\u00a0<\/p>\n
UNITED STATES <\/p>\n
SECURITIES AND EXCHANGE COMMISSION<\/p>\n
Washington, D. C. 20549<\/p>\n
\u00a0<\/p>\n
FORM 10-Q<\/p>\n
\u00a0<\/p>\n
\u2612 QUARTERLY REPORT PURSUANT TO SECTION
\n13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934<\/p>\n
\u00a0<\/p>\n
For the quarterly period ended March 31, 2026<\/p>\n
\u00a0<\/p>\n
\u2610 TRANSITION REPORT PURSUANT TO SECTION
\n13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934<\/p>\n
\u00a0<\/p>\n
For the transition period from __________ to __________<\/p>\n
\u00a0<\/p>\n
Commission File number 001-38605<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION<\/p>\n
(Exact name of registrant as specified in charter)<\/p>\n
\u00a0<\/p>\n
British Virgin Islands \u00a0 001-38605 (State or other jurisdiction of
incorporation or organization) \u00a0 (I.R.S. Employer
Identification No.) <\/p>\n
\u00a0<\/p>\n
50 Millstone Road, Building 400 Suite 130
East Windsor, NJ
United States \u00a0 08512 (Address of principal executive offices) \u00a0 (Zip Code) <\/p>\n
\u00a0<\/p>\n
1 (888) 827-4832<\/p>\n
(Registrant\u2019s telephone number, including
\narea code)<\/p>\n
\u00a0<\/p>\n
Securities registered pursuant to Section 12(b) of the Act:<\/p>\n
\u00a0<\/p>\n
Title of each class \u00a0 Trading Symbol(s) \u00a0 Name of each exchange on which registered Ordinary shares, no par value \u00a0 GTEC\u00a0 \u00a0 The NASDAQ Stock Market LLC <\/p>\n
\u00a0<\/p>\n
Indicate by check mark whether the registrant
\n(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
\n(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
\nfor the past 90 days. Yes \u2612 No \u2610<\/p>\n
\u00a0<\/p>\n
Indicate by check mark whether the registrant
\nhas submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (\u00a7 232.405
\nof this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
\n\u2612 No \u2610<\/p>\n
\u00a0<\/p>\n
Indicate by check mark whether the registrant
\nis a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.
\nSee definitions of \u201clarge accelerated filer,\u201d \u201caccelerated filer,\u201d \u201csmaller reporting company,\u201d and
\n\u201cemerging growth company\u201d in Rule 12b-2 of the Exchange Act.<\/p>\n
\u00a0<\/p>\n
Large accelerated filer \u2610 Accelerated filer \u2610 Non-accelerated filer \u2612 Smaller reporting company \u2612 \u00a0 \u00a0 Emerging growth company \u2610 <\/p>\n
\u00a0<\/p>\n
If an emerging growth company, indicate by check
\nmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
\nstandards provided pursuant to Section 13(a) of the Exchange Act. \u2610<\/p>\n
\u00a0<\/p>\n
Indicate by check mark whether the registrant
\nis a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes \u2610 No \u2612<\/p>\n
\u00a0<\/p>\n
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
\nPROCEEDINGS DURING THE PRECEDING FIVE YEARS:<\/p>\n
\u00a0<\/p>\n
Indicate by check mark whether the registrant
\nhas filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent
\nto the distribution of securities under a plan confirmed by a court. Yes \u2610 No \u2610<\/p>\n
\u00a0<\/p>\n
As of May 13, 2026, there were 20,532,482 Class
\nA ordinary shares, no par value per share, of the registrant issued and outstanding.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
INDEX<\/p>\n
\u00a0<\/p>\n
\u00a0
\n \u00a0
\n Page<\/p>\n
\u00a0
\n \u00a0
\n Number<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
PART I.
\n FINANCIAL INFORMATION
\n 1<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
ITEM 1.
\n Financial Statements (unaudited)
\n 1<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
ITEM 2.
\n Management\u2019s Discussion and Analysis of Financial Condition and Results of Operations
\n 2<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
ITEM 3.
\n Quantitative and Qualitative Disclosures About Market Risk
\n 12<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
ITEM 4.
\n Controls and Procedures
\n 12<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
PART II.
\n OTHER INFORMATION
\n 14<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
ITEM 1.
\n Legal Proceedings
\n 14<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
ITEM 1A.
\n Risk Factors
\n 14<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
ITEM 2.
\n Unregistered Sales of Equity Securities and Use of Proceeds
\n 39<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
ITEM 3.
\n Defaults Upon Senior Securities
\n 39<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
ITEM 4.
\n Mine Safety Disclosures
\n 39<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
ITEM 5.
\n Other Information
\n 39<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
ITEM 6.
\n Exhibits
\n 40<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
Signatures
\n \u00a0
\n 41<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
FORWARD LOOKING STATEMENTS<\/p>\n
\u00a0<\/p>\n
This quarterly report on Form 10-Q (the \u201cQuarterly
\nReport\u201d), and the Financial Statements and Notes to Financial Statements in this Quarterly Report contain forward-looking statements
\nthat discuss, among other things, future expectations and projections regarding future developments, operations and financial conditions.
\nForward-looking statements may appear throughout this Quarterly Report and other documents we file with the U.S. Securities and Exchange
\nCommission (\u201cSEC\u201d), including without limitation, the following sections: Part I, Item 2, \u201cManagement\u2019s Discussion
\nand Analysis of Financial Condition and Results of Operations\u201d in this Quarterly Report on Form 10-Q.<\/p>\n
\u00a0<\/p>\n
Forward-looking statements generally can be identified
\nby words such as \u201canticipates,\u201d \u201cbelieves,\u201d \u201cestimates,\u201d \u201cexpects,\u201d \u201cintends,\u201d
\n\u201cplans,\u201d \u201cpredicts,\u201d \u201cprojects,\u201d \u201cwill be,\u201d \u201cwill continue,\u201d \u201cmay,\u201d
\n\u201ccould,\u201d \u201cwill likely result,\u201d and similar expressions. These forward-looking statements are based on current
\nexpectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from
\nthose reflected in the forward-looking statements. We undertake no obligation to revise or publicly release the results of any revision
\nto these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place
\nundue reliance on such forward-looking statements.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
PART I – FINANCIAL INFORMATION<\/p>\n
\u00a0<\/p>\n
ITEM 1. FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION<\/p>\n
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
THREE MONTHS ENDED MARCH 31, 2026<\/p>\n
\u00a0<\/p>\n
TABLE OF CONTENTS<\/p>\n
\u00a0<\/p>\n
PAGE
\n F-1
\n – F-2
\n CONSOLIDATED
\n BALANCE SHEETS AS OF MARCH 31, 2026 (UNAUDITED) AND DECEMBER 31, 2025<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
PAGE
\n F
\n – 3
\n CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED)<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
PAGE
\n F
\n – 4
\n CONSOLIDATED STATEMENTS OF CHANGE IN SHAREHOLDERS\u2019 EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED)<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
PAGE
\n F-5
\n – F-6
\n CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED)<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
PAGE
\n F-7
\n – F-34
\n NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
UNAUDITED CONSOLIDATED BALANCE SHEETS<\/p>\n
\u00a0<\/p>\n
AS OF MARCH 31, 2026 AND DECEMBER 31, 2025<\/p>\n
\u00a0<\/p>\n
(IN U.S. DOLLARS)<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n March\u00a031,\u00a0\u00a0
\n December\u00a031,\u00a0<\/p>\n
\u00a0\u00a0
\n 2026\u00a0\u00a0
\n 2025\u00a0<\/p>\n
ASSETS\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0<\/p>\n
Current assets\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0<\/p>\n
Cash and cash equivalents\u00a0
\n $10,392,136\u00a0\u00a0
\n $7,775,330\u00a0<\/p>\n
Restricted cash\u00a0
\n \u00a0215,041\u00a0\u00a0
\n \u00a071,540\u00a0<\/p>\n
Short term investment\u00a0
\n \u00a020,831,283\u00a0\u00a0
\n \u00a024,454,701\u00a0<\/p>\n
Notes receivable\u00a0
\n \u00a018,733,369\u00a0\u00a0
\n \u00a014,704,079\u00a0<\/p>\n
Accounts receivable, net\u00a0
\n \u00a025,885,240\u00a0\u00a0
\n \u00a017,256,479\u00a0<\/p>\n
Inventories, net\u00a0
\n \u00a025,703,356\u00a0\u00a0
\n \u00a024,377,036\u00a0<\/p>\n
Due from related parties-current\u00a0
\n \u00a0511,400\u00a0\u00a0
\n \u00a01,106,417\u00a0<\/p>\n
Advance to suppliers\u00a0
\n \u00a075,640\u00a0\u00a0
\n \u00a080,757\u00a0<\/p>\n
Fixed deposit-current\u00a0
\n \u00a01,500,264\u00a0\u00a0
\n \u00a02,966,386\u00a0<\/p>\n
Prepayments and other current assets\u00a0
\n \u00a09,151,451\u00a0\u00a0
\n \u00a02,472,387\u00a0<\/p>\n
Total Current Assets\u00a0
\n $112,999,180\u00a0\u00a0
\n $95,265,112\u00a0<\/p>\n
\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
Non-current asset\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
Property, plant and equipment, net\u00a0
\n \u00a011,746,243\u00a0\u00a0
\n \u00a011,889,147\u00a0<\/p>\n
Land use rights, net\u00a0
\n \u00a03,348,730\u00a0\u00a0
\n \u00a03,325,188\u00a0<\/p>\n
Intangible assets\u00a0
\n \u00a053,082\u00a0\u00a0
\n \u00a068,691\u00a0<\/p>\n
Deferred tax assets\u00a0
\n \u00a0452,771\u00a0\u00a0
\n \u00a0446,613\u00a0<\/p>\n
Fixed deposit-non current\u00a0
\n \u00a07,474,063\u00a0\u00a0
\n \u00a04,421,828\u00a0<\/p>\n
Other non-current assets\u00a0
\n \u00a0478,779\u00a0\u00a0
\n \u00a0355,762\u00a0<\/p>\n
Total non-current assets\u00a0
\n $23,553,668\u00a0\u00a0
\n $20,507,229\u00a0<\/p>\n
TOTAL ASSETS\u00a0
\n $136,552,848\u00a0\u00a0
\n $115,772,341\u00a0<\/p>\n
\u00a0<\/p>\n
The accompanying notes are an integral part of
\nthe unaudited consolidated financial statements.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
UNAUDITED CONSOLIDATED BALANCE SHEETS<\/p>\n
\u00a0<\/p>\n
AS OF MARCH 31, 2026 AND DECEMBER 31, 2025 (Continued)<\/p>\n
\u00a0<\/p>\n
(IN U.S. DOLLARS)<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n March 31,\u00a0\u00a0
\n December\u00a031,\u00a0<\/p>\n
\u00a0\u00a0
\n 2026\u00a0\u00a0
\n 2025\u00a0<\/p>\n
\u00a0\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0<\/p>\n
Current Liabilities\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0<\/p>\n
Notes payable-bank acceptance notes\u00a0
\n $16,440,997\u00a0\u00a0
\n $12,759,720\u00a0<\/p>\n
Accounts payable\u00a0
\n \u00a033,565,416\u00a0\u00a0
\n \u00a025,604,917\u00a0<\/p>\n
Taxes payables\u00a0
\n \u00a01,525,716\u00a0\u00a0
\n \u00a01,622,509\u00a0<\/p>\n
Contract liabilities\u00a0
\n \u00a0122,775\u00a0\u00a0
\n \u00a093,698\u00a0<\/p>\n
Due to related parties\u00a0
\n \u00a03,750,588\u00a0\u00a0
\n \u00a05,275,011\u00a0<\/p>\n
Other current liabilities\u00a0
\n \u00a01,516,342\u00a0\u00a0
\n \u00a02,941,871\u00a0<\/p>\n
Total current liabilities\u00a0
\n $56,921,834\u00a0\u00a0
\n $48,297,726\u00a0<\/p>\n
\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
Non-current liabilities\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
Deferred revenue\u00a0
\n \u00a01,039,241\u00a0\u00a0
\n \u00a01,083,784\u00a0<\/p>\n
Warrant liability\u00a0
\n \u00a0123,837\u00a0\u00a0
\n \u00a070,910\u00a0<\/p>\n
Total non-current liabilities\u00a0
\n $1,163,078\u00a0\u00a0
\n $1,154,694\u00a0<\/p>\n
TOTAL LIABILITIES\u00a0
\n $58,084,912\u00a0\u00a0
\n $49,452,420\u00a0<\/p>\n
\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
COMMITMENTS AND CONTINGENCIES\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0<\/p>\n
Shareholders\u2019 equity\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
Ordinary shares, no par value, unlimited shares authorized; nil \u00a0and 17,394,226 shares issued and outstanding as of March 31, 2026 and December\u00a031, 2025.<\/p>\n
\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0<\/p>\n
Class A Ordinary Shares, no par value, unlimited shares authorized; 20,532,482 \u00a0and nil shares issued and outstanding as of March 31, 2026 and December\u00a031, 2025.<\/p>\n
\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0<\/p>\n
Class B Ordinary Shares, no par value, unlimited shares authorized; 6,011,740 \u00a0and nil shares issued and outstanding as of March 31, 2026 and December\u00a031, 2025.<\/p>\n
\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0<\/p>\n
Additional paid-in capital\u00a0
\n \u00a038,602,913\u00a0\u00a0
\n \u00a033,017,917\u00a0<\/p>\n
Statutory reserves\u00a0
\n \u00a03,842,331\u00a0\u00a0
\n \u00a03,842,331\u00a0<\/p>\n
Retained earnings\u00a0
\n \u00a042,534,128\u00a0\u00a0
\n \u00a037,533,648\u00a0<\/p>\n
Accumulated other comprehensive loss\u00a0
\n \u00a0(727,302)\u00a0
\n \u00a0(1,452,410)<\/p>\n
Total shareholders\u2019 equity attributed to Greenland Technologies Holding Corporation and subsidiaries\u00a0
\n $84,252,070\u00a0\u00a0
\n $72,941,486\u00a0<\/p>\n
Non-controlling interest\u00a0
\n \u00a0(5,784,134)\u00a0
\n \u00a0(6,621,565)<\/p>\n
TOTAL SHAREHOLDERS\u2019 EQUITY\u00a0
\n $78,467,936\u00a0\u00a0
\n $66,319,921\u00a0<\/p>\n
\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
TOTAL LIABILITIES AND SHAREHOLDERS\u2019 EQUITY\u00a0
\n $136,552,848\u00a0\u00a0
\n $115,772,341\u00a0<\/p>\n
\u00a0<\/p>\n
The accompanying notes are an integral part of
\nthe unaudited consolidated financial statements.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
\nAND COMPREHENSIVE INCOME<\/p>\n
\u00a0<\/p>\n
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND
\n2025<\/p>\n
\u00a0<\/p>\n
(UNAUDITED, IN U.S. DOLLARS)<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n For the three months ended
March 31,\u00a0<\/p>\n
\u00a0\u00a0
\n 2026\u00a0\u00a0
\n 2025\u00a0<\/p>\n
Revenues\u00a0
\n $25,538,345\u00a0\u00a0
\n $21,677,564\u00a0<\/p>\n
Cost of goods sold\u00a0
\n \u00a016,779,083\u00a0\u00a0
\n \u00a015,016,614\u00a0<\/p>\n
Gross profit\u00a0
\n \u00a08,759,262\u00a0\u00a0
\n \u00a06,660,950\u00a0<\/p>\n
Selling expenses\u00a0
\n \u00a0419,014\u00a0\u00a0
\n \u00a0331,809\u00a0<\/p>\n
General and administrative expenses\u00a0
\n \u00a01,842,428\u00a0\u00a0
\n \u00a01,438,988\u00a0<\/p>\n
Research and development expenses\u00a0
\n \u00a0778,219\u00a0\u00a0
\n \u00a081,457\u00a0<\/p>\n
Total operating expenses\u00a0
\n $3,039,661\u00a0\u00a0
\n $1,852,254\u00a0<\/p>\n
INCOME FROM OPERATIONS\u00a0
\n $5,719,601\u00a0\u00a0
\n $4,808,696\u00a0<\/p>\n
Interest income\u00a0
\n \u00a0519,843\u00a0\u00a0
\n \u00a0141,040\u00a0<\/p>\n
Interest expense\u00a0
\n \u00a0(33,380)\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0<\/p>\n
Change in fair value of the warrant liability\u00a0
\n \u00a0(52,927)\u00a0
\n \u00a0209,294\u00a0<\/p>\n
Other income\u00a0
\n \u00a0599,189\u00a0\u00a0
\n \u00a0282,081\u00a0<\/p>\n
INCOME BEFORE INCOME TAX\u00a0
\n $6,752,326\u00a0\u00a0
\n $5,441,111\u00a0<\/p>\n
INCOME TAX EXPENSE\u00a0
\n \u00a01,003,895\u00a0\u00a0
\n \u00a0878,275\u00a0<\/p>\n
NET INCOME\u00a0
\n $5,748,431\u00a0\u00a0
\n $4,562,836\u00a0<\/p>\n
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST\u00a0
\n \u00a0747,951\u00a0\u00a0
\n \u00a0559,053\u00a0<\/p>\n
NET INCOME ATTRIBUTABLE TO GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES\u00a0
\n $5,000,480\u00a0\u00a0
\n $4,003,783\u00a0<\/p>\n
OTHER COMPREHENSIVE INCOME:\u00a0
\n \u00a0814,588\u00a0\u00a0
\n \u00a0448,096\u00a0<\/p>\n
Unrealized foreign currency translation income attributable to Greenland Technologies Holding Corporation and subsidiaries\u00a0
\n \u00a0725,108\u00a0\u00a0
\n \u00a0412,136\u00a0<\/p>\n
Unrealized foreign currency translation income attributable to non-controlling interest\u00a0
\n \u00a089,480\u00a0\u00a0
\n \u00a035,960\u00a0<\/p>\n
Total comprehensive income attributable to Greenland technologies holding corporation and subsidiaries\u00a0
\n \u00a05,725,588\u00a0\u00a0
\n \u00a04,415,919\u00a0<\/p>\n
Total comprehensive income attributable to noncontrolling interest\u00a0
\n \u00a0837,431\u00a0\u00a0
\n \u00a0595,013\u00a0<\/p>\n
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:\u00a0
\n \u00a021,753,958\u00a0\u00a0
\n \u00a013,594,530\u00a0<\/p>\n
Basic and diluted\u00a0
\n \u00a00.23\u00a0\u00a0
\n \u00a00.29\u00a0<\/p>\n
\u00a0<\/p>\n
The accompanying notes are an integral part of
\nthe unaudited consolidated financial statements.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGE
\nIN SHAREHOLDERS\u2019 EQUITY<\/p>\n
\u00a0<\/p>\n
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND
\n2025<\/p>\n
\u00a0<\/p>\n
(UNAUDITED, IN U.S. DOLLARS, EXCEPT FOR SHARE
\nDATA)<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n Ordinary Shares\u00a0\u00a0
\n \u00a0\u00a0\u00a0
\n Accumulated \u00a0\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0
\n Total
shareholders\u2019
equity
attributed
to
Greenland
Technologies
Holding\u00a0\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0<\/p>\n
\u00a0\u00a0
\n No Par Value\u00a0\u00a0
\n Additional\u00a0\u00a0
\n Other\u00a0\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0
\n Corporation\u00a0\u00a0
\n Non-\u00a0\u00a0
\n Total\u00a0<\/p>\n
\u00a0\u00a0
\n Shares\u00a0\u00a0
\n Amount\u00a0\u00a0
\n Class A
Shares\u00a0\u00a0
\n Amount\u00a0\u00a0
\n Class B
Shares\u00a0\u00a0
\n Amount\u00a0\u00a0
\n Paid-in
Capital\u00a0\u00a0
\n Comprehensive
Loss\u00a0\u00a0
\n Statutory
Reserve\u00a0\u00a0
\n Retained
Earnings\u00a0\u00a0
\n and
subsidiaries\u00a0\u00a0
\n controlling
Interest\u00a0\u00a0
\n Shareholders\u2019
Equity\u00a0<\/p>\n
Balance as of December\u00a031, 2024\u00a0
\n \u00a013,594,530\u00a0\u00a0
\n $<\/p>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n $<\/p>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n $<\/p>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0–<\/p>\n
\u00a0\u00a0
\n $27,470,361\u00a0\u00a0
\n $(3,707,100)\u00a0
\n \u00a03,842,331\u00a0\u00a0
\n $32,602,105\u00a0\u00a0
\n \u00a060,207,697\u00a0\u00a0
\n $(6,938,809)\u00a0
\n $53,268,888\u00a0<\/p>\n
Net income\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a04,003,783\u00a0\u00a0
\n \u00a04,003,783\u00a0\u00a0
\n \u00a0559,053\u00a0\u00a0
\n \u00a04,562,836\u00a0<\/p>\n
Dividend\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0(188,222)\u00a0
\n \u00a0(188,222)<\/p>\n
Foreign currency translation adjustment\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0412,136\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0412,136\u00a0\u00a0
\n \u00a035,960\u00a0\u00a0
\n \u00a0448,096\u00a0<\/p>\n
Balance as of March 31, 2025\u00a0
\n \u00a013,594,530\u00a0\u00a0
\n $<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n $<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n $<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n $27,470,361\u00a0\u00a0
\n $(3,294,964)\u00a0
\n \u00a03,842,331\u00a0\u00a0
\n $36,605,888\u00a0\u00a0
\n \u00a064,623,616\u00a0\u00a0
\n $(6,532,018)\u00a0
\n $58,091,598\u00a0<\/p>\n
\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
Balance as of December\u00a031, 2025\u00a0
\n \u00a017,394,226\u00a0\u00a0
\n $<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n $<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n $<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n $33,017,917\u00a0\u00a0
\n $(1,452,410)\u00a0
\n \u00a03,842,331\u00a0\u00a0
\n $37,533,648\u00a0\u00a0
\n \u00a072,941,486\u00a0\u00a0
\n $(6,621,565)\u00a0
\n $66,319,921\u00a0<\/p>\n
Reclassification of existing ordinary shares\u00a0
\n \u00a0(17,394,226)\u00a0
\n $<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a011,382,486\u00a0\u00a0
\n $<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a06,011,740\u00a0\u00a0
\n $<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0–\u00a0<\/p>\n
Sale of stock and warrants\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a09,149,996\u00a0\u00a0
\n \u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a05,584,996\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a05,584,996\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a05,584,996\u00a0<\/p>\n
Net income\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n $<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n $<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a05,000,480\u00a0\u00a0
\n \u00a05,000,480\u00a0\u00a0
\n \u00a0747,951\u00a0\u00a0
\n \u00a05,748,431\u00a0<\/p>\n
Foreign currency translation adjustment\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0725,108\u00a0\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0725,108\u00a0\u00a0
\n \u00a089,480\u00a0\u00a0
\n \u00a0814,588\u00a0<\/p>\n
Balance as of March 31, 2026\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n $<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a020,532,482\u00a0\u00a0
\n $<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a06,011,740\u00a0\u00a0
\n $<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n $38,602,913\u00a0\u00a0
\n $(727,302)\u00a0
\n \u00a03,842,331\u00a0\u00a0
\n $42,534,128\u00a0\u00a0
\n \u00a084,252,070\u00a0\u00a0
\n $(5,784,134)\u00a0
\n $78,467,936\u00a0<\/p>\n
\u00a0<\/p>\n
The accompanying notes are an integral part of
\nthe unaudited consolidated financial statements.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS<\/p>\n
\u00a0<\/p>\n
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND
\n2025<\/p>\n
\u00a0<\/p>\n
(UNAUDITED, IN U.S. DOLLARS)<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n For the three months ended
March 31,\u00a0<\/p>\n
\u00a0\u00a0
\n 2026\u00a0\u00a0
\n 2025\u00a0<\/p>\n
CASH FLOWS FROM OPERATING ACTIVITIES:\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0<\/p>\n
Net income\u00a0
\n $5,748,431\u00a0\u00a0
\n $4,562,836\u00a0<\/p>\n
Adjustments to reconcile net income to net cash provided by operating activities:\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
Depreciation and amortization\u00a0
\n \u00a0516,924\u00a0\u00a0
\n \u00a0517,134\u00a0<\/p>\n
Amortization of deferred subsidy\u00a0
\n \u00a0(59,281)\u00a0
\n \u00a0(56,420)<\/p>\n
Change in fair value of warrant liability\u00a0
\n \u00a052,927\u00a0\u00a0
\n \u00a0(209,294)<\/p>\n
Non-cash lease expenses\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0162,361\u00a0<\/p>\n
Accrued interest income derived from loan to related parties\u00a0
\n \u00a0(2,012)\u00a0
\n \u00a0(2,334)<\/p>\n
Accrued expense\u00a0
\n \u00a0(1,816,175)\u00a0
\n \u00a0(2,591,067)<\/p>\n
Changes in operating assets and liabilities:\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
Decrease (Increase) In:\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
Accounts receivable\u00a0
\n \u00a0(8,363,974)\u00a0
\n \u00a0(5,528,940)<\/p>\n
Notes receivable\u00a0
\n \u00a0(3,813,413)\u00a0
\n \u00a02,183,620\u00a0<\/p>\n
Inventories\u00a0
\n \u00a0(993,585)\u00a0
\n \u00a0(437,598)<\/p>\n
Advance to suppliers\u00a0
\n \u00a06,209\u00a0\u00a0
\n \u00a0(116,320)<\/p>\n
Other current and noncurrent assets\u00a0
\n \u00a0(319,609)\u00a0
\n \u00a01,454,809\u00a0<\/p>\n
Increase (Decrease) In:\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
Accounts payable\u00a0
\n \u00a07,581,337\u00a0\u00a0
\n \u00a06,056,496\u00a0<\/p>\n
Contract liabilities\u00a0
\n \u00a027,813\u00a0\u00a0
\n \u00a069,072\u00a0<\/p>\n
Other current liabilities\u00a0
\n \u00a0360,868\u00a0\u00a0
\n \u00a0340,195\u00a0<\/p>\n
Income tax payable\u00a0
\n \u00a0(112,797)\u00a0
\n \u00a0267,885\u00a0<\/p>\n
Due to related parties\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0(5,224,948)<\/p>\n
Lease\u00a0liabilities\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0(202,821)<\/p>\n
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES\u00a0
\n $(1,186,337)\u00a0
\n $1,244,666\u00a0<\/p>\n
\u00a0<\/p>\n
The accompanying notes are an integral part of
\nthe unaudited consolidated financial statements.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS<\/p>\n
\u00a0<\/p>\n
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND
\n2025 (Continued)<\/p>\n
\u00a0<\/p>\n
(UNAUDITED, IN U.S. DOLLARS)<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n For the three months ended
March 31,\u00a0<\/p>\n
\u00a0\u00a0
\n 2026\u00a0\u00a0
\n 2025\u00a0<\/p>\n
CASH FLOWS FROM INVESTING ACTIVITIES:\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0<\/p>\n
Purchases of property, plant and equipment\u00a0
\n $(172,528)\u00a0
\n $(14,371)<\/p>\n
Loan lent to third parties\u00a0
\n \u00a0(4,000,000)\u00a0
\n \u00a0(687,493)<\/p>\n
NET CASH USED IN INVESTING ACTIVITIES\u00a0
\n $(4,172,528)\u00a0
\n $(701,864)<\/p>\n
\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
CASH FLOWS FROM FINANCING ACTIVITIES:\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
Notes payable\u00a0
\n $3,493,311\u00a0\u00a0
\n $(577,494)<\/p>\n
Dividend paid\u00a0
\n \u00a0(1,444,711)\u00a0
\n \u00a0(188,222)<\/p>\n
Proceeds from related parties\u00a0
\n \u00a0597,029\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0<\/p>\n
Repayment of loans from related parties\u00a0
\n \u00a0(94,442)\u00a0
\n \u00a0(1,000,000)<\/p>\n
Proceeds from equity and debt financing\u00a0
\n \u00a05,584,996\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0<\/p>\n
NET CASH\u00a0PROVIDED BY (USED IN) FINANCING ACTIVITIES\u00a0
\n $8,136,183\u00a0\u00a0
\n $(1,765,716)<\/p>\n
NET INEREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH\u00a0
\n $2,777,318\u00a0\u00a0
\n $(1,222,914)<\/p>\n
Effect of exchange rate changes on cash\u00a0
\n \u00a0(17,011)\u00a0
\n \u00a0157,967\u00a0<\/p>\n
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD\u00a0
\n \u00a07,846,870\u00a0\u00a0
\n \u00a08,611,795\u00a0<\/p>\n
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD\u00a0
\n $10,607,177\u00a0\u00a0
\n $7,546,848\u00a0<\/p>\n
Bank balances and cash\u00a0
\n \u00a010,392,136\u00a0\u00a0
\n \u00a05,403,254\u00a0<\/p>\n
Bank balances and cash included in assets classified as restricted cash\u00a0
\n \u00a0215,041\u00a0\u00a0
\n \u00a02,143,594\u00a0<\/p>\n
\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
Supplemental Disclosure of Cash Flow Information\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
Income taxes paid\u00a0
\n \u00a01,116,442\u00a0\u00a0
\n \u00a0997,153\u00a0<\/p>\n
Interest paid\u00a0
\n \u00a017,730\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
The accompanying notes are an integral part of
\nthe unaudited consolidated financial statements.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 1 \u2013 ORGANIZATION AND PRINCIPAL ACTIVITIES<\/p>\n
\u00a0<\/p>\n
Greenland Technologies Holding Corporation (the
\n\u201cCompany\u201d or \u201cGreenland\u201d) designs, develops, manufactures and sells components and products for the global material
\nhandling industries.<\/p>\n
\u00a0<\/p>\n
Through its subsidiaries in the People\u2019s
\nRepublic of China (the \u201cPRC\u201d or \u201cChina\u201d), Greenland offers transmission products, which are key components for
\nforklift trucks used in manufacturing and logistic applications, such as factories, workshops, warehouses, fulfilment centers, shipyards,
\nand seaports. Forklifts play an important role in the logistic systems of many companies across different industries in China and globally.
\nGenerally, industries with the largest demand for forklifts include the transportation, warehousing logistics, electrical machinery, and
\nautomobile industries.<\/p>\n
\u00a0<\/p>\n
Greenland\u2019s transmission products are used
\nin 1-ton to 15-tons forklift trucks, some with mechanical shift and some with automatic shift. Greenland sells these transmission products
\ndirectly to forklift-truck manufacturers. In the three months ended March 31, 2026 and 2025, Greenland sold an aggregate of 46,027 and
\n38,734 sets of transmission products, respectively, to more than 100 forklift manufacturers in the PRC.<\/p>\n
\u00a0<\/p>\n
In January 2020, Greenland formed HEVI Corp. (\u201cHEVI\u201d)
\nto focus on the production and sale of electric industrial vehicles to meet the increasing demand for electric industrial vehicles and
\nmachinery powered by sustainable energy to reduce air pollution and lower carbon emissions. HEVI is a wholly owned subsidiary of Greenland
\nincorporated under the laws of the State of Delaware. Prior to 2025, HEVI had been manufacturing and selling electric industrial vehicle
\nproducts. However, substantially all of HEVI\u2019s business operations have been suspended since 2025 due to uncertainty regarding tariff
\npolicy. HEVI intends to resume operations once the policy environment stabilizes. HEVI\u2019s electric industrial vehicle products (which
\nare not currently being offered as a result of the suspension of its operations) include GEF-series electric forklifts, a series of lithium
\npowered forklifts with three models ranging in size from 1.8 tons to 3.5 tons, GEL-1800, a 1.8-ton rated load lithium powered electric
\nwheeled front loader, GEX-8000, an all-electric 8.0 ton rated load lithium powered wheeled excavator, and GEL-5000, an all-electric 5.0
\nton rated load lithium wheeled front loader. In addition, in April 2023, HEVI introduced a line of mobile DC battery chargers that support
\nDC powered EV applications in the North America market. In July 2024, HEVI announced a partnership with Lonking Holdings Limited to develop
\nand distribute heavy electric machinery and related technology specialized for the U.S. market. In August 2024, HEVI launched its H55L
\nall-electric wheeled front-end loader, which can lift up to six tons in indoor and outdoor applications without the mess and emissions
\nof diesel, and the H65L all-electric wheeled front-end loader, a lithium battery wheeled front-end loader.<\/p>\n
\u00a0<\/p>\n
Greenland is the parent company of HEVI and Greenland
\nHolding Enterprises Inc. (\u201cGreenland Holding\u201d), a holding company formed in the State of Delaware on August 28, 2023, which
\nin turn acts as the holding company for Zhongchai Holding (Hong Kong) Limited, a holding company formed under the laws of the Hong Kong
\nSpecial Administrative Region of the PRC (\u201cHong Kong\u201d) on April 23, 2009 (\u201cZhongchai Holding\u201d). Zhongchai Holding\u2019s
\nsubsidiaries include Zhejiang Zhongchai Machinery Co. Ltd., an operating company formed under the laws of the PRC in 2005 (\u201cZhejiang
\nZhongchai\u201d), Hangzhou Greenland Energy Technologies Co., Ltd. (\u201cHangzhou Greenland\u201d), an operating company formed under
\nthe laws of the PRC in 2019, and Hengyu Capital Limited, a company formed in Hong Kong on August 16, 2022 (\u201cHengyu Capital\u201d).
\nThrough Zhongchai Holding and its subsidiaries, Greenland develops and manufactures traditional transmission products for material handling
\nmachinery in the PRC.<\/p>\n
\u00a0<\/p>\n
Greenland was incorporated on December 28, 2017
\nas a British Virgin Islands business company with limited liability. Following the Business Combination (as described and defined below)
\nin October 2019, the Company changed its name from Greenland Acquisition Corporation to Greenland Technologies Holding Corporation.<\/p>\n
\u00a0<\/p>\n
The Company\u2019s Shareholders<\/p>\n
\u00a0<\/p>\n
As of March 31, 2026, Trendway Capital Limited
\nowned 100.0% of Greenland\u2019s outstanding Class\u00a0B ordinary shares. Trendway Capital Limited is controlled and beneficially owned
\nby Mr. Peter Zuguang Wang, the chairman of the board of directors of the Company. As a result, Mr. Wang, through Trendway Capital Limited,
\nholds approximately 88.0% of the total voting power of the Company (based on 20,532,482 Class A ordinary shares entitled to one vote per
\nshare and 6,011,740 Class B ordinary shares entitled to twenty-five votes per share outstanding as of March 31, 2026).<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 1 \u2013 ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)<\/p>\n
\u00a0<\/p>\n
The Company\u2019s Subsidiaries<\/p>\n
\u00a0<\/p>\n
Zhongchai Holding, the indirect wholly owned subsidiary
\nof the Company, owns 89.47% of the equity interests in Zhejiang Zhongchai, 100% of the equity interests in Hangzhou Greenland and 62.5%
\nof the equity interests in Hengyu Capital. HEVI is a wholly owned subsidiary of Greenland. Greenland Holding is a wholly owned subsidiary
\nof the Company and holds 100% of the equity interests in Zhongchai Holding.<\/p>\n
\u00a0<\/p>\n
Zhejiang Zhongchai<\/p>\n
\u00a0<\/p>\n
Zhejiang Zhongchai, a limited liability company
\nregistered on November 21, 2005, is the direct operating subsidiary of Zhongchai Holding in the PRC. On April 5, 2007, Usunco Automotive
\nLimited (\u201cUsunco\u201d), a British Virgin Islands limited liability company, invested US$8,000,000 for purchasing approximately
\n75.4717% equity interest of Zhejiang Zhongchai. On December 16, 2009, Usunco agreed to transfer its 75.4717% interest in Zhejiang Zhongchai
\nto Zhongchai Holding. On April 26, 2010, Xinchang County Keyi Machinery Co., Ltd. transferred 24.5283% equity interest it owned in Zhejiang
\nZhongchai to Zhongchai Holding in exchange for a consideration of US$2.6 million. On November 1, 2017, Xinchang County Jiuxin Investment
\nManagement Partnership (LP) (\u201cJiuxin\u201d), an entity controlled and beneficially owned by Mr. He Mengxing, president of Zhejiang
\nZhongchai, completed its investment of approximately RMB31,590,000 in Zhejiang Zhongchai for a 10.53% interest. On December 29, 2021,
\nXinchang County Jiuhe Investment Management Partnership (LP) (\u201cJiuhe\u201d), an entity controlled and beneficially owned by Mr.
\nHe Mengxing, president of Zhejiang Zhongchai, completed its investment of approximately RMB34,300,000 in Zhejiang Zhongchai for a 20.00%
\ninterest. On November 25, 2024, Jiuhe withdrew its investment in Zhejiang Zhongchai. As a result, the equity interests in Zhejiang Zhongchai
\nwas redistributed between Zhongchai Holding and Jiuxin. As of March 31, 2026, Zhongchai Holding owned approximately 89.47% of the equity
\ninterests, and Jiuxin owned approximately 10.53% of the equity interests, in Zhejiang Zhongchai.<\/p>\n
\u00a0<\/p>\n
Through Zhejiang Zhongchai, the Company has been
\nengaging in the manufacturing and sales of transmission systems mainly for forklift trucks since 2006. These forklift trucks are used
\nin manufacturing and logistics applications, such as factory, workshop, warehouse, fulfilment centers, shipyards and seaports. The transmission
\nsystems are the key components for forklift trucks. The Company supplies transmission systems to forklift truck manufacturers. Its transmission
\nsystems fit for forklift trucks ranging from 1 to 15 tons, with either mechanical shift or automatic shift. All the products are currently
\nmanufactured at the Company\u2019s facility in Xinchang, Zhejiang Province, the PRC and are sold to both domestic and oversea markets.<\/p>\n
\u00a0<\/p>\n
Hangzhou Greenland<\/p>\n
\u00a0<\/p>\n
Hangzhou Greenland is a limited liability company
\nregistered on August 9, 2019 in Hangzhou Sunking Plaza, Zhejiang, the PRC. Hangzhou Greenland engages in the business of trading construction
\nengineering machinery, electronic components, hardware, and others.<\/p>\n
\u00a0<\/p>\n
HEVI<\/p>\n
\u00a0<\/p>\n
HEVI was incorporated on January 14, 2020 under
\nthe laws of the State of Delaware. HEVI is a wholly owned subsidiary of Greenland and promotes sales of sustainable alternative products
\nfor the heavy industrial equipment industry, including electric industrial vehicles, in the North American market.<\/p>\n
\u00a0<\/p>\n
Hengyu Capital<\/p>\n
\u00a0<\/p>\n
Hengyu Capital is a limited liability company
\nregistered on August 16, 2022 in Hong Kong. The main business of Hengyu Capital is to engage in investment management and consulting services.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 1 \u2013 ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)<\/p>\n
\u00a0<\/p>\n
Greenland Holding Enterprises Inc.<\/p>\n
\u00a0<\/p>\n
Greenland Holding Enterprises Inc. is a holding
\ncompany registered on August 28, 2023 in the State of Delaware with no operations.<\/p>\n
\u00a0<\/p>\n
Details of the Company\u2019s subsidiaries, which are included in
\nthese unaudited consolidated financial statements as of March 31, 2026, are as follows:<\/p>\n
\u00a0<\/p>\n
Name\u00a0 Domicile and
Date of
Incorporation\u00a0 Paid-in
Capital\u00a0 Ownership
Percentage\u00a0\u00a0 Principal Activities Zhongchai Holding (Hong Kong) Limited\u00a0 Hong Kong
April 23, 2009\u00a0 HKD 10,000\u00a0\u00a0 100%\u00a0 Holding Zhejiang Zhongchai Machinery Co., Ltd.\u00a0 PRC
November 21, 2005\u00a0 RMB 20,000,000\u00a0\u00a0 89.47%\u00a0 Manufacture, sale of various transmission boxes Hangzhou Greenland Energy Technologies Co., Ltd.\u00a0 PRC
August 9, 2019\u00a0 RMB 8,669,482\u00a0\u00a0 100%\u00a0 Trading HEVI Corp.\u00a0 Delaware
January 14, 2020\u00a0 USD 6,363,557\u00a0\u00a0 100%\u00a0 U.S. operation and distribution of electric industrial vehicles for North American market Hengyu Capital, Ltd\u00a0 Hong Kong
August 16, 2022\u00a0 HKD 10,000\u00a0\u00a0 62.5%\u00a0 Investment management and consulting services Greenland Holding Enterprises Inc.\u00a0 Delaware
August 28, 2023\u00a0 USD 1\u00a0\u00a0 100%\u00a0 Holding <\/p>\n
\u00a0<\/p>\n
NOTE 2 \u2013 SUMMARY
\nOF SIGNIFICANT ACCOUNTING POLICIES<\/p>\n
\u00a0<\/p>\n
Basis of Presentation<\/p>\n
\u00a0<\/p>\n
The accompanying unaudited consolidated financial
\nstatements are prepared in accordance with accounting principles generally accepted in the United States of America (\u201cU.S. GAAP\u201d)
\nfor information pursuant to the rules and regulations of the U.S. Securities and Exchange Commission.<\/p>\n
\u00a0<\/p>\n
Principles of Consolidation<\/p>\n
\u00a0<\/p>\n
The unaudited consolidated financial statements
\nare prepared in accordance with U.S. GAAP. The unaudited consolidated financial statements include the consolidated financial statements
\nof the Company and its subsidiaries, which include Hong Kong-registered entities and PRC-registered entities directly or indirectly owned
\nby the Company. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. The results
\nof subsidiaries acquired or disposed of are recorded in the consolidated income statements from the effective date of acquisition or up
\nto the effective date of disposal, as appropriate.<\/p>\n
\u00a0<\/p>\n
A subsidiary is an entity in which (i) the Company
\ndirectly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint or remove the majority
\nof the members of the board of directors or to cast a majority of votes at the meetings of the board of directors or to govern the financial
\nand operating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 2 \u2013 SUMMARY OF SIGNIFICANT ACCOUNTING
\nPOLICIES (CONTINUED)<\/p>\n
\u00a0<\/p>\n
Use of Estimates<\/p>\n
\u00a0<\/p>\n
The preparation of unaudited consolidated financial
\nstatements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets
\nand liabilities, disclosures of contingent assets and liabilities as of the date of the unaudited consolidated financial statements, and
\nthe reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing
\nbasis, management reviews these estimates and assumptions in light of currently available information. In accordance with ASC 250, changes
\nin estimates resulting from changes in facts and circumstances are recognized in the period in which such changes occur. The Company bases
\nits estimates on past experience and on various other assumptions believed to be reasonable, the results of which form the basis for making
\njudgments about the carrying values of assets and liabilities. Estimates are used when accounting for matters including, but not limited
\nto, allowances for expected credit losses, inventory provisions, useful lives and impairment of long-lived assets, and valuation allowances
\nfor deferred tax assets.<\/p>\n
\u00a0<\/p>\n
Non-controlling Interest<\/p>\n
\u00a0<\/p>\n
Non-controlling interests in the Company\u2019s
\nsubsidiaries are recorded in accordance with the provisions of Financial Accounting Standards Board (\u201cFASB\u201d) Accounting Standards
\nCodification 810 Consolidation (\u201cASC 810\u201d) and are reported as a component of equity, separate from the parent\u2019s equity.
\nPurchase or sale of equity interests that do not result in a change of control are accounted for as equity transactions. Results of operations
\nattributable to the non-controlling interest are included in our consolidated results of operations and, upon loss of control, the interest
\nsold, as well as interest retained, if any, will be reported at fair value with any gain or loss recognized in earnings.<\/p>\n
\u00a0<\/p>\n
Foreign Currency Translation<\/p>\n
\u00a0<\/p>\n
Since the Company operates primarily in the PRC,
\nthe Company\u2019s functional currency is the Renminbi (\u201cRMB\u201d). The Company\u2019s consolidated financial statements have
\nbeen translated into the reporting currency of the United States Dollar (\u201cUSD\u201d, \u201cUS$\u201d or \u201c$\u201d). Assets
\nand liabilities of the Company are translated at the exchange rate at each reporting period end date. Equity is translated at the historical
\nexchange rate when the transaction occurs. Income and expense accounts are translated at the average rate of exchange during the reporting
\nperiod. The resulting translation adjustments are reported under other comprehensive income (loss). Gains and losses resulting from the
\ntranslation of foreign currency transactions and balances are reflected in the results of operations.<\/p>\n
\u00a0<\/p>\n
The exchange rates used to translate amounts in
\nRMB into USD for the purposes of preparing the audited consolidated financial statements or otherwise\u00a0disclosed in this\u00a0report
\nwere as follows\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n As of\u00a0<\/p>\n
\u00a0\u00a0
\n March 31,
2026\u00a0\u00a0
\n December\u00a031,
2025\u00a0<\/p>\n
Period end RMB: US$ exchange rate\u00a0
\n \u00a06.8980\u00a0\u00a0
\n \u00a06.9931\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n For the three months ended
March 31,\u00a0<\/p>\n
\u00a0\u00a0
\n 2026\u00a0\u00a0
\n 2025\u00a0<\/p>\n
Period average RMB: US$ exchange rate\u00a0
\n \u00a06.9218\u00a0\u00a0
\n \u00a07.2728\u00a0<\/p>\n
\u00a0<\/p>\n
The RMB is not freely convertible into foreign
\ncurrency and all foreign exchange transactions must take place through authorized institutions.\u00a0The PRC government imposes significant
\nexchange restrictions on fund transfers out of the PRC that are not related to business operations.<\/p>\n
\u00a0<\/p>\n
Cash and Cash Equivalents<\/p>\n
\u00a0<\/p>\n
For financial reporting purposes, the Company
\nconsiders all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company
\nmaintains its bank accounts with various financial institutions primarily in mainland China and the U.S. The Company has not experienced
\nany losses in bank accounts.\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 2 \u2013 SUMMARY OF SIGNIFICANT ACCOUNTING
\nPOLICIES (CONTINUED)<\/p>\n
\u00a0<\/p>\n
Restricted Cash<\/p>\n
\u00a0<\/p>\n
Restricted cash represents amounts held by a bank
\nas security for bank acceptance bills, as well as the financial product secured for the short-term bank loan and therefore is not available
\nfor the Company\u2019s use until such time as the bank acceptance notes and bank loans have been fulfilled or expired, normally within
\na twelve-month period.\u00a0
\u00a0<\/p>\n
The following represents a reconciliation of cash
\nand cash equivalents in the consolidated balance sheets to total cash, cash equivalents and restricted cash in the consolidated statements
\nof cash flows as of March\u00a031, 2026 and December 31, 2025:<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n As of\u00a0<\/p>\n
\u00a0\u00a0
\n March\u00a031,
2026\u00a0\u00a0
\n December\u00a031,
2025\u00a0<\/p>\n
Cash and cash equivalents\u00a0
\n $10,392,136\u00a0\u00a0
\n $7,775,330\u00a0<\/p>\n
Restricted cash\u00a0
\n \u00a0215,041\u00a0\u00a0
\n \u00a071,540\u00a0<\/p>\n
Cash, cash equivalents and restricted cash\u00a0
\n $10,607,177\u00a0\u00a0
\n $7,846,870\u00a0<\/p>\n
\u00a0<\/p>\n
Fair Value of Financial Instruments<\/p>\n
\u00a0<\/p>\n
The Company applies the provisions of ASC 820,\u00a0Fair
\nValue Measurements and Disclosures, to the financial instruments that are required to be carried at fair value. Fair value is the
\nprice that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market
\nfor the asset or liability in an orderly transaction between market participants at the measurement date. The Company uses a three-tier
\nfair value hierarchy based upon observable and non-observable inputs that prioritizes the information used to develop our assumptions
\nregarding fair value. Fair value measurements are separately disclosed by level within the fair value hierarchy.<\/p>\n
\u00a0<\/p>\n
\u25cfLevel
\n1\u2014defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;<\/p>\n
\u00a0<\/p>\n
\u25cfLevel
\n2\u2014defined as inputs other than quoted prices in active markets, that are either directly or indirectly observable; and<\/p>\n
\u00a0<\/p>\n
\u25cfLevel
\n3\u2014defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.<\/p>\n
\u00a0<\/p>\n
The Company considers the carrying amounts of
\nits financial assets and liabilities, which consist primarily of cash and cash equivalents, short-term investments, accounts receivable,
\nnotes receivable, amounts due from\/to a related party, other receivables, fixed deposits, accounts payable, other payables, and warrant
\nliability, to approximate the fair values of the respective assets and liabilities as of March\u00a031, 2026 and December 31, 2025, owing
\nto their short-term nature or present value characteristics. For note payable-bank acceptance notes, fair value approximates their carrying
\nvalue at year-end, as fair value is estimated using discounted cash flows in which the interest rates used to discount the host contracts
\napproximate market rates. For the three months ended March 31, 2026 and 2025, there were no transfers between different levels of inputs
\nused to measure fair value.<\/p>\n
\u00a0<\/p>\n
The following table summarizes the fair value
\nmeasurements of assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2026:<\/p>\n
\u00a0<\/p>\n
(amount in absolute value)\u00a0
\n Active\u00a0Market
for Identical
Assets
(Level 1)\u00a0\u00a0
\n Observable
Inputs
(Level 2)\u00a0\u00a0
\n Unobservable
Inputs
(Level 3)\u00a0\u00a0
\n Total
Carrying
Value\u00a0<\/p>\n
Short term investment\u00a0
\n $<\/p>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0–<\/p>\n
\u00a0\u00a0
\n \u00a020,831,283\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n $20,831,283\u00a0<\/p>\n
Warrants liability\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0123,837\u00a0\u00a0
\n \u00a0<\/p>\n
\u00a0\u00a0\u00a0\u00a0\u00a0–<\/p>\n
\u00a0\u00a0
\n \u00a0123,837\u00a0<\/p>\n
\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
Total\u00a0
\n $<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a020,955,120\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n $20,955,120\u00a0<\/p>\n
\u00a0<\/p>\n
Accounts Receivable and Allowance for Expected Credit Losses<\/p>\n
\u00a0<\/p>\n
Accounts receivable are recorded at the gross
\nbilling amount less an allowance for expected credit losses from the customers. Accounts receivable do not bear interest.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 2 \u2013 SUMMARY OF SIGNIFICANT ACCOUNTING
\nPOLICIES (CONTINUED)<\/p>\n
\u00a0<\/p>\n
Effective January 1, 2023, the Company adopted
\nAccounting Standards Update (\u201cASU\u201d) No. 2016-13, Financial Instruments\u2014Credit Losses (Topic 326): Measurement of Credit
\nLosses on Financial Instruments (\u201cASU 2016-13\u201d), using the modified retrospective transition method. ASU 2016-13 replaces
\nthe existing incurred loss impairment model with an expected loss methodology, resulting in more timely recognition of credit losses.
\nUpon adoption, the Company changed its impairment model to utilize a forward-looking current expected credit losses (\u201cCECL\u201d)
\nmodel in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the
\napplication of ASC 606, including contract assets.<\/p>\n
\u00a0<\/p>\n
The Company maintains an allowance for credit
\nlosses in accordance with ASC Topic 326,\u00a0Credit Losses (\u201cASC 326\u201d), and records the allowance for credit losses as an
\noffset to accounts receivable and contract assets, with the estimated credit losses charged to the allowance in the consolidated statements
\nof operations and comprehensive income (loss). The Company assesses collectability by reviewing accounts receivable on a collective basis
\nwhere similar characteristics exist, primarily based on similar business lines, services, or product offerings, and on an individual basis
\nwhen the Company identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance
\nfor credit losses, the Company considers historical collectability based on past due status, the age of the accounts receivable balances
\nand contract asset balances, credit quality of the Company\u2019s customers based on ongoing credit evaluations, current economic conditions,
\nreasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company\u2019s ability to collect
\nfrom customers.<\/p>\n
\u00a0<\/p>\n
Inventories<\/p>\n
\u00a0<\/p>\n
Inventories are stated at the lower of cost or
\nnet realizable value. Cost is determined using the weighted average method and includes all costs of purchase, costs of conversion, and
\nother costs incurred in bringing the inventories to their present location and condition. Costs of purchase consist of the purchase price,
\nimport duties, freight, handling, and other directly attributable costs, less trade discounts, rebates, and other similar items. Costs
\nof conversion include direct labor and a systematic allocation of fixed and variable production overheads incurred in converting raw materials
\ninto finished goods. Other costs are included only to the extent they are incurred in bringing the inventories to their present location
\nand condition. Net realizable value is based on estimated selling prices in the ordinary course of business, less estimated costs of completion
\nand estimated costs necessary to make the sale. Cost of raw materials is calculated using the weighted average method and is based on
\npurchase cost. Work-in-progress and finished goods costs are determined using the weighted average method and comprise direct materials,
\ndirect labor and an appropriate proportion of overhead.<\/p>\n
\u00a0<\/p>\n
Advance to Suppliers<\/p>\n
\u00a0<\/p>\n
Advance to suppliers represents interest-free
\ncash paid in advance to suppliers for purchases of parts and\/or raw materials. The balance of advance to suppliers was $0.08 million as
\nof March 31, 2026 and December 31, 2025.<\/p>\n
\u00a0<\/p>\n
Property, Plant, and Equipment <\/p>\n
\u00a0<\/p>\n
Property, plant, and equipment are stated at cost
\nless accumulated depreciation, and include expenditure that substantially increases the useful lives of existing assets. Expenditures
\nfor repairs and maintenance, which do not extend the useful life of the assets, are expensed as incurred.<\/p>\n
\u00a0<\/p>\n
Depreciation
\nis provided over their estimated useful lives, using the straight-line method. Estimated useful lives are as follows:<\/p>\n
\u00a0<\/p>\n
Buildings\u00a0
\n \u00a020 years\u00a0<\/p>\n
Machinery\u00a0
\n \u00a02~10 years\u00a0<\/p>\n
Motor vehicles\u00a0
\n \u00a04 years\u00a0<\/p>\n
Electronic equipment\u00a0
\n \u00a03~5 years\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 2 \u2013 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)<\/p>\n
\u00a0<\/p>\n
The cost and related accumulated depreciation
\nof assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the combined statements of income
\nand comprehensive income (loss). Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals
\nand betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of
\ndepreciation to determine whether subsequent events and circumstances indicate a change in estimates of useful lives. No such events were
\nidentified for the three months ended March 31, 2026 and 2025.<\/p>\n
\u00a0<\/p>\n
Construction in process<\/p>\n
\u00a0<\/p>\n
Property, plant, and equipment that are purchased
\nor constructed which require a period of time before the assets are ready for their intended use are accounted for as construction-in-progress.
\nConstruction-in-progress is recorded at acquisition cost, including installation costs. Construction-in-progress is transferred to specific
\nproperty and equipment accounts and commences depreciation when these assets are ready for their intended use.\u00a0<\/p>\n
\u00a0<\/p>\n
Land Use Rights<\/p>\n
\u00a0<\/p>\n
According to the PRC laws, the government owns
\nall the land in the PRC. Companies or individuals are authorized to possess and use the land only through land use rights granted by the
\nChinese government. The land use rights granted to the Company are being amortized using the straight-line method over the lease term
\nof fifty years.<\/p>\n
\u00a0<\/p>\n
Impairment of Long-Lived Assets<\/p>\n
\u00a0<\/p>\n
Long-lived assets are evaluated for impairment
\nperiodically whenever events or changes in circumstances indicate that their related carrying amounts may not be recoverable in accordance
\nwith FASB ASC 360, \u201cProperty, Plant and Equipment\u201d.<\/p>\n
\u00a0<\/p>\n
In evaluating long-lived assets for recoverability,
\nthe Company uses its best estimate of future cash flows expected to result from the use of the asset and eventual disposition in accordance
\nwith FASB ASC 360-10-15. To the extent that estimated future, undiscounted cash inflows attributable to the asset, less estimated future,
\nundiscounted cash outflows, are less than the carrying amount, an impairment loss is recognized in an amount equal to the difference between
\nthe carrying value of such asset and its fair value. Assets to be disposed of and for which there is a committed plan of disposal, whether
\nthrough sale or abandonment, are reported at the lower of carrying value or fair value less costs to sell. There was no impairment loss
\nrecognized for the three months ended March 31, 2026 and 2025.<\/p>\n
\u00a0<\/p>\n
Operating leases<\/p>\n
\u00a0<\/p>\n
In February 2016, the FASB issued ASU 2016-02,
\nLeases (Topic 842), which is effective for annual reporting periods (including interim periods) beginning after December 15, 2018. The
\nCompany adopted the Topic 842 on January 1, 2020 using a modified retrospective approach reflecting the application of the standard to
\nleases existing at, or entered after, the beginning of the earliest comparative period presented in the consolidated financial statements.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 2 \u2013 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)<\/p>\n
\u00a0<\/p>\n
The Company, through its subsidiary, leases its
\nassembly site, which are classified as operating leases in accordance with Topic 842. Operating leases are required to be recorded on
\nthe balance sheet as right-of-use assets and lease liabilities, initially measured at the present value of the lease payments. The Company
\nhas elected the package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts
\nas of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date, and
\n(3) initial direct costs for any expired or existing leases as of the adoption date. The Company elected the short-term lease exemption
\nfor the lease terms that are 12 months or less.<\/p>\n
\u00a0<\/p>\n
At inception of a contract, the Company assesses
\nwhether 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
\nasset for a period of time in exchange of a consideration. To assess whether a contract is or contains a lease, the Company assesses whether
\nthe contract involves the use of an identified asset, whether it has the right to obtain substantially all the economic benefits from
\nthe 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
\nare recognized at the lease commencement date. The Company recognizes operating lease expenses on a straight-line basis over the lease
\nterm and had no finance leases for any of the periods stated herein.<\/p>\n
\u00a0<\/p>\n
The right-of-use of asset is initially measured
\nat cost, which comprises the initial amount of the lease liabilities adjusted for any lease payments made at or before the commencement
\ndate, plus any initial direct costs incurred and less any lease incentive received. All right-of-use assets are reviewed for impairment
\nannually. There was no impairment for right-of-use lease assets as of March 31, 2026 and December 31, 2025.<\/p>\n
\u00a0<\/p>\n
Revenue Recognition<\/p>\n
\u00a0<\/p>\n
In accordance with ASC Topic 606, \u201cRevenue
\nfrom Contracts with Customers,\u201d the Company recognizes revenues when goods or services are transferred to customers in an amount
\nthat reflects the consideration which the Company expects to receive in exchange for those goods or services. In determining when and
\nhow revenues are recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of
\na contract with a customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation
\nof the transaction price to the performance obligations; and (v) recognition of revenues when (or as) the Company satisfies each performance
\nobligation.<\/p>\n
\u00a0<\/p>\n
Principal versus Agent Considerations<\/p>\n
\u00a0<\/p>\n
The Company acts as a principal, rather than as
\nan agent, in its revenue transactions. This determination is based on the Company\u2019s assessment of control pursuant to ASC 606-10-55-36
\nthrough 55-40. The Company controls each specified good before it is transferred to the customer, as evidenced by the following indicators:<\/p>\n
\u00a0<\/p>\n
Primary responsibility for fulfillment:\u00a0The
\nCompany is primarily responsible for fulfilling the promise to provide products to customers, including with respect to product quality,
\ndelivery, and acceptance. The Company handles all customer inquiries, complaints, returns, and warranty claims directly with customers.<\/p>\n
\u00a0<\/p>\n
Inventory risk:\u00a0The Company bears inventory
\nrisk prior to the transfer of goods to customers, including the risk of obsolescence, damage, and loss. The Company purchases raw materials,
\nmanufactures finished goods, and holds inventory at its own facilities prior to the receipt of customer orders.<\/p>\n
\u00a0<\/p>\n
Pricing discretion:\u00a0The Company has sole
\ndiscretion in establishing the prices charged to customers. Prices are determined based on the Company\u2019s own cost structure, market
\nconditions, and pricing strategies, independently of any third-party suppliers.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 2 \u2013 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)<\/p>\n
\u00a0<\/p>\n
No intermediary role:\u00a0The Company manufactures
\nits own products through its subsidiaries and sells them directly to customers. There are no arrangements pursuant to which another party
\nprovides goods or services to the customer on the Company\u2019s behalf.<\/p>\n
\u00a0<\/p>\n
Accordingly, the Company recognizes revenue on
\na\u00a0gross basis, presenting the full transaction price as revenue and the corresponding cost of goods sold as a separate line item
\nin the statements of operations.<\/p>\n
\u00a0<\/p>\n
Contracts with Customers and Performance Obligations<\/p>\n
\u00a0<\/p>\n
The Company\u2019s contracts with customers are
\nprimarily purchase orders for the sale of its transmission products. These contracts have commercial substance and are short-term in nature,
\nwith a contract term of one year or less. The transaction price in these contracts is fixed, based on the agreed-upon unit price and quantity.
\nPayment is typically due within two months after the customer\u2019s acceptance of the goods. The Company has concluded that the promise
\nto transfer each unit of product is the only performance obligation in these contracts. This promise is distinct, as the customer can
\nbenefit from the product either on its own or together with other readily available resources, and the Company\u2019s promise to transfer
\nthe goods is separately identifiable from any other promises in the contract, pursuant to ASC 606-10-25-19. The Company\u2019s standard
\nwarranty is not assessed as a separate performance obligation as it does not provide a service beyond assuring that the product complies
\nwith agreed-upon specifications.<\/p>\n
\u00a0<\/p>\n
Contract assets<\/p>\n
\u00a0<\/p>\n
A contract asset is the right to consideration
\nin exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer
\nbefore the customer pays consideration or before payment is due, a contract asset is recognized for the earned consideration that remains
\nconditional upon factors other than the passage of time. The Company does\u00a0not have contract assets for the\u00a0years presented.<\/p>\n
\u00a0<\/p>\n
Contract liabilities<\/p>\n
\u00a0<\/p>\n
Contract liabilities represent consideration received
\nby the Company for which the related performance obligations have not yet been satisfied. Contract liabilities primarily consist of payments
\nreceived for the sale of products in advance of revenue recognition and deferred revenue related to government subsidies received prior
\nto the satisfaction of the associated qualifying conditions<\/p>\n
\u00a0<\/p>\n
The following table summarizes the movement in
\ncontract liabilities during the three months ended March 31, 2026:<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n Contract
Liabilities\u00a0\u00a0
\n Deferred
Revenue\u00a0\u00a0
\n Total
Contract
Liabilities\u00a0<\/p>\n
Beginning balance\u00a0
\n $93,698\u00a0\u00a0
\n \u00a01,083,784\u00a0\u00a0
\n $1,177,482\u00a0<\/p>\n
Additions\u00a0
\n \u00a0247,174\u00a0\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0247,174\u00a0<\/p>\n
Recognized as revenue during the period\u00a0
\n \u00a0(219,361)\u00a0
\n \u00a0(59,281)\u00a0
\n \u00a0(278,642)<\/p>\n
Effect of foreign exchange change\u00a0
\n \u00a01,264\u00a0\u00a0
\n \u00a014,738\u00a0\u00a0
\n \u00a016,002\u00a0<\/p>\n
Ending balance\u00a0
\n $122,775\u00a0\u00a0
\n \u00a01,039,241\u00a0\u00a0
\n $1,162,016\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 2 \u2013 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)<\/p>\n
\u00a0<\/p>\n
Contract liabilities increased during the three
\nmonths ended March 31, 2026, primarily due to an increase in advance payments received from customers for orders not yet delivered. The
\nremaining balance of $122,775 as of March 31, 2026 represents deposits received for orders not yet delivered and is expected to be recognized
\nas revenue within the next twelve (12) months. The decrease in deferred revenue is primarily attributable to the recognition of grant
\nincome upon satisfaction of the associated qualifying conditions during the period.<\/p>\n
\u00a0<\/p>\n
The Company derives revenues from the processing,
\ndistribution and sale of its products. The Company recognizes its revenues net of value-added taxes (\u201cVAT\u201d). The Company is
\nsubject to VAT at a rate of 13%. Output VAT is borne by customers in addition to the invoiced value of sales and input VAT is borne by
\nthe Company in addition to the invoiced value of purchases to the extent not refunded for export sales.<\/p>\n
\u00a0<\/p>\n
Revenues are recognized at a point in time once
\nthe Company has determined that the customer has obtained control over the product. Control is typically deemed to have been transferred
\nto the customer when the performance obligation is fulfilled, usually at the time of customers\u2019 acceptance or consumption, at the
\nnet sales price (transaction price) and each of the criteria under ASC 606 have been met. Contract terms may require the Company to deliver
\nthe finished goods to the customers\u2019 location or the customer may pick up the finished goods at the Company\u2019s factory. Revenue
\nis recognized only upon the customer\u2019s formal acknowledgement of receipt, as evidenced by a signed delivery acceptance document,
\nat which point the risks and rewards of goods are transferred to customers. International sales are recognized when shipment clears customs
\nand leaves the port. Payments due within two months after customers\u2019 acceptance or consumption.<\/p>\n
\u00a0<\/p>\n
The Company adopted ASC 606 on January 1, 2018,
\nusing the transition method of Modified-Retrospective Method. The adoption of ASC 606 had no impact on the Company\u2019s beginning balance
\nof retained earnings.<\/p>\n
\u00a0<\/p>\n
The Company\u2019s contracts are all short-term
\nin nature with a contract term of one year or less. Receivables are recorded when the Company has an unconditional right to consideration.<\/p>\n
\u00a0<\/p>\n
Contracts do not offer any price protection but
\nallow for the return of certain goods if there is a quality problem, which is standard warranty. The Company\u2019s product returns and
\nrecorded reserve for sales returns were minimal for the three months ended March 31, 2026 and 2025. The total sales return amount accounted
\nfor around 0.07% and 0.06% of the total revenue for the three months ended March 31, 2026 and 2025.The total amount of warrant expenditures
\naccounted for around 0.09% and 0.41% of the total revenue for the three months ended March 31, 2026 and 2025, respectively.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 2 \u2013 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)<\/p>\n
\u00a0<\/p>\n
The following table sets forth disaggregation
\nof revenue:<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n For the three months ended
March 31,\u00a0<\/p>\n
\u00a0\u00a0
\n 2026\u00a0\u00a0
\n 2025\u00a0<\/p>\n
Major Product\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0<\/p>\n
Transmission boxes for Forklift\u00a0
\n $24,916,044\u00a0\u00a0
\n $20,929,412\u00a0<\/p>\n
Transmission boxes for Non-Forklift (EV, etc.)\u00a0
\n \u00a0622,301\u00a0\u00a0
\n \u00a0748,152\u00a0<\/p>\n
Total\u00a0
\n $25,538,345\u00a0\u00a0
\n $21,677,564\u00a0<\/p>\n
\u00a0<\/p>\n
Cost of Goods Sold<\/p>\n
\u00a0<\/p>\n
Cost of goods sold consists primarily of material
\ncosts, freight charges, purchasing and receiving costs, inspection costs, internal transfer costs, wages, employee compensation, amortization,
\ndepreciation and related costs, which are directly attributable to the production of products. Write-down of inventory to lower of cost
\nor net realizable value is also recorded in cost of goods sold.<\/p>\n
\u00a0<\/p>\n
Selling Expenses\u00a0<\/p>\n
\u00a0<\/p>\n
Selling expenses include operating expenses such
\nas payroll and traveling and transportation expenses.\u00a0<\/p>\n
\u00a0<\/p>\n
General and Administrative Expenses<\/p>\n
\u00a0<\/p>\n
General and administrative expenses include management
\nand office salaries and employee benefits, depreciation for office facility and office equipment, travel and entertainment, legal and
\naccounting, consulting fees and other office expenses.<\/p>\n
\u00a0<\/p>\n
Research and Development<\/p>\n
\u00a0<\/p>\n
Research and development costs are expensed as
\nincurred and totaled approximately $0.78 million and $0.08 million for the three months ended March 31, 2026 and 2025, respectively. Research
\nand development costs are incurred on a project specific basis.<\/p>\n
\u00a0<\/p>\n
Government Subsidies<\/p>\n
\u00a0<\/p>\n
Government subsidies are recognized when there
\nis reasonable assurance that the subsidy will be received and all attaching conditions will be complied with. When the subsidy relates
\nto an expense item, it is recognized as income over the periods necessary to match the subsidy on a systematic basis to the costs that
\nit is intended to compensate. Where the subsidy relates to an asset, it is recognized as other long-term liabilities and is released to
\nthe statement of operations over the expected useful life in a consistent manner with the depreciation method for the relevant asset.
\nTotal government subsidies recorded in the other long-term liabilities were $1.04 million and $1.08 million as of March 31, 2026 and December
\n31,\u00a02025, respectively.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 2 \u2013 SUMMARY OF SIGNIFICANT ACCOUNTING
\nPOLICIES (CONTINUED)<\/p>\n
\u00a0<\/p>\n
Income Taxes<\/p>\n
\u00a0<\/p>\n
The Company accounts for income taxes following
\nthe liability method pursuant to FASB ASC 740 \u201cIncome Taxes\u201d. Under this method, deferred tax assets and liabilities are determined
\nbased on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in
\neffect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax
\nassets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets
\nwill not be realized. The effect on deferred taxes of a change in tax rate is recognized in income in the period that includes the enactment
\ndate.<\/p>\n
\u00a0<\/p>\n
The Company also follows FASB ASC 740, which addresses
\nthe determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial
\nstatements. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position
\nwill be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized
\nin the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than
\nfifty percent likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on recognition, classification, interest
\nand penalties on income taxes, accounting in interim periods and requires increased disclosures. As of March 31, 2026 and December 31,
\n2025, the Company did not have a liability for unrecognized tax benefits. It is the Company\u2019s policy to include penalties and interest
\nexpense related to income taxes as a component of other expense and interest expense, respectively, as necessary. The Company\u2019s
\nhistorical tax years will remain open for examination by the local authorities until the statute of limitations has passed.<\/p>\n
\u00a0<\/p>\n
Value-Added Tax<\/p>\n
\u00a0<\/p>\n
Enterprises or individuals, who sell commodities,
\nengage in repair and maintenance or import or export goods in the PRC are subject to a value added tax in accordance with PRC Laws. The
\nstandard VAT rate is 13%. A credit is available whereby VAT paid on the purchases of semi-finished products or raw materials used in the
\nproduction of the Company\u2019s finished products can be used to offset the VAT due on the sales of the finished products.<\/p>\n
\u00a0<\/p>\n
Statutory Reserve<\/p>\n
\u00a0<\/p>\n
In accordance with the PRC Regulations on Enterprises
\nwith Foreign Investment, an enterprise established in the PRC with foreign investment is required to provide for certain statutory reserves,
\nnamely (i) a General Reserve Fund, (ii) an Enterprise Expansion Fund and (iii) a Staff Welfare and Bonus Fund, which are appropriated
\nfrom net profit as reported in the enterprise\u2019s PRC statutory accounts. A wholly owned foreign enterprise is required to allocate
\nat least 10% of its annual after-tax profit to the General Reserve Fund until the balance of such fund has reached 50% of its respective
\nregistered capital. A non-wholly owned foreign invested enterprise is permitted to provide for the above allocation at the discretion
\nof its board of directors. Appropriations to the Enterprise Expansion Fund and Staff Welfare and Bonus Fund are at the discretion of the
\nboard of directors for all foreign invested enterprises. The reserves can only be used for specific purposes and are not distributable
\nas cash dividends.<\/p>\n
\u00a0<\/p>\n
Comprehensive Income (Loss)<\/p>\n
\u00a0<\/p>\n
Comprehensive income (loss) is defined as the
\nchange in equity during the year from transactions and other events, excluding the changes resulting from investments by owners and distributions
\nto owners, and is not included in the computation of income tax expense or benefit. Accumulated comprehensive income consists of foreign
\ncurrency translation. The Company presents comprehensive income (loss) in accordance with ASC Topic 220, \u201cComprehensive Income\u201d.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 2 \u2013 SUMMARY OF SIGNIFICANT ACCOUNTING
\nPOLICIES (CONTINUED)<\/p>\n
\u00a0<\/p>\n
Earnings per share<\/p>\n
\u00a0<\/p>\n
The Company calculates earnings per share in accordance
\nwith ASC Topic 260 \u201cEarnings per Share.\u201d Basic earnings per share is computed by dividing the net income(loss) attributable
\nto Greenland Technologies Holding Corporation, by the weighted average number of ordinary shares outstanding during the period. Diluted
\nearnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional
\nordinary shares that would have been outstanding if the potential ordinary shares equivalents had been issued and if the additional ordinary
\nshares were dilutive.<\/p>\n
\u00a0<\/p>\n
Segments and Related Information<\/p>\n
\u00a0<\/p>\n
An operating segment is a component of the Company
\nthat engages in business activities from which it may earn revenue and incur expenses, and is identified on the basis of internal financial
\nreports provided to and regularly reviewed by the Company\u2019s chief operating decision maker in order to allocate resources and assess
\nthe performance of the segment.<\/p>\n
\u00a0<\/p>\n
In accordance with ASC 280, Segment Reporting,
\noperating segments are defined as components of an enterprise about which separate financial information is available that is evaluated
\nregularly by the chief operating decision maker (\u201cCODM\u201d), in deciding how to allocate resources and in assessing performance.
\nThe Company\u2019s revenue segments have similar economic characteristics and they are managed as a single business unit. The Company
\nuses the \u201cmanagement approach\u201d in determining reportable operating segments. The management approach considers the internal
\norganization and reporting used by the Company\u2019s chief operating decision maker for making operating decisions and assessing performance
\nas the source for determining the Company\u2019s reportable segments. The Company\u2019s CODM has been identified as the chief executive
\nofficer (the \u201cCEO\u201d), who reviews consolidated results when making decisions about allocating resources and assessing performance
\nof the Company. The Company has determined that there is only one reportable operating segment.\u00a0<\/p>\n
\u00a0<\/p>\n
Commitments and contingencies<\/p>\n
\u00a0<\/p>\n
In the normal course of business, the Company
\nis subject to contingencies, including legal proceedings and environmental claims arising out of the normal course of businesses that
\nrelate to a wide range of matters, including among others, contracts breach liability. The Company records accruals for such contingencies
\nbased upon the assessment of the probability of occurrence and, where determinable, an estimate of the liability. Management may consider
\nmany factors in making these assessments including past history, scientific evidence and the specifics of each matter. The Company\u2019s
\nmanagement has evaluated all such proceedings and claims that existed as of March 31, 2026 and December 31, 2025. Normal course of businesses
\nthat relate to a wide range of matters, including among others, contracts breach liability. The Company records accruals for such contingencies
\nbased upon the assessment of the probability of occurrence and, where determinable, an estimate of the liability. Management may consider
\nmany factors in making these assessments including past history, scientific evidence and the specifics of each matter. The Company\u2019s
\nmanagement has evaluated all such proceedings and claims that existed as of March 31, 2026 and December 31, 2025.<\/p>\n
\u00a0<\/p>\n
Related Party<\/p>\n
\u00a0<\/p>\n
In general, related parties exist when there is
\na relationship that offers the potential for transactions at less than arm\u2019s-length, favorable treatment, or the ability to influence
\nthe outcome of events different from that outcome which might result in the absence of that relationship. A related party may be any of
\nthe following: a) an affiliate, which is a party that directly or indirectly controls, is controlled by, or is under common control with
\nanother party; b) a principle owner, owner of record or known beneficial owner of more than 10% of the voting interest of an entity; c)
\nmanagement, which are persons having responsibility for achieving objectives of the entity and requisite authority to make decision; d)
\nimmediate family of management or principal owners; e) a parent company and its subsidiaries; f) other parties that have ability to significant
\ninfluence the management or operating policies of the entity; and g) other parties that can significantly influence the management or
\noperating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly
\ninfluence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its or their own separate
\ninterests. The Company discloses all significant related party transactions<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 2 \u2013 SUMMARY OF SIGNIFICANT ACCOUNTING
\nPOLICIES (CONTINUED)<\/p>\n
\u00a0<\/p>\n
Warrants<\/p>\n
\u00a0<\/p>\n
The Company accounts for warrants as either equity-classified
\nor liability-classified instruments based on an assessment of the warrant\u2019s specific terms and applicable authoritative guidance
\nin the ASC 480, Distinguishing Liabilities from Equity (\u201cASC 480\u201d) and ASC 815, Derivatives and Hedging (\u201cASC 815\u201d).
\nManagement\u2019s assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they
\nmeet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification
\nunder ASC 815, including whether the warrants are indexed to the Company\u2019s own ordinary shares and whether the warrant holders could
\npotentially require \u201cnet cash settlement\u201d in a circumstance outside of the Company\u2019s control, among other conditions
\nfor equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance
\nand as of each subsequent quarterly period-end date while the warrants are outstanding.<\/p>\n
\u00a0<\/p>\n
For issued or modified warrants that meet all
\nof the criteria for equity classification, they are recorded as a component of additional paid-in capital at the time of issuance. For
\nissued or modified warrants that do not meet all the criteria for equity classification, they are recorded as warrant liability at their
\ninitial fair value on the date of issuance and subject to remeasurement each balance sheet date with changes in the estimated fair value
\nof the warrants to be recognized as a non-cash gain or loss in the statement of operations and comprehensive income.<\/p>\n
\u00a0<\/p>\n
Uncertainty and Risks<\/p>\n
\u00a0<\/p>\n
Credit Risk<\/p>\n
\u00a0<\/p>\n
Assets that potentially subject the Company to
\nsignificant concentration of credit risk primarily consist of cash and cash equivalents. The maximum exposure of such assets to credit
\nrisk is their carrying amount as at the balance sheet dates. As of March 31, 2026, cash and cash equivalents of $40,412,787 were deposited
\nin financial institutions in the PRC, and each bank account is insured by the PRC government with the maximum limit of RMB500,000 (equivalent
\n$69,800). To limit exposure to credit risk relating to deposits, the Company primarily places cash and cash equivalent with large financial
\ninstitutions in China which management believes are of high credit quality and the Company also continually monitors their credit worthiness.<\/p>\n
\u00a0<\/p>\n
A significant portion of the Company\u2019s operations
\nare conducted in the PRC. Accordingly, the Company\u2019s business, financial condition and results of operations may be influenced by
\nthe political, economic and legal environments in the PRC as well as by the general state of the PRC\u2019s economy. In addition, the
\nCompany\u2019s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary
\nmeasures, currency conversion and remittance abroad, rates and methods of taxation among other factors.<\/p>\n
\u00a0<\/p>\n
Currency Exchange Risk<\/p>\n
\u00a0<\/p>\n
The Company cannot guarantee that the current
\nexchange rate will remain steady. Therefore, there is a possibility that the Company could post the same amount of profit for two comparable
\nperiods and yet, because of the fluctuating exchange rate, record higher or lower profit depending on exchange rate of RMB converted to
\nU.S. dollars on the relevant dates. The exchange rate could fluctuate depending on changes in the political and economic environment without
\nnotice.<\/p>\n
\u00a0<\/p>\n
Concentration risks<\/p>\n
\u00a0<\/p>\n
Accounts receivable are typically unsecured and
\nderived from goods sold to customers that are located primarily in China, thereby exposed to credit risk. The risk is mitigated by the
\nCompany\u2019s assessment of customers\u2019 creditworthiness and its ongoing monitoring of outstanding balances. The Company has a
\nconcentration of its receivables with specific customers. As of March\u00a031, 2026, one customer accounted for 16.44% of the Company\u2019s
\ntotal accounts receivable. As of December\u00a031, 2025, three customers accounted for 11.24%, 10.24% and 10.12% of the Company\u2019s
\ntotal accounts receivable, respectively. No other customers accounted for more than 10% of the Company\u2019s total accounts receivable
\nas of March\u00a031, 2026 and December 31, 2025.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 2 \u2013 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)<\/p>\n
\u00a0<\/p>\n
For the three months ended March\u00a031, 2026,
\none customer accounted for 16.69% of the Company\u2019s total revenue. For the three months ended March\u00a031, 2025, one customer accounted
\nfor 17.77% of the Company\u2019s total revenue. No other customers accounted for more than 10% of the Company\u2019s total revenue for
\nthe three months ended March\u00a031, 2026 and 2025.<\/p>\n
\u00a0<\/p>\n
There were no suppliers representing more than
\n10% of the Company\u2019s total purchases for the three months ended March\u00a031, 2026 and 2025.<\/p>\n
\u00a0<\/p>\n
Recently Issued Accounting Pronouncements<\/p>\n
\u00a0<\/p>\n
Recent accounting pronouncements that the Company
\nhas adopted or may be required to adopt in the future are summarized below:<\/p>\n
\u00a0<\/p>\n
In November 2024, the FASB issued ASU 2024-03,\u00a0Income
\nStatement\u2014Reporting Comprehensive Income\u2014Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement
\nExpenses, which requires incremental disclosures about specific expense categories, including purchases of inventory, employee compensation,
\ndepreciation, amortization, and selling expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and
\nfor interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied
\neither prospectively or retrospectively. Management is currently evaluating this ASU to determine its impact on the Company\u2019s disclosures.<\/p>\n
\u00a0<\/p>\n
In January 2025, the FASB issued ASU 2025-01,
\nIncome Statement\u2014Reporting Comprehensive Income\u2014Expense Disaggregation Disclosures (Subtopic 220-40). The FASB issued ASU
\n2024-03 on November 4, 2024. ASU 2024-03 states that the amendments are effective for public business entities for annual reporting periods
\nbeginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Following the issuance of ASU 2024-03,
\nthe FASB was asked to clarify the initial effective date for entities that do not have an annual reporting period that ends on December
\n31 (referred to as non-calendar year-end entities). Because of how the effective date guidance was written, a non-calendar year-end entity
\nmay have concluded that it would be required to initially adopt the disclosure requirements in ASU 2024-03 in an interim reporting period,
\nrather than in an annual reporting period. The FASB\u2019s intent in the basis for conclusions of ASU 2024-03 is clear that all public
\nbusiness entities should initially adopt the disclosure requirements in the first annual reporting period beginning after December 15,
\n2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.<\/p>\n
\u00a0<\/p>\n
In February 2025, the FASB issued ASU 2025-02,
\nLiabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122 (\u201cASU 2025-02\u201d), which
\namends the Accounting Standards Codification to remove the text of SEC Staff Accounting Bulletin (\u201cSAB\u201d) 121, \u201cAccounting
\nfor Obligations to Safeguard Crypto-Assets an Entity Holds for its Platform Users,\u201d as it has been rescinded by the issuance of
\nSAB 122. ASU 2025-02 is effective immediately and is not expected to have a material impact on the Company\u2019s consolidated financial
\nstatements.<\/p>\n
\u00a0<\/p>\n
In April 2025, the FASB issued ASU 2025-04, Compensation\u2014Stock
\nCompensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to
\na Customer, which revises the definition of \u201cperformance condition\u201d for share-based consideration payable to a customer, eliminates
\nthe forfeiture policy election for awards granted to customers (unless granted in exchange for a distinct good or service), and clarifies
\nthe applicability of the variable consideration constraint. The amendments are effective for annual reporting periods (including interim
\nperiods within annual reporting periods) beginning after December 15, 2026, for all entities. Early adoption is permitted for both interim
\nand annual consolidated financial statements that have not yet been issued. The Company is currently evaluating the impact of the adoption
\nof this guidance.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 2 \u2013 SUMMARY OF SIGNIFICANT ACCOUNTING
\nPOLICIES (CONTINUED)<\/p>\n
\u00a0<\/p>\n
In July 2025, the FASB issued ASU 2025-05, Financial
\nInstruments\u2014Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which introduces
\na practical expedient for all entities and an accounting policy election for entities other than public business entities to simplify
\nthe estimation of expected credit losses for current accounts receivable and current contract assets arising from revenue contracts under
\nTopic 606. The practical expedient allows entities to assume that current conditions as of the balance sheet date remain unchanged for
\nthe remaining life of the asset, thereby reducing the need for complex macroeconomic forecasts. The amendments are effective for annual
\nperiods beginning after December 15, 2025, with early adoption permitted. The Company is currently evaluating the impact of the adoption
\nof this guidance.<\/p>\n
\u00a0<\/p>\n
In September 2025, the FASB issued ASU 2025-06,
\nIntangibles\u2014Goodwill and Other\u2014Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use
\nSoftware (\u201cASU 2025-06\u201d). ASU 2025-06 modernizes the accounting for internal-use software costs by removing all references
\nto prescriptive software development stages and introducing a single capitalization threshold based on management\u2019s authorization
\nof and commitment to fund the project and the probability of its completion. The amendments also incorporate website development cost
\nguidance into Subtopic 350-40 and clarify the related disclosure requirements. The new guidance is effective for annual periods beginning
\nafter December 15, 2027, with early adoption permitted. Entities may apply the amendments prospectively, retrospectively, or using a modified
\ntransition approach. The Company is currently evaluating the impact of the adoption of ASU 2025-06 on its financial statements and disclosures.<\/p>\n
\u00a0<\/p>\n
In November 2025, the FASB issued ASU 2025-08,
\nFinancial Instruments\u2014Credit Losses (Topic 326): Purchased Loans (\u201cASU 2025-08\u201d), which expands the gross-up approach
\nto most acquired loans. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within
\nthose fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2025-08 on its
\nconsolidated financial statements and disclosures.<\/p>\n
\u00a0<\/p>\n
In December 2025, the FASB issued ASU 2025-10,
\nGovernment Grants (Topic 832): Accounting for Government Grants Received by Business Entities (\u201cASU 2025-10\u201d). The amendments
\nare effective for fiscal years beginning after December 15, 2029, and for interim periods within those fiscal years. Early adoption is
\npermitted. The Company is currently evaluating the impact of the adoption of ASU 2025-10 on its consolidated financial statements and
\ndisclosures.<\/p>\n
\u00a0<\/p>\n
In December 2025, the FASB issued ASU 2025-11,
\nInterim Reporting (Topic 270): Narrow-Scope Improvements (\u201cASU 2025-11\u201d). The amendments are effective for interim periods
\nwithin fiscal years beginning after December 15, 2028. Early adoption is permitted. The Company is currently evaluating the impact of
\nthe adoption of ASU 2025-11 on its consolidated financial statements and disclosures.<\/p>\n
\u00a0<\/p>\n
In December 2025, the FASB issued ASU 2025-13,
\nDerivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification
\nfor Share-Based Noncash Consideration from a Customer in a Revenue Contract (\u201cASU 2025-13\u201d). The amendments are effective
\nfor fiscal years beginning after December 15, 2026, and for interim periods within those fiscal years. Early adoption is permitted. The
\nCompany is currently evaluating the impact of the adoption of ASU 2025-13 on its consolidated financial statements and disclosures.<\/p>\n
\u00a0<\/p>\n
Other accounting standards that have been issued
\nby FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements
\nupon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on, or are unrelated to,
\nits consolidated financial condition, results of operations, cash flows or disclosures.<\/p>\n
\u00a0<\/p>\n
NOTE 3 \u2013 SHORT TERM INVESTMENT<\/p>\n
\u00a0<\/p>\n
As of March 31, 2026 and December 31, 2025, the
\nCompany\u2019s short-term investment amounted to $20,831,283 and $24,454,701, respectively. During the three months ended March 31, 2026,
\nthe Company purchased bank management products in a total amount of $20,399,318 (RMB141,200,000). As of March 31, 2026, the fair value
\nof the Company\u2019s bank management products was $20,831,283(RMB143,694,193).<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED\u202fCONSOLIDATED FINANCIAL
\nSTATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 4 \u2013 CONCENTRATION ON REVENUES AND
\nCOST OF GOODS SOLD<\/p>\n
\u00a0<\/p>\n
Concentration of major customers and suppliers:<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n For the three months ended March
\n 31,\u00a0<\/p>\n
\u00a0\u00a0
\n 2026\u00a0\u00a0
\n 2025\u00a0<\/p>\n
Major customers representing more than 10% of the Company\u2019s revenues\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0<\/p>\n
Company A\u00a0
\n $4,261,930\u00a0\u00a0
\n \u00a016.69%\u00a0
\n $3,852,468\u00a0\u00a0
\n \u00a017.77%<\/p>\n
Total Revenues\u00a0
\n $4,261,930\u00a0\u00a0
\n \u00a016.69%\u00a0
\n $3,852,468\u00a0\u00a0
\n \u00a017.77%<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n As of\u00a0<\/p>\n
\u00a0\u00a0
\n March 31, 2026\u00a0\u00a0
\n December 31,\u00a02025\u00a0<\/p>\n
Major customers of the Company\u2019s accounts receivable, net\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0<\/p>\n
Company A\u00a0
\n \u00a04,256,213\u00a0\u00a0
\n \u00a016.44%\u00a0
\n \u00a01,745,719\u00a0\u00a0
\n \u00a010.12%<\/p>\n
Company B\u00a0
\n \u00a02,045,479\u00a0\u00a0
\n \u00a07.90%\u00a0
\n \u00a01,939,540\u00a0\u00a0
\n \u00a011.24%<\/p>\n
Company C\u00a0
\n \u00a01,329,210\u00a0\u00a0
\n \u00a05.14%\u00a0
\n \u00a0592,957\u00a0\u00a0
\n \u00a03.44%<\/p>\n
Company D\u00a0
\n \u00a01,251,819\u00a0\u00a0
\n \u00a04.84%\u00a0
\n \u00a0681,865\u00a0\u00a0
\n \u00a03.95%<\/p>\n
Company E\u00a0
\n \u00a01,192,724\u00a0\u00a0
\n \u00a04.61%\u00a0
\n \u00a01,380,095\u00a0\u00a0
\n \u00a08.00%<\/p>\n
Company F\u00a0
\n \u00a0938,393\u00a0\u00a0
\n \u00a03.63%\u00a0
\n \u00a0723,683\u00a0\u00a0
\n \u00a04.19%<\/p>\n
Company G\u00a0
\n \u00a0877,115\u00a0\u00a0
\n \u00a03.39%\u00a0
\n \u00a01,766,799\u00a0\u00a0
\n \u00a010.24%<\/p>\n
Total\u00a0
\n $11,890,953\u00a0\u00a0
\n \u00a045.95%\u00a0
\n $8,830,658\u00a0\u00a0
\n \u00a051.18%<\/p>\n
\u00a0<\/p>\n
Accounts receivable from the Company\u2019s major
\ncustomers accounted for 45.95% and 51.18% of total accounts receivable balances as of March 31, 2026 and December 31, 2025, respectively.<\/p>\n
\u00a0<\/p>\n
There were no suppliers representing more than
\n10% of the Company\u2019s total purchases for the three months ended March 31, 2026 and 2025, respectively.<\/p>\n
\u00a0<\/p>\n
NOTE 5 \u2013 ACCOUNTS RECEIVABLE, NET<\/p>\n
\u00a0<\/p>\n
Accounts receivable is net of allowance for expected credit losses.<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n As of\u00a0<\/p>\n
\u00a0\u00a0
\n March 31,
2026\u00a0\u00a0
\n December\u00a031,
2025\u00a0<\/p>\n
Accounts receivable\u00a0
\n $25,901,491\u00a0\u00a0
\n $17,272,509\u00a0<\/p>\n
Less: allowance for expected credit losses\u00a0
\n \u00a0(16,251)\u00a0
\n \u00a0(16,030)<\/p>\n
Accounts receivable, net\u00a0
\n $25,885,240\u00a0\u00a0
\n $17,256,479\u00a0<\/p>\n
\u00a0<\/p>\n
Changes in the allowance for expected credit losses
\nare as follows:<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0<\/p>\n
For
\n the
three\u00a0months<\/p>\n
ended
\n March\u00a031,
2026<\/p>\n
\u00a0\u00a0<\/p>\n
For
\n the
Year Ended<\/p>\n
December\u00a031,<\/p>\n
2025<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0<\/p>\n
Beginning balance\u00a0
\n $16,030\u00a0\u00a0
\n $<\/p>\n
–<\/p>\n
\u00a0<\/p>\n
Additional provision charged to expense\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a015,596\u00a0<\/p>\n
Effect of foreign exchange change\u00a0
\n \u00a0221\u00a0\u00a0
\n \u00a0434\u00a0<\/p>\n
Ending balance\u00a0
\n $16,251\u00a0\u00a0
\n $16,030\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 6 \u2013 INVENTORIES, NET<\/p>\n
\u00a0<\/p>\n
As of March 31, 2026 and December 31, 2025, inventories
\nconsisted of the following<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n As of\u00a0<\/p>\n
\u00a0\u00a0
\n March 31,
2026\u00a0\u00a0
\n December\u00a031,
2025\u00a0<\/p>\n
Raw materials\u00a0
\n $10,490,073\u00a0\u00a0
\n $10,165,798\u00a0<\/p>\n
Revolving material\u00a0
\n \u00a01,218,866\u00a0\u00a0
\n \u00a01,172,449\u00a0<\/p>\n
Consigned processing material\u00a0
\n \u00a054,744\u00a0\u00a0
\n \u00a028,671\u00a0<\/p>\n
Work-in-progress\u00a0
\n \u00a02,599,322\u00a0\u00a0
\n \u00a02,334,681\u00a0<\/p>\n
Finished goods\u00a0
\n \u00a012,968,469\u00a0\u00a0
\n \u00a012,290,156\u00a0<\/p>\n
Less: inventory impairment\u00a0
\n \u00a0(1,628,118)\u00a0
\n \u00a0(1,614,719)<\/p>\n
Inventories, net\u00a0
\n $25,703,356\u00a0\u00a0
\n $24,377,036\u00a0<\/p>\n
\u00a0<\/p>\n
Changes in the inventory reserves are as follows:<\/p>\n
\u00a0<\/p>\n
\u00a0
\n \u00a0
\n For the
three\u00a0months
ended
March 31,
2026
\n \u00a0
\n \u00a0
\n For the
Year Ended
December\u00a031,
2025
\n \u00a0<\/p>\n
Beginning balance
\n \u00a0
\n $
\n 1,614,719
\n \u00a0
\n \u00a0
\n $
\n 541,421
\n \u00a0<\/p>\n
Inventory write-downs
\n \u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0
\n \u00a0
\n \u00a0
\n 1,042,942
\n \u00a0<\/p>\n
Effect of foreign exchange change
\n \u00a0
\n \u00a0
\n 13,399
\n \u00a0
\n \u00a0
\n \u00a0
\n 30,356
\n \u00a0<\/p>\n
Ending balance
\n \u00a0
\n $
\n 1,628,118
\n \u00a0
\n \u00a0
\n $
\n 1,614,719
\n \u00a0<\/p>\n
\u00a0<\/p>\n
NOTE 7 \u2013 NOTES RECEIVABLE<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n As of\u00a0<\/p>\n
\u00a0\u00a0
\n March 31, 2026\u00a0\u00a0
\n December\u00a031,
2025\u00a0<\/p>\n
Bank notes receivable:\u00a0
\n $17,391,123\u00a0\u00a0
\n $12,547,551\u00a0<\/p>\n
Commercial notes receivable\u00a0
\n \u00a01,342,246\u00a0\u00a0
\n \u00a02,156,528\u00a0<\/p>\n
Total\u00a0
\n $18,733,369\u00a0\u00a0
\n $14,704,079\u00a0<\/p>\n
\u00a0<\/p>\n
Bank notes and commercial notes are means of payment
\nfrom customers for the purchase of the Company\u2019s products and are issued by financial institutions or business entities, respectively,
\nthat entitle the Company to receive the full nominal amount from the issuers at maturity, which bear no interest and generally range from
\nthree to nine months from the date of issuance. As of March 31, 2026, the Company pledged notes receivable for an aggregate amount of
\n$5.88 million to Bank of Hangzhou as a means of security for issuance of bank acceptance notes in an aggregate amount of $2.50 million.
\nAs of December 31, 2025, the Company pledged notes receivable for an aggregate amount of $3.43 million to Bank of Hangzhou as a means
\nof security for issuance of bank acceptance notes in an aggregate amount of $2.47 million. The Company expects to collect notes receivable
\nwithin 6 months after the issuance date of bank acceptance notes. All notes receivable outstanding as of March 31, 2026 have been or are
\nexpected to be collected in full prior to their respective maturity dates.<\/p>\n
\u00a0\u00a0<\/p>\n
Due to the short term, high-quality credit rating
\nof these commercial banks and no losses have occurred in history, for the three months ended March 31, 2026 and 2025, the Company had
\nno allowance for expected credit losses for notes receivable.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0\u00a0<\/p>\n
NOTE 8 \u2013 PROPERTY, PLANT AND EQUIPMENT, NET<\/p>\n
\u00a0<\/p>\n
(a) As of March 31, 2026 and December 31, 2025, property, plant and
\nequipment consisted of the following:<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n As of\u00a0<\/p>\n
\u00a0\u00a0
\n March 31, 2026\u00a0\u00a0
\n December\u00a031,
2025\u00a0<\/p>\n
Buildings\u00a0
\n $11,779,891\u00a0\u00a0
\n $11,619,695\u00a0<\/p>\n
Machinery\u00a0
\n \u00a023,965,309\u00a0\u00a0
\n \u00a023,471,775\u00a0<\/p>\n
Motor vehicles\u00a0
\n \u00a0347,658\u00a0\u00a0
\n \u00a0342,931\u00a0<\/p>\n
Electronic equipment\u00a0
\n \u00a0294,970\u00a0\u00a0
\n \u00a0289,246\u00a0<\/p>\n
Total property plant and equipment, at cost\u00a0
\n \u00a036,387,828\u00a0\u00a0
\n \u00a035,723,647\u00a0<\/p>\n
\u00a0\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
Less: accumulated depreciation\u00a0
\n \u00a0(24,641,585)\u00a0
\n \u00a0(23,834,500)<\/p>\n
Property, plant and equipment, net\u00a0
\n $11,746,243\u00a0\u00a0
\n $11,889,147\u00a0<\/p>\n
\u00a0\u00a0\u00a0<\/p>\n
For the three months ended March 31, 2026 and
\n2025, depreciation expense amounted to $0.48 million and $0.47 million, respectively, of which $0.31 million and $0.27 million, respectively,
\nwas included in cost of revenue and inventories, and the remainder was included in general and administrative expense, respectively.<\/p>\n
\u00a0<\/p>\n
For the three months ended March 31, 2026 and
\n2025, nil and nil of construction-in-progress was converted into property, plant and equipment.<\/p>\n
\u00a0<\/p>\n
NOTE 9 \u2013 LAND USE RIGHTS<\/p>\n
\u00a0<\/p>\n
Land use rights consisted of the following:<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n As of\u00a0<\/p>\n
\u00a0\u00a0
\n March 31, 2026\u00a0\u00a0
\n December\u00a031,
2025\u00a0<\/p>\n
Land use rights, cost\u00a0
\n $4,460,221\u00a0\u00a0
\n $4,399,566\u00a0<\/p>\n
Less: Accumulated amortization\u00a0
\n \u00a0(1,111,491)\u00a0
\n \u00a0(1,074,378)<\/p>\n
Land use rights, net\u00a0
\n $3,348,730\u00a0\u00a0
\n $3,325,188\u00a0<\/p>\n
\u00a0<\/p>\n
Estimated future amortization expense is as follows as of March 31,
\n2026:<\/p>\n
\u00a0<\/p>\n
Years ending March 31,\u00a0
\n Amortization
expense\u00a0<\/p>\n
2027\u00a0
\n $88,898\u00a0<\/p>\n
2028\u00a0
\n \u00a088,898\u00a0<\/p>\n
2029\u00a0
\n \u00a088,898\u00a0<\/p>\n
2030\u00a0
\n \u00a088,898\u00a0<\/p>\n
2031\u00a0
\n \u00a088,898\u00a0<\/p>\n
Thereafter\u00a0
\n \u00a02,904,240\u00a0<\/p>\n
Total\u00a0
\n $3,348,730\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED\u202fCONSOLIDATED FINANCIAL
\nSTATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 10 \u2013 FIXED DEPOSIT<\/p>\n
\u00a0<\/p>\n
As of March 31, 2026 and December 31, 2025, fixed
\ndeposit consisted of the following:<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n As of\u00a0<\/p>\n
\u00a0\u00a0
\n March 31, 2026\u00a0\u00a0
\n December\u00a031,
2025\u00a0<\/p>\n
Three-year bank deposit-current\u00a0
\n $1,500,264\u00a0\u00a0
\n $2,966,386\u00a0<\/p>\n
Three-year bank deposit-non current\u00a0
\n \u00a07,474,063\u00a0\u00a0
\n \u00a04,421,828\u00a0<\/p>\n
Total\u00a0
\n $8,974,327\u00a0\u00a0
\n $7,388,214\u00a0<\/p>\n
\u00a0<\/p>\n
All fixed deposits were deposited in local banks
\nin the PRC, each with a deposit term of three years. As of March 31, 2026, the Company had four outstanding term deposits with the following
\nmaturity dates and annual interest rates:<\/p>\n
\u00a0<\/p>\n
(1) approximately $1.47 million with China Zheshang Bank, maturing on December 5, 2028, bearing interest at 1.90% per annum; <\/p>\n
\u00a0<\/p>\n
(2) approximately $1.52 million with China Zheshang Bank, maturing on June 27, 2027, bearing interest at 2.60% per annum; <\/p>\n
\u00a0<\/p>\n
(3) approximately $3.03 million with China Zheshang Bank, maturing on September 27, 2027, bearing interest at 2.40% per annum; <\/p>\n
\u00a0<\/p>\n
(4) approximately $1.50 million with Bank of Ningbo, maturing on September 21, 2026, bearing interest at 3.00% per annum. <\/p>\n
\u00a0<\/p>\n
(5) approximately $1.46 million with Bank of Ningbo, maturing on January 15, 2029, bearing interest at 3.00% per annum. <\/p>\n
\u00a0<\/p>\n
NOTE 11 \u2013 NOTES PAYABLE<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n As of\u00a0<\/p>\n
\u00a0\u00a0
\n March 31,
2026\u00a0\u00a0
\n December\u00a031,
2025\u00a0<\/p>\n
Bank acceptance notes\u00a0
\n $16,440,997\u00a0\u00a0
\n $12,759,720\u00a0<\/p>\n
Total\u00a0
\n $16,440,997\u00a0\u00a0
\n $12,759,720\u00a0<\/p>\n
\u00a0<\/p>\n
The interest-free notes payable, ranging from
\nsix months to one year from the date of issuance, were secured by $0.22 million and $0.07 million restricted cash, and $5.88 million and
\n$3.43 million notes receivable, as of March 31, 2026 and December 31, 2025, respectively.<\/p>\n
\u00a0<\/p>\n
All the notes payable are subject to bank charges
\nof 0.05% of the principal amount as commission, included in the financial expenses in the statement of operations, on each loan transaction.\u00a0The
\nnotes payable bears no interests.<\/p>\n
\u00a0<\/p>\n
NOTE 12 \u2013 ACCOUNTS PAYABLE<\/p>\n
\u00a0<\/p>\n
Accounts payable are summarized as follow:\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n As of\u00a0<\/p>\n
\u00a0\u00a0
\n March 31,
2026\u00a0\u00a0
\n December\u00a031,
2025\u00a0<\/p>\n
Procurement of Materials\u00a0
\n $33,029,726\u00a0\u00a0
\n $25,213,713\u00a0<\/p>\n
Infrastructure& Equipment\u00a0
\n \u00a0211,605\u00a0\u00a0
\n \u00a0113,793\u00a0<\/p>\n
Freight fee\u00a0
\n \u00a0324,085\u00a0\u00a0
\n \u00a0277,411\u00a0<\/p>\n
Total\u00a0
\n $33,565,416\u00a0\u00a0
\n $25,604,917\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 13 \u2013 OTHER CURRENT LIABILITIES<\/p>\n
\u00a0<\/p>\n
Other current liabilities are summarized as follow:<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n As of\u00a0<\/p>\n
\u00a0\u00a0
\n March 31, 2026\u00a0\u00a0
\n December\u00a031,
2025\u00a0<\/p>\n
Employee payables\u00a0
\n \u00a0102,842\u00a0\u00a0
\n \u00a0909,168\u00a0<\/p>\n
Other tax payables\u00a0
\n \u00a0433,113\u00a0\u00a0
\n \u00a0178,399\u00a0<\/p>\n
Other payable*\u00a0
\n \u00a0404,095\u00a0\u00a0
\n \u00a0248,565\u00a0<\/p>\n
Accrued expenses\u00a0
\n \u00a0177,566\u00a0\u00a0
\n \u00a0301,134\u00a0<\/p>\n
Accrued after-sales service fee\u00a0
\n \u00a0398,726\u00a0\u00a0
\n \u00a01,304,605\u00a0<\/p>\n
Total\u00a0
\n $1,516,342\u00a0\u00a0
\n $2,941,871\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
NOTE 14 \u2013 DEFERRED REVENUE<\/p>\n
\u00a0<\/p>\n
Deferred revenue is summarized as follow:<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n As of\u00a0<\/p>\n
\u00a0\u00a0
\n March 31, 2026\u00a0\u00a0
\n December\u00a031,
2025\u00a0<\/p>\n
Subsidy\u00a0
\n \u00a01,039,241\u00a0\u00a0
\n \u00a01,083,784\u00a0<\/p>\n
Total\u00a0
\n $1,039,241\u00a0\u00a0
\n $1,083,784\u00a0<\/p>\n
\u00a0<\/p>\n
Changes in the deferred revenue are as follows:<\/p>\n
\u00a0<\/p>\n
\u00a0
\n \u00a0
\n For the
three\u00a0months
ended
March 31,
2026
\n \u00a0
\n \u00a0
\n For the
Year Ended
December\u00a031,
2025
\n \u00a0<\/p>\n
Beginning balance
\n \u00a0
\n $
\n 1,083,784
\n \u00a0
\n \u00a0
\n $
\n 1,263,180
\n \u00a0<\/p>\n
Recognized as revenue during the year
\n \u00a0
\n \u00a0
\n (59,281
\n )
\n \u00a0
\n \u00a0
\n (228,357
\n )<\/p>\n
Effect of foreign exchange change
\n \u00a0
\n \u00a0
\n 14,738\u00a0\u00a0
\n \u00a0
\n \u00a0
\n \u00a0
\n 48,961
\n \u00a0<\/p>\n
Ending balance
\n \u00a0
\n $
\n 1,039,241
\n \u00a0
\n \u00a0
\n $
\n 1,083,784
\n \u00a0<\/p>\n
\u00a0<\/p>\n
Subsidy mainly consists of an incentive granted
\nby the Chinese government to encourage transformation of fixed assets in China and other miscellaneous subsidy from the Chinese government.\u00a0As
\nof March 31, 2026, grant income decreased by $0.22 million, as compared to December 31, 2025. The change was mainly due to timing of incurring
\nqualifying expenses.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 15 \u2013 WARRANT LIABILITY<\/p>\n
\u00a0<\/p>\n
The Company accounts for warrants as either equity-classified
\nor liability-classified instruments based on an assessment of the warrant\u2019s specific terms and applicable authoritative guidance
\nin FASBASC 480, Distinguishing Liabilities from Equity (\u201cASC 480\u201d) and ASC 815. The assessment considers whether the warrants
\nare freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants
\nmeet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company\u2019s
\nown ordinary shares and whether the warrant holders could potentially require \u201cnet cash settlement\u201d in a circumstance outside
\nof the Company\u2019s control, among other conditions for equity classification. This assessment, which requires the use of professional
\njudgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.<\/p>\n
\u00a0<\/p>\n
For issued or modified warrants that meet all
\nof the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the
\ntime of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required
\nto be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair
\nvalue of the warrants are recognized as a non-cash gain or loss on the statements of operations.<\/p>\n
\u00a0<\/p>\n
In connection with the registered direct offering
\nclosed on July 27, 2022, the Company issued to an investor a warrant to purchase up to 4,530,000 ordinary shares at an exercise price
\nof $4.49 per share. The warrant became exercisable on January 27, 2023 and will expire on January 26, 2028.<\/p>\n
\u00a0<\/p>\n
The warrants meet the definition of a derivative
\nunder FASB ASC 815, as the Company cannot avoid a net cash settlement under certain circumstances. The fair value of the warrant liabilities
\nwas measured using a Black\u2013Scholes model. Significant inputs into the model as of the reporting period begin remeasurement dates,
\nand as of the reporting period end remeasurement dates are as follows:<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n Ordinary Share
Warrants\u00a0\u00a0
\n Ordinary Share
Warrants\u00a0<\/p>\n
\u00a0\u00a0
\n March 31,
2026\u00a0\u00a0
\n December\u00a031,
2025\u00a0<\/p>\n
\u00a0\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0<\/p>\n
Share price\u00a0
\n $0.70\u00a0\u00a0
\n $0.61\u00a0<\/p>\n
Exercise price\u00a0
\n $4.49\u00a0\u00a0
\n $4.49\u00a0<\/p>\n
Expected term (years)\u00a0
\n \u00a00.91\u00a0\u00a0
\n \u00a01.04\u00a0<\/p>\n
Risk-free interest rate\u00a0
\n \u00a034%\u00a0
\n \u00a03.5%<\/p>\n
Expected volatility\u00a0
\n \u00a0110.00%\u00a0
\n \u00a0100.00%<\/p>\n
\u00a0<\/p>\n
The warrants outstanding and fair values at each
\nof the respective valuation dates are summarized below:<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n As of\u00a0<\/p>\n
\u00a0\u00a0
\n March 31,
2026\u00a0\u00a0
\n December\u00a031,
2025\u00a0<\/p>\n
Number of ordinary share warrants\u00a0
\n \u00a04,530,000\u00a0\u00a0
\n \u00a04,530,000\u00a0<\/p>\n
Fair value of the warrants\u00a0
\n $123,837\u00a0\u00a0
\n $70,910\u00a0<\/p>\n
\u00a0<\/p>\n
The fair value of the warrants was classified
\nas a liability of $70,910 as of December 31, 2025. For the three months ended March 31, 2026, the Company recognized a loss of $52,927
\nfor the investor warrant from the change in fair value of the warrant liability. As a result, the warrant liability is carried on the
\nconsolidated balance sheets at the fair value of $123,837 for the investor warrant, collectively, as of March 31, 2026.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 16 \u2013 SHAREHOLDER\u2019S EQUITY<\/p>\n
\u00a0<\/p>\n
Preferred Shares\u00a0\u2014 The
\nCompany is authorized to issue an unlimited number of no par value preferred shares, divided into five classes, Class A through Class
\nE, each with such designation, rights and preferences as may be determined by a resolution of the Company\u2019s board of directors to
\namend the Memorandum and Articles of Association to create such designations, rights and preferences. The Company has five classes of
\npreferred shares to give the Company flexibility as to the terms on which each class is issued. All shares of a single class must be issued
\nwith the same rights and obligations. Accordingly, starting with five classes of preferred shares will allow the Company to issue shares
\nat different times on different terms. As of March 31, 2026 and December 31, 2025, there were no preferred shares designated, issued or
\noutstanding.<\/p>\n
\u00a0<\/p>\n
Ordinary Shares\u00a0\u2014 The
\nCompany is authorized to issue an unlimited number of ordinary shares of no par value, divided into two classes: Class A Ordinary Shares,
\neach carrying one vote per share, and Class B Ordinary Shares, each carrying twenty-five votes per share. As of March 31, 2026, there
\nwere 20,532,482 Class A ordinary shares and 6,011,740 Class B ordinary shares issued and outstanding. Accordingly, the total voting power
\nof the Company as of March 31, 2026 was 170,826,982 votes. Trendway Capital Limited, which is controlled and beneficially owned by Mr.
\nPeter Zuguang Wang, the chairman of the Company\u2019s board of directors, held 100% of the outstanding Class B ordinary shares, representing
\n150,293,500 votes, or approximately 88.0% of the total voting power of the Company. As a result, Mr. Wang has the ability to control the
\noutcome of matters submitted to a vote of the Company\u2019s shareholders, including the election of directors and significant corporate
\ntransactions, without the consent of the holders of Class A ordinary shares.<\/p>\n
\u00a0<\/p>\n
On January 28, 2026, the Company entered into
\nan underwriting agreement with Joseph Stone Capital, LLC, as sole underwriter, pursuant to which the Company agreed to sell 5,083,330
\nunits (the \u201cUnits\u201d) at a public offering price of $1.20 per Unit. Each Unit consisted of one ordinary share of the Company
\nand four-fifths of one warrant (each, a \u201cJanuary 2026 Warrant\u201d), with each whole January 2026 Warrant exercisable for one
\nordinary share at an exercise price of $1.20 per share, or by means of a zero price exercise, and expiring three years from the date of
\nissuance. The ordinary shares and January 2026 Warrants included in the Units were immediately separable and were issued separately. The
\noffering closed on January 29, 2026, and the Company received gross proceeds of approximately $6.1 million, before deducting underwriting
\ndiscounts and other offering expenses.<\/p>\n
\u00a0<\/p>\n
On January 30, 2026, the Company re-convened its
\n2025 annual general meeting of shareholders (the \u201c2025 Annual General Meeting\u201d). At the 2025 Annual General Meeting, the shareholders
\nof the Company approved, among other matters: (i) the adoption of amended and restated Memorandum and Articles of Association; (ii) the
\nimplementation of a dual class share structure, pursuant to which the ordinary shares of the Company were re-designated into Class A ordinary
\nshares of no par value, carrying one vote per share, and Class B ordinary shares of no par value, carrying 25 votes per share; and (iii)
\nthe reclassification of each of the issued and outstanding ordinary shares held by Trendway Capital Limited as Class B ordinary shares,
\nand the reclassification of all remaining issued and outstanding ordinary shares as Class A ordinary shares. On February 24, 2026, the
\ndual-class share structure became effective on the Nasdaq Capital Market.<\/p>\n
\u00a0<\/p>\n
Rights<\/p>\n
\u00a0<\/p>\n
Each Class A Ordinary Share confers upon the holder
\none vote at a meeting of the Members or on any Resolution of Members, while each Class B Ordinary Share confers upon the holder twenty-five
\nvotes. Both classes of Ordinary Shares have identical economic rights, entitling the holder to an equal share with each other Ordinary
\nShare in any dividend paid by the Company and in the distribution of the surplus assets of the Company on its liquidation.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 16 \u2013 SHAREHOLDER\u2019S EQUITY (CONTINUED)<\/p>\n
\u00a0<\/p>\n
Conversion<\/p>\n
\u00a0<\/p>\n
In accordance with the Memorandum of Association,
\nClass A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstance, while each Class B Ordinary Share is
\nconvertible into one Class A Ordinary Share at any time by the holder thereof, and upon any sale, transfer, assignment or disposition
\nof any Class B Ordinary Shares by a holder thereof to any person who is not an affiliate of such holder, each of such Class B Ordinary
\nShares will be automatically and immediately converted into one Class A Ordinary Share. Class A Ordinary Shares are freely transferable.<\/p>\n
\u00a0\u00a0<\/p>\n
Warrants \u2014\u00a0Redeemable
\nwarrants sold as part of the units in the Company\u2019s initial public offering, or the Public Warrants (together with the Private Warrants
\n(as defined below), the \u201cWarrants\u201d) may only be exercised for a whole number of shares. No fractional shares were issued upon
\nexercise of the Public Warrants. The Public Warrants were exercisable from October 24, 2019 to October 24, 2024, a total of five years
\nfrom the consummation of the Business Combination.<\/p>\n
\u00a0<\/p>\n
Private warrants included (i) the 282,000 warrants
\nunderlying the units issued to Greenland Asset Management Corporation (the \u201cSponsor\u201d) and Chardan Capital Markets, LLC (\u201cChardan\u201d)
\nin a private placement in connection with our initial public offering (\u201cPrivate Unit Warrants\u201d), and (ii) 120,000 warrants
\nheld by Chardan upon the exercise of its unit purchase option to purchase 120,000 units in March 2021 (\u201cOption Warrants,\u201d
\ntogether with Private Unit Warrants, the \u201cPrivate Warrants\u201d). The Private Warrants are identical to the Public Warrants underlying
\nthe units sold in the Initial Public Offering, except that the Private Warrants and the ordinary shares issuable upon the exercise of
\nthe Private Warrants are not transferable, assignable or saleable until 30 days after the completion of a Business Combination, subject
\nto certain limited exceptions. Additionally, the Private Warrants were exercisable on a cashless basis and are non-redeemable so long
\nas they are held by the initial purchasers or their permitted transferees. If the Private Warrants were held by someone other than the
\ninitial purchasers or their permitted transferees, the Private Warrants would be redeemable by the Company and exercisable by such holders
\non the same basis as the Public Warrants. The Private Warrants expired concurrently with the Public Warrants on October 24, 2024, and
\naccordingly no Private Warrants remain outstanding.<\/p>\n
\u00a0<\/p>\n
On January 28, 2026, the Company entered into
\nan underwriting agreement with Joseph Stone Capital, LLC, as sole underwriter, pursuant to which the Company agreed to sell 5,083,330
\nunits (the \u201cUnits\u201d) at a public offering price of $1.20 per Unit. Each Unit consisted of one ordinary share of the Company
\nand four-fifths of one warrant (each, a \u201cJanuary 2026 Warrant\u201d), with each whole January 2026 Warrant exercisable for one
\nordinary share at an exercise price of $1.20 per share, or by means of a zero price exercise, and expiring three years from the date of
\nissuance. The ordinary shares and January 2026 Warrants included in the Units were immediately separable and were issued separately. The
\noffering closed on January 29, 2026, and the Company received gross proceeds of approximately $6.1 million, before deducting underwriting
\ndiscounts and other offering expenses.<\/p>\n
\u00a0<\/p>\n
As of March 31, 2026, there were no warrants outstanding.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 17 \u2013 EARNINGS PER SHARE<\/p>\n
\u00a0<\/p>\n
The Company reports earnings per share in accordance
\nwith the provisions of the FASB\u2019s related accounting standard. This standard requires presentation of basic and diluted earnings
\nper share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes
\ndilution, but includes vested restricted stocks and is computed by dividing income available to shareholders by the weighted average ordinary
\nshares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities
\nor other contracts to issue ordinary shares were exercised and converted into ordinary shares.<\/p>\n
\u00a0<\/p>\n
The following is a reconciliation of the basic
\nand diluted earnings per share computation:<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n For the three months ended
March 31,\u00a0<\/p>\n
\u00a0\u00a0
\n 2026\u00a0\u00a0
\n 2025\u00a0<\/p>\n
Net income attributable to Greenland Technologies Holding Corporation and subsidiaries\u00a0
\n $5,000,480\u00a0\u00a0
\n $4,003,783\u00a0<\/p>\n
Weighted average basic and diluted computation shares outstanding:\u00a0
\n \u00a0\u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0<\/p>\n
Weighted average shares used in basic computation\u00a0
\n \u00a021,753,958\u00a0\u00a0
\n \u00a013,594,530\u00a0<\/p>\n
Diluted effect of stock options and warrants\u00a0
\n \u00a0<\/p>\n
\u2014<\/p>\n
\u00a0\u00a0
\n \u00a0<\/p>\n
\u2014<\/p>\n
\u00a0<\/p>\n
Weighted average shares used in diluted computation\u00a0
\n \u00a021,753,958\u00a0\u00a0
\n \u00a013,594,530\u00a0<\/p>\n
Basic and diluted net income per share\u00a0
\n $0.23\u00a0\u00a0
\n $0.29\u00a0<\/p>\n
\u00a0<\/p>\n
For the three months ended March 31, 2026 and
\n2025, 4,530,000 shares underlying outstanding warrants to an investor were excluded from the calculation of diluted loss per share as
\nthe warrants were anti-dilutive. The exercise price of the warrants is higher than the average price of ordinary shares during the periods,
\nso the warrants is \u201cout-of-the-money\u201d and result in an anti-dilutive effect on earnings per share.<\/p>\n
\u00a0<\/p>\n
NOTE 18 \u2013 GEOGRAPHICAL SALES AND SEGMENTS<\/p>\n
\u00a0<\/p>\n
All of the Company\u2019s operations are considered
\nby the chief operating decision maker to be aggregated in one reportable operating segment.<\/p>\n
\u00a0<\/p>\n
Information for the Company\u2019s sales by geographical
\narea for the three months ended March 31, 2026 and 2025 is as follows:<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n For three months ended
March 31,\u00a0<\/p>\n
\u00a0\u00a0
\n 2026\u00a0\u00a0
\n 2025\u00a0<\/p>\n
Domestic Sales\u00a0
\n $25,184,187\u00a0\u00a0
\n $21,184,973\u00a0<\/p>\n
International Sales\u00a0
\n \u00a0354,158\u00a0\u00a0
\n \u00a0492,591\u00a0<\/p>\n
Total\u00a0
\n $25,538,345\u00a0\u00a0
\n $21,677,564\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 19 \u2013 INCOME TAXES<\/p>\n
\u00a0<\/p>\n
Income tax expense includes a provision for federal,
\nstate and foreign taxes based on the annual estimated effective tax rate applicable to the Company and its subsidiaries, adjusted for
\nitems which are considered discrete to the period.<\/p>\n
\u00a0<\/p>\n
The effective tax rates on income before income
\ntaxes for the three months ended March 31, 2026 was 14.87%. The effective tax rate for the three months ended March 31, 2026 was lower
\nthan the PRC tax rate of 25.0% primarily due to the China Super R&D deduction.<\/p>\n
\u00a0<\/p>\n
The effective tax rates on income before income
\ntaxes for the three months ended March 31, 2025 was 16.14%. The effective tax rate for the three months ended March 31, 2025 was lower
\nthan the PRC tax rate of 25.0% primarily due to the China Super R&D deduction.<\/p>\n
\u00a0<\/p>\n
The Company has recorded $0 unrecognized benefit
\nas of March 31, 2026 and December 31, 2025, respectively. On the information currently available, the Company does not anticipate a significant
\nincrease or decrease to its unrecognized benefit within the next 12 months.<\/p>\n
\u00a0<\/p>\n
NOTE 20 \u2013 COMMITMENTS AND CONTINGENCIES\n<\/p>\n
\u00a0<\/p>\n
Lease Commitments<\/p>\n
\u00a0<\/p>\n
The following are the aggregate non-cancellable
\nfuture minimum lease payments under operating leases as of March 31, 2026:\u00a0<\/p>\n
\u00a0<\/p>\n
For the year ending March 31,\u00a0
\n Operating
Leases\u00a0<\/p>\n
2027\u00a0
\n $3,864\u00a0<\/p>\n
Total lease payments\u00a0
\n $3,864\u00a0<\/p>\n
\u00a0<\/p>\n
Contingencies<\/p>\n
\u00a0<\/p>\n
From time to time, the Company is involved in
\nvarious claims, legal proceedings, and other matters arising in the ordinary course of business. As of March 31, 2026, management is not
\naware of any pending or threatened litigation, claims, or assessments that would have a material adverse effect on the Company\u2019s
\nfinancial position, results of operations, or cash flows. The Company has no material contingent liabilities, including guarantees, letters
\nof credit, or legal disputes that require accrual or disclosure under ASC 450, Contingencies.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 21 \u2013 RELATED PARTY TRANSACTIONS<\/p>\n
\u00a0<\/p>\n
(a) Names and Relationship of Related Parties:<\/p>\n
\u00a0<\/p>\n
\u00a0 Existing Relationship with the Company Cenntro Holding Limited Under common control of Peter Zuguang Wang Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership) Under common control of Peter Zuguang Wang Peter Zuguang Wang Chairman of the Board of Directors of the Company Xinchang County Jiuxin Investment Management Partnership (LP) Under control of Mr. Mengxing He, the General Manager and one of the directors of Zhejiang Zhongchai\/Non-controlling interest of Zhejiang Zhongchai Raymond Z. Wang Chief Executive Officer and President Cenntro Inc. Under common control of Peter Zuguang Wang Cenntro Enterprise Limited Under common control of Peter Zuguang Wang <\/p>\n
\u00a0<\/p>\n
(b) Summary of Balances with Related Parties:<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n As of\u00a0<\/p>\n
\u00a0\u00a0
\n March\u00a031,
2026\u00a0\u00a0
\n December\u00a031,
2025\u00a0<\/p>\n
Due to related parties:\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0<\/p>\n
Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership)1\u00a0
\n $<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n $94,442\u00a0<\/p>\n
Cenntro Holding Limited2\u00a0
\n \u00a01,341,627\u00a0\u00a0
\n \u00a01,341,627\u00a0<\/p>\n
Peter Zuguang Wang3\u00a0
\n \u00a02,392,961\u00a0\u00a0
\n \u00a02,392,961\u00a0<\/p>\n
Xinchang County Jiuxin Investment Management Partnership (LP)4\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a01,429,981\u00a0<\/p>\n
Raymond Z. Wang5\u00a0
\n \u00a016,000\u00a0\u00a0
\n \u00a016,000\u00a0<\/p>\n
Total\u00a0
\n $3,750,588\u00a0\u00a0
\n $5,275,011\u00a0<\/p>\n
\u00a0<\/p>\n
All balances of due to related parties as of March
\n31, 2026 and December 31, 2025 were unsecured, interest-free and had no fixed terms of repayments.<\/p>\n
\u00a0<\/p>\n
The balance of due to related parties as of March
\n31, 2026 and December 31, 2025 consisted of:<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
\nSUBSIDIARIES<\/p>\n
\u00a0<\/p>\n
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS<\/p>\n
\u00a0<\/p>\n
NOTE 21 \u2013 RELATED PARTY TRANSACTIONS
\n(CONTINUED)<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n As of\u00a0<\/p>\n
\u00a0\u00a0
\n March\u00a031,\u00a0\u00a0
\n December\u00a031,\u00a0<\/p>\n
\u00a0\u00a0
\n 2026\u00a0\u00a0
\n 2025\u00a0<\/p>\n
Due from related parties-current:\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0<\/p>\n
Cenntro Inc.\u00a0
\n \u00a0490,000\u00a0\u00a0
\n \u00a0840,000\u00a0<\/p>\n
Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership)\u00a0
\n \u00a0<\/p>\n
–<\/p>\n
\u00a0\u00a0
\n \u00a0245,017\u00a0<\/p>\n
Cenntro Enterprise Limited\u00a0
\n \u00a021,400\u00a0\u00a0
\n \u00a021,400\u00a0<\/p>\n
Total\u00a0
\n $511,400\u00a0\u00a0
\n $1,106,417\u00a0<\/p>\n
\u00a0<\/p>\n
The balance of due from related parties as of
\nMarch 31, 2026 and December 31, 2025 consisted of:<\/p>\n
\u00a0<\/p>\n
Due from Cenntro Inc. was $0.49 million and $0.84
\nmillion as of March 31, 2026 and December 31, 2025, respectively. The amount of due from this related party represents a loan with an
\nannual interest rate of 7.5% and matured on April 14, 2026. Pursuant to a supplementary agreement between the parties, the period before
\nApril 15, 2025 was an interest-free period for the advanced funds. On April 14, 2026, the Company (through its subsidiary, Zhongchai Holding
\n(Hong Kong) Limited) and Cenntro Inc. entered into an Extension Agreement (the \u201cExtension Agreement\u201d), pursuant to which the
\nmaturity date of the loan was extended from April 14, 2026 to October 14, 2026. As of the date of the Extension Agreement, the outstanding
\nprincipal balance was approximately $0.55 million. During the extension period, interest accrues at 10% per annum (increased from the
\noriginal 7.5%), payable no later than the extended maturity date.<\/p>\n
\u00a0<\/p>\n
Due from Zhuhai Hengzhong Industrial Investment
\nFund (Limited Partnership) was nil and $0.25 million as of March 31, 2026 and December 31, 2025, respectively. The amount of due from
\nthis related party represents a loan with annual interest rate of 4.785%.<\/p>\n
\u00a0<\/p>\n
Due from Cenntro Enterprise limited was $0.02
\nmillion and $0.02 million as of March 31, 2026 and December 31, 2025, respectively. The amount of due from this related party represents
\nexpenses paid on behalf of the related party.<\/p>\n
\u00a0<\/p>\n
(b) Summary of Related Party dividend payment:<\/p>\n
\u00a0<\/p>\n
A summary of dividend payment declared by Zhejiang
\nZhongchai to related parties for the three months ended March 31, 2026 and 2025 are listed below:<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n For the three months
ended March 31,\u00a0<\/p>\n
\u00a0\u00a0
\n 2026\u00a0\u00a0
\n 2025\u00a0<\/p>\n
Dividend payment to related parties:\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0<\/p>\n
Xinchang County Jiuxin Investment Management Partnership (LP)\u00a0
\n \u00a01,444,711\u00a0\u00a0
\n \u00a0188,222\u00a0<\/p>\n
\u00a0<\/p>\n
NOTE 22 \u2013 SUBSEQUENT EVENTS<\/p>\n
\u00a0<\/p>\n
Management has evaluated subsequent events through
\nthe date that the financial statements were available to be issued, which is May 13, 2026. All subsequent events requiring recognition
\nas of March 31, 2026 have been incorporated into these financial statements and there are no other subsequent events that require disclosure
\nin accordance with FASB ASC Topic 855. \u00a0<\/p>\n
\u00a0<\/p>\n
ITEM 2. MANAGEMENT\u2019S DISCUSSION AND ANALYSIS
\nOF FINANCIAL CONDITION AND RESULTS OF OPERATION<\/p>\n
\u00a0<\/p>\n
The following discussion and analysis of financial
\ncondition and results of operations relates to the operations and financial condition reported in the consolidated financial statements
\nof the Company thereto, which appear elsewhere in this Quarterly Report, and should be read in conjunction with such financial statements
\nand related notes included in this Quarterly Report. Except for the historical information contained herein, the following discussion,
\nas well as other information in this Quarterly Report, contain \u201cforward-looking statements,\u201d within the meaning of Section
\n27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the \u201cExchange
\nAct\u201d), and are subject to the \u201csafe harbor\u201d created by those sections. Actual results and the timing of the events may
\ndiffer materially from those contained in these forward-looking statements due to many factors, including those discussed in the \u201cForward-Looking
\nStatements\u201d set forth elsewhere in this Quarterly Report.<\/p>\n
\u00a0\u00a0<\/p>\n
Overview<\/p>\n
\u00a0<\/p>\n
Greenland designs, develops, manufactures and
\nsells components and products for the global material handling industries.<\/p>\n
\u00a0<\/p>\n
Through its subsidiaries in the PRC, Greenland
\noffers transmission products, which are key components for forklift trucks used in manufacturing and logistic applications, such as factories,
\nworkshops, warehouses, fulfilment centers, shipyards, and seaports. Forklifts play an important role in the logistic systems of many companies
\nacross different industries in China and globally. Generally, industries with the largest demand for forklifts include transportation,
\nwarehousing logistics, electrical machinery, and automobile industries. Greenland\u2019s revenue increased from approximately $21.68
\nmillion for the three months ended March 31, 2025 to $25.54 million for the three months ended March 31, 2026. The increase in revenue
\nwas primarily the result of an increase of approximately $3.99 million in the Company\u2019s sales volume of transmission products for
\nthe three months ended March 31, 2026. Based on its revenues for the three months ended March 31, 2026 and 2025, Greenland believes that
\nit is one of the major developers and manufacturers of transmission products for small and medium-sized forklift trucks in China.<\/p>\n
\u00a0<\/p>\n
Greenland\u2019s transmission products are used
\nin 1-ton to 15-tons forklift trucks, some with mechanical shift and some with automatic shift. Greenland sells these transmission products
\ndirectly to forklift-truck manufacturers. For the three months ended March 31, 2026 and 2025, Greenland sold an aggregate of 46,027 and
\n38,734 sets of transmission products, respectively, to more than 100 forklift manufacturers in the PRC.<\/p>\n
\u00a0<\/p>\n
In January 2020, Greenland formed HEVI to focus
\non the production and sale of electric industrial vehicles to meet the increasing demand for electric industrial vehicles and machinery
\npowered by sustainable energy to reduce air pollution and lower carbon emissions. HEVI is a wholly owned subsidiary of Greenland incorporated
\nunder the laws of the State of Delaware. Prior to 2025, HEVI had been manufacturing and selling electric industrial vehicle products.
\nHowever, substantially all of HEVI\u2019s business operations have been suspended since 2025 due to uncertainty regarding tariff policy.
\nHEVI intends to resume operations once the policy environment stabilizes. HEVI\u2019s electric industrial vehicle products (which are
\nnot currently being offered as a result of the suspension of its operations) include GEF-series electric forklifts, a series of lithium
\npowered forklifts with three models ranging in size from 1.8 tons to 3.5 tons, GEL-1800, a 1.8-ton rated load lithium powered electric
\nwheeled front loader, GEX-8000, an all-electric 8.0 ton rated load lithium powered wheeled excavator, and GEL-5000, an all-electric 5.0
\nton rated load lithium wheeled front loader. In addition, in April 2023, HEVI introduced a line of mobile DC battery chargers that support
\nDC powered EV applications in the North America market. In July 2024, HEVI announced a partnership with Lonking Holdings Limited to develop
\nand distribute heavy electric machinery and related technology specialized for the U.S. market. In August 2024, HEVI launched its H55L
\nall-electric wheeled front-end loader, which can lift up to six tons in indoor and outdoor applications without the mess and emissions
\nof diesel, and the H65L all-electric wheeled front-end loader, a lithium battery wheeled front-end loader.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Greenland is the parent company of HEVI and Greenland
\nHolding Enterprises Inc. (\u201cGreenland Holding\u201d), a holding company formed in the State of Delaware on August 28, 2023, which
\nin turn acts as the holding company for Zhongchai Holding (Hong Kong) Limited, a holding company formed under the laws of Hong Kong on
\nApril 23, 2009 (\u201cZhongchai Holding\u201d). Zhongchai Holding\u2019s subsidiaries include Zhejiang Zhongchai Machinery Co. Ltd.,
\nan operating company formed under the laws of the PRC in 2005, Hangzhou Greenland Energy Technologies Co., Ltd. (\u201cHangzhou Greenland\u201d),
\nan operating company formed under the laws of the PRC in 2019, and Hengyu Capital Limited, a company formed in Hong Kong on August 16,
\n2022 (\u201cHengyu Capital\u201d). Through Zhongchai Holding and its subsidiaries, Greenland develops and manufactures traditional transmission
\nproducts for material handling machinery in the PRC.<\/p>\n
\u00a0<\/p>\n
Greenland was incorporated on December 28, 2017
\nas a British Virgin Islands business company with limited liability. Following the Business Combination (as described and defined below)
\nin October 2019, the Company changed its name from Greenland Acquisition Corporation to Greenland Technologies Holding Corporation.<\/p>\n
\u00a0<\/p>\n
Results of Operations<\/p>\n
\u00a0<\/p>\n
For the three months ended March 31, 2026
\nand 2025<\/p>\n
\u00a0<\/p>\n
Overview<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n For the three months ended March 31\u00a0<\/p>\n
\u00a0\u00a0
\n 2026\u00a0\u00a0
\n 2025\u00a0\u00a0
\n Change\u00a0\u00a0
\n Variance\u00a0<\/p>\n
\u00a0\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0\u00a0
\n \u00a0\u00a0<\/p>\n
Revenues\u00a0
\n $25,538,345\u00a0\u00a0
\n $21,677,564\u00a0\u00a0
\n $3,860,781\u00a0\u00a0
\n \u00a017.8%<\/p>\n
Cost of Goods Sold\u00a0
\n \u00a016,779,083\u00a0\u00a0
\n \u00a015,016,614\u00a0\u00a0
\n \u00a01,762,469\u00a0\u00a0
\n \u00a011.7%<\/p>\n
Gross Profit\u00a0
\n \u00a08,759,262\u00a0\u00a0
\n \u00a06,660,950\u00a0\u00a0
\n \u00a02,098,312\u00a0\u00a0
\n \u00a031.5%<\/p>\n
Selling expenses\u00a0
\n \u00a0419,014\u00a0\u00a0
\n \u00a0331,809\u00a0\u00a0
\n \u00a087,205\u00a0\u00a0
\n \u00a026.3%<\/p>\n
General and administrative expenses\u00a0
\n \u00a01,842,428\u00a0\u00a0
\n \u00a01,438,988\u00a0\u00a0
\n \u00a0403,440\u00a0\u00a0
\n \u00a028.0%<\/p>\n
Research and development expenses\u00a0
\n \u00a0778,219\u00a0\u00a0
\n \u00a081,457\u00a0\u00a0
\n \u00a0696,762\u00a0\u00a0
\n \u00a0855.4%<\/p>\n
Total Operating Expenses\u00a0
\n \u00a03,039,661\u00a0\u00a0
\n \u00a01,852,254\u00a0\u00a0
\n \u00a01,187,407\u00a0\u00a0
\n \u00a064.1%<\/p>\n
Income from operations\u00a0
\n \u00a05,719,601\u00a0\u00a0
\n \u00a04,808,696\u00a0\u00a0
\n \u00a0910,905\u00a0\u00a0
\n \u00a018.9%<\/p>\n
Interest income\u00a0
\n \u00a0519,843\u00a0\u00a0
\n \u00a0141,040\u00a0\u00a0
\n \u00a0378,803\u00a0\u00a0
\n \u00a0268.6%<\/p>\n
Interest expenses\u00a0
\n \u00a0(33,380)\u00a0
\n \u00a0–\u00a0\u00a0
\n \u00a0(33,380)\u00a0
\n \u00a0(100.0)%<\/p>\n
Change in fair value of the warrant liability\u00a0
\n \u00a0(52,927)\u00a0
\n \u00a0209,294\u00a0\u00a0
\n \u00a0(262,221)\u00a0
\n \u00a0125.3%<\/p>\n
Other income\u00a0
\n \u00a0599,189\u00a0\u00a0
\n \u00a0282,081\u00a0\u00a0
\n \u00a0317,108\u00a0\u00a0
\n \u00a0112.4%<\/p>\n
Income before income tax\u00a0
\n \u00a06,752,326\u00a0\u00a0
\n \u00a05,441,111\u00a0\u00a0
\n \u00a01,311,215\u00a0\u00a0
\n \u00a024.1%<\/p>\n
Income tax expense\u00a0
\n \u00a01,003,895\u00a0\u00a0
\n \u00a0878,275\u00a0\u00a0
\n \u00a0125,620\u00a0\u00a0
\n \u00a014.3%<\/p>\n
Net income\u00a0
\n \u00a05,748,431\u00a0\u00a0
\n \u00a04,562,836\u00a0\u00a0
\n \u00a01,185,595\u00a0\u00a0
\n \u00a026.0%<\/p>\n
\u00a0<\/p>\n
Components of Results of Operations<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n For the three months ended March 31\u00a0<\/p>\n
Component of Results of Operations\u00a0
\n 2026\u00a0\u00a0
\n 2025\u00a0<\/p>\n
\u00a0\u00a0
\n \u00a0\u00a0<\/p>\n
Revenues\u00a0
\n $25,538,345\u00a0\u00a0
\n $21,677,564\u00a0<\/p>\n
Cost of Goods Sold\u00a0
\n \u00a016,779,083\u00a0\u00a0
\n \u00a015,016,614\u00a0<\/p>\n
Gross Profit\u00a0
\n \u00a08,759,262\u00a0\u00a0
\n \u00a06,660,950\u00a0<\/p>\n
Operating Expenses\u00a0
\n \u00a03,039,661\u00a0\u00a0
\n \u00a01,852,254\u00a0<\/p>\n
Net Income\u00a0
\n \u00a05,748,431\u00a0\u00a0
\n \u00a04,562,836\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Revenue<\/p>\n
\u00a0<\/p>\n
Greenland\u2019s revenue was approximately $25.54
\nmillion for the three months ended March 31, 2026, representing an increase of approximately $3.86 million, or 17.8%, as compared to that
\nof approximately $21.68 million for the three months ended March 31, 2025. The increase in revenue was primarily a result of the increase
\nof approximately $3.99 million in the Company\u2019s sales volume of transmission products for the three months ended March 31, 2026.
\nFor the three months ended March 31, 2026, the Company sold an aggregate of 46,027 sets of transmission products, compared to 38,734 sets
\nsold in the three months ended March 31, 2025. This represents an increase of approximately 7,293 units, or approximately 18.8%. The sales
\nvolume growth was driven by sustained demand from the Company\u2019s customer base in the material handling sector.<\/p>\n
\u00a0\u00a0<\/p>\n
Cost of Goods Sold<\/p>\n
\u00a0<\/p>\n
Greenland\u2019s cost of goods sold consists
\nprimarily of material costs, freight charges, purchasing and receiving costs, inspection costs, internal transfer costs, wages, employee
\ncompensation, amortization, depreciation and related costs, which are directly attributable to the Company\u2019s manufacturing activities.
\nThe write down of inventory using the net realizable value impairment test is also recorded in cost of goods sold. The total cost of goods
\nsold was approximately $16.78 million for the three months ended March 31, 2026, representing an increase of approximately $1.76 million,
\nor 11.7%, as compared to that of approximately $15.02 million for the three months ended March 31, 2025. Cost of goods sold increased
\ndue to the increase in our sales volume.<\/p>\n
\u00a0<\/p>\n
Gross Profit<\/p>\n
\u00a0<\/p>\n
Greenland\u2019s gross profit was approximately
\n$8.76 million for the three months ended March 31, 2026, representing an increase of approximately $2.10 million, or 31.5%, as compared
\nto that of approximately $6.66 million for the three months ended March 31, 2025. For the three months ended March 31, 2026 and 2025,
\nGreenland\u2019s gross margins were approximately 34.3% and 30.7%, respectively. The increase in gross profit in the three months ended
\nMarch 31, 2026 compared to the three months ended March 31, 2025 was primarily due to the increase in our sales volume and a shift in
\nGreenland\u2019s product mix towards higher value and more sophisticated products, such as hydraulic transmission products.<\/p>\n
\u00a0<\/p>\n
Operating Expenses<\/p>\n
\u00a0<\/p>\n
Greenland\u2019s operating expenses consist of
\nselling expenses, general and administrative expenses and research and development expenses.<\/p>\n
\u00a0<\/p>\n
Selling Expenses<\/p>\n
\u00a0<\/p>\n
Selling expenses mainly comprise of operating
\nexpenses such as sales staff payroll, traveling expenses, and transportation expenses. Our selling expenses were approximately $0.42 million
\nfor the three months ended March 31, 2026, representing an increase of approximately $0.09 million, or 26.3%, as compared to approximately
\n$0.33 million for the three months ended March 31, 2025. The increase in selling expenses was mainly due to an increase in the shipping
\nexpenses for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.<\/p>\n
\u00a0<\/p>\n
General and Administrative Expenses<\/p>\n
\u00a0<\/p>\n
General and administrative expenses comprise of
\nmanagement and staff salaries, employee benefits, depreciation for office facility and office furniture and equipment, travel and entertainment
\nexpenses, legal and accounting fees, financial consulting fees, and other office expenses. General and administrative expenses were approximately
\n$1.84 million for the three months ended March 31, 2026, representing an increase of approximately $0.40 million, or 28.0%, as compared
\nto that of approximately $1.44 million for the three months ended March 31, 2025. The increase in general and administrative expenses
\nwas mainly due to an increase of approximately $0.53 million in consultancy fees offset by a decrease of approximately $0.09 million in
\nemployee salary for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Research and Development (R&D) Expenses<\/p>\n
\u00a0<\/p>\n
R&D expenses consist of R&D personnel
\ncompensation, costs of materials used in R&D projects, and depreciation costs for research-related equipment. R&D expenses were
\napproximately $0.78 million for the three months ended March 31, 2026, representing an increase of approximately $0.70 million, or 855.4%,
\nas compared to that of approximately $0.08 million for the three months ended March 31, 2025. Such increase was primarily attributable
\nto a significant increase in the Company\u2019s R&D activities during the three months ended March 31, 2026.<\/p>\n
\u00a0<\/p>\n
Income from Operations<\/p>\n
\u00a0<\/p>\n
Income from operations for the three months ended
\nMarch 31, 2026 was approximately $5.72 million, representing an increase of approximately $0.91 million, as compared to that of approximately
\n$4.81 million for the three months ended March 31, 2025.<\/p>\n
\u00a0<\/p>\n
Interest Income and Interest Expenses<\/p>\n
\u00a0<\/p>\n
Greenland\u2019s interest income was approximately
\n$0.52\u00a0million\u00a0for the three months ended March 31, 2026, representing an increase of approximately $0.38\u00a0million, or 268.6%,
\nas compared to that of approximately $0.14\u00a0million\u00a0for the three months ended March 31, 2025. The increase in interest income
\nwas because more cash was deposited in banks during the three months ended March 31, 2026 as compared to the three months ended March
\n31, 2025.<\/p>\n
\u00a0<\/p>\n
Greenland\u2019s interest expenses were approximately
\n$0.03\u00a0million for the three months ended March 31, 2026, representing an increase of approximately $0.03 million, or 100.0%, as compared
\nto nil for the three months ended March 31, 2025. The increase was primarily due to an increase in interest expense on the discounted
\nnote for the three months ended March 31, 2026, compared to those for the three months ended March 31, 2025.<\/p>\n
\u00a0<\/p>\n
Other Income<\/p>\n
\u00a0<\/p>\n
Greenland\u2019s other income was approximately
\n$0.60 million for the three months ended March 31, 2026, representing an increase of approximately $0.32 million, or 112.4%, as compared
\nto approximately $0.28 million for the three months ended March 31, 2025. The increase was primarily due to an increase in grant income
\nfor the three months ended March 31, 2026, compared to those for the three months ended March 31, 2025.<\/p>\n
\u00a0<\/p>\n
Income Taxes<\/p>\n
\u00a0<\/p>\n
Greenland\u2019s income tax was approximately
\n$1.00 million for the three months ended March 31, 2026, as compared to that of approximately $0.88 million for the three months ended
\nMarch 31, 2025.<\/p>\n
\u00a0<\/p>\n
Zhejiang Zhongchai obtained a \u201chigh-tech
\nenterprise\u201d status near the end of the fiscal year of 2022. Such status allows Zhejiang Zhongchai to enjoy a reduced statutory income
\ntax rate of 15%, rather than the standard PRC corporate income tax rate of 25%. Income tax for the three months ended March 31, 2026 and
\n2025 were calculated based on a rate of 15%. The \u201chigh-tech enterprise\u201d status is reevaluated by relevant Chinese government
\nagencies every three years. Zhejiang Zhongchai\u2019s current \u201chigh-tech enterprise\u201d status will be reevaluated near the
\nend of 2028.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Greenland\u2019s other PRC subsidiaries are subject
\nto different income tax rates. Hangzhou Greenland, the wholly owned subsidiary of Zhongchai Holding, is subject to the 25% standard income
\ntax rate. Greenland is a holding company registered in the British Virgin Islands and is not subject to tax on income or capital gains
\nunder the current British Virgin Islands law. In addition, upon payment of dividends to its shareholders, the Company will not be subject
\nto any British Virgin Islands withholding tax.<\/p>\n
\u00a0<\/p>\n
On January 14, 2020, Greenland established HEVI,
\nits wholly owned subsidiary in the state of Delaware. HEVI promotes sales of sustainable alternative products for the heavy industrial
\nequipment industry, including electric industrial vehicles, in the North American market. On December 22, 2017, the U.S. federal government
\nenacted the 2017 Tax Act. The 2017 Tax Act includes a number of changes in existing tax law impacting businesses, including the transition
\ntax, a one-time deemed repatriation of cumulative undistributed foreign earnings and a permanent reduction in the U.S. federal statutory
\nrate from 35% to 21%, effective on January 1, 2018. ASC 740 requires companies to recognize the effect of tax law changes in the period
\nof enactment, and accordingly, the effects must be recognized on companies\u2019 calendar year-end financial statements, even though
\nthe effective date for most provisions is January 1, 2018. Since HEVI was established in 2020, the one-time transition tax did not have
\nany impact on the Company\u2019s tax provision and there was no undistributed accumulated earnings and profits as of March 31, 2026.<\/p>\n
\u00a0<\/p>\n
On March 26, 2024, the Company entered into a
\nshare exchange agreement with Greenland Holding Enterprises Inc. and Zhongchai Holding (the \u201c2024 Share Exchange Agreement\u201d).
\nPursuant to the 2024 Share Exchange Agreement, Greenland Holding Enterprises Inc. issued 100 shares of common stock to the Company, par
\nvalue $0.01 per share, representing all issued and outstanding share capital of Greenland Holding Enterprises Inc., in exchange for 100%
\nof the equity interest of Zhongchai Holding. Greenland Holding Enterprises Inc. is a holding company registered on August 28, 2023 in
\nthe State of Delaware with no material operations. Since Greenland Holding Enterprises Inc. was established in 2023, the one-time transition
\ntax did not have any impact on the Company\u2019s tax provision and there was no undistributed accumulated earnings and profits as of
\nas of March 31, 2026.<\/p>\n
\u00a0<\/p>\n
Net Income<\/p>\n
\u00a0<\/p>\n
Our net income was approximately $5.75 million
\nfor the three months ended March 31, 2026, representing an increase of approximately $1.19 million, as compared to that of approximately
\n$4.56 million for the three months ended March 31, 2025.<\/p>\n
\u00a0<\/p>\n
Liquidity and Capital Resources<\/p>\n
\u00a0<\/p>\n
Greenland is a holding company incorporated in
\nthe British Virgin Islands. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of their accumulated profits,
\nif any, determined in accordance with PRC accounting standards and regulations. In addition, our PRC subsidiaries are required to set
\naside at least 10% of their respective accumulated profits each year, if any, to fund certain reserve funds until the total amount set
\naside reaches 50% of their respective registered capital. Our PRC subsidiaries may also allocate a portion of their after-tax profits
\nbased on PRC accounting standards to employee welfare and bonus funds at their discretion. These reserves are not distributable as cash
\ndividends.<\/p>\n
\u00a0<\/p>\n
We have funded working capital and other capital
\nrequirements primarily by equity contributions, cash flow from operations, short-term bank loans and bank acceptance notes, and long-term
\nbank loans. Cash is required primarily to purchase raw materials, repay debts and pay salaries, office expenses, income taxes and other
\noperating expenses.<\/p>\n
\u00a0<\/p>\n
For the three months ended March 31, 2026, our
\nPRC subsidiary, Zhejiang Zhongchai, paid approximately $1.44 million in dividends, extended approximately $4.00 million in loans to third
\nparties, and maintained approximately $10.61 million in cash on hand. We plan to maintain the current debt structure and rely on government-supported
\nloans at lower cost, if necessary.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Government subsidies mainly consist of an incentive
\ngranted by the Chinese government to encourage transformation of fixed assets in China and other miscellaneous subsidies from the Chinese
\ngovernment.\u00a0Government subsidies are recognized when there is reasonable assurance that the subsidy will be received, and all conditions
\nbe completed. Total government subsidies recorded under long-term liabilities were $1.04 million and $1.08 million as of March 31, 2026
\nand December 31, 2025, respectively.<\/p>\n
\u00a0<\/p>\n
The Company currently plans to fund its operations
\nmainly through cash flow from its operations, renewal of bank borrowings, additional equity financing, and continuation of financial support
\nfrom its shareholders and affiliates controlled by its principal shareholders, if necessary. The Company might implement a stricter policy
\non sales to less creditworthy customers and plans to continue to improve its collection efforts on accounts with outstanding balances.
\nThe Company is actively working with customers and suppliers and expects to fully collect the remaining balance.<\/p>\n
\u00a0<\/p>\n
We believe that the Company has sufficient cash,
\neven with uncertainty in the Company\u2019s manufacturing and sale of electric industrial heavy equipment in the future and potential
\nfluctuations in demand for our transmission products. We believe our existing funding sources will be sufficient to fund our operations
\nfor the next 12 months. We remain confident and expect to continue to generate positive cash flow from our operations.<\/p>\n
\u00a0<\/p>\n
We may need additional cash resources in the future,
\nif the Company experiences failure in collecting account receivables, changes in business conditions, changes in financial conditions,
\nor other developments. We may also need additional cash resources, if the Company wishes to pursue opportunities for investment, acquisition,
\nstrategic cooperation, or other similar actions. If the Company\u2019s management and its board of directors determine that the cash
\nrequired for specific corporate activities exceed Greenland\u2019s cash and cash equivalents on hand, the Company may issue debt or equity
\nsecurities to raise cash.<\/p>\n
\u00a0<\/p>\n
Historically, we have expended considerable resources
\non building a new factory and paid off a considerable amount of debt, resulting in less available cash. However, we anticipate that our
\ncash flow will continue to improve for the remainder of fiscal year 2026. More specifically, Zhejiang Zhongchai can pledge the deed of
\nits factory as a collateral to banks in order to obtain loans, refinance expiring loans, restructure short-term loans, and fund other
\nworking capital needs upon acceptable terms to Greenland.<\/p>\n
\u00a0<\/p>\n
Cash and Cash Equivalents<\/p>\n
\u00a0<\/p>\n
Cash equivalents refer to all highly liquid investments
\npurchased with original maturity of three months or less. As of March 31, 2026, Greenland had approximately $10.39 million of cash and
\ncash equivalents, representing an increase of approximately $2.62 million, or 33.66%, as compared to approximately $7.78 million as of
\nDecember 31, 2025. The increase of cash and cash equivalents was mainly due to a decrease in short-term investment, as compared to that
\nas of December 31, 2025.<\/p>\n
\u00a0<\/p>\n
Restricted Cash<\/p>\n
\u00a0<\/p>\n
Restricted cash represents the amount held by
\na bank as security for bank acceptance notes and therefore is not available for use until the bank acceptance notes are fulfilled or expired,
\nwhich typically takes less than twelve months. As of March 31, 2026, Greenland had approximately $0.22 million of restricted cash, representing
\nan increase of approximately $0.14 million, or 200.59%, as compared to that of approximately $0.07 million as of December 31, 2025. The
\nincrease in restricted cash was due to an increase in notes payable collateralized by cash.<\/p>\n
\u00a0<\/p>\n
Accounts Receivable<\/p>\n
\u00a0<\/p>\n
As of March 31, 2026, Greenland had approximately
\n$25.89 million of accounts receivables, an increase of approximately $8.63 million, or 50.00%, as compared to approximately $17.26 million
\nas of December 31, 2025. The increase in accounts receivable was due to the increase in our sales volume and our slowed-down efforts in
\nreceivables collections.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Greenland recorded approximately $0.02 million
\nand $0.02 million of allowance for expected credit losses as of March 31, 2026 and December 31, 2025, respectively. Greenland conducted
\nan aging analysis of each customer\u2019s delinquent payments to determine whether allowance for expected credit losses is adequate.
\nIn establishing the allowance for expected credit losses, Greenland considers historical experience, economic environment, and expected
\ncollectability of past due receivables. An estimate of expected credit losses is recorded when collection of the full amount is no longer
\nprobable. When bad debts are identified, such debts are written off against the allowance for expected credit losses. Greenland will continuously
\nassess its expected credit losses based on the credit history of and relationships with its customers on a regular basis to determine
\nwhether its allowance for expected credit losses on its accounts receivable is adequate. Greenland believes that its collection policies
\nare generally in line with the transmissions industry\u2019s standard in the PRC.<\/p>\n
\u00a0<\/p>\n
Due from Related Parties<\/p>\n
\u00a0<\/p>\n
Due from related parties was $0.51 million and
\n$1.11 million as of March 31, 2026 and December 31, 2025, respectively. The balance of due from related parties as of March 31, 2026 and
\nDecember 31, 2025 consisted primarily of the following: (i) other receivable from Zhuhai Hengzhong Industrial Investment Fund (Limited
\nPartnership) of nil and $0.25 million as of March 31, 2026 and December 31, 2025, respectively, representing a loan with an annual interest
\nrate of 4.785%; (ii) other receivable from Cenntro Inc. was $0.49 million and $0.84 million as of March 31, 2026 and December 31, 2025,
\nrespectively, representing a loan with an annual interest rate of 7.5% that will mature before April 14, 2026; and (iii) other receivable
\nfrom Cenntro Enterprise Limited was $0.02 million and $0.02 million as of March 31, 2026 and December 31, 2025, respectively, representing
\nexpenses paid on behalf of the related party.<\/p>\n
\u00a0<\/p>\n
Notes Receivable<\/p>\n
\u00a0<\/p>\n
As of March 31, 2026, Greenland had approximately
\n$18.73 million of notes receivable, which Greenland expects to collect within the next twelve months. The increase was approximately $4.03
\nmillion, or 27.40%, as compared to approximately $14.70 million as of December 31, 2025.\u00a0<\/p>\n
\u00a0<\/p>\n
Working Capital\u00a0<\/p>\n
\u00a0<\/p>\n
Our working capital was approximately $56.08 million
\nas of March 31, 2026, as compared to $46.97 million as of December 31, 2025. The increase in working capital of $9.11 million was primarily
\nattributable to an increase in accounts receivable and prepayments and other current assets.<\/p>\n
\u00a0<\/p>\n
Cash Flow<\/p>\n
\u00a0<\/p>\n
\u00a0\u00a0
\n For\u00a0the\u00a0Three\u00a0Months\u00a0Ended
March 31,\u00a0<\/p>\n
\u00a0\u00a0
\n 2026\u00a0\u00a0
\n 2025\u00a0<\/p>\n
\u00a0\u00a0
\n \u00a0\u00a0<\/p>\n
Net cash (used in) provided by operating activities\u00a0
\n $(1,186,337)\u00a0
\n $1,244,666\u00a0<\/p>\n
Net cash used in investing activities\u00a0
\n $(4,172,528)\u00a0
\n $(701,864)<\/p>\n
Net cash provided by(used in) financing activities\u00a0
\n $8,136,183\u00a0\u00a0
\n $(1,765,716)<\/p>\n
Net decrease in cash and cash equivalents and restricted cash\u00a0
\n $2,777,318\u00a0\u00a0
\n $(1,222,914)<\/p>\n
Effect of exchange rate changes on cash and cash equivalents\u00a0
\n $(17,011)\u00a0
\n $157,967\u00a0<\/p>\n
Cash and cash equivalents and restricted cash at beginning of period\u00a0
\n $7,846,870\u00a0\u00a0
\n $8,611,795\u00a0<\/p>\n
Cash and cash equivalents and restricted cash at end of period\u00a0
\n $10,607,177\u00a0\u00a0
\n $7,546,848\u00a0<\/p>\n
\u00a0<\/p>\n
Operating Activities\u00a0<\/p>\n
\u00a0<\/p>\n
Net cash used in operating activities for the
\nthree months ended March 31, 2026 was approximately $1.19 million, resulting primarily from net income of approximately $5.75 million,
\nadjusted for non-cash item of depreciation and amortization expenses of approximately $0.52 million, change in fair value of warrant liability
\nof approximately $0.05 million, change in accrued expense of approximately $(1.82) million and changes in operating assets and liabilities
\nincluding: (i) an increase of approximately $8.36 million in accounts receivable due to the increase in our sales volume, (ii) an increase
\nof approximately $3.81 million in notes receivables, and (iii) an increase of approximately $7.58 million in accounts payable because
\nwe extended the payment cycle.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Net cash provided by operating activities for
\nthe three months ended March 31, 2025 was approximately $1.24 million, primarily attributable to net income of approximately $4.56 million,
\nadjusted for non-cash item of depreciation and amortization expenses of approximately $0.52 million, change in fair value of warrant liability
\nof approximately $(0.21) million, change in accrued expense of approximately $(2.59) million and changes in operating assets and liabilities
\nincluding: (i) an increase of approximately $6.06 million in accounts payable because we extended the payment cycle, (ii) an increase
\nof approximately $5.53 million in accounts receivable due to our slowed-down efforts in receivables collections, (iii) a decrease of approximately
\n$2.18 million in notes receivables because we prioritized collecting cash rather than accepting notes receivables, and (\u2173) a decrease
\nof approximately $5.22 million due to related parties.<\/p>\n
\u00a0<\/p>\n
Investing Activities<\/p>\n
\u00a0<\/p>\n
Net cash used in investing activities resulted
\nin cash outflow of approximately $4.17 million for the three months ended March 31, 2026. Cash used in investing activities for the three
\nmonths ended March 31, 2026 was mainly due to approximately $0.17 million used for purchases of long-term assets and approximately $4.00
\nmillion loaned to third parties.<\/p>\n
\u00a0<\/p>\n
Net cash used in investing activities resulted
\nin cash outflow of approximately $0.70 million for the three months ended March 31, 2025. Cash used in investing activities for the three
\nmonths ended March 31, 2025 was mainly due to approximately $0.01 million used for purchases of long-term assets and approximately $0.69
\nmillion loaned to third parties.<\/p>\n
\u00a0<\/p>\n
Financing Activities<\/p>\n
\u00a0<\/p>\n
Net cash provided by financing activities resulted
\nin a cash inflow of approximately $8.14 million for the three months ended March 31, 2026, which was mainly attributable to approximately
\n$3.49 million change in notes payable and approximately $5.59 million proceeds from equity and debt financing offset by approximately
\n$1.44 million in dividend.<\/p>\n
\u00a0<\/p>\n
Net cash used in financing activities resulted
\nin a cash outflow of approximately $1.77 million for the three months ended March 31, 2025, which was mainly attributable to approximately
\n$1.00 million in repayment of loans from related parties and approximately $0.58 million change in notes payable.<\/p>\n
\u00a0<\/p>\n
Credit Risk<\/p>\n
\u00a0<\/p>\n
Assets that potentially subject the Company to
\nsignificant concentration of credit risk primarily consist of cash and cash equivalents. The maximum exposure of such assets to credit
\nrisk is their carrying amount as at the balance sheet dates. As of March 31, 2026, cash and cash equivalents of $40,412,787 were deposited
\nin financial institutions in the PRC, and each bank account is insured by the PRC government with the maximum limit of RMB500,000 (equivalent
\nto $69,800). To limit exposure to credit risk relating to deposits, the Company primarily places cash and cash equivalent with large financial
\ninstitutions in China which management believes are of high credit quality and the Company also continually monitors their credit worthiness.<\/p>\n
\u00a0<\/p>\n
A significant portion of the Company\u2019s operations
\nare conducted in the PRC. Accordingly, the Company\u2019s business, financial condition and results of operations may be influenced by
\nthe political, economic and legal environments in the PRC as well as by the general state of the PRC\u2019s economy. In addition, the
\nCompany\u2019s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary
\nmeasures, currency conversion and remittance abroad, rates and methods of taxation among other factors.<\/p>\n
\u00a0<\/p>\n
Currency Exchange Risk<\/p>\n
\u00a0<\/p>\n
The Company cannot guarantee that the current
\nexchange rate will remain steady. Therefore, there is a possibility that the Company could post the same amount of profit for two comparable
\nperiods and yet, because of the fluctuating exchange rate, record higher or lower profit depending on exchange rate of RMB converted to
\nU.S. dollars on the relevant dates. The exchange rate could fluctuate depending on changes in the political and economic environment without
\nnotice.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Concentration risks<\/p>\n
\u00a0<\/p>\n
Accounts receivable are typically unsecured and
\nderived from goods sold to customers that are located primarily in China, thereby exposed to credit risk. The risk is mitigated by the
\nCompany\u2019s assessment of customers\u2019 creditworthiness and its ongoing monitoring of outstanding balances. The Company has a
\nconcentration of its receivables with specific customers. As of March\u00a031, 2026, one customer accounted for 16.44% of total accounts
\nreceivable. As of December\u00a031, 2025, three customers accounted for 11.24%, 10.24% and 10.12% of total accounts receivable, respectively.
\nNo other customers accounted for more than 10% of the Company\u2019s total accounts receivable as of March\u00a031, 2026 and December
\n31, 2025.<\/p>\n
\u00a0<\/p>\n
For the three months ended March\u00a031, 2026,
\none customer accounted for 16.69% of total revenue. For the three months ended March\u00a031, 2025, one customer accounted for 17.77%
\nof total revenue. No other customers accounted for more than 10% of the Company\u2019s total revenue for the three months ended March\u00a031,
\n2026 and 2025.<\/p>\n
\u00a0<\/p>\n
There were no suppliers representing more than
\n10% of the Company\u2019s total purchases for the three months ended March\u00a031, 2026 and 2025, respectively.<\/p>\n
\u00a0<\/p>\n
Critical Accounting Policies and Estimates<\/p>\n
\u00a0<\/p>\n
We prepare our consolidated financial statements
\nin accordance with U.S. GAAP. In applying accounting principles, it is often required to use estimates. These estimates consider the facts,
\ncircumstances and information available, and may be based on subjective inputs, assumptions and information known and unknown to us. Material
\nchanges in certain of the estimates that we use could potentially affect, by a material amount, our consolidated financial position and
\nresults of operations. Although results may vary, we believe our estimates are reasonable and appropriate. See Note 2 to our consolidated
\nfinancial statements included in \u201cItem 8 – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA\u201d for a summary of our significant accounting
\npolicies. The following describes certain of our significant accounting policies that involve more subjective and complex judgments where
\nthe effect on our consolidated financial position and operating performance could be material.<\/p>\n
\u00a0<\/p>\n
Revenue Recognition<\/p>\n
\u00a0<\/p>\n
In accordance with ASC Topic 606, \u201cRevenue
\nfrom Contracts with Customers,\u201d the Company recognizes revenues when goods or services are transferred to customers in an amount
\nthat reflects the consideration which the Company expects to receive in exchange for those goods or services. In determining when and
\nhow revenues are recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of
\ncontract with customer\u037e (ii) determination of performance obligations\u037e (iii) measurement of the transaction price\u037e (iv)
\nallocation of the transaction price to the performance obligations, and (v) recognition of revenues when (or as) the Company satisfies
\neach performance obligation. The Company derives revenues from the processing, distribution and sale of its products. The Company recognizes
\nits revenues net of VAT. The Company is subject to VAT which had been levied at the rate of 17% on the invoiced value of sales until April
\n30, 2018, after which date the rate was reduced to 16%. VAT rate was further reduced to 13% starting from April 1, 2019. Output VAT is
\nborne by customers in addition to the invoiced value of sales and input VAT is borne by the Company in addition to the invoiced value
\nof purchases to the extent not refunded for export sales.<\/p>\n
\u00a0<\/p>\n
Revenues are recognized at a point in time once
\nthe Company has determined that the customer has obtained control over the product. Control is typically deemed to have been transferred
\nto the customer when the performance obligation is fulfilled, usually at the time of customers\u2019 acceptance or consumption, at the
\nnet sales price (transaction price) and each of the criteria under ASC 606 have been met. Contract terms may require the Company to deliver
\nthe finished goods to the customers\u2019 location or the customer may pick up the finished goods at the Company\u2019s factory. International
\nsales are recognized when shipment clears customs and leaves the port.<\/p>\n
\u00a0<\/p>\n
The Company adopted ASC 606 on January 1, 2018,
\nusing the transition method of Modified-Retrospective Method. The adoption of ASC 606 had no impact on the Company\u2019s beginning balance
\nof retained earnings.<\/p>\n
\u00a0<\/p>\n
The Company\u2019s contracts are all short-term
\nin nature with a contract term of one year or less. Receivables are recorded when the Company has an unconditional right to consideration.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Business Combination<\/p>\n
\u00a0<\/p>\n
On October 24, 2019, we consummated our Business
\nCombination with Zhongchai Holding following a special meeting of the shareholders, where the shareholders of Greenland considered and
\napproved, among other matters, a proposal to adopt and entered into the Share Exchange Agreement, dated as of July 12, 2019, among (i)
\nGreenland, (ii) Zhongchai Holding, (iii) the Sponsor in the capacity as the Purchaser Representative, and (iv) Cenntro Holding Limited,
\nthe sole member of Zhongchai Holding.<\/p>\n
\u00a0<\/p>\n
Pursuant to the Share Exchange Agreement, Greenland
\nacquired from Cenntro Holding Limited all of the issued and outstanding equity interests of Zhongchai Holding in exchange for 7,500,000
\nnewly issued ordinary shares, no par value of Greenland, to Cenntro Holding Limited. As a result, Cenntro Holding Limited became the then
\ncontrolling shareholder of Greenland, and Zhongchai Holding became a directly and wholly owned subsidiary of Greenland. The Business Combination
\nwas accounted for as a reverse merger effected by a share exchange, wherein Zhongchai Holding is considered the acquirer for accounting
\nand financial reporting purposes.<\/p>\n
\u00a0<\/p>\n
Pursuant to that certain finder agreement with
\nHanyi Zhou dated May 29, 2019, 50,000 newly issued ordinary shares issued to Hanyi Zhou as a finder fee for the Business Combination.<\/p>\n
\u00a0<\/p>\n
Inventories<\/p>\n
\u00a0<\/p>\n
Inventories are stated at the lower of cost or
\nnet realizable value. Cost is determined using the weighted average method and includes all costs of purchase, costs of conversion, and
\nother costs incurred in bringing the inventories to their present location and condition. Costs of purchase consist of the purchase price,
\nimport duties, freight, handling, and other directly attributable costs, less trade discounts, rebates, and other similar items. Costs
\nof conversion include direct labor and a systematic allocation of fixed and variable production overheads incurred in converting raw materials
\ninto finished goods. Other costs are included only to the extent they are incurred in bringing the inventories to their present location
\nand condition. Net realizable value is based on estimated selling prices in the ordinary course of business, less estimated costs of completion
\nand estimated costs necessary to make the sale. Cost of raw materials is calculated using the weighted average method and is based on
\npurchase cost. Work-in-progress and finished goods costs are determined using the weighted average method and comprise direct materials,
\ndirect labor and an appropriate proportion of overhead.<\/p>\n
\u00a0<\/p>\n
Income Taxes<\/p>\n
\u00a0<\/p>\n
The Company accounts for income taxes following
\nthe liability method pursuant to FASB ASC 740 \u201cIncome Taxes\u201d. Under this method, deferred tax assets and liabilities are determined
\nbased on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in
\neffect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax
\nassets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets
\nwill not be realized. The effect on deferred taxes of a change in tax rate is recognized in income in the period that includes the enactment
\ndate.<\/p>\n
\u00a0<\/p>\n
The Company also follows FASB ASC 740, which addresses
\nthe determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.
\nThe Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will
\nbe sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the
\nfinancial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood
\nof being realized upon ultimate settlement. ASC 740 also provides guidance on recognition, classification, interest and penalties on income
\ntaxes, accounting in interim periods and requires increased disclosures. As of March 31, 2026, the Company did not have any liability
\nfor unrecognized tax benefits. It is the Company\u2019s policy to include penalties and interest expense related to income taxes as a
\ncomponent of other expense and interest expense, respectively, as necessary. The Company\u2019s historical tax years will remain open
\nfor examination by the local authorities until the statute of limitations has passed.<\/p>\n
\u00a0<\/p>\n
Off Balance Sheet Arrangements<\/p>\n
\u00a0<\/p>\n
None.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
\nABOUT MARKET RISK.<\/p>\n
\u00a0<\/p>\n
The Company is not required to provide the information
\nrequired by this item as it is a smaller reporting company.<\/p>\n
\u00a0<\/p>\n
ITEM 4. CONTROLS AND PROCEDURES.<\/p>\n
\u00a0<\/p>\n
Disclosure controls, as defined under Rule 13a-15(e)
\nand 15d-15(e) promulgated under the Exchange Act, are procedures that are designed with the objective of ensuring that information required
\nto be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized, and reported
\nwithin the time specified in the SEC\u2019s rules and forms. Disclosure controls are also designed with the objective of ensuring that
\nsuch information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer,
\nas appropriate to allow timely decisions regarding required disclosure.<\/p>\n
\u00a0<\/p>\n
Evaluation of Disclosure Controls and Procedures<\/p>\n
\u00a0<\/p>\n
As of March 31, 2026, we carried out an evaluation,
\nunder the supervision and with the participation of our management, including our chief executive officer and chief financial officer,
\nof the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
\nunder the Securities Exchange Act of 1934, as amended. Based upon such evaluation, our chief executive officer and chief financial officer
\nconcluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were ineffective.
\nSuch conclusion is based on the presence of the following material weakness in internal control over financial reporting as of March 31,
\n2026:<\/p>\n
\u00a0<\/p>\n
Accounting and Financial Reporting Personnel
\nMaterial Weakness\u00a0– As noted in Item 9A of our annual report on Form 10-K for the preceding fiscal year, management concluded
\nthat in light of a lack of sufficient and competent financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP
\nand SEC reporting requirements to prepare consolidated financial statements and related disclosures in accordance with U.S. GAAP and SEC
\nreporting requirements, we did not maintain effective controls and did not implement adequate and proper supervisory review to ensure
\nthat significant internal control deficiencies can be detected or prevented.<\/p>\n
\u00a0<\/p>\n
As a result, the Company has developed a remedial
\nplan to strengthen its accounting and financial reporting functions. To strengthen the Company\u2019s internal control over financial
\nreporting, the Company expects to implement the following remedial actions during fiscal year ending December 31, 2026:<\/p>\n
\u00a0<\/p>\n
\u00a0
\n \u25cf
\n developing and formalizing of key accounting and financial reporting policies and procedures;<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
\u00a0
\n \u25cf
\n recruiting more financial reporting and accounting personnel who have adequate U.S. GAAP knowledge; <\/p>\n
\u00a0<\/p>\n
\u00a0
\n \u25cf
\n initiating a targeted training program for key accounting personnel, focusing on complex U.S. GAAP topics and SEC disclosure requirements;<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0
\n \u25cf
\n planning to acquire additional resources to strengthen the financial reporting function and set up a financial and system control framework; and<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
\u00a0
\n \u25cf
\n implementing a new review protocol requiring that all non-recurring or complex transactions be reviewed by both management and the external consultants prior to finalization, to ensure proper accounting treatment and disclosure in accordance with U.S. GAAP. <\/p>\n
\u00a0<\/p>\n
Inherent limitation on the effectiveness of
\ninternal control<\/p>\n
\u00a0<\/p>\n
The effectiveness of any system of internal control
\nover financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing,
\noperating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of
\ninternal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not
\nabsolute assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls
\nmay become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
\nWe intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but cannot assure you
\nthat such improvements will be sufficient to provide us with effective internal control over financial reporting.<\/p>\n
\u00a0<\/p>\n
Notwithstanding the material weakness in our internal
\ncontrol over financial reporting, the consolidated unaudited financial statements included in this Quarterly Report fairly present, in
\nall material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting
\nprinciples generally accepted in the United States of America.<\/p>\n
\u00a0<\/p>\n
Changes in Internal Control Over Financial
\nReporting<\/p>\n
\u00a0<\/p>\n
During the most recently completed fiscal quarter,
\nthere has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially
\naffect, our internal control over financial reporting.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
PART II – OTHER INFORMATION<\/p>\n
\u00a0<\/p>\n
ITEM 1. LEGAL PROCEEDINGS.<\/p>\n
\u00a0<\/p>\n
Management is not aware of any legal proceedings
\ncontemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report,
\nno director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal
\nproceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.<\/p>\n
\u00a0<\/p>\n
ITEM 1A. RISK FACTORS.<\/p>\n
\u00a0<\/p>\n
Summary of Risk Factors<\/p>\n
\u00a0<\/p>\n
An investment in our Class A ordinary shares is
\nsubject to a number of risks, including risks related to our business and industry, risks related to our corporate structure, risks related
\nto doing business in China and risks related to our Class A ordinary shares. You should carefully consider all of the information in this
\nQuarterly Report before making an investment in the Class A ordinary shares. The following list summarizes some, but not all, of these
\nrisks. Please read the information in this section for a more thorough description of these and other risks.<\/p>\n
\u00a0<\/p>\n
Risks Related to Our Business and Industry<\/p>\n
\u00a0<\/p>\n
For more detailed discussions of the following
\nrisks, see \u201cRisk Factors\u2014Risks Related to our Business and Industry\u201d on pages 17 through 24.<\/p>\n
\u00a0<\/p>\n
\u25cfOur
\nsubsidiaries\u2019 business operations are cash intensive, and our subsidiaries\u2019 business could be adversely affected if we fail
\nto maintain sufficient levels of liquidity and working capital;<\/p>\n
\u00a0<\/p>\n
\u25cfWe
\ngrant relatively long payment terms for accounts receivable which can adversely affect our cash flow;<\/p>\n
\u00a0<\/p>\n
\u25cfOur
\nsubsidiaries face short lead-times for delivery of products to customers. Failure to meet delivery deadlines could result in the loss
\nof customers and damage to our reputation and goodwill;<\/p>\n
\u00a0<\/p>\n
\u25cfOur
\nsubsidiaries face intense competition, and if we are unable to compete effectively, we may not be able to maintain profitability;<\/p>\n
\u00a0<\/p>\n
\u25cfOur
\nrevenues are highly dependent on a limited number of customers and the loss of any one of our subsidiaries\u2019 major customers could
\nmaterially and adversely affect our growth and revenues;<\/p>\n
\u00a0\u00a0<\/p>\n
\u25cfAs
\nour subsidiaries expand their operations, they may need to establish a more diverse supplier network for raw materials. The failure to
\nsecure a more diverse supplier network could have an adverse effect on our financial condition;<\/p>\n
\u00a0<\/p>\n
\u25cfTo
\nremain competitive, our subsidiaries are introducing new lines of business, including the production and sale of electric industrial
\nheavy equipment. If these efforts are not successful, our results of operations may be materially and adversely affected;<\/p>\n
\u00a0<\/p>\n
\u25cfNew
\nlines of business, including the production and sale of electric industrial heavy equipment, may subject us and our subsidiaries to additional
\nrisks;<\/p>\n
\u00a0<\/p>\n
\u00a0
\n \u25cf
\n Tariffs and other trade barriers imposed on Chinese goods, including components manufactured in the PRC and assembled in the United States by HEVI, could materially and adversely affect our business, financial condition, and results of operations;<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
\u00a0
\n \u25cf
\n Volatile steel prices can cause significant fluctuations in our operating results. Our revenues and operating income could decrease if steel prices increase or if our subsidiaries are unable to pass price increases on to their customers;<\/p>\n
\u00a0<\/p>\n
\u00a0
\n \u25cf
\n We are subject to various risks and uncertainties that may affect our subsidiaries\u2019 ability to procure raw materials; and<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
\u00a0
\n \u25cf
\n Geopolitical conflicts involving Iran, military actions in the Middle East, and the war in Ukraine may adversely affect economic conditions in the U.S., China and globally, and cause significant volatility in the trading price of our Class A ordinary shares.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Risks Related to Doing Business in China<\/p>\n
\u00a0<\/p>\n
For more detailed discussions of the following
\nrisks, see \u201cRisk Factors\u2014Risks Related to Doing Business in China\u201d on pages 25 through 34.<\/p>\n
\u00a0<\/p>\n
\u25cfChanges
\nin China\u2019s economic, political or social conditions or government policies could have a material adverse effect on our business
\nand operations;<\/p>\n
\u00a0<\/p>\n
\u25cfUncertainties
\narising from the legal system in China, including uncertainties regarding the interpretation and enforcement of PRC laws and the possibility
\nthat regulations and rules can change quickly with little advance notice, could hinder our ability to offer or continue to offer our
\nsecurities, result in a material adverse change to our business operations, and damage our reputation, which could materially and adversely
\naffect our financial condition and results of operations and cause our securities to significantly decline in value or become worthless.
\nSee \u201cRisk Factors\u2014Risks Related to Doing Business in China\u2014The PRC government exerts substantial influence over the
\nmanner in which we must conduct our business activities. If the Chinese government significantly regulates the business operations of
\nour PRC subsidiaries in the future and our PRC subsidiaries are not able to substantially comply with such regulations, our business
\noperations may be materially adversely affected and the value of our Class A ordinary shares may significantly decrease\u201d and \u201cRisk
\nFactors\u2014Risks Related to Doing Business in China\u2014Uncertainties with respect to the PRC legal system could adversely affect
\nus and our PRC subsidiaries\u201d;<\/p>\n
\u00a0<\/p>\n
\u25cfThe
\nChinese government may intervene or influence our operations at any time or may exert more control over offerings conducted overseas
\nand\/or foreign investment in China-based issuers. Any actions by the Chinese government to exert more oversight and control over offerings
\nthat are conducted overseas and\/or foreign investment in China-based issuers could significantly limit or completely hinder our ability
\nto offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless.
\nSee \u201cRisk Factors\u2014Risks Related to Doing Business in China\u2014The PRC government exerts substantial influence over the
\nmanner in which we must conduct our business activities. If the Chinese government significantly regulates the business operations of
\nour PRC subsidiaries in the future and our PRC subsidiaries are not able to substantially comply with such regulations, our business
\noperations may be materially adversely affected and the value of our Class A ordinary shares may significantly decrease\u201d;<\/p>\n
\u00a0<\/p>\n
\u25cfOur
\nfuture offerings will need to be filed with the CSRC, along with compliance with any other applicable PRC rules, policies and regulations,
\nin connection with any future offering of our securities. Any failure to filing, or delay in filing, or failure to complying with any
\nother applicable PRC requirements for an offering, may subject us to sanctions imposed by the relevant PRC regulatory authority. In addition,
\nif applicable laws, regulations, or interpretations change such that we are required to obtain approval in the future and we fail to
\nobtain such approvals, we may be subject to an investigation by competent regulators, fines or penalties, or an order prohibiting us
\nfrom conducting an offering, and these risks could result in a material adverse change in our operations and the value of our Class A
\nordinary shares, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause
\nsuch securities to significantly decline in value or become worthless. See \u201cRisk Factors\u2014Risks Related to Doing Business
\nin China\u2014We are required under PRC laws to submit filings to CSRC for our future offerings. However, we believe that we are not
\ncurrently required to obtain the approval and\/or comply with other requirements of the CSRC, the CAC, or other PRC governmental authorities
\nunder PRC rules, regulations or policies in connection with our continued listing on Nasdaq. In the event that any such approval is required
\nor that there are other requirements we are obligated to comply with, we cannot predict whether or how soon we will be able to obtain
\nsuch approvals and\/or comply with such requirements.\u201d and \u201cRisk Factors\u2014Risks Related to Doing Business in China\u2014We
\nmay be liable for improper use or appropriation of personal information provided by our customers and any failure to comply with PRC
\nlaws and regulations over data security could result in materially adverse impact on our business, results of operations, and our continued
\nlisting on Nasdaq\u201d;<\/p>\n
\u00a0<\/p>\n
\u25cfOur
\nsubsidiaries may be liable for improper use or appropriation of personal information provided by their customers and any failure to comply
\nwith PRC laws and regulations over data security could result in materially adverse impact on our business, results of operations, and
\nour continued listing on Nasdaq;<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
\u25cfYou
\nmay have difficulty enforcing judgments against us;<\/p>\n
\u00a0<\/p>\n
\u25cfUnder
\nthe PRC Enterprise Income Tax Law, we may be classified as a \u201cResident Enterprise\u201d of China. Such classification will likely
\nresult in unfavorable tax consequences to us and our non-PRC shareholders;<\/p>\n
\u00a0<\/p>\n
\u25cfPRC
\nregulation of loans to, and direct investments in, PRC entities by offshore holding companies may delay or prevent us from using proceeds
\nfrom our future financing activities to make loans or additional capital contributions to our PRC subsidiaries;<\/p>\n
\u00a0<\/p>\n
\u25cfWe
\nmay rely on dividends paid by our subsidiaries for our cash needs, and any limitation on the ability of our subsidiaries to make payments
\nto us could have a material adverse effect on our ability to conduct business;<\/p>\n
\u00a0<\/p>\n
\u00a0
\n \u25cf
\n Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment;<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
\u00a0
\n \u25cf
\n U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China; and<\/p>\n
\u00a0\u00a0<\/p>\n
\u25cfOur
\nsecurities may be delisted and prohibited from being traded under the Holding Foreign Companies Accountable Act if the PCAOB is unable
\nto inspect our auditor in the future. Any future delisting and cessation of trading of our securities, or the threat of their being delisted
\nand prohibited from being traded, may materially and adversely affect the value of your investment. Additionally, any inability of the
\nPCAOB to conduct inspections of our auditor in the future would deprive our investors of the benefits of such inspections. See \u201cRisk
\nFactors\u2014Risks Related to Doing Business in China\u2014Our Class A ordinary shares may be delisted and prohibited from being traded
\nunder the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors. The delisting and the cessation of
\ntrading of our Class A ordinary shares, or the threat of their being delisted and prohibited from being traded, may materially and adversely
\naffect the value of your investment. Additionally, any inability of the PCAOB to conduct inspections deprives our investors with the
\nbenefits of such inspections.\u201d<\/p>\n
\u00a0<\/p>\n
Risks Related to Our Class A Ordinary Shares<\/p>\n
\u00a0<\/p>\n
For more detailed discussions of the following
\nrisks, see \u201cRisk Factors\u2014Risks Related to Our Class A Ordinary Shares\u201d on pages 35 through 39.<\/p>\n
\u00a0<\/p>\n
\u00a0
\n \u25cf
\n Nasdaq has recently adopted and proposed new listing rules that could result in the accelerated delisting of our Class A ordinary shares.<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
\u00a0
\n \u25cf
\n Our dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares may view as beneficial;<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
\u00a0
\n \u25cf
\n The dual-class structure of our ordinary shares may adversely affect the trading market for the Class A ordinary shares;<\/p>\n
\u00a0
\n \u00a0
\n \u00a0<\/p>\n
\u00a0
\n \u25cf
\n Future sales of our Class A ordinary shares, whether by us or our shareholders, could cause the price of our Class A ordinary shares to decline;<\/p>\n
\u00a0<\/p>\n
\u25cfBecause
\nwe do not expect to pay dividends in the foreseeable future, you must rely on the price appreciation of our Class A ordinary shares for
\nreturn on your investment; and<\/p>\n
\u00a0<\/p>\n
\u25cfTechniques
\nemployed by short sellers may drive down the market price of our Class A ordinary shares.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Risks Related to our Business and Industry<\/p>\n
\u00a0<\/p>\n
Our subsidiaries\u2019 business operations
\nare cash intensive, and our subsidiaries\u2019 business could be adversely affected if we fail to maintain sufficient levels of liquidity
\nand working capital.<\/p>\n
\u00a0<\/p>\n
As of March 31, 2026, we had approximately $10.61
\nmillion of cash and cash equivalents. Historically, we have spent a significant amount of cash on our operational activities, principally
\nto procure raw materials for our subsidiaries\u2019 products. Our short-term loans are from Chinese banks and are generally secured by
\na portion of our fixed assets, land use rights and\/or guarantees by related parties. Certain of these loans are secured against a portion
\nof the shares of our PRC subsidiaries. The term of a majority of such loans is one year. Historically, we rolled over such loans on an
\nannual basis. However, we may not have sufficient funds available to pay all of our borrowings upon maturity in the future. Failure to
\nroll over our short-term borrowings at maturity or to service our debt could result in a transfer of the ownership of a portion of the
\nshares of our PRC subsidiaries to secured lenders, the imposition of penalties, including increases in interest rates, legal actions against
\nus by our creditors, and even insolvency.<\/p>\n
\u00a0<\/p>\n
Although we have been able to maintain adequate
\nworking capital primarily through cash from operations and short-term and long-term borrowings, any failure by our customers to settle
\noutstanding accounts receivable, or our inability to borrow sufficient capital from local banks in the future could materially and adversely
\naffect our cash flow, financial condition and results of operations.<\/p>\n
\u00a0<\/p>\n
We grant relatively long payment terms for
\naccounts receivable which can adversely affect our cash flow.<\/p>\n
\u00a0<\/p>\n
As is customary in China, for competitive reasons,
\nwe grant relatively long payment terms to most of our subsidiaries\u2019 customers. The allowances we establish for our receivables may
\nnot be adequate. We are subject to the risk that we may be unable to collect accounts receivable in a timely manner. If the accounts receivable
\ncannot be collected in time, or at all, a significant amount of expected credit losses will occur, and our business, financial condition
\nand results of operation will likely be materially and adversely affected.<\/p>\n
\u00a0<\/p>\n
Our subsidiaries face short lead-times for
\ndelivery of products to customers. Failure to meet delivery deadlines could result in the loss of customers and damage to our reputation
\nand goodwill.<\/p>\n
\u00a0<\/p>\n
Most of our subsidiaries\u2019 customers are
\nlarge manufacturers, who generally place large orders for our subsidiaries\u2019 products and require prompt delivery. Our subsidiaries\u2019
\nproduct sale agreements typically contain short lead-times\u00a0for the delivery of products and tight production and manufacturer supply
\nschedules that can reduce our profit margins on the products procured from our subsidiaries\u2019 suppliers. Our subsidiaries\u2019
\nsuppliers may lack sufficient capacity at any given time to meet all of the demands from our subsidiaries\u2019 customers if orders exceed
\ntheir production capacity. Our subsidiaries strive for rapid response to customer demands, which can lead to reduced purchasing efficiency,
\nincreased procurement costs and low profit margins. If our subsidiaries are unable to meet the customer demands, they may lose customers.
\nMoreover, failure to meet customer demands may damage our reputation and goodwill.<\/p>\n
\u00a0<\/p>\n
Our subsidiaries face intense competition,
\nand, if our subsidiaries are unable to compete effectively, we may not be able to maintain profitability.<\/p>\n
\u00a0<\/p>\n
Our subsidiaries compete with many other companies
\nlocated in the PRC and internationally that manufacture similar products. Many of our subsidiaries\u2019 competitors are larger companies
\nwith greater financial resources. Intense competition in a challenging economic environment in the PRC has, in the past, put pressure
\non our margins and may adversely affect our future financial performance. Moreover, intense competition may result in potential or actual
\nlitigation between our subsidiaries and their competitors relating to such activities as competitive sales practices, relationships with
\nkey suppliers and customers or other matters.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
It is likely that our subsidiaries\u2019 competitors
\nwill seek to develop similar competing products in the near future. Some of our subsidiaries\u2019 competitors may have more resources
\nthan our subsidiaries do, operate in greater scale, be more capitalized than our subsidiaries are, have access to cheaper raw materials
\nthan our subsidiaries do, or offer products at a more competitive price. There can be no assurance that our initial competitive advantage
\nwill be retained and that one or more competitors will not develop products that are equal or superior in quality and are better priced
\nthan our subsidiaries\u2019 products. If our subsidiaries are unable to compete effectively, our results of operations and financial
\nposition may be materially and adversely affected.<\/p>\n
\u00a0<\/p>\n
Our revenues are highly dependent on a limited
\nnumber of customers and the loss of any one of our subsidiaries\u2019 major customers could materially and adversely affect our growth
\nand revenues.<\/p>\n
\u00a0<\/p>\n
During the three months ended March 31, 2026 and
\n2025, our subsidiaries\u2019 five largest customers contributed 39.79% and 41.27% of our revenues, respectively. For the three months
\nended March 31, 2026 and 2025, Greenland\u2019s single largest customer, Hangcha Group, accounted for 16.69% and 17.77%, respectively,
\nof Greenland\u2019s total revenue. Other than Hangcha Group, no other single customer individually contributed to more than 10% of our
\ntotal revenue for the three months ended March 31, 2026 and 2025.<\/p>\n
\u00a0<\/p>\n
As a result of our subsidiaries\u2019 reliance
\non a limited number of customers, our subsidiaries may face pricing and other competitive pressures, which may have a material adverse
\neffect on our profits and our revenues. The volume of products sold for specific customers varies from year to year, especially since
\nour subsidiaries are not the exclusive provider for any customers. In addition, there are a number of factors that could cause the loss
\nof a customer or a substantial reduction in the products that our subsidiaries provide to any customer that may not be predictable. For
\nexample, our subsidiaries\u2019 customers may decide to reduce spending on our subsidiaries\u2019 products or a customer may no longer
\nneed our subsidiaries\u2019 products following the completion of a project. The loss of any one of our subsidiaries\u2019 major customers,
\na decrease in the volume of sales to our subsidiaries\u2019 customers or a decrease in the price at which our subsidiaries sell their
\nproducts to customers could materially and adversely affect our profits and revenues.<\/p>\n
\u00a0<\/p>\n
In addition, this customer concentration may subject
\nour subsidiaries to perceived or actual leverage that our subsidiaries\u2019 customers may have in negotiations, given their relative
\nsize and importance to our subsidiaries. If our subsidiaries\u2019 customers seek to negotiate their agreements on terms less favorable
\nto our subsidiaries and our subsidiaries accept such terms, such unfavorable terms may have a material adverse effect on our subsidiaries\u2019
\nbusiness and our financial condition and results of operations. Accordingly, unless and until our subsidiaries diversify and expand their
\ncustomer base, our future success will significantly depend upon the timing and volume of business from our subsidiaries\u2019 largest
\ncustomers and the financial and operational success of these customers.<\/p>\n
\u00a0<\/p>\n
As our subsidiaries expand their operations,
\nthey may need to establish a more diverse supplier network for raw materials. The failure to secure a more diverse supplier network could
\nhave an adverse effect on our financial condition.<\/p>\n
\u00a0<\/p>\n
In the event that our subsidiaries need to diversify
\ntheir supplier network, our subsidiaries may not be able to procure a sufficient supply of raw materials at a competitive price, which
\ncould have an adverse effect on our results of operations, financial condition and cash flows. Furthermore, despite our subsidiaries\u2019
\nefforts to control their supply of raw materials and maintain good relationships with their existing suppliers, our subsidiaries could
\nlose one or more of their existing suppliers at any time. The loss of one or more key suppliers could increase our subsidiaries\u2019
\nreliance on higher costs or lower quality supplies, which could negatively affect our profitability. Any interruptions to, or decline
\nin, the amount or quality of our subsidiaries\u2019 raw materials supply could materially disrupt our subsidiaries\u2019 production
\nand adversely affect our subsidiaries\u2019 business and our financial condition and financial prospects.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Our efforts to
\ndiversify into electric industrial heavy equipment may not be successful, and the suspension of substantially all of HEVI\u2019s operations
\ndue to tariff uncertainty could materially and adversely affect our business, results of operations, and financial condition.<\/p>\n
\u00a0<\/p>\n
To remain competitive,
\nwe have sought to diversify our product offerings beyond our traditional transmission systems and integrated powertrains for material
\nhandling machinery by expanding into the production and sale of electric industrial heavy equipment. Prior to December 2020, through Zhongchai
\nHolding and its PRC subsidiaries, our products primarily consisted of transmission systems and integrated powertrains for material handling
\nmachinery, particularly electric forklift trucks. In December 2020, through our subsidiary HEVI, we launched a new division that focused
\non the production and sale of electric industrial heavy equipment as part of our strategy to diversify our business.<\/p>\n
\u00a0<\/p>\n
HEVI\u2019s electric
\nindustrial heavy equipment product portfolio includes lithium-powered electric forklifts, electric wheeled loaders, electric excavators,
\nand related charging solutions, which have been marketed primarily in the United States. HEVI also established an assembly and distribution
\nfacility in Maryland and entered into strategic partnerships intended to support the development and commercialization of electric heavy
\nmachinery for the U.S. market. Despite these efforts, this line of business remains at an early stage and has not yet demonstrated sustained
\ncommercial success.<\/p>\n
\u00a0<\/p>\n
Our expansion into electric
\nindustrial heavy equipment involves significant risks and uncertainties. We have limited operating history and experience in this segment,
\nwhich differs materially from our legacy business. We may encounter difficulties in product development, manufacturing, supply chain management,
\nregulatory compliance, distribution, customer adoption, and after-sales service. Our products may not achieve market acceptance, may face
\nstrong competition from established manufacturers, or may not be cost-competitive. As a result, we may be unable to generate sufficient
\nrevenue to recover our investment or achieve profitability.<\/p>\n
\u00a0<\/p>\n
In addition, substantially
\nall of HEVI\u2019s business operations have been suspended since 2025 due to uncertainty regarding tariff policy, which has adversely
\naffected our ability to manufacture, import, distribute, and sell electric industrial heavy equipment. This suspension has limited HEVI\u2019s
\nrevenue-generating activities and may continue for an extended period. Although HEVI intends to resume operations once the policy environment
\nstabilizes, there can be no assurance as to when, or whether, such stabilization will occur, or whether HEVI will be able to successfully
\nrestart operations on commercially reasonable terms.<\/p>\n
\u00a0<\/p>\n
If the suspension of HEVI\u2019s operations continues,
\nor if we are unable to successfully resume or scale this business following a resumption of operations, our transition into electric industrial
\nheavy equipment may be delayed or unsuccessful. During this transition period, our revenues may remain limited, our operating losses may
\nincrease, and our results of operations, financial condition, cash flows, and business prospects could be materially and adversely affected.<\/p>\n
\u00a0<\/p>\n
Tariffs and other
\ntrade barriers imposed on Chinese goods, including components manufactured in the PRC and assembled in the United States by HEVI, could
\nmaterially and adversely affect our business, financial condition, and results of operations.<\/p>\n
\u00a0<\/p>\n
Our business is subject to significant risks arising
\nfrom the trade policies of the United States government with respect to Chinese goods, and the broader relationship between the United
\nStates and the PRC. HEVI\u2019s electric industrial heavy equipment products are manufactured using components sourced from and manufactured
\nin the PRC, which are then assembled into finished products in the United States. As a result, U.S. tariff policies on Chinese goods have
\na direct and material impact on HEVI\u2019s cost structure and business operations. In February 2025, President Donald J. Trump declared
\na national emergency under the International Emergency Economic Powers Act (\u201cIEEPA\u201d) and announced the imposition of a 10%
\ntariff on all imports from China, citing concerns related to trade imbalances and national security. These tariffs were subsequently lifted
\nfollowing the U.S. Supreme Court\u2019s ruling in Learning Resources in February 2026. A temporary 10% global tariff on imports was separately
\nimposed under Section 122 of the Trade Act of 1974. Tariffs imposed under Section 301 of the Trade Act of 1974 and Section 232 of the
\nTrade Expansion Act of 1962 remain unaffected by the Supreme Court\u2019s ruling and continue to apply to Chinese goods. As of May 2026,
\naverage U.S. tariff rates on Chinese goods remained to be over 30%, excluding exemptions and Section 232 actions, further increasing the
\ncost burden on U.S. importers of PRC-manufactured components and potentially affecting demand for products sourced from the PRC.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
The imposition of these
\ntariffs, and any future escalation thereof, significantly increases the landed cost of PRC-manufactured components imported by HEVI for
\nassembly in the United States, potentially rendering HEVI\u2019s finished products less competitive relative to domestically produced
\nalternatives or products sourced from non-tariffed jurisdictions. Our operating subsidiaries, including HEVI, may be unable to pass increased
\ncosts through to their customers, whether due to competitive pricing pressures, contractual constraints, or prevailing market conditions,
\nwhich would compress margins and adversely affect profitability.<\/p>\n
\u00a0<\/p>\n
The business operations
\nof HEVI have been suspended since 2025 due to the uncertainty surrounding U.S. tariff policy and the broader trade war between the United
\nStates and the PRC, as described elsewhere in this Report. Because HEVI\u2019s products rely on components manufactured in the PRC, the
\nimposition of tariffs on Chinese goods has materially disrupted HEVI\u2019s ability to import components at commercially viable costs,
\nthereby rendering its assembly and distribution operations in the United States economically unviable under current tariff conditions.
\nTo the extent that HEVI\u2019s suspension is prolonged or becomes permanent, the practical impact of tariffs on HEVI\u2019s near-term
\noperations may be limited; however, any future resumption of HEVI\u2019s business activities would require the continued importation
\nof PRC-manufactured components into the United States, which would be subject to the full scope of applicable tariff regimes. The costs
\nand uncertainties associated with those tariffs could impede or delay any such resumption. Additionally, the continued application of
\ntariffs affects the broader competitive and cost environment in which our other subsidiaries operate.<\/p>\n
\u00a0<\/p>\n
More broadly, any deterioration in the relationship
\nbetween the United States and the PRC, whether arising from tariff disputes, geopolitical tensions, sanctions, export controls, or other
\ntrade-related measures, could further increase the costs associated with importing PRC-manufactured components into the United States
\nor limit our ability to source such components altogether. Given HEVI\u2019s dependence on PRC-manufactured components for its assembly
\noperations in the United States, any such deterioration would have a particularly direct and adverse impact on HEVI\u2019s operations
\nand cost structure. If existing tariffs remain in place, are further escalated, or if new tariff regimes are introduced targeting Chinese
\ngoods or components, our business, financial condition, and results of operations could be materially and adversely affected.<\/p>\n
\u00a0<\/p>\n
Volatile steel prices can cause significant
\nfluctuations in our operating results. Our revenues and operating income could decrease if steel prices increase or if our subsidiaries
\nare unable to pass price increases on to their customers.<\/p>\n
\u00a0<\/p>\n
Our subsidiaries\u2019 principal raw materials
\nare processed metal parts and components which are made of carburizing steel. The steel industry as a whole is cyclical and, at times,
\npricing and availability of steel can be volatile due to numerous factors beyond our subsidiaries\u2019 control, including general domestic
\nand international economic conditions, labor costs, sales levels, competition, levels of inventory, consolidation of steel producers,
\nhigher raw material costs for steel producers, import duties and tariffs and currency exchange rates. This volatility can significantly
\naffect the availability and cost of raw materials.<\/p>\n
\u00a0<\/p>\n
Our subsidiaries\u2019 suppliers, like many other
\nprocessed metal parts and components manufacturers, maintain substantial inventories of steel to accommodate the short lead times and
\njust-in-time delivery requirements of customers. Accordingly, our subsidiaries\u2019 suppliers purchase steel in an effort to maintain
\ntheir inventory at levels that they believe to be appropriate to satisfy the anticipated needs of customers based upon historic buying
\npractices, supply agreements with customers and market conditions. When steel prices increase, competitive conditions will influence how
\nmuch of the price increase suppliers would pass on to our subsidiaries and how much our subsidiaries can pass on to their customers. To
\nthe extent our subsidiaries are unable to pass on future price increases in raw materials to their customers, the revenues and profitability
\nof our business could be adversely affected.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
We are subject to various risks and uncertainties
\nthat might affect our subsidiaries\u2019 ability to procure raw materials.<\/p>\n
\u00a0<\/p>\n
Our performance depends upon our subsidiaries\u2019
\nability to procure low cost, high quality raw materials on a timely basis from their suppliers. Our subsidiaries\u2019 suppliers are
\nsubject to certain risks, including the availability of raw materials, labor disputes, inclement weather, natural disasters, and general
\neconomic and political conditions, which might limit the ability of our subsidiaries\u2019 suppliers to provide low-cost, high-quality
\nmerchandise on a timely basis. Furthermore, for these or other reasons, one or more of our subsidiaries\u2019 suppliers might not adhere
\nto our subsidiaries\u2019 quality control standards, and our subsidiaries might not identify the deficiency. Any failure by our subsidiaries\u2019
\nsuppliers to supply quality materials at a reasonable cost on a timely basis could reduce our net sales or profits, damage our reputation
\nand have an adverse effect on our financial condition.<\/p>\n
\u00a0\u00a0<\/p>\n
Our subsidiaries may lose their competitive
\nadvantage, and their operations may suffer, if they fail to prevent the loss or misappropriation of, or disputes over, their intellectual
\nproperty.<\/p>\n
\u00a0<\/p>\n
Our subsidiaries rely on a combination of patents,
\ntrademarks, trade secrets and confidentiality agreements to protect their intellectual property rights. While our subsidiaries are not
\ncurrently aware of any infringement on their intellectual property rights, our subsidiaries\u2019 ability to compete successfully and
\nto achieve future revenue growth will depend, in significant part, on their ability to protect their proprietary technology. Despite many
\nlaws and regulations promulgated, as well as other efforts made, by China over the past several years in an attempt to protect intellectual
\nproperty rights, intellectual property rights are not as certain in China as they would be in many Western countries, including the United
\nStates. Furthermore, enforcement of such laws and regulations in China has not been fully developed. Neither the administrative agencies
\nnor the court systems in China are as equipped as their counterparts in developed countries to deal with violations or handle the nuances
\nand complexities between compliant technological innovation and non-compliant infringement.<\/p>\n
\u00a0<\/p>\n
Our subsidiaries\u2019 transmission technology
\nis protected through a combination of patents, trade secrets, confidentiality agreements and other methods. However, our subsidiaries\u2019
\ncompetitors may independently develop similar proprietary methodologies or duplicate our products, or develop alternatives, which could
\nhave a material adverse effect on our subsidiaries\u2019 business and our results of operations and financial condition. The misappropriation
\nor duplication of our subsidiaries\u2019 intellectual property could disrupt their ongoing business, distract our management and employees,
\nreduce our revenues and increase our expenses. Our subsidiaries may need to litigate to enforce their intellectual property rights. Any
\nsuch litigation could be time-consuming and costly, and the outcome of any such litigation cannot be guaranteed.<\/p>\n
\u00a0<\/p>\n
Our PRC subsidiaries have limited insurance
\ncoverage for their operations in China and may incur losses resulting from product liability claims, business interruption or natural
\ndisasters.<\/p>\n
\u00a0<\/p>\n
Our PRC subsidiaries have limited insurance coverage
\nfor their operations in China, and our PRC subsidiaries are therefore exposed to risks associated with product liability claims against
\nour PRC subsidiaries or otherwise against their operations in the PRC in the event that the use of our PRC subsidiaries\u2019 products
\nresults in property damage or personal injury. Since our subsidiaries\u2019 transmission products are ultimately incorporated into forklifts,
\nit is possible that users of forklifts or people installing these products could be injured or killed, whether as a result of defects,
\nimproper installation or other causes. We are unable to predict whether product liability claims will be brought against our PRC subsidiaries
\nin the future or to predict the impact of any resulting adverse publicity on our PRC subsidiaries\u2019 business. The successful assertion
\nof product liability claims against our PRC subsidiaries could result in potentially significant monetary damages and require us to make
\nsignificant payments. Our subsidiaries do not carry product liability insurance and may not have adequate resources to satisfy a judgment
\nin the event of a successful claim against us. In addition, our subsidiaries do not currently, and may not in the future, maintain business
\ninterruption insurance coverage. As such, our subsidiaries may suffer losses that result from interruptions in their operations as a result
\nof inability to operate or failures of equipment and infrastructure at our subsidiaries\u2019 facilities. Our subsidiaries also do not
\ncurrently maintain catastrophe insurance. As such, any natural disaster or man-made disaster could result in substantial losses and diversion
\nof our subsidiaries\u2019 resources to address the effects of such an occurrence, which could materially and adversely affect our subsidiaries\u2019
\nbusiness and our financial condition and results of operations.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Failure to make adequate contributions to
\nvarious employee benefit plans as required by PRC regulations may subject us to penalties.<\/p>\n
\u00a0<\/p>\n
Our PRC subsidiaries are required under PRC laws
\nto participate in various government sponsored employee benefit plans, including social security insurance, housing funds and other welfare-oriented
\npayments, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of their
\nemployees up to a maximum amount specified by the local government from time to time at locations where our PRC subsidiaries operate their
\nbusinesses. Our PRC subsidiaries have not made adequate employee benefit payments to the social security insurance and the housing fund.
\nAs a result, they may be required to make up the contributions for these plans within a stipulated period of time. In addition, our PRC
\nsubsidiaries may be required to pay late fees equal to 0.05% of the shortage of the contributions to the social security fund for each
\nday our PRC subsidiaries fail to make up the contributions and may be imposed fines up to three times of such shortage if our PRC subsidiaries
\nfail to make up the difference within the time frame prescribed by relevant government authorities. The maximum amount of such penalties
\nthat we anticipate could be imposed on our PRC subsidiaries with respect such employee benefits payments is approximately US$200,000.
\nIf our PRC subsidiaries are subject to late fees or fines in relation to the underpaid employee benefits, our financial condition and
\nresults of operations may be adversely affected. As of the date of this Report, our PRC subsidiaries have not been ordered to pay outstanding
\ncontributions or related penalties.<\/p>\n
\u00a0<\/p>\n
If labor costs in the PRC increase substantially,
\nour PRC subsidiaries\u2019 business and our costs of operations may be adversely affected.<\/p>\n
\u00a0<\/p>\n
In recent years, the Chinese economy has experienced
\ninflation and labor cost increases. Average wages are projected to continue to increase. Further, under PRC law an employer is required
\nto pay various statutory employee benefits, including pensions, housing funds, medical insurance, work-related\u00a0injury insurance,
\nunemployment insurance and maternity insurance to designated government agencies for the benefit of its employees. The relevant government
\nagencies may examine whether an employer has made adequate payments to the statutory employee benefits, and those employers who fail to
\nmake adequate payments may be subject to late payment fees, fines and\/or other penalties. We expect that our labor costs, including wages
\nand employee benefits, will continue to increase based on the past trends. If we are unable to control our labor costs or pass such increased
\nlabor costs on to our subsidiaries\u2019 customers, our financial condition and results of operations may be adversely affected.<\/p>\n
\u00a0<\/p>\n
We may not be able to effectively protect
\nour intellectual property from unauthorized use by others.<\/p>\n
\u00a0<\/p>\n
Through its subsidiaries, we hold patents, trademarks
\nand other intellectual properties that are critical to our business in the PRC. Any of our intellectual property rights could be challenged,
\ninvalidated, circumvented or misappropriated, or such intellectual property may not be sufficient to provide us with competitive advantages.
\nWe cannot assure you that (i) all of the intellectual property rights we owned will be adequately protected, or (ii)\u00a0our intellectual
\nproperty rights will not be challenged by third parties or found by a judicial authority to be invalid or unenforceable. Moreover, there
\ncan be no assurance that we will obtain such trademarks and any other trademarks that are crucial to our business in the future. Thus,
\nthird parties may also take the position that we are infringing their rights, and we may not be successful in defending these claims.
\nAdditionally, we may not be able to enforce and defend its proprietary rights or prevent infringement or misappropriation, without incurring
\nsubstantial expenses to us and a significant diversion of management time and attention from our business strategy.<\/p>\n
\u00a0<\/p>\n
To protect our parents, trademarks and other proprietary
\nrights, we rely on and expect to continue to rely on a combination of physical and electronic security measures and trademark, patent
\nand trade secret protection laws. If the measures we have taken to protect our proprietary rights are inadequate to prevent the use or
\nmisappropriation by third parties or such rights are diminished due to successful challenges, the value of our brand and other intangible
\nassets may be diminished and our ability to attract and retain customers may be adversely affected.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Competition for our and our subsidiaries\u2019
\nemployees is intense, and we and our subsidiaries may not be able to attract and retain the highly skilled employees needed to support
\nour subsidiaries\u2019 business.<\/p>\n
\u00a0<\/p>\n
As we continue to experience growth, our future
\nsuccess depends on our and our subsidiaries\u2019 ability to attract, develop, motivate and retain highly qualified and skilled employees,
\nincluding engineers, financial personnel and marketing professionals. Competition for highly skilled engineering, sales, technical and
\nfinancial personnel is extremely intense. We and our subsidiaries may not be able to hire and retain these personnel at compensation levels
\nconsistent with our existing compensation and salary structure. Many of the companies with which we and our subsidiaries compete for experienced
\nemployees have greater resources than we and our subsidiaries have and may be able to offer more attractive terms of employment.<\/p>\n
\u00a0<\/p>\n
In addition, we and our subsidiaries invest significant
\ntime and expense in training our employees, which increases their value to competitors who may seek to recruit them. If we and our subsidiaries
\nfail to retain our employees, we could incur significant expenses in hiring and training their replacements, and the quality of our products
\ncould decrease, resulting in a material adverse effect on our subsidiaries\u2019 business.<\/p>\n
\u00a0<\/p>\n
Our business depends on the continued efforts
\nof our senior management. If one or more of our key executives were unable or unwilling to continue in their present positions, our business
\nmay be severely disrupted.<\/p>\n
\u00a0<\/p>\n
Our business operations depend on the continuing
\nservices of our senior management. While we have provided different incentives to our management, we cannot assure you that we can continue
\nto retain their services. If one or more of our key executives were unable or unwilling to continue in their present positions, we may
\nnot be able to replace them easily or at all, our future growth may be constrained, business may be severely disrupted and our financial
\ncondition and results of operations may be materially and adversely affected, and we may incur additional expenses to recruit, train and
\nretain qualified personnel. In addition, although we have entered into a non-competition agreement with Mr. Peter Zuguang Wang, the chairman
\nof our board of directors, there is no assurance that Mr. Wang will not join our competitors or form a competing business. If any dispute
\narises between us and Mr. Wang, we may incur substantial costs and expenses in order to enforce the non-competition agreement in China,
\nand we may be unable to enforce it at all.<\/p>\n
\u00a0<\/p>\n
We do not maintain \u201ckey person\u201d
\ninsurance, and as a result, we may incur losses if any of our directors, executive officers, senior manager or other key employees chooses
\nto terminate his or her services with us.<\/p>\n
\u00a0<\/p>\n
We do not maintain \u201ckey person\u201d insurance
\nfor our directors, executive officers, senior management or other key employees. If any of our key employees terminate his or her services
\nor otherwise becomes unable to provide continuous services to us, our business, financial condition and results of operations may be materially
\nand adversely affected and we may incur additional expenses to recruit, train and retain qualified personnel. If any of our executive
\nofficers or key employees joins a competitor or forms a competing company, we may lose customers, operational know-how and key professionals
\nand staff members.<\/p>\n
\u00a0<\/p>\n
Geopolitical conflicts involving Iran, military
\nactions in the Middle East, and the war in Ukraine may adversely affect economic conditions in the U.S., China and globally, and cause
\nsignificant volatility in the trading price of our Class A ordinary shares.<\/p>\n
\u00a0<\/p>\n
U.S. and global markets are experiencing volatility
\nand disruption as a result of the outbreak or escalation of wars including Russia\u2019s launch of a full-scale military invasion of
\nUkraine, conflicts between Israel and Hamas. Although the length and impact of these ongoing conflicts are highly unpredictable, these
\nconflicts have led to market disruptions, including significant volatility in commodity prices, credit, and capital markets. In addition,
\nas a result of the ongoing conflicts around the world, we may experience other risks, difficulties and challenges in the way we conduct
\nour business and operations generally. For example, the conflict could adversely affect supply chains and impact our ability to control
\nraw material costs. A protracted conflict between\u00a0Ukraine\u00a0and Russia or between Israel and Hamas, any escalation of either conflict,
\nand the wider global economy and market conditions could, in turn, have a material adverse impact on our business, financial condition,
\ncash flows and results of operations and could cause the market value of our Class A ordinary shares to decline.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
The heightened military conflict involving the
\nUnited States, Israel, and Iran, which escalated significantly in February 2026, has led to profound instability in global financial and
\nenergy markets. These events, including the closure of strategic airspaces and critical maritime routes such as the Strait of Hormuz and
\nthe Red Sea, have contributed to a dramatic increase in the price of oil and gas and created widespread market uncertainty. China is particularly
\nexposed to these developments, as it is the largest purchaser of Iranian crude oil, having absorbed nearly 90% of Iran\u2019s total crude
\nexports as of early 2026. Any sustained disruption to Iranian oil exports, whether resulting from military action, the imposition of additional
\nsanctions, or the closure of key maritime transit routes, could materially reduce the supply of crude oil available to China, drive up
\ndomestic energy costs, and exert significant downward pressure on China\u2019s broader economy. The ongoing disruptions caused by these
\nmilitary actions, and the potential for further escalation, could result in protracted and severe damage to the global economy and investment
\nclimate, with disproportionate consequences for China-based businesses such as us.<\/p>\n
\u00a0<\/p>\n
Furthermore, the continuing war in Ukraine and
\nthe resulting sanctions levied by the United States, the European Union, and other nations against Russia continue to impact global financial
\nmarkets. The extent and duration of these military actions in the Middle East and Eastern Europe, as well as the resulting sanctions and
\nmarket disruptions, are impossible to predict but are expected to remain substantial. The cumulative effect of these geopolitical pressures,
\nincluding elevated global energy prices, supply chain disruptions, and reduced international trade flows, may weigh materially on China\u2019s
\neconomic growth, consumer spending, and business investment, each of which is relevant to our ability to sustain and grow our business
\noperations China.<\/p>\n
\u00a0<\/p>\n
Such geopolitical instability often leads to broad
\nsell-offs in the equity markets and heightened investor sensitivity to risk. To the extent that disruptions to Iranian oil exports or
\nother geopolitical developments adversely affect China\u2019s energy supply, increase domestic production costs, or dampen consumer confidence
\nand economic activity within China, our business, financial condition, and results of operations could be materially and adversely affected.
\nConsequently, these developments may also materially and adversely affect the market price of our Class A ordinary shares, regardless
\nof our actual operating performance. We cannot predict the ultimate progress or outcome of these situations, and any prolonged unrest
\nor intensified military activities could have a material adverse effect on the global economy and, in particular, on economic conditions
\nin China, which in turn could negatively impact our financial condition and the value of our securities.<\/p>\n
\u00a0<\/p>\n
High inflation rates may adversely affect
\nus by increasing costs beyond what we can recover through price increases and limit our ability to enter into future traditional debt
\nfinancing.<\/p>\n
\u00a0<\/p>\n
Inflation can adversely affect us by increasing
\ncosts of critical materials, equipment, labor, and other services. In addition, inflation is often accompanied by higher interest rates.
\nContinued inflationary pressures could impact our profitability. Inflation may also affect our ability to enter into future traditional
\ndebt financing, as high inflation may result in an increase in cost.<\/p>\n
\u00a0<\/p>\n
The outcome of litigation, inquiries, investigations,
\nexaminations, or other legal proceedings in which we are involved, in which we may become involved, or in which our clients or competitors
\nare involved could distract management, increase our expenses, or subject us to significant monetary damages or restrictions on our ability
\nto do business.<\/p>\n
\u00a0<\/p>\n
From time to time, we are subject to litigations
\nor legal proceedings in connection with our business operations. The scope and outcome of these proceedings is often difficult to assess
\nor quantify. Plaintiffs in lawsuits may seek recovery of large amounts, and the cost to defend such litigation may be significant.<\/p>\n
\u00a0<\/p>\n
Any negative outcomes from above material litigation
\nor any other regulatory actions or litigation or claims, including monetary penalties or damages or injunctive provisions regulating or
\nrestricting how we conduct our business could have a material adverse effect on our business, financial condition, results of operations
\nand reputation. Regardless of whether any current or future claims in which we are involved have merit, or whether we are ultimately held
\nliable or subject to payment of penalties, such investigations and claims have been and may continue to be expensive to defend, may divert
\nmanagement\u2019s time away from our operations and may result in changes to our business practices that adversely affect our results
\nof operations.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Risks Related to Doing Business in China<\/p>\n
\u00a0<\/p>\n
Changes in China\u2019s economic, political
\nor social conditions or government policies could have a material adverse effect on our business and operations.<\/p>\n
\u00a0<\/p>\n
A substantial majority of our assets and operations
\nare located in China. Accordingly, our business, financial condition, results of operations and prospects may be influenced to a significant
\ndegree by political, economic and social conditions in China generally. The PRC economy differs from the economies of most developed countries
\nin many respects, including with regard to the level of government involvement, level of development, growth rate, control of foreign
\nexchange and allocation of resources. Although the PRC government has implemented measures emphasizing the utilization of market forces
\nfor economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate governance in
\nbusiness enterprises, a substantial portion of productive assets in China is still owned by the government. In addition, the PRC government
\ncontinues to play a significant role in regulating industry development by imposing industrial policies.<\/p>\n
\u00a0<\/p>\n
The PRC government also exercises significant
\ncontrol over China\u2019s economic growth through allocating resources, controlling payment of foreign currency-denominated\u00a0obligations,
\nsetting monetary policy, and providing preferential treatment to particular industries or companies.<\/p>\n
\u00a0<\/p>\n
While the PRC economy has experienced significant
\ngrowth over the past decades, growth has been uneven, both geographically and among various sectors of the economy, and the rate of growth
\nhas been slowing since 2012. Any adverse changes in economic conditions in China, in the policies of the PRC government or in the laws
\nand regulations in China could have a material adverse effect on the overall economic growth of China. Such developments could adversely
\naffect our business and operating results, lead to reduction in demand for our subsidiaries\u2019 products and adversely affect our subsidiaries\u2019
\ncompetitive position. The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources.
\nSome of these measures may benefit the overall PRC economy, but may have a negative effect on us and our subsidiaries. For example, our
\nfinancial condition and results of operations may be adversely affected by government control over capital investments or changes in tax
\nregulations. In addition, in the past the PRC government has implemented certain measures, including interest rate adjustment, to control
\nthe pace of economic growth. These measures may cause decreased economic activity in China, which may adversely affect our business and
\noperating results.<\/p>\n
\u00a0<\/p>\n
Uncertainties with respect to the PRC legal
\nsystem could adversely affect us and our PRC subsidiaries.<\/p>\n
\u00a0<\/p>\n
The PRC legal system is a civil law system based
\non written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have
\nlimited precedential value. Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve,
\nthe interpretations of many laws, regulations and rules are not always uniform and the enforcement of these laws, regulations and rules
\ninvolves uncertainties.<\/p>\n
\u00a0<\/p>\n
In addition, we and our PRC subsidiaries are subject
\nto risks and uncertainties of the interpretations and applications of PRC laws and regulations, including, but not limited to, limitations
\non foreign ownership in the industry our PRC subsidiaries operate. We and our PRC subsidiaries are also subject to the risks and uncertainties
\nabout any future actions of the PRC government. If any future actions of the PRC government result in a material change in our operations,
\nand the value of our Class A ordinary shares may depreciate significantly or become worthless.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
The PRC government exerts substantial influence
\nover the manner in which our PRC subsidiaries must conduct their business activities. If the Chinese government significantly regulates
\nthe business operations of our PRC subsidiaries in the future and our PRC subsidiaries are not able to substantially comply with such
\nregulations, the business operations of our PRC subsidiaries may be materially and adversely affected and the value of our Class A ordinary
\nshares may significantly decrease.<\/p>\n
\u00a0<\/p>\n
The PRC government has exercised, and continues
\nto exercise, substantial control over virtually every sector of the Chinese economy through regulation and state ownership, including
\nsteel sector where our PRC subsidiaries have been doing their business. Any government decisions or actions to change the way steel production
\nis regulated, or any decisions the government might make to cut spending, could adversely impact our PRC subsidiaries\u2019 business
\nand our results of operations. In addition, the ability of our PRC subsidiaries to operate in China may be harmed by changes in PRC laws
\nand regulations, including those relating to taxation, environmental conditions, land use rights, property and other matters. The central
\nor local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would
\nrequire additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly,
\ngovernment actions in the future, including regional or local variations in the implementation of economic policies, could have a significant
\neffect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then
\nhold in Chinese properties.<\/p>\n
\u00a0<\/p>\n
We believe that our PRC subsidiaries\u2019 operations
\nin China are in material compliance with all applicable legal and regulatory requirements. However, the central or local governments of
\nthe jurisdictions in which our PRC subsidiaries operate may impose new, stricter regulations or interpretations of existing regulations
\nwith little advance notice that would require additional expenditures and efforts on their part to ensure our subsidiaries\u2019 compliance
\nwith such regulations or interpretations.<\/p>\n
\u00a0<\/p>\n
Our PRC subsidiaries may incur increased costs
\nnecessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. In the event that our
\nPRC subsidiaries are not able to substantially comply with any existing or newly adopted laws and regulations, our business operations
\nmay be materially adversely affected and the value of our Class A ordinary shares may significantly decrease.<\/p>\n
\u00a0<\/p>\n
Furthermore, the PRC government authorities may
\nstrengthen oversight and control over offerings that are conducted overseas and\/or foreign investment in China-based issuers like us.
\nSuch actions taken by the PRC government authorities may intervene or influence the operations of our PRC subsidiaries at any time, which
\nmay be beyond our control. Therefore, any such action may adversely affect the operations of our PRC subsidiaries and substantially limit
\nor hinder our ability to offer or continue to offer securities to you and significantly reduce the value of such securities or cause the
\nvalue of such securities to be completely worthless.<\/p>\n
\u00a0<\/p>\n
We are required under PRC laws to submit
\nfilings to CSRC for our future offerings. However, we believe that we and our PRC subsidiaries are not currently required to obtain the
\napproval and\/or comply with other requirements of the CSRC, the CAC, or other PRC governmental authorities under PRC rules, regulations
\nor policies in connection with our continued listing on Nasdaq. In the event that any such approval is required or that there are other
\nrequirements we and\/or our PRC subsidiaries are obligated to comply with, we cannot predict whether or how soon we and\/or our PRC subsidiaries
\nwill be able to obtain such approvals and\/or comply with such requirements.<\/p>\n
\u00a0<\/p>\n
The PRC government authorities may strengthen
\nfuture oversight over offerings that are conducted overseas. For instance, on July 6, 2021, the relevant PRC governmental authorities
\npromulgated the Opinions on Strictly Cracking Down on Illegal Securities Activities, which emphasized the need to strengthen the PRC government\u2019s
\nsupervision over overseas listings by PRC companies. Pursuant to the Opinions, effective measures, such as promoting the construction
\nof relevant regulatory systems, are to be taken to deal with the risks of China-based overseas-listed companies, cybersecurity and data
\nprivacy protection requirements and similar matters. The Cybersecurity Review Measures (Decree No. 8 of the Cybersecurity Administration
\nof the PRC), or the revised Cybersecurity Review Measures, enacted on December 28, 2021 and came into effect on February 15, 2022, also
\nrequire online platform operators holding over one million users\u2019 personal information to apply for a cybersecurity review before
\nany public offering on a foreign stock exchange. These statements and regulations are recently issued, and there remain substantial uncertainties
\nabout their interpretation and implementation. See also \u201c\u2014Our PRC subsidiaries may be liable for improper use or appropriation
\nof personal information provided by their customers and any failure to comply with PRC laws and regulations over data security could result
\nin materially adverse impact on our business, results of operations, and our continued listing on Nasdaq.\u201d<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
On February 17, 2023, the CSRC published the Regulations
\nof Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the \u201cTrial Measures\u201d)
\nand its accompanying guidelines and instructions, which came into effect on March 31, 2023, and will apply if a domestic enterprise issues
\nshares, depositary receipts, corporate bonds convertible into shares, or other securities of an equity nature outside of the PRC, or lists
\nits securities for trading outside of the PRC. According to such regulations, a domestic enterprise that issues and lists its securities
\noutside of the PRC shall comply with the filing procedures and report the relevant information to the CSRC. A domestic enterprise shall
\nnot be listed on an overseas stock exchange if any of the following circumstances exists: (i) where such securities offering and listing
\nis explicitly prohibited by provisions in laws, administrative regulations and relevant state rules; (ii) where the intended securities
\noffering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance
\nwith law; (iii) where the domestic company intending to make the securities offering and listing, or its controlling shareholders and
\nthe actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the
\norder of the socialist market economy during the latest three years; (iv) where the domestic company intending to make the securities
\noffering and listing is suspected of committing crimes or major violations of laws and regulations, and is under investigation according
\nto law, and no conclusion has yet been made thereof; (v) where there are material ownership disputes over equity held by the domestic
\ncompany\u2019s controlling shareholder or by other shareholders that are controlled by the controlling shareholder and\/or actual controller.
\nThe Trial Measures changes the management of licensing to record management, strengthen the supervision in the aftermath, create a more
\ntransparent and predictable institutional environment, and support the standardized development of enterprises using the overseas capital
\nmarket.<\/p>\n
\u00a0<\/p>\n
According to the Notice on Filing Management Arrangements
\nfor Overseas Listings of Domestic Enterprises issued and implemented by the CSRC on February 17, 2023, since the date of effectiveness
\nof the Trial Measures, the domestic enterprises falling within the scope of filing that have been listed overseas or met the following
\ncircumstances are existing enterprises: Before the effectiveness of the Trial Measures, the application for indirect overseas issuance
\nand listing has been agreed by the overseas regulators or overseas stock exchanges (such as having passed the hearing on the Hong Kong
\nmarket or registration become effective as agreed on the U.S. market, etc.), and it is not required to perform issuance and listing supervision
\nprocedures of the overseas regulators or overseas stock exchanges (such as rehearing on the Hong Kong market, etc.), and the overseas
\nissuance and listing shall have been completed by September\u00a030, 2023. According to the above regulations, the Company is an existing
\nenterprise, which do not be required to file immediately, and filing should be made as required if they involve refinancing and other
\nfiling matters.<\/p>\n
\u00a0<\/p>\n
As of the date of this Quarterly Report, we believe
\nwe and our PRC subsidiaries are not required to obtain any permission from PRC authorities (including the CSRC and the CAC) to operate
\nour PRC subsidiaries\u2019 business as presently conducted or continue being listed on Nasdaq. Therefore, as of the date of this Quarterly
\nReport, we and our PRC subsidiaries have not applied for any permission or approval from any PRC governmental authority in connection
\nwith our offshore listing and, as such, no such permission or approval has been granted or denied. However, if it fails to comply with
\nthe Trial Measures during future issuance of securities or listing on other stock exchanges outside of China, we may be subjected sanctions
\nimposed by the PRC regulatory authorities, and our reputation, financial condition, and results of operations may be materially and adversely
\naffected.<\/p>\n
\u00a0<\/p>\n
To the extent cash
\nin the business is in the mainland China\/Hong Kong or a mainland China\/Hong Kong entity, the funds may not be available to fund operations
\nor for other use outside of the mainland China\/Hong Kong due to interventions in or the imposition of restrictions and limitations on
\nthe ability of our Company or our subsidiaries by the PRC government to transfer cash.<\/p>\n
\u00a0<\/p>\n
Relevant mainland PRC
\nlaws and regulations permit companies in mainland China to pay dividends only out of their respective retained earnings, if any, as determined
\nin accordance with mainland China accounting standards and regulations. Additionally, each of the companies in mainland China are required
\nto set aside at least 10% of its after-tax\u00a0profits each year, if any, to fund a statutory reserve until such reserve reaches 50%
\nof its registered capital. These reserves are not distributable as cash dividends. Furthermore, in order for us to pay dividends to our
\nshareholders, we may rely on payments made from our mainland PRC subsidiaries to their respective shareholders and then to our Company.
\nIf these entities incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends
\nor make other payments to us.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Our cash dividends, if any, will be paid in U.S.\u00a0dollars.
\nIf we are considered a tax resident enterprise of mainland China for tax purposes, any dividends we pay to our overseas shareholders may
\nbe regarded as mainland China-sourced\u00a0income and as a result may be subject to mainland PRC withholding tax. See \u201c\u2014\u00a0Risks
\nRelated to Doing Business in China \u2014\u00a0Under the PRC Enterprise Income Tax Law, we may be classified as a \u2018Resident Enterprise\u2019
\nof China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.\u201d The PRC government
\nalso imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out
\nof mainland China. Shortages in foreign currencies may restrict our ability to pay dividends or other payments, or otherwise satisfy our
\nforeign currency denominated obligations, if any. Under existing PRC foreign exchange regulations, payments of current account items,
\nincluding profit distributions, interest payments and expenditures from trade-related\u00a0transactions, can be made in foreign currencies
\nwithout prior approval from the State Administration of Foreign Exchange as long as certain procedural requirements are met. Approval
\nfrom appropriate government authorities is required if Renminbi is converted into foreign currency and remitted out of mainland China
\nto pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may, at its discretion, impose
\nrestrictions on access to foreign currencies for current account transactions and if this occurs in the future, we may not be able to
\npay dividends in foreign currencies to our shareholders.<\/p>\n
\u00a0<\/p>\n
As of the date of this
\nQuarterly Report, there are no restrictions or limitations imposed by the Hong\u00a0Kong government on the transfer of capital within,
\ninto, and out of Hong\u00a0Kong (including funds from Hong\u00a0Kong to mainland China), except for the transfer of funds involving money
\nlaundering and criminal activities. However, there is no guarantee that the Hong\u00a0Kong government will not promulgate new laws or
\nregulations that may impose such restrictions in the future. If there is a significant change to current political arrangements between
\nmainland China and Hong\u00a0Kong, or the applicable laws, regulations, or interpretations change, our Hong\u00a0Kong subsidiary may become
\nsubject to PRC laws or authorities. As a result, our Hong\u00a0Kong subsidiary could be subject to similar government controls on the
\nconvertibility of foreign currency and the remittance of currency out of Hong Kong as described above.<\/p>\n
\u00a0<\/p>\n
As a result of the above, to the extent cash in
\nthe business is in the mainland China\/Hong Kong or a mainland China\/Hong Kong entity, such funds or assets may not be available to fund
\noperations or for other use outside of the mainland China\/Hong Kong, due to interventions in or the imposition of restrictions and limitations
\non the ability of us or our subsidiaries by the competent government to the transfer of cash.\u00a0<\/p>\n
\u00a0<\/p>\n
Our PRC subsidiaries may be liable for improper
\nuse or appropriation of personal information provided by their customers and any failure to comply with PRC laws and regulations over
\ndata security could result in materially adverse impact on our business, results of operations, and our continued listing on Nasdaq.<\/p>\n
\u00a0<\/p>\n
Our PRC subsidiaries\u2019 business involves
\ncollecting and retaining certain internal and customer data. Our PRC subsidiaries also maintain information about various aspects of their
\noperations. The integrity and protection of customer and company data is critical to our business. Our subsidiaries\u2019 customers expect
\nthat our subsidiaries will adequately protect their personal information. Our PRC subsidiaries are required by applicable laws to keep
\nstrictly confidential the personal information that they collect, and to take adequate security measures to safeguard such information.<\/p>\n
\u00a0<\/p>\n
The PRC Criminal Law, as amended by its Amendment
\n7 (effective on February 28, 2009) and Amendment 9 (effective on November 1, 2015), prohibits institutions, companies and their employees
\nfrom selling or otherwise illegally disclosing a citizen\u2019s personal information obtained in performing duties or providing services
\nor obtaining such information through theft or other illegal ways. On November 7, 2016, the Standing Committee of the PRC National People\u2019s
\nCongress issued the Cyber Security Law of the PRC, or Cyber Security Law, which became effective on June 1, 2017. Pursuant to the Cyber
\nSecurity Law, network operators must not, without users\u2019 consent, collect their personal information, and may only collect users\u2019
\npersonal information necessary to provide their services. Providers are also obliged to provide security maintenance for their products
\nand services and shall comply with provisions regarding the protection of personal information as stipulated under the relevant laws and
\nregulations.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
The Civil Code of the PRC (issued by the PRC National
\nPeople\u2019s Congress on May 28, 2020 and effective from January 1, 2021) provides the legal basis for privacy and personal information
\ninfringement claims under the Chinese civil laws. PRC regulators, including the CAC, the Ministry of Industry and Information Technology,
\nand the Ministry of Public Security, have been increasingly focused on regulation in data security and data protection.<\/p>\n
\u00a0<\/p>\n
The PRC regulatory requirements regarding cybersecurity
\nare evolving. For instance, various regulatory bodies in China, including the CAC, the Ministry of Public Security and the State Administration
\nfor Market Regulation, have enforced data privacy and protection laws and regulations with varying and evolving standards and interpretations.
\nIn April 2020, the Chinese government promulgated Cybersecurity Review Measures, which came into effect on June 1, 2020. According to
\nthe Cybersecurity Review Measures, operators of critical information infrastructure must pass a cybersecurity review when purchasing network
\nproducts and services which do or may affect national security.<\/p>\n
\u00a0<\/p>\n
In December 2021, the CAC and other related authorities
\npromulgated the revised Cybersecurity Review Measures, which came into effect on February 15, 2022. The revised Cybersecurity Review Measures
\npropose the following key changes:<\/p>\n
\u00a0<\/p>\n
\u25cfonline
\nplatform operators who are engaged in data processing are also subject to the regulatory scope;<\/p>\n
\u00a0<\/p>\n
\u25cfthe
\nCSRC is included as one of the regulatory authorities for purposes of jointly establishing the state cybersecurity review working mechanism;<\/p>\n
\u00a0<\/p>\n
\u25cfthe
\nonline platform operators holding more than one million users\u2019 individual information and seeking a listing outside China shall
\nfile for cybersecurity review with the Cybersecurity Review Office; and<\/p>\n
\u00a0<\/p>\n
\u25cfthe
\nrisks of core data, material data or large amounts of personal information being stolen, leaked, destroyed, damaged, illegally used or
\ntransmitted to overseas parties and the risks of critical information infrastructure, core data, material data or large amounts of personal
\ninformation being influenced, controlled or used maliciously shall be collectively taken into consideration during the cybersecurity
\nreview process.<\/p>\n
\u00a0<\/p>\n
Certain internet platforms in China have reportedly
\nbecome subject to heightened regulatory scrutiny in relation to cybersecurity matters. As of the date of this Quarterly Report, we have
\nnot been included within the definition of \u201coperator of critical information infrastructure\u201d by a competent authority, nor
\nhave we been informed by any PRC governmental authority of any requirement that we file for a cybersecurity review. However, if we are
\ndeemed to be a critical information infrastructure operator or an online platform operator that is engaged in data processing and holds
\npersonal information of more than one million users, we could be subject to PRC cybersecurity review in the future.<\/p>\n
\u00a0<\/p>\n
As there remains significant uncertainty in the
\ninterpretation and enforcement of relevant PRC cybersecurity laws and regulations, we could be subject to cybersecurity review. In addition,
\nwe could become subject to enhanced cybersecurity review or investigations launched by PRC regulators in the future. Any failure or delay
\nin the completion of the cybersecurity review procedures or any other non-compliance with the related laws and regulations may result
\nin fines or other penalties, including suspension of business, website closure and revocation of prerequisite licenses, as well as reputational
\ndamage or legal proceedings or actions against us and\/or our PRC subsidiaries, which may have material adverse effect on our business,
\nfinancial condition or results of operations. As of the date of this Quarterly Report, we and our PRC subsidiaries have not been involved
\nin any investigations on cybersecurity review initiated by the CAC or related governmental regulatory authorities, and we and our PRC
\nsubsidiaries have not received any inquiry, notice, warning, or sanction in such respect.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
On June 10, 2021, the Standing Committee of the
\nNational People\u2019s Congress of China promulgated the PRC Data Security Law, which took effect in September 2021. The PRC Data Security
\nLaw imposes data security and privacy obligations on entities and individuals carrying out data activities, and introduces a data classification
\nand hierarchical protection system based on the importance of data in economic and social development, and the degree of harm it will
\ncause to national security, public interests, or legitimate rights and interests of individuals or organizations when such data is tampered
\nwith, destroyed, leaked, illegally acquired or used. The PRC Data Security Law also provides for a national security review procedure
\nfor data activities that may affect national security and imposes export restrictions on certain data and information.<\/p>\n
\u00a0<\/p>\n
As of the date of this Quarterly Report, we do
\nnot expect that the current PRC laws on cybersecurity or data security would have a material adverse impact on our business operations.
\nHowever, as the scope of the PRC Data Security Law is broad and includes the collection, storage, use, processing, transmission, availability
\nand disclosure of data, among others, and uncertainties remain regarding the interpretation and implementation of these laws and regulations,
\nwe cannot assure you that we and our PRC subsidiaries will comply with such regulations in all respects and we and\/or our PRC subsidiaries
\nmay be ordered to rectify or terminate any actions that are deemed illegal by regulatory authorities. Any directly liable person within
\nour Company for violations or alleged violations of the PRC Data Security Law may become subject to fines. We and\/or our PRC subsidiaries
\nmay also become subject to fines and\/or other sanctions that may have material adverse effect on our business, operations and financial
\ncondition.<\/p>\n
\u00a0<\/p>\n
On September 24, 2024, the CAC released the Administrative
\nRegulations on the Network Data Security, or the Data Security Regulations, which became effective on January 1, 2025. The Data Security
\nRegulations may apply to the use of networks to carry out data processing activities and the supervision and administration of network
\ndata security within the territory of the PRC and apply to activities outside the territory of the PRC to process personal information
\nof any natural persons within the territory of the PRC under any of the following circumstances: (i) for the purpose of providing products
\nor services to domestic natural persons; (ii) analyze and evaluate the behavior of domestic natural persons; and (iii) other circumstances
\nstipulated by laws and administrative regulations. The Data Security Regulations further stipulate that where it is indeed necessary to
\ntransfer \u201cimportant data\u201d collected and generated by a network data processor during its operation within the territory of
\nthe PRC to overseas parties, it shall pass the security assessment for cross-border data transfer organized by the CAC. Network data processors
\nshould identify and declare \u201cimportant data\u201d in accordance with the relevant provisions, but they are not required to conduct
\nsecurity assessment for outbound data transfer for data that has not been notified or published as \u201cimportant data\u201d by relevant
\ndepartments or regions. In addition, the Data Security Regulations provides that data processors that process \u201cimportant data\u201d
\nmust conduct an annual data security assessment with regard to the data process activities, and submit the assessment report to relevant
\ncompetent authorities at or above the provincial level. Since the Data Security Regulations is newly promulgated, there remains uncertainty
\nas to how it will be implemented and interpreted by the competent authorities and whether the PRC regulatory agencies, including the CAC,
\nwill adopt new laws, regulations, rules, or detailed implementation and interpretation related to security assessment. We cannot predict
\nthe impact of the Data Security Regulations on us, if any, at this stage, and we will closely monitor and assess any development in the
\nimplementation and interpretation of the Data Security Regulations. Even though we do not believe our business activities fall under the
\nscope of Data Security Regulations, in the event that a competent PRC governmental authority concludes otherwise, we face uncertainties
\nas to whether such clearance can be timely obtained, or at all.<\/p>\n
\u00a0<\/p>\n
A severe or prolonged downturn in the PRC
\nor global economy could materially and adversely affect our business and our financial condition.<\/p>\n
\u00a0<\/p>\n
The global macroeconomic environment is facing
\nchallenges. There is considerable uncertainty over the long-term\u00a0effects of the expansionary monetary and fiscal policies adopted
\nby the central banks and financial authorities of some of the world\u2019s leading economies, including the United States and China.
\nGeopolitical conflicts involving Iran, current military actions in the Middle East, as well as the conflicts involving Ukraine, Syria,
\nRussia and North Korea may result in volatility and disruptions to the economy in the U.S., China, and globally. In particular, the ongoing
\nconflict involving Iran poses significant risks to regional and global economic stability. Iran is a major producer of crude oil, and
\nany escalation of conflicts in Iran, including potential disruptions to oil production, export infrastructure, or transit routes through
\nthe Strait of Hormuz, have resulted in and could continue to result in significant increases in global crude oil prices. Elevated energy
\ncosts could, in turn, contribute to inflationary pressures, increased production and transportation costs, reduced consumer spending,
\nand a broader economic slowdown across major economies, including China and the United States. Such developments could materially and
\nadversely affect the demand for our products, increase our operating costs, and negatively impact our results of operations and financial
\ncondition. See also \u201c\u2014 Risks Related to our Business and Industry \u2014 Geopolitical conflicts involving Iran, military
\nactions in the Middle East, and the war in Ukraine may adversely affect economic conditions in the U.S., China and globally, and cause
\nsignificant volatility in the trading price of our Class A ordinary shares.\u201d There have also been concerns on the relationship among
\nChina and other Asian countries, which may result in, or intensify potential conflicts in relation to, territorial disputes, and the trade
\ndisputes between China and other countries. It is unclear whether these challenges and uncertainties will be contained or resolved, and
\nwhat effects they may have on the global political and economic conditions in the long term.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Economic conditions in China are sensitive to
\nglobal economic conditions, changes in domestic economic and political policies and the expected or perceived overall economic growth
\nrate in China. While the economy in China has grown significantly over the past decades, growth has been uneven, both geographically and
\namong various sectors of the economy, and the rate of growth has been slowing in recent years. Although growth of China\u2019s economy
\nremained relatively stable, there is a possibility that China\u2019s economic growth may materially decline in the near future. Any severe
\nor prolonged slowdown in the global or PRC economy may materially and adversely affect our business, results of operations and financial
\ncondition.<\/p>\n
\u00a0<\/p>\n
You may have difficulty enforcing judgments
\nagainst us. <\/p>\n
\u00a0<\/p>\n
A significant portion of our assets are located,
\nand a substantial amount of our subsidiaries\u2019 operations are conducted, in the PRC. In addition, some of our directors and officers
\nare nationals or residents of the PRC, including our acting chief financial officer, Ms. Chenyang Wang, and independent directors, Mr.
\nMing Zhao and Mr. Zheng He, and a substantial majority of their assets are located outside the United States. As a result, it may be difficult
\nto effect service of process within the United States upon these persons. In addition, there is uncertainty as to whether the courts of
\nthe PRC would recognize or enforce judgments of U.S. courts because China does not have any treaties or other arrangements that provide
\nfor the reciprocal recognition and enforcement of foreign judgments with the United States. In addition, according to the PRC Civil Procedures
\nLaw, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates
\nbasic principles of PRC law or national sovereignty, security, or the public interest.<\/p>\n
\u00a0<\/p>\n
Under the PRC Enterprise Income Tax Law,
\nwe may be classified as a \u201cResident Enterprise\u201d of China. Any classification as such will likely result in unfavorable tax
\nconsequences to us and our non-PRC shareholders.<\/p>\n
\u00a0<\/p>\n
Under the PRC EIT Law, an enterprise established
\noutside of China with \u201cde facto management bodies\u201d within China is considered a \u201cresident enterprise,\u201d meaning
\nthat it can be subject to an enterprise income tax, or EIT, rate of 25.0% on its global income. In April 2009, the SAT promulgated a circular,
\nknown as Circular 82, and partially amended by Circular 9 promulgated in January 2014, to clarify the certain criteria for the determination
\nof the \u201cde facto management bodies\u201d for foreign enterprises controlled by PRC enterprises or PRC enterprise groups. Under
\nCircular 82, a foreign enterprise is considered a PRC resident enterprise if all of the following apply: (1) the senior management and
\ncore management departments in charge of daily operations are located mainly within China; (2) decisions relating to the enterprise\u2019s
\nfinancial and human resource matters are made or subject to approval by organizations or personnel in China; (3) the enterprise\u2019s
\nprimary assets, accounting books and records, company seals, and board and shareholders\u2019 meeting minutes are located or maintained
\nin China; and (4) 50.0% or more of voting board members or senior executives of the enterprise habitually reside in China. Further to
\nCircular 82, the SAT issued a bulletin, known as Bulletin 45, effective in September 2011 and amended on June 1, 2015 and October 1, 2016,
\nto provide more guidance on the implementation of Circular 82 and clarify the reporting and filing obligations of such \u201cChinese
\ncontrolled offshore incorporated resident enterprises.\u201d Bulletin 45 provides for, among other matters, procedures for the determination
\nof resident status and administration of post-determination matters. Although Circular 82 and Bulletin 45 explicitly provide that the
\nabove standards apply to enterprises that are registered outside China and controlled by PRC enterprises or PRC enterprise groups, Circular
\n82 may reflect the SAT\u2019s criteria for determining the tax residence of foreign enterprises in general.<\/p>\n
\u00a0<\/p>\n
If the PRC tax authorities determine that we are
\na \u201cresident enterprise\u201d for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow.
\nFirst, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income
\ntax reporting obligations. In our case, this would mean that income such as non-China source income would be subject to PRC enterprise
\nincome tax at a rate of 25%. Second, under the PRC EIT Law, dividends paid to us from our PRC subsidiaries would be deemed as \u201cqualified
\ninvestment income between resident enterprises\u201d and therefore qualify as \u201ctax-exempt income\u201d pursuant to the clause
\n26 of the PRC EIT Law. Finally, it is possible that future guidance issued with respect to the new \u201cresident enterprise\u201d classification
\ncould result in a situation in which the dividends we pay with respect to our Class A ordinary shares, or the gain our non-PRC shareholders
\nmay realize from the transfer of our Class A ordinary shares, may be treated as PRC-sourced income and may therefore be subject to a 10%
\nPRC withholding tax. The PRC EIT Law is, however, relatively new and ambiguities exist with respect to the interpretation and identification
\nof PRC-sourced income, and the application and assessment of withholding taxes. If we are required under the PRC EIT Law to withhold PRC
\nincome tax on dividends payable to our non-PRC shareholders, should there be a determination in the future to pay dividends, or if non-PRC
\nshareholders are required to pay PRC income tax on gains on the transfer of their Class A ordinary shares, our business could be negatively
\nimpacted and the value of your investment may be materially reduced. Further, if we were treated as a \u201cresident enterprise\u201d
\nby PRC tax authorities, we would be subject to taxation in both China and such countries in which we have taxable income, and our PRC
\ntax may not be creditable against such other taxes.<\/p>\n
\u00a0\u00a0<\/p>\n
\u00a0<\/p>\n
PRC regulation of loans to, and direct investments
\nin, PRC entities by offshore holding companies may delay or prevent us from using proceeds from our future financing activities to make
\nloans or additional capital contributions to our PRC subsidiaries.<\/p>\n
\u00a0<\/p>\n
As an offshore holding company with PRC subsidiaries,
\nwe may transfer funds to our PRC subsidiaries or finance our PRC entities by means of loans or capital contributions. Any capital contributions
\nor loans that we, as an offshore entity, make to our PRC subsidiaries, are subject to PRC regulations. Any loans to our PRC subsidiaries,
\nwhich are foreign-invested enterprises, cannot exceed statutory limits based on the difference between the amount of our investments and
\nregistered capital in such subsidiaries, and shall be registered with State Administration of Foreign Exchange, or SAFE, or its local
\ncounterparts. Furthermore, any capital increase contributions we make to our PRC subsidiaries, which are foreign-invested enterprises,
\nare subject to the requirement of making necessary reports in Foreign Investment Comprehensive Management Information System, and registration
\nwith other government authorities in China. We may not be able to obtain these government registrations or approvals on a timely basis,
\nif at all. If we fail to obtain such approvals or make such registration, our ability to make equity contributions or provide loans to
\nour PRC subsidiaries or to fund their operations may be negatively affected, which may adversely affect their liquidity and ability to
\nfund their working capital and expansion projects and meet their obligations and commitments. As a result, our liquidity and our ability
\nto fund and expand our business may be negatively affected.<\/p>\n
\u00a0<\/p>\n
We may rely on dividends paid by our subsidiaries
\nfor our cash needs, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect
\non our ability to conduct business.<\/p>\n
\u00a0<\/p>\n
As a holding company, we conduct a substantial
\namount of our business through our subsidiaries in China. We may rely on dividends paid by these PRC subsidiaries for our cash needs,
\nincluding the funds necessary to pay any dividends and other cash distributions to our shareholders, to service any debt we may incur
\nand to pay our operating expenses. The payment of dividends by entities established in China is subject to limitations. Regulations in
\nChina currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and
\nregulations in China. In accordance with the Article 210, 214 of the Company Law of the PRC (Revised in 2023), each of our PRC subsidiaries
\nis required to allocate 10% of their profits to their statutory common reserve when they distribute their after-tax profits for the current
\nyear. A company shall no longer be required to make allocations to their statutory common reserve once the aggregate amount of such reserve
\nexceeds 50% of their registered capital. The statutory common reserve fund of a company may only be used to cover the losses of the company,
\nexpand the business and production of the company or be converted into additional capital. As a result, our PRC subsidiaries are restricted
\nin their ability to transfer a portion of their net assets to us in the form of dividends. In addition, if any of our PRC subsidiaries
\nincurs debt on its own behalf in the future, the instruments governing the debt may restrict such subsidiary\u2019s ability to pay dividends
\nor make other distributions to us. Any limitations on the ability of our PRC subsidiaries to transfer funds to us could materially and
\nadversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends and otherwise
\nfund and conduct our business.<\/p>\n
\u00a0\u00a0<\/p>\n
You may be subject to PRC income tax on
\ndividends from us or on any gain realized on the transfer of our Class A ordinary shares.<\/p>\n
\u00a0<\/p>\n
Under the PRC EIT Law, subject to any applicable
\ntax treaty or similar arrangement between the PRC and your jurisdiction of residence that provides for a different income tax arrangement,
\nPRC withholding tax at the rate of 10.0% is normally applicable to dividends from PRC sources payable to investors that are non-PRC resident
\nenterprises, which do not have an establishment or place of business in China, or which have such establishment or place of business if
\nthe relevant income is not effectively connected with the establishment or place of business. Any gain realized on the transfer of shares
\nby such investors is subject to 10.0% PRC income tax if such gain is regarded as income derived from sources within China unless a treaty
\nor similar arrangement otherwise provides. Under the Individual Income Tax Law of the PRC and its implementation rules, dividends from
\nsources within China paid to foreign individual investors who are not PRC residents are generally subject to a PRC withholding tax at
\na rate of 20% and gains from PRC sources realized by such investors on the transfer of shares are generally subject to 20% PRC income
\ntax, in each case, subject to any reduction or exemption set forth in applicable tax treaties and PRC laws.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
There is a risk that we will be treated by the
\nPRC tax authorities as a PRC tax resident enterprise. In that case, any dividends we pay to our shareholders may be regarded as income
\nderived from sources within China and we may be required to withhold a 10.0% PRC withholding tax for the dividends we pay to our investors
\nwho are non-PRC corporate shareholders, or a 20.0% withholding tax for the dividends we pay to our investors who are non-PRC individual
\nshareholders, including the holders of our Shares. In addition, our non-PRC shareholders may be subject to PRC tax on gains realized on
\nthe sale or other disposition of our Class A ordinary shares, if such income is treated as sourced from within China. It is unclear whether
\nour non-PRC shareholders would be able to claim the benefits of any tax treaties between their tax residence and China in the event that
\nwe are considered as a PRC resident enterprise. If PRC income tax is imposed on gains realized through the transfer of our Class A ordinary
\nshares or on dividends paid to our non-resident investors, should there be a determination in the future to pay dividends, the value of
\nyour investment in our Class A ordinary shares may be materially and adversely affected. Furthermore, our shareholders whose jurisdictions
\nof residence have tax treaties or arrangements with China may not qualify for benefits under such tax treaties or arrangements.<\/p>\n
\u00a0<\/p>\n
Fluctuations in exchange rates could have
\na material adverse impact on our results of operations and the value of your investment.<\/p>\n
\u00a0<\/p>\n
The conversion of Renminbi into foreign currencies,
\nincluding U.S. dollars, is based on rates set by the People\u2019s Bank of China. The Renminbi has fluctuated against the U.S. dollar,
\nat times significantly and unpredictably. The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is
\naffected by, among other things, changes in political and economic conditions in China and by China\u2019s foreign exchange policies,
\namong other things. We cannot assure you that Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar
\nin the future. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the
\nRenminbi and the U.S. dollar in the future.<\/p>\n
\u00a0<\/p>\n
Significant fluctuation of the Renminbi may have
\na material adverse effect on your investment. For example, to the extent that we need to convert U.S. dollars into Renminbi for our operations,
\nappreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive from the conversion.
\nConversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our Class A ordinary
\nshares or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar
\namount available to us.<\/p>\n
\u00a0<\/p>\n
Very limited hedging options are available in
\nChina to reduce our exposure to exchange rate fluctuations. As of the date of this Quarterly Report, we have not entered into any material
\nhedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging
\ntransactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge
\nour exposure or at all. In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our
\nability to convert Renminbi into foreign currency.<\/p>\n
\u00a0<\/p>\n
Governmental control of currency conversion
\nmay limit our ability to utilize our revenues effectively and affect the value of your investment.<\/p>\n
\u00a0<\/p>\n
The PRC government imposes controls on the convertibility
\nof the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive a significant portion
\nof our revenues in Renminbi. Under our current corporate structure, our British Virgin Islands holding company may rely on dividend payments
\nfrom our PRC subsidiaries to fund any cash and financing requirements we may have. Under existing PRC foreign exchange regulations, payments
\nof current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions,
\ncan be made in foreign currencies without prior approval of SAFE, by complying with certain procedural requirements. Specifically, under
\nthe existing exchange restrictions, without prior approval of SAFE, cash generated from the operations of our PRC subsidiaries in China
\nmay be used to pay dividends to our Company. However, approval from or registration with appropriate government authorities is required
\nwhere Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans
\ndenominated in foreign currencies. As a result, we need to obtain SAFE approval to use cash generated from the operations of our PRC subsidiaries
\nto pay off their respective debt in a currency other than Renminbi owed to entities outside China, or to make other capital expenditure
\npayments outside China in a currency other than Renminbi. If such approval is withheld or the PRC government imposes other restrictions
\non the convertibility of Renminbi into foreign currencies, we may not be able to utilize our revenues effectively, and as a result, our
\nbusiness and results of operations may be materially adversely affected, and the value of our Class A ordinary shares may decrease.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
U.S. regulatory bodies may be limited in
\ntheir ability to conduct investigations or inspections of our operations in China.<\/p>\n
\u00a0<\/p>\n
The SEC, the U.S. Department of Justice and other
\nU.S. authorities may also have difficulties in bringing and enforcing actions against us or our directors or executive officers in the
\nPRC. The SEC has stated that there are significant legal and other obstacles to obtaining information needed for investigations or litigation
\nin China. China has recently adopted a revised securities law that became effective on March 1, 2020, Article 177 of which provides, among
\nother things, that no overseas securities regulator is allowed to directly conduct an investigation or evidence collection activities
\nwithin the territory of the PRC. Accordingly, without governmental approval in China, no entity or individual in China may provide documents
\nand information relating to securities business activities to overseas regulators when it is under direct investigation or evidence discovery
\nconducted by overseas regulators, which could present significant legal and other obstacles to obtaining information needed for investigations
\nand litigation conducted outside of China.<\/p>\n
\u00a0<\/p>\n
Our Class A ordinary shares may be delisted
\nand prohibited from being traded under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors. The
\ndelisting and the cessation of trading of our Class A ordinary shares, or the threat of their being delisted and prohibited from being
\ntraded, may materially and adversely affect the value of your investment. Additionally, any inability of the PCAOB to conduct inspections
\ndeprives our investors with the benefits of such inspections.<\/p>\n
\u00a0<\/p>\n
Pursuant to the Holding Foreign Companies Accountable
\nAct, as amended by the Consolidated Appropriations Act 2023, if the SEC determines that we have filed audit reports issued by a registered
\npublic accounting firm that has not been subject to inspections by the PCAOB for two consecutive years, the SEC will prohibit our Class
\nA ordinary shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States.<\/p>\n
\u00a0<\/p>\n
Our auditor, Enrome LLP, as an auditor of companies
\nthat are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to
\nwhich the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards and was not identified
\nin PCAOB\u2019s determination report as a firm subject to the PCAOB\u2019s determination. Enrome LLP is headquartered in Singapore and
\nsubject to inspect by the PCAOB.<\/p>\n
\u00a0<\/p>\n
If the PCAOB determines in the future that it
\nno longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we use an accounting
\nfirm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be
\nidentified as a Commission-Identified Issuer following the filing of the annual report on Form 10-K for the relevant fiscal year. In accordance
\nwith the Holding Foreign Companies Accountable Act, our securities would be prohibited from being traded on a national securities exchange
\nor in the over-the-counter trading market in the United States if we are identified as a Commission-Identified Issuer for two consecutive
\nyears in the future. A prohibition of being able to trade in the United States would substantially impair or completely hinder your ability
\nto sell or purchase our Class A ordinary shares when you wish to do so, and the risk and uncertainty associated with delisting would have
\na negative impact on the price of our Class A ordinary shares or render them worthless. Also, such a prohibition would significantly affect
\nour ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial
\ncondition, and prospects.<\/p>\n
\u00a0<\/p>\n
Additionally, we cannot assure you whether the
\nnational securities exchange we are listed on or regulatory authorities would apply additional and more stringent criteria to us after
\nconsidering the effectiveness of our auditor\u2019s audit procedures and quality control procedures, adequacy of personnel and training,
\nor sufficiency of resources, geographic reach, or experience as it relates to our audit.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Risks Related to Our Ordinary Shares<\/p>\n
\u00a0<\/p>\n
Nasdaq has recently adopted and proposed
\nnew listing rules that could result in the accelerated delisting of our Class A ordinary shares.<\/p>\n
\u00a0<\/p>\n
Nasdaq has recently adopted and proposed several
\nnew continued listing requirements that could subject our Class A ordinary shares to accelerated suspension and delisting proceedings,
\nwith limited or no opportunity to cure noncompliance.<\/p>\n
\u00a0<\/p>\n
Amended Minimum Bid Price Rule (Effective January
\n19, 2026). Nasdaq amended its minimum bid price rules, effective January 19, 2026, such that if a listed security\u2019s closing
\nbid price falls below $0.10 for ten consecutive trading days, Nasdaq will immediately issue a Staff Delisting Determination under Rule
\n5810 and the company will be ineligible for any compliance period that would otherwise be available. Prior to this amendment, an immediate
\ndelisting determination could only be issued after a company\u2019s security had already been non-compliant with the $1.00 minimum bid
\nprice requirement for 30 consecutive trading days. Nasdaq adopted this change on the basis that a rapid decline in a security\u2019s
\nprice to below $0.10 is indicative of deep financial or operational distress that is unlikely to be temporary.<\/p>\n
\u00a0<\/p>\n
On March 12, 2026, we received a notification
\nletter (the \u201cBid Price Deficiency Letter\u201d) from the Listing Qualifications staff of Nasdaq notifying us that, for the last
\n30 consecutive business days, the closing bid price for our Class A ordinary shares had been below the minimum $1.00 per share required
\nfor continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (\u201cRule 5550(a)(2)\u201d). The Bid
\nPrice Deficiency Letter constitutes a notice of deficiency only and does not currently affect the listing or trading of our Class A ordinary
\nshares on The Nasdaq Capital Market.<\/p>\n
\u00a0<\/p>\n
Pursuant to the Bid Price Deficiency Letter, we
\nhave 180 days, or until September 8, 2026, to regain compliance with Rule 5550(a)(2) by maintaining a closing bid price of at least $1.00
\nper share for a minimum of 10 consecutive business days. We may also be eligible for an additional compliance period of 180 calendar days
\nif, on September 8, 2026, we meet the continued listing requirement for market value of publicly held shares and all other applicable
\nstandards for initial listing on The Nasdaq Capital Market (with the exception of the closing bid price requirement) based on our then
\nmost recent public filings and market information, and we provide written notice to Nasdaq of our intent to cure the deficiency during
\nsuch additional compliance period, including, without limitation, by effecting a share consolidation, if necessary.<\/p>\n
\u00a0<\/p>\n
We intend to monitor closely the closing bid price
\nof our Class A ordinary shares and to consider plans for regaining compliance with Rule 5550(a)(2). While we plan to review all available
\noptions, there can be no assurance that we will be able to regain compliance with the applicable rules during the 180-day compliance period
\nending on September 8, 2026, any additional compliance period, or at all. Furthermore, in the event that the closing bid price of our
\nClass A ordinary shares falls below $0.10 per share for ten consecutive trading days, Nasdaq will issue an immediate Staff Delisting Determination
\nand we will be ineligible for any compliance period that would otherwise be available, which would result in the immediate delisting of
\nour Class A ordinary shares from The Nasdaq Capital Market.<\/p>\n
\u00a0<\/p>\n
Proposed Minimum Market Value Requirement (SR-NASDAQ-2026-004,
\nPending SEC Approval). Nasdaq has proposed a new rule that would require listed companies on the Nasdaq Global Market and Nasdaq Capital
\nMarket to maintain a minimum Market Value of Listed Securities of at least $5 million. Failure to satisfy this requirement for 30 consecutive
\nbusiness days would result in immediate suspension and delisting without a standard compliance period. Under the proposed rule, any automatic
\nstay of suspension during an appeal would be eliminated, meaning our securities would likely trade over-the-counter while any appeal is
\npending.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Proposed Discretionary Delisting Authority
\n(SR-NASDAQ-2026-009, Pending SEC Approval). Nasdaq has also proposed granting itself discretionary authority to immediately delist
\nsecurities if the SEC has suspended trading due to potential third-party misconduct.<\/p>\n
\u00a0<\/p>\n
If our Class A ordinary shares are delisted from
\nNasdaq for any reason, it could materially and adversely affect our business, financial condition, and results of operations. Delisting
\nwould likely cause the trading volume and liquidity of our Class A ordinary shares to decline significantly, as many institutional investors
\nare prohibited by their investment mandates from holding securities that are not listed on a national securities exchange. Our Class A
\nordinary shares would likely be traded on the over-the-counter markets, where investors may find it more difficult to obtain timely and
\naccurate information about our company and where the trading market may be significantly less liquid than Nasdaq. The reduction in liquidity
\ncould cause the trading price of our Class A ordinary shares to decline materially. In addition, delisting could impair our ability to
\nraise capital through the issuance of equity or equity-linked securities, as investors and underwriters may be unwilling to participate
\nin offerings of securities that are not listed on a national securities exchange. Delisting could also trigger defaults or acceleration
\nprovisions under any existing or future debt instruments or agreements, and could impair our ability to attract and retain employees,
\ncustomers, and business partners who may view a Nasdaq listing as an indicator of our financial stability and credibility. Furthermore,
\nthe delisting of our Class A ordinary shares could result in negative publicity and erode investor confidence in our company, which could
\nhave a long-term adverse impact on our business prospects and the value of your investment.<\/p>\n
\u00a0<\/p>\n
Our\u00a0dual-class\u00a0share structure
\nwith different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change
\nof control transactions that holders of our Class\u00a0A ordinary shares may view as beneficial.<\/p>\n
\u00a0<\/p>\n
Under our dual-class\u00a0share structure, our
\nordinary shares consist of Class\u00a0A ordinary shares and Class\u00a0B ordinary shares. In respect of matters requiring the votes of
\nshareholders, holders of Class\u00a0B ordinary shares are entitled to 25 votes per share, while holders of Class\u00a0A ordinary shares
\nare entitled to one vote per share based on our dual-class\u00a0share structure. Each Class\u00a0B ordinary share is convertible into
\none Class\u00a0A ordinary share at any time by the holder thereof, while Class\u00a0A ordinary shares are not convertible into Class\u00a0B
\nordinary shares under any circumstances. Upon any sale, transfer, assignment, or disposition of any Class\u00a0B ordinary shares by a
\nholder thereof to a transferee who is not an affiliate of the transferor, such Class\u00a0B ordinary shares are automatically and immediately
\nconverted into an equal number of Class\u00a0A ordinary shares.<\/p>\n
\u00a0<\/p>\n
As of the date of this Report, Mr. Peter Zuguang
\nWang, the Chairman of our Board of Directors, beneficially owns all of our issued and outstanding Class B ordinary shares. These Class\u00a0B
\nordinary shares constitute approximately 24.00% of our total issued and outstanding ordinary shares and 88.76% of the aggregate voting
\npower of our total issued and outstanding ordinary shares, due to the disparate voting powers associated with our dual-class\u00a0share
\nstructure. As a result of the dual-class\u00a0share structure and the concentration of ownership, the holder of Class\u00a0B ordinary
\nshares will have considerable influence over matters such as decisions regarding mergers, consolidations, and the sale of all or substantially
\nall of our assets, election of directors, and other significant corporate actions. The holder may take actions that are not in the best
\ninterest of us or our other shareholders. This concentration of ownership may discourage, delay, or prevent a change in control of our
\nCompany, which could have the effect of depriving our other shareholders of the opportunity to receive a premium for their shares as part
\nof a sale of our Company and may reduce the price of the Class\u00a0A ordinary shares. This concentrated control will limit your ability
\nto influence corporate matters and could discourage others from pursuing any potential merger, takeover, or other change of control transactions
\nthat holders of Class\u00a0A ordinary shares may view as beneficial.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
The\u00a0dual-class\u00a0structure of our
\nordinary shares may adversely affect the trading market for the Class\u00a0A ordinary shares.<\/p>\n
\u00a0<\/p>\n
S&P Dow Jones and FTSE Russell have announced
\nchanges to their eligibility criteria for inclusion of shares of public companies in certain indices, including the S&P 500, to exclude
\ncompanies with multiple classes of shares and companies whose public shareholders hold no more than 5% of total voting power from being
\nadded to such indices. In addition, several shareholder advisory firms have announced their opposition to the use of multiple class capital
\nstructures. As a result, the dual class structure of our ordinary shares may prevent the inclusion of the Class\u00a0A ordinary shares
\nin such indices and may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise
\nseek to cause us to change our capital structure. Any such exclusion from indices could result in a less active trading market for the
\nClass\u00a0A ordinary shares. Any actions or publications by shareholder advisory firms critical of our corporate governance practices
\nor capital structure could also adversely affect the value of the Class\u00a0A ordinary shares<\/p>\n
\u00a0<\/p>\n
Future sales of our Class A ordinary shares,
\nwhether by us or our shareholders, could cause the price of our Class A ordinary shares to decline.<\/p>\n
\u00a0<\/p>\n
If our existing shareholders sell, or indicate
\nan intent to sell, substantial amounts of our Class A ordinary shares in the public market, the trading price of our Class A ordinary
\nshares could decline significantly. Similarly, the perception in the public market that our shareholders might sell our Class A ordinary
\nshares could also depress the market price of our shares. A decline in the price of our Class A ordinary shares might impede our ability
\nto raise capital through the issuance of additional Class A ordinary shares or other equity securities. In addition, the issuance and
\nsale by us of additional Class A ordinary shares, or securities convertible into or exercisable for our Class A ordinary shares, or the
\nperception that we will issue such securities, could reduce the trading price for our Class A ordinary shares as well as make future sales
\nof equity securities by us less attractive or not feasible. The sale of Class A ordinary shares issued upon the exercise of our outstanding
\nwarrants could further dilute the holdings of our then existing shareholders.<\/p>\n
\u00a0\u00a0<\/p>\n
We do not know whether a market for the
\nClass A ordinary shares will be sustained or what the trading price of the Class A ordinary shares will be and as a result it may be difficult
\nfor you to sell your Class A ordinary shares.<\/p>\n
\u00a0<\/p>\n
Although our Class A ordinary shares trade on
\nNasdaq, an active trading market for the Class A ordinary shares may not be sustained. It may be difficult for you to sell your Class
\nA ordinary shares without depressing the market price for the Class A ordinary shares. As a result of these and other factors, you may
\nnot be able to sell your Class A ordinary shares. Further, an inactive market may also impair our ability to raise capital by selling
\nClass A ordinary shares, or may impair our ability to enter into strategic partnerships or acquire companies or products by using our
\nClass A ordinary shares as consideration.<\/p>\n
\u00a0<\/p>\n
Securities analysts may not cover our Class
\nA ordinary shares and this may have a negative impact on the market price of our Class A ordinary shares.<\/p>\n
\u00a0<\/p>\n
The trading market for our Class A ordinary shares
\nwill depend, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have
\nany control over independent analysts (provided that we have engaged various non-independent analysts). We do not currently have and may
\nnever obtain research coverage by independent securities and industry analysts. If no independent securities or industry analysts commence
\ncoverage of us, the trading price for our Class A ordinary shares would be negatively impacted. If we obtain independent securities or
\nindustry analyst coverage and if one or more of the analysts who covers us downgrades our Class A ordinary shares, changes their opinion
\nof our shares or publishes inaccurate or unfavorable research about our business, the price of our Class A ordinary shares would likely
\ndecline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our Class A ordinary
\nshares could decrease and we could lose visibility in the financial markets, which could cause the price and trading volume of our Class
\nA ordinary shares to decline.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Because we do not expect to pay dividends
\nin the foreseeable future, you must rely on the price appreciation of our Class A ordinary shares for a return on your investment.<\/p>\n
\u00a0<\/p>\n
We currently intend to retain most, if not all,
\nof our available funds and any future earnings to fund the development and growth of our business. As a result, we do not expect to pay
\nany cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our Class A ordinary shares as a source
\nfor any future dividend income.<\/p>\n
\u00a0<\/p>\n
Our board of directors has complete discretion
\nas to whether to distribute dividends, subject to certain requirements of British Virgin Islands law. In addition, our shareholders may
\nby ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors. Under British
\nVirgin Islands law, a British Virgin Islands company may pay a dividend out of either profit or share premium account, provided that in
\nno 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
\ncourse of business. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends,
\nif any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the
\namount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions, and other factors
\ndeemed relevant by our board of directors. Accordingly, the return on your investment in our Class A ordinary shares will likely depend
\nentirely upon any future price appreciation of our Class A ordinary shares. There is no guarantee that our Class A ordinary shares will
\nappreciate in value or even maintain the price at which you purchased the Class A ordinary shares. You may not realize a return on your
\ninvestment in our Class A ordinary shares and you may even lose your entire investment in our Class A ordinary shares.<\/p>\n
\u00a0<\/p>\n
Techniques employed by short sellers may
\ndrive down the market price of our Class A ordinary shares.<\/p>\n
\u00a0<\/p>\n
Short selling is the practice of selling securities
\nthat the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later
\ndate to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed
\nsecurities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the
\nsale. As it is in the short seller\u2019s interest for the price of the security to decline, many short sellers publish, or arrange for
\nthe publication of, negative opinions regarding the relevant issuer and its business prospects in order to create negative market momentum
\nand generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in
\nthe market.<\/p>\n
\u00a0<\/p>\n
Other public companies listed in the United States
\nthat have substantial operations in China have been the subject of short selling. Much of the scrutiny and negative publicity has centered
\non allegations of a lack of effective internal control over financial reporting resulting in financial and accounting irregularities and
\nmistakes, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result,
\nmany of these companies are now conducting internal and external investigations into the allegations and, in the interim, are subject
\nto shareholder lawsuits and\/or SEC enforcement actions.<\/p>\n
\u00a0<\/p>\n
We may in the future be the subject of unfavorable
\nallegations made by short sellers. Any such allegations may be followed by periods of instability in the market price of our Class A ordinary
\nshares and negative publicity. If and when we become the subject of any unfavorable allegations, whether such allegations are proven to
\nbe true or untrue, we could be required to expend a significant amount of resources to investigate such allegations and\/or defend ourselves.
\nWhile we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against
\nthe relevant short seller by principles of freedom of speech, applicable federal or state law or issues of commercial confidentiality.
\nSuch a situation could be costly and time- consuming and could distract our management from growing our business. Even if such allegations
\nare ultimately proven to be groundless, allegations against us could severely impact our business operations and shareholder\u2019s equity,
\nand the value of any investment in our Class A ordinary shares could be greatly reduced or rendered worthless.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Our Class A ordinary shares may experience
\nextreme price and volume fluctuations, which could lead to costly litigation for us and make an investment in us less appealing.<\/p>\n
\u00a0<\/p>\n
The market price of our Class A ordinary shares
\nmay fluctuate substantially due to a variety of factors, including:<\/p>\n
\u00a0<\/p>\n
\u25cfour
\nbusiness strategy and plans;<\/p>\n
\u00a0<\/p>\n
\u25cfnew
\nregulatory pronouncements and changes in regulatory guidelines and timing of regulatory approvals;<\/p>\n
\u00a0<\/p>\n
\u25cfgeneral
\nand industry-specific economic conditions;<\/p>\n
\u00a0<\/p>\n
\u25cfvariations
\nin our quarterly financial and operating results, including the rate at which we incur negative cash flow in future periods;<\/p>\n
\u00a0<\/p>\n
\u25cfchanges
\nin market valuations of other companies that operate in our business segments or in our industry;<\/p>\n
\u00a0<\/p>\n
\u25cflack
\nof trading liquidity;<\/p>\n
\u00a0<\/p>\n
\u25cfchanges
\nin accounting principles; and<\/p>\n
\u00a0<\/p>\n
\u25cfgeneral
\nmarket conditions, economic and other external factors.<\/p>\n
\u00a0<\/p>\n
In addition, the stock market in general, and
\nthe market for shares of PRC-based issuers in particular, has experienced extreme price and volume fluctuations that have often been unrelated
\nor disproportionate to the operating performance of individual companies. These broad market and industry fluctuations, as well as general
\neconomic, political, regulatory and market conditions, such as recessions, interest rate changes, inflation, public health crises, geopolitical
\ninstability or disruptions in global supply chains, could cause the market price of our Class A ordinary shares to decline materially,
\nregardless of our actual operating performance or prospects. As a result, investors in our Class A ordinary shares may experience a significant
\ndecrease in the value of their investment and may be unable to resell their shares at or above the price paid.<\/p>\n
\u00a0<\/p>\n
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES
\nAND USE OF PROCEEDS.<\/p>\n
\u00a0<\/p>\n
There were no unregistered sales of the Company\u2019s
\nequity securities during the three months ended March 31, 2026 that were not previously disclosed in reports filed with the SEC. \u00a0\u00a0<\/p>\n
\u00a0<\/p>\n
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.<\/p>\n
\u00a0<\/p>\n
No senior securities were issued and outstanding
\nduring the three-month period ended March 31, 2024.<\/p>\n
\u00a0<\/p>\n
ITEM 4. MINE SAFETY DISCLOSURES.<\/p>\n
\u00a0<\/p>\n
Not applicable.<\/p>\n
\u00a0<\/p>\n
ITEM 5. OTHER INFORMATION.<\/p>\n
\u00a0<\/p>\n
None.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
ITEM 6. EXHIBITS\u00a0<\/p>\n
\u00a0<\/p>\n
(a) Exhibits<\/p>\n
\u00a0<\/p>\n
Exhibit
\n \u00a0
\n Exhibit Description<\/p>\n
3.1(2)
\n \u00a0
\n Memorandum and Articles of Association.<\/p>\n
3.2(2)
\n \u00a0
\n Amended and Restated Articles of Association.<\/p>\n
3.3(1)
\n \u00a0
\n Second Amended and Restated Articles of Association.<\/p>\n
3.4(3)
\n \u00a0
\n Amended and Restated Memorandum and Articles of Association, effective on October 24, 2019.<\/p>\n
10.1(4)
\n \u00a0
\n Employment Agreement, dated March 21, 2026 by and between the Company and Chenyang Wang<\/p>\n
10.2*
\n \u00a0
\n Extension Agreement, dated April 14, 2026, by and between Zhongchai Holding (Hong Kong) Limited and Cenntro Inc.<\/p>\n
10.3*
\n \u00a0
\n Supplementary Agreement, dated January 1, 2025, by and between Zhejiang Zhongchai Machinery Co. Ltd. and Hangcha Group<\/p>\n
31.1*
\n \u00a0
\n Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.<\/p>\n
31.2*
\n \u00a0
\n Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.<\/p>\n
32.1**
\n \u00a0
\n Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.<\/p>\n
32.2**
\n \u00a0
\n Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.<\/p>\n
101.INS
\n \u00a0
\n Inline XBRL Instance Document.<\/p>\n
101.SCH
\n \u00a0
\n Inline XBRL Taxonomy Extension Schema Document.<\/p>\n
101.CAL
\n \u00a0
\n Inline XBRL Taxonomy Extension Calculation Linkbase Document.<\/p>\n
101.DEF
\n \u00a0
\n Inline XBRL Taxonomy Extension Definition Linkbase Document.<\/p>\n
101.LAB
\n \u00a0
\n Inline XBRL Taxonomy Extension Label Linkbase Document.<\/p>\n
101.PRE
\n \u00a0
\n Inline XBRL Taxonomy Extension Presentation Linkbase Document.<\/p>\n
104
\n \u00a0
\n Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).<\/p>\n
\u00a0<\/p>\n
(1)
\n Incorporated by reference to the Company\u2019s Form 8-K, filed with the SEC on July 30, 2018.<\/p>\n
\u00a0<\/p>\n
(2)
\n Incorporated by reference to the Company\u2019s Form S-1\/A, filed with the SEC on July 16, 2018.<\/p>\n
\u00a0<\/p>\n
(3)
\n Incorporated by reference to the Company\u2019s Form 8-K, filed with the SEC on October 30, 2019.<\/p>\n
\u00a0<\/p>\n
(4)
\n Incorporated by reference to the Company\u2019s Form 10-K, filed with the SEC on March 23, 2026.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
**
\n In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibits 32.1 and 32.2 herewith are deemed to accompany this Form 10-Q and will not be deemed filed for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
SIGNATURES<\/p>\n
\u00a0<\/p>\n
Pursuant to the requirements of the Securities
\nExchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
\n\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0
\n Greenland Technologies Holding Corp.<\/p>\n
\u00a0
\n \u00a0<\/p>\n
Date: May 13, 2026
\n \/s\/ Raymond Z. Wang<\/p>\n
\u00a0
\n Raymond Z. Wang<\/p>\n
\u00a0
\n Chief Executive Officer and President<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
01-0038605<\/p>\n
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