{"url_path":"/sec/epow/10-k/2026/item-3","section_key":"item-3","section_title":"Item 3 KEY INFORMATION**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1780731/0001213900-26-056928-index.html","accession_number":"0001213900-26-056928","cik":"0001780731","ticker":"EPOW","issuer_name":"E-Power Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1780731/0001213900-26-056928-index.html","primary_entity_key":"0001780731","primary_entity_name":"E-Power Inc."},"word_count":29204,"has_tables":true,"body_markdown":"**Item 3. KEY INFORMATION**\n\n \n\nWe are a Cayman Islands holding company conducting a substantial portion\nof our operations in China through our PRC operating entities. Unless otherwise stated, as used in this annual report, the terms “we,”\n“us,” “our,” “E-Power Inc.,” “our Company,” and the “Company” refer to E-Power\nInc., an exempted company with limited liability incorporated under the laws of the Cayman Islands (formerly known as Sunrise New Energy\nCo., Ltd.); and “SDH” or “the VIE” are to Global Mentor Board (Zibo) Information Technology Co., Ltd., a limited\nliability company organized under the laws of the PRC.\n\n \n\nAs of the date of this annual report, substantially\nall of our business is conducted by (1) Sunrise Guizhou, a joint venture established by Zhuhai Zibo (a wholly owned subsidiary of the\nCompany) and certain other partners, as a limited company pursuant to PRC laws for the purpose of manufacturing and sales of graphite\nanode materials; and (2) SDH, the Company’s VIE entity that operates a knowledge sharing platform in China. Investors of our Ordinary\nShares do not hold shares in the PRC operating entities, but instead hold shares of a Cayman Islands exempted company. Further, neither\nwe nor our subsidiaries own any shares in the VIE. Instead, we entered into a series of contractual arrangements, also known as VIE Agreements,\ndated June 10, 2019, with the VIE and its shareholders. Under the generally accepted accounting principles in the United States (“U.S.\nGAAP”), we are deemed to have a controlling financial interest in, and be the primary beneficiary of, the VIE for accounting purposes,\nbecause such contractual arrangements are designed so that the operations of the VIE are solely for the benefit of GIOP BJ and, ultimately,\nthe Company. Solely for accounting purpose, the VIE Agreements enable us to consolidate the financial results of the VIE and its subsidiaries\nin our consolidated financial statements under U.S. GAAP. Pursuant to the VIE Agreements, which have not been tested in a court of law,\nunder, the assets and liabilities of the VIE are treated as our assets and liabilities and the results of operations of the VIE are treated\nas if they were the results of our operations. See “Item 3. Key Information — Contractual Agreements among GIOP BJ, the VIE\nand Its Shareholders” for a summary of these VIE Agreements.\n\n \n\nThe VIE Agreements, however, may not be as effective\nin providing us with the necessary control over the VIE and its operations. For example, the VIE and its shareholders could breach their\ncontractual arrangements with us by, among other things, failing to conduct their operations in an acceptable manner or taking other actions\nthat are detrimental to our interests. If we had direct ownership of the VIE, we would be able to exercise our rights as a shareholder\nto effect changes in the board of directors of the VIE, which in turn could implement changes, subject to any applicable fiduciary obligations,\nat the management and operational level. Under the current VIE Agreements, however, we rely on the performance by the VIE and its shareholders\nof their respective obligations under the contracts to direct the activities of a VIE that most significantly impact the VIE’s economic\nperformance. We are also subject to the risks of uncertainty about any future actions of the PRC government in this regard. Because of\nour corporate structure, we are subject to risks due to uncertainty of the interpretation and the application of the PRC laws and regulations,\nincluding but not limited to the validity and enforcement of the VIE Agreements. The VIE Agreements may not be effective in providing\ncontrol over the VIE. We may be also subject to sanctions imposed by PRC regulatory agencies including Chinese Securities Regulatory\nCommission if we fail to comply with their rules and regulations. See “Risk Factors—Risks Related to Doing Business in\nChina,” and “Risk Factors—Risks Related to Our Corporate Structure.”\n\n \n\nAs of December 31, 2025, 2024 and 2023, the VIE\naccounted for an aggregate of 6.30%, 4.05% and 5.48%, respectively, of our consolidated total assets, 3.76%, 7.14% and 6.54%, respectively,\nof our consolidated total liabilities, and 0.61%, 1.05% and 1.46%, respectively, of our consolidated total net revenues. See our consolidated\nfinancial statements and the related notes in this annual report.·\n\n \n\n1\n\n \n\n \n\nWe are subject to legal and operational risks\nassociated with being based in the PRC, which could result in a material change in our PRC operating entities and the VIE’s operations\nand/or the value of the securities we are registering for sale, or could significantly limit or completely hinder our ability to offer\nor continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless. PRC laws\nand regulations governing our current business operations are sometimes vague and uncertain. In recent years, the PRC government adopted\na series of regulatory actions and issued statements to regulate business operations in the PRC with little advance notice, including\ncracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and\nexpanding the efforts in anti-monopoly enforcement. For example, the General Office of the Central Committee of the Communist Party of\nChina and the General Office of the State Council jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities\nAccording to Law, or the Opinions, which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen\nthe administration over illegal securities activities and the need to strengthen the supervision over overseas listings by Chinese companies.\nAs of the date of this annual report, we, our PRC subsidiaries, or the VIE and its subsidiaries have not been involved in any investigations\non cybersecurity review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice, or sanction.\n\n \n\nAs confirmed by our PRC counsel, Jincheng Tongda\n& Neal Law Firm (“JT&N”), as of the date of this annual report, we are not subject to cybersecurity review with the\nCyberspace Administration of China, or the CAC, under the Cybersecurity Review Measures that became effective on February 15, 2022, or\nthe Regulations on the Network Data Security Administration (the “Security Administration Regulation”), which became effective\non January 1, 2025, since (i) as companies that engage in business-oriented consulting services and manufacturing and sales of graphite\nanode materials, we, our PRC subsidiaries, or the VIE and its subsidiaries, are unlikely to be classified as critical information infrastructure\noperators (“CIIOs”) by the PRC regulatory agencies; (ii) according to the interpretation of the relevant laws by the CAC,\nfor online platform operators who have listed in foreign countries before the effective date of Cybersecurity Review Measures, and who\nare not seeking a new listing (such as a secondary or dual listing) in foreign countries, a cybersecurity review is not required; and\n(iii) the data processed in the business of the VIE and its subsidiaries, which is a knowledge sharing and enterprise service platform\nbusiness, is unlikely to have a bearing on national security. There remains uncertainty, however, as to how the Cybersecurity Review Measures\nand the Security Administration Regulation will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC,\nmay adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and\nthe Security Administration Regulation. See “Risk Factors—Risks Relating to Doing Business in the PRC—Recent greater\noversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our\nbusiness and our offering.”\n\n \n\nFurthermore, on February 17, 2023, the China Securities Regulatory\nCommission (the “CSRC”) released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic\nCompanies (the “Trial Measures”) and five supporting guidelines, which took effect on March 31, 2023. Pursuant to the Trial\nMeasures, PRC domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures\nwith the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of relevant applications\nor its completion of subsequent offerings. If a domestic company fails to complete required filing procedures or conceals any material\nfact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as\nan order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly\nliable persons may also be subject to administrative penalties, such as warnings and fines. On the same day, the CSRC also held a press\nconference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing\nby Domestic Companies, or the CSRC Notice, which, among others, clarifies that PRC domestic companies that have already been listed overseas\nbefore the effective date of the Trial Measures, which is March 31, 2023, shall be deemed to be “Existing Issuers”, and Existing\nIssuers are not required to complete the filing procedures with the CSRC immediately, and they shall be required to file with the CSRC\nfor any subsequent offerings. We are an Existing Issuer, based on the foregoing, we made the requisite filing with the CSRC on November\n7, 2024 as required for our subsequent offering completed on November 5, 2024. We are not aware of any other PRC laws or regulations currently\nin effect requiring that we obtain permission from any PRC government authority for our continued listing on the Nasdaq. However, since\nthese statements and regulatory actions are newly published, official guidance and related implementation rules have not been issued.\nIt is highly uncertain what the potential impact such modified or new laws and regulations will have on the daily business operations\nof our subsidiaries and the VIE, our ability to accept foreign investments, and our listing on an U.S. exchange. See “Risk Factors—Risks\nRelating to Doing Business in the PRC—The Trial Measures and the revised Provisions recently issued by the PRC authorities may subject\nus to additional compliance requirements in the future.”\n\n \n\n2\n\n \n\n \n\nSince 2021, the Chinese government has strengthened\nits anti-monopoly supervision, mainly in three aspects: (i) establishing the National Anti-Monopoly Bureau; (ii) revising and promulgating\nanti-monopoly laws and regulations, including: the Anti-Monopoly Law of the PRC (amended on June 24, 2022 and effective on August 1, 2022),\nthe anti-monopoly guidelines for various industries, and the Detailed Rules for the Implementation of the Fair Competition Review System;\nand (iii) expanding the anti-monopoly law enforcement targeting Internet companies and large enterprises. As of the date of this annual\nreport, the Chinese government’s recent statements and regulatory actions related to anti-monopoly concerns have not impacted our\nor our PRC subsidiaries, or the VIE and its subsidiaries’ ability to conduct business, our ability to accept foreign investments\nor issue our securities to foreign investors because neither we and our subsidiaries, nor our PRC subsidiaries, or the VIE and its subsidiaries\nengage in monopolistic behaviors that are subject to these statements or regulatory actions.\n\n \n\nIn addition, our Class A Ordinary Shares may be\nprohibited from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable Act (the “HFCA\nAct”) and related regulations, if the Public Company Accounting Oversight Board (United States) (the “PCAOB”) is unable\nto inspect our auditor for two consecutive years beginning in 2022. On June 22, 2021, the U.S. Senate passed the Accelerating Holding\nForeign Companies Accountable Act, and on December 29, 2022, legislation entitled “Consolidated Appropriations Act, 2023”\n(the “Consolidated Appropriations Act”) was signed into law, which included an identical provision of the Accelerating Holding\nForeign Companies Accountable Act and amended the HFCA Act by requiring the U.S. Securities and Exchange Commission (the “SEC”)\nto prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for\ntwo consecutive years instead of three, thus reducing the time period for triggering the delisting of our Company and the prohibition\nof trading in our securities if the PCAOB is unable to inspect our accounting firm at such future time. On December 16, 2021, the PCAOB\nissued a report on its determinations that it was unable to inspect or investigate completely PCAOB-registered public accounting firms\nheadquartered in mainland China and in Hong Kong, because of positions taken by PRC authorities in those jurisdictions. On December 15,\n2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting\nfirms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC\nauthorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to\nissue a new determination. Our former auditor, Marcum Asia CPAs LLP (“MarcumAsia”), as well as our current auditor, Wei, Wei\n& Co., LLP (“WW”), are PCAOB-registered public accounting firms subject to laws in the United States, pursuant to which\nthe PCAOB conducts regular inspections to assess an auditor’s compliance with the applicable professional standards. As such, as\nof the date of this annual report, our listing is not affected by the HFCA Act and related regulations. See “Risk Factors—Risks\nRelating to Doing Business in the PRC—The Holding Foreign Companies Accountable Act and related regulations, all call for additional\nand more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially\nthe non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our continued listing on the Nasdaq,\nand Nasdaq may determine to delist our securities if the PCAOB determines that it cannot inspect or fully investigate our auditor.”\n\n \n\nAs of the date of this annual report, our Company,\nour subsidiaries, and the VIE have not distributed any earnings or settled any amounts owed under the VIE Agreements, nor do they have\nany plan to distribute earnings or settle amounts owed under the VIE Agreements in the foreseeable future. As of the date of this annual\nreport, none of our subsidiaries or the VIE have made any dividends or distributions to our Company and our Company has not made any dividends\nor distributions to our shareholders. We intend to keep any future earnings to finance the expansion of our business, and we do not anticipate\nthat any cash dividends will be paid in the foreseeable future. If we determine to pay dividends on any of our Ordinary Shares in the\nfuture, as a holding company, we will be dependent on receipt of funds from our operating entities, pursuant to the VIE Agreements.\n\n \n\n3\n\n \n\n \n\nThe Company’s management is directly\nsupervising cash management. Our finance department is responsible for establishing the cash management policies and procedures\namong our subsidiaries and departments and our PRC subsidiaries, or the VIE and its subsidiaries. Each subsidiary, department, or\nPRC operating entity initiates a cash request by putting forward a cash demand plan, which explains the specific amount and timing\nof cash requested, and submitting it to designated management members of the Company, based on the amount and the use of cash\nrequested. The designated management member examines and approves the allocation of cash based on the sources of cash and the\npriorities of the needs, and submit it to the cashier specialists of our finance department for a second review. Other than the\nabove, we currently do not have other cash management policies or procedures that dictate how funds are transferred. Prior to the\ncompletion of our initial public offering in February 2021, the sources of funding of the Company, its subsidiaries and the VIE\nprimarily consisted of capital injections by shareholders and cash generated from operations. For the last three fiscal years, cash\ntransfers and transfers of other assets among E-Power Inc., its subsidiaries, and fiscal year ended December 31, 2025, Zibo Shidong\nprovided an interest-free loan of $427,687 to GIOP BJ; Sunrise Guizhou repaid a loan of $139,130 to Zibo\nShidong, bearing interest at 4%; Sunrise Chenhui provided an interest-free loan of $278,261 to Zibo Shidong; Sunrise Guizhou repaid\na loan of $166,957 to GMB Hangzhou, bearing interest at 4%; Zibo Shidong paid $42,002 on behalf of the Company for legal fees;\nAlchemistica paid $175,426 on behalf of the Company for professional fees and the Company repaid Alchemistica $100,000. (ii) For the\nfiscal year ended December 31, 2024, the Company provided interest-free loans in the aggregate principal amount of $516,661 to GMB\nHK and an interest-free loan of $1,300,000 to the VIE’s subsidiary, Zibo Shidong; the VIE provided interest-free loans in the\naggregate principal amount of $77,268 to GIOP BJ; Zibo Shidong provided interest-free loans in the aggregate principal amount of\n$150,880 to GIOP BJ; Sunrise Guizhou provided loans in the aggregate principal amount of $166,766 with a 4% interest rate to GMB\nHangzhou and a loan of $347,430 with a 4% interest rate to Zibo Shidong. (iii) For the fiscal year ended December 31, 2023, the\nCompany provided interest-free loans in the aggregate principal amount of $400,000 to Zibo Shidong, and received interest-free loans\nin the aggregate principal amount of $150,000 from the Company’s subsidiary, GMB HK. To the extent cash in the business is in\nthe PRC, the funds may not be available to fund operations or for other use outside of the PRC due to interventions in or the\nimposition of restrictions and limitations on the ability of our Company, our subsidiaries, or the VIE by the PRC government to\ntransfer cash. See “Risk Factors—Risks Relating to Our Corporate Structure—To the extent cash in the business is\nin the PRC/Hong Kong or a PRC/Hong Kong entity, the funds may not be available to fund operations or for other use outside of the\nPRC/Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of our Company, our\nsubsidiaries, or the VIE by the PRC government to transfer cash.”\n\n \n\n**Permissions Required from PRC Authorities**\n\n \n\nAs of the date of this annual report, we, our\nPRC subsidiaries, or the VIE and its subsidiaries, (i) have received from PRC authorities material licenses, permissions, and approvals\nneeded to engage in the businesses currently conducted in the PRC, and (ii) no such permission or approval has been denied. The licenses,\npermissions, and approvals, which have been successfully obtained, are: (1) business license; (2) the filing-for-record procedures with\nthe relevant competent departments for our knowledge sharing and enterprise service platform business; and (3) the approval for the Construction\nLand Use Planning Permit, the Construction Works Planning Permit, the Construction Permit, the Pollutant Discharge License, the filing-for-record\nprocedures with the relevant work safety administrative department, the approval for the Environmental Impact Report, the Filing for Environmental\nProtection Acceptance upon Completion of the Construction Project and the Filing Certificate for Fire Safety Inspection and Acceptance\nof Construction Project for our graphite anode material business. Besides, based on the progress of our relevant construction projects,\nwe will apply for other necessary licenses or filings that are required by relevant PRC rules from time to time, such as those related\nto the construction completion acceptance, fire safety inspection and acceptance, work safety acceptance, environmental protection acceptance,\nand the processing of relevant real estate certificates, etc. However, we cannot assure you that any of these entities will be able to\nreceive clearance of such compliance requirements in a timely manner, or at all. Any failure of these entities to fully comply with such\ncompliance requirements may cause our PRC subsidiaries, or the VIE and its subsidiaries to be unable to begin their new businesses or\noperations in the PRC, subject them to fines, relevant new businesses or operations suspension for rectification, or other sanctions.\nSee “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—We may be required to obtain and maintain\nadditional approvals, licenses or permits applicable to our business, including our graphite anode manufacturing and sales business and\nour knowledge share platform, which could have a material adverse impact on our business, financial conditions and results of operations.”\nWe have been closely monitoring the development in the regulatory landscape in China, particularly regarding the requirement of approvals,\nincluding on a retrospective basis, from the CSRC, the CAC, or other PRC authorities with respect to this offering, as well as other procedures\nthat may be imposed on us.\n\n \n\n4\n\n \n\n \n\n**Selected Condensed Consolidating Financial\nSchedule**\n\n \n\nAs a holding company with no material operations\nof our own, we conduct our operations through Sunrise Guizhou, the VIE and its subsidiaries in the PRC. Our subsidiaries and the VIE and\nits subsidiaries as of the date of this annual report are described below:\n\n \n\n**Name**\n \n**Date of\nincorporation**\n \n**Place of\nincorporation**\n \n**Percentage of\neffective\nownership**\n \n**Principal Activities**\n\n**Subsidiaries**\n \n \n \n \n \n \n \n \n\nGlobal Mentor Board Information Technology Limited (“GMB HK”)\n \nMarch 22, 2019\n \nHK\n \n100% by the Company\n \nHolding company\n\nAlchemistica Inc. (“Alchemistica”)\n \nAugust 5, 2025\n \nU.S.\n \n71%  by the Company\n \nBusiness development on lithium battery materials\n\nBeijing Mentor Board Union Information Technology Co, Ltd. (“GIOP BJ”)\n \nJune 3, 2019\n \nPRC\n \n100% by the Company\n \nHolding company\n\nShidong Cloud (Beijing) Education Technology Co., Ltd (“Shidong Cloud”)\n \nDecember 22, 2021\n \nPRC\n \n75% by the Company\n \nEducational consulting\n\nSDH (HK) New Energy Tech Co., Ltd. (“SDH New Energy”)\n \nOctober 8, 2021\n \nHK\n \n100% by the Company\n \nHolding company\n\nZhuhai (Zibo) Investment Co., Ltd. (“Zhuhai Zibo”)\n \nOctober 15, 2021\n \nPRC\n \n100% by the Company\n \nNew energy investment\n\nZhuhai (Guizhou) New Energy Investment Co., Ltd. (“Zhuhai Guizhou”)\n \nNovember 23, 2021\n \nPRC\n \n100% by the Company\n \nNew energy investment\n\nSunrise (Guizhou) New Energy Materials Co., Ltd.  (“Sunrise Guizhou”)\n \nNovember 8, 2021\n \nPRC\n \n39.35% by the Company\n \nManufacture of lithium battery materials\n\nGuizhou Sunrise Technology Co., Ltd. (“Sunrise Tech”)\n \nSeptember 1, 2011, acquired through an asset acquisition on\n\nJuly 7, 2022\n \nPRC\n \n39.35% by the Company\n \nManufacture of lithium battery materials\n\nSunrise (Guxian) New Energy Materials Co., Ltd. (“Sunrise Guxian”)\n \nApril 26, 2022\n \nPRC\n \n20.07% by the Company\n \nManufacture of lithium battery materials\n\nGuizhou Sunrise Technology Innovation Research Co., Ltd. (“Innovation Research”)\n \nDecember 13, 2022\n \nPRC\n \n39.35% by the Company\n \nResearch and development\n\nShenzhen Sunrise Yitan New Energy Technology Co., Ltd. (“Sunrise Yitan”)\n \nJune 24, 2024\n \nPRC\n \n25.58% by the Company\n \nResearch and development of Sodium-ion battery\n\nShenzhen Sunrise Suiyuan New Materials Technology Co., Ltd. (“Sunrise Suiyuan”)\n \nJune 24, 2024\n \nPRC\n \n25.58% by the Company\n \nResearch and development of silicon carbon battery\n\nGuizhou Chenhui Trading Co., Ltd. (“Sunrise Chenhui”)\n \nMarch 25, 2024\n \nPRC\n \n39.35% by the Company\n \nSales of lithium battery materials\n\nSunrise Anhui New Energy Materials Co., Ltd. (Sunrise Anhui )    \n \nJanuary 21, 2025\n \nPRC\n \n39.35% by the Company\n \nProduction of lithium battery materials\n\n**Variable Interest Entity (“VIE”) and subsidiaries of VIE**\n \n \n \n \n \n \n \n \n\nGlobal Mentor Board (Zibo) Information Technology Co., Ltd. (“SDH” or “VIE”)\n \nDecember 5, 2014\n \nPRC\n \nN/A\n \nKnowledge sharing and enterprise service platform provider\n\nGlobal Mentor Board (Hangzhou) Technology Co., Ltd. (“GMB (Hangzhou)”)\n \nNovember 1, 2017\n \nPRC\n \n100% by the VIE\n \nConsulting, training and tailored services provider\n\nGlobal Mentor Board (Shanghai) Enterprise Management Consulting Co., Ltd. (“GMB Consulting”)\n \nJune 30, 2017\n \nPRC\n \n51% by the VIE\n \nConsulting services provider\n\nShanghai Voice of Seedling Cultural Media Co., Ltd. (“GMB Culture”)\n \nJune 22, 2017\n \nPRC\n \n51% by the VIE\n \nCultural and artistic exchanges and planning, conference services provider\n\nShidong (Beijing) Information Technology Co., LTD. (“GMB (Beijing)”)\n \nJune 19, 2018\n \nPRC\n \n51% by the VIE\n \nInformation technology services provider\n\nMentor Board Voice of Seeding (Shanghai) Cultural Technology Co., Ltd. (“GMB Technology”)\n \nAugust 29, 2018\n \nPRC\n \n30.6% by the VIE\n \nTechnical services provider\n\nShidong Zibo Digital Technology Co., Ltd. (“Zibo Shidong”)\n \nOctober 16, 2020\n \nPRC\n \n100% by the VIE\n \nTechnical services provider\n\nBeijing Mentor Board Health Technology Co., Ltd (“GMB Health”)\n \nJanuary 7, 2022\n \nPRC\n \n100% by the VIE\n \nHealth services\n\nShidong Yike (Beijing) Technology Co., Ltd. (“Shidong Yike”)\n \nJuly 16, 2021\n \nPRC\n \n100% by the VIE\n \nHealth services\n\nGuizhou Yuanneng Zhihui Enterprise Management Partnership Enterprise (Limited Partnership) (“Guizhou Yuanneng”)\n \nApril 1, 2024\n \nPRC\n \n94% by the VIE\n \nHolding company\n\n \n\n5\n\n \n\n \n\n \n\nThe following tables present selected condensed\nconsolidating financial data of E-Power Inc. and its subsidiaries and the VIE and its subsidiaries for the fiscal years ended December\n31, 2025, 2024, and 2023 and balance sheet data as of December 31, 2025, 2024, and 2023.\n\n \n\n**SELECTED CONDENSED CONSOLIDATING STATEMENT OF\nOPERATIONS DATA**\n\n** **\n\n  \nYear ended December 31, 2025 \n\n  \nParent  \nSubsidiaries  \nVIE and\nVIE’s\nsubsidiaries  \nInter-\ncompany\nelimination  \nGroup\nconsolidated \n\n  \n(US$) \n\nRevenues, net \n -  \n 53,588,439  \n 9,358,263  \n (16,530,570) \n 46,416,132 \n\nTotal cost and operating expenses \n 1,273,505  \n 68,660,177  \n 9,040,508  \n (16,530,570) \n 62,443,620 \n\n(Loss) Profit from operations \n (1,273,505) \n (15,071,737) \n 317,754  \n -  \n (16,027,488)\n\n(Loss) Profit before income taxes \n (7,809,895) \n (19,273,462) \n 423,589  \n -  \n (26,659,768)\n\nNet (loss) income \n (7,809,895) \n (19,273,075) \n 423,589  \n -  \n (26,659,381)\n\n \n\n  \nYear ended December 31, 2024 \n\n  \nParent  \nSubsidiaries  \nVIE and\nVIE’s\nsubsidiaries  \nInter-\ncompany\nelimination  \nGroup\nconsolidated \n\n  \n(US$) \n\nRevenues, net \n -  \n 71,276,389  \n 2,899,946  \n (9,178,594) \n 64,997,741 \n\nTotal cost and operating expenses \n 1,776,146  \n 86,746,148  \n 2,250,369  \n (9,178,594) \n 81,594,069 \n\n(Loss) Profit from operations \n (1,776,146) \n (15,469,759) \n 649,577  \n -  \n (16,596,328)\n\n(Loss) Profit before income taxes \n (1,778,111) \n (17,052,619) \n 855,129  \n -  \n (17,975,601)\n\nNet (loss) income \n (1,778,111) \n (17,057,370) \n 854,317  \n -  \n (17,981,164)\n\n \n\n  \nYear ended December 31, 2023 \n\n  \nParent  \nSubsidiaries  \nVIE and\nVIE’s\nsubsidiaries  \nInter-\ncompany\nelimination  \nGroup\nconsolidated \n\n  \n(US$) \n\nRevenues, net \n -  \n 44,394,292  \n 656,113  \n        -  \n 45,050,405 \n\nTotal cost and operating expenses \n 6,524,022  \n 65,728,723  \n 3,327,665  \n -  \n 75,580,410 \n\nLoss from operations \n (6,524,022) \n (21,334,431) \n (2,671,552) \n -  \n (30,530,005)\n\nLoss before income taxes \n (6,611,490) \n (22,612,303) \n (3,697,157) \n -  \n (32,920,950)\n\nNet loss \n (6,611,490) \n (22,612,303) \n (3,696,931) \n -  \n (32,920,724)\n\n \n\n6\n\n \n\n \n\n**SELECTED CONDENSED CONSOLIDATING BALANCE SHEET\nDATA**\n\n** **\n\n  \nAs of December 31, 2025 \n\n  \nParent  \nSubsidiaries  \nVIE and\nVIE’s\nsubsidiaries  \nInter-\ncompany\nelimination  \nGroup\nconsolidated \n\n  \n(US$) \n\nTotal current assets \n 8,953,999  \n 89,876,704  \n 18,481,304  \n (45,068,778) \n 72,243,229 \n\nTotal non-current assets \n 14,939,000  \n 79,531,416  \n 4,730,433  \n (15,007,629) \n 84,193,220 \n\nTotal assets \n 23,892,999  \n 169,408,120  \n 23,211,737  \n (60,076,407) \n 156,436,449 \n\nTotal current liabilities \n 371,987  \n 133,490,256  \n 11,871,961  \n (45,068,778) \n 100,665,426 \n\nTotal non-current liabilities \n -  \n 39,878,853  \n -  \n -  \n 39,878,853 \n\nTotal liabilities \n 371,987  \n 173,369,109  \n 11,871,961  \n (45,068,778) \n 140,544,279 \n\n** **\n\n  \nAs of December 31, 2024 \n\n  \nParent  \nSubsidiaries  \nVIE and\nVIE’s\nsubsidiaries  \nInter-\ncompany\nelimination  \nGroup\nconsolidated \n\n  \n(US$) \n\nTotal current assets \n 2,442,761  \n 66,149,892  \n 14,823,298  \n (20,405,078) \n 63,010,873 \n\nTotal non-current assets \n 14,540,000  \n 75,540,659  \n 4,537,251  \n (14,605,751) \n 80,012,159 \n\nTotal assets \n 16,982,761  \n 141,690,551  \n 19,360,549  \n (35,010,829) \n 143,023,032 \n\nTotal current liabilities \n 252,338  \n 93,511,037  \n 13,398,312  \n (20,405,078) \n 86,756,609 \n\nTotal non-current liabilities \n -  \n 28,971,750  \n -  \n -  \n 28,971,750 \n\nTotal liabilities \n 252,338  \n 122,482,787  \n 13,398,312  \n (20,405,078) \n 115,728,359 \n\n** **\n\n  \nAs of December 31, 2023 \n\n  \nParent  \nSubsidiaries  \nVIE and\nVIE’s\nsubsidiaries  \nInter-\ncompany\nelimination  \nGroup\nconsolidated \n\n  \n(US$) \n\nTotal current assets \n 3,030,688  \n 30,874,514  \n 7,673,555  \n (5,762,862) \n 35,815,895 \n\nTotal non-current assets \n 14,540,000  \n 80,084,256  \n 4,604,379  \n (14,540,000) \n 84,688,635 \n\nTotal assets \n 17,570,688  \n 110,958,770  \n 12,277,934  \n (20,302,862) \n 120,504,530 \n\nTotal current liabilities \n 31,823  \n 64,306,203  \n 4,913,254  \n (5,762,862) \n 63,488,418 \n\nTotal non-current liabilities \n -  \n 11,684,348  \n -  \n -  \n 11,684,348 \n\nTotal liabilities \n 31,823  \n 75,990,551  \n 4,913,254  \n (5,762,862) \n 75,172,766 \n\n \n\n7\n\n \n\n \n\n**SELECTED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS DATA**\n\n** **\n\n  \nYear ended December 31, 2025 \n\n  \nParent  \nSubsidiaries  \nVIE and\nVIE’s\nsubsidiaries  \nInter-\n\ncompany elimination  \nGroup consolidated \n\n  \n(US$) \n\nNet cash (used in) provided by operating activities \n (773,372) \n (24,868,890) \n 481,678  \n -  \n (25,160,584)\n\nNet cash used in investing activities \n (399,000) \n (10,311,033) \n (980,477) \n 469,426  \n (11,221,084)\n\nNet cash provided by financing activities \n 7,743,162  \n 46,922,201  \n 264,348  \n (469,426) \n 54,460,285 \n\n \n\n  \nYear ended December 31, 2024 \n\n  \nParent  \nSubsidiaries  \nVIE and\nVIE’s\nsubsidiaries  \nInter-\n\ncompany elimination  \nGroup consolidated \n\n  \n(US$) \n\nNet cash used in operating activities \n (1,269,634) \n (2,574,103) \n (1,508,420) \n -  \n (5,352,157)\n\nNet cash provided by (used in) investing activities \n 1,071,942  \n (2,293,647) \n 423,298  \n 1,430,868  \n 632,461 \n\nNet cash (used in) provided by financing activities \n (150,000) \n 11,251,341  \n 961,196  \n (1,430,868) \n 10,631,669 \n\n \n\n  \nYear ended December 31, 2023 \n\n  \nParent  \nSubsidiaries  \nVIE and\nVIE’s\nsubsidiaries  \nInter-\n\ncompany elimination  \nGroup consolidated \n\n  \n(US$) \n\nNet cash (used in) provided by operating activities \n (1,516,279) \n (5,592,986) \n (423,730) \n 250,000  \n (7,282,995)\n\nNet cash provided by (used in) investing activities \n 878,000  \n (7,881,035) \n -  \n -  \n (7,003,035)\n\nNet cash provided by (used in) financing activities \n -  \n 13,529,267  \n 400,000  \n (250,000) \n 13,679,267 \n\n \n\n**A. [Reserved]**\n\n \n\n**B. Capitalization and Indebtedness**\n\n \n\nNot applicable.\n\n \n\n**C. Reasons for the Offer and Use of Proceeds**\n\n \n\nNot applicable.\n\n \n\n8\n\n \n\n \n\n**D. Risk Factors**\n\n \n\n*An investment in our Ordinary Shares involves\na high degree of risk. Before deciding whether to invest in our Ordinary Shares, you should consider carefully the risks described below,\ntogether with all of the other information set forth in this annual report. If any of these risks actually occurs, our business, financial\ncondition, results of operations or cash flow could be materially and adversely affected, which could cause the trading price of our Ordinary\nShares to decline, resulting in a loss of all or part of your investment. The risks described below are not the only ones that we face.\nAdditional risks not presently known to us or that we currently deem immaterial may also affect our business. You should only consider\ninvesting in our Ordinary Shares if you can bear the risk of loss of your entire investment.*\n\n \n\n**Risks Related to Our Business**\n\n** **\n\nRisks and uncertainties related to our business\ninclude, but are not limited to, the following:\n\n \n\n \n●\nWe have a limited operating history and are subject to the risks encountered by development-stage companies.\n\n \n\n \n●\nWe have incurred substantial losses in the past and may incur losses in the future. There is substantial doubt about our ability to continue as a going concern.\n\n \n\n \n●\nIf we cannot manage our growth effectively and efficiently, our results of operations or profitability could be adversely affected.\n\n \n\n \n●\nWe may not be successful in implementing important new strategic initiatives, which may have an adverse impact on our business and financial results.\n\n \n\n \n●\nWe may be required to obtain and maintain additional approvals, licenses or permits applicable to our business, including our graphite anode manufacturing and sales business and our knowledge share platform, which could have a material adverse impact on our business, financial conditions and results of operations.\n\n** **\n\n**Risks Related to Our Graphite Anode Manufacturing\nand Sales Business**\n\n \n\nRisks and uncertainties related to our graphite\nanode manufacturing and sales business include, but are not limited to, the following:\n\n \n\n \n●\nOur graphite anode manufacturing and sales joint venture may not perform as well as we expected.\n\n \n\n \n●\nJoint venture with which we engage for developing graphite anode manufacturing and sales business presents a number of challenges that could have a material adverse effect on our business and results of operations and cash flows.\n\n \n\n \n●\nWe may not respond quickly to continued innovations.\n\n \n\n \n●\nComplying with numerous health, safety and environmental regulations is both complex and costly.\n\n \n\n \n●\nSunrise Guizhou depends on a few major customers, and the loss of any of which could cause a significant decline in our revenues.\n\n \n\n \n●\nSunrise Guizhou faces the risk of fluctuations in the cost, availability, and quality of raw materials, which could adversely affect our results of operations.\n\n \n\n \n●\nPrice volatility of our finished goods.\n\n \n\n \n●\nSunrise Guizhou may need additional capital to pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances, and financing may not be available on acceptable terms or at all.\n\n \n\n9\n\n \n\n \n\n**Risks Related to Our Corporate Structure**\n\n** **\n\nThe VIE conducts the knowledge sharing and enterprise\nservice platform and we consolidate the financials of the VIE under the U.S. GAAP for accounting purpose only; however, the VIE Agreements\nhave not been tested in a court of law and are subject to significant risks, as set forth in the following risk factors. For a description\nof these VIE Agreements, see “ITEM 4. INFORMATION ON THE COMPANY — C. Organizational Structure”.\n\n** **\n\nRisks and uncertainties related to our corporate\nstructure include, but are not limited to, the following:\n\n \n\n \n●\nIf the PRC government finds that the agreements that establish the structure for operating our businesses in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.\n\n \n\n \n●\nWe rely on contractual arrangements with the VIE and its subsidiaries, and shareholders for our China operations, which may not be as effective in providing operational control as direct ownership.\n\n \n\n \n●\nThe contractual arrangements we have entered into with the VIE and its shareholders, and any other arrangements and transactions among related parties that we currently have or will have in future may be subject to scrutiny by the PRC tax authorities and they may determine that we owe additional taxes, which could substantially reduce our consolidated net income and the value of your investment.\n\n \n\n \n●\nThe shareholders of the VIE may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.\n\n \n\n \n●\nWe may lose the ability to use and enjoy assets held by the VIE that are material to the operation of certain portion of our business if the VIE goes bankrupt or become subject to a dissolution or liquidation proceeding.\n\n \n\n \n●\nAs an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with such corporate governance listing standards.\n\n \n \n \n\n \n●\n\nAs a “controlled company” under the\nlisting rules of the NASDAQ Stock Market, we may choose to exempt our company from certain corporate governance requirements that could\nhave an adverse effect on our public shareholders.\n\n \n \n \n\n \n●\n\nOur dual\nclass share structure with different voting rights may adversely affect the value and liquidity of the Class A Ordinary Shares.  \n\n \n\n \n●\nThe dual class structure of our ordinary shares has the effect of concentrating voting control with our Chairman, and his interest may not be aligned with the interests of our other shareholders.\n\n \n\n**Risks Related to Doing Business in China**\n\n \n\nRisks and uncertainties related to doing business\nin China include, but are not limited to, the following:\n\n \n\n \n●\nThe Chinese government\nexerts substantial influence over the manner in which we must conduct our business, and may intervene or influence our operations\nat any time, which could result in a material change in our operations, significantly limit or completely hinder our ability to offer\nor continue to offer securities to investors and, and cause the value of our Class A Ordinary Shares to significantly decline or\nbe worthless.\n\n \n\n \n●\nRecent greater oversight\nby the Cyberspace Administration of China over data security, particularly for companies seeking to list on a foreign exchange, could\nadversely impact our business and our securities.\n\n \n\n \n●\nThe Trial Measures and\nthe revised Provisions recently issued by the PRC authorities may subject us to additional compliance requirements in the future.\n\n \n\n \n●\nA severe or prolonged downturn\nin the global or Chinese economy could materially and adversely affect our business and our financial condition.\n\n \n\n10\n\n \n\n \n\n \n●\nBecause our business is dependent upon government policies that encourage a market-based economy, change in the political or economic climate in the PRC may impair our ability to operate profitably, if at all.\n\n \n\n \n●\nPRC laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may materially and adversely affect our business and impede our ability to continue our operations.\n\n \n\n \n●\nBecause our business is conducted in RMB and the price of our Class A Ordinary Shares is quoted in United States dollars, changes in currency conversion rates may affect the value of your investments.\n\n \n\n \n●\nUnder the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified as a “resident enterprise” of China, which could result in unfavorable tax consequences to us and our non-PRC shareholders.\n\n \n\n \n●\nThere are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiaries, and dividends payable by our PRC subsidiaries to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.\n\n \n\n \n●\nPRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans or additional capital contributions to our PRC subsidiaries, the VIE and its subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.  \n\n \n\n \n●\nGovernment control in currency conversion may adversely affect our financial condition, our ability to remit dividends, and the value of your investment.\n\n \n\n \n●\nIf we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation.\n\n \n\n \n●\nThe disclosures in our reports and other filings with the SEC and our other public pronouncements are not subject to the scrutiny of any regulatory bodies in the PRC.\n\n \n\n \n●\nThe Holding Foreign Companies Accountable Act and related regulations all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our continued listing on the Nasdaq, and Nasdaq may determine to delist our securities if the PCAOB determines that it cannot inspect or fully investigate our auditor.\n\n \n\n \n●\nOur contractual arrangements with the VIE are governed by the laws of the PRC and we may have difficulty in enforcing any rights we may have under these contractual arrangements.\n\n \n\n \n●\nThe failure to comply with PRC regulations relating to mergers and acquisitions of domestic entities by offshore special purpose vehicles may subject us to severe fines or penalties and create other regulatory uncertainties regarding our corporate structure.\n\n \n\n \n●\nPRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase its registered capital or distribute profits to us, or may otherwise adversely affect us.\n\n \n\n \n●\nIncreases in labor costs in the PRC may adversely affect our business and our profitability.\n\n \n\n \n●\nU.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China.\n\n \n\n11\n\n \n\n \n\n**Risks Related to Our Class A Ordinary Shares\nand the Trading Market**\n\n** **\n\nRisks\nand uncertainties related to our Class A Ordinary Shares and the trading market include, but are not limited to, the following:\n\n \n\n \n●\nIf we are a passive foreign\ninvestment company for United States federal income tax purposes for any taxable year, United States holders of our Class A Ordinary\nShares could be subject to adverse United States federal income tax consequences.\n\n \n\n \n●\nWe have identified several\ncontrol deficiencies in our internal control over financial reporting. If we fail to maintain an effective system of internal controls\nover financial reporting, we may not be able to accurately report our financial results or prevent fraud.\n\n \n\n \n●\nWe do not intend to pay\ndividends for the foreseeable future.\n\n \n\n \n●\nThe market price of our\nClass A Ordinary Shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell\nyour shares at or above the initial public offering price.\n\n \n\n \n●\nAs a foreign private issuer,\nwe are not subject to certain U.S. securities law disclosure requirements that apply to a domestic U.S. issuer, and are exempt from\ncertain Nasdaq corporate governance standards applicable to U.S. issuers, which may limit the information publicly available to our\ninvestors and afford them less protection than if we were a U.S. issuer.\n\n \n \n \n\n \n●\n\nIf\nwe cannot satisfy the listing requirements and other rules of Nasdaq Capital Market, our securities\nmay be delisted, which could negatively impact the price of our securities and your ability to sell\nthem.\n\n \n \n \n\n \n●\n\nNasdaq\nhas proposed a new $5 million minimum market value continued listing requirement that, if approved,\ncould result in immediate suspension and delisting of our Class A Ordinary Shares without any cure\nperiod or opportunity to regain compliance.\n\n \n \n \n\n \n●\nGeopolitical conflicts\ninvolving Iran, military actions in the Middle East, and the war in Ukraine may adversely affect global economic conditions and cause\nsignificant volatility in the trading price of our Class A Ordinary Shares.\n\n \n\n \n●\nNasdaq has adopted enhanced listing standards and has proposed other related rule changes that expand its discretionary authority, which could adversely affect our ability to maintain our listing on Nasdaq, limit the liquidity of our securities, or result in increased volatility or delisting risk.\n\n \n\n**Risks\nRelated to Our Business**\n\n \n\n**We\nhave a limited operating history and are subject to the risks encountered by development-stage companies.**\n\n** **\n\nOur\nPRC operating entities have been in business since 2014 as a consulting company. In 2022, we entered into a new business, manufacturing\nand sales of graphite anode materials, by forming a joint venture (Sunrise Guizhou) in Guizhou Province, China. As a development-stage\ncompany, our business strategies and model are constantly being tested by the market and operating results, and we adjust the allocation\nof our resources accordingly. As such, our business may be subject to significant fluctuations in operating results in terms of amounts\nof revenues and percentages of total with respect to the business segments.\n\n \n\nWe\nare, and expect for the foreseeable future to be, subject to all the risks and uncertainties, inherent in a development-stage business.\nAs a result, we must establish many functions necessary to operate a business, including expanding our managerial and administrative\nstructure, assessing and implementing our marketing program, implementing financial systems and controls and personnel recruitment. Accordingly,\nyou should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by companies with\na limited operating history. These risks and challenges are, among other things:\n\n \n\n \n●\nwe operate in industries\nthat are or may in the future be subject to increasing regulation by various governmental agencies in China;\n\n \n \n \n\n \n●\nwe may require additional\ncapital to develop and expand our operations which may not be available to us when we require it;\n\n \n \n \n\n \n●\nour marketing and growth\nstrategy may not be successful;\n\n \n \n \n\n \n●\nour business may be subject\nto significant fluctuations in operating results; and\n\n \n \n \n\n \n●\nwe may not be able to attract,\nretain and motivate qualified professionals.\n\n \n\nOur\nfuture growth will depend substantially on our ability to address the risks described in this annual report. If we do not successfully\naddress these risks, our business would be significantly harmed.\n\n \n\n12\n\n \n\n \n\n**We\nhave incurred substantial losses in the past and may incur losses in the future. There is substantial doubt about our ability to continue\nas a going concern**.\n\n \n\nAs\ndiscussed in “Note 3” to the consolidated financial statements to this annual report, we have suffered significant losses\nfrom operations resulting in a significant decrease in working capital that raises substantial doubt about our ability to continue as\na going concern. Our net revenue was $46,416,132, $64,997,741 and $45,050,405 for the years ended December 31, 2025, 2024 and 2023, respectively.\nOur net loss was $26,659,381, $17,981,164 and $32,920,724 for the year ended December 31, 2025, 2024 and 2023, respectively. The losses\nduring the reporting periods were mainly due to the large capital investment injected by us into the new business venture, Sunrise Guizhou,\nto enter into the manufacture and sales of lithium-ion power battery anode materials, and the subsequent losses Sunrise Guizhou has incurred\ndue to overcapacity and intense competition in the graphite material industry. Our limited history of operation makes it difficult to\nevaluate our future prospects.\n\n \n\nIn\nassessing its liquidity, management monitors and analyzes the Company’s cash on-hand, its ability to generate sufficient revenue\nsources and ability to obtain additional financial support in the future, and its operating and capital expenditure commitments.\n\n \n\nManagement’s\nplan to alleviate the substantial doubt about our ability to continue as a going concern as the following: working to improve our liquidity\nand working capital sources, mainly through cash flow from its operations, renewal of bank borrowings, equity or debt offering and borrowing\nfrom related parties. In order to fully implement our business plan and recover from continuing losses, we may also seek equity financing\nfrom outside investors. There can be no assurance that additional financing, if required, would be available on favorable terms or at\nall and/or that the foregoing plans and arrangements will be sufficient to fund our ongoing capital expenditures, working capital, and\nother requirements.\n\n \n\n**If we cannot manage our growth effectively\nand efficiently, our results of operations or profitability could be adversely affected.**\n\n** **\n\nIn April 2022, we entered into an investment agreement\nwith certain partners to form a joint venture, Sunrise Guizhou, which is dedicated to the production of lithium-ion power battery anode\nmaterials. As of the date of this annual report, we have made substantial investment into the new venture. Such expansion has placed,\nand will continue to place, substantial demands on our financial, managerial, operational, technological and other resources. Our expansion\nhas placed significant demands on us to maintain the quality of our services to ensure that our brand does not suffer as a result of any\ndeviations, whether actual or perceived, in the quality of our services. In order to manage and support our growth, we must continue to\nimprove our existing operational and administrative systems and our quality control, and recruit, train and retain additional qualified\nprofessionals as well as other administrative and sales and marketing personnel, particularly as we expand into new business ventures\nand launch new business initiatives. We may not be able to effectively and efficiently manage the growth of our operations, recruit and\nretain qualified personnel and integrate new expansion into our operations. As a result, our results of operations or profitability could\nbe adversely affected.\n\n \n\n**We may not be successful in implementing\nimportant new strategic initiatives, which may have an adverse impact on our business and financial results.**\n\n** **\n\nThere is no assurance that we will be able to\nimplement important strategic initiatives in accordance with our expectations, which may result in an adverse impact on our business and\nfinancial results. For example, our latest strategic initiative, establishing our graphite anode manufacturing and sales joint venture,\nSunrise Guizhou, is designed to create growth, improve our results of operations and drive long-term shareholders value; however, our\nmanagement may lack required experience, knowledge, insight, or human and capital resources to carry out the effective implementation\nto expand into new spaces outside of our current focuses. Furthermore, overcapacity and intense competition in the graphite material industry\nhave led to a decline in the sales prices of our graphite material products, which contributed significantly to the Company's net losses\nduring the reporting periods. As such, we may not be able to realize our expected growth, and our business and financial results will\nbe adversely impacted.\n\n \n\n**We may be required to obtain and maintain\nadditional approvals, licenses or permits applicable to our business, including our graphite anode manufacturing and sales business and\nour knowledge share platform, which could have a material adverse impact on our business, financial conditions and results of operations.**\n\n** **\n\nBefore we develop certain new products in our graphite anode manufacturing\nand sales business, we must obtain a variety of approvals from local and municipal governments in the PRC for the operating of our graphite\nanode manufacturing and sales business. We have obtained the following in relation to our graphite anode manufacturing and sales business:\nconstruction permits, fire acceptance record certificate, sewage discharge permit, environmental impact statements, and product quality\nsystem certification, including: ISO 14001, ISO 45001, ISO 9001, IATF 16949, ISO 27001 and GB/T29490.   In addition, based on\nthe progress of our relevant construction projects, we will apply for other necessary licenses that are required by relevant PRC rules\nfrom time to time. There is no assurance that we will be able to obtain all required licenses, permits, or approvals from government authorities.\nIf we fail to obtain all required licenses, permits or approvals, we may be unable to expand our operations.\n\n \n\n13\n\n \n\n \n\nThe operation of our knowledge sharing platform is subject to governmental\nsupervision and regulation by the relevant PRC governmental authorities, including the Ministry of Commerce, or MOFCOM, the Ministry of\nIndustry and Information Technology, or MIIT, the National Radio and Television Administration, or NRTA, and other governmental authorities\nin charge of the relevant categories of services offered by us. Together, these government authorities promulgate and enforce regulations\nthat cover many aspects of the operations we provide on our APP, including the scope of permissible business activities, licenses and\npermits for various business activities, and foreign investment.\n\n \n\nOur ICP License (the Administrative Measures\non Internet Information Services, or the Internet Measures, promulgated by the State Council requires commercial internet\ncontent-related services operators to obtain a VATS (“value added telecommunications service”) license for internet\ncontent provision business, or the “ICP License”) expired in July 2024. Our new ICP license was approved on May 27, 2025\nand is valid until May 27, 2030. See “Regulations— Regulations Related to Online Transmission of Audio-Visual\nPrograms.”\n\n \n\nThere are uncertainties with respect to the interpretation\nand implementation of existing and future laws and regulations governing our business activities. As of the date of this annual report,\nwe (i) have received from PRC authorities the material licenses, permissions, and approvals needed to engage in the businesses currently\nconducted in the PRC, (ii) no such permission or approval has been denied, and (iii) based on the progress of our relevant construction\nprojects, we will apply for other necessary licenses that are required by relevant PRC rules from time to time. However, we cannot assure\nyou that any of these entities will be able to receive clearance of such compliance requirements in a timely manner, or at all. Any failure\nof these entities to fully comply with such compliance requirements may cause our PRC subsidiaries, or the VIE and its subsidiaries to\nbe unable to begin their new businesses or operations in the PRC, subject them to fines, relevant new businesses or operations suspension\nfor rectification, or other sanctions, which may materially and adversely affect our business, financial conditions and results of operations.\n\n \n\n**Cyber-attacks or other failures in our telecommunications\nor information technology systems, or those of our collaborators, third-party logistics providers, distributors or other contractors or\nconsultants, could result in information theft, data corruption and significant disruption of our business operations.**\n\n** **\n\nWe, our programs, our collaborators, third-party\nlogistics providers, distributors and other contractors and consultants utilize information technology, or IT, systems and networks to\nprocess, transmit and store electronic information, including but not limited to intellectual property, proprietary business information\nand personal information, in connection with our business activities. Our internal IT systems and those of current and future third parties\non which we rely may fail and are vulnerable to breakdown, breach, interruption or damage from cyber incidents, employee error or malfeasance,\ntheft or misuse, sophisticated nation-state and nation-state-supported actors, unauthorized access, natural disasters, terrorism, war,\ntelecommunication and electrical failures or other compromises. As use of digital technologies has increased, cyber incidents, including\nthird parties gaining access to employee accounts using stolen or inferred credentials, computer malware, viruses, spamming, phishing\nattacks, denial-of-service attacks or other means, and deliberate attacks and attempts to gain unauthorized access to computer systems\nand networks, have increased in frequency, intensity, and sophistication. These threats pose a risk to the security of our, our programs’,\nour collaborators’, third-party logistics providers’, distributors’ and other contractors’ and consultants’\nsystems and networks, and the confidentiality, availability and integrity of our data. There can be no assurance that we will be successful\nin preventing cyber-attacks or successfully mitigating their effects. We may not be able to anticipate all types of security threats,\nand we may not be able to implement preventive measures effective against all such security threats. The techniques used by cyber criminals\nchange frequently, may not be recognized until launched, and can originate from a wide variety of sources, including outside groups such\nas external service providers, organized crime affiliates, terrorist organizations or hostile foreign governments or agencies. Similarly,\nthere can be no assurance that our collaborators, third-party logistics providers, distributors and other contractors and consultants\nwill be successful in protecting our clinical and other data that is stored on their systems. Any loss of clinical trial data from our\ncompleted or ongoing clinical trials for any of our product candidates could result in delays in our development and regulatory approval\nefforts and significantly increase our costs to recover or reproduce the data. Although to our knowledge we have not experienced any such\nmaterial system failure or material security breach to date, if such an event were to occur and cause interruptions in our operations,\nit could result in a material disruption of development programs and business operations.\n\n \n\nAny cyber-attack that leads to unauthorized access,\nuse, or disclosure of personal information, data breach or destruction or loss of data could result in a violation of applicable U.S.\nand international privacy, data protection and other laws and regulations, subject us to litigation and governmental investigations, proceedings\nand regulatory actions by federal, state and local regulatory entities in the United States and by international regulatory entities,\nresulting in exposure to material civil and/or criminal liability, cause us to breach our contractual obligations, which could result\nin significant legal and financial exposure and reputational damages. As cyber threats continue to evolve, we may be required to incur\nsignificant additional expenses in order to implement further data protection measures or to remediate any information security vulnerability.\nFurther, our general liability insurance and corporate risk program may not cover all potential claims to which we are exposed and may\nnot be adequate to indemnify us for all liability that maybe imposed, which could have a material adverse effect on our business and prospects.\nThere can be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would otherwise protect\nus from liabilities or damages as a result of the events referenced above.\n\n \n\n14\n\n \n\n \n\n**If we fail to hire, train or retain qualified\nmanagerial and other employees, our business and results of operations could be materially and adversely affected.**\n\n \n\nOur personnel are critical to maintaining the\nquality and consistency of our services, brand and reputation. It is important for us to attract qualified managerial and other employees.\nThere may be a limited supply of such qualified individuals. We must hire and train qualified managerial and other employees on a timely\nbasis to keep pace with our rapid growth while maintaining consistent quality of services across our operations. We must also provide\ncontinuous training to our managerial and other employees so that they are equipped with up-to-date knowledge of various aspects of our\noperations and can meet our demand for high-quality services. If we fail to do so, the quality of our services may decrease, which in\nturn, may cause a negative perception of our brand and adversely affect our business.\n\n \n\n**We may be involved from time to time in\nlegal proceedings and commercial or contractual disputes, which could have a material adverse effect on our business, results of operations\nand financial condition.**\n\n \n\nFrom time to time, we may be involved in legal\nproceedings and commercial disputes. Such proceedings or disputes are typically claims that arise in the ordinary course of business,\nincluding, without limitation, commercial or contractual disputes, and other disputes with customers and suppliers, intellectual property\nmatters, tax matters and employment matters. There can be no assurance that such proceedings and claims, should they arise, will not have\na material adverse effect on our business, results of operations and financial condition.\n\n \n\n**Any failure to protect our trademarks and\nother intellectual property rights could have a negative impact on our business.**\n\n \n\nWe believe our key trademark, “Sunrise” and “晖阳,”\nfor which we have obtained trademark protection, and 41 patents, are critical to our success. Any unauthorized use of our trademarks or\nother intellectual property rights could harm our competitive advantages and business. Historically, China has not protected intellectual\nproperty rights to the same extent as the United States, and infringement of intellectual property rights continues to pose a serious\nrisk of doing business in China. Monitoring and preventing unauthorized use are difficult. The measures we take to protect our intellectual\nproperty rights may not be adequate. Furthermore, the application of laws governing intellectual property rights in China and abroad is\nuncertain and evolving, and could involve substantial risks to us. If we are unable to adequately protect our brand, trademarks and other\nintellectual property rights, we may lose these rights and our business may suffer materially.\n\n \n\n**Risks Related to Graphite Anode Manufacturing\nand Sales Business**\n\n** **\n\n**Our graphite anode manufacturing and sales\njoint venture may not perform as well as we expected.**\n\n** **\n\nIn 2022, Zhuhai Zibo entered into an Investment\nAgreement with 13 other parties to form a graphite anode manufacturing and sales joint venture, Sunrise Guizhou. While we believe the\njoint venture could give the Company new potential growth, it may not perform as well as we expected and, as a result, could impact the\nCompany’s financial performance.\n\n \n\n**Joint venture with which we engage for developing\ngraphite anode manufacturing and sales business presents a number of challenges that could have a material adverse effect on our business\nand results of operations and cash flows.**\n\n \n\nThe success of our overall development plans for\nour graphite anode manufacturing and sales business depends on our relationships with our joint venture partners. Transactions included\nin developing a joint venture typically involve a number of risks and present financial, managerial and operational challenges, including\nthe existence of unknown potential disputes, liabilities or contingencies that arise after entering into the joint venture related to\nthe counterparties to such joint venture. We could experience financial or other setbacks, if transactions encounter unanticipated problems\ndue to challenges, including problems related to execution or integration. Any of these risks could reduce our revenues or increase our\nexpenses, which could adversely affect our results of operations and cash flows.\n\n \n\n**We require cooperation from our joint venture\npartners to establish and operate the graphite anode manufacturing and sales business.**\n\n \n\nTo successfully establish and operate the graphite\nanode manufacturing and sales business, in addition to capital contributions, we need our partner’s expertise in a number of areas,\nsuch as advanced technology R&D, marketing and sales. In the event that we cannot maintain our cooperative relationships with our\njoint venture partners, on terms favorable to us or at all, we will need to source other business partners, and we may lose access to\nkey strategic assets, which could result in material and adverse effects on our business and results of operations.\n\n** **\n\n**We may not respond quickly to continued\ninnovations in the graphene products industry.**\n\n** **\n\nWe believe that technological advances in graphite\nmanufacture will continue to evolve and new technologies will continue to develop. Advances in the manufacture of graphite could allow\nour competitors to develop products faster or produce more efficiently or at lower cost than we can. If we are unable to adapt or incorporate\ntechnological advances into our operations, our production facilities could become less competitive. Further, it may be necessary for\nus to incur significant expenditures to acquire any new technologies and retrofit our current processes to remain competitive.\n\n** **\n\n15\n\n \n\n** **\n\n**We must continuously invest in research\nand development.**\n\n** **\n\nTo remain competitive, we must continuously invest\nin research and development which can be costly. Much of our technology and intellectual property portfolio is at an early stage of development,\nand we may not be able to continue to identify, develop, exploit, market and, in certain cases, secure regulatory approval for, innovative\nproducts in a timely manner or at all.\n\n \n\n**Risks of relationships with third parties\nin respect of research and development.**\n\n** **\n\nAlthough we have resources and staff dedicated\nto research and development, market conditions and other factors such as management efficiencies may make it required or preferable for\nus to enter into arrangements with third parties for the development, production and commercialization of graphite. If we are unable to\nnegotiate favorable terms for such arrangements with respect to intellectual property or otherwise or disagreements arise between us and\nany partner or potential partner, our business, financial condition, and results of operations may be adversely affected. Further, there\ncan be no assurance that any otherwise successful collaborations will generate products or intellectual property which can be commercialized\nor will result in any revenue or cash flow.\n\n** **\n\n**Government support of electric vehicles\nand renewable energy may be reduced.**\n\n** **\n\nDemand for and development of the products that\nincorporate our graphite products, including electric vehicles, renewable energy technologies, and power storage technologies, are significantly\naffected by government policies, support, and subsidies. Any reduction in government support for relevant industries or technologies may\nadversely affect our business.\n\n \n\n**Price volatility of our finished goods.**\n\n** **\n\nWhether due to the entry into the market of new\nmanufacturers, the development of new graphite products manufacturing technologies, changes in downstream technologies, or other causes,\nthere may be an increase in the availability of graphite products in the market relative to the demand for those products. In the event\nthat production exceeds demand, we may not be able to negotiate favorable pricing for the sale of our products, and there is no assurance\nthat we will maintain or achieve growth in revenue, profitability or cash flow from our graphite products.\n\n \n\n**Complying with numerous health, safety and\nenvironmental regulations is both complex and costly.**\n\n** **\n\nSunrise Guizhou’s graphite manufacturing\nbusiness is subject to numerous health, safety, and environmental requirements in the PRC. Such laws and regulations govern, among other\nmatters, air emissions, wastewater discharges, solid and hazardous waste management and the use, composition, handling, distribution,\nand transportation of hazardous materials. Many such laws and regulations are becoming increasingly stringent (and may impose strict liability)\nand the cost of compliance with these requirements can be expected to increase over time. Although we believe that our operations will\ncomply with applicable regulations, any failure to comply with these laws and regulations could result in us incurring costs and/or liabilities,\nincluding as a result of regulatory enforcement, personal injury, property damage and claims and litigation resulting from such events,\nwhich could adversely affect our results of operations and financial condition.\n\n \n\n**Industrial operations can be hazardous.**\n\n** **\n\nAccidents involving the mishandling of heavy equipment\nor hazardous substances could cause severe or critical damage or injury to property and human health. Such an event could result in civil\nlawsuits and/or regulatory enforcement proceedings, both of which could lead to significant liabilities. Any damage to persons, equipment\nor property or other disruption of our business could result in significant additional costs to replace, repair and insure assets, which\ncould negatively affect our business, prospects, operating results and financial condition.\n\n \n\n16\n\n \n\n \n\n**Sunrise Guizhou depends on a few major customers,\nand the loss of any of which could cause a significant decline in our revenues.**\n\n \n\nSunrise Guizhou’s customers are manufacturers of industrial and\nconsumer energy storage lithium-ion batteries, such as batteries for electric vehicles and electric ships, and smart consumer electronics.\nFor the fiscal year ended December 31, 2025, Sunrise Guizhou had 35 customers. Two customers accounted for more than 10% of Sunrise Guizhou’s\ntotal sales, accounting for 52% and 12%, respectively. For the fiscal year ended December 31, 2024, Sunrise Guizhou had 26 customers.\nOne customer accounted for more than 10% of Sunrise Guizhou’s total sales, accounting for 67%. For the fiscal year ended December\n31, 2023, Sunrise Guizhou had 23 customers. Three customers accounted for more than 10% of Sunrise Guizhou’s total sales, accounting\nfor 38%, 25%, and 11%, respectively.\n\n \n\nIf any of its key customers reduces, delays or\ncancels its orders for any reason, or the financial condition of any of its key customers deteriorates, Sunrise Guizhou’s business\ncould be seriously harmed. Similarly, a failure to manufacture sufficient quantities of products to meet the demands of these customers\nmay cause Sunrise Guizhou to lose business. Furthermore, if Sunrise Guizhou experiences difficulties in the collection of its accounts\nreceivables from its key customers, the results of our operation may be materially and adversely affected.\n\n \n\n**Sunrise Guizhou faces the risk of fluctuations\nin the cost, availability, and quality of raw materials, which could adversely affect our results of operations.**\n\n \n\nThe cost, availability, and quality of the principle\nraw materials, such as asphalt coke, petroleum coke, needle coke, and American petroleum coke, are essential to Sunrise Guizhou’s\noperations. It purchases these raw materials from suppliers in China, Romania, and Indonesia, in order to meet the requirements of different\ncustomers, as well as to maintain a diversified supplier base which is beneficial to a stable supply chain. Lack of availability of raw\nmaterials, whether due to shortages in supply, delays or interruptions in processing, failure of timely delivery, or otherwise, could\ninterrupt Sunrise Guizhou’s operations and adversely affect our financial results. If the costs of raw materials increases due to\npolicy changes, significant market price fluctuation, or any other causes that generally cannot be controlled by Sunrise Guizhou, Sunrise\nGuizhou’s business and results of operations could be adversely affected.\n\n \n\nFurther, defective raw materials or raw materials\nwith quality deficiencies could subject Sunrise Guizhou to product liability claims or legal actions, which circumstances could adversely\naffect Sunrise Guizhou’s financial conditions and results of operations.\n\n \n\n**Sunrise Guizhou entrusts third-party contract\nmanufacturers for certain processes for the manufacturing of its graphite anode products.**\n\n** **\n\nAs of the date of this annual report, Sunrise\nGuizhou entrusts certain processes of the manufacturing of its graphite anode products to third-party contractors, who might be unable\nto timely manufacture its products or produce the quantity and quality required to meet its commercial needs, or may not be able to execute\nour manufacturing procedures appropriately, or may not perform as agreed upon, or to produce, store and distribute its products satisfactorily.\nAny of the above could adversely affect the business results of operations and financial condition.\n\n \n\n**Sunrise Guizhou may need additional capital\nto pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances, and financing may not be\navailable on acceptable terms or at all.**\n\n \n\nAs Sunrise Guizhou intends to continue to make\ninvestments to support the growth of its business, it may require additional capital to pursue its business objectives and respond to\nbusiness opportunities, challenges or unforeseen circumstances, including expanding manufacturing capacities, developing new products\nand service offerings, increasing sales and marketing expenditures, and engage customers through expanded channels, enhancing its operating\ninfrastructure and acquiring complementary businesses and technologies. Accordingly, Sunrise Guizhou may need to engage in equity or debt\nfinancing to secure additional funds. However, additional funds may not be available when needed, on terms that are acceptable, or at\nall. Repayment of any such debt may divert a substantial portion of cash flow to repay principal and interest on such debt, which would\nreduce the funds available for expenses, capital expenditures, acquisitions and other general corporate purposes. Sunrise Guizhou may\nsuffer as a result of any default and foreclosure on assets pledged to secure any such financing, if the operating cash flow is insufficient\nto service debt obligations, which could in turn result in acceleration of obligations to repay the indebtedness and limit sources of\nfinancing.\n\n \n\nVolatility in the credit markets may also have\nan adverse effect on Sunrise Guizhou’s ability to obtain debt financing. If it raises additional funds through further issuance\nof equity or convertible debt securities, our existing shareholders could suffer significant dilution, and any new equity securities we\nissue could have rights, preferences and privileges superior to those of holders of our Ordinary Shares. If Sunrise Guizhou is unable\nto obtain adequate financing or financing on terms satisfactory to it when required, our ability to continue to pursue our business objectives\nand to respond to business opportunities, challenges or unforeseen circumstances could be significantly limited, and our business, financial\ncondition, results of operations and prospects could be adversely affected.\n\n \n\n17\n\n \n\n \n\n**Risks Related to Our Corporate Structure**\n\n \n\n**The VIE Agreements have not been tested\nin a court of law and are subject to significant risks, as set forth in the following risk factors. For a description of these VIE Agreements,\nsee “ITEM 4. INFORMATION ON THE COMPANY — C. Organizational Structure”.**\n\n** **\n\n**If the PRC government finds that the agreements\nthat establish the structure for operating our businesses in China do not comply with PRC regulations relating to the relevant industries,\nor if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or\nbe forced to relinquish our interests in those operations.**\n\n** **\n\nForeign ownership of certain value-added telecommunications\nservices, or the VATS, is subject to restrictions under current PRC laws and regulations. For example, the ultimate foreign equity ownership\nin a VATS provider may not exceed 50%. Also, for a foreign investor contemplating to acquire any equity interest in a VATS business in\nChina, it must satisfy a number of stringent performance and operational experience requirements. In addition, to conduct any VATS business\nin China, foreign investors have to set up foreign-invested enterprises and obtain a relevant telecommunications business operating license.\nSee “Regulations—Regulations Related to Foreign Investment.”\n\n \n\nThe Company’s knowledge sharing business\npreviously included VATS, and in light of the above restrictions and requirements, the Company opted to rely on contractual arrangements\nbetween GIOP BJ and the VIE to operate its knowledge sharing and enterprise business in China. As a result of which, under United States\ngenerally accepted accounting principles, the assets and liabilities of the VIE are treated as our assets and liabilities and the results\nof operations of the VIE are treated as if they were the results of our operations. For a description of these contractual arrangements,\nsee “Business—Contractual Arrangements between GIOP BJ, the VIE and Its Shareholders” and “Related Party Transactions—Contractual\nArrangements with GIOP BJ, the VIE and Its Shareholders.” As of the date of this annual report, the Company no longer engages in\nbusiness activities that are VATS.\n\n \n\nIn the opinion of our PRC legal counsel, JT&N,\nbased on its understandings of the relevant PRC laws and regulations, (i) the ownership structures of the VIE in China and GIOP BJ are\nnot in violation of applicable PRC laws and regulations currently in effect; and (ii) each of the contracts among GIOP BJ, the VIE and\nits shareholders is legal, valid, binding and enforceable in accordance with its terms and applicable PRC laws. However, our PRC legal\ncounsel has also advised us that there are substantial uncertainties regarding the interpretation and application of current or future\nPRC laws and regulations. Accordingly, the PRC regulatory authorities may ultimately take a view contrary to the opinion of our PRC legal\ncounsel. It is uncertain whether any new PRC laws or regulations relating to variable interest entity structures will be adopted or if\nadopted, what they would provide. If we or the VIE are found to be in violation of any PRC laws or regulations, if the contractual arrangements\namong GIOP BJ, the VIE and its shareholders are determined to be illegal or invalid by a PRC court, arbitral tribunal or regulatory authorities,\nor if we or the VIE fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would\nhave broad discretion to take action in dealing with such violations or failures, including:\n\n \n\n \n●\nrevoking the business and/or operating licenses of GIOP BJ or the VIE;\n\n \n\n \n●\ndiscontinuing or restricting the operations of GIOP BJ or the VIE;\n\n \n\n \n●\nimposing conditions or requirements with which we, GIOP BJ, or the VIE may not be able to comply;\n\n \n\n \n●\nrequiring us, GIOP BJ, or the VIE to restructure the relevant ownership structure or operations which may significantly impair the rights of the holders of our Ordinary Shares in the equity of the VIE;\n\n \n\n \n●\nrestricting or prohibiting our use of the proceeds from our initial public offering to finance our business and operations in China; and\\or\n\n \n\n \n●\nimposing fines.\n\n \n\nThe imposition of any of these penalties would\nresult in a material and adverse effect on our ability to conduct our business. In addition, it is unclear what impact the PRC government\nactions would have on us and on our ability to consolidate the financial results of the VIE in our consolidated financial statements,\nif the PRC government authorities were to find our legal structure and contractual arrangements to be in violation of PRC laws and regulations.\nIf the imposition of any of these government actions causes us to lose our right to direct the activities of the VIE or our right to receive\nsubstantially all of the economic benefits and residual returns from the VIE and we are not able to restructure our ownership structure\nand operations in a satisfactory manner, we would no longer be able to consolidate the financial results of the VIE in our consolidated\nfinancial statements. Either of these results, or any other significant penalties that might be imposed on us in this event, would have\na material adverse effect on our financial condition and results of operations.\n\n \n\n**We rely on contractual arrangements with\nthe VIE and its subsidiaries, and shareholders for our China operations, which may not be as effective in providing operational control\nas direct ownership.**\n\n \n\nWe have relied and expect to continue to rely\non contractual arrangements with the VIE, its subsidiaries and shareholders to operate our business in China. For a description of these\ncontractual arrangements, see “Business—Contractual Arrangements between GIOP BJ, the VIE and Its Shareholders” and\n“Related Party Transactions— Contractual Arrangements with GIOP BJ, the VIE and Its Shareholders.” These contractual\narrangements may not be as effective in providing us with control over the VIE and its subsidiaries as direct ownership. We have no direct\nor indirect equity interests in the VIE or any of its subsidiaries.\n\n \n\n18\n\n \n\n \n\nIf we had direct ownership of the VIE and its\nsubsidiaries, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of the VIE and its\nsubsidiaries, which in turn could effect changes, subject to any applicable fiduciary obligations, at the management level. But under\nthe current contractual arrangements, as a legal matter, if the VIE or any of its subsidiaries and shareholders fails to perform their\nobligations under these contractual arrangements, we may have to incur substantial costs and resources to enforce such arrangements and\nrely on legal remedies under PRC law, including seeking specific performance or injunctive relief and claiming damages, which may not\nbe effective. For example, if the shareholders of the VIE were to refuse to transfer their equity interest in the VIE to us or our designee\nwhen we exercise the call option pursuant to these contractual arrangements, or if they were otherwise to act in bad faith toward us,\nthen we may have to take legal action to compel them to fulfill their contractual obligations.\n\n \n\nMany of these contractual arrangements are governed\nby PRC law and provide for the resolution of disputes through arbitration in the PRC. Accordingly, these contracts would be interpreted\nin accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC\nis not as developed as in some other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could\nlimit our ability to enforce these contractual arrangements. In the event we are unable to enforce these contractual arrangements, we\nmay not be able to exert effective control over our affiliated entities, and our ability to conduct our business may be negatively affected.\n\n \n\n**The contractual arrangements we have entered\ninto with the VIE and its shareholders, and any other arrangements and transactions among related parties that we currently have or will\nhave in future may be subject to scrutiny by the PRC tax authorities and they may determine that we owe additional taxes, which could\nsubstantially reduce our consolidated net income and the value of your investment.**\n\n \n\nUnder applicable PRC laws and regulations, arrangements\nand transactions among related parties may be subject to audit or challenge by the PRC tax authorities within ten years after the taxable\nyear when the transactions are conducted. We could face material and adverse tax consequences if the PRC tax authorities determine that\nthe VIE contractual arrangements were not entered into on an arm’s-length basis in such a way as to result in an impermissible reduction\nin taxes under applicable PRC laws, rules and regulations, and adjust the income of the VIE in the form of a transfer pricing adjustment.\nA transfer pricing adjustment could, among other things, result in a reduction of expense deductions recorded by the VIE for PRC tax purposes,\nwhich could in turn increase its tax liabilities without reducing GIOP BJ’s tax expenses. In addition, the PRC tax authorities may\nimpose late payment fees and other penalties on the VIE for the adjusted but unpaid taxes according to the applicable regulations. Our\nfinancial position could be materially and adversely affected if the VIE’s tax liabilities increase or if it is required to pay\nlate payment fees and other penalties.\n\n \n\n**Because we are a Cayman Islands holding\ncompany and conduct a knowledge sharing platform through the VIE in China, if we fail to comply with applicable PRC law, we could be subject\nto severe penalties and our business could be adversely affected.**\n\n \n\nWe are a Cayman Islands holding company and operate\na portion of our business through the VIE in China through VIE Agreements, as a result of which, under United States generally accepted\naccounting principles, the assets and liabilities of the VIE are treated as our assets and liabilities and the results of operations of\nthe VIE are treated in all respects as if they were the results of our operations. There are uncertainties regarding the interpretation\nand application of PRC laws, rules and regulations, including but not limited to the laws, rules and regulations governing the validity\nand enforcement of the VIE Agreements between GIOP BJ and the VIE.\n\n \n\nThe Provisions Regarding Mergers and Acquisitions\nof Domestic Projects by Foreign Investors (the “M&A Rules”) requires an overseas special purpose vehicle that are controlled\nby PRC companies or individuals formed for the purpose of seeking a public listing on an overseas stock exchange through acquisitions\nof PRC domestic companies using shares of such special purpose vehicle or held by its shareholders as considerations to obtain the approval\nof the China Securities Regulatory Commission, or the CSRC, prior to the listing and trading of such special purpose\nvehicle’s securities on an overseas stock exchange. However, the application of the M&A Rules remains unclear. If CSRC approval\nis required, it is uncertain whether it would be possible for us to obtain the approval. Any failure to obtain or delay in obtaining CSRC\napproval for such an offering would subject us to sanctions imposed by the CSRC and other PRC regulatory agencies.\n\n \n\nIf GIOP BJ, the VIE or their ownership structure\nor the VIE Agreements are determined to be in violation of any existing or future PRC laws, rules or regulations, or GIOP BJ or the VIE\nfail to obtain or maintain any of the required governmental permits or approvals, the relevant PRC regulatory authorities would have broad\ndiscretion in dealing with such violations, including:\n\n \n\n \n●\nrevoking the business and operating licenses of GIOP BJ or the VIE;\n\n \n \n \n\n \n●\ndiscontinuing or restricting the operations of GIOP BJ or the VIE;\n\n \n \n \n\n \n●\nimposing conditions or requirements with which we, GIOP BJ, or the VIE may not be able to comply;\n\n \n\n19\n\n \n\n \n\n \n●\nrequiring us, GIOP BJ, or the VIE to restructure the relevant ownership structure or operations which may significantly impair the rights of the holders of our ordinary shares in the equity of the VIE; and\\or \n\n \n \n \n\n \n●\nimposing fines.\n\n \n\nWe cannot assure you that the PRC courts or regulatory\nauthorities may not determine that our corporate structure and VIE Agreements violate PRC laws, rules or regulations. If the PRC courts\nor regulatory authorities determine that our contractual arrangements are in violation of applicable PRC laws, rules or regulations, the\nVIE Agreements will become invalid or unenforceable, and the VIE will not be treated as VIE entities and we will not be entitled to treat\nthe VIE’s assets, liabilities and results of operations as our assets, liabilities and results of operations, which could effectively\neliminate the assets, revenue and net income of the VIE from our balance sheet, which would most likely require us to cease conducting\nour business and would result in the delisting of our Class A Ordinary Shares from the Nasdaq Capital Market and a significant impairment\nin the market value of our Class A Ordinary Shares.\n\n \n\n**The shareholders of the VIE may have potential\nconflicts of interest with us, which may materially and adversely affect our business and financial condition.**\n\n \n\nAlmost all of our beneficiary owners hold equity\ninterests in the VIE. They may have conflicts of interest with us. Conflicts of interest may arise between the dual roles of them who\nare both shareholders of our Company and shareholders of SDH, the VIE. These shareholders may breach, or cause the VIE to breach, or refuse\nto renew, the existing contractual arrangements we have with them and SDH, which would have a material and adverse effect on our ability\nto effectively control the VIE and receive economic benefits from it. For example, the shareholders may be able to cause our agreements\nwith the VIE to be performed in a manner adverse to us by, among other things, failing to remit payments due under the contractual arrangements\nto us on a timely basis. We cannot assure you that when conflicts of interest arise any or all of these shareholders will act in the best\ninterests of our Company or such conflicts will be resolved in our favor.\n\n \n\nCurrently, we do not have any arrangements to\naddress potential conflicts of interest between these shareholders and our Company, except that we could exercise our purchase option\nunder the exclusive option agreements with these shareholders to request them to transfer all of their equity interests in the VIE to\na PRC entity or individual designated by us, to the extent permitted by PRC law. If we cannot resolve any conflicts of interest or disputes\nbetween us and those individuals, we would have to rely on legal proceedings, which may materially disrupt our business. There is also\nsubstantial uncertainty as to the outcome of any such legal proceeding.\n\n \n\n**Uncertainties exist with respect to the\ninterpretation and implementation of the Foreign Investment Law and how it may impact the viability of our current corporate structure,\ncorporate governance and business operations.**\n\n \n\nOn March 15, 2019, the National People’s\nCongress approved the Foreign Investment Law, which has come into effect on January 1, 2020 and replaced the trio of existing laws regulating\nforeign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture\nEnterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations. The\nForeign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with\nprevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic\ninvestments. However, since it is relatively new, uncertainties still exist in relation to its interpretation and implementation. For\ninstance, under the Foreign Investment Law, “foreign investment’’ refers to the investment activities directly or indirectly\nconducted by foreign individuals, enterprises or other entities in China. Though it does not explicitly classify VIE Agreements as a form\nof foreign investment, there is no assurance that operation conducted by foreign investors or foreign-invested enterprises via contractual\narrangement would not be interpreted as a type of indirect foreign investment activities under the definition in the future. In addition,\nthe definition contains a catch-all provision which includes investments made by foreign investors through means stipulated in laws or\nadministrative regulations or other methods prescribed by the State Council. Therefore, it still leaves leeway for future laws, administrative\nregulations or provisions promulgated by the Stale Council to provide for VIE Agreements as a form of foreign investment. In any of these\ncases, it will be uncertain whether the VIE Agreements will be deemed to be in violation of the market access requirements for foreign\ninvestment under the PRC laws and regulations. Furthermore, if future laws, administrative regulations or provisions prescribed by the\nState Council mandate further actions to be taken by companies with respect to existing VIE Agreements, we may face substantial uncertainties\nas to whether we can complete such actions in a timely manner, or at all. Failure to take timely and appropriate measures to cope with\nany of these or similar regulatory compliance challenges could materially and adversely affect our current corporate structure, corporate\ngovernance and business operations.\n\n \n\n**Our dual class share\nstructure with different voting rights may adversely affect the value and liquidity of the Class A Ordinary Shares.**\n\n \n\nWe cannot predict whether\nour dual class share structure with different voting rights will result in a lower or more volatile market price of the Class A Ordinary\nShares, in adverse publicity, or other adverse consequences. Certain index providers have announced restrictions on including companies\nwith multiple class share structures in certain of their indices. Because of our dual class structure, we will likely be excluded from\nthese indices and other stock indices that take similar actions. Given the sustained flow of investment funds into passive strategies\nthat seek to track certain indices, exclusion from certain stock indices would likely preclude investment by many of these funds and could\nmake the Class A Ordinary Shares less attractive to investors. In addition, several shareholder advisory firms have announced their\nopposition to the use of multiple class structure and our dual class structure may cause shareholder advisory firms to publish negative\ncommentary about our corporate governance, in which case the market price and liquidity of the Class A Ordinary Shares could be adversely\naffected.\n\n \n\n20\n\n \n\n \n\n**The dual class structure of our ordinary\nshares has the effect of concentrating voting control with our Chairman, and his interest may not be aligned with the interests of our\nother shareholders.**\n\n \n\nWe have adopted a dual-class voting structure,\nconsisting of Class A Ordinary Shares and Class B Ordinary Shares. Under this structure, holders of Class A Ordinary Shares are entitled\nto one vote per Class A Ordinary Share, and holders of Class B Ordinary Shares are entitled to twenty votes per Class B Ordinary Share,\nwhich may cause the holders of Class B Ordinary Shares to have an unbalanced, higher concentration of voting power. As of the date of\nthis annual report, Haping Hu, our CEO and chairman of the board of directors, beneficially owns 2,540,789, or 7.90%, of our issued Class\nA Ordinary Shares, and 6,567,272, or 100%, of our issued Class B Ordinary Shares, representing approximately 81.88% of the voting rights\nin our Company. As a result, until such time as Haiping Hu’s voting power is below 50%, he, as the controlling shareholder, has\nsubstantial influence over our business, including decisions regarding mergers, consolidations and the sale of all or substantially all\nof our assets, election of directors, and other significant corporate actions. He may take actions that are not in our best interest or\nin the best interest of other shareholders. These corporate actions may be taken even if they are opposed by other shareholders. Further,\nsuch concentration of voting power may discourage, prevent, or delay the consummation of change of control transactions that shareholders\nmay consider favorable, including transactions in which shareholders might otherwise receive a premium for their shares. Future issuances\nof Class B Ordinary Shares may also be dilutive to the holders of Class A Ordinary Shares. As a result, the market price of our Class\nA Ordinary Shares could be adversely affected.\n\n \n\n**As a “controlled company” under\nthe listing rules of the NASDAQ Stock Market, we may choose to exempt our company from certain corporate governance requirements that\ncould have an adverse effect on our public shareholders.**\n\n \n\nAs of the date of this annual report, Mr. Haiping\nHu, our CEO and chairman of the board of directors, beneficially owns the majority of the voting power of our outstanding Ordinary Shares.\nUnder NASDAQ Listing Rules, a company of which more than 50% of the voting power is held by an individual, group or another company is\na “controlled company” and may elect not to comply with certain corporate governance requirements, including the\nrequirement that a majority of our directors be independent, as defined in the NASDAQ Listing Rules, and the requirement that our compensation\nand nominating and corporate governance committees consist entirely of independent directors. Although we do not intend to rely on the\n“controlled company” exemption under the Nasdaq listing rules, we could elect to rely on this exemption in the future if we\nmeet certain disclosure requirements. If we elect to rely on the “controlled company” exemption, a majority of the members\nof our board of directors might not be independent directors and our nominating and corporate governance and compensation committees might\nnot consist entirely of independent directors. Accordingly, during any time while we remain a controlled company relying on\nthe exemption and during any transition period following a time when we are no longer a controlled company, you would not have the\nsame protections afforded to shareholders of companies that are subject to all of the NASDAQ Stock Market corporate governance requirements.\nOur status as a controlled company could cause our Class A Ordinary Share to look less attractive to certain investors or otherwise\nharm our trading price.\n\n \n\n**We may lose the ability to use and enjoy\nassets held by the VIE that are material to the operation of certain portion of our business if the VIE goes bankrupt or become subject\nto a dissolution or liquidation proceeding.**\n\n \n\nAs part of our contractual arrangements with the\nVIE, the VIE and its subsidiaries hold certain assets that are material to the operation of certain portion of our business, including\nintellectual property and licenses. If the VIE goes bankrupt and all or part of its assets become subject to liens or rights of third-party\ncreditors, we may be unable to continue some or all of our business activities, which could materially and adversely affect our business,\nfinancial condition and results of operations. Under the contractual arrangements, the VIE may not, in any manner, sell, transfer, mortgage\nor dispose of their assets or legal or beneficial interests in the business without our prior consent. If the VIE undergoes a voluntary\nor involuntary liquidation proceeding, independent third-party creditors may claim rights to some or all of these assets, thereby hindering\nour ability to operate our business, which could materially and adversely affect our business, financial condition and results of operations.\n\n \n\n**Because we are a Cayman Islands exempted\ncompany and all of our business is conducted in the PRC, you may be unable to bring an action against us or our officers and directors\nor to enforce any judgment you may obtain.**\n\n \n\nWe are incorporated in the Cayman Islands and\nconduct our operations primarily in China. Substantially all of our assets are located outside of the United States. In addition, all\nof our directors and officers reside outside of the United States. As a result, it may be difficult or impossible for you to bring an\naction against us or against these individuals in the United States in the event that you believe we have violated your rights, either\nunder United States federal or state securities laws or otherwise, or if you have a claim against us. Even if you are successful in bringing\nan action of this kind, the laws of the Cayman Islands and of China may not permit you to enforce a judgment against our assets or the\nassets of our directors and officers.\n\n \n\nThe 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, and Article 177 of which provides, among other things, that no overseas\nsecurities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. Accordingly,\nwithout governmental approval in China, no entity or individual in China may provide documents and information relating to securities\nbusiness activities to overseas regulators when it is under direct investigation or evidence discovery conducted by overseas regulators,\nwhich could present significant legal and other obstacles to obtaining information needed for investigations and litigation conducted\nin China.\n\n  \n\n21\n\n \n\n \n\n**As an exempted company incorporated in the\nCayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly\nfrom the Nasdaq listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully\nwith such corporate governance listing standards.**\n\n \n\nAs a Cayman Islands exempted company listed on\nthe Nasdaq Stock Market, we are subject to the Nasdaq listing standards. However, the Nasdaq Stock Market Rules permit a foreign private\nissuer like us to follow the corporate governance practices of its home country. Currently, we rely on home country practice with respect\nto certain aspects of our corporate governance. See “Item 16G. Corporate Governance.” Our shareholders may be afforded less\nprotection than they would otherwise enjoy under the Nasdaq listing standards applicable to U.S. domestic issuers given our reliance\non the home country practice exception.\n\n \n\n**Risks Related to Doing Business in China**\n\n \n\n**The Chinese government exerts substantial\ninfluence over the manner in which we must conduct our business, and may intervene or influence our operations at any time, which could\nresult in a material change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities\nto investors and, and cause the value of our Class A Ordinary Shares to significantly decline or be worthless.**\n\n** **\n\nThe Chinese government has exercised and continues\nto exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability\nto operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations,\nland use rights, property and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations\nor interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance\nwith such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue to support\nrecent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic\npolicies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest\nourselves of any interest we then hold in Chinese properties.\n\n \n\nFurthermore, given recent statements by the Chinese\ngovernment indicating an intent to exert more oversight and control over offerings that are conducted overseas, although we are currently\nnot required to obtain permission from any of the PRC federal or local government authorities and have not received any denial to list\non the U.S. exchange, it is uncertain when and whether we will be required to obtain permission from the PRC government to list on U.S.\nexchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded, which could significantly\nlimit or completely hinder our ability to offer or continue to offer our securities to investors and cause the value of our securities\nto significantly decline or be worthless.\n\n \n\n**Recent greater oversight by the Cyberspace\nAdministration of China over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our\nbusiness and our securities.**\n\n \n\nOn December 28, 2021, 13 governmental departments\nof the PRC, including the Cyberspace Administration of China, or the CAC, issued the Cybersecurity Review Measures, which became effective\non February 15, 2022. The Cybersecurity Review Measures provide that, in addition to critical information infrastructure operators (“CIIOs”)\nthat intend to purchase Internet products and services, online platform operators engaging in data processing activities that affect\nor may affect national security must be subject to cybersecurity review by the Cybersecurity Review Office of the PRC.\n\n \n\nOn January 1, 2025, the Regulations on the Network\nData Security Administration (the “Security Administration Regulation”) became effective, which provides that data processing\noperators engaging in data processing activities that affect or may affect national security must be subject to network data security\nreview by the relevant Cyberspace Administration of the PRC.\n\n \n\nAs confirmed by our PRC counsel, JT&N, as\nof the date of this annual report, we are not subject to cybersecurity review with the CAC, under the Cybersecurity Review Measures that\nbecame effective on February 15, 2022, or the Security Administration Regulation, since (i) as companies that engage in business-oriented\nconsulting services and manufacturing and sales of graphite anode materials, we, our PRC subsidiaries, or the VIE and its subsidiaries\nare unlikely to be classified as CIIOs by the PRC regulatory agencies; (ii) according to the interpretation of the relevant laws by the\nCAC, for online platform operators who have listed in foreign countries before the effective date of Cybersecurity Review Measures, and\nwho are not seeking a new listing (such as a secondary or dual listing) in foreign countries, a cybersecurity review is not required;\n(iii) the data processed in the business of the VIE and its subsidiaries, which is knowledge sharing and enterprise service platform business,\nis unlikely to have a bearing on national security. There remains uncertainty, however, as to how the Cybersecurity Review Measures and\nthe Security Administration Regulation will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC,\nmay adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and\nthe Security Administration Regulation. If any such new laws, regulations, rules, or implementation and interpretation come into effect,\nwe will take all reasonable measures and actions to comply with and to mitigate any adverse effect of such new laws, regulations, rules,\nor implementation and interpretation on us. We cannot guarantee, however, that we will not be subject to cybersecurity review and network\ndata security review in the future. During such reviews, if required, our operations could be suspended or experience other disruptions.\nFurther, cybersecurity review and network data security review could also result in negative publicity with respect to our Company and\ndiversion of our managerial and financial resources, which could materially and adversely affect our business, financial conditions, and\nresults of operations.\n\n \n\n22\n\n \n\n \n\n**The Trial Measures and the revised Provisions\nrecently issued by the PRC authorities may subject us to additional compliance requirements in the future.**\n\n \n\nOn February 17, 2023, the CSRC promulgated the Trial Measures and five\nsupporting guidelines, which took effect on March 31, 2023. Pursuant to the Trial Measures, PRC domestic companies that seek to offer\nor list securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements\nof the Trial Measures within three working days following its submission of relevant applications or its completion of subsequent offerings.\nIf a domestic company fails to complete required filing procedures or conceals any material fact or falsifies any major content in its\nfiling documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings, fines, and\nits controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject\nto administrative penalties, such as warnings and fines. On the same day, the CSRC also held a press conference for the release of the\nTrial Measures and issued the *Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies*, or\nthe CSRC Notice, which, among others, clarifies that PRC domestic companies that have already been listed overseas before the effective\ndate of the Trial Measures, which is March 31, 2023, shall be deemed to be Existing Issuers, and Existing Issuers are not required to\ncomplete the filing procedures with the CSRC immediately, and they shall be required to file with the CSRC for any subsequent offerings.\nWe are an Existing Issuer, based on the foregoing, and we are not, therefore, required to complete the filing procedures with the CSRC\nimmediately, and shall be required, however, to file with the CSRC for any subsequent offerings.\n\n \n\nOn February 24, 2023, the CSRC, together with\nthe MOF, the National Administration of State Secrets Protection and National Archives Administration of China, revised the *Provisions\non Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing*, which were issued by the\nCSRC and National Administration of State Secrets Protection and National Archives Administration of China in 2009, or the Provisions.\nThe revised Provisions were issued under the title the “*Provisions on Strengthening Confidentiality and Archives Administration\nof Overseas Securities Offering and Listing by Domestic Companies*,” and came into effect on March 31, 2023, together with the\nTrial Measures. One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering\nand listing, as is consistent with the Trial Measures. The revised Provisions require that, among other things, (i) a domestic company\nthat plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals\nor entities, including securities companies, securities service providers, and overseas regulators, any documents and materials that\ncontain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to\nlaw, and file with the secrecy administrative department at the same level; and (ii) a domestic company that plans to, either directly\nor indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities, including securities\ncompanies, securities service providers, and overseas regulators, any other documents and materials that, if leaked, will be detrimental\nto national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations. Any\nfailure or perceived failure by our Company, our subsidiaries or the VIE and its subsidiaries to comply with the above confidentiality\nand archives administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities\nbeing held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected\nof committing a crime. See “Regulations—Regulations Related to Mergers and Acquisitions and Overseas Listings.”\n\n \n\nThe Trial Measures and the revised Provisions that recently issued\nby the PRC authorities may subject us to additional compliance requirements in the future, as there are still uncertainties regarding\nthe interpretation and implementation of such regulatory guidance, and we cannot assure you that we will be able to comply with all the\nnew regulatory requirements of the Trial Measures, the revised Provisions, or any future implementing rules on a timely basis, or at all.\nAny failure by us to fully comply with the new regulatory requirements, including, but not limited to, the failure to complete the filing\nprocedures with the CSRC if required, may significantly limit or completely hinder our ability to offer or continue to offer our Class\nA Ordinary Shares, cause significant disruption to our business operations, and severely damage our reputation, which would materially\nand adversely affect our financial condition and results of operations and cause our Class A Ordinary Shares to significantly decline\nin value or become worthless.\n\n \n\n**A severe or prolonged downturn in the global\nor Chinese economy could materially and adversely affect our business and our financial condition.**\n\n** **\n\nThe rapid growth of the Chinese economy has slowed\ndown since 2012, and there is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted\nby the People’s Bank of China and financial authorities of some of the world’s leading economies, including the United States\nand China. There have been concerns over unrest and terrorist threats in the Middle East, Europe and Africa, which have resulted in volatility\nin oil and other markets. There have also been concerns on the relationship among China and other Asian countries, which may result in\nor intensify potential conflicts in relation to territorial disputes. Economic conditions in China are sensitive to global economic conditions,\nas well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any\nsevere or prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results of operations\nand financial condition.\n\n \n\n23\n\n \n\n \n\n**Changes in international trade policies,\nor the escalation of tensions in international relations, particularly with regard to China, may adversely impact our business and operating\nresults.**\n\n \n\nThere have been heightened tensions in international relations, particularly\nbetween the United States and China. Recently, the U.S. government has taken steps to reassess its trade policies with several countries,\nwith a primary focus on China. These policies have undergone significant recent changes, including the imposition of escalating tariffs,\nstrategic export controls, and targeted sanctions. However, the future direction of U.S. and global trade policy remains uncertain. It\nis unclear what additional actions may be taken by the U.S. or other governments regarding international trade agreements, tariffs on\nimported goods, tax policies related to international commerce, or other trade-related measures. Should new tariffs, legislation, or regulations\nbe introduced—or if existing trade agreements are renegotiated or further retaliatory actions are taken in response to ongoing U.S.-China\ntrade tensions—such developments could materially and adversely affect our business, financial condition, and results of operations.\n\n \n\nThese tensions have strained both diplomatic\nand economic relations between the two countries. Heightened geopolitical friction may reduce trade volumes, investment activity, technology\nexchange, and other forms of economic engagement between the U.S. and China. A further deterioration in international relations could\nnegatively impact China’s broader economic and social conditions. Given our dependence on the Chinese market, any such developments\nmay have a material adverse effect on our business, financial condition, and results of operations.\n\n \n\nIn addition to trade\nrelated tensions between China and the United States, the U.S. government escalated tensions between the U.S. and China in recent years\nby revoking Hong Kong’s special trading status. Also, the Congress of the United States enacted the Uyghur Forced Labor Prevention\nAct (the “UFLPA”) in December 2021. Effective from June 21, 2022, the UFLPA creates a rebuttable presumption that goods mined,\nproduced, or manufactured (wholly or in part) in China’s Xinjiang Uyghur Autonomous Region are made with forced labor, where goods\ndesignated as such will be subject to an import ban into the United States. The President of the United States may also impose sanctions\non companies that knowingly engage in, are responsible for, or facilitate forced labor in Xinjiang. As of the date of this prospectus,\nwe do not have any operations in Xinjiang Uyghur Autonomous Region, and our business is not impacted by the UFLPA. \n\n \n\nMoreover, recently, the\nwar in Ukraine and sanctions on Russia have increased the uncertainties in the relations between China and the United States, and tensions\nbetween these two countries could be heightened as a result. These tensions have affected both diplomatic and economic ties between the\ntwo countries. Heightened tensions could reduce levels of trade, investments, technological exchanges, and other economic activities between\nthe two major economies. The impacts of the war in Ukraine and sanctions on Russia to our business are very limited, because the PRC subsidiaries\nand the VIE and its subsidiaries source their raw materials from China, Romania and Indonesia and can seek alternative suppliers to their\ncurrent suppliers from such sources without undue cost or effort. The prices of main raw materials used in the products were stable in\nfiscal years ended December 31, 2025 and 2024.  However, the existing tensions and any further deterioration in international relations\nmay have a negative impact on the general, economic, political, and social conditions in China and, given our reliance on the foregoing\nmarkets for raw materials, could adversely impact our business, financial condition, and results of operations.\n\n \n\n**Geopolitical conflicts involving Iran, military\nactions in the Middle East, and the war in Ukraine may adversely affect global economic conditions and cause significant volatility in\nthe trading price of our Class A Ordinary Shares.**\n\n** **\n\nThe 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. The ongoing\ndisruptions caused by these military actions, and the potential for further escalation, could result in protracted and severe damage to\nthe global economy and investment climate.\n\n \n\n**Nasdaq has adopted\nenhanced listing standards and has proposed other related rule changes that expand its discretionary authority, which could adversely\naffect our ability to maintain our listing on Nasdaq, limit the liquidity of our securities, or result in increased volatility or delisting\nrisk.**\n\n** **\n\nNasdaq has recently adopted\na series of rule changes that enhance its initial and continued listing standards and has proposed other related rule changes to the SEC\nfor approval, that expand Nasdaq’s discretionary authority in evaluating and enforcing compliance with those standards. For example,\nNasdaq has recently proposed amendments to its initial listing standards that would impose additional requirements specifically on China-based\nissuers, including heightened liquidity thresholds and more rigorous corporate governance disclosures. These proposed changes reflect\na broader trend by Nasdaq to increase scrutiny of companies with significant operations or affiliations in China. In addition, recent\nchanges to Nasdaq listing standards and Nasdaq’s expanded discretionary authority to deny initial listings under Rule IM-5101-3,\neven where a company meets all applicable quantitative and qualitative criteria, further signal a trend toward tighter listing controls.\nIn exercising this discretion, Nasdaq has indicated that it may consider factors such as a company’s geographic nexus, business\nmodel, and relationships with professional advisors. As such, companies with operations in China or other emerging markets may face a\nhigher burden in satisfying Nasdaq’s listing expectations. Moreover, Nasdaq has recently increased its initial listing requirements\nrelating to the minimum market value of unrestricted publicly held shares. Effective January 17, 2026, companies seeking to list on the\nNasdaq Capital Market or the Nasdaq Global Market under the net income standard are required to have a minimum market value of unrestricted\npublicly held shares of $15 million, compared to prior thresholds of $5 million and $8 million, respectively.\n\n** **\n\n24\n\n \n\n \n\nOn January 13, 2026,\nNasdaq filed a rule proposal with the SEC to adopt a new continued listing requirement that would require all companies listed on the\nNasdaq Global Market or Nasdaq Capital Market to maintain a minimum market value of listed securities of US$5 million. Under the proposed\nrule, if a company’s market value of listed securities falls below this threshold for 30 consecutive trading days, Nasdaq may immediately\nsuspend trading and initiate delisting proceedings without affording the company a compliance cure period. This proposed rule, if adopted,\nwould be in addition to Nasdaq’s existing continued listing requirements, which include minimum bid price, publicly held shares,\nand shareholders’ equity, among others. If the market value of our Class A Ordinary Shares were to fall below the proposed $5 million\nthreshold or we otherwise fail to satisfy Nasdaq’s continued listing standards, we could face delisting proceedings on an accelerated\nbasis. Moreover, even if we remain in compliance with quantitative criteria, Nasdaq retains discretionary authority under Rule IM-5101-1\nto suspend or terminate a company’s listing if necessary to protect investors or ensure the orderly operation of the market. We\ncannot assure you that we will be able to maintain compliance with Nasdaq’s continued listing standards, particularly in light of\nour trading volume, market capitalization, public float and other qualitative factors. If we are unable to maintain our listing, we may\nbe forced to trade on an over-the-counter market, which may be less liquid and more volatile and could impair investors’ ability\nto buy or sell our Class A Ordinary Shares. The loss of our Nasdaq listing could also reduce our visibility and credibility in the market\nand adversely affect our ability to access capital through future equity financings.\n\n \n\nFurthermore, 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.\n\n \n\nSuch geopolitical instability often leads to broad\nsell-offs in the equity markets and heightened investor sensitivity to risk. Consequently, these developments may materially and adversely\naffect the market price of our Class A Ordinary Shares, regardless of our actual operating performance. We cannot predict the ultimate\nprogress or outcome of these situations, and any prolonged unrest or intensified military activities could have a material adverse effect\non the global economy, which in turn could negatively impact our financial condition and the value of our securities.\n\n \n\n**Because our business is dependent upon government\npolicies that encourage a market-based economy, change in the political or economic climate in the PRC may impair our ability to operate\nprofitably, if at all.**\n\n** **\n\nAlthough the PRC government has been pursuing\na number of economic reform policies for more than two decades, the PRC government continues to exercise significant control over economic\ngrowth in the PRC. Because of the nature of our business, we are dependent upon the PRC government pursuing policies that encourage private\nownership of businesses. We cannot assure you that the PRC government will pursue policies favoring a market-oriented economy or that\nexisting policies will not be significantly altered, especially in the event of a change in leadership, social or political disruption,\nor other circumstances affecting political, economic and social life in the PRC.\n\n \n\n**PRC laws and regulations governing our current\nbusiness operations are sometimes vague and uncertain and any changes in such laws and regulations may materially and adversely affect\nour business and impede our ability to continue our operations.**\n\n \n\nThere are substantial uncertainties regarding\nthe interpretation and application of PRC laws and regulations including, but not limited to, the laws and regulations governing our business\nand the enforcement and performance of our arrangements with customers in certain circumstances. The laws and regulations are sometimes\nvague and may be subject to future changes, and their official interpretation and enforcement may involve substantial uncertainty. In\nfact, the PRC legal system is evolving rapidly, and the interpretations of many laws, regulations and rules may contain inconsistencies\nand enforcement of these laws, regulations and rules involves uncertainties. The effectiveness and interpretation of newly enacted laws\nor regulations, including amendments to existing laws and regulations, may be delayed, and our business may be affected if we rely on\nlaws and regulations which are subsequently adopted or interpreted in a manner different from our understanding of these laws and regulations.\nNew laws and regulations that affect existing and proposed future businesses may also be applied retroactively. Furthermore, if China\nadopts more stringent standards with respect to environmental protection or social issues, which are increasingly becoming the focus globally,\nwe may incur increased compliance cost or become subject to additional restrictions in our operations. We cannot predict what effect the\ninterpretation of existing or new PRC laws or regulations may have on our business.\n\n \n\nFrom time to time, we may have to resort to administrative\nand court proceedings to enforce our legal rights. Since PRC administrative and court authorities have significant discretion in interpreting\nand implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings\nand the level of legal protection we enjoy in the PRC legal system than in more developed legal systems. Furthermore, the PRC legal system\nis based in part on government policies and internal rules (some of which are not published in a timely manner or at all) that may have\nretroactive effect. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation.\nSuch uncertainties, including uncertainties over the scope and effect of our contractual, property (including intellectual property)\nand procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely affect\nour business and impede our ability to continue our operations.\n\n \n\n25\n\n \n\n \n\nFor example, on July 6, 2021, the General Office\nof the Communist Party of China Central Committee and the General Office of the State Council jointly issued an announcement to crack\ndown on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other\nthings, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation,\nto enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application\nof the PRC securities laws. Since this announcement is relatively new, uncertainties still exist in relation to how soon legislative or\nadministrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations\nwill be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on companies like\nus.\n\n \n\n**Because our business is conducted in RMB\nand the price of our Class A Ordinary Shares is quoted in United States dollars, changes in currency conversion rates may affect the value\nof your investments.**\n\n** **\n\nOur business is conducted in the PRC, our books\nand records are maintained in RMB, which is the currency of the PRC, and the financial statements that we file with the SEC and provide\nto our shareholders are presented in United States dollars. Changes in the exchange rate between the RMB and dollar affect the value of\nour assets and the results of our operations in United States dollars. The value of the RMB against the United States dollar and other\ncurrencies may fluctuate and is affected by, among other things, changes in the PRC’s political and economic conditions and perceived\nchanges in the economy of the PRC and the United States. Any significant revaluation of the RMB may materially and adversely affect our\ncash flows, revenue and financial condition.\n\n \n\n**Under the PRC Enterprise Income Tax Law,\nor the EIT Law, we may be classified as a “resident enterprise” of China, which could result in unfavorable tax consequences\nto us and our non-PRC shareholders.**\n\n** **\n\nThe EIT Law and its implementing rules provide\nthat enterprises established outside of China whose “de facto management bodies” are located in China are considered “resident\nenterprises” under PRC tax laws. The implementing rules promulgated under the EIT Law define the term “de facto management\nbodies” as a management body which substantially manages, or has control over the business, personnel, finance and assets of an\nenterprise. In April 2009, the State Administration of Taxation, or SAT, issued the Circular on Issues Concerning the Identification of\nChinese-Controlled Overseas Registered Enterprises as Resident Enterprises in Accordance With the Actual Standards of Organizational Management,\nknown as SAT Circular 82, which has been revised by the Decision of the State Administration of Taxation on Issuing the Lists of Invalid\nand Abolished Tax Departmental Rules and Taxation Normative Documents on December 29, 2017 and by the Decision of the State Council on\nCancellation and Delegation of a Batch of Administrative Examination and Approval Items on November 8, 2013. Circular 82 has provided\ncertain specific criteria for determining whether the “de facto management bodies” of a PRC-controlled enterprise that is\nincorporated offshore is located in China. Although this circular only applies to offshore enterprises controlled by PRC enterprises or\nPRC enterprise groups, not those controlled by PRC individuals or foreigners, the criteria set forth in the circular may reflect the SAT’s\ngeneral position on how the “de facto management body” text should be applied in determining the tax resident status of all\noffshore enterprises. According to SAT Circular 82, a Chinese-controlled offshore incorporated enterprise will be regarded as a PRC tax\nresident by virtue of having a “de facto management body” in China and will be subject to PRC enterprise income tax on its\nworldwide income only if all of the following criteria are met: (i) the places where senior management and senior management departments\nthat are responsible for daily production, operation and management of the enterprise perform their duties are mainly located within the\nterritory of China; (ii) financial decisions (such as money borrowing, lending, financing and financial risk management) and personnel\ndecisions (such as appointment, dismissal, salary and wages) are made or need to be made by organizations or persons located within the\nterritory of China; (iii) main property, accounting books, corporate seal, the board of directors and files of the minutes of shareholders’\nmeetings of the enterprise are located or preserved within the territory of China; and (iv) one half (or more) of the directors or senior\nmanagement staff having the right to vote habitually reside within the territory of China.\n\n \n\nWe believe that E-Power Inc. is not a resident\nenterprise for PRC tax purpose. E-Power Inc. is not controlled by a PRC enterprise or PRC enterprise group and we do not meet some of\nthe conditions outlined in the immediately preceding paragraph. For example, as a holding company, the key assets and records of E-Power\nInc., including the resolutions and meeting minutes of our board of directors and the resolutions and meeting minutes of our shareholders,\nare located and maintained outside the PRC. In addition, we are not aware of any offshore holding companies with a corporate structure\nsimilar to ours that has been deemed a PRC “resident enterprise” by the PRC tax authorities. However, as the tax residency\nstatus of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation\nof the term “de facto management body”.\n\n \n\nIf we are deemed to be a PRC “resident enterprise” by PRC\ntax authorities, we will be subject to PRC enterprise income tax on our worldwide income at a uniform tax rate of 25%, although dividends\ndistributed to us from our existing PRC subsidiaries and any other PRC subsidiaries which we may establish from time to time could be\nexempt from the PRC dividend withholding tax due to our PRC “resident recipient” status. This could have a material and adverse\neffect on our overall effective tax rate, our income tax expenses and our net income. Furthermore, dividends, if any, paid to our shareholders\nmay be decreased as a result of the decrease in distributable profits. In addition, if we were considered a PRC “resident enterprise”,\nany dividends we pay to our non-PRC investors, and the gains realized from the transfer of our Ordinary Shares may be considered income\nderived from sources within the PRC and be subject to PRC tax, at a rate of 10% in the case of non-PRC enterprises or 20% in the case\nof non-PRC individuals (in each case, subject to the provisions of any applicable tax treaty). It is unclear whether holders of our Ordinary\nShares would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we\nare treated as a PRC resident enterprise. This could have a material and adverse effect on the value of your investment in us and the\nprice of our Ordinary Shares.\n\n \n\n26\n\n \n\n \n\n**There are significant uncertainties under\nthe EIT Law relating to the withholding tax liabilities of our PRC subsidiaries, and dividends payable by our PRC subsidiaries to our\noffshore subsidiaries may not qualify to enjoy certain treaty benefits.**\n\n \n\nUnder the EIT Law and its implementation rules,\nthe profits of a foreign invested enterprise generated through operations, which are distributed to its immediate holding company outside\nthe PRC, will be subject to a withholding tax rate of 10%. Pursuant to the *Arrangement between the Mainland China and the Hong Kong\nSpecial Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income*, or the Double Tax Avoidance Arrangement,\na withholding tax rate of 10% may be lowered to 5% if the PRC enterprise is at least 25% held by a Hong Kong enterprise for at least 12\nconsecutive months prior to distribution of the dividends and is determined by the relevant PRC tax authority to have satisfied other\nconditions and requirements under the Double Tax Avoidance Arrangement and other applicable PRC laws.\n\n \n\nHowever, based on the *Circular on Certain Issues\nwith Respect to the Enforcement of Dividend Provisions in Tax Treaties*, or the SAT Circular 81, which became effective on February\n20, 2009, if the relevant PRC tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate\ndue to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment. According\nto *Circular on Several Issues regarding the “Beneficial Owner” in Tax Treaties*, which became effective as of April\n1, 2018, when determining an applicant’s status as the “beneficial owner” regarding tax treatments in connection with\ndividends, interests, or royalties in the tax treaties, several factors will be taken into account. Such factors include whether the business\noperated by the applicant constitutes actual business activities, and whether the counterparty country or region to the tax treaties does\nnot levy any tax, grant tax exemption on relevant incomes, or levy tax at an extremely low rate. This circular further requires any applicant\nwho intends to be proved of being the “beneficial owner” to file relevant documents with the relevant tax authorities. Our\nPRC subsidiaries is wholly owned by their respective HK based parent companies. However, we cannot assure you that our determination regarding\nour qualification to enjoy the preferential tax treatment will not be challenged by the relevant PRC tax authority or we will be able\nto complete the necessary filings with the relevant PRC tax authority and enjoy the preferential withholding tax rate of 5% under the\nDouble Tax Avoidance Arrangement with respect to dividends to be paid by our PRC subsidiaries to our HK subsidiaries, in which case, we\nwould be subject to the higher withdrawing tax rate of 10% on dividends received.\n\n \n\n**PRC regulation of loans to and direct investment\nin PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans\nor additional capital contributions to our PRC subsidiaries, the VIE and its subsidiaries, which could materially and adversely affect\nour liquidity and our ability to fund and expand our business.**\n\n \n\nWe are an offshore holding company conducting\nour operations in China through Sunrise Guizhou, the VIE and its subsidiaries. We may make loans to Sunrise Guizhou, the VIE and its\nsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any capital contributions or loans that we, as\nan offshore entity, make to our PRC subsidiaries, are subject to PRC regulations. For example, loans to our PRC subsidiaries cannot exceed\nstatutory limits and are subject to foreign exchange loan registrations. Our capital contributions to our PRC subsidiaries must be registered\nwith the MOFCOM or its local counterpart. For more details, see “Regulation—Regulations Related to Foreign Debt.” and\n“Regulation—Regulations Related to Foreign Exchange.”\n\n \n\nIn light of the various requirements imposed by\nof PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will\nbe able to complete the necessary government registrations or obtain the necessary government approvals or filings on a timely basis,\nif at all, with respect to future loans by us to our PRC subsidiaries or the VIE or with respect to future capital contributions by us\nto our PRC subsidiaries. If we fail to complete such registrations or obtain such approvals on a timely basis or at all, our ability to\ncapitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity\nand our ability to fund and expand our business.\n\n \n\n**Government control in currency conversion\nmay adversely affect our financial condition, our ability to remit dividends, and the value of your investment.**\n\n \n\nThe 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 substantially all of\nour revenues in Renminbi. Under our current corporate structure, our Cayman Islands holding company may rely on dividend payments from\nour PRC subsidiaries to fund any cash and financing requirements we may have.\n\n \n\nUnder existing PRC foreign exchange regulations,\nRenminbi cannot be freely converted into any foreign currency, and conversion and remittance of foreign currencies are subject to PRC\nforeign exchange regulations. It cannot be guaranteed that under a certain exchange rate, we will have sufficient foreign exchange to\nmeet our foreign exchange requirements. Under the current PRC foreign exchange control system, foreign exchange transactions under the\ncurrent account conducted by us, including the payment of dividends, do not require advance approval from SAFE, but we are required to\npresent documentary evidence of such transactions and conduct such transactions at designated foreign exchange banks within China that\nhave the licenses to carry out foreign exchange business. Foreign exchange transactions under the capital account conducted by us, however,\nmust be approved in advance by SAFE.\n\n \n\n27\n\n \n\n \n\nUnder existing foreign exchange regulations, we\nwill be able to pay dividends in foreign currencies without prior approval from SAFE by complying with certain procedural requirements.\nHowever, we cannot assure you that these foreign exchange policies regarding payment of dividends in foreign currencies will continue\nin the future.\n\n \n\nIn fact, in light of the flood of capital outflows\nof China in 2016 due to the weakening Renminbi, the PRC government has imposed more restrictive foreign exchange policies and stepped\nup scrutiny of major outbound capital movement including overseas direct investment. More restrictions and substantial vetting process\nare put in place by SAFE to regulate cross-border transactions falling under the capital account. If any of our shareholders regulated\nby such policies fails to satisfy the applicable overseas direct investment filing or approval requirement timely or at all, it may be\nsubject to penalties from the relevant PRC authorities. The PRC government may at its discretion further restrict access in the future\nto foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign\ncurrencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including\nholders of the Ordinary Shares. Our capital expenditure plans and our business, operating results and financial condition may be materially\nand adversely affected.\n\n \n\n**If we become directly subject to the scrutiny,\ncriticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and\nresolve the matter which could harm our business operations, stock price and reputation.**\n\n** **\n\nU.S. public companies that have substantially\nall of their operations in China have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators\nand regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered on financial and accounting\nirregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance policies\nor a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity,\nthe publicly traded stock of many U.S. listed Chinese companies sharply decreased in value and, in some cases, has become virtually worthless.\nMany of these companies are now subject to shareholder lawsuits and SEC enforcement actions and are conducting internal and external investigations\ninto the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on us, our business\nand our stock price. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue,\nwe will have to expend significant resources to investigate such allegations and/or defend our company. This situation will be costly\nand time consuming and distract our management from growing our business. If such allegations are not proven to be groundless, we and\nour business operations will be severely affected and you could sustain a significant decline in the value of our stock.\n\n \n\n**The disclosures in our reports and other\nfilings with the SEC and our other public pronouncements may be subject to the scrutiny of any regulatory bodies in the PRC.**\n\n** **\n\nWe are regulated by the SEC and our reports and\nother filings with the SEC are subject to SEC review in accordance with the rules and regulations promulgated by the SEC under the Securities\nAct and the Exchange Act. Our SEC reports and other disclosures and public pronouncements are not subject to the review or scrutiny of\nany PRC regulatory authority. For example, the disclosure in our SEC reports and other filings are not subject to the review by the CSRC,\na PRC regulator that is responsible for oversight of the capital markets in China. However, on February 17, 2023, with the approval of\nthe State Council, the CSRC released the Trial Measures and five supporting guidelines, which took effect on March 31, 2023. According\nto the Trial Measures, PRC domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill\nthe filing procedures and submit relevant documents, including the prospectus and other listing documents submitted to overseas regulatory\nauthorities, to the CSRC. However, as the laws and regulations are relatively new, substantial uncertainties exist with respect to its\ninterpretation and implementation regarding such laws and regulations. It is not clear how the CSRC may review and scrutinize these listing\ndocuments and we cannot assure you whether and how such scrutiny may affect our listing on an U.S. exchange.\n\n \n\n28\n\n \n\n \n\n**The Holding Foreign Companies Accountable\nAct and related regulations all call for additional and more stringent criteria to be applied to emerging market companies upon assessing\nthe qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add\nuncertainties to our continued listing on the Nasdaq, and Nasdaq may determine to delist our securities if the PCAOB determines that it\ncannot inspect or fully investigate our auditor.**\n\n \n\nOn April 21, 2020, SEC Chairman Jay Clayton and\nPCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated\nwith investing in companies based in or have substantial operations in emerging markets including China. The joint statement emphasized\nthe risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in\nemerging markets.\n\n \n\nOn May 18, 2020, Nasdaq filed three proposals\nwith the SEC to (i) apply minimum offering size requirement for companies primarily operating in “Restrictive Market”, (ii)\nadopt a new requirement relating to the qualification of management or board of director for Restrictive Market companies, and (iii) apply\nadditional and more stringent criteria to an applicant or listed company based on the qualifications of the company’s auditors.\n\n \n\nOn December 18, 2020, the “Holding Foreign\nCompanies Accountable Act” was signed by President Donald Trump and became law. This legislation requires certain issuers of securities\nto establish that they are not owned or controlled by a foreign government. Specifically, an issuer must make this certification if the\nPCAOB is unable to audit specified reports because the issuer has retained a foreign public accounting firm not subject to inspection\nby the PCAOB. Furthermore, if the PCAOB is unable to inspect the issuer’s public accounting firm for three consecutive years beginning\nin 2021, the issuer’s securities are banned from trade on a national exchange or through other methods.\n\n \n\nOn June 22, 2021, the U.S. Senate passed the “Accelerating\nHolding Foreign Companies Accountable Act”, which proposed to decrease the number of non-inspection years for foreign companies\nto comply with PCAOB audits from three to two years, thus reducing the time period before their securities may be prohibited from trading\nor delisted.\n\n \n\nOn December 16, 2021, the PCAOB issued a report\non its determinations that the Board was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered\nin mainland China and in Hong Kong, a Special Administrative Region of the People’s Republic of China (PRC), because of positions\ntaken by PRC authorities in those jurisdictions (the “Determination”). The Board made these determinations pursuant to PCAOB\nRule 6100, which provides a framework for how the PCAOB fulfills its responsibilities under the Holding Foreign Companies Accountable\nAct (HFCAA).\n\n \n\nOn August 26, 2022, the CSRC, the MOF, and the\nPCAOB signed a Protocol, governing inspections and investigations of audit firms based in mainland China and Hong Kong. Pursuant to the\nfact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits\nfor inspection or investigation and has the unfettered ability to transfer information to the SEC.\n\n \n\nOn December 15, 2022, the PCAOB Board determined\nthat the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland\nChina and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise\nfail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination.\n\n \n\n29\n\n \n\n \n\nOn December 29, 2022, the provisions of the Accelerating\nHolding Foreign Companies Accountable Act were signed into law by President Biden as part of the Consolidated Appropriations Act, amending\nthe HFCAA and requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchange if its auditor is not\nsubject to PCAOB inspections for two consecutive years instead of three consecutive years. The PCAOB continues to demand complete access\nin mainland China and Hong Kong moving forward and has resumed regular inspections in early 2023 and beyond, as well as to continue pursuing\nongoing investigations and initiate new investigations as needed. The PCAOB has also indicated that it will act immediately to issue new\ndeterminations with the HFCAA, if needed.\n\n \n\nOur former and current auditor are PCAOB-registered\npublic accounting firms subject to laws in the United States, pursuant to which the PCAOB conducts regular inspections to assess our auditor’s\ncompliance with the applicable professional standards As such, as of the date of this annual report, our listing is not affected by the\nHolding Foreign Companies Accountable Act and related regulations. However, we cannot assure you whether Nasdaq or regulatory authorities\nwould apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and\nquality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as related\nto the audit of our financial statements. Furthermore, there is a risk that our auditor cannot be inspected by the PCAOB in the future.\nThe lack of inspection could cause trading in our securities to be prohibited under the Holding Foreign Companies Accountable Act, and,\nas a result, Nasdaq may determine to delist our securities, which may cause the value of our securities to decline or become worthless.\n\n \n\n**The failure to comply with PRC regulations\nrelating to mergers and acquisitions of domestic entities by offshore special purpose vehicles may subject us to severe fines or penalties\nand create other regulatory uncertainties regarding our corporate structure.**\n\n** **\n\nOn August 8, 2006, MOFCOM, joined by the CSRC,\nthe State-owned Assets Supervision and Administration Commission of the State Council, the SAT, the State Administration for Industry\nand Commerce (the “SAIC”, currently known as the PRC State Administration for Market Regulation, or the SAMR), and State Administration\nof Foreign Exchange (“SAFE”), jointly promulgated regulations entitled the Provisions Regarding Mergers and Acquisitions of\nDomestic Entities by Foreign Investors (the “M&A Rules”), which took effect as of September 8, 2006, and as amended on\nJune 22, 2009. These regulations, among other things, have certain provisions that require offshore special purpose vehicles formed for\nthe purpose of acquiring PRC domestic companies and controlled directly or indirectly by PRC individuals and companies, to obtain the\napproval of MOFCOM prior to engaging in such acquisitions and to obtain the approval of the CSRC prior to publicly listing their securities\non an overseas stock market. On September 21, 2006, the CSRC published on its official website a notice specifying the documents and materials\nthat are required to be submitted for obtaining CSRC approval. The application of the M&A Rules with respect to our corporate structure\nremains unclear, with no current consensus existing among leading PRC law firms regarding the scope and applicability of the M&A Rules.\n\n \n\nIf the CSRC, MOFCOM, or another PRC regulatory\nagency determines that government approval was required for the VIE arrangement between GIOP BJ and the VIE, or if prior CSRC approval\nfor overseas financings is required and not obtained, we may face severe regulatory actions or other sanctions from MOFCOM, the CSRC or\nother PRC regulatory agencies. In such event, these regulatory agencies may impose fines or other penalties on our operations in the PRC,\nlimit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from overseas financings into the PRC, restrict\nor prohibit payment or remittance of dividends to us or take other actions that could have a material adverse effect on our business,\nfinancial condition, results of operations, reputation and prospects, as well as the trading price of our Class A Ordinary Shares. The\nCSRC or other PRC regulatory agencies may also take actions requiring us, or making it advisable for us, to delay or cancel overseas financings,\nto restructure our current corporate structure, or to seek regulatory approvals that may be difficult or costly to obtain.\n\n \n\n30\n\n \n\n \n\n**PRC regulations relating to the establishment\nof offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability\nor penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase its\nregistered capital or distribute profits to us, or may otherwise adversely affect us.**\n\n \n\nOn July 4, 2014, SAFE issued the Circular on Issues\nConcerning Foreign Exchange Control over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special\nPurpose Vehicles, or SAFE Circular 37, which became effective as of July 4, 2014 and has replaced the Notice on Relevant Issues Concerning\nForeign Exchange Administration for Domestic Residents’ Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles\n(“SAFE Circular 75”). According to SAFE Circular 37, prior registration with the local SAFE branch is required for PRC residents,\nincluding PRC individuals and PRC corporate entities as well as foreign individuals that are deemed as PRC residents for foreign exchange\nadministration purpose, in connection with their direct or indirect contribution of domestic assets or interests to offshore companies,\nknown as SPVs. SAFE Circular 37 further requires amendment to the SAFE registrations in the event of any changes with respect to the basic\ninformation of the offshore special purpose vehicle, such as change of a PRC individual shareholder, name and operation term, or any significant\nchanges with respect to the offshore special purpose vehicle, such as increase or decrease of capital contribution, share transfer or\nexchange, or mergers or divisions. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any\noffshore acquisitions that we make in the future. In February 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign\nExchange Administration Policy on Direct Investment, or SAFE Notice 13, effective June 2015. Under SAFE Notice 13, applications for foreign\nexchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE\nCircular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the applications and accept\nregistrations under the supervision of SAFE.\n\n \n\nIn addition to SAFE Circular 37 and SAFE Notice\n13, our ability to conduct foreign exchange activities in China may be subject to the interpretation and enforcement of the Implementation\nRules of the Administrative Measures for Individual Foreign Exchange promulgated by SAFE in January 2007 (as amended and supplemented,\nthe “Individual Foreign Exchange Rules”). Under the Individual Foreign Exchange Rules, any PRC individual seeking to make\na direct investment overseas or engage in the issuance or trading of negotiable securities or derivatives overseas must make the appropriate\nregistrations in accordance with SAFE provisions, the failure of which may subject such PRC individual to warnings, fines or other liabilities.\n\n \n\nAll of our shareholders who are subject to the\nSAFE Circular 37 and Individual Foreign Exchange Rules have completed the initial registrations with the qualified banks as required by\nthe regulations. However, we may not be informed of the identities of all the PRC residents holding direct or indirect interest in our\ncompany, and we have no control over any of our beneficial owners. Thus, we cannot provide any assurance that our current or future PRC\nresident beneficial owners will comply with our request to make or obtain any applicable registrations or continuously comply with all\nregistration procedures set forth in these SAFE regulations. Such failure or inability of our PRC residents beneficial owners to comply\nwith these SAFE regulations may subject us or our PRC residents beneficial owners to fines and legal sanctions, restrict our cross-border\ninvestment activities, or limit our PRC subsidiaries’ ability to distribute dividends to, or obtain foreign-exchange-dominated loans\nfrom, our company, or prevent us from being able to make distributions or pay dividends, as a result of which our business operations\nand our ability to distribute profits to you could be materially adversely affected.\n\n \n\n**Our contractual arrangements with the VIE\nare governed by the laws of the PRC and we may have difficulty in enforcing any rights we may have under these contractual arrangements.**\n\n** **\n\nAs all of our contractual arrangements with the\nVIE are governed by the PRC laws and provide for the resolution of disputes through arbitration in the PRC, they would be interpreted\nin accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. Disputes arising from these contractual\narrangements between us and the VIE will be resolved through arbitration in China, although these disputes do not include claims arising\nunder the United States federal securities law and thus do not prevent you from pursuing claims under the United States federal securities\nlaw. The legal environment in the PRC is not as developed as in the United States. As a result, uncertainties in the PRC legal system\ncould further limit our ability to enforce these contractual arrangements, through arbitration, litigation and other legal proceedings\nremain in China, which could limit our ability to enforce these contractual arrangements and exert effective control over the VIE. Furthermore,\nthese contracts may not be enforceable in China if PRC government authorities or courts take a view that such contracts contravene PRC\nlaws and regulations or are otherwise not enforceable for public policy reasons. In the event we are unable to enforce these contractual\narrangements, we may not be able to exert effective control over the VIE, and our ability to conduct our business may be materially and\nadversely affected.\n\n \n\n31\n\n \n\n \n\n**Increases in labor costs in the PRC may\nadversely affect our business and our profitability.**\n\n \n\nChina’s economy has experienced increases\nin labor costs in recent years, which is expected to continue to grow. The average wage level for our employees has also increased in\nrecent years. We expect that our labor costs, including wages and employee benefits, will continue to increase. Unless we are able to\npass on these increased labor costs to our customers by increasing prices for our products or services, our profitability and results\nof operations may be materially and adversely affected.\n\n \n\nIn addition, we have been subject to stricter\nregulatory requirements in terms of entering into labor contracts with our employees and paying various statutory employee benefits, including\npensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and childbearing insurance to designated\ngovernment agencies for the benefits of our employees. Pursuant to the PRC Labor Contract Law, or the Labor Contract Law, that became\neffective in January 2008 and its implementing rules that became effective in September 2008 and its amendments that became effective\nin July 2013, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration,\ndetermining the term of employees’ probation and unilaterally terminating labor contracts. In the event that we decide to terminate\nsome of our employees or otherwise change our employment or labor practices, the Labor Contract Law and its implementation rules may limit\nour ability to effect those changes in a desirable or cost-effective manner, which could adversely affect our business and results of\noperations.\n\n \n\nAs the interpretation and implementation of labor-related\nlaws and regulations are still evolving, we cannot assure you that our employment practice does not and will not violate labor-related\nlaws and regulations in China, which may subject us to labor disputes or government investigations. If we are deemed to have violated\nrelevant labor laws and regulations, we could be required to provide additional compensation to our employees and our business, financial\ncondition and results of operations could be materially and adversely affected.\n\n \n\n**U.S. regulatory bodies may be limited in\ntheir ability to conduct investigations or inspections of our operations in China.**\n\n \n\nThe 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. Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities\nof another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory\nauthorities in Hong Kong or other jurisdictions may not be efficient in the absence of mutual and practical cooperation mechanism. Furthermore,\nChina has recently adopted a revised securities law that became effective on March 1, 2020, Article 177 of which provides, among other\nthings, that no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the\nterritory of the PRC. Accordingly, without governmental approval in China, no entity or individual in China may provide documents and\ninformation relating to securities business activities to overseas regulators when it is under direct investigation or evidence discovery\nconducted by overseas regulators. While detailed interpretation of or implementation rules under Article 177 have yet to be promulgated,\nit could present significant legal and other obstacles to obtaining information needed for investigations and litigation conducted outside\nof China, which may further increase difficulties faced by you in protecting your interests.\n\n \n\n32\n\n \n\n \n\n**Risks Related to Our Class A Ordinary Shares\nand the Trading Market**\n\n \n\n**If we are a passive foreign investment company\nfor United States federal income tax purposes for any taxable year, United States holders of our Class A Ordinary Shares could be subject\nto adverse United States federal income tax consequences.**\n\n \n\nA non-United States corporation will be a passive\nforeign investment company, or PFIC, for United States federal income tax purposes for any taxable year if either (i) at least 75% of\nits gross income for such taxable year is passive income or (ii) at least 50% of the value of its assets (based on an average of the quarterly\nvalues of the assets) during such year is attributable to assets that produce or are held for the production of passive income. Based\non the current and anticipated value of our assets and the composition of our income and assets, we do not expect to be a PFIC for United\nStates federal income tax purposes for our current taxable year or in the foreseeable future. However, the determination of whether or\nnot we are a PFIC according to the PFIC rules is made on an annual basis and will depend on the composition of our income and assets and\nthe value of our assets from time to time. Therefore, changes in the composition of our income or assets or the value of our assets may\ncause us to become a PFIC. The determination of the value of our assets (including goodwill not reflected on our balance sheet) may be\nbased, in part, on the quarterly market value of our Class A Ordinary Shares, which is subject to change and may be volatile. It is possible\nthat, for any subsequent year, more than 50% of our assets may be assets which produce passive income. We will make this determination\nfollowing the end of any particular tax year.\n\n \n\nAlthough the U.S. tax law with regards to VIEs\nis unclear, we are treating the VIE as being owned by us for United States federal income tax purposes, not only because we control their\nmanagement decisions, but also because we are entitled to the economic benefits associated with the VIE, and as a result, we are treating\nthe VIE as our wholly-owned subsidiary for U.S. federal income tax purposes. For purposes of the PFIC analysis, in general, according\nto Section 1297(c) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), a non-U.S. corporation\nis deemed to own its pro rata share of the gross income and assets of any entity in which it is considered to own at least 25% of the\nequity by value. Although our Company does not technically own any stock in the VIE there are numerous factors that give rise to a strong\nconclusion that its control of management decisions, the entitlement to economic benefits associated with the VIE, and the inclusion of\nthe VIE as part of the consolidated group (Under Accounting Standards Codification (ASC) Topic 810, “Consolidation,” VIEs\nare generally consolidated with other related entities under common control) is so akin to our Company holding a stock interest in the\nVIE that it is reasonable and consistent to consider our Company’s interest in the VIE as a deemed stock interest. Therefore, the\nincome and assets of the VIE should be included in the determination of whether or not we are a PFIC in any taxable year. It is important\nto emphasize that there is little to no guidance other than the statute itself (Internal Revenue Code Section 1297(c)) and analogous portions\nof the code, treasury regulations and other accepted authorities and as such it is possible for the IRS to challenge the argument that\nthe look through rule would apply in this case, especially since the statute explicitly says “stock”.\n\n \n\nThe classification of certain of our income as\nactive or passive, and certain of our assets as producing active or passive income, and hence whether we are or will become a PFIC, depends\non the interpretation of certain United States Treasury Regulations as well as certain IRS guidance relating to the classification of\nassets as producing active or passive income. Such regulations and guidance are potentially subject to different interpretations. If due\nto different interpretations of such regulations and guidance the percentage of our passive income or the percentage of our assets treated\nas producing passive income increases, we may be a PFIC in one or more taxable years.\n\n \n\nIf we are a PFIC for any taxable year during which\na United States person holds Class A Ordinary Shares, certain adverse United States federal income tax consequences could apply to such\nUnited States person.\n\n \n\nFor a more detailed discussion of the application\nof the PFIC rules to us and the consequences to U.S. taxpayers if we were or are determined to be a PFIC, see “Taxation—U.S.\nFederal Income Taxation—Passive Foreign Investment Company.”\n\n \n\nU.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISERS\nABOUT THE PFIC RULES, THE POTENTIAL APPLICABILITY OF THESE RULES TO THE COMPANY CURRENTLY AND IN THE FUTURE, AND THEIR FILING OBLIGATIONS\nIF THE COMPANY IS A PFIC.\n\n \n\n33\n\n \n\n \n\n**We have identified several material weaknesses\nin our internal control over financial reporting. If we fail to maintain an effective system of internal controls over financial reporting,\nwe may not be able to accurately report our financial results or prevent fraud.**\n\n \n\nThe Securities and Exchange Commission, as required\nby Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring every public company to include a management report on such\ncompany’s internal controls over financial reporting in its annual report, which contains management’s assessment of the effectiveness\nof the company’s internal controls over financial reporting. In addition, an independent registered public accounting firm must\nattest to and report on management’s assessment of the effectiveness of the company’s internal controls over financial reporting\nwhen the Company no longer qualifies as an emerging company. Our reporting obligations as a public company place a significant strain\non our management, operational and financial resources and systems for the foreseeable future.\n\n \n\nSince we are an emerging company, our independent\nregistered public accounting firm has not conducted an audit of our internal control over financial reporting. During the course of preparing\nour consolidated financial statements as of and for the fiscal year ended December 31, 2025, we identified material weaknesses and other\ncontrol deficiencies in our internal control over financial reporting. Many of the deficiencies noted below were communicated to us from\nour independent registered public accounting firm as observations, which stemmed from their audit. The material weaknesses identified\nincluded: (1) a lack of formal internal controls policies over financial closing and reporting processes, which may increase risk of error,\nfraud, misstatement of financial reporting, or even non-compliance with related regulations for a U.S. listed Group; (2) a lack of accounting\nstaff and resources with appropriate knowledge of U.S. GAAP and SEC reporting and compliance requirements, and accounting policies and\nprocedures manual that covers U.S. GAAP and SEC financial reporting requirements to complete relate US GAAP and SEC reporting; and (3)\na lack of appropriately restricted to privileged level access to employees. As a result of the above, our management has concluded that,\nas of December 31, 2025, our disclosure controls and procedures were not effective.\n\n \n\nWe are taking a number of measures to address the\ncontrol deficiencies identified, including: (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting experience\nand qualifications to strengthen the financial reporting function and to set up a financial and system control framework; (ii) implementing\nregular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel;\n(iii) preparing a comprehensive accounting policies and procedures manual that covers financial closing and reporting processes, U.S.\nGAAP and SEC financial reporting requirements, and ensuring that accounting personnel are familiar with and follow the manual; and (iv)\nReinforcing the implementation of IT authorization limits matrix and segregation of duties systems to ensure the appropriateness of all\napprovals, authorizations, and confirmations granted.\n\n \n\nEffective internal controls over financial reporting\nare necessary for us to produce reliable financial reports and are important to help prevent fraud. As a result, our failure to achieve\nand maintain effective internal controls over financial reporting could result in the loss of investor confidence in the reliability of\nour financial statements, which in turn could harm our business and negatively impact the trading price of our Class A Ordinary Shares.\nFurthermore, we anticipate that we will incur considerable costs and devote significant management time and efforts and other resources\nto comply with Section 404 of the Sarbanes-Oxley Act.\n\n \n\n**We do not intend to pay dividends for the\nforeseeable future.**\n\n** **\n\nWe currently intend to retain any future earnings\nto finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future.\nAs a result, you may only receive a return on your investment in our Class A Ordinary Shares if the market price of our Class A Ordinary\nShares increases.\n\n \n\n**The market price of our Class A Ordinary\nShares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above\nthe initial public offering price.**\n\n** **\n\nThe market price of our Class A Ordinary Shares\nmay fluctuate significantly in response to numerous factors, many of which are beyond our control, including:\n\n \n\n \n●\nactual or anticipated fluctuations in our revenue and other operating results;\n\n \n \n \n\n \n●\nthe financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;\n\n \n \n \n\n \n●\nactions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;\n\n \n \n \n\n \n●\nannouncements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;\n\n \n\n34\n\n \n\n \n\n \n●\nprice and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;\n\n \n \n \n\n \n●\nlawsuits threatened or filed against us; and\n\n \n \n \n\n \n●\nother events or factors, including those resulting from war or incidents of terrorism, or responses to these events.\n\n \n\nIn addition, the stock markets have experienced\nextreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.\nStock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies.\nIn the past, shareholders have filed securities class action litigation following periods of market volatility. If we were to become involved\nin securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business,\nand adversely affect our business.\n\n \n\n**As a foreign private issuer, we are not\nsubject to certain U.S. securities law disclosure requirements that apply to a domestic U.S. issuer, and are exempt from certain Nasdaq\ncorporate governance standards applicable to U.S. issuers, which may limit the information publicly available to our investors and afford\nthem less protection than if we were a U.S. issuer.**\n\n \n\nAs a Cayman Islands company listed on the Nasdaq\nGlobal Select Market, we are subject to the Nasdaq Stock Market listing standards (“Nasdaq Rules”). However, the Nasdaq Rules\npermit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance\npractices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq Rules. We currently follow home country\npractice in lieu of the requirements under the Nasdaq Rules with respect to certain corporate governance standards. For example, based\non home country practice, we are not required to seek shareholder approval for issuance of 20% or more of our outstanding ordinary shares\nor voting power in a private offering (as defined by Nasdaq Rules). Accordingly, our shareholders may not be provided with the benefits\nof certain corporate governance requirements of the Nasdaq Rules. Please see ITEM 16.G. CORPORATE GOVERNANCE for further details.\n\n \n\nFurther, as a foreign private issuer we are not\nrequired to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act and therefore there may\nbe less publicly available information about us than if we were a U.S. domestic issuer. We are exempt from certain provisions of the securities\nrules and regulations in the United States that are applicable to U.S. domestic issuers, including:\n\n \n\n \n●\nthe rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K;\n\n \n\n \n●\nthe sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;\n\n \n\n \n●\nthe sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and the selective disclosure rules by issuers of material non-public information under Regulation FD.\n\n \n\nWe are required to file an annual report on Form\n20-F within four months of the end of each fiscal year. However, the information we are required to file with or furnish to the SEC will\nbe less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not\nbe afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.\n\n \n\n**Anti-takeover provisions in our memorandum\nand articles of association may discourage, delay or prevent a change in control.**\n\n** **\n\nSome provisions in our memorandum and articles\nof association, may discourage, delay or prevent a change in control of our company or management that shareholders may consider favorable,\nincluding, among other things, the following:\n\n \n\n \n●\nprovisions that permit our board of directors by resolution to issue classes of shares with preferred, deferred or other special rights or restrictions as the board of directors determine in their discretion, without any further vote or action by our shareholders. If issued, the rights, preferences, designations and limitations of any class of preferred shares could operate to the disadvantage of the outstanding ordinary shares the holders of which would not have any pre-emption rights in respect of such an issue of preferred shares. Such terms could include, among others, preferences as to dividends and distributions on liquidation, or could be used to prevent possible corporate takeovers;\n\n \n\n35\n\n \n\n  \n\n \n●\nprovisions that restrict the ability of our shareholders holding in aggregate less than thirty percent (30%) of the outstanding voting shares in the company to call general meetings or annual general meetings and to include matters for consideration at shareholder meetings; and\n\n \n\n \n●\nprovisions that prevent shareholders holding in aggregate less than ten percent (10%) of the outstanding voting shares in the company to requisition general meetings of the Company.\n\n \n\n**If we cannot satisfy the listing requirements\nand other rules of Nasdaq Capital Market, our securities may be delisted, which could negatively impact the price of our securities and\nyour ability to sell them.**\n\n \n\nIn order to maintain our listing on the Nasdaq\nCapital Market, we are required to comply with certain rules of Nasdaq Capital Market, including those regarding minimum stockholders’\nequity, minimum share price and certain corporate governance requirements. Even if we initially meet the listing requirements and other\napplicable rules of the Nasdaq Capital Market, we may not be able to continue to satisfy these requirements and applicable rules. If we\nare unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our securities could be subject to delisting.\n\n \n\nIf the Nasdaq Capital Market delists our securities\nfrom trading, we could face significant consequences, including:\n\n \n\n \n●\na limited availability for market quotations for our securities;\n\n \n \n \n\n \n●\nreduced liquidity with respect to our securities;\n\n \n \n \n\n \n●\na determination that our Class A Ordinary Shares are a “penny stock,” which will require brokers trading in our Class A Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Class A Ordinary Shares;\n\n \n \n \n\n \n●\nlimited amount of news and analyst coverage; and\n\n \n \n \n\n \n●\na decreased ability to issue additional securities or obtain additional financing in the future.\n\n \n\n**You may be unable to call, requisition or\npresent proposals before general meetings.**\n\n \n\nCayman Islands law provides shareholders with\nonly limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general\nmeeting. However, these rights may be provided in a company’s articles of association and have been provided for in the amended\narticles and memorandum of association of the Company, subject to the restrictions described therein. General meetings may be convened\non the written requisition of one or more of the shareholders entitled to attend and vote at our general meetings who (together) hold\nnot less than ten percent of the rights to vote at such general meetings.\n\n \n\nTo the extent that shareholders hold in aggregate\nless than thirty percent (30%) of the outstanding voting shares in the Company, they cannot: (a) call general meetings or annual general\nmeetings; and (b) include matters for consideration at shareholder meetings.\n\n \n\nA shareholder may give notice to the Company of\nbusiness proposed to be brought before an annual general meeting provided that such notice of proposal of business must be delivered to,\nor mailed and received at the principal executive offices of the Company not less than ninety (90) days and not more than one hundred\nand twenty (120) days prior to the one-year anniversary of the preceding year’s annual general meeting; provided, however, that\nif the date of the annual general meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date,\nsuch notice by the Member, to be timely, must be so delivered, or so mailed and received, not later than the ninetieth (90th) day prior\nto such annual general meeting or, if later, the tenth (10th) day following the day on which “public disclosure” of the date\nof such meeting was first made by the Company.\n\n \n\n**The dual-class structure of our ordinary\nshares may adversely affect the trading market and price for our Class A Ordinary Shares.**\n\n \n\nWe have adopted a dual-class share voting structure.\nSeveral shareholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the dual class\nstructure of our ordinary shares may cause shareholder advisory firms to publish negative commentary about our corporate governance practices\nor otherwise seek to cause us to change our capital structure. Any actions or publications by shareholder advisory firms critical of our\ncorporate governance practices or capital structure could also adversely affect the value of our Class A Ordinary Shares. Furthermore,\nour Class A Ordinary Shares may be excluded from certain stock indices as a result of our disparate voting stock structure, which structure\nmay adversely affect the trading market and price for our Class A Ordinary Shares.\n\n \n\n36\n\n \n\n \n\n**Nasdaq has proposed a new $5 million minimum\nmarket value continued listing requirement that, if approved, could result in immediate suspension and delisting of our Class A Ordinary\nShares without any cure period or opportunity to regain compliance.**\n\n** **\n\nOn January 13, 2026, Nasdaq proposed new listing\nrules requiring companies on the Nasdaq Global and Capital Markets to maintain a minimum market value of listed securities of at least\n$5 million. Under this proposal, if our market value falls below $5 million for 30 consecutive business days, our Class A Ordinary Shares\nwould be immediately suspended from trading and delisted from Nasdaq, with no cure period, no compliance period, and no stay of suspension\nduring any appeal.\n\n \n\nThis proposed rule represents a fundamental departure\nfrom Nasdaq’s traditional approach to listing deficiencies. Unlike other continued listing requirements that provide companies with\n180 days or more to regain compliance, the proposed market value requirement would result in immediate and irreversible consequences.\nWhile we could request a hearing before a Nasdaq Listing Qualifications Hearings Panel to appeal a delisting determination, such a request\nwould not prevent the immediate suspension of our Class A Ordinary Shares from trading. Furthermore, the panel would have extremely limited\ndiscretion and could only reverse the delisting decision if it determines that the initial determination was in error, and the panel could\nnot consider evidence that we had subsequently regained compliance or grant us additional time to do so.\n\n \n\nNasdaq’s proposal reflects its belief that\nonce a company’s market value falls below $5 million, the challenges facing that company are generally not temporary and are so\nsevere that the company is unlikely to regain and sustain compliance for the long term. Nasdaq further believes it is difficult to maintain\nfair and orderly markets for such low-value companies. The SEC must decide on the proposal within 45 days of publication in the Federal\nRegister, unless it extends the review period, creating uncertainty regarding whether and when this rule may become effective.\n\n \n\nOur market value is calculated as our consolidated\nclosing bid price multiplied by our total listed securities. Factors that could cause our market value to fall below the proposed threshold\ninclude continued stock price decline, lack of investor interest, adverse market conditions, negative developments in our business operations,\ndilutive financing transactions, or broader market volatility affecting microcap companies.\n\n \n\nThis proposal is part of a broader trend of Nasdaq\ntightening listing standards for smaller issuers, including recent rules granting Nasdaq discretion to deny initial listings based on\nsusceptibility to manipulative trading and other market value-based requirements. This increasingly stringent regulatory environment creates\ngreater challenges for microcap companies such as us to maintain public listings.\n\n \n\nIf the proposed $5 million market value continued\nlisting requirement is approved and we subsequently fail to maintain the required market value for 30 consecutive business days, our Class\nA Ordinary Shares would be immediately suspended from trading and delisted from Nasdaq without any opportunity to cure the deficiency.\nSuch suspension and delisting would have severe adverse consequences for our business, our ability to raise capital, and the liquidity\nand value of our shareholders’ investments. Moreover, even if we remain in compliance with quantitative criteria, Nasdaq retains\ndiscretionary authority under Rule IM-5101-1 to suspend or terminate a company’s listing if necessary to protect investors or ensure\nthe orderly operation of the market, which could result in similar adverse consequences even absent a failure to meet specific quantitative\nthresholds.\n\n \n\nBecause we are a small company, the requirements\nof being a public company, including compliance with the reporting requirements of the Exchange Act and certain requirements of the Sarbanes-Oxley\nAct of 2022 (the “Sarbanes-Oxley Act”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank\nAct”), may strain our resources, increase our costs and distract management, and we may be unable to comply with these requirements\nin a timely or cost-effective manner.\n\n \n\nAs a public company with listed equity securities,\nwe must comply with the federal securities laws, rules, and regulations, including certain corporate governance provisions of the Sarbanes-Oxley\nAct and the Dodd-Frank Act, related rules and regulations of the SEC and Nasdaq, with which a private company is not required to comply.\nComplying with these laws, rules and regulations occupies a significant amount of the time of our board of directors and management and\nsignificantly increases our costs and expenses. Among other things, we must:\n\n \n\n●\nmaintain a system of internal control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC;\n\n \n\n \n●\ncomply with rules and regulations promulgated by Nasdaq;\n\n \n\n \n●\nprepare and distribute periodic public reports in compliance with our obligations under the federal securities laws;\n\n \n\n \n●\nmaintain various internal compliance and disclosures policies, such as those relating to disclosure controls and procedures and insider trading in our Class A Ordinary Shares; and\n\n \n\n \n●\ninvolve and retain to a greater degree outside counsel and accountants in the above activities.\n\n  \n\n37"}