The accompanying notes are an integral part of the unaudited consolidated
financial statements.
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS)
FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND
2020
(UNAUDITED, IN U.S. DOLLARS)
|
|
For the three months ended March 31,
|
|
|
|
2021
|
|
|
2020
|
|
REVENUES
|
|
$
|
24,610,894
|
|
|
$
|
9,872,067
|
|
COST OF GOODS SOLD
|
|
|
19,506,507
|
|
|
|
7,948,119
|
|
GROSS PROFIT
|
|
|
5,104,387
|
|
|
|
1,923,948
|
|
Selling expenses
|
|
|
379,230
|
|
|
|
216,841
|
|
General and administrative expenses
|
|
|
911,139
|
|
|
|
1,074,409
|
|
Research and development expenses
|
|
|
959,545
|
|
|
|
564,298
|
|
Total operating expenses
|
|
$
|
2,249,914
|
|
|
$
|
1,855,548
|
|
INCOME FROM OPERATIONS
|
|
$
|
2,854,473
|
|
|
$
|
68,400
|
|
Interest income
|
|
|
4,595
|
|
|
|
33,310
|
|
Interest expense
|
|
|
(180,189
|
)
|
|
|
(321,692
|
)
|
Other income
|
|
|
287,190
|
|
|
|
597,252
|
|
INCOME BEFORE INCOME TAX
|
|
$
|
2,965,855
|
|
|
$
|
377,270
|
|
INCOME TAX
|
|
|
522,616
|
|
|
|
49,187
|
|
NET INCOME
|
|
$
|
2,443,239
|
|
|
$
|
328,083
|
|
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST
|
|
|
314,671
|
|
|
|
71,419
|
|
NET INCOME ATTRIBUTABLE TO GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
|
|
$
|
2,128,568
|
|
|
$
|
256,664
|
|
OTHER COMPREHENSIVE INCOME (LOSS):
|
|
|
(258,229
|
)
|
|
|
(1,305,760
|
)
|
Unrealized foreign currency translation income (loss) attributable to Greenland technologies holding corporation and subsidiaries
|
|
|
(189,103
|
)
|
|
|
(604,994
|
)
|
Unrealized foreign currency translation income (loss) attributable to Noncontrolling interest
|
|
|
(69,126
|
)
|
|
|
(700,766
|
)
|
Comprehensive income (loss)
|
|
|
1,939,465
|
|
|
|
(348,330
|
)
|
Noncontrolling interest
|
|
|
245,545
|
|
|
|
(629,347
|
)
|
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
10,333,968
|
|
|
|
10,009,198
|
|
NET INCOME PER ORDINARY SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY:
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
0.21
|
|
|
|
0.03
|
|
The accompanying notes are an integral part of the unaudited consolidated
financial statements.
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’
EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND
2020
(UNAUDITED, IN U.S. DOLLARS, EXCEPT FOR SHARE
DATA)
|
|
Ordinary Shares
|
|
|
Additional
|
|
|
Accumulated
Other
|
|
|
|
|
|
|
|
|
Non-
|
|
|
|
|
|
|
No Par Value
|
|
|
Paid-in
|
|
|
Comprehensive
|
|
|
Statutory
|
|
|
Retained
|
|
|
controlling
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Income/(loss)
|
|
|
Reserve
|
|
|
Earnings
|
|
|
Interest
|
|
|
Total
|
|
Balance at December 31, 2019
|
|
|
10,006,142
|
|
|
|
-
|
|
|
$
|
15,226,685
|
|
|
$
|
(360,981
|
)
|
|
|
3,866,574
|
|
|
$
|
19,863,600
|
|
|
$
|
8,366,246
|
|
|
$
|
46,962,124
|
|
Restricted stock grants
|
|
|
15,000
|
|
|
|
-
|
|
|
|
42,800
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
42,800
|
|
Net income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
256,664
|
|
|
|
71,419
|
|
|
|
328,083
|
|
Transfer to statutory reserve
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
60,253
|
|
|
|
(60,253
|
)
|
|
|
-
|
|
|
|
-
|
|
Foreign currency translation adjustment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(604,994
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(700,766
|
)
|
|
|
(1,305,760
|
)
|
Balance at March 31, 2020
|
|
|
10,021,142
|
|
|
|
-
|
|
|
$
|
15,269,485
|
|
|
$
|
(965,975
|
)
|
|
|
3,926,827
|
|
|
$
|
20,060,011
|
|
|
$
|
7,736,899
|
|
|
$
|
46,027,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2020
|
|
|
10,225,142
|
|
|
|
-
|
|
|
$
|
13,707,398
|
|
|
$
|
(62,925
|
)
|
|
|
4,517,117
|
|
|
$
|
26,728,332
|
|
|
$
|
5,771,540
|
|
|
$
|
50,661,462
|
|
Restricted stock grants
|
|
|
51,000
|
|
|
|
-
|
|
|
|
51,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
51,000
|
|
Sale of stock and warrants
|
|
|
221,985
|
|
|
|
-
|
|
|
|
1,858,841
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,858,841
|
|
Net income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,128,568
|
|
|
|
314,671
|
|
|
|
2,443,239
|
|
Foreign currency translation adjustment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(189,103
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(69,126
|
)
|
|
|
(258,229
|
)
|
Balance at March 31, 2021
|
|
|
10,498,127
|
|
|
|
-
|
|
|
$
|
15,617,239
|
|
|
$
|
(252,028
|
)
|
|
|
4,517,117
|
|
|
$
|
28,856,900
|
|
|
$
|
6,017,085
|
|
|
$
|
54,756,313
|
|
The accompanying notes are an integral part of the unaudited consolidated
financial statements.
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND
2020
(UNAUDITED, IN U.S. DOLLARS)
|
|
For the three months ended
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
Net income
|
|
$
|
2,443,239
|
|
|
$
|
328,083
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
617,739
|
|
|
|
562,048
|
|
Loss on disposal of property and equipment
|
|
|
(1,770
|
)
|
|
|
-
|
|
Increase in allowance for doubtful accounts
|
|
|
-
|
|
|
|
57,258
|
|
Increase in allowance for notes receivable
|
|
|
-
|
|
|
|
(3,979
|
)
|
Increase in provision for inventory
|
|
|
-
|
|
|
|
(11,143
|
)
|
Deferred tax assets
|
|
|
-
|
|
|
|
(47,568
|
)
|
Stock based compensation expense
|
|
|
51,000
|
|
|
|
42,800
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Decrease (Increase) In:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(8,782,628
|
)
|
|
|
(667,154
|
)
|
Notes receivable
|
|
|
(1,917,274
|
)
|
|
|
1,918,096
|
|
Inventories
|
|
|
(2,659,425
|
)
|
|
|
(2,289,727
|
)
|
Advance to suppliers
|
|
|
(95,982
|
)
|
|
|
(8,730
|
)
|
Other current and noncurrent assets
|
|
|
(8,782
|
)
|
|
|
223,104
|
|
Increase (Decrease) In:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
6,670,537
|
|
|
|
3,510,842
|
|
Customer deposits
|
|
|
21,231
|
|
|
|
133,959
|
|
Other current liabilities
|
|
|
81,112
|
|
|
|
(328,334
|
)
|
Income tax payable
|
|
|
-
|
|
|
|
248,669
|
|
Due to related parties
|
|
|
(268,449
|
)
|
|
|
323,227
|
|
Long-term payables-Unamortized deferred financing costs
|
|
|
(1,257
|
)
|
|
|
104,335
|
|
Other long-term liabilities
|
|
|
(147,438
|
)
|
|
|
(54,791
|
)
|
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
|
$
|
(3,998,147
|
)
|
|
$
|
4,040,995
|
|
The accompanying notes are an integral part of the unaudited consolidated
financial statements.
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND
2020 (Continued)
(UNAUDITED, IN U.S. DOLLARS)
|
|
For the three months ended
March 31
|
|
|
|
2021
|
|
|
2020
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
Purchases of long term assets
|
|
$
|
(149,603
|
)
|
|
$
|
(384,624
|
)
|
Proceeds from government grants for construction
|
|
|
84,575
|
|
|
|
242,763
|
|
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
|
|
$
|
(65,028
|
)
|
|
$
|
(141,861
|
)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds from short-term bank loans
|
|
$
|
769,562
|
|
|
$
|
3,271,391
|
|
Repayments of short-term bank loans
|
|
|
(1,539,124
|
)
|
|
|
-
|
|
Notes payable
|
|
|
4,796,343
|
|
|
|
(2,191,338
|
)
|
Proceeds from related parties
|
|
|
409,645
|
|
|
|
620,183
|
|
Repayment of loans from related parties
|
|
|
(1,077,930
|
)
|
|
|
(355,586
|
)
|
Repayment of loans from third parties
|
|
|
(307,825
|
)
|
|
|
(2,844,097
|
)
|
Proceeds from third parties
|
|
|
153,912
|
|
|
|
1,498,686
|
|
Payment of principal on financing lease obligation
|
|
|
(192,391
|
)
|
|
|
(677,734
|
)
|
Proceeds from equity and debt financing
|
|
|
1,858,841
|
|
|
|
-
|
|
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
|
$
|
4,871,033
|
|
|
$
|
(678,495
|
)
|
NET INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
|
|
$
|
807,858
|
|
|
$
|
3,220,639
|
|
Effect of exchange rate changes on cash
|
|
|
(59,934
|
)
|
|
|
(642,434
|
)
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR
|
|
|
9,403,053
|
|
|
|
5,717,207
|
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD
|
|
$
|
10,150,977
|
|
|
$
|
8,295,412
|
|
Bank balances and cash
|
|
|
8,092,764
|
|
|
|
6,694,870
|
|
Bank balances and cash included in assets classified as restricted cash
|
|
|
2,058,213
|
|
|
|
1,600,542
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
|
|
|
|
Income taxes paid
|
|
|
170,474
|
|
|
|
3,861
|
|
Interest paid
|
|
|
215,375
|
|
|
|
298,337
|
|
The accompanying notes are an integral part of the unaudited consolidated
financial statements.
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES
Greenland Technologies Holding Corporation, formerly
known as Greenland Acquisition Corporation (“Greenland” or the “Company”), was incorporated on December 28, 2017
as a British Virgin Islands Company with limited liability. The Company was incorporated as a blank check Company for the purpose of effecting
a merger, capital stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination
with one or more target businesses. On October 24, 2019, the Company acquired all of the outstanding shares of Zhongchai Holding (Hong
Kong) Limited via a reverse capitalization and changed its name from Greenland Acquisition Corporation to Greenland Technologies Holding
Corporation.
Greenland serves as the parent Company for the
primary operating Company, Zhongchai Holding (Hong Kong) Limited, a holding Company formed under the laws of Hong Kong on April 23, 2009
(“Zhongchai Holding”). Through Zhongchai Holding and other subsidiaries, Greenland develops and manufactures traditional transmission
products for material handling machineries in PRC, as well as develop models for robotic cargo carriers, which are expected to be produced
in the near future in PRC.
Greenland, through its subsidiaries, is:
|
●
|
a leading developer and manufacturer of transmission products
for material handling machineries in China; and
|
|
●
|
since December 2020, a developer of electric industrial vehicles,
with our first model of electric industrial vehicle expected to be available in the third or fourth quarter of 2021.
|
Greenland’s transmission products are key
components for forklift trucks, used in manufacturing and logistic applications such as factories, workshops, warehouses, fulfilment centers,
shipyards, and seaports. Greenland’s transmission products are used in 1-ton to 15-tons forklift trucks, some with mechanical shift
and some with automatic shift. Greenland sells these transmission products directly to forklift-truck manufacturers. Forklifts play an
important role in logistics for many enterprises across different industries in the PRC and around the globe. Generally, industries with
the largest demand for forklifts are transportation, warehousing logistics, electrical machinery, and automobile.
Greenland has experienced increased demand for
forklifts in the manufacturing industry in the PRC, as its revenue increased from approximately $9.87 million for the three months ended
March 31, 2020 to approximately $24.61 million for the three months ended March 31, 2021. Since late March 2020, the Company’s business
operations have gradually recovered from the negative impacts due to the lockdown as a result of the COVID-19 pandemic, and part of the
Company’s backlogged orders were processed during the three months ended March 31, 2021, which contributed to an increase in its
revenues for the three months ended March 31, 2021. For the three months ended March 31, 2021 and 2020, Greenland sold 36,986 and 17,075
sets of transmission products, respectively, to more than 100 forklift manufacturers in aggregate in PRC.
In December 2020, Greenland launched a new division
to focus on the electric industrial vehicle market, a market that Greenland intends to develop to diversify its product offerings. With
this new division, Greenland plans to develop and deploy the next generation of industrial vehicles. Greenland plans to establish a new
facility on the east coast of the U.S. and start producing electric industrial vehicles between the third and fourth quarter of 2021.
The outbreak of the novel coronavirus, commonly referred to as “COVID-19”,
first found in mainland China, then in Asia and eventually throughout the world, has significantly affected business and manufacturing
activities within China, including travel restrictions, widespread mandatory quarantines, and suspension of business activities within
China. Effective February 3, 2020, the Company announced the temporary closure of its operating offices in Zhejiang Province, including
suspension of its manufacturing activities in response to the emergency measures imposed by the local government. The Company’s
operating subsidiaries were temporary shut down until the end of February 2020. Moreover, the outbreak has significantly limited suppliers’
ability to provide low-cost, high-quality parts and materials to the Company on a timely basis. Zhejiang Province, where we conduct a
substantial part of our business, is one of the most affected areas in China. As of the date of this report, Chinese industries have gradually
resumed businesses as government officials started to ease the restrictive measures since April 2020. However, we remain cautious and
prudent when assessing the future impact of COVID-19 on our business due to the current ongoing global pandemic.
The Company’s Shareholders
As of March 31, 2021, Cenntro Holding Limited
owns 69.60% of Greenland’s outstanding ordinary shares. Cenntro Holding Limited is controlled and beneficially owned by Mr. Peter
Zuguang Wang, chairman of the Company.
The Company’s Subsidiaries
Zhongchai Holding, the 100% owned subsidiary of
the Company, owned 89.47% of Zhejiang Zhongchai Machinery Co., Ltd. (“Zhejiang Zhongchai”), 62.5% of Shanghai Hengyu Enterprise
Management Consulting Co., Ltd. (“Hengyu”) and 100% of Hangzhou Greenland Robotic Co., Ltd (“Hangzhou Greenland”).
Zhejiang Zhongchai, the subsidiary of the Company,
is the sole shareholder of Zhejiang Shengte Transmission Co., Ltd. (“Shengte”). It also owned 62.5% of Hengyu until transferred
its ownership to Zhongchai Holding on July 15, 2019.
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)
Zhejiang Zhongchai
Zhejiang Zhongchai, a limited liability Company
registered on November 21, 2005, is the direct operating subsidiary of Zhongchai Holding in PRC. On April 5, 2007, Usunco Automotive Limited
(“Usunco”), a British Virgin Islands limited liability Company incorporated on April 24, 2006, invested $8,000,000 USD into
Zhejiang Zhongchai for its approximately 75.47% interest. On December 16, 2009, Usunco agreed to transfer its 75.47% interest in Zhejiang
Zhongchai to Zhongchai Holding. On April 26, 2010, Xinchang County Keyi Machinery Co., Ltd. transferred all its 24.528% interest in Zhejiang
Zhongchai to Zhongchai Holding for a consideration of US$2.6 million. On November 1, 2017, Xinchang County Jiuxin Investment Management
Partnership (LP) (“Jiuxin”), an entity controlled and beneficially owned by Mr. He Mengxing, president of Zhejiang Zhongchai,
closed its investment of approximately RMB31,590,000 in Zhejiang Zhongchai for 10.53% of its interest. As of March 31, 2021, Zhongchai
Holding owns approximately 89.47% of Zhejiang Zhongchai and Jiuxin owns approximately 10.53% of Zhejiang Zhongchai.
Through Zhejiang Zhongchai, the Company has been
engaging in the manufacture and sale of transmission systems mainly for forklift trucks since 2006. These forklift trucks are used in
manufacturing and logistics applications, such as factory, workshop, warehouse, fulfilment centers, shipyards and seaports. The transmission
systems are the key components for the forklift trucks. The Company supplies transmission systems to forklift truck manufacturers. Its
transmission systems fit for forklift trucks ranging from 1 to 15 tons, with either mechanical shift or automatic shift. All the products
are currently manufactured at the Company’s facility in Xinchang, Zhejiang Province, PRC and are sold to both domestic and oversea
markets. The Company has moved to its new factory in Meizhu, Xinchang, Zhejiang Province, PRC, in October of 2019.
Hengyu
Hengyu is a limited liability Company registered
on September 10, 2015 in Shanghai Free Trade Zone, Shanghai, and PRC. Hengyu holds no assets other than an account receivable owed by
Cenntro Holding Limited. Main business of Hengyu are investment management and consulting services.
Hangzhou Greenland
Hangzhou Greenland is a limited liability Company
registered on August 9, 2019 in Hangzhou Sunking Plaza, Zhejiang, PRC. Hangzhou Greenland engages in the business of trading.
Greenland Tech
Greenland Technologies Corporation was incorporated
in the state of Delaware on January 14, 2020 as a wholly owned subsidiary of Greenland (“Greenland Tech”). The Company aims
to use it as its U.S. operation site for the assembly, marketing and sales of electric industrial vehicles for the North American market.
Details of the Company’s subsidiaries, which are included in
these unaudited consolidated financial statements as of March 31, 2021, are as follows:
Name
|
|
Domicile and Date
of Incorporation
|
|
Paid-in Capital
|
|
Percentage of
Effective
Ownership
|
|
|
Principal Activities
|
Zhongchai Holding (Hong Kong) Limited
|
|
Hong Kong
April 23, 2009
|
|
HKD
|
10,000
|
|
|
100
|
%
|
|
Holding
|
Zhejiang Zhongchai Machinery Co., Ltd.
|
|
PRC
November 21, 2005
|
|
RMB
|
20,000,000
|
|
|
89.47
|
%
|
|
Manufacture, sale of various transmission boxes.
|
Shanghai Hengyu Enterprise Management Consulting Co., Ltd.
|
|
PRC
September 10, 2015
|
|
RMB
|
251,500,000
|
|
|
62.5
|
%
|
|
Investment management and consulting services.
|
Hangzhou Greenland Robotic Technologies Co., Ltd.
|
|
PRC
August 9, 2019
|
|
RMB
|
1,570,460
|
|
|
100
|
%
|
|
Trading.
|
Greenland Technologies Corporation
|
|
Delaware, USA
January 14, 2020
|
|
USD
|
0
|
|
|
100
|
%
|
|
US operation and distribution of electric industrial vehicles for North
American market
|
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements
are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The
consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiaries. All significant inter-company
transactions and balances between the Company and its subsidiaries are eliminated upon consolidation.
Principles of Consolidation
The consolidated financial statements include
the accounts of Greenland Technologies Holding Corporation and its subsidiaries and have been prepared in accordance with U.S. generally
accepted accounting principles (“U.S. GAAP”). Intercompany accounts and transactions have been eliminated upon consolidation.
Certain reclassifications to previously reported financial information have been made to conform to the current period presentation.
The Business Combination was accounted for as
a reverse recapitalization (the “Recapitalization Transaction”) in accordance with Accounting Standard Codification (“ASC”)
805, Business Combinations. For accounting and financial reporting purposes, Zhongchai Holding is considered the acquirer based on facts
and circumstances, including the following:
●
|
Zhongchai Holding’s operations comprise the ongoing operations of the combined entity;
|
●
|
The officers of the newly combined company consist of Zhongchai Holding’s executives, including the Chief Executive Officer, Chief Financial Officer and General Counsel; and,
|
●
|
The former shareholders of Zhongchai Holding own a majority voting interests in the combined entity.
|
As a result of Zhongchai Holding being the accounting
acquirer, the financial reports filed with the SEC by the Company subsequent to the Business Combination are prepared “as if”
Zhongchai Holding is the predecessor and legal successor to the Company. The historical operations of Zhongchai Holding are deemed to
be those of the Company. Thus, the financial statements included in this report reflect (i) the historical operating results of Zhongchai
Holding prior to the Business Combination; (ii) the combined results of the Company and Zhongchai Holding following the Business
Combination in October 24, 2019; (iii) the assets and liabilities of Zhongchai Holding at their historical cost, and (iv) Greenland’s
equity structure for all periods presented. Zhongchai Holding received 7,500,000 shares of Greenland in exchange for all the share capital,
which is reflected retroactively to December 31, 2017 and will be utilized for calculating earnings per share in all prior periods. No
step-up basis of intangible assets or goodwill was recorded in the Business Combination transaction consistent with the treatment of the
transaction as a reverse capitalization of Zhongchai Holding.
Use of Estimates
The preparation of the consolidated financial
statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported
amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at
the time the estimates are made. Actual results could differ from those estimates. Significant estimates in the three months ended March
31, 2021 and 2020 include allowance for doubtful accounts, reserve for inventories, useful life of property, plant and equipment, assumptions
used in assessing impairment of long-term assets and valuation of deferred tax assets and accruals for taxes due.
Non-controlling Interest
Non-controlling interests in the Company’s
subsidiaries are recorded in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification 810 Consolidation (“ASC 810”) and are reported as a component of equity, separate from the parent’s equity.
Purchase or sale of equity interests that do not result in a change of control are accounted for as equity transactions. Results of operations
attributable to the non-controlling interest are included in our consolidated results of operations and, upon loss of control, the interest
sold, as well as interest retained, if any, will be reported at fair value with any gain or loss recognized in earnings.
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
Foreign Currency Translation
The accompanying consolidated financial statements
are presented in United States dollars (“US$” or “$”). The functional currency of the Company is Renminbi (“RMB”). Transactions
in foreign currencies are initially recorded at the functional currency rate ruling at the date of transaction. Any differences between
the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated
statements of operations.
|
|
For the three months ended
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Period end RMB: US$ exchange rate
|
|
|
6.5518
|
|
|
|
7.0851
|
|
Period average RMB: US$ exchange rate
|
|
|
6.4972
|
|
|
|
7.0307
|
|
The RMB is not freely convertible into foreign
currency and all foreign exchange transactions must take place through authorized institutions. The PRC government imposes significant
exchange restrictions on fund transfers out of the PRC that are not related to business operations.
Cash and Cash Equivalents
For financial reporting purposes, the
Company considers all highly liquid investments purchased with original maturity of three months or less to be cash equivalents. The
Company maintains one bank account in the United States of America as of March 31, 2021. The Company maintains its bank accounts in PRC and Hong Kong
Special Administrative Region (“SAR”). Balances at financial institutions or state-owned banks within PRC and Hong Kong
SAR are not covered by insurance.
Restricted Cash
Restricted cash represents amounts held by a bank
as security for bank acceptance bills, as well as the financial product secured for the short-term bank loan and therefore is not available
for the Company’s use until such time as the bank acceptance notes and bank loans have been fulfilled or expired, normally within
a twelve-month period.
Fair Value of Financial Instruments
The Company applies the provisions of ASC 820, Fair
Value Measurements and Disclosures, to the financial instruments that are required to be carried at fair value. Fair value is the
price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market
for the asset or liability in an orderly transaction between market participants at the measurement date. The Company uses a three-tier
fair value hierarchy based upon observable and non-observable inputs that prioritizes the information used to develop our assumptions
regarding fair value. Fair value measurements are separately disclosed by level within the fair value hierarchy.
●
|
Level 1—defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;
|
●
|
Level 2—defined as inputs other than quoted prices in active markets, that are either directly or indirectly observable; and
|
●
|
Level 3—defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
|
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
The Company’s financial instruments primarily
consist of cash and cash equivalents, restricted cash, accounts receivable, notes receivable, accounts payable, other payables and accrued
liabilities, short-term bank loans, and notes payable.
The carrying value of cash and cash equivalents,
restricted cash, accounts receivable, accounts payable, and other current assets and liabilities approximate fair value because of the
short-term nature of these items. The estimated fair values of short-term bank loans were not materially different from their carrying
value as presented due to the short maturities and that the interest rates on the borrowing approximate those that would have been available
for loans of similar remaining maturity and risk profile. As the carrying amounts are reasonable estimates of the fair value, these financial
instruments are classified within Level 1 of the fair value hierarchy.
Accounts Receivable
Accounts receivable are carried at net realizable
value. The Company reviews its accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as
to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers
many factors, including the age of the balance, customer’s historical payment history, its current creditworthiness and current
economic trends. Accounts are written off after exhaustive efforts at collection. The Company only grants credit terms to established
customers who are deemed to be financially responsible. Credit periods to customers are within 60 days after customers received the purchased
goods. If accounts receivable are to be provided for, or written off, they would be recognized in the consolidated statement of operations
within operating expenses. Balance of allowance of doubtful accounts was $0.98 million and $1.08 million as of March 31, 2021 and December
31, 2020, respectively.
Inventories
Inventories are stated at the lower of cost or
net realizable value, which is based on estimated selling prices less any further costs expected to be incurred for completion and disposal.
Cost of raw materials is calculated using the weighted average method and is based on purchase cost. Work-in-progress and finished goods
costs are determined using the weighted average method and comprise direct materials, direct labor and an appropriate proportion of overhead.
As of March 31, 2021 and December 31, 2020, the Company had reserves for inventories of $0 million and $0 million, respectively. The Company
records inventory reserves for excess or obsolete inventories based upon assumptions about our current and future demand forecasts.
Advance to Suppliers
Advance to suppliers represents interest-free
cash paid in advance to suppliers for purchases of parts and/or raw materials. The balance of advance to suppliers was $0.54 million and
$0.45 million as of March 31, 2021 and December 31, 2020.
Property, Plant, and Equipment
Property, plant, and equipment are stated at cost
less accumulated depreciation, and include expenditure that substantially increases the useful lives of existing assets. Expenditures
for repairs and maintenance, which do not extend the useful life of the assets, are expensed as incurred.
Depreciation is provided over their estimated
useful lives, using the straight-line method. Estimated useful lives are as follows:
Plant, buildings and improvements
|
20 years
|
|
Machinery and equipment
|
2~10 years
|
|
Motor vehicles
|
4 years
|
|
Office equipment
|
3~5 years
|
|
Fixtures and decorations
|
5 years
|
|
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
When assets are sold or retired, their costs and
accumulated depreciation are eliminated from the consolidated financial statements and any gain or loss resulting from their disposal
is recognized in the period of disposition as an element of other income. The cost of maintenance and repairs is charged to income as
incurred, whereas significant renewals and betterments are capitalized.
Land Use Rights
According to the PRC laws, the government owns
all the land in the PRC. Companies or individuals are authorized to possess and use the land only through land use rights granted by the
Chinese government. The land use rights granted to the Company are being amortized using the straight-line method over the lease term
of fifty years.
Impairment of Long-Lived Assets
Long-lived assets are evaluated for impairment
periodically whenever events or changes in circumstances indicate that their related carrying amounts may not be recoverable in accordance
with FASB ASC 360, “Property, Plant and Equipment”.
In evaluating long-lived assets for recoverability,
the Company uses its best estimate of future cash flows expected to result from the use of the asset and eventual disposition in accordance
with FASB ASC 360-10-15. To the extent that estimated future, undiscounted cash inflows attributable to the asset, less estimated future,
undiscounted cash outflows, are less than the carrying amount, an impairment loss is recognized in an amount equal to the difference between
the carrying value of such asset and its fair value. Assets to be disposed of and for which there is a committed plan of disposal, whether
through sale or abandonment, are reported at the lower of carrying value or fair value less costs to sell.
There was no impairment loss recognized for the
year ended December 31, 2020 and 2019.
Lease
ASC 842 supersedes the lease requirements in ASC
840 “Leases”, and generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use
assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from
leasing arrangements. Leases that transfer substantially all of the benefits and risks incidental to the ownership of assets are accounted
for as finance leases as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other
leases are accounted for as operating leases.
A sale-leaseback transaction occurs when an entity
sells an asset it owns and immediately leases the asset back from the buyer. The seller then becomes the lessee and the buyer becomes
the lessor. under ASC 842, both parties must assess whether the buyer-lessor has obtained control of the asset and a sale has occurred.
The Company has determined that the leaseback
transaction that it newly entered in current year fails to qualify as a sale because control is not transferred to the buyer-lessor. Therefore,
the Company has classified the lease portion of the transaction as a finance lease whereby the Company continues to depreciate the assets
and recorded a financing obligation for the consideration received from the buyer-lessor, with an implicit interest rate of 4.0038%.
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
Statutory Reserve
In accordance with the PRC Regulations on Enterprises
with Foreign Investment, an enterprise established in the PRC with foreign investment is required to provide for certain statutory reserves,
namely (i) General Reserve Fund, (ii) Enterprise Expansion Fund and (iii) Staff Welfare and Bonus Fund, which are appropriated from net
profit as reported in the enterprise’s PRC statutory accounts. A wholly-owned foreign enterprise is required to allocate at least
10% of its annual after-tax profit to the General Reserve Fund until the balance of such fund has reached 50% of its respective registered
capital. A non-wholly-owned foreign invested enterprise is permitted to provide for the above allocation at the discretion of its board
of directors. Appropriations to the Enterprise Expansion Fund and Staff Welfare and Bonus Fund are at the discretion of the board of directors
for all foreign invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as
cash dividends.
Revenue Recognition
In accordance with ASC Topic 606, “Revenue
from Contracts with Customers”, the Company recognizes revenues when goods or services are transferred to customers in an amount
that reflects the consideration which the Company expects to receive in exchange for those goods or services. In determining when and
how revenues are recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of
contract with customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv)
allocation of the transaction price to the performance obligations and (v) recognition of revenues when (or as) the Company satisfies
each performance obligation. The Company derives revenues from the processing, distribution and sale of its products. The Company recognizes
its revenues net of value-added taxes (“VAT”). The Company is subject to VAT which had been levied at the rate of 17% on the
invoiced value of sales until April 30, 2018, after which date the rate was reduced to 16%. VAT rate was further reduced to 13% starting
from April 1, 2019. Output VAT is borne by customers in addition to the invoiced value of sales and input VAT is borne by the Company
in addition to the invoiced value of purchases to the extent not refunded for export sales.
Revenues are recognized at a point in time once
the Company has determined that the customer has obtained control over the product. Control is typically deemed to have been transferred
to the customer when the performance obligation is fulfilled, usually at the time of customers’ acceptance or consumption, at the
net sales price (transaction price) and each of the criteria under ASC 606 have been met. Contract terms may require the Company to deliver
the finished goods to the customers’ location or the customer may pick up the finished goods at the Company’s factory. International
sales are recognized when shipment clears customs and leaves the port.
The Company has adopted ASC 606 on January 1,
2018, using the transition method of Modified-Retrospective Method (“MRM”). The adoption of ASC 606 had no impact on the Company’s
beginning balance of retained earnings.
The Company’s contracts are all short-term
in nature with a contract term of one year or less. Receivables are recorded when the Company has an unconditional right to consideration.
Contracts do not offer any price protection, but
allow for the return of certain goods if quality problem, which is standard warranty. The Company product returns and recorded reserve
for sales returns were minimal for the three months ended March 31, 2021 and 2020. The total rebates amount is accounting for around 0.53%
and 0.43% of the total revenue of Greenland.
The following table sets forth disaggregation
of revenue:
|
|
For the three months ended
March 31,
|
|
Major Product
|
|
2021
|
|
|
2020
|
|
Transmission boxes for Forklift
|
|
|
21,549,356
|
|
|
|
9,872,057
|
|
Transmission boxes for Non-Forklift (EV, etc.)
|
|
|
3,061,538
|
|
|
|
10
|
|
Total
|
|
|
24,610,894
|
|
|
|
9,872,067
|
|
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
Cost of Goods Sold
Cost of goods sold consists primarily of material
costs, freight charges, purchasing and receiving costs, inspection costs, internal transfer costs, wages, employee compensation, amortization,
depreciation and related costs, which are directly attributable to the production of products. Write-down of inventory to lower of cost
or net realizable value is also recorded in cost of goods sold.
Selling Expenses
Selling expenses include operating expenses such
as payroll and traveling and transportation expenses.
General and Administrative Expenses
General and administrative expenses include management
and office salaries and employee benefits, depreciation for office facility and office equipment, travel and entertainment, legal and
accounting, consulting fees and other office expenses.
Research and Development
Research and development costs are expensed as
incurred and totaled approximately $959,545 and $564,298 for the three months ended March 31, 2021 and 2020, respectively.
Government subsidies
Government subsidies are recognized when there
is reasonable assurance that the subsidy will be received and all attaching conditions will be complied with. When the subsidy relates
to an expense item, it is recognized as income over the periods necessary to match the subsidy on a systematic basis to the costs that
it is intended to compensate. Where the subsidy relates to an asset, it is recognized as other long-term liabilities and is released to
the statement of operations over the expected useful life in a consistent manner with the depreciation method for the relevant asset.
Total government subsidies recorded in the other long-term liabilities were $2.27 million and $2.34 million at March 31, 2021 and December
31, 2020, respectively.
Income Taxes
The Company accounts for income taxes following
the liability method pursuant to FASB ASC 740 “Income Taxes”. Under this method, deferred tax assets and liabilities are determined
based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in
effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax
assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets
will not be realized. The effect on deferred taxes of a change in tax rate is recognized in income in the period that includes the enactment
date.
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
The Company also follows FASB ASC 740, which addresses
the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.
The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will
be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the
financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood
of being realized upon ultimate settlement. ASC 740 also provides guidance on recognition, classification, interest and penalties on income
taxes, accounting in interim periods and requires increased disclosures. As of March 31, 2021 and December 31, 2020, the Company did not
have a liability for unrecognized tax benefits. It is the Company’s policy to include penalties and interest expense related to
income taxes as a component of other expense and interest expense, respectively, as necessary. The Company’s historical tax years
will remain open for examination by the local authorities until the statute of limitations has passed.
Value-Added Tax
Enterprises or individuals, who sell commodities,
engage in repair and maintenance or import or export goods in the PRC are subject to a value added tax in accordance with PRC Laws. The
VAT standard rate had been 17% of the gross sale price until April 30, 2018, after which date the rate was reduced to 16%. VAT rate was
further reduced to 13% starting from April 1, 2019. A credit is available whereby VAT paid on the purchases of semi-finished products
or raw materials used in the production of the Company’s finished products can be used to offset the VAT due on the sales of the
finished products.
Statutory Reserve
In accordance with the PRC Regulations on Enterprises
with Foreign Investment, an enterprise established in the PRC with foreign investment is required to provide for certain statutory reserves,
namely (i) General Reserve Fund, (ii) Enterprise Expansion Fund and (iii) Staff Welfare and Bonus Fund, which are appropriated from net
profit as reported in the enterprise’s PRC statutory accounts. A wholly-owned foreign enterprise is required to allocate at least
10% of its annual after-tax profit to the General Reserve Fund until the balance of such fund has reached 50% of its respective registered
capital. A non-wholly-owned foreign invested enterprise is permitted to provide for the above allocation at the discretion of its board
of directors. Appropriations to the Enterprise Expansion Fund and Staff Welfare and Bonus Fund are at the discretion of the board of directors
for all foreign invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as
cash dividends.
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
Comprehensive Income (Loss)
Comprehensive income (loss) is defined as the
change in equity during the year from transactions and other events, excluding the changes resulting from investments by owners and distributions
to owners, and is not included in the computation of income tax expense or benefit. Accumulated comprehensive income consists of foreign
currency translation. The Company presents comprehensive income (loss) consists in accordance with ASC Topic 220, “Comprehensive
Income”.
Earnings per share
The Company calculates earnings per share in accordance
with ASC Topic 260 “Earnings per Share.” Basic earnings per share is computed by dividing the net income by the weighted average
number of common shares outstanding during the period. Diluted earnings per share is computed similar to basic earnings per share except
that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential
ordinary shares equivalents had been issued and if the additional common shares were dilutive. On October 24, 2019, the Company completed
a reverse merger with Greenland Acquisition Corporation whereby the Company received 7,500,000 shares in exchange for all the share capital,
which is reflected retroactively to December 31, 2017 and will be utilized for calculating earnings per share in all prior periods. The
per share amounts have been updated to show the effect of the exchange on earnings per share as if the exchange occurred at the beginning
of both years for the annual financial statements of the Company. The impact of the stock exchange is also shown on the Company’s
Statements of Shareholders’ Equity.
Pursuant to the Service Agreement entered into
and by the Company and Chineseinvestors.com, Inc., an Indiana corporation (“CIIX”) on August 21, 2019 (the “Service
Agreement”), CIIX were to provide certain investor relations services to the Company for a period of three months beginning on August
21, 2019. And later on February 24, 2020, the Company and CIIX entered into a termination agreement (the “CIIX Termination
Agreement”) to terminate their respective obligations under the Service Agreement. Pursuant to the CIIX Termination Agreement, the
Company agreed to issue 5,000 restricted ordinary shares, no par value (the “CIIX Termination Shares”) to CIIX.
Pursuant to the Investor Relations Consulting
Agreement entered into and by the Company and Skyline Corporate Communication Group, LLC, a Massachusetts limited liability Company (“SCCG”)
on August 15, 2019 (the “Consulting Agreement”), SCCG were to provide certain investor relations services to the Company for
a period of twelve months beginning on August 15, 2019. And later on February 25, 2020, the Company and SCCG entered into a termination
agreement (the “SCCG Termination Agreement”) to terminate their respective obligations under the Consulting Agreement. Pursuant
to the SCCG Termination Agreement, the Company agreed to issue 10,000 restricted ordinary shares, no par value (the “SCCG Termination
Shares”) to SCCG.
Pursuant to the CIIX Termination Agreement and
the SCCG Termination Agreement, 5,000 and 10,000 restricted ordinary shares, no par value, were issued to CIIX and SCCG on March 12,
2020 and March 13, 2020, respectively, and will be utilized for calculating earnings per share for the three months ended March 31, 2021.
Segments and Related Information
ASC 280 “Segment reporting” establishes
standards for reporting information on operating segments in interim and annual financial statements. All of the Company’s operations
are considered by the chief operating decision maker to be aggregated in one reportable operating segment.
The Company is engaged in the business of manufacturing
and selling various transmission boxes. The Company’s manufacturing process is essentially the same for the entire Company and is
performed in-house at the Company’s facilities in PRC. The Company’s customers primarily consist of entities in the automotive,
construction machinery or warehousing equipment industries. The distribution of the Company’s products is consistent across the
entire Company. In addition, the economic characteristics of each customer arrangement are similar in that the Company maintains policies
at the corporate level.
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Commitments and contingencies
In the normal course of business, the Company
is subject to contingencies, including legal proceedings and environmental claims arising out of the normal course of businesses that
relate to a wide range of matters, including among others, contracts breach liability. The Company records accruals for such contingencies
based upon the assessment of the probability of occurrence and, where determinable, an estimate of the liability. Management may consider
many factors in making these assessments including past history, scientific evidence and the specifics of each matter. The Company’s
management has evaluated all such proceedings and claims that existed as of March 31, 2021 and December 31, 2020. Normal course of businesses
that relate to a wide range of matters, including among others, contracts breach liability. The Company records accruals for such contingencies
based upon the assessment of the probability of occurrence and, where determinable, an estimate of the liability. Management may consider
many factors in making these assessments including past history, scientific evidence and the specifics of each matter. The Company’s
management has evaluated all such proceedings and claims that existed as of March 31, 2021 and December 31, 2020.
Related Party
In general, related parties exist when there is
a relationship that offers the potential for transactions at less than arm’s-length, favorable treatment, or the ability to influence
the outcome of events different from that which might result in the absence of that relationship. A related party may be any of the following:
a) an affiliate, which is a party that directly or indirectly controls, is controlled by, or is under common control with another party;
b) a principle owner, owner of record or known beneficial owner of more than 10% of the voting interest of an entity; c) management, which
are persons having responsibility for achieving objectives of the entity and requisite authority to make decision; d) immediate family
of management or principal owners; e) a parent Company and its subsidiaries; and f) other parties that have ability to significant influence
the management or operating policies of the entity. The Company discloses all significant related party transactions.
Economic and Political Risks
The Company’s operations are conducted in
the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political,
economic and legal environment in the PRC, and by the general state of the PRC economy.
The Company’s operations in the PRC are
subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These
include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s
results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies
with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation,
among other things.
Financial instruments which potentially subject
the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. All of the Company’s cash
is maintained with state-owned banks within the PRC, and none of these deposits are covered by insurance. The Company has not experienced
any losses in such accounts. A portion of the Company’s sales are credit sales which are primarily to customers whose abilities
to pay are dependent upon the industry economics prevailing in these areas; however, concentrations of credit risk with respect to trade
accounts receivables is limited due to generally short payment terms. The Company also performs ongoing credit evaluations of its customers
to help further reduce credit risk
Exchange Risk
The Company cannot guarantee that the current
exchange rate will remain steady. Therefore, there is a possibility that the Company could post the same amount of profit for two comparable
periods and yet, because of a fluctuating exchange rates, record higher or lower profit depending on exchange rate of PRC Renminbi (RMB)
converted to U.S. dollars on the relevant dates. The exchange rate could fluctuate depending on changes in the political and economic
environment without notice.
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recently Issued Accounting Pronouncements
Recent accounting pronouncements that the Company
has adopted or may be required to adopt in the future are summarized below:
In June 2016, the FASB issued ASU 2016-13,”
Measurement of Credit Losses on Financial Instruments”, to require financial assets carried at amortized cost to be presented at
the net amount expected to be collected based on historical experience, current conditions and forecasts. Subsequently, the FASB issued
ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and
Topic 825, Financial Instruments, in April 2019. To clarify that receivables arising from operating leases are within the scope of lease
accounting standards. In October 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives
and Hedging (Topic 815) and Leases (Topic 842), which defers the effective date for public filers that are considered small reporting
companies as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods
within those fiscal years. Since the Company is a smaller reporting company, implementation is not needed until January 1, 2023. Adoption
of the standard requires using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the
effective date to align existing credit loss methodology with the new standard. The Company is evaluating the impact of this standard
on its consolidated financial statements, including accounting policies, processes, and systems, and expects the standard will have a
minor impact on its consolidated financial statements.
In January 2017, the FASB issued ASU No. 2017-04 (Topic
350) Intangibles—Goodwill and Other: Simplifying the Test for Goodwill Impairment, which removes Step 2 of the goodwill
impairment test, which requires a hypothetical purchase price allocation. Under the amended guidance, a goodwill impairment charge will
now be recognized for the amount by which the carrying value of a reporting unit exceeds its fair value, not to exceed the carrying amount
of goodwill. As amended by ASU 2019-10, this ASU will be applied on a prospective basis and is effective for interim and annual periods
beginning after December 15, 2022, with early adoption permitted for any impairment tests performed after January 1, 2017. The Company
is evaluating the impact of the application of this standard and does not expect that the adoption of the ASU 2017-04 will have a material
impact on the Company’s consolidated financial statements.
In August 2018, the FASB issued ASU 2018-13 Disclosure
Framework — Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds, and modifies certain
disclosure requirements for fair value measurements under ASC 820. This ASU is to be applied on a prospective basis for certain modified
or new disclosure requirements, and all other amendments in the standard are to be applied on a retrospective basis. The new standard
is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. The Company adopted Topic
820 on January 1, 2020. The adoption of the ASU 2018-13 did not have a material impact on the Company’s consolidated financial statements.
In December 2019, the FASB issued ASU No. 2019-12,
“Income Taxes” (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 will simplify
the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent
application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public business entities,
the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December
15, 2020. The Company does not expect that the requirements of ASU 2019-12 will have a material impact on its consolidated financial
statements.
GREENLAND TECHNOLOGIES HOLDING CORPORATION
AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS
NOTE 3 – CONCENTRATION ON REVENUES AND
COST OF GOODS SOLD
Concentration of major customers and suppliers:
|
|
For the three months ended March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Major customers representing more than 10% of the Company’s revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Company A
|
|
$
|
3,993,750
|
|
|
|
16.23
|
%
|
|
$
|
15,311,874
|
|
|
|
22.90
|
%
|
Company B
|
|
|
2,573,399
|
|
|
|
10.46
|
%
|
|
|
7,699,161
|
|
|
|
11.51
|
|
Total Revenues
|
|
$
|
6,567,149
|
|
|
|
26.69
|
%
|
|
$
|
23,011,035
|
|
|
|
34.41
|
%
|
|
|
As of
|
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Major customers of the Company’s accounts receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
Company A
|
|
|
3,993,750
|
|
|
|
16.17
|
%
|
|
|
2,002,275
|
|
|
|
14.95
|
%
|
Company B
|
|
|
2,573,399
|
|
|
|
7.31
|
%
|
|
|
1,955,113
|
|
|
|
14.60
|
%
|
Company C
|
|
|
1,666,458
|
|
|
|
7.50
|
%
|
|
|
1,359,607
|
|
|
|
10.15
|
%
|
Total
|
|
$
|
8,233,607
|
|
|
|
30.99
|
%
|
|
$
|
5,316,995
|
|
|
|
39.69
|
%
|
Accounts receivable from the Company’s major
customers accounted for 30.99% and 39.69% of total accounts receivable balances as of March 31, 2021 and December 31, 2020, respectively.
There were no suppliers representing more than
10% of the Company’s total purchases for the three months ended March 31, 2021 and 2020, respectively.
NOTE 4 – ACCOUNTS RECEIVABLE
Accounts receivable is net of allowance for doubtful accounts.
|
|
As of
|
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Accounts receivable
|
|
$
|
22,049,725
|
|
|
$
|
13,395,080
|
|
Less: allowance for doubtful accounts
|
|
|
(982,497
|
)
|
|
|
(986,532
|
)
|
Accounts receivable, net
|
|
$
|
21,067,228
|
|
|
$
|
12,408,548
|
|
Changes in the allowance for doubtful accounts are as follows:
|
|
For the three months ended
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Beginning balance
|
|
$
|
986,532
|
|
|
$
|
1,037,797
|
|
Provision for doubtful accounts
|
|
|
(4,035
|
)
|
|
|
40,867
|
|
Ending balance
|
|
$
|
982,497
|
|
|
$
|
1,078,664
|
|
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – INVENTORIES
|
|
As of
|
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Raw materials
|
|
$
|
7,228,655
|
|
|
$
|
5,682,382
|
|
Revolving material
|
|
|
893,687
|
|
|
|
742,437
|
|
Consigned processing material
|
|
|
51,045
|
|
|
|
51,290
|
|
Work-in-progress
|
|
|
2,057,704
|
|
|
|
2,015,677
|
|
Finished goods
|
|
|
7,723,323
|
|
|
|
6,888,277
|
|
Inventories, net
|
|
$
|
17,954,414
|
|
|
$
|
15,380,063
|
|
NOTE 6 – NOTES RECEIVABLE
|
|
As of
|
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Bank notes receivable:
|
|
$
|
32,579,066
|
|
|
$
|
30,803,772
|
|
Commercial notes receivable
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
$
|
32,579,066
|
|
|
$
|
30,803,772
|
|
Bank notes and commercial notes are means of payment
from customers for the purchase of the Company’s products and are issued by financial institutions or business entities, respectively,
that entitle the Company to receive the full nominal amount from the issuer at maturity, which bears no interest and generally ranges
from three to six months from the date of issuance. As of March 31, 2021, the Company pledged notes receivable for an aggregate
amount of $27.45 million to Bank of Communications and Bank of Hangzhou as a means of security for issuance of bank acceptance notes for
an aggregate amount of $26.18 million. As of December 31, 2020, the Company pledged notes receivable for an aggregate amount of $26.53
million to Bank of Communications as a means of security for issuance of bank acceptance notes for an aggregate amount of $23.70 million.
The Company expects collection of notes receivable within 6 months.
NOTE 7 – PROPERTY, PLANT AND EQUIPMENT AND CONSTRUCTION IN
PROGRESS
(a) At March 31, 2021 and December 31, 2020, property, plant and equipment
consisted of the following:
|
|
As of
|
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Buildings
|
|
$
|
12,403,010
|
|
|
$
|
12,453,285
|
|
Machinery
|
|
|
20,943,732
|
|
|
|
20,907,623
|
|
Motor vehicles
|
|
|
324,517
|
|
|
|
325,850
|
|
Electronic equipment
|
|
|
197,692
|
|
|
|
198,955
|
|
Total property plant and equipment, at cost
|
|
|
33,868,951
|
|
|
|
33,885,713
|
|
|
|
|
|
|
|
|
|
|
Less: accumulated depreciation
|
|
|
(14,367,871
|
)
|
|
|
(13,843,189
|
)
|
Property, plant and equipment, net
|
|
$
|
19,501,080
|
|
|
$
|
20,042,524
|
|
Construction in process
|
|
|
92,435
|
|
|
|
92,815
|
|
Total
|
|
$
|
19,593,515
|
|
|
$
|
20,135,339
|
|
For the three months ended March 31, 2021 and
2020, depreciation expense amounted to $0.62 million and $0.56 million, respectively, of which $0.38 million and $0.37 million, respectively,
was included in cost of revenue and inventories, and the remainder was included in general and administrative expense and research and
development expenses etc.
For the three months ended March 31, 2021 and
2020, $0 and $375,119 of construction in progress were converted into fixed assets.
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 – PROPERTY, PLANT AND EQUIPMENT AND CONSTRUCTION IN
PROGRESS (CONTINUED)
Restricted assets consist of the following:
|
|
As of
|
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Buildings, net
|
|
$
|
11,005,439
|
|
|
$
|
11,050,641
|
|
Machinery, net
|
|
|
2,141,488
|
|
|
|
2,150,284
|
|
Total
|
|
|
13,146,927
|
|
|
|
13,200,925
|
|
As of March 31, 2021, the Company pledged its
Buildings ownership of buildings for net book value of RMB72.11 million ($11.01 million) as security with ABC Xinchang and Rural commercial bank,
for its loan facility with maximum exposure of RMB94.63 million.
As of December 31, 2020, the Company pledged its
Buildings ownership of buildings for net book value of RMB72.11 million ($11.05 million) as security with ABC Xinchang and Rural commercial bank,
for its loan facility with maximum exposure of RMB104.63 million.
On January 3, 2019, the Company sold a set of
manufacturing equipment to third parties for aggregate proceeds of $3.08 million (RMB21.25 million) and the Company entered into
lease agreements under which the Company agreed to lease back each of the properties for an initial term of 3 years. On May 12, 2020,
the Company prepaid the financing lease obligations for aggregate payment of $1.34 million.
On April 26, 2019, the Company sold various
equipment including the general assembly line and the differential assembly line to third parties for aggregate proceeds of $2.12
million (RMB14.66 million) and the Company entered into lease agreements under which the Company agreed to lease back each of the properties
for an initial term of 2 years. On April 30, 2020, the Company prepaid the financing lease obligations for aggregate payment of $0.94
million.
On May 27, 2020, the Company sold various equipment
including the general assembly line and the differential assembly line to third parties for aggregate proceeds of $1.42 million (RMB10.00
million) and the Company entered into lease agreements under which the Company agreed to lease back each of the properties for an initial
term of 2 years.
The Company determined that it did not relinquish
control of the assets to the buyer-lessor. Therefore, the Company accounted for the transactions as failed sale-leaseback whereby
the Company continues to depreciate the assets and recorded a financing obligation for the consideration received from the buyer-lessor.
NOTE 8 – LAND USE RIGHTS
Land use rights consisted of the following:
|
|
As of
|
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Land use rights, cost
|
|
$
|
4,695,901
|
|
|
$
|
4,715,188
|
|
Less: Accumulated amortization
|
|
|
(699,921
|
)
|
|
|
(679,934
|
)
|
Land use rights, net
|
|
$
|
3,995,980
|
|
|
$
|
4,035,254
|
|
As of March 31, 2021, there was land use rights
with net book value of $4.00 million, which approximately were used as collateral for the Company’s short-term bank loans. As of
December 31, 2020, there was land use rights with net book value of $4.04 million, which approximately were used as collateral for the
Company’s short-term bank loans.
Estimated future amortization expense is as follows as of March 31,
2021:
Years ending March 31,
|
|
Amortization expense
|
|
2022
|
|
$
|
91,840
|
|
2023
|
|
|
91,840
|
|
2024
|
|
|
91,840
|
|
2025
|
|
|
91,840
|
|
2026
|
|
|
91,840
|
|
Thereafter
|
|
|
3,536,780
|
|
Total
|
|
$
|
3,995,980
|
|
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS
NOTE 9 – NOTES PAYABLE
|
|
As of
|
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Bank acceptance notes
|
|
$
|
30,539,541
|
|
|
$
|
25,889,067
|
|
Total
|
|
$
|
30,539,541
|
|
|
$
|
25,889,067
|
|
The interest-free notes payable, ranging from
nine months to one year from the date of issuance, were secured by $2.06 million and $2.24 million restricted cash, $27.45 million and
$26.53 million notes receivable, and $4.00 million and $4.04 million land use rights, as of March 31, 2021 and December 31, 2020, respectively.
All the notes payable are subject to bank charges
of 0.05% of the principal amount as commission, included in the financial expenses in the statement of operations, on each loan transaction. The
interest charge of notes payable is free.
NOTE 10 – ACCOUNTS PAYABLE
Accounts payable are summarized as follow:
|
|
As of
|
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Procurement of Materials
|
|
$
|
26,997,424
|
|
|
$
|
21,140,063
|
|
Infrastructure & Equipment
|
|
|
1,387,032
|
|
|
|
717,053
|
|
Freight fee
|
|
|
145,739
|
|
|
|
148,144
|
|
Total
|
|
$
|
28,530,195
|
|
|
$
|
22,005,260
|
|
NOTE 11 – SHORT TERM BANK LOANS
Short-term loans are summarized as follow:
|
|
As of
|
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Collateralized bank loans
|
|
$
|
15,664,397
|
|
|
$
|
17,261,302
|
|
Guaranteed bank loans
|
|
|
1,984,188
|
|
|
|
1,226,054
|
|
Total
|
|
$
|
17,648,585
|
|
|
$
|
18,487,356
|
|
Short-term loans as of March 31, 2021 are as follow:
Maturity Date
|
|
Type
|
|
Bank Name
|
|
Interest
Rate per
Annum (%)
|
|
|
March
31,
2021
|
|
Sep.01, 2021
|
|
Operating Loans
|
|
Agricultural bank of PRC
|
|
|
4.44
|
|
|
$
|
4,400,318
|
|
Sep.06, 2021
|
|
Operating Loans
|
|
Agricultural bank of PRC
|
|
|
4.44
|
|
|
$
|
6,227,297
|
|
Sep.16, 2021
|
|
Operating Loans
|
|
Rural commercial bank of Xinchang
|
|
|
5.30
|
|
|
$
|
1,221,038
|
|
Sep.22, 2021
|
|
Operating Loans
|
|
Rural commercial bank of Xinchang
|
|
|
4.35
|
|
|
$
|
1,221,038
|
|
Sep.26, 2021
|
|
Operating Loans
|
|
Rural commercial bank of Xinchang
|
|
|
4.35
|
|
|
$
|
2,594,707
|
|
Jan.21, 2022
|
|
Operating Loans
|
|
Rural commercial bank of Xinchang
|
|
|
5.30
|
|
|
$
|
763,149
|
|
Nov.11, 2021
|
|
Operating Loans
|
|
SPD Rural Bank of Xinchang
|
|
|
5.50
|
|
|
$
|
1,221,038
|
|
Total
|
|
|
|
|
|
|
|
|
|
$
|
17,648,585
|
|
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 – SHORT TERM BANK LOANS (CONTINUED)
Short-term loans as of December 31, 2020 are as follow:
Maturity Date
|
|
Type
|
|
Bank Name
|
|
Interest
Rate per
Annum (%)
|
|
|
December 31,
2020
|
|
Sep.01, 2021
|
|
Operating Loans
|
|
Agricultural bank of PRC
|
|
|
4.44
|
|
|
$
|
5,950,958
|
|
Sep.06, 2021
|
|
Operating Loans
|
|
Agricultural bank of PRC
|
|
|
4.44
|
|
|
$
|
6,252,874
|
|
Sep.16, 2021
|
|
Operating Loans
|
|
Rural commercial bank of Xinchang
|
|
|
5.30
|
|
|
$
|
1,226,053
|
|
Sep.22, 2021
|
|
Operating Loans
|
|
Rural commercial bank of Xinchang
|
|
|
4.35
|
|
|
$
|
1,226,053
|
|
Sep.26, 2021
|
|
Operating Loans
|
|
Rural commercial bank of Xinchang
|
|
|
4.35
|
|
|
$
|
2,605,364
|
|
Nov.11, 2021
|
|
Operating Loans
|
|
SPD Rural Bank of Xinchang
|
|
|
5.50
|
|
|
|
1,226,054
|
|
Total
|
|
|
|
|
|
|
|
|
|
$
|
18,487,356
|
|
All short-term bank loans are obtained from local
banks in PRC and are repayable within one year.
The average annual interest rate of the short-term
bank loans was 4.597% and 4.547% for the three months ended March 31, 2021 and 2020, respectively. The Company was in compliance with
its loan financial covenants at March 31, 2021 and December 31, 2020, respectively.
NOTE 12 – OTHER CURRENT LIABILITIES
Other current liabilities are summarized as follow:
|
|
As of
|
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Employee payables
|
|
|
111,537
|
|
|
|
483,922
|
|
Other tax payables
|
|
|
1,752,713
|
|
|
|
1,208,323
|
|
Borrowing from third party
|
|
|
266,831
|
|
|
|
520,080
|
|
Total
|
|
$
|
2,131,081
|
|
|
$
|
2,212,325
|
|
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 – OTHER LONG-TERM LIABILITIES
Other long-term liabilities are summarized as follow:
|
|
As of
|
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Subsidy
|
|
|
2,270,726
|
|
|
|
2,342,648
|
|
Total
|
|
$
|
2,270,726
|
|
|
$
|
2,342,648
|
|
The subsidy mainly consists of an incentive granted
by the Chinese government to encourage transformation of fixed assets in China and other miscellaneous subsidy from the Chinese government. As
of March 31, 2021, grant income increased by $0.07 million, as compared to December 31, 2020. The change was mainly due to timing of incurring
qualifying expenses.
NOTE 14 – LONG TERM PAYABLES
|
|
As of
|
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Long-term payables current portion
|
|
$
|
767,496
|
|
|
$
|
797,179
|
|
Long-term payables– non-current portion
|
|
|
-
|
|
|
|
166,292
|
|
Total
|
|
$
|
767,496
|
|
|
$
|
963,471
|
|
On January 3, 2019, the Company sold a set of
manufacturing equipment to third parties for aggregate proceeds of $3.08 million (RMB21.25 million) and the Company entered into
lease agreements under which the Company agreed to lease back each of the properties for an initial term of 3 years. On May 12, 2020,
the Company prepaid the financing lease obligations for aggregate payment of $1.34 million.
On April 26, 2019, the Company sold various
equipment including the general assembly line and the differential assembly line to third parties for aggregate proceeds of $2.12
million (RMB14.66 million) and the Company entered into lease agreements under which the Company agreed to lease back each of the properties
for an initial term of 2 years. On April 30, 2020, the Company prepaid the financing lease obligations for aggregate payment of $0.94
million.
On May 27, 2020, the Company sold various equipment
including its general assembly line and the differential assembly line to third parties for aggregate proceeds of $1.42 million (RMB10.00
million). The Company also entered into lease agreements under which the Company agreed to lease back each of the properties for an initial
term of 2 years.
The Company determined that it did not relinquish
control of the assets to the buyer-lessor. Therefore, the sale of the equipment does not qualify for sale-leaseback accounting. As a result,
the aggregate proceeds have been recorded as a financing obligation and the assets related to the sold and leased manufacturing equipment
remain on the Company’s Consolidated Balance Sheet and continue to be depreciated. The current and long-term portions of the
financing obligation are included within long-term payables-current portion and long-term payables-non-current portion, respectively.
NOTE 15 – STOCKHOLDER’S EQUITY
Preferred Shares — The
Company is authorized to issue an unlimited number of no par value preferred shares, divided into five classes, Class A through Class
E, each with such designation, rights and preferences as may be determined by a resolution of the Company’s board of directors to
amend the Memorandum and Articles of Association to create such designations, rights and preferences. The Company has five classes of
preferred shares to give the Company flexibility as to the terms on which each Class is issued. All shares of a single class must be issued
with the same rights and obligations. Accordingly, starting with five classes of preferred shares will allow the Company to issue shares
at different times on different terms. As of March 31, 2021 and December 31, 2020, there were no preferred shares designated, issued or
outstanding.
Ordinary Shares — The
Company is authorized to issue an unlimited number of no par value ordinary shares. Holders of the Company’s ordinary shares are
entitled to one vote for each share. As of March 31, 2021 and December 31, 2020, there were 10,498,127 and 10,225,142 ordinary shares
issued and outstanding.
On July 27, 2018, the Company consummated its
initial public offering of 4,400,000 units, including a partial exercise by the underwriters of their over-allotment option in the amount
of 400,000 units. Each unit consists of one ordinary share, no par value, one warrant to purchase one-half of one ordinary share and one
right to receive one-tenth of one ordinary share upon the consummation of its initial business combination.
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15 – STOCKHOLDER’S EQUITY (CONTINUED)
Simultaneously with the consummation of its initial
public offering, the Company completed a private placement of 282,000 units, issued to Greenland Asset Management Corporation (the “Sponsor”)
and Chardan Capital Markets, LLC.
In 2019, in connection with the Business Combination
3,875,458 redeemable shares have been redeemed and 81,400 redeemable shares have been converted into ordinary shares, 1,906,542 ordinary
shares left upon consummation of the reverse recapitalization.
Pursuant to the Share Exchange Agreement, Greenland
acquired from the Seller all of the issued and outstanding equity interests of Zhongchai Holding in exchange for 7,500,000 newly issued
ordinary shares, no par value of Greenland, issued to the Seller (the “Exchange Shares”). As a result, the Seller became the
controlling shareholder of Greenland, and Zhongchai Holding became a directly and wholly owned subsidiary of Greenland. The Business Combination
was accounted for as a reverse merger effected by a share exchange, wherein Zhongchai Holding is considered the acquirer for accounting
and financial reporting purposes. The recapitalization of the number of shares of common stock attributable to the purchase of Zhongchai
Holding in connection with the Business Combination is reflected retroactively to December 31, 2017 and will be utilized for calculating
earnings per share in all prior periods presented. The impact of the stock exchange is also shown on the Company’s Statements of
Stockholders’ Equity.
Pursuant to certain Finder Agreement with Hanyi
Zhou, dated May 29, 2019, 50,000 newly issued ordinary shares were issued to Zhou Hanyi as the finder fee for the business combination.
In connection with the Business Combination, all
the outstanding rights of the Company were converted into 468,200 ordinary shares on a one-tenth (1/10) ordinary share per right basis
if holders of the rights elected to convert their rights into the underlying ordinary shares.
Pursuant to the Service Agreement entered into
and by The Company and Chineseinvestors.com, Inc., an Indiana corporation (“CIIX”) on August 21, 2019 (the “Service
Agreement”), CIIX were to provide certain investor relations services to the Company for a period of three months beginning on August
21, 2019. Pursuant to the Service Agreement, the Company were to pay CIIX fees consisting of three equal monthly instalments of $12,000
and 5,000 restricted ordinary shares, no par value, of the Company on a quarterly basis during the term of the Consulting Agreement. On
February 24, 2020, Greenland and CIIX entered into a termination agreement (the “CIIX Termination Agreement”) to terminate
their respective obligations under the Service Agreement. Pursuant to the CIIX Termination Agreement, the Company agreed to issue 5,000
restricted ordinary shares, no par value (the “CIIX Termination Shares”) to CIIX. Upon CIIX’s receipt of the CIIX Termination
Shares, the Company will have fully satisfied its payment obligations under the Service Agreement.
Pursuant to the Investor Relations Consulting
Agreement entered into and by The Company and Skyline Corporate Communication Group, LLC, a Massachusetts limited liability Company (“SCCG”)
on August 15, 2019 (the “Consulting Agreement”), SCCG were to provide certain investor relations services to the Company for
a period of twelve months beginning on August 15, 2019. Pursuant to the Consulting Agreement, the Company were to pay SCCG fees consisting
of $5,000 per month and 1,250 restricted ordinary shares, no par value, of the Company on a quarterly basis during the term of the Consulting
Agreement. On February 25, 2020, Greenland and SCCG entered into a termination agreement (the “SCCG Termination Agreement”)
to terminate their respective obligations under the Consulting Agreement. Pursuant to the SCCG Termination Agreement, the Company agreed
to issue 10,000 restricted ordinary shares, no par value (the “SCCG Termination Shares”) to SCCG. Upon SCCG’s receipt
of the SCCG Termination Shares, the Company will have fully satisfied its payment obligations under the Consulting Agreement.
On November 10, 2020, the Company granted a total
of 135,000 restricted ordinary shares to JING JIN.
On December 30, 2020, the Company granted a total
of 69,000 restricted ordinary shares to RAYMOND Z. WANG.
On February 8, 2021, the Company granted a total
of 51,000 restricted ordinary shares to RAYMOND Z. WANG.
Rights — Each holder
of a right will receive one-tenth (1/10) of one ordinary share upon consummation of a Business Combination, even if the holder of such
right redeemed all Public Shares held by it in connection with a Business Combination. No fractional shares will be issued upon exchange
of the rights. No additional consideration will be required to be paid by a holder of rights in order to receive its additional shares
upon consummation of a Business Combination as the consideration related thereto has been included in the Unit purchase price paid for
by investors in the Initial Public Offering. If the Company enters into a definitive agreement for a Business Combination in which the
Company will not be the surviving entity, the definitive agreement provides for the holders of rights to receive the same per share consideration
the holders of the ordinary shares will receive in the transaction on an as-converted into ordinary share basis and each holder of a right
will be required to affirmatively convert its rights in order to receive the 1/10 of one share underlying each right (without paying additional
consideration). The shares issuable upon exchange of the rights will be freely tradable (except to the extent held by affiliates of the
Company).
If the Company is unable to complete a Business
Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of rights will not receive
any of such funds with respect to their rights, nor will they receive any distribution from the Company’s assets held outside of
the Trust Account with respect to such rights, and the rights will expire worthless. Further, there are no contractual penalties for failure
to deliver securities to the holders of the rights upon consummation of a Business Combination. Additionally, in no event will the Company
be required to net cash settle the rights. Accordingly, the rights may expire worthless.
As of March 31, 2021, all of the existing Rights
were converted into 468,200 ordinary shares as a result of the Business Combination.
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15 – STOCKHOLDER’S EQUITY (CONTINUED)
Warrants — Public Warrants
may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public
Warrants will become exercisable on the later of (a) the consummation of a Business Combination or (b) July 24, 2019. No Public Warrants
will be exercisable for cash unless the Company has an effective and current registration statement covering the ordinary shares issuable
upon exercise of the Public Warrants and a current prospectus relating to such ordinary shares. Notwithstanding the foregoing, if a registration
statement covering the ordinary shares issuable upon the exercise of the Public Warrants is not effective within 90 days from the consummation
of a Business Combination, the holders may, until such time as there is an effective registration statement and during any period when
the Company shall have failed to maintain an effective registration statement, exercise the Public Warrants on a cashless basis pursuant
to an available exemption from registration under the Securities Act. If an exemption from registration is not available, holders will
not be able to exercise their Public Warrants on a cashless basis. The Public Warrants will expire five years from the consummation of
a Business Combination or earlier upon redemption or liquidation.
The Company may call the warrants for redemption
(excluding the Private Warrants), in whole and not in part, at a price of $0.01 per warrant:
|
●
|
At
any time while the Public Warrants are exercisable,
|
|
●
|
Upon
not less than 30 days’ prior written notice of redemption to each Public Warrant holder,
|
|
●
|
If,
and only if, the reported last sale price of the ordinary shares equals or exceeds $16.50 per share, for any 20 trading days within a
30-trading-day period ending on the third trading day prior to the notice of redemption to Public Warrant holders, and
|
|
●
|
If,
and only if, there is a current registration statement in effect with respect to the ordinary shares underlying such warrants at the
time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.
|
If the Company calls the Public Warrants for redemption,
management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,”
as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the warrants may be
adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization,
merger or consolidation. However, the warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price.
Additionally, in no event will the Company be required to net cash settle the warrants. Accordingly, the warrants may expire worthless.
The Private Warrants are identical to the Public
Warrants underlying the Units sold in the Initial Public Offering, except that the Private Warrants and the ordinary shares issuable upon
the exercise of the Private Warrants are not transferable, assignable or saleable until 30 days after the completion of a Business Combination,
subject to certain limited exceptions. Additionally, the Private Warrants are exercisable on a cashless basis and are non-redeemable so
long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than
the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such
holders on the same basis as the Public Warrants.
As of March 31, 2021 there were total 4,682,000 Warrants outstanding,
including 4,621,985 Public Warrants held by CEDE & CO, and 22,000 and 260,000 Private Warrants held by Chardan Capital Markets, LLC
and Greenland Asset Management Corporation, respectively.
Certain warrants were exercised in February of 2021 for the issuance
of 221,985 newly issued ordinary shares. The Company received cash proceeds of $1,858,841 from the exercise of these warrants.
Unit Purchase Option
On July 27, 2018, the Company sold to Chardan
(and its designees), for $100, an option to purchase up to 240,000 Units exercisable at $11.50 per Unit (or an aggregate exercise price
of $2,760,000) commencing on the later of July 24, 2019 and the consummation of a Business Combination. The unit purchase option may be
exercised for cash or on a cashless basis, at the holder’s option, and expires July 24, 2023. The Units issuable upon exercise of
the option are identical to those offered in the Initial Public Offering. The Company accounted for the unit purchase option, inclusive
of the receipt of $100 cash payment, as an expense of the Initial Public Offering resulting in a charge directly to shareholders’
equity. The option and such units purchased pursuant to the option, as well as the ordinary shares underlying such units, the rights included
in such units, the ordinary shares that are issuable for the rights included in such units, the warrants included in such units, and the
shares underlying such warrants, have been deemed compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to Rule
5110(g) (1) of FINRA’s NASDAQ Conduct Rules. Additionally, the option may not be sold, transferred, assigned, pledged or hypothecated
for a one-year period (including the foregoing 180-day period) following the date of Initial Public Offering except to any underwriter
and selected dealer participating in the Initial Public Offering and their bona fide officers or partners. The option grants to holders
demand and “piggy back” rights for periods of five and seven years, respectively, from the effective date of the registration
statement with respect to the registration under the Securities Act of the securities directly and indirectly issuable upon exercise of
the option. The Company will bear all fees and expenses attendant to registering the securities, other than underwriting commissions which
will be paid for by the holders themselves. The exercise price and number of units issuable upon exercise of the option may be adjusted
in certain circumstances including in the event of a stock dividend, or the Company’s recapitalization, reorganization, merger or
consolidation. However, the option will not be adjusted for issuances of ordinary shares at a price below its exercise price. As of March
31, 2021, there was no unit purchase option outstanding.
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16 – EARNINGS PER SHARE
The Company reports earnings per share in accordance
with the provisions of the FASB’s related accounting standard. This standard requires presentation of basic and diluted earnings
per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes
dilution, but includes vested restricted stocks and is computed by dividing income available to shareholders by the weighted average common
shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities
or other contracts to issue ordinary shares were exercised and converted into ordinary shares. On October 24, 2019, the Company completed
a reverse merger with Zhongchai Holding. The recapitalization of the number of shares of common stock attributable to the purchase of
Zhongchai Holding in connection with the Business Combination is reflected retroactively to December 31, 2017 and will be utilized for
calculating earnings per share in all prior periods presented. Pursuant to the CIIX Termination Agreement and the SCCG Termination Agreement,
5,000 and 10,000 restricted ordinary shares, no par value, were issued to CIIX and SCCG on March 12, 2020 and March 13, 2020 respectively.
The following is a reconciliation of the basic
and diluted earnings per share computation:
|
|
Three months ended
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Net income attributable to the Greenland Corporation and subsidiaries
|
|
$
|
2,128,568
|
|
|
$
|
256,664
|
|
Weighted average basic and diluted computation shares outstanding:
|
|
|
|
|
|
|
|
|
Shares outstanding at the beginning or period
|
|
|
10,225,142
|
|
|
|
10,006,142
|
|
Weighted average shares of restricted grants
|
|
|
29,467
|
|
|
|
15,000
|
|
Weighted average shares issued for exercise of warrants
|
|
|
79,359
|
|
|
|
-
|
|
Weighted average shares of common stock
|
|
|
10,333,968
|
|
|
|
10,009,198
|
|
Dilutive effect of stock options
|
|
|
-
|
|
|
|
-
|
|
Restricted stock vested not issued
|
|
|
-
|
|
|
|
-
|
|
Common stock and common stock equivalents
|
|
|
10,333,968
|
|
|
|
10,009,198
|
|
Basic and diluted net income per share
|
|
$
|
0.21
|
|
|
$
|
0.03
|
|
NOTE 17 – GEOGRAPHICAL SALES AND SEGMENTS
All of the Company’s operations are considered
by the chief operating decision maker to be aggregated in one reportable operating segment.
Information for the Company’s sales by geographical
area for the three months ended March 31, 2021 and 2020 are as follows:
|
|
For the three months ended
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Domestic Sales
|
|
$
|
24,501,039
|
|
|
$
|
9,863,853
|
|
International Sales
|
|
|
109,855
|
|
|
|
8,214
|
|
Total
|
|
$
|
24,610,894
|
|
|
$
|
9,872,067
|
|
NOTE 18 – INCOME TAXES
Income tax expense includes a provision for federal,
state and foreign taxes based on the annual estimated effective tax rate applicable to the Company and its subsidiaries, adjusted for
items which are considered discrete to the period.
The effective tax rates on income before income
taxes for the three months ended March 31, 2021 was 17.62%. The effective tax rate for the three months ended March 31, 2021 was lower
than the PRC tax rate of 25.0% primarily due to the China Super R&D deduction. The effective tax rate is based on forecasted annual
results and these amounts may fluctuate significantly through the rest of the year as a result of the unpredictable impact of COVID-19
on its operating activities.
The effective tax rate on income before income
taxes for the three months ended March 31, 2020 was 13.04%. The effective tax rate for the three months ended March 31, 2020 was lower
than the PRC tax rate of 25.0% primarily due to the China Super R&D deduction.
The Company has recorded $0 unrecognized benefit
as of March 31, 2021. On the information currently available, the Company does not anticipate a significant increase or decrease to its
unrecognized benefit within the next 12 months.
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19 – COMMITMENTS AND CONTINGENCIES
Guarantees and pledged collateral for bank loans to other parties:
(1) Pledged collateral for bank loans
On December 6, 2019, Zhejiang Zhongchai signed
a Maximum Amount Pledge Contract with Agricultural Bank of PRC Co., Ltd. Xinchang County Sub-Branch (ABC Xinchang), pledging its land
use rights for original book value of RMB11.08 million and property ownership for original book value of RMB35.12 million as security
with ABC Xinchang, for its loan facility with maximum exposure of RMB48.83 million during the period from December 6, 2019 to May 21,
2022. As of March 31, 2021 and December 31, 2020, outstanding amount of the short-term bank loan under this Pledge Contract was RMB28.83
million and RMB38.83 million.
On November 28, 2019, Zhejiang Zhongchai signed
a Maximum Amount Pledge Contract with Agricultural Bank of PRC Co., Ltd. Xinchang County Sub-Branch (ABC Xinchang), pledging its land
use rights for original book value of RMB9.84 million and property ownership for original book value of RMB27.82 million, as security
with ABC Xinchang, for its loan facility with maximum exposure of RMB40.80 million during the period from November 28, 2019 to December
26, 2022. As of March 31, 2021 and December 31, 2020, outstanding amount of the short-term bank loan under this Pledge Contract was RMB40.80
million and RMB40.80 million.
On December 17, 2019, Zhejiang Zhongchai signed
a Maximum Amount Pledge Contract with Rural Commercial Bank of PRC Co., Ltd., pledging its land use rights for original book value of
RMB4.75 million and property ownership for original book value of RMB11.28 million as security, for its loan facility with maximum exposure
of RMB16.95 million during the period from December 16, 2019 to December 15, 2024. As of March 31, 2021 and December 31, 2020, outstanding
amount of the short-term bank loan under this Pledge Contract was RMB17.00 million and RMB17.00 million.
On December 18, 2019, Zhejiang Zhongchai signed
a Maximum Amount Pledge Contract with Rural Commercial Bank of PRC Co., Ltd., pledging its land use rights for original book value of
RMB4.17 million as security, for its loan facility with maximum exposure of RMB8.00 million during the period from December 16, 2019 to
December 15, 2024. As of March 31, 2021 and December 31, 2020, outstanding amount of the short-term bank loan under this Pledge Contract
was RMB8.00 million and RMB8.00 million.
(2) Litigation
On October 14, 2019, the plaintiff, the Company
and all other named defendants entered into a confidential memorandum of understanding (the “MOU”), pursuant to which a Stipulation
and Order of Dismissal (“Stipulation of Dismissal”) of the Action was filed on October 14, 2019. The Stipulation of Dismissal
was approved and entered by the District Court on October 15, 2019. Among other things, the Stipulation of Dismissal acknowledged
that the Definitive Proxy Statement mooted the plaintiff’s claims regarding the sufficiency of disclosures, dismissed all claims
asserted in the Action, with prejudice as to the plaintiff only, permits the plaintiff to seek an award of attorneys’ fees in connection
with the mooted claims, and reserves the defendants’ rights to oppose such an award, if appropriate. Pursuant to the MOU,
the parties have engaged in discussions regarding the amount of attorneys’ fees, if any, to which the plaintiff’s counsel
is entitled in connection with the Action. As of January 25,2021, we have been settled with our counter party which paid into in
total $65,000. As of March 31, 2021, those discussions have been completed.
Facility Leases
The Company entered into a failed sale-leaseback
transaction on January 3, 2019 and April 26, 2019. See further discussion in NOTE 14 –LONG TERM PAYABLES.
Rent expense is recognized on a straight-line
basis over the terms of the operating leases accordingly and the Company records the difference between cash rent payments and the recognition
of rent expense as a deferred rent liability.
The following are the aggregate non-cancellable
future minimum lease payments under operating and financing leases as of March 31, 2021:
Years ending March 31,
|
|
Amount
|
|
2022
|
|
|
767,496
|
|
2023
|
|
|
-
|
|
Total
|
|
$
|
767,496
|
|
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 20 – RELATED PARTY TRANSACTIONS
(a) Names and Relationship of Related Parties:
|
Existing Relationship with the Company
|
Sinomachinery Holding Limited
|
|
Under common control of Peter Zuguang Wang
|
Cenntro Holding Limited
|
|
Controlling shareholder of the Company
|
Zhejiang Kangchen Biotechnology Co., Ltd.
|
|
Under common control of Peter Zuguang Wang
|
Cenntro Smart Manufacturing Tech. Co., Ltd.
|
|
Under common control of Peter Zuguang Wang
|
Zhejiang Zhonggong Machinery Co., Ltd.
|
|
Under common control of Peter Zuguang Wang
|
Zhejiang Zhonggong Agricultural Equipment Co., Ltd.
|
|
Under common control of Peter Zuguang Wang
|
Jiuxin Investment Management Partnership (LP)
|
|
Under control of Mr. Mengxing He, the General Manger and one of the directors of Zhejiang Zhongchai
|
Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership)
|
|
Under common control of Peter Zuguang Wang
|
Hangzhou Cenntro Autotech Co., Limited
|
|
Under common control of Peter Zuguang Wang
|
Peter Zuguang Wang
|
|
Chairman of the Company
|
Greenland Asset Management Corporation
|
|
Shareholder of the Company
|
Hangzhou Jiuru Economic Information Consulting Co. Ltd
|
|
One of the directors of Hengyu
|
(b) Summary of Balances with Related Parties:
|
|
As of
|
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Due to related parties:
|
|
|
|
|
|
|
Sinomachinery Holding Limited1
|
|
$
|
1,775,869
|
|
|
$
|
1,775,869
|
|
Zhejiang Kangchen Biotechnology Co., Ltd2
|
|
|
-
|
|
|
|
64,505
|
|
Zhejiang Zhonggong Machinery Co., Ltd.3
|
|
|
474,913
|
|
|
|
538,166
|
|
Zhejiang Zhonggong Agricultural Equipment Co., Ltd.4
|
|
|
-
|
|
|
|
-
|
|
Cenntro Smart Manufacturing Tech. Co., Ltd.5
|
|
|
3,587
|
|
|
|
3,602
|
|
Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership)6
|
|
|
485,175
|
|
|
|
514,365
|
|
Cenntro Holding Limited⁷
|
|
|
1,591,627
|
|
|
|
1,591,627
|
|
Peter Zuguang Wang⁷
|
|
|
25,000
|
|
|
|
25,000
|
|
Greenland Asset Management Corporation7
|
|
|
-
|
|
|
|
-
|
|
Xinchang County Jiuxin Investment Management Partnership (LP)7
|
|
|
3,567,050
|
|
|
|
4,347,985
|
|
Hangzhou Jiuru Economic Information Consulting Co. Ltd7
|
|
|
190,000
|
|
|
|
190,000
|
|
Total
|
|
$
|
8,088,221
|
|
|
$
|
9,051,119
|
|
The balance of Due to related parties as of March
31, 2021 and December 31, 2020 consisted of:
|
1
|
Advance
from Sinomachinery Holding Limited for certain purchase order;
|
|
2
|
Temporary
borrowings from Zhejiang Kangchen Biotechnology Co., Ltd.;
|
|
3
|
Unpaid
balances for purchasing of materials and equipment and temporary borrowing from Zhejiang Zhonggong Machinery Co., Ltd.;
|
|
4
|
Unpaid
balances for purchasing of materials from Zhejiang Zhonggong Agricultural Equipment Co., Ltd.;
|
|
5
|
Prepayment
from Cenntro Smart Manufacturing Tech. Co., Ltd.;
|
|
6
|
Temporary
borrowings from Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership); and
|
|
7
|
Borrowings
from related parties
|
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 20 – RELATED PARTY TRANSACTIONS (CONTINUED)
|
|
As of
|
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Due from related parties-current:
|
|
|
|
|
|
|
Cenntro Holding Limited
|
|
$
|
38,377,544
|
|
|
$
|
38,535,171
|
|
Cenntro Smart Manufacturing Tech. Co., Ltd.
|
|
|
3,053
|
|
|
|
-
|
|
Total
|
|
$
|
38,380,597
|
|
|
$
|
38,535,171
|
|
The balance of Due from related parties as of
March 31, 2021 and December 31, 2020 consisted of:
Other receivable from Cenntro Holding Limited
was $38.4 million and $38.5 million as of March 31, 2021 and December 31, 2020, respectively.
The Company expects the amount due from its equity
holder, Cenntro Holding will pay back on April 27th, 2022, as mutually agreed by the Company and Cenntro Holding Limited, for an
extension of repayment from the end of October 2020 in accordance with the original maturity date.
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND
SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 20 – RELATED PARTY TRANSACTIONS (CONTINUED)
(c) Summary of Related Party Funds Lending:
A summary of funds lending with related
parties for the three months ended March 31, 2021 and 2020 are listed below:
Withdraw funds from related parties:
|
|
For the three months ended
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Zhejiang Zhonggong Machinery Co., Ltd.
|
|
|
76,956
|
|
|
|
355,586
|
|
Cenntro Smart Manufacturing Tech. Co., Ltd.
|
|
|
24,934
|
|
|
|
-
|
|
Peter Zuguang Wang
|
|
|
25,000
|
|
|
|
-
|
|
Xinchang County Jiuxin Investment Management Partnership (LP)
|
|
|
-
|
|
|
|
256,022
|
|
Cenntro Holding Limited
|
|
|
251,973
|
|
|
|
-
|
|
Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership)
|
|
|
30,782
|
|
|
|
8,575
|
|
Total
|
|
|
409,645
|
|
|
|
620,183
|
|
|
|
|
|
|
|
|
|
|
Deposit funds with related parties:
|
|
|
|
|
|
|
|
|
Zhejiang Zhonggong Machinery Co., Ltd.
|
|
|
138,521
|
|
|
|
355,586
|
|
Xinchang County Jiuxin Investment Management Partnership (LP)
|
|
|
769,562
|
|
|
|
-
|
|
Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership)
|
|
|
61,565
|
|
|
|
-
|
|
Cenntro Smart Manufacturing Tech. Co., Ltd.
|
|
|
18,777
|
|
|
|
-
|
|
Zhejiang Kangchen Biotechnology Co., Ltd
|
|
|
64,505
|
|
|
|
-
|
|
Peter Zuguang Wang
|
|
|
25,000
|
|
|
|
-
|
|
Total
|
|
|
1,077,930
|
|
|
|
355,586
|
|
NOTE 21 – SUBSEQUENT EVENTS
The management has evaluated subsequent events
through the date of the report, and there was no material subsequent event requiring adjustments to the financial statements or disclosure.