDH (the &#8220;VIE Agreements&#8221;).</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of the date of this annual report, substantially
all of our business is conducted by (1) Sunrise Guizhou, a joint venture formed by Zhuhai Zibo (a wholly owned subsidiary of the Company)
and certain other partners, as a limited company pursuant to PRC laws for the purpose of manufacturing and sales of graphite anode materials,
and (2) SDH, the Company&#8217;s VIE entity that operates a knowledge sharing platform in China. Investors of our Ordinary Shares do
not hold shares in the PRC operating entities, but instead hold shares of a Cayman Islands company. Further, neither we nor our subsidiaries
own any shares in the VIE. For accounting purposes, we control and receive the economic benefits of the VIE&#8217;s business operation
through the VIE Agreements, each of which are dated June 10, 2019, and which enable us to consolidate the financial results of the VIE
and its subsidiaries in our consolidated financial statements under U.S. GAAP. See &#8220;Item 3. Key Information &#8212; Contractual
Agreements among GIOP BJ, SDH the VIE and Its Shareholders&#8221; for more details.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Overview</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
VIE, or SDH, started as a consulting company providing enterprise services to small and medium-sized enterprises in the PRC in December
2014, and launched a peer-to-peer knowledge sharing and enterprise service platform in May 2016. Since then, the VIE has been operating
a knowledge sharing platform and provided services both online, via a mobile application &#8220;Shidonghui App&#8221; (the &#8220;APP&#8221;),
and offline, through local offices directly operated by us in Beijing, Shanghai, Zibo and Guizhou in China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
the VIE first launched its services, the aim was not only to continue providing enterprise services to PRC&#8217;s growing business communities,
but also create a marketplace where qualified entities (individuals and enterprises) have opportunities to serve as providers, and receive
rewards by sharing their knowledge with others on the platform. As of April 2023, our knowledge sharing and enterprise service ecosystem
had 784 Mentors, 1,930 Experts, and 518,659 Users. In addition to serving Users and Members, the VIE continues to provide enterprise
services to small and medium-sized enterprises in China through a dedicated team with seven full-time professional consultants, as well
as Mentors and Experts. The providers (Mentors, Experts and consultants) are successful entrepreneurs, scientists, investors, and professionals
with qualifications and achievements in major industries such as finance, energy, health care, technology, manufacturing and academia.
Our core strength is the knowledge brought by our providers, highlighted by their experiences, wisdom, industry know-how, and social
connections.&#160;The VIE offers online services to Users on the APP, which was released to the public in May 2016, and offline services
to Members. The online services the VIE currently offers to Users are (1) Questions and Answers (Q &amp;A) Sessions and (2) streaming
of audio and video courses and programs. The offline services the VIE offers to Members are study tours and forums.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In April 2022, we entered into the graphite anode
material manufacturing and sales business through a joint venture, Sunrise Guizhou, of which we currently own 39.35% through our wholly
owned subsidiary, Zhuhai Zibo. We consolidate Sunrise Guizhou&#8217;s financials because we own a majority of seats on its board of directors
and control its financial and operating policies pursuant to an agreement among its funding shareholders. Sunrise Guizhou is located
at Yilong New District, Xingyi City, Qian Southwest State, Guizhou Province, China. The land use of Sunrise Guizhou&#8217;s graphite
anode manufacturing site is approximately 260,543 square meters. Sunrise Guizhou purchased the site in March 2022 for approximately $6.6
million. Sunrise Guizhou began construction of the manufacturing plant in April 2022, and the first phase the construction of (20,000
tons annual manufacturing capacity) of the manufacturing plant has been completed as of the date of this annual report, pending the requisite
fire and environmental inspections by relevant government agencies. The inspections are currently ongoing and expected to be completed
in June 2023. If Sunrise Guizhou passes the inspections and receives the requisite approvals from the relevant government agencies, it
will start manufacturing graphite anode material on-site. The second phase of the construction of the manufacturing plant (10,000 tons
annual manufacturing capacity) is ongoing and expected to be completed in June 2023, and the third phase of construction of the manufacturing
plant (20,000 tons annual manufacturing capacity) was approved by the board of the directors of the Company in March 2023, and is expected
to start in July 2023.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Graphite anode materials are essential components
used in fast-charging batteries, energy storage batteries, electric vehicle power batteries, and long-cycle high-power batteries. The
market is driven primarily by demand for Li-ion batteries that require anode materials. We believe that a significant driver for Li-ion
batteries is their use in electric vehicles (EVs) and in grid-storage applications. According to a research report published by Goldman
Sachs on February 10, 2023, entitled &#8220;Electric vehicles are forecast to be half of global car sales by 2035&#8221;, EV sales is
expected to soar to about 73 million units in 2040, up from around 2 million in 2020. The percentage of EVs in worldwide car sales, meanwhile,
is expected to rise to 61% from 2% during that time-span, and EV sales are anticipated to be well over 80% in many developed countries
in 2040. The International Energy Agency (&#8220;IEA&#8221;)&#8217;s Net Zero by 2050 Roadmap predicts that 2 billion battery electric,
plug-in hybrid and fuel-cell electric light-duty vehicles are needed by that year to reach net zero emission. A typical Li-ion High-Energy
(100 Ah) cell of around 3,400g requires over 650g of graphite and each EV contains approximately 70kg of graphite. The Company sees this
as a major growth driver for the graphite anode industry. Sunrise Guizhou&#8217;s products are critical to the transition to a more sustainable,
resilient and environmentally friendly future. We believe that the sales for Sunrise Guizhou&#8217;s graphite anode material products
will continue to grow.</p><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Our
Past Performance</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
generated net revenue of $38,125,668, $7,409,272 for the fiscal years 2022 and 2021, respectively. For fiscal year 2022, net revenue
increased by $30,716,396, or 415%, which increase was mainly driven by the sale of graphite anode material products. For fiscal year
2022, sales of graphite anode material products became a major revenue source, while revenue from knowledge sharing and enterprise services
business accounted for a small portion of the total revenue.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
revenues for fiscal years 2022 and 2021 were derived from the following sources:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; font-weight: bold; text-align: left">Graphite anode business</td><td style="width: 1%; font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">106,724</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">498,330</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; padding-left: 9pt">Enterprise services</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">153,658</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,433,847</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 0.25in">-Sponsorship advertising services</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,734,390</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 0.25in">-Consulting services</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">9,645</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,583,583</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">2,100</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">40,391</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">272,864</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; padding-bottom: 4pt">Revenues, net</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">38,125,668</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">7,409,272</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
fiscal year 2022, revenue from the sale of graphite anode material products was $37,580,677, which accounted for 99% of our total revenues.
Intangible assets also grew from $3,594,977 as of December 31, 2021 to $3,962,650 as of December 31, 2022, which is concurrent with us
entering into and financing a joint venture.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For fiscal year 2022, revenue from the knowledge
sharing and enterprise services business was $544,991, which was a 93% decline from fiscal 2021, and accounted for only 1% of our total
revenues. The decline of this business was due to the material negative impact of the large-scale COVID-19 lockdowns in China, during
which time the normal business operations were seriously disrupted, as the VIE relied on in-person networking and meetings in order to
both conduct and promote many aspects of this business. As China relaxed its Zero-COVID policy in December 2022, the VIE has gradually
resumed its normal business operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span style="text-decoration:underline">Graphite
Anode Material Manufacturing and Sales Business</span></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In April 2022, we entered into the graphite anode
material manufacturing and sales business through a joint venture, Sunrise Guizhou, of which we currently own 39.35% through our wholly
owned subsidiary, Zhuhai Zibo. We consolidate Sunrise Guizhou&#8217;s financials because we own a majority of seats on its board of directors
and control its financial and operating policies pursuant to an agreement among its funding shareholders. Sunrise Guizhou is located
at Yilong New District, Xingyi City, Qian Southwest State, Guizhou Province, China. The land use of Sunrise Guizhou&#8217;s graphite
anode manufacturing site is approximately 260,543 square meters. Sunrise Guizhou purchased the site in March 2022 for approximately $6.6
million. Sunrise Guizhou began construction of the manufacturing plant in April 2022 and the first phase the construction of (20,000
tons annual manufacturing capacity) of the manufacturing plant has been completed as of the date of this annual report, pending the requisite
fire and environmental inspections by relevant government agencies. The inspections are currently ongoing and expected to be completed
in June 2023. If Sunrise Guizhou passes the inspections and receives the requisite approvals from the relevant government agencies, it
will start manufacturing graphite anode material on-site. The second phase of the construction of the manufacturing plant (10,000 tons
annual manufacturing capacity) is ongoing and expected to be completed June 2023, and the third phase of construction of the manufacturing
plant (20,000 tons annual manufacturing capacity) was approved by the board of the directors of the Company in March 2023, and is expected
to start in July 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Products</span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Sunrise Guizhou&#8217;s products include various
artificial graphite anode material products. As of the date of this annual report, Sunrise Guizhou outsources manufacturing to third-party
contract manufacturers. Artificial graphite is made of petroleum coke, needle coke and pitch coke as the main material, and formed after
crushing, shaping, granulation and graphitization. The performance, features and uses of Sunrise Guizhou&#8217;s products are as follows:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt; vertical-align: bottom; width: 18%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Type</b></span></td>
    <td style="padding-bottom: 1.5pt; width: 1%"><b>&#160;</b></td>
    <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt; vertical-align: bottom; width: 10%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Product
    Image</b></span></td>
    <td style="text-align: center; padding-bottom: 1.5pt; width: 1%; vertical-align: bottom"><b>&#160;</b></td>
    <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt; vertical-align: bottom; width: 9%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Medium
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    <td style="text-align: center; padding-bottom: 1.5pt; width: 1%; vertical-align: bottom"><b>&#160;</b></td>
    <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt; vertical-align: bottom; width: 9%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Designed
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    <td style="text-align: center; padding-bottom: 1.5pt; width: 1%; vertical-align: bottom"><b>&#160;</b></td>
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    <td style="text-align: center; padding-bottom: 1.5pt; width: 1%; vertical-align: bottom"><b>&#160;</b></td>
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    <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt; vertical-align: bottom; width: 30%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Uses</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cost-effective
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    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0pt; text-align: center"><img alt="" src="img_001.jpg"/></td>
    <td>&#160;</td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Volumetric
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    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0pt; text-align: center"><img alt="" src="img_002.jpg"/></td>
    <td>&#160;</td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
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    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0pt; text-align: center"><img alt="" src="img_003.jpg"/></td>
    <td>&#160;</td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
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    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0pt; text-align: center"><img alt="" src="img_006.jpg"/></td>
    <td>&#160;</td>
    <td style="padding: 0pt; font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.5&#177;3.0</span></td>
    <td>&#160;</td>
    <td style="padding: 0pt; font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">349-354</span></td>
    <td>&#160;</td>
    <td style="padding: 0pt; font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.58
    -1.65</span></td>
    <td>&#160;</td>
    <td style="text-align: center; padding: 0pt; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">High
    energy density and power performance, long cycle life</span></td>
    <td>&#160;</td>
    <td style="text-align: center; padding: 0pt; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Multiple
    long cycle square and polymer batteries</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cost-effective
    long-cycle artificial graphite</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0pt; text-align: center"><img alt="" src="img_007.jpg"/></td>
    <td>&#160;</td>
    <td style="padding: 0pt; font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">11.0&#177;2.5</span></td>
    <td>&#160;</td>
    <td style="padding: 0pt; font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">340-345</span></td>
    <td>&#160;</td>
    <td style="padding: 0pt; font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.45-1.55</span></td>
    <td>&#160;</td>
    <td style="text-align: center; padding: 0pt; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Excellent
    comprehensive performance, long cycle, cost-effective</span></td>
    <td>&#160;</td>
    <td style="text-align: center; padding: 0pt; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Energy
    storage anode material, cell of soft pack, square aluminum shell, and cylindrical batteries</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 48 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->42<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Direct
Sales Channel</span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Sunrise Guizhou markets its graphite anode products
through a direct sales channel, through its sales department, which department consists of five experienced employees who report directly
to the CEO of Sunrise Guizhou, who has more than 20 years of experience in the lithium-ion battery material industry, and has accumulated
extensive business connections in this industry. The initial step to develop relationships with a potential customer is to making a targeted
sales pitch and if a potential customer responds to the sales pitch or shows interest in the products, Sunrise Guizhou then goes through
the qualification process in order to become a supplier. The process usually consists of the following steps: (1) Sunrise Guizhou sends
out samples of its graphite anode to the potential customer, (2) the potential customer conducts preliminary tests to evaluate the sample
products, (3) if the sample products pass the initial evaluations, the next step is generally a small commercial order placed by the
potential customer to verify the product quality at commercial scale, and (4) the potential customers often send an engineering team
to visit Sunrise Guizhou&#8217;s R&amp;D center and quality control department, to further assess the quality and performance of Sunrise
Guizhou&#8217;s products. If Sunrise Guizhou successfully passes each of the above validation steps, the potential customer usually starts
negotiating supplier agreement with Sunrise Guizhou.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Customers</span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
fiscal year 2022, Sunrise Guizhou had 16 customers. Sunrise Guizhou&#8217;s customers are manufacturers of industrial and consumer energy
storage lithium-ion batteries, such as batteries for electric vehicles and electric ships, and smart consumer electronics. The vast majority
of Sunrise Guizhou&#8217;s customers are Chinese companies, and some of them are large well-known companies, including the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jiangsu
                                            Pylontech Battery Co., Ltd., a leading energy storage lithium battery manufacturer in China,
                                            whose products are mainly exported to Europe and the United States.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hangzhou
                                            Narada Power Technology Co., Ltd., one of China&#8217;s leading battery energy storage system
                                            suppliers, whose products are mainly exported to Europe and the United States;</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Henan
                                            Great Power Co., Ltd.: its lithium batteries are used in energy storage systems, light power,
                                            EV, and consumer electronics, including drones, electronic cigarettes, earphones, computers,
                                            and smart wearables; and</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Xiamen
                                            Hithium Energy Storage Technology Co., Ltd.: a company dedicated to industrial and commercial
                                            energy storage batteries.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the fiscal year ended December 31, 2022,
four customers accounted for more than 10% of Sunrise Guizhou&#8217;s total sales, with each accounting for 28.43%, 19.54%, 19.30% and
18.87% of the total sales, respectively. As Sunrise Guizhou grows its customers bases, it is expected that the concentration of sales
will diminish in the future. See &#8220;Risk Factors&#8212;Risks Related to Our Business&#8212;Sunrise Guizhou depends on a few major
customers with whom it does not enter into long-term contracts, the loss of any of which could cause a significant decline in its revenues.&#8221;</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Raw
Materials and Suppliers</span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sunrise
Guizhou sources raw materials, including asphalt coke, petroleum coke, needle coke, and American petroleum coke, from suppliers in China,
the United States, Romania, and Indonesia, to diversify its raw material origins and stabilize its supply chain. Sunrise Guizhou selects
suppliers based on many criteria including but not limited to: quality, production site, production process, delivery cycle, and price.
As there are a variety of options for supplies, and the technical demand of preparing most of the raw materials are relatively low, Sunrise
Guizhou does not anticipate difficulties in obtaining raw materials. Sunrise Guizhou purchases raw materials on a per purchase order
basis. The prices for these raw materials are nevertheless subject to market forces largely beyond our control, including energy costs,
market demand, economy trend, and freight costs. The prices for raw materials have fluctuated in the past, and may fluctuate significantly
in the future. See &#8220;Risk Factors&#8212;Risks Related to Our Business&#8212;Sunrise Guizhou faces the risk of fluctuations in the
cost, availability, and quality of raw materials, which could adversely affect our results of operations.&#8221; The costs of raw materials
accounted for 33.53% of the total costs of production for fiscal year 2022, and two suppliers accounted for more than 10% of Sunrise
Guizhou&#8217;s total costs for raw materials.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Third-party
Contract Manufacturers</span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this annual report, Sunrise Guizhou entrusts third-party contract manufacturers for the manufacturing of its graphite
anode products. Once Sunrise Guizhou receives the requisite government approvals for its manufacturing plant, it will start manufacturing
graphite anode products on-site. Sunrise Guizhou implements a rigorous process for selecting third-party contract manufacturers. Sunrise
Guizhou strictly evaluates various factors, including the production capacity, quality control management, environmental qualifications,
and key customers of its contract manufacturers. Sunrise Guizhou regularly sends its technical team and quality control team to the facilities
of the contract manufacturers for on-site supervision, guidance and quality control. Sunrise Guizhou issues a detailed quantitative scoring
table for each contract manufacturer every month to evaluate their performance. As of the date of this annual report, Sunrise Guizhou
contracts with 9 third-party contract manufacturers in China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Industry
and Competition</span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
present, lithium batteries are widely used in new energy vehicles, energy storage, electric ships, and smart homes, and the boundaries
of use continue to expand, resulting in a trillion-dollar market. According to the Global EV Outlook, an annual publication that identifies
and discusses recent developments in electric mobility across the globe, in May 2022, today&#8217;s battery supply chains are concentrated
in China, which produces three-quarters of all lithium-ion batteries and is home to 70% of production capacity for cathodes and 85% of
production capacity for anodes (both are key components of batteries). Over half of lithium, cobalt and graphite processing and refining
capacity is located in China.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
January 2023, research institutions EVTank, Evie Economic Research Institute and China Battery Industry Research Institute jointly released
the &#8220;White Paper on the Development of China&#8217;s Anode Material Industry (2023) (the &#8220;White Paper&#8221;)&#8221;. According
to the data in the White Paper, the global shipment of anode materials will reach 1.556 million tons in 2022, a year-on-year increase
of 71.9%. Among them, the sales volume of China&#8217;s anode materials will increase by 84.0% year-on-year to 1.433 million tons, a
year-on-year growth rate hitting a record high. It is estimated that driven by the downstream demand for lithium-ion batteries, global
sales of anode materials will reach 3.317 million tons and 8.634 million tons in 2025 and 2030, respectively, of which more than 90%
will be produced by Chinese companies, according to the White Paper.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Sunrise Guizhou, which was newly formed in April
2022, has already delivered approximately 6,000 tons of anode material products to its customers, as of the date of this annual report.
Sunrise Guizhou&#8217;s main competitors are lithium-ion battery anode material manufacturers such as Btr New Material Group Co., Ltd,
Shanghai Putailai New Energy Technology Co., Ltd., Ningbo Shanshan Co., Ltd., Shijiazhuang Shangtai Technology Co., Ltd.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 50 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->44<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Intellectual
Property</span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sunrise
Guizhou has built a portfolio of intellectual property and plans to continue to invest in research and development. Sunrise Guizhou&#8217;s
success depends, in part, on its ability to protect its intellectual property. To accomplish this, Sunrise Guizhou relies on a combination
of patents, patent applications, trade secrets, including employee and third-party nondisclosure agreements, trademarks, and other contractual
rights to establish and protect proprietary rights in intellectual property. As of the date of this annual report, Sunrise Guizhou has
11 issued patents and 22 pending patent applications, 1 registered trademark and 2 pending trademark applications in China. Set forth
below is a detailed description of its registered patents:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top; ">
    <td style="text-align: center; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; white-space: nowrap; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; width: 4%; vertical-align: bottom">&#160;</td>
    <td style="text-align: center; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; width: 9%; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Country</b></span></td>
    <td style="vertical-align: bottom; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; width: 12%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Patent
    No./<br/>
    Application<br/>
    No.</b></span></td>
    <td style="vertical-align: bottom; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; width: 37%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Patent
    Name</b></span></td>
    <td style="vertical-align: bottom; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; width: 12%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Patent<br/>
    Publication<br/>
    Date</b></span></td>
    <td style="vertical-align: bottom; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; width: 15%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Patent
    Type</b></span></td>
    <td style="vertical-align: bottom; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; width: 11%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Patent
    Validity Period</b></span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="white-space: nowrap; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><br/>
    ZL2022 1 0339329.5</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
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    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">20
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  <tr style="vertical-align: top; ">
    <td style="white-space: nowrap; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2</span></td>
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    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
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    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">April
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    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Invention</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">20
    years</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="white-space: nowrap; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL
    2022 1 0400775.2</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">A kind of preparation method of negative electrode
    material of lithium ion battery</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Already applied for international patents
    in the United States, Japan and South Korea )</p></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">April
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    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Invention</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">20
    years</span></td></tr>
  <tr style="vertical-align: top; ">
    <td style="white-space: nowrap; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4</span></td>
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    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL2022
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    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
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    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">April
    17, 2022</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Invention</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">20
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  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="white-space: nowrap; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">5</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL
    2022 1 0400774.8</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
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    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">April
    17, 2022</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Invention</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">20
    years</span></td></tr>
  <tr style="vertical-align: top; ">
    <td style="white-space: nowrap; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">6</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL
    2022 1 0400788.X</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
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    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">April
    17, 2022</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Invention</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">20
    years</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="white-space: nowrap; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">7</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL
    2022 1 0401382.3</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
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    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">April
    18, 2022</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Invention</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">20
    years</span></td></tr>
  <tr style="vertical-align: top; ">
    <td style="white-space: nowrap; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">8</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL
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    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
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    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">July
    20, 2022</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Invention</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">20
    years</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="white-space: nowrap; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">9</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL
    20221 0396110.9</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
    fast ion conductor coated silicon-carbon composite material and its preparation method</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">April
    15, 2022</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Invention</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">20
    years</span></td></tr>
  <tr style="vertical-align: top; ">
    <td style="white-space: nowrap; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL
    2017 1 1155250.2</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
    kind of lithium ion battery, used silicon carbon negative electrode material and preparation method thereof</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">November
    20, 2017</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Invention</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">20
    years</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="white-space: nowrap; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">11</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL
    2017 2 1552539.3</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
    system for producing negative electrode coke by batch coking</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">November&#160;20,&#160;2017</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Utility
    Model</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10
    years</span></td></tr>
  <tr style="vertical-align: top; ">
    <td style="white-space: nowrap; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ZL
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    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Production
    device for negative electrode material multi-stage series continuous heating coating granulation</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">October
    17, 2018</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Utility
    Model</span></td>
    <td style="border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10
    years</span></td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;<span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 51 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->45<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span style="text-decoration:underline">Knowledge
Sharing and Enterprise Service Business</span></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
VIE, or SDH, started as a consulting company providing enterprise services to small and medium-sized enterprises in the PRC in December
2014, and launched a peer-to-peer knowledge sharing and enterprise service platform in May 2016. Since then, the VIE has been operating
a knowledge sharing platform and provided services both online, via a mobile application &#8220;Shidonghui App&#8221; (the &#8220;APP&#8221;),
and offline, through local offices in Beijing, Shanghai, Zibo and Guizhou in China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">When the VIE first launched its services, the
aim was not only to continue providing enterprise services to PRC&#8217;s growing business communities, but also to create a marketplace
where qualified entities (individuals and enterprises) have opportunities to serve as providers, and receive rewards by sharing their
knowledge with others on the platform. As of April 2023, the knowledge sharing and enterprise service ecosystem had 784 Mentors, 1,930
Experts, and 518,659 Users. In addition to serving Users and Members, the VIE continues to provide enterprise services to small and medium-sized
enterprises in China through a dedicated team with seven full-time professional consultants, as well as Mentors and Experts. The providers
(Mentors, Experts and consultants) are successful entrepreneurs, scientists, investors, and professionals with qualifications and achievements
in major industries such as finance, energy, health care, technology, manufacturing and academia. Our core strength is the knowledge
brought by our providers, highlighted by their experiences, wisdom, industry know-how, and social connections.&#160;The VIE offers online
services to Users on the APP, which was released to the public in May 2016, and offline services to Members. The online services the
VIE currently offers to Users are (1) Questions and Answers (Q &amp;A) Sessions and (2) streaming of audio and video courses and programs.
The offline services the VIE offers to Members are study tours and forums.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
late 2019, taking advantage of our knowledge of market demand and trends, as well as access to resources afforded to us by our knowledge
sharing platform, the VIE started procuring and offering merchandises for sale through its platform to clients and the general public.
The merchandises are obtained through: (1) fee exchange arrangement, through which the VIE receives products in exchange for collection
of membership fees and consulting fees earned from customers at the VIE&#8217;s discretion, and (2) direct purchases from customers and
third parties based on market trend and demand. In fiscal year 2022, due to deteriorating consumer demand and market condition, the Company
did not procure any merchandises and wrote down the cost of inventories of the merchandises to the estimated net realizable value, which
was $nil, resulting in $2,711,158 impairment.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Knowledge
Sharing and Enterprise Service Platform Ecosystem </b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Users
and Members </i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Users</span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
APP is available in the PRC and elsewhere in the world where potential Users can access on the internet the http hyper-link provided
for downloading/installing the APP on their mobile devices; anyone over the age of 18, with a mobile phone (IOS or Android) can download
the APP and complete an online registration process to become a User. Currently, although the VIE does not charge any fee to register
for the APP, the VIE does require Users to obtain a verification code via their mobile devices to register. Additionally, Users must
agree to the Terms of Use in the form of a user agreement, which can be completed and submitted to us on the APP. As of April 30, 2023,
the VIE had approximately 518,659 APP Users.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Members</span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Members
can choose from three annual membership plans: Platinum, Diamond, and Prot&#233;g&#233;. Members enjoy services included in their
respective membership plans. Due to the impact of COVID-19, SDH did not have any Members for fiscal year 2022. The following table presents
the annual membership fees:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 49%; border-bottom: black 1.5pt solid; padding-top: 0.75pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Membership
    Tiers</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 2%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 49%; border-bottom: black 1.5pt solid; padding-top: 0.75pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Annual
    Membership Fee</b></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Platinum
    </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">RMB
    16,800 (approximately US$2,435) </span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Diamond
    </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">RMB
    98,000 (approximately US$14,203) </span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prot&#233;g&#233;
    </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">RMB
    500,000 (approximately US$72,464) </span></td>
    </tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Mentors
and Experts</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Mentors</span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mentors
are leaders in their respective professional fields, all of them enjoy strong social influence due to their professional achievements
and social status in China. The majority of Mentors are successful well-known entrepreneurs, executive officers of public companies,
PE/VC partners, doctors, and artists, in a wide range of industries including academia, health care, financial service, energy, technology,
manufacturing, etc. As of April 30, 2023, the VIE had 784 Mentors, and all of them were hand-picked and invited by our management to
join our platform.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Experts</span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Experts
are skilled and qualified in their specialized fields to provide advice and guidance to Users. Persons can become Experts through a certification
process either on the APP or in-person at the VIE&#8217;s local offices and centers. The certification process consists of three steps:
(1) an applicant is required to demonstrate his or her expertise and qualifications by submitting an application along with supporting
documents such as resume, publications, and school transcripts; (2) our team reviews and verifies the applicant&#8217;s qualifications
and background information, based on which we make a determination on whether to approve the application; and (3) the VIE enters into
a service agreement with the approved applicant. As of April 30, 2023, the VIE had 1,930 Experts.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Service
Agreements with Mentors and Experts</span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
of the Mentors and Experts, as a service provider on our platform, must enter into a service agreement with us that governs the rights
and obligations of each party. The term of the service agreement is open and can be terminated by either party without any cause, and
the services they provide to our Users and Members must be given exclusively on our platform, either online or offline, for which the
fees generated are shared between the VIE and the providers, usually at a 30/70 split, that is, we receive 30% and providers receive
70% of the fees. Under certain circumstances where providers generate additional fees such as registering new members, the providers
will be entitled to a larger percentage of the fees generated, as decided between the parties on a case-by-case basis.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Enterprise
Service Consultants </i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
VIE has a professional consulting team with seven full-time employees, who have at least five years of experience in their respective
fields of professions, including finance, capital markets, marketing, public relations, sales, etc. The majority of our team previously
worked in the technology or finance industries. See &#8220;<i>Consulting</i>&#8221; below.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Enterprise
Service Clients </i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The majority of the Enterprise Service Clients
are small and medium-sized enterprises located in the following provinces: Zhejiang, Shanxi, Guangdong, Shandong and Liaoning, as well
as Shanghai City. For the fiscal year ended December 31, 2022, or 2021, no client accounted for more than 10% of our revenues.</p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Services</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Member
Service </span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
chart below summarizes the services Members receive:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><b>&#160;</b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 15%; border-bottom: black 1.5pt solid; padding-top: 0.75pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Membership
    Tier</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 84%; border-bottom: black 1.5pt solid; padding-top: 0.75pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Service</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Platinum
    </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">seven
    organized activities (study tours and forums) per year </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Diamond</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">seven
    organized activities (study tours and forum) per year, during which a Member may enjoy special seating assigned only to Diamond Members,
    and make presentations and sales pitches of his or her business, products and services </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prot&#233;g&#233;
    </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">seven
    organized activities (study tours and forum) per year, during which a Member may enjoy special seating assigned only to Prot&#233;g&#233;
    Members, make presentations and sales pitches of his or her business, products and services, and communicate with Mentors and Experts
    in person at such activities</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
each of the study tours and forums, a number of Mentors and Experts, along with other business leaders, are invited to attend, give speeches
and host discussion sessions at these activities. The VIE compensates the attending Mentors and Experts with fees ranging from RMB5,000
(approximately US$725) to RMB20,000 (approximately US$2,899) depending on factors such as the size of the audience, the location of the
activity and qualifications of the attending Mentors and Experts.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Study
Tours</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Beginning in 2016, the VIE started organizing
study tours for our Members. The study tours are designed to provide trainings on real world business skills for entrepreneurs and executives.
Each study tour generally lasts two days, in which a day and a half are dedicated to classroom style lecturing and discussions, while
the remaining half day is spent on visiting the headquarters or facilities of successful enterprises. All participants are responsible
for their own food, traveling and living accommodations throughout the study tours.&#160;The VIE did not offer any study tours in 2022,
which activities decreased because of restrictions imposed by the government due to the COVID-19 pandemic.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Forums</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The VIE organizes large-scale forums (with more
than 1,000 attendees) that last two to three days. The purpose of the forums is to share business intelligence with small and medium-sized
enterprises and help them develop business plans and strategies. The themes of the forums are usually related to interpretation of newly
published governmental policies, sharing of industry opportunities and perspectives on corporate transformation and growth. The VIE did
not hold large-scale forums in 2022 due to COVID-19 restrictions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Enterprise
Services </span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition to providing services to Users and
Members, the VIE has been providing customized enterprise service to small and medium-sized enterprises in the PRC since its inception
in 2014. Enterprise service is an integral part of its platform, and a number of the Enterprise Service Clients are also Members and
Users. For fiscal year 2022 and 2021, enterprise services generated $163,303, and $4,751,819 in revenues, respectively.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Below
are the three main enterprise services we provide:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Comprehensive
Tailored Services</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Comprehensive tailored services are geared towards
small and medium-sized businesses, to provide tailored packaged services, including conference and salon organizations, booth exhibition
services, guidance by Mentors and Experts, and other value-added services, for the purpose of promoting and growing their businesses.
Clients are required to enter into service agreements with us, which are individually negotiated based on the services and resources
we provide. For 2022, the comprehensive enterprise services generated revenue in the amount of US$153,658 from 7 clients. For 2021, the
comprehensive enterprise services generated revenue in the amount of US$1,433,847 from 80 clients.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Consulting</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A team of professional consultants provides enterprise
consulting services and develops strategies and solutions for corporate reorganization, product promotion and marketing, industry supply
chain integration, corporate governance, financing and capital structure, etc. The consulting services are customized to meet each client&#8217;s
specific needs and requirements. The fees and payment structures are based on the specifics of the services we provide, such as the time
and efforts required, the duration of the service, and are usually in the range of RMB20,000 (approximately US$2,973) to RMB80,000 (approximately
US$11,894) for a one-time service charge, or monthly fees in the amounts of RMB10,000 (approximately US$1,487) to RMB20,000 (approximately
US$2,973) for continued services. For fiscal years 2022 and 2021, consulting generated $9,645, and $1,583,583 in revenues, respectively.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Sponsorship
Advertising</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sponsorship
advertising is a special form of advertising, generally referring to a publicity strategy adopted by enterprises in order to enhance
their corporate and product image, as well as brand awareness and influence. The VIE provides sponsorship advertising services for enterprise
clients at various events, such as forums and study tours, in the following forms:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    VIE displays the names and logos of the sponsor enterprises on the background and display boards.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    representatives of the sponsor enterprises are assigned to the VIP seating areas with name tags displaying their company names and
    logos.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    sponsor enterprises enjoy a certain number of tickets for an event, which can be used for sale or as gifts to their customers.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    names and logos of the sponsor company are displayed in the related advertisements and promotional materials for an event.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    VIE uses products exclusively provided by the sponsor enterprise for an event.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    names and logos of the sponsor enterprise may also be displayed in programs and videos the VIE produces, such as &#8220;Haiping&#8217;s
    Meeting Room.&#8221;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-indent: -0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The fees we charge for sponsorship advertising
is in the range of RMB500,000 (approximately US$74,337) to RMB2,000,000 (approximately US$297,349) per engagement, depending on several
specific factors, such as the number of the participants, the location, and popularity of an event. For fiscal years 2022 and 2021, sponsorship
advertising service generated $nil, and $1,734,390 in revenues, respectively.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Sale
of Merchandises</span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
late 2019, the VIE started procuring and offering merchandises for sale through its platform to clients and the general public. The merchandises
included Chinese tea, red wine, wellness products, gift cards, and others. Some of the merchandises for sale were obtained from Members
and enterprise service clients through exchange for collection of membership fees and consulting fees. Such exchanges were non-routine
and made at our discretion, based on a number of factors, including but not limited to, the market trend and demand for such merchandises,
the profit margin expected to be realized from the sale of such merchandises, and the credit-worthiness of and the relationship with
these clients. Other merchandises were sourced and purchased from customers directly at preferred prices or from third parties, based
on our knowledge of current market trends and demand generated from our platform. For fiscal years 2022 and 2021, the VIE generated $3,165
and $ $2,104,766 in revenue from sale of merchandises, respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
fiscal 2022, due to deteriorating consumer demand and market conditions, the Company did not procure any merchandises and wrote down
the cost of inventories of the merchandises to the estimated net realizable value, which was $nil, resulting in $2,711,158 impairment.
&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Online
Service </span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
VIE provides Users two services on the APP: (1) Question and Answer (Q&amp;A) Sessions and (2) Online Streaming of Courses and Programs.
In addition, our APP has a community building function that facilitates relationship building on our platform. For example, our APP allows
Users to share their &#8220;moments,&#8221; such as pictures and videos of their life experiences, via instant messaging, with other
Users on the APP. Users may also &#8220;like&#8221; and/or comment on other User&#8217;s &#8220;moments.&#8221; In addition, Users may
establish their own communities by creating and inviting other Users to join his or her group. For fiscal years 2022 and 2021, the VIE
generated $2,100 and $40,391 in revenue from online service, respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">The
APP</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
APP was launched in May 2016, and runs on both IOS and Android devices. The VIE strives to provide Users superb experiences on the APP
and has established an in-house Information Technology team of eight employees dedicated to the development and support of our system.
To date, the VIE has registered 35 computer software copyrights with the Copyright Protection Centre of China (CPCC), in connection with
the development of the APP. In October 2017, as a result of its efforts, the VIE was certified by the State Intellectual Property Office
(&#8220;SIPO&#8221;) as a national high-tech enterprise, which affords the VIE a favorable tax rate of 15%, rather than the unified rate
of 25% for the duration of the certification. The certification lasts for three years, and was renewed in 2020. As of April 30, 2023,
the APP has been downloaded by approximately 518,659 Users. The number of average monthly active Users was approximately 495 in 2022
and approximately 1,104 in 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Questions
and Answers (Q &amp;A) Session </span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mentors
and Experts, as providers, are available to answer questions and share valuable personalized guidance and advice in a wide range of fields,
including business management, health care, beauty, financial services, education, etc. Through a Q&amp;A session, a User can submit
questions on our APP to a chosen provider, who are listed on the APP under their specializing sectors, and receive a response within
72-hours. When a User submits a question on our APP, our customer service representatives and the chosen provider receive a text notification
from our system immediately. Upon receipt of the text notification, a provider is required to respond within 72-hours, although most
of the time the responses are provided in a much shorter time frame. If the response is delayed or unsatisfactory to the User, he or
she may notify our customer service representatives who will contact the provider to follow-up with the User.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Users
must purchase top-up credits on the APP to pay for Q&amp;A sessions. Providers set their own fees for Q&amp;A sessions. At present, the
average fee for a Q&amp;A session is RMB31 (approximately US$4.38), which translates to 31 APP top-up credits. After each session concludes,
credits are automatically awarded to the provider&#8217;s APP account and can be used for services on our APP or converted to RMB and
paid out to the provider&#8217;s bank account linked with our APP. When submitting a question in a Q&amp;A session, a User can also choose
to share the Q&amp;A session on the APP for a fee of one to five credits and earn credits when other Users access the shared Q&amp;A
session. The credits earned from the shared Q&amp;A sessions are to be split 50/50 between the Users and us.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Online
Streaming of Video &amp; Audio Courses and Programs</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
VIE provides video and audio courses and programs on the APP for on-demand and live streaming. At present, the APP has approximately
4,806 audio and 5,279 video courses and programs available for streaming. The majority of the courses and programs are business-oriented,
which cover subjects such as entrepreneurship development, financial service, corporate governance, team management, marketing strategy,
etc. We also provide some focused courses and programs that target special audience groups, such as parent-child education for new parents,
and business school selection programs for graduate students.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Other
Services</span></i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Member activities, including study tours and
forums, are also open to non-members, who pays a fixed fee of RMB3,000 (approximately US$446) for each activity. Fees are usually collected
on site on the date of each activity. Other than member activities, the Company provided health services, which were charged fixed fees
ranging from RMB 1,000 (approximately $149) to RMB 14,000 (approximately $2,081), according to the types of health services provided.
For fiscal years 2022 and 2021, the VIE generated fees from other services in the amount of $269,699, and $13,965, respectively.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
section sets forth a summary of the principal PRC laws and regulations relevant to our business and operations in China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Internet Information Services</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Among
all of the applicable laws and regulations, the <i>Telecommunications Regulations of the PRC</i>, or the Telecom Regulations, promulgated
by the PRC State Council on September 25, 2000 and most recently amended on February 6, 2016, is the primary governing law, which sets
out the general framework for the provision of telecommunications services by domestic PRC companies. Under the Telecom Regulations,
telecommunications service providers are required to procure operating licenses prior to their commencement of operations. The Telecom
Regulations distinguish &#8220;basic telecommunications services&#8221; from VATS. VATS are defined as telecommunications and information
services provided through public networks. The <i>Telecom Catalogue</i> was issued as an attachment to the Telecom Regulations to categorize
telecommunications services as either basic or value-added. In February 2003, December 2015, and June 2019, the Telecom Catalogue was
updated respectively, categorizing information services provided via fixed network, mobile network among others, as VATS.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
<i>Administrative Measures on Telecommunications Business Operating Licenses</i> was promulgated by the Ministry of Industry and Information
Technology on March 1, 2009 and most recently amended on July 3, 2017, which set forth more specific provisions regarding the types of
licenses required to operate VATS, the qualifications and procedures for obtaining such licenses and the administration and supervision
of such licenses. Under these regulations, a commercial operator of VATS must first obtain a VATS License, from the MIIT or its provincial
level counterparts, otherwise such operator might be subject to sanctions including corrective orders and warnings from the competent
administration authority, fines and confiscation of illegal gains and, in the case of significant infringements, the websites may be
ordered to close.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
September 2000, the State Council promulgated the <i>Administrative Measures on Internet Information Services</i>, or the Internet Measures,
which was most recently amended on January 8, 2011. Under the Internet Measures, commercial internet content-related services operators
shall obtain a VATS License for internet content provision business, or the ICP License, from the relevant government authorities before
engaging in any commercial internet content-related services operations within China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
VIE obtained the ICP License on July 2, 2019, which will remain effective for 5 years.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Foreign Investment</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Guidance
Catalogue of Industries for Foreign Investment</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investment
activities in the PRC by foreign investors are principally governed by the <i>Guidance Catalogue of Industries for Foreign Investment</i>,
or the Guidance Catalog, which was promulgated and is amended from time to time by Ministry of Commerce, or MOFCOM, and the National
Development and Reform Commission, or NDRC. The Guidance Catalog lays out the basic framework for foreign investment in China, classifying
businesses into three categories with regard to foreign investment: &#8220;encourage,&#8221; &#8220;restricted&#8221; and &#8220;prohibited.&#8221;
Industries not listed in the catalog are generally deemed as falling into a fourth category &#8220;permitted&#8221; unless specifically
restricted by other PRC laws.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, in June 2018 the MOFCOM and the NDRC promulgated the <i>Special Management Measures (Negative List) for the Access of Foreign
Investment</i>, or the Negative List, which was most recently amended on December 27, 2021 and effective on January 1, 2022. The value-added
telecommunications services (except for e-commerce, domestic conferencing, store-and-forward, and call center services), or the VATS,
fall within the Negative List.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the <i>Provisions on Administration of Foreign-Invested Telecommunications Enterprises</i> promulgated by the State Council in December
2001 and most recently amended in March 29, 2022, or the FITE Regulations, the ultimate foreign equity ownership in a VATS provider may
not exceed 50%. Moreover, for a foreign investor contemplating to acquire any equity interest in a VATS business in China, it must satisfy
a number of stringent performance and operational experience requirements, including demonstrating good track records and experience
in operating VATS business overseas.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
July 2006, Ministry of Information Industry, or the MII (the predecessor of the MIIT), released the <i>Notice on Strengthening the Administration
of Foreign Investment in and the Operation of Value-added Telecommunications Business</i>, or the MII Notice, which requires foreign
investors to set up foreign-invested enterprises and obtain a relevant telecommunications business operating license, to conduct any
VATS business in China. Furthermore, under the MII Notice, domestic telecommunication enterprises may not rent, transfer or sell a telecommunications
business operating license to foreign investors in any form, nor may they provide any resources, premises, facilities and other assistance
in any form to foreign investors for their illegal operation of any telecommunications business in China. In addition, under the MII
Notice, the relevant trademarks and domain names used by a foreign-invested VATS operator shall be legally owned by that operator (or
its shareholders).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company engages in business activities that are VATS, and in light of the above restrictions and requirements, the Company relies on
contractual arrangements between GIOP BJ and the VIE to operate its business in China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Foreign
Investment Law</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 15, 2019, the National People&#8217;s Congress approved the <i>Foreign Investment Law of the PRC,</i> or the Foreign Investment
Law, which came into effect on January 1, 2020 and replaced the trio of existing laws regulating foreign investment in China, namely,
the <i>Sino-foreign Equity Joint Venture Enterprise Law of the PRC</i>, the <i>Sino-foreign Cooperative Joint Venture Enterprise Law
of the PRC </i>and the <i>Wholly Foreign-invested Enterprise Law of the PRC</i>, together with their implementation rules and ancillary
regulations. The organization form, organization and activities of foreign-invested enterprises shall be governed, among others, by the
<i>PRC Company Law</i> and <i>the PRC Partnership Enterprise Law.</i> Foreign-invested enterprises established before the implementation
of the Foreign Investment Law may retain the original business organization and so on within five years after the implementation of this
Law.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Foreign Investment Law is formulated to further expand opening-up, vigorously promote foreign investment and protect the legitimate rights
and interests of foreign investors. According to the Foreign Investment Law, foreign investments are entitled to pre-entry national treatment
and are subject to negative list management system. The pre-entry national treatment means that the treatment given to foreign investors
and their investments at the stage of investment access shall not be less favorable than that of domestic investors and their investments.
The negative list management system means that the state implements special administrative measures for access of foreign investment
in specific fields. The Foreign Investment Law does not mention the relevant concept and regulatory regime of VIE structures. However,
since it is relatively new, uncertainties still exist in relation to its interpretation and implementation. See &#8220;<i>Risk Factors&#8212;Risks
Related to Our Corporate Structure&#8212;Uncertainties exist with respect to the interpretation and implementation of the newly enacted
PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business
operations.</i>&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign
investors&#8217; investment, earnings and other legitimate rights and interests within the territory of China shall be protected in accordance
with the law, and all national policies on supporting the development of enterprises shall equally apply to foreign-invested enterprises.
Among others, the state guarantees that foreign-invested enterprises participate in the formulation of standards in an equal manner and
that foreign-invested enterprises participate in government procurement activities through fair competition in accordance with the law.
Further, the state shall not expropriate any foreign investment except under special circumstances. In special circumstances, the state
may levy or expropriate the investment of foreign investors in accordance with the law for the needs of the public interest. The expropriation
and requisition shall be conducted in accordance with legal procedures and timely and reasonable compensation shall be given. In carrying
out business activities, foreign-invested enterprises shall comply with relevant provisions on labor protection.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
<i>Implementation Regulations of Foreign Investment Law of the PRC</i>, adopted by the State Council on December 26, 2019 and came into
effect on January 1, 2020, provides implementing measures and detailed rules to ensure the effective implementation of the Foreign Investment
Law.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Mobile Internet Applications Information Services</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to the telecommunications regulations and other regulations above, mobile Internet applications and application stores are specifically
regulated by the <i>Administrative Provisions on Mobile Internet Applications Information Services</i>, or the App Provisions, which
were promulgated by the Cyberspace Administration of China, or the CAC, on June 28, 2016, and became effective on August 1, 2016. Pursuant
to the App Provisions, application information service providers shall obtain the relevant qualifications prescribed by laws and regulations,
strictly implement their information security management responsibilities and carry out certain duties, including establishing and completing
user information security protection mechanism and information content inspection and management mechanisms, protect users&#8217; right
to know and to choose in the process of usage, and to record and preserve users&#8217; daily usage information for at least 60 days.
Furthermore, internet application store service providers and internet application information service providers shall sign service agreements
to determinate both sides&#8217; rights and obligations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, on December 16, 2016, the MIIT promulgated the <i>Interim Measures on the Administration of Pre-Installation and Distribution
of Applications for Mobile Smart Terminals</i>, or the App Interim Measures, which took effect on July 1, 2017. The App Interim Measures
requires, among others, that internet information service providers must ensure that a mobile application, as well as its ancillary resource
files, configuration files and user data can be uninstalled by a user on a convenient basis, unless it is a basic function software,
which refers to a software that supports the normal functioning of hardware and operating system of a mobile smart device.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Neither
the App Provisions nor the App Interim Measures, however, has further clarified the scope of &#8220;information services,&#8221; neither
do they specify what &#8220;relevant qualification(s)&#8221; that an app owner/operator must obtain. In practice, operational activities
of a company conducted through an app is currently subject to the supervisions of local departments of the Information Communications
Administration, and often, the local departments differentiate the operational activities conducted through websites and through apps.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
comply with these laws and regulations, the VIE obtained the ICP License on July 2, 2019, which will remain effective for 5 years, we
have also adopted and implemented strict information security policies and measures to protect our cyber security systems and customer
information.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Online Transmission of Audio-Visual Programs</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 13, 2005, the State Council promulgated the <i>Certain Decisions on the Entry of the Non-state-owned Capital into the Cultural
Industry</i>. On July 6, 2005, five PRC governmental authorities, including the Ministry of Culture, or the MOC, the State Administration
of Radio, Film and Television, or the SARFT (the predecessor of the National Radio and Television Administration, or NRTA), the General
Administration of Press and Publication, or the GAPP, the China Securities Regulatory Commission, or the CSRC and the MOFCOM, jointly
adopted the <i>Several Opinions on Canvassing Foreign Investment into the Cultural Sector</i>. Under these provisions, non-state owned
capital and foreign investors are prohibited from engaging in the business of distributing audio-visual programs through information
networks.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
further regulate the provision of audio-visual program services to the public via the internet, including through mobile networks, within
the territory of the PRC, the SARFT and the MIIT jointly promulgated the <i>Administrative Provisions on Internet Audio-Visual Program
Service</i>, or the Audio-Visual Program Provisions, on December 20, 2007, which took effect on January 31, 2008 and subsequently amended
on August 28, 2015. Pursuant to the Audio-Visual Program Provisions, Internet audio-visual program services refer to activities of making,
redacting and integrating audio-visual programs, providing them to the general public via the Internet, and providing platforms for uploading
and spreading audio-visual programs. Providers of internet audio-visual program services are required to obtain the Audio-Visual License
issued by SARFT, or complete certain registration procedures with SARFT. In general, providers of internet audio-visual program services
must be either state-owned or state-controlled entities, and the business to be carried out by such providers must satisfy the overall
planning and guidance catalog for internet audio-visual program service determined by SARFT. The VIE is neither state-owned nor state-controlled,
therefore it is unlikely that it will be able to obtain the Audio-Visual License if required to do so. Whoever engages in Internet audio-visual
program service without the license or registration, the competent authorities shall give it/him an admonition and order it/him to correct,
and may impose a fine of not more than RMB30,000 (approximately US$4,348); if the circumstances are serious, a punishment shall be imposed
in accordance with the provision of Article 47 of the <i>Radio and Television Administration Regulation</i>.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 21, 2008, SARFT issued a <i>Notice on Relevant Issues Concerning Application and Approval of License for the Online Transmission
of Audio-Visual Programs</i>, as amended on August 28, 2015, which further set out detailed provisions concerning the application and
approval process regarding the Audio-Visual License. Further, on March 31, 2009, SARFT promulgated the <i>Notice on Strengthening the
Administration of the Content of Internet Audio-Visual Programs</i>, which reiterates the pre-approval requirements for the audio-visual
programs transmitted via the internet, including through mobile networks, where applicable, and prohibits certain types of internet audio-visual
programs containing violence, pornography, gambling, terrorism, superstition or other similarly prohibited elements.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 17, 2010, the SARFT issued the <i>Internet Audio-visual Program Services Categories (Provisional)</i>, or the Provisional Categories,
as amended on March 10, 2017. According to the Provisional Categories, there are four categories of internet audio-visual program services
which are further divided into seventeen sub-categories. The third sub-category to the second category covers the making and editing
of certain specialized audio-visual programs concerning, among other things, finance and educational content, and broadcasting such content
to the general public online. However, there are still significant uncertainties relating to the interpretation and implementation of
the Audio-Visual Program Provisions, in particular, the scope of &#8220;internet audio-visual programs&#8221;.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 16, 2018, the SAPPRFT issued the <i>Notice on Further Regulating the Transmission Order of Internet Audio-Visual Programs</i>,
which requires that, among others, audio-visual platforms shall: (i) not produce or transmit programs intended to parody or denigrate
classic works, (ii) not re-edit, re-dub, re-caption or otherwise</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 22, 2019, in the Beijing Municipal Radio and Television Bureau&#8217;s Q&amp;A section of its official website, the Bureau responded
to an inquiry submitted by an online education service provider, and confirmed that the offering of online audio and video courses or
programs on websites or mobile applications for the purpose of improving the professional qualifications/skills of target audiences,
does not fall into the activities regulated by the PRC Administrative Provisions on Internet Audio-Visual Program Services; therefore,
the service provider is not required to obtain an Audio-Visual License. Currently, all of our online content on our APP are educational
and training video and audio courses targeting specific groups of audiences, such as small and medium enterprise owners and graduate
students, who use our online courses and programs to improve their professional qualifications and skills. Accordingly, based on the
Bureau&#8217;s published interpretation, we believe we are not required to obtain an Audio-Visual License. However, given the significant
uncertainties of the interpretation and implementation of Internet related regulations in the PRC, we cannot assure you that the competent
PRC authorities will not ultimately take a view contrary to our opinion. See &#8220;<i>Risk Factors&#8212;Risks Related to Our Business&#8212;
We may be required to obtain and maintain additional approvals, licenses or permits applicable to our business, including our online
business, which could have a material adverse impact on our business, financial conditions and results of operations.&#8221;</i></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Information Security</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Internet
content in China is regulated and restricted from a state security standpoint. The Standing Committee of the National People&#8217;s
Congress, or the SCNPC, enacted the <i>Decisions on the Maintenance of Internet Security</i> on December 28, 2000, which was amended
on August 27, 2009, that may subject persons to criminal liabilities in China for any attempt to: (i) gain improper entry to a computer
or system of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial
information or (v) infringe upon intellectual property rights. In 1997, Ministry of Public Security, or the MPS, issued the <i>Administration
Measures on the Security Protection of Computer Information Network with International Connections</i>, which were amended by the State
Council on January 8, 2011 and prohibit using the Internet in ways which, among others, result in a leakage of state secrets or a spread
of socially destabilizing content. The MPS has supervision and inspection powers in this regard, and relevant local security bureaus
may also have jurisdiction. On December 13, 2005, the MPS promulgated <i>Regulations on Technological Measures for Internet Security
Protection</i>, or the Internet Protection Measures, which took effect on March 1, 2006 and requires internet service providers to take
proper measures including anti-virus, data back-up and other related measures, to keep records of certain information about its users
(including user registration information, log-in and log-out time, IP address, content and time of posts by users) for at least 60 days,
and to detect illegal information, stop transmission of such information, and keep relevant records. If an ICP License holder violates
these measures, the PRC government may revoke its ICP License and shut down its websites.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
November 2016, the SCNPC promulgated the <i>Cyber Security Law of the PRC</i>, or the Cyber Security Law, which became effective on June
1, 2017 and requires network operators to perform certain functions related to cyber security protection and the strengthening of network
information management. For instance, under the Cyber Security Law, network operators of key information infrastructure shall store within
the territory of the PRC all the personal information and important data collected and produced within the territory of PRC and their
purchase of network products and services that may affect national securities shall be subject to national cybersecurity review. On April
13, 2020, the CAC and other 11 Commissions, Ministries and Administrations, jointly issued the <i>Measures for Cybersecurity Review,
</i>which took effect on June 1, 2020, to provide for more detailed rules regarding cybersecurity review requirements.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 13, 2019, the SAMR and the CAC jointly promulgated the <i>Announcement on the Implementation of App Security Certification</i>,
or the Implementation Announcement, according to which, the China Cyber Security Review Technology and Certification Center shall be
responsible for app security certification work, and app operators are encouraged to undergo such security certification voluntarily;
search engines, app stores, among others, are encouraged to clearly mark and give priority to recommend certified apps. As an attachment
to the Implementation Announcement, the <i>Implementation Rules of App Security Certification</i>, which came into effect on March 15,
2019, stipulated specific certification procedures, post-certification supervision and management of app security certifications.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 10, 2021, the SCNPR promulgated the <i>Data Security Law of the PRC</i>, or the Data Security Law, which took effect on September
1, 2021. Under the Data Security Law, data refers to any record of information that is kept electronically or otherwise, and data processing
includes the collection, storage, use, processing, transmission, provision, and disclosure of data. Pursuant to the Data Security Law,
any individual or entity shall only collect data in a legitimate and proper manner. A data security review mechanism will be established
by the State, and any data processing activity that endangers or may endanger national security shall be subject to national security
review. The security management for the cross-border transfer of important data collected and produced during operation by CIIOs or other
data processors within the territory of the PRC shall be subject to the Cyber Security Law and other regulations and rules that promulgated
by the CAC and the State Council. In case of any non-compliance under the Data Security Law, a data processor may be ordered to make
corrections, and under certain serious circumstances, such as severe data divulgence, may be subject to penalties, including the revocation
of business license or other permits.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 28, 2021, 13 PRC authorities, including the NDRC, the MOFCOM, the MIIT, the CAC, and several other authorities jointly promulgated
the revised <i>Cybersecurity Review Measures</i>, which came into effect on February 15, 2022. The Cybersecurity Review Measures provide
that, in addition to CIIOs that intend to purchase Internet products and services, online platform operators engaging in data processing
activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity Review Office of
the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security risks that may be
brought about by any procurement, data processing, or overseas listing. The Cybersecurity Review Measures require that an online platform
operator which possesses the personal information of at least one million users must apply for a cybersecurity review by the CAC if it
intends to be listed in foreign countries.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
comply with these laws and regulations, we have adopted security policies and measures to protect our cyber system and customer information.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Internet Privacy Protection</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Internet Protection Measures, Internet services providers are prohibited from unauthorized disclosure of users&#8217; information
to any third parties unless such disclosure is required by the laws and regulations. They are further required to establish management
systems and take technological measures to safeguard the freedom and secrecy of the users&#8217; correspondences.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 28, 2012, the SCNPC promulgated the <i>Decision on Strengthening Network Information Protection</i>, which took into effect
on the same date, to enhance the legal protection of information security and privacy on the internet. On July 16, 2013, the MIIT promulgated
the <i>Provisions on Protection of Personal Information of Telecommunication and Internet Users</i>, which took into effect on September
1, 2013, to regulate the collection and use of users&#8217; personal information in the provision of telecommunication services and internet
information services in China and the personal information includes a user&#8217;s name, birth date, identification card number, address,
phone number, account name, password and other information that can be used independently or in combination with other information for
identifying a user.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 29, 2011, the MIIT promulgated the <i>Several Provisions on Regulation of the Order of Internet Information Service Market</i>,
which took into effect on March 15, 2012. The Provisions stipulate that without the consent of users, internet information service providers
shall not collect information relevant to the users that can lead to the recognition of the identity of the users independently or in
combination with other information, nor shall they provide the information to others, unless otherwise provided by laws and administrative
regulations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 8, 2017, the Supreme People&#8217;s Court and the Supreme People&#8217;s Procuratorate released the <i>Interpretations of the Supreme
People&#8217;s Court and the Supreme People&#8217;s Procuratorate on Several Issues Concerning the Application of Law in the Handling
of Criminal Cases Involving Infringement of Citizens&#8217; Personal Information</i>, or the Interpretations, which took into effect
on June 1, 2017. The Interpretations clarify several concepts regarding the crime of &#8220;infringement of citizens&#8217; personal
information&#8221; stipulated by Article 253A of the Criminal Law of the PRC, including &#8220;citizen&#8217;s personal information&#8221;,
&#8220;provision&#8221;, and &#8220;unlawful acquisition&#8221;. Also, the Interpretations specify the standards for determining &#8220;serious
circumstances&#8221; and &#8220;particularly serious circumstances&#8221; of this crime.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 23, 2019, the CAC, the MIIT, the MPS and the SAMR jointly issued the <i>Notice on Special Governance of Illegal Collection and
Use of Personal Information via Apps</i>, which restates the requirement of legal collection and use of personal information, encourages
app operators to conduct security certifications, and encourages search engines and app stores to clearly mark and recommend those certified
apps.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November 28, 2019, the CAC, MIIT, MPS and SAMR jointly issued the <i>Measures to Identify Illegal Collection and Usage of Personal Information
by APPs</i>, which lists six types of illegal collection and usage of personal information, including &#8220;not publishing rules on
the collection and usage of personal information&#8221; and &#8220;not providing privacy rules.&#8221;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 28, 2020, the NPC adopted the <i>Civil Code of the PRC</i>, or the Civil Code, which became effective on January 1, 2021 and abolished
the <i>General Rules of the Civil Law of the PRC</i>. Pursuant to the Civil Code, the collection, storage, use, process, transmission,
provision and disclosure of personal information should follow the principles of legitimacy, properness and necessity.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 12, 2021, the CAC, the MIIT, the MPS and the SAMR jointly promulgated the <i>Regulations on the Scope of Necessary Personal Information
for Common Types of Mobile Internet Apps</i>, which will become effective on May 1, 2021. According to these regulations, an app may
not refuse a user from using its basic functional services if the user disagrees to provide unnecessary personal information. In particular,
basic functional services of job hunting and recruitment applications are the &#8220;exchange of job hunting and recruitment information,&#8221;
and the necessary personal information includes mobile phone numbers of registered users and resumes provided by job seekers. Additionally,
the regulations also apply to mini programs, which are apps developed and based on open platform interfaces and available to users without
installation.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 20, 2021, the SCNPC adopted the <i>Personal Information Protection Law of the PRC</i>, or the PIP Law, which took effect on November
1, 2021. The PIP Law includes the basic rules for personal information processing, the rules for cross-border provision of personal information,
the rights of individuals in personal information processing activities, the obligations of personal information processors, and the
legal responsibilities for illegal collection, processing, and use of personal information. As the first systematic and comprehensive
law specifically for the protection of personal information in the PRC, the PIP Law provides, among others, that (i) an individual&#8217;s
consent shall be obtained to use sensitive personal information, such as biometric characteristics and individual location tracking,
(ii) personal information operators using sensitive personal information shall notify individuals of the necessity of such use and impact
on the individual&#8217;s rights, and (iii) where personal information operators reject an individual&#8217;s request to exercise his
or her rights, the individual may file a lawsuit with a People&#8217;s Court.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
comply with these laws and regulations, we have required our customers to consent to our collecting and using of their personal information
in order to receive our services, and established information security systems to protect customers&#8217; privacy.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Consumer Rights Protection</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
<i>Consumer Rights and Interests Protection Law of the PRC</i>, or the Consumer Protection Law, promulgated by the SCNPC on October 31,
1993 and most recently amended on October 25, 2013 (effective as of March 15, 2014), and the <i>Online Trading Measures</i> issued by
the SAIC on January 26, 2014 (effective as of March 15, 2014), set out the obligations of business operators and the rights and interests
of the customers. For example, business operators must guarantee the quality, function, usage, term of validity, personal or property
safety requirement of the goods and services and provide customers with authentic information about the goods and services. Consumer
whose legitimate rights and interests are harmed in the purchase of goods or receipt of services rendered through an online trading platform
may seek compensation from the seller or the service provider.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 15, 2021, the SAMR promulgated the <i>Measures for the Supervision and Administration of Online Trading</i>, or New Online Trading
Measures, which will come into effect on May 1, 2021 and replace the above original Online Trading Measure. The New Online Trading Measures
also apply to all online commerce business conducted through information networks in general, with particular emphasis on transactions
through online social networking and online live streaming. Under the New Online Trading Measures, online trading operators shall perform
relevant compliance obligations, such as registration with the SAMR, protection of customers&#8217; personal information and fair competition.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Additionally,
the Civil Code, which became effective on January 1, 2021 and replaced the <i>Tort Liability Law of the PRC</i>, provides that both internet
users and internet service providers may be liable for the wrongful acts of users who infringe the lawful rights of other parties. If
an internet user utilizes internet services to commit a tortious act, the party whose rights are infringed may request the internet service
provider to take measures, such as removing or blocking the content, or disabling the links thereto, to prevent or stop the infringement.
If the internet service provider does not take necessary measures after receiving such notice, it shall be jointly liable for any further
damages suffered by the rights holder. Furthermore, if an internet service provider fails to take necessary measures when it knows that
an internet user utilizes its internet services to infringe the lawful rights and interests of other parties, it shall be jointly liable
with the internet user for damages resulting from the infringement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Intellectual Property Rights</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Copyright</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
<i>Copyright Law of the PRC</i>, or the Copyright Law, which took effect on June 1, 1991, was amended in 2001, 2010 and 2020. The latest
version will come into effect on June 1, 2021. Under the currently effective Copyright Law and its implementing regulations adopted in
2002 and amended in 2011 and 2013, Chinese citizens, legal persons, or other organizations will, whether published or not, enjoy copyright
provides that Chinese citizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable
works, which include, among others, works of literature, art, natural science, social science, engineering technology and computer software.
Copyright owners enjoy certain legal rights, including right of publication, right of authorship and right of reproduction. The Copyright
Law extends copyright protection to Internet activities, products disseminated over the Internet and software products. In addition,
the Copyright Law provides for a voluntary registration system administered by the China Copyright Protection Center, or the CPCC. According
to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasing infringement
activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject
to fines and/or administrative or criminal liabilities in severe situations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the <i>Computer Software Copyright Protection Regulations</i> promulgated by the State Council in 1991 and amended in 2001, 2011 and
2013 respectively, Chinese citizens, legal persons and other organizations shall enjoy copyright on software they develop, regardless
of whether the software is released publicly. Software copyright commences from the date on which the development of the software is
completed. The protection period for software copyright of a legal person or other organizations shall be 50 years, concluding on December
31 of the 50th year after the software&#8217;s initial release. The software copyright owner may go through the registration formalities
with a software registration authority recognized by the State Council&#8217;s copyright administrative department. The software copyright
owner may authorize others to exercise that copyright, and is entitled to receive remuneration.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Trademark</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Trademarks
are protected by the <i>Trademark Law of the PRC</i>, which was adopted in 1982 and subsequently amended in 1993, 2001, 2013 and 2019
as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 1983 and as most recently amended
on April 29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a 10-year term to
registered trademarks and the term may be renewed for another 10-year period upon request by the trademark owner. A trademark registrant
may license its registered trademarks to another party by entering into trademark license agreements, which must be filed with the Trademark
Office for its record. As with patents, the Trademark Law has adopted a first-to-file principle with respect to trademark registration.
If a trademark applied for is identical or similar to another trademark which has already been registered or subject to a preliminary
examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any
person applying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person
register in advance a trademark that has already been used by another party and has already gained a &#8220;sufficient degree of reputation&#8221;
through such party&#8217;s use.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Patent</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Patents
in the PRC are principally protected under the <i>Patent Law of the PRC</i> (2020 Revision) and its Implementation Rules (2010 Revision),
collectively the Patent Laws. According to the Patent Laws, patents in the PRC are classified into three categories, namely, inventions,
utility models and designs. The protection period of a patent right is ten (10)&#160;years for utility models, fifteen (15)&#160;years
for designs, and twenty (20)&#160;years for inventions upon the date of application. The Patent Administration Office under the State
Council is responsible for receiving, reviewing and approving patent applications. After a patent right is granted for an invention or
utility model, except otherwise provided for in the Patent Laws, no entity or individual may, without the permission of the patent owner,
exploit the patent, that is, manufacture, use, offer to sell, sell or import the patented product, or use the patented method, or use,
offer to sell, sell or import any product which is a direct result of the use of the patented method, for production or business purposes.
And after a patent right is granted for a design, no entity or individual shall, without the permission of the patent owner, exploit
the patent, that is, manufacture, offer to sell, sell, or import any product containing the patented design for production or business
purposes.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Domain
name</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
domain names are protected under the <i>Administrative Measures on the Internet Domain Names</i>, or the Domain Name Measures, which
was promulgated by the MIIT and became effective in November 2017. The MIIT is the major regulatory body responsible for the administration
of the PRC internet domain names, under supervision of which China Internet Network Information Center, or the CNNIC, is responsible
for the daily administration of CN domain names and PRC domain names. Pursuant to the Domain Name Measures, the registration of domain
names adopts the &#8220;first to file&#8221; principle and the registrant shall complete the registration via the domain name registration
service institutions. In the event of a domain name dispute, the disputed parties may lodge a complaint to the designated domain name
dispute resolution institution to trigger the domain name dispute resolution procedure in accordance with the CNNIC Measures on Resolution
of the Domain Name Disputes, file a suit to the People&#8217;s Court, or initiate an arbitration procedure.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Foreign Exchange </b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
principal regulations governing foreign currency exchange in China are the <i>Foreign Exchange Administration Regulations</i>, promulgated
by the State Council in 1996 and most recently amended in 2008. Under the PRC foreign exchange regulations, payments of current account
items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without
prior approval from State Administration of Foreign Exchange or SAFE by complying with certain procedural requirements. By contrast,
approval from or registration with appropriate governmental authorities is required where Renminbi is to be converted into foreign currency
and remitted out of China to pay capital expenses such as the repayment of foreign currency-denominated loans.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
November 2012, SAFE promulgated the <i>Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign
Direct Investment,</i> or SAFE Circular 59, which was most recently amended in 2015 and substantially amends and simplifies the current
foreign exchange procedures. Pursuant to SAFE Circular 59, the opening of various special purpose foreign exchange accounts, such as
pre-establishment expenses accounts, foreign exchange capital accounts, and guarantee accounts, the reinvestment of Renminbi proceeds
derived by foreign investors in China, and remittance of foreign exchange profits and dividends by a foreign-invested enterprise to its
foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be
opened in different provinces, which was not possible previously.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
February 2015, SAFE promulgated the <i>Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning
Direct Investment,</i> or SAFE Circular 13, pursuant to which, instead of applying for approval regarding foreign exchange registrations
of foreign direct investment and overseas direct investment from SAFE, entities and individuals may apply for such foreign exchange registrations
from qualified banks. The qualified banks, under the supervision of SAFE, may directly review the applications and conduct the registration.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
March 2015, SAFE issued the <i>Circular of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange
Settlement of Capital of Foreign-invested Enterprises,</i> or SAFE Circular 19. Pursuant to SAFE Circular 19, a foreign-invested enterprise
may, according to its actual business needs, settle with a bank the portion of the foreign exchange capital in its capital account for
which the relevant foreign exchange administration has confirmed monetary capital contribution rights and interests (or for which the
bank has registered the injection of the monetary capital contribution into the account). In addition, for the time being, foreign-invested
enterprises are allowed to settle 100% of their foreign exchange capital on a discretionary basis. A foreign-invested enterprise shall
truthfully use its capital for its own operational purposes within the scope of business. Where an ordinary foreign-invested enterprise
makes domestic equity investment with the amount of foreign exchanges settled, the invested enterprise must first go through domestic
re-investment registration and open a corresponding account for foreign exchange settlement pending payment with the foreign exchange
administration or the bank at the place where it is registered.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
June 2016, SAFE promulgated the <i>Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital
Accounts,</i> or SAFE Circular 16, pursuant to which, in addition to foreign currency capital, enterprises registered in China may also
convert their foreign debts, as well as repatriated fund raised through overseas listing, from foreign currency to Renminbi on a discretional
basis. SAFE Circular 16 also reiterates that the use of capital so converted shall follow &#8220;the principle of authenticity and self-use&#8221;
within the business scope of the enterprise. According to SAFE Circular 16, the Renminbi funds so converted shall not be used for the
purposes of, whether directly or indirectly, (i) paying expenditures beyond the business scope of the enterprises or prohibited by laws
and regulations; (ii) making securities investment or other investments (except for banks&#8217; principal-secured products); (iii) granting
loans to non-affiliated enterprises, except as expressly permitted in the business license; and (iv) purchasing non-self-used real estate
(except for the foreign-invested real estate enterprises).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 24.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
January 2017, SAFE promulgated the <i>Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness
and Compliance Verification,</i> or SAFE Circular 3, which stipulates several capital control measures with respect to the outbound remittance
of profit from domestic entities to offshore entities, including (i) under the principle of genuine transaction, banks shall check board
resolutions regarding profit distribution, the original version of tax filing records, and audited financial statements; and (ii) domestic
entities shall hold income to account for previous years&#8217; losses before remitting the profits. Further, pursuant to SAFE Circular
3, domestic entities shall make detailed explanations of the sources of capital and utilization arrangements, and provide board resolutions,
contracts and other proof when completing the registration procedures in connection with an outbound investment.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 23, 2019, SAFE issued the <i>Circular of the State Administration of Foreign Exchange on Further Promoting the Facilitation of
Cross-border Trade and Investment</i>, or SAFE Circular 28, which allows non-investment foreign-invested enterprises to make domestic
equity investment with their capital funds in accordance with the law under the premise that such investment does not violate the existing
special administrative measures (negative list) for foreign investment and the project invested in China is authentic and compliant.
Pursuant to SAFE Circular 28, upon receiving the payment of consideration from a foreign investor for the equity transfer under foreign
direct investment, the domestic transferor, with relevant registration certificates, can process the formalities for account opening,
fund receipt, and foreign exchange settlement and use directly at the bank. The foreign investor&#8217;s deposit remitted from overseas
or transferred from domestic accounts can be directly used for its lawful domestic capital contribution as well as domestic and overseas
payment after the transaction is concluded.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 10, 2020, SAFE issued the <i>Circular on Optimizing Administration of Foreign Exchange to Support the Development of Foreign-related
Business</i>, or SAFE Circular 8, pursuant to which, eligible enterprises are allowed to use the income under capital account, from such
sources as capital funds, foreign debt and overseas listing, for domestic payment without having to provide supporting authentication
materials to the banks for every transaction in advance, but the use of funds shall be true and compliant as well as conform to the existing
administration regulations regarding use of income under capital account. The concerned bank shall conduct spot checking in accordance
with the relevant requirements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Dividend Distribution</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
principal regulations governing the distribution of dividends paid by the wholly foreign owned subsidiaries of the Company (the &#8220;WFOEs&#8221;)
include the <i>Company Law of PRC, </i>which applies to both PRC domestic companies and foreign-invested companies, and the Foreign Investment
Law and its implementing rules, which apply to foreign-invested companies. Under these regulations, WFOEs in China may pay dividends
only out of their accumulated profits, if any, as determined in accordance with PRC accounting standards and regulations. In addition,
WFOEs in China are required to set aside at least 10% of its after-tax profits based on PRC accounting standards each year to its general
reserves until its cumulative total reserve funds reaches 50% of its registered capital. These reserve funds, however, may not be distributed
as cash dividends.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Foreign Exchange Registration of Offshore Investment by PRC Residents</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
July 2014, SAFE issued the <i>Circular of the State Administration of Foreign Exchange on Issues concerning Foreign Exchange Administration
over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles</i>, or SAFE
Circular 37 which was most recently amended on June 15, 2018 and has replaced the Notice on Relevant Issues Concerning Foreign Exchange
Administration for Domestic Residents&#8217; Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles (known as Circular
75). SAFE Circular 37 regulates foreign exchange matters in relation to the use of special purpose vehicles, or &#8220;SPVs,&#8221; by
PRC residents or entities to seek offshore investment and financing or conduct round trip investment in China. Under SAFE Circular 37,
an SPV refers to an offshore entity established or controlled, directly or indirectly, by PRC residents or entities for the purpose of
seeking offshore financing or making offshore investment, using legitimate domestic or offshore assets or interests, while &#8220;round
trip investment&#8221; refers to the direct investment in China by PRC residents or entities through SPVs, namely, establishing foreign-invested
enterprises to obtain the ownership, control rights and management rights. Circular 37 requires that, before making contribution into
an SPV, PRC residents or entities are required to complete foreign exchange registration with SAFE or its local branch.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
February 2015, SAFE promulgated the SAFE Circular 13. SAFE Circular 13 has amended SAFE Circular 37 by requiring PRC residents or entities
to register with qualified banks instead of SAFE or its local branch in connection with their establishment of an SPV.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, pursuant to SAFE Circular 37, an amendment to registration or subsequent filing with qualified banks by such PRC resident is
also required if there is a material change with respect to the capital of the offshore company, such as any change of basic information
(including change of such PRC residents, change of name and operation term of the SPV), increases or decreases in investment amount,
transfers or exchanges of shares, or mergers or divisions. Failure to comply with the registration requirements as set forth in SAFE
Circular 37 and SAFE Circular 13, misrepresent on or failure to disclose controllers of foreign-invested enterprises that are established
by round-trip investment may result in bans on the foreign exchange activities of the relevant onshore company, including the payment
of dividends and other distributions to its offshore parent or affiliates, and may also subject relevant PRC residents to penalties under
the Foreign Exchange Administration Regulations of the PRC.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Foreign Debt</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
an offshore holding company, we may make additional capital contributions to WFOEs subject to approval from the local department of commerce
and the SAFE, with no limitation on the amount of capital contributions. We may also make loans to WFOEs subject to the approval from
SAFE or its local office and the limitation on the amount of loans.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">By
means of making loans, WFOEs are subject to the relevant PRC laws and regulation relating to foreign debts. On January 8, 2003, the State
Development Planning Commission, SAFE, and Ministry of Finance, or MOF, jointly promulgated the <i>Circular on the Interim Provisions
on the Management of Foreign Debts</i>, or the Foreign Debts Provisions, which became effective on March 1, 2003, and was partially abolished
on May 10, 2015. Pursuant to Foreign Debts Provisions, the total amount of foreign loans received by a foreign-invested company shall
not exceed the difference between the total investment in projects as approved by the MOFCOM or its local counterpart and the amount
of registered capital of such foreign-invested company. In addition, on January 12, 2017, the People&#8217;s Bank of China, or PBOC,
issued the <i>Circular on Full-Coverage Macro-Prudent Management of Cross-Border Financing</i>, or the PBOC Circular 9, which sets out
the statutory upper limit on the foreign debts for PRC non-financial entities, including both foreign-invested companies and domestic-invested
companies, and the macro-prudential adjustment parameter is 1. Pursuant to the PBOC Circular 9, the foreign debt upper limit for both
foreign-invested companies and domestic-invested companies is calculated as twice the net asset of such companies. As to net assets,
the companies shall take the net assets value stated in their latest audited financial statement. On March 11, 2020, the PBOC and SAFE
promulgated the <i>Circular of the People&#8217;s Bank of China and the State Administration of Foreign Exchange on Adjusting the Macro-prudential
Regulation Parameter for Full-covered Cross-border Financing,</i> which provides that based on the current macro economy and international
balance of payments, the macro-prudential regulation parameter as set forth in the PBOC Circular 9 is updated from 1 to 1.25.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
PBOC Circular 9 does not supersede the Foreign Debts Provisions. It provides a one-year transitional period from January 11, 2017, for
foreign-invested companies, during which foreign-invested companies, such as WFOEs, could adopt their calculation method of foreign debt
upper limit based on either the Foreign Debts Provisions or the PBOC Circular 9. The transitional period ended on January 11, 2018. Upon
its expiry, pursuant to the PBOC Circular 9, PBOC and SAFE shall reevaluate the calculation method for foreign-invested companies and
determine what the applicable calculation method would be. As of the date of this annual report, neither the PBOC nor SAFE has promulgated
and made public any further rules, regulations, notices, or circulars in this regard.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Tax</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Enterprise
Income Tax</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 16, 2007, the SCNPC promulgated the EIT Law<i>, </i>which was recently amended on December 29, 2018. On December 6, 2007, the State
Council enacted the <i>Regulations for the Implementation of the Enterprise Income Tax Law</i>, which was amended on April 23, 2019.
Under the EIT Law and relevant implementation regulations, both resident enterprises and non-resident enterprises are subject to the
enterprise income tax so long as their income is generated within the territory of PRC. &#8220;Resident enterprises&#8221; are defined
as enterprises that are established in China in accordance with PRC laws, or that are established in accordance with the laws of foreign
countries but are actually or in effect controlled from within the PRC. &#8220;Non-resident enterprises&#8221; are defined as enterprises
that are organized under the laws of foreign countries and whose actual management is conducted outside the PRC, but have established
institutions or premises in the PRC, or have no such established institutions or premises but have income generated from inside the PRC.
Under the EIT Law and relevant implementing regulations, a uniform corporate income tax rate of 25% is applied. If non-resident enterprises
have not formed permanent establishments or premises in the PRC, or if they have formed permanent establishment or premises in the PRC
but there is no actual relationship between the relevant income derived in the PRC and the established institutions or premises set up
by them, however, enterprise income tax is set at the rate of 10% with respect to their income sourced from inside the PRC.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
EIT Law and its implementation rules permit certain &#8220;high and new technology enterprises strongly supported by the state&#8221;
that independently own core intellectual property and meet statutory criteria, to enjoy a reduced 15% enterprise income tax rate.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to the <i>Administrative Rules for the Certification of High Tech Enterprises</i>, effective on January 1, 2008 and amended on January
29, 2016 (effective as of January 1, 2016), for each entity accredited as High Tech Enterprise, such status is valid for three years
if it meets the qualifications for High Tech Enterprise on a continuing basis during such period.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Value-Added
Tax (&#8220;VAT&#8221;)</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
<i>Provisional Regulations of the PRC on Value-added Tax</i> was promulgated by the State Council on December 13, 1993, and most recently
amended on November 19, 2017. The <i>Detailed Rules for the Implementation of the Provisional Regulations of the PRC on Value-added Tax
(Revised in 2011)</i> were promulgated by the MOF on December 25, 1993, and were recently amended on October 28, 2011 (collectively with
the VAT Regulations, the VAT Law). On April 4, 2018, MOF and SAT jointly promulgated the Circular on Adjustment of Value-Added Tax Rates,
or MOF and SAT Circular 32. On March 20, 2019, MOF, SAT and General Administration of Customs, or GAC, jointly issued a <i>Circular on
Relevant Polices for Deepening Value-added Tax Reform</i>, or MOF, SAT and GAC Circular 39, which became effective from April 1, 2019.
According to the abovementioned laws and circulars, all enterprises and individuals engaged in the sale of goods, the provision of processing,
repair and replacement services, sales of services, intangible assets, real property and the importation of goods within the territory
of the PRC are the taxpayers of VAT. The VAT tax rates generally applicable are simplified as 13%, 9%, 6% and 0%, and the VAT tax rate
applicable to the small-scale taxpayers is 3%.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Withholding
Tax</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
<i>Enterprise Income Tax Law of the PRC</i> provides that since January 1, 2008, an income tax rate of 10% will normally be applicable
to dividends declared to non-PRC resident investors which do not have an establishment or place of business in the PRC, or which have
such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business,
to the extent such dividends are derived from sources within the PRC.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to an <i>Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation
and the Prevention of Fiscal Evasion with Respect to Taxes on Incomes</i>, or the Double Tax Avoidance Arrangement, and other applicable
PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions
and requirements under such Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends the
Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5%. Based on the <i>Circular on Certain Issues
with Respect to the Enforcement of Dividend Provisions in Tax Treaties</i>, or the SAT Circular 81, issued on February 20, 2009, by the
SAT, however, if the relevant PRC tax authorities determine, in their discretion, that a company benefits from such reduced income tax
rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment.
According to the <i>Circular on Several Questions regarding the &#8220;Beneficial Owner&#8221; in Tax Treaties</i>, which was issued
on February 3, 2018, by the SAT and took effect on April 1, 2018, when determining the applicant&#8217;s status of the &#8220;beneficial
owner&#8221; regarding tax treatments in connection with dividends, interests or royalties in the tax treaties, several factors, including
without limitation, whether the applicant is obligated to pay more than 50% of his or her income in 12 months to residents in third country
or region, whether the business operated by the applicant constitutes the actual business activities, and whether the counterparty country
or region to the tax treaties does not levy any tax or grant tax exemption on relevant incomes or levy tax at an extremely low rate,
will be taken into account, and it will be analyzed according to the actual circumstances of the specific cases. This circular further
provides that applicants who intend to prove his or her status of the &#8220;beneficial owner&#8221; shall submit the relevant documents
to the relevant tax bureau according to the <i>Announcement on Issuing the Measures for the Administration of Non-Resident Taxpayers&#8217;
Enjoyment of the Treatment under Tax Agreements</i>.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Tax
on Indirect Transfer</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 3, 2015, the SAT issued the <i>Circular on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC Resident
Enterprises</i>, or SAT Circular 7. Pursuant to SAT Circular 7, an &#8220;indirect transfer&#8221; of assets, including equity interests
in a PRC resident enterprise, by non-PRC resident enterprises, may be re-characterized and treated as a direct transfer of PRC taxable
assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of
PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax. When determining
whether there is a &#8220;reasonable commercial purpose&#8221; of the transaction arrangement, features to be taken into consideration
include, inter alia, whether the main value of the equity interest of the relevant offshore enterprise derives directly or indirectly
from PRC taxable assets; whether the assets of the relevant offshore enterprise mainly consist of direct or indirect investment in China
or if its income is mainly derived from China; and whether the offshore enterprise and its subsidiaries directly or indirectly holding
PRC taxable assets have real commercial nature which is evidenced by their actual function and risk exposure. According to SAT Circular
7, where the transferee fails to withhold any or sufficient tax, the transferor shall declare and pay such tax to the tax authority by
itself within the statutory time limit. Late payment of applicable tax will subject the transferor to default interest. SAT Circular
7 does not apply to transactions of sale of shares by investors through a public stock exchange where such shares were acquired on a
public stock exchange. On October 17, 2017, the SAT issued the <i>Circular on Issues of Tax Withholding regarding Non-PRC Resident Enterprise
Income Tax</i>, or SAT Circular 37, which further elaborates the relevant implemental rules regarding the calculation, reporting and
payment obligations of the withholding tax by the non-resident enterprises. Nonetheless, there remain uncertainties as to the interpretation
and application of SAT Circular 7. SAT Circular 7 may be determined by the tax authorities to be applicable to our offshore transactions
or sale of our shares or those of our offshore subsidiaries where non-resident enterprises, being the transferors, were involved.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Employment and Social Welfare</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Employment</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
<i>Labor Law of the PRC</i>, which was promulgated on July 5, 1994, effective since January 1, 1995, and most recently amended on December
29, 2018, the <i>Labor Contract Law of the PRC</i>, which was promulgated on June 29, 2007, and amended on December 28, 2012, and the
<i>Implementation Regulations of the Labor Contract Law of the PRC</i>, which was promulgated on September 18, 2008, are the principal
regulations that govern employment and labor matters in the PRC. Under the above regulations, labor contracts shall be concluded in writing
if labor relationships are to be or have been established between employers and the employees. Employers are prohibited from forcing
employees to work above certain time limit and employers shall pay employees for overtime work in accordance to national regulations.
In addition, wages may not be lower than the local minimum wage. Employers must establish a system for labor safety and sanitation, strictly
abide by state standards, and provide relevant education to its employees. Employees are also required to work in safe and sanitary conditions.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Social
Insurance and Housing Fund</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the <i>Social Insurance Law of the PRC</i> that was promulgated by the SCNPC on October 28, 2010, and came into force as of July 1, 2011,
and was most recently amended on December 29, 2018 (also the effective date), together with other laws and regulations, employers are
required to pay basic pension insurance, unemployment insurance, basic medical insurance, employment injury insurance, maternity insurance,
and other social insurance for its employees at specified percentages of the salaries of the employees, up to a maximum amount specified
by the local government regulations from time to time. When an employer fails to fully pay social insurance premiums, relevant social
insurance collection agency shall order it to make up for any shortfall within a prescribed time limit, and may impose a late payment
fee at the rate of 0.05% per day of the outstanding amount from the due date. If such employer still fails to make up for the shortfalls
within the prescribed time limit, the relevant administrative authorities shall impose a fine of one to three times the outstanding amount
upon such employer.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
accordance with the <i>Regulations on the Management of Housing Fund</i> which was promulgated by the State Council in 1999 and most
recently amended in March 2019 (which became effective as of March 24<sup>th</sup> 2019), employers must register at the designated administrative
centers and open bank accounts for depositing employees&#8217; housing funds. Employer and employee are also required to pay and deposit
housing funds, with an amount no less than 5% of the monthly average salary of the employee in the preceding year in full and on time.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Mergers and Acquisitions and Overseas Listings</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 8, 2006, six PRC governmental and regulatory agencies, including MOFCOM and the China Securities Regulatory Commission, or the
CSRC, promulgated the <i>Rules on Acquisition of Domestic Enterprises by Foreign Investors</i>, or the M&amp;A Rules, governing the mergers
and acquisitions of domestic enterprises by foreign investors that became effective on September 8, 2006, and was amended on June 22,
2009. The M&amp;A Rules, among other things, requires that offshore SPVs that are controlled by PRC companies or individuals and that
have been formed for overseas listing purposes through acquisitions of PRC domestic interest held by such PRC companies or individuals,
to obtain the approval of the CSRC prior to publicly listing their securities on an overseas stock exchange.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
PRC counsel has advised us that, based on its understanding of current PRC laws, rules, and regulations, and the M&amp;A Rules, the CSRC
approval is not required in the context of this offering because: (i) our PRC subsidiaries were established by means of direct investment
rather than by mergers with or acquisitions of any PRC domestic companies as defined under the M&amp;A Rules, and (ii) no explicit provision
in the M&amp;A Rules classifies the respective contractual arrangements among GIOP BJ, SDH and its shareholders as a type of acquisition
transaction falling under the M&amp;A Rules. Notwithstanding the above opinion, our PRC counsel has further advised us that uncertainties
still exist as to how the M&amp;A Rules will be interpreted and implemented and its opinions summarized above are subject to any new
laws, rules, and regulations or detailed implementations and interpretations in any form relating to the M&amp;A Rules. If the CSRC or
other PRC regulatory agencies subsequently determine that prior CSRC approval was required, we may face regulatory actions or other sanctions
from the CSRC or other PRC regulatory agencies. See &#8220;<i>Risk Factors&#8212;Risks Related to Doing Business in China&#8212;The failure
to comply with PRC regulations relating to mergers and acquisitions of domestic entities by offshore special purpose vehicles may subject
us to severe fines or penalties and create other regulatory uncertainties regarding our corporate structure</i>.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 17, 2023, the CSRC released the <i>Trial Measures</i> and five supporting guidelines, which took effect on March 31, 2023. Pursuant
to the Trial Measures, PRC domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete
filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission
of relevant applications or its completion of subsequent offerings. If a domestic company fails to complete required filing procedures
or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative
penalties, such as an order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in
charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Trial Measures outline the circumstances where domestic companies are prohibited from offering and listing securities overseas, if such
overseas offering and listing made by domestic companies (i) are explicitly prohibited by laws; (ii) may endanger national security as
determined by relevant competent departments under the State Council; (iii) involve criminal offenses that disrupting PRC economy such
as corruption, bribery, embezzlement, or misappropriation of property by such domestic company, the controlling shareholder, and/or actual
controller in the recent three years; (iv) involve such domestic company in investigations for suspicion of criminal offenses or major
violations of laws and regulations; or (v) involve material ownership disputes over the shares held by the controlling shareholder or
by other shareholders that are controlled by the controlling shareholder and/or actual controller. We believe that our listing on Nasdaq
does not fall under the circumstance that such overseas listing is prohibited by the Trial Measures.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
the same day, the CSRC also held a press conference for the release of the Trial Measures and issued the CSRC Notice, which, among others,
clarifies that PRC domestic companies that have already been listed overseas before the effective date of the Trial Measures, which is
March 31, 2023, shall be deemed as Existing Issuers, and Existing Issuers are not required to complete the filing procedures with the
CSRC immediately, and they shall be required to file with the CSRC for any subsequent offerings. We are an Existing Issuer, based on
the foregoing, we are not required to complete the filing procedures with the CSRC immediately, and shall be required to file with the
CSRC for any subsequent offerings.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 24, 2023, the CSRC, together with the MOF, the National Administration of State Secrets Protection and National Archives Administration
of China, revised the Provisions, which were issued by the CSRC and National Administration of State Secrets Protection and National
Archives Administration of China in 2009. The revised Provisions were issued under the title the &#8220;<i>Provisions on Strengthening
Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies</i>,&#8221; and came into
effect on March 31, 2023, together with the Trial Measures. One of the major revisions to the revised Provisions is expanding their application
to cover indirect overseas offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, among
other things, (i) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose
or provide to relevant individuals or entities, including securities companies, securities service providers, and overseas regulators,
any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent
authorities according to law, and file with the secrecy administrative department at the same level; and (ii) a domestic company that
plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and
entities, including securities companies, securities service providers, and overseas regulators, any other documents and materials that,
if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable
national regulations. Any failure or perceived failure by our Company, our subsidiaries or the VIE and its subsidiaries to comply with
the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may
result in the relevant entities being held legally liable by competent authorities, and referred to the judicial organ to be investigated
for criminal liability if suspected of committing a crime.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Trial Measures and the revised Provisions that recently issued by the PRC authorities may subject us to additional compliance requirements
in the future. See &#8220;<i>Risk Factors &#8212; Risks Related to Doing Business in China &#8212; The Trial Measures and the revised
Provisions recently issued by the PRC authorities may subject us to additional compliance requirements in the future.</i>&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>The
following section sets forth a summary of the principal PRC laws and regulations relevant to graphite anode material manufacturing and
sales business operations in China.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Industrial
Polices</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign
investors and foreign-invested enterprises investing in the PRC shall comply with the <i>Catalog of Industries for Encouraging Foreign
Investment (2022 edition)</i>, which was promulgated by the National Development and Reform Commission (the &#8220;NDRC&#8221;) and the
Ministry of Commerce (the &#8220;MOFCOM&#8221;) on October 26, 2022 and took effect on January 1, 2023. Pursuant to the Catalog, the
development and production of lithium-ion batteries falls within the scope of industries in which foreign investment is encouraged.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to the <i>Guiding Catalog for Industrial Restructuring</i>, which was promulgated by the NDRC on December 2, 2005, with the latest amendment
on December 30, 2021, and was effective on December 30, 2021, new batteries such as lithium-ion batteries, and lithium-ion batteries
use intermediate phase Anode materials such as carbon microspheres and silicon carbon fall into the state-encouraged industries.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to the <i>Guiding Catalog for Key Products and Services for Strategic Emerging Industries</i> promulgated by the NDRC on January 25,
2017, high-power graphite electrodes, graphite for negative electrodes of lithium-ion batteries, mesocarbon microspheres, Synthetic diamond
etc. are key products and services for strategic emerging industries.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to the <i>Guiding Opinions on Accelerating the Development of New Energy Storage</i> jointly promulgated by the NDRC and the National
Energy Administration on July 15, 2021, the PRC will strive to build a clean, low-carbon, safe and efficient energy system, and seek
to drive down the cost and advance the commercial-scale application of more mature new energy storage technologies such as lithium-ion
batteries, in an effort to achieve carbon peak and carbon neutrality.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
order to encourage and guide the technological progress and normative development of lithium-ion battery industry, the Ministry of Industry
and Information Technology (the &#8220;MIIT&#8221;) enacted the <i>Conditions on the Standardization of Lithium Battery Industry</i>
(the &#8220;Standardization Conditions&#8221;) on August 31, 2015, which was latest amended on December 10, 2021, and provides guidance
for all types of upstream and downstream manufacturers in the lithium-ion battery industry, including negative electrode materials, on
their production scale and process technology, product quality and performance, comprehensive utilization of resources and environmental
protection and safety management, etc. However, the Standardization Conditions is not pre-emptive and mandatory for administrative approval.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
MIIT further enacted the <i>Management Measures of Standardization Announcement of Lithium Battery Industry</i> according to the Standardization
Conditions on January 16, 2019, which was latest amended on December 10, 2021, and provides that the responsible departments of industry
and information technology in each province, autonomous region and municipality directly under the central government are responsible
for the acceptance, verification and submission of announcement applications for lithium battery industry enterprise in the region, and
for supervising and checking the implementation of the Standardization Conditions.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Production Safety</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to the <i>Production Safety Law of the PRC </i>(the &#8220;Production Safety Law&#8221;)latest amended by the Standing Committee of the
National People&#8217;s Congress (the &#8220;SCNPC&#8221;) on June 10, 2021 and came into effect on September 1, 2021, an enterprise
shall (i) provide production safety conditions as stipulated in the Production Safety Law and other relevant laws, administrative regulations,
national and industry standards, (ii) establish a comprehensive production safety accountability system and production safety rules,
and (iii) develop production safety standards to ensure production safety. Any entity that fails to provide required production safety
conditions is prohibited from engaging in production activities. The person-in-charge of an enterprise shall be fully responsible for
the safety of production of the enterprise. An enterprise having more than 100 employees shall establish a production safety management
institution or be equipped with dedicated production safety management personnel.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to the <i>Measures for the Supervision and Administration of &#8220;Three Simultaneities&#8221; for the Safety Facilities of Construction
Projects </i>promulgated by the former State Administration of Work Safety (currently known as the Ministry of Emergency Management)
on December 14, 2010 and amended on April 2, 2015, the safety facilities in a newly built, reconstructed or expanded construction project
must be designed, constructed and put into use in production simultaneously with the main body of the project. The enterprises shall
demonstrate and pre-assess the safety conditions of its construction projects, make a safety design chapter, submit to the relevant work
safety administrative department for examination or filing, and apply to the work safety administrative department for the completion
and acceptance or the filing of its projects. If an enterprise violates the relevant requirements, it may be warned and be ordered to
make corrections within a specified time limit. Failure to make correction within the specified time limit may result in the enterprise
being ordered to discontinue the construction process or suspend its production and business operation for rectification, and being imposed
a fine.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 5, 2022, Sunrise Guizhou completed the filing-for-record procedures with local work safety administrative department for its construction
of the first phase of the manufacturing plant.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Product Quality</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to the <i>Product Quality Law of the PRC</i> (the &#8220;Product Quality Law&#8221;), promulgated on February 22, 1993 and last amended
on December 29, 2018 by the SCNPC, producers and sellers shall establish a sound internal product quality control system and strictly
adhere to a job responsibility system in relation to quality standards and quality liabilities together with implementing corresponding
examination and inspection measures. The counterfeiting or imitation of quality marks such as certification marks is prohibited; falsifying
the place of origin of product, and falsifying or imitating the name or address of another factory is prohibited; adulteration of, or
mixing of improper elements with products under manufacturing or on sale, passing off the sham as the genuine or passing off the inferior
as the superior is prohibited. Any manufacturer or seller who violates the Product Quality Law may be subject to (i) administrative penalties
including suspension of production or sale, ordered correction of illegal activities, confiscation of products subject to illegal production
or sale, imposition of fines, confiscation of illegal gains and, in severe cases, revocation of business license; and (ii) criminal liabilities
if the illegal activity constitutes crime.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this annual report, Sunrise Guizhou has passed the ISO14001, ISO45001, ISO9001 and IATF16949 quality management system
certification for its development and manufacturing of graphite anode materials for lithium-ion batteries.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Real Properties</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Land</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the <i>Land Administration Law of the PRC</i>, which became effective from 1 January 1987 and was last amended on 26 August 2019,
and the <i>Regulation on the Implementation of the Land Administration Law of the PRC</i>, which became effective from 1 February1991
and was last amended on 2 July 2021, issues related to the ownership of land, land use right, the overall planning of land use, the protection
of cultivated land and the construction land in the PRC are all subject to the supervision of the above laws and regulations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Property
Rights</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to <i>the Civil Code of the PRC</i>, civil relationships arising from the possession and the use of property (including ownership, usufructuary
right, security rights to the property and possession) are subject to the law, of which a holder of the land use right of the construction
land enjoys the rights to possess, use and seek proceeds from the state-owned land as prescribed by the laws and the rights to build
buildings, structures and their accessory facilities on such land. A mortgage can be set up on the land use right of the construction
land, buildings and other land affiliated items as prescribed by the laws.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Construction
Under Progress</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the <i>Law of Urban and Rural Planning of the PRC</i>, which became effective from 1 January 2008 and was last amended on 23 April
2019, <i>Construction Law of the PRC</i>, which became effective from 1 March 1998 and was last amended on 23 April 2019, <i>Administrative
Measures for Construction Permits of Construction Projects</i>, which became effective on 25 October 2014 and was last amended on 30
March 2021 and the <i>Regulations on the Administration of Construction Project Quality</i>, which became effective from 30 January 2000
and was last amended on 23 April 2019, construction activities carried out in the preoccupied areas of cities, towns and villages and
in areas subject to planning control due to the needs of urban and rural construction and development shall comply with the relevant
requirements of the <i>Law of Urban and Rural Planning of the PRC</i>, under which the construction enterprises shall obtain the Construction
Land Use Planning Permit and Construction Works Planning Permit from the competent urban and rural planning department of the City and
County People&#8217;s Government and apply for the Construction Permit with the competent housing and urban-rural department of the People&#8217;s
Government above county level at places where the construction projects are located before construction commences as prescribed by the
laws. Upon receiving the completion report of the construction project, the construction enterprise shall organize the acceptance inspection
by the relevant design, construction and supervision enterprises.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sunrise
Guizhou obtained the approval for the Construction Land Use Planning Permit and the Construction Works Planning Permit from local urban
and rural planning department in March 2022, and obtained the Construction Permit from local housing and urban-rural department in April
and July 2022, for its construction of the first phase of the manufacturing plant.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Environmental Protection</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to the <i>Environmental Protection Law of the PRC</i> (the &#8220;Environmental Protection Law&#8221;) promulgated by the SCNPC on December
26, 1989 and last amended on April 24, 2014, any entity that discharges or will discharge pollutants in the course of operation or other
activities must implement effective environmental protection measures to control and properly handle of hazardous substances such as
waste gas, waste water, waste residues, dust, malodorous gases, radioactive substances, noise, vibration and electromagnetic radiation
generated in the course of such activities. The State implements a pollutant discharge permit management system in accordance with the
law. According to the Environmental Protection Law and the <i>Regulations on the Administration of Pollutant Discharge Licensing</i>,
which was promulgated by the State Council on January 24, 2021 and came into effect on March 1, 2021, enterprises, business units and
other producers and operators that implement the pollutant discharge licensing management shall discharge pollutants according to the
requirements of the pollutant discharge license, and shall not discharge pollutants without obtaining the pollutant discharge license.
The competent environmental protection authorities impose various administrative penalties on individuals or enterprises in violation
of the Environmental Protection Law, for example, if an entity discharges pollutant in violation of the pollutant discharge standards
or volume control requirement, the entity would be subject to administrative penalties, including order to suspend business for rectification,
and even order to terminate or close down business under severe circumstances.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the <i>Regulations on the Administration of Environmental Protection of Construction Projects</i> promulgated by the State Council
on November 29, 1998 and amended on July 16, 2017 and the <i>Interim Measures for Environmental Protection Acceptance Examination Upon
Completion of Construction Projects</i> promulgated by the former Ministry of Environmental Protection on November 20, 2017, the PRC
implements a system to appraise the environmental impact of construction projects. The construction entity shall submit an environmental
impact report or an environmental impact statement for approval prior to the commencement of the construction project, or an environmental
impact registration form as required by the environmental protection administrative department of the State Council for record. In addition,
after the completion of a construction project for which an environmental impact report or an environmental impact statement has been
prepared, the construction entity shall, in accordance with the standards and procedures prescribed by the competent administrative department
of environmental protection under the State Council, conduct acceptance checks on the supporting environmental protection facilities
and prepare an acceptance report. For construction projects that are constructed in phases or put into production or use in phases, the
corresponding environmental protection facilities shall be inspected and accepted in phases. The construction project can only be put
into production or use after the completed supporting environmental protection facilities have passed the acceptance inspection. Facilities
that have not been carried out or have not passed the acceptance examination shall not be put into production or use.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to the <i>Environmental Protection Tax Law of the PRC</i> promulgated by the SCNPC on December 25, 2016, amended on October 26, 2018
and implemented on the same day, and the <i>Regulations for the Implementation of the Environmental Protection Tax Law of the PRC</i>
came into effective on January 1, 2018, (i) enterprises, public institutions and other producers and operators that directly discharge
pollutants to the environment within the territory of the PRC and other sea areas under the jurisdiction of the PRC are taxpayers of
environmental pollution tax, and shall pay environmental pollution tax in accordance with the aforementioned laws and regulations, (ii)
the <i>Administrative Regulations on the Collection and Use of Pollutant Discharge Fees</i> was repealed and no more pollutant discharge
fees shall be collected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 25, 2022, Sunrise Guizhou obtained the approval for the Environmental Impact Report for its construction of the first phase
of the manufacturing plant. And on April 25, 2022, Sunrise Guizhou obtained the Pollutant Discharge License, which will remain effective
for 5 years.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations
Related to Fire Control</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to the Fire Control Law of the PRC promulgated by the SCNPC on April 29, 1998 and last amended on April 29, 2021, the fire control design
and construction of a construction project shall comply with the national fire control technical standards for construction projects.
Upon completion of construction of a development project which is required to apply for fire safety inspection and acceptance as stipulated
by the housing and urban-rural development authority of the State Council, the developer shall apply to the housing and urban-rural development
authority for fire safety inspection and acceptance. For development projects other than those stipulated in the preceding paragraph,
the developer shall complete filing formalities with the housing and urban-rural development authority following the inspection and acceptance,
the housing and urban-rural development department shall conduct spot check. Where a development project which is required by law to
undergo fire safety inspection and acceptance does not undergo fire safety inspection and acceptance, or does not pass fire safety inspection
and acceptance, the project shall not be put into use; the use of other development projects which do not pass inspection in spot checks
carried out pursuant to the law shall be suspended.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 16, 2023, Sunrise Guizhou obtained the Filing Certificate for Fire Safety Inspection and Acceptance of Construction Project from
local urban and rural development authority for its construction of the first phase of the manufacturing plant.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.
Organizational Structure</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following diagram illustrates our current corporate structure, which includes our significant subsidiaries as of the date of this annual
report:&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img alt="" src="img_008.jpg"/></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Contractual
Arrangements among GIOP BJ, the VIE and Its Shareholders</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Neither
we nor our subsidiaries own any equity interest in the VIE. Instead, we control and receive the economic benefits of the VIE&#8217;s
business operation through a series of contractual arrangements. GIOP BJ, the VIE and its shareholders entered into a series of contractual
arrangements, also known as VIE Agreements, in June 2019. Pursuant to the VIE Agreements, GIOP BJ holds the contractual right to control
and operate the business of the VIE. Therefore, pursuant to ASC 810, the VIE has been included in the Company&#8217;s consolidated financial
statements since June 2019.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
of the VIE Agreements is described in detail below:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Exclusive
Technical and Consulting Services Agreement</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Exclusive Technical and Consulting Services Agreement between the VIE and GIOP BJ (the &#8220;Exclusive Service Agreement&#8221;),
GIOP BJ provides the VIE with technical support, consulting services, business support and other management services relating to its
day-to-day business operations and management, on an exclusive basis, utilizing its advantages in technology, human resources, and information.
For services rendered to the VIE by GIOP BJ under the Exclusive Service Agreement, GIOP BJ is entitled to collect a service fee approximately
equal to the VIE&#8217;s earnings before corporate income tax, i.e., the VIE&#8217;s revenue after deduction of operating costs, expenses
and other taxes, subject to adjustment based on services rendered and the VIE&#8217;s operation needs.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
agreement became effective on June 10, 2019 and will remain effective unless otherwise terminated as required by laws or regulations,
or by relevant governmental or regulatory authorities. Nevertheless, this agreement shall be terminated after all the equity interest
in the VIE held by its shareholders and/or all the assets of the VIE have been legally transferred to GIOP BJ and/or its designee in
accordance with the Exclusive Option Agreement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
CEO of GIOP BJ, Mr. Haiping Hu, is currently managing the VIE pursuant to the terms of the Exclusive Service Agreement. The Exclusive
Service Agreement does not prohibit related party transactions. The Company&#8217;s audit committee is required to review and approve
in advance any related party transactions, including transactions involving GIOP BJ or the VIE.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Equity
Pledge Agreement</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the Equity Pledge Agreement between GIOP BJ, and shareholders of the VIE, together holding 100% of the shares of the VIE (the &#8220;VIE
Shareholders&#8221;), the VIE Shareholders pledged all of their equity interests in the VIE to GIOP BJ to guarantee the performance of
the VIE&#8217;s obligations under the Exclusive Service Agreement. Under the terms of the Equity Pledge Agreement, in the event that
the VIE or the VIE Shareholders breach their respective contractual obligations under the Exclusive Service Agreement, GIOP BJ, as pledgee,
will be entitled to certain rights, including, but not limited to, the right to collect dividends generated by the pledged equity interests.
The VIE Shareholders also agreed that upon occurrence of any event of default, as set forth in the Equity Pledge Agreement, GIOP BJ is
entitled to dispose of the pledged equity interests in accordance with applicable PRC laws. The VIE Shareholders further agreed not to
dispose of the pledged equity interests or take any actions that would prejudice GIOP BJ&#8217;s interests without the prior written
consent of GIOP BJ.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Equity Pledge Agreement is effective until: (1) the secured debt in the scope of pledge is cleared off; and (2) Pledgers transfer all
the pledged equity interests to Pledgees according to the Exclusive Option Agreement, or other entity or individual designated by it.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
purposes of the Equity Pledge Agreement are to (1) guarantee the performance of the VIE&#8217;s obligations under the Exclusive Service
Agreement; (2) make sure the VIE Shareholders do not transfer or assign the pledged equity interests, or create or allow any encumbrance
that would prejudice GIOP BJ&#8217;s interests without GIOP BJ&#8217;s prior written consent. In the event the VIE breaches its contractual
obligations under the Exclusive Service Agreement, GIOP BJ will be entitled to dispose of the pledged equity interests.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Exclusive
Option Agreement</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the Exclusive Option Agreement, the VIE Shareholders irrevocably granted GIOP BJ (or its designee) an exclusive option to purchase, to
the extent permitted under PRC law, once or at multiple times, at any time, part or all of their equity interests in the VIE or the assets
of the VIE. The option price to be paid by GIOP BJ to each shareholder of the VIE is RMB10 (approximately US$1.47) or the minimum amount
to the extent permitted under PRC law at the time when such transfer occurs.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the Exclusive Option Agreement, GIOP BJ may at any time under any circumstances, purchase, or have its designee purchase, at its discretion,
to the extent permitted under PRC law, all or part of the VIE Shareholders&#8217; equity interests in the VIE or the assets of the VIE.
The Exclusive Option Agreement, together with the Equity Pledge Agreement, the Exclusive Service Agreement, and Powers of Attorney, enable
GIOP BJ to exercise effective control over the VIE.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Exclusive Option Agreement remains effective until all the equity or assets of the VIE is legally transferred under the name of GIOP
BJ and/or other entity or individual designated by it, or unilaterally terminated by GIOP BJ with a 30-day written notice.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Powers
of Attorney</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
each of the Powers of Attorney, the VIE Shareholders authorized GIOP BJ to act on their behalf as their exclusive agent and attorney
with respect to all rights as shareholders, including, but not limited to: (a) attending shareholders&#8217; meetings; (b) exercising
all the shareholder&#8217;s rights, including voting, that shareholders are entitled to under the laws of China and the Articles of Association,
including, but not limited to, the sale or transfer or pledge or disposition of shares in part or in whole; and (c) designating and appointing
on behalf of shareholders the legal representative, the executive director, supervisor, the chief executive officer, and other senior
management members of the VIE.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Powers of Attorney are irrevocable and continuously valid from the date of execution of the Powers of Attorney, so long as the VIE Shareholders
own the equity interests of the VIE.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Spousal
Consent</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Spousal Consent, each spouse of the individual shareholders of the VIE irrevocably agreed that the equity interest in the VIE
held by their respective spouses would be disposed of pursuant to the Equity Pledge Agreement, the Exclusive Option Agreement, and the
Powers of Attorney. Each spouse of the shareholders agreed not to assert any rights over the equity interest in the VIE held by their
respective spouses. In addition, in the event that any spouse obtains any equity interest in the VIE through the respective shareholder
for any reason, he or she agreed to be bound by the contractual arrangements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b>&#160;&#160;<b>Property,
Plants and Equipment</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">I.
The VIE currently maintains offices in Beijing and Shanghai in the PRC. The total office space is 1,205 square meters including both
leased and owned properties. The VIE leases 567 square meters of office space under a non-cancelable operating lease agreement with expiration
dates through December 31, 2023. Operating lease expense amounted to $270,254, $244,045, and $352,645 for the years ended December 31,
2022, 2021, and 2020, respectively. In December 2019, the Company signed property purchase agreements to acquire four properties in Beijing
with approximately an aggregate of 638 square meters of office space for a total consideration of US$2,991,492. The Company paid US$1,204,094
as a prepayment during the year ended December 31, 2019 and paid the rest of the consideration of US$1,787,398 and acquired the ownership
of the properties in May 2020.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">II.
Sunrise Guizhou maintains the below corporate office space and manufacturing properties in China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth the location, approximate size, primary use and lease term of major facilities:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold">Location</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Approximate <br/> Gross Land Area
    <br/> in Square Meters</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: center"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Primary
                                            Use (Gross Floor Area</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>in
                                            Square Meters)</b></p></td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Lease&#160;or&#160;Own</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; width: 41%; text-align: left; text-indent: -10pt; padding-left: 10pt">Yilong New Area, Qianxinan
    Prefecture, Guizhou Province,China</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="vertical-align: top; width: 9%; text-align: right">260,543</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="vertical-align: top; width: 35%; text-align: center">Office (3,434), <br/>Manufacturing (24,879) <br/>staff dormitory (4,919)</td><td style="width: 1%">&#160;</td>
    <td style="vertical-align: top; width: 10%; text-align: center">own</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Future
minimum lease payments under non-cancellable operating leases as of December 31, 2022 was nil.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_008"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;4.A.</b>&#160;<b>UNRESOLVED
STAFF COMMENTS</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">None.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_009"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;5.</b>&#160;<b>OPERATING
AND FINANCIAL REVIEW AND PROSPECTS</b>&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>The
following discussion of the Company&#8217;s financial condition and results of operations is based upon and should be read in conjunction
with the Company&#8217;s consolidated financial statements and their related notes included elsewhere in this annual report. This annual
report contains forward-looking statements. See &#8220;Forward-Looking Information&#8221; in this annual report. In evaluating our business,
you should carefully consider the information provided under the caption &#8220;Item 3. Key Information&#8212;D. Risk Factors&#8221;
in this annual report. The Company caution you that its businesses and financial performance are subject to substantial risks and uncertainties.</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Overview</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
VIE, or SDH, started operating as a consulting company providing enterprise services to small and medium-sized enterprises in the PRC
in December 2014, and launched its peer-to-peer knowledge sharing and enterprise service platform in May 2016. Since then, SDH has continued
to expand and improve its platform, where knowledge is shared and gained, and services are requested and provided. Operating its platform
through its PRC operating entity, SDH and its subsidiaries, both on-line, via the mobile application &#8220;Shidonghui App&#8221; (the
&#8220;APP&#8221;), and off-line, through its local offices in Beijing, Shanghai, Zibo and Guizhou in China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Substantially
all of SDH&#8217;s operations are conducted in the PRC and all of the revenues are denominated in RMB. Foreign ownership of certain parts
of its businesses including the value-added telecommunications services, or the VATS, is subject to restrictions under current PRC laws
and regulations. See &#8220;<i>Regulations&#8212;Regulations Related to Foreign Investment</i>.&#8221; We have relied and expect to continue
to rely on contractual arrangements with SDH, its subsidiaries and shareholders to operate the business in China. For a description of
these contractual arrangements and uncertainties regarding the interpretation and application of current or future PRC laws and regulations,
see &#8220;<i>Business&#8212;Contractual Arrangements between GIOP BJ, SDH and Its Shareholders.</i>&#8221; and &#8220;<i>Risks Related
to Our Corporate Structure&#8212;If the PRC government finds that the agreements that establish the structure for operating our businesses
in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing
regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.</i>&#8221;.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
SDH launched its platform, the aim was not only to continue providing enterprise services to PRC&#8217;s growing business communities,
but also create a marketplace where qualified entities (individuals and enterprises) have opportunities to serve as providers, and receive
rewards by sharing their knowledge with others on the platform. As of April 2023, our knowledge sharing and enterprise service ecosystem
had 784 Mentors, 1,930 Experts, and 518,659 Users. In addition to serving the Users and Members, SDH continues to provide enterprise
services to small and medium-sized enterprises in China, through a dedicated team with ten full-time professional consultants, as well
as the Mentors and Experts. The providers (Mentors, Experts and consultants) are successful entrepreneurs, scientists, investors, and
professionals with qualifications and achievements in major industries such as finance, energy, health care, and academia. SDH&#8217;s
core strength is the knowledge brought by its providers, highlighted by their experiences, knowledge, industry know-how, and social connections.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In April 2022, the Company entered into the graphite
anode material manufacturing and sales business through a joint venture, Sunrise Guizhou, of which the Company currently owns 39.35%
through its wholly owned subsidiary, Zhuhai Zibo. The Company consolidates Sunrise Guizhou&#8217;s financials because it owns a majority
of seats on its board of directors and control its financial and operating policies pursuant to an agreement among its funding shareholders.
Sunrise Guizhou is located at Yilong New District, Xingyi City, Qian Southwest State, Guizhou Province, China. The land use of Sunrise
Guizhou&#8217;s graphite anode manufacturing site is approximately 260,543 square meters. Sunrise Guizhou purchased the site in March
2022 for approximately $6.6 million. Sunrise Guizhou began construction of the manufacturing plant in April 2022, and the first phase
the construction of (20,000 tons annual manufacturing capacity) of the manufacturing plant has been completed as of the date of this
annual report. The inspections have been scheduled to take place in Mid-March, and are expected to be completed in June 2023. The second
phase of the construction of the manufacturing plant (10,000 tons annual manufacturing capacity) is ongoing and expected to be completed
June 2023, and the third phase of construction of the manufacturing plant (20,000 tons annual manufacturing capacity) was approved by
the board of the directors of the Company in March 2023, and is expected to start in July 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Impact
from COVID-19</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
early January of 2020, a novel coronavirus (&#8220;COVID-19&#8221;) outbreak took place in Wuhan, China. Subsequently, it has spread
rapidly to Asia and other parts of the world. The COVID-19 outbreak has resulted in widespread economic disruptions in China, as well
as stringent government measures by the Chinese government to contain its transmissions including quarantines, travel restrictions, and
temporary closures of non-essential businesses in China and elsewhere.</span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Essentially
all SDH&#8217;s revenues and operations are generated in China. Consequently, the results of operations and financial performances was
affected materially for the year ended December 31, 2022. Due to the government restrictions, SDH was prevented from arranging offline
activities generally for the year ended December 31, 2022, resulting in cancellations or postponements of study tours, forums and sponsorship
advertising events. For the year ended December 31, 2022, revenue from knowledge sharing and enterprise service business decreased by
$6,864,281 or 92.64% as compared to the same period of 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sunrise
Guizhou&#8217;s graphite anode material manufacturing and sales business in Guizhou Province has not been severely impacted by the COVID-19
locks downs, primarily due to its relatively remote location.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Although the PRC government relaxed its COVID-19
restrictions since December 2022, there still remains uncertainties as to the future development of the COVID-19. The Company is operating
in a rapidly changing environment so the extent to which COVID-19 may impact its business, operations and financial results from this
point forward will depend on numerous evolving factors that the Company cannot accurately predict.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Results
of Operations</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes the results of the Company&#8217;s operations during the years ended December 31, 2022, 2021 and 2020, respectively,
and provides information regarding the dollar and percentage increase or decrease during such periods.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="10" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the years ended<br/> December
    31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold">REVENUE, NET</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 64%; text-indent: -9pt; padding-left: 18pt">Products</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">37,583,844</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,104,767</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,495,380</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 18pt">Service</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">541,824</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,304,505</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">21,685,704</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="font-weight: bold; text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">COMPREHENSIVE (LOSS) INCOME
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 78 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->72<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span style="text-decoration:underline">Year
Ended December&#160;31, 2022 Compared to Year Ended December&#160;31, 2021</span></i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Revenues,
net</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenues
for the years ended December 31, 2022 and 2021 were derived from the following sources:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenues
increased by $30,716,396, or 414.57%, from $7,409,272 for the year ended December 31, 2021, to $38,125,668 for the year ended December
31, 2022. Revenues from graphite anode material business accounted for 98.57% of net revenues for year ended December 31, 2022, as compared
to nil for year ended December 31, 2021. Revenue from peer-to-peer knowledge sharing and enterprise business accounted for 1.43% and
100% of net revenues for the years ended December 31, 2022 and 2021, respectively. The change was primarily attributable to the launch
of graphite anode materials business and offset by the shrink of peer-to-peer knowledge sharing and enterprise service revenue due to
the impact of COVID-19 for the year ended December 31, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Revenues
from graphite anode material sales</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s products include various artificial graphite anode material products. Artificial graphite is made of petroleum coke,
needle coke and pitch coke as the main material, and formed after crushing, shaping, granulation and graphitization. The Company markets
its graphite anode products through a direct sales channel, through its sales department consists of five experienced employees, who
report directly to the CEO of the Company, who has more than 20 years of experience in the lithium-ion battery material industry, and
has accumulated extensive business connections in this industry.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended December 31, 2022, the Company
had supplied products to 16 customers. The Company&#8217;s customers were manufacturers of industrial and consumer energy storage lithium-ion
batteries, such as batteries for electric vehicles and electric ships, and smart consumer electronics. For the year ended December 31,
2022, four customers accounted for more than 10% of the Company&#8217;s total sales, accounting for 28.43%, 19.54%, 19.30% and 18.87%
of the total sales, respectively. As the Company grows its customers bases, it is expected that the concentration of the sales will diminish
in the future.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Revenues
from member services</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">SDH
offers three tiers of membership services, Platinum, Diamond and Prot&#233;g&#233;, which differ in membership fees as well as the
level of the services provided. Members pay a fixed fee for exchange of the right to participate in seven activities, including study
tours and forums, within a typically one-year membership period.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenues
from member services decreased by $391,606, or 78.58%, from $498,330 for the year ended December 31, 2021, to $106,724 for the year ended
December 31, 2022. As the outbreak of the COVID-19, SDH was prevented from offering large offline activities, which resulted in a decreased
demand for member services.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Revenues
from comprehensive tailored services</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are four major categories of SDH&#8217;s comprehensive tailored services. The following table presents the type of tailored services
as well as their respective prices:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 22.2pt">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
    <td style="width: 49%; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Type
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    <td style="width: 2%; text-align: center">&#160;</td>
    <td style="width: 49%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Pricing</b></span></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Conference and salon organization </span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">RMB50,000 (approximately US$7,434) </span></td></tr>
  <tr style="vertical-align: bottom">
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    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">RMB50,000 (approximately US$7,434) </span></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">RMB50,000-100,000 (approximately US$7,434-US$14,867)
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  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other additional services </span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">RMB10,000-200,000 (approximately US$1,487 -US$29,735)
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 22.2pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 21pt"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 21pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Revenues from comprehensive tailored services
decreased by $1,280,189, or 89.28%, from $1,433,847 for the year ended December 31, 2021, to $153,658 for the year ended December 31,
2022. Due to the impact of COVID-19, the comprehensive tailored service revenues from individual customers and some of the enterprise
customers became unstable, and the accounts receivable of these customers also became harder to collect. In addition, due to the continuous
government restrictions on public gatherings in 2022, the demand for comprehensive tailored services for large conferences and salon
organizations decreased.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 5.3pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Revenues
from sponsorship advertising service</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sponsorship
advertising is a special form of advertising, generally referring to a publicity strategy adopted by enterprises in order to enhance
their corporate and product image, as well as brand awareness and influence. SDH provides sponsorship advertising services for enterprise
clients at events SDH holds, such as forums and study tours.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 5.3pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenues
from sponsorship advertising services decreased by $1,734,390, or 100% from $1,734,390 for the year ended December 31, 2021, to $nil
for the year ended December 31, 2022, primarily due to the fact that offline forums and study tours were canceled due to the continuous
government restrictions on public gatherings.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Revenues
from consulting services</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">SDH
provides consulting services to small and medium-sized enterprises to develop strategies and solutions for the following: corporate reorganization,
product promotion and marketing, industry supply chain integration, corporate governance, financing and capital structure, etc. Revenues
from consulting services decreased by $1,573,938, or 99.39% from $1,583,583 for the year ended December 31, 2021, to $9,645 for the year
ended December 31, 2022, primarily due to the fact that small forums and salons were canceled due to the continuous government restrictions
on public gatherings.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Revenues
from online services</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">SDH
provides two types of online services to the Company&#8217;s APP Users, which are questions and answers (Q&amp;A) sessions with chosen
Mentors or Experts and online streaming of courses and programs. Top-up credits are paid by Users through SDH&#8217;s APP, using which
Users can purchase the online services.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
from online services were immaterial in terms of amount and percentage of the net revenues for the years ended December 31, 2021 and
2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Revenues
from sales of merchandises</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenues
from the sale of merchandise decreased by $2,101,601, or 99.85% from $2,104,766 for the year ended December 31, 2021 to $3,165 for the
year ended December 31, 2022. The decrease was primarily due to the fact that SDH had not organized trade conferences facilitating the
sales of merchandise due to the continuous government restrictions on public gatherings.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Costs
of revenues</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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    <td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: justify">&#160;</td><td>&#160;</td><td>&#160;</td>
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    <td colspan="2" style="text-align: justify">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: justify">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">3,886,654</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Service
                                            costs </i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The service costs primarily include (1) the cost
of holding activities, such as venue rental fees, conference equipment fees, (2) professional and consulting fees paid to third parties
for the activities; (3) the fees paid to Mentors and Experts; (4) labor costs; and (5) amortization cost of copyright. Service costs
decreased by $646,402, or 35.45% for the year ended December 31, 2022 compared to same period in 2021, mainly due to the decrease of
$540,641 in service fee and consultant fee, which was mainly because the Company held less small conferences due to the government limitation
on the scale of conferences in COVID-19.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 80 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Cost
of goods sold</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The cost of goods sold were $38,299,090 and $2,063,296
for the years ended December 31, 2022 and 2021, respectively. The significant increase of the cost of goods sold was due to the expansion
of the graphite anode materials business, which was launched in 2022. In addition, $2,711,158 impairment on inventory, including health
service gift cards, learning course gift cards, Chinese tea, latex pillows and health care products which was in exchange of collection
of account receivables and deferred revenue due from the customers, was recoded due to the adverse effect of COVID-19 on peer-to-peer
knowledge sharing and enterprise business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Gross (loss) profit </i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As a result of the foregoing, the Company reported
a gross loss of $1,350,378 for the year ended December 31, 2022. The negative gross margin was due to $3,344,511 gross loss on peer-to-peer
knowledge sharing and enterprise business. For the year ended December 31, 2022, $2,711,158 impairment on inventory was recorded due
to the adverse effect of COVID-19 and the Company maintained the necessary cost to operate peer-to-peer knowledge sharing and enterprise
business. The gross loss was partially set off by a gross profit of $1,994,133 for graphite anode material sales business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Operating
expenses</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth the breakdown of the operating expenses for the years ended December 31, 2022 and 2021:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    the years ended December 31,</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">2,151,565</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">19.68</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">%</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(1,097,683</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(51.02</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)%</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Impairment
    of intangible assets</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">2,650,020</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">15.18</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">%</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">%</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">2,650,020</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">100</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">%</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif">Total
    costs and operating expenses</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><span style="font-family: Times New Roman, Times, Serif">100.00</span></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">%</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><span style="font-family: Times New Roman, Times, Serif">100.00</span></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">%</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><span style="font-family: Times New Roman, Times, Serif">6,526,124</span></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><span style="font-family: Times New Roman, Times, Serif">59.69</span></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">%</span></td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Selling
expenses </i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The selling expenses increased by $129,205 or
13.65%, from $946,775 for the year ended December 31, 2021 to $1,075,980 for the year ended December 31, 2022. Such increase was primarily
due to (1) an increase of travel expenses of $51,662 and entertainment expenses of $35,357, which was mainly due to increasing needs
for marketing activities to the launch of graphite anode materials business; and (2) an increase of $39,301 of share-based compensation,
as the Company adopted the 2022 Stock Incentive Plan for the grant of restricted share units to sales employees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>General
and administrative expenses </i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The general and administrative expenses increased
by $4,844,582, or 61.84%, from $7,834,291 for the year ended December 31, 2021 to $12,678,873 for the year ended December 31, 2022. Such
increase was primarily due to (1) an increase of bad debt expenses of $ $364,346, which was mainly due to the fact that as the Company
experienced a slow-down in the collection of accounts receivable resulting from impact from COVID-19 for the year ended December 31,
2022 on peer-to-peer knowledge sharing and enterprise service business; (2) an increases of $1,191,284 due to outsourced labor that due
to the launch of graphite anode material business in August 2022, as the Company recruited factory workers and security personnel from
labor outsourcing companies; and (3) an increase of $2,674,292 of share-based compensation as the Company adopted the 2022 Stock Incentive
Plan for the grant of restricted share units to employees, directors and non-employees to provide incentive for their services.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->75<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Research
and development expenses</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Research and development expenses decreased by
$1,097,683 or 51.02%, from $2,151,565 for the year ended December 31, 2021 to $1,053,882 for the year ended December 31, 2022. Research
and development expenses for the year ended December 31, 2022 was mainly associated with the research development activities of graphite
anode material business, including technology service, technical service, purchasing laboratory chemical material collaterals, while
in the year ended December 31, 2021, as SDH hired more personnel to update and support the mobile application, or the APP, to meet Users&#8217;
increasing needs.</p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Impairment
of intangible assets</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Impairment
of intangible assets increased from $nil for the year ended December 31, 2021 to $2,650,020 for the year ended December 31, 2022. The
impaired intangible assets for the year ended December 31, 2022 were associated with the copyrights of course videos purchased from a
third party including but not limited to course videos which cover subjects such as entrepreneurship development, financial service,
corporate governance, team management, marketing strategy and etc. The peer-to-peer knowledge sharing and enterprise service business
was adversely affected by COVID-19 for the year ended December 31, 2022. The Company online service was $2,100 for the year ended December
31, 2022.The Company reviewed its copyright of course videos for impairment in the event of the adverse change to market conditions that
would impact the future use of the copyrights. It indicated that the carrying amount of an asset might no longer be recoverable as of
December 31, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Other
expenses (income), net</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The total net other expenses were $3,506,299
for the year ended December 31, 2022, and was $1,540,900 for the year ended December 31, 2021. The net of other expenses for the year
ended December 31, 2022 was primarily consisted of the investment loss of $3,618,847 which was mainly attributed by the investment loss
in a trust fund of $2,625,349 and impairment loss of $979,426 on long-term investment. The net of other expenses for the year ended December
31, 2021 primarily consisted of the investment loss of $2,118,453, which was mainly attributed to the investment loss in a trust fund
of $2,038,395, which was partially offset by the government subsidies of $413,422.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Income
taxes provision</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Cayman
Islands </i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the current tax laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains. In addition, no Cayman
Islands withholding tax will be imposed upon the payment of dividends by the Company to its shareholders.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Hong
Kong </i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within
Hong Kong at the applicable tax rate on taxable income. From year of assessment of 2019/2020 onwards, Hong Kong profit tax rates are
8.25% on assessable profits up to HK$2,000,000, and 16.5% on any part of assessable profits over HK$2,000,000. However, the Company&#8217;s
HK subsidiary did not generate any assessable profits arising in or derived from Hong Kong for the fiscal years ended December 31, 2022,
2021 and 2020, and accordingly no provision for Hong Kong profits tax has been made in these periods.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>China</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s subsidiaries are incorporated in the PRC, and are subject to the PRC Enterprise Income Tax Laws (&#8220;EIT Laws&#8221;)
with the statutory income tax rate of 25% with the following exceptions.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
accordance with the implementation rules of EIT Laws, a qualified &#8220;High and New Technology Enterprise&#8221; (&#8220;HNTE&#8221;)
is eligible for a preferential tax rate of 15%. The HNTE certificate is effective for a period of three years. An entity could re-apply
for the HNTE certificate when the prior certificate expires. SDH obtained its HNTE certificate on October 25, 2017, and renewed in 2021.
Therefore, SDH is eligible to enjoy a preferential tax rate of 15% from 2017 to 2023 to the extent it has taxable income under the EIT
Law.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">For
qualified small and thin-profit enterprises, the annual taxable income up to RMB 1 million (inclusive) is subject to an effective EIT
rate of 2.5% from 1 January 2021 to 31 December 2022; where the annual taxable income exceeds RMB 1 million but does not exceed RMB 3
million (inclusive), the amount in excess of RMB 1 million is subject to an effective EIT rate of 5% from 1 January 2022 to 31 December
2024. GMB Consulting was eligible to enjoy a preferential tax rate of 5% from 2018 to 2021. Shidong Health was eligible to enjoy a preferential
tax rate of 2.5% in 2022.</span></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The PRC income taxes expense was $808,970 for
the year ended December 31, 2022, primarily generated by the changes in valuation allowance. The income tax benefit was $236,581 for
the year ended December 31, 2021.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Net
loss </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of the foregoing, the Company reported a net loss of $23,124,402 for the year ended December 31, 2022, compared to $8,403,260
for the year ended December 31, 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Net
loss attributable to non-controlling interest </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-controlling
interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the
controlling shareholder. As of December 32, 2022, for the Company&#8217;s consolidated subsidiaries, VIE and VIE&#8217; s subsidiaries,
non-controlling interests represent: a) a minority shareholder&#8217;s 49% ownership interest in GMB (Beijing), GMB Consulting, Nanyu
Culture and Jiagui Haifeng; b) a minority shareholder&#8217;s 60.65% ownership interest in Sunrise Guizhou; c) a minority shareholder&#8217;s
49% ownership interest in GMB Culture, which has a subsidiary called GMB Technology; and d) a minority shareholder&#8217;s 25% ownership
interest in Shidong Cloud, and 40% ownership interest in Shidong Trading.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Net
loss attributable to the ordinary shareholders </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
loss attributable to the ordinary shareholders was $22,404,366 for the year ended December 31, 2022, compared to $8,403,260 for the year
ended December 31, 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span style="text-decoration:underline">Year
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Revenues,
net</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenues
for the year ended December 31, 2021 and 2020 were derived from the following sources:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">0.55</td><td style="text-align: left">%</td><td>&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="margin: 0pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenues
decreased by $15,771,812, or 68.04%, from $23,181,084 for the year ended December 31, 2020, to $7,409,272 for the year ended December
31, 2021. Revenues from Member services accounted for 6.73% of net revenues in the year ended December 31, 2021, as compared to 3.76%
in year ended December 31, 2020. Revenue from enterprise services accounted for 64.13% and 87.84% of net revenues for the years ended
December 31, 2021 and 2020, respectively. Revenue from sales of merchandise accounted for 28.41% and 6.45% of net revenues for the years
ended December 31, 2021 and 2020, respectively. The decrease in revenues was primarily attributable to the decrease in the revenue generated
from comprehensive tailored services, sponsorship advertising services, member services and partially offset by the increase of revenue
from consulting services and sales of merchandises.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Revenues
from member services</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">SDH
offers three tiers of membership services, Platinum, Diamond and Prot&#233;g&#233;, which differ in membership fees as well as the
level of the services provided. Members pay a fixed fee for exchange of the right to participate in seven activities, including study
tours and forums, within a typically one-year membership period.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenues
from member services decreased by $374,299, or 42.89%, from $872,629 for the year ended December 31, 2020, to $498,330 for the year ended
December 31, 2021. Due to the COVID-19 pandemic, SDH was prevented from offering large offline activities, which resulted in a decreased
demand for member services.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Revenues
from comprehensive tailored services</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are four major categories of SDH&#8217;s comprehensive tailored services. The following table presents the type of tailored services
as well as their respective prices:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 22.2pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 51%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Type
    of comprehensive tailored services</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 48%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Pricing</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Conference
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">RMB50,000
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Booth
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">RMB50,000
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On-site
    mentors&#8217; guidance </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">RMB50,000-100,000
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
    additional services </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">RMB10,000-200,000
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenues
from comprehensive tailored services decreased by $11,912,033, or 89.26%, from $13,345,880 for the year ended December 31, 2020, to $1,433,847
for the year ended December 31, 2021. Due to the impact of COVID-19, the comprehensive tailored service revenues from individual customers
and some of the enterprise customers became unstable, and the accounts receivable of these customers also became harder to collect. In
addition, due to the continuous government restrictions on public gatherings in 2021, the demand of comprehensive tailored services for
large conference and salon organization decreased.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 5.3pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Revenues
from sponsorship advertising service</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sponsorship
advertising is a special form of advertising, generally referring to a publicity strategy adopted by enterprises in order to enhance
their corporate and product image, as well as brand awareness and influence. SDH provides sponsorship advertising services for enterprise
clients at events SDH holds, such as forums and study tours.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 5.3pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenues
from sponsorship advertising services decreased by $4,864,137, or 73.72% from $6,598,527 for the year ended December 31, 2020, to $1,734,390
for the year ended December 31, 2021, primarily due to the fact that offline forums and study tours were canceled due to the continuous
government restrictions on public gatherings.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Revenues
from consulting services</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">SDH
provides consulting services to small and medium-sized enterprises to develop strategies and solutions for the following: corporate reorganization,
product promotion and marketing, industry supply chain integration, corporate governance, financing and capital structure, etc. Revenues
from consulting services increased by $1,166,949, or 280.09% from $416,634 for the year ended December 31, 2020, to $1,583,583 for the
year ended December 31, 2021, primarily due to the fact that SDH managed to hold more small forums and salons to provide consulting services
instead of large conferences.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 84 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Revenues
from online services</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">SDH
provides two types of online services to the Company&#8217;s APP Users, which are questions and answers (Q&amp;A) sessions with chosen
Mentors or Experts and online streaming of courses and programs. Top-up credits are paid by Users through SDH&#8217;s APP, using which
Users can purchase the online services.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
from online services decreased by $321,542, or 88.84% from $361,933 for the year ended December 31, 2020 to $40,391 for the year ended
December 31, 2021. The decrease was primarily due to the fact that SDH offered more free streaming content to attract both existing and
potential clients.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Revenues
from sales of merchandises</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenues
from the sale of merchandise increased by $609,401, or 40.75% from $1,495,365 for the year ended December 31, 2020 to $2,104,766 for
the year ended December 31, 2021. The increase was primarily due to the fact that SDH organized more small trade conferences facilitating
the sales of merchandises.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Costs
of revenues</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth the breakdown of the cost of revenues for the years ended December 31, 2021 and 2020:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="14" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the years ended December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 28%; text-align: left; text-indent: -9pt; padding-left: 9pt">Service costs</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Cost of goods sold</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Total costs of revenues</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Service
costs </i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
service costs primarily include (1) the cost of holding activities, such as venue rental fees, conference equipment fees, (2) professional
and consulting fees paid to third parties for the activities; (3) the fees paid to Mentors and Experts; (4) labor costs; and (5) amortization
cost of copyright. Service costs decreased by $264,067, or 12.65% for the year ended December 31, 2021 compared to same period in 2020,
mainly due to: (1) the decrease of $255,000 in consulting service cost paid to third parties for the activities, which was mainly due
to the fact that the cost control for outsource expenses; (2) the decrease of $253,913 in video maintenance service fee; and was partially
offset by the increase in conference cost of $296,549, which was mainly because the Company held more small conferences due to the government
limitation on the scale of conferences.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Cost
of goods sold</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
cost of goods sold were $2,063,296 and $892,791 for the years ended December 31, 2021 and 2020, respectively. Cost of goods sold is recognized
when revenue from sales of merchandises is recognized. The significant increase of the cost of goods sold was due to sale of electrolytic
copper, which incurred cost of goods sold of $2,000,332.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Operating
expenses</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth the breakdown of the operating expenses for the years ended December 31, 2021 and 2020:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Selling
expenses </i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
selling expenses of $946,775 for the year ended December 31, 2021 remained stable compared with $906,456 for the year ended December
31, 2020. Although the revenues for the year ended December 31, 2021 declined while compare to that for the year ended December 31, 2020,
SDH spent more selling expenses to retain and attract customers.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>General
and administrative expenses </i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
general and administrative expenses increased by $3,937,251 or 101.03%, from $3,897,040 for the year ended December 31, 2020 to $7,834,291
for the year ended December 31, 2021. Such increase was primarily due to (1) an increase of bad debt expenses of $2,376,268, which was
mainly due to the fact that as SDH experienced a slow-down in the collection of accounts receivable resulting from impact from COVID-19
for the year ended December 31, 2021, the bad debt expenses increased; (2) increases of directors&#8217; and officers&#8217; liability
insurance fee of $343,611, training consulting fees of $238,704, legal fees of $131,390, independent director fees of $103,368 and miscellaneous
service fees of $383,147, including training fee, business consulting services, etc. In order to meet public company reporting and corporate
governance requirements to meet all of the demands associated with being a public company, audit fee, management insurance and miscellaneous
service fees, including training and general consulting services, increased for the year ended December 31, 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Research
and development expenses</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Research
and development expenses for the mobile application, the APP, increased by $1,480,253 or 220.50% from $671,312 for the year ended December
31, 2020 to $2,151,565 for the year ended December 31, 2021, primarily due to the fact that SDH hired more personnel to update and support
the APP to meet Users&#8217; increasing needs.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Other
expenses (income), net</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
total net other expenses were $1,540,900 for the year ended December 31, 2021, and the net of other income was $286,210 for the year
ended December 31, 2020. The net of other expenses for the year ended December 31, 2021 was primarily consisted of the investment loss
of $2,118,453 which was mainly attributed by the investment loss in a trust fund of $2,038,395, which was partially offset by the government
subsidies received in the amounted of $413,422. The total net of other income for the year ended December 31, 2020 was primarily consisted
of interest income of $214,460.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Income
taxes provision</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company was incorporated in the Cayman Islands and under the laws of the Cayman Islands; the Company is not subject to tax on its income
or capital gains. In addition, no Cayman Islands withholding tax will be imposed upon the payment of dividends by the Company to its
shareholders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">GMB
HK and New Energy HK are companies registered in Hong Kong, and are subject to income taxes within Hong Kong at the applicable tax rate
on taxable income. From the years of assessment of 2019/2020 onwards, Hong Kong profit tax rates are 8.25% on assessable profits up to
HK$2,000,000, (approximately US$257,874), and 16.5% on any part of assessable profits over HK$2,000,000. However, the Company did not
have any assessable profits arising in or derived from Hong Kong for the years ended December 31, 2021 and 2020, therefore no provision
for Hong Kong profits tax was made in these periods.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
PRC subsidiaries and VIE are subject to the PRC Enterprise Income Tax Laws (&#8220;EIT Laws&#8221;) with the statutory income tax rate
of 25%. SDH obtained its &#8220;National High Tech Enterprise&#8221; (&#8220;NHTE&#8221;) certificate on October 25, 2017. SDH has completed
the process of renewing the NHTE certificate in the first quarter of 2021. Therefore, SDH is eligible to enjoy a preferential tax rate
of 15% from 2017 to 2023 to the extent it has taxable income under the EIT Laws.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 17, 2019, the PRC State Taxation Administration issued the notice on the scope of small-scale and low-profit corporate income
tax preferential policies of the Ministry of Finance and the State Administration of Taxation, [2019] No. 13. According to which, the
taxable income of a small-scale and low-profit enterprise, whose annual taxable income is not more than RMB1,000,000, approximately US$155,003,
is reduced by 25% income, which essentially resulted in a favorable income tax rate of 5%. The qualifications of small-scale and low-profit
enterprises were examined annually by the Tax Bureau. GMB Consulting was eligible to enjoy a preferential tax rate of 5% from 2018 to
2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
PRC income taxes benefit was $236,581 for the year ended December 31, 2021, primarily generated by the annual taxable loss. The income
tax provision was $3,054,983 for the year ended December 31, 2020.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Net
(loss) income</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of the foregoing, the Company reported a net loss of $8,714,332 for the year ended December 31, 2021, compared to a net income
of&#8201;$11,957,287 for the year ended December 31, 2020.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Net
loss attributable to non-controlling interest </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-controlling
interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the
controlling shareholder. As of December 31, 2021, for the Company&#8217;s consolidated subsidiaries, VIE and VIE&#8217; s subsidiaries,
non-controlling interests represent: a) a minority shareholder&#8217;s 49% ownership interest in Sunrise (Guizhou), GMB (Beijing), GMB
Consulting, Nanyu Culture and Jiagui Haifeng; b) a minority shareholder&#8217;s 49% ownership interest in GMB Culture, which has a subsidiary
called GMB Technology; c) a minority shareholder&#8217;s 25% ownership interest in Shidong Cloud, and 40% ownership interest in Shidong
Trading. Net loss attributable to non-controlling interest was $311,072 and $130,240 for the years ended December 31, 2021 and 2020,
respectively, mainly due to the net loss in GMB (Beijing), GMB Culture and GMB Technology.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Net
loss (income) attributable to the ordinary shareholders </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
loss attributable to the ordinary shareholders was $8,403,260 for the year ended December 31, 2021, and net income was $12,087,527 for
the year ended December 31, 2020.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Liquidity
and Capital Resources</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
reflected in the consolidated financial statements, the Company has been incurring $23,124,402 and $8,714,332 net losses for the years
ended December 31 2022 and 2021, respectively. Net cash used in operating activities were $9,573,401 and $5,233,182 for the years ended
December 31, 2022 and 2021, respectively. Total cash, cash equivalents and restricted cash decreased by $10,322,198 for the year ended
December 31, 2022. Management expected to continue to construct the production plant in Guizhou Sunrise. In 2022, the ongoing COVID-19
pandemic continued to negatively impact the Company&#8217;s business operations. A resurgence of the COVID-19 outbreak had given rise
to economic downturns and other significant changes in regional and global economic conditions, and negatively affected the Company&#8217;s
ability to execute the sales contract, fulfil customer orders, and collect customer payments timely. As a result, there was a possibility
that the Company&#8217;s revenue and cash flows might underperform in the next 12 months.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These adverse conditions and events raised substantial
doubt about the Company&#8217;s ability to continue as a going concern. For the next 12 months from the issuance date of this report,
the Company plans to continue implementing various measures to boost revenue and controlling the cost and expenses within an acceptable
level. The Company is in the process of transitioning peer-to-peer knowledge sharing and enterprise business to graphite anode material
business. In assessing its liquidity, management monitors and analyzes the Company&#8217;s cash on-hand, its ability to generate sufficient
revenue sources and ability to obtain additional financial support in the future, and its operating and capital expenditure commitments.
As of December 31, 2022, the Company had cash of $1,655,549. The management believed that it would be able to make borrowings from banks
based on past experience and the Company&#8217;s good credit history when necessary. As of December 31, 2022, the Company had available
line of credit from Bank of Guizhou for RMB 6,500,000, approximately $933,291. On January 18, 2023, Sunrise Guizhou entered a credit
facility agreement with Post Savings Bank of China (&#8220;Post Bank&#8221;) to obtain revolving fund up to RMB 30,000,000, approximately
$4,307,498, for a term from January 19, 2023 to January 18, 2031. On February 7, 2023, Sunrise Guizhou entered a two-year debt financing
arrangement with Zhongguancun Science and Technology Leasing Co., Ltd. to obtain a loan of RMB 20,000,000, approximately $2,871,665,
for a term from February 7, 2023 to February 7, 2025.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currently,
the Company is working to improve its liquidity and capital sources primarily through cash flows from operation, debt and equity financing,
and financial support from its principal shareholder. In order to fully implement its business plan and sustain continued growth, the
Company may also seek equity financing from outside investors when necessary. As of December 31, 2022, the working capital of the Company
was $18,614,388. Based on the operating plan and the working capital condition, management believed that the above-mentioned measures
collectively would provide sufficient liquidity for the Company to meet its future liquidity and capital requirement for at least 12
months from the date the consolidated financial statements are issued. <b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the Company experiences an adverse operating environment or incurred unanticipated capital expenditure requirements, or if the Company
accelerates its growth, then additional financing may be required. No assurance can be given, however, that additional financing, if
required, would be on favorable terms or available at all. Such financing may include the use of additional debt or the sale of additional
equity securities. Any financing which involves the sale of equity securities or instruments that are convertible into equity securities
could result in immediate and possibly significant dilutions to the existing shareholders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Substantially
all of the Company&#8217;s operations are conducted in the PRC and all of the revenues and the vast majority of expenses, cash and cash
equivalents are denominated in RMB. As of December 31, 2022, 72.35% of cash, cash equivalents and restricted cash were held in China,
and held by its subsidiaries, VIE and VIE&#8217;s subsidiaries and denominated in Renminbi, while 27.65% of cash, cash equivalents and
restricted cash were held in Hong Kong, and held by EPOW, SDH New Energy and GMB HK and denominated in US dollars. Although the Company
consolidates the results of the VIE and its subsidiaries, the Company only has the access to the assets or earnings of the VIE and their
subsidiaries through the contractual arrangements with the VIE and its shareholders. See &#8220;Business &#8212; Contractual Arrangements
between GIOP BJ, SDH and Its Shareholders.&#8221;<b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
majority of the future revenues are likely to continue to be in the form of Renminbi. Under existing PRC foreign exchange regulations,
Renminbi may be converted into foreign exchange for current account items, including profit distributions, interest payments and&#160;trade-and&#160;service-related
foreign exchange transactions, can be made in foreign currencies without prior SAFE approval as long as certain routine procedural requirements
are fulfilled. Therefore, PRC subsidiaries are allowed to pay dividends in foreign currencies to the Company without prior SAFE approval
by following certain routine procedural requirements. However, approval from or registration with competent government authorities is
required where the Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment
of loans denominated in foreign currencies. The PRC government may at its discretion restrict access to foreign currencies for current
account transactions in the future.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2022, the following were outstanding balances of cash and cash equivalents, restricted cash and short-term investments
in each jurisdiction:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Cash and cash equivalents</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Restricted cash</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Short-term investments</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 52%">PRC</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Hong Kong</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">201,120</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">201,120</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">285,916</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">700,094</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">3,336,256</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">4,322,266</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,655,549</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,638,468</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">3,336,256</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,630,273</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Cash
Flows</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;
</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth a summary of cash flows for the periods indicated:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(9,573,401</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(5,233,182</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">7,066,163</td><td style="width: 1%; text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(45,609,072</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(22,095,198</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(6,365,555</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">45,760,061</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">30,837,261</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">119,996</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(899,786</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">141,322</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: justify; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Net (decrease) increase in cash and
    cash equivalents</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(10,322,198</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">3,650,203</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->82<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Operating
Activities&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash used in operating activities amounted
to $9,573,401 for the year ended December 31, 2022. It was primarily due to a) a net loss of $23,124,402, adjusted by depreciation and
amortization of $2,062,499, share-based compensation of $2,729,969, deferred tax expenses of $807,412, interest expenses of $213,823,
investment losses of $3,618,847, bad debt expense of $2,887,754, impairment on inventory of $2,711,158, impairment on intangible assets
of $2,650,020, amortization of land use rights of $126,042 and amortization of operating lease right-of-use asset of $213,063; increase
in b) account receivable of $1,734,486, notes receivable of $899,481 due to sales of graphite anode products; c) inventories of $18,747,772
finished goods and purchased raw materials of graphite anode; d) prepaid expenses and other current assets of $2,894,690 due to increase
on tax prepayment of $4,345,304 offset by decrease on prepaid expenses of 2,251,169; d) account payable of $12,661,801 and notes payable
of $ 4,014,213 for payables to vendors of graphite business; and e) deferred government subsidy of $2,973,491 due to relocation bonus
received from the government of Zibo City, Shandong Province, PRC.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash used in operating activities amounted to $5,233,182 for the year ended December 31, 2021. It was primarily due to a) a net loss
of $8,714,332, adjusted by depreciation and amortization of $988,672, deferred tax benefits of $232,363, investment losses of $2,118,453,
bad debt expense of $3,847,426 and amortization of operating lease right-of-use asset of $90,320; b) decrease in income tax payable of
$3,696,654 due to the payment of income tax; c) increase in prepaid expenses and other current assets of $678,288 due to increase of
prepayment for service fee of $1,054,240; d) increase of inventories of $331,491 and right-of-use asset of $211,213; e) and partially
offset by decrease in accounts receivable of $1,729,006.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash provided by operating activities amounted to $7,066,163 for the year ended December 31, 2020. It was primarily due to a) a net income
of $11,957,287, adjusted by depreciation and amortization of $865,426, investment losses of $1,087, bad debt expense of $1,514,559 and
amortization of operating lease right-of-use asset of $359,551; b) increase in income taxes payable of $2,565,098 due to the increased
taxable income for the year ended December 31, 2020; c) increase in accrued expenses and other current liabilities of $852,731 because
of the IPO efforts and the expansion of the business for the year ended December 31, 2020; d) increase in inventories of $667,758 due
to purchase from third parties; and partially offset by a) increase in accounts receivable of $8,385,804 because of the expansion of
the business in the fiscal year 2020; b) decrease in deferred revenue of $322,534 because SDH received services fees in the fiscal year
2019 from customers for member services and comprehensive tailored services and other services have been rendered in the year ended December
31, 2020; c) increase in prepaid expenses and other current assets of $447,421.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Investing
Activities</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash used in investing activities amounted to $45,609,072 for the year ended December 31, 2022. It was primarily due to: a) purchase
of plant, property and equipment of $43,714,195; and b) consideration paid for an asset acquisition of $1,486,746. In July 2022, Sunrise
Guizhou entered into purchase agreements with the original shareholders of Sunrise Tech (formerly known as Anlong Hengrui Graphite Material
Co., Ltd.) to acquire 100% of Sunrise Tech&#8217;s assets and equity ownership for a gross consideration of RMB 40,000,000 (approximately
$5,743,331), of which RMB10,000,000 (approximately $1,486,746) was paid in July 2022. The unpaid consideration will be paid in installments
from 2023 to 2026.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash used in investing activities amounted to $22,095,198 for the year ended December 31, 2021. It was primarily due to a) prepayment
for land use right, construction and equipment of $8,244,917; b) purchase of short-term investments of $8,000,000; c) interest-bearing
loans to third party of 2,825,359; d) and purchase of long-term investments of $2,289,945.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash used in investing activities amounted
to $6,365,555 for the year ended December 31, 2020. It was primarily due to purchase of property of $1,723,543, purchase of intangible
asset of $2,735,433, and purchase of long-term investments of $1,678,514.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Financing
Activities</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash provided by financing activities amounted to $45,760,061 for the year ended December 31, 2022, representing proceeds from the following
debt financing from sale and leaseback contracts, net of issuance cost, of $8,827,701 and capital contributions from the non-controlling
shareholders of $ 37,024,594.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
                                            September 22, 2022, Sunrise Guizhou entered into a sales and leaseback contract with Far
                                            East International Financial Leasing Co., Ltd. (&#8220;Far East&#8221;). Pursuant to the
                                            contract, the Company sold its machines for RMB 20,000,000, approximately $2,871,665, and
                                            immediately leased the machines back from Far East for an eighteen-month term from September
                                            22, 2022 to March 21, 2024, with a yearly implied interest rate of 11.98%.</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
                                            November 4, 2022, Sunrise Guizhou entered into a sales and leaseback financing contract with
                                            China Power Investment Ronghe Financial Leasing Co., Ltd. to obtain an amount of RMB 40,000,000,
                                            approximately $5,743,331, for a three years leasing term from November 10, 2022 to November
                                            9, 2025, with a yearly interest rate of one-year loan prime rate plus 1.55%.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash provided by financing activities amounted to $30,837,261 for the year ended December 31, 2021, representing issuance of ordinary
shares in connection with IPO, net of issuance cost of $27,504,639 and capital contributions from the non-controlling shareholders of
$3,332,622.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash provided by financing activities amounted to $119,996 for the year ended December 31, 2020, representing capital contributions from
the controlling shareholders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Trend
Information</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
than as disclosed elsewhere in this annual report, the Company is not aware of any trends, uncertainties, demands, commitments or events
that are reasonably likely to have a material effect on net revenues, incomes from operations, profitability, liquidity or capital resources,
or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Off-Balance
Sheet Arrangements</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company does not have any off-balance sheet arrangements as of December 31, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Contingencies</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company may be involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees
and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines
whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated.
Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will
have a material adverse impact on its financial position, results of operations or liquidity. As of December 31, 2022, the Company did
not have material litigations or lawsuits against them.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Inflation</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inflation
does not materially affect the Company&#8217;s business or the results of its operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Seasonality</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
nature of the Company&#8217;s business does not appear to be affected by seasonal variations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Critical
Accounting Policies and Management Estimates</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company prepares the consolidated financial statements in accordance with U.S. GAAP. These accounting principles require the Company
to make judgments, estimates and assumptions on the reported amounts of assets and liabilities at the end of each fiscal period, and
the reported amounts of revenues and expenses during each fiscal period. The Company continually evaluate these judgments and estimates
based on the own historical experience, knowledge and assessment of current business and other conditions, the expectations regarding
the future based on available information and assumptions that the Company believe to be reasonable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The selection of critical accounting policies,
the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions
and assumptions are factors that should be considered when reviewing the Company&#8217;s financial statements. Our critical accounting
policies and practices include the following: (i) revenue recognition, (ii) lease, (iii) asset acquisition and (iv) income taxes. For
further information on these accounting policies, see note 2 to our consolidated financial statements included elsewhere in this annual
report.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">We consider an accounting estimate to
be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the
accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different
estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results
of operations. Such critical estimates are discussed below.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Allowance for doubtful accounts</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-indent: -0.05pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts
receivables mainly represent amounts due from clients in the ordinary course of business and are recorded net of allowance for doubtful
accounts.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: -0.05pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: -0.05pt">The Company mitigates
the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established
and recorded based on management&#8217;s assessment of historical bad debts, creditworthiness and financial conditions of the clients,
current economic trends and changes in client payment patterns. Past due accounts are generally written off against the allowance for
bad debts only after all collection attempts have been exhausted and the potential for recovery is considered remote. The allowance for
doubtful accounts was $8,047,527, $5,744,387 and $1,808,889 for the years ended December 31, 2022, 2021 and 2020, respectively.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Allowance on inventories</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The cost of inventories is calculated using the weighted average method.
Any excess of the cost over the net realizable value of each item of inventories is recognized in the value of inventories. Net realizable
value is estimated using selling price in the normal course of business less any costs to complete and sell products. The valuation allowance provided for the inventory was $2,711,158, $nil and $nil for the years ended December 31, 2022,
2021 and 2020.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Impairment
on long-term investments</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
equity investments that do not have readily determinable fair values and over which the Company has neither significant influence nor
control through investments in common stock or&#160;in-substance&#160;common stock, the Company accounts for these investments at cost
minus any impairment, if necessary.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company continually reviews its investments in equity investees to determine whether a decline in fair value below the carrying value
is other than temporary. The primary factors the Company considers in its determination are the length of time that the fair value of
the investment is below the Company&#8217;s carrying value; the financial condition, operating performance and the prospects of the equity
investee. If the decline in fair value is deemed to be other than temporary, the carrying value of the equity investee is written down
to fair value. Impairment charges for long-term investments were $979,426, $nil and $nil recorded in the Company&#8217;s Consolidated
Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Impairment
of long-lived assets</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company reviews its long-lived assets for impairment whenever events or changes in circumstances (such as a significant adverse change
to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset may no longer be recoverable.
When these events occur, the Company measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted
future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted
cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss, which is the excess of carrying
amount over the fair value of the assets, using the expected future discounted cash flows. Impairments charges for intangible assets
were $2,650,020, $nil and $nil recorded in the Company&#8217;s Consolidated Statements of Operations and Comprehensive (Loss) Income
for the years ended December 31, 2022, 2021 and 2020.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><b><i>Valuation allowance on deferred
tax assets</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including
the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
Valuation allowance on deferred tax assets were $3,936,504 and $1,218,319 as of December 31, 2022 and 2021, respectively.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><div><a id="s_010"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;6.</b>&#160;<b>DIRECTORS,
SENIOR MANAGEMENT AND EMPLOYEES</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b>&#160;<b>Directors
and Executive Officers</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth information regarding our directors and executive officers as of the date of this annual report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 30%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Directors
    and Executive Officers</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Age</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 57%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Position/Title</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Haiping
    Hu </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">55</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief
    Executive Officer (&#8220;CEO&#8221;), Chairman of the Board of Director </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chao
    Liu </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">42</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief
    Financial Officer (&#8220;CFO&#8221;) </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chenming
    Qi </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">52</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief
    Operating Officer (&#8220;COO&#8221;) </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Haiwei
    Zuo </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">40</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director
    </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ligang
    Lu </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">54</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent
    Director </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Xiang
    Luo</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">52
    </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent
    Director </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jian
    Pei</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">55</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent
    Director </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Mr.
Haiping Hu </b>has been our CEO and Chairman since February 2019, and he has served as CEO and Chairman of the VIE since December 2014.
From August 2004 to January 2018, he was CEO and Vice Chairman of Shanshan Holdings Co., Ltd, which is mainly engaged in the production
of lithium-ion battery parts, such as lithium-ion capacitors, battery pack, and charging pile, and providing new energy services such
as new energy vehicle operation and energy management services, etc. From January 1996 to July 2004, he served as Vice President of Shanshan
Group Co., Ltd. Since 2002, Shanshan Holdings Co., Ltd. has ranked among the top 500 Chinese companies in successive years. Mr. Hu holds
a bachelor&#8217;s degree in Chemical Automation and a master&#8217;s degree in Chemical Engineering from Zhejiang University. Nicknamed
&#8220;General Hu Haiping on Horseback,&#8221; Mr. Hu has more than 20 years of experience as founder and executive, and is a well-known
entrepreneur in China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Ms.
Chao Liu</b> has served as our CFO since February 2019, and as the CFO of the VIE since January 2016. From June 2012 to June 2015, she
was the head of the accounting department of Beijing Meanfang Institute of Physics and Technology, which is engaged in manufacturing
gas instruments that are widely used in petrochemical, cement, chemical fertilizer, agriculture, military, medical, environmental protection,
scientific research and other fields, Beijing Meanfang Spectrum Technology Co., Ltd., which is engaged in manufacturing and selling spectrum
instruments, and Beijing Zhongchuang Technology Co., Ltd., which is engaged in providing interactive marketing technology solutions for
brand customers and advertising agents. From May 2008 to December 2015, she was the comptroller of Beijing Hongri Dongsheng Decoration
Co., Ltd., which provides decoration services to customers and Beijing Sunshine Season Network Technology Company, which provides network
maintenance services to its customers. From November 2003 to November 2014, she served as supervisor of the accounting department of
Beijing Haixinyuan Food Co., Ltd. which is engaged in the manufacture and sale of cold candies, pastries and cold drinks and Beijing
Haixinyuan Guest House Co., Ltd., which provides hoteling services to its customers. Ms. Liu studied finance at Beijing Language and
Culture University and graduated in January 2016. She has a strong understanding of international accounting and tax policies.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Mr.
Chenming Qi</b> has served as our COO since February 2019, and as the COO and director of the VIE since July 2017. From May 2014 to June
2017, Mr. Qi served as the Vice President of the sales division of 360 Enterprise Security Group, which specializes in providing enterprise-level
network security technologies, products and services to government, enterprises, education, finance and other institutions and organizations.
He co-founded Netgod Information Technology (Beijing) Co., Ltd, which is engaged in enterprise-level network security technologies, products
and services in 2006, and served as a vice president of operations from June 2006 to May 2017. He served as the deputy general manager
of Lenovo Information Security Division from April 2004 to June 2006. From March 2002 to March 2004, he was the sales director of Hampoo
(China) Management Consulting Company, which is engaged in management consulting, IT planning, information implementation, etc. Mr. Qi
graduated from Tianjin University with a master&#8217;s degree in Precision Instrument Engineering in March 1996. We believe that Mr.
Qi, with over twenty years of experience in team building and enterprise management, is qualified to serve as our COO.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Mr.
Haiwei Zuo</b> has served as our director since February 2019, and as Vice Chairman of the VIE since December 2014. From September 2013
to December 2014, he served as the Dean of Beijing Huatai Weiye Management Science and Technology Research Institute. From March 2009
to September 2013, he served as the CEO of Beijing Naked in Frontier Cultural Exchange Co., Ltd., which is engaged in producing TV program
content that is in category of business and financial management. He studied business administration at the China Agricultural University
and graduated in July 2019.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Mr.
Xiang Luo </b>was appointed as our director on March 11, 2022. Mr. Luo holds a PhD in Business Administration from Bulacan State University
in Philippines, and has over twenty years of experience working at various senior positions at the United Nations and other international
organizations, including the International Economic Development Council. Since June 2020, Mr. Luo has served as the co-chair of Global
Steering Committee of Carbon Neutral Action (GSCCNA), an international non-governmental organization that provides strategic advice on
special purpose financing, green technical and systematic solutions to achieving the Sustainable Development Goals (SDG) under the United
Nations&#8217; sustainable development agenda and climate change planning. From November 2014 to December 2019, Mr. Lou served as the
head of the China Office of the United Nations Office for Project Services (UNOPS), responsible for the overall coordination of strategic
planning, project financing and management, team capacity building, public advocacy, risk management and performance evaluation, of various
projects.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Dr.
Jian Pei</b> was appointed as our director on May 30, 2022. He has served as a professor at the College of Chemistry and Molecular Engineering
of Peking University, China, since April 2001. Dr. Pei received his undergraduate degree in 1989 and Ph.D. degree in 1995, majoring in
Chemistry, from Peking University in 1995. After the completion of his postdoctoral work at the National University of Singapore in July
1997, he joined the Institute of Materials Research and Engineering in Singapore and served as a research associate from November 1997
to August 2001. From June 1998 to January 2000, Dr. Pei was a visiting scholar at the Institute of Polymer and Organic Solids, University
of California at Santa Barbra. Dr. Pei is a receiver of the Changjiang Scholar award, an academic award given to an individual in higher
education by the Ministry of Education of the People&#8217;s Republic of China. Dr. Pei&#8217;s research focuses on the development of
organic semiconducting materials for application in optoelectronics.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Mr.
Ligang Lu </b>was appointed as our director upon the closing of our IPO. Since January 2011, Mr. Lu has been the auditor director and
group supervisor of Shanshan Holdings Co. Ltd. which is mainly engaged in the production of lithium-ion battery parts, such as lithium-ion
capacitors, battery pack, and charging pile, and providing new energy services such as new energy vehicle operation and energy management
services, etc. From January 2003 to January 2011, he held several positions at Hebei Hualong Riqing Noodle Industry Group Co., Ltd.,
which is mainly engaged in noodle manufacturing, including audit manage and chief financial officer. From September 1990 to January 2003,
he was the audit office director of Sinosteel Xingji Group, which is engaged in steel productions, sales, distributions related services.
Mr. Lu holds a bachelor&#8217;s degree in Financial Auditing and Accounting from Hebei University of Economics and Business (formerly
Hebei University of Finance and Economics). In May 2001, Mr. Lu was certified as senior auditor and accountant by China Human Resources
Bureau of Hebei Province, and became a Certified Internal Auditor (&#8220;CIA&#8221;) by International Registered Institute of Internal
Auditors (USA).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b>&#160;<b>Compensation
of Directors and Executive Officers</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth certain information with respect to compensation for the year ended December 31, 2022, earned by or paid to
our chief executive officers.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Summary
Compensation Table</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Chenming Qi</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;<b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2022, the Company paid the above compensations to our executive officers and directors. <b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 95 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->89<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2022
Share Incentive Plan</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
board of directors adopted the 2022 Stock Incentive Plan (the &#8220;2022 Plan&#8221;) in July 2022, effective as of July 11, 2022, to
attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the
success of our business. Under the 2022 Plan, the maximum aggregate number of shares that may be issued pursuant to all awards shall
be 3,679,200 Ordinary Shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this annual report, we issued 833,550 Ordinary Shares to qualified persons under the 2022 Plan.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">The following describes
the principal terms of the 2022 Plan.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Types
of awards</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
2022 Plan permits the awards of cash, restricted stock units, share options, or any similar securities with a value derived from the
value of or related to the Ordinary Shares and/or returns thereon.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Plan
Administration</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
board of directors or a committee of one or more members of the board of directors administers the 2022 Plan. The committee or the full
board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to
each participant, and the terms and conditions of each award grant.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Award
Agreement</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
awards granted under the 2022 Plan is evidenced by an award agreement that sets forth terms, conditions and limitations, which may include
the provisions applicable in the event of the grantee&#8217;s employment or service terminates, and our authority to unilaterally or
bilaterally amend, modify, suspend, cancel or rescind the award.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Eligibility</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may grant awards to our employees, directors and consultants of our Company, and other individuals, as determined by the plan administrator.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Vesting
Schedule</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
general, the plan administrator determines the vesting schedule, which is specified in the award agreement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Exercise
of Options</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
plan administrator determines the exercise price for each award, which is stated in the award agreement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->90<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Agreements
with Named Executive Officers</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
enter into employment agreements with our executive officers. Pursuant to employment agreements, we agree to employ each of our executive
officers for a specified time period, which will be renewed upon both parties&#8217; agreement thirty days before the end of the current
employment term. We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive
officer, including but not limited to the commitments of any serious or persistent breach or non-observance of the terms and conditions
of the employment, conviction of a criminal offense, willful disobedience of a lawful and reasonable order, fraud or dishonesty, receipt
of bribery, or severe neglect of his or her duties. An executive officer may terminate his or her employment at any time with a two-month
prior written notice. Each executive officer has agreed to hold, both during and after the employment agreement expires, in strict confidence
and not to use or disclose to any person, corporation or other entity without written consent, any confidential information.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b>&#160;<b>Board
Practices</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Board
of Directors</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
board of directors consists of five directors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Duties
of Directors</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">Under Cayman Islands law, our directors
owe fiduciary duties at common law, including, but not limited to a duty to act honestly, in good faith and with a view to our best interests.
When exercising powers or performing duties as a director, our directors also have a duty to exercise the care, diligence and skills
that a reasonable director would exercise in comparable circumstances, taking into account, without limitation, the nature of the company,
the nature of the decision, the position of the director and the nature of the responsibilities undertaken by him. In exercising the
powers of a director, our directors must exercise their powers for a proper purpose and shall not act or agree to the company acting
in a manner that contravenes our amended and restated memorandum and articles of association or the Companies Act (Revised) of the Cayman
Islands.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Generally,
we have the right to seek damages if a duty owed by our directors is breached.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
functions and powers of our board of directors include, among others:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">appointing
    officers and determining the term of office of the officers;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">exercising
    the borrowing powers of the company and mortgaging the property of the company; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Terms
of Directors and Executive Officers</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
of our directors holds office until a successor has been duly elected and qualified unless the director was appointed by the board of
directors, in which case such director holds office until the next following annual meeting of shareholders at which time such director
is eligible for reelection. All of our executive officers are appointed by and serve at the discretion of our board of directors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Qualification</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
is currently no shareholding qualification for directors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Insider
Participation Concerning Executive Compensation</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
board of directors, which was comprised of five directors, with the assistance of the Compensation Committee, makes all determinations
regarding executive officer compensation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Committees
of the Board of Directors </b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have established three committees under the board of directors: the audit committee, the compensation committee and the corporate governance
and nominating committee, and adopt a charter for each of the committees. Each committee&#8217;s members and functions are described
below.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Audit
Committee. </i></b>Our audit committee, formed upon the closing of our IPO, consists of Mr. Ligang Lu, Mr. Xiang Luo and Mr. Jian Pei,
with Mr. Ligang Lu serving as the chairman of our audit committee. We have determined that Mr. Ligang Lu, Mr. Xiang Luo and Mr. Jian
Pei satisfy the &#8220;independence&#8221; requirements of Section 5605(a)(2) of the Nasdaq Listing Rules and Rule 10A-3 under the Securities
Exchange Act. Prior to our IPO, our board also determined that Ligang Lu qualifies as an audit committee financial expert within the
meaning of the SEC rules or possesses financial sophistication within the meaning of the Nasdaq Listing Rules. The audit committee oversees
our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible
for, among other things:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">selecting
    the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
    with the independent auditors any audit problems or difficulties and management&#8217;s response;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
    and approving all proposed related-party transactions, as defined in Item 404 of Regulation S-K under the Securities Act;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">discussing
    the annual audited financial statements with management and the independent auditors;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
    major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">annually
    reviewing and reassessing the adequacy of our audit committee charter;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">such
    other matters that are specifically delegated to our audit committee by our board of directors from time to time;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">meeting
    separately and periodically with management and the independent auditors; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reporting
    regularly to the full board of directors.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Compensation
Committee.</i></b><i>&#160;</i>Our compensation committee, formed upon the closing of our IPO, consists of Mr. Xiang Luo, Mr. Ligang
Lu and Mr. Jian Pei. Mr. Ligang Lu is the chairman of our compensation committee. The compensation committee assists the board in reviewing
and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our
chief executive officer may not be present at any committee meeting during which his compensation is deliberated. The compensation committee
is responsible for, among other things:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
    and recommending to the board with respect to the total compensation package for our chief executive officer;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">approving
    and overseeing the total compensation package for our executives other than the chief executive officer;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
    and making recommendations to the board with respect to the compensation of our directors; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
    periodically and approving any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses,
    employee pension and welfare benefit plans.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 98 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->92<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Corporate
Governance and Nominating Committee</i></b>.<i>&#160;</i>Our corporate governance and nominating committee, formed upon the closing of
our IPO, consists of Mr. Ligang Lu and Mr. Jian Pei. Mr. Xiang Luo is the chairman of our corporate governance and nominating committee.
The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors
and in determining the composition of the board and its committees. The nominating and corporate governance committee is responsible
for, among other things:&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">identifying
    and recommending to the board nominees for election or re-election to the board, or for appointment to fill any vacancy;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
    annually with the board the current composition of the board in light of the characteristics of independence, skills, experience
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">identifying
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b>&#160;<b>Employees</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
had a total of 134, 96, and 48 full-time employees (excluding the employees of Sunrise Guizhou), as of December 31, 2020, 2021, and 2022,
respectively.&#160; As of April 30, 2023, we had 48 full-time employees (excluding the employees of Sunrise Guizhou),. We had
4, 22, 7 and 15 employees located in Shanghai, Beijing, Hangzhou, and Zibo, respectively. The following table sets forth the numbers
of our employees by areas of business as of April 30, 2023, 2023:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; ">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sunrise
Guizhou had 229 and 257 employees as of April 30, 2023, and December 31, 2022, respectively. The following table sets forth the numbers
of Sunrise Guizhou&#8217;s employees by areas of business as of April 30, 2023</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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    <td style="text-align: left">Human Resources &amp; Administration</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="padding-bottom: 1.5pt">Total</td><td style="border-bottom: Black 1.5pt solid">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-indent: 0pt; text-align: left">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-indent: 0pt; text-align: left"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-indent: 0pt; text-align: left">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Generally,
we enter into standard employment contracts with our officers, managers, and other employees. According to these contracts, all of our
employees are prohibited from engaging in any other employment during the period of their employment with us. None of our employees is
a member of a labor union and we consider our relationship with our employees to be good.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E. Share
Ownership</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Except
as specifically noted, the following table sets forth information with respect to the beneficial ownership of our Ordinary Shares as
of May 15, 2023 by:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">each
    of our directors and executive officers; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">each
    of our principal shareholders who beneficially own more than 5% of our total outstanding Ordinary Shares.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
calculations in the table below are based on 25,361,550 Ordinary Shares outstanding as of the date of this annual report, including 833,550
Ordinary Shares issued under the Stock Incentive Plan.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Beneficial
ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned
by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days,
including through the exercise of any option, warrant or other right or the conversion of any other security. These shares, however,
are not included in the computation of the percentage ownership of any other person.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="font-weight: bold">Director and Executive Officers:</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left">Haiping Hu (1)</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Chao Liu</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">1,140,282</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Ligang Lu</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Xiang Luo</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">Jian Pei</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Directors and Executive Officers as a group (7 persons)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">11,046,287</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">43.56</td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">5% Beneficial Owners**</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">GMB Wisdom Sharing Platform Co., Ltd. (1)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">6,840,887</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">26.97</td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">GMB Information Technology Co., Ltd. (4)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,085,282</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">4.28</td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">GMB Culture Communication Co., Ltd. (2)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,705,583</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">10.67</td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">GMB Resource Services Co., Ltd (3)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,491,318</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">9.82</td><td style="text-align: left">%</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unless
                                            otherwise indicated, the business address of each of the individuals is Room 350, 3rd Floor,
                                            Building 6,Yard 1, Shangdi 10th Street, Haidian District, Beijing, The PRC.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">**</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            principal office of each of the 5% beneficial owners are located at Start Chambers, Wickham&#8217;s
                                            Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Haiping
                                            Hu, our CEO and chairman of the Board, beneficially owns 6,840,887 Ordinary Shares through
                                            his 100% ownership of GMB Wisdom Sharing Platform Co., LTD, and 483,800 Ordinary Shares held
                                            directly.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Representing
                                            2,705,583 Ordinary Shares held by GMB Culture Communication Co., Ltd, a British Virgin Islands
                                            company. Ertao Zhao, Yidong Zhang, Xiaoli Chen serve as the directors of GMB Culture Communication
                                            Co., Ltd. and share the dispositive and voting power of the shares held by GMB Culture.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Representing
                                            2,491,318 Ordinary Shares Held by GMB Resource Services Co., Ltd., a British Virgin Islands
                                            company. Our COO Chenming Qi and Cunyou Li, Jinhai Ying, Gesheng Fei, each of whom serves
                                            as a director of GMB Resource Services Co., share the dispositive and voting power of the
                                            shares held by GMB Resources.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Haiwei
                                            Zuo, our director, beneficially owns 1,085,282 Ordinary Shares through his 100% ownership
                                            of GMB Information Technology Co., Ltd., a British Virgin Islands company, and 55,000 Ordinary
                                            Shares held directly.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 100 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->94<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_011"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;7.
&#160;MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b>&#160;<b>Major
Shareholders</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;<i>Item 6. Directors, Senior Management and Employees&#8212;E. Share Ownership</i>.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b>&#160;<b>Related
Party Transactions</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.35pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Contractual
Arrangements between GIOP BJ and Gansu QLS </b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.35pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;<i>Item 4. Information on the Company&#8212;C. Organizational Structure</i>.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Material
Transactions with Related Parties</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a list of related parties which the Company had transactions with:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ningbo
    Zhuhai Investment Co., Ltd. (&#8220;Zhuhai Investment&#8221;), a company controlled by Mr. Haiping Hu</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Bally,
    Corp. (&#8220;Bally&#8221;), a company controlled by Mr. Haiping Hu</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
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  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
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  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(e)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shanghai
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  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(f)</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(g)</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify">&#160;</td></tr>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(l)</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; ">
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Beijing
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>a.</i></b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Due
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</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td>&#160;</td>
    <td>&#160;</td>
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    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Due from related parties</b></span></td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td>
    <td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td>
    <td>&#160;</td></tr>
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    <td style="width: 1%">&#160;</td>
    <td style="width: 7%; text-align: center">&#160;</td>
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    <td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">5,168</span></td>
    <td style="width: 1%">&#160;</td>
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    <td style="width: 1%">&#160;</td>
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    <td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">5,168</span></td>
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    <td>&#160;</td>
    <td style="text-align: center">&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
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    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">25,534</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">155,378</span></td>
    <td>&#160;</td></tr>
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    <td>&#160;</td>
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    <td>&#160;</td>
    <td>&#160;</td>
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    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">26,664</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td>
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    <td>&#160;</td>
    <td style="text-align: center">&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">7,912</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td>
    <td>&#160;</td></tr>
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    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr. Wenwu Zhang</span></td>
    <td>&#160;</td>
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    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">337,420</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Yihe Beijing</span></td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12,184</span></td>
    <td>&#160;</td></tr>
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    <td>&#160;</td>
    <td style="text-align: center">&#160;</td>
    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">37,332</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td>&#160;</td>
    <td style="text-align: center">&#160;</td>
    <td>&#160;</td>
    <td style="border-bottom: black 4.5pt double"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="border-bottom: black 4.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">400,022</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="border-bottom: black 4.5pt double"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="border-bottom: black 4.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">65,278</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="border-bottom: black 4.5pt double">&#160;</td>
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    <td>&#160;</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            balance as of December 31, 2022 represented the prepaid acquisition consideration to purchase
                                            Mr. Wenwu Zhang&#8217;s equity in Haicheng Shenhe.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0">&#160;</p><div>


</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>b.</i></b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Due
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</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2022 and 2021, the balances of amounts due to related parties were as follows:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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<tr style="vertical-align: bottom">
    <td>&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center"></td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td style="font-weight: bold">Due to related parties</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 7%; text-align: center">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">2,872</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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    <td style="width: 1%; text-align: left"></td><td style="width: 9%; text-align: right">&#160;&#160;&#160;&#160;-</td><td style="width: 1%; text-align: left">&#160;</td></tr>
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    <td style="text-align: left">Mr. Chenming Qi</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">9,189</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Ms. Jing Ji</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">19,923</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left">Shanghai HuiYang Investment Co.</td><td>&#160;</td>
    <td style="text-align: center">(1)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">738,128</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">Haicheng Shenhe</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">50,395</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">64,643</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            balance as of December 31, 2022 represented the loans from the related party, with the annual
                                            interest rate of 4.35% and was initially due on August 13, 2022 and extended to December
                                            31, 2023.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>c.</i></b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Deferred
                                            revenue -related parties</i></b></span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2022 and 2021, the balances of deferred revenue of related parties were as follows:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As of December 31,</td><td style="padding-bottom: 1.5pt">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold">Deferred revenue of related parties</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 56%; text-align: justify; padding-bottom: 1.5pt">Shanghai Hui Yang Investment Co.</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 7%; text-align: center; padding-bottom: 1.5pt">(1)</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">347,471</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">&#160;&#160;&#160;-</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right; width: 9%"></td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">347,471</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;&#160;&#160;&#160;</span></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            balance as of December 31, 2022 represented the advance from the related party for tailored
                                            services.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>d.</i></b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Related
                                            party transactions</i></b></span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Related
party purchase</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company rented office spaces from Zhuhai Investment. For the years ended December 31, 2022, 2021 and 2020, total rental fee to Zhuhai
Investment were $118,475, $103,411 and $96,695, respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company purchased graphite material processing
service of $450,591 and purchased raw material of $580,452 from Haicheng Shenhe for the year ended December 31, 2022.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company also purchased professional services from Yihe Beijing. For the year ended December 31, 2020, service costs paid to Beijing Yihe
were $27,175.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Related
party sales</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company sold titanium of $205&#160;to Mr.
Shousheng Guo for the year ended December 31, 2022.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company sold medical wine of $666 to Zhuhai Investment for the year ended December 31, 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>e.</i></b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Related
                                            party guarantee</i></b></span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 4, 2022, Surnise Guizhou entered a line of credit financing contract with Bank of Guizhou for revolving credit of RMB 20,000,000,
approximately $ 2,871,665, for a term from August 4, 2022 to August 3, 2023. The line of credit was in various means including bank loans,
commercial note and letter of credit. As of December 31, 2022, the Company has utilized RMB 13,500,000, approximately $1,938,374, line
of credit by issuing commercial notes to its vendors for amount of RMB 27,000,000, approximately $3,876,748. Pursuant to the line of
credit contract, the Company was obliged to deposit fifty percent of the notes payable amount issued as restricted cash in the designated
bank accounts in Bank of Guizhou. Pursuant to the contract, Mr. Haiping Hu and Guizhou Yilong New Area Industrial Development and Investment
Co., Ltd., the non-controlling shareholder of Sunrise Guzhou, were the guarantor of the line of credit.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 22, 2022, Sunrise Guizhou entered
a financing contract into an eighteen-month loan with Far East to obtain a loan of RMB 20,000,000, approximately $2,871,665, for a term
from September 22, 2022 to March 21. On November 4, 2022, Sunrise Guizhou entered a sales and leaseback financing contract into a three-year
financing with Ronghe to obtain an amount of RMB 40,000,000, approximately $5,743,331, for a term from November 10, 2022 to November
9, 2025. Pursuant to the financing contracts, Mr. Haiping Hu.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In July 2022, Sunrise Guizhou entered into purchase
agreements with original shareholders of Sunrise to acquire 100% of Sunrise Tech&#8217;s assets and equity ownership for a gross consideration
of RMB 40,000,000 (approximately $5,743,331), among of which RMB10,000,000 (approximately $1,486,746) was paid in July 2022. The unpaid
consideration RMB30,000,000 (approximately $4,307,499) will be paid in installments from 2023 to 2026. The consideration payable is guaranteed
by Mr. Haiping Hu.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Employment
Agreements and Indemnification Agreements</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;<i>Item 6. Directors, Senior Management and Employees&#8212;B. Compensation of Directors and Executive Officers</i>.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b>&#160;<b>Interests
of Experts and Counsel</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_012"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;8.
&#160;FINANCIAL INFORMATION</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b>&#160;<b>Consolidated
Statements and Other Financial Information</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
Item 18 for our audited consolidated financial statements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Legal
Proceedings</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are not currently involved in any material legal or administrative proceedings. From time to time, we may be subject to various legal
or administrative claims and proceedings arising in the ordinary course of business. Such legal or administrative claims and proceedings,
even if without merit, could result in the expenditure of financial and management resources and potentially result in civil liability
for damages.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Dividend
Policy</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
do not have any present plan to pay any cash dividends on our Ordinary Shares in the foreseeable future. We currently intend to retain
most, if not all, of our available funds and any future earnings to operate and expand our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a holding company incorporated in the Cayman Islands. We rely principally on dividends from our PRC subsidiaries for our cash requirements,
including any payment of dividends to our shareholders. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends
to us.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
board of directors has discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. Under
Cayman Islands law, a Cayman Islands company may pay a dividend out of either profit or share premium account, provided that in no circumstances
may a dividend be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business.
Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings,
capital requirements and surplus, general financial condition, contractual restrictions and other factors that our board of directors
may deem relevant.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b>&#160;<b>Significant
Changes</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Except
as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated
financial statements included in this annual report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_013"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;9.
&#160;THE OFFER AND LISTING</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b>&#160;<b>Offering
and Listing Details</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Ordinary Shares have been listed on the Nasdaq Capital Market since February 9, 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b>&#160;<b>Plan
of Distribution</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b>&#160;<b>Markets</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Ordinary Shares have been listed on the Nasdaq Global Market since February 9, 2021. On August 5, 2022, our Ordinary Shares began trading
on the NASDAQ Capital Market under the new ticker symbol &#8220;EPOW&#8221;. Our Ordinary Shares previously traded under the ticker symbol
&#8220;SDH&#8221;.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b>&#160;<b>Selling
Shareholders</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E.</b>&#160;<b>Dilution</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>F.</b>&#160;<b>Expenses
of the Issue</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><div><a id="s_014"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;10.
ADDITIONAL INFORMATION</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b>&#160;<b>Share
Capital</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b>&#160;<b>Memorandum
and Articles of Association</b>&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">We are an exempted company with limited
liability incorporated under the laws of the Cayman Islands and our affairs are governed by our Amended and Restated Memorandum and Articles
of Association, as amended and restated from time to time, and Companies Act (Revised) of the Cayman Islands, which we refer to as the
Companies Act below, and the common law of the Cayman Islands.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 104 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->98<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            following are summaries of material provisions of our Amended and Restated Memorandum and
                                            Articles of Association and the Companies Act insofar as they relate to the material terms
                                            of our Ordinary Shares.</span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Board
of Directors</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;<i>Item 6. Directors, Senior Management and Employees</i>.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Ordinary
Shares</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>General</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
authorized share capital is US$50,000 divided into 500,000,000 Ordinary Shares, par value US$0.0001 per share.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Dividends</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
to the provisions of the Companies Act and any rights attaching to any class or classes of shares under and in accordance with the Company&#8217;s
shareholders may, by ordinary resolution, declare dividends but no such dividend shall exceed the amount recommended by the directors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
to the requirements of the Companies Act regarding the application of a company&#8217;s share premium account and with the sanction of
an ordinary resolution, dividends may also be declared and paid out of any share premium account. The directors when paying dividends
to shareholders may make such payment either in cash or in specie.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unless
provided by the rights attached to a share, no dividend shall bear interest.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Voting
Rights</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
to any rights or restrictions as to voting attached to any shares, unless any share carries special voting rights, on a show of hands
every shareholder who is present in person and every person representing a shareholder by proxy shall have one vote. On a poll, every
shareholder who is present in person and every person representing a shareholder by proxy shall have one vote for each share of which
he or the person represented by proxy is the holder. In addition, all shareholders holding shares of a particular class are entitled
to vote at a meeting of the holders of that class of shares. Votes may be given either personally or by proxy.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Variation
of Rights of Shares</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Whenever
our capital is divided into different classes of shares, the rights attaching to any class of share (unless otherwise provided by the
terms of issue of the shares of that class) may be varied either with the consent in writing of the holders of not less than two-thirds
of the issued shares of that class, or with the sanction of a resolution passed by a majority of not less than two-thirds of the holders
of shares of the class present in person or by proxy at a separate general meeting of the holders of shares of that class.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unless
the terms on which a class of shares was issued state otherwise, the rights conferred on the shareholder holding shares of any class
shall not be deemed to be varied by the creation or issue of further shares ranking pari passu with the existing shares of that class
or the creation or issue of one or more classes of shares with or without preferred, deferred or other special rights or restrictions
(including, without limitation, the creation of Shares with enhanced or weighted voting rights), whether in regard to dividend, voting,
return of capital or otherwise.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Transfer
of Ordinary Shares</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
to the restrictions contained in our articles, any shareholder may transfer all or any of his shares by an instrument of transfer in
the usual or common form or in a form prescribed by any Designated Stock Exchange (as defined under our articles) or in any other form
approved by our board of directors and may be under hand or by electronic machine imprinted signature or by such other manner of execution
as our board of directors may approve from time to time.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 105 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->99<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
board of directors may, in its absolute discretion, decline to register any transfer of any ordinary share which is not fully paid up
or on which we have a lien. Our board of directors may also decline to register any transfer of any ordinary share unless:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other
    evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    instrument of transfer is in respect of only one class of shares;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    instrument of transfer is properly stamped, if required;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">in
    the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed
    four;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    shares transferred are fully paid up and free of any lien in our favor; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
    fee of such maximum sum as the Nasdaq may determine to be payable, or such lesser sum as our directors may from time to time require,
    is paid to us in respect thereof.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;
&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
our directors refuse to register a transfer, they are required, within three months after the date on which the instrument of transfer
was lodged, to send to the transferee notice of such refusal. This, however, is unlikely to affect market transactions of the ordinary
shares purchased by investors. Since our ordinary shares are listed on the Nasdaq, the legal title to such ordinary shares and the registration
details of those ordinary shares in our register of members remain with DTC/Cede &amp; Co. All market transactions with respect to those
ordinary shares will then be carried out without the need for any kind of registration by the directors, as the market transactions will
all be conducted through the DTC systems.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
registration of transfers of shares or of any class of shares may, after compliance with any notice requirement of any Designated Stock
Exchange (as defined under our articles), be suspended and our register of members be closed at such times and for such periods (not
exceeding in the whole thirty (30) days in any year) as our board of directors may determine.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Inspection
of Books and Records</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Holders
of our Ordinary Shares will have no general right under the Companies Act to inspect or obtain copies of our register of members or our
corporate records (other than the register of mortgages).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>General
Meeting of Shareholders</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a Cayman Islands exempted company, we are not obligated by the Companies Act to call shareholders&#8217; annual general meetings; accordingly,
we may, but shall not be obliged to, in each year hold a general meeting as an annual general meeting. Any annual general meeting held
shall be held at such time and place as may be determined by our board of directors. All general meetings other than annual general meetings
shall be called extraordinary general meetings.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">The directors may convene general meetings
whenever they think fit. General meetings shall also be convened on the written requisition of one or more of the shareholders entitled
to attend and vote at our general meetings who (together) hold not less than 10 percent of the rights to vote at such general meeting
in accordance with the notice provisions in the articles, specifying the purpose of the meeting and signed by each of the shareholders
making the requisition. If the directors do not convene such meeting for a date not later than 21 clear days&#8217; after the date of
receipt of the written requisition, those shareholders who requested the meeting may convene the general meeting themselves within ninety
days after the end of such period of 21 clear days in which case reasonable expenses incurred by them as a result of the directors failing
to convene a meeting shall be reimbursed by us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 106 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->100<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
least 7 days&#8217; notice of a general meeting shall be given to shareholders entitled to attend and vote at such meeting. The notice
shall specify the place, the day and the hour of the meeting and the general nature of that business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
quorum shall consist of the presence (whether in person or represented by proxy) of one or more shareholders holding shares that represent
not less than one-third of the outstanding shares carrying the right to vote at such general meeting.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If,
within half an hour from the time appointed for the general meeting, or at any time during the meeting, a quorum is not present, the
meeting, if convened upon the requisition of shareholders, shall be cancelled. In any other case it shall stand adjourned to the same
day in the next week, at the same time and place, and if at the adjourned meeting a quorum is not present within half an hour from the
time appointed for the meeting, the shareholder present shall be a quorum</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
chairman may, with the consent of a meeting at which a quorum is present, adjourn the meeting. When a meeting is adjourned for ten days
or more, notice of the adjourned meeting shall be given in accordance with the articles.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before, or on,
the declaration of the result of the show of hands) demanded by one or more shareholders present in person or by a proxy who together
hold not less than fifteen per cent of the paid up capital of the Company entitled to vote. Unless a poll is so demanded, a declaration
by the chairman as to the result of a resolution and an entry to that effect in the minutes of the meeting, shall be conclusive evidence
of the outcome of a show of hands, without proof of the number or proportion of the votes recorded in favor of, or against, that resolution.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
a poll is duly demanded it shall be taken in such manner as the chairman directs and the result of the poll shall be deemed to be the
resolution of the meeting at which the poll was demanded.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes
place or at which the poll is demanded, shall be entitled to a second or casting vote.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Directors</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may by ordinary resolution, from time to time, fix the maximum and minimum number of directors to be appointed. Under the Articles, we
are required to have a minimum of three directors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
director may be appointed by ordinary resolution or by the directors. Any appointment may be to fill a vacancy or as an additional director.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
remuneration of the directors shall be determined by the shareholders by ordinary resolution, except that the directors shall be entitled
to such remuneration as the directors may determine.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unless
removed or re-appointed, each director shall be appointed for a term expiring at the next-following annual general meeting or upon any
specified event or after any specified period in a written agreement between the Company and the director, if any. Our directors will
be elected by an ordinary resolution of our shareholders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
director may be removed by ordinary resolution.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
director may at any time resign or retire from office by giving us notice in writing.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
to the provisions of the articles, the office of a director may be terminated forthwith if:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">becomes
    bankrupt or makes any arrangement or composition with his creditors generally;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">is
    found to be or becomes of unsound mind; or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">resigns
    his office by notice in writing to the Company.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 107 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->101<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
of the compensation committee and the nominating and corporate governance committee shall consist of at least three directors and the
majority of the committee members shall be independent within the meaning of Section 5605(a)(2) of the NASDAQ Listing Rules. The audit
committee shall consist of at least three directors, all of whom shall be independent within the meaning of Section 5605(a)(2) of the
NASDAQ Listing Rules and will meet the criteria for independence set forth in Rule 10A-3 of the Exchange Act.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Powers
and Duties of Directors</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
to the provisions of the Companies Act, our amended and restated memorandum and articles, our business shall be managed by the directors,
who may exercise all our powers. No prior act of the directors shall be invalidated by any subsequent alteration of our amended and restated
memorandum or articles. However, to the extent allowed by the Companies Act, shareholders may by special resolution validate any prior
or future act of the directors which would otherwise be in breach of their duties.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
directors may delegate any of their powers to any committee consisting of one or more persons who need not be shareholders and may include
non-directors so long as the majority of those persons are directors; any committee so formed shall in the exercise of the powers so
delegated conform to any regulations that may be imposed on it by the directors. Our board of directors has established an audit committee,
compensation committee, and nomination and corporate governance committee.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
board of directors may establish any local or divisional board of directors or agency and delegate to it its powers and authorities (with
power to sub-delegate) for managing any of our affairs whether in the Cayman Islands or elsewhere and may appoint any persons to be members
of a local or divisional board of directors, or to be managers or agents, and may fix their remuneration.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
directors may from time to time and at any time by power of attorney or in any other manner they determine appoint any person, either
generally or in respect of any specific matter, to be our agent with or without authority for that person to delegate all or any of that
person&#8217;s powers.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
directors may from time to time and at any time by power of attorney or in any other manner they determine appoint any person, whether
nominated directly or indirectly by the directors, to be our attorney or our authorized signatory and for such period and subject to
such conditions as they may think fit. The powers, authorities and discretions, however, must not exceed those vested in, or exercisable,
by the directors under the articles.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
board of directors may remove any person so appointed and may revoke or vary the delegation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
director who is in any way, whether directly or indirectly, interested in a contract or transaction or proposed contract or transaction
with the Company shall declare the nature of his interest at a meeting of the directors. A general notice given to the directors by any
director to the effect that he is a member of any specified Company or firm and is to be regarded as interested in any contract or transaction
which may thereafter be made with that company or firm shall be deemed a sufficient declaration of interest in regard to any contract
so made or transaction so consummated. A director may vote in respect of any contract or transaction or proposed contract or transaction
notwithstanding that he may be interested therein and if he does so his vote shall be counted and he may be counted in the quorum at
any meeting of the directors at which any such contract or transaction or proposed contract or transaction shall come before the meeting
for consideration.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Capitalization
of Profits</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company may upon the recommendation of the directors by ordinary resolution authorize the directors to capitalize any sum standing to
the credit of any of the Company&#8217;s reserve accounts (including share premium account and capital redemption reserve fund) or any
sum standing to the credit of the profit and loss account or otherwise available for distribution and to appropriate such sums to shareholders
in the proportions in which such sum would have been divisible amongst them had the same been a distribution of profits by way of dividend
and to apply such sum on their behalf in paying up in full unissued shares for allotment and distribution credited as fully paid up to
and amongst them in the proportion aforesaid.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 108 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->102<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Liquidation
Rights</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we are wound up, the shareholders may, subject to the articles and any other sanction required by the Companies Act, pass a special resolution
allowing the liquidator to do either or both of the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)
to divide in specie among the shareholders the whole or any part of our assets and, for that purpose, to value any assets and to determine
how the division shall be carried out as between the shareholders or different classes of shareholders; and</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)
to vest the whole or any part of the assets in trustees for the benefit of shareholders and those liable to contribute to the winding
up.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
directors have the authority to present a petition for our winding up to the Grand Court of the Cayman Islands on our behalf without
the sanction of a resolution passed at a general meeting.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Exempted
Company</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies
and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside the Cayman Islands
may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary
company except that an exempted company:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">is
    not required to make its register of members open to inspection by shareholders;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">does
    not have to hold an annual general meeting;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;
&#160; &#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">may
    issue shares with no par value;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">may
    obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first
    instance);</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">may
    register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">may
    register as a limited duration company; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">may
    register as a segregated portfolio company.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;
&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Limited
liability&#8221; means that the liability of each shareholder is limited to the amount unpaid by the shareholder on that shareholder&#8217;s
shares of the company, except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an
illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b>&#160;<b>Material
Contracts</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have not entered into any material contracts other than in the ordinary course of business and other than those described in &#8220;Item
4. Information on the Company,&#8221; &#8220;Item 7. Major Shareholders and Related Party Transactions&#8212;B. Related Party Transactions&#8221;
or elsewhere in this annual report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 109 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->103<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b>&#160;<b>Exchange
Controls</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;<i>Item 4. Information on the Company&#8212;B. Business Overview&#8212;Regulation&#8212; Regulations Relating to Foreign Exchange</i>.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E.</b>&#160;<b>Taxation</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following summary of the Cayman Islands, PRC and U.S. federal income tax considerations of an investment in the Ordinary Shares is based
upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change. This
summary does not deal with all possible tax considerations relating to an investment in the Ordinary Shares, such as the tax considerations
under U.S. state and local tax laws or under the tax laws of jurisdictions other than the Cayman Islands, the People&#8217;s Republic
of China and the United States.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Cayman
Islands Taxation</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation, and there
is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us or holders of our
Ordinary Shares levied by the government of the Cayman Islands, except for stamp duties which may be applicable on instruments executed
in, or after execution brought within the jurisdiction of the Cayman Islands. The Cayman Islands are not party to any double tax treaties
that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in
the Cayman Islands.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">Payments of dividends and capital in
respect of Ordinary Shares will not be subject to taxation in the Cayman Islands and no Cayman Islands withholding will be required on
the payment of a dividend or capital to any holder of Ordinary Shares, nor will gains derived from the disposal of Ordinary Shares be
subject to Cayman Islands income or corporation tax.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
an exempted company, the Company has received a tax exemption certificate from the Financial Secretary of the Cayman Islands pursuant
to the Tax Concessions Law (Revised) of the Cayman Islands, containing an undertaking that in the event of any change to the foregoing,
the Company, for a period of twenty years from the date of the grant of the undertaking (such date of grant being 1 August 2019), will
not be chargeable to tax in the Cayman Islands on its income or its capital gains arising in the Cayman Islands or elsewhere.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>People&#8217;s
Republic of China Taxation</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Enterprise
Income Tax and Withholding Tax</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a holding company incorporated in the Cayman Islands and we gain substantial income by way of dividends paid to us from our PRC subsidiaries.
The EIT Law and its implementation rules provide that China-sourced income of foreign enterprises, such as dividends paid by a PRC subsidiary
to its equity holders that are non-resident enterprises, will normally be subject to PRC withholding tax at a rate of 10%, unless any
such foreign investor&#8217;s jurisdiction of incorporation has a tax treaty with China that provides for a preferential tax rate or
a tax exemption.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the EIT Law, an enterprise established outside of China with a &#8220;de facto management body&#8221; within China is considered a &#8220;resident
enterprise,&#8221; which means that it is treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. Although
the implementation rules of the EIT Law define &#8220;de facto management body&#8221; as a managing body that actually, comprehensively
manage and control the production and operation, staff, accounting, property and other aspects of an enterprise, the only official guidance
for this definition currently available is set forth in SAT Circular 82, which provides guidance on the determination of the tax residence
status of a Chinese-controlled offshore incorporated enterprise. Although this circular only applies to offshore enterprises controlled
by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the criteria set forth in the circular
may reflect the SAT&#8217;s general position on how the &#8220;de facto management body&#8221; text should be applied in determining
the tax resident status of all offshore enterprises.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to SAT Circular 82 (the Circular on Issues Concerning the Identification of Chinese-Controlled Overseas Registered Enterprises as Resident
Enterprises in Accordance With the Actual Standards of Organizational Management), a Chinese-controlled offshore incorporated enterprise
will be regarded as a PRC tax resident by virtue of having a &#8220;de facto management body&#8221; in China and will be subject to PRC
enterprise income tax on its worldwide income only if all of the following criteria are met: (i) the places where senior management and
senior management departments that are responsible for daily production, operation and management of the enterprise perform their duties
are mainly located within the territory of China; (ii) financial decisions (such as money borrowing, lending, financing and financial
risk management) and personnel decisions (such as appointment, dismissal and salary and wages) are made or need to be made by organizations
or persons located within the territory of China; (iii) main property, accounting books, corporate seal, the board of directors and files
of the minutes of shareholders&#8217; meetings of the enterprise are located or preserved within the territory of China; and (iv) half
(or more) of the directors or senior management staff having the right to vote habitually reside within the territory of China.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that Sunrise New Energy is not a resident enterprise for PRC tax purpose. Sunrise New Energy is not controlled by a PRC enterprise
or PRC enterprise group and we do not meet some of the conditions outlined in the immediately preceding paragraph. For example, as a
holding company, the key assets and records of Sunrise New Energy, including the resolutions and meeting minutes of our board of directors
and the resolutions and meeting minutes of our shareholders, are located and maintained outside the PRC. In addition, we are not aware
of any offshore holding companies with a corporate structure similar to ours that has been deemed a PRC &#8220;resident enterprise&#8221;
by the PRC tax authorities. However, as the tax residency status of an enterprise is subject to determination by the PRC tax authorities
and uncertainties remain with respect to the interpretation of the term &#8220;de facto management body&#8221; as applicable to our offshore
entities, we will continue to monitor our tax status.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the PRC tax authorities determine that Sunrise New Energy is a PRC resident enterprise for enterprise income tax purposes, we would be
subject to PRC enterprise income on our worldwide income at the rate of 25%. Furthermore, we may be required to withhold a 10% withholding
tax from dividends we pay to our shareholders that are non-resident enterprises. In addition, non-resident enterprise shareholders may
be subject to a 10% PRC withholding tax on gains realized on the sale or other disposition of our ordinary shares, if such income is
treated as sourced from within the PRC. It is unclear whether our non-PRC individual shareholders would be subject to any PRC tax on
dividends or gains obtained by such non-PRC individual shareholders in the event we are determined to be a PRC resident enterprise. If
any PRC tax were to apply to dividends or gains realized by non-PRC individuals, it would generally apply at a rate of 20% unless a reduced
rate is available under an applicable tax treaty. However, it is also unclear whether non-PRC shareholders of the Company would be able
to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that Sunrise New Energy is
treated as a PRC resident enterprise.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 15pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
<i>&#8220;Risk Factors&#160;&#8212;&#160;Risks Related to Doing Business in China&#160;&#8212;&#160;Under the PRC Enterprise Income Tax
Law, or the EIT Law, we may be classified as a &#8220;resident enterprise&#8221; of China, which could result in unfavorable tax consequences
to us and our non-PRC shareholders.&#8221;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Value-added
Tax</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to the VAT Laws, MOF and SAT Circular 32 (the Circular of the Ministry of Finance and the State Administration of Taxation on Adjustment
of Value-Added Tax Rates), and MOF, SAT and GAC Circular 39 (the Announcement on Policies for Deepening the VAT Reform), all enterprises
and individuals engaged in the sale of goods, the provision of processing, repair and replacement services, sales of services, intangible
assets, real property and the importation of goods within the territory of the PRC are the taxpayers of VAT. The VAT tax rates generally
applicable are simplified as 13%, 9%, 6% and 0%, and the VAT tax rate of 3% is applicable to small-scale taxpayers. The VAT tax rates
applicable to our PRC subsidiaries and consolidated affiliates are as follows: 6% on services for the VIE, GMB (Hangzhou) and Mentor
Board Voice of Seeding (Shanghai) Cultural Technology Co., Ltd.; 3% for small-scale taxpayers including GMB (Beijing), GMB Culture, GMB
Consulting and GMB Linking and GIOP BJ.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>United
States Federal Income Tax Considerations</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following does not address the tax consequences to any particular investor or to persons in special tax situations such as:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">banks;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">financial
    institutions;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">insurance
    companies;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">regulated
    investment companies;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">real
    estate investment trusts;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">broker-dealers;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
    that elect to mark their securities to market;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">U.S.
    expatriates or former long-term residents of the U.S.;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">governments
    or agencies or instrumentalities thereof;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">tax-exempt
    entities;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
    liable for alternative minimum tax;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
    holding our Ordinary Shares as part of a straddle, hedging, conversion or integrated transaction;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
    that actually or constructively own 10% or more of our voting power or value (including by reason of owning our Ordinary Shares);</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
    who acquired our Ordinary Shares pursuant to the exercise of any employee share option or otherwise as compensation;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
    holding our Ordinary Shares through partnerships or other pass-through entities;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">beneficiaries
    of a Trust holding our Ordinary Shares; or</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
    holding our Ordinary Shares through a Trust.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 112 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->106<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Material
Tax Consequences Applicable to U.S. Holders of Our Ordinary Shares</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following sets forth the material U.S. federal income tax consequences related to the ownership and disposition of our Ordinary Shares.
This description does not deal with all possible tax consequences relating to ownership and disposition of our Ordinary Shares or U.S.
tax laws, other than the U.S. federal income tax laws, such as the tax consequences under non-U.S. tax laws, state, local and other tax
laws.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following brief description applies only to U.S. Holders (defined below) that hold Ordinary Shares as capital assets and that have the
U.S. dollar as their functional currency. This brief description is based on the federal income tax laws of the United States in effect
as of the date of this annual report and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this annual
report, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities
are subject to change, which change could apply retroactively and could affect the tax consequences described below.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
brief description below of the U.S. federal income tax consequences to &#8220;U.S. Holders&#8221; will apply to you if you are a beneficial
owner of Ordinary Shares and you are, for U.S. federal income tax purposes,</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an
    individual who is a citizen or resident of the United States;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
    corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United
    States, any state thereof or the District of Columbia;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an
    estate whose income is subject to U.S. federal income taxation regardless of its source; or</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
    trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons
    for all substantial decisions or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a
    U.S. person.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
a partnership (or other entities treated as a partnership for United States federal income tax purposes) is a beneficial owner of our
Ordinary Shares, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of the
partnership. Partnerships and partners of a partnership holding our Ordinary Shares are urged to consult their tax advisors regarding
an investment in our Ordinary Shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
individual is considered a resident of the U.S. for federal income tax purposes if he or she meets either the &#8220;Green Card Test&#8221;
or the &#8220;Substantial Presence Test&#8221; described as follows:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Green Card Test: You are a lawful permanent resident of the United States, at any time, if you have been given the privilege, according
to the immigration laws of the United States, of residing permanently in the United States as an immigrant. You generally have this status
if the U.S. Citizenship and Immigration Services issued you an alien registration card, Form I-551, also known as a &#8220;green card.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Substantial Presence Test: If an alien is present in the United States on at least 31 days of the current calendar year, he or she will
(absent an applicable exception) be classified as a resident alien if the sum of the following equals 183 days or more (<i>See </i>&#167;7701(b)(3)(A)
of the Internal Revenue Code and related Treasury Regulations):</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    actual days in the United States in the current year; plus</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">One-third
    of his or her days in the United States in the immediately preceding year; plus</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">One-sixth
    of his or her days in the United States in the second preceding year.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 113 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->107<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Taxation
of Dividends and Other Distributions on our Ordinary Shares</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
to the passive foreign investment company (PFIC) rules (defined below) discussed below, the gross amount of distributions made by us
to you with respect to the Ordinary Shares (including the amount of any taxes withheld therefrom) will generally be includable in your
gross income as dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current
or accumulated earnings and profits (as determined under U.S. federal income tax principles). With respect to corporate U.S. Holders,
the dividends will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from
other U.S. corporations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">With
respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable
to qualified dividend income, provided that (1) the Ordinary Shares are readily tradable on an established securities market in the United
States, or we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange
of information program, (2) we are not a PFIC (defined below) for either our taxable year in which the dividend is paid or the preceding
taxable year, and (3) certain holding period requirements are met. Because there is no income tax treaty between the United States and
the Cayman Islands, clause (1) above can be satisfied only if the Ordinary Shares are readily tradable on an established securities market
in the United States. Under U.S. Internal Revenue Service authority, Ordinary Shares are considered for purpose of clause (1) above to
be readily tradable on an established securities market in the United States if they are listed on certain exchanges, which presently
include the Nasdaq. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect
to our Ordinary Shares, including the effects of any change in law after the date of this annual report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dividends
will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income
(as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will
be limited to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable
to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income.
For this purpose, dividends distributed by us with respect to our Ordinary Shares will constitute &#8220;passive category income&#8221;
but could, in the case of certain U.S. Holders, constitute &#8220;general category income.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal
income tax principles), it will be treated first as a tax-free return of your tax basis in your Ordinary Shares, and to the extent the
amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings
and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a
dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described
above.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Taxation
of Dispositions of Ordinary Shares</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other
taxable disposition of a share equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis
(in U.S. dollars) in the Ordinary Shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including
an individual U.S. Holder, who has held the Ordinary Shares for more than one year, you will generally be eligible for reduced tax rates.
The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize will generally be treated as
United States source income or loss for foreign tax credit limitation purposes which will generally limit the availability of foreign
tax credits.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Passive
Foreign Investment Company Considerations</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A&#160;non-U.S.&#160;corporation,
such as our company, will be classified as a PFIC for U.S. federal income tax purposes for any taxable year if, applying applicable look-through
rules, either (i) 75% or more of its gross income for such year consists of certain types of &#8220;passive&#8221; income or (ii) 50%
or more of the value of its assets (generally determined on the basis of a quarterly average) during such year is attributable to assets
that produce or are held for the production of passive income (the &#8220;asset test&#8221;). For this purpose, cash and assets readily
convertible into cash are categorized as passive assets and the company&#8217;s goodwill and other unbooked intangibles not reflected
on its balance sheet are taken into account. Passive income generally includes, among other things, dividends, interest, income equivalent
to interest, rents, royalties, and gains from the disposition of passive assets. We will be treated as owning a proportionate share of
the assets and earning a proportionate share of the income of any other corporation in which we own, directly or indirectly, 25% or more
(by value) of the stock.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Based
upon our current and projected income and assets, including the proceeds we received from our initial public offering and the value of
our Ordinary Shares, we do not expect to be a PFIC for the current taxable year or the foreseeable future. However, no assurance can
be given in this regard because the determination of whether we are or will become a PFIC for any taxable year is a factual determination
made annually that will depend, in part, upon the composition and classification of our income and assets. Furthermore, fluctuations
in the market price of our Ordinary Shares may cause us to be classified as a PFIC for the current or future taxable years because the
value of our assets for purposes of the asset test, including the value of our goodwill and other unbooked intangibles, may be determined
by reference to the market price of our Ordinary Shares from time to time (which may be volatile). In addition, the composition of our
income and assets may also be affected by how, and how quickly, we use our liquid assets and the cash raised in our initial public offering.
Under circumstances where our revenue from activities that produce passive income significantly increases relative to our revenue from
activities that produce&#160;non-passive&#160;income, or where we determine not to deploy significant amounts of cash for active purposes,
our risk of becoming classified as a PFIC may substantially increase.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we are a PFIC for any year during which a U.S. Holder holds our Ordinary Shares, we generally will continue to be treated as a PFIC for
all succeeding years during which such U.S. Holder holds our Ordinary Shares, unless we were to cease to be a PFIC and the U.S. Holder
were to make a &#8220;deemed sale&#8221; election with respect to the Ordinary Shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Information
Reporting and Backup Withholding</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dividend
payments with respect to our Ordinary Shares and proceeds from the sale, exchange or redemption of our Ordinary Shares may be subject
to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding under Section 3406 of the US Internal
Revenue Code with at a current flat rate of 24%. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct
taxpayer identification number and makes any other required certification on U.S. Internal Revenue Service Form W-9 or who is otherwise
exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification
on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S.
information reporting and backup withholding rules.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Backup
withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability,
and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund
with the U.S. Internal Revenue Service and furnishing any required information. We do not intend to withhold taxes for individual shareholders.
However, transactions effected through certain brokers or other intermediaries may be subject to withholding taxes (including backup
withholding), and such brokers or intermediaries may be required by law to withhold such taxes.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the Hiring Incentives to Restore Employment Act of 2010, certain U.S. Holders are required to report information relating to our Ordinary
Shares, subject to certain exceptions (including an exception for Ordinary Shares held in accounts maintained by certain financial institutions),
by attaching a complete Internal Revenue Service Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for
each year in which they hold Ordinary Shares. Failure to report such information could result in substantial penalties.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>F.</b>&#160;<b>Dividends
and Paying Agents</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>G.</b>&#160;<b>Statement
by Experts</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>H.</b>&#160;<b>Documents
on Display</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
previously filed with the SEC registration statement on Form F-1 (File Number 333-233745), as amended, to register our Ordinary Shares
in relation to our initial public offering, which was completed on February 11, 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers.
Accordingly, we are required to file reports, including annual reports on Form 20-F, and other information with the SEC. All information
filed with the SEC can be obtained over the internet at the SEC&#8217;s website at www.sec.gov or inspected and copied at the public
reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information regarding
the Washington, D.C. Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site at www.sec.gov that
contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the
SEC using its EDGAR system. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing
and content of quarterly reports and proxy statements, and officers, directors and principal shareholders are exempt from the reporting
and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>I.</b>&#160;<b>Subsidiary
Information</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
a listing of our subsidiaries, see &#8220;<i>Item 4C.&#160;&#160;Organizational Structure&#8221; </i>for a chart of our current structure.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


</div><div><a id="s_015"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Interest
Rate Risk</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are exposed to interest rate risk while we have short-term bank loans outstanding. Although interest rates for our short-term loans are
typically fixed for the terms of the loans, the terms are typically twelve months and interest rates are subject to change upon renewal.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Credit
Risk</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Credit
risk is controlled by the application of credit approvals, limits and monitoring procedures. We manage credit risk through in-house research
and analysis of the Chinese economy and the underlying obligors and transaction structures. We identify credit risk collectively based
on industry, geography and customer type. In measuring the credit risk of our sales to our customers, we mainly reflect the &#8220;probability
of default&#8221; by the customer on its contractual obligations and consider the current financial position of the customer and the
current and likely future exposures to the customer.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Liquidity
Risk</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are also exposed to liquidity risk which is risk that it we will be unable to provide sufficient capital resources and liquidity to meet
our commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures.
When necessary, we will turn to other financial institutions and related parties to obtain short-term funding to cover any liquidity
shortage.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Foreign
Exchange Risk</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">While
our reporting currency is the U.S. dollar, almost all of our consolidated revenues and consolidated costs and expenses are denominated
in RMB. All of our assets are denominated in RMB. As a result, we are exposed to foreign exchange risk as our revenues and results of
operations may be affected by fluctuations in the exchange rate between the U.S. dollar and RMB. If the RMB depreciates against the U.S.
dollar, the value of our RMB revenues, earnings and assets as expressed in our U.S. dollar financial statements will decline. We have
not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_016"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b>&#160;<b>Debt
Securities</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b>&#160;<b>Warrants
and Rights</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b>&#160;<b>Other
Securities</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b>&#160;<b>American
Depositary Shares</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_017"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>PART
II</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_018"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">None.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_019"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Material
Modifications to the Rights of Security Holders</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;<i>Item 10. Additional Information</i>&#8221; for a description of the rights of securities holders, which remain unchanged.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Use
of Proceeds</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following &#8220;Use of Proceeds&#8221; information relates to the registration statement on Form F-1, as amended (File Number: 333-233745)
in relation to the initial public offering of 6,720,000 Ordinary Shares at an initial public offering price of $4.00 per Ordinary Share.
Our initial public offering closed on February 11, 2021. The registration statement was declared effective by the SEC on February 5,
2021. ViewTrade Securities, Inc. was the representative of the underwriters for our initial public offering. On February 19, 2021, Network
1 Financial Securities, Inc. exercised the over-allotment option in full to purchase an additional 1,008,000 Ordinary Shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
received net proceeds of approximately $24.61 million, after deducting underwriting discounts and estimated offering expenses payable
by us. The total expense incurred for our Company&#8217;s account in connection with our initial public offering was approximately $2.28
million, which included approximately $2.02 million in underwriting discounts for the initial public offering and approximately $0.26
million in other costs and expenses for our initial public offering. None of the transaction expenses included payments to directors
or officers of our Company or their associates, persons owning more than 10% or more of our equity securities or our affiliates. None
of the net proceeds we received from the initial public offering were paid, directly or indirectly, to any of our directors or officers
or their associates, persons owning 10% or more of our equity securities or our affiliates. As of the date of this annual report, we
have used $10.76 million from our initial public offering as the registered capital for our newly established JV, Sunrise Guizhou. We
intend to use the remaining proceeds from our initial public offering as disclosed in our registration statement on Form F-1. Our management,
however, will have significant flexibility and discretion to apply the net proceeds from our initial public offering. If an unforeseen
event occurs or business conditions change, we may use the proceeds of this offering differently than as disclosed previously.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_020"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;15.
CONTROLS AND PROCEDURES</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Disclosure
Controls and Procedures</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December&#160;31, 2022, under the supervision and with the participation of our management, including our Chief Executive Officer
and Chief Financial Officer, we performed an evaluation of the effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rule&#160;13a-15(e)&#160;under the Exchange Act). There are inherent limitations to the effectiveness of any
disclosure controls and procedures system, including the possibility of human error and circumventing or overriding them. Even if effective,
disclosure controls and procedures can provide only reasonable assurance of achieving their control objectives.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Based
on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were
not effective as of December 31, 2022 and as of the date that the evaluation of the effectiveness of our disclosure controls and procedures
was completed,&#160;failed to provide reasonable assurance that the information we are required to disclose in the reports we file or
submit under the Exchange Act is (1)&#160;recorded, processed, summarized and reported within the time periods specified in the SEC&#8217;s
rules&#160;and forms and (2)&#160;accumulated and communicated to our management to allow timely decisions regarding required disclosures.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Management&#8217;s
Annual Report on Internal Control Over Financial Reporting</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined
in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Our management conducted an assessment of the effectiveness of our internal control
over financial reporting based on the criteria set forth in &#8220;Internal Control - Integrated Framework (2013)&#8221; issued by the
Committee of Sponsoring Organizations of the Treadway Commission.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the course of preparing our consolidated financial
statements for the year ended December 31, 2022, we identified material weaknesses and other control deficiencies in our internal control
over financial reporting as of December 31, 2022. The material weaknesses identified included: (1) a lack of formal internal controls
policies over financial closing and reporting processes, which may increase risk of error, fraud, misstatement of financial reporting,
or even non-compliance with related regulations for a U.S. listed Group; (2) a lack of accounting staff and resources with appropriate
knowledge of U.S. GAAP and SEC reporting and compliance requirements, and accounting policies and procedures manual that covers U.S.
GAAP and SEC financial reporting requirements to complete relate US GAAP and SEC reporting. Based on this evaluation, our management
has concluded that our internal control over financial reporting was not effective as of December 31, 2022.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are taking a number of measures to tackle
the control deficiencies identified, including: (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting
experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework;
(ii) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial
reporting personnel; and (iii) preparing a comprehensive accounting policies and procedures manual that covers financial closing and
reporting processes, U.S. GAAP and SEC financial reporting requirements, and ensuring that accounting personnel are familiar with and
follow the manual.</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">However,
we cannot assure you that we will remediate our control deficiencies in a timely manner. The process of designing and implementing an
effective financial reporting system is a continuous effort that requires us to anticipate and react to changes in our business and the
economic and regulatory environments and to expend significant resources to maintain a financial reporting system that is adequate to
satisfy our reporting obligation. See &#8220;Item 3. Key Information&#8212;D. Risk Factors&#8212;We have identified several control deficiencies
in our internal control over financial reporting. If we fail to maintain an effective system of internal controls over financial reporting,
we may not be able to accurately report our financial results or prevent fraud.&#8221; Additionally, we cannot assure you that we have
identified all, or that we will not in the future have additional, material weaknesses.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Attestation
Report of the Registered Public Accounting Firm</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a company with less than $1.235 billion in revenue for our last fiscal year, we qualify as an &#8220;emerging growth company&#8221; pursuant
to the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise
applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404
of the Sarbanes-Oxley Act of 2002, in the assessment of the emerging growth company&#8217;s internal control over financial reporting.
This annual report on Form 20-F does not include an attestation report of our registered public accounting firm because we are an emerging
growth company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Changes
in Internal Control</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
than as described above, there were no changes in our internal controls over financial reporting that occurred during the period covered
by this annual report on Form 20-F that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_021"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM
16. [RESERVED]</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_022"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;16.A.</b>&#160;<b>AUDIT
COMMITTEE FINANCIAL EXPERT</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
board of directors determined that Mr.&#160;Ligang Lu, chairman of our audit committee and an independent director (under the standards
set forth in Nasdaq Stock Market Rule 5605(a)(2) and&#160;Rule&#160;10A-3&#160;under&#160;the Exchange Act), is an audit committee financial
expert.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_023"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;16.B.</b>&#160;<b>CODE
OF ETHICS</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
board of directors adopted a code of business conduct and ethics that applies to all of our directors, officers, employees, including
certain provisions that specifically apply to our principal executive officer, principal financial officer or controller and any other
persons who perform similar functions for us. A copy of our code of business conduct and ethics can be accessed at http://sdh365.com/IR/.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_024"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;16.C.</b>&#160;<b>PRINCIPAL
ACCOUNTANT FEES AND SERVICES</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered
by our independent registered public accounting firm, for the periods indicated.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Year&#160;Ended&#160;December
    31,</b></span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Services</b></span></td>
    <td>&#160;</td>
    <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2022</b></span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2021</b></span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>US$</b></span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>US$</b></span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="width: 76%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Audit fees<sup>(1)</sup></span></td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">330,000</span></td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">290,000</span></td>
    <td style="width: 1%">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Audit-related fees<sup>(2)</sup></span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">8,400</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10,000</span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tax fees<sup>(3)</sup></span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right">&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other fees<sup>(4)</sup></span></td>
    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; text-align: right">&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Total</b></span></td>
    <td>&#160;</td>
    <td style="border-bottom: black 4.5pt double">&#160;</td>
    <td style="border-bottom: black 4.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">338,400</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="border-bottom: black 4.5pt double">&#160;</td>
    <td style="border-bottom: black 4.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">300,000</span></td>
    <td>&#160;</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Note:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Audit
                                            fees&#8221; means the aggregate fees billed for professional services rendered by our principal
                                            accounting firm for the audit of our annual financial statements and the review of our comparative
                                            interim financial statements.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Audit-related
                                            fees&#8221; means the aggregate fees billed for professional services rendered by our principal
                                            accounting firm for the assurance and related services, which mainly included the audit and
                                            review of financial statements and are not reported under &#8220;Audit fees&#8221; above.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Tax
                                            fees&#8221; means the aggregate fees billed for professional services rendered by our principal
                                            accounting firm for tax compliance, tax advice and tax planning.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Other
                                            fees&#8221; means the aggregate fees incurred in each of the fiscal years listed for the
                                            professional tax services rendered by our principal accounting firm other than services reported
                                            under &#8220;Audit fees,&#8221; &#8220;Audit-related fees&#8221; and &#8220;Tax fees.&#8221;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The policy of our audit committee is to pre-approve
all audit and non-audit services provided by MarcumAsia and Friedman LLP, our independent registered public accounting firm including
audit services, audit-related services, tax services, and other services as described above.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_025"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;16.D.</b>&#160;<b>EXEMPTIONS
FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_026"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;16.E.</b>&#160;<b>PURCHASES
OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">None.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_027"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;16.F.</b>&#160;<b>CHANGE
IN REGISTRANT&#8217;S CERTIFYING ACCOUNTANT</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
has been no change in independent accountants for our Company during the two most recent fiscal years or any subsequent interim period
except as previously reported in our Form 6-K filed with the SEC on December 23, 2022. There have been no disagreements of the type required
to be disclosed by Item 16F(b).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 119 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->113<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_028"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;16.G.</b>&#160;<b>CORPORATE
GOVERNANCE</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a Cayman Islands company listed on the Nasdaq Capital Market, we are subject to the Nasdaq Capital Market corporate governance listing
standards. However, Nasdaq Capital Market rules permit a foreign private issuer like us to follow the corporate governance practices
of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly
from the Nasdaq Capital Market corporate governance listing standards.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NASDAQ
Listing Rule 5635 generally provides that shareholder approval is required of U.S. domestic companies listed on the NASDAQ Capital Market
prior to issuance (or potential issuance) of securities (i) equaling 20% or more of the company&#8217;s common stock or voting power
for less than the greater of market or book value (ii) resulting in a change of control of the company; and (iii) which is being issued
pursuant to a stock option or purchase plan to be established or materially amended or other equity compensation arrangement made or
materially amended. Notwithstanding this general requirement, NASDAQ Listing Rule 5615(a)(3)(A) permits foreign private issuers to follow
their home country practice rather than these shareholder approval requirements. The Cayman Islands do not require shareholder approval
prior to any of the foregoing types of issuances. The Company, therefore, is not required to obtain such shareholder approval prior to
entering into a transaction with the potential to issue securities as described above. Prior to the closing of our IPO, the Board of
Directors of the Company elected to follow the Company&#8217;s home country rules as to such issuances and will not be required to seek
shareholder approval prior to entering into such a transaction.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
than those described above, there are no significant differences between our corporate governance practices and those followed by U.S.
domestic companies under Nasdaq Capital Market corporate governance listing standards.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_029"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;16.H.</b>&#160;<b>MINE
SAFETY DISCLOSURE</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_030"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM
16.I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 120 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->114<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_031"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>PART
III</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_032"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;17.
FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have elected to provide financial statements pursuant to Item 18.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_033"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;18.
FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consolidated financial statements of Sunrise New Energy Co., Ltd. are included at the end of this annual report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="s_034"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM&#160;19.</b>&#160;<b>EXHIBITS</b></span></p><div>

</div><p style="margin: 0">&#160;</p><div>

</div><p style="margin: 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: black 1.5pt solid; width: 9%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Exhibit<br/>
    Number</b></span></td>
    <td style="width: 1%">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; width: 90%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Description</b></span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.1</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1780731/000121390022051492/ea164830ex4-2_sunrisenew.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amended
    and Restated Memorandum and Articles of Association (incorporated herein by reference to exhibit 4.2 to our registration statement
    on Form S-8 (File No. 333-267105), filed with the SEC on August 26, 2022)</span></a></td></tr>
  <tr>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.1</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1780731/000121390019021043/ff12019a2ex4-1_global.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Registrant&#8217;s
    Specimen Certificate for Ordinary Shares (incorporated herein by reference to Exhibit 4.1 to our registration statement on Form&#160;F-1&#160;(File&#160;No.&#160;333-233745),&#160;as
    amended)</span></a></td></tr>
  <tr>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.2</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1780731/000121390021023882/f20f2020ex2-2_globalinter.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Description
    of Securities registered under Section 12 of the Exchange Act of 1934, as amended (incorporated herein by reference to exhibit 2.2
    to the annual report on Form 20-F (File No. 001-40008), filed with the SEC on April 30, 2021)</span></a></td></tr>
  <tr>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.1</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1780731/000121390019017971/ff12019ex10-1_global.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form
    of Employment Agreement by and between executive officers and the Registrant (incorporated herein by reference to Exhibit 10.1 to
    our registration statement on Form F-1 (File No. 333-233745), as amended)</span></a></td></tr>
  <tr>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.2</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1780731/000121390019017971/ff12019ex10-2_global.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form
    of Indemnification Agreement by and between executive officers, directors and the Registrant (incorporated herein by reference to
    Exhibit 10.2 to our registration statement on Form F-1 (File No. 333-233745), as amended)</span></a></td></tr>
  <tr>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: bottom">&#160;</td>
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  <tr>
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  <tr>
    <td style="vertical-align: top">&#160;</td>
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  <tr>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: bottom">&#160;</td>
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  <tr>
    <td style="vertical-align: top">&#160;</td>
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
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    Yilong New District Branch and Sunrise (Guizhou) New Energy Materials Co., Ltd. (incorporated herein by reference to Exhibit 4.14
    to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 2, 2022)</span></a></td></tr>
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
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    Service Co, Ltd. and other parties (incorporated herein by reference to Exhibit 4.15 to our annual report on Form 20-F (File No.
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    Co., Ltd., Beijing Zhitong Zhenye Technology Co., Ltd., and Li Jiyou (incorporated herein by reference to Exhibit 4.16 to our annual
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.1*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><a href="f20f2022ex8-1_sunrisenew.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Principal
    subsidiaries and consolidated affiliated entities of the Registrant</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">11.1</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1780731/000121390019017971/ff12019ex99-1_global.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Code
    of Business Conduct and Ethics of the Registrant (incorporated herein by reference to Exhibit 99.1 to our registration statement
    on Form F-1 (File No. 333-233745), as amended)</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.1*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><a href="f20f2022ex12-1_sunrisenew.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certification
    by the Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.2*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><a href="f20f2022ex12-2_sunrisenew.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certification
    by the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">13.1**</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><a href="f20f2022ex13-1_sunrisenew.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certification
    by the Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">13.2**</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><a href="f20f2022ex13-2_sunrisenew.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certification
    by the Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">15.1*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><a href="f20f2022ex15-1_sunrisenew.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consent
    by Jincheng Tongda &amp; Neal Law Firm</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    following financial statements from the Company&#8217;s Annual Report on Form 20-F for the fiscal year ended December 31, 2022, formatted
    in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income (Loss), (iii)
    Consolidated Statements of Changes in Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial
    Statements, tagged as blocks of text and including detailed tags</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">104.*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cover
    Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Filed
                                            herewith.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">**</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furnished
                                            herewith.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 122 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->116<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SIGNATURES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this annual report on its behalf.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sunrise
    New Energy Co., Ltd.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td colspan="3" style="font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; vertical-align: top; width: 60%; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; vertical-align: bottom; width: 5%; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</span></td>
    <td style="border-bottom: black 1.5pt solid; padding-top: 0pt; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 35%; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    Haiping Hu</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; vertical-align: top; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; vertical-align: bottom; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Name:</b>&#160;&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; vertical-align: bottom; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Haiping
    Hu</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; vertical-align: top; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; vertical-align: bottom; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Title:</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; vertical-align: bottom; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chairman,&#160;Chief&#160;Executive&#160;Officer,&#160;and&#160;Director</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; vertical-align: top; padding-right: 0pt; padding-left: 0pt">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; vertical-align: bottom; padding-right: 0pt; padding-left: 0pt">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; vertical-align: bottom; padding-right: 0pt; padding-left: 0pt">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; vertical-align: top; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; vertical-align: bottom; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Date
    </b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0pt; vertical-align: bottom; padding-right: 0pt; padding-left: 0pt"><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">May 16, 2023</p></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 123 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->117<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>SUNRISE NEW ENERGY CO.,
LTD.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>INDEX TO CONSOLIDATED
FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>TABLE OF CONTENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr> <td style="width: 90%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Consolidated Financial Statements</b></span></td> <td style="width: 1%">&#160;</td> <td style="width: 9%; text-align: center">&#160;</td></tr> <tr> <td style="text-align: justify">&#160;</td> <td>&#160;</td> <td style="text-align: center">&#160;</td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="text-align: justify"><a href="#f_001"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Report of Independent Registered Public Accounting Firm (Marcum Asia CPAs LLP PCAOB ID: 5395)</span></a></td> <td>&#160;</td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-2</span></td></tr> <tr> <td style="text-align: justify">&#160;</td> <td>&#160;</td> <td style="text-align: center">&#160;</td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="text-align: justify"><a href="#f_002"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Report of Independent Registered Public Accounting Firm (Friedman LLP PCAOB ID: <ix:nonNumeric contextRef="c0" name="dei:AuditorFirmId">711</ix:nonNumeric>)</span></a></td> <td>&#160;</td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-3</span></td></tr> <tr> <td style="text-align: justify">&#160;</td> <td>&#160;</td> <td style="text-align: center">&#160;</td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="text-align: justify"><a href="#f_003"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Balance Sheets as of December 31, 2022 and 2021</span></a></td> <td>&#160;</td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-4</span></td></tr> <tr> <td style="text-align: justify">&#160;</td> <td>&#160;</td> <td style="text-align: center">&#160;</td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: justify"><a href="#f_004"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended December 31, 2022, 2021 and 2020</span></a></td> <td>&#160;</td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-5</span></td></tr> <tr> <td style="text-align: justify">&#160;</td> <td>&#160;</td> <td style="text-align: center">&#160;</td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="text-align: justify"><a href="#f_005"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Statements of Changes in Equity for the Years Ended December 31, 2022, 2021 and 2020</span></a></td> <td>&#160;</td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-6</span></td></tr> <tr> <td style="text-align: justify">&#160;</td> <td>&#160;</td> <td style="text-align: center">&#160;</td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="text-align: justify"><a href="#f_006"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021 and 2020</span></a></td> <td>&#160;</td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-7</span></td></tr> <tr> <td style="text-align: justify">&#160;</td> <td>&#160;</td> <td style="text-align: center">&#160;</td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="text-align: justify"><a href="#f_007"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes to Consolidated Financial Statements</span></a></td> <td>&#160;</td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-8</span></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>


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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><div><a id="f_001"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="text-transform: uppercase"><b>Report
of Independent Registered Public Accounting Firm</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the Board of Directors and Shareholders of</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Sunrise New Energy Co., Ltd.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Opinion on the Financial Statements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have audited the accompanying consolidated
balance sheet of Sunrise New Energy Co., Ltd. and its subsidiaries (collectively, the &#8220;Company&#8221;) as of December 31, 2022,
the related consolidated statements of operations and comprehensive (loss) income, changes in equity, and cash flows for the year ended
December 31, 2022, and the related notes (collectively referred to as the &#8220;consolidated financial statements&#8221;). In our opinion,
the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December
31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles
generally accepted in the United States of America.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Basis for Opinion</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These financial statements are the responsibility
of the Company&#8217;s management. Our responsibility is to express an opinion on the Company&#8217;s financial statements based on our audit. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (&#8220;PCAOB&#8221;) 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.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We conducted our audit in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company&#8217;s internal
control over financial reporting. Accordingly, we express no such opinion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our audit included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">/s/ Marcum Asia CPAs <span style="font-variant: small-caps">LLP</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Marcum Asia CPAs <span style="font-variant: small-caps">LLP</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We
                                            have served as the Company&#8217;s auditor since 2018. (such date takes into account the
                                            acquisition of certain assets of Friedman LLP by Marcum Asia CPAs LLP effective September
                                            1, 2022)</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">New York, New York<br/>
May 16, 2023</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="f_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="text-transform: uppercase"><b>Report
of Independent Registered Public Accounting Firm</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the Board of Directors and Shareholders of</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Sunrise New Energy Co., Ltd.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Opinion on the Financial Statements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We have audited the accompanying consolidated balance
sheet of Sunrise New Energy Co., Ltd.(formerly known as Global Internet of People, Inc.) and its subsidiaries (collectively, the &#8220;Company&#8221;)
as of December 31, 2021, the related consolidated statements of operations and comprehensive (loss) income, changes in equity, and cash
flows for each of the two years in the period ended December 31, 2021 and 2020, and the related notes (collectively referred to as the
&#8220;consolidated financial statements&#8221;). In our opinion, the consolidated financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for each
of the two years in the period ended December 31, 2021 and 2020 in conformity with accounting principles generally accepted in the United
States of America.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Basis for Opinion</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These consolidated financial statements are the
responsibility of the Company&#8217;s management. Our responsibility is to express an opinion on the Company&#8217;s consolidated financial
statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (&#8220;PCAOB&#8221;) 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.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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&#8217;s internal control over financial reporting. Accordingly, we express no such opinion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our audits included performing procedures to
assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable
basis for our opinion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>/s/ <ix:nonNumeric contextRef="c0" name="dei:AuditorName">Friedman LLP</ix:nonNumeric></i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonNumeric contextRef="c0" name="dei:AuditorLocation">New York</ix:nonNumeric>, New York</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">May 2, 2022</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We served as the Company&#8217;s auditor from 2018
to 2022.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><div><a id="f_003"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>SUNRISE NEW ENERGY CO.,
LTD.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>CONSOLIDATED BALANCE SHEETS</b></p><div>

</div><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December&#160;31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold">ASSETS</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold">CURRENT ASSETS</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">TOTAL CURRENT ASSETS</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AssetsCurrent" scale="0" unitRef="usd">34,345,558</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-size: 8pt; text-indent: -9pt; padding-left: 9pt">&#160;</td><td style="font-size: 8pt">&#160;</td>
    <td style="font-size: 8pt; text-align: left">&#160;</td><td style="font-size: 8pt; text-align: right">&#160;</td><td style="font-size: 8pt; text-align: left">&#160;</td><td style="font-size: 8pt">&#160;</td>
    <td style="font-size: 8pt; text-align: left">&#160;</td><td style="font-size: 8pt; text-align: right">&#160;</td><td style="font-size: 8pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">NON-CURRENT ASSETS</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Restricted cash</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Long term prepayments and other non-current assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PrepaidExpenseNoncurrent" scale="0" unitRef="usd">3,850,985</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Plant, property and equipment, net</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="sdh:ConstructionInProgress" scale="0" unitRef="usd">41,468,383</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Land use rights, net</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="sdh:LandUseRightsNet" scale="0" unitRef="usd">10,083,242</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-6">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Intangible assets, net</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsNet" scale="0" unitRef="usd">3,962,650</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Long-term investments</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LongTermInvestments" scale="0" unitRef="usd">3,019,281</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LongTermInvestments" scale="0" unitRef="usd">5,381,441</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Operating lease right-of-use assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseRightOfUseAsset" scale="0" unitRef="usd">224,773</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Deferred tax assets</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredIncomeTaxAssetsNet" scale="0" unitRef="usd">852,037</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">TOTAL NON-CURRENT ASSETS</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AssetsNoncurrent" scale="0" unitRef="usd">62,384,541</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AssetsNoncurrent" scale="0" unitRef="usd">24,349,526</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-size: 8pt; text-indent: -9pt; padding-left: 9pt">&#160;</td><td style="font-size: 8pt">&#160;</td>
    <td style="font-size: 8pt; text-align: left">&#160;</td><td style="font-size: 8pt; text-align: right">&#160;</td><td style="font-size: 8pt; text-align: left">&#160;</td><td style="font-size: 8pt">&#160;</td>
    <td style="font-size: 8pt; text-align: left">&#160;</td><td style="font-size: 8pt; text-align: right">&#160;</td><td style="font-size: 8pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">TOTAL ASSETS</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:Assets" scale="0" unitRef="usd">107,022,374</ix:nonFraction></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:Assets" scale="0" unitRef="usd">58,695,084</ix:nonFraction></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-size: 8pt; text-indent: -9pt; padding-left: 9pt">&#160;</td><td style="font-size: 8pt">&#160;</td>
    <td style="font-size: 8pt; text-align: left">&#160;</td><td style="font-size: 8pt; text-align: right">&#160;</td><td style="font-size: 8pt; text-align: left">&#160;</td><td style="font-size: 8pt">&#160;</td>
    <td style="font-size: 8pt; text-align: left">&#160;</td><td style="font-size: 8pt; text-align: right">&#160;</td><td style="font-size: 8pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">LIABILITIES AND SHAREHOLDERS&#8217; EQUITY</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">CURRENT LIABILITIES</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Accounts payable</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsPayableCurrent" scale="0" unitRef="usd">12,259,772</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsPayableCurrent" scale="0" unitRef="usd">34,486</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Note payable</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NotesPayableCurrent" scale="0" unitRef="usd">3,876,748</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-7">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Deferred revenue</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredRevenueCurrent" scale="0" unitRef="usd">347,231</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredRevenueCurrent" scale="0" unitRef="usd">179,407</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Deferred revenue - related parties</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsPayableRelatedPartiesCurrentAndNoncurrent" scale="0" unitRef="usd">347,471</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-8">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Deferred government subsidy</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="sdh:DeferredGovernmentalSubsidy" scale="0" unitRef="usd">2,871,665</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-9">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Due to related parties</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueToRelatedPartiesCurrent" scale="0" unitRef="usd">885,150</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-10">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Income taxes payable</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccruedIncomeTaxesCurrent" scale="0" unitRef="usd">506,638</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccruedIncomeTaxesCurrent" scale="0" unitRef="usd">1,076,518</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Operating lease liabilities, current</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-11">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseLiabilityCurrent" scale="0" unitRef="usd">99,569</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Long-term payable, current</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="sdh:LongtermPayableCurrent" scale="0" unitRef="usd">3,706,628</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-12">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Consideration payable, current</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="sdh:ConsiderationsPayableCurrent" scale="0" unitRef="usd">582,381</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-13">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NoncontrollingInterestInVariableInterestEntity" scale="0" unitRef="usd">42,239,392</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="font-size: 8pt; text-indent: -9pt; padding-left: 9pt">&#160;</td><td style="font-size: 8pt">&#160;</td>
    <td style="font-size: 8pt; text-align: left">&#160;</td><td style="font-size: 8pt; text-align: right">&#160;</td><td style="font-size: 8pt; text-align: left">&#160;</td><td style="font-size: 8pt">&#160;</td>
    <td style="font-size: 8pt; text-align: left">&#160;</td><td style="font-size: 8pt; text-align: right">&#160;</td><td style="font-size: 8pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">TOTAL LIABILITIES AND EQUITY</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
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  </table><div>



</div><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral part of
these consolidated financial statements.</p><div>

</div><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 127; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence --></span></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="f_004"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>SUNRISE
NEW ENERGY CO., LTD.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>CONSOLIDATED STATEMENTS
OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="10" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the years ended<br/> December
    31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemNoncontrollingInterest" scale="0" sign="-" unitRef="usd">22,315,432</ix:nonFraction></td><td style="font-weight: bold; text-align: left">)</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Income taxes provision (benefit)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncomeTaxExpenseBenefit" scale="0" unitRef="usd">808,970</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">NET (LOSS) INCOME</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProfitLoss" scale="0" sign="-" unitRef="usd">23,124,402</ix:nonFraction></td><td style="font-weight: bold; text-align: left">)</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProfitLoss" scale="0" sign="-" unitRef="usd">8,714,332</ix:nonFraction></td><td style="font-weight: bold; text-align: left">)</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProfitLoss" scale="0" unitRef="usd">11,957,287</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Less: net loss attributable to non-controlling
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLossAttributableToNoncontrollingInterest" scale="0" sign="-" unitRef="usd">720,036</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLossAttributableToNoncontrollingInterest" scale="0" sign="-" unitRef="usd">311,072</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLossAttributableToNoncontrollingInterest" scale="0" sign="-" unitRef="usd">130,240</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">NET (LOSS) INCOME ATTRIBUTABLE
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    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd">22,404,366</ix:nonFraction></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">)</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd">8,403,260</ix:nonFraction></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">)</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" unitRef="usd">12,087,527</ix:nonFraction></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">OTHER COMPREHENSIVE INCOME (LOSS)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Foreign currency translation adjustment</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherComprehensiveIncomeForeignCurrencyTransactionAndTranslationGainLossArisingDuringPeriodNetOfTax" scale="0" sign="-" unitRef="usd">5,123,964</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">TOTAL COMPREHENSIVE (LOSS) INCOME</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ComprehensiveIncomeNetOfTaxIncludingPortionAttributableToNoncontrollingInterest" scale="0" sign="-" unitRef="usd">28,248,366</ix:nonFraction></td><td style="font-weight: bold; text-align: left">)</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ComprehensiveIncomeNetOfTaxIncludingPortionAttributableToNoncontrollingInterest" scale="0" sign="-" unitRef="usd">8,014,016</ix:nonFraction></td><td style="font-weight: bold; text-align: left">)</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Less: comprehensive loss attributable to
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  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral part of
these consolidated financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><!-- Field: Page; Sequence: 128; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --></span></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 6pt">&#160;</span></p><div>

</div><div><a id="f_005"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>SUNRISE
NEW ENERGY CO., LTD.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>CONSOLIDATION STATEMENTS
OF CHANGES IN EQUITY</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 6pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-size: 8pt">&#160;</span></td>
    <td><span style="font-size: 8pt">&#160;</span></td>
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    <td><span style="font-size: 8pt">&#160;</span></td>
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    <td style="width: 1%"><span style="font-size: 8pt">&#160;</span></td>
    <td style="width: 1%"><span style="font-size: 8pt">&#160;</span></td>
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    <td style="width: 1%"><span style="font-size: 8pt">&#160;</span></td>
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    <td style="width: 1%"><span style="font-size: 8pt">&#160;</span></td>
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    <td><span style="font-size: 8pt">&#160;</span></td>
    <td><span style="font-size: 8pt">&#160;</span></td>
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    <td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-24; font-family: Times New Roman, Times, Serif; font-size: 8pt">-</span></td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-89; font-family: Times New Roman, Times, Serif; font-size: 8pt">-</span></td>
    <td><span style="font-size: 8pt">&#160;</span></td>
    <td><span style="font-size: 8pt">&#160;</span></td>
    <td><span style="font-size: 8pt">&#160;</span></td>
    <td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-90; font-family: Times New Roman, Times, Serif; font-size: 8pt">-</span></td>
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    <td><span style="font-size: 8pt">&#160;</span></td>
    <td><span style="font-size: 8pt">&#160;</span></td>
    <td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-91; font-family: Times New Roman, Times, Serif; font-size: 8pt">-</span></td>
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    <td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-92; font-family: Times New Roman, Times, Serif; font-size: 8pt">-</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 6pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">The accompanying notes are
an integral part of these consolidated financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 6pt">&#160;</span></p><div>

</div><!-- Field: Page; Sequence: 129; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->6<!-- Field: /Sequence --></span></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><div><a id="f_006"></a></div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><b>SUNRISE
NEW ENERGY CO., LTD.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>CONSOLIDATED STATEMENTS
OF CASH FLOWS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-size: 7pt"><b>&#160;</b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Operating lease liabilities</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets" scale="0" unitRef="usd">2,894,690</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Accounts payable</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInOtherAccountsPayable" scale="0" sign="-" unitRef="usd">79,426</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Notes payable</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Income taxes payable</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccruedIncomeTaxesPayable" scale="0" sign="-" unitRef="usd">3,696,654</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Deferred revenue</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:IncreaseDecreaseDeferredRevenue" scale="0" sign="-" unitRef="usd">549,274</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="sdh:IncreaseDecreaseDeferredRevenue" scale="0" unitRef="usd">75,857</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="sdh:IncreaseDecreaseDeferredRevenue" scale="0" unitRef="usd">322,534</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Lease liabilities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInOperatingLeaseLiability" scale="0" sign="-" unitRef="usd">211,213</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Due to related parties</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:DueToRelatedParties" scale="0" unitRef="usd">100,053</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-105">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-106">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInDeferredCompensation" scale="0" unitRef="usd">2,973,491</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-107">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 27pt">Accrued expenses and other current liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Net cash (used in) provided
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">Cash flows from investing activities</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 27pt">Disposal of subsidiary</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">Cash flows from financing activities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Proceeds from capital contributions by controlling shareholders</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-125">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromContributionsFromAffiliates" scale="0" unitRef="usd">119,996</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Proceeds from long term payable, net of issuance cost</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-126">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-127">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Repayment on long term payable</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RepaymentsOfLongTermDebt" scale="0" unitRef="usd">887,788</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Proceeds from issuance of ordinary shares in connection with
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-128">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceInitialPublicOffering" scale="0" unitRef="usd">27,504,639</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-129">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Loans from related party</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromRepaymentsOfRelatedPartyDebt" scale="0" unitRef="usd">795,554</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-130">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-131">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 27pt">Proceeds from capital contributions by
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromPaymentsToMinorityShareholders" scale="0" unitRef="usd">37,024,594</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromPaymentsToMinorityShareholders" scale="0" unitRef="usd">3,332,622</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-132">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Net cash provided by
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    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" unitRef="usd">30,837,261</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" unitRef="usd">119,996</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">Effect of foreign exchange rate on cash and
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><div>

</div><p style="font: 7pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">The accompanying notes are
an integral part of these consolidated financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-size: 7pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_007"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>SUNRISE NEW ENERGY CO.,
LTD.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -0.05pt"><b>&#160;</b></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_1" escape="true" name="us-gaap:BusinessDescriptionAndBasisOfPresentationTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -0.05pt"><b>NOTE 1 &#8211; ORGANIZATION AND BUSINESS
DESCRIPTION</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -0.05pt"><b>&#160;</b></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_2" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.05pt">Sunrise New Energy Co.,
Ltd. (&#8220;EPOW&#8221;), previously known as Global Internet of People, Inc., or GIOP, is a limited liability company established under
the laws of the Cayman Islands on February&#160;22, 2019. It is a holding company with no business operation.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.05pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_3" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.05pt">On March 22, 2019, EPOW
incorporated Global Mentor Board Information Technology Limited (&#8220;GMB HK&#8221;), a limited liability company formed in accordance
with laws and regulations of Hong Kong. GMB HK is currently not engaging in any active business and is merely acting as a holding company
of Beijing Mentor Board Union Information Technology Co, Ltd. (&#8220;GIOP BJ&#8221;). GIOP BJ was incorporated by GMB HK as a Foreign
Enterprise in China on June 3, 2019.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.05pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_4" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.05pt">GIOP BJ incorporated Global
Mentor Board (Beijing) Information Technology Co., Ltd. (&#8220;SDH&#8221;) and Shidong Cloud (Beijing) Education Technology Co., Ltd.
(&#8220;Shidong Cloud&#8221;) on December 5, 2014 and December 22, 2021, respectively.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.05pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_5" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.05pt">SDH is a limited liability
company incorporated on December&#160;5,&#160;2014 under the laws of China. Since 2017, SDH established several subsidiaries in China,
including Global Mentor Board (Hangzhou) Technology Co., Ltd. (&#8220;GMB (Hangzhou)&#8221;), Global Mentor Board (Shanghai) Enterprise
Management Consulting Co., Ltd. (&#8220;GMB Consulting&#8221;), Linking (Shanghai) Network Technology Co., Ltd. (&#8220;GMB Linking&#8221;,
deconsolidated in July, 2021), Shanghai Voice of Seedling Cultural Media Co., Ltd. (&#8220;GMB Culture&#8221;), which has a majority
owned subsidiary, Mentor Board Voice of Seedling (Shanghai) Cultural Technology Co., Ltd. (&#8220;GMB Technology&#8221;), Shidong (Beijing)
Information Technology Co., Ltd. (&#8220;GMB (Beijing)&#8221;), and, Beijing Mentor Board Health Technology Co., Ltd. (&#8220;GMB Health&#8221;),
Zibo Shidong Digital Technology Co., Ltd. (&#8220;Zibo Shidong&#8221;) and its major owned subsidiaries, Shidong Trading Service (Zhejiang)
Co., Ltd (&#8220;Shidong Trading&#8221;, deregistered in November 2022), Shanghai Jiagui Haifeng Technology Co., Ltd. (&#8220;Jiagui
Haifeng&#8221;), Shanghai Nanyu Culture Communication Co., Ltd. (&#8220;Nanyu Culture&#8221;) and Shanghai Yuantai Fengdeng Agricultural
Technology Co., Ltd. (&#8220;Yuantai Fengdeng&#8221;, deregistered in April 2023). SDH and its subsidiaries are primarily engaged in
providing peer-to-peer knowledge sharing and enterprise services to clients in the PRC.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_6" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.05pt">On October 8, 2021, EPOW
incorporated SDH (HK) New Energy Tech Co., Ltd. (&#8220;SDH New Energy&#8221;), a limited liability company formed in accordance with
laws and regulations of Hong Kong. SDH New Energy is acting as a holding company of Zhuhai (Zibo) Investment Co., Ltd (&#8220;Zhuhai
Zibo&#8221;) and Zhuhai (Guizhou) New Energy Investment Co., Ltd. (&#8220;Zhuhai Guizhou&#8221;). Zhuhai Zibo and Zhuhai Guizhou&#160;were
incorporated by SDH New Energy as Foreign Enterprises in China on October 15, 2021 and November 23, 2021, respectively.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.05pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_7" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On August 26, 2022, GMB HK transferred its equity
interest in GIOP BJ to Zhuhai Zibo. GIOP BJ eventually became the wholly owned subsidiary of Zhuhai Zibo.&#160;&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.05pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_8" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 8, 2021, Zhuhai Zibo incorporated
Sunrise (Guizhou) New Energy Materials Co., Ltd. (&#8220;Sunrise Guizhou&#8221;). Sunrise Guizhou incorporated Sunrise (Guxian) New Energy
Materials Co., Ltd. (&#8220;Sunrise Guxian&#8221;) and Guizhou Sunrise Technology Innovation Research Co., Ltd. (&#8220;Innovation Research&#8221;)
on April 26, 2022 and December 13, 2022, respectively. On July 2, 2022, Sunrise Guizhou entered into purchase agreements with original
shareholders of Guizhou Sunrise Technology Co., Ltd. (&#8220;Sunrise Tech&#8221;, formerly as Anlong Hengrui Graphite Material Co., Ltd.)
to acquire <ix:nonFraction contextRef="c57" decimals="2" format="ixt:num-dot-decimal" name="sdh:PercentageOfShareholders" scale="-2" unitRef="pure">100</ix:nonFraction>% of Sunrise Tech&#8217;s assets and equity ownership. On July 7, 2022, Sunrise Tech became the wholly owned subsidiary
of Sunrise Guizhou. Sunrise Guizhou and its subsidiaries are primarily engaged in manufacturing lithium battery materials to clients
in the PRC.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.05pt">&#160;</p></ix:continuation><div>



</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_9" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.05pt">As described below in Reorganization,
EPOW, through a restructuring which is accounted for as a reorganization of entities under common control (the &#8220;Reorganization&#8221;),
became the ultimate parent entity of its subsidiaries, and the primary beneficiary of the variable interest entity (the &#8220;VIE&#8221;),
SDH, and the VIE&#8217;s subsidiaries for accounting purposes under U.S. GAAP. EPOW, its subsidiaries, the VIE and the VIE&#8217;s subsidiaries,
are collectively hereinafter referred as the &#8220;Company&#8221;.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.05pt">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_10" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Reorganization</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_11" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 10, 2019, GIOP BJ entered into a series
of contractual arrangements with the owners of SDH. These agreements include an Exclusive Technical and Consulting Service Agreement,
an Exclusive Service Agreement, an Exclusive Option Agreement and Powers of Attorney (collectively &#8220;VIE Agreements&#8221;). Pursuant
to the above VIE Agreements, GIOP BJ has the exclusive right to provide SDH with comprehensive technical support, consulting services
and other services in relation to the principal business during the term the VIE Agreement. All the above contractual arrangements obligate
GIOP BJ to absorb a majority of the risk of loss from business activities of SDH and entitle GIOP BJ to receive a majority of their residual
returns. In essence, GIOP BJ is the primary beneficiary of SDH for accounting purpose under U.S. GAAP. Therefore, SDH should be considered
as a VIE under the Statement of Financial Accounting Standards Board (&#8220;FASB&#8221;) Accounting Standards Codification (&#8220;ASC&#8221;)
810 &#8220;Consolidation&#8221;.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_12" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">EPOW, together with its wholly-owned subsidiaries,
GIOP BJ, VIE and VIE&#8217;s subsidiaries were effectively controlled by the same shareholders before and after the Reorganization and,
therefore, the Reorganization is considered under common control. The consolidation of the Company has been accounted for at historical
cost and prepared on the basis as if the Reorganization had become effective as of the beginning of the first period presented in the
consolidated financial statements.&#160;&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>
</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

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the activities of the Company and each of the following entities:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_14" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_13"><ix:nonNumeric contextRef="c0" escape="true" name="sdh:ScheduleOfSubsidiariesAndVariableInterestEntitiesTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Date of <br/> Incorporation</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Place of <br/> incorporation</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Percentage&#160;of <br/> effective <br/> ownership</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="font-weight: bold; text-indent: -0.125in; padding-left: 0.125in">Subsidiaries</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
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    <td style="width: 30%; text-align: left; text-indent: -0.125in; padding-left: 0.125in">Global Mentor Board <br/> Information Technology
    Limited <br/> (&#8220;GMB HK&#8221;)</td><td style="width: 1%">&#160;</td>
    <td style="width: 17%; text-align: center"><ix:nonNumeric contextRef="c58" format="ixt:date-monthname-day-year-en" name="dei:EntityIncorporationDateOfIncorporation">March 22, 2019</ix:nonNumeric></td><td style="width: 1%">&#160;</td>
    <td style="width: 11%; text-align: center"><ix:nonNumeric contextRef="c58" name="sdh:EntityIncorporationsStateCountryName">HK</ix:nonNumeric></td><td style="width: 1%">&#160;</td>
    <td style="width: 12%; text-align: center"><ix:nonNumeric contextRef="c58" name="sdh:PercentageOfEffectiveOwnerships">100%</ix:nonNumeric></td><td style="width: 1%">&#160;</td>
    <td style="width: 26%; text-align: center"><ix:nonNumeric contextRef="c58" name="us-gaap:EquityMethodInvestmentDescriptionOfPrincipalActivities">Holding company</ix:nonNumeric></td></tr>
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    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in">Beijing Mentor Board Union<br/> Information Technology
    Co, Ltd.<br/> (&#8220;GIOP BJ&#8221;)</td><td>&#160;</td>
    <td style="text-align: center"><ix:nonNumeric contextRef="c59" format="ixt:date-monthname-day-year-en" name="dei:EntityIncorporationDateOfIncorporation">June 3, 2019</ix:nonNumeric></td><td>&#160;</td>
    <td style="text-align: center"><ix:nonNumeric contextRef="c59" name="sdh:EntityIncorporationsStateCountryName">PRC</ix:nonNumeric></td><td>&#160;</td>
    <td style="text-align: center"><ix:nonNumeric contextRef="c59" name="sdh:PercentageOfEffectiveOwnerships">100%</ix:nonNumeric></td><td>&#160;</td>
    <td style="text-align: center"><ix:nonNumeric contextRef="c59" name="us-gaap:EquityMethodInvestmentDescriptionOfPrincipalActivities">Holding company of GIOP BJ</ix:nonNumeric></td></tr>
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    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in">Shidong Cloud (Beijing) Education Technology Co., Ltd
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    <td style="text-align: center"><ix:nonNumeric contextRef="c60" format="ixt:date-monthname-day-year-en" name="dei:EntityIncorporationDateOfIncorporation">December 22, 2021</ix:nonNumeric></td><td>&#160;</td>
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    <td style="text-align: center"><ix:nonNumeric contextRef="c60" name="sdh:PercentageOfEffectiveOwnerships">75%</ix:nonNumeric></td><td>&#160;</td>
    <td style="text-align: center"><ix:nonNumeric contextRef="c60" name="us-gaap:EquityMethodInvestmentDescriptionOfPrincipalActivities">Educational Consulting</ix:nonNumeric></td></tr>
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    <td style="text-align: center"><ix:nonNumeric contextRef="c61" format="ixt:date-monthname-day-year-en" name="dei:EntityIncorporationDateOfIncorporation">October 8, 2021</ix:nonNumeric></td><td>&#160;</td>
    <td style="text-align: center"><ix:nonNumeric contextRef="c61" name="sdh:EntityIncorporationsStateCountryName">HK</ix:nonNumeric></td><td>&#160;</td>
    <td style="text-align: center"><ix:nonNumeric contextRef="c61" name="sdh:PercentageOfEffectiveOwnerships">100%</ix:nonNumeric></td><td>&#160;</td>
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    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in">Zhuhai (Zibo) Investment Co., Ltd. (&#8220;Zhuhai Zibo&#8221;)</td><td>&#160;</td>
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    <td style="text-align: center"><ix:nonNumeric contextRef="c62" name="sdh:EntityIncorporationsStateCountryName">PRC</ix:nonNumeric></td><td>&#160;</td>
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    <td style="text-align: center"><ix:nonNumeric contextRef="c63" name="sdh:EntityIncorporationsStateCountryName">PRC</ix:nonNumeric></td><td>&#160;</td>
    <td style="text-align: center"><ix:nonNumeric contextRef="c63" name="sdh:PercentageOfEffectiveOwnerships">100%</ix:nonNumeric></td><td>&#160;</td>
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    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in">Sunrise (Guizhou) New Energy Materials Co., Ltd. &#160;(&#8220;Sunrise
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    <td style="text-align: center"><ix:nonNumeric contextRef="c64" name="sdh:EntityIncorporationsStateCountryName">PRC</ix:nonNumeric></td><td>&#160;</td>
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    <td style="text-align: center"><ix:nonNumeric contextRef="c65" format="ixt:date-monthname-day-year-en" name="dei:EntityIncorporationDateOfIncorporation">September 1, 2011</ix:nonNumeric></td><td>&#160;</td>
    <td style="text-align: center"><ix:nonNumeric contextRef="c65" name="sdh:EntityIncorporationsStateCountryName">PRC</ix:nonNumeric></td><td>&#160;</td>
    <td style="text-align: center"><ix:nonNumeric contextRef="c65" name="sdh:PercentageOfEffectiveOwnerships">39.35%</ix:nonNumeric></td><td>&#160;</td>
    <td style="text-align: center"><ix:nonNumeric contextRef="c65" name="us-gaap:EquityMethodInvestmentDescriptionOfPrincipalActivities">Manufacture of Lithium Battery Materials</ix:nonNumeric></td></tr>
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    <td style="text-align: center"><ix:nonNumeric contextRef="c66" name="us-gaap:EquityMethodInvestmentDescriptionOfPrincipalActivities">Manufacture of Lithium Battery Materials</ix:nonNumeric></td></tr>
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    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in">Guizhou Sunrise Technology Innovation Research Co., Ltd.
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    <td style="text-align: center"><ix:nonNumeric contextRef="c67" name="sdh:EntityIncorporationsStateCountryName">PRC</ix:nonNumeric></td><td>&#160;</td>
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    <td style="text-align: center"><ix:nonNumeric contextRef="c77" format="ixt:date-monthname-day-year-en" name="dei:EntityIncorporationDateOfIncorporation">July 27, 2021</ix:nonNumeric></td><td>&#160;</td>
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</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_15" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>The VIE contractual arrangements</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_16" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Neither the Company nor the Company&#8217;s subsidiaries
own any equity interest in SDH. Instead, The Company controls and receives the economic benefits of SDH&#8217;s business operation through
a series of contractual arrangements. GIOP BJ, SDH and its shareholders entered into a series of contractual arrangements, also known
as VIE Agreements, in June 2019. The VIE agreements are designed to provide GIOP BJ with the power, rights and obligations equivalent
in all material respects to those it would possess as the sole equity holder of SDH, including absolute control rights and the rights
to the assets, property and revenue of SDH.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_17" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Each of the VIE Agreements is described in detail
below:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_18" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Exclusive Technical and Consulting Services
Agreement</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_19" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Exclusive Technical and Consulting
Services Agreement between SDH and GIOP BJ (the &#8220;Exclusive Service Agreement&#8221;), GIOP BJ provides SDH with technical support,
consulting services, business support and other management services relating to its day-to-day business operations and management, on
an exclusive basis, utilizing its advantages in technology, human resources, and information. For services rendered to SDH by GIOP BJ
under the Exclusive Service Agreement, GIOP BJ is entitled to collect a service fee approximately equal to SDH&#8217;s earnings before
corporate income tax, i.e., SDH&#8217;s revenue after deduction of operating costs, expenses and other taxes, subject to adjustment based
on services rendered and SDH&#8217;s operation needs.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_20" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This agreement became effective on June 10, 2019
and will remain effective unless otherwise terminated as required by laws or regulations, or by relevant governmental or regulatory authorities
otherwise terminated earlier in accordance with the provisions of this agreement or relevant agreements separately executed between the
parties. Nevertheless, this agreement shall be terminated after all the equity interest in SDH held by its shareholders and/or all the
assets of SDH have been legally transferred to GIOP BJ and/or its designee in accordance with the Exclusive Option Agreement (described
below).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_21" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Chief Executive Officer (&#8220;CEO&#8221;)
of GIOP BJ, Mr. Haiping Hu, is currently managing SDH pursuant to the terms of the Exclusive Service Agreement. The Exclusive Service
Agreement does not prohibit related party transactions. The Company&#8217;s audit committee will be required to review and approve in
advance any related party transactions, including transactions involving GIOP BJ or SDH.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_22" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_21"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Equity Pledge Agreement</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_23" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_22"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the Equity Pledge Agreement between GIOP
BJ, and shareholders of SDH, together holding <ix:nonFraction contextRef="c2" decimals="2" format="ixt:num-dot-decimal" name="sdh:PercentageOfShareholders" scale="-2" unitRef="pure">100</ix:nonFraction>% of the shares of SDH (&#8220;SDH Shareholders&#8221;), the SDH Shareholders pledged
all of their equity interests in SDH to GIOP BJ to guarantee the performance of SDH&#8217;s obligations under the Exclusive Service Agreement.
Under the terms of the Equity Pledge Agreement, in the event that SDH or the SDH Shareholders breach their respective contractual obligations
under the Exclusive Service Agreement, GIOP BJ, as pledgee, will be entitled to certain rights, including, but not limited to, the right
to collect dividends generated by the pledged equity interests. The SDH Shareholders also agreed that upon occurrence of any event of
default, as set forth in the Equity Pledge Agreement, GIOP BJ is entitled to dispose of the pledged equity interests in accordance with
applicable PRC laws. The SDH Shareholders further agreed not to dispose of the pledged equity interests or take any actions that would
prejudice GIOP BJ&#8217;s interests without the prior written consent of GIOP BJ.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_24" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_23"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Equity Pledge Agreement is effective until:
(1) the secured debt in the scope of pledge is cleared off; and (2) Pledgers transfer all the pledged equity interests to Pledgees according
to the Equity Pledge Agreement, or other entity or individual designated by it.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_25" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_24"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The purposes of the Equity Pledge Agreement are
to (1) guarantee the performance of SDH&#8217;s obligations under the Exclusive Service Agreement; (2) make sure the SDH Shareholders
do not transfer or assign the pledged equity interests, or create or allow any encumbrance that would prejudice GIOP BJ&#8217;s interests
without GIOP BJ&#8217;s prior written consent. In the event SDH breaches its contractual obligations under the Exclusive Service Agreement,
GIOP BJ will be entitled to dispose of the pledged equity interests.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_26" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_25"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Exclusive Option Agreement</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_27" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_26"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the Exclusive Option Agreement, the SDH
Shareholders irrevocably granted GIOP BJ (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, once
or at multiple times, at any time, part or all of their equity interests in SDH or the assets of SDH. The option price to be paid by
GIOP BJ to each shareholder of SDH is RMB<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:OptionPrice" scale="0" unitRef="cnyPershares">10</ix:nonFraction> (approximately US$<ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="sdh:OptionPrice" scale="0" unitRef="usdPershares">1.45</ix:nonFraction>) or the minimum amount to the extent permitted under PRC law at the
time when such transfer occurs.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_28" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_27"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the Exclusive Option Agreement, GIOP BJ
may at any time under any circumstances, purchase, or have its designee purchase, at its discretion, to the extent permitted under PRC
law, all or part of the SDH Shareholders&#8217; equity interests in SDH or the assets of SDH. The Equity Pledge Agreement, together with
the Equity Pledge Agreement, the Exclusive Service Agreement, and Powers of Attorney, enable GIOP BJ to be the primary beneficiary of
SDH.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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until all the equity or assets of SDH is legally transferred under the name of GIOP BJ and/or other entity or individual designated by
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</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_30" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_29"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Powers of Attorney</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_31" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_30"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under each of the Powers of Attorney, the SDH
Shareholders authorized GIOP BJ to act on their behalf as their exclusive agent and attorney with respect to all rights as shareholders,
including, but not limited to: (a) attending shareholders&#8217; meetings; (b) exercising all the shareholder&#8217;s rights, including
voting, that shareholders are entitled to under the laws of China and the Articles of Association, including, but not limited to, the
sale or transfer or pledge or disposition of shares in part or in whole; and (c) designating and appointing on behalf of shareholders
the legal representative, the executive director, supervisor, the chief executive officer, and other senior management members of SDH.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_32" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_31"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Powers of Attorney are irrevocable and continuously
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</div><div>

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</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_33" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_32"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Spousal Consent</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_34" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_33"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Spousal Consent, each spouse
of the individual shareholders of SDH irrevocably agreed that the equity interest in SDH held by their respective spouses would be disposed
of pursuant to the Equity Interest Pledge Agreement, the Exclusive Option Agreement, and the Powers of Attorney. Each spouse of the shareholders
agreed not to assert any rights over the equity interest in SDH held by their respective spouses. In addition, in the event that any
spouse obtains any equity interest in SDH through the respective shareholder for any reason, he or she agreed to be bound by the contractual
arrangements.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_35" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_34"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Risks in relation to the VIE structure</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_36" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_35"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">EPOW believes that the contractual arrangements
with its VIE and their respective shareholders are in compliance with PRC laws and regulations and are legally enforceable. However,
uncertainties in the PRC legal system could limit the EPOW&#8217;s ability to enforce the contractual arrangements. If the legal structure
and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_37" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_36"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_38" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_37"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_39" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_38"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_40" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_39"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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                                            fines or other requirements with which the Company&#8217;s PRC subsidiary and VIE may not
                                            be able to comply;</span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_41" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_40"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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                                            structure or operations; or</span></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_42" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_41"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_43" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_42"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&#8217;s ability to conduct its wisdom
sharing and enterprise consulting business may be negatively affected if the PRC government were to carry out any of the aforementioned
actions. As a result, the Company may not be able to consolidate its VIE in its consolidated financial statements as it may lose the
ability to receive economic benefits from the VIE. The Company, however, does not believe such actions would result in the liquidation
or dissolution of the Company, its PRC subsidiary and VIE.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_44" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_43"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Total assets and liabilities presented on the
Company&#8217;s consolidated balance sheets and revenue, expense, net income presented on consolidated statement of operations and comprehensive
income as well as the cash flow from operating, investing and financing activities presented on the consolidated statement of cash flows
are substantially the financial position, operation and cash flow of the Company&#8217;s VIE and VIE&#8217;s subsidiaries. The Company
has not provided any financial support to SDH for the years ended December 31, 2022, 2021 and 2020. The following financial statements
of the VIE and VIE&#8217;s subsidiaries were included in the consolidated financial statements as of December 31, 2022 and 2021 and for
the year ended December 31, 2022, 2021 and 2020:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_45" id="_BusinessDescriptionAndBasisOfPresentationTextBlock-c0_cont_44"><ix:nonNumeric contextRef="c0" escape="true" name="sdh:ScheduleOfCondensedBalanceSheetsTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Operating lease right-of-use assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-144">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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in conformity with U.S. GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. These estimates and judgments are based on historical information, information that is currently
available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances.&#160;&#160;Significant
estimates required to be made by management, include, but are not limited to, the assessment of the allowance for doubtful accounts,
inventory valuation, depreciable lives of property and equipment, impairment of long-lived assets and realization of deferred tax assets.&#160;&#160;
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</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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</div><div>

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The Company&#8217;s consolidated financial statements are reported using the U.S. Dollars (&#8220;US$&#8221; or &#8220;$&#8221;). The
results of operations and the consolidated statements of cash flows denominated in foreign currency are translated at the average rate
of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated
at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical
rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts
related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the
corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from
period to period are included as a separate component of accumulated other comprehensive (loss) income included in consolidated statements
of changes in shareholders&#8217; equity. Gains and losses from foreign currency transactions are included in the Company&#8217;s Consolidated
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</div><div>

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may fluctuate and is affected by, among other things, changes in the PRC&#8217;s political and economic conditions. Any significant revaluation
of RMB may materially affect the Company&#8217;s financial condition in terms of US$ reporting. The following table outlines the currency
exchange rates that were used in preparing the consolidated financial statements:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_17" id="_SignificantAccountingPoliciesTextBlock-c0_cont_16"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfForeignExchangeContractsStatementOfFinancialPositionTableTextBlock"><ix:continuation id="_ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock-c0_cont_3"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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</div><div>

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</div><div>

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and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market
data.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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other current assets, deferred revenue, income taxes payable, accounts payable, note payable, due to related parties, accrued expenses
and other current liabilities approximate their fair value based on the short-term maturity of these instruments. The carrying amount
of non-current long term payables and consideration payable approximates fair value as its interest rates are at the same level of current
market yield for comparable loans.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>
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</div><div>

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based on information provided by external fund administrators. The Group&#8217;s investments valued at NAV as a practical expedient are
private equity funds, which represent the short term investment on the balance sheet.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

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</div><div>

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or use and are readily convertible to known amounts of cash. The interest incomes of highly liquid investments are reported in the Company&#8217;s
Consolidated Statements of Operations and Comprehensive (Loss) Income. The Company maintains the bank accounts in Mainland China and
Hong Kong. Cash balances in bank accounts in Mainland China and Hong Kong are not insured by the Federal Deposit Insurance Corporation
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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_29" id="_SignificantAccountingPoliciesTextBlock-c0_cont_28"><ix:continuation id="_CashAndCashEquivalentsRestrictedCashAndCashEquivalentsPolicy-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Restricted cash represent bank deposits with
designated use, which cannot be withdrawn without certain approval or notice. Restricted cash classified as a long-term asset on the
Company&#8217;s consolidated balance sheets consists of cash equivalents restricted as to withdrawal or use which matures in more than
twelve months after the balance sheet date. Such restricted cash relates to an escrowed fund of listing companies. The escrowed fund
shall be held by the Escrow Agent for the purpose of satisfying the initial $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RestrictedCashAndCashEquivalents" scale="0" unitRef="usd">700,000</ix:nonFraction> of the indemnification obligations of the Company,
with respect to the Escrowed Funds, for a period of 24 months from the closing of the Offering the Company&#8217;s initial public offering
in February 2021.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>



</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 7pt">&#160;</span></p><div>

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</div><div>

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other-than-temporarily impaired based on the specific facts and circumstances. Factors that are considered in determining whether an
other-than-temporary decline in value has occurred include the market value of the security in relation to its cost basis, the financial
condition of the investee, and the intent and ability to retain the investment for a sufficient period of time to allow for recovery
in the market value of the investment.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_32" id="_SignificantAccountingPoliciesTextBlock-c0_cont_31"><ix:nonNumeric contextRef="c0" continuedAt="_TradeAndOtherAccountsReceivablePolicy-c0_cont_1" escape="true" name="us-gaap:TradeAndOtherAccountsReceivablePolicy"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Accounts receivable, net</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -0.05pt"><span style="font-size: 7pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_34" id="_SignificantAccountingPoliciesTextBlock-c0_cont_33"><ix:continuation id="_TradeAndOtherAccountsReceivablePolicy-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.05pt">The Company mitigates the
associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established
and recorded based on management&#8217;s assessment of historical bad debts, creditworthiness and financial conditions of the clients,
current economic trends and changes in client payment patterns. Past due accounts are generally written off against the allowance for
bad debts only after all collection attempts have been exhausted and the potential for recovery is considered remote. The valuation allowance
provided was $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AllowanceForDoubtfulAccountsPremiumsAndOtherReceivables" scale="0" unitRef="usd">8,047,527</ix:nonFraction> and $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AllowanceForDoubtfulAccountsPremiumsAndOtherReceivables" scale="0" unitRef="usd">5,744,387</ix:nonFraction> as of December 31, 2022 and 2021, respectively.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>
</div><div>

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</div><div>

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of raw materials, materials in transit, work in process and finished goods. Finished goods were mainly graphite anode materials, health
service gift cards, learning course gift cards, Chinese tea, latex pillows and health care products. Costs include the cost of raw materials,
freight, direct labor and related production overhead. The cost of inventories is calculated using the weighted average method. Any excess
of the cost over the net realizable value of each item of inventories is recognized in the value of inventories. Net realizable value
is estimated using selling price in the normal course of business less any costs to complete and sell products. The valuation allowance
provided for the inventory was $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherInventory" scale="0" unitRef="usd">2,711,158</ix:nonFraction>, $<span style="-sec-ix-hidden: hidden-fact-153">nil</span> and $<span style="-sec-ix-hidden: hidden-fact-154">nil</span> for the years ended December 31, 2022, 2021 and 2020.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_37" id="_SignificantAccountingPoliciesTextBlock-c0_cont_36"><ix:continuation id="_InventoryCashFlowPolicy-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Part of the Company&#8217;s finished goods, such
as health service gift cards, learning course gift cards, Chinese tea, latex pillows and health care products, were obtained through
fee exchange arrangements with its customers prior to 2022. These arrangements were entered into at the Company&#8217;s discretion to
receive inventory in exchange of collection of account receivables and deferred revenue due from the customers. The Company accounted
for these nonmonetary exchanges based on the fair values of the assets involved. The cost of inventories acquired in exchange was initially
measured at the fair value of the accounts receivable the Company surrendered to obtain them.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_38" id="_SignificantAccountingPoliciesTextBlock-c0_cont_37"><ix:nonNumeric contextRef="c0" continuedAt="_LesseeLeasesPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:LesseeLeasesPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Lease</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

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whether a contract is, or contains, a lease. A contract is or contains a lease if it conveys the right to control the use of an identified
asset for a period of time in exchange of a consideration. To assess whether a contract is or contains a lease, the Company assess whether
the contract involves the use of an identified asset, whether it has the right to obtain substantially all the economic benefits from
the use of the asset and whether it has the right to control the use of the asset.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_40" id="_SignificantAccountingPoliciesTextBlock-c0_cont_39"><ix:continuation continuedAt="_LesseeLeasesPolicyTextBlock-c0_cont_3" id="_LesseeLeasesPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The right-of-use assets and related lease liabilities
are recognized at the lease commencement date. The Company recognizes operating lease expenses on a straight-line basis over the lease
term.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_41" id="_SignificantAccountingPoliciesTextBlock-c0_cont_40"><ix:continuation continuedAt="_LesseeLeasesPolicyTextBlock-c0_cont_4" id="_LesseeLeasesPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration:underline">Operating lease right-of-use of assets</span></i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

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at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement
date, plus any initial direct costs incurred and less any lease incentive received.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_43" id="_SignificantAccountingPoliciesTextBlock-c0_cont_42"><ix:continuation continuedAt="_LesseeLeasesPolicyTextBlock-c0_cont_6" id="_LesseeLeasesPolicyTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration:underline">Operating lease liabilities</span></i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_44" id="_SignificantAccountingPoliciesTextBlock-c0_cont_43"><ix:continuation continuedAt="_LesseeLeasesPolicyTextBlock-c0_cont_7" id="_LesseeLeasesPolicyTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Lease liability is initially measured at the
present value of the outstanding lease payments at the commencement date, discounted using the Company incremental borrowing rate. Lease
payments included in the measurement of the lease liability comprise fixed lease payments, variable lease payments that depend on an
index or a rate, amounts expected to be payable under a residual value guarantee and any exercise price under a purchase option that
the Company is reasonably certain to exercise.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_45" id="_SignificantAccountingPoliciesTextBlock-c0_cont_44"><ix:continuation continuedAt="_LesseeLeasesPolicyTextBlock-c0_cont_8" id="_LesseeLeasesPolicyTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Lease liability is measured at amortized cost
using the effective interest rate method. It is remeasured when there is a change in future lease payments, if there is a change in the
estimate of the amount expected to be payable under a residual value guarantee, or if there is any change in the Company assessment of
option purchases, contract extensions or termination options.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_46" id="_SignificantAccountingPoliciesTextBlock-c0_cont_45"><ix:continuation continuedAt="_LesseeLeasesPolicyTextBlock-c0_cont_9" id="_LesseeLeasesPolicyTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration:underline">Short-term leases</span></i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_47" id="_SignificantAccountingPoliciesTextBlock-c0_cont_46"><ix:continuation continuedAt="_LesseeLeasesPolicyTextBlock-c0_cont_10" id="_LesseeLeasesPolicyTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has elected to not recognize right-of-use
assets and lease liabilities for short-term leases that have a lease term of 12 months or less. Lease payments associated with these
leases are expensed as incurred.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_48" id="_SignificantAccountingPoliciesTextBlock-c0_cont_47"><ix:continuation continuedAt="_LesseeLeasesPolicyTextBlock-c0_cont_11" id="_LesseeLeasesPolicyTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i><span style="text-decoration:underline">Sales and leaseback contracts </span></i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt"><i>&#160;</i></span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_49" id="_SignificantAccountingPoliciesTextBlock-c0_cont_48"><ix:continuation id="_LesseeLeasesPolicyTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company enters sale and leaseback transactions.
The Company acts as the seller-lessee, transfers its assets to a third-party entity (the buyer-lessor) and then leases the transferred
assets back from the buyer-lessor at a contract designated rental price. The Company evaluates if sales of the underlying assets in the
sale and leaseback contract has occurred in accordance with ASC 606. When a sale and leaseback transaction does not qualify for sale
accounting, the transaction is accounted for as a financing transaction by the seller-lessee and a lending transaction by the buyer-lessor.
The seller-lessee shall not derecognize the transferred asset and shall account for any amounts received as a financial liability.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_50" id="_SignificantAccountingPoliciesTextBlock-c0_cont_49"><ix:nonNumeric contextRef="c0" continuedAt="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:PropertyPlantAndEquipmentPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b><i>Plant,
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_51" id="_SignificantAccountingPoliciesTextBlock-c0_cont_50"><ix:continuation continuedAt="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_2" id="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Plant,
property and equipment are stated at cost less accumulated depreciation. Depreciation of property and equipment is provided using the
straight-line method over their expected useful lives, as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_52" id="_SignificantAccountingPoliciesTextBlock-c0_cont_51"><ix:nonNumeric contextRef="c0" escape="true" name="sdh:ScheduleOfPropertyAndEquipmentAreStatedAtCostLessAccumulatedDepreciationTableTextBlock"><ix:continuation continuedAt="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_3" id="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Leasehold improvements</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_53" id="_SignificantAccountingPoliciesTextBlock-c0_cont_52"><ix:continuation id="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Expenditures
for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures
for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated
depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated
statements of Operation and Comprehensive (Loss) Income in other income or expenses.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_54" id="_SignificantAccountingPoliciesTextBlock-c0_cont_53"><ix:nonNumeric contextRef="c0" continuedAt="_LandUnderOptionArrangementsPolicy-c0_cont_1" escape="true" name="us-gaap:LandUnderOptionArrangementsPolicy"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b><i>Land
use right, net</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_55" id="_SignificantAccountingPoliciesTextBlock-c0_cont_54"><ix:continuation id="_LandUnderOptionArrangementsPolicy-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Land
use rights are recorded at cost less accumulated amortization and amortized on a straight-line basis over the remaining term of the land
certificates, from <ix:nonNumeric contextRef="c93" format="ixt-sec:duryear" name="us-gaap:PublicUtilitiesPropertyPlantAndEquipmentOtherPropertyPlantAndEquipmentUsefulLife">40</ix:nonNumeric> years to&#160;<ix:nonNumeric contextRef="c94" format="ixt-sec:duryear" name="us-gaap:PublicUtilitiesPropertyPlantAndEquipmentOtherPropertyPlantAndEquipmentUsefulLife">50</ix:nonNumeric>&#160;years.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_56" id="_SignificantAccountingPoliciesTextBlock-c0_cont_55"><ix:nonNumeric contextRef="c0" continuedAt="_IntangibleAssetsFiniteLivedPolicy-c0_cont_1" escape="true" name="us-gaap:IntangibleAssetsFiniteLivedPolicy"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b><i>Intangible
assets, net</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_57" id="_SignificantAccountingPoliciesTextBlock-c0_cont_56"><ix:continuation id="_IntangibleAssetsFiniteLivedPolicy-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&#8217;s intangible assets represent
intellectual property rights on manufacturing graphite anode materials from capital injection by a non-controlling shareholder of Sunrise
Guizhou and the copyright of course videos purchased from a third party including but not limited to course videos which cover subjects
such as entrepreneurship development, financial service, corporate governance, team management, marketing strategy and etc. Intangible
assets are stated at cost less accumulated amortization and amortized on a straight-line basis over their estimated useful lives. The
estimated useful lives of intangible assets are determined to be <ix:nonNumeric contextRef="c93" format="ixt-sec:duryear" name="us-gaap:FiniteLivedIntangibleAssetUsefulLife">5</ix:nonNumeric> to <ix:nonNumeric contextRef="c94" format="ixt-sec:duryear" name="us-gaap:FiniteLivedIntangibleAssetUsefulLife">10</ix:nonNumeric> years in accordance with the period the Company estimates to
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_58" id="_SignificantAccountingPoliciesTextBlock-c0_cont_57"><ix:nonNumeric contextRef="c0" continuedAt="_InvestmentPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:InvestmentPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b><i>Long-term
investments</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_59" id="_SignificantAccountingPoliciesTextBlock-c0_cont_58"><ix:continuation continuedAt="_InvestmentPolicyTextBlock-c0_cont_2" id="_InvestmentPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Equity
method investments in investees represent the Company&#8217;s investments in privately held companies, over which it has significant
influence but does not own a majority equity interest or otherwise control. The Company applies the equity method to account for an equity
investment, in common stock or in-substance common stock, according to ASC 323 &#8220;Investment &#8212; Equity Method and Joint Ventures&#8221;.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_60" id="_SignificantAccountingPoliciesTextBlock-c0_cont_59"><ix:continuation continuedAt="_InvestmentPolicyTextBlock-c0_cont_3" id="_InvestmentPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">An
investment in in-substance common stock is an investment in an entity that has risk and reward characteristics that are substantially
similar to that entity&#8217;s common stock. The Company considers subordination, risks and rewards of ownership and obligation to transfer
value when determining whether an investment in an entity is substantially similar to an investment in that entity&#8217;s common stock.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_61" id="_SignificantAccountingPoliciesTextBlock-c0_cont_60"><ix:continuation continuedAt="_InvestmentPolicyTextBlock-c0_cont_4" id="_InvestmentPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Under
the equity method, the Company&#8217;s share of the post-acquisition profits or losses of the equity investee is recognized in the consolidated
income statements and its share of post-acquisition movements in accumulated other comprehensive income is recognized in shareholders&#8217;
equity. When the Company&#8217;s share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company
does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity
investee. Investment loss for long-term investments of $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PrincipalInvestmentGainsLosses" scale="0" unitRef="usd">14,072</ix:nonFraction>, $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PrincipalInvestmentGainsLosses" scale="0" unitRef="usd">41,925</ix:nonFraction> and $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PrincipalInvestmentGainsLosses" scale="0" unitRef="usd">1,087</ix:nonFraction> were recorded in the Company&#8217;s Consolidated
Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020, respectively.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_62" id="_SignificantAccountingPoliciesTextBlock-c0_cont_61"><ix:continuation continuedAt="_InvestmentPolicyTextBlock-c0_cont_5" id="_InvestmentPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">For
other equity investments that do not have readily determinable fair values and over which the Company has neither significant influence
nor control through investments in common stock or&#160;in-substance&#160;common stock, the Company accounts for these investments at
cost minus any impairment, if necessary.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_63" id="_SignificantAccountingPoliciesTextBlock-c0_cont_62"><ix:continuation id="_InvestmentPolicyTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company continually reviews its investments in equity investees to determine whether a decline in fair value below the carrying value
is other than temporary. The primary factors the Company considers in its determination are the length of time that the fair value of
the investment is below the Company&#8217;s carrying value; the financial condition, operating performance and the prospects of the equity
investee. If the decline in fair value is deemed to be other than temporary, the carrying value of the equity investee is written down
to fair value. Impairment charges for long-term investments were $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AssetImpairmentCharges" scale="0" unitRef="usd">979,426</ix:nonFraction>, $<span style="-sec-ix-hidden: hidden-fact-155">nil</span> and $<span style="-sec-ix-hidden: hidden-fact-156">nil</span> recorded in the Company&#8217;s Consolidated
Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_64" id="_SignificantAccountingPoliciesTextBlock-c0_cont_63"><ix:nonNumeric contextRef="c0" continuedAt="_ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b><i>Impairment
of long-lived assets</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_65" id="_SignificantAccountingPoliciesTextBlock-c0_cont_64"><ix:continuation id="_ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company reviews its long-lived assets for impairment whenever events or changes in circumstances (such as a significant adverse change
to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset may no longer be recoverable.
When these events occur, the Company measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted
future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted
cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss, which is the excess of carrying
amount over the fair value of the assets, using the expected future discounted cash flows. Impairments charges for intangible assets
were $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:OtherAssetImpairmentCharge" scale="0" unitRef="usd">2,650,020</ix:nonFraction>, $<span style="-sec-ix-hidden: hidden-fact-157">nil</span> and $<span style="-sec-ix-hidden: hidden-fact-158">nil</span> recorded in the Company&#8217;s Consolidated Statements of Operations and Comprehensive (Loss) Income
for the years ended December 31, 2022, 2021 and 2020.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>
</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_66" id="_SignificantAccountingPoliciesTextBlock-c0_cont_65"><ix:nonNumeric contextRef="c0" continuedAt="sdh_AssetAcquisitionPolicyTextBlock-c0_cont_1" escape="true" name="sdh:AssetAcquisitionPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b><i>Asset
acquisition</i></b>&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_67" id="_SignificantAccountingPoliciesTextBlock-c0_cont_66"><ix:continuation id="sdh_AssetAcquisitionPolicyTextBlock-c0_cont_1"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">When
the Company acquires other entities, if the assets acquired and liabilities assumed do not constitute a business, the transaction is
accounted for as an asset acquisition. Assets are recognized based on the cost, which generally includes the transaction costs of the
asset acquisition, and no gain or loss is recognized unless the fair value of noncash assets given as consideration differs from the
assets&#8217; carrying amounts on the Company&#8217;s consolidated financial statements. The cost of a group of assets acquired in an
asset acquisition is allocated to the individual assets acquired or liabilities assumed based on their relative fair value and does not
give rise to goodwill.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_68" id="_SignificantAccountingPoliciesTextBlock-c0_cont_67"><ix:nonNumeric contextRef="c0" continuedAt="_ShareBasedCompensationOptionAndIncentivePlansPolicy-c0_cont_1" escape="true" name="us-gaap:ShareBasedCompensationOptionAndIncentivePlansPolicy"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Share-based
compensation</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_69" id="_SignificantAccountingPoliciesTextBlock-c0_cont_68"><ix:continuation id="_ShareBasedCompensationOptionAndIncentivePlansPolicy-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Share-based
compensation are measured based on the grant date fair value of the equity instrument. Share-based compensation expenses are recognized
over the requisite service period based on the graded vesting attribution method with corresponding impact reflected in additional paid-in
capital. When no future services are required to be performed by grantees in exchange for an award of equity instruments, the cost of
the award is expensed on the grant date. The Group elects to recognize forfeitures when they occur.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_70" id="_SignificantAccountingPoliciesTextBlock-c0_cont_69"><ix:nonNumeric contextRef="c0" continuedAt="_GovernmentContractorsPolicyPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:GovernmentContractorsPolicyPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b><i>Government
subsidies</i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_71" id="_SignificantAccountingPoliciesTextBlock-c0_cont_70"><ix:continuation id="_GovernmentContractorsPolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&#8217;s PRC based subsidiary received
government subsidies from local government. Government subsidies are recognized when there is reasonable assurance that the attached
conditions will be complied with. When the government subsidy relates to an expense item, it is net against the expense and recognized
in the consolidated statements of income and comprehensive income over the period necessary to match the subsidy on a systematic basis
to the related expenses. Where the subsidy relates to an asset acquisition, it is recognized as income in the Consolidated Statements
of Operations and Comprehensive (Loss) Income in proportion to the useful life of the related assets. Government grants received for
the years ended December 31, 2022, 2021 and 2020 were $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GrantsReceivable" scale="0" unitRef="usd">3,048,035</ix:nonFraction>, $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GrantsReceivable" scale="0" unitRef="usd">458,182</ix:nonFraction> and $<ix:nonFraction contextRef="c28" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GrantsReceivable" scale="0" unitRef="usd">101,485</ix:nonFraction>, respectively. As of December 31, 2022 and 2021,
the deferred government grants were $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredIncome" scale="0" unitRef="usd">2,871,665</ix:nonFraction> and $<span style="-sec-ix-hidden: hidden-fact-159">nil</span>, respectively.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:continuation></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_72" id="_SignificantAccountingPoliciesTextBlock-c0_cont_71"><ix:nonNumeric contextRef="c0" continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:RevenueRecognitionPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Revenue
recognition </i></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_73" id="_SignificantAccountingPoliciesTextBlock-c0_cont_72"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_2" id="_RevenueRecognitionPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company recognizes revenue under Accounting Standards Codification (&#8220;ASC&#8221;) 606, Revenue from Contracts with Customers. The
core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services
to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or
services. The following five steps are applied to achieve that core principle:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_74" id="_SignificantAccountingPoliciesTextBlock-c0_cont_73"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_3" id="_RevenueRecognitionPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif">Step
1: Identify the contract with the customer</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_75" id="_SignificantAccountingPoliciesTextBlock-c0_cont_74"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_4" id="_RevenueRecognitionPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif">Step
2: Identify the performance obligations in the contract</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_76" id="_SignificantAccountingPoliciesTextBlock-c0_cont_75"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_5" id="_RevenueRecognitionPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif">Step
3: Determine the transaction price</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_77" id="_SignificantAccountingPoliciesTextBlock-c0_cont_76"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_6" id="_RevenueRecognitionPolicyTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif">Step
4: Allocate the transaction price to the performance obligations in the contract</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_78" id="_SignificantAccountingPoliciesTextBlock-c0_cont_77"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_7" id="_RevenueRecognitionPolicyTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif">Step
5: Recognize revenue when the company satisfies a performance obligation</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_79" id="_SignificantAccountingPoliciesTextBlock-c0_cont_78"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_8" id="_RevenueRecognitionPolicyTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company mainly offers and generates revenue from five kinds of services to its clients in China, sales of graphite anode materials, member
services, enterprise services, online services and other services. Enterprise services include comprehensive tailored services, sponsorship
advertising services, and consulting services.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_80" id="_SignificantAccountingPoliciesTextBlock-c0_cont_79"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_9" id="_RevenueRecognitionPolicyTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Revenue
recognition policies for each type of the Company&#8217;s services are discussed as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_81" id="_SignificantAccountingPoliciesTextBlock-c0_cont_80"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_10" id="_RevenueRecognitionPolicyTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><span style="text-decoration:underline">Sales
of graphite anode materials</span></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_82" id="_SignificantAccountingPoliciesTextBlock-c0_cont_81"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_11" id="_RevenueRecognitionPolicyTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&#8217;s major business is to sell
graphite anode materials to its customers. The Company&#8217;s major customers are manufacturers of industrial and consumer energy storage
lithium-ion batteries, such as batteries for electric vehicles and electric ships, and smart consumer electronics. The Company examines
the availability of the inventory, takes control of products in its warehouses, and then organizes the shipping and delivery of products
to customers after the purchase orders are received from customers.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_83" id="_SignificantAccountingPoliciesTextBlock-c0_cont_82"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_12" id="_RevenueRecognitionPolicyTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for revenue from sales of
graphite anode materials on a gross basis as the Company is responsible for fulfilling the promise to provide the desired products to
customers, and is subject to inventory risk before the product ownership and risk are transferred and has the discretion in establishing
prices. All of the Company&#8217;s contracts and purchase orders are fixed prices and have one single performance obligation as the promise
is to transfer the products to customers, and there are no separately identifiable other promises in the contracts. The Company&#8217;s
revenue from sales of graphite anode materials is recognized at a point in time when title and risk of loss passes and the customer accepts
the goods, which generally occurs at delivery. There is no separate rebate, discount, or volume incentive involved. Revenue is reported
net of all value added taxes (&#8220;VAT&#8221;).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_84" id="_SignificantAccountingPoliciesTextBlock-c0_cont_83"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_13" id="_RevenueRecognitionPolicyTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><span style="text-decoration:underline">Member
services</span></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_85" id="_SignificantAccountingPoliciesTextBlock-c0_cont_84"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_14" id="_RevenueRecognitionPolicyTextBlock-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company offers three tiers of member services, Platinum, Diamond and Prot&#233;g&#233;, which differ in membership fees as well as
the level of the services provided. Members pay a fixed fee for exchange of the right to participate in organized activities offered
by the Company, such as study tours and forums, typically within one-year membership period. Any non-participating activities will expire
and not be refunded beyond the agreed-upon period. Each member is entitled to choose from same activities offered by the Company for
a total of seven times but different level of membership will receive different level of privileges at each activity, such as seating
arrangement or private consultation opportunity etc. The activities for Platinum Members are also open to non-members, who pay a pre-set
fee for participating in a single activity, while the Company does not offer Diamond and Prot&#233;g&#233; services to non-members
separately.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_86" id="_SignificantAccountingPoliciesTextBlock-c0_cont_85"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_15" id="_RevenueRecognitionPolicyTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Each
activity represents a separate performance obligation, which is typically 5 days or less. The Company uses an expected cost plus margin
approach to estimate the standalone selling prices of each activity. As Members can benefit from each activity on their own in the same
way and there is no material difference in the Company&#8217;s delivering costs, such as number of staffs involved and size of each activity.
Therefore, membership fees are equally allocated to seven performance obligations when the Company determines transaction price of each
performance obligation.</span></p></ix:continuation></ix:continuation><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_87" id="_SignificantAccountingPoliciesTextBlock-c0_cont_86"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_16" id="_RevenueRecognitionPolicyTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company recognizes membership fees as revenue upon completion of each activity as the duration of each activity is short. Membership
fees from non-participating activity will be recognized when the agreed-upon period has expired. Membership fees collected in advance
are recorded as deferred revenue on the consolidated balance sheets.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_88" id="_SignificantAccountingPoliciesTextBlock-c0_cont_87"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_17" id="_RevenueRecognitionPolicyTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><span style="text-decoration:underline">Enterprise
services</span></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_89" id="_SignificantAccountingPoliciesTextBlock-c0_cont_88"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_18" id="_RevenueRecognitionPolicyTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company charges its clients service fees for providing enterprise services, which mainly include comprehensive tailored services, sponsorship
advertising services and consulting services.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>



</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_90" id="_SignificantAccountingPoliciesTextBlock-c0_cont_89"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_19" id="_RevenueRecognitionPolicyTextBlock-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><i>Comprehensive
tailored services</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><i>&#160;</i></span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_91" id="_SignificantAccountingPoliciesTextBlock-c0_cont_90"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_20" id="_RevenueRecognitionPolicyTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
comprehensive tailored services provide tailored packaged services to small and medium business, including conference and salon organization,
booth exhibition services, on-site Mentors&#8217; guidance, and other value-added services. The Company typically signs one-year framework
agreements and a tailored services contract with the clients, which list the types of tailored services as ordered by the clients to
fit their specific needs. Each tailored service is a separate performance obligation under ASC 606, as these performance obligations
are distinct, the clients can benefit from each service on their own and the Company&#8217;s promises to deliver the services are separately
identifiable from each other in the services contract. The performance of each tailored service is usually on a specific date designated
by the clients.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_92" id="_SignificantAccountingPoliciesTextBlock-c0_cont_91"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_21" id="_RevenueRecognitionPolicyTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company establishes a uniform list for the unit price of each type of tailored services with reference to quoted market prices. If no
quoted market price is available, the price will be estimated by using an expected cost plus a margin approach.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_93" id="_SignificantAccountingPoliciesTextBlock-c0_cont_92"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_22" id="_RevenueRecognitionPolicyTextBlock-c0_cont_21"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company recognizes the price for each tailored service as revenue when the service has been provided on a specific date designated and
the receipt of each tailored services is confirmed by the clients. If a client does not request certain items of the tailored services
included in the services contract during the agreed-upon period, the Company will not refund the service fees and the revenue will be
recognized upon expiration of service contracts. The tailored services fees collected before providing services are recorded as deferred
revenue on the consolidated balance sheets.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_94" id="_SignificantAccountingPoliciesTextBlock-c0_cont_93"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_23" id="_RevenueRecognitionPolicyTextBlock-c0_cont_22"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><i>Sponsorship
advertising service</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_95" id="_SignificantAccountingPoliciesTextBlock-c0_cont_94"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_24" id="_RevenueRecognitionPolicyTextBlock-c0_cont_23"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company provides sponsorship advertising service for its clients at certain activities it held, i.e. study tours and forums. The sponsorship
advertising services are mainly to display banners with the clients&#8217; information and distribute clients&#8217; brochures through
the activities, so that the clients can enhance their corporate and product image.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_96" id="_SignificantAccountingPoliciesTextBlock-c0_cont_95"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_25" id="_RevenueRecognitionPolicyTextBlock-c0_cont_24"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
fee the Company charges for sponsorship advertising service is depending on multiple specific factors, including number of event participants,
location, public interest, etc. The Company considers all factors and determines pricing for each contract separately. The sponsorship
advertising fees are recognized as revenue when services have been provided on a specific date designated and receipt of sponsorship
advertising services are confirmed by clients. Sponsorship advertising fees collected before providing services are recorded as deferred
revenue on the consolidated balance sheets.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_97" id="_SignificantAccountingPoliciesTextBlock-c0_cont_96"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_26" id="_RevenueRecognitionPolicyTextBlock-c0_cont_25"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><i>Consulting
services</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><i>&#160;</i></span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_98" id="_SignificantAccountingPoliciesTextBlock-c0_cont_97"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_27" id="_RevenueRecognitionPolicyTextBlock-c0_cont_26"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company provides consulting services to small and medium-sized enterprises by helping them to develop strategies and solutions including:
corporate reorganization, product promotion and marketing, industry supply chain integration, corporate governance, financing and capital
structure, etc. The consulting services are tailored to meet each client&#8217;s specific needs and requirements.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_99" id="_SignificantAccountingPoliciesTextBlock-c0_cont_98"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_28" id="_RevenueRecognitionPolicyTextBlock-c0_cont_27"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Consulting
fees are based on the specifics of the services provided, for instance, time and efforts required, etc. The Company considers comprehensive
factors and determines prices with reference to quoted market prices. If no quoted market price is available, price will be estimated
by using an expected cost plus a margin approach.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_100" id="_SignificantAccountingPoliciesTextBlock-c0_cont_99"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_29" id="_RevenueRecognitionPolicyTextBlock-c0_cont_28"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Consulting
fees are recognized as revenue when services have been provided and receipt of consulting services is confirmed by clients as the duration
of services is short, typically one month or less. Consulting fees collected before providing any service are presented as deferred revenue
on the consolidated balance sheets.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><i>&#160;</i></span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_101" id="_SignificantAccountingPoliciesTextBlock-c0_cont_100"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_30" id="_RevenueRecognitionPolicyTextBlock-c0_cont_29"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><span style="text-decoration:underline">Online
services</span></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt"><i>&#160;</i></span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_102" id="_SignificantAccountingPoliciesTextBlock-c0_cont_101"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_31" id="_RevenueRecognitionPolicyTextBlock-c0_cont_30"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company provides two types of online services to the Company&#8217;s APP Users, which are questions and answers (Q&amp;A) session with
chosen Mentors and online streaming of courses and programs. Top-up credits are paid by Users through the Company&#8217;s APP platform,
using which Users can purchase the online services.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_103" id="_SignificantAccountingPoliciesTextBlock-c0_cont_102"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_32" id="_RevenueRecognitionPolicyTextBlock-c0_cont_31"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Users
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is usually provided by chosen Mentors or Experts within a course of a 72-hour period. The Company charges 30% of the Q&amp;A fees as
a facilitator of online services. The Q&amp;A fees are allocated to the Company and chosen Mentors or Experts automatically by the APP
on a 30%/70% split upon completion of Q&amp;A sessions. The Company recognizes this online service fees as revenue at completion of Q&amp;A
sessions on a net basis, i.e., in the amount of 30% of allocated Q&amp;A fees, as the Company merely provides a platform for its Users
and is not the primary obligor of the Q&amp;A session, neither has risks and rewards as principal.</ix:nonNumeric></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_104" id="_SignificantAccountingPoliciesTextBlock-c0_cont_103"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_33" id="_RevenueRecognitionPolicyTextBlock-c0_cont_32"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company granted Users the access to view various online courses and programs. Users can subscribe an annual VIP at a rate of RMB<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:AnnualRate" scale="0" unitRef="cny">299</ix:nonFraction>.
The VIP grants Users the access right to the Company&#8217;s VIP courses and programs over the subscription period. The Company recognizes
the VIP annual subscription fees as revenue on a straight-line basis over VIP subscription period. Users can also purchase &#224; la
carte courses and programs at a rate from RMB <ix:nonFraction contextRef="c95" decimals="1" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockPricePerShare" scale="0" unitRef="cnyPershares">9.9</ix:nonFraction> to <ix:nonFraction contextRef="c96" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockPricePerShare" scale="0" unitRef="cnyPershares">299</ix:nonFraction> per course or program by top-up credits through the Company&#8217;s APP platform.
The payment for &#224; la carte course and program is not refundable. After the payment is collected by the Company, the Users obtain
unlimited access to the courses and programs they purchased for without limitation. The Company recognizes the fees a la carte courses
and programs as revenue at the point of time that Users obtain the access to the courses and programs.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 140; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->17<!-- Field: /Sequence --></span></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_105" id="_SignificantAccountingPoliciesTextBlock-c0_cont_104"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_34" id="_RevenueRecognitionPolicyTextBlock-c0_cont_33"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Other
services fees are mainly derived from non-member participation of study tours and forums at the service level of Platinum Members. The
Company charges non-members a fixed fee for each Member activity and the price for non-members is determined based on the Company&#8217;s
allocated Member pricing for each activity. Fees are usually collected on site at the date of each activity and revenues are recognized
at the completion of such activity.</span></p><p style="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_106" id="_SignificantAccountingPoliciesTextBlock-c0_cont_105"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_35" id="_RevenueRecognitionPolicyTextBlock-c0_cont_34"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Contract assets and liabilities</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_107" id="_SignificantAccountingPoliciesTextBlock-c0_cont_106"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_36" id="_RevenueRecognitionPolicyTextBlock-c0_cont_35"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group&#8217;s contract liabilities consist
of deferred revenues, primarily relating to the advance consideration received from customers, which include the advance member service
fees and enterprise service fees received from customers. The amount from customers before provision of service is recognized as deferred
revenue. The deferred revenue is recognized as revenue once the criteria for revenue recognition are met.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 6pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_108" id="_SignificantAccountingPoliciesTextBlock-c0_cont_107"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_37" id="_RevenueRecognitionPolicyTextBlock-c0_cont_36"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recognized $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:Revenue" scale="0" unitRef="usd">170,061</ix:nonFraction> and $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="sdh:Revenue" scale="0" unitRef="usd">253,157</ix:nonFraction>
in revenue for the years ended December 31, 2022 and 2021, respectively, which related to contract liabilities that existed at December
31, 2021 and 2020, respectively. The balances as of December 31, 2022 and 2021 are expected to be recognized as revenue within one year.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 6pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_109" id="_SignificantAccountingPoliciesTextBlock-c0_cont_108"><ix:continuation id="_RevenueRecognitionPolicyTextBlock-c0_cont_37"><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">There was no contract asset recorded as of December 31, 2022 and 2021.</p><p style="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_110" id="_SignificantAccountingPoliciesTextBlock-c0_cont_109"><ix:nonNumeric contextRef="c0" continuedAt="_CostOfSalesPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:CostOfSalesPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Cost
of goods sold</i></b></span></p><p style="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_111" id="_SignificantAccountingPoliciesTextBlock-c0_cont_110"><ix:continuation id="_CostOfSalesPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The cost of goods sold for the year ended December
31, 2022 was primarily the cost of finished goods of graphite anode materials, including single granular coke, secondary granular coke,
and mixed batches of single particle and secondary coke. The cost of goods sold for the year ended December 31, 2021 and 2020 was mainly
the cost of electrolytic copper. Cost of goods sold was $<ix:nonFraction contextRef="c97" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CostOfGoodsAndServicesSold" scale="0" unitRef="usd">38,299,090</ix:nonFraction>, $ <ix:nonFraction contextRef="c98" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CostOfGoodsAndServicesSold" scale="0" unitRef="usd">2,063,296</ix:nonFraction>, and $<ix:nonFraction contextRef="c99" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CostOfGoodsAndServicesSold" scale="0" unitRef="usd">892,791</ix:nonFraction> for the years ended December 31, 2022,
2021 and 2020, respectively.</p><p style="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_112" id="_SignificantAccountingPoliciesTextBlock-c0_cont_111"><ix:nonNumeric contextRef="c0" continuedAt="sdh_ServiceCostsPolcyTextBlock-c0_cont_1" escape="true" name="sdh:ServiceCostsPolcyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b><i>Service
costs </i></b></span></p><p style="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_113" id="_SignificantAccountingPoliciesTextBlock-c0_cont_112"><ix:continuation id="sdh_ServiceCostsPolcyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Service costs primarily include (1) the cost
of holding events and activities, such as venue rental fees, conference equipment fees, (2) professional and consulting fees paid to
third parties for the Company&#8217;s activity; (3) the fees paid to Mentors and Experts; and (4) labor costs. Service costs were $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CostOfGoodsAndServicesSoldAmortization" scale="0" unitRef="usd">1,176,956</ix:nonFraction>, $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CostOfGoodsAndServicesSoldAmortization" scale="0" unitRef="usd">1,823,358</ix:nonFraction> and $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CostOfGoodsAndServicesSoldAmortization" scale="0" unitRef="usd">2,087,425</ix:nonFraction> for the years ended December 31, 2022, 2021 and 2020, respectively.</p><p style="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_114" id="_SignificantAccountingPoliciesTextBlock-c0_cont_113"><ix:nonNumeric contextRef="c0" continuedAt="_IncomeTaxPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:IncomeTaxPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Income
taxes</i></b></span></p><p style="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_115" id="_SignificantAccountingPoliciesTextBlock-c0_cont_114"><ix:continuation continuedAt="_IncomeTaxPolicyTextBlock-c0_cont_2" id="_IncomeTaxPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable
to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective
tax bases.</span></p><p style="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_116" id="_SignificantAccountingPoliciesTextBlock-c0_cont_115"><ix:continuation continuedAt="_IncomeTaxPolicyTextBlock-c0_cont_3" id="_IncomeTaxPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets
to the amount expected to be realized.</span></p><p style="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_117" id="_SignificantAccountingPoliciesTextBlock-c0_cont_116"><ix:continuation continuedAt="_IncomeTaxPolicyTextBlock-c0_cont_4" id="_IncomeTaxPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
provisions of ASC 740-10-25, &#8220;Accounting for Uncertainty in Income Taxes,&#8221; prescribe a more-likely-than-not threshold for
consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This
interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred
income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures.</span></p><p style="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_118" id="_SignificantAccountingPoliciesTextBlock-c0_cont_117"><ix:continuation id="_IncomeTaxPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company believes there were no uncertain tax positions as of December 31, 2022 and 2021, respectively. The Company does not expect
that its assessment regarding unrecognized tax positions will materially change over the next 12 months. The Company is not
currently under examination by an income tax authority, nor has been notified that an examination is contemplated.</span> The
Company will recognize interest and penalties, if any, related to unrecognized tax benefits on the income tax expense line in the
accompanying consolidated statement of operations. Accrued interest and penalties will be included on the related tax liability line
in the consolidated balance sheet.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_119" id="_SignificantAccountingPoliciesTextBlock-c0_cont_118"><ix:nonNumeric contextRef="c0" continuedAt="_EarningsPerSharePolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:EarningsPerSharePolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>(Loss)
Earnings per share</i></b></span></p><p style="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_120" id="_SignificantAccountingPoliciesTextBlock-c0_cont_119"><ix:continuation id="_EarningsPerSharePolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company computes (loss) earnings per share (&#8220;EPS&#8221;) in accordance with ASC 260, &#8220;Earnings per Share&#8221; (&#8220;ASC
260&#8221;). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS are computed by dividing
(loss) income available to ordinary shareholders of the Company by the weighted average ordinary shares outstanding during the period.
Diluted EPS takes into account the potential dilution that could occur if securities or other contracts to issue ordinary shares were
exercised and converted into ordinary shares. As of December 31, 2022 and 2021, the basic and diluted shares were <ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EarningsPerShareDilutedDistributed" scale="0" unitRef="usdPershares">24,820,313</ix:nonFraction> and <ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EarningsPerShareDilutedDistributed" scale="0" unitRef="usdPershares">23,638,751</ix:nonFraction>,
respectively.</span></p><p style="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_121" id="_SignificantAccountingPoliciesTextBlock-c0_cont_120"><ix:nonNumeric contextRef="c0" continuedAt="_ComprehensiveIncomePolicyPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:ComprehensiveIncomePolicyPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Comprehensive
(loss) income</i></b></span></p><p style="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_122" id="_SignificantAccountingPoliciesTextBlock-c0_cont_121"><ix:continuation id="_ComprehensiveIncomePolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Comprehensive
(loss) income consists of two components, net (loss) income and other comprehensive (loss) income. Other comprehensive (loss) income
refers to revenue, expenses, gains and losses that under U.S. GAAP are recorded as an element of shareholders&#8217; equity but are excluded
from net (loss) income. Other comprehensive (loss) income consists of foreign currency translation adjustment resulting from the Company
translating its financial statements from functional currency into reporting currency.</span></p><p style="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_123" id="_SignificantAccountingPoliciesTextBlock-c0_cont_122"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Risks and uncertainties</i></b></p><p style="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_124" id="_SignificantAccountingPoliciesTextBlock-c0_cont_123"><ix:nonNumeric contextRef="c0" continuedAt="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_1" escape="true" name="sdh:RisksAndUncertaintiesPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><i>Currency
risk</i></span></p><p style="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_125" id="_SignificantAccountingPoliciesTextBlock-c0_cont_124"><ix:continuation continuedAt="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_2" id="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">A
majority of the Company&#8217;s expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries&#8217;
assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange
transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People&#8217;s
Bank of China (&#8220;PBOC&#8221;). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC
or other Company foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.</span></p><p style="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 141; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->18<!-- Field: /Sequence --></span></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_126" id="_SignificantAccountingPoliciesTextBlock-c0_cont_125"><ix:continuation continuedAt="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_3" id="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company maintains certain bank accounts in the PRC. On May 1, 2015, China&#8217;s new Deposit Insurance Regulation came into effect,
pursuant to which banking financial institutions, such as commercial banks, established in the PRC are required to purchase deposit insurance
for deposits in RMB and in foreign currency placed with them. Such Deposit Insurance Regulation would not be effective in providing complete
protection for the Company&#8217;s accounts, as its aggregate deposits are much higher than the compensation limit, which is RMB <ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:Deposits" scale="0" unitRef="cny">500,000</ix:nonFraction>
for one bank. However, the Company believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon
in the PRC and the Company believes that those Chinese banks that hold the Company&#8217;s cash and cash equivalents and short-term investments
are financially sound based on public available information.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_127" id="_SignificantAccountingPoliciesTextBlock-c0_cont_126"><ix:continuation continuedAt="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_4" id="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Other
than the deposit insurance mechanism in the PRC mentioned above, the Company&#8217;s bank accounts are not insured by Federal Deposit
Insurance Corporation insurance or other insurance.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>



</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_128" id="_SignificantAccountingPoliciesTextBlock-c0_cont_127"><ix:continuation continuedAt="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_5" id="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><i>Concentration
and credit risk&#160;</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_129" id="_SignificantAccountingPoliciesTextBlock-c0_cont_128"><ix:continuation continuedAt="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_6" id="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Financial
instruments that potentially subject the Company to the concentration of credit risks consist of cash and short-term investments. The
maximum exposures of such assets to credit risk are their carrying amounts as of the balance sheet dates. The Company deposits its cash
and short-term investments with financial institutions located in jurisdictions where the subsidiaries are located. The Company believes
that no significant credit risk exists as these financial institutions have high credit quality.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_130" id="_SignificantAccountingPoliciesTextBlock-c0_cont_129"><ix:continuation continuedAt="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_7" id="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&#8217;s exposure to credit risk associated
with its trading and other activities is measured on an individual counterparty basis, as well as by group of counterparties that share
similar attributes. There were $<ix:nonFraction contextRef="c100" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CostOfRevenue" scale="0" unitRef="usd">10,837,501</ix:nonFraction>, $<ix:nonFraction contextRef="c101" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CostOfRevenue" scale="0" unitRef="usd">7,449,250</ix:nonFraction>, $<ix:nonFraction contextRef="c102" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CostOfRevenue" scale="0" unitRef="usd">7,358,181</ix:nonFraction> and $<ix:nonFraction contextRef="c103" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CostOfRevenue" scale="0" unitRef="usd">7,193,849</ix:nonFraction> of revenue from four client which represented <ix:nonFraction contextRef="c104" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:RevenueRemainingPerformanceObligationPercentage" scale="-2" unitRef="pure">28</ix:nonFraction>%,
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changes in political, industry, or economic factors. To reduce the potential for risk concentration, The Company generally requires advanced
payment before delivery of the services but may extend unsecured credit to its clients in the ordinary course of business. Credit limits
are established and exposure is monitored in light of changing counterparty and market conditions. The Company did not have any material
concentrations of credit risk outside the ordinary course of business as of December 31, 2022 and 2021.&#160;&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_131" id="_SignificantAccountingPoliciesTextBlock-c0_cont_130"><ix:continuation continuedAt="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_8" id="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><i>Interest
rate risk</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_132" id="_SignificantAccountingPoliciesTextBlock-c0_cont_131"><ix:continuation continuedAt="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_9" id="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Fluctuations
in market interest rates may negatively affect the financial condition and results of operations. The Company is exposed to floating
interest rate risk on cash deposit and floating rate borrowings, and the risks due to changes in interest rates is not material. The
Company has not used any derivative financial instruments to manage its interest risk exposure.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_133" id="_SignificantAccountingPoliciesTextBlock-c0_cont_132"><ix:continuation continuedAt="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_10" id="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><i>Other
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_134" id="_SignificantAccountingPoliciesTextBlock-c0_cont_133"><ix:continuation continuedAt="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_11" id="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company&#8217;s major operations are conducted in the PRC. Accordingly, the political, economic, and legal environments in the PRC, as
well as the general state of the PRC&#8217;s economy may influence the Company&#8217;s business, financial condition, and results of
operations.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_135" id="_SignificantAccountingPoliciesTextBlock-c0_cont_134"><ix:continuation id="sdh_RisksAndUncertaintiesPolicyTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company&#8217;s major operations in the PRC are subject to special considerations and significant risks not typically associated with
companies in North America and Western Europe. These include risks associated with, among others, the political, economic, and legal
environment. The Company&#8217;s results may be adversely affected by changes in governmental policies with respect to laws and regulations,
anti-inflationary measures, and rates and methods of taxation, among other things. Although the Company has not experienced losses from
these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed
in Note 1, this may not be indicative of future results.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_136" id="_SignificantAccountingPoliciesTextBlock-c0_cont_135"><ix:nonNumeric contextRef="c0" continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Recently
issued accounting pronouncements </i></b>&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_137" id="_SignificantAccountingPoliciesTextBlock-c0_cont_136"><ix:continuation continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_2" id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company considers the applicability and impact of all accounting standards updates (&#8220;ASUs&#8221;). Management periodically reviews
new accounting standards that are issued. The Company is an &#8220;emerging growth company&#8221; (&#8220;EGC&#8221;) as defined in the
Jumpstart Our Business Startups Act of 2012 (the &#8220;JOBS Act&#8221;). Under the JOBS Act, EGC can delay adopting new or revised accounting
standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_138" id="_SignificantAccountingPoliciesTextBlock-c0_cont_137"><ix:continuation continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_3" id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In June 2016, the FASB issued ASU No. 2016-13,
&#8220;Financial Instruments &#8211; Credit Losses&#8221;, which will require the measurement of all expected credit losses for financial
assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Further,
the FASB issued ASU No. 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11 and ASU 2020-02 to provide additional guidance on the credit losses
standard. For all other entities, the amendments for ASU 2016-13 are effective for fiscal years beginning after December 15, 2022, including
interim periods within those fiscal years, with early adoption permitted. Adoption of the ASUs is on a modified retrospective basis.
The Company has adopt ASU 2016-13 from January 1, 2023. There is no effect on the Company&#8217;s consolidated financial statement of
the adoption of this ASU.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>
</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:continuation id="_SignificantAccountingPoliciesTextBlock-c0_cont_138"><ix:continuation id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_3"><p style="text-align: justify; font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">In
June 2022, the FASB issued ASU 2022-03, which (1) clarifies the guidance in ASC 820 on the fair value measurement of an equity security
that is subject to a contractual sale restriction and (2) requires specific disclosures related to such an equity security. ASU 2022-03
clarifies that a &#8220;contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting
entity holding the equity security&#8221; and is not included in the equity security&#8217;s unit of account. Accordingly, an entity
should not consider the contractual sale restriction when measuring the equity security&#8217;s fair value (i.e., the entity should not
apply a discount related to the contractual sale restriction, as stated in ASC 820-10-35-36B as amended by the ASU). In addition, the
ASU prohibits an entity from recognizing a contractual sale restriction as a separate unit of account. For public business entities,
the guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early
adoption permitted. The Company is in the process of evaluating the effect of the adoption of this ASU.</span></p></ix:continuation></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_SubstantialDoubtAboutGoingConcernTextBlock-c0_cont_1" escape="true" name="us-gaap:SubstantialDoubtAboutGoingConcernTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 3
&#8211; LIQUIDITY</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_SubstantialDoubtAboutGoingConcernTextBlock-c0_cont_2" id="_SubstantialDoubtAboutGoingConcernTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As reflected in the consolidated financial statements,
the Company has been incurring $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:NetLoss" scale="0" unitRef="usd">23,124,402</ix:nonFraction> and $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="sdh:NetLoss" scale="0" unitRef="usd">8,714,332</ix:nonFraction> net losses for the years ended December 31 2022 and 2021, respectively. Net
cash used in operating activities were $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForOperatingActivities" scale="0" unitRef="usd">9,573,401</ix:nonFraction> and $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForOperatingActivities" scale="0" unitRef="usd">5,233,182</ix:nonFraction> for the years ended December 31, 2022 and 2021, respectively. Total
cash, cash equivalents and restricted cash decreased by $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:CashEquivalentsAndRestrictedCash" scale="0" unitRef="usd">10,322,198</ix:nonFraction> for the year ended December 31, 2022. Management expected to continue
to construct the production plant in Guizhou Sunrise. In 2022, the ongoing COVID-19 pandemic continued to negatively impact the Company&#8217;s
business operations. A resurgence of the COVID-19 outbreak had given rise to economic downturns and other significant changes in regional
and global economic conditions, and negatively affected the Company&#8217;s ability to execute the sales contract, fulfil customer orders,
and collect customer payments timely. As a result, there was a possibility that the Company&#8217;s revenue and cash flows might underperform
in the next 12 months.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_SubstantialDoubtAboutGoingConcernTextBlock-c0_cont_3" id="_SubstantialDoubtAboutGoingConcernTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These adverse conditions and events raised substantial
doubt about the Company&#8217;s ability to continue as a going concern. For the next 12 months from the issuance date of this report,
the Company plans to continue implementing various measures to boost revenue and controlling the cost and expenses within an acceptable
level. The Company is in the process of transitioning peer-to-peer knowledge sharing and enterprise business to graphite anode material
business. In assessing its liquidity, management monitors and analyzes the Company&#8217;s cash on-hand, its ability to generate sufficient
revenue sources and ability to obtain additional financial support in the future, and its operating and capital expenditure commitments.
As of December 31, 2022, the Company had cash of $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="sdh:CashPayment" scale="0" unitRef="usd">1,655,549</ix:nonFraction>. The management believes that it would be able to make borrowings from banks
based on past experience and the Company&#8217;s good credit history when necessary. As of December 31, 2022, the Company had available
line of credit from Bank of Guizhou for RMB <ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LineOfCreditFacilityDecreaseForgiveness1" scale="0" unitRef="cny">6,500,000</ix:nonFraction>, approximately $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LineOfCreditFacilityDecreaseForgiveness1" scale="0" unitRef="usd">933,291</ix:nonFraction>. On January 18, 2023, Sunrise Guizhou entered a credit
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$<ix:nonFraction contextRef="c115" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LineOfCreditFacilityIncreaseDecreaseOtherNet" scale="0" unitRef="usd">4,307,498</ix:nonFraction>, for a term from January 19, 2023 to January 18, 2031. On February 7, 2023, Sunrise Guizhou entered a two-year debt financing
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for a term from February 7, 2023 to February 7, 2025.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation id="_SubstantialDoubtAboutGoingConcernTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Currently, the Company is working to improve
its liquidity and capital sources primarily through cash flows from operation, debt financing, and financial support from its principal
shareholder. In order to fully implement its business plan and sustain continued growth, the Company may also seek equity financing from
outside investors when necessary. Based on the current operating plan, management believes that the above-mentioned measures collectively
will provide sufficient liquidity for the Company to meet its future liquidity and capital requirement for at least 12 months from the
date the consolidated financial statements are issued.</p></ix:continuation><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_AccountsAndNontradeReceivableTextBlock-c0_cont_1" escape="true" name="us-gaap:AccountsAndNontradeReceivableTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE 4
&#8211; ACCOUNTS RECEIVABLE, NET </b></span>&#160;&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric><div>


</div><div>

</div><ix:continuation continuedAt="_AccountsAndNontradeReceivableTextBlock-c0_cont_2" id="_AccountsAndNontradeReceivableTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Accounts
and notes receivable consisted of the following:&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><ix:continuation continuedAt="_AccountsAndNontradeReceivableTextBlock-c0_cont_3" id="_AccountsAndNontradeReceivableTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="sdh:ScheduleOfAccountsReceivableTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif">As
    of December 31,</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif">2022</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif">2021</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsReceivableGrossCurrent" scale="0" unitRef="usd">12,606,059</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
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    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Allowance for doubtful
    accounts</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsReceivableNoncurrentNonaccrualNoAllowance" scale="0" unitRef="usd">8,047,527</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsReceivableNoncurrentNonaccrualNoAllowance" scale="0" unitRef="usd">5,744,387</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Accounts
    receivable, net</span></td><td style="font-weight: bold; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsReceivableNet" scale="0" unitRef="usd">5,167,701</ix:nonFraction></span></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsReceivableNet" scale="0" unitRef="usd">6,861,672</ix:nonFraction></span></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_AccountsAndNontradeReceivableTextBlock-c0_cont_4" id="_AccountsAndNontradeReceivableTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">The movement
of allowance of doubtful accounts is as follows:&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_AccountsAndNontradeReceivableTextBlock-c0_cont_5" id="_AccountsAndNontradeReceivableTextBlock-c0_cont_4"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:AccountsReceivableAllowanceForCreditLossTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    of December 31,</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 64%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">Balance at beginning of the year</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c13" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AllowanceForDoubtfulAccountsReceivableCurrent" scale="0" unitRef="usd">194,375</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">Current year addition</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:AdditionalReserveThroughBadDebtExpense" scale="0" unitRef="usd">2,887,754</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="sdh:AdditionalReserveThroughBadDebtExpense" scale="0" unitRef="usd">3,890,827</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="sdh:AdditionalReserveThroughBadDebtExpense" scale="0" unitRef="usd">1,514,559</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif">Write-off</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:WriteOffOfDeferredDebtIssuanceCost" scale="0" unitRef="usd">43,401</ix:nonFraction></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="-sec-ix-hidden: hidden-fact-160; font-family: Times New Roman, Times, Serif">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">Foreign currency translation
    adjustments</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:TemporaryEquityForeignCurrencyTranslationAdjustments" scale="0" sign="-" unitRef="usd">584,614</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:TemporaryEquityForeignCurrencyTranslationAdjustments" scale="0" unitRef="usd">88,072</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:TemporaryEquityForeignCurrencyTranslationAdjustments" scale="0" unitRef="usd">99,955</ix:nonFraction></span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">Balance
    at end of the year</span></td><td style="font-weight: bold; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AllowanceForDoubtfulAccountsReceivableCurrent" scale="0" unitRef="usd">8,047,527</ix:nonFraction></span></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AllowanceForDoubtfulAccountsReceivableCurrent" scale="0" unitRef="usd">5,744,387</ix:nonFraction></span></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right"><span style="font-family: Times New Roman, Times, Serif"><ix:nonFraction contextRef="c28" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AllowanceForDoubtfulAccountsReceivableCurrent" scale="0" unitRef="usd">1,808,889</ix:nonFraction></span></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation id="_AccountsAndNontradeReceivableTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.05pt"><span style="font-family: Times New Roman, Times, Serif">Doubtful
accounts provision was $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AllowanceForDoubtfulAccountsReceivableWriteOffs" scale="0" unitRef="usd">2,887,754</ix:nonFraction>, $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AllowanceForDoubtfulAccountsReceivableWriteOffs" scale="0" unitRef="usd">3,847,426</ix:nonFraction> and $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AllowanceForDoubtfulAccountsReceivableWriteOffs" scale="0" unitRef="usd">1,514,559</ix:nonFraction> recorded for the years ended December 31, 2022, 2021 and 2020, respectively.</span></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 143; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->20<!-- Field: /Sequence --></span></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_InventoryDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:InventoryDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE
5 &#8211; INVENTORIES, NET</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_InventoryDisclosureTextBlock-c0_cont_2" id="_InventoryDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Inventories
as of December 31, 2022 and 2021 consisted of the following:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_InventoryDisclosureTextBlock-c0_cont_3" id="_InventoryDisclosureTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfInventoryCurrentTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">As of December 31,</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2022</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2021</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left">Raw materials</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c118" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InventoryRawMaterials" scale="0" unitRef="usd">3,237,940</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-161">-</div></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Finished Goods</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c118" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InventoryFinishedGoods" scale="0" unitRef="usd">12,842,333</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c119" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InventoryFinishedGoods" scale="0" unitRef="usd">3,105,673</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt">Graphite anode materials</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c120" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InventoryNet" scale="0" unitRef="usd">12,842,333</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-162">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 9pt">Healthcare service gift cards</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-163">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c123" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InventoryNet" scale="0" unitRef="usd">1,276,550</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt">Chinese tea</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left; padding-left: 9pt">Latex pillows</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-166">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-167">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-168">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-169">-</div></td><td style="text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; ">
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</div><div>

</div><ix:continuation continuedAt="_InventoryDisclosureTextBlock-c0_cont_4" id="_InventoryDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 10pt">As of December
31, 2021, other than cash purchase, a portion of the Company&#8217;s inventories were obtained through fee exchange arrangements with
its customers, which are entered into at the Company&#8217;s discretion to receive inventory in exchange for collection of accounts receivable
due from the customers. These inventories are all commodities available for sale.</span> In fiscal year 2022, the Company wrote down
these inventories <span style="font-size: 10pt">to the estimated net realizable value, which was $<span style="-sec-ix-hidden: hidden-fact-171">nil</span>, resulting in inventory valuation
allowance of $<ix:nonFraction contextRef="c117" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InventoryNetOfAllowancesCustomerAdvancesAndProgressBillings" scale="0" unitRef="usd">2,711,158</ix:nonFraction>.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 10pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_InventoryDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.05pt"><span style="font-family: Times New Roman, Times, Serif">Inventory
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -0.05pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_ShortTermDebtTextBlock-c0_cont_1" escape="true" name="us-gaap:ShortTermDebtTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b>NOTE
6 &#8211; SHORT-TERM INVESTMENT</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_ShortTermDebtTextBlock-c0_cont_2" id="_ShortTermDebtTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In February 2021, the Company entered into an
investment agreement with Viner Total investment Fund (the &#8220;Fund&#8221;) to invest the Fund with the total investment consideration
of $<ix:nonFraction contextRef="c134" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InvestmentsAndCash" scale="0" unitRef="usd">8,000,000</ix:nonFraction>. The Fund is an exempted company incorporated in the Cayman Islands and managed by Mainstream Fund Services (HK).&#160;The
Fund is invested in a wide range of instruments with no specific limitations. The redemption of such shares for cash can be made with
a one-month advanced written notice (such advanced written notice period can be extended by the administrator).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_ShortTermDebtTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The value of private equity fund are measured
at fair value with gains and losses recognized in earnings. As a practical expedient, the Company uses Net Asset Value (&#8220;NAV&#8221;)
or its equivalent to measure the fair value of the Fund. NAV is primarily determined based on information provided by external fund administrators.
The NAV of the Fund was $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FairValueNetAssetLiability" scale="0" unitRef="usd">3,336,256</ix:nonFraction>, and $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FairValueNetAssetLiability" scale="0" unitRef="usd">5,961,605</ix:nonFraction>&#160;as of December 31, 2022 and 2021. Investment loss of $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RealizedInvestmentGainsLosses" scale="0" unitRef="usd">2,625,349</ix:nonFraction> and $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RealizedInvestmentGainsLosses" scale="0" unitRef="usd">2,038,395</ix:nonFraction>
was recorded in the Company&#8217;s Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December
31, 2022 and 2021, respectively.&#160;&#160;</p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 144; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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7 &#8211;&#160;PREPAID EXPENSES AND OTHER CURRENT ASSETS</b>&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:nonNumeric><div>

</div><div>

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  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 66%; text-align: left">Prepaid expenses</td><td style="width: 1%">&#160;</td>
    <td style="width: 9%; text-align: center">&#160;</td><td style="width: 1%">&#160;</td>
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsPrepaidExpenseAndOtherAssets" scale="0" unitRef="usd">703,281</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Advance to supplier</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToSuppliersAndEmployees" scale="0" unitRef="usd">2,820,551</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToSuppliersAndEmployees" scale="0" unitRef="usd">1,759,253</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Loans to third parties</td><td>&#160;</td>
    <td style="text-align: center">(1)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" id="ix_0_fact" name="us-gaap:RecordedThirdPartyEnvironmentalRecoveriesNet" scale="0" unitRef="usd">2,873,818</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" id="ix_1_fact" name="us-gaap:RecordedThirdPartyEnvironmentalRecoveriesNet" scale="0" unitRef="usd">840,685</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: center">(2)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" id="ix_2_fact" name="us-gaap:PaymentsForProceedsFromShortTermInvestments" scale="0" unitRef="usd">1,206,099</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Other receivables</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherReceivables" scale="0" unitRef="usd">401,936</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherReceivables" scale="0" unitRef="usd">299,864</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InterestReceivable" scale="0" unitRef="usd">365,478</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Deposits for operating lease</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DepositAssets" scale="0" unitRef="usd">36,574</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold">Subtotal</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="sdh_PrepaidExpensesAndOtherCurrentAssetsTextBlock-c0_cont_3" id="sdh_PrepaidExpensesAndOtherCurrentAssetsTextBlock-c0_cont_2"><ix:continuation continuedAt="_ScheduleOfOtherCurrentAssetsTableTextBlock-c0_cont_2" id="_ScheduleOfOtherCurrentAssetsTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr> <td style="vertical-align: top; width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td> <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:footnote id="ix_0_footnote" xml:lang="en-US">On March 8, 2021, the Company signed a loan contract with a third party, Waichun Logistics Technology Limited (&#8220;Waichun&#8221;), to lend $<ix:nonFraction contextRef="c135" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DebtInstrumentAnnualPrincipalPayment" scale="0" unitRef="usd">825,000</ix:nonFraction>, with annual interest rate of <ix:nonFraction contextRef="c135" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:DerivativeFixedInterestRate" scale="-2" unitRef="pure">8</ix:nonFraction>%, and will be due on <ix:nonNumeric contextRef="c136" format="ixt:date-monthname-day-year-en" name="sdh:DueDate">May 10, 2022</ix:nonNumeric>. The Company renewed the contract with Waichun on May 10, 2022 to extend the loan period to December 31, 2023; Besides, the Company signed a loan contract on March 8, 2021 and renewed it on March 6, 2022 with Waichun to lend <ix:nonNumeric contextRef="c137" name="us-gaap:ShortTermDebtLender">$2,000,000</ix:nonNumeric> with annual interest rate of <ix:nonFraction contextRef="c138" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PrepaidInterest" scale="0" unitRef="usd">8</ix:nonFraction>%, which will be due on December 31, 2023.</ix:footnote> </span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

</div><ix:continuation id="sdh_PrepaidExpensesAndOtherCurrentAssetsTextBlock-c0_cont_4"><ix:continuation id="_ScheduleOfOtherCurrentAssetsTableTextBlock-c0_cont_3"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr> <td style="vertical-align: top; width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</span></td> <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:footnote id="ix_2_footnote" xml:lang="en-US">The amount of VAT payable is determined by applying the applicable tax rate to the invoiced amount of services provided (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). The Company&#8217;s input VAT exceeded output VAT as the Company purchased property, plant and equipment for the manufacture on graphite anode materials as of December 31, 2022.</ix:footnote> </span></td></tr> </table></ix:continuation></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

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</div><div>

</div><ix:continuation continuedAt="sdh_LongTermPrepaymentsAndOtherNonCurrentAssetsTextBlock-c0_cont_2" id="sdh_LongTermPrepaymentsAndOtherNonCurrentAssetsTextBlock-c0_cont_1"><ix:nonNumeric contextRef="c0" continuedAt="sdh_ScheduleOfLongTermPrepaymentsAndOtherNonCurrentAssetsTableTextBlock-c0_cont_1" escape="true" name="sdh:ScheduleOfLongTermPrepaymentsAndOtherNonCurrentAssetsTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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</div><div>

</div><ix:continuation continuedAt="sdh_LongTermPrepaymentsAndOtherNonCurrentAssetsTextBlock-c0_cont_3" id="sdh_LongTermPrepaymentsAndOtherNonCurrentAssetsTextBlock-c0_cont_2"><ix:continuation continuedAt="sdh_ScheduleOfLongTermPrepaymentsAndOtherNonCurrentAssetsTableTextBlock-c0_cont_2" id="sdh_ScheduleOfLongTermPrepaymentsAndOtherNonCurrentAssetsTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td> <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:footnote id="ix_3_footnote" xml:lang="en-US">The Company&#8217;s subsidiary Sunrise Guizhou signed to purchase land use right from Qianxinan public resources trading center, with an area of <ix:nonFraction contextRef="c141" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AreaOfLand" scale="0" unitRef="sqm">260,543</ix:nonFraction> square meters and prepaid the consideration of $<ix:nonFraction contextRef="c142" decimals="0" format="ixt:num-dot-decimal" name="sdh:PrepaidConsideration" scale="0" unitRef="usd">6,947,051</ix:nonFraction>. The land use right had been registered under Sunrise Guizhou on June 10, 2022.</ix:footnote> </span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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</div><ix:continuation continuedAt="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_2" id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_1"><span style="font-family: Times New Roman, Times, Serif">Plant,
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</div><div>

</div><ix:continuation continuedAt="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_3" id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:PropertyPlantAndEquipmentTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-176">-</div></td><td style="text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><ix:continuation id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Depreciation
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 145; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="sdh_LandUseRightsTextBlock-c0_cont_1" escape="true" name="sdh:LandUseRightsTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 9 &#8211; LAND USE RIGHTS, NET</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="sdh_LandUseRightsTextBlock-c0_cont_2" id="sdh_LandUseRightsTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Land use rights, stated at cost less accumulated
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</div><div>

</div><ix:continuation continuedAt="sdh_LandUseRightsTextBlock-c0_cont_3" id="sdh_LandUseRightsTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfChangesInAccumulatedPostemploymentBenefitObligationsTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-179">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="sdh_LandUseRightsTextBlock-c0_cont_4" id="sdh_LandUseRightsTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the years ended December 31, 2022, 2021 and
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land use rights as of December 31, 2022:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23.75pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="sdh_LandUseRightsTextBlock-c0_cont_4"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 88%; text-align: left">2023</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearTwo" scale="0" unitRef="usd">221,617</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">2024</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearThree" scale="0" unitRef="usd">221,617</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">2025</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearFour" scale="0" unitRef="usd">221,617</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">2026</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearFive" scale="0" unitRef="usd">221,617</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">2027 and thereafter</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseAfterYearFive" scale="0" unitRef="usd">9,196,774</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; font-weight: bold; padding-bottom: 4pt">Total</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
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  </table></ix:nonNumeric></ix:continuation><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_IntangibleAssetsDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:IntangibleAssetsDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 10 &#8211; INTANGIBLE ASSETS, NET</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:nonNumeric><div>

</div><ix:continuation continuedAt="_IntangibleAssetsDisclosureTextBlock-c0_cont_2" id="_IntangibleAssetsDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Intangible
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</div><ix:continuation continuedAt="_IntangibleAssetsDisclosureTextBlock-c0_cont_3" id="_IntangibleAssetsDisclosureTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfFiniteLivedIntangibleAssetsTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td style="text-align: center">&#160;</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As of December 31,</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c155" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsGross" scale="0" unitRef="usd">4,876,413</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c156" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsGross" scale="0" unitRef="usd">5,326,829</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; padding-bottom: 1.5pt">Intellectual property rights</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c157" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsGross" scale="0" unitRef="usd">4,498,261</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-183">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: justify">Intangible assets, cost</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsGross" scale="0" unitRef="usd">9,374,674</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsGross" scale="0" unitRef="usd">5,326,829</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify">Less:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: justify">Accumulated amortization</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsAccumulatedAmortization" scale="0" sign="-" unitRef="usd">2,852,753</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FiniteLivedIntangibleAssetsAccumulatedAmortization" scale="0" sign="-" unitRef="usd">1,731,852</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: justify; padding-bottom: 1.5pt">Impairment</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FinancingReceivableAllowanceForCreditLossesCollectivelyEvaluatedForImpairment" scale="0" unitRef="usd">2,559,271</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
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</div><div>

</div><ix:continuation continuedAt="_IntangibleAssetsDisclosureTextBlock-c0_cont_4" id="_IntangibleAssetsDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the years ended December 31, 2022, 2021 and
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of intangible asset as of December 31, 2022:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23.75pt"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>
</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23.75pt"></p><div>

</div><ix:continuation id="_IntangibleAssetsDisclosureTextBlock-c0_cont_4"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleofFiniteLivedIntangibleAssetsFutureAmortizationExpenseTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">2024</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">2026</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">2027 and thereafter</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  </table></ix:nonNumeric></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23.75pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23.75pt"></p><div>

</div><!-- Field: Page; Sequence: 146; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->23<!-- Field: /Sequence --></span></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23.75pt">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_LongTermDebtTextBlock-c0_cont_1" escape="true" name="us-gaap:LongTermDebtTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 11 &#8211; LONG-TERM INVESTMENTS</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt"><b>&#160;</b></span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_2" id="_LongTermDebtTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&#8217;s long-term investments consist
of the following:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_3" id="_LongTermDebtTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="sdh:ScheduleOfLongtermInvestmentsTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold">Equity method investments:</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left">Shidong (Suzhou) Investment Co., Ltd. (&#8220;Suzhou Investment&#8221;)</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Shenzhen Jiazhong Creative Capital LLP (&#8220;Jiazhong&#8221;)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c198" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherLongTermDebt" scale="0" unitRef="usd">1,435,832</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Beijing Xingshuizhixing Technology Co., Ltd. (&#8220;Xingshuizhixing&#8221;)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c200" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherLongTermDebt" scale="0" unitRef="usd">1,148,665</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Zhejiang Wangxin Health Technology Co., Ltd. (&#8220;Wangxin&#8221;)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-185">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Hangzhou Zhongfei Aerospace Health Management Co., Ltd. (&#8220;Zhongfei&#8221;)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c204" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherLongTermDebt" scale="0" unitRef="usd">430,750</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c205" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherLongTermDebt" scale="0" unitRef="usd">470,537</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Shanghai Zhongren Yinzhirun Investment Management Partnership (&#8220;Yinzhirun&#8221;)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c206" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherLongTermDebt" scale="0" unitRef="usd">287,167</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c207" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherLongTermDebt" scale="0" unitRef="usd">313,691</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Jiangxi Cheyi Tongcheng Car Networking Tech Co., Ltd.(&#8220;Cheyi&#8221;)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c208" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherLongTermDebt" scale="0" unitRef="usd">227,970</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Chengdu Zhongfuze Management LLP(&#8220;Zhongfuze&#8221;)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c210" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherLongTermDebt" scale="0" unitRef="usd">71,792</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Shanghai Outu Home Furnishings Co., Ltd. (&#8220;Outu&#8221;)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c212" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherLongTermDebt" scale="0" unitRef="usd">71,792</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Zhejiang Qianshier Household Co., Ltd.(&#8220;Qianshier&#8221;)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c214" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherLongTermDebt" scale="0" unitRef="usd">71,792</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c215" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherLongTermDebt" scale="0" unitRef="usd">78,423</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c216" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherLongTermDebt" scale="0" unitRef="usd">71,792</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Zhejiang Yueteng Information Technology Co., Ltd. (&#8220;Yueteng&#8221;)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c218" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherLongTermDebt" scale="0" unitRef="usd">71,792</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c219" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherLongTermDebt" scale="0" unitRef="usd">78,423</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Shidong Funeng(Ruzhou) Industry Development Co., Ltd.( &#8220;Funeng&#8221;)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c220" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherLongTermDebt" scale="0" unitRef="usd">38,767</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c221" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherLongTermDebt" scale="0" unitRef="usd">42,348</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">Dongguan Zhiduocheng Car Service Co., Ltd. (&#8220;Car Service&#8221;)</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold">Subtotal</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InventoryAdjustments" scale="0" sign="-" unitRef="usd">28,232</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; padding-bottom: 4pt">Total</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt"><b>&#160;</b></span></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_4" id="_LongTermDebtTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><span style="text-decoration:underline">Equity
method investments</span></b></span>&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt"><b>&#160;</b></span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_5" id="_LongTermDebtTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Investment in Suzhou Investment</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt"><i>&#160;</i></span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_6" id="_LongTermDebtTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In December 2017, the Company acquired <ix:nonFraction contextRef="c159" decimals="2" format="ixt:num-dot-decimal" name="sdh:PercentageOfAcquiredShareholding" scale="-2" unitRef="pure">17</ix:nonFraction>% of
shareholding of Suzhou Investment with cash consideration of RMB <ix:nonFraction contextRef="c160" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationConsiderationTransferredOther1" scale="0" unitRef="cny">850,000</ix:nonFraction>. As the Company&#8217;s CEO, Mr. Haiping Hu is Suzhou Investment&#8217;s
director and the Company can exercise significant influence on Suzhou Investment&#8217;s business operation, the Company therefore accounted
for this investment under equity methods from December 2017 and share the profit or loss of Suzhou Investment accordingly. For the years
ended December 31, 2022, 2021 and 2020, the Company recognized investment losses of $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:RealizedInvestmentGains" scale="0" unitRef="usd">14,072</ix:nonFraction>, $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="sdh:RealizedInvestmentGains" scale="0" unitRef="usd">14,025</ix:nonFraction> and $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="sdh:RealizedInvestmentGains" scale="0" unitRef="usd">15,585</ix:nonFraction>, respectively, according
to its share of the post-acquisition losses of Suzhou Investment.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt"><i>&#160;</i></span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_7" id="_LongTermDebtTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span style="text-decoration:underline">Equity investments without readily determinable
fair value</span></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_8" id="_LongTermDebtTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Investment in Jiazhong</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt"><i>&#160;</i></span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_9" id="_LongTermDebtTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In December 2020, the Company acquired <ix:nonFraction contextRef="c161" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">33</ix:nonFraction>% of
partnership share of Jiazhong as a limited partner with cash consideration of RMB <ix:nonFraction contextRef="c162" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireBusinessesGross" scale="0" unitRef="cny">10,000,000</ix:nonFraction>, approximately $<ix:nonFraction contextRef="c162" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireBusinessesGross" scale="0" unitRef="usd">1,435,832</ix:nonFraction>. The Company has
fully paid RMB <ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireBusinessesGross" scale="0" unitRef="cny">10,000,000</ix:nonFraction> as of December 31, 2020. The Company does not have significant influence or control over Jiazhong, and the
partnership share investment does not have readily determinable market value, and therefore accounted for the investment of Jiazhong
at cost minus impairments and plus or minus observable changes in prices.&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>



</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_10" id="_LongTermDebtTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Investment in Xingshuizhixing</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_11" id="_LongTermDebtTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company signed an investment agreement with
Beijing Zhitong Zhenye Technology Co., Ltd. and Li Jiyou to invest RMB<ix:nonFraction contextRef="c163" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InvestmentOwnedUnderlyingFaceAmountAtMarketValue" scale="0" unitRef="cny">8,000,000</ix:nonFraction>, approximately $<ix:nonFraction contextRef="c163" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InvestmentOwnedUnderlyingFaceAmountAtMarketValue" scale="0" unitRef="usd">1,148,666</ix:nonFraction>, to Xingshuizhixing, which
is accounting for <ix:nonFraction contextRef="c163" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:DebtInstrumentInterestRateEffectivePercentage" scale="-2" unitRef="pure">4</ix:nonFraction>% of its equity interest. Xinshuizhixing mainly operates online tax management system. The Company has no control,
joint control or significant influence on the invested units, and therefore accounted for the investment of Xingshuizhixing at cost minus
impairments and plus or minus observable changes in prices.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_12" id="_LongTermDebtTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Investment in Wangxin</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_13" id="_LongTermDebtTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 11, 2021, Zibo Shidong signed an equity
transfer agreement with Wangxin, which mainly provides health consulting service, to acquire its <ix:nonFraction contextRef="c164" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:DebtInstrumentInterestRateEffectivePercentage" scale="-2" unitRef="pure">2.15</ix:nonFraction>% equity interest in the consideration
of RMB<ix:nonFraction contextRef="c165" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationConsiderationTransferredOther1" scale="0" unitRef="cny">6,600,000</ix:nonFraction>, approximately $<ix:nonFraction contextRef="c165" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationConsiderationTransferredOther1" scale="0" unitRef="usd">947,650</ix:nonFraction>. The company has no control, joint control or significant influence on the invested units, and
therefore accounted for the investment of Wangxin at cost minus impairments and plus or minus observable changes in prices. The investment
fund would be refunded and reclassified as other receivable as December 31, 2022.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_14" id="_LongTermDebtTextBlock-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Investment in Zhongfei</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_15" id="_LongTermDebtTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In November 2020, the Company acquired <ix:nonFraction contextRef="c166" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">3</ix:nonFraction>% of
shareholding interest of Zhongfei through nonmonetary transactions, with which are entered into at the Company&#8217;s discretion to
receive equity interest in exchange of collection of account receivables due from Zhongfei of RMB<ix:nonFraction contextRef="c167" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueFromAffiliateCurrent" scale="0" unitRef="cny">3,000,000</ix:nonFraction>, approximately $<ix:nonFraction contextRef="c167" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueFromAffiliateCurrent" scale="0" unitRef="usd">430,750</ix:nonFraction>. In
2021, The Company provided it with a customized service worth of RMB<ix:nonFraction contextRef="c168" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ContinuingCareRetirementCommunitiesObligationForFutureServiceAmount" scale="0" unitRef="cny">3,000,000</ix:nonFraction>. The service has been completed and Zhongfei has decided
to transfer <ix:nonFraction contextRef="c168" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:DebtInstrumentInterestRateEffectivePercentage" scale="-2" unitRef="pure">3</ix:nonFraction>% of the equity according to its fair value to the Company. The registration change was completed as of December 31, 2021.
The Company does not have significant influence or control over Zhongfei, and the equity investment does not have readily determinable
market value, and therefore accounted for the investment of Zhongfei at cost minus impairments and plus or minus observable changes in
prices. The cost of equity interest acquired in exchange is initially measured at the fair value of the account receivables the Company
surrendered to obtain them. In 2022, the Company noticed that Zhongfei had encountered going-concern issue and determined that the impairment
on investment was other-than-temporary. Full impairment of $ $<ix:nonFraction contextRef="c169" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ImpairmentOfLeasehold" scale="0" unitRef="usd">446,025</ix:nonFraction> was provided for investment of <i>Zhongfei</i> for the year ended
December 31, 2022.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_16" id="_LongTermDebtTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Investment in Yinzhirun</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_17" id="_LongTermDebtTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In December 2016, the Company acquired <ix:nonFraction contextRef="c170" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">0.45</ix:nonFraction>%
of shareholding of Yinzhirun with cash consideration of RMB <ix:nonFraction contextRef="c171" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationConsiderationTransferredOther1" scale="0" unitRef="cny">2,000,000</ix:nonFraction>, approximately $<ix:nonFraction contextRef="c171" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationConsiderationTransferredOther1" scale="0" unitRef="usd">287,167</ix:nonFraction>. The Company does not have significant
influence or control over Yinzhirun, and the equity investment does not have readily determinable market value, and therefore accounted
for the investment of Yinzhirun at cost minus impairments and plus or minus observable changes in prices.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_18" id="_LongTermDebtTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Investment in Cheyi</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_19" id="_LongTermDebtTextBlock-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In November 2020, the Company acquired <ix:nonFraction contextRef="c172" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">0.5</ix:nonFraction>% of
shareholding interest of Cheyi through nonmonetary transactions, with which are entered into at the Company&#8217;s discretion to receive
equity interest in exchange of collection of account receivables due from Cheyi of RMB<ix:nonFraction contextRef="c173" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueFromAffiliateCurrent" scale="0" unitRef="cny">1,587,719</ix:nonFraction>, approximately $<ix:nonFraction contextRef="c173" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueFromAffiliateCurrent" scale="0" unitRef="usd">227,970</ix:nonFraction>. In 2021, the
Company provided it with a membership service worth of RMB<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:MembershipsInExchangesOwned" scale="0" unitRef="cny">1,500,000</ix:nonFraction>. This service has been completed. Cheyi has a poor capital turnover,
it has decided to transfer <ix:nonFraction contextRef="c174" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:DebtInstrumentInterestRateEffectivePercentage" scale="-2" unitRef="pure">0.5</ix:nonFraction>% of the equity according to its fair value to the Company and registration change was completed as of
December 31, 2021. The Company accounts for these non-monetary exchanges based on the fair values of the assets involved. The Company
does not have significant influence or control over Cheyi, and the equity investment does not have readily determinable market value,
and therefore accounted for the investment of Cheyi at cost minus impairments and plus or minus observable changes in prices. The cost
of equity interest acquired in exchange is initially measured at the fair value of the account receivables the Company surrendered to
obtain them.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_20" id="_LongTermDebtTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company noticed that Industry and Commerce
Administration of Nanchang Xihu Branch was not able to perform on-site inspection on Cheyi&#8217;s subsidiary Nanchang Qingchong Technology
Co., Ltd. (&#8220;Qingchong&#8221;) in August 2022; Another Cheyi&#8217;s subsidiary, Jiangxi Cheyi Tongcheng Vehicle Networking Technology
Co., Ltd. (&#8220;Cheyi Tongcheng&#8221;) had a legal dispute with China Construction Bank Nanchang Branch (&#8220;CCB&#8221;) on March
9, 2023. The Company noticed the above factors that raise significant concerns about the investee&#8217;s ability to continue as a going
concern. Full impairment of $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RemainingAmountsOfRegulatoryAssetsForWhichNoReturnOnInvestmentDuringRecoveryPeriodIsProvided" scale="0" unitRef="usd">236,053</ix:nonFraction> was provided for investment of Cheyi for the year ended December 31, 2022.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_21" id="_LongTermDebtTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Investment in Zhongfuze</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_22" id="_LongTermDebtTextBlock-c0_cont_21"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In September 2019, the Company acquired <ix:nonFraction contextRef="c175" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">11.11</ix:nonFraction>%
of partnership share of Zhongfuze with cash consideration of RMB<ix:nonFraction contextRef="c176" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationConsiderationTransferredOther1" scale="0" unitRef="cny">500,000</ix:nonFraction>, approximately $<ix:nonFraction contextRef="c176" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationConsiderationTransferredOther1" scale="0" unitRef="usd">71,792</ix:nonFraction>. The Company has fully paid RMB<ix:nonFraction contextRef="c177" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireBusinessesGross" scale="0" unitRef="cny">500,000</ix:nonFraction>
as of December 31, 2020. The Company does not have significant influence or control over Zhongfuze, and the partnership share investment
does not have readily determinable market value, and therefore accounted for the investment of Zhongfuze at cost minus impairments and
plus or minus observable changes in prices.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_23" id="_LongTermDebtTextBlock-c0_cont_22"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Investment in Outu</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_24" id="_LongTermDebtTextBlock-c0_cont_23"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In December 2019, the Company acquired <ix:nonFraction contextRef="c178" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">15</ix:nonFraction>% of
shareholding interest of Outu with cash consideration of RMB<ix:nonFraction contextRef="c179" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationConsiderationTransferredOther1" scale="0" unitRef="cny">3,000,000</ix:nonFraction>, approximately $<ix:nonFraction contextRef="c179" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationConsiderationTransferredOther1" scale="0" unitRef="usd">430,750</ix:nonFraction>. The Company has paid RMB <ix:nonFraction contextRef="c163" decimals="0" format="ixt:num-dot-decimal" name="sdh:CashPaid" scale="0" unitRef="cny">500,000</ix:nonFraction>, approximately
$<ix:nonFraction contextRef="c180" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LineOfCreditFacilityMaximumMonthendOutstandingAmount" scale="0" unitRef="usd">71,792</ix:nonFraction>, as of December 31, 2022. The Company does not have significant influence or control over Outu, and the equity investment does
not have readily determinable market value, and therefore accounted for the investment of Outu at cost minus impairments and plus or
minus observable changes in prices. In 2022, the Company noticed that Qutu had encountered going-concern issue and determined that the
impairment on investment was other-than-temporary. Full impairment of $<ix:nonFraction contextRef="c180" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ImpairmentOfLeasehold" scale="0" unitRef="usd">74,337</ix:nonFraction> was provided for investment of Outu for the year ended
December 31, 2022.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 148; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->25<!-- Field: /Sequence --></span></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_25" id="_LongTermDebtTextBlock-c0_cont_24"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Investment in Qianshier</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.25in"><i>&#160;</i></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_26" id="_LongTermDebtTextBlock-c0_cont_25"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In December 2020, the Company acquired <ix:nonFraction contextRef="c181" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">5</ix:nonFraction>% of
shareholding interest of Qiansier through nonmonetary transactions with, which are entered into at the Company&#8217;s discretion to
receive equity interest in exchange of collection of account receivables due from Qianshier of RMB <ix:nonFraction contextRef="c182" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueFromAffiliateCurrent" scale="0" unitRef="cny">500,000</ix:nonFraction>, approximately $<ix:nonFraction contextRef="c182" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueFromAffiliateCurrent" scale="0" unitRef="usd">71,792</ix:nonFraction>. The
Company accounts for these nonmonetary exchanges based on the fair values of the assets involved. The Company does not have significant
influence or control over Qianshier, and the equity investment does not have readily determinable market value, and therefore accounted
for the investment of Qianshier at cost minus impairments and plus or minus observable changes in prices. The cost of equity interest
acquired in exchange is initially measured at the fair value of the account receivables the Company surrendered to obtain them.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_27" id="_LongTermDebtTextBlock-c0_cont_26"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">In
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which raised significant concerns about the investee&#8217;s ability to continue as a going concern. Full impairment of $<ix:nonFraction contextRef="c183" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ImpairmentOfLeasehold" scale="0" unitRef="usd">74,337</ix:nonFraction> was provided
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</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_28" id="_LongTermDebtTextBlock-c0_cont_27"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Investment in Taizhoujia</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_29" id="_LongTermDebtTextBlock-c0_cont_28"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In June 2020, the Company acquired <ix:nonFraction contextRef="c184" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">5</ix:nonFraction>% of shareholding
interest of Taizhoujia through nonmonetary transactions with Taizhoujia, which are entered into at the Company&#8217;s discretion to
receive equity interest in exchange of collection of account receivables due from Taizhoujia of RMB<ix:nonFraction contextRef="c185" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueFromAffiliateCurrent" scale="0" unitRef="cny">500,000</ix:nonFraction>, approximately $<ix:nonFraction contextRef="c185" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueFromAffiliateCurrent" scale="0" unitRef="usd">71,792</ix:nonFraction>. The
Company accounts for these nonmonetary exchanges based on the fair values of the assets involved. The Company does not have significant
influence or control over Taizhoujia, and the equity investment does not have readily determinable market value, and therefore accounted
for the investment of Taizhoujia at cost minus impairments and plus or minus observable changes in prices. The cost of equity interest
acquired in exchange is initially measured at the fair value of the account receivables the Company surrendered to obtain them. In 2022,
the Company noticed Taizhoujia was involved in legal proceedings as respondent to its debt guarantor, which raised significant concerns
about the investee&#8217;s ability to continue as a going concern. Full impairment of $<ix:nonFraction contextRef="c186" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ImpairmentOfLeasehold" scale="0" unitRef="usd">74,337</ix:nonFraction> was provided for investment of Taizhoujia
for the year ended December 31, 2022.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_30" id="_LongTermDebtTextBlock-c0_cont_29"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Investment in Yueteng</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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interest of Yueteng through nonmonetary transactions with Yueteng, which are entered into at the Company&#8217;s discretion to receive
equity interest in exchange of collection of account receivables due from Yueteng of RMB<ix:nonFraction contextRef="c188" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueFromAffiliateCurrent" scale="0" unitRef="cny">500,000</ix:nonFraction>, approximately $<ix:nonFraction contextRef="c188" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueFromAffiliateCurrent" scale="0" unitRef="usd">71,792</ix:nonFraction>. The Company accounts
for these nonmonetary exchanges based on the fair values of the assets involved. The Company does not have significant influence or control
over Yueteng, and the equity investment does not have readily determinable market value, and therefore accounted for the investment of
Yueteng at cost minus impairments and plus or minus observable changes in prices. The cost of equity interest acquired in exchange is
initially measured at the fair value of the account receivables the Company surrendered to obtain them. In 2022, the Company determined
that the investment was impaired and the impairment was other-than-temporary. Full impairment of $<ix:nonFraction contextRef="c189" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ImpairmentOfLeasehold" scale="0" unitRef="usd">74,337</ix:nonFraction> was provided for investment
of Taizhoujia for the year ended December 31, 2022.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p></ix:continuation><div>



</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_32" id="_LongTermDebtTextBlock-c0_cont_31"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Investment in Funeng</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_33" id="_LongTermDebtTextBlock-c0_cont_32"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In August 2019, the Company subscribed capital
with cash consideration of RMB <ix:nonFraction contextRef="c190" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationConsiderationTransferredOther1" scale="0" unitRef="cny">570,000</ix:nonFraction> and acquired <ix:nonFraction contextRef="c191" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">19</ix:nonFraction>% of shareholding interest of Funeng. The Company has paid RMB <ix:nonFraction contextRef="c192" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireBusinessesGross" scale="0" unitRef="cny">270,000</ix:nonFraction> as of December
31, 2020. The Company does not have significant influence or control over Funeng, and the equity investment does not have readily determinable
market value, and therefore accounted for the investment of Funeng at cost minus impairments and plus or minus observable changes in
prices.<i>&#160;</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_34" id="_LongTermDebtTextBlock-c0_cont_33"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Investment in Car Service</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_LongTermDebtTextBlock-c0_cont_34"><p style="text-align: justify; margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">In November 2017, the Company acquired <ix:nonFraction contextRef="c193" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:VariableInterestEntityOwnershipPercentage" scale="-2" unitRef="pure">1.5</ix:nonFraction> %
of shareholding interest of Car Service with cash consideration of RMB<ix:nonFraction contextRef="c194" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:Cash" scale="0" unitRef="cny">90,000</ix:nonFraction>. In May 2019, the shareholding interest the Company held
was diluted to <ix:nonFraction contextRef="c195" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:VariableInterestEntityOwnershipPercentage" scale="-2" unitRef="pure">0.98</ix:nonFraction>% after Car Service received capital from a new shareholder. The Company does not have significant influence or control
over Car Service, and the equity investment does not have readily determinable market value, and therefore accounted for the investment
of Car Service at cost minus impairments and plus or minus observable changes in prices. In 2021, the Company noticed that with the adverse
impact of COVID-19, Car Service failed to publish the annual report of 2020 in accordance with the time limit to the Industry and Commerce
Administration of Dongguan Nancheng Branch, which was factors that raise significant concerns about the investee&#8217;s ability to continue
as a going concern. Full impairment of $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ImpairmentOfLeasehold" scale="0" unitRef="usd">27,900</ix:nonFraction> was provided for investment of Car Service for the year ended December 31, 2021.</p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><!-- Field: Page; Sequence: 149; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->26<!-- Field: /Sequence --></span></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_AssetAcquisitionTextBlock-c0_cont_1" escape="true" name="us-gaap:AssetAcquisitionTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 12 &#8211; ASSET ACQUISITION</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_AssetAcquisitionTextBlock-c0_cont_2" id="_AssetAcquisitionTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In July 2022, Sunrise Guizhou entered into purchase
agreements with original shareholders of Sunrise Tech (formerly known as Anlong Hengrui Graphite Material Co., Ltd.) to acquire <ix:nonFraction contextRef="c224" decimals="2" format="ixt:num-dot-decimal" name="sdh:EquityOwnershipPercentage" scale="-2" unitRef="pure">100</ix:nonFraction>%
of Sunrise Tech&#8217;s assets and equity ownership for a gross consideration of RMB <ix:nonFraction contextRef="c224" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AssetAcquisitionConsiderationTransferredEquityInterestIssuedAndIssuable" scale="0" unitRef="cny">40,000,000</ix:nonFraction> (approximately $<ix:nonFraction contextRef="c224" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AssetAcquisitionConsiderationTransferredEquityInterestIssuedAndIssuable" scale="0" unitRef="usd">5,743,331</ix:nonFraction>), among of
which RMB<ix:nonFraction contextRef="c224" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AssetAcquisitionConsiderationTransferredContingentConsideration" scale="0" unitRef="cny">10,000,000</ix:nonFraction> (approximately $<ix:nonFraction contextRef="c224" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AssetAcquisitionConsiderationTransferredContingentConsideration" scale="0" unitRef="usd">1,486,746</ix:nonFraction>) was paid in July 2022. In July 2022, the Group completed the acquisition. Sunrise Tech
held three land use rights and two buildings.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_AssetAcquisitionTextBlock-c0_cont_3" id="_AssetAcquisitionTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company evaluated the acquisition of the
purchased assets under ASC 805-Business Combination (ASC 805), and concluded that as substantially all of the fair value of the gross
assets acquired is concentrated in an identifiable group of similar assets, the transaction did not meet the requirements to be accounted
for as a business combination and therefore was accounted for as an asset acquisition.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_AssetAcquisitionTextBlock-c0_cont_4" id="_AssetAcquisitionTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The purchase prices of the assets as of the acquisition
date are as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_AssetAcquisitionTextBlock-c0_cont_5" id="_AssetAcquisitionTextBlock-c0_cont_4"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfOtherAssetsTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 88%; text-align: left">Land use rights</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:Land" scale="0" unitRef="usd">3,654,545</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">Plant, property and equipment &#8211; buildings</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedPropertyPlantAndEquipment" scale="0" unitRef="usd">1,853,556</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Total assets acquired</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="sdh:TotalAssetsAcquired" scale="0" unitRef="usd">5,508,101</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">Deferred tax liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedDeferredTaxLiabilities" scale="0" unitRef="usd">199,813</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 4pt">Net assets acquired</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="sdh:NetAssetsAcquired" scale="0" unitRef="usd">5,308,288</ix:nonFraction></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#160;</td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_AssetAcquisitionTextBlock-c0_cont_6" id="_AssetAcquisitionTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recognized any excess consideration
transferred over the fair value of the net assets acquired on a relative fair value basis to the identifiable net assets. The Company
determined the estimated fair values using Level 3 inputs after review and consideration of relevant quoted market prices of comparable
companies and relevant information.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_AssetAcquisitionTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The unpaid consideration RMB<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:UnpaidConsideration" scale="0" unitRef="cny">30,000,000</ix:nonFraction>
(approximately $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:UnpaidConsideration" scale="0" unitRef="usd">4,307,499</ix:nonFraction>) will be paid in installments from 2023 to 2026. These consideration payables were interest free, and the
present value was discounted using the incremental borrowing rate. The current and non-current portion of the consideration payable
was $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:ConsiderationPayableCurrent" scale="0" unitRef="usd">582,381</ix:nonFraction> and $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="sdh:ConsiderationPayableNoncurrent" scale="0" unitRef="usd">3,358,906</ix:nonFraction>, respectively, as of December 31, 2022. For the year ended December 31, 2022, the Company recorded
interest expense of $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InterestExpenseOther" scale="0" unitRef="usd">71,272</ix:nonFraction> relating to the amortization of the discount. The consideration payable is guaranteed by Mr. Haiping Hu,
CEO and Chairman of the Board of Director.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="sdh_DeferredGovernmentSubsidyTextBlock-c0_cont_1" escape="true" name="sdh:DeferredGovernmentSubsidyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 13 &#8211; DEFERRED GOVERNMENT SUBSIDY</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation id="sdh_DeferredGovernmentSubsidyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">GMB BJ planned to relocate the Company address
from Beijing to Zibo city, and it applied for subsidy of RMB <ix:nonFraction contextRef="c225" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardPlanModificationIncrementalCompensationCost" scale="0" unitRef="cny">21,926,900</ix:nonFraction> to compensate for the future incremental costs arising from the
relocation, which was approved by the Finance Bureau of Zibo. As of December 31, 2022, the Company received government subsidy of RMB<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:GovernmentSubsidyToCompensate" scale="0" unitRef="cny">20,000,000</ix:nonFraction>,
approximately $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredCostsCurrentAndNoncurrent" scale="0" unitRef="usd">2,871,665</ix:nonFraction>, was recognized as deferred government subsidy. It would be deducted from the relocation expenses when incurred.&#160;</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 150; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="sdh_LongTremPayableTextBlock-c0_cont_1" escape="true" name="sdh:LongTremPayableTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 14 &#8211; LONG TERM PAYABLE</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="sdh_LongTremPayableTextBlock-c0_cont_2" id="sdh_LongTremPayableTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Loans payable represented the financial liabilities
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</div><div>

</div><ix:continuation continuedAt="sdh_LongTremPayableTextBlock-c0_cont_3" id="sdh_LongTremPayableTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfAccountsNotesLoansAndFinancingReceivableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.05pt">&#160;</p><div>

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</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_2" id="_IncomeTaxDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>a. VAT</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p></ix:continuation><div>
</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

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VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). VAT liability is recorded in the line item of
accrued expenses and other current liabilities on the consolidated balance sheets. Under the commercial practice of the PRC, the Company
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_4" id="_IncomeTaxDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All of the tax returns of the Company have been
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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_6" id="_IncomeTaxDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Cayman Islands </i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_16" id="_IncomeTaxDisclosureTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(Loss) profit before income taxes was attributable
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_17" id="_IncomeTaxDisclosureTextBlock-c0_cont_16"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ReconciliationOfOperatingProfitLossFromSegmentsToConsolidatedTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_18" id="_IncomeTaxDisclosureTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Reconciliation between the provision (benefit)
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_19" id="_IncomeTaxDisclosureTextBlock-c0_cont_18"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; ">
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</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_20" id="_IncomeTaxDisclosureTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Deferred
                                            tax assets and liabilities</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_21" id="_IncomeTaxDisclosureTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to PRC tax regulations, net operating
losses can be carried forward to offset future operating income for five years. Significant components of deferred tax assets and liabilities
were as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_22" id="_IncomeTaxDisclosureTextBlock-c0_cont_21"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold; text-align: left">Deferred tax assets</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left">Net operating loss carry forwards</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsOperatingLossCarryforwards" scale="0" unitRef="usd">1,934,559</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Provision for doubtful debts</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="sdh:ProvisionForDoubtfulDebts" scale="0" unitRef="usd">1,439,947</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="sdh:ProvisionForDoubtfulDebts" scale="0" unitRef="usd">1,092,140</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsInventory" scale="0" unitRef="usd">398,578</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-196">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsGoodwillAndIntangibleAssets" scale="0" unitRef="usd">163,420</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-197">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">Deferred tax assets, gross</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsGross" scale="0" unitRef="usd">3,936,504</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsGross" scale="0" unitRef="usd">2,070,356</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">Less: valuation allowance</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsValuationAllowance" scale="0" unitRef="usd">3,936,504</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsValuationAllowance" scale="0" unitRef="usd">1,218,319</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 4pt">Deferred tax assets, net</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right"><div style="-sec-ix-hidden: hidden-fact-198">-</div></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsNet" scale="0" unitRef="usd">852,037</ix:nonFraction></td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">&#160;</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">&#160;</td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">Deferred tax liabilities</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">&#160;</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">&#160;</td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">Assets acquired in the asset acquisition</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredGoodwillAndLiabilitiesAssumedNet" scale="0" unitRef="usd">199,583</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-199">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>




</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_23" id="_IncomeTaxDisclosureTextBlock-c0_cont_22"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has accumulated operating loss of
approximately $<ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PropertySubjectToOrAvailableForOperatingLeaseNet" scale="0" unitRef="usd">10,130,515</ix:nonFraction> and $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PropertySubjectToOrAvailableForOperatingLeaseNet" scale="0" unitRef="usd">4,745,479</ix:nonFraction> as of December 31, 2022 and 2021 for income tax purposes available for offsetting against future
taxable income. The accumulated operating loss were from several PRC subsidiaries of the Company. The graphite anode business was in its
start-up phase for the year ended December 31, 2022. In the meantime, peer-to-peer knowledge sharing and enterprise business continued
to shrink in 2022. Considering the factors in graphite anode business and peer-to-peer knowledge sharing and enterprise business, management
believed that there was substantial doubt on realization of the benefits from these losses as they were not able to estimate if the business
would start to make profits in the near future. In making such determination, the Company considered factors including (i)&#160;future
reversals of existing taxable temporary differences, (ii)&#160;future taxable income exclusive of reversing temporary differences and
carry forwards, and (iii)&#160;tax planning strategies. The following is a schedule of expiration of carry forward operating loss as of
December 31, 2022:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation><div>
</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_24" id="_IncomeTaxDisclosureTextBlock-c0_cont_23"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:LessorOperatingLeasePaymentsToBeReceivedMaturityTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 11pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: left; font-size: 10pt">For the years ending December 31,</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 88%; font-size: 10pt; text-align: left">2023</td><td style="width: 1%; font-size: 10pt">&#160;</td>
    <td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths" scale="0" unitRef="usd">5,360</ix:nonFraction></td><td style="width: 1%; font-size: 10pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-size: 10pt; text-align: left">2024</td><td style="font-size: 10pt">&#160;</td>
    <td style="font-size: 10pt; text-align: left">&#160;</td><td style="font-size: 10pt; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LesseeOperatingLeaseLiabilityPaymentsDueYearTwo" scale="0" unitRef="usd">522,780</ix:nonFraction></td><td style="font-size: 10pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-size: 10pt; text-align: left">2025</td><td style="font-size: 10pt">&#160;</td>
    <td style="font-size: 10pt; text-align: left">&#160;</td><td style="font-size: 10pt; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LesseeOperatingLeaseLiabilityPaymentsDueYearThree" scale="0" unitRef="usd">166,113</ix:nonFraction></td><td style="font-size: 10pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-size: 10pt; text-align: left">2026</td><td style="font-size: 10pt">&#160;</td>
    <td style="font-size: 10pt; text-align: left">&#160;</td><td style="font-size: 10pt; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LesseeOperatingLeaseLiabilityPaymentsDueYearFour" scale="0" unitRef="usd">12,894</ix:nonFraction></td><td style="font-size: 10pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">2027</td><td style="font-size: 10pt; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LesseeOperatingLeaseLiabilityPaymentsDueYearFive" scale="0" unitRef="usd">9,423,368</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&#160;</td></tr>
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</div><div>

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the unrecognized benefits associated with the tax positions. For the fiscal years ended December 31, 2022 and 2021, the Company had no
unrecognized tax benefits.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_IncomeTaxDisclosureTextBlock-c0_cont_25"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the Company&#8217;s operating subsidiaries,
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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of RMB <ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationConsiderationTransferred1" scale="0" unitRef="cny">40,000,000</ix:nonFraction> (approximately $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationConsiderationTransferred1" scale="0" unitRef="usd">5,743,331</ix:nonFraction>), among of which RMB<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:PaidConsideration" scale="0" unitRef="cny">10,000,000</ix:nonFraction> (approximately $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:PaidConsideration" scale="0" unitRef="usd">1,486,746</ix:nonFraction>) was paid in July 2022. The unpaid
consideration RMB<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:UnpaidConsideration" scale="0" unitRef="cny">30,000,000</ix:nonFraction> (approximately $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="sdh:UnpaidConsideration" scale="0" unitRef="usd">4,307,499</ix:nonFraction>) will be paid in installments from 2023 to 2026. The consideration payable is guaranteed
by Mr. Haiping Hu. See Note 12.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:StockholdersEquityNoteDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 17 &#8211; SHAREHOLDERS&#8217; EQUITY</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_2" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Ordinary shares</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_3" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">EPOW was established under the laws of the Cayman
Islands on February 22, 2019. The authorized number of Ordinary Shares was <ix:nonFraction contextRef="c280" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesAuthorized" scale="0" unitRef="shares">500,000,000</ix:nonFraction> with par value of&#8201;$<ix:nonFraction contextRef="c280" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares">0.0001</ix:nonFraction> per share. On
February 22, 2019, EPOW issued <ix:nonFraction contextRef="c281" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" scale="0" unitRef="shares">999,999</ix:nonFraction> new shares to the controlling shareholders and one share to Osiris International Cayman Limited
at par $<ix:nonFraction contextRef="c282" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:SharesIssuedPricePerShare" scale="0" unitRef="usdPershares">0.0001</ix:nonFraction> per share. On August 8, 2019, EPOW issued an aggregate of <ix:nonFraction contextRef="c283" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" scale="0" unitRef="shares">27,000,000</ix:nonFraction> ordinary shares at a price of US$<ix:nonFraction contextRef="c284" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:SharesIssuedPricePerShare" scale="0" unitRef="usdPershares">0.0001</ix:nonFraction> per share
with total consideration of US$<ix:nonFraction contextRef="c283" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodValueNewIssues" scale="0" unitRef="usd">2,800</ix:nonFraction>,&#160;pro-rata&#160;to the shareholders of EPOW as of such date.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_4" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonNumeric contextRef="c285" name="us-gaap:StockholdersEquityReverseStockSplit">On April 2, 2020, the shareholders of the Company
unanimously authorize a one-for-0.88 reverse stock split of the Company&#8217;s outstanding and issued ordinary shares (the &#8220;First
Reverse Stock Split&#8221;), which became effective on April 3, 2020.</ix:nonNumeric> Any fractional ordinary share that would have otherwise resulted
from the First Reverse Stock Split were rounded up to the nearest full share. The First Reverse Stock Split did not change the par value
of the ordinary shares and had no effect on the number of authorized ordinary shares of the Company. As a result of the First Reverse
Stock Split, <ix:nonFraction contextRef="c286" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ExcessStockSharesIssued" scale="0" unitRef="shares"><ix:nonFraction contextRef="c286" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ExcessStockSharesOutstanding" scale="0" unitRef="shares">28,000,000</ix:nonFraction></ix:nonFraction> ordinary shares that were issued and outstanding at April 3, 2020 was reduced to <ix:nonFraction contextRef="c286" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares">24,640,000</ix:nonFraction> ordinary shares (taking
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</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_5" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonNumeric contextRef="c287" name="us-gaap:StockholdersEquityReverseStockSplit">On April 24, 2020, the shareholders of the Company
unanimously authorize another one-for-0.68 reverse stock split of the Company&#8217;s issued and outstanding ordinary shares (the &#8220;Second
Reverse Stock Split&#8221;), which became effective on April 24, 2020.</ix:nonNumeric> Any fractional ordinary share that would have otherwise resulted
from the Second Reverse Stock Split were rounded up to the nearest full share. The Second Reverse Stock Split did not change the par
value of the ordinary shares and had no effect on the number of authorized ordinary shares of the Company. As a result of the Second
Reverse Stock Split, <ix:nonFraction contextRef="c288" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ExcessStockSharesIssued" scale="0" unitRef="shares"><ix:nonFraction contextRef="c288" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ExcessStockSharesOutstanding" scale="0" unitRef="shares">24,640,000</ix:nonFraction></ix:nonFraction> ordinary shares that were issued and outstanding at April 24, 2020 was reduced to <ix:nonFraction contextRef="c288" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares">16,800,000</ix:nonFraction> ordinary
shares (taking into account the rounding of fractional shares).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_6" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 11, 2021, the Company closed its
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a price of $<ix:nonFraction contextRef="c289" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SharesIssuedPricePerShare" scale="0" unitRef="usdPershares">4.00</ix:nonFraction> per share and received total gross proceed of $<ix:nonFraction contextRef="c290" decimals="0" format="ixt:num-dot-decimal" name="sdh:GrossProceed" scale="0" unitRef="usd">26,880,000</ix:nonFraction>. Besides, the Company offered <ix:nonFraction contextRef="c291" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" scale="0" unitRef="shares">1,008,000</ix:nonFraction> ordinary shares, par
value $<ix:nonFraction contextRef="c292" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:TemporaryEquityRedemptionPricePerShare" scale="0" unitRef="usdPershares">0.0001</ix:nonFraction> per share, as part of the representative of the underwriters&#8217; over-allotment option, at a price of $<ix:nonFraction contextRef="c292" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SharesIssuedPricePerShare" scale="0" unitRef="usdPershares">4.00</ix:nonFraction> per share
and received total gross proceed of $<ix:nonFraction contextRef="c291" decimals="0" format="ixt:num-dot-decimal" name="sdh:GrossProceed" scale="0" unitRef="usd">4,032,000</ix:nonFraction>. Total net proceeding amounted to $<ix:nonFraction contextRef="c291" decimals="0" format="ixt:num-dot-decimal" name="sdh:NetProceeding" scale="0" unitRef="usd">27,504,639</ix:nonFraction> after deducting underwriting discounts and
other related expenses.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_7" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Share-based compensation</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_8" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recorded share-based compensation
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the allocation of share-based compensation expenses:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_9" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_8"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfEmployeeServiceShareBasedCompensationAllocationOfRecognizedPeriodCostsTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherCostOfOperatingRevenue" scale="0" unitRef="usd">8,188</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-213">&#160;&#160;&#160;-</div></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-214">&#160;&#160;&#160;&#160;-</div></td><td style="width: 1%; text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-215">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-216">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">General and administrative expenses</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherGeneralAndAdministrativeExpense" scale="0" unitRef="usd">2,674,292</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-217">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-218">-</div></td><td style="text-align: left">&#160;</td></tr>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-219">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_10" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company adopted the 2022 Stock Incentive
Plan for the grant of restricted share units to employees, directors and non-employees to provide incentive for their services.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_11" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The maximum number of ordinary shares that may
be delivered pursuant to compensatory awards granted to the employees, directors and non-employees under the 2022 Stock Incentive Plan
should not exceed <ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ExcessStockSharesIssued" scale="0" unitRef="shares">3,679,200</ix:nonFraction> ordinary shares of par value $<ix:nonFraction contextRef="c2" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:TemporaryEquityRedemptionPricePerShare" scale="0" unitRef="usdPershares">0.0001</ix:nonFraction> per share.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_12" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Restricted share units</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_13" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On August 26, 2022, the Company granted <ix:nonFraction contextRef="c293" decimals="0" format="ixt:num-dot-decimal" name="sdh:GrantedRestrictedShare" scale="0" unitRef="shares">3,334,200</ix:nonFraction>
restricted share units to its directors and employees. <ix:nonFraction contextRef="c293" decimals="2" format="ixt:num-dot-decimal" name="sdh:RestrictedSharePercentage" scale="-2" unitRef="pure">25</ix:nonFraction>% of the restricted share units was immediately vested on August 26, 2022. <ix:nonFraction contextRef="c293" decimals="2" format="ixt:num-dot-decimal" name="sdh:NonvestedPercentage" scale="-2" unitRef="pure">75</ix:nonFraction>%
of the restricted share units will be vested in <ix:nonNumeric contextRef="c293" format="ixt-sec:durwordsen" name="sdh:VestedTerm">three years</ix:nonNumeric> with equal yearly installments after August 26, 2022. The grant date fair
value of the restricted share units was $<ix:nonFraction contextRef="c293" decimals="2" format="ixt:num-dot-decimal" name="sdh:RestrictedShareParValue" scale="0" unitRef="usdPershares">2.00</ix:nonFraction> per share, which was the closing price of the Company&#8217;s ordinary share on NASDAQ
on August 26, 2022. This grant resulted in a total share-based compensation of $<ix:nonFraction contextRef="c293" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EmployeeBenefitsAndShareBasedCompensation" scale="0" unitRef="usd">6,668,400</ix:nonFraction> to be recognized ratably over the requisite
service period of <ix:nonNumeric contextRef="c293" format="ixt-sec:duryear" name="sdh:ServicePeriodTerm">3</ix:nonNumeric> years.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p></ix:continuation><div>
</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

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</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_15" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_14"><ix:nonNumeric contextRef="c0" escape="true" name="sdh:ScheduleOfNoncontrollingInterestTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_16" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The weighted average grant date fair value of
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</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_17" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group recognized compensation expense over
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</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_18" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Non-controlling interest</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_19" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Non-controlling interest consists of the following:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c304" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:MinorityInterest" scale="0" unitRef="usd">4,313</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Jiagui Haifeng</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c311" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:MinorityInterest" scale="0" sign="-" unitRef="usd">35</ix:nonFraction></td><td style="text-align: left">)</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c312" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:MinorityInterest" scale="0" unitRef="usd">13,270</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-229">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c316" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:MinorityInterest" scale="0" sign="-" unitRef="usd">39,323</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-230">-</div></td><td style="text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; ">
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</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_21" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Jiagui Haifeng was established by Zibo Shidong
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</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_22" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_21"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Sunrise Guizhou was established by Zhuhai (Zibo) Investment and five other companies in November, 2021. Shidong Cloud was established by GIOP BJ and Beijing Yunqianyi Information Technology Co., Ltd. (&#8220;Yunqianyi&#8221;) in December 2022. <ix:nonFraction contextRef="c296" decimals="2" format="ixt:num-dot-decimal" name="sdh:EquityInterestRate" scale="-2" unitRef="pure">75</ix:nonFraction>% shares of Shidong Cloud was held by GIOP BJ and <ix:nonFraction contextRef="c297" decimals="2" format="ixt:num-dot-decimal" name="sdh:EquityInterestRate" scale="-2" unitRef="pure">25</ix:nonFraction>% of shares was held by Yunqianyi.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_24" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_23"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended December 31, 2022, the Company
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</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_25" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_24"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the years ended December 31, 2022 and 2021,
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</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_26" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_25"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The actual capital contributions made by the
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in its eight subsidiaries.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_28" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_27"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In accordance with the Regulations on Enterprises
of PRC, the Company&#8217;s subsidiaries, GIOP BJ, VIE and VIE&#8217;s subsidiaries in the PRC are required to provide for statutory
reserves, which are appropriated from net profit as reported in the Company&#8217;s PRC statutory accounts. They are required to allocate
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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_30" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_29"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Restricted net assets</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_30"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&#8217;s PRC subsidiaries and the VIE
and VIE&#8217;s subsidiaries are restricted in their ability to transfer a portion of their net assets, equivalent to their statutory
reserves and their share capital to the Company in the form of loans, advances, or cash dividends. The payment of dividends by entities
organized in China is subject to limitations, procedures, and formalities. Regulations in the PRC currently permit payment of dividends
only out of accumulated profits as determined in accordance with accounting standards and regulations in China. As of December 31, 2022,
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</div><div>

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</div><div>

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proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general,
are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency
should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. Although the outcomes of these legal
proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on
its financial position, results of operations or liquidity. As of December 31, 2022, the Company was not aware of any litigations or
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

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standards for reporting information about operating segments on a basis consistent with the Company&#8217;s internal organizational structure
as well as information about geographical areas, business segments and major customers in financial statements for details on the Company&#8217;s
business segments.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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chief operating decision maker (&#8220;CODM&#8221;) for making decisions, allocating resources and assessing performance. The Company&#8217;s
CODM has been identified as the CEO, who reviews consolidated results when making decisions about allocating resources and assessing
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</div><div>

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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 158; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

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approximately $<ix:nonFraction contextRef="c349" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromLinesOfCredit" scale="0" unitRef="usd">4,307,498</ix:nonFraction>, for a term from January 19, 2023 to January 18, 2031. This credit loan was guaranteed by Mr. Haiping Hu, CEO
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</div><div>

</div><ix:continuation continuedAt="_SubsequentEventsTextBlock-c0_cont_3" id="_SubsequentEventsTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 7, 2023, Sunrise Guizhou entered
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approximately $<ix:nonFraction contextRef="c350" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DebtCurrent" scale="0" unitRef="usd">2,871,665</ix:nonFraction>, for a term from February 7, 2023 to February 7, 2025 with five-year loan prime rate plus <ix:nonFraction contextRef="c350" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:InvestmentInterestRate" scale="-2" unitRef="pure">2.6</ix:nonFraction>%. This debt financing
arrangement was guaranteed by Mr. Haiping Hu, CEO and Chairman of the Board of Director, and Zhuhai Zibo. The Company also pledged its
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</div><div>

</div><ix:continuation id="_SubsequentEventsTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company evaluated subsequent events and transactions
that occurred after the balance sheet date through May 16, 2023, the date that the audited consolidated financial statements were available
to be issued.</p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

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S-X require the condensed financial information of the parent company to be filed when the restricted net assets of consolidated subsidiaries
exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. The Company performed a test on
the restricted net assets of consolidated subsidiaries in accordance with such requirement and concluded that it was applicable to the
Company as the restricted net assets of the Company&#8217;s PRC subsidiaries and VIE and its subsidiaries exceeded <ix:nonFraction contextRef="c2" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:InvestmentOwnedPercentOfNetAssets" scale="-2" unitRef="pure">25</ix:nonFraction>% of the consolidated
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</div><div>

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net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not
be transferred to the parent company by subsidiaries and VIE and its subsidiaries in the form of loans, advances or cash dividends without
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</div><div>

</div><ix:continuation continuedAt="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_4" id="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The condensed financial information of the parent
company has been prepared using the same accounting policies as set out in the Company&#8217;s consolidated financial statements except
that the parent company used the equity method to account for investment in its subsidiaries and VIE and its subsidiaries. Such investment
is presented on the condensed balance sheets as &#8220;Investment in subsidiaries and VIE&#8221; and the respective loss or profit as
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</div><div>

</div><ix:continuation continuedAt="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_5" id="_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The footnote disclosures contain supplemental
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the consolidated financial statements of the Company. Certain information and footnote disclosures normally included in financial statements
prepared in accordance with U.S GAAP have been condensed or omitted.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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periods presented. As of December 31, 2022 and 2021, there were no material contingencies, significant provisions for long-term obligations,
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->37<!-- Field: /Sequence --></span></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>SUNRISE NEW ENERGY CO., LTD.</b></p><div>

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</div><div>

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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction contextRef="c353" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LiabilitiesCurrent" scale="0" unitRef="usd">211,430</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">TOTAL LIABILITES</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-indent: -9pt; padding-left: 9pt">EQUITY</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c353" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockValue" scale="0" unitRef="usd">2,453</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Additional paid-in capital</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c352" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AdditionalPaidInCapitalCommonStock" scale="0" unitRef="usd">34,696,702</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Statutory reserves</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c352" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:TreasuryStockValue" scale="0" unitRef="usd">2,477,940</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c353" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:TreasuryStockValue" scale="0" unitRef="usd">2,473,801</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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</div><div>




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</div><!-- Field: Page; Sequence: 161; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>SUNRISE NEW ENERGY CO., LTD.</b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>SUNRISE NEW ENERGY CO., LTD.</b></p><div>

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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
20-F
☐
REGISTRATION
STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended
December 31
,
2022
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date
of event requiring this shell company report:
For
the transition period from _________ to _____________.
Commission
file number:
001-40008
Sunrise New Energy Co., Ltd.
(Exact name of Registrant as Specified in its Charter)
Cayman Islands
(Jurisdiction of Incorporation or Organization)
Room 703, West Zone, R&D Building
Zibo
Science and Technology Industrial Entrepreneurship Park
,
No. 69
Sanying Road
Zhangdian District, Zibo City, Shandong Province
People's Republic of
China
+861082967728
(Address of Principal Executive Offices)
Haiping Hu
, Chief Executive Officer
Room 703, West Zone, R&D Building
Zibo
Science and Technology Industrial Entrepreneurship Park
,
No. 69
Sanying Road
Zhangdian District, Zibo City, Shandong Province
People's Republic of
China
+861082967728
(Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person)
Securities
registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
ordinary share
EPOW
The Nasdaq Stock Market LLC
Securities
registered or to be registered pursuant to Section 12(g) of the Act:
None
(Title
of Class)
Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
(Title
of Class)
Indicate
the number of outstanding shares of each of the issuer's classes of capital stock as of the close of the period covered by the
annual report.
An aggregate of
25,361,550
ordinary shares, par
value $0.0001 per share, were outstanding as of December 31, 2022.
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
No
☒
If
this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐
No
☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes
☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files).
Yes
☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
"large accelerated filer, 'accelerated filer" and "emerging growth company" in Rule 12b-2 of the Exchange
Act. (Check one):
Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☒
Emerging growth company
☒
If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided
pursuant to Section 13(a) of the Exchange Act.
☐
If securities are registered pursuant
to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect
the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive
officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
☒
U.S. GAAP
☐
International Financial Reporting Standards as issued by the International Accounting Standards Board
☐
Other
If
"Other" has been checked in response to the previous question, indicate by check mark which financial statement item the
registrant has elected to follow: Item 17 ☐  Item 18 ☐
If
this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes ☐ No
☒
Indicate
by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
TABLE
OF CONTENTS
INTRODUCTION
ii
FORWARD-LOOKING
    INFORMATION
iv
PART
    I
1
ITEM
    1.
IDENTITY
    OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
1
ITEM
    2.
OFFER
    STATISTICS AND EXPECTED TIMETABLE
1
ITEM
    3.
KEY
    INFORMATION
1
ITEM
    4.
INFORMATION
    ON THE COMPANY
38
ITEM
    4A.
UNRESOLVED
    STAFF COMMENTS
70
ITEM
    5.
OPERATING
    AND FINANCIAL REVIEW AND PROSPECTS
70
ITEM
    6.
DIRECTORS,
    SENIOR MANAGEMENT AND EMPLOYEES
87
ITEM
    7.
MAJOR
    SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
95
ITEM
    8.
FINANCIAL
    INFORMATION
97
ITEM
    9.
THE
    OFFER AND LISTING
98
ITEM
    10.
ADDITIONAL
    INFORMATION
98
ITEM
    11.
QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
110
ITEM
    12.
DESCRIPTION
    OF SECURITIES OTHER THAN EQUITY SECURITIES
110
PART
    II
111
ITEM
    13.
DEFAULTS,
    DIVIDEND ARREARAGES AND DELINQUENCIES
111
ITEM
    14.
MATERIAL
    MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
111
ITEM
    15.
CONTROLS
    AND PROCEDURES
111
ITEM
    16.
[RESERVED]
112
ITEM
    16A.
AUDIT
    COMMITTEE FINANCIAL EXPERT
112
ITEM
    16B.
CODE
    OF ETHICS
112
ITEM
    16C.
PRINCIPAL
    ACCOUNTANT FEES AND SERVICES
113
ITEM
    16D.
EXEMPTIONS
    FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
113
ITEM
    16E.
PURCHASES
    OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
113
ITEM
    16F.
CHANGE
    IN REGISTRANT'S CERTIFYING ACCOUNTANT
113
ITEM
    16G.
CORPORATE
    GOVERNANCE
114
ITEM
    16H.
MINE
    SAFETY DISCLOSURE
114
ITEM
    16I.
DISCLOSURE
    REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
114
PART
    III
115
ITEM
    17.
FINANCIAL
    STATEMENTS
115
ITEM
    18.
FINANCIAL
    STATEMENTS
115
ITEM
    19.
EXHIBITS
115
i
INTRODUCTION
We
are a holding company incorporated in the Cayman Islands with no material operations of our own. We are not a Chinese operating company.
Investors of our Ordinary Shares do not own any equity interests in the VIE, but instead own shares of a Cayman Islands holding company.
Unless otherwise stated, as used in this annual report and in the context of describing our operations and consolidated financial information,
"we," "us," "Company," "Sunrise New Energy", or "our," refers to Sunrise
New Energy Co., Ltd., a Cayman Islands holding company, and "VIE" refers to the variable interest entity ("VIE"),
Global Mentor Board (Beijing) Information Technology Co., Ltd., or SDH.
Unless
the context otherwise requires, in this annual report on Form 20-F, references to:
●
"Affiliated
    Entities" are to Sunrise New Energy's subsidiaries, and the VIE and its subsidiaries;
●
"APP"
    are to our mobile application, "Shidonghui APP;"
●
"China"
    or the "PRC" are to the People's Republic of China;
●
"Enterprise
    Service Client" or "Enterprise Service Clients" are to small and medium-sized enterprises that have entered into
    service agreements with us for customized enterprise services;
●
"Expert"
    or "Experts" are to individual(s) qualified and certified by us to provide services to Users and Members;
●
"GIOP BJ" are to Beijing Mentor Board Union
    Information Technology Co, Ltd., a limited liability company organized under the laws of the PRC, Zhuhai Zibo's wholly owned
    subsidiary;
●
"GMB
    HK" are to "Global Mentor Board Information Technology Limited", Sunrise New Energy's wholly-owned-subsidiary,
    a Hong Kong corporation.
●
"GMB
    (Hangzhou)" are to Global Mentor Board (Hangzhou) Technology Co., Ltd., a limited liability company organized under the laws
    of the PRC, the VIE's wholly owned subsidiary;
●
"GMB
    (Beijing)" are to Shidong (Beijing) Information Technology Co., Ltd., a limited liability company organized under the laws
    of the PRC and 51% of its equity interest is owned by the VIE;
●
"GMB
    Culture" are to Shanghai Voice of Seedling Cultural Media Co., Ltd., a limited liability company organized under the laws of
    the PRC and 51% of its equity interest is owned by the VIE;
●
"GMB
    Consulting" are to Global Mentor Board (Shanghai) Enterprise Management Consulting Co. Ltd., a limited liability company organized
    under the laws of the PRC and 51% of its equity interest is owned by the VIE;
●
"GMB
    Linking" are to "Linking (Shanghai) Network Technology Co., Ltd., a limited liability company organized under the laws
    of the PRC; the 51% of its equity interest owned by the VIE was transferred to a third party in July 2021;
ii
●
"HK subsidiaries" are to GMB HK and SDH New
    Energy; and
●
"Member"
    or "Members" are to individual(s) and enterprise(s) who signed up for each of our three annual membership plans: Platinum,
    Diamond, Protégé;
●
"Mentor"
    or "Mentors" are to individual(s) invited by us to provide services to Users and Members;
●
"PRC subsidiaries" are to GIOP BJ, Zhuhai Zibo,
    Zhuhai Guizhou and their respective subsidiaries.
●
"shares,"
    "Shares," or "Ordinary Shares" are to the Ordinary Shares of the Company, par value US$0.0001 per share;
●
"SDH"
    or "the VIE" are to Global Mentor Board (Beijing) Information Technology Co., Ltd., a limited liability company organized
    under the laws of the PRC, which we control via a series of contractual arrangements among GIOP BJ, the VIE and shareholders of the
    VIE;
●
"SDH
    Cloud" are to Global Mentor Cloud (Beijing) Education Technology Co., Ltd.; 75% of the shares of SDH Cloud are held by GIOP
    BJ and the remaining 25% shares are held by Beijing Yunqianyi Information Technology Co., Ltd.
●
"SDH
    New Energy" are to SDH (HK) New Energy Tech Co., Limited, Sunrise New Energy's wholly-owned-subsidiary, a Hong Kong corporation.
●
"Sunrise
    Guizhou" are to Sunrise (Guizhou) New Energy Material Co., Ltd, a limited liability company organized under the laws of the
    PRC and 39.3519% of its equity interest is owned by Sunrise New Energy;
●
"U.S."
    are to the United States;
●
"User"
    or "Users" are to registered users of our APP;
●
"VIE"
    are to variable interest entity;
●
"Zhuhai
                                            Zibo" are to Zhuhai (Zibo) Investment Co., Ltd.,  a limited liability company
                                            organized under the laws of the PRC, SDH New Energy's wholly owned subsidiary;
●
"Zhuhai
    Guizhou" are to Zhuhai (Guizhou) New Energy Investment Co., Ltd., a limited liability company organized under the laws of the
    PRC, SDH New Energy's wholly owned subsidiary;
●
"Zibo
    Shidong" are to Zibo Shidong Digital Technology Service Co., Ltd., a limited liability company organized under the laws of
    the PRC, the VIE's wholly owned subsidiary;
As
of the date of this annual report, substantially all of the Company's business is conducted by (1) Sunrise Guizhou, a joint venture
formed by the Company and certain other shareholders in 2022, and (2) SDH, the Company's VIE entity, in the PRC, using RMB, the
currency of China. Our consolidated financial statements are presented in United States dollars or US$. In this annual report, we refer
to assets, obligations, commitments and liabilities in our consolidated financial statements in United States dollars or US$. These US$
references are based on the exchange rate of RMB to United States dollars, determined as of a specific date or for a specific period.
Changes in the exchange rate will affect the amount of our obligations and the value of our assets in terms of United States dollars
which may result in an increase or decrease in the amount of our obligations and the value of our assets, including accounts receivable.
Unless
expressly indicated herein to the contrary, all references to share amounts in this annual report give retroactive effect to share consolidations,
the last of which was effected on April 24, 2020.
iii
FORWARD-LOOKING
INFORMATION
This
annual report on Form 20-F contains 'forward-looking statements' within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties.
Known and unknown risks, uncertainties and other factors, including those listed under "Item 3. Key Information—D. Risk Factors,"
may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking
statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance
or achievements to be materially different from those expressed or implied by the forward-looking statements.
You
can identify some of these forward-looking statements by words or phrases such as "may," "will," "expect,"
"anticipate," "aim," "estimate," "intend," "plan," "believe,"
"is/are likely to," "potential," "continue" or other similar expressions. We have based these forward-looking
statements largely on our current expectations and projections about future events that we believe may affect our financial condition,
results of operations, business strategy and financial needs. These forward-looking statements include statements relating to:
●
future
    financial and operating results, including revenues, income, expenditures, cash balances and other financial items;
●
our
    ability to execute our growth and expansion, including our ability to meet our goals;
●
current
    and future economic and political conditions;
●
the
    future growth of the Chinese knowledge sharing and enterprise service industries;
●
our
    ability to continue to operate through the VIE structure;
●
our
    capital requirements and our ability to raise any additional funds which we may require;
●
our
    ability to attract clients and further enhance our brand recognition;
●
our
    ability to hire and retain qualified management personnel and key employees in order to enable us to develop our business;
●
trends
    and competition in Chinese enterprise service and knowledge sharing industries;
●
impact
    of the novel COVID-19 outbreak on our business operations; and
●
other
    assumptions described in this annual report underlying or relating to any forward-looking statements.
These
forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking
statements are reasonable, our expectations may later be found to be incorrect. Our actual results could be materially different from
our expectations. Other sections of this annual report include additional factors that could adversely impact our business and financial
performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not
possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business
or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any
forward-looking statements. You should read thoroughly this annual report and the documents that we refer to with the understanding that
our actual future results may be materially different from, or worse than, what we expect. We qualify all of our forward-looking statements
by these cautionary statements.
This
annual report contains certain data and information that we obtained from various government and private publications. Statistical data
in these publications also include projections based on a number of assumptions. The insurance industry may not grow at the rate projected
by market data, or at all. Failure of this market to grow at the projected rate may have a material and adverse effect on our business
and the market price of the Ordinary Shares. In addition, the rapidly evolving nature of this industry results in significant uncertainties
for any projections or estimates relating to the growth prospects or future condition of our market. Furthermore, if any one or more
of the assumptions underlying the market data are later found to be incorrect, actual results may differ from the projections based on
these assumptions. You should not place undue reliance on these forward-looking statements.
The
forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are
made in this annual report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements,
whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the
occurrence of unanticipated events. You should read this annual report and the documents that we refer to in this annual report and exhibits
to this annual report completely and with the understanding that our actual future results may be materially different from what we expect.
iv
PART
I
Item
1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not
Applicable.
Item
2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not
Applicable.
Item
3. KEY INFORMATION
We
are a Cayman Islands holding company conducting a substantial portion of our operations in China through our PRC operating entities.
Unless otherwise stated, as used in this annual report, the terms "we," "us," "our," "Sunrise
New Energy," "our Company," and the "Company" refer to Sunrise New Energy Co., Ltd., an exempted company
limited by shares incorporated under the laws of the Cayman Islands; and "SDH" or "the VIE" are to Global Mentor
Board (Beijing) Information Technology Co., Ltd., a limited liability company organized under the laws of the PRC, which we control via
a series of contractual arrangements among GIOP BJ, SDH and shareholders of SDH (the "VIE Agreements").
As
of the date of this annual report, substantially all of our business is conducted by (1) Sunrise Guizhou, a joint venture established
by Zhuhai Zibo (a wholly owned subsidiary of the Company) and certain other partners, as a limited company pursuant to PRC laws for the
purpose of manufacturing and sales of graphite anode materials; and (2) SDH, the Company's VIE entity that operates a knowledge
sharing platform in China. Investors of our Ordinary Shares do not hold shares in the PRC operating entities, but instead hold shares
of a Cayman Islands company. Further, neither we nor our subsidiaries own any shares in the VIE. Instead, for accounting purposes, we
control and receive the economic benefits of the VIE's business operation through a series of contractual arrangements, also known
as VIE Agreements, dated June 10, 2019. The VIE Agreements enable us to consolidate the financial results of the VIE and its subsidiaries
in our consolidated financial statements under the generally accepted accounting principles in the United States ("U.S. GAAP").
Pursuant to the VIE Agreements, which have not been tested in a court of law, under, the assets and liabilities of the VIE are treated
as our assets and liabilities and the results of operations of the VIE are treated as if they were the results of our operations. See
"Item 3. Key Information — Contractual Agreements among GIOP BJ, the VIE and Its Shareholders" for a summary of these
VIE Agreements.
We
have relied and expect to continue to rely on the VIE Agreements to control and operate the business of the VIE. The VIE Agreements,
however, may not be as effective in providing us with the necessary control over the VIE and its operations. For example, the VIE and
its shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations in an
acceptable manner or taking other actions that are detrimental to our interests. If we had direct ownership of the VIE, we would be able
to exercise our rights as a shareholder to effect changes in the board of directors of the VIE, which in turn could implement changes,
subject to any applicable fiduciary obligations, at the management and operational level. Under the current VIE Agreements, however,
we rely on the performance by the VIE and its shareholders of their respective obligations under the contracts to exercise control over
the VIE. We are also subject to the risks of uncertainty about any future actions of the PRC government in this regard. Because of our
corporate structure, we are subject to risks due to uncertainty of the interpretation and the application of the PRC laws and regulations,
including but not limited to the validity and enforcement of the VIE Agreements. The VIE Agreements may not be effective in providing
control over the VIE. We may be also subject to sanctions imposed by PRC regulatory agencies including Chinese Securities Regulatory
Commission if we fail to comply with their rules and regulations. See "Risk Factors—Risks Related to Doing Business
in China," and "Risk Factors—Risks Related to Our Corporate Structure."
As
of December 31, 2022 and 2021, the VIE accounted for an aggregate of 8.79% and 51.21%, respectively, of our consolidated total assets,
13.04% and 99% respectively, of our consolidated total liabilities, and 1.61% and 100% respectively, of our consolidated total net revenues.
See our consolidated financial statements and the related notes in this annual report.
1
We
are subject to legal and operational risks associated with being based in the PRC, which could result in a material change in our PRC
operating entities and the VIE's operations and/or the value of the securities we are registering for sale, or could significantly
limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to
significantly decline or be worthless. PRC laws and regulations governing our current business operations are sometimes vague and uncertain.
Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in the PRC
with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the
scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. For example, the General Office of the Central
Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severely Cracking
Down on Illegal Securities Activities According to Law, or the Opinions, which were made available to the public on July 6, 2021. The
Opinions emphasized the need to strengthen the administration over illegal securities activities and the need to strengthen the supervision
over overseas listings by Chinese companies. As of the date of this annual report, we, our PRC subsidiaries, or the VIE and its subsidiaries
have not been involved in any investigations on cybersecurity review initiated by any PRC regulatory authority, nor has any of them received
any inquiry, notice, or sanction.
As
confirmed by our PRC counsel, Jincheng Tongda & Neal Law Firm ("JT&N"), as of the date of this annual report, we
are not subject to cybersecurity review with the Cyberspace Administration of China, or the CAC, under the Cybersecurity Review Measures
that became effective on February 15, 2022, or if the draft Regulations on the Network Data Security Administration (Draft for Comments)
(the "Security Administration Draft") is enacted as proposed, since (i) as companies that engage in business-oriented consulting
services and manufacturing and sales of graphite anode materials, we, our PRC subsidiaries, or the VIE and its subsidiaries, are unlikely
to be classified as critical information infrastructure operators ("CIIOs") by the PRC regulatory agencies; (ii) according
to the interpretation of the relevant laws by the CAC, for online platform operators who have listed in foreign countries before the
effective date of Cybersecurity Review Measures, and who are not seeking a new listing (such as a secondary or dual listing) in foreign
countries, a cybersecurity review is not required; and (iii) the data processed in the business of the VIE and its subsidiaries, which
is a knowledge sharing and enterprise service platform business, is unlikely to have a bearing on national security. There remains uncertainty,
however, as to how the Cybersecurity Review Measures and the Security Administration Draft will be interpreted or implemented and whether
the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation
related to the Cybersecurity Review Measures and the Security Administration Draft. See "Risk Factors—Risks Relating to Doing
Business in the PRC—Recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign
exchange, could adversely impact our business and our offering."
Furthermore,
on February 17, 2023, the China Securities Regulatory Commission (the "CSRC") released the Trial Administrative Measures
of Overseas Securities Offering and Listing by Domestic Companies (the "Trial Measures") and five supporting guidelines,
which took effect on March 31, 2023. Pursuant to the Trial Measures, PRC domestic companies that seek to offer or list securities overseas,
both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within
three working days following its submission of relevant applications or its completion of subsequent offerings. If a domestic company
fails to complete required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such
domestic company may be subject to administrative penalties, such as an order to rectify, warnings, fines, and its controlling shareholders,
actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties,
such as warnings and fines. On the same day, the CSRC also held a press conference for the release of the Trial Measures and issued the
Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies
, or the CSRC Notice, which, among
others, clarifies that PRC domestic companies that have already been listed overseas before the effective date of the Trial Measures,
which is March 31, 2023, shall be deemed as Existing Issuers, and Existing Issuers are not required to complete the filing procedures
with the CSRC immediately, and they shall be required to file with the CSRC for any subsequent offerings. We are an Existing Issuer,
based on the foregoing, and we are not, therefore, required to complete the filing procedures with the CSRC immediately, and shall be
required, however, to file with the CSRC for any subsequent offerings. As of the date of this annual report, we are not aware of the
Trial Measures or any other PRC laws or regulations currently in effect requiring that we obtain permission from any PRC government authority
for our continued listing on the Nasdaq. However, since these statements and regulatory actions are newly published, however, official
guidance and related implementation rules have not been issued. It is highly uncertain what the potential impact such modified or new
laws and regulations will have on the daily business operations of our subsidiaries and the VIE, our ability to accept foreign investments,
and our listing on an U.S. exchange. See "
Risk Factors—Risks Relating to Doing Business in the PRC—The Trial Measures
and the revised Provisions recently issued by the PRC authorities may subject us to additional compliance requirements in the future.
"
2
Since
2021, the Chinese government has strengthened its anti-monopoly supervision, mainly in three aspects: (i) establishing the National Anti-Monopoly
Bureau; (ii) revising and promulgating anti-monopoly laws and regulations, including: the Anti-Monopoly Law of the PRC (amended on June
24, 2022 and effective on August 1, 2022), the anti-monopoly guidelines for various industries, and the Detailed Rules for the Implementation
of the Fair Competition Review System; and (iii) expanding the anti-monopoly law enforcement targeting Internet companies and large enterprises.
As of the date of this annual report, the Chinese government's recent statements and regulatory actions related to anti-monopoly
concerns have not impacted our or our PRC subsidiaries, or the VIE and its subsidiaries' ability to conduct business, our ability
to accept foreign investments or issue our securities to foreign investors because neither we and our subsidiaries, nor our PRC subsidiaries,
or the VIE and its subsidiaries engage in monopolistic behaviors that are subject to these statements or regulatory actions.
In addition, our Ordinary Shares may be prohibited
from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable Act (the "HFCA Act")
and related regulations, if the Public Company Accounting Oversight Board (United States) (the "PCAOB") is unable to inspect
our auditor for two consecutive years beginning in 2022. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies
Accountable Act, and on December 29, 2022, legislation entitled "Consolidated Appropriations Act, 2023" (the "Consolidated
Appropriations Act") was signed into law, which included an identical provision of the Accelerating Holding Foreign Companies Accountable
Act and amended the HFCA Act by requiring the U.S. Securities and Exchange Commission (the "SEC") to prohibit an issuer's
securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead
of three, thus reducing the time period for triggering the delisting of our Company and the prohibition of trading in our securities if
the PCAOB is unable to inspect our accounting firm at such future time. On December 16, 2021, the PCAOB issued a report on its determinations
that it was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in
Hong Kong, because of positions taken by PRC authorities in those jurisdictions. On December 15, 2022, the PCAOB Board determined that
the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China
and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail
to facilitate the PCAOB's access in the future, the PCAOB Board will consider the need to issue a new determination. Our former
auditor, Friedman LLP, the independent registered public accounting firm that issued the audit report included in our 2021 annual report,
was a PCAOB-registered public accounting firm headquartered in New York during the time it served as our independent auditor. Our current
auditor, Marcum Asia CPAs LLP ("MarcumAsia"), has been our independent auditor since December 16, 2022. The change in auditor
was made due to the combination of Friedman LLP with Marcum LLP, effective September 1, 2022. MarcumAsia, is a PCAOB registered public
accounting firm headquartered in New York. Our current and former auditors are both subject to laws in the United States pursuant to which
the PCAOB conducts regular inspections to assess an auditor's compliance with the applicable professional standards, and have been
inspected by the PCAOB on a regular basis. As such, as of the date of this annual report, our listing is not affected by the HFCA Act
and related regulations. See "Risk Factors—Risks Relating to Doing Business in the PRC—The Holding Foreign Companies
Accountable Act and related regulations, all call for additional and more stringent criteria to be applied to emerging market companies
upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments
could add uncertainties to our continued listing on the Nasdaq, and Nasdaq may determine to delist our securities if the PCAOB determines
that it cannot inspect or fully investigate our auditor."
As
of the date of this annual report, our Company, our subsidiaries, and the VIE have not distributed any earnings or settled any amounts
owed under the VIE Agreements, nor do they have any plan to distribute earnings or settle amounts owed under the VIE Agreements in the
foreseeable future. As of the date of this annual report, none of our subsidiaries or the VIE have made any dividends or distributions
to our Company and our Company has not made any dividends or distributions to our shareholders. We intend to keep any future earnings
to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future. If
we determine to pay dividends on any of our Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds
from our operating entities, pursuant to the VIE Agreements. Cash is transferred among our Company, our subsidiaries, and the VIE, in
the following manners: prior to the completion of our initial public offering in February 2021, the sources of funding of Sunrise New
Energy, its subsidiaries and the VIE primarily consisted of capital injection by shareholders and cash generated from operations; after
the completion of our initial public offering, Sunrise New Energy made capital contributions to its subsidiaries. To the extent cash
in the business is in the PRC, the funds may not be available to fund operations or for other use outside of the PRC due to interventions
in or the imposition of restrictions and limitations on the ability of our Company, our subsidiaries, or the VIE by the PRC government
to transfer cash. See "Risk Factors—Risks Relating to Our Corporate Structure—To the extent cash in the business is
in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds may not be available to fund operations or for other use outside of the PRC/Hong
Kong due to interventions in or the imposition of restrictions and limitations on the ability of our Company, our subsidiaries, or the
VIE by the PRC government to transfer cash."
3
The
Company's management is directly supervising cash management. Our finance department is responsible for establishing the cash management
policies and procedures among our subsidiaries and departments and our PRC subsidiaries, or the VIE and its subsidiaries. Each subsidiary,
department, or PRC operating entity initiates a cash request by putting forward a cash demand plan, which explains the specific amount
and timing of cash requested, and submitting it to designated management members of the Company, based on the amount and the use of cash
requested. The designated management member examines and approves the allocation of cash based on the sources of cash and the priorities
of the needs, and submit it to the cashier specialists of our finance department for a second review. Other than the above, we currently
do not have other cash management policies or procedures that dictate how funds are transferred. Prior to the completion of our initial
public offering in February 2021, the sources of funding of the Company, its subsidiaries and the VIE primarily consisted of capital
injections by shareholders and cash generated from operations. Cash transfers and transfers of other assets between Sunrise New Energy,
its subsidiaries, and the VIE were as follows: (i) For the fiscal year ended December 31, 2022, the VIE provided interest-free loans
of $6,188,307 to the Company's subsidiaries, Zhuhai Zibo and Sunrise Guizhou for the construction costs related to the graphite
anode business, and the Company's subsidiary, GMB HK, provided interest-free loans of $310,000 to the Company for professional
fees. (ii) For the fiscal year ended December 31, 2021, the Company transferred the proceeds from its initial public offering in the
amount of $15,000,000 to its subsidiary, Zhuhai Zibo, and the VIE provided interest-free loans of $90,000 to the Company for professional
fees related to the initial public offering. (iii) For the fiscal year ended December 31, 2020, the VIE provided interest-free loans
of $128,282 to the Company for professional fees related to the initial public offering.
Permissions
Required from PRC Authorities
As
of the date of this annual report, we, our PRC subsidiaries, or the VIE and its subsidiaries, (i) are not subject to additional permissions
or approval requirements from any governmental agency that are required to approve the operations of our PRC subsidiaries, or the VIE
and its subsidiaries, (ii) have received from PRC authorities all requisite licenses, permissions, and approvals needed to engage in
the businesses currently conducted in the PRC, and (iii) no such permission or approval has been denied. These licenses, permissions,
and approvals, which have been successfully obtained, are: (1) business license; (2) the ICP License for our knowledge sharing and enterprise
service platform business; and (3) the approval for the Construction Land Use Planning Permit, the Construction Works Planning Permit,
the Construction Permit, the Pollutant Discharge License, the filing-for-record procedures with the relevant work safety administrative
department, the approval for the Environmental Impact Report and the Filing Certificate for Fire Safety Inspection and Acceptance of
Construction Project for our new business of manufacturing and sales of graphite anode material. However, we cannot assure you that any
of these entities will be able to receive clearance of such compliance requirements in a timely manner, or at all. Any failure of these
entities to fully comply with such compliance requirements may cause our PRC subsidiaries, or the VIE and its subsidiaries to be unable
to begin their new businesses or operations in the PRC, subject them to fines, relevant new businesses or operations suspension for rectification,
or other sanctions. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—We may be required
to obtain and maintain additional approvals, licenses or permits applicable to our business, including our online business, which could
have a material adverse impact on our business, financial conditions and results of operations." We have been closely monitoring
the development in the regulatory landscape in China, particularly regarding the requirement of approvals, including on a retrospective
basis, from the CSRC, the CAC, or other PRC authorities with respect to this offering, as well as other procedures that may be imposed
on us.
4
Selected
Condensed Consolidating Financial Schedule
As
a holding company with no material operations of our own, we conduct our operations through Sunrise Guizhou, the VIE and its subsidiaries
in the PRC. Our subsidiaries and the VIE and its subsidiaries as of the date of this annual report are described below:
Name
Date
    of
Incorporation
Place
    of
incorporation
Percentage of
effective
ownership
Principal
Activities
Subsidiaries
Global
    Mentor Board
Information Technology Limited
("GMB HK")
March
    22, 2019
HK
100%
Holding
    company
Beijing
    Mentor Board Union
Information Technology Co, Ltd.
("GIOP BJ")
June
    3, 2019
PRC
100%
Holding
    company
Shidong
    Cloud (Beijing) Education Technology Co., Ltd ("Shidong Cloud")
December
    22, 2021
PRC
75%
Educational
    Consulting
SDH
    (HK) New Energy Tech Co., Ltd. ("SDH New Energy")
October
    8, 2021
Hongkong
100%
Holding
    company
Zhuhai
    (Zibo) Investment Co., Ltd. ("Zhuhai Zibo")
October
    15, 2021
PRC
100%
New
    Energy Investment
Zhuhai
    (Guizhou) New Energy Investment Co., Ltd. ("Zhuhai Guizhou")
November
    23, 2021
PRC
100%
New
    Energy Investment
Sunrise
    (Guizhou) New Energy Materials Co., Ltd.  ("Sunrise Guizhou")
November
    8, 2021
PRC
39.35%
Manufacture
    of Lithium Battery Materials
Guizhou
    Sunrise Technology Co., Ltd. ("Sunrise Tech")
September
    1, 2011
PRC
39.35%
Manufacture
    of Lithium Battery Materials
Sunrise
    (Guxian) New Energy Materials Co., Ltd. ("Sunrise Guxian")
April
    26, 2022
PRC
20.07%
Manufacture
    of Lithium Battery Materials
Guizhou
    Sunrise Technology Innovation Research Co., Ltd. ("Innovation Research")
December
    13, 2022
PRC
39.35%
Research
    and Development
Variable
    Interest Entity ("VIE") and subsidiaries of VIE
Global
    Mentor Board (Beijing)
Information Technology Co.,
Ltd. ("SDH" or "VIE")
December 5,
    2014
PRC
VIE
peer-to-peer
    knowledge sharing and enterprise service platform provider
Global
    Mentor Board (Hangzhou)
Technology Co., Ltd.
("GMB (Hangzhou)")
November
    1, 2017
PRC
100%
    by VIE
Consulting,
    training and tailored services provider
Global
    Mentor Board (Shanghai)
Enterprise Management Consulting
Co., Ltd. ("GMB Consulting")
June
    30, 2017
PRC
51%
    by VIE
Consulting
    services provider
Shanghai
    Voice of Seedling
Cultural Media Co., Ltd.
("GMB Culture")
June
    22, 2017
PRC
51%
    by VIE
cultural
    and artistic exchanges and planning, conference services provider
Shidong
    (Beijing) Information
Technology Co., LTD.
("GMB (Beijing)")
June
    19, 2018
PRC
100%
    by VIE
information
    technology services provider
Mentor
    Board Voice of Seeding (Shanghai)
Cultural Technology Co., Ltd.
("GMB Technology")
August
    29, 2018
PRC
30.6%
    by VIE
Technical
    services provider
Shidong
    Zibo Digital Technology Co., Ltd. ("Zibo Shidong")
October
    16, 2020
PRC
100%
    by VIE
Technical
    services provider
Shidong
    Trading Service (Zhejiang) Co., Ltd. ("Shidong Trading")
April
    19, 2021
PRC
Deregistered
    in November 2022
Sale
    of Merchandise
Shanghai
    Jiagui Haifeng Technology Co., Ltd. ("Jiagui Haifeng")
November
    29, 2021
PRC
51%
    by VIE
Business
    Incubation Services provider
Shanghai
    Nanyu Culture Communication Co., Ltd. ("Nanyu Culture")
July
    27, 2021
PRC
51%
    by VIE
Enterprise
    Information Technology Integration services provider
Beijing
    Mentor Board Health Technology Co., Ltd ("GMB Health")
January
    7, 2022
PRC
100%
    by VIE
Health
    Services
Shanghai
    Yuantai Fengdeng Agricultural Technology Co., Ltd. ("Yuantai Fengdeng")
March
    4, 2022
PRC
51%
    by VIE
Agricultural
    Technology Service
5
The following tables present selected condensed consolidating
financial data of Sunrise New Energy and its subsidiaries and the VIE and its subsidiaries for the fiscal years ended December 31, 2022,
2021, 2020, and balance sheet data as of December 31, 2022, 2021, and 2020.
SELECTED
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS DATA
Year ended December 31, 2022
Parent
Consolidated
affiliated
entities
VIE
consolidated
entities
Inter-
company
elimination
Group
consolidated
(US$)
Revenues, net
-
37,511,989
613,679
-
38,125,668
Total cost and operating expenses
3,586,852
39,001,736
14,346,213
-
56,934,801
Loss from operations
(3,586,852
)
(1,489,747
)
(13,732,534
)
-
(18,809,133
)
Loss before income taxes
(5,990,264
)
(1,696,242
)
(14,628,926
)
-
(22,315,432
)
Net loss
(5,990,264
)
(1,696,003
)
(15,438,135
)
-
(23,124,402
)
Year ended December 31, 2021
Parent
Consolidated
affiliated
entities
VIE
consolidated
entities
Inter-
company
elimination
Group
consolidated
(US$)
Revenues, net
-
-
7,409,272
-
7,409,272
Total cost and operating expenses
1,010,536
127,627
13,681,122
-
14,819,285
Loss from operations
(1,010,536
)
(127,627
)
(6,271,850
)
-
(7,410,013
)
Loss before income taxes
(3,021,789
)
(170,253
)
(5,865,989
)
107,118
(8,950,913
)
Net loss
(3,021,789
)
(170,253
)
(5,629,408
)
107,118
(8,714,332
)
Year ended December 31, 2020
Parent
Consolidated
affiliated
entities
VIE
consolidated
entities
Inter-
company
elimination
Group
consolidated
(US$)
Revenues, net
73,744
-
23,107,340
-
23,181,084
Total cost and operating expenses
50,000
-
8,405,024
-
8,455,024
Profit (loss) from operations
23,744
-
14,702,316
-
14,726,060
Profit (loss) before income taxes
28,203
(1,995
)
14,986,062
-
15,012,270
Net income (loss)
28,203
(1,995
)
11,931,079
-
11,957,287
6
SELECTED
CONDENSED CONSOLIDATING BALANCE SHEETS DATA
As of December 31, 2022
Parent
Consolidated
affiliated
entities
VIE
consolidated
entities
Inter-
company
elimination
Group
consolidated
(US$)
Total current assets
7,330,103
33,642,263
9,713,750
(6,048,283
)
44,637,833
Total non-current assets
14,690,000
56,445,366
5,939,175
(14,690,000
)
62,384,541
Total assets
22,020,103
90,087,629
15,652,925
(20,738,283
)
107,022,374
Total current liabilities
15,550
27,666,520
4,389,658
(6,048,283
)
26,023,445
Total non-current liabilities
-
7,637,332
-
-
7,637,332
Total liabilities
15,550
35,303,852
4,389,658
(6,048,283
)
33,660,777
As of December 31, 2021
Parent
Consolidated
affiliated
entities
VIE
consolidated
entities
Inter-
company
elimination
Group
consolidated
(US$)
Total current assets
7,776,218
9,932,297
16,864,942
(227,899
)
34,345,558
Total non-current assets
17,700,060
8,244,917
13,404,549
(15,000,000
)
24,349,526
Total assets
25,476,278
18,177,214
30,269,491
(15,227,899
)
58,695,084
Total current liabilities
211,430
33,686
1,703,665
(227,899
)
1,720,882
Total non-current liabilities
-
-
-
-
-
Total liabilities
211,430
33,686
1,703,665
(227,899
)
1,720,882
As of December 31, 2020
Parent
Consolidated
affiliated
entities
VIE
consolidated
entities
Inter-
company
elimination
Group
consolidated
(US$)
Total current assets
125,386
14,360
28,246,141
(128,282
)
28,257,605
Total non-current assets
-
-
11,479,238
-
11,479,238
Total assets
125,386
14,360
39,725,379
(128,282
)
39,736,843
Total current liabilities
-
-
5,583,463
-
5,583,463
Total non-current liabilities
-
-
3,196
-
3,196
Total liabilities
-
-
5,586,659
-
5,586,659
7
SELECTED
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS DATA
Year ended December 31, 2022
Parent
Consolidated affiliated entities
VIE consolidated entities
Inter-company elimination
Group consolidated
(US$)
Net cash used in operating activities
(808,226
)
(5,444,733
)
(3,320,442
)
-
(9,573,401
)
Net cash used in investing activities
-
(45,299,072
)
(6,188,307
)
5,878,307
(45,609,072
)
Net cash provided by financing activities
310,000
51,328,368
-
(5,878,307
)
45,760,061
Year ended December 31, 2021
Parent
Consolidated affiliated entities
VIE consolidated entities
Inter-company elimination
Group consolidated
(US$)
Net cash (used in) provided
    by operating activities
(1,015,145
)
(6,532,445
)
2,314,408
-
(5,233,182
)
Net cash used in investing activities
(25,825,000
)
(8,244,917
)
(3,115,281
)
15,090,000
(22,095,198
)
Net cash provided by financing activities
28,249,093
17,678,168
-
(15,090,000
)
30,837,261
Year ended December 31, 2020
Parent
Consolidated affiliated entities
VIE consolidated entities
Inter-company elimination
Group consolidated
(US$)
Net cash (used in) provided
    by operating activities
(52,994
)
120,750
6,998,407
-
7,066,163
Net cash used in investing activities
-
-
(6,493,837
)
128,282
(6,365,555
)
Net cash provided by financing activities
128,282
-
119,996
(128,282
)
119,996
A.
[Reserved]
B.
Capitalization and Indebtedness
Not
applicable.
C.
Reasons for the Offer and Use of Proceeds
Not
applicable.
8
D.
Risk Factors
An
investment in our Ordinary Shares involves a high degree of risk. Before deciding whether to invest in our Ordinary Shares, you should
consider carefully the risks described below, together with all of the other information set forth in this annual report. If any of these
risks actually occurs, our business, financial condition, results of operations or cash flow could be materially and adversely affected,
which could cause the trading price of our Ordinary Shares to decline, resulting in a loss of all or part of your investment. The risks
described below are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may
also affect our business. You should only consider investing in our Ordinary Shares if you can bear the risk of loss of your entire investment.
Risks Related to Our Business
Risks
and uncertainties related to our business include, but are not limited to, the following:
●
We
                                            have a limited operating history and are subject to the risks encountered by development-stage
                                            companies.
●
Our
                                            historical financial results may not be indicative of our future performance.
●
If
                                            we cannot manage our growth effectively and efficiently, our results of operations or profitability
                                            could be adversely affected.
●
We
                                            may not be successful in implementing important new strategic initiatives, which may have
                                            an adverse impact on our business and financial results.
●
We
                                            may be required to obtain and maintain additional approvals, licenses or permits applicable
                                            to our business, including our graphite anode manufacturing and sales business and our knowledge
                                            share platform, which could have a material adverse impact on our business, financial conditions
                                            and results of operations.
Risks
Related to Our Graphite Anode Manufacturing and Sales Business
Risks
and uncertainties related to our graphite anode manufacturing and sales business include, but are not limited to, the following:
●
Our
                                            graphite anode manufacturing and sales joint venture may not perform as well as we expected.
●
Joint
                                            venture with which we engage for developing graphite anode manufacturing and sales business
                                            presents a number of challenges that could have a material adverse effect on our business
                                            and results of operations and cash flows.
●
We
                                            may not respond quickly to continued innovations.
●
Complying
                                            with numerous health, safety and environmental regulations is both complex and costly.
●
Sunrise
                                            Guizhou depends on a few major customers, and the loss of any of which could cause a significant
                                            decline in our revenues.
●
Sunrise
                                            Guizhou may need additional capital to pursue business objectives and respond to business
                                            opportunities, challenges or unforeseen circumstances, and financing may not be available
                                            on acceptable terms or at all.
9
Risks
Related to Our Corporate Structure
With
regard to our knowledge sharing and enterprise service platform, we control and receive the economic benefits of the business operations
of the VIE through the VIE Agreements solely because we met the conditions for consolidation of the VIE under the U.S. GAAP for accounting
purpose; however, the VIE Agreements have not been tested in a court of law and are subject to significant risks, as set forth in the
following risk factors. For a description of these VIE Agreements, see "ITEM 4. INFORMATION ON THE COMPANY — C. Organizational
Structure".
Risks
and uncertainties related to our corporate structure include, but are not limited to, the following:
●
If
                                            the PRC government finds that the agreements that establish the structure for operating our
                                            businesses in China do not comply with PRC regulations relating to the relevant industries,
                                            or if these regulations or the interpretation of existing regulations change in the future,
                                            we could be subject to severe penalties or be forced to relinquish our interests in those
                                            operations.
●
We
                                            rely on contractual arrangements with the VIE and its subsidiaries, and shareholders for
                                            our China operations, which may not be as effective in providing operational control as direct
                                            ownership.
●
The
                                            contractual arrangements we have entered into with the VIE and its shareholders, and any
                                            other arrangements and transactions among related parties that we currently have or will
                                            have in future may be subject to scrutiny by the PRC tax authorities and they may determine
                                            that we owe additional taxes, which could substantially reduce our consolidated net income
                                            and the value of your investment.
●
The
                                            shareholders of the VIE may have potential conflicts of interest with us, which may materially
                                            and adversely affect our business and financial condition.
●
We
                                            may lose the ability to use and enjoy assets held by the VIE that are material to the operation
                                            of certain portion of our business if the VIE goes bankrupt or become subject to a dissolution
                                            or liquidation proceeding.
●
As
                                            an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain
                                            home country practices in relation to corporate governance matters that differ significantly
                                            from the Nasdaq listing standards; these practices may afford less protection to shareholders
                                            than they would enjoy if we complied fully with such corporate governance listing standards.
Risks
Related to Doing Business in China
Risks
and uncertainties related to doing business in China include, but are not limited to, the following:
●
The
                                            Chinese government exerts substantial influence over the manner in which we must conduct
                                            our business, and may intervene or influence our operations at any time, which could result
                                            in a material change in our operations, significantly limit or completely hinder our ability
                                            to offer or continue to offer securities to investors and, and cause the value of our Ordinary
                                            Shares to significantly decline or be worthless.
●
Recent
                                            greater oversight by the Cyberspace Administration of China over data security, particularly
                                            for companies seeking to list on a foreign exchange, could adversely impact our business
                                            and our securities.
●
The
                                            Trial Measures and the revised Provisions recently issued by the PRC authorities may subject
                                            us to additional compliance requirements in the future.
●
A
                                            severe or prolonged downturn in the global or Chinese economy could materially and adversely
                                            affect our business and our financial condition.
●
We
                                            face risks related to health epidemics such as the COVID-19 first identified in Wuhan city
                                            at the end of 2019, which significantly disrupted our operations and may continue to adversely
                                            affect our business, financial condition and results of operations.
10
●
Because
                                            our business is dependent upon government policies that encourage a market-based economy,
                                            change in the political or economic climate in the PRC may impair our ability to operate
                                            profitably, if at all.
●
PRC
                                            laws and regulations governing our current business operations are sometimes vague and uncertain
                                            and any changes in such laws and regulations may materially and adversely affect our business
                                            and impede our ability to continue our operations.
●
Because
                                            our business is conducted in RMB and the price of our Ordinary Shares is quoted in United
                                            States dollars, changes in currency conversion rates may affect the value of your investments.
●
Under
                                            the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified as a "resident
                                            enterprise" of China, which could result in unfavorable tax consequences to us and
                                            our non-PRC shareholders.
●
There
                                            are significant uncertainties under the EIT Law relating to the withholding tax liabilities
                                            of our PRC subsidiaries, and dividends payable by our PRC subsidiaries to our offshore subsidiaries
                                            may not qualify to enjoy certain treaty benefits.
●
PRC
                                            regulation of loans to and direct investment in PRC entities by offshore holding companies
                                            and governmental control of currency conversion may delay or prevent us from making loans
                                            or additional capital contributions to our PRC subsidiaries, the VIE and its subsidiaries,
                                            which could materially and adversely affect our liquidity and our ability to fund and expand
                                            our business.
●
Government
                                            control in currency conversion may adversely affect our financial condition, our ability
                                            to remit dividends, and the value of your investment.
●
If
                                            we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed
                                            Chinese companies, we may have to expend significant resources to investigate and resolve
                                            the matter which could harm our business operations, stock price and reputation.
●
The
                                            disclosures in our reports and other filings with the SEC and our other public pronouncements
                                            are not subject to the scrutiny of any regulatory bodies in the PRC.
●
The
Holding Foreign Companies Accountable Act and related regulations all call for additional and more stringent criteria to be applied to
emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected
by the PCAOB. These developments could add uncertainties to our continued listing on the Nasdaq, and Nasdaq may determine to delist our
securities if the PCAOB determines that it cannot inspect or fully investigate our auditor.
●
Our
                                            contractual arrangements with the VIE are governed by the laws of the PRC and we may have
                                            difficulty in enforcing any rights we may have under these contractual arrangements.
●
The
                                            failure to comply with PRC regulations relating to mergers and acquisitions of domestic entities
                                            by offshore special purpose vehicles may subject us to severe fines or penalties and create
                                            other regulatory uncertainties regarding our corporate structure.
●
PRC
                                            regulations relating to the establishment of offshore special purpose companies by PRC residents
                                            may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties,
                                            limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries'
                                            ability to increase its registered capital or distribute profits to us, or may otherwise
                                            adversely affect us.
●
Increases
                                            in labor costs in the PRC may adversely affect our business and our profitability.
●
U.S.
                                            regulatory bodies may be limited in their ability to conduct investigations or inspections
                                            of our operations in China.
11
Risks
Related to Our Ordinary Shares and the Trading Market
Risks
and uncertainties related to our Ordinary Shares and the trading market include, but are not limited to, the following:
●
If
                                            we are a passive foreign investment company for United States federal income tax purposes
                                            for any taxable year, United States holders of our Ordinary Shares could be subject to adverse
                                            United States federal income tax consequences.
●
We
                                            have identified several control deficiencies in our internal control over financial reporting.
                                            If we fail to maintain an effective system of internal controls over financial reporting,
                                            we may not be able to accurately report our financial results or prevent fraud.
●
We
                                            do not intend to pay dividends for the foreseeable future.
●
The
                                            market price of our Ordinary Shares may be volatile or may decline regardless of our operating
                                            performance, and you may not be able to resell your shares at or above the initial public
                                            offering price.
●
As
                                            a foreign private issuer, we are not subject to certain U.S. securities law disclosure requirements
                                            that apply to a domestic U.S. issuer, and are exempt from certain Nasdaq corporate governance
                                            standards applicable to U.S. issuers, which may limit the information publicly available
                                            to our investors and afford them less protection than if we were an U.S issuer.
●
If
                                            we cannot satisfy the listing requirements and other rules of Nasdaq Capital Market, our
                                            securities may be delisted, which could negatively impact the price of our securities and
                                            your ability to sell them.
Risks
Related to Our Business
We
have a limited operating history and are subject to the risks encountered by development-stage companies.
Our
PRC operating entities have been in business since 2014 as a consulting company. In 2022, we entered into a new business, manufacturing
and sales of graphite anode materials, by forming a joint venture (Sunrise Guizhou) in Guizhou Province, China. As a development-stage
company, our business strategies and model are constantly being tested by the market and operating results, and we adjust the allocation
of our resources accordingly. As such, our business may be subject to significant fluctuations in operating results in terms of amounts
of revenues and percentages of total with respect to the business segments.
We
are, and expect for the foreseeable future to be, subject to all the risks and uncertainties, inherent in a development-stage business.
As a result, we must establish many functions necessary to operate a business, including expanding our managerial and administrative
structure, assessing and implementing our marketing program, implementing financial systems and controls and personnel recruitment. Accordingly,
you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by companies with
a limited operating history. These risks and challenges are, among other things:
●
we
    operate in industries that are or may in the future be subject to increasing regulation by various governmental agencies in China;
●
we
    may require additional capital to develop and expand our operations which may not be available to us when we require it;
●
our
    marketing and growth strategy may not be successful;
●
our
    business may be subject to significant fluctuations in operating results; and
●
we
    may not be able to attract, retain and motivate qualified professionals.
Our
future growth will depend substantially on our ability to address these and the other risks described in this annual report. If we do
not successfully address these risks, our business would be significantly harmed.
Our
historical financial results may not be indicative of our future performance.
Our
net revenue was $7,409,272 and $23,181,084 for the years ended December 31, 2021 and 2020, respectively. Our net loss was $8,714,332
for the year ended December 31, 2021 and net income was $11,957,287 for the year ended December 31, 2020, respectively. However, our
net revenue was $38,125,668 and we incurred a net loss of $23,124,402 for the year ended December 31, 2022. The loss was mainly due to
the material and negative impact of the COVID-19 pandemic on our business, and the large capital investment injected by us into the new
business venture, Sunrise Guizhou, to enter into the manufacture and sales of lithium-ion power battery anode materials. As such, our
limited history of operation makes it difficult to evaluate our future prospects.
12
If
we cannot manage our growth effectively and efficiently, our results of operations or profitability could be adversely affected.
We
are expanding our operations into the graphite anode manufacturing and sales business. In April 2022, we entered into an investment agreement
with certain partners to form a joint venture, Sunrise Guizhou, which is dedicated to the production of lithium-ion power battery anode
materials. As of the date of this annual report, we have made substantial investment into the new venture. Such expansion has placed,
and will continue to place, substantial demands on our financial, managerial, operational, technological and other resources. Our planned
expansion will also place significant demands on us to maintain the quality of our services to ensure that our brand does not suffer
as a result of any deviations, whether actual or perceived, in the quality of our services. In order to manage and support our growth,
we must continue to improve our existing operational and administrative systems and our quality control, and recruit, train and retain
additional qualified professionals as well as other administrative and sales and marketing personnel, particularly as we expand into
new business ventures and launch new business initiatives. We may not be able to effectively and efficiently manage the growth of our
operations, recruit and retain qualified personnel and integrate new expansion into our operations. As a result, our quality of service
may deteriorate and our results of operations or profitability could be adversely affected.
We
may not be successful in implementing important new strategic initiatives, which may have an adverse impact on our business and financial
results.
There
is no assurance that we will be able to implement important strategic initiatives in accordance with our expectations, which may result
in an adverse impact on our business and financial results. For example, our latest strategic initiative, establishing our graphite anode
manufacturing and sales joint venture, Sunrise Guizhou, is designed to create growth, improve our results of operations and drive long-term
shareholders value; however, our management may lack required experience, knowledge, insight, or human and capital resources to carry
out the effective implementation to expand into new spaces outside of our current focuses. As such, we may not be able to realize our
expected growth, and our business and financial results will be adversely impacted.
If
we are not successful in selling inventory, we may have to sell the inventory at significantly reduced prices or may not be able to sell
the inventory at all.
In
late 2019, we started selling merchandises obtained through (1) fee exchange arrangements, through which we receive products in exchange
for collection of membership fees and consulting fees earned from our customers, and (2) direct purchases from our customers and third
parties based on market trend and demand. Our profitability in sale of merchandises depends on our ability to manage inventory levels
and respond to shifts in consumer demand patterns. Overestimating customer demand for merchandises will likely result in the need to
record inventory markdowns and sell excess inventory at clearance prices which would negatively impact our gross margins and operating
results. Underestimating customer demand for merchandises can lead to inventory shortages, missed sales opportunities and negative customer
experiences. Our gross margins could suffer if we are unable to effectively manage our inventory and sell merchandises at a significantly
reduced price, which could have a material adverse effect on our results of operations and cash flows.
Increasing
competition within the enterprise service and knowledge sharing industries could have an impact on our business prospects.
The
enterprise service and knowledge sharing are industries where new competitors can easily enter into since there are no significant barriers
to entry. We also face many competitors in the knowledge sharing industry where a number of competitors have been in business longer
than us. Competing companies may have significantly greater financial and other resources than we have and may offer services that are
more attractive to prospective clients; increased competition would have a negative impact on both our revenues and our profit margins.
We
may be required to obtain and maintain additional approvals, licenses or permits applicable to our business, including our graphite anode
manufacturing and sales business and our knowledge share platform, which could have a material adverse impact on our business, financial
conditions and results of operations.
Before
we develop certain new products in our graphite anode manufacturing and sales business, we must obtain a variety of approvals from local
and municipal governments in the PRC for the operating of our graphite anode manufacturing and sales business. We have obtained the following
in relation to our graphite anode manufacturing and sales business: construction permits, fire acceptance record certificate, sewage
discharge permit, environmental impact statements, and product quality system certification, including: ISO 14001:2015, ISO 45001:2018,
ISO 9001:2015, ISO 16949:2016. There is no assurance that we will be able to obtain all required licenses, permits, or approvals from
government authorities. If we fail to obtain all required licenses, permits or approvals, we may be unable to expand our operations.
The
operation of our knowledge sharing platform is subject to governmental supervision and regulation by the relevant PRC governmental authorities,
including the Ministry of Commerce, or MOFCOM, the Ministry of Industry and Information Technology, or MIIT, the National Radio and Television
Administration or NRTA, and other governmental authorities in charge of the relevant categories of services offered by us. Together,
these government authorities promulgate and enforce regulations that cover many aspects of the operation of online services we provide
on our APP, including entry into this online service industry, the scope of permissible business activities, licenses and permits for
various business activities, and foreign investment.
13
We
currently hold an ICP License (the Administrative Measures on Internet Information Services, or the Internet Measures, promulgated by
the State Council requires commercial internet content-related services operators to obtain a VATS ("value added telecommunications
service") License for internet content provision business, or the ICP License). Although we do not currently believe we are required
to hold any other licenses, we may be required to obtain additional licenses, permits or approval, given the significant uncertainties
of the interpretation and implementation of certain regulatory requirements applicable to our business. See "
Regulations—
Regulations Related to Online Transmission of Audio-Visual Programs
."
There
are uncertainties with respect to the interpretation and implementation of existing and future laws and regulations governing our business
activities. As of the date of this annual report, we are not aware of any other approvals, licenses, or permits that are material to
our business operations that we have not, but may be required to, obtain; nor have we received any notice of warning or been subject
to penalties or other disciplinary action from the relevant governmental authorities for lack of approvals and permits or noncompliance
with regulations related to our current licenses. However, we cannot assure you that we will not be subject to any warning, investigations
or penalties in the future. If the PRC government deems us as operating without proper approvals, licenses or permits, promulgates new
laws and regulations that require additional approvals or licenses or impose additional restrictions on the operation of any part of
our business, we may be required to apply for additional approvals, license or permits, or be subject to various penalties, including
fines, termination or restrictions of the part of our business or revoking of our business licenses, which may materially and adversely
affect our business, financial conditions and results of operations.
The
successful operation of our online service depends upon the performance and reliability of the internet infrastructure and fixed telecommunication
networks in China.
Our
online service depends on the performance and reliability of the internet infrastructure in China. Almost all access to the internet
is maintained through state-owned telecommunication operators under the administrative control and regulatory supervision of the MIIT.
In addition, the national networks in China are connected to the internet through international gateways controlled by the PRC government.
These international gateways are the only channels through which a domestic user can connect to the internet. It is unpredictable whether
a more sophisticated internet infrastructure will be developed in China. We may not have access to alternative networks in the event
of disruptions, failures or other problems with China's internet infrastructure. In addition, the internet infrastructure in China
may not support the demands associated with continued growth in internet usage.
We
rely on China Telecommunications Corporation, or China Telecom, and China United Network Communications Group Company Limited, or China
Unicom, to provide us with network services and data center hosting services. We have limited access to alternative services in the event
of disruptions, failures or other problems with the fixed telecommunications networks of these companies, or if these companies otherwise
fail to provide the services. Any unscheduled service interruption could damage our reputation and result in a decrease in our revenues.
Furthermore, we have no control over the costs of the services provided by these telecommunication companies. If the prices that we pay
for telecommunications and internet services rise significantly, our gross margins could be adversely affected. In addition, if internet
access fees or other charges to internet users increase, our user traffic may decrease, which in turn may harm our revenues.
Cyber-attacks
or other failures in our telecommunications or information technology systems, or those of our collaborators, third-party logistics providers,
distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption of our
business operations.
We,
our programs, our collaborators, third-party logistics providers, distributors and other contractors and consultants utilize information
technology, or IT, systems and networks to process, transmit and store electronic information, including but not limited to intellectual
property, proprietary business information and personal information, in connection with our business activities. Our internal IT systems
and those of current and future third parties on which we rely may fail and are vulnerable to breakdown, breach, interruption or damage
from cyber incidents, employee error or malfeasance, theft or misuse, sophisticated nation-state and nation-state-supported actors, unauthorized
access, natural disasters, terrorism, war, telecommunication and electrical failures or other compromises. As use of digital technologies
has increased, cyber incidents, including third parties gaining access to employee accounts using stolen or inferred credentials, computer
malware, viruses, spamming, phishing attacks, denial-of-service attacks or other means, and deliberate attacks and attempts to gain unauthorized
access to computer systems and networks, have increased in frequency, intensity, and sophistication. These threats pose a risk to the
security of our, our programs', our collaborators', third-party logistics providers', distributors' and other
contractors' and consultants' systems and networks, and the confidentiality, availability and integrity of our data. There
can be no assurance that we will be successful in preventing cyber-attacks or successfully mitigating their effects. We may not be able
to anticipate all types of security threats, and we may not be able to implement preventive measures effective against all such security
threats. The techniques used by cyber criminals change frequently, may not be recognized until launched, and can originate from a wide
variety of sources, including outside groups such as external service providers, organized crime affiliates, terrorist organizations
or hostile foreign governments or agencies. Similarly, there can be no assurance that our collaborators, third-party logistics providers,
distributors and other contractors and consultants will be successful in protecting our clinical and other data that is stored on their
systems. Any loss of clinical trial data from our completed or ongoing clinical trials for any of our product candidates could result
in delays in our development and regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Although
to our knowledge we have not experienced any such material system failure or material security breach to date, if such an event were
to occur and cause interruptions in our operations, it could result in a material disruption of development programs and business operations.
14
Any
cyber-attack that leads to unauthorized access, use, or disclosure of personal information, data breach or destruction or loss of data
could result in a violation of applicable U.S. and international privacy, data protection and other laws and regulations, subject us
to litigation and governmental investigations, proceedings and regulatory actions by federal, state and local regulatory entities in
the United States and by international regulatory entities, resulting in exposure to material civil and/or criminal liability, cause
us to breach our contractual obligations, which could result in significant legal and financial exposure and reputational damages. As
cyber threats continue to evolve, we may be required to incur significant additional expenses in order to implement further data protection
measures or to remediate any information security vulnerability. Further, our general liability insurance and corporate risk program
may not cover all potential claims to which we are exposed and may not be adequate to indemnify us for all liability that maybe imposed,
which could have a material adverse effect on our business and prospects. There can be no assurance that the limitations of liability
in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages as a result of the events
referenced above.
If
we fail to hire, train or retain qualified managerial and other employees, our business and results of operations could be materially
and adversely affected.
We
place substantial reliance on the knowledge sharing and enterprise service industry experience and knowledge of our senior management
team as well as their relationships with other industry participants. The loss of the services of one or more members of our senior management
could hinder our ability to effectively manage our business and implement our growth strategies. Finding suitable replacements for our
current senior management could be difficult, and competition for such personnel of similar experience is intense. If we fail to retain
our senior management, our business and results of operations could be materially and adversely affected.
Our
personnel are critical to maintaining the quality and consistency of our services, brand and reputation. It is important for us to attract
qualified managerial and other employees who have experience in consulting services and are committed to our service approach. There
may be a limited supply of such qualified individuals. We must hire and train qualified managerial and other employees on a timely basis
to keep pace with our rapid growth while maintaining consistent quality of services across our operations. We must also provide continuous
training to our managerial and other employees so that they are equipped with up-to-date knowledge of various aspects of our operations
and can meet our demand for high-quality services. If we fail to do so, the quality of our services may decrease, which in turn, may
cause a negative perception of our brand and adversely affect our business.
If
we fail to attract or retain qualified service providers, our business and results of operations could be materially and adversely affected.
Our
core strength is the knowledge brought by our service providers, highlighted by their experiences, wisdom, industry know-how, and social
connections. We rely heavily on the expertise of our service providers, including Mentors, Experts, and our consultants to maintain our
core competence. As of April 30, 2023, our knowledge sharing and enterprise service ecosystem had 784 Mentors and 1,930 Experts, and
a team of full-time consultants as our knowledge sharing providers. Many of our Mentors are experienced leaders of successful and well-known
corporations. Likewise, our Experts are outstanding professionals in their specialized fields, and our team of consultants is professionals
with industrial experiences of more than five years. As our business scope increases, we expect to continue to invest significant resources
in attracting and retaining service providers. Our ability to sustain our growth will depend on our ability to attract and retain qualified
service providers. If we fail to attract or retain qualified service providers, our business and results of operations could be materially
and adversely affected.
If
we were to lose our certification as a National High Tech Enterprise, we could face higher tax rates than we currently pay for much of
our revenues.
In
October 2017, the VIE was approved as a National High Tech Enterprise, which certificate was renewed in December 2020 and is valid for
three years. This certification entitles the VIE to a favorable tax rates of 15%, rather than the unified rate of 25% if it was not so
certified. In the event the VIE were to lose the benefit of the favorable tax rate in the future, we could see significant increases
in the amount of taxes we pay, meaning that our operating results could be materially harmed, even in the absence of a decrease in our
operations.
We may be involved from time to time in
legal proceedings and commercial or contractual disputes, which could have a material adverse effect on our business, results of operations
and financial condition.
From time to time, we may be involved in legal proceedings and commercial
disputes. Such proceedings or disputes are typically claims that arise in the ordinary course of business, including, without limitation,
commercial or contractual disputes, and other disputes with customers and suppliers, intellectual property matters, tax matters and employment
matters. There can be no assurance that such proceedings and claims, should they arise, will not have a material adverse effect on our
business, results of operations and financial condition.
Failure
to maintain or enhance our brand or image could have a material and adverse effect on our business and results of operations.
We
believe our SDH ("师董会") brand is associated with a well-recognized knowledge sharing and enterprise
services provider in the markets that we operate with online and offline services designed to suit our clients' needs. Our brand
is integral to our sales and marketing efforts. We have obtained trademark registrations for our brand SDH in the PRC. Our continued
success in maintaining and enhancing our brand and image depends to a large extent on our ability to satisfy customer needs by further
developing and maintaining quality of services across our operations, as well as our ability to respond to competitive pressures. If
we are unable to satisfy clients' needs or if our public image or reputation were otherwise diminished, our business transactions
with our clients may decline, which could in turn adversely affect our results of operations.
15
Any
failure to protect our trademarks and other intellectual property rights could have a negative impact on our business.
We
believe our key trademark, "师董会," for which we have obtained trademark protection in China, and 35 computer
software copyrights and one artwork copyright, for which we have obtained protection with the Copyright Protection Centre of China (CPCC),
and other intellectual property rights are critical to our success. Any unauthorized use of our trademarks or other intellectual property
rights could harm our competitive advantages and business. Historically, China has not protected intellectual property rights to the
same extent as the United States, and infringement of intellectual property rights continues to pose a serious risk of doing business
in China. Monitoring and preventing unauthorized use are difficult. The measures we take to protect our intellectual property rights
may not be adequate. Furthermore, the application of laws governing intellectual property rights in China and abroad is uncertain and
evolving, and could involve substantial risks to us. If we are unable to adequately protect our brand, trademarks and other intellectual
property rights, we may lose these rights and our business may suffer materially.
As
internet domain name rights are not rigorously regulated or enforced in China, other companies may incorporate in their domain names
elements similar in writing or pronunciation to the "师董会" trademarks or their Chinese equivalents. This
may result in confusion between those companies and our company and may lead to the dilution of our brand value, which could adversely
affect our business.
Risks
Related to Graphite Anode Manufacturing and Sales Business
Our
graphite anode manufacturing and sales joint venture may not perform as well as we expected.
In 2022, Zhuhai Zibo entered into an Investment
Agreement with 13 other parties to form a graphite anode manufacturing and sales joint venture, Sunrise Guizhou. As of the date of this
annual report, Zhuhai Zibo has invested a total of RMB126,480,000 ($19,858,670) in Sunrise Guizhou. While we believe the joint venture
could give the Company new potential growth, it may not perform as well as we expected and, as a result, could impact the Company's
financial performance.
Joint
venture with which we engage for developing graphite anode manufacturing and sales business presents a number of challenges that could
have a material adverse effect on our business and results of operations and cash flows.
The
success of our overall development plans for our graphite anode manufacturing and sales business depends on our relationships with our
joint venture partners. Transactions included in developing a joint venture typically involve a number of risks and present financial,
managerial and operational challenges, including the existence of unknown potential disputes, liabilities or contingencies that arise
after entering into the joint venture related to the counterparties to such joint venture. We could experience financial or other setbacks,
if transactions encounter unanticipated problems due to challenges, including problems related to execution or integration. Any of these
risks could reduce our revenues or increase our expenses, which could adversely affect our results of operations and cash flows.
We
require cooperation from our joint venture partners to establish and operate the graphite anode manufacturing and sales business.
To successfully establish and operate the graphite
anode manufacturing and sales business, in addition to capital contributions, we need our partner's expertise in a number of areas,
such as advanced technology R&D, marketing and sales.In the event that we cannot maintain our cooperative relationships with our joint
venture partners, on terms favorable to us or at all, we will need to source other business partners, and we may lose access to key strategic
assets, which could result in material and adverse effects on our business and results of operations.
We may not respond quickly to continued
innovations in the graphene products industry.
We
believe that technological advances in graphite manufacture will continue to evolve and new technologies will continue to develop. Advances
in the manufacture of graphite could allow our competitors to develop products faster or produce more efficiently or at lower cost than
we can. If we are unable to adapt or incorporate technological advances into our operations, our production facilities could become less
competitive. Further, it may be necessary for us to incur significant expenditures to acquire any new technologies and retrofit our current
processes to remain competitive.
16
We
must continuously invest in research and development.
To
remain competitive, we must continuously invest in research and development which can be costly. Much of our technology and intellectual
property portfolio is at an early stage of development, and we may not be able to continue to identify, develop, exploit, market and,
in certain cases, secure regulatory approval for, innovative products in a timely manner or at all.
Risks
of relationships with third parties in respect of research and development.
Although
we have resources and staff dedicated to research and development, market conditions and other factors such as management efficiencies
may make it required or preferable for us to enter into arrangements with third parties for the development, production and commercialization
of graphite. If we are unable to negotiate favorable terms for such arrangements with respect to intellectual property or otherwise or
disagreements arise between us and any partner or potential partner, our business, financial condition, and results of operations may
be adversely affected. Further, there can be no assurance that any otherwise successful collaborations will generate products or intellectual
property which can be commercialized or will result in any revenue or cash flow.
Government
support of electric vehicles and renewable energy may be reduced.
Demand
for and development of the products that incorporate our graphite products, including electric vehicles, renewable energy technologies,
and power storage technologies, are significantly affected by government policies, support, and subsidies. Any reduction in government
support for relevant industries or technologies may adversely affect our business.
Price
volatility of our finished goods.
Whether
due to the entry into the market of new manufacturers, the development of new graphite products manufacturing technologies, changes in
downstream technologies, or other causes, there may be an increase in the availability of graphite products in the market relative to
the demand for those products. In the event that production exceeds demand, we may not be able to negotiate favorable pricing for the
sale of our products, and there is no assurance that we will maintain or achieve growth in revenue, profitability or cash flow from our
graphite products.
Complying
with numerous health, safety and environmental regulations is both complex and costly.
Sunrise
Guizhou's graphite manufacturing business is subject to numerous health, safety, and environmental requirements in the PRC. Such
laws and regulations govern, among other matters, air emissions, wastewater discharges, solid and hazardous waste management and the
use, composition, handling, distribution, and transportation of hazardous materials. Many such laws and regulations are becoming increasingly
stringent (and may impose strict liability) and the cost of compliance with these requirements can be expected to increase over time.
Although we believe that our operations will comply with applicable regulations, any failure to comply with these laws and regulations
could result in us incurring costs and/or liabilities, including as a result of regulatory enforcement, personal injury, property damage
and claims and litigation resulting from such events, which could adversely affect our results of operations and financial condition.
Industrial
operations can be hazardous.
Accidents
involving the mishandling of heavy equipment or hazardous substances could cause severe or critical damage or injury to property and
human health. Such an event could result in civil lawsuits and/or regulatory enforcement proceedings, both of which could lead to significant
liabilities. Any damage to persons, equipment or property or other disruption of our business could result in significant additional
costs to replace, repair and insure assets, which could negatively affect our business, prospects, operating results and financial condition.
17
Sunrise Guizhou depends on a few major customers,
and the loss of any of which could cause a significant decline in our revenues.
For fiscal year 2022, Sunrise Guizhou had 16 customers.
Sunrise Guizhou's customers are manufacturers of industrial and consumer energy storage lithium-ion batteries, such as batteries
for electric vehicles and electric ships, and smart consumer electronics. For the fiscal year ended December 31, 2022, four customers
accounted for more than 10% of Sunrise Guizhou's total sales, accounting for 28.43%, 19.54%, 19.30% and 18.87% respectively.
If
any of its key customers reduces, delays or cancels its orders for any reason, or the financial condition of any of its key
customers deteriorates, Sunrise Guizhou's business could be seriously harmed. Similarly, a failure to manufacture sufficient
quantities of products to meet the demands of these customers may cause Sunrise Guizhou to lose business. Furthermore, if Sunrise
Guizhou experiences difficulties in the collection of its accounts receivables from its key customers, the results of our operation
may be materially and adversely affected.
Sunrise
Guizhou faces the risk of fluctuations in the cost, availability, and quality of raw materials, which could adversely affect our results
of operations.
The
cost, availability, and quality of the principle raw materials, such as asphalt coke, petroleum coke, needle coke, and American petroleum
coke, are essential to Sunrise Guizhou's operations. It purchases these raw materials from suppliers in China, the United States,
Romania, and Indonesia, in order to meet the requirements of different customers, as well as to maintain a diversified supplier base
which is beneficial to a stable supply chain. Lack of availability of raw materials, whether due to shortages in supply, delays or interruptions
in processing, failure of timely delivery, or otherwise, could interrupt Sunrise Guizhou's operations and adversely affect our
financial results. If the costs of raw materials increases due to policy changes, significant market price fluctuation, or any other
causes that generally cannot be controlled by Sunrise Guizhou, Sunrise Guizhou's business and results of operations could be adversely
affected.
Further,
defective raw materials or raw materials with quality deficiencies could subject Sunrise Guizhou to product liability claims or legal
actions, which circumstances could adversely affect Sunrise Guizhou's financial conditions and results of operations.
Sunrise
Guizhou entrusts third-party contract manufacturers for the manufacturing of its graphite anode products.
As of the date of this annual report, Sunrise Guizhou
entrusts manufacturing of its graphite anode products to third parties contractors, who might be unable to timely manufacture its products
or produce the quantity and quality required to meet its commercial needs, or may not be able to execute our manufacturing procedures
appropriately, or may not perform as agreed upon, or to produce, store and distribute its products satisfactorily. Any of the above could
adversely affect the business results of operations and financial condition.
Sunrise
Guizhou may need additional capital to pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances,
and financing may not be available on acceptable terms or at all.
As
Sunrise Guizhou intends to continue to make investments to support the growth of its business, it may require additional capital to pursue
its business objectives and respond to business opportunities, challenges or unforeseen circumstances, including expanding manufacturing
capacities, developing new products and service offerings, increasing sales and marketing expenditures, and engage customers through
expanded channels, enhancing its operating infrastructure and acquiring complementary businesses and technologies. Accordingly, Sunrise
Guizhou may need to engage in equity or debt financing to secure additional funds. However, additional funds may not be available when
needed, on terms that are acceptable, or at all. Repayment of any such debt may divert a substantial portion of cash flow to repay principal
and interest on such debt, which would reduce the funds available for expenses, capital expenditures, acquisitions and other general
corporate purposes. Sunrise Guizhou may suffer as a result of any default and foreclosure on assets pledged to secure any such financing,
if the operating cash flow is insufficient to service debt obligations, which could in turn result in acceleration of obligations to
repay the indebtedness and limit sources of financing.
Volatility
in the credit markets may also have an adverse effect on Sunrise Guizhou's ability to obtain debt financing. If it raises additional
funds through further issuance of equity or convertible debt securities, our existing shareholders could suffer significant dilution,
and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our ordinary shares.
If Sunrise Guizhou is unable to obtain adequate financing or financing on terms satisfactory to it when required, our ability to continue
to pursue our business objectives and to respond to business opportunities, challenges or unforeseen circumstances could be significantly
limited, and our business, financial condition, results of operations and prospects could be adversely affected.
18
Risks
Related to Our Corporate Structure
We
control and receive the economic benefits of the business operations of the VIE through the VIE Agreements solely because we met the
conditions for consolidation of the VIE under the U.S. GAAP for accounting purpose; however, the VIE Agreements have not been tested
in a court of law and are subject to significant risks, as set forth in the following risk factors. For a description of these VIE Agreements,
see "ITEM 4. INFORMATION ON THE COMPANY — C. Organizational Structure".
If
the PRC government finds that the agreements that establish the structure for operating our businesses in China do not comply with PRC
regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the
future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
Foreign
ownership of certain parts of our businesses including the value-added telecommunications services, or the VATS, is subject to restrictions
under current PRC laws and regulations. For example, the ultimate foreign equity ownership in a VATS provider may not exceed 50%. Also,
for a foreign investor contemplating to acquire any equity interest in a VATS business in China, it must satisfy a number of stringent
performance and operational experience requirements. In addition, to conduct any VATS business in China, foreign investors have to set
up foreign-invested enterprises and obtain a relevant telecommunications business operating license. See "
Regulations—Regulations
Related to Foreign Investment
."
In
light of the above restrictions and requirements, we currently operate our knowledge sharing and enterprise service platform through
SDH, a VIE entity, through a series of contractual arrangements, as a result of which, under United States generally accepted accounting
principles, the assets and liabilities of the VIE are treated as our assets and liabilities and the results of operations of the VIE
are treated in all aspects as if they were the results of our operations. For a description of these contractual arrangements, see "
Business—Contractual
Arrangements between GIOP BJ, the VIE and Its Shareholders
" and "
Related Party Transactions—Contractual Arrangements
with GIOP BJ, the VIE and Its Shareholders.
"
In
the opinion of our PRC legal counsel, Jincheng Tongda & Neal Law Firm ("JT&N"), based on its understandings of the
relevant PRC laws and regulations, (i) the ownership structures of the VIE in China and GIOP BJ are not in violation of applicable PRC
laws and regulations currently in effect; and (ii) each of the contracts among GIOP BJ, the VIE and its shareholders is legal, valid,
binding and enforceable in accordance with its terms and applicable PRC laws. However, our PRC legal counsel has also advised us that
there are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations. Accordingly,
the PRC regulatory authorities may ultimately take a view contrary to the opinion of our PRC legal counsel. It is uncertain whether any
new PRC laws or regulations relating to variable interest entity structures will be adopted or if adopted, what they would provide. If
we or the VIE are found to be in violation of any PRC laws or regulations, if the contractual arrangements among GIOP BJ, the VIE and
its shareholders are determined to be illegal or invalid by a PRC court, arbitral tribunal or regulatory authorities, or if we or the
VIE fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion
to take action in dealing with such violations or failures, including:
●
revoking
    the business and/or operating licenses of GIOP BJ or the VIE;
●
discontinuing
    or restricting the operations of GIOP BJ or the VIE;
●
imposing
    conditions or requirements with which we, GIOP BJ, or the VIE may not be able to comply;
●
requiring
    us, GIOP BJ, or the VIE to restructure the relevant ownership structure or operations which may significantly impair the rights of
    the holders of our Ordinary Shares in the equity of the VIE;
●
restricting
    or prohibiting our use of the proceeds from our initial public offering to finance our business and operations in China; and\or
●
imposing
    fines.
The
imposition of any of these penalties would result in a material and adverse effect on our ability to conduct our business. In addition,
it is unclear what impact the PRC government actions would have on us and on our ability to consolidate the financial results of the
VIE in our consolidated financial statements, if the PRC government authorities were to find our legal structure and contractual arrangements
to be in violation of PRC laws and regulations. If the imposition of any of these government actions causes us to lose our right to direct
the activities of the VIE or our right to receive substantially all of the economic benefits and residual returns from the VIE and we
are not able to restructure our ownership structure and operations in a satisfactory manner, we would no longer be able to consolidate
the financial results of the VIE in our consolidated financial statements. Either of these results, or any other significant penalties
that might be imposed on us in this event, would have a material adverse effect on our financial condition and results of operations.
We
rely on contractual arrangements with the VIE and its subsidiaries, and shareholders for our China operations, which may not be as effective
in providing operational control as direct ownership.
We
have relied and expect to continue to rely on contractual arrangements with the VIE, its subsidiaries and shareholders to operate our
business in China. For a description of these contractual arrangements, see "
Business—Contractual Arrangements between
GIOP BJ, the VIE and Its Shareholders
" and "
Related Party Transactions— Contractual Arrangements with GIOP BJ,
the VIE and Its Shareholders
." These contractual arrangements may not be as effective in providing us with control over the
VIE and its subsidiaries as direct ownership. We have no direct or indirect equity interests in the VIE or any of its subsidiaries.
19
If
we had direct ownership of the VIE and its subsidiaries, we would be able to exercise our rights as a shareholder to effect changes in
the board of directors of the VIE and its subsidiaries, which in turn could effect changes, subject to any applicable fiduciary obligations,
at the management level. But under the current contractual arrangements, as a legal matter, if the VIE or any of its subsidiaries and
shareholders fails to perform their obligations under these contractual arrangements, we may have to incur substantial costs and resources
to enforce such arrangements and rely on legal remedies under PRC law, including seeking specific performance or injunctive relief and
claiming damages, which may not be effective. For example, if the shareholders of the VIE were to refuse to transfer their equity interest
in the VIE to us or our designee when we exercise the call option pursuant to these contractual arrangements, or if they were otherwise
to act in bad faith toward us, then we may have to take legal action to compel them to fulfill their contractual obligations.
Many
of these contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC.
Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC
legal procedures. The legal environment in the PRC is not as developed as in some other jurisdictions, such as the United States. As
a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements. In the event we are
unable to enforce these contractual arrangements, we may not be able to exert effective control over our affiliated entities, and our
ability to conduct our business may be negatively affected.
The
contractual arrangements we have entered into with the VIE and its shareholders, and any other arrangements and transactions among related
parties that we currently have or will have in future may be subject to scrutiny by the PRC tax authorities and they may determine that
we owe additional taxes, which could substantially reduce our consolidated net income and the value of your investment.
Under
applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the
PRC tax authorities within ten years after the taxable year when the transactions are conducted. We could face material and adverse tax
consequences if the PRC tax authorities determine that the VIE contractual arrangements were not entered into on an arm's-length
basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and adjust
the income of the VIE in the form of a transfer pricing adjustment. A transfer pricing adjustment could, among other things, result in
a reduction of expense deductions recorded by the VIE for PRC tax purposes, which could in turn increase its tax liabilities without
reducing GIOP BJ's tax expenses. In addition, the PRC tax authorities may impose late payment fees and other penalties on the VIE
for the adjusted but unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected
if the VIE's tax liabilities increase or if it is required to pay late payment fees and other penalties.
Because
we are a Cayman Islands holding company and conduct a knowledge sharing platform through the VIE in China, if we fail to comply with
applicable PRC law, we could be subject to severe penalties and our business could be adversely affected.
We
are a Cayman Islands holding company and operate a substantial portion of our business through the VIE in China through VIE Agreements,
as a result of which, under United States generally accepted accounting principles, the assets and liabilities of the VIE are treated
as our assets and liabilities and the results of operations of the VIE are treated in all respects as if they were the results of our
operations. There are uncertainties regarding the interpretation and application of PRC laws, rules and regulations, including but not
limited to the laws, rules and regulations governing the validity and enforcement of the VIE Agreements between GIOP BJ and the VIE.
The
Provisions Regarding Mergers and Acquisitions of Domestic Projects by Foreign Investors (the "M&A Rules") requires an
overseas special purpose vehicle that are controlled by PRC companies or individuals formed for the purpose of seeking a public listing
on an overseas stock exchange through acquisitions of PRC domestic companies using shares of such special purpose vehicle or held by
its shareholders as considerations to obtain the approval of the China Securities Regulatory Commission, or the CSRC,
prior to the listing and trading of such special purpose vehicle's securities on an overseas stock exchange. However, the application
of the M&A Rules remains unclear. If CSRC approval is required, it is uncertain whether it would be possible for us to obtain the
approval. Any failure to obtain or delay in obtaining CSRC approval for such an offering would subject us to sanctions imposed by the
CSRC and other PRC regulatory agencies.
Furthermore,
on July 10, 2021, the Cyberspace Administration of China ("CAC") publicly issued the Measures for Cybersecurity Censorship
(Revised Draft for Comments) aiming to, upon its enactment, replace the existing Measures for Cybersecurity Censorship. The draft measures
extend the scope of cybersecurity reviews to data processing operators engaging in data processing activities that affect or may affect
national security, including listing in a foreign country. If the enacted version of the draft measures mandates clearance of cybersecurity
review and other specific actions to be completed by companies, we face uncertainties as to whether such clearance is required for our
offerings and whether such clearance can be timely obtained, or at all.
If
GIOP BJ, the VIE or their ownership structure or the VIE Agreements are determined to be in violation of any existing or future PRC laws,
rules or regulations, or GIOP BJ or the VIE fail to obtain or maintain any of the required governmental permits or approvals, the relevant
PRC regulatory authorities would have broad discretion in dealing with such violations, including:
●
revoking
    the business and operating licenses of GIOP BJ or the VIE;
●
discontinuing
    or restricting the operations of GIOP BJ or the VIE;
●
imposing
    conditions or requirements with which we, GIOP BJ, or the VIE may not be able to comply;
●
requiring
    us, GIOP BJ, or the VIE to restructure the relevant ownership structure or operations which may significantly impair the rights of
    the holders of our ordinary shares in the equity of the VIE; and\or
●
imposing
    fines.
20
We
cannot assure you that the PRC courts or regulatory authorities may not determine that our corporate structure and VIE Agreements violate
PRC laws, rules or regulations. If the PRC courts or regulatory authorities determine that our contractual arrangements are in violation
of applicable PRC laws, rules or regulations, the VIE Agreements will become invalid or unenforceable, and the VIE will not be treated
as VIE entities and we will not be entitled to treat the VIE's assets, liabilities and results of operations as our assets, liabilities
and results of operations, which could effectively eliminate the assets, revenue and net income of the VIE from our balance sheet, which
would most likely require us to cease conducting our business and would result in the delisting of our ordinary shares from the Nasdaq
Capital Market and a significant impairment in the market value of our ordinary shares.
The
shareholders of the VIE may have potential conflicts of interest with us, which may materially and adversely affect our business and
financial condition.
Almost
all of our beneficiary owners hold equity interests in the VIE. They may have conflicts of interest with us. Conflicts of interest may
arise between the dual roles of them who are both shareholders of our Company and shareholders of SDH, the VIE. These shareholders may
breach, or cause the VIE to breach, or refuse to renew, the existing contractual arrangements we have with them and SDH, which would
have a material and adverse effect on our ability to effectively control the VIE and receive economic benefits from it. For example,
the shareholders may be able to cause our agreements with the VIE to be performed in a manner adverse to us by, among other things, failing
to remit payments due under the contractual arrangements to us on a timely basis. We cannot assure you that when conflicts of interest
arise any or all of these shareholders will act in the best interests of our Company or such conflicts will be resolved in our favor.
Currently,
we do not have any arrangements to address potential conflicts of interest between these shareholders and our Company, except that we
could exercise our purchase option under the exclusive option agreements with these shareholders to request them to transfer all of their
equity interests in the VIE to a PRC entity or individual designated by us, to the extent permitted by PRC law. If we cannot resolve
any conflicts of interest or disputes between us and those individuals, we would have to rely on legal proceedings, which may materially
disrupt our business. There is also substantial uncertainty as to the outcome of any such legal proceeding.
Uncertainties
exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of our
current corporate structure, corporate governance and business operations.
On
March 15, 2019, the National People's Congress approved the Foreign Investment Law, which has come into effect on January 1, 2020
and replaced the trio of existing laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise
Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation
rules and ancillary regulations. The Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment
regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements
for both foreign and domestic investments. However, since it is relatively new, uncertainties still exist in relation to its interpretation
and implementation. For instance, under the Foreign Investment Law, "foreign investment'' refers to the investment
activities directly or indirectly conducted by foreign individuals, enterprises or other entities in China. Though it does not explicitly
classify VIE Agreements as a form of foreign investment, there is no assurance that operation conducted by foreign investors or foreign-invested
enterprises via contractual arrangement would not be interpreted as a type of indirect foreign investment activities under the definition
in the future. In addition, the definition contains a catch-all provision which includes investments made by foreign investors through
means stipulated in laws or administrative regulations or other methods prescribed by the State Council. Therefore, it still leaves leeway
for future laws, administrative regulations or provisions promulgated by the Stale Council to provide for VIE Agreements as a form of
foreign investment. In any of these cases, it will be uncertain whether the VIE Agreements will be deemed to be in violation of the market
access requirements for foreign investment under the PRC laws and regulations. Furthermore, if future laws, administrative regulations
or provisions prescribed by the State Council mandate further actions to be taken by companies with respect to existing VIE Agreements,
we may face substantial uncertainties as to whether we can complete such actions in a timely manner, or at all. Failure to take timely
and appropriate measures to cope with any of these or similar regulatory compliance challenges could materially and adversely affect
our current corporate structure, corporate governance and business operations.
Our
executive officers, directors and affiliates own a significant percentage of our shares and will be able to exert significant control
over matters subject to shareholder approval.
As
of the date of this annual report, our executive officers, directors and affiliates beneficially own approximately 43.56% of our outstanding
Ordinary Shares. Therefore, these stockholders will have the ability to influence us through their ownership positions. Further, our
CEO and majority shareholder, Mr. Haiping Hu, has beneficial ownership of 7,324,687 Ordinary Shares. These shares represent ownership
of approximately 28.88% of our outstanding Ordinary Shares as of the date of this annual report. These shareholders may be able to determine
all matters requiring shareholder approval. For example, these shareholders, acting together, may be able to control elections of directors,
amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may
prevent or discourage unsolicited transaction proposals or offers for our Ordinary Shares that you may believe are in your best interest
as one of our shareholders.
21
We
may lose the ability to use and enjoy assets held by the VIE that are material to the operation of certain portion of our business if
the VIE goes bankrupt or become subject to a dissolution or liquidation proceeding.
As
part of our contractual arrangements with the VIE, the VIE and its subsidiaries hold certain assets that are material to the operation
of certain portion of our business, including intellectual property and licenses. If the VIE goes bankrupt and all or part of its assets
become subject to liens or rights of third-party creditors, we may be unable to continue some or all of our business activities, which
could materially and adversely affect our business, financial condition and results of operations. Under the contractual arrangements,
the VIE may not, in any manner, sell, transfer, mortgage or dispose of their assets or legal or beneficial interests in the business
without our prior consent. If the VIE undergoes a voluntary or involuntary liquidation proceeding, independent third-party creditors
may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could materially and adversely
affect our business, financial condition and results of operations.
Because
we are a Cayman Island company and all of our business is conducted in the PRC, you may be unable to bring an action against us or our
officers and directors or to enforce any judgment you may obtain.
We
are incorporated in the Cayman Islands and conduct our operations primarily in China. Substantially all of our assets are located outside
of the United States. In addition, the majority of our directors and officers reside outside of the United States. As a result, it may
be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that
you believe we have violated your rights, either under United States federal or state securities laws or otherwise, or if you have a
claim against us. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of China may not
permit you to enforce a judgment against our assets or the assets of our directors and officers.
The
SEC, the U.S. Department of Justice and other U.S. authorities may also have difficulties in bringing and enforcing actions against us
or our directors or executive officers in the PRC. The SEC has stated that there are significant legal and other obstacles to obtaining
information needed for investigations or litigation in China. China has recently adopted a revised securities law, and Article 177 of
which provides, among other things, that no overseas securities regulator is allowed to directly conduct investigation or evidence collection
activities within the territory of the PRC. Accordingly, without governmental approval in China, no entity or individual in China may
provide documents and information relating to securities business activities to overseas regulators when it is under direct investigation
or evidence discovery conducted by overseas regulators, which could present significant legal and other obstacles to obtaining information
needed for investigations and litigation conducted in China.
As
an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate
governance matters that differ significantly from the Nasdaq listing standards; these practices may afford less protection to shareholders
than they would enjoy if we complied fully with such corporate governance listing standards.
As
a Cayman Islands exempted company listed on the Nasdaq Stock Market, we are subject to the Nasdaq listing standards. However, the Nasdaq
Stock Market Rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Currently,
we rely on home country practice with respect to certain aspects of our corporate governance. See "
Item 16G. Corporate Governance
."
Our shareholders may be afforded less protection than they would otherwise enjoy under the Nasdaq listing standards applicable to U.S.
domestic issuers given our reliance on the home country practice exception.
22
Risks
Related to Doing Business in China
The
Chinese government exerts substantial influence over the manner in which we must conduct our business, and may intervene or influence
our operations at any time, which could result in a material change in our operations, significantly limit or completely hinder our ability
to offer or continue to offer securities to investors and, and cause the value of our Ordinary Shares to significantly decline or be
worthless.
The
Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through
regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those
relating to taxation, environmental regulations, land use rights, property and other matters. The central or local governments of these
jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures
and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future,
including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional
or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular
regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.
Furthermore,
given recent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted
overseas, although we are currently not required to obtain permission from any of the PRC federal or local government authorities and
have not received any denial to list on the U.S. exchange, it is uncertain when and whether we will be required to obtain permission
from the PRC government to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied
or rescinded, which could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors
and cause the value of our securities to significantly decline or be worthless.
Recent
greater oversight by the Cyberspace Administration of China over data security, particularly for companies seeking to list on a foreign
exchange, could adversely impact our business and our securities.
On
December 28, 2021, 13 governmental departments of the PRC, including the Cyberspace Administration of China, or the CAC, issued the Cybersecurity
Review Measures, which became effective on February 15, 2022. The Cybersecurity Review Measures provide that, in addition to critical
information infrastructure operators ("CIIOs") that intend to purchase Internet products and services, online platform operators
engaging in data processing activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity
Review Office of the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security
risks that may be brought about by any procurement, data processing, or overseas listing. The Cybersecurity Review Measures require that
an online platform operator which possesses the personal information of at least one million users must apply for a cybersecurity review
by the CAC if it intends to be listed in foreign countries.
On
November 14, 2021, the CAC published draft Regulations on the Network Data Security Administration (Draft for Comments) (the "Security
Administration Draft"), which provides that data processing operators engaging in data processing activities that affect or may
affect national security must be subject to network data security review by the relevant Cyberspace Administration of the PRC. According
to the Security Administration Draft, data processing operators who possess personal data of at least one million users or collect data
that affects or may affect national security must be subject to network data security review by the relevant Cyberspace Administration
of the PRC. The deadline for public comments on the Security Administration Draft was December 13, 2021.
As
confirmed by our PRC counsel, JT&N, as of the date of this annual report, we are not subject to cybersecurity review with the CAC,
under the Cybersecurity Review Measures that became effective on February 15, 2022, or if the Security Administration Draft is enacted
as proposed, since (i) as companies that engage in business-oriented consulting services and manufacturing and sales of graphite anode
materials, we, our PRC subsidiaries, or the VIE and its subsidiaries are unlikely to be classified as CIIOs by the PRC regulatory agencies;
(ii) according to the interpretation of the relevant laws by the CAC, for online platform operators who have listed in foreign countries
before the effective date of Cybersecurity Review Measures, and who are not seeking a new listing (such as a secondary or dual listing)
in foreign countries, a cybersecurity review is not required; and (iii) the data processed in the business of the VIE and its subsidiaries,
which is knowledge sharing and enterprise service platform business, is unlikely to have a bearing on national security. There remains
uncertainty, however, as to how the Cybersecurity Review Measures and the Security Administration Draft will be interpreted or implemented
and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation
related to the Cybersecurity Review Measures and the Security Administration Draft. However, there remains uncertainty, as to how the
Cybersecurity Review Measures and the Security Administration Draft will be interpreted or implemented by the authorities and whether
the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation
related to the Cybersecurity Review Measures and the Security Administration Draft in the future. If any such new laws, regulations,
rules, or implementation and interpretation come into effect, we will take all reasonable measures and actions to comply with and to
mitigate any adverse effect of such new laws, regulations, rules, or implementation and interpretation on us. We cannot guarantee, however,
that we will not be subject to cybersecurity review and network data security review in the future. During such reviews, if required,
our operations could be suspended or experience other disruptions. Further, cybersecurity review and network data security review could
also result in negative publicity with respect to our Company and diversion of our managerial and financial resources, which could materially
and adversely affect our business, financial conditions, and results of operations.
23
The
Trial Measures and the revised Provisions recently issued by the PRC authorities may subject us to additional compliance requirements
in the future.
On
February 17, 2023, the CSRC promulgated the Trial Measures and five supporting guidelines, which took effect on March 31, 2023. Pursuant
to the Trial Measures, PRC domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete
filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission
of relevant applications or its completion of subsequent offerings. If a domestic company fails to complete required filing procedures
or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative
penalties, such as an order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in
charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. On the same day,
the CSRC also held a press conference for the release of the Trial Measures and issued the
Notice on Administration for the Filing
of Overseas Offering and Listing by Domestic Companies
, or the CSRC Notice, which, among others, clarifies that PRC domestic companies
that have already been listed overseas before the effective date of the Trial Measures, which is March 31, 2023, shall be deemed as Existing
Issuers, and Existing Issuers are not required to complete the filing procedures with the CSRC immediately, and they shall be required
to file with the CSRC for any subsequent offerings. We are an Existing Issuer, based on the foregoing, and we are not, therefore, required
to complete the filing procedures with the CSRC immediately, and shall be required, however, to file with the CSRC for any subsequent
offerings.
On
February 24, 2023, the CSRC, together with the MOF, the National Administration of State Secrets Protection and National Archives Administration
of China, revised the
Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and
Listing
, which were issued by the CSRC and National Administration of State Secrets Protection and National Archives Administration
of China in 2009, or the Provisions. The revised Provisions were issued under the title the "
Provisions on Strengthening Confidentiality
and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies
," and came into effect on March
31, 2023, together with the Trial Measures. One of the major revisions to the revised Provisions is expanding their application to cover
indirect overseas offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, among other things,
(i) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide
to relevant individuals or entities, including securities companies, securities service providers, and overseas regulators, any documents
and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities
according to law, and file with the secrecy administrative department at the same level; and (ii) a domestic company that plans to, either
directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities, including
securities companies, securities service providers, and overseas regulators, any other documents and materials that, if leaked, will
be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national
regulations. Any failure or perceived failure by our Company, our subsidiaries or the VIE and its subsidiaries to comply with the above
confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in
the relevant entities being held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal
liability if suspected of committing a crime. See "
Regulations—Regulations Related to Mergers and Acquisitions and Overseas
Listings
."
The
Trial Measures and the revised Provisions that recently issued by the PRC authorities may subject us to additional compliance requirements
in the future, as there are still uncertainties regarding the interpretation and implementation of such regulatory guidance, and we cannot
assure you that we will be able to comply with all the new regulatory requirements of the Trial Measures, the revised Provisions, or
any future implementing rules on a timely basis, or at all. Any failure by us to fully comply with the new regulatory requirements, including
but not limited to the failure to complete the filing procedures with the CSRC if required, may significantly limit or completely hinder
our ability to offer or continue to offer our Ordinary Shares, cause significant disruption to our business operations, and severely
damage our reputation, which would materially and adversely affect our financial condition and results of operations and cause our Ordinary
Shares to significantly decline in value or become worthless.
24
A
severe or prolonged downturn in the global or Chinese economy could materially and adversely affect our business and our financial condition.
Although
the Chinese economy expanded well in the last two decades, the rapid growth of the Chinese economy has slowed down since 2012, and there
is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the People's
Bank of China and financial authorities of some of the world's leading economies, including the United States and China. There
have been concerns over unrest and terrorist threats in the Middle East, Europe and Africa, which have resulted in volatility in oil
and other markets. There have also been concerns on the relationship among China and other Asian countries, which may result in or intensify
potential conflicts in relation to territorial disputes. Economic conditions in China are sensitive to global economic conditions, as
well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any
severe or prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results of operations
and financial condition.
We
face risks related to health epidemics such as the COVID-19 coronavirus outbreak first identified in Wuhan city at the end of 2019, and
other outbreaks, which significantly disrupted our operations and may continue to adversely affect our business, financial condition
and results of operations.
Our
business has been significantly disrupted and may continue be materially and adversely affected by health epidemics such as the COVID-19
pandemic and other outbreaks affecting the PRC. Our business operations depend on China's overall economy and demand for our service
and products, which could be disrupted by health epidemics. In fiscal years 2022 and 2021, due to the government imposed restrictions
and lock-downs that were intended to contain the spread of the COVID-19 pandemic, we were prevented from arranging many of our offline
activities, resulting in cancellations or postponements of study tours, forums and sponsorship advertising events, which materially and
adversely impacted the performance of our knowledge sharing business. For fiscal year 2021, revenues generated from the core business
of our knowledge sharing platform (member services, enterprise services and online services) decreased by approximately 76%, compared
to the same period of fiscal year 2020. For the year ended December 31, 2022, the revenues generated from the core services of our knowledge
sharing platform (member services, enterprise services and online services) decreased by approximately 95%, compared to that of fiscal
year 2021. Although the PRC government relaxed its COVID-19 restrictions since December 2022, there still remains a possibility of further
outbreaks of COVID-19 variants forcing a complete or partial suspension of our business operations in the PRC, a prolonged outbreak of
the coronavirus or other adverse public health developments in China would likely have a material adverse effect on our business operations
as such outbreak or other development could significantly impact the Chinese economy and our industry, disrupt our operations and adversely
affect our business, financial condition and results of operations. The Company is operating in a rapidly changing environment, so the
extent to which COVID-19 may impact its business, operations and financial results from this point forward will depend on numerous evolving
factors that the Company cannot accurately predict. Those factors include the following: the duration and scope of the pandemic, and
governmental, business and individuals' actions that have been and continue to be taken in response to the pandemic.
Because
our business is dependent upon government policies that encourage a market-based economy, change in the political or economic climate
in the PRC may impair our ability to operate profitably, if at all.
Although
the PRC government has been pursuing a number of economic reform policies for more than two decades, the PRC government continues to
exercise significant control over economic growth in the PRC. Because of the nature of our business, we are dependent upon the PRC government
pursuing policies that encourage private ownership of businesses. We cannot assure you that the PRC government will pursue policies favoring
a market-oriented economy or that existing policies will not be significantly altered, especially in the event of a change in leadership,
social or political disruption, or other circumstances affecting political, economic and social life in the PRC.
25
PRC
laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations
may materially and adversely affect our business and impede our ability to continue our operations.
There
are substantial uncertainties regarding the interpretation and application of PRC laws and regulations including, but not limited to,
the laws and regulations governing our business and the enforcement and performance of our arrangements with customers in certain circumstances.
The laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement
may involve substantial uncertainty. In fact, the PRC legal system is evolving rapidly, and the interpretations of many laws, regulations
and rules may contain inconsistencies and enforcement of these laws, regulations and rules involves uncertainties. The effectiveness
and interpretation of newly enacted laws or regulations, including amendments to existing laws and regulations, may be delayed, and our
business may be affected if we rely on laws and regulations which are subsequently adopted or interpreted in a manner different from
our understanding of these laws and regulations. New laws and regulations that affect existing and proposed future businesses may also
be applied retroactively. Furthermore, if China adopts more stringent standards with respect to environmental protection or social issues,
which are increasingly becoming the focus globally, we may incur increased compliance cost or become subject to additional restrictions
in our operations. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business.
From
time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. Since PRC administrative and
court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult
to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy in the PRC legal system than
in more developed legal systems. Furthermore, the PRC legal system is based in part on government policies and internal rules (some of
which are not published in a timely manner or at all) that may have retroactive effect. As a result, we may not be aware of our violation
of these policies and rules until sometime after the violation. Such uncertainties, including uncertainties over the scope and effect
of our contractual, property (including intellectual property) and procedural rights, and any failure to respond to changes in the regulatory
environment in China could materially and adversely affect our business and impede our ability to continue our operations.
For
example, on July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council
jointly issued an announcement to crack down on illegal activities in the securities market and promote the high-quality development
of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight
of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and
improve the system of extraterritorial application of the PRC securities laws. Since this announcement is relatively new, uncertainties
still exist in relation to how soon legislative or administrative regulation making bodies will respond and what existing or new laws
or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such
modified or new laws and regulations will have on companies like us.
26
Because
our business is conducted in RMB and the price of our Ordinary Shares is quoted in United States dollars, changes in currency conversion
rates may affect the value of your investments.
Our
business is conducted in the PRC, our books and records are maintained in RMB, which is the currency of the PRC, and the financial statements
that we file with the SEC and provide to our shareholders are presented in United States dollars. Changes in the exchange rate between
the RMB and dollar affect the value of our assets and the results of our operations in United States dollars. The value of the RMB against
the United States dollar and other currencies may fluctuate and is affected by, among other things, changes in the PRC's political
and economic conditions and perceived changes in the economy of the PRC and the United States. Any significant revaluation of the RMB
may materially and adversely affect our cash flows, revenue and financial condition. Further, our Ordinary Shares offered by this annual
report are denominated in United States dollars, we will need to convert the net proceeds we receive into RMB in order to use the funds
for our business. Changes in the conversion rate between the United States dollar and the RMB will affect that amount of proceeds we
will have available for our business.
Under
the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified as a "resident enterprise" of China, which could
result in unfavorable tax consequences to us and our non-PRC shareholders.
The
EIT Law and its implementing rules provide that enterprises established outside of China whose "de facto management bodies"
are located in China are considered "resident enterprises" under PRC tax laws. The implementing rules promulgated under the
EIT Law define the term "de facto management bodies" as a management body which substantially manages, or has control over
the business, personnel, finance and assets of an enterprise. In April 2009, the State Administration of Taxation, or SAT, issued the
Circular on Issues Concerning the Identification of Chinese-Controlled Overseas Registered Enterprises as Resident Enterprises in Accordance
With the Actual Standards of Organizational Management, known as SAT Circular 82, which has been revised by the Decision of the State
Administration of Taxation on Issuing the Lists of Invalid and Abolished Tax Departmental Rules and Taxation Normative Documents on December
29, 2017 and by the Decision of the State Council on Cancellation and Delegation of a Batch of Administrative Examination and Approval
Items on November 8, 2013. Circular 82 has provided certain specific criteria for determining whether the "de facto management
bodies" of a PRC-controlled enterprise that is incorporated offshore is located in China. Although this circular only applies to
offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the
criteria set forth in the circular may reflect the SAT's general position on how the "de facto management body" text
should be applied in determining the tax resident status of all offshore enterprises. According to SAT Circular 82, a Chinese-controlled
offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a "de facto management body"
in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following criteria are met: (i)
the places where senior management and senior management departments that are responsible for daily production, operation and management
of the enterprise perform their duties are mainly located within the territory of China; (ii) financial decisions (such as money borrowing,
lending, financing and financial risk management) and personnel decisions (such as appointment, dismissal, salary and wages) are made
or need to be made by organizations or persons located within the territory of China; (iii) main property, accounting books, corporate
seal, the board of directors and files of the minutes of shareholders' meetings of the enterprise are located or preserved within
the territory of China; and (iv) one half (or more) of the directors or senior management staff having the right to vote habitually reside
within the territory of China.
We
believe that Sunrise New Energy is not a resident enterprise for PRC tax purpose. Sunrise New Energy is not controlled by a PRC enterprise
or PRC enterprise group and we do not meet some of the conditions outlined in the immediately preceding paragraph. For example, as a
holding company, the key assets and records of Sunrise New Energy, including the resolutions and meeting minutes of our board of directors
and the resolutions and meeting minutes of our shareholders, are located and maintained outside the PRC. In addition, we are not aware
of any offshore holding companies with a corporate structure similar to ours that has been deemed a PRC "resident enterprise"
by the PRC tax authorities. However, as the tax residency status of an enterprise is subject to determination by the PRC tax authorities
and uncertainties remain with respect to the interpretation of the term "de facto management body".
If
we are deemed as a PRC "resident enterprise" by PRC tax authorities, we will be subject to PRC enterprise income tax on our
worldwide income at a uniform tax rate of 25%, although dividends distributed to us from our existing PRC subsidiaries and any other
PRC subsidiaries which we may establish from time to time could be exempt from the PRC dividend withholding tax due to our PRC "resident
recipient" status. This could have a material and adverse effect on our overall effective tax rate, our income tax expenses and
our net income. Furthermore, dividends, if any, paid to our shareholders may be decreased as a result of the decrease in distributable
profits. In addition, if we were considered a PRC "resident enterprise", any dividends we pay to our non-PRC investors, and
the gains realized from the transfer of our Ordinary Shares may be considered income derived from sources within the PRC and be subject
to PRC tax, at a rate of 10% in the case of non-PRC enterprises or 20% in the case of non-PRC individuals (in each case, subject to the
provisions of any applicable tax treaty). It is unclear whether holders of our Ordinary Shares would be able to claim the benefits of
any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. This
could have a material and adverse effect on the value of your investment in us and the price of our Ordinary Shares.
27
There
are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiaries, and dividends payable
by our PRC subsidiaries to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.
Under
the EIT Law and its implementation rules, the profits of a foreign invested enterprise generated through operations, which are distributed
to its immediate holding company outside the PRC, will be subject to a withholding tax rate of 10%. Pursuant to the
Arrangement between
the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income
,
or the Double Tax Avoidance Arrangement, a withholding tax rate of 10% may be lowered to 5% if the PRC enterprise is at least 25% held
by a Hong Kong enterprise for at least 12 consecutive months prior to distribution of the dividends and is determined by the relevant
PRC tax authority to have satisfied other conditions and requirements under the Double Tax Avoidance Arrangement and other applicable
PRC laws.
However,
based on the
Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties
, or the SAT Circular
81, which became effective on February 20, 2009, if the relevant PRC tax authorities determine, in their discretion, that a company benefits
from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust
the preferential tax treatment. According to
Circular on Several Issues regarding the "Beneficial Owner" in Tax Treaties
,
which became effective as of April 1, 2018, when determining an applicant's status as the "beneficial owner" regarding
tax treatments in connection with dividends, interests, or royalties in the tax treaties, several factors will be taken into account.
Such factors include whether the business operated by the applicant constitutes actual business activities, and whether the counterparty
country or region to the tax treaties does not levy any tax, grant tax exemption on relevant incomes, or levy tax at an extremely low
rate. This circular further requires any applicant who intends to be proved of being the "beneficial owner" to file relevant
documents with the relevant tax authorities. Our PRC subsidiaries is wholly owned by their respective HK based parent companies. However,
we cannot assure you that our determination regarding our qualification to enjoy the preferential tax treatment will not be challenged
by the relevant PRC tax authority or we will be able to complete the necessary filings with the relevant PRC tax authority and enjoy
the preferential withholding tax rate of 5% under the Double Tax Avoidance Arrangement with respect to dividends to be paid by our PRC
subsidiaries to our HK subsidiaries, in which case, we would be subject to the higher withdrawing tax rate of 10% on dividends received.
PRC
regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion
may delay or prevent us from making loans or additional capital contributions to our PRC subsidiaries, the VIE and its subsidiaries,
which could materially and adversely affect our liquidity and our ability to fund and expand our business.
We
are an offshore holding company conducting our operations in China through Sunrise Guizhou, the VIE and its subsidiaries. We may make
loans to Sunrise Guizhou, the VIE and its subsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any
capital contributions or loans that we, as an offshore entity, make to our PRC subsidiaries, are subject to PRC regulations. For example,
loans to our PRC subsidiaries cannot exceed statutory limits and are subject to foreign exchange loan registrations. Our capital contributions
to our PRC subsidiaries must be registered with the MOFCOM or its local counterpart. For more details,
see "Regulation—Regulations
Related to Foreign Debt."
and
"Regulation—Regulations Related to Foreign Exchange."
In
light of the various requirements imposed by of PRC regulations on loans to and direct investment in PRC entities by offshore holding
companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government
approvals or filings on a timely basis, if at all, with respect to future loans by us to our PRC subsidiaries or the VIE or with respect
to future capital contributions by us to our PRC subsidiaries. If we fail to complete such registrations or obtain such approvals on
a timely basis or at all, our ability to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially
and adversely affect our liquidity and our ability to fund and expand our business.
Government
control in currency conversion may adversely affect our financial condition, our ability to remit dividends, and the value of your investment.
The
PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of
currency out of China. We receive substantially all of our revenues in Renminbi. Under our current corporate structure, our Cayman Islands
holding company may rely on dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have.
Under
existing PRC foreign exchange regulations, Renminbi cannot be freely converted into any foreign currency, and conversion and remittance
of foreign currencies are subject to PRC foreign exchange regulations. It cannot be guaranteed that under a certain exchange rate, we
will have sufficient foreign exchange to meet our foreign exchange requirements. Under the current PRC foreign exchange control system,
foreign exchange transactions under the current account conducted by us, including the payment of dividends, do not require advance approval
from SAFE, but we are required to present documentary evidence of such transactions and conduct such transactions at designated foreign
exchange banks within China that have the licenses to carry out foreign exchange business. Foreign exchange transactions under the capital
account conducted by us, however, must be approved in advance by SAFE.
28
Under
existing foreign exchange regulations, we will be able to pay dividends in foreign currencies without prior approval from SAFE by complying
with certain procedural requirements. However, we cannot assure you that these foreign exchange policies regarding payment of dividends
in foreign currencies will continue in the future.
In
fact, in light of the flood of capital outflows of China in 2016 due to the weakening Renminbi, the PRC government has imposed more restrictive
foreign exchange policies and stepped up scrutiny of major outbound capital movement including overseas direct investment. More restrictions
and substantial vetting process are put in place by SAFE to regulate cross-border transactions falling under the capital account. If
any of our shareholders regulated by such policies fails to satisfy the applicable overseas direct investment filing or approval requirement
timely or at all, it may be subject to penalties from the relevant PRC authorities. The PRC government may at its discretion further
restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents
us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign
currencies to our shareholders, including holders of the Ordinary Shares. Our capital expenditure plans and our business, operating results
and financial condition may be materially and adversely affected.
If
we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to
expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation.
U.S.
public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism and negative
publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative
publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial
accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result
of the scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese companies sharply decreased
in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC
enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide
scrutiny, criticism and negative publicity will have on us, our business and our stock price. If we become the subject of any unfavorable
allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such
allegations and/or defend our company. This situation will be costly and time consuming and distract our management from growing our
business. If such allegations are not proven to be groundless, we and our business operations will be severely affected and you could
sustain a significant decline in the value of our stock.
The
disclosures in our reports and other filings with the SEC and our other public pronouncements are not subject to the scrutiny of any
regulatory bodies in the PRC.
We
are regulated by the SEC and our reports and other filings with the SEC are subject to SEC review in accordance with the rules and regulations
promulgated by the SEC under the Securities Act and the Exchange Act. Our SEC reports and other disclosures and public pronouncements
are not subject to the review or scrutiny of any PRC regulatory authority. For example, the disclosure in our SEC reports and other filings
are not subject to the review by the CSRC, a PRC regulator that is responsible for oversight of the capital markets in China. However,
on February 17, 2023, with the approval of the State Council, the CSRC released the Trial Measures and five supporting guidelines, which
took effect on March 31, 2023. According to the Trial Measures, PRC domestic companies that seek to offer or list securities overseas,
both directly and indirectly, should fulfill the filing procedures and submit relevant documents, including the prospectus and other
listing documents submitted to overseas regulatory authorities, to the CSRC. However, as the laws and regulations are relatively new,
substantial uncertainties exist with respect to its interpretation and implementation regarding such laws and regulations. It is not
clear how the CSRC may review and scrutinize these listing documents and we cannot assure you whether and how such scrutiny may affect
our listing on an U.S. exchange.
29
The Holding Foreign Companies Accountable
Act and related regulations all call for additional and more stringent criteria to be applied to emerging market companies upon assessing
the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add
uncertainties to our continued listing on the Nasdaq, and Nasdaq may determine to delist our securities if the PCAOB determines that it
cannot inspect or fully investigate our auditor.
On
April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint
statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including
China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers
in China and higher risks of fraud in emerging markets.
On
May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating
in "Restrictive Market", (ii) adopt a new requirement relating to the qualification of management or board of director for
Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications
of the company's auditors.
On
December 18, 2020, the "Holding Foreign Companies Accountable Act" was signed by President Donald Trump and became law. This
legislation requires certain issuers of securities to establish that they are not owned or controlled by a foreign government. Specifically,
an issuer must make this certification if the PCAOB is unable to audit specified reports because the issuer has retained a foreign public
accounting firm not subject to inspection by the PCAOB. Furthermore, if the PCAOB is unable to inspect the issuer's public accounting
firm for three consecutive years beginning in 2021, the issuer's securities are banned from trade on a national exchange or through
other methods.
On June 22, 2021, the U.S. Senate passed the
"Accelerating Holding Foreign Companies Accountable Act", which proposed to decrease the number of non-inspection years for
foreign companies to comply with PCAOB audits from three to two years, thus reducing the time period before their securities may be prohibited
from trading or delisted.
On
December 16, 2021, the PCAOB issued a report on its determinations that the Board was unable to inspect or investigate completely PCAOB-registered
public accounting firms headquartered in mainland China and in Hong Kong, a Special Administrative Region of the People's Republic
of China (PRC), because of positions taken by PRC authorities in those jurisdictions (the "Determination"). The Board made
these determinations pursuant to PCAOB Rule 6100, which provides a framework for how the PCAOB fulfills its responsibilities under the
Holding Foreign Companies Accountable Act (HFCAA).
On August 26, 2022, the CSRC, the MOF, and the
PCAOB signed a Protocol, governing inspections and investigations of audit firms based in mainland China and Hong Kong. Pursuant to the
fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits
for inspection or investigation and has the unfettered ability to transfer information to the SEC.
On
December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered
public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary.
However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB's access in the future, the PCAOB Board will
consider the need to issue a new determination.
30
On December 29, 2022, the provisions of the Accelerating
Holding Foreign Companies Accountable Act were signed into law by President Biden as part of the Consolidated Appropriations Act, amending
the HFCAA and requiring the SEC to prohibit an issuer's securities from trading on any U.S. stock exchange if its auditor is not
subject to PCAOB inspections for two consecutive years instead of three consecutive years. The PCAOB continues to demand complete access
in mainland China and Hong Kong moving forward and is making plans to resume regular inspections in early 2023 and beyond, as well as
to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has also indicated that it will act
immediately to issue new determinations with the HFCAA, if needed.
Our auditor prior to September 29, 2022, Friedman
LLP, was registered with the PCAOB and had been inspected by the PCAOB on a regular basis in the audit period. Our current auditor, MarcumAsia,
is headquartered in Manhattan, New York and registered with the PCAOB. Our auditor is subject to laws in the United States pursuant to
which the PCAOB conducts regular inspections to assess our auditor's compliance with the applicable professional rstandards, and
has been inspected by the PCAOB on a regular basis. As such, as of the date of this annual report, our listing is not affected by
the Holding Foreign Companies Accountable Act and related regulations. However, the recent developments would add uncertainties to our
continued listing and we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria
to us after considering the effectiveness of our auditor's audit procedures and quality control procedures, adequacy of personnel
and training, or sufficiency of resources, geographic reach or experience as related to the audit of our financial statements. Furthermore,
there is a risk that our auditor cannot be inspected by the PCAOB in the future. The lack of inspection could cause trading in our securities
to be prohibited under the Holding Foreign Companies Accountable Act, and, as a result, Nasdaq may determine to delist our securities,
which may cause the value of our securities to decline or become worthless.
The
failure to comply with PRC regulations relating to mergers and acquisitions of domestic entities by offshore special purpose vehicles
may subject us to severe fines or penalties and create other regulatory uncertainties regarding our corporate structure.
On
August 8, 2006, MOFCOM, joined by the CSRC, the State-owned Assets Supervision and Administration Commission of the State Council, the
SAT, the State Administration for Industry and Commerce (the "SAIC", currently known as the PRC State Administration for
Market Regulation, or the SAMR), and State Administration of Foreign Exchange ("SAFE"), jointly promulgated regulations entitled
the Provisions Regarding Mergers and Acquisitions of Domestic Entities by Foreign Investors (the "M&A Rules"), which
took effect as of September 8, 2006, and as amended on June 22, 2009. These regulations, among other things, have certain provisions
that require offshore special purpose vehicles formed for the purpose of acquiring PRC domestic companies and controlled directly or
indirectly by PRC individuals and companies, to obtain the approval of MOFCOM prior to engaging in such acquisitions and to obtain the
approval of the CSRC prior to publicly listing their securities on an overseas stock market. On September 21, 2006, the CSRC published
on its official website a notice specifying the documents and materials that are required to be submitted for obtaining CSRC approval.
The application of the M&A Rules with respect to our corporate structure remains unclear, with no current consensus existing among
leading PRC law firms regarding the scope and applicability of the M&A Rules.
If
the CSRC, MOFCOM, or another PRC regulatory agency determines that government approval was required for the VIE arrangement between GIOP
BJ and the VIE, or if prior CSRC approval for overseas financings is required and not obtained, we may face severe regulatory actions
or other sanctions from MOFCOM, the CSRC or other PRC regulatory agencies. In such event, these regulatory agencies may impose fines
or other penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the
proceeds from overseas financings into the PRC, restrict or prohibit payment or remittance of dividends to us or take other actions that
could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as
the trading price of our Ordinary Shares. The CSRC or other PRC regulatory agencies may also take actions requiring us, or making it
advisable for us, to delay or cancel overseas financings, to restructure our current corporate structure, or to seek regulatory approvals
that may be difficult or costly to obtain.
31
PRC
regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial
owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC
subsidiaries' ability to increase its registered capital or distribute profits to us, or may otherwise adversely affect us.
On
July 4, 2014, SAFE issued the Circular on Issues Concerning Foreign Exchange Control over the Overseas Investment and Financing and Round-trip
Investment by Domestic Residents via Special Purpose Vehicles, or SAFE Circular 37, which became effective as of July 4, 2014 and has
replaced the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents' Financing and Roundtrip
Investment Through Offshore Special Purpose Vehicles ("SAFE Circular 75"). According to SAFE Circular 37, prior registration
with the local SAFE branch is required for PRC residents, including PRC individuals and PRC corporate entities as well as foreign individuals
that are deemed as PRC residents for foreign exchange administration purpose, in connection with their direct or indirect contribution
of domestic assets or interests to offshore companies, known as SPVs. SAFE Circular 37 further requires amendment to the SAFE registrations
in the event of any changes with respect to the basic information of the offshore special purpose vehicle, such as change of a PRC individual
shareholder, name and operation term, or any significant changes with respect to the offshore special purpose vehicle, such as increase
or decrease of capital contribution, share transfer or exchange, or mergers or divisions. SAFE Circular 37 is applicable to our shareholders
who are PRC residents and may be applicable to any offshore acquisitions that we make in the future. In February 2015, SAFE promulgated
a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, effective
June 2015. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas
direct investments, including those required under SAFE Circular 37, will be filed with qualified banks instead of SAFE. The qualified
banks will directly examine the applications and accept registrations under the supervision of SAFE.
In
addition to SAFE Circular 37 and SAFE Notice 13, our ability to conduct foreign exchange activities in China may be subject to the interpretation
and enforcement of the Implementation Rules of the Administrative Measures for Individual Foreign Exchange promulgated by SAFE in January
2007 (as amended and supplemented, the "Individual Foreign Exchange Rules"). Under the Individual Foreign Exchange Rules,
any PRC individual seeking to make a direct investment overseas or engage in the issuance or trading of negotiable securities or derivatives
overseas must make the appropriate registrations in accordance with SAFE provisions, the failure of which may subject such PRC individual
to warnings, fines or other liabilities.
All
of our shareholders who are subject to the SAFE Circular 37 and Individual Foreign Exchange Rules have completed the initial registrations
with the qualified banks as required by the regulations. However, we may not be informed of the identities of all the PRC residents holding
direct or indirect interest in our company, and we have no control over any of our beneficial owners. Thus, we cannot provide any assurance
that our current or future PRC resident beneficial owners will comply with our request to make or obtain any applicable registrations
or continuously comply with all registration procedures set forth in these SAFE regulations. Such failure or inability of our PRC residents
beneficial owners to comply with these SAFE regulations may subject us or our PRC residents beneficial owners to fines and legal sanctions,
restrict our cross-border investment activities, or limit our PRC subsidiaries' ability to distribute dividends to, or obtain foreign-exchange-dominated
loans from, our company, or prevent us from being able to make distributions or pay dividends, as a result of which our business operations
and our ability to distribute profits to you could be materially adversely affected.
Our
contractual arrangements with the VIE are governed by the laws of the PRC and we may have difficulty in enforcing any rights we may have
under these contractual arrangements.
As
all of our contractual arrangements with the VIE are governed by the PRC laws and provide for the resolution of disputes through arbitration
in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures.
Disputes arising from these contractual arrangements between us and the VIE will be resolved through arbitration in China, although these
disputes do not include claims arising under the United States federal securities law and thus do not prevent you from pursuing claims
under the United States federal securities law. The legal environment in the PRC is not as developed as in the United States. As a result,
uncertainties in the PRC legal system could further limit our ability to enforce these contractual arrangements, through arbitration,
litigation and other legal proceedings remain in China, which could limit our ability to enforce these contractual arrangements and exert
effective control over the VIE. Furthermore, these contracts may not be enforceable in China if PRC government authorities or courts
take a view that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the
event we are unable to enforce these contractual arrangements, we may not be able to exert effective control over the VIE, and our ability
to conduct our business may be materially and adversely affected.
Increases
in labor costs in the PRC may adversely affect our business and our profitability.
China's
economy has experienced increases in labor costs in recent years, which is expected to continue to grow. The average wage level for our
employees has also increased in recent years. We expect that our labor costs, including wages and employee benefits, will continue to
increase. Unless we are able to pass on these increased labor costs to our customers by increasing prices for our products or services,
our profitability and results of operations may be materially and adversely affected.
32
In
addition, we have been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees and paying
various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment
insurance and childbearing insurance to designated government agencies for the benefits of our employees. Pursuant to the PRC Labor Contract
Law, or the Labor Contract Law, that became effective in January 2008 and its implementing rules that became effective in September 2008
and its amendments that became effective in July 2013, employers are subject to stricter requirements in terms of signing labor contracts,
minimum wages, paying remuneration, determining the term of employees' probation and unilaterally terminating labor contracts.
In the event that we decide to terminate some of our employees or otherwise change our employment or labor practices, the Labor Contract
Law and its implementation rules may limit our ability to effect those changes in a desirable or cost-effective manner, which could adversely
affect our business and results of operations.
As
the interpretation and implementation of labor-related laws and regulations are still evolving, we cannot assure you that our employment
practice does not and will not violate labor-related laws and regulations in China, which may subject us to labor disputes or government
investigations. If we are deemed to have violated relevant labor laws and regulations, we could be required to provide additional compensation
to our employees and our business, financial condition and results of operations could be materially and adversely affected.
U.S.
regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China.
The
SEC, the U.S. Department of Justice and other U.S. authorities may also have difficulties in bringing and enforcing actions against us
or our directors or executive officers in the PRC. The SEC has stated that there are significant legal and other obstacles to obtaining
information needed for investigations or litigation in China. Although the authorities in China may establish a regulatory cooperation
mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration,
such cooperation with the securities regulatory authorities in Hong Kong or other jurisdictions may not be efficient in the absence of
mutual and practical cooperation mechanism. Furthermore, China has recently adopted a revised securities law that became effective on
March 1, 2020, Article 177 of which provides, among other things, that no overseas securities regulator is allowed to directly conduct
investigation or evidence collection activities within the territory of the PRC. Accordingly, without governmental approval in China,
no entity or individual in China may provide documents and information relating to securities business activities to overseas regulators
when it is under direct investigation or evidence discovery conducted by overseas regulators. While detailed interpretation of or implementation
rules under Article 177 have yet to be promulgated, it could present significant legal and other obstacles to obtaining information needed
for investigations and litigation conducted outside of China, which may further increase difficulties faced by you in protecting your
interests.
33
Risks
Related to Our Ordinary Shares and the Trading Market
If
we are a passive foreign investment company for United States federal income tax purposes for any taxable year, United States holders
of our Ordinary Shares could be subject to adverse United States federal income tax consequences.
A
non-United States corporation will be a passive foreign investment company, or PFIC, for United States federal income tax purposes for
any taxable year if either (i) at least 75% of its gross income for such taxable year is passive income or (ii) at least 50% of the value
of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce or
are held for the production of passive income. Based on the current and anticipated value of our assets and the composition of our income
and assets, we do not expect to be a PFIC for United States federal income tax purposes for our current taxable year or in the foreseeable
future. However, the determination of whether or not we are a PFIC according to the PFIC rules is made on an annual basis and will depend
on the composition of our income and assets and the value of our assets from time to time. Therefore, changes in the composition of our
income or assets or the value of our assets may cause us to become a PFIC. The determination of the value of our assets (including goodwill
not reflected on our balance sheet) may be based, in part, on the quarterly market value of our Ordinary Shares, which is subject to
change and may be volatile. It is possible that, for any subsequent year, more than 50% of our assets may be assets which produce passive
income. We will make this determination following the end of any particular tax year.
Although
the U.S. tax law with regards to VIEs is unclear, we are treating the VIE as being owned by us for United States federal income tax purposes,
not only because we control their management decisions, but also because we are entitled to the economic benefits associated with the
VIE, and as a result, we are treating the VIE as our wholly-owned subsidiary for U.S. federal income tax purposes. For purposes of the
PFIC analysis, in general, according to Section 1297(c) of the Internal Revenue Code of 1986, as amended (the "Internal Revenue
Code"), a non-U.S. corporation is deemed to own its pro rata share of the gross income and assets of any entity in which it is
considered to own at least 25% of the equity by value. Although our Company does not technically own any stock in the VIE there are numerous
factors that give rise to a strong conclusion that its control of management decisions, the entitlement to economic benefits associated
with the VIE, and the inclusion of the VIE as part of the consolidated group (Under Accounting Standards Codification (ASC) Topic 810,
"Consolidation," VIEs are generally consolidated with other related entities under common control) is so akin to our Company
holding a stock interest in the VIE that it is reasonable and consistent to consider our Company's interest in the VIE as a deemed
stock interest. Therefore, the income and assets of the VIE should be included in the determination of whether or not we are a PFIC in
any taxable year. It is important to emphasize that there is little to no guidance other than the statute itself (Internal Revenue Code
Section 1297(c)) and analogous portions of the code, treasury regulations and other accepted authorities and as such it is possible for
the IRS to challenge the argument that the look through rule would apply in this case, especially since the statute explicitly says "stock".
The
classification of certain of our income as active or passive, and certain of our assets as producing active or passive income, and hence
whether we are or will become a PFIC, depends on the interpretation of certain United States Treasury Regulations as well as certain
IRS guidance relating to the classification of assets as producing active or passive income. Such regulations and guidance are potentially
subject to different interpretations. If due to different interpretations of such regulations and guidance the percentage of our passive
income or the percentage of our assets treated as producing passive income increases, we may be a PFIC in one or more taxable years.
If
we are a PFIC for any taxable year during which a United States person holds Ordinary Shares, certain adverse United States federal income
tax consequences could apply to such United States person.
For
a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were or are determined
to be a PFIC, see "Taxation—U.S. Federal Income Taxation—Passive Foreign Investment Company."
U.S.
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISERS ABOUT THE PFIC RULES, THE POTENTIAL APPLICABILITY OF THESE RULES TO THE COMPANY CURRENTLY
AND IN THE FUTURE, AND THEIR FILING OBLIGATIONS IF THE COMPANY IS A PFIC.
34
We
have identified several control deficiencies in our internal control over financial reporting. If we fail to maintain an effective system
of internal controls over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
The
Securities and Exchange Commission, as required by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring every public
company to include a management report on such company's internal controls over financial reporting in its annual report, which
contains management's assessment of the effectiveness of the company's internal controls over financial reporting. In addition,
an independent registered public accounting firm must attest to and report on management's assessment of the effectiveness of the
company's internal controls over financial reporting when the Company no longer qualifies as an emerging company. Our reporting
obligations as a public company place a significant strain on our management, operational and financial resources and systems for the
foreseeable future.
Our independent registered public accounting
firm has not conducted an audit of our internal control over financial reporting. During the course of preparing our consolidated financial
statements as of and for the years ended December 31, 2022, we identified material weaknesses and other control deficiencies in our internal
control over financial reporting. Many of the deficiencies noted below were communicated to us from our independent registered public
accounting firm as observations, which stemmed from their audit. The material weaknesses identified included: (1) a lack of formal internal
controls policies over financial closing and reporting processes, which may increase risk of error, fraud, misstatement of financial
reporting, or even non-compliance with related regulations for a U.S. listed Group; (2) a lack of accounting staff and resources with
appropriate knowledge of U.S. GAAP and SEC reporting and compliance requirements, and accounting policies and procedures manual that
covers U.S. GAAP and SEC financial reporting requirements to complete relate US GAAP and SEC reporting. As a result of the above, our
management has concluded that, as of December 31, 2022, our disclosure controls and procedures were not effective.
We are taking a number of measures to tackle
the control deficiencies identified, including: (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting
experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework;
(ii) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial
reporting personnel; and (iii) preparing a comprehensive accounting policies and procedures manual that covers financial closing and
reporting processes, U.S. GAAP and SEC financial reporting requirements, and ensuring that accounting personnel are familiar with and
follow the manual.
Effective
internal controls over financial reporting are necessary for us to produce reliable financial reports and are important to help prevent
fraud. As a result, our failure to achieve and maintain effective internal controls over financial reporting could result in the loss
of investor confidence in the reliability of our financial statements, which in turn could harm our business and negatively impact the
trading price of our Ordinary Shares. Furthermore, we anticipate that we will incur considerable costs and devote significant management
time and efforts and other resources to comply with Section 404 of the Sarbanes-Oxley Act.
We
do not intend to pay dividends for the foreseeable future.
We
currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare
or pay any dividends in the foreseeable future. As a result, you may only receive a return on your investment in our Ordinary Shares
if the market price of our Ordinary Shares increases.
The
market price of our Ordinary Shares may be volatile or may decline regardless of our operating performance, and you may not be able to
resell your shares at or above the initial public offering price.
The
market price of our Ordinary Shares may fluctuate significantly in response to numerous factors, many of which are beyond our control,
including:
●
actual
    or anticipated fluctuations in our revenue and other operating results;
●
the
    financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;
●
actions
    of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow
    our company, or our failure to meet these estimates or the expectations of investors;
●
announcements
    by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint
    ventures, or capital commitments;
●
price
    and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;
●
lawsuits
    threatened or filed against us; and
●
other
    events or factors, including those resulting from war or incidents of terrorism, or responses to these events.
35
In
addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market
prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate
to the operating performance of those companies. In the past, shareholders have filed securities class action litigation following periods
of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources
and the attention of management from our business, and adversely affect our business.
As
a foreign private issuer, we are not subject to certain U.S. securities law disclosure requirements that apply to a domestic U.S. issuer,
and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, which may limit the information publicly
available to our investors and afford them less protection than if we were an U.S issuer.
Nasdaq
listing rules require listed companies to have, among other things, a majority of its board members be independent. As a foreign private
issuer, however, we are permitted to, and we may follow home country practice in lieu of the above requirements, or we may choose to
comply with the above requirement within one year of listing. The corporate governance practice in our home country, the Cayman Islands,
does not require a majority of our board to consist of independent directors. Thus, although a director must act in the best interests
of the Company, it is possible that fewer board members will be exercising independent judgment and the level of independent board oversight
of the management of our company may decrease as a result. In addition, Nasdaq listing rules also require U.S. domestic issuers to have
a compensation committee, a nominating/corporate governance committee composed entirely of independent directors, and an audit committee
with a minimum of three members. Furthermore, Cayman law does not require that we obtain shareholder approval to issue 20% or more
of our outstanding Ordinary Shares in a private offering.
As
a foreign private issuer we are not required to comply with all of the periodic disclosure and current reporting requirements of the
Exchange Act and therefore there may be less publicly available information about us than if we were a U.S. domestic issuer. We are exempt
from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:
●
the
    rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K;
●
the
    sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered
    under the Exchange Act;
●
the
    sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability
    for insiders who profit from trades made in a short period of time; and the selective disclosure rules by issuers of material non-public
    information under Regulation FD.
We
are required to file an annual report on Form 20-F within four months of the end of each fiscal year. However, the information we are
required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC
by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you
were you investing in a U.S. domestic issuer.
36
Anti-takeover
provisions in our memorandum and articles of association may discourage, delay or prevent a change in control.
Some
provisions in our memorandum and articles of association, may discourage, delay or prevent a change in control of our company or management
that shareholders may consider favorable, including, among other things, the following:
●
provisions
    that permit our board of directors by resolution to issue classes of shares with preferred, deferred or other special rights or restrictions
    as the board of directors determine in their discretion, without any further vote or action by our shareholders. If issued, the rights,
    preferences, designations and limitations of any class of preferred shares could operate to the disadvantage of the outstanding ordinary
    shares the holders of which would not have any pre-emption rights in respect of such an issue of preferred shares. Such terms could
    include, among others, preferences as to dividends and distributions on liquidation, or could be used to prevent possible corporate
    takeovers; and
●
provisions
    that restrict the ability of our shareholders holding in aggregate less than thirty percent (30%) of the outstanding voting shares
    in the company to call general meetings or annual general meetings and to include matters for consideration at shareholder meetings
    and the ability of our shareholders holding in aggregate of 10% of the outstanding voting shares to call for special meetings of
    shareholders.
If
we cannot satisfy the listing requirements and other rules of Nasdaq Capital Market, our securities may be delisted, which could negatively
impact the price of our securities and your ability to sell them.
In
order to maintain our listing on the Nasdaq Capital Market, we are required to comply with certain rules of Nasdaq Capital Market, including
those regarding minimum stockholders' equity, minimum share price and certain corporate governance requirements. Even if we initially
meet the listing requirements and other applicable rules of the Nasdaq Capital Market, we may not be able to continue to satisfy these
requirements and applicable rules. If we are unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our securities
could be subject to delisting.
If
the Nasdaq Capital Market delists our securities from trading, we could face significant consequences, including:
●
a
    limited availability for market quotations for our securities;
●
reduced
    liquidity with respect to our securities;
●
a
    determination that our Ordinary Shares are a "penny stock," which will require brokers trading in our Ordinary Shares
    to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for
    our Ordinary Shares;
●
limited
    amount of news and analyst coverage; and
●
a
    decreased ability to issue additional securities or obtain additional financing in the future.
You
may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders.
Cayman
Islands law provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any
right to put any proposal before a general meeting. However, these rights may be provided in a company's articles of association
and have been provided for in the amended articles and memorandum of association of the Company, subject to the restrictions described
therein. Advance notice of at least twenty-one clear days is required for the convening of our annual general shareholders' meeting
and at least 14 clear days' notice any other general meeting of our shareholders. A quorum required for a meeting of shareholders
consists of at least one shareholder present or by proxy, representing not less than one-third in nominal value of the total issued voting
shares in the Company. To the extent that shareholders hold in aggregate less than thirty percent (30%) of the outstanding voting shares
in the Company, they cannot (a) call general meetings or annual general meetings; and (b) Include matters for consideration at shareholder
meetings.
37
ITEM 4.
INFORMATION
ON THE COMPANY
A.
History
and Development of the Company
We are a holding company incorporated in the
Cayman Islands. As a holding company with no material operations of our own, we primarily operate our businesses through PRC operating
entities. In 2022, Sunrise Guizhou was established by our wholly owned subsidiary, Zhuhai Zibo, and certain other joint venture partners,
as a limited company pursuant to PRC laws, for the purpose of manufacturing and sales of graphite anode materials. Zhuhai Zibo currently
owns a 39.35% equity interest in Sunrise Guizhou, but has the power to cast a majority of votes at the meeting of the board of directors
and governs the financial and operating policies of Sunrise Guizhou under an agreement among the shareholders. We operate a knowledge
sharing platform through the VIE, of which we do not own any equity interest; rather we control the VIE via a series of contractual arrangements
between GIOP BJ and the VIE. The VIE (formerly known as Beijing Huatai Yihe Co., Ltd.) was established in 2014 as a limited company pursuant
to PRC laws for the purpose of providing corporate consulting services.
The
VIE established a wholly owned subsidiary, GMB Hangzhou, on November 1, 2017 pursuant to PRC laws.
In
2017 and 2018, the VIE also established three subsidiaries pursuant to PRC laws, which were GMB (Beijing), GMB Culture, and GMB Consulting.
The VIE owns 51% of the equity interest of each of these three subsidiaries. Additionally, GMB Culture has a subsidiary, Mentor Board
Voice of Seeding (Shanghai) Cultural Technology Co., Ltd., and owns 60% of its equity interest.
On
February 22, 2019, the holding company, Sunrise New Energy, was established under the laws of the Cayman Islands. Sunrise New Energy
owns 100% of GMB HK, a Hong Kong company incorporated on March 22, 2019.
On
June 3, 2019, GIOP BJ was incorporated pursuant to PRC laws as a wholly foreign owned enterprise. GMB HK holds 100% of the equity interest
in GIOP BJ. On August 26, 2022, GMB HK transferred its equity interest in GIOP BJ to Zhuhai Zibo, and GIOP BJ became a wholly owned subsidiary
of Zhuhai Zibo.
On
October 15, 2020, the VIE established another wholly owned subsidiary, Zibo Shidong, pursuant to PRC laws. See "
Item 4C.
Organizational Structure
for a chart of our current structure."
On February 11, 2021, the Company closed its
initial public offering ("IPO") of 6,720,000 Ordinary Shares. The Ordinary Shares were priced at $4.00 per share, before
underwriting discounts and offering expenses, resulting in gross proceeds of $26,880,000. The offering was conducted on a firm commitment
basis. The Ordinary Shares commenced trading on The Nasdaq Capital Market under the ticker symbol "SDH" on February 9, 2021.
On February 19, 2021, ViewTrade Securities, Inc.,
as the representative of the underwriters in the initial public offering of the Company, exercised in full its option to purchase an
additional 1,008,000 Ordinary Shares at a price of $4.00 per share. As a result, the Company raised gross proceeds of approximately $4,032,000,
in addition to the previously announced IPO gross proceeds of approximately $26.88 million, before deducting underwriting discounts and
other related expenses.
On October 8, 2021, the Company established a
wholly-owned-subsidiary, SDH New Energy, pursuant to Hong Kong laws.
On
October 15, 2021, SDH New Energy established a wholly-owned-subsidiary, Zhuhai Zibo, pursuant to PRC laws.
On
November 23, 2021, SDH New Energy established a wholly-owned-subsidiary, Zhuhai Guizhou, pursuant to PRC laws.
On
April 2, 2022, Zhuhai Zibo entered into an investment agreement (the "Agreement") with certain parties to form Sunrise Guizhou,
a joint venture (the "JV") dedicated to the production of high-grade lithium-ion power battery anode materials. Pursuant
to the Agreement, Zhuhai Zibo owned 51% equity interest in the JV. The Agreement and related transactions were approved by Sunrise New
Energy's shareholders at an extraordinary general meeting of shareholders held on April 1, 2022.
On
June 13, 2022, Zhuhai Zibo and the other thirteen founding shareholders of Sunrise Guizhou (the "Original Shareholders")
entered into an investment agreement (the "Investment Agreement") with Guizhou Province New Kinetic Industry Development
Fund Partnership (the "Investor"). Pursuant to the Investment Agreement, the Investor invested RMB 200 million in Sunrise
in exchange for 22.8395% of Sunrise Guizhou's equity interest (the "Capital Increase"), and the Original Shareholders
have agreed to waive their pre-emptive rights and accept the Investor as a new shareholder of Sunrise. As a result of the Capital Increase,
each Original Shareholder's equity interest in Sunrise was reduced by the same ratio. Zhuhai Zibo's equity share in Sunrise
Guizhou was reduced from 51% to 39.3519%. On April 12, 2022, Zhuhai Zibo entered into an "Agreement of Action in Concert"
with twelve of the thirteen Original Shareholders, who agreed to act in concert with Zhuhai Zibo in matters relating to the corporate
governance of Sunrise, including voting on shareholder proposals and nominating directors of Sunrise Guizhou. The Agreement of Action
in Concert ensures that Zhuhai Zibo controls 74.0743% of Sunrise Guizhou's voting rights after the Capital Increase took effect
pursuant to the Investment Agreement.
On
July 11, 2022, the Company relocated its principal executive offices from Room 208, Building 1, No. 28 Houtun Road, Haidian District,
Beijing, PRC, to Room 703, West Zone, R&D Building, Zibo Science and Technology Industrial Entrepreneurship Park, No. 69 Sanying
Road, Zhangdian District, Zibo City, Shandong Province, PRC.
38
On
August 5, 2022, at the 2022 annual general meeting of shareholders of the Company, the shareholders of the Company approved to change
the Company's name from Global Internet of People, Inc. to Sunrise New Energy Co., Ltd. The name change of the Company became effective
on August 10, 2022. In conjunction with the name change, the Company's ordinary shares began trading on the NASDAQ Capital Market
under the new ticker symbol "EPOW" as of the opening of trading on August 15, 2022. The Company's ordinary shares previously
traded under the ticker symbol "SDH".
Pursuant
to PRC laws, each entity formed under PRC law shall have certain business scopes as submitted to the Administration of Industry and Commerce
or its local counterpart. Pursuant to specific business scopes, approval by the relevant competent regulatory agencies may be required
prior to commencement of business operations. As such, GIOP BJ's business scope is to primarily engage in: technology development,
technology promotion, technology transfer, technical consultation, technical services; sales of self-developed products; business management
consulting; corporate planning; conference services, organization of cultural and artistic exchange activities (excluding commercial
performances); economic and trade consulting. Since the sole business of GIOP BJ is to provide the VIE with technical support, consulting
services and other management services relating to its day-to-day business operations and management in exchange for a service fee approximately
equal to the VIE's earnings before corporate income tax, i.e., the VIE's revenue after deduction of operating costs, expenses
and other taxes, subject to adjustment based on services rendered and the VIE's operation needs, such business scope is necessary
and appropriate under PRC laws. the VIE, on the other hand, is also able to, pursuant to its business scope, provide a platform for our
Members to obtain practical corporate guidance, financing sources, resource joining, assistance with corporate emergencies, support with
public listings and other mutual assistance services.
We
control the VIE through contractual arrangements, which are described under "
Business — Contractual Arrangements between
GIOP BJ,
the VIE
and Its Shareholders.
" Sunrise New Energy is a holdings company with no business operation other than
holding the shares in GMB HK, which is also a pass-through entity with no business operation.
Our
principal executive offices are located at Room 703, West Zone, R&D Building, Zibo Science and Technology Industrial Entrepreneurship
Park, No. 69 Sanying Road, Zhangdian District, Zibo City, Shandong Province, PRC, and our phone number is +86 10-82967728. Our registered
office in the Cayman Islands is located at Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands, and the
phone number of our registered office is +1 345 945 3901. We maintain a corporate website at www.sdh365.com.
Investor
inquiries should be directed to us at the address and telephone number of our principal executive offices set forth above. Our agent
for service of process in the United States is Cogency Global Inc., 122 East 42nd Street, 18th Floor, New York, NY 10168.
The
SEC maintains a website at
www.sec.gov
that contains reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC using its EDGAR system.
See
"
Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditures
"
for a discussion of our capital expenditures.
B.
Business
We
are a Cayman Islands holding company conducting a substantial portion of our operations in China through our PRC operating entities.
Unless otherwise stated, as used in this annual report, the term's "we," "us," "our," "Sunrise
New Energy," "our Company," and the "Company" refer to Sunrise New Energy Co., Ltd., an exempted company
limited by shares incorporated under the laws of the Cayman Islands; and "SDH" or "the VIE" are to Global Mentor
Board (Beijing) Information Technology Co., Ltd., a limited liability company organized under the laws of the PRC, which we control via
a series of contractual arrangements among GIOP BJ, SDH and shareholders of SDH (the "VIE Agreements").
39
As of the date of this annual report, substantially
all of our business is conducted by (1) Sunrise Guizhou, a joint venture formed by Zhuhai Zibo (a wholly owned subsidiary of the Company)
and certain other partners, as a limited company pursuant to PRC laws for the purpose of manufacturing and sales of graphite anode materials,
and (2) SDH, the Company's VIE entity that operates a knowledge sharing platform in China. Investors of our Ordinary Shares do
not hold shares in the PRC operating entities, but instead hold shares of a Cayman Islands company. Further, neither we nor our subsidiaries
own any shares in the VIE. For accounting purposes, we control and receive the economic benefits of the VIE's business operation
through the VIE Agreements, each of which are dated June 10, 2019, and which enable us to consolidate the financial results of the VIE
and its subsidiaries in our consolidated financial statements under U.S. GAAP. See "Item 3. Key Information — Contractual
Agreements among GIOP BJ, SDH the VIE and Its Shareholders" for more details.
Overview
The
VIE, or SDH, started as a consulting company providing enterprise services to small and medium-sized enterprises in the PRC in December
2014, and launched a peer-to-peer knowledge sharing and enterprise service platform in May 2016. Since then, the VIE has been operating
a knowledge sharing platform and provided services both online, via a mobile application "Shidonghui App" (the "APP"),
and offline, through local offices directly operated by us in Beijing, Shanghai, Zibo and Guizhou in China.
When
the VIE first launched its services, the aim was not only to continue providing enterprise services to PRC's growing business communities,
but also create a marketplace where qualified entities (individuals and enterprises) have opportunities to serve as providers, and receive
rewards by sharing their knowledge with others on the platform. As of April 2023, our knowledge sharing and enterprise service ecosystem
had 784 Mentors, 1,930 Experts, and 518,659 Users. In addition to serving Users and Members, the VIE continues to provide enterprise
services to small and medium-sized enterprises in China through a dedicated team with seven full-time professional consultants, as well
as Mentors and Experts. The providers (Mentors, Experts and consultants) are successful entrepreneurs, scientists, investors, and professionals
with qualifications and achievements in major industries such as finance, energy, health care, technology, manufacturing and academia.
Our core strength is the knowledge brought by our providers, highlighted by their experiences, wisdom, industry know-how, and social
connections. The VIE offers online services to Users on the APP, which was released to the public in May 2016, and offline services
to Members. The online services the VIE currently offers to Users are (1) Questions and Answers (Q &A) Sessions and (2) streaming
of audio and video courses and programs. The offline services the VIE offers to Members are study tours and forums.
In April 2022, we entered into the graphite anode
material manufacturing and sales business through a joint venture, Sunrise Guizhou, of which we currently own 39.35% through our wholly
owned subsidiary, Zhuhai Zibo. We consolidate Sunrise Guizhou's financials because we own a majority of seats on its board of directors
and control its financial and operating policies pursuant to an agreement among its funding shareholders. Sunrise Guizhou is located
at Yilong New District, Xingyi City, Qian Southwest State, Guizhou Province, China. The land use of Sunrise Guizhou's graphite
anode manufacturing site is approximately 260,543 square meters. Sunrise Guizhou purchased the site in March 2022 for approximately $6.6
million. Sunrise Guizhou began construction of the manufacturing plant in April 2022, and the first phase the construction of (20,000
tons annual manufacturing capacity) of the manufacturing plant has been completed as of the date of this annual report, pending the requisite
fire and environmental inspections by relevant government agencies. The inspections are currently ongoing and expected to be completed
in June 2023. If Sunrise Guizhou passes the inspections and receives the requisite approvals from the relevant government agencies, it
will start manufacturing graphite anode material on-site. The second phase of the construction of the manufacturing plant (10,000 tons
annual manufacturing capacity) is ongoing and expected to be completed in June 2023, and the third phase of construction of the manufacturing
plant (20,000 tons annual manufacturing capacity) was approved by the board of the directors of the Company in March 2023, and is expected
to start in July 2023.
Graphite anode materials are essential components
used in fast-charging batteries, energy storage batteries, electric vehicle power batteries, and long-cycle high-power batteries. The
market is driven primarily by demand for Li-ion batteries that require anode materials. We believe that a significant driver for Li-ion
batteries is their use in electric vehicles (EVs) and in grid-storage applications. According to a research report published by Goldman
Sachs on February 10, 2023, entitled "Electric vehicles are forecast to be half of global car sales by 2035", EV sales is
expected to soar to about 73 million units in 2040, up from around 2 million in 2020. The percentage of EVs in worldwide car sales, meanwhile,
is expected to rise to 61% from 2% during that time-span, and EV sales are anticipated to be well over 80% in many developed countries
in 2040. The International Energy Agency ("IEA")'s Net Zero by 2050 Roadmap predicts that 2 billion battery electric,
plug-in hybrid and fuel-cell electric light-duty vehicles are needed by that year to reach net zero emission. A typical Li-ion High-Energy
(100 Ah) cell of around 3,400g requires over 650g of graphite and each EV contains approximately 70kg of graphite. The Company sees this
as a major growth driver for the graphite anode industry. Sunrise Guizhou's products are critical to the transition to a more sustainable,
resilient and environmentally friendly future. We believe that the sales for Sunrise Guizhou's graphite anode material products
will continue to grow.
40
Our
Past Performance
We
generated net revenue of $38,125,668, $7,409,272 for the fiscal years 2022 and 2021, respectively. For fiscal year 2022, net revenue
increased by $30,716,396, or 415%, which increase was mainly driven by the sale of graphite anode material products. For fiscal year
2022, sales of graphite anode material products became a major revenue source, while revenue from knowledge sharing and enterprise services
business accounted for a small portion of the total revenue.
Our
revenues for fiscal years 2022 and 2021 were derived from the following sources:
REVENUES, NET
2022
2021
Graphite anode business
$
37,580,677
$
-
Peer-to-peer knowledge sharing and enterprise business
544,991
7,409,272
Member services
106,724
498,330
Enterprise services
-Comprehensive tailored services
153,658
1,433,847
-Sponsorship advertising services
-
1,734,390
-Consulting services
9,645
1,583,583
Online services
2,100
40,391
Other revenues
272,864
2,118,731
Revenues, net
$
38,125,668
$
7,409,272
For
fiscal year 2022, revenue from the sale of graphite anode material products was $37,580,677, which accounted for 99% of our total revenues.
Intangible assets also grew from $3,594,977 as of December 31, 2021 to $3,962,650 as of December 31, 2022, which is concurrent with us
entering into and financing a joint venture.
For fiscal year 2022, revenue from the knowledge
sharing and enterprise services business was $544,991, which was a 93% decline from fiscal 2021, and accounted for only 1% of our total
revenues. The decline of this business was due to the material negative impact of the large-scale COVID-19 lockdowns in China, during
which time the normal business operations were seriously disrupted, as the VIE relied on in-person networking and meetings in order to
both conduct and promote many aspects of this business. As China relaxed its Zero-COVID policy in December 2022, the VIE has gradually
resumed its normal business operations.
Graphite
Anode Material Manufacturing and Sales Business
In April 2022, we entered into the graphite anode
material manufacturing and sales business through a joint venture, Sunrise Guizhou, of which we currently own 39.35% through our wholly
owned subsidiary, Zhuhai Zibo. We consolidate Sunrise Guizhou's financials because we own a majority of seats on its board of directors
and control its financial and operating policies pursuant to an agreement among its funding shareholders. Sunrise Guizhou is located
at Yilong New District, Xingyi City, Qian Southwest State, Guizhou Province, China. The land use of Sunrise Guizhou's graphite
anode manufacturing site is approximately 260,543 square meters. Sunrise Guizhou purchased the site in March 2022 for approximately $6.6
million. Sunrise Guizhou began construction of the manufacturing plant in April 2022 and the first phase the construction of (20,000
tons annual manufacturing capacity) of the manufacturing plant has been completed as of the date of this annual report, pending the requisite
fire and environmental inspections by relevant government agencies. The inspections are currently ongoing and expected to be completed
in June 2023. If Sunrise Guizhou passes the inspections and receives the requisite approvals from the relevant government agencies, it
will start manufacturing graphite anode material on-site. The second phase of the construction of the manufacturing plant (10,000 tons
annual manufacturing capacity) is ongoing and expected to be completed June 2023, and the third phase of construction of the manufacturing
plant (20,000 tons annual manufacturing capacity) was approved by the board of the directors of the Company in March 2023, and is expected
to start in July 2023.
41
Products
Sunrise Guizhou's products include various
artificial graphite anode material products. As of the date of this annual report, Sunrise Guizhou outsources manufacturing to third-party
contract manufacturers. Artificial graphite is made of petroleum coke, needle coke and pitch coke as the main material, and formed after
crushing, shaping, granulation and graphitization. The performance, features and uses of Sunrise Guizhou's products are as follows:
Type
Product
    Image
Medium
    Particle Size (um)
Designed
    Capacity (mAh/g)
Compaction
    (g/cc)
Features
Uses
Cost-effective
    artificial graphite
15.5±2.5
340-348
1.50-1.60
Excellent
    comprehensive performance, long cycle, cost-effective
Power
    batteries and energy storage batteries;  cell of soft pack, square aluminum shell, and cylindrical batteries
Volumetric
    artificial graphite
16.5±2.5
348-355
1.60-1.65
High
    energy density and comprehensive performance
Multiple
    long-cycle square, cylindrical, polymer batteries
Multiplier
    rate artificial graphite
13.5±3.0
347-353
1.55-1.63
Excellent
    comprehensive performance, long cycle, good rate performance
Power
    anode material, cell of soft pack, square aluminum shell, and cylindrical batteries
High
    capacity and high compaction artificial graphite
16.0±2.0
353-358
1.63-1.68
High
    energy density, excellent comprehensive performance
Power
    anode material, cell of soft pack, square aluminum shell, and cylindrical batteries
Volumetric
    artificial graphite
13.5±3.0
350-355
1.60-1.65
High
    energy density and comprehensive performance
Multiple
    long-cycle square, cylindrical, polymer batteries
High
    capacity and rate artificial graphite
12.5±3.0
349-354
1.58
    -1.65
High
    energy density and power performance, long cycle life
Multiple
    long cycle square and polymer batteries
Cost-effective
    long-cycle artificial graphite
11.0±2.5
340-345
1.45-1.55
Excellent
    comprehensive performance, long cycle, cost-effective
Energy
    storage anode material, cell of soft pack, square aluminum shell, and cylindrical batteries
42
Direct
Sales Channel
Sunrise Guizhou markets its graphite anode products
through a direct sales channel, through its sales department, which department consists of five experienced employees who report directly
to the CEO of Sunrise Guizhou, who has more than 20 years of experience in the lithium-ion battery material industry, and has accumulated
extensive business connections in this industry. The initial step to develop relationships with a potential customer is to making a targeted
sales pitch and if a potential customer responds to the sales pitch or shows interest in the products, Sunrise Guizhou then goes through
the qualification process in order to become a supplier. The process usually consists of the following steps: (1) Sunrise Guizhou sends
out samples of its graphite anode to the potential customer, (2) the potential customer conducts preliminary tests to evaluate the sample
products, (3) if the sample products pass the initial evaluations, the next step is generally a small commercial order placed by the
potential customer to verify the product quality at commercial scale, and (4) the potential customers often send an engineering team
to visit Sunrise Guizhou's R&D center and quality control department, to further assess the quality and performance of Sunrise
Guizhou's products. If Sunrise Guizhou successfully passes each of the above validation steps, the potential customer usually starts
negotiating supplier agreement with Sunrise Guizhou.
Customers
For
fiscal year 2022, Sunrise Guizhou had 16 customers. Sunrise Guizhou's customers are manufacturers of industrial and consumer energy
storage lithium-ion batteries, such as batteries for electric vehicles and electric ships, and smart consumer electronics. The vast majority
of Sunrise Guizhou's customers are Chinese companies, and some of them are large well-known companies, including the following:
●
Jiangsu
                                            Pylontech Battery Co., Ltd., a leading energy storage lithium battery manufacturer in China,
                                            whose products are mainly exported to Europe and the United States.
●
Hangzhou
                                            Narada Power Technology Co., Ltd., one of China's leading battery energy storage system
                                            suppliers, whose products are mainly exported to Europe and the United States;
●
Henan
                                            Great Power Co., Ltd.: its lithium batteries are used in energy storage systems, light power,
                                            EV, and consumer electronics, including drones, electronic cigarettes, earphones, computers,
                                            and smart wearables; and
●
Xiamen
                                            Hithium Energy Storage Technology Co., Ltd.: a company dedicated to industrial and commercial
                                            energy storage batteries.
For the fiscal year ended December 31, 2022,
four customers accounted for more than 10% of Sunrise Guizhou's total sales, with each accounting for 28.43%, 19.54%, 19.30% and
18.87% of the total sales, respectively. As Sunrise Guizhou grows its customers bases, it is expected that the concentration of sales
will diminish in the future. See "Risk Factors—Risks Related to Our Business—Sunrise Guizhou depends on a few major
customers with whom it does not enter into long-term contracts, the loss of any of which could cause a significant decline in its revenues."
Raw
Materials and Suppliers
Sunrise
Guizhou sources raw materials, including asphalt coke, petroleum coke, needle coke, and American petroleum coke, from suppliers in China,
the United States, Romania, and Indonesia, to diversify its raw material origins and stabilize its supply chain. Sunrise Guizhou selects
suppliers based on many criteria including but not limited to: quality, production site, production process, delivery cycle, and price.
As there are a variety of options for supplies, and the technical demand of preparing most of the raw materials are relatively low, Sunrise
Guizhou does not anticipate difficulties in obtaining raw materials. Sunrise Guizhou purchases raw materials on a per purchase order
basis. The prices for these raw materials are nevertheless subject to market forces largely beyond our control, including energy costs,
market demand, economy trend, and freight costs. The prices for raw materials have fluctuated in the past, and may fluctuate significantly
in the future. See "Risk Factors—Risks Related to Our Business—Sunrise Guizhou faces the risk of fluctuations in the
cost, availability, and quality of raw materials, which could adversely affect our results of operations." The costs of raw materials
accounted for 33.53% of the total costs of production for fiscal year 2022, and two suppliers accounted for more than 10% of Sunrise
Guizhou's total costs for raw materials.
43
Third-party
Contract Manufacturers
As
of the date of this annual report, Sunrise Guizhou entrusts third-party contract manufacturers for the manufacturing of its graphite
anode products. Once Sunrise Guizhou receives the requisite government approvals for its manufacturing plant, it will start manufacturing
graphite anode products on-site. Sunrise Guizhou implements a rigorous process for selecting third-party contract manufacturers. Sunrise
Guizhou strictly evaluates various factors, including the production capacity, quality control management, environmental qualifications,
and key customers of its contract manufacturers. Sunrise Guizhou regularly sends its technical team and quality control team to the facilities
of the contract manufacturers for on-site supervision, guidance and quality control. Sunrise Guizhou issues a detailed quantitative scoring
table for each contract manufacturer every month to evaluate their performance. As of the date of this annual report, Sunrise Guizhou
contracts with 9 third-party contract manufacturers in China.
Industry
and Competition
At
present, lithium batteries are widely used in new energy vehicles, energy storage, electric ships, and smart homes, and the boundaries
of use continue to expand, resulting in a trillion-dollar market. According to the Global EV Outlook, an annual publication that identifies
and discusses recent developments in electric mobility across the globe, in May 2022, today's battery supply chains are concentrated
in China, which produces three-quarters of all lithium-ion batteries and is home to 70% of production capacity for cathodes and 85% of
production capacity for anodes (both are key components of batteries). Over half of lithium, cobalt and graphite processing and refining
capacity is located in China.
In
January 2023, research institutions EVTank, Evie Economic Research Institute and China Battery Industry Research Institute jointly released
the "White Paper on the Development of China's Anode Material Industry (2023) (the "White Paper")". According
to the data in the White Paper, the global shipment of anode materials will reach 1.556 million tons in 2022, a year-on-year increase
of 71.9%. Among them, the sales volume of China's anode materials will increase by 84.0% year-on-year to 1.433 million tons, a
year-on-year growth rate hitting a record high. It is estimated that driven by the downstream demand for lithium-ion batteries, global
sales of anode materials will reach 3.317 million tons and 8.634 million tons in 2025 and 2030, respectively, of which more than 90%
will be produced by Chinese companies, according to the White Paper.
Sunrise Guizhou, which was newly formed in April
2022, has already delivered approximately 6,000 tons of anode material products to its customers, as of the date of this annual report.
Sunrise Guizhou's main competitors are lithium-ion battery anode material manufacturers such as Btr New Material Group Co., Ltd,
Shanghai Putailai New Energy Technology Co., Ltd., Ningbo Shanshan Co., Ltd., Shijiazhuang Shangtai Technology Co., Ltd.
44
Intellectual
Property
Sunrise
Guizhou has built a portfolio of intellectual property and plans to continue to invest in research and development. Sunrise Guizhou's
success depends, in part, on its ability to protect its intellectual property. To accomplish this, Sunrise Guizhou relies on a combination
of patents, patent applications, trade secrets, including employee and third-party nondisclosure agreements, trademarks, and other contractual
rights to establish and protect proprietary rights in intellectual property. As of the date of this annual report, Sunrise Guizhou has
11 issued patents and 22 pending patent applications, 1 registered trademark and 2 pending trademark applications in China. Set forth
below is a detailed description of its registered patents:
Country
Patent
    No./
Application
No.
Patent
    Name
Patent
Publication
Date
Patent
    Type
Patent
    Validity Period
1
PRC
ZL2022 1 0339329.5
A
    kind of sulfur and phosphorus co-doped hard carbon composite material and preparation method thereof
April 01, 2022
Invention
20
    years
2
PRC
ZL2022
    1 0386246.1
A
    kind of high initial efficiency hard carbon composite material and preparation method thereof
April
    13, 2022
Invention
20
    years
3
PRC
ZL
    2022 1 0400775.2
A kind of preparation method of negative electrode
    material of lithium ion battery
(Already applied for international patents
    in the United States, Japan and South Korea )
April
    17, 2022
Invention
20
    years
4
PRC
ZL2022
    1 0400796.4
A
    kind of high-energy-density fast-charging graphite composite material and preparation method thereof
April
    17, 2022
Invention
20
    years
5
PRC
ZL
    2022 1 0400774.8
A
    kind of sulfur-containing fast ion conductor coated graphite composite material and preparation method thereof
April
    17, 2022
Invention
20
    years
6
PRC
ZL
    2022 1 0400788.X
A
    kind of long-life fast charging lithium-ion battery negative electrode material and preparation method thereof
April
    17, 2022
Invention
20
    years
7
PRC
ZL
    2022 1 0401382.3
A
    long-life and high-first-efficiency hard carbon composite material and its preparation method
April
    18, 2022
Invention
20
    years
8
PRC
ZL
    2022 1 0851869.1
A
    kind of preparation method of hard carbon composite material used in sodium ion battery
July
    20, 2022
Invention
20
    years
9
PRC
ZL
    20221 0396110.9
A
    fast ion conductor coated silicon-carbon composite material and its preparation method
April
    15, 2022
Invention
20
    years
10
PRC
ZL
    2017 1 1155250.2
A
    kind of lithium ion battery, used silicon carbon negative electrode material and preparation method thereof
November
    20, 2017
Invention
20
    years
11
PRC
ZL
    2017 2 1552539.3
A
    system for producing negative electrode coke by batch coking
November 20, 2017
Utility
    Model
10
    years
12
PRC
ZL
    2018 1 683803.1
Production
    device for negative electrode material multi-stage series continuous heating coating granulation
October
    17, 2018
Utility
    Model
10
    years
45
Knowledge
Sharing and Enterprise Service Business
The
VIE, or SDH, started as a consulting company providing enterprise services to small and medium-sized enterprises in the PRC in December
2014, and launched a peer-to-peer knowledge sharing and enterprise service platform in May 2016. Since then, the VIE has been operating
a knowledge sharing platform and provided services both online, via a mobile application "Shidonghui App" (the "APP"),
and offline, through local offices in Beijing, Shanghai, Zibo and Guizhou in China.
When the VIE first launched its services, the
aim was not only to continue providing enterprise services to PRC's growing business communities, but also to create a marketplace
where qualified entities (individuals and enterprises) have opportunities to serve as providers, and receive rewards by sharing their
knowledge with others on the platform. As of April 2023, the knowledge sharing and enterprise service ecosystem had 784 Mentors, 1,930
Experts, and 518,659 Users. In addition to serving Users and Members, the VIE continues to provide enterprise services to small and medium-sized
enterprises in China through a dedicated team with seven full-time professional consultants, as well as Mentors and Experts. The providers
(Mentors, Experts and consultants) are successful entrepreneurs, scientists, investors, and professionals with qualifications and achievements
in major industries such as finance, energy, health care, technology, manufacturing and academia. Our core strength is the knowledge
brought by our providers, highlighted by their experiences, wisdom, industry know-how, and social connections. The VIE offers online
services to Users on the APP, which was released to the public in May 2016, and offline services to Members. The online services the
VIE currently offers to Users are (1) Questions and Answers (Q &A) Sessions and (2) streaming of audio and video courses and programs.
The offline services the VIE offers to Members are study tours and forums.
In
late 2019, taking advantage of our knowledge of market demand and trends, as well as access to resources afforded to us by our knowledge
sharing platform, the VIE started procuring and offering merchandises for sale through its platform to clients and the general public.
The merchandises are obtained through: (1) fee exchange arrangement, through which the VIE receives products in exchange for collection
of membership fees and consulting fees earned from customers at the VIE's discretion, and (2) direct purchases from customers and
third parties based on market trend and demand. In fiscal year 2022, due to deteriorating consumer demand and market condition, the Company
did not procure any merchandises and wrote down the cost of inventories of the merchandises to the estimated net realizable value, which
was $nil, resulting in $2,711,158 impairment.
Knowledge
Sharing and Enterprise Service Platform Ecosystem
Users
and Members
Users
The
APP is available in the PRC and elsewhere in the world where potential Users can access on the internet the http hyper-link provided
for downloading/installing the APP on their mobile devices; anyone over the age of 18, with a mobile phone (IOS or Android) can download
the APP and complete an online registration process to become a User. Currently, although the VIE does not charge any fee to register
for the APP, the VIE does require Users to obtain a verification code via their mobile devices to register. Additionally, Users must
agree to the Terms of Use in the form of a user agreement, which can be completed and submitted to us on the APP. As of April 30, 2023,
the VIE had approximately 518,659 APP Users.
46
Members
Members
can choose from three annual membership plans: Platinum, Diamond, and Protégé. Members enjoy services included in their
respective membership plans. Due to the impact of COVID-19, SDH did not have any Members for fiscal year 2022. The following table presents
the annual membership fees:
Membership
    Tiers
Annual
    Membership Fee
Platinum
RMB
    16,800 (approximately US$2,435)
Diamond
RMB
    98,000 (approximately US$14,203)
Protégé
RMB
    500,000 (approximately US$72,464)
Mentors
and Experts
Mentors
Mentors
are leaders in their respective professional fields, all of them enjoy strong social influence due to their professional achievements
and social status in China. The majority of Mentors are successful well-known entrepreneurs, executive officers of public companies,
PE/VC partners, doctors, and artists, in a wide range of industries including academia, health care, financial service, energy, technology,
manufacturing, etc. As of April 30, 2023, the VIE had 784 Mentors, and all of them were hand-picked and invited by our management to
join our platform.
Experts
Experts
are skilled and qualified in their specialized fields to provide advice and guidance to Users. Persons can become Experts through a certification
process either on the APP or in-person at the VIE's local offices and centers. The certification process consists of three steps:
(1) an applicant is required to demonstrate his or her expertise and qualifications by submitting an application along with supporting
documents such as resume, publications, and school transcripts; (2) our team reviews and verifies the applicant's qualifications
and background information, based on which we make a determination on whether to approve the application; and (3) the VIE enters into
a service agreement with the approved applicant. As of April 30, 2023, the VIE had 1,930 Experts.
Service
Agreements with Mentors and Experts
Each
of the Mentors and Experts, as a service provider on our platform, must enter into a service agreement with us that governs the rights
and obligations of each party. The term of the service agreement is open and can be terminated by either party without any cause, and
the services they provide to our Users and Members must be given exclusively on our platform, either online or offline, for which the
fees generated are shared between the VIE and the providers, usually at a 30/70 split, that is, we receive 30% and providers receive
70% of the fees. Under certain circumstances where providers generate additional fees such as registering new members, the providers
will be entitled to a larger percentage of the fees generated, as decided between the parties on a case-by-case basis.
Enterprise
Service Consultants
the
VIE has a professional consulting team with seven full-time employees, who have at least five years of experience in their respective
fields of professions, including finance, capital markets, marketing, public relations, sales, etc. The majority of our team previously
worked in the technology or finance industries. See "
Consulting
" below.
Enterprise
Service Clients
The majority of the Enterprise Service Clients
are small and medium-sized enterprises located in the following provinces: Zhejiang, Shanxi, Guangdong, Shandong and Liaoning, as well
as Shanghai City. For the fiscal year ended December 31, 2022, or 2021, no client accounted for more than 10% of our revenues.
47
Services
Member
Service
The
chart below summarizes the services Members receive:
Membership
    Tier
Service
Platinum
seven
    organized activities (study tours and forums) per year
Diamond
seven
    organized activities (study tours and forum) per year, during which a Member may enjoy special seating assigned only to Diamond Members,
    and make presentations and sales pitches of his or her business, products and services
Protégé
seven
    organized activities (study tours and forum) per year, during which a Member may enjoy special seating assigned only to Protégé
    Members, make presentations and sales pitches of his or her business, products and services, and communicate with Mentors and Experts
    in person at such activities
During
each of the study tours and forums, a number of Mentors and Experts, along with other business leaders, are invited to attend, give speeches
and host discussion sessions at these activities. The VIE compensates the attending Mentors and Experts with fees ranging from RMB5,000
(approximately US$725) to RMB20,000 (approximately US$2,899) depending on factors such as the size of the audience, the location of the
activity and qualifications of the attending Mentors and Experts.
Study
Tours
Beginning in 2016, the VIE started organizing
study tours for our Members. The study tours are designed to provide trainings on real world business skills for entrepreneurs and executives.
Each study tour generally lasts two days, in which a day and a half are dedicated to classroom style lecturing and discussions, while
the remaining half day is spent on visiting the headquarters or facilities of successful enterprises. All participants are responsible
for their own food, traveling and living accommodations throughout the study tours. The VIE did not offer any study tours in 2022,
which activities decreased because of restrictions imposed by the government due to the COVID-19 pandemic.
Forums
The VIE organizes large-scale forums (with more
than 1,000 attendees) that last two to three days. The purpose of the forums is to share business intelligence with small and medium-sized
enterprises and help them develop business plans and strategies. The themes of the forums are usually related to interpretation of newly
published governmental policies, sharing of industry opportunities and perspectives on corporate transformation and growth. The VIE did
not hold large-scale forums in 2022 due to COVID-19 restrictions.
Enterprise
Services
In addition to providing services to Users and
Members, the VIE has been providing customized enterprise service to small and medium-sized enterprises in the PRC since its inception
in 2014. Enterprise service is an integral part of its platform, and a number of the Enterprise Service Clients are also Members and
Users. For fiscal year 2022 and 2021, enterprise services generated $163,303, and $4,751,819 in revenues, respectively.
Below
are the three main enterprise services we provide:
Comprehensive
Tailored Services
Comprehensive tailored services are geared towards
small and medium-sized businesses, to provide tailored packaged services, including conference and salon organizations, booth exhibition
services, guidance by Mentors and Experts, and other value-added services, for the purpose of promoting and growing their businesses.
Clients are required to enter into service agreements with us, which are individually negotiated based on the services and resources
we provide. For 2022, the comprehensive enterprise services generated revenue in the amount of US$153,658 from 7 clients. For 2021, the
comprehensive enterprise services generated revenue in the amount of US$1,433,847 from 80 clients.
Consulting
A team of professional consultants provides enterprise
consulting services and develops strategies and solutions for corporate reorganization, product promotion and marketing, industry supply
chain integration, corporate governance, financing and capital structure, etc. The consulting services are customized to meet each client's
specific needs and requirements. The fees and payment structures are based on the specifics of the services we provide, such as the time
and efforts required, the duration of the service, and are usually in the range of RMB20,000 (approximately US$2,973) to RMB80,000 (approximately
US$11,894) for a one-time service charge, or monthly fees in the amounts of RMB10,000 (approximately US$1,487) to RMB20,000 (approximately
US$2,973) for continued services. For fiscal years 2022 and 2021, consulting generated $9,645, and $1,583,583 in revenues, respectively.
48
Sponsorship
Advertising
Sponsorship
advertising is a special form of advertising, generally referring to a publicity strategy adopted by enterprises in order to enhance
their corporate and product image, as well as brand awareness and influence. The VIE provides sponsorship advertising services for enterprise
clients at various events, such as forums and study tours, in the following forms:
●
The
    VIE displays the names and logos of the sponsor enterprises on the background and display boards.
●
The
    representatives of the sponsor enterprises are assigned to the VIP seating areas with name tags displaying their company names and
    logos.
●
The
    sponsor enterprises enjoy a certain number of tickets for an event, which can be used for sale or as gifts to their customers.
●
The
    names and logos of the sponsor company are displayed in the related advertisements and promotional materials for an event.
●
The
    VIE uses products exclusively provided by the sponsor enterprise for an event.
●
The
    names and logos of the sponsor enterprise may also be displayed in programs and videos the VIE produces, such as "Haiping's
    Meeting Room."
The fees we charge for sponsorship advertising
is in the range of RMB500,000 (approximately US$74,337) to RMB2,000,000 (approximately US$297,349) per engagement, depending on several
specific factors, such as the number of the participants, the location, and popularity of an event. For fiscal years 2022 and 2021, sponsorship
advertising service generated $nil, and $1,734,390 in revenues, respectively.
Sale
of Merchandises
In
late 2019, the VIE started procuring and offering merchandises for sale through its platform to clients and the general public. The merchandises
included Chinese tea, red wine, wellness products, gift cards, and others. Some of the merchandises for sale were obtained from Members
and enterprise service clients through exchange for collection of membership fees and consulting fees. Such exchanges were non-routine
and made at our discretion, based on a number of factors, including but not limited to, the market trend and demand for such merchandises,
the profit margin expected to be realized from the sale of such merchandises, and the credit-worthiness of and the relationship with
these clients. Other merchandises were sourced and purchased from customers directly at preferred prices or from third parties, based
on our knowledge of current market trends and demand generated from our platform. For fiscal years 2022 and 2021, the VIE generated $3,165
and $ $2,104,766 in revenue from sale of merchandises, respectively.
In
fiscal 2022, due to deteriorating consumer demand and market conditions, the Company did not procure any merchandises and wrote down
the cost of inventories of the merchandises to the estimated net realizable value, which was $nil, resulting in $2,711,158 impairment.
Online
Service
The
VIE provides Users two services on the APP: (1) Question and Answer (Q&A) Sessions and (2) Online Streaming of Courses and Programs.
In addition, our APP has a community building function that facilitates relationship building on our platform. For example, our APP allows
Users to share their "moments," such as pictures and videos of their life experiences, via instant messaging, with other
Users on the APP. Users may also "like" and/or comment on other User's "moments." In addition, Users may
establish their own communities by creating and inviting other Users to join his or her group. For fiscal years 2022 and 2021, the VIE
generated $2,100 and $40,391 in revenue from online service, respectively.
The
APP
The
APP was launched in May 2016, and runs on both IOS and Android devices. The VIE strives to provide Users superb experiences on the APP
and has established an in-house Information Technology team of eight employees dedicated to the development and support of our system.
To date, the VIE has registered 35 computer software copyrights with the Copyright Protection Centre of China (CPCC), in connection with
the development of the APP. In October 2017, as a result of its efforts, the VIE was certified by the State Intellectual Property Office
("SIPO") as a national high-tech enterprise, which affords the VIE a favorable tax rate of 15%, rather than the unified rate
of 25% for the duration of the certification. The certification lasts for three years, and was renewed in 2020. As of April 30, 2023,
the APP has been downloaded by approximately 518,659 Users. The number of average monthly active Users was approximately 495 in 2022
and approximately 1,104 in 2021.
Questions
and Answers (Q &A) Session
Mentors
and Experts, as providers, are available to answer questions and share valuable personalized guidance and advice in a wide range of fields,
including business management, health care, beauty, financial services, education, etc. Through a Q&A session, a User can submit
questions on our APP to a chosen provider, who are listed on the APP under their specializing sectors, and receive a response within
72-hours. When a User submits a question on our APP, our customer service representatives and the chosen provider receive a text notification
from our system immediately. Upon receipt of the text notification, a provider is required to respond within 72-hours, although most
of the time the responses are provided in a much shorter time frame. If the response is delayed or unsatisfactory to the User, he or
she may notify our customer service representatives who will contact the provider to follow-up with the User.
49
Users
must purchase top-up credits on the APP to pay for Q&A sessions. Providers set their own fees for Q&A sessions. At present, the
average fee for a Q&A session is RMB31 (approximately US$4.38), which translates to 31 APP top-up credits. After each session concludes,
credits are automatically awarded to the provider's APP account and can be used for services on our APP or converted to RMB and
paid out to the provider's bank account linked with our APP. When submitting a question in a Q&A session, a User can also choose
to share the Q&A session on the APP for a fee of one to five credits and earn credits when other Users access the shared Q&A
session. The credits earned from the shared Q&A sessions are to be split 50/50 between the Users and us.
Online
Streaming of Video & Audio Courses and Programs
The
VIE provides video and audio courses and programs on the APP for on-demand and live streaming. At present, the APP has approximately
4,806 audio and 5,279 video courses and programs available for streaming. The majority of the courses and programs are business-oriented,
which cover subjects such as entrepreneurship development, financial service, corporate governance, team management, marketing strategy,
etc. We also provide some focused courses and programs that target special audience groups, such as parent-child education for new parents,
and business school selection programs for graduate students.
Other
Services
Member activities, including study tours and
forums, are also open to non-members, who pays a fixed fee of RMB3,000 (approximately US$446) for each activity. Fees are usually collected
on site on the date of each activity. Other than member activities, the Company provided health services, which were charged fixed fees
ranging from RMB 1,000 (approximately $149) to RMB 14,000 (approximately $2,081), according to the types of health services provided.
For fiscal years 2022 and 2021, the VIE generated fees from other services in the amount of $269,699, and $13,965, respectively.
Regulations
This
section sets forth a summary of the principal PRC laws and regulations relevant to our business and operations in China.
Regulations
Related to Internet Information Services
Among
all of the applicable laws and regulations, the
Telecommunications Regulations of the PRC
, or the Telecom Regulations, promulgated
by the PRC State Council on September 25, 2000 and most recently amended on February 6, 2016, is the primary governing law, which sets
out the general framework for the provision of telecommunications services by domestic PRC companies. Under the Telecom Regulations,
telecommunications service providers are required to procure operating licenses prior to their commencement of operations. The Telecom
Regulations distinguish "basic telecommunications services" from VATS. VATS are defined as telecommunications and information
services provided through public networks. The
Telecom Catalogue
was issued as an attachment to the Telecom Regulations to categorize
telecommunications services as either basic or value-added. In February 2003, December 2015, and June 2019, the Telecom Catalogue was
updated respectively, categorizing information services provided via fixed network, mobile network among others, as VATS.
The
Administrative Measures on Telecommunications Business Operating Licenses
was promulgated by the Ministry of Industry and Information
Technology on March 1, 2009 and most recently amended on July 3, 2017, which set forth more specific provisions regarding the types of
licenses required to operate VATS, the qualifications and procedures for obtaining such licenses and the administration and supervision
of such licenses. Under these regulations, a commercial operator of VATS must first obtain a VATS License, from the MIIT or its provincial
level counterparts, otherwise such operator might be subject to sanctions including corrective orders and warnings from the competent
administration authority, fines and confiscation of illegal gains and, in the case of significant infringements, the websites may be
ordered to close.
In
September 2000, the State Council promulgated the
Administrative Measures on Internet Information Services
, or the Internet Measures,
which was most recently amended on January 8, 2011. Under the Internet Measures, commercial internet content-related services operators
shall obtain a VATS License for internet content provision business, or the ICP License, from the relevant government authorities before
engaging in any commercial internet content-related services operations within China.
The
VIE obtained the ICP License on July 2, 2019, which will remain effective for 5 years.
Regulations
Related to Foreign Investment
Guidance
Catalogue of Industries for Foreign Investment
Investment
activities in the PRC by foreign investors are principally governed by the
Guidance Catalogue of Industries for Foreign Investment
,
or the Guidance Catalog, which was promulgated and is amended from time to time by Ministry of Commerce, or MOFCOM, and the National
Development and Reform Commission, or NDRC. The Guidance Catalog lays out the basic framework for foreign investment in China, classifying
businesses into three categories with regard to foreign investment: "encourage," "restricted" and "prohibited."
Industries not listed in the catalog are generally deemed as falling into a fourth category "permitted" unless specifically
restricted by other PRC laws.
50
In
addition, in June 2018 the MOFCOM and the NDRC promulgated the
Special Management Measures (Negative List) for the Access of Foreign
Investment
, or the Negative List, which was most recently amended on December 27, 2021 and effective on January 1, 2022. The value-added
telecommunications services (except for e-commerce, domestic conferencing, store-and-forward, and call center services), or the VATS,
fall within the Negative List.
Pursuant
to the
Provisions on Administration of Foreign-Invested Telecommunications Enterprises
promulgated by the State Council in December
2001 and most recently amended in March 29, 2022, or the FITE Regulations, the ultimate foreign equity ownership in a VATS provider may
not exceed 50%. Moreover, for a foreign investor contemplating to acquire any equity interest in a VATS business in China, it must satisfy
a number of stringent performance and operational experience requirements, including demonstrating good track records and experience
in operating VATS business overseas.
In
July 2006, Ministry of Information Industry, or the MII (the predecessor of the MIIT), released the
Notice on Strengthening the Administration
of Foreign Investment in and the Operation of Value-added Telecommunications Business
, or the MII Notice, which requires foreign
investors to set up foreign-invested enterprises and obtain a relevant telecommunications business operating license, to conduct any
VATS business in China. Furthermore, under the MII Notice, domestic telecommunication enterprises may not rent, transfer or sell a telecommunications
business operating license to foreign investors in any form, nor may they provide any resources, premises, facilities and other assistance
in any form to foreign investors for their illegal operation of any telecommunications business in China. In addition, under the MII
Notice, the relevant trademarks and domain names used by a foreign-invested VATS operator shall be legally owned by that operator (or
its shareholders).
The
Company engages in business activities that are VATS, and in light of the above restrictions and requirements, the Company relies on
contractual arrangements between GIOP BJ and the VIE to operate its business in China.
Foreign
Investment Law
On
March 15, 2019, the National People's Congress approved the
Foreign Investment Law of the PRC,
or the Foreign Investment
Law, which came into effect on January 1, 2020 and replaced the trio of existing laws regulating foreign investment in China, namely,
the
Sino-foreign Equity Joint Venture Enterprise Law of the PRC
, the
Sino-foreign Cooperative Joint Venture Enterprise Law
of the PRC
and the
Wholly Foreign-invested Enterprise Law of the PRC
, together with their implementation rules and ancillary
regulations. The organization form, organization and activities of foreign-invested enterprises shall be governed, among others, by the
PRC Company Law
and
the PRC Partnership Enterprise Law.
Foreign-invested enterprises established before the implementation
of the Foreign Investment Law may retain the original business organization and so on within five years after the implementation of this
Law.
The
Foreign Investment Law is formulated to further expand opening-up, vigorously promote foreign investment and protect the legitimate rights
and interests of foreign investors. According to the Foreign Investment Law, foreign investments are entitled to pre-entry national treatment
and are subject to negative list management system. The pre-entry national treatment means that the treatment given to foreign investors
and their investments at the stage of investment access shall not be less favorable than that of domestic investors and their investments.
The negative list management system means that the state implements special administrative measures for access of foreign investment
in specific fields. The Foreign Investment Law does not mention the relevant concept and regulatory regime of VIE structures. However,
since it is relatively new, uncertainties still exist in relation to its interpretation and implementation. See "
Risk Factors—Risks
Related to Our Corporate Structure—Uncertainties exist with respect to the interpretation and implementation of the newly enacted
PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business
operations.
"
51
Foreign
investors' investment, earnings and other legitimate rights and interests within the territory of China shall be protected in accordance
with the law, and all national policies on supporting the development of enterprises shall equally apply to foreign-invested enterprises.
Among others, the state guarantees that foreign-invested enterprises participate in the formulation of standards in an equal manner and
that foreign-invested enterprises participate in government procurement activities through fair competition in accordance with the law.
Further, the state shall not expropriate any foreign investment except under special circumstances. In special circumstances, the state
may levy or expropriate the investment of foreign investors in accordance with the law for the needs of the public interest. The expropriation
and requisition shall be conducted in accordance with legal procedures and timely and reasonable compensation shall be given. In carrying
out business activities, foreign-invested enterprises shall comply with relevant provisions on labor protection.
The
Implementation Regulations of Foreign Investment Law of the PRC
, adopted by the State Council on December 26, 2019 and came into
effect on January 1, 2020, provides implementing measures and detailed rules to ensure the effective implementation of the Foreign Investment
Law.
Regulations
Related to Mobile Internet Applications Information Services
In
addition to the telecommunications regulations and other regulations above, mobile Internet applications and application stores are specifically
regulated by the
Administrative Provisions on Mobile Internet Applications Information Services
, or the App Provisions, which
were promulgated by the Cyberspace Administration of China, or the CAC, on June 28, 2016, and became effective on August 1, 2016. Pursuant
to the App Provisions, application information service providers shall obtain the relevant qualifications prescribed by laws and regulations,
strictly implement their information security management responsibilities and carry out certain duties, including establishing and completing
user information security protection mechanism and information content inspection and management mechanisms, protect users' right
to know and to choose in the process of usage, and to record and preserve users' daily usage information for at least 60 days.
Furthermore, internet application store service providers and internet application information service providers shall sign service agreements
to determinate both sides' rights and obligations.
In
addition, on December 16, 2016, the MIIT promulgated the
Interim Measures on the Administration of Pre-Installation and Distribution
of Applications for Mobile Smart Terminals
, or the App Interim Measures, which took effect on July 1, 2017. The App Interim Measures
requires, among others, that internet information service providers must ensure that a mobile application, as well as its ancillary resource
files, configuration files and user data can be uninstalled by a user on a convenient basis, unless it is a basic function software,
which refers to a software that supports the normal functioning of hardware and operating system of a mobile smart device.
Neither
the App Provisions nor the App Interim Measures, however, has further clarified the scope of "information services," neither
do they specify what "relevant qualification(s)" that an app owner/operator must obtain. In practice, operational activities
of a company conducted through an app is currently subject to the supervisions of local departments of the Information Communications
Administration, and often, the local departments differentiate the operational activities conducted through websites and through apps.
To
comply with these laws and regulations, the VIE obtained the ICP License on July 2, 2019, which will remain effective for 5 years, we
have also adopted and implemented strict information security policies and measures to protect our cyber security systems and customer
information.
Regulations
Related to Online Transmission of Audio-Visual Programs
On
April 13, 2005, the State Council promulgated the
Certain Decisions on the Entry of the Non-state-owned Capital into the Cultural
Industry
. On July 6, 2005, five PRC governmental authorities, including the Ministry of Culture, or the MOC, the State Administration
of Radio, Film and Television, or the SARFT (the predecessor of the National Radio and Television Administration, or NRTA), the General
Administration of Press and Publication, or the GAPP, the China Securities Regulatory Commission, or the CSRC and the MOFCOM, jointly
adopted the
Several Opinions on Canvassing Foreign Investment into the Cultural Sector
. Under these provisions, non-state owned
capital and foreign investors are prohibited from engaging in the business of distributing audio-visual programs through information
networks.
52
To
further regulate the provision of audio-visual program services to the public via the internet, including through mobile networks, within
the territory of the PRC, the SARFT and the MIIT jointly promulgated the
Administrative Provisions on Internet Audio-Visual Program
Service
, or the Audio-Visual Program Provisions, on December 20, 2007, which took effect on January 31, 2008 and subsequently amended
on August 28, 2015. Pursuant to the Audio-Visual Program Provisions, Internet audio-visual program services refer to activities of making,
redacting and integrating audio-visual programs, providing them to the general public via the Internet, and providing platforms for uploading
and spreading audio-visual programs. Providers of internet audio-visual program services are required to obtain the Audio-Visual License
issued by SARFT, or complete certain registration procedures with SARFT. In general, providers of internet audio-visual program services
must be either state-owned or state-controlled entities, and the business to be carried out by such providers must satisfy the overall
planning and guidance catalog for internet audio-visual program service determined by SARFT. The VIE is neither state-owned nor state-controlled,
therefore it is unlikely that it will be able to obtain the Audio-Visual License if required to do so. Whoever engages in Internet audio-visual
program service without the license or registration, the competent authorities shall give it/him an admonition and order it/him to correct,
and may impose a fine of not more than RMB30,000 (approximately US$4,348); if the circumstances are serious, a punishment shall be imposed
in accordance with the provision of Article 47 of the
Radio and Television Administration Regulation
.
On
May 21, 2008, SARFT issued a
Notice on Relevant Issues Concerning Application and Approval of License for the Online Transmission
of Audio-Visual Programs
, as amended on August 28, 2015, which further set out detailed provisions concerning the application and
approval process regarding the Audio-Visual License. Further, on March 31, 2009, SARFT promulgated the
Notice on Strengthening the
Administration of the Content of Internet Audio-Visual Programs
, which reiterates the pre-approval requirements for the audio-visual
programs transmitted via the internet, including through mobile networks, where applicable, and prohibits certain types of internet audio-visual
programs containing violence, pornography, gambling, terrorism, superstition or other similarly prohibited elements.
On
March 17, 2010, the SARFT issued the
Internet Audio-visual Program Services Categories (Provisional)
, or the Provisional Categories,
as amended on March 10, 2017. According to the Provisional Categories, there are four categories of internet audio-visual program services
which are further divided into seventeen sub-categories. The third sub-category to the second category covers the making and editing
of certain specialized audio-visual programs concerning, among other things, finance and educational content, and broadcasting such content
to the general public online. However, there are still significant uncertainties relating to the interpretation and implementation of
the Audio-Visual Program Provisions, in particular, the scope of "internet audio-visual programs".
On
March 16, 2018, the SAPPRFT issued the
Notice on Further Regulating the Transmission Order of Internet Audio-Visual Programs
,
which requires that, among others, audio-visual platforms shall: (i) not produce or transmit programs intended to parody or denigrate
classic works, (ii) not re-edit, re-dub, re-caption or otherwise
On
July 22, 2019, in the Beijing Municipal Radio and Television Bureau's Q&A section of its official website, the Bureau responded
to an inquiry submitted by an online education service provider, and confirmed that the offering of online audio and video courses or
programs on websites or mobile applications for the purpose of improving the professional qualifications/skills of target audiences,
does not fall into the activities regulated by the PRC Administrative Provisions on Internet Audio-Visual Program Services; therefore,
the service provider is not required to obtain an Audio-Visual License. Currently, all of our online content on our APP are educational
and training video and audio courses targeting specific groups of audiences, such as small and medium enterprise owners and graduate
students, who use our online courses and programs to improve their professional qualifications and skills. Accordingly, based on the
Bureau's published interpretation, we believe we are not required to obtain an Audio-Visual License. However, given the significant
uncertainties of the interpretation and implementation of Internet related regulations in the PRC, we cannot assure you that the competent
PRC authorities will not ultimately take a view contrary to our opinion. See "
Risk Factors—Risks Related to Our Business—
We may be required to obtain and maintain additional approvals, licenses or permits applicable to our business, including our online
business, which could have a material adverse impact on our business, financial conditions and results of operations."
53
Regulations
Related to Information Security
Internet
content in China is regulated and restricted from a state security standpoint. The Standing Committee of the National People's
Congress, or the SCNPC, enacted the
Decisions on the Maintenance of Internet Security
on December 28, 2000, which was amended
on August 27, 2009, that may subject persons to criminal liabilities in China for any attempt to: (i) gain improper entry to a computer
or system of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial
information or (v) infringe upon intellectual property rights. In 1997, Ministry of Public Security, or the MPS, issued the
Administration
Measures on the Security Protection of Computer Information Network with International Connections
, which were amended by the State
Council on January 8, 2011 and prohibit using the Internet in ways which, among others, result in a leakage of state secrets or a spread
of socially destabilizing content. The MPS has supervision and inspection powers in this regard, and relevant local security bureaus
may also have jurisdiction. On December 13, 2005, the MPS promulgated
Regulations on Technological Measures for Internet Security
Protection
, or the Internet Protection Measures, which took effect on March 1, 2006 and requires internet service providers to take
proper measures including anti-virus, data back-up and other related measures, to keep records of certain information about its users
(including user registration information, log-in and log-out time, IP address, content and time of posts by users) for at least 60 days,
and to detect illegal information, stop transmission of such information, and keep relevant records. If an ICP License holder violates
these measures, the PRC government may revoke its ICP License and shut down its websites.
In
November 2016, the SCNPC promulgated the
Cyber Security Law of the PRC
, or the Cyber Security Law, which became effective on June
1, 2017 and requires network operators to perform certain functions related to cyber security protection and the strengthening of network
information management. For instance, under the Cyber Security Law, network operators of key information infrastructure shall store within
the territory of the PRC all the personal information and important data collected and produced within the territory of PRC and their
purchase of network products and services that may affect national securities shall be subject to national cybersecurity review. On April
13, 2020, the CAC and other 11 Commissions, Ministries and Administrations, jointly issued the
Measures for Cybersecurity Review,
which took effect on June 1, 2020, to provide for more detailed rules regarding cybersecurity review requirements.
On
March 13, 2019, the SAMR and the CAC jointly promulgated the
Announcement on the Implementation of App Security Certification
,
or the Implementation Announcement, according to which, the China Cyber Security Review Technology and Certification Center shall be
responsible for app security certification work, and app operators are encouraged to undergo such security certification voluntarily;
search engines, app stores, among others, are encouraged to clearly mark and give priority to recommend certified apps. As an attachment
to the Implementation Announcement, the
Implementation Rules of App Security Certification
, which came into effect on March 15,
2019, stipulated specific certification procedures, post-certification supervision and management of app security certifications.
On
June 10, 2021, the SCNPR promulgated the
Data Security Law of the PRC
, or the Data Security Law, which took effect on September
1, 2021. Under the Data Security Law, data refers to any record of information that is kept electronically or otherwise, and data processing
includes the collection, storage, use, processing, transmission, provision, and disclosure of data. Pursuant to the Data Security Law,
any individual or entity shall only collect data in a legitimate and proper manner. A data security review mechanism will be established
by the State, and any data processing activity that endangers or may endanger national security shall be subject to national security
review. The security management for the cross-border transfer of important data collected and produced during operation by CIIOs or other
data processors within the territory of the PRC shall be subject to the Cyber Security Law and other regulations and rules that promulgated
by the CAC and the State Council. In case of any non-compliance under the Data Security Law, a data processor may be ordered to make
corrections, and under certain serious circumstances, such as severe data divulgence, may be subject to penalties, including the revocation
of business license or other permits.
54
On
December 28, 2021, 13 PRC authorities, including the NDRC, the MOFCOM, the MIIT, the CAC, and several other authorities jointly promulgated
the revised
Cybersecurity Review Measures
, which came into effect on February 15, 2022. The Cybersecurity Review Measures provide
that, in addition to CIIOs that intend to purchase Internet products and services, online platform operators engaging in data processing
activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity Review Office of
the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security risks that may be
brought about by any procurement, data processing, or overseas listing. The Cybersecurity Review Measures require that an online platform
operator which possesses the personal information of at least one million users must apply for a cybersecurity review by the CAC if it
intends to be listed in foreign countries.
To
comply with these laws and regulations, we have adopted security policies and measures to protect our cyber system and customer information.
Regulations
Related to Internet Privacy Protection
Pursuant
to the Internet Protection Measures, Internet services providers are prohibited from unauthorized disclosure of users' information
to any third parties unless such disclosure is required by the laws and regulations. They are further required to establish management
systems and take technological measures to safeguard the freedom and secrecy of the users' correspondences.
On
December 28, 2012, the SCNPC promulgated the
Decision on Strengthening Network Information Protection
, which took into effect
on the same date, to enhance the legal protection of information security and privacy on the internet. On July 16, 2013, the MIIT promulgated
the
Provisions on Protection of Personal Information of Telecommunication and Internet Users
, which took into effect on September
1, 2013, to regulate the collection and use of users' personal information in the provision of telecommunication services and internet
information services in China and the personal information includes a user's name, birth date, identification card number, address,
phone number, account name, password and other information that can be used independently or in combination with other information for
identifying a user.
On
December 29, 2011, the MIIT promulgated the
Several Provisions on Regulation of the Order of Internet Information Service Market
,
which took into effect on March 15, 2012. The Provisions stipulate that without the consent of users, internet information service providers
shall not collect information relevant to the users that can lead to the recognition of the identity of the users independently or in
combination with other information, nor shall they provide the information to others, unless otherwise provided by laws and administrative
regulations.
On
May 8, 2017, the Supreme People's Court and the Supreme People's Procuratorate released the
Interpretations of the Supreme
People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Application of Law in the Handling
of Criminal Cases Involving Infringement of Citizens' Personal Information
, or the Interpretations, which took into effect
on June 1, 2017. The Interpretations clarify several concepts regarding the crime of "infringement of citizens' personal
information" stipulated by Article 253A of the Criminal Law of the PRC, including "citizen's personal information",
"provision", and "unlawful acquisition". Also, the Interpretations specify the standards for determining "serious
circumstances" and "particularly serious circumstances" of this crime.
On
January 23, 2019, the CAC, the MIIT, the MPS and the SAMR jointly issued the
Notice on Special Governance of Illegal Collection and
Use of Personal Information via Apps
, which restates the requirement of legal collection and use of personal information, encourages
app operators to conduct security certifications, and encourages search engines and app stores to clearly mark and recommend those certified
apps.
On
November 28, 2019, the CAC, MIIT, MPS and SAMR jointly issued the
Measures to Identify Illegal Collection and Usage of Personal Information
by APPs
, which lists six types of illegal collection and usage of personal information, including "not publishing rules on
the collection and usage of personal information" and "not providing privacy rules."
On
May 28, 2020, the NPC adopted the
Civil Code of the PRC
, or the Civil Code, which became effective on January 1, 2021 and abolished
the
General Rules of the Civil Law of the PRC
. Pursuant to the Civil Code, the collection, storage, use, process, transmission,
provision and disclosure of personal information should follow the principles of legitimacy, properness and necessity.
55
On
March 12, 2021, the CAC, the MIIT, the MPS and the SAMR jointly promulgated the
Regulations on the Scope of Necessary Personal Information
for Common Types of Mobile Internet Apps
, which will become effective on May 1, 2021. According to these regulations, an app may
not refuse a user from using its basic functional services if the user disagrees to provide unnecessary personal information. In particular,
basic functional services of job hunting and recruitment applications are the "exchange of job hunting and recruitment information,"
and the necessary personal information includes mobile phone numbers of registered users and resumes provided by job seekers. Additionally,
the regulations also apply to mini programs, which are apps developed and based on open platform interfaces and available to users without
installation.
On
August 20, 2021, the SCNPC adopted the
Personal Information Protection Law of the PRC
, or the PIP Law, which took effect on November
1, 2021. The PIP Law includes the basic rules for personal information processing, the rules for cross-border provision of personal information,
the rights of individuals in personal information processing activities, the obligations of personal information processors, and the
legal responsibilities for illegal collection, processing, and use of personal information. As the first systematic and comprehensive
law specifically for the protection of personal information in the PRC, the PIP Law provides, among others, that (i) an individual's
consent shall be obtained to use sensitive personal information, such as biometric characteristics and individual location tracking,
(ii) personal information operators using sensitive personal information shall notify individuals of the necessity of such use and impact
on the individual's rights, and (iii) where personal information operators reject an individual's request to exercise his
or her rights, the individual may file a lawsuit with a People's Court.
To
comply with these laws and regulations, we have required our customers to consent to our collecting and using of their personal information
in order to receive our services, and established information security systems to protect customers' privacy.
Regulations
Related to Consumer Rights Protection
The
Consumer Rights and Interests Protection Law of the PRC
, or the Consumer Protection Law, promulgated by the SCNPC on October 31,
1993 and most recently amended on October 25, 2013 (effective as of March 15, 2014), and the
Online Trading Measures
issued by
the SAIC on January 26, 2014 (effective as of March 15, 2014), set out the obligations of business operators and the rights and interests
of the customers. For example, business operators must guarantee the quality, function, usage, term of validity, personal or property
safety requirement of the goods and services and provide customers with authentic information about the goods and services. Consumer
whose legitimate rights and interests are harmed in the purchase of goods or receipt of services rendered through an online trading platform
may seek compensation from the seller or the service provider.
On
March 15, 2021, the SAMR promulgated the
Measures for the Supervision and Administration of Online Trading
, or New Online Trading
Measures, which will come into effect on May 1, 2021 and replace the above original Online Trading Measure. The New Online Trading Measures
also apply to all online commerce business conducted through information networks in general, with particular emphasis on transactions
through online social networking and online live streaming. Under the New Online Trading Measures, online trading operators shall perform
relevant compliance obligations, such as registration with the SAMR, protection of customers' personal information and fair competition.
Additionally,
the Civil Code, which became effective on January 1, 2021 and replaced the
Tort Liability Law of the PRC
, provides that both internet
users and internet service providers may be liable for the wrongful acts of users who infringe the lawful rights of other parties. If
an internet user utilizes internet services to commit a tortious act, the party whose rights are infringed may request the internet service
provider to take measures, such as removing or blocking the content, or disabling the links thereto, to prevent or stop the infringement.
If the internet service provider does not take necessary measures after receiving such notice, it shall be jointly liable for any further
damages suffered by the rights holder. Furthermore, if an internet service provider fails to take necessary measures when it knows that
an internet user utilizes its internet services to infringe the lawful rights and interests of other parties, it shall be jointly liable
with the internet user for damages resulting from the infringement.
Regulations
Related to Intellectual Property Rights
Copyright
The
Copyright Law of the PRC
, or the Copyright Law, which took effect on June 1, 1991, was amended in 2001, 2010 and 2020. The latest
version will come into effect on June 1, 2021. Under the currently effective Copyright Law and its implementing regulations adopted in
2002 and amended in 2011 and 2013, Chinese citizens, legal persons, or other organizations will, whether published or not, enjoy copyright
provides that Chinese citizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable
works, which include, among others, works of literature, art, natural science, social science, engineering technology and computer software.
Copyright owners enjoy certain legal rights, including right of publication, right of authorship and right of reproduction. The Copyright
Law extends copyright protection to Internet activities, products disseminated over the Internet and software products. In addition,
the Copyright Law provides for a voluntary registration system administered by the China Copyright Protection Center, or the CPCC. According
to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasing infringement
activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject
to fines and/or administrative or criminal liabilities in severe situations.
56
Pursuant
to the
Computer Software Copyright Protection Regulations
promulgated by the State Council in 1991 and amended in 2001, 2011 and
2013 respectively, Chinese citizens, legal persons and other organizations shall enjoy copyright on software they develop, regardless
of whether the software is released publicly. Software copyright commences from the date on which the development of the software is
completed. The protection period for software copyright of a legal person or other organizations shall be 50 years, concluding on December
31 of the 50th year after the software's initial release. The software copyright owner may go through the registration formalities
with a software registration authority recognized by the State Council's copyright administrative department. The software copyright
owner may authorize others to exercise that copyright, and is entitled to receive remuneration.
Trademark
Trademarks
are protected by the
Trademark Law of the PRC
, which was adopted in 1982 and subsequently amended in 1993, 2001, 2013 and 2019
as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 1983 and as most recently amended
on April 29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a 10-year term to
registered trademarks and the term may be renewed for another 10-year period upon request by the trademark owner. A trademark registrant
may license its registered trademarks to another party by entering into trademark license agreements, which must be filed with the Trademark
Office for its record. As with patents, the Trademark Law has adopted a first-to-file principle with respect to trademark registration.
If a trademark applied for is identical or similar to another trademark which has already been registered or subject to a preliminary
examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any
person applying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person
register in advance a trademark that has already been used by another party and has already gained a "sufficient degree of reputation"
through such party's use.
Patent
Patents
in the PRC are principally protected under the
Patent Law of the PRC
(2020 Revision) and its Implementation Rules (2010 Revision),
collectively the Patent Laws. According to the Patent Laws, patents in the PRC are classified into three categories, namely, inventions,
utility models and designs. The protection period of a patent right is ten (10) years for utility models, fifteen (15) years
for designs, and twenty (20) years for inventions upon the date of application. The Patent Administration Office under the State
Council is responsible for receiving, reviewing and approving patent applications. After a patent right is granted for an invention or
utility model, except otherwise provided for in the Patent Laws, no entity or individual may, without the permission of the patent owner,
exploit the patent, that is, manufacture, use, offer to sell, sell or import the patented product, or use the patented method, or use,
offer to sell, sell or import any product which is a direct result of the use of the patented method, for production or business purposes.
And after a patent right is granted for a design, no entity or individual shall, without the permission of the patent owner, exploit
the patent, that is, manufacture, offer to sell, sell, or import any product containing the patented design for production or business
purposes.
Domain
name
The
domain names are protected under the
Administrative Measures on the Internet Domain Names
, or the Domain Name Measures, which
was promulgated by the MIIT and became effective in November 2017. The MIIT is the major regulatory body responsible for the administration
of the PRC internet domain names, under supervision of which China Internet Network Information Center, or the CNNIC, is responsible
for the daily administration of CN domain names and PRC domain names. Pursuant to the Domain Name Measures, the registration of domain
names adopts the "first to file" principle and the registrant shall complete the registration via the domain name registration
service institutions. In the event of a domain name dispute, the disputed parties may lodge a complaint to the designated domain name
dispute resolution institution to trigger the domain name dispute resolution procedure in accordance with the CNNIC Measures on Resolution
of the Domain Name Disputes, file a suit to the People's Court, or initiate an arbitration procedure.
Regulations
Related to Foreign Exchange
The
principal regulations governing foreign currency exchange in China are the
Foreign Exchange Administration Regulations
, promulgated
by the State Council in 1996 and most recently amended in 2008. Under the PRC foreign exchange regulations, payments of current account
items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without
prior approval from State Administration of Foreign Exchange or SAFE by complying with certain procedural requirements. By contrast,
approval from or registration with appropriate governmental authorities is required where Renminbi is to be converted into foreign currency
and remitted out of China to pay capital expenses such as the repayment of foreign currency-denominated loans.
In
November 2012, SAFE promulgated the
Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign
Direct Investment,
or SAFE Circular 59, which was most recently amended in 2015 and substantially amends and simplifies the current
foreign exchange procedures. Pursuant to SAFE Circular 59, the opening of various special purpose foreign exchange accounts, such as
pre-establishment expenses accounts, foreign exchange capital accounts, and guarantee accounts, the reinvestment of Renminbi proceeds
derived by foreign investors in China, and remittance of foreign exchange profits and dividends by a foreign-invested enterprise to its
foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be
opened in different provinces, which was not possible previously.
57
In
February 2015, SAFE promulgated the
Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning
Direct Investment,
or SAFE Circular 13, pursuant to which, instead of applying for approval regarding foreign exchange registrations
of foreign direct investment and overseas direct investment from SAFE, entities and individuals may apply for such foreign exchange registrations
from qualified banks. The qualified banks, under the supervision of SAFE, may directly review the applications and conduct the registration.
In
March 2015, SAFE issued the
Circular of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange
Settlement of Capital of Foreign-invested Enterprises,
or SAFE Circular 19. Pursuant to SAFE Circular 19, a foreign-invested enterprise
may, according to its actual business needs, settle with a bank the portion of the foreign exchange capital in its capital account for
which the relevant foreign exchange administration has confirmed monetary capital contribution rights and interests (or for which the
bank has registered the injection of the monetary capital contribution into the account). In addition, for the time being, foreign-invested
enterprises are allowed to settle 100% of their foreign exchange capital on a discretionary basis. A foreign-invested enterprise shall
truthfully use its capital for its own operational purposes within the scope of business. Where an ordinary foreign-invested enterprise
makes domestic equity investment with the amount of foreign exchanges settled, the invested enterprise must first go through domestic
re-investment registration and open a corresponding account for foreign exchange settlement pending payment with the foreign exchange
administration or the bank at the place where it is registered.
In
June 2016, SAFE promulgated the
Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital
Accounts,
or SAFE Circular 16, pursuant to which, in addition to foreign currency capital, enterprises registered in China may also
convert their foreign debts, as well as repatriated fund raised through overseas listing, from foreign currency to Renminbi on a discretional
basis. SAFE Circular 16 also reiterates that the use of capital so converted shall follow "the principle of authenticity and self-use"
within the business scope of the enterprise. According to SAFE Circular 16, the Renminbi funds so converted shall not be used for the
purposes of, whether directly or indirectly, (i) paying expenditures beyond the business scope of the enterprises or prohibited by laws
and regulations; (ii) making securities investment or other investments (except for banks' principal-secured products); (iii) granting
loans to non-affiliated enterprises, except as expressly permitted in the business license; and (iv) purchasing non-self-used real estate
(except for the foreign-invested real estate enterprises).
In
January 2017, SAFE promulgated the
Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness
and Compliance Verification,
or SAFE Circular 3, which stipulates several capital control measures with respect to the outbound remittance
of profit from domestic entities to offshore entities, including (i) under the principle of genuine transaction, banks shall check board
resolutions regarding profit distribution, the original version of tax filing records, and audited financial statements; and (ii) domestic
entities shall hold income to account for previous years' losses before remitting the profits. Further, pursuant to SAFE Circular
3, domestic entities shall make detailed explanations of the sources of capital and utilization arrangements, and provide board resolutions,
contracts and other proof when completing the registration procedures in connection with an outbound investment.
On
October 23, 2019, SAFE issued the
Circular of the State Administration of Foreign Exchange on Further Promoting the Facilitation of
Cross-border Trade and Investment
, or SAFE Circular 28, which allows non-investment foreign-invested enterprises to make domestic
equity investment with their capital funds in accordance with the law under the premise that such investment does not violate the existing
special administrative measures (negative list) for foreign investment and the project invested in China is authentic and compliant.
Pursuant to SAFE Circular 28, upon receiving the payment of consideration from a foreign investor for the equity transfer under foreign
direct investment, the domestic transferor, with relevant registration certificates, can process the formalities for account opening,
fund receipt, and foreign exchange settlement and use directly at the bank. The foreign investor's deposit remitted from overseas
or transferred from domestic accounts can be directly used for its lawful domestic capital contribution as well as domestic and overseas
payment after the transaction is concluded.
On
April 10, 2020, SAFE issued the
Circular on Optimizing Administration of Foreign Exchange to Support the Development of Foreign-related
Business
, or SAFE Circular 8, pursuant to which, eligible enterprises are allowed to use the income under capital account, from such
sources as capital funds, foreign debt and overseas listing, for domestic payment without having to provide supporting authentication
materials to the banks for every transaction in advance, but the use of funds shall be true and compliant as well as conform to the existing
administration regulations regarding use of income under capital account. The concerned bank shall conduct spot checking in accordance
with the relevant requirements.
58
Regulations
Related to Dividend Distribution
The
principal regulations governing the distribution of dividends paid by the wholly foreign owned subsidiaries of the Company (the "WFOEs")
include the
Company Law of PRC,
which applies to both PRC domestic companies and foreign-invested companies, and the Foreign Investment
Law and its implementing rules, which apply to foreign-invested companies. Under these regulations, WFOEs in China may pay dividends
only out of their accumulated profits, if any, as determined in accordance with PRC accounting standards and regulations. In addition,
WFOEs in China are required to set aside at least 10% of its after-tax profits based on PRC accounting standards each year to its general
reserves until its cumulative total reserve funds reaches 50% of its registered capital. These reserve funds, however, may not be distributed
as cash dividends.
Regulations
Related to Foreign Exchange Registration of Offshore Investment by PRC Residents
In
July 2014, SAFE issued the
Circular of the State Administration of Foreign Exchange on Issues concerning Foreign Exchange Administration
over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles
, or SAFE
Circular 37 which was most recently amended on June 15, 2018 and has replaced the Notice on Relevant Issues Concerning Foreign Exchange
Administration for Domestic Residents' Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles (known as Circular
75). SAFE Circular 37 regulates foreign exchange matters in relation to the use of special purpose vehicles, or "SPVs," by
PRC residents or entities to seek offshore investment and financing or conduct round trip investment in China. Under SAFE Circular 37,
an SPV refers to an offshore entity established or controlled, directly or indirectly, by PRC residents or entities for the purpose of
seeking offshore financing or making offshore investment, using legitimate domestic or offshore assets or interests, while "round
trip investment" refers to the direct investment in China by PRC residents or entities through SPVs, namely, establishing foreign-invested
enterprises to obtain the ownership, control rights and management rights. Circular 37 requires that, before making contribution into
an SPV, PRC residents or entities are required to complete foreign exchange registration with SAFE or its local branch.
In
February 2015, SAFE promulgated the SAFE Circular 13. SAFE Circular 13 has amended SAFE Circular 37 by requiring PRC residents or entities
to register with qualified banks instead of SAFE or its local branch in connection with their establishment of an SPV.
In
addition, pursuant to SAFE Circular 37, an amendment to registration or subsequent filing with qualified banks by such PRC resident is
also required if there is a material change with respect to the capital of the offshore company, such as any change of basic information
(including change of such PRC residents, change of name and operation term of the SPV), increases or decreases in investment amount,
transfers or exchanges of shares, or mergers or divisions. Failure to comply with the registration requirements as set forth in SAFE
Circular 37 and SAFE Circular 13, misrepresent on or failure to disclose controllers of foreign-invested enterprises that are established
by round-trip investment may result in bans on the foreign exchange activities of the relevant onshore company, including the payment
of dividends and other distributions to its offshore parent or affiliates, and may also subject relevant PRC residents to penalties under
the Foreign Exchange Administration Regulations of the PRC.
Regulations
Related to Foreign Debt
As
an offshore holding company, we may make additional capital contributions to WFOEs subject to approval from the local department of commerce
and the SAFE, with no limitation on the amount of capital contributions. We may also make loans to WFOEs subject to the approval from
SAFE or its local office and the limitation on the amount of loans.
59
By
means of making loans, WFOEs are subject to the relevant PRC laws and regulation relating to foreign debts. On January 8, 2003, the State
Development Planning Commission, SAFE, and Ministry of Finance, or MOF, jointly promulgated the
Circular on the Interim Provisions
on the Management of Foreign Debts
, or the Foreign Debts Provisions, which became effective on March 1, 2003, and was partially abolished
on May 10, 2015. Pursuant to Foreign Debts Provisions, the total amount of foreign loans received by a foreign-invested company shall
not exceed the difference between the total investment in projects as approved by the MOFCOM or its local counterpart and the amount
of registered capital of such foreign-invested company. In addition, on January 12, 2017, the People's Bank of China, or PBOC,
issued the
Circular on Full-Coverage Macro-Prudent Management of Cross-Border Financing
, or the PBOC Circular 9, which sets out
the statutory upper limit on the foreign debts for PRC non-financial entities, including both foreign-invested companies and domestic-invested
companies, and the macro-prudential adjustment parameter is 1. Pursuant to the PBOC Circular 9, the foreign debt upper limit for both
foreign-invested companies and domestic-invested companies is calculated as twice the net asset of such companies. As to net assets,
the companies shall take the net assets value stated in their latest audited financial statement. On March 11, 2020, the PBOC and SAFE
promulgated the
Circular of the People's Bank of China and the State Administration of Foreign Exchange on Adjusting the Macro-prudential
Regulation Parameter for Full-covered Cross-border Financing,
which provides that based on the current macro economy and international
balance of payments, the macro-prudential regulation parameter as set forth in the PBOC Circular 9 is updated from 1 to 1.25.
The
PBOC Circular 9 does not supersede the Foreign Debts Provisions. It provides a one-year transitional period from January 11, 2017, for
foreign-invested companies, during which foreign-invested companies, such as WFOEs, could adopt their calculation method of foreign debt
upper limit based on either the Foreign Debts Provisions or the PBOC Circular 9. The transitional period ended on January 11, 2018. Upon
its expiry, pursuant to the PBOC Circular 9, PBOC and SAFE shall reevaluate the calculation method for foreign-invested companies and
determine what the applicable calculation method would be. As of the date of this annual report, neither the PBOC nor SAFE has promulgated
and made public any further rules, regulations, notices, or circulars in this regard.
Regulations
Related to Tax
Enterprise
Income Tax
On
March 16, 2007, the SCNPC promulgated the EIT Law
,
which was recently amended on December 29, 2018. On December 6, 2007, the State
Council enacted the
Regulations for the Implementation of the Enterprise Income Tax Law
, which was amended on April 23, 2019.
Under the EIT Law and relevant implementation regulations, both resident enterprises and non-resident enterprises are subject to the
enterprise income tax so long as their income is generated within the territory of PRC. "Resident enterprises" are defined
as enterprises that are established in China in accordance with PRC laws, or that are established in accordance with the laws of foreign
countries but are actually or in effect controlled from within the PRC. "Non-resident enterprises" are defined as enterprises
that are organized under the laws of foreign countries and whose actual management is conducted outside the PRC, but have established
institutions or premises in the PRC, or have no such established institutions or premises but have income generated from inside the PRC.
Under the EIT Law and relevant implementing regulations, a uniform corporate income tax rate of 25% is applied. If non-resident enterprises
have not formed permanent establishments or premises in the PRC, or if they have formed permanent establishment or premises in the PRC
but there is no actual relationship between the relevant income derived in the PRC and the established institutions or premises set up
by them, however, enterprise income tax is set at the rate of 10% with respect to their income sourced from inside the PRC.
The
EIT Law and its implementation rules permit certain "high and new technology enterprises strongly supported by the state"
that independently own core intellectual property and meet statutory criteria, to enjoy a reduced 15% enterprise income tax rate.
According
to the
Administrative Rules for the Certification of High Tech Enterprises
, effective on January 1, 2008 and amended on January
29, 2016 (effective as of January 1, 2016), for each entity accredited as High Tech Enterprise, such status is valid for three years
if it meets the qualifications for High Tech Enterprise on a continuing basis during such period.
Value-Added
Tax ("VAT")
The
Provisional Regulations of the PRC on Value-added Tax
was promulgated by the State Council on December 13, 1993, and most recently
amended on November 19, 2017. The
Detailed Rules for the Implementation of the Provisional Regulations of the PRC on Value-added Tax
(Revised in 2011)
were promulgated by the MOF on December 25, 1993, and were recently amended on October 28, 2011 (collectively with
the VAT Regulations, the VAT Law). On April 4, 2018, MOF and SAT jointly promulgated the Circular on Adjustment of Value-Added Tax Rates,
or MOF and SAT Circular 32. On March 20, 2019, MOF, SAT and General Administration of Customs, or GAC, jointly issued a
Circular on
Relevant Polices for Deepening Value-added Tax Reform
, or MOF, SAT and GAC Circular 39, which became effective from April 1, 2019.
According to the abovementioned laws and circulars, all enterprises and individuals engaged in the sale of goods, the provision of processing,
repair and replacement services, sales of services, intangible assets, real property and the importation of goods within the territory
of the PRC are the taxpayers of VAT. The VAT tax rates generally applicable are simplified as 13%, 9%, 6% and 0%, and the VAT tax rate
applicable to the small-scale taxpayers is 3%.
60
Withholding
Tax
The
Enterprise Income Tax Law of the PRC
provides that since January 1, 2008, an income tax rate of 10% will normally be applicable
to dividends declared to non-PRC resident investors which do not have an establishment or place of business in the PRC, or which have
such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business,
to the extent such dividends are derived from sources within the PRC.
Pursuant
to an
Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation
and the Prevention of Fiscal Evasion with Respect to Taxes on Incomes
, or the Double Tax Avoidance Arrangement, and other applicable
PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions
and requirements under such Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends the
Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5%. Based on the
Circular on Certain Issues
with Respect to the Enforcement of Dividend Provisions in Tax Treaties
, or the SAT Circular 81, issued on February 20, 2009, by the
SAT, however, if the relevant PRC tax authorities determine, in their discretion, that a company benefits from such reduced income tax
rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment.
According to the
Circular on Several Questions regarding the "Beneficial Owner" in Tax Treaties
, which was issued
on February 3, 2018, by the SAT and took effect on April 1, 2018, when determining the applicant's status of the "beneficial
owner" regarding tax treatments in connection with dividends, interests or royalties in the tax treaties, several factors, including
without limitation, whether the applicant is obligated to pay more than 50% of his or her income in 12 months to residents in third country
or region, whether the business operated by the applicant constitutes the actual business activities, and whether the counterparty country
or region to the tax treaties does not levy any tax or grant tax exemption on relevant incomes or levy tax at an extremely low rate,
will be taken into account, and it will be analyzed according to the actual circumstances of the specific cases. This circular further
provides that applicants who intend to prove his or her status of the "beneficial owner" shall submit the relevant documents
to the relevant tax bureau according to the
Announcement on Issuing the Measures for the Administration of Non-Resident Taxpayers'
Enjoyment of the Treatment under Tax Agreements
.
Tax
on Indirect Transfer
On
February 3, 2015, the SAT issued the
Circular on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC Resident
Enterprises
, or SAT Circular 7. Pursuant to SAT Circular 7, an "indirect transfer" of assets, including equity interests
in a PRC resident enterprise, by non-PRC resident enterprises, may be re-characterized and treated as a direct transfer of PRC taxable
assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of
PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax. When determining
whether there is a "reasonable commercial purpose" of the transaction arrangement, features to be taken into consideration
include, inter alia, whether the main value of the equity interest of the relevant offshore enterprise derives directly or indirectly
from PRC taxable assets; whether the assets of the relevant offshore enterprise mainly consist of direct or indirect investment in China
or if its income is mainly derived from China; and whether the offshore enterprise and its subsidiaries directly or indirectly holding
PRC taxable assets have real commercial nature which is evidenced by their actual function and risk exposure. According to SAT Circular
7, where the transferee fails to withhold any or sufficient tax, the transferor shall declare and pay such tax to the tax authority by
itself within the statutory time limit. Late payment of applicable tax will subject the transferor to default interest. SAT Circular
7 does not apply to transactions of sale of shares by investors through a public stock exchange where such shares were acquired on a
public stock exchange. On October 17, 2017, the SAT issued the
Circular on Issues of Tax Withholding regarding Non-PRC Resident Enterprise
Income Tax
, or SAT Circular 37, which further elaborates the relevant implemental rules regarding the calculation, reporting and
payment obligations of the withholding tax by the non-resident enterprises. Nonetheless, there remain uncertainties as to the interpretation
and application of SAT Circular 7. SAT Circular 7 may be determined by the tax authorities to be applicable to our offshore transactions
or sale of our shares or those of our offshore subsidiaries where non-resident enterprises, being the transferors, were involved.
Regulations
Related to Employment and Social Welfare
Employment
The
Labor Law of the PRC
, which was promulgated on July 5, 1994, effective since January 1, 1995, and most recently amended on December
29, 2018, the
Labor Contract Law of the PRC
, which was promulgated on June 29, 2007, and amended on December 28, 2012, and the
Implementation Regulations of the Labor Contract Law of the PRC
, which was promulgated on September 18, 2008, are the principal
regulations that govern employment and labor matters in the PRC. Under the above regulations, labor contracts shall be concluded in writing
if labor relationships are to be or have been established between employers and the employees. Employers are prohibited from forcing
employees to work above certain time limit and employers shall pay employees for overtime work in accordance to national regulations.
In addition, wages may not be lower than the local minimum wage. Employers must establish a system for labor safety and sanitation, strictly
abide by state standards, and provide relevant education to its employees. Employees are also required to work in safe and sanitary conditions.
61
Social
Insurance and Housing Fund
Under
the
Social Insurance Law of the PRC
that was promulgated by the SCNPC on October 28, 2010, and came into force as of July 1, 2011,
and was most recently amended on December 29, 2018 (also the effective date), together with other laws and regulations, employers are
required to pay basic pension insurance, unemployment insurance, basic medical insurance, employment injury insurance, maternity insurance,
and other social insurance for its employees at specified percentages of the salaries of the employees, up to a maximum amount specified
by the local government regulations from time to time. When an employer fails to fully pay social insurance premiums, relevant social
insurance collection agency shall order it to make up for any shortfall within a prescribed time limit, and may impose a late payment
fee at the rate of 0.05% per day of the outstanding amount from the due date. If such employer still fails to make up for the shortfalls
within the prescribed time limit, the relevant administrative authorities shall impose a fine of one to three times the outstanding amount
upon such employer.
In
accordance with the
Regulations on the Management of Housing Fund
which was promulgated by the State Council in 1999 and most
recently amended in March 2019 (which became effective as of March 24
th
2019), employers must register at the designated administrative
centers and open bank accounts for depositing employees' housing funds. Employer and employee are also required to pay and deposit
housing funds, with an amount no less than 5% of the monthly average salary of the employee in the preceding year in full and on time.
Regulations
Related to Mergers and Acquisitions and Overseas Listings
On
August 8, 2006, six PRC governmental and regulatory agencies, including MOFCOM and the China Securities Regulatory Commission, or the
CSRC, promulgated the
Rules on Acquisition of Domestic Enterprises by Foreign Investors
, or the M&A Rules, governing the mergers
and acquisitions of domestic enterprises by foreign investors that became effective on September 8, 2006, and was amended on June 22,
2009. The M&A Rules, among other things, requires that offshore SPVs that are controlled by PRC companies or individuals and that
have been formed for overseas listing purposes through acquisitions of PRC domestic interest held by such PRC companies or individuals,
to obtain the approval of the CSRC prior to publicly listing their securities on an overseas stock exchange.
Our
PRC counsel has advised us that, based on its understanding of current PRC laws, rules, and regulations, and the M&A Rules, the CSRC
approval is not required in the context of this offering because: (i) our PRC subsidiaries were established by means of direct investment
rather than by mergers with or acquisitions of any PRC domestic companies as defined under the M&A Rules, and (ii) no explicit provision
in the M&A Rules classifies the respective contractual arrangements among GIOP BJ, SDH and its shareholders as a type of acquisition
transaction falling under the M&A Rules. Notwithstanding the above opinion, our PRC counsel has further advised us that uncertainties
still exist as to how the M&A Rules will be interpreted and implemented and its opinions summarized above are subject to any new
laws, rules, and regulations or detailed implementations and interpretations in any form relating to the M&A Rules. If the CSRC or
other PRC regulatory agencies subsequently determine that prior CSRC approval was required, we may face regulatory actions or other sanctions
from the CSRC or other PRC regulatory agencies. See "
Risk Factors—Risks Related to Doing Business in China—The failure
to comply with PRC regulations relating to mergers and acquisitions of domestic entities by offshore special purpose vehicles may subject
us to severe fines or penalties and create other regulatory uncertainties regarding our corporate structure
."
On
February 17, 2023, the CSRC released the
Trial Measures
and five supporting guidelines, which took effect on March 31, 2023. Pursuant
to the Trial Measures, PRC domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete
filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission
of relevant applications or its completion of subsequent offerings. If a domestic company fails to complete required filing procedures
or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative
penalties, such as an order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in
charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines.
62
The
Trial Measures outline the circumstances where domestic companies are prohibited from offering and listing securities overseas, if such
overseas offering and listing made by domestic companies (i) are explicitly prohibited by laws; (ii) may endanger national security as
determined by relevant competent departments under the State Council; (iii) involve criminal offenses that disrupting PRC economy such
as corruption, bribery, embezzlement, or misappropriation of property by such domestic company, the controlling shareholder, and/or actual
controller in the recent three years; (iv) involve such domestic company in investigations for suspicion of criminal offenses or major
violations of laws and regulations; or (v) involve material ownership disputes over the shares held by the controlling shareholder or
by other shareholders that are controlled by the controlling shareholder and/or actual controller. We believe that our listing on Nasdaq
does not fall under the circumstance that such overseas listing is prohibited by the Trial Measures.
On
the same day, the CSRC also held a press conference for the release of the Trial Measures and issued the CSRC Notice, which, among others,
clarifies that PRC domestic companies that have already been listed overseas before the effective date of the Trial Measures, which is
March 31, 2023, shall be deemed as Existing Issuers, and Existing Issuers are not required to complete the filing procedures with the
CSRC immediately, and they shall be required to file with the CSRC for any subsequent offerings. We are an Existing Issuer, based on
the foregoing, we are not required to complete the filing procedures with the CSRC immediately, and shall be required to file with the
CSRC for any subsequent offerings.
On
February 24, 2023, the CSRC, together with the MOF, the National Administration of State Secrets Protection and National Archives Administration
of China, revised the Provisions, which were issued by the CSRC and National Administration of State Secrets Protection and National
Archives Administration of China in 2009. The revised Provisions were issued under the title the "
Provisions on Strengthening
Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies
," and came into
effect on March 31, 2023, together with the Trial Measures. One of the major revisions to the revised Provisions is expanding their application
to cover indirect overseas offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, among
other things, (i) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose
or provide to relevant individuals or entities, including securities companies, securities service providers, and overseas regulators,
any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent
authorities according to law, and file with the secrecy administrative department at the same level; and (ii) a domestic company that
plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and
entities, including securities companies, securities service providers, and overseas regulators, any other documents and materials that,
if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable
national regulations. Any failure or perceived failure by our Company, our subsidiaries or the VIE and its subsidiaries to comply with
the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may
result in the relevant entities being held legally liable by competent authorities, and referred to the judicial organ to be investigated
for criminal liability if suspected of committing a crime.
The
Trial Measures and the revised Provisions that recently issued by the PRC authorities may subject us to additional compliance requirements
in the future. See "
Risk Factors — Risks Related to Doing Business in China — The Trial Measures and the revised
Provisions recently issued by the PRC authorities may subject us to additional compliance requirements in the future.
"
The
following section sets forth a summary of the principal PRC laws and regulations relevant to graphite anode material manufacturing and
sales business operations in China.
Industrial
Polices
Foreign
investors and foreign-invested enterprises investing in the PRC shall comply with the
Catalog of Industries for Encouraging Foreign
Investment (2022 edition)
, which was promulgated by the National Development and Reform Commission (the "NDRC") and the
Ministry of Commerce (the "MOFCOM") on October 26, 2022 and took effect on January 1, 2023. Pursuant to the Catalog, the
development and production of lithium-ion batteries falls within the scope of industries in which foreign investment is encouraged.
63
According
to the
Guiding Catalog for Industrial Restructuring
, which was promulgated by the NDRC on December 2, 2005, with the latest amendment
on December 30, 2021, and was effective on December 30, 2021, new batteries such as lithium-ion batteries, and lithium-ion batteries
use intermediate phase Anode materials such as carbon microspheres and silicon carbon fall into the state-encouraged industries.
According
to the
Guiding Catalog for Key Products and Services for Strategic Emerging Industries
promulgated by the NDRC on January 25,
2017, high-power graphite electrodes, graphite for negative electrodes of lithium-ion batteries, mesocarbon microspheres, Synthetic diamond
etc. are key products and services for strategic emerging industries.
According
to the
Guiding Opinions on Accelerating the Development of New Energy Storage
jointly promulgated by the NDRC and the National
Energy Administration on July 15, 2021, the PRC will strive to build a clean, low-carbon, safe and efficient energy system, and seek
to drive down the cost and advance the commercial-scale application of more mature new energy storage technologies such as lithium-ion
batteries, in an effort to achieve carbon peak and carbon neutrality.
In
order to encourage and guide the technological progress and normative development of lithium-ion battery industry, the Ministry of Industry
and Information Technology (the "MIIT") enacted the
Conditions on the Standardization of Lithium Battery Industry
(the "Standardization Conditions") on August 31, 2015, which was latest amended on December 10, 2021, and provides guidance
for all types of upstream and downstream manufacturers in the lithium-ion battery industry, including negative electrode materials, on
their production scale and process technology, product quality and performance, comprehensive utilization of resources and environmental
protection and safety management, etc. However, the Standardization Conditions is not pre-emptive and mandatory for administrative approval.
The
MIIT further enacted the
Management Measures of Standardization Announcement of Lithium Battery Industry
according to the Standardization
Conditions on January 16, 2019, which was latest amended on December 10, 2021, and provides that the responsible departments of industry
and information technology in each province, autonomous region and municipality directly under the central government are responsible
for the acceptance, verification and submission of announcement applications for lithium battery industry enterprise in the region, and
for supervising and checking the implementation of the Standardization Conditions.
Regulations
Related to Production Safety
According
to the
Production Safety Law of the PRC
(the "Production Safety Law")latest amended by the Standing Committee of the
National People's Congress (the "SCNPC") on June 10, 2021 and came into effect on September 1, 2021, an enterprise
shall (i) provide production safety conditions as stipulated in the Production Safety Law and other relevant laws, administrative regulations,
national and industry standards, (ii) establish a comprehensive production safety accountability system and production safety rules,
and (iii) develop production safety standards to ensure production safety. Any entity that fails to provide required production safety
conditions is prohibited from engaging in production activities. The person-in-charge of an enterprise shall be fully responsible for
the safety of production of the enterprise. An enterprise having more than 100 employees shall establish a production safety management
institution or be equipped with dedicated production safety management personnel.
64
According
to the
Measures for the Supervision and Administration of "Three Simultaneities" for the Safety Facilities of Construction
Projects
promulgated by the former State Administration of Work Safety (currently known as the Ministry of Emergency Management)
on December 14, 2010 and amended on April 2, 2015, the safety facilities in a newly built, reconstructed or expanded construction project
must be designed, constructed and put into use in production simultaneously with the main body of the project. The enterprises shall
demonstrate and pre-assess the safety conditions of its construction projects, make a safety design chapter, submit to the relevant work
safety administrative department for examination or filing, and apply to the work safety administrative department for the completion
and acceptance or the filing of its projects. If an enterprise violates the relevant requirements, it may be warned and be ordered to
make corrections within a specified time limit. Failure to make correction within the specified time limit may result in the enterprise
being ordered to discontinue the construction process or suspend its production and business operation for rectification, and being imposed
a fine.
On
July 5, 2022, Sunrise Guizhou completed the filing-for-record procedures with local work safety administrative department for its construction
of the first phase of the manufacturing plant.
Regulations
Related to Product Quality
According
to the
Product Quality Law of the PRC
(the "Product Quality Law"), promulgated on February 22, 1993 and last amended
on December 29, 2018 by the SCNPC, producers and sellers shall establish a sound internal product quality control system and strictly
adhere to a job responsibility system in relation to quality standards and quality liabilities together with implementing corresponding
examination and inspection measures. The counterfeiting or imitation of quality marks such as certification marks is prohibited; falsifying
the place of origin of product, and falsifying or imitating the name or address of another factory is prohibited; adulteration of, or
mixing of improper elements with products under manufacturing or on sale, passing off the sham as the genuine or passing off the inferior
as the superior is prohibited. Any manufacturer or seller who violates the Product Quality Law may be subject to (i) administrative penalties
including suspension of production or sale, ordered correction of illegal activities, confiscation of products subject to illegal production
or sale, imposition of fines, confiscation of illegal gains and, in severe cases, revocation of business license; and (ii) criminal liabilities
if the illegal activity constitutes crime.
As
of the date of this annual report, Sunrise Guizhou has passed the ISO14001, ISO45001, ISO9001 and IATF16949 quality management system
certification for its development and manufacturing of graphite anode materials for lithium-ion batteries.
Regulations
Related to Real Properties
Land
Pursuant
to the
Land Administration Law of the PRC
, which became effective from 1 January 1987 and was last amended on 26 August 2019,
and the
Regulation on the Implementation of the Land Administration Law of the PRC
, which became effective from 1 February1991
and was last amended on 2 July 2021, issues related to the ownership of land, land use right, the overall planning of land use, the protection
of cultivated land and the construction land in the PRC are all subject to the supervision of the above laws and regulations.
Property
Rights
Pursuant
to
the Civil Code of the PRC
, civil relationships arising from the possession and the use of property (including ownership, usufructuary
right, security rights to the property and possession) are subject to the law, of which a holder of the land use right of the construction
land enjoys the rights to possess, use and seek proceeds from the state-owned land as prescribed by the laws and the rights to build
buildings, structures and their accessory facilities on such land. A mortgage can be set up on the land use right of the construction
land, buildings and other land affiliated items as prescribed by the laws.
Construction
Under Progress
Pursuant
to the
Law of Urban and Rural Planning of the PRC
, which became effective from 1 January 2008 and was last amended on 23 April
2019,
Construction Law of the PRC
, which became effective from 1 March 1998 and was last amended on 23 April 2019,
Administrative
Measures for Construction Permits of Construction Projects
, which became effective on 25 October 2014 and was last amended on 30
March 2021 and the
Regulations on the Administration of Construction Project Quality
, which became effective from 30 January 2000
and was last amended on 23 April 2019, construction activities carried out in the preoccupied areas of cities, towns and villages and
in areas subject to planning control due to the needs of urban and rural construction and development shall comply with the relevant
requirements of the
Law of Urban and Rural Planning of the PRC
, under which the construction enterprises shall obtain the Construction
Land Use Planning Permit and Construction Works Planning Permit from the competent urban and rural planning department of the City and
County People's Government and apply for the Construction Permit with the competent housing and urban-rural department of the People's
Government above county level at places where the construction projects are located before construction commences as prescribed by the
laws. Upon receiving the completion report of the construction project, the construction enterprise shall organize the acceptance inspection
by the relevant design, construction and supervision enterprises.
65
Sunrise
Guizhou obtained the approval for the Construction Land Use Planning Permit and the Construction Works Planning Permit from local urban
and rural planning department in March 2022, and obtained the Construction Permit from local housing and urban-rural department in April
and July 2022, for its construction of the first phase of the manufacturing plant.
Regulations
Related to Environmental Protection
According
to the
Environmental Protection Law of the PRC
(the "Environmental Protection Law") promulgated by the SCNPC on December
26, 1989 and last amended on April 24, 2014, any entity that discharges or will discharge pollutants in the course of operation or other
activities must implement effective environmental protection measures to control and properly handle of hazardous substances such as
waste gas, waste water, waste residues, dust, malodorous gases, radioactive substances, noise, vibration and electromagnetic radiation
generated in the course of such activities. The State implements a pollutant discharge permit management system in accordance with the
law. According to the Environmental Protection Law and the
Regulations on the Administration of Pollutant Discharge Licensing
,
which was promulgated by the State Council on January 24, 2021 and came into effect on March 1, 2021, enterprises, business units and
other producers and operators that implement the pollutant discharge licensing management shall discharge pollutants according to the
requirements of the pollutant discharge license, and shall not discharge pollutants without obtaining the pollutant discharge license.
The competent environmental protection authorities impose various administrative penalties on individuals or enterprises in violation
of the Environmental Protection Law, for example, if an entity discharges pollutant in violation of the pollutant discharge standards
or volume control requirement, the entity would be subject to administrative penalties, including order to suspend business for rectification,
and even order to terminate or close down business under severe circumstances.
Pursuant
to the
Regulations on the Administration of Environmental Protection of Construction Projects
promulgated by the State Council
on November 29, 1998 and amended on July 16, 2017 and the
Interim Measures for Environmental Protection Acceptance Examination Upon
Completion of Construction Projects
promulgated by the former Ministry of Environmental Protection on November 20, 2017, the PRC
implements a system to appraise the environmental impact of construction projects. The construction entity shall submit an environmental
impact report or an environmental impact statement for approval prior to the commencement of the construction project, or an environmental
impact registration form as required by the environmental protection administrative department of the State Council for record. In addition,
after the completion of a construction project for which an environmental impact report or an environmental impact statement has been
prepared, the construction entity shall, in accordance with the standards and procedures prescribed by the competent administrative department
of environmental protection under the State Council, conduct acceptance checks on the supporting environmental protection facilities
and prepare an acceptance report. For construction projects that are constructed in phases or put into production or use in phases, the
corresponding environmental protection facilities shall be inspected and accepted in phases. The construction project can only be put
into production or use after the completed supporting environmental protection facilities have passed the acceptance inspection. Facilities
that have not been carried out or have not passed the acceptance examination shall not be put into production or use.
According
to the
Environmental Protection Tax Law of the PRC
promulgated by the SCNPC on December 25, 2016, amended on October 26, 2018
and implemented on the same day, and the
Regulations for the Implementation of the Environmental Protection Tax Law of the PRC
came into effective on January 1, 2018, (i) enterprises, public institutions and other producers and operators that directly discharge
pollutants to the environment within the territory of the PRC and other sea areas under the jurisdiction of the PRC are taxpayers of
environmental pollution tax, and shall pay environmental pollution tax in accordance with the aforementioned laws and regulations, (ii)
the
Administrative Regulations on the Collection and Use of Pollutant Discharge Fees
was repealed and no more pollutant discharge
fees shall be collected.
On
February 25, 2022, Sunrise Guizhou obtained the approval for the Environmental Impact Report for its construction of the first phase
of the manufacturing plant. And on April 25, 2022, Sunrise Guizhou obtained the Pollutant Discharge License, which will remain effective
for 5 years.
Regulations
Related to Fire Control
According
to the Fire Control Law of the PRC promulgated by the SCNPC on April 29, 1998 and last amended on April 29, 2021, the fire control design
and construction of a construction project shall comply with the national fire control technical standards for construction projects.
Upon completion of construction of a development project which is required to apply for fire safety inspection and acceptance as stipulated
by the housing and urban-rural development authority of the State Council, the developer shall apply to the housing and urban-rural development
authority for fire safety inspection and acceptance. For development projects other than those stipulated in the preceding paragraph,
the developer shall complete filing formalities with the housing and urban-rural development authority following the inspection and acceptance,
the housing and urban-rural development department shall conduct spot check. Where a development project which is required by law to
undergo fire safety inspection and acceptance does not undergo fire safety inspection and acceptance, or does not pass fire safety inspection
and acceptance, the project shall not be put into use; the use of other development projects which do not pass inspection in spot checks
carried out pursuant to the law shall be suspended.
On
March 16, 2023, Sunrise Guizhou obtained the Filing Certificate for Fire Safety Inspection and Acceptance of Construction Project from
local urban and rural development authority for its construction of the first phase of the manufacturing plant.
66
C.
Organizational Structure
The
following diagram illustrates our current corporate structure, which includes our significant subsidiaries as of the date of this annual
report:
Contractual
Arrangements among GIOP BJ, the VIE and Its Shareholders
Neither
we nor our subsidiaries own any equity interest in the VIE. Instead, we control and receive the economic benefits of the VIE's
business operation through a series of contractual arrangements. GIOP BJ, the VIE and its shareholders entered into a series of contractual
arrangements, also known as VIE Agreements, in June 2019. Pursuant to the VIE Agreements, GIOP BJ holds the contractual right to control
and operate the business of the VIE. Therefore, pursuant to ASC 810, the VIE has been included in the Company's consolidated financial
statements since June 2019.
Each
of the VIE Agreements is described in detail below:
Exclusive
Technical and Consulting Services Agreement
Pursuant
to the Exclusive Technical and Consulting Services Agreement between the VIE and GIOP BJ (the "Exclusive Service Agreement"),
GIOP BJ provides the VIE with technical support, consulting services, business support and other management services relating to its
day-to-day business operations and management, on an exclusive basis, utilizing its advantages in technology, human resources, and information.
For services rendered to the VIE by GIOP BJ under the Exclusive Service Agreement, GIOP BJ is entitled to collect a service fee approximately
equal to the VIE's earnings before corporate income tax, i.e., the VIE's revenue after deduction of operating costs, expenses
and other taxes, subject to adjustment based on services rendered and the VIE's operation needs.
This
agreement became effective on June 10, 2019 and will remain effective unless otherwise terminated as required by laws or regulations,
or by relevant governmental or regulatory authorities. Nevertheless, this agreement shall be terminated after all the equity interest
in the VIE held by its shareholders and/or all the assets of the VIE have been legally transferred to GIOP BJ and/or its designee in
accordance with the Exclusive Option Agreement.
The
CEO of GIOP BJ, Mr. Haiping Hu, is currently managing the VIE pursuant to the terms of the Exclusive Service Agreement. The Exclusive
Service Agreement does not prohibit related party transactions. The Company's audit committee is required to review and approve
in advance any related party transactions, including transactions involving GIOP BJ or the VIE.
67
Equity
Pledge Agreement
Under
the Equity Pledge Agreement between GIOP BJ, and shareholders of the VIE, together holding 100% of the shares of the VIE (the "VIE
Shareholders"), the VIE Shareholders pledged all of their equity interests in the VIE to GIOP BJ to guarantee the performance of
the VIE's obligations under the Exclusive Service Agreement. Under the terms of the Equity Pledge Agreement, in the event that
the VIE or the VIE Shareholders breach their respective contractual obligations under the Exclusive Service Agreement, GIOP BJ, as pledgee,
will be entitled to certain rights, including, but not limited to, the right to collect dividends generated by the pledged equity interests.
The VIE Shareholders also agreed that upon occurrence of any event of default, as set forth in the Equity Pledge Agreement, GIOP BJ is
entitled to dispose of the pledged equity interests in accordance with applicable PRC laws. The VIE Shareholders further agreed not to
dispose of the pledged equity interests or take any actions that would prejudice GIOP BJ's interests without the prior written
consent of GIOP BJ.
The
Equity Pledge Agreement is effective until: (1) the secured debt in the scope of pledge is cleared off; and (2) Pledgers transfer all
the pledged equity interests to Pledgees according to the Exclusive Option Agreement, or other entity or individual designated by it.
The
purposes of the Equity Pledge Agreement are to (1) guarantee the performance of the VIE's obligations under the Exclusive Service
Agreement; (2) make sure the VIE Shareholders do not transfer or assign the pledged equity interests, or create or allow any encumbrance
that would prejudice GIOP BJ's interests without GIOP BJ's prior written consent. In the event the VIE breaches its contractual
obligations under the Exclusive Service Agreement, GIOP BJ will be entitled to dispose of the pledged equity interests.
Exclusive
Option Agreement
Under
the Exclusive Option Agreement, the VIE Shareholders irrevocably granted GIOP BJ (or its designee) an exclusive option to purchase, to
the extent permitted under PRC law, once or at multiple times, at any time, part or all of their equity interests in the VIE or the assets
of the VIE. The option price to be paid by GIOP BJ to each shareholder of the VIE is RMB10 (approximately US$1.47) or the minimum amount
to the extent permitted under PRC law at the time when such transfer occurs.
Under
the Exclusive Option Agreement, GIOP BJ may at any time under any circumstances, purchase, or have its designee purchase, at its discretion,
to the extent permitted under PRC law, all or part of the VIE Shareholders' equity interests in the VIE or the assets of the VIE.
The Exclusive Option Agreement, together with the Equity Pledge Agreement, the Exclusive Service Agreement, and Powers of Attorney, enable
GIOP BJ to exercise effective control over the VIE.
The
Exclusive Option Agreement remains effective until all the equity or assets of the VIE is legally transferred under the name of GIOP
BJ and/or other entity or individual designated by it, or unilaterally terminated by GIOP BJ with a 30-day written notice.
Powers
of Attorney
Under
each of the Powers of Attorney, the VIE Shareholders authorized GIOP BJ to act on their behalf as their exclusive agent and attorney
with respect to all rights as shareholders, including, but not limited to: (a) attending shareholders' meetings; (b) exercising
all the shareholder's rights, including voting, that shareholders are entitled to under the laws of China and the Articles of Association,
including, but not limited to, the sale or transfer or pledge or disposition of shares in part or in whole; and (c) designating and appointing
on behalf of shareholders the legal representative, the executive director, supervisor, the chief executive officer, and other senior
management members of the VIE.
The
Powers of Attorney are irrevocable and continuously valid from the date of execution of the Powers of Attorney, so long as the VIE Shareholders
own the equity interests of the VIE.
68
Spousal
Consent
Pursuant
to the Spousal Consent, each spouse of the individual shareholders of the VIE irrevocably agreed that the equity interest in the VIE
held by their respective spouses would be disposed of pursuant to the Equity Pledge Agreement, the Exclusive Option Agreement, and the
Powers of Attorney. Each spouse of the shareholders agreed not to assert any rights over the equity interest in the VIE held by their
respective spouses. In addition, in the event that any spouse obtains any equity interest in the VIE through the respective shareholder
for any reason, he or she agreed to be bound by the contractual arrangements.
D.
Property,
Plants and Equipment
I.
The VIE currently maintains offices in Beijing and Shanghai in the PRC. The total office space is 1,205 square meters including both
leased and owned properties. The VIE leases 567 square meters of office space under a non-cancelable operating lease agreement with expiration
dates through December 31, 2023. Operating lease expense amounted to $270,254, $244,045, and $352,645 for the years ended December 31,
2022, 2021, and 2020, respectively. In December 2019, the Company signed property purchase agreements to acquire four properties in Beijing
with approximately an aggregate of 638 square meters of office space for a total consideration of US$2,991,492. The Company paid US$1,204,094
as a prepayment during the year ended December 31, 2019 and paid the rest of the consideration of US$1,787,398 and acquired the ownership
of the properties in May 2020.
II.
Sunrise Guizhou maintains the below corporate office space and manufacturing properties in China.
The
following table sets forth the location, approximate size, primary use and lease term of major facilities:
Location
Approximate
Gross Land Area
in Square Meters
Primary
                                            Use (Gross Floor Area
in
                                            Square Meters)
Lease or Own
Yilong New Area, Qianxinan
    Prefecture, Guizhou Province,China
260,543
Office (3,434),
Manufacturing (24,879)
staff dormitory (4,919)
own
Future
minimum lease payments under non-cancellable operating leases as of December 31, 2022 was nil.
69
ITEM 4.A.
UNRESOLVED
STAFF COMMENTS
None.
ITEM 5.
OPERATING
AND FINANCIAL REVIEW AND PROSPECTS
The
following discussion of the Company's financial condition and results of operations is based upon and should be read in conjunction
with the Company's consolidated financial statements and their related notes included elsewhere in this annual report. This annual
report contains forward-looking statements. See "Forward-Looking Information" in this annual report. In evaluating our business,
you should carefully consider the information provided under the caption "Item 3. Key Information—D. Risk Factors"
in this annual report. The Company caution you that its businesses and financial performance are subject to substantial risks and uncertainties.
Overview
The
VIE, or SDH, started operating as a consulting company providing enterprise services to small and medium-sized enterprises in the PRC
in December 2014, and launched its peer-to-peer knowledge sharing and enterprise service platform in May 2016. Since then, SDH has continued
to expand and improve its platform, where knowledge is shared and gained, and services are requested and provided. Operating its platform
through its PRC operating entity, SDH and its subsidiaries, both on-line, via the mobile application "Shidonghui App" (the
"APP"), and off-line, through its local offices in Beijing, Shanghai, Zibo and Guizhou in China.
Substantially
all of SDH's operations are conducted in the PRC and all of the revenues are denominated in RMB. Foreign ownership of certain parts
of its businesses including the value-added telecommunications services, or the VATS, is subject to restrictions under current PRC laws
and regulations. See "
Regulations—Regulations Related to Foreign Investment
." We have relied and expect to continue
to rely on contractual arrangements with SDH, its subsidiaries and shareholders to operate the business in China. For a description of
these contractual arrangements and uncertainties regarding the interpretation and application of current or future PRC laws and regulations,
see "
Business—Contractual Arrangements between GIOP BJ, SDH and Its Shareholders.
" and "
Risks Related
to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating our businesses
in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing
regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
".
When
SDH launched its platform, the aim was not only to continue providing enterprise services to PRC's growing business communities,
but also create a marketplace where qualified entities (individuals and enterprises) have opportunities to serve as providers, and receive
rewards by sharing their knowledge with others on the platform. As of April 2023, our knowledge sharing and enterprise service ecosystem
had 784 Mentors, 1,930 Experts, and 518,659 Users. In addition to serving the Users and Members, SDH continues to provide enterprise
services to small and medium-sized enterprises in China, through a dedicated team with ten full-time professional consultants, as well
as the Mentors and Experts. The providers (Mentors, Experts and consultants) are successful entrepreneurs, scientists, investors, and
professionals with qualifications and achievements in major industries such as finance, energy, health care, and academia. SDH's
core strength is the knowledge brought by its providers, highlighted by their experiences, knowledge, industry know-how, and social connections.
70
In April 2022, the Company entered into the graphite
anode material manufacturing and sales business through a joint venture, Sunrise Guizhou, of which the Company currently owns 39.35%
through its wholly owned subsidiary, Zhuhai Zibo. The Company consolidates Sunrise Guizhou's financials because it owns a majority
of seats on its board of directors and control its financial and operating policies pursuant to an agreement among its funding shareholders.
Sunrise Guizhou is located at Yilong New District, Xingyi City, Qian Southwest State, Guizhou Province, China. The land use of Sunrise
Guizhou's graphite anode manufacturing site is approximately 260,543 square meters. Sunrise Guizhou purchased the site in March
2022 for approximately $6.6 million. Sunrise Guizhou began construction of the manufacturing plant in April 2022, and the first phase
the construction of (20,000 tons annual manufacturing capacity) of the manufacturing plant has been completed as of the date of this
annual report. The inspections have been scheduled to take place in Mid-March, and are expected to be completed in June 2023. The second
phase of the construction of the manufacturing plant (10,000 tons annual manufacturing capacity) is ongoing and expected to be completed
June 2023, and the third phase of construction of the manufacturing plant (20,000 tons annual manufacturing capacity) was approved by
the board of the directors of the Company in March 2023, and is expected to start in July 2023.
Impact
from COVID-19
In
early January of 2020, a novel coronavirus ("COVID-19") outbreak took place in Wuhan, China. Subsequently, it has spread
rapidly to Asia and other parts of the world. The COVID-19 outbreak has resulted in widespread economic disruptions in China, as well
as stringent government measures by the Chinese government to contain its transmissions including quarantines, travel restrictions, and
temporary closures of non-essential businesses in China and elsewhere.
Essentially
all SDH's revenues and operations are generated in China. Consequently, the results of operations and financial performances was
affected materially for the year ended December 31, 2022. Due to the government restrictions, SDH was prevented from arranging offline
activities generally for the year ended December 31, 2022, resulting in cancellations or postponements of study tours, forums and sponsorship
advertising events. For the year ended December 31, 2022, revenue from knowledge sharing and enterprise service business decreased by
$6,864,281 or 92.64% as compared to the same period of 2021.
Sunrise
Guizhou's graphite anode material manufacturing and sales business in Guizhou Province has not been severely impacted by the COVID-19
locks downs, primarily due to its relatively remote location.
Although the PRC government relaxed its COVID-19
restrictions since December 2022, there still remains uncertainties as to the future development of the COVID-19. The Company is operating
in a rapidly changing environment so the extent to which COVID-19 may impact its business, operations and financial results from this
point forward will depend on numerous evolving factors that the Company cannot accurately predict.
71
Results
of Operations
The
following table summarizes the results of the Company's operations during the years ended December 31, 2022, 2021 and 2020, respectively,
and provides information regarding the dollar and percentage increase or decrease during such periods.
For the years ended
December
    31,
2022
2021
2020
REVENUE, NET
Products
$
37,583,844
$
2,104,767
$
1,495,380
Service
541,824
5,304,505
21,685,704
Total revenues
38,125,668
7,409,272
23,181,084
COSTS OF REVENUES
Products
38,299,090
2,063,296
892,791
Service
1,176,956
1,823,358
2,087,425
Total cost of revenues
39,476,046
3,886,654
2,980,216
GROSS (LOSS) PROFIT
(1,350,378
)
3,522,618
20,200,868
OPERATING EXPENSES
Selling expenses
1,075,980
946,775
906,456
General and administrative expenses
12,678,873
7,834,291
3,897,040
Research and development expenses
1,053,882
2,151,565
671,312
Impairment of intangible assets
2,650,020
-
-
Total operating expenses
17,458,755
10,932,631
5,474,808
(LOSS) PROFIT FROM OPERATIONS
(18,809,133
)
(7,410,013
)
14,726,060
OTHER (EXPENSES) INCOME
Investment losses
(3,566,561
)
(2,118,453
)
(1,087
)
Interest (expense) income
(27,128
)
173,173
214,460
Other income, net
87,390
404,380
72,837
Total other (expenses)
    income
(3,506,299
)
(1,540,900
)
286,210
(LOSS) PROFIT BEFORE INCOME TAXES
(22,315,432
)
(8,950,913
)
15,012,270
Income taxes provision (benefit)
808,970
(236,581
)
3,054,983
NET (LOSS) INCOME
(23,124,402
)
(8,714,332
)
11,957,287
Less: net loss attributable to non-controlling
    interests
(720,036
)
(311,072
)
(130,240
)
NET (LOSS) INCOME ATTRIBUTABLE
    TO SUNRISE NEW ENERGY CO., LTD. ORDINARY SHAREHOLDERS
$
(22,404,366
)
$
(8,403,260
)
12,087,527
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment
(5,123,965
)
700,316
2,076,303
TOTAL COMPREHENSIVE (LOSS) INCOME
(28,248,367
)
(8,014,016
)
14,033,590
Less: comprehensive loss attributable to
    non-controlling interest
(2,788,650
)
(321,522
)
(91,862
)
COMPREHENSIVE (LOSS) INCOME
    ATTRIBUTABLE TO ORIDNARY SHAREHOLDERS OF SUNRISE NEW ENERGY CO., LTD.
$
(25,459,716
)
$
(7,692,494
)
14,125,452
(LOSS) EARNINGS PER SHARE
Basic and diluted
$
(0.90
)
$
(0.36
)
$
0.72
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic and diluted
24,820,313
23,638,751
16,800,000
72
Year
Ended December 31, 2022 Compared to Year Ended December 31, 2021
Revenues,
net
Revenues
for the years ended December 31, 2022 and 2021 were derived from the following sources:
For the year ended December 31,
2022
%
2021
%
Change
%
Graphite anode material business
$
37,580,677
98.57
%
$
-
-
$
37,580,677
100.00
%
Peer-to-peer knowledge sharing and enterprise
    business
Member services
106,724
0.28
%
498,330
6.73
%
(391,606
)
(78.58
)%
Enterprise service
-Comprehensive tailored services
153,658
0.40
%
1,433,847
19.35
%
(1,280,189
)
(89.28
)%
-Sponsorship advertising services
-
-
1,734,390
23.41
%
(1,734,390
)
(100.00
)%
-Consulting services
9,645
0.03
%
1,583,583
21.37
%
(1,573,938
)
(99.39
)%
Online services
2,100
0.01
%
40,391
0.55
%
(38,291
)
(94.80
)%
Sales of merchandises
3,165
0.01
%
2,104,766
28.41
%
(2,101,601
)
(99.85
)%
Other
    services
269,699
0.71
%
13,965
0.18
%
255,734
1,831.25
%
Revenues, net
$
38,125,668
100.00
%
$
7,409,272
100.00
%
$
30,716,396
414.57
%
Revenues
increased by $30,716,396, or 414.57%, from $7,409,272 for the year ended December 31, 2021, to $38,125,668 for the year ended December
31, 2022. Revenues from graphite anode material business accounted for 98.57% of net revenues for year ended December 31, 2022, as compared
to nil for year ended December 31, 2021. Revenue from peer-to-peer knowledge sharing and enterprise business accounted for 1.43% and
100% of net revenues for the years ended December 31, 2022 and 2021, respectively. The change was primarily attributable to the launch
of graphite anode materials business and offset by the shrink of peer-to-peer knowledge sharing and enterprise service revenue due to
the impact of COVID-19 for the year ended December 31, 2022.
Revenues
from graphite anode material sales
The
Company's products include various artificial graphite anode material products. Artificial graphite is made of petroleum coke,
needle coke and pitch coke as the main material, and formed after crushing, shaping, granulation and graphitization. The Company markets
its graphite anode products through a direct sales channel, through its sales department consists of five experienced employees, who
report directly to the CEO of the Company, who has more than 20 years of experience in the lithium-ion battery material industry, and
has accumulated extensive business connections in this industry.
For the year ended December 31, 2022, the Company
had supplied products to 16 customers. The Company's customers were manufacturers of industrial and consumer energy storage lithium-ion
batteries, such as batteries for electric vehicles and electric ships, and smart consumer electronics. For the year ended December 31,
2022, four customers accounted for more than 10% of the Company's total sales, accounting for 28.43%, 19.54%, 19.30% and 18.87%
of the total sales, respectively. As the Company grows its customers bases, it is expected that the concentration of the sales will diminish
in the future.
Revenues
from member services
SDH
offers three tiers of membership services, Platinum, Diamond and Protégé, which differ in membership fees as well as the
level of the services provided. Members pay a fixed fee for exchange of the right to participate in seven activities, including study
tours and forums, within a typically one-year membership period.
Revenues
from member services decreased by $391,606, or 78.58%, from $498,330 for the year ended December 31, 2021, to $106,724 for the year ended
December 31, 2022. As the outbreak of the COVID-19, SDH was prevented from offering large offline activities, which resulted in a decreased
demand for member services.
Revenues
from comprehensive tailored services
There
are four major categories of SDH's comprehensive tailored services. The following table presents the type of tailored services
as well as their respective prices:
Type
    of comprehensive tailored services
Pricing
Conference and salon organization
RMB50,000 (approximately US$7,434)
Booth exhibition services
RMB50,000 (approximately US$7,434)
On-site mentors' guidance
RMB50,000-100,000 (approximately US$7,434-US$14,867)
Other additional services
RMB10,000-200,000 (approximately US$1,487 -US$29,735)
73
Revenues from comprehensive tailored services
decreased by $1,280,189, or 89.28%, from $1,433,847 for the year ended December 31, 2021, to $153,658 for the year ended December 31,
2022. Due to the impact of COVID-19, the comprehensive tailored service revenues from individual customers and some of the enterprise
customers became unstable, and the accounts receivable of these customers also became harder to collect. In addition, due to the continuous
government restrictions on public gatherings in 2022, the demand for comprehensive tailored services for large conferences and salon
organizations decreased.
Revenues
from sponsorship advertising service
Sponsorship
advertising is a special form of advertising, generally referring to a publicity strategy adopted by enterprises in order to enhance
their corporate and product image, as well as brand awareness and influence. SDH provides sponsorship advertising services for enterprise
clients at events SDH holds, such as forums and study tours.
Revenues
from sponsorship advertising services decreased by $1,734,390, or 100% from $1,734,390 for the year ended December 31, 2021, to $nil
for the year ended December 31, 2022, primarily due to the fact that offline forums and study tours were canceled due to the continuous
government restrictions on public gatherings.
Revenues
from consulting services
SDH
provides consulting services to small and medium-sized enterprises to develop strategies and solutions for the following: corporate reorganization,
product promotion and marketing, industry supply chain integration, corporate governance, financing and capital structure, etc. Revenues
from consulting services decreased by $1,573,938, or 99.39% from $1,583,583 for the year ended December 31, 2021, to $9,645 for the year
ended December 31, 2022, primarily due to the fact that small forums and salons were canceled due to the continuous government restrictions
on public gatherings.
Revenues
from online services
SDH
provides two types of online services to the Company's APP Users, which are questions and answers (Q&A) sessions with chosen
Mentors or Experts and online streaming of courses and programs. Top-up credits are paid by Users through SDH's APP, using which
Users can purchase the online services.
Revenue
from online services were immaterial in terms of amount and percentage of the net revenues for the years ended December 31, 2021 and
2022.
Revenues
from sales of merchandises
Revenues
from the sale of merchandise decreased by $2,101,601, or 99.85% from $2,104,766 for the year ended December 31, 2021 to $3,165 for the
year ended December 31, 2022. The decrease was primarily due to the fact that SDH had not organized trade conferences facilitating the
sales of merchandise due to the continuous government restrictions on public gatherings.
Costs
of revenues
The
following table sets forth the breakdown of the cost of revenues for the years ended December 31, 2022 and 2021:
For the years ended December 31,
Change
2022
%
2021
%
Amount
%
Service costs
$
1,176,956
2.98
%
$
1,823,358
46.91
%
$
(646,402
)
(35.45
)%
Cost of goods sold
38,299,090
97.02
%
2,063,296
53.09
%
36,235,794
1,756.21
%
Total costs of revenues
39,476,046
100.00
%
3,886,654
100.00
%
35,589,392
915.68
%
Service
                                            costs
The service costs primarily include (1) the cost
of holding activities, such as venue rental fees, conference equipment fees, (2) professional and consulting fees paid to third parties
for the activities; (3) the fees paid to Mentors and Experts; (4) labor costs; and (5) amortization cost of copyright. Service costs
decreased by $646,402, or 35.45% for the year ended December 31, 2022 compared to same period in 2021, mainly due to the decrease of
$540,641 in service fee and consultant fee, which was mainly because the Company held less small conferences due to the government limitation
on the scale of conferences in COVID-19.
74
Cost
of goods sold
The cost of goods sold were $38,299,090 and $2,063,296
for the years ended December 31, 2022 and 2021, respectively. The significant increase of the cost of goods sold was due to the expansion
of the graphite anode materials business, which was launched in 2022. In addition, $2,711,158 impairment on inventory, including health
service gift cards, learning course gift cards, Chinese tea, latex pillows and health care products which was in exchange of collection
of account receivables and deferred revenue due from the customers, was recoded due to the adverse effect of COVID-19 on peer-to-peer
knowledge sharing and enterprise business.
Gross (loss) profit
As a result of the foregoing, the Company reported
a gross loss of $1,350,378 for the year ended December 31, 2022. The negative gross margin was due to $3,344,511 gross loss on peer-to-peer
knowledge sharing and enterprise business. For the year ended December 31, 2022, $2,711,158 impairment on inventory was recorded due
to the adverse effect of COVID-19 and the Company maintained the necessary cost to operate peer-to-peer knowledge sharing and enterprise
business. The gross loss was partially set off by a gross profit of $1,994,133 for graphite anode material sales business.
Operating
expenses
The
following table sets forth the breakdown of the operating expenses for the years ended December 31, 2022 and 2021:
For
    the years ended December 31,
Change
2022
%
2021
%
Amount
%
Selling
    expenses
$
1,075,980
6.16
%
946,775
8.66
%
129,205
13.65
%
General
    and administrative expenses
12,678,873
72.62
%
7,834,291
71.66
%
4,844,582
61.84
%
Research
    and development expenses
1,053,882
6.04
%
2,151,565
19.68
%
(1,097,683
)
(51.02
)%
Impairment
    of intangible assets
2,650,020
15.18
%
-
-
%
2,650,020
100
%
Total
    costs and operating expenses
17,458,755
100.00
%
10,932,631
100.00
%
6,526,124
59.69
%
Selling
expenses
The selling expenses increased by $129,205 or
13.65%, from $946,775 for the year ended December 31, 2021 to $1,075,980 for the year ended December 31, 2022. Such increase was primarily
due to (1) an increase of travel expenses of $51,662 and entertainment expenses of $35,357, which was mainly due to increasing needs
for marketing activities to the launch of graphite anode materials business; and (2) an increase of $39,301 of share-based compensation,
as the Company adopted the 2022 Stock Incentive Plan for the grant of restricted share units to sales employees.
General
and administrative expenses
The general and administrative expenses increased
by $4,844,582, or 61.84%, from $7,834,291 for the year ended December 31, 2021 to $12,678,873 for the year ended December 31, 2022. Such
increase was primarily due to (1) an increase of bad debt expenses of $ $364,346, which was mainly due to the fact that as the Company
experienced a slow-down in the collection of accounts receivable resulting from impact from COVID-19 for the year ended December 31,
2022 on peer-to-peer knowledge sharing and enterprise service business; (2) an increases of $1,191,284 due to outsourced labor that due
to the launch of graphite anode material business in August 2022, as the Company recruited factory workers and security personnel from
labor outsourcing companies; and (3) an increase of $2,674,292 of share-based compensation as the Company adopted the 2022 Stock Incentive
Plan for the grant of restricted share units to employees, directors and non-employees to provide incentive for their services.
75
Research
and development expenses
Research and development expenses decreased by
$1,097,683 or 51.02%, from $2,151,565 for the year ended December 31, 2021 to $1,053,882 for the year ended December 31, 2022. Research
and development expenses for the year ended December 31, 2022 was mainly associated with the research development activities of graphite
anode material business, including technology service, technical service, purchasing laboratory chemical material collaterals, while
in the year ended December 31, 2021, as SDH hired more personnel to update and support the mobile application, or the APP, to meet Users'
increasing needs.
Impairment
of intangible assets
Impairment
of intangible assets increased from $nil for the year ended December 31, 2021 to $2,650,020 for the year ended December 31, 2022. The
impaired intangible assets for the year ended December 31, 2022 were associated with the copyrights of course videos purchased from a
third party including but not limited to course videos which cover subjects such as entrepreneurship development, financial service,
corporate governance, team management, marketing strategy and etc. The peer-to-peer knowledge sharing and enterprise service business
was adversely affected by COVID-19 for the year ended December 31, 2022. The Company online service was $2,100 for the year ended December
31, 2022.The Company reviewed its copyright of course videos for impairment in the event of the adverse change to market conditions that
would impact the future use of the copyrights. It indicated that the carrying amount of an asset might no longer be recoverable as of
December 31, 2022.
Other
expenses (income), net
The total net other expenses were $3,506,299
for the year ended December 31, 2022, and was $1,540,900 for the year ended December 31, 2021. The net of other expenses for the year
ended December 31, 2022 was primarily consisted of the investment loss of $3,618,847 which was mainly attributed by the investment loss
in a trust fund of $2,625,349 and impairment loss of $979,426 on long-term investment. The net of other expenses for the year ended December
31, 2021 primarily consisted of the investment loss of $2,118,453, which was mainly attributed to the investment loss in a trust fund
of $2,038,395, which was partially offset by the government subsidies of $413,422.
Income
taxes provision
Cayman
Islands
Under
the current tax laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains. In addition, no Cayman
Islands withholding tax will be imposed upon the payment of dividends by the Company to its shareholders.
Hong
Kong
In
accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within
Hong Kong at the applicable tax rate on taxable income. From year of assessment of 2019/2020 onwards, Hong Kong profit tax rates are
8.25% on assessable profits up to HK$2,000,000, and 16.5% on any part of assessable profits over HK$2,000,000. However, the Company's
HK subsidiary did not generate any assessable profits arising in or derived from Hong Kong for the fiscal years ended December 31, 2022,
2021 and 2020, and accordingly no provision for Hong Kong profits tax has been made in these periods.
China
The
Company's subsidiaries are incorporated in the PRC, and are subject to the PRC Enterprise Income Tax Laws ("EIT Laws")
with the statutory income tax rate of 25% with the following exceptions.
In
accordance with the implementation rules of EIT Laws, a qualified "High and New Technology Enterprise" ("HNTE")
is eligible for a preferential tax rate of 15%. The HNTE certificate is effective for a period of three years. An entity could re-apply
for the HNTE certificate when the prior certificate expires. SDH obtained its HNTE certificate on October 25, 2017, and renewed in 2021.
Therefore, SDH is eligible to enjoy a preferential tax rate of 15% from 2017 to 2023 to the extent it has taxable income under the EIT
Law.
76
For
qualified small and thin-profit enterprises, the annual taxable income up to RMB 1 million (inclusive) is subject to an effective EIT
rate of 2.5% from 1 January 2021 to 31 December 2022; where the annual taxable income exceeds RMB 1 million but does not exceed RMB 3
million (inclusive), the amount in excess of RMB 1 million is subject to an effective EIT rate of 5% from 1 January 2022 to 31 December
2024. GMB Consulting was eligible to enjoy a preferential tax rate of 5% from 2018 to 2021. Shidong Health was eligible to enjoy a preferential
tax rate of 2.5% in 2022.
The PRC income taxes expense was $808,970 for
the year ended December 31, 2022, primarily generated by the changes in valuation allowance. The income tax benefit was $236,581 for
the year ended December 31, 2021.
Net
loss
As
a result of the foregoing, the Company reported a net loss of $23,124,402 for the year ended December 31, 2022, compared to $8,403,260
for the year ended December 31, 2021.
Net
loss attributable to non-controlling interest
Non-controlling
interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the
controlling shareholder. As of December 32, 2022, for the Company's consolidated subsidiaries, VIE and VIE' s subsidiaries,
non-controlling interests represent: a) a minority shareholder's 49% ownership interest in GMB (Beijing), GMB Consulting, Nanyu
Culture and Jiagui Haifeng; b) a minority shareholder's 60.65% ownership interest in Sunrise Guizhou; c) a minority shareholder's
49% ownership interest in GMB Culture, which has a subsidiary called GMB Technology; and d) a minority shareholder's 25% ownership
interest in Shidong Cloud, and 40% ownership interest in Shidong Trading.
Net
loss attributable to the ordinary shareholders
Net
loss attributable to the ordinary shareholders was $22,404,366 for the year ended December 31, 2022, compared to $8,403,260 for the year
ended December 31, 2021.
Year
Ended December 31, 2021 Compared to Year Ended December 31, 2020
Revenues,
net
Revenues
for the year ended December 31, 2021 and 2020 were derived from the following sources:
For the year ended December 31,
2021
%
2020
%
Change
%
Member services
$
498,330
6.73
%
$
872,629
3.76
%
$
(374,299
)
(42.89
)%
Enterprise service
-Comprehensive tailored services
1,433,847
19.35
%
13,345,880
57.57
%
(11,912,033
)
(89.26
)%
-Sponsorship advertising services
1,734,390
23.41
%
6,598,527
28.47
%
(4,864,137
)
(73.72
)%
-Consulting services
1,583,583
21.37
%
416,634
1.80
%
1,166,949
280.09
%
Online services
40,391
0.55
%
361,933
1.56
%
(321,542
)
(88.84
)%
Sales of merchandises
2,104,766
28.41
%
1,495,365
6.45
%
609,401
40.75
%
Other services
13,965
0.18
%
90,116
0.39
%
(76,151
)
(84.50
)%
Revenues, net
$
7,409,272
100.00
%
$
23,181,084
100.00
%
$
(15,771,812
)
(68.04
)%
77
Revenues
decreased by $15,771,812, or 68.04%, from $23,181,084 for the year ended December 31, 2020, to $7,409,272 for the year ended December
31, 2021. Revenues from Member services accounted for 6.73% of net revenues in the year ended December 31, 2021, as compared to 3.76%
in year ended December 31, 2020. Revenue from enterprise services accounted for 64.13% and 87.84% of net revenues for the years ended
December 31, 2021 and 2020, respectively. Revenue from sales of merchandise accounted for 28.41% and 6.45% of net revenues for the years
ended December 31, 2021 and 2020, respectively. The decrease in revenues was primarily attributable to the decrease in the revenue generated
from comprehensive tailored services, sponsorship advertising services, member services and partially offset by the increase of revenue
from consulting services and sales of merchandises.
Revenues
from member services
SDH
offers three tiers of membership services, Platinum, Diamond and Protégé, which differ in membership fees as well as the
level of the services provided. Members pay a fixed fee for exchange of the right to participate in seven activities, including study
tours and forums, within a typically one-year membership period.
Revenues
from member services decreased by $374,299, or 42.89%, from $872,629 for the year ended December 31, 2020, to $498,330 for the year ended
December 31, 2021. Due to the COVID-19 pandemic, SDH was prevented from offering large offline activities, which resulted in a decreased
demand for member services.
Revenues
from comprehensive tailored services
There
are four major categories of SDH's comprehensive tailored services. The following table presents the type of tailored services
as well as their respective prices:
Type
    of comprehensive tailored services
Pricing
Conference
    and salon organization
RMB50,000
    (approximately US$7,249)
Booth
    exhibition services
RMB50,000
    (approximately US$7,249)
On-site
    mentors' guidance
RMB50,000-100,000
    (approximately US$7,249-US$14,498)
Other
    additional services
RMB10,000-200,000
    (approximately US$1,450 -US$28,996)
Revenues
from comprehensive tailored services decreased by $11,912,033, or 89.26%, from $13,345,880 for the year ended December 31, 2020, to $1,433,847
for the year ended December 31, 2021. Due to the impact of COVID-19, the comprehensive tailored service revenues from individual customers
and some of the enterprise customers became unstable, and the accounts receivable of these customers also became harder to collect. In
addition, due to the continuous government restrictions on public gatherings in 2021, the demand of comprehensive tailored services for
large conference and salon organization decreased.
Revenues
from sponsorship advertising service
Sponsorship
advertising is a special form of advertising, generally referring to a publicity strategy adopted by enterprises in order to enhance
their corporate and product image, as well as brand awareness and influence. SDH provides sponsorship advertising services for enterprise
clients at events SDH holds, such as forums and study tours.
Revenues
from sponsorship advertising services decreased by $4,864,137, or 73.72% from $6,598,527 for the year ended December 31, 2020, to $1,734,390
for the year ended December 31, 2021, primarily due to the fact that offline forums and study tours were canceled due to the continuous
government restrictions on public gatherings.
Revenues
from consulting services
SDH
provides consulting services to small and medium-sized enterprises to develop strategies and solutions for the following: corporate reorganization,
product promotion and marketing, industry supply chain integration, corporate governance, financing and capital structure, etc. Revenues
from consulting services increased by $1,166,949, or 280.09% from $416,634 for the year ended December 31, 2020, to $1,583,583 for the
year ended December 31, 2021, primarily due to the fact that SDH managed to hold more small forums and salons to provide consulting services
instead of large conferences.
78
Revenues
from online services
SDH
provides two types of online services to the Company's APP Users, which are questions and answers (Q&A) sessions with chosen
Mentors or Experts and online streaming of courses and programs. Top-up credits are paid by Users through SDH's APP, using which
Users can purchase the online services.
Revenue
from online services decreased by $321,542, or 88.84% from $361,933 for the year ended December 31, 2020 to $40,391 for the year ended
December 31, 2021. The decrease was primarily due to the fact that SDH offered more free streaming content to attract both existing and
potential clients.
Revenues
from sales of merchandises
Revenues
from the sale of merchandise increased by $609,401, or 40.75% from $1,495,365 for the year ended December 31, 2020 to $2,104,766 for
the year ended December 31, 2021. The increase was primarily due to the fact that SDH organized more small trade conferences facilitating
the sales of merchandises.
Costs
of revenues
The
following table sets forth the breakdown of the cost of revenues for the years ended December 31, 2021 and 2020:
For the years ended December 31,
Change
2021
%
2020
%
Amount
%
Service costs
$
1,823,358
46.91
%
$
2,087,425
70.04
%
$
(264,067
)
(12.65
)%
Cost of goods sold
2,063,296
53.09
%
892,791
29.96
%
1,170,505
131.11
%
Total costs of revenues
3,886,654
100.00
%
2,980,216
100.00
%
6,364,261
75.27
%
Service
costs
The
service costs primarily include (1) the cost of holding activities, such as venue rental fees, conference equipment fees, (2) professional
and consulting fees paid to third parties for the activities; (3) the fees paid to Mentors and Experts; (4) labor costs; and (5) amortization
cost of copyright. Service costs decreased by $264,067, or 12.65% for the year ended December 31, 2021 compared to same period in 2020,
mainly due to: (1) the decrease of $255,000 in consulting service cost paid to third parties for the activities, which was mainly due
to the fact that the cost control for outsource expenses; (2) the decrease of $253,913 in video maintenance service fee; and was partially
offset by the increase in conference cost of $296,549, which was mainly because the Company held more small conferences due to the government
limitation on the scale of conferences.
Cost
of goods sold
The
cost of goods sold were $2,063,296 and $892,791 for the years ended December 31, 2021 and 2020, respectively. Cost of goods sold is recognized
when revenue from sales of merchandises is recognized. The significant increase of the cost of goods sold was due to sale of electrolytic
copper, which incurred cost of goods sold of $2,000,332.
Operating
expenses
The
following table sets forth the breakdown of the operating expenses for the years ended December 31, 2021 and 2020:
For the years ended December 31,
Change
2021
%
2020
%
Amount
%
Selling expenses
946,775
8.66
%
906,456
16.56
%
40,319
4.45
%
General and administrative expenses
7,834,291
71.66
%
3,897,040
71.18
%
3,937,251
101.03
%
Research and development expenses
2,151,565
19.68
%
671,312
12.26
%
1,480,253
220.50
%
Total costs and operating
    expenses
10,932,631
100.00
%
5,474,808
100.00
%
6,364,261
75.27
%
79
Selling
expenses
The
selling expenses of $946,775 for the year ended December 31, 2021 remained stable compared with $906,456 for the year ended December
31, 2020. Although the revenues for the year ended December 31, 2021 declined while compare to that for the year ended December 31, 2020,
SDH spent more selling expenses to retain and attract customers.
General
and administrative expenses
The
general and administrative expenses increased by $3,937,251 or 101.03%, from $3,897,040 for the year ended December 31, 2020 to $7,834,291
for the year ended December 31, 2021. Such increase was primarily due to (1) an increase of bad debt expenses of $2,376,268, which was
mainly due to the fact that as SDH experienced a slow-down in the collection of accounts receivable resulting from impact from COVID-19
for the year ended December 31, 2021, the bad debt expenses increased; (2) increases of directors' and officers' liability
insurance fee of $343,611, training consulting fees of $238,704, legal fees of $131,390, independent director fees of $103,368 and miscellaneous
service fees of $383,147, including training fee, business consulting services, etc. In order to meet public company reporting and corporate
governance requirements to meet all of the demands associated with being a public company, audit fee, management insurance and miscellaneous
service fees, including training and general consulting services, increased for the year ended December 31, 2021.
Research
and development expenses
Research
and development expenses for the mobile application, the APP, increased by $1,480,253 or 220.50% from $671,312 for the year ended December
31, 2020 to $2,151,565 for the year ended December 31, 2021, primarily due to the fact that SDH hired more personnel to update and support
the APP to meet Users' increasing needs.
Other
expenses (income), net
The
total net other expenses were $1,540,900 for the year ended December 31, 2021, and the net of other income was $286,210 for the year
ended December 31, 2020. The net of other expenses for the year ended December 31, 2021 was primarily consisted of the investment loss
of $2,118,453 which was mainly attributed by the investment loss in a trust fund of $2,038,395, which was partially offset by the government
subsidies received in the amounted of $413,422. The total net of other income for the year ended December 31, 2020 was primarily consisted
of interest income of $214,460.
Income
taxes provision
The
Company was incorporated in the Cayman Islands and under the laws of the Cayman Islands; the Company is not subject to tax on its income
or capital gains. In addition, no Cayman Islands withholding tax will be imposed upon the payment of dividends by the Company to its
shareholders.
GMB
HK and New Energy HK are companies registered in Hong Kong, and are subject to income taxes within Hong Kong at the applicable tax rate
on taxable income. From the years of assessment of 2019/2020 onwards, Hong Kong profit tax rates are 8.25% on assessable profits up to
HK$2,000,000, (approximately US$257,874), and 16.5% on any part of assessable profits over HK$2,000,000. However, the Company did not
have any assessable profits arising in or derived from Hong Kong for the years ended December 31, 2021 and 2020, therefore no provision
for Hong Kong profits tax was made in these periods.
The
PRC subsidiaries and VIE are subject to the PRC Enterprise Income Tax Laws ("EIT Laws") with the statutory income tax rate
of 25%. SDH obtained its "National High Tech Enterprise" ("NHTE") certificate on October 25, 2017. SDH has completed
the process of renewing the NHTE certificate in the first quarter of 2021. Therefore, SDH is eligible to enjoy a preferential tax rate
of 15% from 2017 to 2023 to the extent it has taxable income under the EIT Laws.
80
On
January 17, 2019, the PRC State Taxation Administration issued the notice on the scope of small-scale and low-profit corporate income
tax preferential policies of the Ministry of Finance and the State Administration of Taxation, [2019] No. 13. According to which, the
taxable income of a small-scale and low-profit enterprise, whose annual taxable income is not more than RMB1,000,000, approximately US$155,003,
is reduced by 25% income, which essentially resulted in a favorable income tax rate of 5%. The qualifications of small-scale and low-profit
enterprises were examined annually by the Tax Bureau. GMB Consulting was eligible to enjoy a preferential tax rate of 5% from 2018 to
2021.
The
PRC income taxes benefit was $236,581 for the year ended December 31, 2021, primarily generated by the annual taxable loss. The income
tax provision was $3,054,983 for the year ended December 31, 2020.
Net
(loss) income
As
a result of the foregoing, the Company reported a net loss of $8,714,332 for the year ended December 31, 2021, compared to a net income
of $11,957,287 for the year ended December 31, 2020.
Net
loss attributable to non-controlling interest
Non-controlling
interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the
controlling shareholder. As of December 31, 2021, for the Company's consolidated subsidiaries, VIE and VIE' s subsidiaries,
non-controlling interests represent: a) a minority shareholder's 49% ownership interest in Sunrise (Guizhou), GMB (Beijing), GMB
Consulting, Nanyu Culture and Jiagui Haifeng; b) a minority shareholder's 49% ownership interest in GMB Culture, which has a subsidiary
called GMB Technology; c) a minority shareholder's 25% ownership interest in Shidong Cloud, and 40% ownership interest in Shidong
Trading. Net loss attributable to non-controlling interest was $311,072 and $130,240 for the years ended December 31, 2021 and 2020,
respectively, mainly due to the net loss in GMB (Beijing), GMB Culture and GMB Technology.
Net
loss (income) attributable to the ordinary shareholders
Net
loss attributable to the ordinary shareholders was $8,403,260 for the year ended December 31, 2021, and net income was $12,087,527 for
the year ended December 31, 2020.
Liquidity
and Capital Resources
As
reflected in the consolidated financial statements, the Company has been incurring $23,124,402 and $8,714,332 net losses for the years
ended December 31 2022 and 2021, respectively. Net cash used in operating activities were $9,573,401 and $5,233,182 for the years ended
December 31, 2022 and 2021, respectively. Total cash, cash equivalents and restricted cash decreased by $10,322,198 for the year ended
December 31, 2022. Management expected to continue to construct the production plant in Guizhou Sunrise. In 2022, the ongoing COVID-19
pandemic continued to negatively impact the Company's business operations. A resurgence of the COVID-19 outbreak had given rise
to economic downturns and other significant changes in regional and global economic conditions, and negatively affected the Company's
ability to execute the sales contract, fulfil customer orders, and collect customer payments timely. As a result, there was a possibility
that the Company's revenue and cash flows might underperform in the next 12 months.
These adverse conditions and events raised substantial
doubt about the Company's ability to continue as a going concern. For the next 12 months from the issuance date of this report,
the Company plans to continue implementing various measures to boost revenue and controlling the cost and expenses within an acceptable
level. The Company is in the process of transitioning peer-to-peer knowledge sharing and enterprise business to graphite anode material
business. In assessing its liquidity, management monitors and analyzes the Company's cash on-hand, its ability to generate sufficient
revenue sources and ability to obtain additional financial support in the future, and its operating and capital expenditure commitments.
As of December 31, 2022, the Company had cash of $1,655,549. The management believed that it would be able to make borrowings from banks
based on past experience and the Company's good credit history when necessary. As of December 31, 2022, the Company had available
line of credit from Bank of Guizhou for RMB 6,500,000, approximately $933,291. On January 18, 2023, Sunrise Guizhou entered a credit
facility agreement with Post Savings Bank of China ("Post Bank") to obtain revolving fund up to RMB 30,000,000, approximately
$4,307,498, for a term from January 19, 2023 to January 18, 2031. On February 7, 2023, Sunrise Guizhou entered a two-year debt financing
arrangement with Zhongguancun Science and Technology Leasing Co., Ltd. to obtain a loan of RMB 20,000,000, approximately $2,871,665,
for a term from February 7, 2023 to February 7, 2025.
81
Currently,
the Company is working to improve its liquidity and capital sources primarily through cash flows from operation, debt and equity financing,
and financial support from its principal shareholder. In order to fully implement its business plan and sustain continued growth, the
Company may also seek equity financing from outside investors when necessary. As of December 31, 2022, the working capital of the Company
was $18,614,388. Based on the operating plan and the working capital condition, management believed that the above-mentioned measures
collectively would provide sufficient liquidity for the Company to meet its future liquidity and capital requirement for at least 12
months from the date the consolidated financial statements are issued.
If
the Company experiences an adverse operating environment or incurred unanticipated capital expenditure requirements, or if the Company
accelerates its growth, then additional financing may be required. No assurance can be given, however, that additional financing, if
required, would be on favorable terms or available at all. Such financing may include the use of additional debt or the sale of additional
equity securities. Any financing which involves the sale of equity securities or instruments that are convertible into equity securities
could result in immediate and possibly significant dilutions to the existing shareholders.
Substantially
all of the Company's operations are conducted in the PRC and all of the revenues and the vast majority of expenses, cash and cash
equivalents are denominated in RMB. As of December 31, 2022, 72.35% of cash, cash equivalents and restricted cash were held in China,
and held by its subsidiaries, VIE and VIE's subsidiaries and denominated in Renminbi, while 27.65% of cash, cash equivalents and
restricted cash were held in Hong Kong, and held by EPOW, SDH New Energy and GMB HK and denominated in US dollars. Although the Company
consolidates the results of the VIE and its subsidiaries, the Company only has the access to the assets or earnings of the VIE and their
subsidiaries through the contractual arrangements with the VIE and its shareholders. See "Business — Contractual Arrangements
between GIOP BJ, SDH and Its Shareholders."
A
majority of the future revenues are likely to continue to be in the form of Renminbi. Under existing PRC foreign exchange regulations,
Renminbi may be converted into foreign exchange for current account items, including profit distributions, interest payments and trade-and service-related
foreign exchange transactions, can be made in foreign currencies without prior SAFE approval as long as certain routine procedural requirements
are fulfilled. Therefore, PRC subsidiaries are allowed to pay dividends in foreign currencies to the Company without prior SAFE approval
by following certain routine procedural requirements. However, approval from or registration with competent government authorities is
required where the Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment
of loans denominated in foreign currencies. The PRC government may at its discretion restrict access to foreign currencies for current
account transactions in the future.
As
of December 31, 2022, the following were outstanding balances of cash and cash equivalents, restricted cash and short-term investments
in each jurisdiction:
Cash and cash equivalents
Restricted cash
Short-term investments
Total
PRC
$
1,168,513
$
1,938,374
$
-
$
3,106,887
Hong Kong
201,120
-
-
201,120
Cayman Islands
285,916
700,094
3,336,256
4,322,266
Total
$
1,655,549
$
2,638,468
$
3,336,256
$
7,630,273
Cash
Flows
The
following table sets forth a summary of cash flows for the periods indicated:
For the years ended December 31,
2022
2021
2020
Net cash (used in) provided by operating activities
$
(9,573,401
)
$
(5,233,182
)
$
7,066,163
Net cash used in investing activities
(45,609,072
)
(22,095,198
)
(6,365,555
)
Net cash provided by financing activities
45,760,061
30,837,261
119,996
Effect of foreign exchange rate on cash
    and cash equivalents
(899,786
)
141,322
706,302
Net (decrease) increase in cash and
    cash equivalents
$
(10,322,198
)
$
3,650,203
$
1,526,906
82
Operating
Activities
Net cash used in operating activities amounted
to $9,573,401 for the year ended December 31, 2022. It was primarily due to a) a net loss of $23,124,402, adjusted by depreciation and
amortization of $2,062,499, share-based compensation of $2,729,969, deferred tax expenses of $807,412, interest expenses of $213,823,
investment losses of $3,618,847, bad debt expense of $2,887,754, impairment on inventory of $2,711,158, impairment on intangible assets
of $2,650,020, amortization of land use rights of $126,042 and amortization of operating lease right-of-use asset of $213,063; increase
in b) account receivable of $1,734,486, notes receivable of $899,481 due to sales of graphite anode products; c) inventories of $18,747,772
finished goods and purchased raw materials of graphite anode; d) prepaid expenses and other current assets of $2,894,690 due to increase
on tax prepayment of $4,345,304 offset by decrease on prepaid expenses of 2,251,169; d) account payable of $12,661,801 and notes payable
of $ 4,014,213 for payables to vendors of graphite business; and e) deferred government subsidy of $2,973,491 due to relocation bonus
received from the government of Zibo City, Shandong Province, PRC.
Net
cash used in operating activities amounted to $5,233,182 for the year ended December 31, 2021. It was primarily due to a) a net loss
of $8,714,332, adjusted by depreciation and amortization of $988,672, deferred tax benefits of $232,363, investment losses of $2,118,453,
bad debt expense of $3,847,426 and amortization of operating lease right-of-use asset of $90,320; b) decrease in income tax payable of
$3,696,654 due to the payment of income tax; c) increase in prepaid expenses and other current assets of $678,288 due to increase of
prepayment for service fee of $1,054,240; d) increase of inventories of $331,491 and right-of-use asset of $211,213; e) and partially
offset by decrease in accounts receivable of $1,729,006.
Net
cash provided by operating activities amounted to $7,066,163 for the year ended December 31, 2020. It was primarily due to a) a net income
of $11,957,287, adjusted by depreciation and amortization of $865,426, investment losses of $1,087, bad debt expense of $1,514,559 and
amortization of operating lease right-of-use asset of $359,551; b) increase in income taxes payable of $2,565,098 due to the increased
taxable income for the year ended December 31, 2020; c) increase in accrued expenses and other current liabilities of $852,731 because
of the IPO efforts and the expansion of the business for the year ended December 31, 2020; d) increase in inventories of $667,758 due
to purchase from third parties; and partially offset by a) increase in accounts receivable of $8,385,804 because of the expansion of
the business in the fiscal year 2020; b) decrease in deferred revenue of $322,534 because SDH received services fees in the fiscal year
2019 from customers for member services and comprehensive tailored services and other services have been rendered in the year ended December
31, 2020; c) increase in prepaid expenses and other current assets of $447,421.
Investing
Activities
Net
cash used in investing activities amounted to $45,609,072 for the year ended December 31, 2022. It was primarily due to: a) purchase
of plant, property and equipment of $43,714,195; and b) consideration paid for an asset acquisition of $1,486,746. In July 2022, Sunrise
Guizhou entered into purchase agreements with the original shareholders of Sunrise Tech (formerly known as Anlong Hengrui Graphite Material
Co., Ltd.) to acquire 100% of Sunrise Tech's assets and equity ownership for a gross consideration of RMB 40,000,000 (approximately
$5,743,331), of which RMB10,000,000 (approximately $1,486,746) was paid in July 2022. The unpaid consideration will be paid in installments
from 2023 to 2026.
Net
cash used in investing activities amounted to $22,095,198 for the year ended December 31, 2021. It was primarily due to a) prepayment
for land use right, construction and equipment of $8,244,917; b) purchase of short-term investments of $8,000,000; c) interest-bearing
loans to third party of 2,825,359; d) and purchase of long-term investments of $2,289,945.
Net cash used in investing activities amounted
to $6,365,555 for the year ended December 31, 2020. It was primarily due to purchase of property of $1,723,543, purchase of intangible
asset of $2,735,433, and purchase of long-term investments of $1,678,514.
83
Financing
Activities
Net
cash provided by financing activities amounted to $45,760,061 for the year ended December 31, 2022, representing proceeds from the following
debt financing from sale and leaseback contracts, net of issuance cost, of $8,827,701 and capital contributions from the non-controlling
shareholders of $ 37,024,594.
●
On
                                            September 22, 2022, Sunrise Guizhou entered into a sales and leaseback contract with Far
                                            East International Financial Leasing Co., Ltd. ("Far East"). Pursuant to the
                                            contract, the Company sold its machines for RMB 20,000,000, approximately $2,871,665, and
                                            immediately leased the machines back from Far East for an eighteen-month term from September
                                            22, 2022 to March 21, 2024, with a yearly implied interest rate of 11.98%.
●
On
                                            November 4, 2022, Sunrise Guizhou entered into a sales and leaseback financing contract with
                                            China Power Investment Ronghe Financial Leasing Co., Ltd. to obtain an amount of RMB 40,000,000,
                                            approximately $5,743,331, for a three years leasing term from November 10, 2022 to November
                                            9, 2025, with a yearly interest rate of one-year loan prime rate plus 1.55%.
Net
cash provided by financing activities amounted to $30,837,261 for the year ended December 31, 2021, representing issuance of ordinary
shares in connection with IPO, net of issuance cost of $27,504,639 and capital contributions from the non-controlling shareholders of
$3,332,622.
Net
cash provided by financing activities amounted to $119,996 for the year ended December 31, 2020, representing capital contributions from
the controlling shareholders.
Trend
Information
Other
than as disclosed elsewhere in this annual report, the Company is not aware of any trends, uncertainties, demands, commitments or events
that are reasonably likely to have a material effect on net revenues, incomes from operations, profitability, liquidity or capital resources,
or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.
Off-Balance
Sheet Arrangements
The
Company does not have any off-balance sheet arrangements as of December 31, 2022.
Contingencies
The
Company may be involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees
and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines
whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated.
Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will
have a material adverse impact on its financial position, results of operations or liquidity. As of December 31, 2022, the Company did
not have material litigations or lawsuits against them.
84
Inflation
Inflation
does not materially affect the Company's business or the results of its operations.
Seasonality
The
nature of the Company's business does not appear to be affected by seasonal variations.
Critical
Accounting Policies and Management Estimates
The
Company prepares the consolidated financial statements in accordance with U.S. GAAP. These accounting principles require the Company
to make judgments, estimates and assumptions on the reported amounts of assets and liabilities at the end of each fiscal period, and
the reported amounts of revenues and expenses during each fiscal period. The Company continually evaluate these judgments and estimates
based on the own historical experience, knowledge and assessment of current business and other conditions, the expectations regarding
the future based on available information and assumptions that the Company believe to be reasonable.
The selection of critical accounting policies,
the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions
and assumptions are factors that should be considered when reviewing the Company's financial statements. Our critical accounting
policies and practices include the following: (i) revenue recognition, (ii) lease, (iii) asset acquisition and (iv) income taxes. For
further information on these accounting policies, see note 2 to our consolidated financial statements included elsewhere in this annual
report.
We consider an accounting estimate to
be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the
accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different
estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results
of operations. Such critical estimates are discussed below.
Allowance for doubtful accounts
Accounts
receivables mainly represent amounts due from clients in the ordinary course of business and are recorded net of allowance for doubtful
accounts.
The Company mitigates
the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established
and recorded based on management's assessment of historical bad debts, creditworthiness and financial conditions of the clients,
current economic trends and changes in client payment patterns. Past due accounts are generally written off against the allowance for
bad debts only after all collection attempts have been exhausted and the potential for recovery is considered remote. The allowance for
doubtful accounts was $8,047,527, $5,744,387 and $1,808,889 for the years ended December 31, 2022, 2021 and 2020, respectively.
Allowance on inventories
The cost of inventories is calculated using the weighted average method.
Any excess of the cost over the net realizable value of each item of inventories is recognized in the value of inventories. Net realizable
value is estimated using selling price in the normal course of business less any costs to complete and sell products. The valuation allowance provided for the inventory was $2,711,158, $nil and $nil for the years ended December 31, 2022,
2021 and 2020.
85
Impairment
on long-term investments
For
equity investments that do not have readily determinable fair values and over which the Company has neither significant influence nor
control through investments in common stock or in-substance common stock, the Company accounts for these investments at cost
minus any impairment, if necessary.
The
Company continually reviews its investments in equity investees to determine whether a decline in fair value below the carrying value
is other than temporary. The primary factors the Company considers in its determination are the length of time that the fair value of
the investment is below the Company's carrying value; the financial condition, operating performance and the prospects of the equity
investee. If the decline in fair value is deemed to be other than temporary, the carrying value of the equity investee is written down
to fair value. Impairment charges for long-term investments were $979,426, $nil and $nil recorded in the Company's Consolidated
Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020.
Impairment
of long-lived assets
The
Company reviews its long-lived assets for impairment whenever events or changes in circumstances (such as a significant adverse change
to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset may no longer be recoverable.
When these events occur, the Company measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted
future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted
cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss, which is the excess of carrying
amount over the fair value of the assets, using the expected future discounted cash flows. Impairments charges for intangible assets
were $2,650,020, $nil and $nil recorded in the Company's Consolidated Statements of Operations and Comprehensive (Loss) Income
for the years ended December 31, 2022, 2021 and 2020.
Valuation allowance on deferred
tax assets
Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including
the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
Valuation allowance on deferred tax assets were $3,936,504 and $1,218,319 as of December 31, 2022 and 2021, respectively.
86
ITEM 6.
DIRECTORS,
SENIOR MANAGEMENT AND EMPLOYEES
A.
Directors
and Executive Officers
The
following table sets forth information regarding our directors and executive officers as of the date of this annual report.
Directors
    and Executive Officers
Age
Position/Title
Haiping
    Hu
55
Chief
    Executive Officer ("CEO"), Chairman of the Board of Director
Chao
    Liu
42
Chief
    Financial Officer ("CFO")
Chenming
    Qi
52
Chief
    Operating Officer ("COO")
Haiwei
    Zuo
40
Director
Ligang
    Lu
54
Independent
    Director
Xiang
    Luo
52
Independent
    Director
Jian
    Pei
55
Independent
    Director
Mr.
Haiping Hu
has been our CEO and Chairman since February 2019, and he has served as CEO and Chairman of the VIE since December 2014.
From August 2004 to January 2018, he was CEO and Vice Chairman of Shanshan Holdings Co., Ltd, which is mainly engaged in the production
of lithium-ion battery parts, such as lithium-ion capacitors, battery pack, and charging pile, and providing new energy services such
as new energy vehicle operation and energy management services, etc. From January 1996 to July 2004, he served as Vice President of Shanshan
Group Co., Ltd. Since 2002, Shanshan Holdings Co., Ltd. has ranked among the top 500 Chinese companies in successive years. Mr. Hu holds
a bachelor's degree in Chemical Automation and a master's degree in Chemical Engineering from Zhejiang University. Nicknamed
"General Hu Haiping on Horseback," Mr. Hu has more than 20 years of experience as founder and executive, and is a well-known
entrepreneur in China.
Ms.
Chao Liu
has served as our CFO since February 2019, and as the CFO of the VIE since January 2016. From June 2012 to June 2015, she
was the head of the accounting department of Beijing Meanfang Institute of Physics and Technology, which is engaged in manufacturing
gas instruments that are widely used in petrochemical, cement, chemical fertilizer, agriculture, military, medical, environmental protection,
scientific research and other fields, Beijing Meanfang Spectrum Technology Co., Ltd., which is engaged in manufacturing and selling spectrum
instruments, and Beijing Zhongchuang Technology Co., Ltd., which is engaged in providing interactive marketing technology solutions for
brand customers and advertising agents. From May 2008 to December 2015, she was the comptroller of Beijing Hongri Dongsheng Decoration
Co., Ltd., which provides decoration services to customers and Beijing Sunshine Season Network Technology Company, which provides network
maintenance services to its customers. From November 2003 to November 2014, she served as supervisor of the accounting department of
Beijing Haixinyuan Food Co., Ltd. which is engaged in the manufacture and sale of cold candies, pastries and cold drinks and Beijing
Haixinyuan Guest House Co., Ltd., which provides hoteling services to its customers. Ms. Liu studied finance at Beijing Language and
Culture University and graduated in January 2016. She has a strong understanding of international accounting and tax policies.
87
Mr.
Chenming Qi
has served as our COO since February 2019, and as the COO and director of the VIE since July 2017. From May 2014 to June
2017, Mr. Qi served as the Vice President of the sales division of 360 Enterprise Security Group, which specializes in providing enterprise-level
network security technologies, products and services to government, enterprises, education, finance and other institutions and organizations.
He co-founded Netgod Information Technology (Beijing) Co., Ltd, which is engaged in enterprise-level network security technologies, products
and services in 2006, and served as a vice president of operations from June 2006 to May 2017. He served as the deputy general manager
of Lenovo Information Security Division from April 2004 to June 2006. From March 2002 to March 2004, he was the sales director of Hampoo
(China) Management Consulting Company, which is engaged in management consulting, IT planning, information implementation, etc. Mr. Qi
graduated from Tianjin University with a master's degree in Precision Instrument Engineering in March 1996. We believe that Mr.
Qi, with over twenty years of experience in team building and enterprise management, is qualified to serve as our COO.
Mr.
Haiwei Zuo
has served as our director since February 2019, and as Vice Chairman of the VIE since December 2014. From September 2013
to December 2014, he served as the Dean of Beijing Huatai Weiye Management Science and Technology Research Institute. From March 2009
to September 2013, he served as the CEO of Beijing Naked in Frontier Cultural Exchange Co., Ltd., which is engaged in producing TV program
content that is in category of business and financial management. He studied business administration at the China Agricultural University
and graduated in July 2019.
Mr.
Xiang Luo
was appointed as our director on March 11, 2022. Mr. Luo holds a PhD in Business Administration from Bulacan State University
in Philippines, and has over twenty years of experience working at various senior positions at the United Nations and other international
organizations, including the International Economic Development Council. Since June 2020, Mr. Luo has served as the co-chair of Global
Steering Committee of Carbon Neutral Action (GSCCNA), an international non-governmental organization that provides strategic advice on
special purpose financing, green technical and systematic solutions to achieving the Sustainable Development Goals (SDG) under the United
Nations' sustainable development agenda and climate change planning. From November 2014 to December 2019, Mr. Lou served as the
head of the China Office of the United Nations Office for Project Services (UNOPS), responsible for the overall coordination of strategic
planning, project financing and management, team capacity building, public advocacy, risk management and performance evaluation, of various
projects.
Dr.
Jian Pei
was appointed as our director on May 30, 2022. He has served as a professor at the College of Chemistry and Molecular Engineering
of Peking University, China, since April 2001. Dr. Pei received his undergraduate degree in 1989 and Ph.D. degree in 1995, majoring in
Chemistry, from Peking University in 1995. After the completion of his postdoctoral work at the National University of Singapore in July
1997, he joined the Institute of Materials Research and Engineering in Singapore and served as a research associate from November 1997
to August 2001. From June 1998 to January 2000, Dr. Pei was a visiting scholar at the Institute of Polymer and Organic Solids, University
of California at Santa Barbra. Dr. Pei is a receiver of the Changjiang Scholar award, an academic award given to an individual in higher
education by the Ministry of Education of the People's Republic of China. Dr. Pei's research focuses on the development of
organic semiconducting materials for application in optoelectronics.
Mr.
Ligang Lu
was appointed as our director upon the closing of our IPO. Since January 2011, Mr. Lu has been the auditor director and
group supervisor of Shanshan Holdings Co. Ltd. which is mainly engaged in the production of lithium-ion battery parts, such as lithium-ion
capacitors, battery pack, and charging pile, and providing new energy services such as new energy vehicle operation and energy management
services, etc. From January 2003 to January 2011, he held several positions at Hebei Hualong Riqing Noodle Industry Group Co., Ltd.,
which is mainly engaged in noodle manufacturing, including audit manage and chief financial officer. From September 1990 to January 2003,
he was the audit office director of Sinosteel Xingji Group, which is engaged in steel productions, sales, distributions related services.
Mr. Lu holds a bachelor's degree in Financial Auditing and Accounting from Hebei University of Economics and Business (formerly
Hebei University of Finance and Economics). In May 2001, Mr. Lu was certified as senior auditor and accountant by China Human Resources
Bureau of Hebei Province, and became a Certified Internal Auditor ("CIA") by International Registered Institute of Internal
Auditors (USA).
88
B.
Compensation
of Directors and Executive Officers
The
following table sets forth certain information with respect to compensation for the year ended December 31, 2022, earned by or paid to
our chief executive officers.
Summary
Compensation Table
Name and Principal Position
Year
Salary
(US$)
Bonus
(US$)
Stock
Awards
(US$)
Option
Awards
(US$)
Non-Equity
Incentive Plan
Compensation
Deferred
Compensation
Earnings
Other
Total
(US$)
Haiping Hu
2022
44,778
967,600
1,012,378
CEO of the Company and the VIE
Chao Liu
2022
39,722
100,000
139,722
CFO of the Company and the VIE
Chenming Qi
2022
27,300
0
27,300
COO of the Company and the VIE
Haiwei Zuo
2022
56,333
110,000
166,333
Director of the Company
Jian Pei
2022
0
25,000
25,000
Director of the Company
Xiang Luo
2022
0
25,000
25,000
Director of the Company
Ligang Lu
2022
0
30,000
30,000
Director of the Company
For
the year ended December 31, 2022, the Company paid the above compensations to our executive officers and directors.
89
2022
Share Incentive Plan
Our
board of directors adopted the 2022 Stock Incentive Plan (the "2022 Plan") in July 2022, effective as of July 11, 2022, to
attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the
success of our business. Under the 2022 Plan, the maximum aggregate number of shares that may be issued pursuant to all awards shall
be 3,679,200 Ordinary Shares.
As
of the date of this annual report, we issued 833,550 Ordinary Shares to qualified persons under the 2022 Plan.
The following describes
the principal terms of the 2022 Plan.
Types
of awards
The
2022 Plan permits the awards of cash, restricted stock units, share options, or any similar securities with a value derived from the
value of or related to the Ordinary Shares and/or returns thereon.
Plan
Administration
Our
board of directors or a committee of one or more members of the board of directors administers the 2022 Plan. The committee or the full
board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to
each participant, and the terms and conditions of each award grant.
Award
Agreement
Each
awards granted under the 2022 Plan is evidenced by an award agreement that sets forth terms, conditions and limitations, which may include
the provisions applicable in the event of the grantee's employment or service terminates, and our authority to unilaterally or
bilaterally amend, modify, suspend, cancel or rescind the award.
Eligibility
We
may grant awards to our employees, directors and consultants of our Company, and other individuals, as determined by the plan administrator.
Vesting
Schedule
In
general, the plan administrator determines the vesting schedule, which is specified in the award agreement.
Exercise
of Options
The
plan administrator determines the exercise price for each award, which is stated in the award agreement.
90
Agreements
with Named Executive Officers
We
enter into employment agreements with our executive officers. Pursuant to employment agreements, we agree to employ each of our executive
officers for a specified time period, which will be renewed upon both parties' agreement thirty days before the end of the current
employment term. We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive
officer, including but not limited to the commitments of any serious or persistent breach or non-observance of the terms and conditions
of the employment, conviction of a criminal offense, willful disobedience of a lawful and reasonable order, fraud or dishonesty, receipt
of bribery, or severe neglect of his or her duties. An executive officer may terminate his or her employment at any time with a two-month
prior written notice. Each executive officer has agreed to hold, both during and after the employment agreement expires, in strict confidence
and not to use or disclose to any person, corporation or other entity without written consent, any confidential information.
C.
Board
Practices
Board
of Directors
Our
board of directors consists of five directors.
Duties
of Directors
Under Cayman Islands law, our directors
owe fiduciary duties at common law, including, but not limited to a duty to act honestly, in good faith and with a view to our best interests.
When exercising powers or performing duties as a director, our directors also have a duty to exercise the care, diligence and skills
that a reasonable director would exercise in comparable circumstances, taking into account, without limitation, the nature of the company,
the nature of the decision, the position of the director and the nature of the responsibilities undertaken by him. In exercising the
powers of a director, our directors must exercise their powers for a proper purpose and shall not act or agree to the company acting
in a manner that contravenes our amended and restated memorandum and articles of association or the Companies Act (Revised) of the Cayman
Islands.
Generally,
we have the right to seek damages if a duty owed by our directors is breached.
The
functions and powers of our board of directors include, among others:
●
appointing
    officers and determining the term of office of the officers;
●
exercising
    the borrowing powers of the company and mortgaging the property of the company; and
Terms
of Directors and Executive Officers
Each
of our directors holds office until a successor has been duly elected and qualified unless the director was appointed by the board of
directors, in which case such director holds office until the next following annual meeting of shareholders at which time such director
is eligible for reelection. All of our executive officers are appointed by and serve at the discretion of our board of directors.
Qualification
There
is currently no shareholding qualification for directors.
Insider
Participation Concerning Executive Compensation
Our
board of directors, which was comprised of five directors, with the assistance of the Compensation Committee, makes all determinations
regarding executive officer compensation.
91
Committees
of the Board of Directors
We
have established three committees under the board of directors: the audit committee, the compensation committee and the corporate governance
and nominating committee, and adopt a charter for each of the committees. Each committee's members and functions are described
below.
Audit
Committee.
Our audit committee, formed upon the closing of our IPO, consists of Mr. Ligang Lu, Mr. Xiang Luo and Mr. Jian Pei,
with Mr. Ligang Lu serving as the chairman of our audit committee. We have determined that Mr. Ligang Lu, Mr. Xiang Luo and Mr. Jian
Pei satisfy the "independence" requirements of Section 5605(a)(2) of the Nasdaq Listing Rules and Rule 10A-3 under the Securities
Exchange Act. Prior to our IPO, our board also determined that Ligang Lu qualifies as an audit committee financial expert within the
meaning of the SEC rules or possesses financial sophistication within the meaning of the Nasdaq Listing Rules. The audit committee oversees
our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible
for, among other things:
●
selecting
    the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors;
●
reviewing
    with the independent auditors any audit problems or difficulties and management's response;
●
reviewing
    and approving all proposed related-party transactions, as defined in Item 404 of Regulation S-K under the Securities Act;
●
discussing
    the annual audited financial statements with management and the independent auditors;
●
reviewing
    major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies;
●
annually
    reviewing and reassessing the adequacy of our audit committee charter;
●
such
    other matters that are specifically delegated to our audit committee by our board of directors from time to time;
●
meeting
    separately and periodically with management and the independent auditors; and
●
reporting
    regularly to the full board of directors.
Compensation
Committee.
Our compensation committee, formed upon the closing of our IPO, consists of Mr. Xiang Luo, Mr. Ligang
Lu and Mr. Jian Pei. Mr. Ligang Lu is the chairman of our compensation committee. The compensation committee assists the board in reviewing
and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our
chief executive officer may not be present at any committee meeting during which his compensation is deliberated. The compensation committee
is responsible for, among other things:
●
reviewing
    and recommending to the board with respect to the total compensation package for our chief executive officer;
●
approving
    and overseeing the total compensation package for our executives other than the chief executive officer;
●
reviewing
    and making recommendations to the board with respect to the compensation of our directors; and
●
reviewing
    periodically and approving any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses,
    employee pension and welfare benefit plans.
92
Corporate
Governance and Nominating Committee
.
Our corporate governance and nominating committee, formed upon the closing of
our IPO, consists of Mr. Ligang Lu and Mr. Jian Pei. Mr. Xiang Luo is the chairman of our corporate governance and nominating committee.
The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors
and in determining the composition of the board and its committees. The nominating and corporate governance committee is responsible
for, among other things:
●
identifying
    and recommending to the board nominees for election or re-election to the board, or for appointment to fill any vacancy;
●
reviewing
    annually with the board the current composition of the board in light of the characteristics of independence, skills, experience
    and availability of service to us;
●
identifying
    and recommending to the board the names of directors to serve as members of the audit committee and the compensation committee, as
    well as the corporate governance and nominating committee itself;
●
advising
    the board periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance
    with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any corrective
    action to be taken; and
●
monitoring
    compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to
    ensure proper compliance.
D.
Employees
We
had a total of 134, 96, and 48 full-time employees (excluding the employees of Sunrise Guizhou), as of December 31, 2020, 2021, and 2022,
respectively.  As of April 30, 2023, we had 48 full-time employees (excluding the employees of Sunrise Guizhou),. We had
4, 22, 7 and 15 employees located in Shanghai, Beijing, Hangzhou, and Zibo, respectively. The following table sets forth the numbers
of our employees by areas of business as of April 30, 2023, 2023:
Department
Number of Employees
Senior Management
5
Human Resources & Administration
8
Sales & Marketing
12
Business & Consulting
1
Customer Service
2
Information Technology
2
Research & Development
10
Finance
8
Total
48
Sunrise
Guizhou had 229 and 257 employees as of April 30, 2023, and December 31, 2022, respectively. The following table sets forth the numbers
of Sunrise Guizhou's employees by areas of business as of April 30, 2023
Department
Number of Employees
Senior Management
1
Human Resources & Administration
13
Research & Development
50
Manufacturing & Equipment
128
Warehouse & Operation
19
Engineering & Construction
9
Finance & Compliance
5
Sales & Marketing
4
Total
229
93
Generally,
we enter into standard employment contracts with our officers, managers, and other employees. According to these contracts, all of our
employees are prohibited from engaging in any other employment during the period of their employment with us. None of our employees is
a member of a labor union and we consider our relationship with our employees to be good.
E. Share
Ownership
Except
as specifically noted, the following table sets forth information with respect to the beneficial ownership of our Ordinary Shares as
of May 15, 2023 by:
●
each
    of our directors and executive officers; and
●
each
    of our principal shareholders who beneficially own more than 5% of our total outstanding Ordinary Shares.
The
calculations in the table below are based on 25,361,550 Ordinary Shares outstanding as of the date of this annual report, including 833,550
Ordinary Shares issued under the Stock Incentive Plan.
Beneficial
ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned
by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days,
including through the exercise of any option, warrant or other right or the conversion of any other security. These shares, however,
are not included in the computation of the percentage ownership of any other person.
Name and Address of Beneficial Owner*
Ordinary
                                            Shares
Beneficially
                                            Owned
Number
%
Director and Executive Officers:
Haiping Hu (1)
7,324,687
28.88
%
Chao Liu
50,000
0.20
%
Chenming Qi (3)
2,491,318
9.82
%
Haiwei Zuo (4)
1,140,282
4.50
%
Ligang Lu
15,000
0.06
%
Xiang Luo
12,500
0.05
%
Jian Pei
12,500
0.05
%
Directors and Executive Officers as a group (7 persons)
11,046,287
43.56
%
5% Beneficial Owners**
GMB Wisdom Sharing Platform Co., Ltd. (1)
6,840,887
26.97
%
GMB Information Technology Co., Ltd. (4)
1,085,282
4.28
%
GMB Culture Communication Co., Ltd. (2)
2,705,583
10.67
%
GMB Resource Services Co., Ltd (3)
2,491,318
9.82
%
*
Unless
                                            otherwise indicated, the business address of each of the individuals is Room 350, 3rd Floor,
                                            Building 6,Yard 1, Shangdi 10th Street, Haidian District, Beijing, The PRC.
**
The
                                            principal office of each of the 5% beneficial owners are located at Start Chambers, Wickham's
                                            Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands.
(1)
Haiping
                                            Hu, our CEO and chairman of the Board, beneficially owns 6,840,887 Ordinary Shares through
                                            his 100% ownership of GMB Wisdom Sharing Platform Co., LTD, and 483,800 Ordinary Shares held
                                            directly.
(2)
Representing
                                            2,705,583 Ordinary Shares held by GMB Culture Communication Co., Ltd, a British Virgin Islands
                                            company. Ertao Zhao, Yidong Zhang, Xiaoli Chen serve as the directors of GMB Culture Communication
                                            Co., Ltd. and share the dispositive and voting power of the shares held by GMB Culture.
(3)
Representing
                                            2,491,318 Ordinary Shares Held by GMB Resource Services Co., Ltd., a British Virgin Islands
                                            company. Our COO Chenming Qi and Cunyou Li, Jinhai Ying, Gesheng Fei, each of whom serves
                                            as a director of GMB Resource Services Co., share the dispositive and voting power of the
                                            shares held by GMB Resources.
(4)
Haiwei
                                            Zuo, our director, beneficially owns 1,085,282 Ordinary Shares through his 100% ownership
                                            of GMB Information Technology Co., Ltd., a British Virgin Islands company, and 55,000 Ordinary
                                            Shares held directly.
We
are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.
94
ITEM 7.
 MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A.
Major
Shareholders
See
"
Item 6. Directors, Senior Management and Employees—E. Share Ownership
."
B.
Related
Party Transactions
Contractual
Arrangements between GIOP BJ and Gansu QLS
See
"
Item 4. Information on the Company—C. Organizational Structure
."
Material
Transactions with Related Parties
The
following is a list of related parties which the Company had transactions with:
(a)
Ningbo
    Zhuhai Investment Co., Ltd. ("Zhuhai Investment"), a company controlled by Mr. Haiping Hu
(b)
Bally,
    Corp. ("Bally"), a company controlled by Mr. Haiping Hu
(c)
Mr.
    Xuanming Wang, General Manager and legal representative of GMB (Hangzhou)
(d)
Mr.
    Haiwei Zuo, Vice Chairman of the Board, 7.49% shareholder of GMB (Beijing)
(e)
Shanghai
    Hui Yang Investment Co., 9.6451% shareholder of Sunrise Guizhou and controlled by immediate family members of Mr. Haiping Hu
(f)
Shidong
    (Suzhou) Investment Co., Ltd., a company of which Mr. Haiping Hu is the CEO
(g)
Mr.
    Shousheng Guo, Director, 3.00% shareholder of GMB (Beijing)
(h)
Mr.
    Wenwu Zhang, Director of Sunrise Guizhou
(i)
Mr.
    Chenming Qi, General Manager, Director and 3.00% shareholder of GIOP BJ; Director of GMB (Hangzhou)
(j)
Ms.
    Jing Ji, CEO of and 46% shareholder of GMB Technology
(k)
Haicheng
    Shenhe, 9.6451% shareholder of Sunrise Guizhou
(l)
Guizhou
    Yilong New Area Industrial Development and Investment Co., Ltd., 3.0864% shareholder of Sunrise Guizhou
(m)
Beijing
    Yihe Business Technology Co., Ltd. ("Yihe Beijing"), a 40% shareholder of GMB (Beijing).
a.
Due
                                            from related parties
As
of December 31, 2022, 2021 and 2020, the balances of amount due from related parties were as follows:
As
    of December 31,
2022
2021
2020
Due from related parties
Bally
5,168
5,168
5,168
Zhuhai Investment
-
25,534
155,378
Mr. Xuanming Wang
20,102
26,664
-
Mr. Haiwei Zuo
-
7,912
-
Mr. Wenwu Zhang
(1)
337,420
-
-
Yihe Beijing
-
-
12,184
Shidong (Suzhou) Investment Co., Ltd.
37,332
-
-
Total
$
400,022
$
65,278
172,730
(1)
The
                                            balance as of December 31, 2022 represented the prepaid acquisition consideration to purchase
                                            Mr. Wenwu Zhang's equity in Haicheng Shenhe.
95
b.
Due
                                            to related parties
As
of December 31, 2022 and 2021, the balances of amounts due to related parties were as follows:
As of December 31,
2022
2021
2020
Due to related parties
Mr. Haiping Hu
2,872
-
-
Mr. Chenming Qi
9,189
-
-
Ms. Jing Ji
19,923
-
-
Shanghai HuiYang Investment Co.
(1)
738,128
-
-
Haicheng Shenhe
50,395
-
-
Zhuhai Investment
64,643
-
-
Total
$
885,150
$
-
-
(1)
The
                                            balance as of December 31, 2022 represented the loans from the related party, with the annual
                                            interest rate of 4.35% and was initially due on August 13, 2022 and extended to December
                                            31, 2023.
c.
Deferred
                                            revenue -related parties
As
of December 31, 2022 and 2021, the balances of deferred revenue of related parties were as follows:
As of December 31,
2022
2021
2020
Deferred revenue of related parties
Shanghai Hui Yang Investment Co.
(1)
$
347,471
$
-
$
Total
$
347,471
$
-
$
(1)
The
                                            balance as of December 31, 2022 represented the advance from the related party for tailored
                                            services.
d.
Related
                                            party transactions
Related
party purchase
The
Company rented office spaces from Zhuhai Investment. For the years ended December 31, 2022, 2021 and 2020, total rental fee to Zhuhai
Investment were $118,475, $103,411 and $96,695, respectively.
The Company purchased graphite material processing
service of $450,591 and purchased raw material of $580,452 from Haicheng Shenhe for the year ended December 31, 2022.
The
Company also purchased professional services from Yihe Beijing. For the year ended December 31, 2020, service costs paid to Beijing Yihe
were $27,175.
Related
party sales
The Company sold titanium of $205 to Mr.
Shousheng Guo for the year ended December 31, 2022.
The
Company sold medical wine of $666 to Zhuhai Investment for the year ended December 31, 2021.
96
e.
Related
                                            party guarantee
On
August 4, 2022, Surnise Guizhou entered a line of credit financing contract with Bank of Guizhou for revolving credit of RMB 20,000,000,
approximately $ 2,871,665, for a term from August 4, 2022 to August 3, 2023. The line of credit was in various means including bank loans,
commercial note and letter of credit. As of December 31, 2022, the Company has utilized RMB 13,500,000, approximately $1,938,374, line
of credit by issuing commercial notes to its vendors for amount of RMB 27,000,000, approximately $3,876,748. Pursuant to the line of
credit contract, the Company was obliged to deposit fifty percent of the notes payable amount issued as restricted cash in the designated
bank accounts in Bank of Guizhou. Pursuant to the contract, Mr. Haiping Hu and Guizhou Yilong New Area Industrial Development and Investment
Co., Ltd., the non-controlling shareholder of Sunrise Guzhou, were the guarantor of the line of credit.
On September 22, 2022, Sunrise Guizhou entered
a financing contract into an eighteen-month loan with Far East to obtain a loan of RMB 20,000,000, approximately $2,871,665, for a term
from September 22, 2022 to March 21. On November 4, 2022, Sunrise Guizhou entered a sales and leaseback financing contract into a three-year
financing with Ronghe to obtain an amount of RMB 40,000,000, approximately $5,743,331, for a term from November 10, 2022 to November
9, 2025. Pursuant to the financing contracts, Mr. Haiping Hu.
In July 2022, Sunrise Guizhou entered into purchase
agreements with original shareholders of Sunrise to acquire 100% of Sunrise Tech's assets and equity ownership for a gross consideration
of RMB 40,000,000 (approximately $5,743,331), among of which RMB10,000,000 (approximately $1,486,746) was paid in July 2022. The unpaid
consideration RMB30,000,000 (approximately $4,307,499) will be paid in installments from 2023 to 2026. The consideration payable is guaranteed
by Mr. Haiping Hu.
Employment
Agreements and Indemnification Agreements
See
"
Item 6. Directors, Senior Management and Employees—B. Compensation of Directors and Executive Officers
."
C.
Interests
of Experts and Counsel
Not
applicable.
ITEM 8.
 FINANCIAL INFORMATION
A.
Consolidated
Statements and Other Financial Information
See
Item 18 for our audited consolidated financial statements.
Legal
Proceedings
We
are not currently involved in any material legal or administrative proceedings. From time to time, we may be subject to various legal
or administrative claims and proceedings arising in the ordinary course of business. Such legal or administrative claims and proceedings,
even if without merit, could result in the expenditure of financial and management resources and potentially result in civil liability
for damages.
Dividend
Policy
We
do not have any present plan to pay any cash dividends on our Ordinary Shares in the foreseeable future. We currently intend to retain
most, if not all, of our available funds and any future earnings to operate and expand our business.
We
are a holding company incorporated in the Cayman Islands. We rely principally on dividends from our PRC subsidiaries for our cash requirements,
including any payment of dividends to our shareholders. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends
to us.
Our
board of directors has discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. Under
Cayman Islands law, a Cayman Islands company may pay a dividend out of either profit or share premium account, provided that in no circumstances
may a dividend be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business.
Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings,
capital requirements and surplus, general financial condition, contractual restrictions and other factors that our board of directors
may deem relevant.
B.
Significant
Changes
Except
as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated
financial statements included in this annual report.
97
ITEM 9.
 THE OFFER AND LISTING
A.
Offering
and Listing Details
Our
Ordinary Shares have been listed on the Nasdaq Capital Market since February 9, 2021.
B.
Plan
of Distribution
Not
applicable.
C.
Markets
Our
Ordinary Shares have been listed on the Nasdaq Global Market since February 9, 2021. On August 5, 2022, our Ordinary Shares began trading
on the NASDAQ Capital Market under the new ticker symbol "EPOW". Our Ordinary Shares previously traded under the ticker symbol
"SDH".
D.
Selling
Shareholders
Not
applicable.
E.
Dilution
Not
applicable.
F.
Expenses
of the Issue
Not
applicable.
ITEM 10.
ADDITIONAL INFORMATION
A.
Share
Capital
Not
applicable.
B.
Memorandum
and Articles of Association
We are an exempted company with limited
liability incorporated under the laws of the Cayman Islands and our affairs are governed by our Amended and Restated Memorandum and Articles
of Association, as amended and restated from time to time, and Companies Act (Revised) of the Cayman Islands, which we refer to as the
Companies Act below, and the common law of the Cayman Islands.
98
The
                                            following are summaries of material provisions of our Amended and Restated Memorandum and
                                            Articles of Association and the Companies Act insofar as they relate to the material terms
                                            of our Ordinary Shares.
Board
of Directors
See
"
Item 6. Directors, Senior Management and Employees
."
Ordinary
Shares
General
Our
authorized share capital is US$50,000 divided into 500,000,000 Ordinary Shares, par value US$0.0001 per share.
Dividends
Subject
to the provisions of the Companies Act and any rights attaching to any class or classes of shares under and in accordance with the Company's
shareholders may, by ordinary resolution, declare dividends but no such dividend shall exceed the amount recommended by the directors.
Subject
to the requirements of the Companies Act regarding the application of a company's share premium account and with the sanction of
an ordinary resolution, dividends may also be declared and paid out of any share premium account. The directors when paying dividends
to shareholders may make such payment either in cash or in specie.
Unless
provided by the rights attached to a share, no dividend shall bear interest.
Voting
Rights
Subject
to any rights or restrictions as to voting attached to any shares, unless any share carries special voting rights, on a show of hands
every shareholder who is present in person and every person representing a shareholder by proxy shall have one vote. On a poll, every
shareholder who is present in person and every person representing a shareholder by proxy shall have one vote for each share of which
he or the person represented by proxy is the holder. In addition, all shareholders holding shares of a particular class are entitled
to vote at a meeting of the holders of that class of shares. Votes may be given either personally or by proxy.
Variation
of Rights of Shares
Whenever
our capital is divided into different classes of shares, the rights attaching to any class of share (unless otherwise provided by the
terms of issue of the shares of that class) may be varied either with the consent in writing of the holders of not less than two-thirds
of the issued shares of that class, or with the sanction of a resolution passed by a majority of not less than two-thirds of the holders
of shares of the class present in person or by proxy at a separate general meeting of the holders of shares of that class.
Unless
the terms on which a class of shares was issued state otherwise, the rights conferred on the shareholder holding shares of any class
shall not be deemed to be varied by the creation or issue of further shares ranking pari passu with the existing shares of that class
or the creation or issue of one or more classes of shares with or without preferred, deferred or other special rights or restrictions
(including, without limitation, the creation of Shares with enhanced or weighted voting rights), whether in regard to dividend, voting,
return of capital or otherwise.
Transfer
of Ordinary Shares
Subject
to the restrictions contained in our articles, any shareholder may transfer all or any of his shares by an instrument of transfer in
the usual or common form or in a form prescribed by any Designated Stock Exchange (as defined under our articles) or in any other form
approved by our board of directors and may be under hand or by electronic machine imprinted signature or by such other manner of execution
as our board of directors may approve from time to time.
99
Our
board of directors may, in its absolute discretion, decline to register any transfer of any ordinary share which is not fully paid up
or on which we have a lien. Our board of directors may also decline to register any transfer of any ordinary share unless:
●
the
    instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other
    evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;
●
the
    instrument of transfer is in respect of only one class of shares;
●
the
    instrument of transfer is properly stamped, if required;
●
in
    the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed
    four;
●
the
    shares transferred are fully paid up and free of any lien in our favor; and
●
a
    fee of such maximum sum as the Nasdaq may determine to be payable, or such lesser sum as our directors may from time to time require,
    is paid to us in respect thereof.
If
our directors refuse to register a transfer, they are required, within three months after the date on which the instrument of transfer
was lodged, to send to the transferee notice of such refusal. This, however, is unlikely to affect market transactions of the ordinary
shares purchased by investors. Since our ordinary shares are listed on the Nasdaq, the legal title to such ordinary shares and the registration
details of those ordinary shares in our register of members remain with DTC/Cede & Co. All market transactions with respect to those
ordinary shares will then be carried out without the need for any kind of registration by the directors, as the market transactions will
all be conducted through the DTC systems.
The
registration of transfers of shares or of any class of shares may, after compliance with any notice requirement of any Designated Stock
Exchange (as defined under our articles), be suspended and our register of members be closed at such times and for such periods (not
exceeding in the whole thirty (30) days in any year) as our board of directors may determine.
Inspection
of Books and Records
Holders
of our Ordinary Shares will have no general right under the Companies Act to inspect or obtain copies of our register of members or our
corporate records (other than the register of mortgages).
General
Meeting of Shareholders
As
a Cayman Islands exempted company, we are not obligated by the Companies Act to call shareholders' annual general meetings; accordingly,
we may, but shall not be obliged to, in each year hold a general meeting as an annual general meeting. Any annual general meeting held
shall be held at such time and place as may be determined by our board of directors. All general meetings other than annual general meetings
shall be called extraordinary general meetings.
The directors may convene general meetings
whenever they think fit. General meetings shall also be convened on the written requisition of one or more of the shareholders entitled
to attend and vote at our general meetings who (together) hold not less than 10 percent of the rights to vote at such general meeting
in accordance with the notice provisions in the articles, specifying the purpose of the meeting and signed by each of the shareholders
making the requisition. If the directors do not convene such meeting for a date not later than 21 clear days' after the date of
receipt of the written requisition, those shareholders who requested the meeting may convene the general meeting themselves within ninety
days after the end of such period of 21 clear days in which case reasonable expenses incurred by them as a result of the directors failing
to convene a meeting shall be reimbursed by us.
100
At
least 7 days' notice of a general meeting shall be given to shareholders entitled to attend and vote at such meeting. The notice
shall specify the place, the day and the hour of the meeting and the general nature of that business.
A
quorum shall consist of the presence (whether in person or represented by proxy) of one or more shareholders holding shares that represent
not less than one-third of the outstanding shares carrying the right to vote at such general meeting.
If,
within half an hour from the time appointed for the general meeting, or at any time during the meeting, a quorum is not present, the
meeting, if convened upon the requisition of shareholders, shall be cancelled. In any other case it shall stand adjourned to the same
day in the next week, at the same time and place, and if at the adjourned meeting a quorum is not present within half an hour from the
time appointed for the meeting, the shareholder present shall be a quorum
The
chairman may, with the consent of a meeting at which a quorum is present, adjourn the meeting. When a meeting is adjourned for ten days
or more, notice of the adjourned meeting shall be given in accordance with the articles.
At
any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before, or on,
the declaration of the result of the show of hands) demanded by one or more shareholders present in person or by a proxy who together
hold not less than fifteen per cent of the paid up capital of the Company entitled to vote. Unless a poll is so demanded, a declaration
by the chairman as to the result of a resolution and an entry to that effect in the minutes of the meeting, shall be conclusive evidence
of the outcome of a show of hands, without proof of the number or proportion of the votes recorded in favor of, or against, that resolution.
If
a poll is duly demanded it shall be taken in such manner as the chairman directs and the result of the poll shall be deemed to be the
resolution of the meeting at which the poll was demanded.
In
the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes
place or at which the poll is demanded, shall be entitled to a second or casting vote.
Directors
We
may by ordinary resolution, from time to time, fix the maximum and minimum number of directors to be appointed. Under the Articles, we
are required to have a minimum of three directors.
A
director may be appointed by ordinary resolution or by the directors. Any appointment may be to fill a vacancy or as an additional director.
The
remuneration of the directors shall be determined by the shareholders by ordinary resolution, except that the directors shall be entitled
to such remuneration as the directors may determine.
Unless
removed or re-appointed, each director shall be appointed for a term expiring at the next-following annual general meeting or upon any
specified event or after any specified period in a written agreement between the Company and the director, if any. Our directors will
be elected by an ordinary resolution of our shareholders.
A
director may be removed by ordinary resolution.
A
director may at any time resign or retire from office by giving us notice in writing.
Subject
to the provisions of the articles, the office of a director may be terminated forthwith if:
(a)
becomes
    bankrupt or makes any arrangement or composition with his creditors generally;
(b)
is
    found to be or becomes of unsound mind; or
(c)
resigns
    his office by notice in writing to the Company.
101
Each
of the compensation committee and the nominating and corporate governance committee shall consist of at least three directors and the
majority of the committee members shall be independent within the meaning of Section 5605(a)(2) of the NASDAQ Listing Rules. The audit
committee shall consist of at least three directors, all of whom shall be independent within the meaning of Section 5605(a)(2) of the
NASDAQ Listing Rules and will meet the criteria for independence set forth in Rule 10A-3 of the Exchange Act.
Powers
and Duties of Directors
Subject
to the provisions of the Companies Act, our amended and restated memorandum and articles, our business shall be managed by the directors,
who may exercise all our powers. No prior act of the directors shall be invalidated by any subsequent alteration of our amended and restated
memorandum or articles. However, to the extent allowed by the Companies Act, shareholders may by special resolution validate any prior
or future act of the directors which would otherwise be in breach of their duties.
The
directors may delegate any of their powers to any committee consisting of one or more persons who need not be shareholders and may include
non-directors so long as the majority of those persons are directors; any committee so formed shall in the exercise of the powers so
delegated conform to any regulations that may be imposed on it by the directors. Our board of directors has established an audit committee,
compensation committee, and nomination and corporate governance committee.
The
board of directors may establish any local or divisional board of directors or agency and delegate to it its powers and authorities (with
power to sub-delegate) for managing any of our affairs whether in the Cayman Islands or elsewhere and may appoint any persons to be members
of a local or divisional board of directors, or to be managers or agents, and may fix their remuneration.
The
directors may from time to time and at any time by power of attorney or in any other manner they determine appoint any person, either
generally or in respect of any specific matter, to be our agent with or without authority for that person to delegate all or any of that
person's powers.
The
directors may from time to time and at any time by power of attorney or in any other manner they determine appoint any person, whether
nominated directly or indirectly by the directors, to be our attorney or our authorized signatory and for such period and subject to
such conditions as they may think fit. The powers, authorities and discretions, however, must not exceed those vested in, or exercisable,
by the directors under the articles.
The
board of directors may remove any person so appointed and may revoke or vary the delegation.
A
director who is in any way, whether directly or indirectly, interested in a contract or transaction or proposed contract or transaction
with the Company shall declare the nature of his interest at a meeting of the directors. A general notice given to the directors by any
director to the effect that he is a member of any specified Company or firm and is to be regarded as interested in any contract or transaction
which may thereafter be made with that company or firm shall be deemed a sufficient declaration of interest in regard to any contract
so made or transaction so consummated. A director may vote in respect of any contract or transaction or proposed contract or transaction
notwithstanding that he may be interested therein and if he does so his vote shall be counted and he may be counted in the quorum at
any meeting of the directors at which any such contract or transaction or proposed contract or transaction shall come before the meeting
for consideration.
Capitalization
of Profits
The
Company may upon the recommendation of the directors by ordinary resolution authorize the directors to capitalize any sum standing to
the credit of any of the Company's reserve accounts (including share premium account and capital redemption reserve fund) or any
sum standing to the credit of the profit and loss account or otherwise available for distribution and to appropriate such sums to shareholders
in the proportions in which such sum would have been divisible amongst them had the same been a distribution of profits by way of dividend
and to apply such sum on their behalf in paying up in full unissued shares for allotment and distribution credited as fully paid up to
and amongst them in the proportion aforesaid.
102
Liquidation
Rights
If
we are wound up, the shareholders may, subject to the articles and any other sanction required by the Companies Act, pass a special resolution
allowing the liquidator to do either or both of the following:
(a)
to divide in specie among the shareholders the whole or any part of our assets and, for that purpose, to value any assets and to determine
how the division shall be carried out as between the shareholders or different classes of shareholders; and
(b)
to vest the whole or any part of the assets in trustees for the benefit of shareholders and those liable to contribute to the winding
up.
The
directors have the authority to present a petition for our winding up to the Grand Court of the Cayman Islands on our behalf without
the sanction of a resolution passed at a general meeting.
Exempted
Company
We
are an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies
and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside the Cayman Islands
may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary
company except that an exempted company:
●
is
    not required to make its register of members open to inspection by shareholders;
●
does
    not have to hold an annual general meeting;
●
may
    issue shares with no par value;
●
may
    obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first
    instance);
●
may
    register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;
●
may
    register as a limited duration company; and
●
may
    register as a segregated portfolio company.
"Limited
liability" means that the liability of each shareholder is limited to the amount unpaid by the shareholder on that shareholder's
shares of the company, except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an
illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil.
C.
Material
Contracts
We
have not entered into any material contracts other than in the ordinary course of business and other than those described in "Item
4. Information on the Company," "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions"
or elsewhere in this annual report.
103
D.
Exchange
Controls
See
"
Item 4. Information on the Company—B. Business Overview—Regulation— Regulations Relating to Foreign Exchange
."
E.
Taxation
The
following summary of the Cayman Islands, PRC and U.S. federal income tax considerations of an investment in the Ordinary Shares is based
upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change. This
summary does not deal with all possible tax considerations relating to an investment in the Ordinary Shares, such as the tax considerations
under U.S. state and local tax laws or under the tax laws of jurisdictions other than the Cayman Islands, the People's Republic
of China and the United States.
Cayman
Islands Taxation
The
Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation, and there
is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us or holders of our
Ordinary Shares levied by the government of the Cayman Islands, except for stamp duties which may be applicable on instruments executed
in, or after execution brought within the jurisdiction of the Cayman Islands. The Cayman Islands are not party to any double tax treaties
that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in
the Cayman Islands.
Payments of dividends and capital in
respect of Ordinary Shares will not be subject to taxation in the Cayman Islands and no Cayman Islands withholding will be required on
the payment of a dividend or capital to any holder of Ordinary Shares, nor will gains derived from the disposal of Ordinary Shares be
subject to Cayman Islands income or corporation tax.
As
an exempted company, the Company has received a tax exemption certificate from the Financial Secretary of the Cayman Islands pursuant
to the Tax Concessions Law (Revised) of the Cayman Islands, containing an undertaking that in the event of any change to the foregoing,
the Company, for a period of twenty years from the date of the grant of the undertaking (such date of grant being 1 August 2019), will
not be chargeable to tax in the Cayman Islands on its income or its capital gains arising in the Cayman Islands or elsewhere.
People's
Republic of China Taxation
Enterprise
Income Tax and Withholding Tax
We
are a holding company incorporated in the Cayman Islands and we gain substantial income by way of dividends paid to us from our PRC subsidiaries.
The EIT Law and its implementation rules provide that China-sourced income of foreign enterprises, such as dividends paid by a PRC subsidiary
to its equity holders that are non-resident enterprises, will normally be subject to PRC withholding tax at a rate of 10%, unless any
such foreign investor's jurisdiction of incorporation has a tax treaty with China that provides for a preferential tax rate or
a tax exemption.
Under
the EIT Law, an enterprise established outside of China with a "de facto management body" within China is considered a "resident
enterprise," which means that it is treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. Although
the implementation rules of the EIT Law define "de facto management body" as a managing body that actually, comprehensively
manage and control the production and operation, staff, accounting, property and other aspects of an enterprise, the only official guidance
for this definition currently available is set forth in SAT Circular 82, which provides guidance on the determination of the tax residence
status of a Chinese-controlled offshore incorporated enterprise. Although this circular only applies to offshore enterprises controlled
by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the criteria set forth in the circular
may reflect the SAT's general position on how the "de facto management body" text should be applied in determining
the tax resident status of all offshore enterprises.
According
to SAT Circular 82 (the Circular on Issues Concerning the Identification of Chinese-Controlled Overseas Registered Enterprises as Resident
Enterprises in Accordance With the Actual Standards of Organizational Management), a Chinese-controlled offshore incorporated enterprise
will be regarded as a PRC tax resident by virtue of having a "de facto management body" in China and will be subject to PRC
enterprise income tax on its worldwide income only if all of the following criteria are met: (i) the places where senior management and
senior management departments that are responsible for daily production, operation and management of the enterprise perform their duties
are mainly located within the territory of China; (ii) financial decisions (such as money borrowing, lending, financing and financial
risk management) and personnel decisions (such as appointment, dismissal and salary and wages) are made or need to be made by organizations
or persons located within the territory of China; (iii) main property, accounting books, corporate seal, the board of directors and files
of the minutes of shareholders' meetings of the enterprise are located or preserved within the territory of China; and (iv) half
(or more) of the directors or senior management staff having the right to vote habitually reside within the territory of China.
104
We
believe that Sunrise New Energy is not a resident enterprise for PRC tax purpose. Sunrise New Energy is not controlled by a PRC enterprise
or PRC enterprise group and we do not meet some of the conditions outlined in the immediately preceding paragraph. For example, as a
holding company, the key assets and records of Sunrise New Energy, including the resolutions and meeting minutes of our board of directors
and the resolutions and meeting minutes of our shareholders, are located and maintained outside the PRC. In addition, we are not aware
of any offshore holding companies with a corporate structure similar to ours that has been deemed a PRC "resident enterprise"
by the PRC tax authorities. However, as the tax residency status of an enterprise is subject to determination by the PRC tax authorities
and uncertainties remain with respect to the interpretation of the term "de facto management body" as applicable to our offshore
entities, we will continue to monitor our tax status.
If
the PRC tax authorities determine that Sunrise New Energy is a PRC resident enterprise for enterprise income tax purposes, we would be
subject to PRC enterprise income on our worldwide income at the rate of 25%. Furthermore, we may be required to withhold a 10% withholding
tax from dividends we pay to our shareholders that are non-resident enterprises. In addition, non-resident enterprise shareholders may
be subject to a 10% PRC withholding tax on gains realized on the sale or other disposition of our ordinary shares, if such income is
treated as sourced from within the PRC. It is unclear whether our non-PRC individual shareholders would be subject to any PRC tax on
dividends or gains obtained by such non-PRC individual shareholders in the event we are determined to be a PRC resident enterprise. If
any PRC tax were to apply to dividends or gains realized by non-PRC individuals, it would generally apply at a rate of 20% unless a reduced
rate is available under an applicable tax treaty. However, it is also unclear whether non-PRC shareholders of the Company would be able
to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that Sunrise New Energy is
treated as a PRC resident enterprise.
See
"Risk Factors — Risks Related to Doing Business in China — Under the PRC Enterprise Income Tax
Law, or the EIT Law, we may be classified as a "resident enterprise" of China, which could result in unfavorable tax consequences
to us and our non-PRC shareholders."
Value-added
Tax
According
to the VAT Laws, MOF and SAT Circular 32 (the Circular of the Ministry of Finance and the State Administration of Taxation on Adjustment
of Value-Added Tax Rates), and MOF, SAT and GAC Circular 39 (the Announcement on Policies for Deepening the VAT Reform), all enterprises
and individuals engaged in the sale of goods, the provision of processing, repair and replacement services, sales of services, intangible
assets, real property and the importation of goods within the territory of the PRC are the taxpayers of VAT. The VAT tax rates generally
applicable are simplified as 13%, 9%, 6% and 0%, and the VAT tax rate of 3% is applicable to small-scale taxpayers. The VAT tax rates
applicable to our PRC subsidiaries and consolidated affiliates are as follows: 6% on services for the VIE, GMB (Hangzhou) and Mentor
Board Voice of Seeding (Shanghai) Cultural Technology Co., Ltd.; 3% for small-scale taxpayers including GMB (Beijing), GMB Culture, GMB
Consulting and GMB Linking and GIOP BJ.
105
United
States Federal Income Tax Considerations
The
following does not address the tax consequences to any particular investor or to persons in special tax situations such as:
●
banks;
●
financial
    institutions;
●
insurance
    companies;
●
regulated
    investment companies;
●
real
    estate investment trusts;
●
broker-dealers;
●
persons
    that elect to mark their securities to market;
●
U.S.
    expatriates or former long-term residents of the U.S.;
●
governments
    or agencies or instrumentalities thereof;
●
tax-exempt
    entities;
●
persons
    liable for alternative minimum tax;
●
persons
    holding our Ordinary Shares as part of a straddle, hedging, conversion or integrated transaction;
●
persons
    that actually or constructively own 10% or more of our voting power or value (including by reason of owning our Ordinary Shares);
●
persons
    who acquired our Ordinary Shares pursuant to the exercise of any employee share option or otherwise as compensation;
●
persons
    holding our Ordinary Shares through partnerships or other pass-through entities;
●
beneficiaries
    of a Trust holding our Ordinary Shares; or
●
persons
    holding our Ordinary Shares through a Trust.
106
Material
Tax Consequences Applicable to U.S. Holders of Our Ordinary Shares
The
following sets forth the material U.S. federal income tax consequences related to the ownership and disposition of our Ordinary Shares.
This description does not deal with all possible tax consequences relating to ownership and disposition of our Ordinary Shares or U.S.
tax laws, other than the U.S. federal income tax laws, such as the tax consequences under non-U.S. tax laws, state, local and other tax
laws.
The
following brief description applies only to U.S. Holders (defined below) that hold Ordinary Shares as capital assets and that have the
U.S. dollar as their functional currency. This brief description is based on the federal income tax laws of the United States in effect
as of the date of this annual report and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this annual
report, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities
are subject to change, which change could apply retroactively and could affect the tax consequences described below.
The
brief description below of the U.S. federal income tax consequences to "U.S. Holders" will apply to you if you are a beneficial
owner of Ordinary Shares and you are, for U.S. federal income tax purposes,
●
an
    individual who is a citizen or resident of the United States;
●
a
    corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United
    States, any state thereof or the District of Columbia;
●
an
    estate whose income is subject to U.S. federal income taxation regardless of its source; or
●
a
    trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons
    for all substantial decisions or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a
    U.S. person.
If
a partnership (or other entities treated as a partnership for United States federal income tax purposes) is a beneficial owner of our
Ordinary Shares, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of the
partnership. Partnerships and partners of a partnership holding our Ordinary Shares are urged to consult their tax advisors regarding
an investment in our Ordinary Shares.
An
individual is considered a resident of the U.S. for federal income tax purposes if he or she meets either the "Green Card Test"
or the "Substantial Presence Test" described as follows:
The
Green Card Test: You are a lawful permanent resident of the United States, at any time, if you have been given the privilege, according
to the immigration laws of the United States, of residing permanently in the United States as an immigrant. You generally have this status
if the U.S. Citizenship and Immigration Services issued you an alien registration card, Form I-551, also known as a "green card."
The
Substantial Presence Test: If an alien is present in the United States on at least 31 days of the current calendar year, he or she will
(absent an applicable exception) be classified as a resident alien if the sum of the following equals 183 days or more (
See
§7701(b)(3)(A)
of the Internal Revenue Code and related Treasury Regulations):
1.
The
    actual days in the United States in the current year; plus
2.
One-third
    of his or her days in the United States in the immediately preceding year; plus
3.
One-sixth
    of his or her days in the United States in the second preceding year.
107
Taxation
of Dividends and Other Distributions on our Ordinary Shares
Subject
to the passive foreign investment company (PFIC) rules (defined below) discussed below, the gross amount of distributions made by us
to you with respect to the Ordinary Shares (including the amount of any taxes withheld therefrom) will generally be includable in your
gross income as dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current
or accumulated earnings and profits (as determined under U.S. federal income tax principles). With respect to corporate U.S. Holders,
the dividends will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from
other U.S. corporations.
With
respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable
to qualified dividend income, provided that (1) the Ordinary Shares are readily tradable on an established securities market in the United
States, or we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange
of information program, (2) we are not a PFIC (defined below) for either our taxable year in which the dividend is paid or the preceding
taxable year, and (3) certain holding period requirements are met. Because there is no income tax treaty between the United States and
the Cayman Islands, clause (1) above can be satisfied only if the Ordinary Shares are readily tradable on an established securities market
in the United States. Under U.S. Internal Revenue Service authority, Ordinary Shares are considered for purpose of clause (1) above to
be readily tradable on an established securities market in the United States if they are listed on certain exchanges, which presently
include the Nasdaq. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect
to our Ordinary Shares, including the effects of any change in law after the date of this annual report.
Dividends
will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income
(as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will
be limited to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable
to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income.
For this purpose, dividends distributed by us with respect to our Ordinary Shares will constitute "passive category income"
but could, in the case of certain U.S. Holders, constitute "general category income."
To
the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal
income tax principles), it will be treated first as a tax-free return of your tax basis in your Ordinary Shares, and to the extent the
amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings
and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a
dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described
above.
Taxation
of Dispositions of Ordinary Shares
Subject
to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other
taxable disposition of a share equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis
(in U.S. dollars) in the Ordinary Shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including
an individual U.S. Holder, who has held the Ordinary Shares for more than one year, you will generally be eligible for reduced tax rates.
The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize will generally be treated as
United States source income or loss for foreign tax credit limitation purposes which will generally limit the availability of foreign
tax credits.
Passive
Foreign Investment Company Considerations
A non-U.S. corporation,
such as our company, will be classified as a PFIC for U.S. federal income tax purposes for any taxable year if, applying applicable look-through
rules, either (i) 75% or more of its gross income for such year consists of certain types of "passive" income or (ii) 50%
or more of the value of its assets (generally determined on the basis of a quarterly average) during such year is attributable to assets
that produce or are held for the production of passive income (the "asset test"). For this purpose, cash and assets readily
convertible into cash are categorized as passive assets and the company's goodwill and other unbooked intangibles not reflected
on its balance sheet are taken into account. Passive income generally includes, among other things, dividends, interest, income equivalent
to interest, rents, royalties, and gains from the disposition of passive assets. We will be treated as owning a proportionate share of
the assets and earning a proportionate share of the income of any other corporation in which we own, directly or indirectly, 25% or more
(by value) of the stock.
108
Based
upon our current and projected income and assets, including the proceeds we received from our initial public offering and the value of
our Ordinary Shares, we do not expect to be a PFIC for the current taxable year or the foreseeable future. However, no assurance can
be given in this regard because the determination of whether we are or will become a PFIC for any taxable year is a factual determination
made annually that will depend, in part, upon the composition and classification of our income and assets. Furthermore, fluctuations
in the market price of our Ordinary Shares may cause us to be classified as a PFIC for the current or future taxable years because the
value of our assets for purposes of the asset test, including the value of our goodwill and other unbooked intangibles, may be determined
by reference to the market price of our Ordinary Shares from time to time (which may be volatile). In addition, the composition of our
income and assets may also be affected by how, and how quickly, we use our liquid assets and the cash raised in our initial public offering.
Under circumstances where our revenue from activities that produce passive income significantly increases relative to our revenue from
activities that produce non-passive income, or where we determine not to deploy significant amounts of cash for active purposes,
our risk of becoming classified as a PFIC may substantially increase.
If
we are a PFIC for any year during which a U.S. Holder holds our Ordinary Shares, we generally will continue to be treated as a PFIC for
all succeeding years during which such U.S. Holder holds our Ordinary Shares, unless we were to cease to be a PFIC and the U.S. Holder
were to make a "deemed sale" election with respect to the Ordinary Shares.
Information
Reporting and Backup Withholding
Dividend
payments with respect to our Ordinary Shares and proceeds from the sale, exchange or redemption of our Ordinary Shares may be subject
to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding under Section 3406 of the US Internal
Revenue Code with at a current flat rate of 24%. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct
taxpayer identification number and makes any other required certification on U.S. Internal Revenue Service Form W-9 or who is otherwise
exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification
on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S.
information reporting and backup withholding rules.
Backup
withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability,
and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund
with the U.S. Internal Revenue Service and furnishing any required information. We do not intend to withhold taxes for individual shareholders.
However, transactions effected through certain brokers or other intermediaries may be subject to withholding taxes (including backup
withholding), and such brokers or intermediaries may be required by law to withhold such taxes.
Under
the Hiring Incentives to Restore Employment Act of 2010, certain U.S. Holders are required to report information relating to our Ordinary
Shares, subject to certain exceptions (including an exception for Ordinary Shares held in accounts maintained by certain financial institutions),
by attaching a complete Internal Revenue Service Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for
each year in which they hold Ordinary Shares. Failure to report such information could result in substantial penalties.
F.
Dividends
and Paying Agents
Not
applicable.
G.
Statement
by Experts
Not
applicable.
H.
Documents
on Display
We
previously filed with the SEC registration statement on Form F-1 (File Number 333-233745), as amended, to register our Ordinary Shares
in relation to our initial public offering, which was completed on February 11, 2021.
We
are subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers.
Accordingly, we are required to file reports, including annual reports on Form 20-F, and other information with the SEC. All information
filed with the SEC can be obtained over the internet at the SEC's website at www.sec.gov or inspected and copied at the public
reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information regarding
the Washington, D.C. Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site at www.sec.gov that
contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the
SEC using its EDGAR system. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing
and content of quarterly reports and proxy statements, and officers, directors and principal shareholders are exempt from the reporting
and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.
I.
Subsidiary
Information
For
a listing of our subsidiaries, see "
Item 4C.  Organizational Structure"
for a chart of our current structure.
109
ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest
Rate Risk
We
are exposed to interest rate risk while we have short-term bank loans outstanding. Although interest rates for our short-term loans are
typically fixed for the terms of the loans, the terms are typically twelve months and interest rates are subject to change upon renewal.
Credit
Risk
Credit
risk is controlled by the application of credit approvals, limits and monitoring procedures. We manage credit risk through in-house research
and analysis of the Chinese economy and the underlying obligors and transaction structures. We identify credit risk collectively based
on industry, geography and customer type. In measuring the credit risk of our sales to our customers, we mainly reflect the "probability
of default" by the customer on its contractual obligations and consider the current financial position of the customer and the
current and likely future exposures to the customer.
Liquidity
Risk
We
are also exposed to liquidity risk which is risk that it we will be unable to provide sufficient capital resources and liquidity to meet
our commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures.
When necessary, we will turn to other financial institutions and related parties to obtain short-term funding to cover any liquidity
shortage.
Foreign
Exchange Risk
While
our reporting currency is the U.S. dollar, almost all of our consolidated revenues and consolidated costs and expenses are denominated
in RMB. All of our assets are denominated in RMB. As a result, we are exposed to foreign exchange risk as our revenues and results of
operations may be affected by fluctuations in the exchange rate between the U.S. dollar and RMB. If the RMB depreciates against the U.S.
dollar, the value of our RMB revenues, earnings and assets as expressed in our U.S. dollar financial statements will decline. We have
not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk.
ITEM 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
A.
Debt
Securities
Not
applicable.
B.
Warrants
and Rights
Not
applicable.
C.
Other
Securities
Not
applicable.
D.
American
Depositary Shares
Not
applicable.
110
PART
II
ITEM 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Material
Modifications to the Rights of Security Holders
See
"
Item 10. Additional Information
" for a description of the rights of securities holders, which remain unchanged.
Use
of Proceeds
The
following "Use of Proceeds" information relates to the registration statement on Form F-1, as amended (File Number: 333-233745)
in relation to the initial public offering of 6,720,000 Ordinary Shares at an initial public offering price of $4.00 per Ordinary Share.
Our initial public offering closed on February 11, 2021. The registration statement was declared effective by the SEC on February 5,
2021. ViewTrade Securities, Inc. was the representative of the underwriters for our initial public offering. On February 19, 2021, Network
1 Financial Securities, Inc. exercised the over-allotment option in full to purchase an additional 1,008,000 Ordinary Shares.
We
received net proceeds of approximately $24.61 million, after deducting underwriting discounts and estimated offering expenses payable
by us. The total expense incurred for our Company's account in connection with our initial public offering was approximately $2.28
million, which included approximately $2.02 million in underwriting discounts for the initial public offering and approximately $0.26
million in other costs and expenses for our initial public offering. None of the transaction expenses included payments to directors
or officers of our Company or their associates, persons owning more than 10% or more of our equity securities or our affiliates. None
of the net proceeds we received from the initial public offering were paid, directly or indirectly, to any of our directors or officers
or their associates, persons owning 10% or more of our equity securities or our affiliates. As of the date of this annual report, we
have used $10.76 million from our initial public offering as the registered capital for our newly established JV, Sunrise Guizhou. We
intend to use the remaining proceeds from our initial public offering as disclosed in our registration statement on Form F-1. Our management,
however, will have significant flexibility and discretion to apply the net proceeds from our initial public offering. If an unforeseen
event occurs or business conditions change, we may use the proceeds of this offering differently than as disclosed previously.
ITEM 15.
CONTROLS AND PROCEDURES
Disclosure
Controls and Procedures
As
of December 31, 2022, under the supervision and with the participation of our management, including our Chief Executive Officer
and Chief Financial Officer, we performed an evaluation of the effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rule 13a-15(e) under the Exchange Act). There are inherent limitations to the effectiveness of any
disclosure controls and procedures system, including the possibility of human error and circumventing or overriding them. Even if effective,
disclosure controls and procedures can provide only reasonable assurance of achieving their control objectives.
Based
on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were
not effective as of December 31, 2022 and as of the date that the evaluation of the effectiveness of our disclosure controls and procedures
was completed, failed to provide reasonable assurance that the information we are required to disclose in the reports we file or
submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the SEC's
rules and forms and (2) accumulated and communicated to our management to allow timely decisions regarding required disclosures.
111
Management's
Annual Report on Internal Control Over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined
in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Our management conducted an assessment of the effectiveness of our internal control
over financial reporting based on the criteria set forth in "Internal Control - Integrated Framework (2013)" issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
In the course of preparing our consolidated financial
statements for the year ended December 31, 2022, we identified material weaknesses and other control deficiencies in our internal control
over financial reporting as of December 31, 2022. The material weaknesses identified included: (1) a lack of formal internal controls
policies over financial closing and reporting processes, which may increase risk of error, fraud, misstatement of financial reporting,
or even non-compliance with related regulations for a U.S. listed Group; (2) a lack of accounting staff and resources with appropriate
knowledge of U.S. GAAP and SEC reporting and compliance requirements, and accounting policies and procedures manual that covers U.S.
GAAP and SEC financial reporting requirements to complete relate US GAAP and SEC reporting. Based on this evaluation, our management
has concluded that our internal control over financial reporting was not effective as of December 31, 2022.
We are taking a number of measures to tackle
the control deficiencies identified, including: (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting
experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework;
(ii) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial
reporting personnel; and (iii) preparing a comprehensive accounting policies and procedures manual that covers financial closing and
reporting processes, U.S. GAAP and SEC financial reporting requirements, and ensuring that accounting personnel are familiar with and
follow the manual.
However,
we cannot assure you that we will remediate our control deficiencies in a timely manner. The process of designing and implementing an
effective financial reporting system is a continuous effort that requires us to anticipate and react to changes in our business and the
economic and regulatory environments and to expend significant resources to maintain a financial reporting system that is adequate to
satisfy our reporting obligation. See "Item 3. Key Information—D. Risk Factors—We have identified several control deficiencies
in our internal control over financial reporting. If we fail to maintain an effective system of internal controls over financial reporting,
we may not be able to accurately report our financial results or prevent fraud." Additionally, we cannot assure you that we have
identified all, or that we will not in the future have additional, material weaknesses.
Attestation
Report of the Registered Public Accounting Firm
As
a company with less than $1.235 billion in revenue for our last fiscal year, we qualify as an "emerging growth company" pursuant
to the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise
applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404
of the Sarbanes-Oxley Act of 2002, in the assessment of the emerging growth company's internal control over financial reporting.
This annual report on Form 20-F does not include an attestation report of our registered public accounting firm because we are an emerging
growth company.
Changes
in Internal Control
Other
than as described above, there were no changes in our internal controls over financial reporting that occurred during the period covered
by this annual report on Form 20-F that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.
ITEM
16. [RESERVED]
Not
applicable.
ITEM 16.A.
AUDIT
COMMITTEE FINANCIAL EXPERT
Our
board of directors determined that Mr. Ligang Lu, chairman of our audit committee and an independent director (under the standards
set forth in Nasdaq Stock Market Rule 5605(a)(2) and Rule 10A-3 under the Exchange Act), is an audit committee financial
expert.
ITEM 16.B.
CODE
OF ETHICS
Our
board of directors adopted a code of business conduct and ethics that applies to all of our directors, officers, employees, including
certain provisions that specifically apply to our principal executive officer, principal financial officer or controller and any other
persons who perform similar functions for us. A copy of our code of business conduct and ethics can be accessed at http://sdh365.com/IR/.
112
ITEM 16.C.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
The
following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered
by our independent registered public accounting firm, for the periods indicated.
Year Ended December
    31,
Services
2022
2021
US$
US$
Audit fees
(1)
330,000
290,000
Audit-related fees
(2)
8,400
10,000
Tax fees
(3)
-
Other fees
(4)
-
Total
338,400
300,000
Note:
(1)
"Audit
                                            fees" means the aggregate fees billed for professional services rendered by our principal
                                            accounting firm for the audit of our annual financial statements and the review of our comparative
                                            interim financial statements.
(2)
"Audit-related
                                            fees" means the aggregate fees billed for professional services rendered by our principal
                                            accounting firm for the assurance and related services, which mainly included the audit and
                                            review of financial statements and are not reported under "Audit fees" above.
(3)
"Tax
                                            fees" means the aggregate fees billed for professional services rendered by our principal
                                            accounting firm for tax compliance, tax advice and tax planning.
(4)
"Other
                                            fees" means the aggregate fees incurred in each of the fiscal years listed for the
                                            professional tax services rendered by our principal accounting firm other than services reported
                                            under "Audit fees," "Audit-related fees" and "Tax fees."
The policy of our audit committee is to pre-approve
all audit and non-audit services provided by MarcumAsia and Friedman LLP, our independent registered public accounting firm including
audit services, audit-related services, tax services, and other services as described above.
ITEM 16.D.
EXEMPTIONS
FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not
applicable.
ITEM 16.E.
PURCHASES
OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
None.
ITEM 16.F.
CHANGE
IN REGISTRANT'S CERTIFYING ACCOUNTANT
There
has been no change in independent accountants for our Company during the two most recent fiscal years or any subsequent interim period
except as previously reported in our Form 6-K filed with the SEC on December 23, 2022. There have been no disagreements of the type required
to be disclosed by Item 16F(b).
113
ITEM 16.G.
CORPORATE
GOVERNANCE
As
a Cayman Islands company listed on the Nasdaq Capital Market, we are subject to the Nasdaq Capital Market corporate governance listing
standards. However, Nasdaq Capital Market rules permit a foreign private issuer like us to follow the corporate governance practices
of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly
from the Nasdaq Capital Market corporate governance listing standards.
NASDAQ
Listing Rule 5635 generally provides that shareholder approval is required of U.S. domestic companies listed on the NASDAQ Capital Market
prior to issuance (or potential issuance) of securities (i) equaling 20% or more of the company's common stock or voting power
for less than the greater of market or book value (ii) resulting in a change of control of the company; and (iii) which is being issued
pursuant to a stock option or purchase plan to be established or materially amended or other equity compensation arrangement made or
materially amended. Notwithstanding this general requirement, NASDAQ Listing Rule 5615(a)(3)(A) permits foreign private issuers to follow
their home country practice rather than these shareholder approval requirements. The Cayman Islands do not require shareholder approval
prior to any of the foregoing types of issuances. The Company, therefore, is not required to obtain such shareholder approval prior to
entering into a transaction with the potential to issue securities as described above. Prior to the closing of our IPO, the Board of
Directors of the Company elected to follow the Company's home country rules as to such issuances and will not be required to seek
shareholder approval prior to entering into such a transaction.
Other
than those described above, there are no significant differences between our corporate governance practices and those followed by U.S.
domestic companies under Nasdaq Capital Market corporate governance listing standards.
ITEM 16.H.
MINE
SAFETY DISCLOSURE
Not
applicable.
ITEM
16.I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not
applicable.
114
PART
III
ITEM 17.
FINANCIAL STATEMENTS
We
have elected to provide financial statements pursuant to Item 18.
ITEM 18.
FINANCIAL STATEMENTS
The
consolidated financial statements of Sunrise New Energy Co., Ltd. are included at the end of this annual report.
ITEM 19.
EXHIBITS
Exhibit
Number
Description
1.1
Amended
    and Restated Memorandum and Articles of Association (incorporated herein by reference to exhibit 4.2 to our registration statement
    on Form S-8 (File No. 333-267105), filed with the SEC on August 26, 2022)
2.1
Registrant's
    Specimen Certificate for Ordinary Shares (incorporated herein by reference to Exhibit 4.1 to our registration statement on Form F-1 (File No. 333-233745), as
    amended)
2.2
Description
    of Securities registered under Section 12 of the Exchange Act of 1934, as amended (incorporated herein by reference to exhibit 2.2
    to the annual report on Form 20-F (File No. 001-40008), filed with the SEC on April 30, 2021)
4.1
Form
    of Employment Agreement by and between executive officers and the Registrant (incorporated herein by reference to Exhibit 10.1 to
    our registration statement on Form F-1 (File No. 333-233745), as amended)
4.2
Form
    of Indemnification Agreement by and between executive officers, directors and the Registrant (incorporated herein by reference to
    Exhibit 10.2 to our registration statement on Form F-1 (File No. 333-233745), as amended)
4.4
Equity
    Pledge Agreement dated June 10, 2019, by and among GIOP BJ, SDH, and shareholders of SDH (incorporated herein by reference to Exhibit
    10.3 to our registration statement on Form F-1 (File No. 333-233745), as amended)
4.5
Exclusive
    Technical and Consulting Services Agreement, dated June 10, 2019, by and between GIOP BJ and SDH (incorporated herein by reference
    to Exhibit 10.5 to our registration statement on Form F-1 (File No. 333-233745), as amended)
4.6
Form
    of Power of Attorney, by and among GIOP BJ, SDH, and shareholders of SDH (incorporated herein by reference to Exhibit 10.6 to our
    registration statement on Form F-1 (File No. 333-233745), as amended)
4.7
Form
    of Spousal Consent, by and among GIOP BJ, SDH, and certain spouses of shareholders of SDH (incorporated herein by reference to Exhibit
    10.7 to our registration statement on Form F-1 (File No. 333-233745), as amended)
4.9
Exclusive
    Option Agreement, dated June 10, 2019, by and among GIOP BJ, SDH, and shareholders of SDH (incorporated herein by reference to Exhibit
    10.4 to our registration statement on Form F-1 (File No. 333-233745), as amended)
4.10
Strategic
    Cooperation Agreement, dated May 30, 2016, by and between Beijing Winning at the Frontlines Cultural Exchange Co., Ltd. and GMB (Beijing)
    (incorporated herein by reference to Exhibit 10.8 to our registration statement on Form F-1 (File No. 333-233745), as amended)
4.11
Copyright
    Authorization Agreement, dated May 30, 2016 by and between Beijing Winning at the Frontlines Cultural Exchange Co., Ltd. and GMB
    (Beijing) (incorporated herein by reference to Exhibit 10.9 to our registration statement on Form F-1 (File No. 333-233745), as amended)
4.12
Intangible
    Assets Purchase Agreement, dated November 2, 2019, by and between Beijing Wining at the Frontlines Cultural Exchange Co., Ltd and
    GMB (Beijing) (incorporated herein by reference to Exhibit 10.10 to our registration statement on Form F-1 (File No. 333-233745),
    as amended)
4.13
Investment
    Agreement, dated April 2, 2022, by and among Zhuhai (Zibo) Investment Co., Ltd and other parties (incorporated herein by reference
    to Exhibit 4.13 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 2, 2022)
4.14
State-owned
    Construction Land Right Use Assignment, dated December 24, 2021, by and between Natural Resources Bureau of Qianxinan Prefecture,
    Yilong New District Branch and Sunrise (Guizhou) New Energy Materials Co., Ltd. (incorporated herein by reference to Exhibit 4.14
    to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 2, 2022)
4.15
Capital
    Increase Agreement (Zhejiang Wangxin Health Technology Co., Ltd.), dated February 20, 2021, by and among Zibo Shidong Digital Technology
    Service Co, Ltd. and other parties (incorporated herein by reference to Exhibit 4.15 to our annual report on Form 20-F (File No.
    001-40008), filed with the SEC on May 2, 2022)
115
4.16
Investment
    Agreement, dated April 11, 2021, by and among Global Mentor Board (Beijing) Information Technology Co, Ltd., Beijing Tax Star Technology
    Co., Ltd., Beijing Zhitong Zhenye Technology Co., Ltd., and Li Jiyou (incorporated herein by reference to Exhibit 4.16 to our annual
    report on Form 20-F (File No. 001-40008), filed with the SEC on May 2, 2022)
4.17
Loan
    Agreement, dated May 10, 2021, by and between Global Internet of People, Inc. and Waichun Logistics Technology Limited (incorporated
    herein by reference to Exhibit 4.17 to our annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 2, 2022)
4.18
Shenzhen
    Jiazhong Innovation Investment Enterprise (Limited Partnership) Partnership Agreement, dated June 1, 2021, by and among Global
    Mentor Board (Beijing) Information Technology Co., Ltd and other parties (incorporated herein by reference to Exhibit 4.18 to our
    annual report on Form 20-F (File No. 001-40008), filed with the SEC on May 2, 2022)
4.19
Agreement
    of Action in Concert, dated April 12, 2022, among Zhuhai Zibo and twelve original shareholders of Sunrise Guizhou (incorporated herein
    by reference to Exhibit 10.2 to our report on Form 6-K, filed with the SEC on June 26, 2022)
4.20*
Purchase
    Agreement, dated July 2, 2022, between Sunrise Guizhou and former shareholders of Sunrise Tech (formerly known as Anlong Hengrui
    Graphite Material Co., Ltd.)
4.21*
Sales
    and leaseback contract, dated September 22, 2022, between Sunrise Guizhou and Far East International Financial Leasing Co., Ltd.
4.22*
Sales
    and leaseback contract, dated November 4, 2022, between Sunrise Guizhou and China Power Investment Ronghe Financial Leasing Co.,
    Ltd.
8.1*
Principal
    subsidiaries and consolidated affiliated entities of the Registrant
11.1
Code
    of Business Conduct and Ethics of the Registrant (incorporated herein by reference to Exhibit 99.1 to our registration statement
    on Form F-1 (File No. 333-233745), as amended)
12.1*
Certification
    by the Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2*
Certification
    by the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1**
Certification
    by the Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2**
Certification
    by the Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1*
Consent
    by Jincheng Tongda & Neal Law Firm
101.*
The
    following financial statements from the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2022, formatted
    in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income (Loss), (iii)
    Consolidated Statements of Changes in Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial
    Statements, tagged as blocks of text and including detailed tags
104.*
Cover
    Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*
Filed
                                            herewith.
**
Furnished
                                            herewith.
116
SIGNATURES
The
registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this annual report on its behalf.
Sunrise
    New Energy Co., Ltd.
By:
/s/
    Haiping Hu
Name:
Haiping
    Hu
Title:
Chairman, Chief Executive Officer, and Director
Date
May 16, 2023
117
SUNRISE NEW ENERGY CO.,
LTD.
INDEX TO CONSOLIDATED
FINANCIAL STATEMENTS
TABLE OF CONTENTS
Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (Marcum Asia CPAs LLP PCAOB ID: 5395)
F-2
Report of Independent Registered Public Accounting Firm (Friedman LLP PCAOB ID:
711
)
F-3
Consolidated Balance Sheets as of December 31, 2022 and 2021
F-4
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended December 31, 2022, 2021 and 2020
F-5
Consolidated Statements of Changes in Equity for the Years Ended December 31, 2022, 2021 and 2020
F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021 and 2020
F-7
Notes to Consolidated Financial Statements
F-8
F-
1
Report
of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of
Sunrise New Energy Co., Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated
balance sheet of Sunrise New Energy Co., Ltd. and its subsidiaries (collectively, the "Company") as of December 31, 2022,
the related consolidated statements of operations and comprehensive (loss) income, changes in equity, and cash flows for the year ended
December 31, 2022, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion,
the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December
31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles
generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ Marcum Asia CPAs
LLP
Marcum Asia CPAs
LLP
We
                                            have served as the Company's auditor since 2018. (such date takes into account the
                                            acquisition of certain assets of Friedman LLP by Marcum Asia CPAs LLP effective September
                                            1, 2022)
New York, New York
May 16, 2023
F-
2
Report
of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of
Sunrise New Energy Co., Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance
sheet of Sunrise New Energy Co., Ltd.(formerly known as Global Internet of People, Inc.) and its subsidiaries (collectively, the "Company")
as of December 31, 2021, the related consolidated statements of operations and comprehensive (loss) income, changes in equity, and cash
flows for each of the two years in the period ended December 31, 2021 and 2020, and the related notes (collectively referred to as the
"consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for each
of the two years in the period ended December 31, 2021 and 2020 in conformity with accounting principles generally accepted in the United
States of America.
Basis for Opinion
These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial
statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain
an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness
of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to
assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable
basis for our opinion.
/s/
Friedman LLP
New York
, New York
May 2, 2022
We served as the Company's auditor from 2018
to 2022.
F-
3
SUNRISE NEW ENERGY CO.,
LTD.
CONSOLIDATED BALANCE SHEETS
As of December 31,
2022
2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
1,655,549
$
13,916,155
Restricted cash
2,638,468
-
Accounts receivable, net
5,167,701
6,861,672
Notes receivable
868,679
-
Inventories, net
18,330,516
3,105,673
Due from related parties
400,022
65,278
Short-term investment
3,336,256
5,961,605
Prepaid expenses and other current assets
12,240,642
4,435,175
TOTAL CURRENT ASSETS
44,637,833
34,345,558
NON-CURRENT ASSETS
Restricted cash
-
700,060
Long term prepayments and other non-current assets
3,850,985
10,244,917
Plant, property and equipment, net
41,468,383
3,351,321
Land use rights, net
10,083,242
-
Intangible assets, net
3,962,650
3,594,977
Long-term investments
3,019,281
5,381,441
Operating lease right-of-use assets
-
224,773
Deferred tax assets
-
852,037
TOTAL NON-CURRENT ASSETS
62,384,541
24,349,526
TOTAL ASSETS
107,022,374
58,695,084
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable
12,259,772
34,486
Note payable
3,876,748
-
Deferred revenue
347,231
179,407
Deferred revenue - related parties
347,471
-
Deferred government subsidy
2,871,665
-
Due to related parties
885,150
-
Income taxes payable
506,638
1,076,518
Operating lease liabilities, current
-
99,569
Long-term payable, current
3,706,628
-
Consideration payable, current
582,381
-
Accrued expenses and other current liabilities
639,761
330,902
TOTAL CURRENT LIABILITIES
26,023,445
1,720,882
NON-CURRENT LIABILITIES
Long term payable, non-current
4,078,843
-
Consideration payable, non-current
3,358,906
-
Deferred tax liabilities, net
199,583
-
TOTAL NON-CURRENT LIABILITIES
7,637,332
-
TOTAL LIABILITES
33,660,777
1,720,882
EQUITY
Ordinary shares (
500,000,000
shares authorized; $
0.0001
par value,
24,528,000
shares issued and outstanding as of December 31, 2021;
25,361,550
shares issued and outstanding as of December 31, 2022)
2,536
2,453
Additional paid-in capital
34,696,702
31,966,816
Statutory reserves
2,477,940
2,473,801
(Accumulated deficits) Retained earnings
(
5,148,529
)
17,259,976
Accumulated other comprehensive (loss) income
(
906,444
)
2,148,906
TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO SUNRISE NEW ENERGY CO., LTD. ORDINARY SHAREHOLDERS
31,122,205
53,851,952
Non-controlling interests
42,239,392
3,122,250
TOTAL EQUITY
73,361,597
56,974,202
TOTAL LIABILITIES AND EQUITY
$
107,022,374
$
58,695,084
The accompanying notes are an integral part of
these consolidated financial statements.
F-
4
SUNRISE
NEW ENERGY CO., LTD.
CONSOLIDATED STATEMENTS
OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
For the years ended
December
    31,
2022
2021
2020
REVENUE, NET
Products
$
37,583,844
$
2,104,767
$
1,495,380
Service
541,824
5,304,505
21,685,704
Total revenues
38,125,668
7,409,272
23,181,084
COSTS OF REVENUES
Products
38,299,090
2,063,296
892,791
Service
1,176,956
1,823,358
2,087,425
Total cost of revenues
39,476,046
3,886,654
2,980,216
GROSS (LOSS) PROFIT
(
1,350,378
)
3,522,618
20,200,868
OPERATING EXPENSES
Selling expenses
1,075,980
946,775
906,456
General and administrative expenses
12,678,873
7,834,291
3,897,040
Research and development expenses
1,053,882
2,151,565
671,312
Impairment of intangible assets
2,650,020
-
-
Total operating expenses
17,458,755
10,932,631
5,474,808
(LOSS) PROFIT FROM OPERATIONS
(
18,809,133
)
(
7,410,013
)
14,726,060
OTHER (EXPENSES) INCOME
Investment losses
(
3,566,561
)
(
2,118,453
)
(
1,087
)
Interest (expense) income
(
27,128
)
173,173
214,460
Other income, net
87,390
404,380
72,837
Total other (expenses)
    income
(
3,506,299
)
(
1,540,900
)
286,210
(LOSS) PROFIT BEFORE INCOME TAXES
(
22,315,432
)
(
8,950,913
)
15,012,270
Income taxes provision (benefit)
808,970
(
236,581
)
3,054,983
NET (LOSS) INCOME
(
23,124,402
)
(
8,714,332
)
11,957,287
Less: net loss attributable to non-controlling
    interests
(
720,036
)
(
311,072
)
(
130,240
)
NET (LOSS) INCOME ATTRIBUTABLE
    TO SUNRISE NEW ENERGY CO., LTD. ORDINARY SHAREHOLDERS
$
(
22,404,366
)
$
(
8,403,260
)
12,087,527
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment
(
5,123,964
)
700,316
2,076,303
TOTAL COMPREHENSIVE (LOSS) INCOME
(
28,248,366
)
(
8,014,016
)
14,033,590
Less: comprehensive loss attributable to
    non-controlling interest
(
2,788,650
)
(
321,522
)
(
91,862
)
COMPREHENSIVE (LOSS) INCOME
    ATTRIBUTABLE TO ORIDNARY SHAREHOLDERS OF SUNRISE NEW ENERGY CO., LTD.
$
(
25,459,716
)
$
(
7,692,494
)
14,125,452
(LOSS) EARNINGS PER SHARE
Basic and diluted
$
(
0.90
)
$
(
0.36
)
$
0.72
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic and diluted
24,820,313
23,638,751
16,800,000
The accompanying notes are an integral part of
these consolidated financial statements.
F-
5
SUNRISE
NEW ENERGY CO., LTD.
CONSOLIDATION STATEMENTS
OF CHANGES IN EQUITY
Ordinary
    shares
Additional
paid-in
Statutory
Retained
earnings
(Accumulated
Accumulated
other
comprehensive
Total equity
attributable to
ordinary
Non-controlling
Total
Shares
Amount
Capital
reserves
deficits)
(loss)
    income
shareholders
interests
equity
Balance
    at January 1, 2020
16,800,000
$
1,680
$
4,342,181
$
1,636,414
$
14,413,096
$
(
599,786
)
$
19,793,585
$
203,013
$
19,996,598
Capital
    contributions from shareholders
-
-
119,996
-
-
-
119,996
-
119,996
Net income
-
-
-
-
12,087,527
-
12,087,527
(
130,240
)
11,957,287
Statutory reserves
-
-
-
837,383
(
837,383
)
-
-
-
-
Foreign
    currency translation adjustment
-
-
-
-
-
2,037,926
2,037,926
38,377
2,076,303
Balance
    at December 31, 2020
16,800,000
$
1,680
$
4,462,177
$
2,473,797
$
25,663,240
$
1,438,140
$
34,039,034
$
111,150
$
34,150,184
Issued
    shares of ordinary shares, net of offering cost
7,728,000
773
27,504,639
-
-
-
27,505,412
-
27,505,412
Capital
    contributions from non-controlling interests
-
-
-
-
-
-
-
3,332,622
3,332,622
Net loss
-
-
-
-
(
8,403,260
)
-
(
8,403,260
)
(
311,072
)
(
8,714,332
)
Statutory reserves
-
-
-
(
13
)
13
-
-
-
-
Disposal
    of subsidiary
-
-
-
17
(
17
)
-
-
(
2,642
)
(
2,642
)
Foreign
    currency translation adjustment
-
-
-
-
-
710,766
710,766
(
7,808
)
702,958
Balance
    at December 31, 2021
24,528,000
$
2,453
$
31,966,816
$
2,473,801
$
17,259,976
$
2,148,906
$
53,851,952
$
3,122,250
$
56,974,202
Capital
    contributions from non-controlling interests
-
-
-
-
-
-
-
41,905,792
41,905,792
Net loss
-
-
-
-
(
22,404,366
)
-
(
22,404,366
)
(
720,036
)
(
23,124,402
)
Statutory reserves
-
-
-
4,139
(
4,139
)
-
-
-
-
Share-based
    compensation
-
-
2,729,969
-
2,729,969
-
2,729,969
Settlement
    for vested shares
833,550
83
(
83
)
-
-
-
-
-
-
Foreign
    currency translation adjustment
-
-
-
-
-
(
3,055,350
)
(
3,055,350
)
(
2,068,614
)
(
5,123,964
)
Balance
    at December 31, 2022
25,361,550
$
2,536
$
34,696,702
$
2,477,940
$
(
5,148,529
)
$
(
906,444
)
$
31,122,205
$
42,239,392
$
73,361,597
The accompanying notes are
an integral part of these consolidated financial statements.
F-
6
SUNRISE
NEW ENERGY CO., LTD.
CONSOLIDATED STATEMENTS
OF CASH FLOWS
For the years ended December 31,
2022
2021
2020
Cash flows from operating activities
Net (loss) income
$
(
23,124,402
)
$
(
8,714,332
)
11,957,287
Adjusted to reconcile net income to cash (used in) provided
    by operating activities
Depreciation and amortization
2,062,499
988,672
865,426
Amortization of land use right
126,042
-
-
Share-based compensation
2,729,969
-
-
Deferred tax expenses (benefits)
807,412
(
232,363
)
(
312,780
)
Interest expense
213,823
-
-
Investment losses
3,618,847
2,118,453
1,087
Bad debt expense
2,887,754
3,847,426
1,514,559
Impairment on inventory
2,711,158
-
-
Impairment on intangible assets
2,650,020
-
-
Amortization of right-of-use assets
213,063
90,320
359,551
Changes in operating assets and liabilities:
Accounts receivable, net
(
1,734,486
)
1,729,006
(
8,385,804
)
Note receivable
(
899,481
)
-
-
Due from related parties
(
376,080
)
110,184
(
151,007
)
Operating lease liabilities
(
94,381
)
31,145
(
312,900
)
Inventories
(
18,747,772
)
(
331,491
)
667,758
Prepaid expenses and other current assets
(
2,894,690
)
(
678,288
)
(
447,421
)
Accounts payable
12,661,801
-
(
79,426
)
Notes payable
4,014,213
-
-
Income taxes payable
-
(
3,696,654
)
2,565,098
Deferred revenue
549,274
(
75,857
)
(
322,534
)
Lease liabilities
-
(
211,213
)
-
Due to related parties
100,053
-
-
Deferred government subsidy
2,973,491
-
-
Accrued expenses and other current liabilities
(
21,528
)
(
208,190
)
(
852,731
)
Net cash (used in) provided
    by operating activities
(
9,573,401
)
(
5,233,182
)
7,066,163
Cash flows from investing activities
Purchase of property and equipment
(
43,714,195
)
(
1,372,634
)
(
1,723,543
)
Disposal of property and equipment
-
-
392
Prepayment for leasehold improvement
-
-
(
228,457
)
Purchase of land use right
(
197,554
)
(
6,947,051
)
-
Purchase of intangible assets
(
174,895
)
-
(
2,735,433
)
Loans to third parties
(
35,682
)
(
2,825,359
)
-
Prepaid for investment
-
(
650,909
)
-
Purchase of long-term investments
-
(
2,289,945
)
(
1,678,514
)
Purchase of short-term investments
-
(
8,000,000
)
-
Consideration paid for asset acquisition
(
1,486,746
)
-
-
Disposal of subsidiary
-
(
9,300
)
-
Net cash used in investing
    activities
(
45,609,072
)
(
22,095,198
)
(
6,365,555
)
Cash flows from financing activities
Proceeds from capital contributions by controlling shareholders
-
-
119,996
Proceeds from long term payable, net of issuance cost
8,827,701
-
-
Repayment on long term payable
(
887,788
)
-
-
Proceeds from issuance of ordinary shares in connection with
    initial public offering, net of issuance cost
-
27,504,639
-
Loans from related party
795,554
-
-
Proceeds from capital contributions by
    non-controlling shareholders
37,024,594
3,332,622
-
Net cash provided by
    financing activities
45,760,061
30,837,261
119,996
Effect of foreign exchange rate on cash and
    cash equivalents
(
899,786
)
141,322
706,302
Net (decrease) increase in cash and cash equivalents
(
10,322,198
)
3,650,203
1,526,906
Cash, cash equivalents
    and restricted cash, beginning of year
14,616,215
10,966,012
9,439,106
Cash, cash equivalents
    and restricted cash, end of year
$
4,294,017
$
14,616,215
$
10,966,012
Cash, cash equivalents and restricted cash,
    end of year
4,294,017
14,616,215
10,966,012
Less:  restricted
    cash
2,638,468
700,060
-
Cash and cash equivalents,
    end of year
1,655,549
13,916,155
10,966,012
Supplemental disclosure of cash flow information
Cash paid for income tax
$
564,335
$
3,699,180
$
638,180
Supplemental non cash transactions
Operating lease right-of-use assets obtained
    in exchange of operating lease liabilities
$
-
$
311,638
$
64,402
Inventories obtained in exchange for accounts
    receivable
$
-
$
155,003
$
-
Inventories obtained in exchange for deferred
    revenue
$
-
$
-
$
30,851
Long term investment obtained in exchange
    for accounts receivable
$
-
$
-
$
652,401
Intangible assets obtained from capital
    contribution by non-controlling shareholders
$
4,881,198
$
-
$
-
The accompanying notes are
an integral part of these consolidated financial statements.
F-
7
SUNRISE NEW ENERGY CO.,
LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND BUSINESS
DESCRIPTION
Sunrise New Energy Co.,
Ltd. ("EPOW"), previously known as Global Internet of People, Inc., or GIOP, is a limited liability company established under
the laws of the Cayman Islands on February 22, 2019. It is a holding company with no business operation.
On March 22, 2019, EPOW
incorporated Global Mentor Board Information Technology Limited ("GMB HK"), a limited liability company formed in accordance
with laws and regulations of Hong Kong. GMB HK is currently not engaging in any active business and is merely acting as a holding company
of Beijing Mentor Board Union Information Technology Co, Ltd. ("GIOP BJ"). GIOP BJ was incorporated by GMB HK as a Foreign
Enterprise in China on June 3, 2019.
GIOP BJ incorporated Global
Mentor Board (Beijing) Information Technology Co., Ltd. ("SDH") and Shidong Cloud (Beijing) Education Technology Co., Ltd.
("Shidong Cloud") on December 5, 2014 and December 22, 2021, respectively.
SDH is a limited liability
company incorporated on December 5, 2014 under the laws of China. Since 2017, SDH established several subsidiaries in China,
including Global Mentor Board (Hangzhou) Technology Co., Ltd. ("GMB (Hangzhou)"), Global Mentor Board (Shanghai) Enterprise
Management Consulting Co., Ltd. ("GMB Consulting"), Linking (Shanghai) Network Technology Co., Ltd. ("GMB Linking",
deconsolidated in July, 2021), Shanghai Voice of Seedling Cultural Media Co., Ltd. ("GMB Culture"), which has a majority
owned subsidiary, Mentor Board Voice of Seedling (Shanghai) Cultural Technology Co., Ltd. ("GMB Technology"), Shidong (Beijing)
Information Technology Co., Ltd. ("GMB (Beijing)"), and, Beijing Mentor Board Health Technology Co., Ltd. ("GMB Health"),
Zibo Shidong Digital Technology Co., Ltd. ("Zibo Shidong") and its major owned subsidiaries, Shidong Trading Service (Zhejiang)
Co., Ltd ("Shidong Trading", deregistered in November 2022), Shanghai Jiagui Haifeng Technology Co., Ltd. ("Jiagui
Haifeng"), Shanghai Nanyu Culture Communication Co., Ltd. ("Nanyu Culture") and Shanghai Yuantai Fengdeng Agricultural
Technology Co., Ltd. ("Yuantai Fengdeng", deregistered in April 2023). SDH and its subsidiaries are primarily engaged in
providing peer-to-peer knowledge sharing and enterprise services to clients in the PRC.
On October 8, 2021, EPOW
incorporated SDH (HK) New Energy Tech Co., Ltd. ("SDH New Energy"), a limited liability company formed in accordance with
laws and regulations of Hong Kong. SDH New Energy is acting as a holding company of Zhuhai (Zibo) Investment Co., Ltd ("Zhuhai
Zibo") and Zhuhai (Guizhou) New Energy Investment Co., Ltd. ("Zhuhai Guizhou"). Zhuhai Zibo and Zhuhai Guizhou were
incorporated by SDH New Energy as Foreign Enterprises in China on October 15, 2021 and November 23, 2021, respectively.
On August 26, 2022, GMB HK transferred its equity
interest in GIOP BJ to Zhuhai Zibo. GIOP BJ eventually became the wholly owned subsidiary of Zhuhai Zibo.
On November 8, 2021, Zhuhai Zibo incorporated
Sunrise (Guizhou) New Energy Materials Co., Ltd. ("Sunrise Guizhou"). Sunrise Guizhou incorporated Sunrise (Guxian) New Energy
Materials Co., Ltd. ("Sunrise Guxian") and Guizhou Sunrise Technology Innovation Research Co., Ltd. ("Innovation Research")
on April 26, 2022 and December 13, 2022, respectively. On July 2, 2022, Sunrise Guizhou entered into purchase agreements with original
shareholders of Guizhou Sunrise Technology Co., Ltd. ("Sunrise Tech", formerly as Anlong Hengrui Graphite Material Co., Ltd.)
to acquire
100
% of Sunrise Tech's assets and equity ownership. On July 7, 2022, Sunrise Tech became the wholly owned subsidiary
of Sunrise Guizhou. Sunrise Guizhou and its subsidiaries are primarily engaged in manufacturing lithium battery materials to clients
in the PRC.
As described below in Reorganization,
EPOW, through a restructuring which is accounted for as a reorganization of entities under common control (the "Reorganization"),
became the ultimate parent entity of its subsidiaries, and the primary beneficiary of the variable interest entity (the "VIE"),
SDH, and the VIE's subsidiaries for accounting purposes under U.S. GAAP. EPOW, its subsidiaries, the VIE and the VIE's subsidiaries,
are collectively hereinafter referred as the "Company".
Reorganization
On June 10, 2019, GIOP BJ entered into a series
of contractual arrangements with the owners of SDH. These agreements include an Exclusive Technical and Consulting Service Agreement,
an Exclusive Service Agreement, an Exclusive Option Agreement and Powers of Attorney (collectively "VIE Agreements"). Pursuant
to the above VIE Agreements, GIOP BJ has the exclusive right to provide SDH with comprehensive technical support, consulting services
and other services in relation to the principal business during the term the VIE Agreement. All the above contractual arrangements obligate
GIOP BJ to absorb a majority of the risk of loss from business activities of SDH and entitle GIOP BJ to receive a majority of their residual
returns. In essence, GIOP BJ is the primary beneficiary of SDH for accounting purpose under U.S. GAAP. Therefore, SDH should be considered
as a VIE under the Statement of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC")
810 "Consolidation".
EPOW, together with its wholly-owned subsidiaries,
GIOP BJ, VIE and VIE's subsidiaries were effectively controlled by the same shareholders before and after the Reorganization and,
therefore, the Reorganization is considered under common control. The consolidation of the Company has been accounted for at historical
cost and prepared on the basis as if the Reorganization had become effective as of the beginning of the first period presented in the
consolidated financial statements.
F-
8
The consolidated financial statements reflect
the activities of the Company and each of the following entities:
Name
Date of
Incorporation
Place of
incorporation
Percentage of
effective
ownership
Principal
Activities
Subsidiaries
Global Mentor Board
Information Technology
    Limited
("GMB HK")
March 22, 2019
HK
100%
Holding company
Beijing Mentor Board Union
Information Technology
    Co, Ltd.
("GIOP BJ")
June 3, 2019
PRC
100%
Holding company of GIOP BJ
Shidong Cloud (Beijing) Education Technology Co., Ltd
    ("Shidong Cloud")
December 22, 2021
PRC
75%
Educational Consulting
SDH (HK) New Energy Tech Co., Ltd. ("SDH New Energy")
October 8, 2021
HK
100%
Holding company
Zhuhai (Zibo) Investment Co., Ltd. ("Zhuhai Zibo")
October 15, 2021
PRC
100%
New Energy Investment
Zhuhai (Guizhou) New Energy Investment Co., Ltd. ("Zhuhai
    Guizhou")
November 23, 2021
PRC
100%
New Energy Investment
Sunrise (Guizhou) New Energy Materials Co., Ltd.  ("Sunrise
    Guizhou")
November 8, 2021
PRC
39.35%
Manufacture of Lithium Battery Materials
Guizhou Sunrise Technology Co., Ltd. ("Sunrise Tech")
September 1, 2011
PRC
39.35%
Manufacture of Lithium Battery Materials
Sunrise (Guxian) New Energy Materials Co., Ltd. ("Sunrise
    Guxian")
April 26, 2022
PRC
20.07%
Manufacture of Lithium Battery Materials
Guizhou Sunrise Technology Innovation Research Co., Ltd.
    ("Innovation Research")
December 13, 2022
PRC
39.35%
Research and Development
Variable Interest Entity ("VIE")
    and subsidiaries of VIE
Global Mentor Board (Beijing)
Information Technology
    Co.,
Ltd. ("SDH" or "VIE")
December 5, 2014
PRC
VIE
peer-to-peer knowledge sharing and enterprise service platform provider
Global Mentor Board (Hangzhou)
Technology Co., Ltd.
("GMB (Hangzhou)")
November 1, 2017
PRC
100% by VIE
Consulting, training and tailored services provider
Global Mentor Board (Shanghai)
Enterprise Management
    Consulting
Co., Ltd. ("GMB Consulting")
June 30, 2017
PRC
51% by VIE
Consulting services provider
Shanghai Voice of Seedling
Cultural Media Co., Ltd.
("GMB Culture")
June 22, 2017
PRC
51% by VIE
cultural and artistic exchanges and planning, conference services provider
Shidong (Beijing) Information
Technology Co., LTD.
("GMB (Beijing)")
June 19, 2018
PRC
100% by VIE
information technology services provider
Mentor Board Voice of Seeding (Shanghai)
Cultural
    Technology Co., Ltd.
("GMB Technology")
August 29, 2018
PRC
30.6% by VIE
Technical services provider
Shidong Zibo Digital Technology Co., Ltd. ("Zibo
    Shidong")
October 16, 2020
PRC
100% by VIE
Technical services provider
Shidong Trading Service (Zhejiang) Co., Ltd. ("Shidong
    Trading")
April 19, 2021
PRC
Deregistered in November 2022
Sale of Merchandise
Shanghai Jiagui Haifeng Technology Co., Ltd. ("Jiagui
    Haifeng")
November 29, 2021
PRC
51% by VIE
Business Incubation Services provider
Shanghai Nanyu Culture Communication Co., Ltd. ("Nanyu
    Culture")
July 27, 2021
PRC
51% by VIE
Enterprise Information Technology Integration services provider
Beijing Mentor Board Health Technology Co., Ltd ("GMB
    Health")
January 7, 2022
PRC
100% by VIE
Health Services
Shanghai Yuantai Fengdeng Agricultural Technology Co.,
    Ltd. ("Yuantai Fengdeng")
March 4, 2022
PRC
51% by VIE
Agricultural Technology Service
The VIE contractual arrangements
Neither the Company nor the Company's subsidiaries
own any equity interest in SDH. Instead, The Company controls and receives the economic benefits of SDH's business operation through
a series of contractual arrangements. GIOP BJ, SDH and its shareholders entered into a series of contractual arrangements, also known
as VIE Agreements, in June 2019. The VIE agreements are designed to provide GIOP BJ with the power, rights and obligations equivalent
in all material respects to those it would possess as the sole equity holder of SDH, including absolute control rights and the rights
to the assets, property and revenue of SDH.
F-
9
Each of the VIE Agreements is described in detail
below:
Exclusive Technical and Consulting Services
Agreement
Pursuant to the Exclusive Technical and Consulting
Services Agreement between SDH and GIOP BJ (the "Exclusive Service Agreement"), GIOP BJ provides SDH with technical support,
consulting services, business support and other management services relating to its day-to-day business operations and management, on
an exclusive basis, utilizing its advantages in technology, human resources, and information. For services rendered to SDH by GIOP BJ
under the Exclusive Service Agreement, GIOP BJ is entitled to collect a service fee approximately equal to SDH's earnings before
corporate income tax, i.e., SDH's revenue after deduction of operating costs, expenses and other taxes, subject to adjustment based
on services rendered and SDH's operation needs.
This agreement became effective on June 10, 2019
and will remain effective unless otherwise terminated as required by laws or regulations, or by relevant governmental or regulatory authorities
otherwise terminated earlier in accordance with the provisions of this agreement or relevant agreements separately executed between the
parties. Nevertheless, this agreement shall be terminated after all the equity interest in SDH held by its shareholders and/or all the
assets of SDH have been legally transferred to GIOP BJ and/or its designee in accordance with the Exclusive Option Agreement (described
below).
The Chief Executive Officer ("CEO")
of GIOP BJ, Mr. Haiping Hu, is currently managing SDH pursuant to the terms of the Exclusive Service Agreement. The Exclusive Service
Agreement does not prohibit related party transactions. The Company's audit committee will be required to review and approve in
advance any related party transactions, including transactions involving GIOP BJ or SDH.
Equity Pledge Agreement
Under the Equity Pledge Agreement between GIOP
BJ, and shareholders of SDH, together holding
100
% of the shares of SDH ("SDH Shareholders"), the SDH Shareholders pledged
all of their equity interests in SDH to GIOP BJ to guarantee the performance of SDH's obligations under the Exclusive Service Agreement.
Under the terms of the Equity Pledge Agreement, in the event that SDH or the SDH Shareholders breach their respective contractual obligations
under the Exclusive Service Agreement, GIOP BJ, as pledgee, will be entitled to certain rights, including, but not limited to, the right
to collect dividends generated by the pledged equity interests. The SDH Shareholders also agreed that upon occurrence of any event of
default, as set forth in the Equity Pledge Agreement, GIOP BJ is entitled to dispose of the pledged equity interests in accordance with
applicable PRC laws. The SDH Shareholders further agreed not to dispose of the pledged equity interests or take any actions that would
prejudice GIOP BJ's interests without the prior written consent of GIOP BJ.
The Equity Pledge Agreement is effective until:
(1) the secured debt in the scope of pledge is cleared off; and (2) Pledgers transfer all the pledged equity interests to Pledgees according
to the Equity Pledge Agreement, or other entity or individual designated by it.
The purposes of the Equity Pledge Agreement are
to (1) guarantee the performance of SDH's obligations under the Exclusive Service Agreement; (2) make sure the SDH Shareholders
do not transfer or assign the pledged equity interests, or create or allow any encumbrance that would prejudice GIOP BJ's interests
without GIOP BJ's prior written consent. In the event SDH breaches its contractual obligations under the Exclusive Service Agreement,
GIOP BJ will be entitled to dispose of the pledged equity interests.
Exclusive Option Agreement
Under the Exclusive Option Agreement, the SDH
Shareholders irrevocably granted GIOP BJ (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, once
or at multiple times, at any time, part or all of their equity interests in SDH or the assets of SDH. The option price to be paid by
GIOP BJ to each shareholder of SDH is RMB
10
(approximately US$
1.45
) or the minimum amount to the extent permitted under PRC law at the
time when such transfer occurs.
Under the Exclusive Option Agreement, GIOP BJ
may at any time under any circumstances, purchase, or have its designee purchase, at its discretion, to the extent permitted under PRC
law, all or part of the SDH Shareholders' equity interests in SDH or the assets of SDH. The Equity Pledge Agreement, together with
the Equity Pledge Agreement, the Exclusive Service Agreement, and Powers of Attorney, enable GIOP BJ to be the primary beneficiary of
SDH.
The Exclusive Option Agreement remains effective
until all the equity or assets of SDH is legally transferred under the name of GIOP BJ and/or other entity or individual designated by
it, or unilaterally terminated by GIOP BJ within 30-day prior written notice.
Powers of Attorney
Under each of the Powers of Attorney, the SDH
Shareholders authorized GIOP BJ to act on their behalf as their exclusive agent and attorney with respect to all rights as shareholders,
including, but not limited to: (a) attending shareholders' meetings; (b) exercising all the shareholder's rights, including
voting, that shareholders are entitled to under the laws of China and the Articles of Association, including, but not limited to, the
sale or transfer or pledge or disposition of shares in part or in whole; and (c) designating and appointing on behalf of shareholders
the legal representative, the executive director, supervisor, the chief executive officer, and other senior management members of SDH.
The Powers of Attorney are irrevocable and continuously
valid from the date of execution of the Powers of Attorney, so long as the SDH Shareholders own the equity interests of SDH.
F-
10
Spousal Consent
Pursuant to the Spousal Consent, each spouse
of the individual shareholders of SDH irrevocably agreed that the equity interest in SDH held by their respective spouses would be disposed
of pursuant to the Equity Interest Pledge Agreement, the Exclusive Option Agreement, and the Powers of Attorney. Each spouse of the shareholders
agreed not to assert any rights over the equity interest in SDH held by their respective spouses. In addition, in the event that any
spouse obtains any equity interest in SDH through the respective shareholder for any reason, he or she agreed to be bound by the contractual
arrangements.
Risks in relation to the VIE structure
EPOW believes that the contractual arrangements
with its VIE and their respective shareholders are in compliance with PRC laws and regulations and are legally enforceable. However,
uncertainties in the PRC legal system could limit the EPOW's ability to enforce the contractual arrangements. If the legal structure
and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could:
●
revoke
                                            the business and operating licenses of the Company's PRC subsidiary and VIE;
●
discontinue
                                            or restrict the operations of any related-party transactions between the Company's
                                            PRC subsidiary and VIE;
●
limit
                                            the Company's business expansion in China by way of entering into contractual arrangements;
●
impose
                                            fines or other requirements with which the Company's PRC subsidiary and VIE may not
                                            be able to comply;
●
require
                                            the Company or the Company's PRC subsidiary and VIE to restructure the relevant ownership
                                            structure or operations; or
●
restrict
                                            or prohibit the Company's use of the proceeds of the additional public offering to
                                            finance.
The Company's ability to conduct its wisdom
sharing and enterprise consulting business may be negatively affected if the PRC government were to carry out any of the aforementioned
actions. As a result, the Company may not be able to consolidate its VIE in its consolidated financial statements as it may lose the
ability to receive economic benefits from the VIE. The Company, however, does not believe such actions would result in the liquidation
or dissolution of the Company, its PRC subsidiary and VIE.
Total assets and liabilities presented on the
Company's consolidated balance sheets and revenue, expense, net income presented on consolidated statement of operations and comprehensive
income as well as the cash flow from operating, investing and financing activities presented on the consolidated statement of cash flows
are substantially the financial position, operation and cash flow of the Company's VIE and VIE's subsidiaries. The Company
has not provided any financial support to SDH for the years ended December 31, 2022, 2021 and 2020. The following financial statements
of the VIE and VIE's subsidiaries were included in the consolidated financial statements as of December 31, 2022 and 2021 and for
the year ended December 31, 2022, 2021 and 2020:
As of December 31,
2022
2021
Cash and cash equivalents
$
336,871
$
3,870,916
Accounts receivable, net
200,539
6,861,672
Inventories
3,590
2,865,958
Due from related parties
391,982
52,268
Prepaid expenses and other current assets
2,537,524
3,002,698
Total current assets
3,470,506
16,653,512
Long term prepayments and other non-current assets
14,358
-
Plant, property and equipment, net
2,874,500
3,351,321
Intangible assets, net
31,036
3,594,977
Long-term investments
3,019,281
5,381,441
Operating lease right-of-use assets
-
224,773
Deferred tax assets
-
852,037
Total non-current assets
5,939,175
13,404,549
Total assets
$
9,409,681
$
30,058,061
Accounts payable
$
50,953
$
34,486
Deferred revenue
222,605
179,407
Deferred revenue - related parties
347,471
-
Deferred government subsidy
2,871,665
-
Income taxes payable
506,638
1,076,518
Due to related parties
96,627
-
Operating lease liabilities, current
-
99,569
Accrued expenses and other current liabilities
293,699
313,685
Total current liabilities
4,389,658
1,703,665
Total liabilities
$
4,389,658
$
1,703,665
F-
11
For the years ended
December
    31,
2022
2021
2020
Total net revenue
$
613,679
$
7,409,272
$
23,107,340
Net (loss) income
$
(
15,438,135
)
$
(
5,629,408
)
$
11,931,079
For the years ended
December
    31,
2022
2021
2020
Net cash (used in) provided by operating activities
$
(
3,320,442
)
$
2,314,408
$
6,998,407
Net cash used in investing activities
$
-
$
(
3,025,281
)
$
(
6,493,837
)
Net cash provided by financing activities
$
-
$
-
$
119,996
NOTE 2
–
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and have
been consistently applied.
Principles of consolidation
The consolidated financial statements include
the financial statements of the Company, its subsidiaries, VIE and VIE's subsidiaries for which the Company is the ultimate primary
beneficiary for accounting purpose only under U.S. GAAP.
A subsidiary is an entity in which the Company,
directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members
of the board of directors, to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating
policies of the investee under a statute or agreement among the shareholders or equity holders. The Company owns
39.35
% equity interest
in Sunrise Guizhou, but has the power to cast a majority of votes at the meeting of the board of directors and governs the financial
and operating policies of Sunrise Guizhou under an agreement among the shareholders.
All transactions and balances between the Company,
its subsidiaries, VIE and VIE's subsidiaries have been eliminated upon consolidation.
Non-controlling interests
Non-controlling interests are recognized to reflect
the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling shareholder. As of December
31, 2022, for the Company's consolidated subsidiaries, the VIE and VIE' s subsidiaries, non-controlling interests represent:
a) a non-controlling shareholder's
49
% ownership interest in GMB (Beijing), GMB Consulting, Nanyu Culture and Jiagui Haifeng; b)
a non-controlling shareholder's
60.65
% ownership interest in Sunrise Guizhou; c) a non-controlling shareholder's
49
% ownership
interest in GMB Culture, which has a subsidiary called GMB Technology; and d) a non-controlling shareholder's
25
% ownership interest
in Shidong Cloud, and
40
% ownership interest in Shidong Trading.
As of December 31, 2021, for the Company's
consolidated subsidiaries, VIE and VIE' s subsidiaries, non-controlling interests represent: a) a non-controlling shareholder's
49
%   ownership interest in Sunrise Guizhou, GMB (Beijing), GMB Consulting, Nanyu Culture and Jiagui Haifeng; b) a non-controlling
shareholder's
49
% ownership interest in GMB Culture, which has a subsidiary called GMB Technology; c) a non-controlling shareholder's
25
% ownership interest in Shidong Cloud, and
40
% ownership interest in Shidong Trading.
Non-controlling interests are presented as a
separate line item in the equity section of the Company's Consolidated Balance Sheets and have been separately disclosed in the
Company's Consolidated Statements of Operations and Comprehensive (Loss) Income to distinguish the interests from that of the Company.
Use of estimates
The preparation of consolidated financial statements
in conformity with U.S. GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. These estimates and judgments are based on historical information, information that is currently
available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances.  Significant
estimates required to be made by management, include, but are not limited to, the assessment of the allowance for doubtful accounts,
inventory valuation, depreciable lives of property and equipment, impairment of long-lived assets and realization of deferred tax assets.  
Actual results could differ from those estimates.
F-
12
Foreign currency translation
The Company's principal country of operations
is the PRC. The financial position and results of its operations are determined using RMB, the local currency, as the functional currency.
The Company's consolidated financial statements are reported using the U.S. Dollars ("US$" or "$"). The
results of operations and the consolidated statements of cash flows denominated in foreign currency are translated at the average rate
of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated
at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical
rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts
related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the
corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from
period to period are included as a separate component of accumulated other comprehensive (loss) income included in consolidated statements
of changes in shareholders' equity. Gains and losses from foreign currency transactions are included in the Company's Consolidated
Statements of Operations and Comprehensive (Loss) Income.
The value of RMB against US$ and other currencies
may fluctuate and is affected by, among other things, changes in the PRC's political and economic conditions. Any significant revaluation
of RMB may materially affect the Company's financial condition in terms of US$ reporting. The following table outlines the currency
exchange rates that were used in preparing the consolidated financial statements:
December 31,
2022
December 31,
2021
December 31,
2020
Year-end spot rate
US$1= RMB 6.9646
US$1= RMB 6.3757
US$1= RMB 6.5249
Average rate
US$1= RMB 6.7261
US$1= RMB 6.4515
US$1= RMB 6.8976
Fair value measurements
The Company follows the provisions of ASC 820,
Fair Value Measurements and Disclosures. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value,
and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:
Level 1 - Inputs are unadjusted quoted
prices in active markets for identical assets or liabilities available at the measurement date.
Level 2 - Inputs are unadjusted quoted
prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets
that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market
data.
Level 3 - Inputs are unobservable
inputs which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the
asset or liability based on the best available information.
The carrying amounts reported in the balance sheets
for cash, restricted cash, accounts receivable, notes receivable, due from related parties, advance to suppliers, prepaid expenses and
other current assets, deferred revenue, income taxes payable, accounts payable, note payable, due to related parties, accrued expenses
and other current liabilities approximate their fair value based on the short-term maturity of these instruments. The carrying amount
of non-current long term payables and consideration payable approximates fair value as its interest rates are at the same level of current
market yield for comparable loans.
The Company's non-financial assets, such
as property and equipment would be measured at fair value only if they were determined to be impaired.
As a practical expedient, the Company uses Net
Asset Value ("NAV") or its equivalent to measure the fair value of its certain fund investment. NAV is primarily determined
based on information provided by external fund administrators. The Group's investments valued at NAV as a practical expedient are
private equity funds, which represent the short term investment on the balance sheet.
Cash and cash equivalents
Cash and cash equivalents include cash on hand
and demand deposits in accounts maintained with commercial banks, as well as highly liquid investments which are unrestricted as to withdrawal
or use and are readily convertible to known amounts of cash. The interest incomes of highly liquid investments are reported in the Company's
Consolidated Statements of Operations and Comprehensive (Loss) Income. The Company maintains the bank accounts in Mainland China and
Hong Kong. Cash balances in bank accounts in Mainland China and Hong Kong are not insured by the Federal Deposit Insurance Corporation
or other programs.
Restricted cash
Restricted cash represent bank deposits with
designated use, which cannot be withdrawn without certain approval or notice. Restricted cash classified as a long-term asset on the
Company's consolidated balance sheets consists of cash equivalents restricted as to withdrawal or use which matures in more than
twelve months after the balance sheet date. Such restricted cash relates to an escrowed fund of listing companies. The escrowed fund
shall be held by the Escrow Agent for the purpose of satisfying the initial $
700,000
of the indemnification obligations of the Company,
with respect to the Escrowed Funds, for a period of 24 months from the closing of the Offering the Company's initial public offering
in February 2021.
F-
13
Short-term investments
The Company evaluates whether an investment is
other-than-temporarily impaired based on the specific facts and circumstances. Factors that are considered in determining whether an
other-than-temporary decline in value has occurred include the market value of the security in relation to its cost basis, the financial
condition of the investee, and the intent and ability to retain the investment for a sufficient period of time to allow for recovery
in the market value of the investment.
Accounts receivable, net
Accounts receivables mainly represent amounts
due from clients in the ordinary course of business and are recorded net of allowance for doubtful accounts.
The Company mitigates the
associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established
and recorded based on management's assessment of historical bad debts, creditworthiness and financial conditions of the clients,
current economic trends and changes in client payment patterns. Past due accounts are generally written off against the allowance for
bad debts only after all collection attempts have been exhausted and the potential for recovery is considered remote. The valuation allowance
provided was $
8,047,527
and $
5,744,387
as of December 31, 2022 and 2021, respectively.
Inventories, net
The inventories as of December 31, 2022 consisted
of raw materials, materials in transit, work in process and finished goods. Finished goods were mainly graphite anode materials, health
service gift cards, learning course gift cards, Chinese tea, latex pillows and health care products. Costs include the cost of raw materials,
freight, direct labor and related production overhead. The cost of inventories is calculated using the weighted average method. Any excess
of the cost over the net realizable value of each item of inventories is recognized in the value of inventories. Net realizable value
is estimated using selling price in the normal course of business less any costs to complete and sell products. The valuation allowance
provided for the inventory was $
2,711,158
, $
nil
and $
nil
for the years ended December 31, 2022, 2021 and 2020.
Part of the Company's finished goods, such
as health service gift cards, learning course gift cards, Chinese tea, latex pillows and health care products, were obtained through
fee exchange arrangements with its customers prior to 2022. These arrangements were entered into at the Company's discretion to
receive inventory in exchange of collection of account receivables and deferred revenue due from the customers. The Company accounted
for these nonmonetary exchanges based on the fair values of the assets involved. The cost of inventories acquired in exchange was initially
measured at the fair value of the accounts receivable the Company surrendered to obtain them.
Lease
At inception of a contract, the Company assesses
whether a contract is, or contains, a lease. A contract is or contains a lease if it conveys the right to control the use of an identified
asset for a period of time in exchange of a consideration. To assess whether a contract is or contains a lease, the Company assess whether
the contract involves the use of an identified asset, whether it has the right to obtain substantially all the economic benefits from
the use of the asset and whether it has the right to control the use of the asset.
The right-of-use assets and related lease liabilities
are recognized at the lease commencement date. The Company recognizes operating lease expenses on a straight-line basis over the lease
term.
Operating lease right-of-use of assets
The right-of-use of asset is initially measured
at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement
date, plus any initial direct costs incurred and less any lease incentive received.
Operating lease liabilities
Lease liability is initially measured at the
present value of the outstanding lease payments at the commencement date, discounted using the Company incremental borrowing rate. Lease
payments included in the measurement of the lease liability comprise fixed lease payments, variable lease payments that depend on an
index or a rate, amounts expected to be payable under a residual value guarantee and any exercise price under a purchase option that
the Company is reasonably certain to exercise.
Lease liability is measured at amortized cost
using the effective interest rate method. It is remeasured when there is a change in future lease payments, if there is a change in the
estimate of the amount expected to be payable under a residual value guarantee, or if there is any change in the Company assessment of
option purchases, contract extensions or termination options.
Short-term leases
The Company has elected to not recognize right-of-use
assets and lease liabilities for short-term leases that have a lease term of 12 months or less. Lease payments associated with these
leases are expensed as incurred.
Sales and leaseback contracts
The Company enters sale and leaseback transactions.
The Company acts as the seller-lessee, transfers its assets to a third-party entity (the buyer-lessor) and then leases the transferred
assets back from the buyer-lessor at a contract designated rental price. The Company evaluates if sales of the underlying assets in the
sale and leaseback contract has occurred in accordance with ASC 606. When a sale and leaseback transaction does not qualify for sale
accounting, the transaction is accounted for as a financing transaction by the seller-lessee and a lending transaction by the buyer-lessor.
The seller-lessee shall not derecognize the transferred asset and shall account for any amounts received as a financial liability.
F-
14
Plant,
property and equipment, net
Plant,
property and equipment are stated at cost less accumulated depreciation. Depreciation of property and equipment is provided using the
straight-line method over their expected useful lives, as follows:
Building
30
years
Machines
10
years
Electronic equipment
3
years
Furniture, fixtures and equipment
3
years
Vehicle
3
years
Leasehold improvements
The shorter of useful life and lease term
Expenditures
for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures
for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated
depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated
statements of Operation and Comprehensive (Loss) Income in other income or expenses.
Land
use right, net
Land
use rights are recorded at cost less accumulated amortization and amortized on a straight-line basis over the remaining term of the land
certificates, from
40
years to
50
years.
Intangible
assets, net
The Company's intangible assets represent
intellectual property rights on manufacturing graphite anode materials from capital injection by a non-controlling shareholder of Sunrise
Guizhou and the copyright of course videos purchased from a third party including but not limited to course videos which cover subjects
such as entrepreneurship development, financial service, corporate governance, team management, marketing strategy and etc. Intangible
assets are stated at cost less accumulated amortization and amortized on a straight-line basis over their estimated useful lives. The
estimated useful lives of intangible assets are determined to be
5
to
10
years in accordance with the period the Company estimates to
generate economic benefits from such intellectual property rights and copyright.
Long-term
investments
Equity
method investments in investees represent the Company's investments in privately held companies, over which it has significant
influence but does not own a majority equity interest or otherwise control. The Company applies the equity method to account for an equity
investment, in common stock or in-substance common stock, according to ASC 323 "Investment — Equity Method and Joint Ventures".
An
investment in in-substance common stock is an investment in an entity that has risk and reward characteristics that are substantially
similar to that entity's common stock. The Company considers subordination, risks and rewards of ownership and obligation to transfer
value when determining whether an investment in an entity is substantially similar to an investment in that entity's common stock.
Under
the equity method, the Company's share of the post-acquisition profits or losses of the equity investee is recognized in the consolidated
income statements and its share of post-acquisition movements in accumulated other comprehensive income is recognized in shareholders'
equity. When the Company's share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company
does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity
investee. Investment loss for long-term investments of $
14,072
, $
41,925
and $
1,087
were recorded in the Company's Consolidated
Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020, respectively.
For
other equity investments that do not have readily determinable fair values and over which the Company has neither significant influence
nor control through investments in common stock or in-substance common stock, the Company accounts for these investments at
cost minus any impairment, if necessary.
The
Company continually reviews its investments in equity investees to determine whether a decline in fair value below the carrying value
is other than temporary. The primary factors the Company considers in its determination are the length of time that the fair value of
the investment is below the Company's carrying value; the financial condition, operating performance and the prospects of the equity
investee. If the decline in fair value is deemed to be other than temporary, the carrying value of the equity investee is written down
to fair value. Impairment charges for long-term investments were $
979,426
, $
nil
and $
nil
recorded in the Company's Consolidated
Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020.
Impairment
of long-lived assets
The
Company reviews its long-lived assets for impairment whenever events or changes in circumstances (such as a significant adverse change
to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset may no longer be recoverable.
When these events occur, the Company measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted
future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted
cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss, which is the excess of carrying
amount over the fair value of the assets, using the expected future discounted cash flows. Impairments charges for intangible assets
were $
2,650,020
, $
nil
and $
nil
recorded in the Company's Consolidated Statements of Operations and Comprehensive (Loss) Income
for the years ended December 31, 2022, 2021 and 2020.
F-
15
Asset
acquisition
When
the Company acquires other entities, if the assets acquired and liabilities assumed do not constitute a business, the transaction is
accounted for as an asset acquisition. Assets are recognized based on the cost, which generally includes the transaction costs of the
asset acquisition, and no gain or loss is recognized unless the fair value of noncash assets given as consideration differs from the
assets' carrying amounts on the Company's consolidated financial statements. The cost of a group of assets acquired in an
asset acquisition is allocated to the individual assets acquired or liabilities assumed based on their relative fair value and does not
give rise to goodwill.
Share-based
compensation
Share-based
compensation are measured based on the grant date fair value of the equity instrument. Share-based compensation expenses are recognized
over the requisite service period based on the graded vesting attribution method with corresponding impact reflected in additional paid-in
capital. When no future services are required to be performed by grantees in exchange for an award of equity instruments, the cost of
the award is expensed on the grant date. The Group elects to recognize forfeitures when they occur.
Government
subsidies
The Company's PRC based subsidiary received
government subsidies from local government. Government subsidies are recognized when there is reasonable assurance that the attached
conditions will be complied with. When the government subsidy relates to an expense item, it is net against the expense and recognized
in the consolidated statements of income and comprehensive income over the period necessary to match the subsidy on a systematic basis
to the related expenses. Where the subsidy relates to an asset acquisition, it is recognized as income in the Consolidated Statements
of Operations and Comprehensive (Loss) Income in proportion to the useful life of the related assets. Government grants received for
the years ended December 31, 2022, 2021 and 2020 were $
3,048,035
, $
458,182
and $
101,485
, respectively. As of December 31, 2022 and 2021,
the deferred government grants were $
2,871,665
and $
nil
, respectively.
Revenue
recognition
The
Company recognizes revenue under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers. The
core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services
to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or
services. The following five steps are applied to achieve that core principle:
Step
1: Identify the contract with the customer
Step
2: Identify the performance obligations in the contract
Step
3: Determine the transaction price
Step
4: Allocate the transaction price to the performance obligations in the contract
Step
5: Recognize revenue when the company satisfies a performance obligation
The
Company mainly offers and generates revenue from five kinds of services to its clients in China, sales of graphite anode materials, member
services, enterprise services, online services and other services. Enterprise services include comprehensive tailored services, sponsorship
advertising services, and consulting services.
Revenue
recognition policies for each type of the Company's services are discussed as follows:
Sales
of graphite anode materials
The Company's major business is to sell
graphite anode materials to its customers. The Company's major customers are manufacturers of industrial and consumer energy storage
lithium-ion batteries, such as batteries for electric vehicles and electric ships, and smart consumer electronics. The Company examines
the availability of the inventory, takes control of products in its warehouses, and then organizes the shipping and delivery of products
to customers after the purchase orders are received from customers.
The Company accounts for revenue from sales of
graphite anode materials on a gross basis as the Company is responsible for fulfilling the promise to provide the desired products to
customers, and is subject to inventory risk before the product ownership and risk are transferred and has the discretion in establishing
prices. All of the Company's contracts and purchase orders are fixed prices and have one single performance obligation as the promise
is to transfer the products to customers, and there are no separately identifiable other promises in the contracts. The Company's
revenue from sales of graphite anode materials is recognized at a point in time when title and risk of loss passes and the customer accepts
the goods, which generally occurs at delivery. There is no separate rebate, discount, or volume incentive involved. Revenue is reported
net of all value added taxes ("VAT").
Member
services
The
Company offers three tiers of member services, Platinum, Diamond and Protégé, which differ in membership fees as well as
the level of the services provided. Members pay a fixed fee for exchange of the right to participate in organized activities offered
by the Company, such as study tours and forums, typically within one-year membership period. Any non-participating activities will expire
and not be refunded beyond the agreed-upon period. Each member is entitled to choose from same activities offered by the Company for
a total of seven times but different level of membership will receive different level of privileges at each activity, such as seating
arrangement or private consultation opportunity etc. The activities for Platinum Members are also open to non-members, who pay a pre-set
fee for participating in a single activity, while the Company does not offer Diamond and Protégé services to non-members
separately.
Each
activity represents a separate performance obligation, which is typically 5 days or less. The Company uses an expected cost plus margin
approach to estimate the standalone selling prices of each activity. As Members can benefit from each activity on their own in the same
way and there is no material difference in the Company's delivering costs, such as number of staffs involved and size of each activity.
Therefore, membership fees are equally allocated to seven performance obligations when the Company determines transaction price of each
performance obligation.
F-
16
The
Company recognizes membership fees as revenue upon completion of each activity as the duration of each activity is short. Membership
fees from non-participating activity will be recognized when the agreed-upon period has expired. Membership fees collected in advance
are recorded as deferred revenue on the consolidated balance sheets.
Enterprise
services
The
Company charges its clients service fees for providing enterprise services, which mainly include comprehensive tailored services, sponsorship
advertising services and consulting services.
Comprehensive
tailored services
The
comprehensive tailored services provide tailored packaged services to small and medium business, including conference and salon organization,
booth exhibition services, on-site Mentors' guidance, and other value-added services. The Company typically signs one-year framework
agreements and a tailored services contract with the clients, which list the types of tailored services as ordered by the clients to
fit their specific needs. Each tailored service is a separate performance obligation under ASC 606, as these performance obligations
are distinct, the clients can benefit from each service on their own and the Company's promises to deliver the services are separately
identifiable from each other in the services contract. The performance of each tailored service is usually on a specific date designated
by the clients.
The
Company establishes a uniform list for the unit price of each type of tailored services with reference to quoted market prices. If no
quoted market price is available, the price will be estimated by using an expected cost plus a margin approach.
The
Company recognizes the price for each tailored service as revenue when the service has been provided on a specific date designated and
the receipt of each tailored services is confirmed by the clients. If a client does not request certain items of the tailored services
included in the services contract during the agreed-upon period, the Company will not refund the service fees and the revenue will be
recognized upon expiration of service contracts. The tailored services fees collected before providing services are recorded as deferred
revenue on the consolidated balance sheets.
Sponsorship
advertising service
The
Company provides sponsorship advertising service for its clients at certain activities it held, i.e. study tours and forums. The sponsorship
advertising services are mainly to display banners with the clients' information and distribute clients' brochures through
the activities, so that the clients can enhance their corporate and product image.
The
fee the Company charges for sponsorship advertising service is depending on multiple specific factors, including number of event participants,
location, public interest, etc. The Company considers all factors and determines pricing for each contract separately. The sponsorship
advertising fees are recognized as revenue when services have been provided on a specific date designated and receipt of sponsorship
advertising services are confirmed by clients. Sponsorship advertising fees collected before providing services are recorded as deferred
revenue on the consolidated balance sheets.
Consulting
services
The
Company provides consulting services to small and medium-sized enterprises by helping them to develop strategies and solutions including:
corporate reorganization, product promotion and marketing, industry supply chain integration, corporate governance, financing and capital
structure, etc. The consulting services are tailored to meet each client's specific needs and requirements.
Consulting
fees are based on the specifics of the services provided, for instance, time and efforts required, etc. The Company considers comprehensive
factors and determines prices with reference to quoted market prices. If no quoted market price is available, price will be estimated
by using an expected cost plus a margin approach.
Consulting
fees are recognized as revenue when services have been provided and receipt of consulting services is confirmed by clients as the duration
of services is short, typically one month or less. Consulting fees collected before providing any service are presented as deferred revenue
on the consolidated balance sheets.
Online
services
The
Company provides two types of online services to the Company's APP Users, which are questions and answers (Q&A) session with
chosen Mentors and online streaming of courses and programs. Top-up credits are paid by Users through the Company's APP platform,
using which Users can purchase the online services.
Users
can raise questions to chosen Mentors or Experts with a fixed fee per Q&A session preset by Mentors or Experts.
The Q&A session
is usually provided by chosen Mentors or Experts within a course of a 72-hour period. The Company charges 30% of the Q&A fees as
a facilitator of online services. The Q&A fees are allocated to the Company and chosen Mentors or Experts automatically by the APP
on a 30%/70% split upon completion of Q&A sessions. The Company recognizes this online service fees as revenue at completion of Q&A
sessions on a net basis, i.e., in the amount of 30% of allocated Q&A fees, as the Company merely provides a platform for its Users
and is not the primary obligor of the Q&A session, neither has risks and rewards as principal.
The
Company granted Users the access to view various online courses and programs. Users can subscribe an annual VIP at a rate of RMB
299
.
The VIP grants Users the access right to the Company's VIP courses and programs over the subscription period. The Company recognizes
the VIP annual subscription fees as revenue on a straight-line basis over VIP subscription period. Users can also purchase à la
carte courses and programs at a rate from RMB
9.9
to
299
per course or program by top-up credits through the Company's APP platform.
The payment for à la carte course and program is not refundable. After the payment is collected by the Company, the Users obtain
unlimited access to the courses and programs they purchased for without limitation. The Company recognizes the fees a la carte courses
and programs as revenue at the point of time that Users obtain the access to the courses and programs.
F-
17
Other
services fees are mainly derived from non-member participation of study tours and forums at the service level of Platinum Members. The
Company charges non-members a fixed fee for each Member activity and the price for non-members is determined based on the Company's
allocated Member pricing for each activity. Fees are usually collected on site at the date of each activity and revenues are recognized
at the completion of such activity.
Contract assets and liabilities
The Group's contract liabilities consist
of deferred revenues, primarily relating to the advance consideration received from customers, which include the advance member service
fees and enterprise service fees received from customers. The amount from customers before provision of service is recognized as deferred
revenue. The deferred revenue is recognized as revenue once the criteria for revenue recognition are met.
The Company recognized $
170,061
and $
253,157
in revenue for the years ended December 31, 2022 and 2021, respectively, which related to contract liabilities that existed at December
31, 2021 and 2020, respectively. The balances as of December 31, 2022 and 2021 are expected to be recognized as revenue within one year.
There was no contract asset recorded as of December 31, 2022 and 2021.
Cost
of goods sold
The cost of goods sold for the year ended December
31, 2022 was primarily the cost of finished goods of graphite anode materials, including single granular coke, secondary granular coke,
and mixed batches of single particle and secondary coke. The cost of goods sold for the year ended December 31, 2021 and 2020 was mainly
the cost of electrolytic copper. Cost of goods sold was $
38,299,090
, $
2,063,296
, and $
892,791
for the years ended December 31, 2022,
2021 and 2020, respectively.
Service
costs
Service costs primarily include (1) the cost
of holding events and activities, such as venue rental fees, conference equipment fees, (2) professional and consulting fees paid to
third parties for the Company's activity; (3) the fees paid to Mentors and Experts; and (4) labor costs. Service costs were $
1,176,956
, $
1,823,358
and $
2,087,425
for the years ended December 31, 2022, 2021 and 2020, respectively.
Income
taxes
The
Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable
to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective
tax bases.
Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets
to the amount expected to be realized.
The
provisions of ASC 740-10-25, "Accounting for Uncertainty in Income Taxes," prescribe a more-likely-than-not threshold for
consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This
interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred
income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures.
The
Company believes there were no uncertain tax positions as of December 31, 2022 and 2021, respectively. The Company does not expect
that its assessment regarding unrecognized tax positions will materially change over the next 12 months. The Company is not
currently under examination by an income tax authority, nor has been notified that an examination is contemplated.
The
Company will recognize interest and penalties, if any, related to unrecognized tax benefits on the income tax expense line in the
accompanying consolidated statement of operations. Accrued interest and penalties will be included on the related tax liability line
in the consolidated balance sheet.
(Loss)
Earnings per share
The
Company computes (loss) earnings per share ("EPS") in accordance with ASC 260, "Earnings per Share" ("ASC
260"). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS are computed by dividing
(loss) income available to ordinary shareholders of the Company by the weighted average ordinary shares outstanding during the period.
Diluted EPS takes into account the potential dilution that could occur if securities or other contracts to issue ordinary shares were
exercised and converted into ordinary shares. As of December 31, 2022 and 2021, the basic and diluted shares were
24,820,313
and
23,638,751
,
respectively.
Comprehensive
(loss) income
Comprehensive
(loss) income consists of two components, net (loss) income and other comprehensive (loss) income. Other comprehensive (loss) income
refers to revenue, expenses, gains and losses that under U.S. GAAP are recorded as an element of shareholders' equity but are excluded
from net (loss) income. Other comprehensive (loss) income consists of foreign currency translation adjustment resulting from the Company
translating its financial statements from functional currency into reporting currency.
Risks and uncertainties
Currency
risk
A
majority of the Company's expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries'
assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange
transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People's
Bank of China ("PBOC"). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC
or other Company foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.
F-
18
The
Company maintains certain bank accounts in the PRC. On May 1, 2015, China's new Deposit Insurance Regulation came into effect,
pursuant to which banking financial institutions, such as commercial banks, established in the PRC are required to purchase deposit insurance
for deposits in RMB and in foreign currency placed with them. Such Deposit Insurance Regulation would not be effective in providing complete
protection for the Company's accounts, as its aggregate deposits are much higher than the compensation limit, which is RMB
500,000
for one bank. However, the Company believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon
in the PRC and the Company believes that those Chinese banks that hold the Company's cash and cash equivalents and short-term investments
are financially sound based on public available information.
Other
than the deposit insurance mechanism in the PRC mentioned above, the Company's bank accounts are not insured by Federal Deposit
Insurance Corporation insurance or other insurance.
Concentration
and credit risk
Financial
instruments that potentially subject the Company to the concentration of credit risks consist of cash and short-term investments. The
maximum exposures of such assets to credit risk are their carrying amounts as of the balance sheet dates. The Company deposits its cash
and short-term investments with financial institutions located in jurisdictions where the subsidiaries are located. The Company believes
that no significant credit risk exists as these financial institutions have high credit quality.
The Company's exposure to credit risk associated
with its trading and other activities is measured on an individual counterparty basis, as well as by group of counterparties that share
similar attributes. There were $
10,837,501
, $
7,449,250
, $
7,358,181
and $
7,193,849
of revenue from four client which represented
28
%,
20
%,
19
% and
19
% of the total revenues for the years ended December 31, 2022, respectively. There was $
2,000,483
of revenue from one
client which represented
27
% of the total revenues for the years ended December 31, 2021. There was no revenue from clients which individually
represented greater than
10
% of the total revenues for the year ended December 31, 2020. There was $
1,549,436
of account receivable from
one client which represented
12
% of the account receivable as of December 31, 2022. Concentrations of credit risk can be affected by
changes in political, industry, or economic factors. To reduce the potential for risk concentration, The Company generally requires advanced
payment before delivery of the services but may extend unsecured credit to its clients in the ordinary course of business. Credit limits
are established and exposure is monitored in light of changing counterparty and market conditions. The Company did not have any material
concentrations of credit risk outside the ordinary course of business as of December 31, 2022 and 2021.
Interest
rate risk
Fluctuations
in market interest rates may negatively affect the financial condition and results of operations. The Company is exposed to floating
interest rate risk on cash deposit and floating rate borrowings, and the risks due to changes in interest rates is not material. The
Company has not used any derivative financial instruments to manage its interest risk exposure.
Other
uncertainty risk
The
Company's major operations are conducted in the PRC. Accordingly, the political, economic, and legal environments in the PRC, as
well as the general state of the PRC's economy may influence the Company's business, financial condition, and results of
operations.
The
Company's major operations in the PRC are subject to special considerations and significant risks not typically associated with
companies in North America and Western Europe. These include risks associated with, among others, the political, economic, and legal
environment. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations,
anti-inflationary measures, and rates and methods of taxation, among other things. Although the Company has not experienced losses from
these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed
in Note 1, this may not be indicative of future results.
Recently
issued accounting pronouncements
The
Company considers the applicability and impact of all accounting standards updates ("ASUs"). Management periodically reviews
new accounting standards that are issued. The Company is an "emerging growth company" ("EGC") as defined in the
Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). Under the JOBS Act, EGC can delay adopting new or revised accounting
standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.
In June 2016, the FASB issued ASU No. 2016-13,
"Financial Instruments – Credit Losses", which will require the measurement of all expected credit losses for financial
assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Further,
the FASB issued ASU No. 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11 and ASU 2020-02 to provide additional guidance on the credit losses
standard. For all other entities, the amendments for ASU 2016-13 are effective for fiscal years beginning after December 15, 2022, including
interim periods within those fiscal years, with early adoption permitted. Adoption of the ASUs is on a modified retrospective basis.
The Company has adopt ASU 2016-13 from January 1, 2023. There is no effect on the Company's consolidated financial statement of
the adoption of this ASU.
F-
19
In
June 2022, the FASB issued ASU 2022-03, which (1) clarifies the guidance in ASC 820 on the fair value measurement of an equity security
that is subject to a contractual sale restriction and (2) requires specific disclosures related to such an equity security. ASU 2022-03
clarifies that a "contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting
entity holding the equity security" and is not included in the equity security's unit of account. Accordingly, an entity
should not consider the contractual sale restriction when measuring the equity security's fair value (i.e., the entity should not
apply a discount related to the contractual sale restriction, as stated in ASC 820-10-35-36B as amended by the ASU). In addition, the
ASU prohibits an entity from recognizing a contractual sale restriction as a separate unit of account. For public business entities,
the guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early
adoption permitted. The Company is in the process of evaluating the effect of the adoption of this ASU.
NOTE 3
– LIQUIDITY
As reflected in the consolidated financial statements,
the Company has been incurring $
23,124,402
and $
8,714,332
net losses for the years ended December 31 2022 and 2021, respectively. Net
cash used in operating activities were $
9,573,401
and $
5,233,182
for the years ended December 31, 2022 and 2021, respectively. Total
cash, cash equivalents and restricted cash decreased by $
10,322,198
for the year ended December 31, 2022. Management expected to continue
to construct the production plant in Guizhou Sunrise. In 2022, the ongoing COVID-19 pandemic continued to negatively impact the Company's
business operations. A resurgence of the COVID-19 outbreak had given rise to economic downturns and other significant changes in regional
and global economic conditions, and negatively affected the Company's ability to execute the sales contract, fulfil customer orders,
and collect customer payments timely. As a result, there was a possibility that the Company's revenue and cash flows might underperform
in the next 12 months.
These adverse conditions and events raised substantial
doubt about the Company's ability to continue as a going concern. For the next 12 months from the issuance date of this report,
the Company plans to continue implementing various measures to boost revenue and controlling the cost and expenses within an acceptable
level. The Company is in the process of transitioning peer-to-peer knowledge sharing and enterprise business to graphite anode material
business. In assessing its liquidity, management monitors and analyzes the Company's cash on-hand, its ability to generate sufficient
revenue sources and ability to obtain additional financial support in the future, and its operating and capital expenditure commitments.
As of December 31, 2022, the Company had cash of $
1,655,549
. The management believes that it would be able to make borrowings from banks
based on past experience and the Company's good credit history when necessary. As of December 31, 2022, the Company had available
line of credit from Bank of Guizhou for RMB
6,500,000
, approximately $
933,291
. On January 18, 2023, Sunrise Guizhou entered a credit
facility agreement with Post Savings Bank of China ("Post Bank") to obtain revolving fund up to RMB
30,000,000
, approximately
$
4,307,498
, for a term from January 19, 2023 to January 18, 2031. On February 7, 2023, Sunrise Guizhou entered a two-year debt financing
arrangement with Zhongguancun Science and Technology Leasing Co., Ltd. to obtain a loan of RMB
20,000,000
, approximately $
2,871,665
,
for a term from February 7, 2023 to February 7, 2025.
Currently, the Company is working to improve
its liquidity and capital sources primarily through cash flows from operation, debt financing, and financial support from its principal
shareholder. In order to fully implement its business plan and sustain continued growth, the Company may also seek equity financing from
outside investors when necessary. Based on the current operating plan, management believes that the above-mentioned measures collectively
will provide sufficient liquidity for the Company to meet its future liquidity and capital requirement for at least 12 months from the
date the consolidated financial statements are issued.
NOTE 4
– ACCOUNTS RECEIVABLE, NET
Accounts
and notes receivable consisted of the following:
As
    of December 31,
2022
2021
Accounts receivable
$
13,215,228
$
12,606,059
Allowance for doubtful
    accounts
(
8,047,527
)
(
5,744,387
)
Accounts
    receivable, net
$
5,167,701
$
6,861,672
The movement
of allowance of doubtful accounts is as follows:
As
    of December 31,
2022
2021
2020
Balance at beginning of the year
$
5,744,387
$
1,808,889
$
194,375
Current year addition
2,887,754
3,890,827
1,514,559
Write-off
-
(
43,401
)
-
Foreign currency translation
    adjustments
(
584,614
)
88,072
99,955
Balance
    at end of the year
$
8,047,527
$
5,744,387
$
1,808,889
Doubtful
accounts provision was $
2,887,754
, $
3,847,426
and $
1,514,559
recorded for the years ended December 31, 2022, 2021 and 2020, respectively.
F-
20
NOTE
5 – INVENTORIES, NET
Inventories
as of December 31, 2022 and 2021 consisted of the following:
As of December 31,
2022
2021
Raw materials
$
3,237,940
$
-
Finished Goods
12,842,333
3,105,673
Graphite anode materials
12,842,333
-
Healthcare service gift cards
-
1,276,550
Chinese tea
-
718,426
Learning course gift cards
-
454,852
Latex pillows
-
138,246
Healthcare products
-
207,348
Others
-
310,251
Work in process
2,246,653
-
Others
3,590
-
Total
$
18,330,516
$
3,105,673
As of December
31, 2021, other than cash purchase, a portion of the Company's inventories were obtained through fee exchange arrangements with
its customers, which are entered into at the Company's discretion to receive inventory in exchange for collection of accounts receivable
due from the customers. These inventories are all commodities available for sale.
In fiscal year 2022, the Company wrote down
these inventories
to the estimated net realizable value, which was $
nil
, resulting in inventory valuation
allowance of $
2,711,158
.
Inventory
valuation allowance was $
2,711,158
, $
nil
and $
nil
recorded for the fiscal years ended December 31, 2022, 2021 and 2020, respectively.
NOTE
6 – SHORT-TERM INVESTMENT
In February 2021, the Company entered into an
investment agreement with Viner Total investment Fund (the "Fund") to invest the Fund with the total investment consideration
of $
8,000,000
. The Fund is an exempted company incorporated in the Cayman Islands and managed by Mainstream Fund Services (HK). The
Fund is invested in a wide range of instruments with no specific limitations. The redemption of such shares for cash can be made with
a one-month advanced written notice (such advanced written notice period can be extended by the administrator).
The value of private equity fund are measured
at fair value with gains and losses recognized in earnings. As a practical expedient, the Company uses Net Asset Value ("NAV")
or its equivalent to measure the fair value of the Fund. NAV is primarily determined based on information provided by external fund administrators.
The NAV of the Fund was $
3,336,256
, and $
5,961,605
as of December 31, 2022 and 2021. Investment loss of $
2,625,349
and $
2,038,395
was recorded in the Company's Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December
31, 2022 and 2021, respectively.
F-
21
NOTE
7 – PREPAID EXPENSES AND OTHER CURRENT ASSETS
As of December 31,
2022
2021
Prepaid expenses
$
211,365
$
703,281
Advance to supplier
2,820,551
1,759,253
Loans to third parties
(1)
2,873,818
840,685
Prepayment for investment
(2)
1,206,099
650,909
Other receivables
401,936
299,864
Interest receivable
365,478
171,840
Prepaid value added tax ("VAT") and income tax
(3)
4,468,404
123,100
Deposits for operating lease
36,574
43,090
Subtotal
12,384,225
4,592,022
Less: allowance for other receivables
(
143,583
)
(
156,847
)
Total
$
12,240,642
$
4,435,175
(1)
On March 8, 2021, the Company signed a loan contract with a third party, Waichun Logistics Technology Limited ("Waichun"), to lend $
825,000
, with annual interest rate of
8
%, and will be due on
May 10, 2022
. The Company renewed the contract with Waichun on May 10, 2022 to extend the loan period to December 31, 2023; Besides, the Company signed a loan contract on March 8, 2021 and renewed it on March 6, 2022 with Waichun to lend
$2,000,000
with annual interest rate of
8
%, which will be due on December 31, 2023.
(2)
In September 2021, the Company prepaid $
650,909
to acquire
61.5
% equity interest of Haicheng Shenhe Technology Co., Ltd. ("Haicheng Shenhe") The Company and the shareholders of Haicheng Shenhe agreed on the termination of the acquisition however the acquisition fund had not been paid back as of December 31, 2022. One of the shareholders in Haicheng Shenhe, Mr. Wenwu Zhang, was nominated as the Director of Sunrise Guizhou and a balance of $
337,421
was reclassified to due from related parties as of December 31, 2022.
(3)
The amount of VAT payable is determined by applying the applicable tax rate to the invoiced amount of services provided (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). The Company's input VAT exceeded output VAT as the Company purchased property, plant and equipment for the manufacture on graphite anode materials as of December 31, 2022.
NOTE 8
– LONG TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS
As of December 31,
2022
2021
Prepaid for land use right
(1)
-
6,947,051
Prepaid for equipment
(2)
3,836,627
1,297,866
Loans to third party
(3)
-
2,000,000
Others
15,329
-
Total
$
3,850,985
$
10,244,917
(1)
The Company's subsidiary Sunrise Guizhou signed to purchase land use right from Qianxinan public resources trading center, with an area of
260,543
square meters and prepaid the consideration of $
6,947,051
. The land use right had been registered under Sunrise Guizhou on June 10, 2022.
(2)
Prepaid for equipment represented advance payment on the production line equipment by Sunrise Guizhou, which had not been shipped as of December 31, 2022.
(3)
The Company signed a loan contract on March 8, 2021 and renewed it on March 6, 2022 with Waichun to lend $2,000,000 with annual interest rate of 8%, which will be due on December 31, 2023.
The loan was reclassified to current assets that its maturity was within a year.
Note 9
– PLANT, PROPERTY AND EQUIPMENT, NET
Plant,
property and equipment, stated at cost less accumulated depreciation, consisted of the following:
As of December 31,
2022
2021
Building
$
4,656,184
$
3,061,496
Machines
16,341,419
-
Vehicles
332,113
106,266
Electronic equipment
587,131
100,148
Furniture, fixtures and equipment
139,650
82,104
Leasehold improvements
405,141
442,563
Subtotal
22,461,638
3,792,577
Construction in progress
20,135,220
-
Less: accumulated depreciation
(
1,128,475
)
(
441,256
)
Plant, property and equipment, net
$
41,468,383
$
3,351,321
Depreciation
expense was $
750,220
, $
198,747
and $
126,589
for the fiscal years ended December 31, 2022, 2021 and 2020, respectively.
F-
22
NOTE 9 – LAND USE RIGHTS, NET
Land use rights, stated at cost less accumulated
amortization, consisted of the following:
As of December 31,
2022
2021
Land use rights - cost
$
10,204,968
$
-
Less: accumulated amortization
(
121,726
)
-
Land use rights, net
$
10,083,242
$
-
For the years ended December 31, 2022, 2021 and
2020, amortization expense amounted to $
126,042
and $
nil
and $
nil
, respectively. The following is a schedule of future amortization of
land use rights as of December 31, 2022:
2023
$
221,617
2024
221,617
2025
221,617
2026
221,617
2027 and thereafter
9,196,774
Total
$
10,083,242
NOTE 10 – INTANGIBLE ASSETS, NET
Intangible
                                            assets, stated at cost less accumulated amortization and impairment, consisted of the following:
As of December 31,
2022
2021
Copyrights of course videos
$
4,876,413
$
5,326,829
Intellectual property rights
4,498,261
-
Intangible assets, cost
9,374,674
5,326,829
Less:
Accumulated amortization
(
2,852,753
)
(
1,731,852
)
Impairment
(
2,559,271
)
-
Intangible assets, net
$
3,962,650
$
3,594,977
For the years ended December 31, 2022, 2021 and
2020, amortization expense amounted to $
1,312,279
and $
789,925
and $
738,837
, respectively. The following is a schedule of future amortization
of intangible asset as of December 31, 2022:
2023
$
716,271
2024
716,271
2025
716,271
2026
716,271
2027 and thereafter
1,097,568
Total
$
3,962,650
F-
23
NOTE 11 – LONG-TERM INVESTMENTS
The Company's long-term investments consist
of the following:
As of December 31,
2022
2021
Equity method investments:
Shidong (Suzhou) Investment Co., Ltd. ("Suzhou Investment")
$
37,056
$
55,324
Equity investments without readily determinable fair value:
Shenzhen Jiazhong Creative Capital LLP ("Jiazhong")
1,435,832
1,568,455
Beijing Xingshuizhixing Technology Co., Ltd. ("Xingshuizhixing")
1,148,665
1,254,764
Zhejiang Wangxin Health Technology Co., Ltd. ("Wangxin")
-
1,035,180
Hangzhou Zhongfei Aerospace Health Management Co., Ltd. ("Zhongfei")
430,750
470,537
Shanghai Zhongren Yinzhirun Investment Management Partnership ("Yinzhirun")
287,167
313,691
Jiangxi Cheyi Tongcheng Car Networking Tech Co., Ltd.("Cheyi")
227,970
249,027
Chengdu Zhongfuze Management LLP("Zhongfuze")
71,792
78,423
Shanghai Outu Home Furnishings Co., Ltd. ("Outu")
71,792
78,423
Zhejiang Qianshier Household Co., Ltd.("Qianshier")
71,792
78,423
Taizhoujia Menkou Auto Greengrocer's Delivery Technology Co., Ltd. ("Taizhoujia")
71,792
78,423
Zhejiang Yueteng Information Technology Co., Ltd. ("Yueteng")
71,792
78,423
Shidong Funeng(Ruzhou) Industry Development Co., Ltd.( "Funeng")
38,767
42,348
Dongguan Zhiduocheng Car Service Co., Ltd. ("Car Service")
25,845
28,232
Subtotal
3,991,012
5,409,673
Less: impairment
(
971,731
)
(
28,232
)
Total
$
3,019,281
$
5,381,441
Equity
method investments
Investment in Suzhou Investment
In December 2017, the Company acquired
17
% of
shareholding of Suzhou Investment with cash consideration of RMB
850,000
. As the Company's CEO, Mr. Haiping Hu is Suzhou Investment's
director and the Company can exercise significant influence on Suzhou Investment's business operation, the Company therefore accounted
for this investment under equity methods from December 2017 and share the profit or loss of Suzhou Investment accordingly. For the years
ended December 31, 2022, 2021 and 2020, the Company recognized investment losses of $
14,072
, $
14,025
and $
15,585
, respectively, according
to its share of the post-acquisition losses of Suzhou Investment.
Equity investments without readily determinable
fair value
Investment in Jiazhong
In December 2020, the Company acquired
33
% of
partnership share of Jiazhong as a limited partner with cash consideration of RMB
10,000,000
, approximately $
1,435,832
. The Company has
fully paid RMB
10,000,000
as of December 31, 2020. The Company does not have significant influence or control over Jiazhong, and the
partnership share investment does not have readily determinable market value, and therefore accounted for the investment of Jiazhong
at cost minus impairments and plus or minus observable changes in prices.
F-
24
Investment in Xingshuizhixing
The Company signed an investment agreement with
Beijing Zhitong Zhenye Technology Co., Ltd. and Li Jiyou to invest RMB
8,000,000
, approximately $
1,148,666
, to Xingshuizhixing, which
is accounting for
4
% of its equity interest. Xinshuizhixing mainly operates online tax management system. The Company has no control,
joint control or significant influence on the invested units, and therefore accounted for the investment of Xingshuizhixing at cost minus
impairments and plus or minus observable changes in prices.
Investment in Wangxin
On April 11, 2021, Zibo Shidong signed an equity
transfer agreement with Wangxin, which mainly provides health consulting service, to acquire its
2.15
% equity interest in the consideration
of RMB
6,600,000
, approximately $
947,650
. The company has no control, joint control or significant influence on the invested units, and
therefore accounted for the investment of Wangxin at cost minus impairments and plus or minus observable changes in prices. The investment
fund would be refunded and reclassified as other receivable as December 31, 2022.
Investment in Zhongfei
In November 2020, the Company acquired
3
% of
shareholding interest of Zhongfei through nonmonetary transactions, with which are entered into at the Company's discretion to
receive equity interest in exchange of collection of account receivables due from Zhongfei of RMB
3,000,000
, approximately $
430,750
. In
2021, The Company provided it with a customized service worth of RMB
3,000,000
. The service has been completed and Zhongfei has decided
to transfer
3
% of the equity according to its fair value to the Company. The registration change was completed as of December 31, 2021.
The Company does not have significant influence or control over Zhongfei, and the equity investment does not have readily determinable
market value, and therefore accounted for the investment of Zhongfei at cost minus impairments and plus or minus observable changes in
prices. The cost of equity interest acquired in exchange is initially measured at the fair value of the account receivables the Company
surrendered to obtain them. In 2022, the Company noticed that Zhongfei had encountered going-concern issue and determined that the impairment
on investment was other-than-temporary. Full impairment of $ $
446,025
was provided for investment of
Zhongfei
for the year ended
December 31, 2022.
Investment in Yinzhirun
In December 2016, the Company acquired
0.45
%
of shareholding of Yinzhirun with cash consideration of RMB
2,000,000
, approximately $
287,167
. The Company does not have significant
influence or control over Yinzhirun, and the equity investment does not have readily determinable market value, and therefore accounted
for the investment of Yinzhirun at cost minus impairments and plus or minus observable changes in prices.
Investment in Cheyi
In November 2020, the Company acquired
0.5
% of
shareholding interest of Cheyi through nonmonetary transactions, with which are entered into at the Company's discretion to receive
equity interest in exchange of collection of account receivables due from Cheyi of RMB
1,587,719
, approximately $
227,970
. In 2021, the
Company provided it with a membership service worth of RMB
1,500,000
. This service has been completed. Cheyi has a poor capital turnover,
it has decided to transfer
0.5
% of the equity according to its fair value to the Company and registration change was completed as of
December 31, 2021. The Company accounts for these non-monetary exchanges based on the fair values of the assets involved. The Company
does not have significant influence or control over Cheyi, and the equity investment does not have readily determinable market value,
and therefore accounted for the investment of Cheyi at cost minus impairments and plus or minus observable changes in prices. The cost
of equity interest acquired in exchange is initially measured at the fair value of the account receivables the Company surrendered to
obtain them.
The Company noticed that Industry and Commerce
Administration of Nanchang Xihu Branch was not able to perform on-site inspection on Cheyi's subsidiary Nanchang Qingchong Technology
Co., Ltd. ("Qingchong") in August 2022; Another Cheyi's subsidiary, Jiangxi Cheyi Tongcheng Vehicle Networking Technology
Co., Ltd. ("Cheyi Tongcheng") had a legal dispute with China Construction Bank Nanchang Branch ("CCB") on March
9, 2023. The Company noticed the above factors that raise significant concerns about the investee's ability to continue as a going
concern. Full impairment of $
236,053
was provided for investment of Cheyi for the year ended December 31, 2022.
Investment in Zhongfuze
In September 2019, the Company acquired
11.11
%
of partnership share of Zhongfuze with cash consideration of RMB
500,000
, approximately $
71,792
. The Company has fully paid RMB
500,000
as of December 31, 2020. The Company does not have significant influence or control over Zhongfuze, and the partnership share investment
does not have readily determinable market value, and therefore accounted for the investment of Zhongfuze at cost minus impairments and
plus or minus observable changes in prices.
Investment in Outu
In December 2019, the Company acquired
15
% of
shareholding interest of Outu with cash consideration of RMB
3,000,000
, approximately $
430,750
. The Company has paid RMB
500,000
, approximately
$
71,792
, as of December 31, 2022. The Company does not have significant influence or control over Outu, and the equity investment does
not have readily determinable market value, and therefore accounted for the investment of Outu at cost minus impairments and plus or
minus observable changes in prices. In 2022, the Company noticed that Qutu had encountered going-concern issue and determined that the
impairment on investment was other-than-temporary. Full impairment of $
74,337
was provided for investment of Outu for the year ended
December 31, 2022.
F-
25
Investment in Qianshier
In December 2020, the Company acquired
5
% of
shareholding interest of Qiansier through nonmonetary transactions with, which are entered into at the Company's discretion to
receive equity interest in exchange of collection of account receivables due from Qianshier of RMB
500,000
, approximately $
71,792
. The
Company accounts for these nonmonetary exchanges based on the fair values of the assets involved. The Company does not have significant
influence or control over Qianshier, and the equity investment does not have readily determinable market value, and therefore accounted
for the investment of Qianshier at cost minus impairments and plus or minus observable changes in prices. The cost of equity interest
acquired in exchange is initially measured at the fair value of the account receivables the Company surrendered to obtain them.
In
2022, the Company noticed Qianshier had been applied as dishonest entity subject to enforcement in associated with a rental dispute,
which raised significant concerns about the investee's ability to continue as a going concern. Full impairment of $
74,337
was provided
for investment of Qianshier for the year ended December 31, 2022.
Investment in Taizhoujia
In June 2020, the Company acquired
5
% of shareholding
interest of Taizhoujia through nonmonetary transactions with Taizhoujia, which are entered into at the Company's discretion to
receive equity interest in exchange of collection of account receivables due from Taizhoujia of RMB
500,000
, approximately $
71,792
. The
Company accounts for these nonmonetary exchanges based on the fair values of the assets involved. The Company does not have significant
influence or control over Taizhoujia, and the equity investment does not have readily determinable market value, and therefore accounted
for the investment of Taizhoujia at cost minus impairments and plus or minus observable changes in prices. The cost of equity interest
acquired in exchange is initially measured at the fair value of the account receivables the Company surrendered to obtain them. In 2022,
the Company noticed Taizhoujia was involved in legal proceedings as respondent to its debt guarantor, which raised significant concerns
about the investee's ability to continue as a going concern. Full impairment of $
74,337
was provided for investment of Taizhoujia
for the year ended December 31, 2022.
Investment in Yueteng
In June 2020, the Company acquired
5
% of shareholding
interest of Yueteng through nonmonetary transactions with Yueteng, which are entered into at the Company's discretion to receive
equity interest in exchange of collection of account receivables due from Yueteng of RMB
500,000
, approximately $
71,792
. The Company accounts
for these nonmonetary exchanges based on the fair values of the assets involved. The Company does not have significant influence or control
over Yueteng, and the equity investment does not have readily determinable market value, and therefore accounted for the investment of
Yueteng at cost minus impairments and plus or minus observable changes in prices. The cost of equity interest acquired in exchange is
initially measured at the fair value of the account receivables the Company surrendered to obtain them. In 2022, the Company determined
that the investment was impaired and the impairment was other-than-temporary. Full impairment of $
74,337
was provided for investment
of Taizhoujia for the year ended December 31, 2022.
Investment in Funeng
In August 2019, the Company subscribed capital
with cash consideration of RMB
570,000
and acquired
19
% of shareholding interest of Funeng. The Company has paid RMB
270,000
as of December
31, 2020. The Company does not have significant influence or control over Funeng, and the equity investment does not have readily determinable
market value, and therefore accounted for the investment of Funeng at cost minus impairments and plus or minus observable changes in
prices.
Investment in Car Service
In November 2017, the Company acquired
1.5
%
of shareholding interest of Car Service with cash consideration of RMB
90,000
. In May 2019, the shareholding interest the Company held
was diluted to
0.98
% after Car Service received capital from a new shareholder. The Company does not have significant influence or control
over Car Service, and the equity investment does not have readily determinable market value, and therefore accounted for the investment
of Car Service at cost minus impairments and plus or minus observable changes in prices. In 2021, the Company noticed that with the adverse
impact of COVID-19, Car Service failed to publish the annual report of 2020 in accordance with the time limit to the Industry and Commerce
Administration of Dongguan Nancheng Branch, which was factors that raise significant concerns about the investee's ability to continue
as a going concern. Full impairment of $
27,900
was provided for investment of Car Service for the year ended December 31, 2021.
F-
26
NOTE 12 – ASSET ACQUISITION
In July 2022, Sunrise Guizhou entered into purchase
agreements with original shareholders of Sunrise Tech (formerly known as Anlong Hengrui Graphite Material Co., Ltd.) to acquire
100
%
of Sunrise Tech's assets and equity ownership for a gross consideration of RMB
40,000,000
(approximately $
5,743,331
), among of
which RMB
10,000,000
(approximately $
1,486,746
) was paid in July 2022. In July 2022, the Group completed the acquisition. Sunrise Tech
held three land use rights and two buildings.
The Company evaluated the acquisition of the
purchased assets under ASC 805-Business Combination (ASC 805), and concluded that as substantially all of the fair value of the gross
assets acquired is concentrated in an identifiable group of similar assets, the transaction did not meet the requirements to be accounted
for as a business combination and therefore was accounted for as an asset acquisition.
The purchase prices of the assets as of the acquisition
date are as follows:
Land use rights
$
3,654,545
Plant, property and equipment – buildings
1,853,556
Total assets acquired
5,508,101
Deferred tax liabilities
(
199,813
)
Net assets acquired
$
5,308,288
The Company recognized any excess consideration
transferred over the fair value of the net assets acquired on a relative fair value basis to the identifiable net assets. The Company
determined the estimated fair values using Level 3 inputs after review and consideration of relevant quoted market prices of comparable
companies and relevant information.
The unpaid consideration RMB
30,000,000
(approximately $
4,307,499
) will be paid in installments from 2023 to 2026. These consideration payables were interest free, and the
present value was discounted using the incremental borrowing rate. The current and non-current portion of the consideration payable
was $
582,381
and $
3,358,906
, respectively, as of December 31, 2022. For the year ended December 31, 2022, the Company recorded
interest expense of $
71,272
relating to the amortization of the discount. The consideration payable is guaranteed by Mr. Haiping Hu,
CEO and Chairman of the Board of Director.
NOTE 13 – DEFERRED GOVERNMENT SUBSIDY
GMB BJ planned to relocate the Company address
from Beijing to Zibo city, and it applied for subsidy of RMB
21,926,900
to compensate for the future incremental costs arising from the
relocation, which was approved by the Finance Bureau of Zibo. As of December 31, 2022, the Company received government subsidy of RMB
20,000,000
,
approximately $
2,871,665
, was recognized as deferred government subsidy. It would be deducted from the relocation expenses when incurred.
F-
27
NOTE 14 – LONG TERM PAYABLE
Loans payable represented the financial liabilities
due to financial lease companies maturing within one or over one year. The loans payable consisted of the following:
As of December 31,
2022
2021
Long term payables:
Far East International Financial Leasing Co., Ltd. ("Far East")
$
2,594,415
$
-
China Power Investment Ronghe Financial Leasing Co., Ltd. ("Ronghe")
5,191,056
-
Total
$
7,785,471
-
Current portion
3,706,628
-
Non-current portion
$
4,078,843
$
-
On September 22, 2022, Sunrise Guizhou entered into a sales and leaseback contract with Far East. Pursuant to the contract, the Company sold its machines for RMB
20,000,000
, approximately $
2,871,665
, and immediately leased it back from Far East for an eighteen-month period from September 22, 2022 to March 21, 2024. The Company had not transferred the control of the underlying assets to Far East and the Company evaluated that the sales transaction did not qualify as a sale in accordance with ASC 606. Therefore, the sales and leaseback contract was in essence a debt financing arrangement and did not apply sales and leaseback accounting in ASC 842. The proceeds, net of the financing costs, were financial liability with a yearly implied interest rate of
11.98
%. This long-term payable was guaranteed by SDH and Mr. Haiping Hu. The Company was required to make monthly interest and principal payment. During the year ended December 31, 2022, The Company repaid RMB
2,277,510
, approximately $
338,608
. As of December 31, 2022, the Company had outstanding balance of $
2,594,415
, of which $
1,984,684
and $
609,731
were classified to current portion and non-current portion, respectively. The total outstanding balance of this long term facility was collateralized by certain plant and equipment at the original cost of RMB
38,223,638
, approximately $
5,488,275
, as of December 31, 2022.
On November 4, 2022, Sunrise Guizhou entered
a sales and leaseback financing contract into a three-year financing with Ronghe to obtain an amount of RMB
40,000,000
, approximately
$
5,743,331
, for a term from November 10, 2022 to November 9, 2025. The sales and leaseback contract were a debt financing arrangement
in essence, similar as the contract with Far East, with a yearly interest rate of one-year loan prime rate plus
1.55
%. This long-term
payable is guaranteed by Mr. Haiping Hu and Zhuhai Zibo. The Company is required to make quarterly interest and principal payment. During
the year ended December 31, 2022, The Company repaid RMB
3,693,843
, approximately $
549,181
. As of December 31, 2022, the Company had outstanding
balance of $
5,191,056
, of which $
1,721,944
and $
3,469,112
were classified to current portion and non-current portion, respectively. The
total outstanding balance of this long term facility was collateralized by certain plant and equipment at the original cost of RMB
47,917,699
,
approximately $
6,880,180
, as of December 31, 2022.
NOTE 15 – TAXES
a. VAT
The Company is subject to VAT and related surcharges
in China for providing member services and other in-depth services.
The applicable VAT rate is 6% for general taxpayers and 3% for small-scale
taxpayer.
The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of services provided (output
VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). VAT liability is recorded in the line item of
accrued expenses and other current liabilities on the consolidated balance sheets. Under the commercial practice of the PRC, the Company
pays VAT based on tax invoices issued.
All of the tax returns of the Company have been
and remain subject to examination by the PRC tax authorities for five years from the date of filing.
b. Income tax
Cayman Islands
Under the current tax laws of the Cayman Islands,
the Company is not subject to tax on its income or capital gains. In addition, no Cayman Islands withholding tax will be imposed upon
the payment of dividends by the Company to its shareholders.
F-
28
Hong Kong
In accordance with the relevant tax laws and
regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on
taxable income.
From year of assessment of 2019/2020 onwards, Hong Kong profit tax rates are 8.25% on assessable profits up to HK$2,000,000,
and 16.5% on any part of assessable profits over HK$2,000,000.
However, the Company's HK subsidiary did not generate any assessable
profits arising in or derived from Hong Kong for the fiscal years ended December 31, 2022, 2021 and 2020, and accordingly no provision
for Hong Kong profits tax has been made in these periods.
China
The Company's subsidiaries are incorporated
in the PRC, and are subject to the PRC Enterprise Income Tax Laws ("EIT Laws") with the statutory income tax rate of
25
%
with the following exceptions.
In accordance with the implementation rules of
EIT Laws, a qualified "High and New Technology Enterprise" ("HNTE") is eligible for a preferential tax rate of
15
%. The HNTE certificate is effective for a period of three years. An entity could re-apply for the HNTE certificate when the prior
certificate expires. SDH obtained its HNTE certificate on October 25, 2017, and renewed in 2021.
Therefore, SDH is eligible to enjoy
a preferential tax rate of 15% from 2017 to 2023 to the extent it has taxable income under the EIT Law.
For qualified small and thin-profit enterprises,
the annual taxable income up to RMB 1 million (inclusive) is subject to an effective EIT rate of 2.5% from 1 January 2021 to 31 December
2022; where the annual taxable income exceeds RMB 1 million but does not exceed RMB 3 million (inclusive), the amount in excess of RMB
1 million is subject to an effective EIT rate of 5% from 1 January 2022 to 31 December 2024
. GMB Consulting was eligible to enjoy a preferential
tax rate of
5
% from 2018 to 2021. Shidong Health was eligible to enjoy a preferential tax rate of
2.5
% in 2022.
The components of the income tax provision (benefit) are as follows:
For the years ended
December 31,
2022
2021
2020
Current
China
$
1,560
$
-
$
3,367,763
Deferred
China
807,410
(
236,581
)
(
312,780
)
Total
$
808,970
$
(
236,581
)
$
3,054,983
F-
29
(Loss) profit before income taxes was attributable
to the following geographic locations for the years ended December 31:
For the years ended December 31,
2022
2021
2020
PRC
$
(
16,323,667
)
$
(
6,034,466
)
$
15,150,941
Others
(
5,991,765
)
(
2,916,447
)
(
138,671
)
(Loss) profit before income taxes
$
(
22,315,432
)
$
(
8,950,913
)
$
15,012,270
Reconciliation between the provision (benefit)
for income taxes computed by applying the PRC EIT rate of
25
% to (loss) income before income taxes and the actual provision of income
taxes is as follows:
For the years ended December 31,
2022
2021
2020
(Loss) profit before income taxes
$
(
22,315,432
)
$
(
8,950,913
)
15,012,270
PRC EIT rate
25
%
25
%
25
%
Income taxes computed at statutory EIT rate
$
(
5,578,858
)
$
(
2,237,728
)
3,753,068
Reconciling items:
Effect of tax holiday and preferential tax rate
1,274,465
169,657
(
581,434
)
Effect of tax rates in foreign jurisdictions
1,497,723
728,965
(
46,330
)
Effect of non-deductible expense
13,917
4,403
5,202
Effect of non-deductible share-based compensation
682,492
-
-
Super deduction of qualified R&D expenditures
-
(
107,975
)
(
75,523
)
Changes in valuation allowance
2,919,231
1,206,097
-
Income tax expense (benefit)
$
808,970
$
(
236,581
)
3,054,983
Effective tax rate
(
3.63
)%
2.64
%
20.35
%
Deferred
                                            tax assets and liabilities
According to PRC tax regulations, net operating
losses can be carried forward to offset future operating income for five years. Significant components of deferred tax assets and liabilities
were as follows:
As of December 31,
2022
2021
Deferred tax assets
Net operating loss carry forwards
$
1,934,559
$
978,216
Provision for doubtful debts
1,439,947
1,092,140
Impairment on inventory
398,578
-
Impairment of long-lived assets
163,420
-
Deferred tax assets, gross
3,936,504
2,070,356
Less: valuation allowance
(
3,936,504
)
(
1,218,319
)
Deferred tax assets, net
$
-
$
852,037
Deferred tax liabilities
Assets acquired in the asset acquisition
$
199,583
-
The Company has accumulated operating loss of
approximately $
10,130,515
and $
4,745,479
as of December 31, 2022 and 2021 for income tax purposes available for offsetting against future
taxable income. The accumulated operating loss were from several PRC subsidiaries of the Company. The graphite anode business was in its
start-up phase for the year ended December 31, 2022. In the meantime, peer-to-peer knowledge sharing and enterprise business continued
to shrink in 2022. Considering the factors in graphite anode business and peer-to-peer knowledge sharing and enterprise business, management
believed that there was substantial doubt on realization of the benefits from these losses as they were not able to estimate if the business
would start to make profits in the near future. In making such determination, the Company considered factors including (i) future
reversals of existing taxable temporary differences, (ii) future taxable income exclusive of reversing temporary differences and
carry forwards, and (iii) tax planning strategies. The following is a schedule of expiration of carry forward operating loss as of
December 31, 2022:
For the years ending December 31,
2023
$
5,360
2024
522,780
2025
166,113
2026
12,894
2027
9,423,368
Total
$
10,130,515
The Company evaluates the level of authority
for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures
the unrecognized benefits associated with the tax positions. For the fiscal years ended December 31, 2022 and 2021, the Company had no
unrecognized tax benefits.
For the Company's operating subsidiaries,
the tax years ended December 31, 2018, through December 31, 2022 remain open for statutory examination by PRC tax authorities.
F-
30
NOTE 16 – RELATED PARTY BALANCE AND
TRANSACTIONS
The following is a list of related parties which the Company has transactions
with:
(a)
Ningbo Zhuhai Investment Co., Ltd. ("Zhuhai Investment"), a company controlled by Mr. Haiping Hu
(b)
Bally, Corp. ("Bally"), a company controlled by Mr. Haiping Hu
(c)
Mr. Xuanming Wang, General Manager and legal representative of GMB (Hangzhou)
(d)
Mr. Haiwei Zuo, Vice Chairman of the Board,
7.49
% shareholder of GMB (Beijing)
(e)
Shanghai Hui Yang Investment Co.,
9.6451
% shareholder of Sunrise Guizhou and controlled by immediate family members of Mr. Haiping Hu
(f)
Shidong (Suzhou) Investment Co., Ltd., a company of which Mr. Haiping Hu is the CEO
(g)
Mr. Shousheng Guo, Director,
3.00
% shareholder of GMB (Beijing)
(h)
Mr. Wenwu Zhang, Director of Sunrise Guizhou
(i)
Mr. Chenming Qi, General Manager, Director and
3.00
% shareholder of GIOP BJ; Director of GMB (Hangzhou)
(j)
Ms. Jing Ji, CEO of and
46
% shareholder of GMB Technology
(k)
Haicheng Shenhe,
9.6451
% shareholder of Sunrise Guizhou
(l)
Guizhou Yilong New Area Industrial Development and Investment Co., Ltd.,
3.0864
% shareholder of Sunrise Guizhou
a.
Due
                                            from related parties
As of December 31, 2022 and 2021, the balances of amount due from
related parties were as follows:
As of December 31,
2022
2021
Due from related parties
Bally
5,168
5,168
Zhuhai Investment
-
25,534
Mr. Xuanming Wang
20,102
26,664
Mr. Haiwei Zuo
-
7,912
Mr. Wenwu Zhang
(1)
337,420
-
Shidong (Suzhou) Investment Co., Ltd.
37,332
-
Total
$
400,022
$
65,278
(1)
The balance as of December 31, 2022 represented the prepaid acquisition consideration to purchase Mr. Wenwu Zhang's equity in Haicheng Shenhe. See Note 7.
b.
Due to related parties
As of December 31, 2022 and 2021, the balances of amounts due to related
parties were as follows:
As of December 31,
2022
2021
Due to related parties
Mr. Haiping Hu
2,872
-
Mr. Chenming Qi
9,189
-
Ms. Jing Ji
19,923
-
Shanghai HuiYang Investment Co.
(1)
738,128
-
Haicheng Shenhe
50,395
-
Zhuhai Investment
64,643
-
Total
$
885,150
$
-
(1)
The balance as of December 31, 2022 represented the loans from the related party, with the annual interest rate of
4.35
% and was initially due on August 13, 2022 and extended to December 31, 2023.
F-
31
c.
Deferred revenue
    -related parties
As of December 31, 2022 and 2021, the balances of deferred revenue
of related parties were as follows:
As of December 31,
2022
2021
Deferred revenue of related parties
Shanghai Hui Yang Investment Co.
(1)
$
347,471
$
-
Total
$
347,471
$
-
(1)
The balance as of December 31, 2022 represented the advance from the related party for tailored services.
d.
Related
                                            party transactions
Related party purchase
The Company rented office spaces from Zhuhai
Investment. For the years ended December 31, 2022, 2021 and 2020, total rental fee to Zhuhai Investment were $
118,475
, $
103,411
and $
96,695
,
respectively.
The Company purchased graphite material processing
service of $
450,591
and purchased raw material of $
580,452
from Haicheng Shenhe for the year ended December 31, 2022.
The Company purchased professional services from
Yihe Beijing. For the year ended December 31, 2020, service costs paid to Beijing Yihe were $
27,175
.
Related party sales
The Company sold titanium of $
205
to Mr.
Shousheng Guo for the year ended December 31, 2022.
The Company sold medical wine of $
666
to Zhuhai
Investment for the year ended December 31, 2021.
e.
Related
    party guarantee
On August 4, 2022, Surnise Guizhou entered a
line of credit financing contract with Bank of Guizhou for revolving credit of RMB
20,000,000
, approximately $
2,871,665
, for a term
from August 4, 2022 to August 3, 2023. The line of credit was in various means including bank loans, commercial note and letter of credit.
As of December 31, 2022, the Company has utilized RMB
13,500,000
, approximately $
1,938,374
, line of credit by issuing commercial notes
to its vendors for amount of RMB
27,000,000
, approximately $
3,876,748
. Pursuant to the line of credit contract, the Company was obliged
to deposit fifty percent of the notes payable amount issued as restricted cash in the designated bank accounts in Bank of Guizhou. Pursuant
to the contract, Mr. Haiping Hu and Guizhou Yilong New Area Industrial Development and Investment Co., Ltd., the non-controlling shareholder
of Sunrise Guzhou, were the guarantor of the line of credit.
On September 22, 2022, Sunrise Guizhou entered
a financing contract into an eighteen-month loan with Far East to obtain a loan of RMB
20,000,000
, approximately $
2,871,665
, for a term
from September 22, 2022 to March 21. On November 4, 2022, Sunrise Guizhou entered a sales and leaseback financing contract into a three-year
financing with Ronghe to obtain an amount of RMB
40,000,000
, approximately $
5,743,331
, for a term from November 10, 2022 to November
9, 2025. Pursuant to the financing contracts, Mr. Haiping Hu, CEO and Chairman of the Board of Director was the guarantor for the debt
financing. See Note 14.
In July 2022, Sunrise Guizhou entered into purchase
agreements with original shareholders of Sunrise to acquire
100
% of Sunrise Tech's assets and equity ownership for a gross consideration
of RMB
40,000,000
(approximately $
5,743,331
), among of which RMB
10,000,000
(approximately $
1,486,746
) was paid in July 2022. The unpaid
consideration RMB
30,000,000
(approximately $
4,307,499
) will be paid in installments from 2023 to 2026. The consideration payable is guaranteed
by Mr. Haiping Hu. See Note 12.
F-
32
NOTE 17 – SHAREHOLDERS' EQUITY
Ordinary shares
EPOW was established under the laws of the Cayman
Islands on February 22, 2019. The authorized number of Ordinary Shares was
500,000,000
with par value of $
0.0001
per share. On
February 22, 2019, EPOW issued
999,999
new shares to the controlling shareholders and one share to Osiris International Cayman Limited
at par $
0.0001
per share. On August 8, 2019, EPOW issued an aggregate of
27,000,000
ordinary shares at a price of US$
0.0001
per share
with total consideration of US$
2,800
, pro-rata to the shareholders of EPOW as of such date.
On April 2, 2020, the shareholders of the Company
unanimously authorize a one-for-0.88 reverse stock split of the Company's outstanding and issued ordinary shares (the "First
Reverse Stock Split"), which became effective on April 3, 2020.
Any fractional ordinary share that would have otherwise resulted
from the First Reverse Stock Split were rounded up to the nearest full share. The First Reverse Stock Split did not change the par value
of the ordinary shares and had no effect on the number of authorized ordinary shares of the Company. As a result of the First Reverse
Stock Split,
28,000,000
ordinary shares that were issued and outstanding at April 3, 2020 was reduced to
24,640,000
ordinary shares (taking
into account the rounding of fractional shares).
On April 24, 2020, the shareholders of the Company
unanimously authorize another one-for-0.68 reverse stock split of the Company's issued and outstanding ordinary shares (the "Second
Reverse Stock Split"), which became effective on April 24, 2020.
Any fractional ordinary share that would have otherwise resulted
from the Second Reverse Stock Split were rounded up to the nearest full share. The Second Reverse Stock Split did not change the par
value of the ordinary shares and had no effect on the number of authorized ordinary shares of the Company. As a result of the Second
Reverse Stock Split,
24,640,000
ordinary shares that were issued and outstanding at April 24, 2020 was reduced to
16,800,000
ordinary
shares (taking into account the rounding of fractional shares).
On February 11, 2021, the Company closed its
initial public offering ("IPO") on Nasdaq. The Company offered
6,720,000
ordinary shares, par value $
0.0001
per share, at
a price of $
4.00
per share and received total gross proceed of $
26,880,000
. Besides, the Company offered
1,008,000
ordinary shares, par
value $
0.0001
per share, as part of the representative of the underwriters' over-allotment option, at a price of $
4.00
per share
and received total gross proceed of $
4,032,000
. Total net proceeding amounted to $
27,504,639
after deducting underwriting discounts and
other related expenses.
Share-based compensation
The Company recorded share-based compensation
expenses of $
2,729,969
, $
nil
and $
nil
for the years ended December 31, 2022, 2021 and 2020, respectively. The following table sets forth
the allocation of share-based compensation expenses:
For the years ended
December 31,
2022
2021
2020
Cost of revenues
$
8,188
$
-
$
-
Selling expenses
39,301
-
-
General and administrative expenses
2,674,292
-
-
Research and development expenses
8,188
-
-
Total
$
2,729,969
$
-
$
-
The Company adopted the 2022 Stock Incentive
Plan for the grant of restricted share units to employees, directors and non-employees to provide incentive for their services.
The maximum number of ordinary shares that may
be delivered pursuant to compensatory awards granted to the employees, directors and non-employees under the 2022 Stock Incentive Plan
should not exceed
3,679,200
ordinary shares of par value $
0.0001
per share.
Restricted share units
On August 26, 2022, the Company granted
3,334,200
restricted share units to its directors and employees.
25
% of the restricted share units was immediately vested on August 26, 2022.
75
%
of the restricted share units will be vested in
three years
with equal yearly installments after August 26, 2022. The grant date fair
value of the restricted share units was $
2.00
per share, which was the closing price of the Company's ordinary share on NASDAQ
on August 26, 2022. This grant resulted in a total share-based compensation of $
6,668,400
to be recognized ratably over the requisite
service period of
3
years.
F-
33
A summary of the restricted shares units activities
is as follows:
Number of
restricted
share
    units
outstanding
Weighted
average
grant date
fair value
Aggregate
intrinsic
value
Restricted share units outstanding at January 1, 2022
-
-
-
Granted
3,334,200
2.00
-
Vested
(
833,550
)
2.00
-
Restricted share units outstanding at December 31, 2022
2,500,650
2.00
6,826,775
The weighted average grant date fair value of
restricted share units granted during the years ended December 31, 2022, 2021 and 2020 were $
2.00
, $
nil
and $
nil
, respectively. The total
fair value of restricted share units vested during the years ended December 31, 2022, 2021 and 2020 were $
1,667,100
, $
nil
, and $
nil
respectively.
The Group recognized compensation expense over
the requisite service period for each separately vesting portion of the award as if the award is in substance, multiple awards. The Company
recorded share-based compensation expenses relating to restricted share units of $
2,729,969
for the year ended December 31, 2022. As
of December 31, 2022, total unrecognized compensation expenses relating to nonvested shares were $
3,938,431
, which is expected to be
recognized over a weighted average period of
1.75
years.
Non-controlling interest
Non-controlling interest consists of the following:
As of December 31,
2022
2021
GMB (Beijing)
$
4,313
$
5,365
GMB Culture
2,997
25,613
Jiagui Haifeng
(
710
)
(
13
)
Shidong Trading
-
(
35
)
GMB Consulting
13,270
14,477
Shidong Cloud
42,389
-
Sunrise Guxian
(
39,323
)
-
GMB Technology
(
186,539
)
(
185,377
)
Sunrise Guizhou
42,402,995
3,262,220
Total
$
42,239,392
$
3,122,250
Jiagui Haifeng was established by Zibo Shidong
and Mr. Lifeng Wang in November, 2021.
51
% shares of Jiagui Haifeng was held by Zibo Shidong and
49
% of shares was held by Mr. Lifeng
Wang.
Sunrise Guizhou was established by Zhuhai (Zibo) Investment and five other companies in November, 2021. Shidong Cloud was established by GIOP BJ and Beijing Yunqianyi Information Technology Co., Ltd. ("Yunqianyi") in December 2022.
75
% shares of Shidong Cloud was held by GIOP BJ and
25
% of shares was held by Yunqianyi.
Sunrise Guxian was established by Sunrise Guizhou
and seven	 other companies in April 2022.
For the year ended December 31, 2022, the Company
made capital contributions of $
52,863
to Shidong Cloud; and the non-controlling shareholders made capital contributions of $
78,851
to
Shidong Cloud.
For the years ended December 31, 2022 and 2021,
Zhuhai (Zibo) made capital contributions of $
10,759,335
and $
9,099,878
to Sunrise Guizhou; and the non-controlling shareholders made
capital contributions of $
41,826,941
and $
3,332,622
to Sunrise Guizhou.
The actual capital contributions made by the
Company and the non-controlling shareholders for the fiscal year ended 2022 and 2021 had no effect on the Company's equity percentage
in its eight subsidiaries.
F-
34
Statutory reserves
In accordance with the Regulations on Enterprises
of PRC, the Company's subsidiaries, GIOP BJ, VIE and VIE's subsidiaries in the PRC are required to provide for statutory
reserves, which are appropriated from net profit as reported in the Company's PRC statutory accounts. They are required to allocate
10
% of their after-tax profits to fund statutory reserves until such reserves have reached
50
% of their respective registered capital.
These reserve funds, however, may not be distributed as cash dividends.
As of December 31, 2022 and 2021, the statutory
reserves of the Company's subsidiaries, GIOP BJ, VIE and VIE's subsidiaries in the PRC have not reached
50
% of their respective
registered capital. As of December 31, 2022 and 2021, the balances of the statutory reserves were $
2,477,940
and $
2,473,801
, respectively.
Restricted net assets
The Company's PRC subsidiaries and the VIE
and VIE's subsidiaries are restricted in their ability to transfer a portion of their net assets, equivalent to their statutory
reserves and their share capital to the Company in the form of loans, advances, or cash dividends. The payment of dividends by entities
organized in China is subject to limitations, procedures, and formalities. Regulations in the PRC currently permit payment of dividends
only out of accumulated profits as determined in accordance with accounting standards and regulations in China. As of December 31, 2022,
the statutory reserves and the share capital amounted to $
2,477,940
and $
22,710,147
, respectively.
NOTE 18 – COMMITMENTS AND CONTINGENCIES
Contingencies
The Company may be involved in various legal
proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general,
are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency
should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. Although the outcomes of these legal
proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on
its financial position, results of operations or liquidity. As of December 31, 2022, the Company was not aware of any litigations or
lawsuits against it.
NOTE 19 – SEGMENT REPORTING
ASC 280, "Segment Reporting", establishes
standards for reporting information about operating segments on a basis consistent with the Company's internal organizational structure
as well as information about geographical areas, business segments and major customers in financial statements for details on the Company's
business segments.
The Company uses the management approach to determine
reportable operating segments. The management approach considers the internal organization and reporting used by the Company's
chief operating decision maker ("CODM") for making decisions, allocating resources and assessing performance. The Company's
CODM has been identified as the CEO, who reviews consolidated results when making decisions about allocating resources and assessing
performance of the Company.
Based on the
management's assessment, the Company determined that it has
two
operating segments and therefore
two
reportable segments as defined
by ASC 280. The Company's assets are substantially all located in the PRC and substantially all of the Company's revenue
and expense are derived in the PRC. Therefore, no geographical segments are presented.
The
Company's CODM evaluates performance based on each reporting segment's revenue, costs of revenues and gross profit (loss).
Revenues, cost of revenues and gross (loss) profits by segment are presented below. Separate financial information of operating income
by segment is not available.
F-
35
For the years ended
December
    31,
REVENUES, NET
2022
2021
2020
Graphite anode business
$
37,580,677
$
-
$
-
Peer-to-peer knowledge sharing and enterprise business
544,991
7,409,272
23,181,084
Member services
106,724
498,330
872,629
Enterprise services
-Comprehensive tailored services
153,658
1,433,847
13,345,880
-Sponsorship advertising services
-
1,734,390
6,598,527
-Consulting services
9,645
1,583,583
416,634
Online services
2,100
40,391
361,933
Other revenues
272,864
2,118,731
1,585,481
Revenues, net
$
38,125,668
$
7,409,272
$
23,181,084
For the years ended
December
    31,
COST OF REVENUES
2022
2021
2020
Graphite anode business
$
35,586,544
$
-
$
-
Peer-to-peer knowledge sharing and enterprise business
3,889,502
3,886,654
2,980,216
Member services
591,000
99,013
174,660
Enterprise services
-Comprehensive tailored services
294,759
157,563
340,783
-Sponsorship advertising services
-
34,041
255,634
-Consulting services
218,719
733,266
239,845
Online services
66,403
798,010
1,076,503
Other revenues
2,718,621
2,064,761
892,791
Cost of revenues
$
39,476,046
$
3,886,654
$
2,980,216
For the years ended
December
    31,
GROSS (LOSS) PROFIT
2022
2021
2020
Graphite anode business
$
1,994,133
$
-
$
-
Peer-to-peer knowledge sharing and enterprise business
(
3,344,511
)
3,522,618
20,200,868
Member services
(
484,276
)
399,317
697,969
Enterprise services
-Comprehensive tailored services
(
141,101
)
1,276,284
13,005,097
-Sponsorship advertising services
-
1,700,349
6,342,893
-Consulting services
(
209,074
)
850,317
176,789
Online services
(
64,303
)
(
757,619
)
(
714,570
)
Other revenues
(
2,445,757
)
53,970
692,690
Gross (loss) profit
$
(
1,350,378
)
$
3,522,618
$
20,200,868
NOTE 20 – SUBSEQUENT EVENTS
On January 18, 2023, Sunrise Guizhou entered
a credit facility agreement with Post Savings Bank of China ("Post Bank") to obtain revolving fund up to RMB
30,000,000
,
approximately $
4,307,498
, for a term from January 19, 2023 to January 18, 2031. This credit loan was guaranteed by Mr. Haiping Hu, CEO
and Chairman of the Board of Director, and Zhuhai Zibo. The Company also needed to mortgage its plants, property and equipment to Post
Bank.
On February 7, 2023, Sunrise Guizhou entered
a two-year debt financing arrangement with Zhongguancun Science and Technology Leasing Co., Ltd. to obtain a loan of RMB
20,000,000
,
approximately $
2,871,665
, for a term from February 7, 2023 to February 7, 2025 with five-year loan prime rate plus
2.6
%. This debt financing
arrangement was guaranteed by Mr. Haiping Hu, CEO and Chairman of the Board of Director, and Zhuhai Zibo. The Company also pledged its
account receivable amounted to RMB
20,000,000
, approximately $
2,871,665
of its customer. The Company is required to make quarterly interest
and principal payments.
The Company evaluated subsequent events and transactions
that occurred after the balance sheet date through May 16, 2023, the date that the audited consolidated financial statements were available
to be issued.
F-
36
NOTE 21 – CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY
Rule 12-04(a), 5-04(c) and 4-08(e)(3) of Regulation
S-X require the condensed financial information of the parent company to be filed when the restricted net assets of consolidated subsidiaries
exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. The Company performed a test on
the restricted net assets of consolidated subsidiaries in accordance with such requirement and concluded that it was applicable to the
Company as the restricted net assets of the Company's PRC subsidiaries and VIE and its subsidiaries exceeded
25
% of the consolidated
net assets of the Company, therefore, the condensed financial information for the parent company are included herein.
For purposes of the above test, restricted net
assets of consolidated subsidiaries and VIE and its subsidiaries shall mean that amount of the Company's proportionate share of
net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not
be transferred to the parent company by subsidiaries and VIE and its subsidiaries in the form of loans, advances or cash dividends without
the consent of a third party.
The condensed financial information of the parent
company has been prepared using the same accounting policies as set out in the Company's consolidated financial statements except
that the parent company used the equity method to account for investment in its subsidiaries and VIE and its subsidiaries. Such investment
is presented on the condensed balance sheets as "Investment in subsidiaries and VIE" and the respective loss or profit as
"Equity in (loss) earnings of subsidiaries and VIE" on the condensed statements of operations and comprehensive (loss) income.
The footnote disclosures contain supplemental
information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to
the consolidated financial statements of the Company. Certain information and footnote disclosures normally included in financial statements
prepared in accordance with U.S GAAP have been condensed or omitted.
The Company did not pay any dividend for the
periods presented. As of December 31, 2022 and 2021, there were no material contingencies, significant provisions for long-term obligations,
or guarantees of the Company, except for those which have been separately disclosed in the consolidated financial statements, if any.
F-
37
SUNRISE NEW ENERGY CO., LTD.
PARENT COMPNAY BALANCE SHEETS
As of December 31,
2022
2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
285,916
$
784,176
Restricted cash
700,094
-
Due from related parties
5,168
5,168
Short-term investment
3,336,256
5,961,605
Advance to suppliers
7,694
13,727
Prepaid expenses and other current assets
2,994,975
1,011,542
TOTAL CURRENT ASSETS
7,330,103
7,776,218
NON-CURRENT ASSETS
Restricted cash
-
700,060
Long term prepayments and other non-current assets
-
2,000,000
Investment in subsidiaries and VIE
24,714,096
41,438,198
TOTAL NON-CURRENT
    ASSETS
24,714,096
44,138,258
TOTAL ASSETS
32,044,199
51,914,476
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses and other current liabilities
15,550
211,430
TOTAL CURRENT LIABILITIES
15,550
211,430
TOTAL LIABILITES
15,550
211,430
EQUITY
Ordinary shares (
500,000,000
shares authorized; $
0.0001
par value,
24,528,000
shares issued and outstanding as of December 31, 2021;
25,361,550
shares issued and outstanding as of December 31, 2022)
2,536
2,453
Additional paid-in capital
34,696,702
31,966,816
Statutory reserves
2,477,940
2,473,801
(Accumulated deficits) Retained earnings
(
5,148,529
)
17,259,976
TOTAL EQUITY
32,028,649
51,703,046
TOTAL LIABILITIES AND
    EQUITY
$
32,044,199
$
51,914,476
F-
38
SUNRISE NEW ENERGY CO., LTD.
PARENT COMPNAY STATEMENTS OF OPERATIONS AND
COMPREHENSIVE (LOSS) INCOME
For the years ended
December
    31,
2022
2021
2020
REVENUES, NET
$
-
$
-
$
73,744
COSTS OF REVENUES
8,188
-
-
GROSS (LOSS) PROFIT
(
8,188
)
-
73,744
OPERATING EXPENSES
3,578,664
1,010,536
50,000
(LOSS) PROFIT FROM OPERATIONS
(
3,586,852
)
(
1,010,536
)
23,744
OTHER (EXPENSES) INCOME
(
2,403,412
)
(
1,904,135
)
4,459
(LOSS) PROFIT BEFORE EQUITY IN (LOSS) EARNINGS
    OF SUBSIDIARIES AND VIE
(
5,990,264
)
(
2,914,671
)
28,203
Equity in (loss) earnings of subsidiaries
    and VIE
(
16,414,102
)
(
5,488,589
)
12,059,324
NET (LOSS) INCOME ATTRIBUTABLE TO SUNRISE NEW
    ENERGY CO., LTD. ORDINARY SHAREHOLDERS
(
22,404,366
)
(
8,403,260
)
12,087,527
Foreign currency translation adjustment
-
-
-
COMPREHENSIVE (LOSS) INCOME
    ATTRIBUTABLE TO SUNRISE NEW ENERGY CO., LTD. ORDINARY SHAREHOLDERS
$
(
22,404,366
)
$
(
8,403,260
)
$
12,087,527
F-
39
SUNRISE NEW ENERGY CO., LTD.
PARENT COMPNAY STATEMENTS OF CASH FLOWS
For the years ended December 31,
2022
2021
2020
Net cash used in operating activities
(
808,226
)
(
1,015,145
)
(
52,994
)
Net cash used in investing activities
(
25,825,000
)
-
Net cash provided by financing activities
310,000
28,249,093
128,282
(Decrease) increase in cash and cash equivalents
(
498,226
)
1,408,948
75,288
Cash, cash equivalents
    and restricted cash, beginning of year
1,484,236
75,288
-
Cash, cash equivalents
    and restricted cash, end of year
$
986,010
$
1,484,236
$
75,288
Cash, cash equivalents and restricted cash,
    end of year
986,010
1,484,236
75,288
Less: restricted
    cash
700,094
700,060
-
Cash and cash equivalents,
    end of year
285,916
784,176
75,288
F-40