The following discussion and analysis of financial condition and results of
operations relates to the operations and financial condition reported in the
consolidated financial statements of the Company thereto, which appear elsewhere
in this Report, and should be read in conjunction with such financial statements
and related notes included in this Report. Except for the historical information
contained herein, the following discussion, as well as other information in this
Report, contain "forward-looking statements," within the meaning of Section 27A
of the Securities Act, and Section 21E of the Exchange Act, and are subject to
the "safe harbor" created by those sections. Actual results and the timing of
the events may differ materially from those contained in these forward-looking
statements due to many factors, including those discussed in the "Cautionary
Note Regarding Forward-Looking Statements" set forth elsewhere in this Report.



Overview



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. Following the Business
Combination (as described below) in October 2019, the Company changed its name
from Greenland Acquisition Corporation to Greenland Technologies Holding
Corporation.



On July 27, 2018, we consummated our initial public offering of 4,400,000 units,
including a partial exercise by the underwriters of their over-allotment option
in the amount of 400,000 units. Each unit 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 our initial
business combination, pursuant to a registration statement on Form S-1. Warrants
must be exercised in multiples of two warrants, and each two warrants are
exercisable for one ordinary share at an exercise price of $11.50 per share. The
units were sold in our initial public offering at an offering price of $10.00
per unit, generated $44,000,000 (before underwriting discounts and offering
expenses) in gross proceeds.



Simultaneously with the consummation of our initial public offering, we
completed a private placement of 282,000 units, issued to the Sponsor and
Chardan, which generated $2,820,000 in gross proceeds. We also sold to Chardan
(and its designees), for $100, an option to purchase up to 240,000 units
exercisable at $11.50 per unit (or an aggregate exercise price of $2,760,000)
commencing on consummation of the Business Combination. The unit purchase option
may be exercised for cash or on a cashless basis, at the holder's option, and
expires on July 24, 2023. On February 18, 2021, Chardan exercised its option to
purchase 120,000 units. As of the date of this Report, an option exercisable by
Chardan for 120,000 units is outstanding.



On October 24, 2019, we consummated our Business Combination with Zhongchai
Holding following a special meeting, where the shareholders of Greenland
considered and approved, among other matters, a proposal to adopt and entered
into the Share Exchange Agreement that allowed Greenland to acquire 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. 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.



                                       42






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.

On December 17, 2019, the Company's warrants, which were trading under the ticker symbol "GTECW," were delisted from the Nasdaq Capital Market by the Nasdaq Listing Qualifications Staff.


On January 14, 2020, Greenland Tech was incorporated under the laws of the State
of Delaware. Greenland Tech is the 100% owned subsidiary of Greenland. Greenland
Tech focuses on the production and sale of electric industrial vehicles for

the
North American market.



Greenland serves as the parent company to Zhongchai Holding. Through Zhongchai
Holding and its subsidiaries, Greenland develops and manufactures traditional
transmission products for material handling machineries and electric industrial
vehicles.




Through its PRC subsidiaries, Greenland offers transmission products, which are
key components for forklift trucks used in manufacturing and logistic
applications, such as factories, workshops, warehouses, fulfilment centers,
shipyards, and seaports. Forklifts play an important role in the logistic
systems of many companies across different industries in China and globally.
Generally, industries with the largest demand for forklifts include the
transportation, warehousing logistics, electrical machinery, and automobile
industries. Through Zhongchai Holding and other subsidiaries, Greenland has
experienced an increase in demand for forklifts in the manufacturing and
logistics industries in China, as its revenue increased from approximately
$66.86 million in the fiscal year 2020 to $98.84 million in the fiscal year
2021. The increase in revenue was due primarily to a significant increase in our
sales volume, driven by steady growth of domestic sales in China. Based on our
revenues in the fiscal years ended December 31, 2021 and 2020, we believe that
Greenland is one of the major developers and manufacturers of transmission
products for small and medium-sized forklift trucks in China.



Greenland's transmission products are used in 1-ton to 15-tons forklift trucks,
some with mechanical shift and some with automatic shift. Greenland sells these
transmission products directly to forklift-truck manufacturers. In the fiscal
years ended December 31, 2021 and 2020, Greenland sold an aggregate of 141,431
and 108,913 sets of transmission products, respectively, to more than 100
forklift manufacturers in the PRC.



There is increasing demand for electric industrial vehicles powered by
sustainable energy in order to reduce air pollution and lower carbon emissions.
In December 2020, Greenland launched a new division to focus on the production
and sale of electric industrial vehicles-a division that Greenland intends to
develop to diversify its product offerings. Greenland's electric industrial
vehicle products currently include GEF-series electric forklifts, a series of
lithium powered forklifts with three models ranging in size from 1.8 tons to 3.5
tons, and GEL-1800, a 1.8 ton rated load lithium powered electric wheeled front
loader. In February 2022, Greenland launched its GEX-8000 all-electric 8.0 ton
rated load lithium powered wheeled excavator. These products have become
available for purchase in the U.S. market. Greenland plans to establish an
assembly site and an experience center in the United States in 2022 to support
local sales, assembly and distribution.



                                       43

Impact of COVID-19 Pandemic on Our Operations and Financial Performance





The COVID-19 pandemic has severely affected China and the rest of the world. In
an effort to contain the spread of the COVID-19 pandemic, China and many other
countries have taken precautionary measures, such as imposing travel
restrictions, quarantining individuals infected with or suspected of being
infected with COVID-19, encouraging or requiring people to work remotely, and
canceling public activities, among others. These ongoing measures adversely
affected our operations and financial performance in 2020.



Specifically, the COVID-19 pandemic adversely affected our revenue in the first
half of 2020. For example, from February 3, 2020 to the end of February 2020,
the Company closed all of its operating offices in Zhejiang Province, including
manufactory, in response to the emergency measures imposed by local government.
The pandemic also significantly limited suppliers' ability to provide low-cost,
high-quality merchandise to the Company on a timely basis.



Since late March 2020, the Company's business operations have gradually
recovered from the negative impacts due to lockdown, and the Company's
backlogged orders were mostly processed during the rest of fiscal year 2020,
which contributed to an increase in its revenues for the year ended December 31,
2020.



In 2021, a few waves of COVID-19 infections emerged in various regions of China,
and in response, the Chinese government implemented certain anti-COVID measures
and protocols. However, these scattered outbreaks were brought under control in
a relatively short period of time, and the COVID-19 had limited impact on our
financial condition and results of operations in the fiscal year ended December
31, 2021. In the fiscal year ended December 31, 2021, we experienced rising raw
material costs, and we expect raw material costs to continue increasing in the
foreseeable future due to the COVID-19 pandemic.

The extent to which the COVID-19 pandemic may continue to affect our operations and financial performance in the future will depend on future developments, which are highly uncertain and cannot be predicted at this time.





Results of Operations

For the fiscal years ended December 31, 2021 and 2020





Overview



                                                             For the fiscal year ended
                                                                    December 31,
                                               2021             2020           $ Change       % Variance

Revenues                                     98,839,900       66,864,375       31,975,525           47.82
Cost of Goods Sold                           79,246,280       54,051,367       25,194,913           46.61
Gross Profit                                 19,593,620       12,813,008        6,780,612           52.92
Selling expenses                              1,868,156        1,588,302          279,854           17.62

General and administrative expenses           3,948,850        2,131,405        1,817,445           85.27
Research and development expenses             5,526,546        2,384,951        3,141,595          131.73
Total Operating Expenses                     11,343,552        6,104,658        5,238,894           85.82
Income from operations                        8,250,068        6,708,350        1,541,718           22.98
Interest income                                  68,295            2,645           65,650        2,482.04
Interest expenses, net                         (587,264 )       (930,634 )        343,370          (36.90 )
Loss on disposal of property and
equipment                                         1,785          (79,216 )         81,001         (102.25 )
Other income                                  1,378,597        1,002,642          375,955           37.50
Remeasurement gain from change in
functional currency                                   -        1,940,773       (1,940,773 )       (100.00 )
Income before income tax                      9,111,481        8,644,560   

      466,921            5.40
Income tax                                    1,843,260        2,272,997         (429,737 )        (18.91 )
Net income                                    7,268,221        6,371,563          896,658           14.07




                                       44

Components of Results of Operations





                                       For the Fiscal Year ended
                                              December 31,
Component of Results of Operations       2021              2020

Revenues                             $  98,839,900     $ 66,864,375
Cost of Goods Sold                      79,246,280       54,051,367
Gross Profit                            19,593,620       12,813,008
Operating Expenses                      11,343,552        6,104,658
Net Income                               7,268,221        6,371,563




Revenue



Greenland's revenue increased by approximately $31.98 million, or approximately
47.82%, to approximately $98.84 million for the fiscal year ended December 31,
2021, from approximately $66.86 million for the fiscal year ended December 31,
2020. The increase was primarily due to a significant increase in our sales
volume resulting from the continuously growing market demand and our ability to
boost supplies while some competitors faced challenges in handling material
shortage and were unable to deliver. On a RMB basis, our revenue for the fiscal
year ended December 31, 2021 increased by approximately 38.61% compared to the
fiscal year ended December 31, 2020.



Cost of Goods Sold



Greenland's cost of goods sold consists primarily of material costs, freight
charges, purchasing and receiving costs, inspection costs, warehousing costs,
internal transfer costs, wages, employee compensation, amortization,
depreciation and related costs, which are directly attributable to Greenland's
production activities. The write down of inventory using net realizable value
impairment test is also recorded in cost of goods sold. The total cost of goods
sold increased by approximately $25.20 million, or approximately 46.61%, to
approximately $79.25 million for the fiscal year ended December 31, 2021, from
approximately $54.05 million for the fiscal year ended December 31, 2020. Cost
of goods sold increased in fiscal year 2021 compared to fiscal year 2020 due to
an increase in our sales volume.



Gross Profit



Greenland's gross profit increased by approximately $6.78 million, or 52.92%, to
approximately $19.59 million for the fiscal year ended December 31, 2021, from
approximately $12.81 million for the fiscal year ended December 31, 2020. For
the fiscal years ended December 31, 2021 and 2020, Greenland's gross margin was
approximately 19.82% and 19.16%, respectively. The increase in gross margin in
fiscal year 2021 compared to fiscal year 2020 was primarily due to a shift in
Greenland's product mix towards higher value and more sophisticated products,
such as hydraulic transmission products.



Operating Expense



Greenland's operating expenses consist of selling expenses, general and
administrative expenses and research and development expenses. Greenland's
operating expenses were $11.3 million for the fiscal year ended December 31,
2021, representing an increase of 85.82% from $6.1 million for the fiscal year
ended December 31, 2020. The increase in operating expenses was primarily due to
the increase in transportation expenses, consultancy fees, and research and
development expenses in fiscal year 2021.



Selling Expense



Greenland's selling expenses mainly include operating expenses such as sales
staff payroll, traveling expenses and transportation expenses. Selling expenses
increased by $0.28 million, or 17.62%, to approximately $1.87 million for the
fiscal year ended December 31, 2021, from approximately $1.59 million for the
fiscal year ended December 31, 2020. The increase was mainly due to an increase
in the unit price of transportation expenses.

General and Administrative Expenses

Greenland's general and administrative expenses include management and office
staff salaries and employee benefits, depreciation for office facility and
office furniture and equipment, travel and entertainment, legal and accounting,
consulting fees and other office expenses. General and administrative expenses
increased by approximately $1.82 million, or approximately 85.27%, to
approximately $3.95 million for the fiscal year ended December 31, 2021, from
approximately $2.13 million for the fiscal year ended December 31, 2020. The
fundamental reasons for the rise in the general and administrative expenses were
the following: (i) increased legal fees and consultancy fees on the Company's
business planning and projects for the fiscal year ended December 31, 2021 as
the Company expanded its operations, compared to the fiscal year ended December
31, 2020; and (ii) an increase in after-sales service fees resulted from the
substantial increase in revenue.



                                       45

Research and Development Expenses


R&D expenses consist of R&D personnel compensation, costs of materials used in
R&D projects, and depreciation costs for research-related equipment. R&D
expenses increased by approximately $3.15 million, or 131.73%, to approximately
$5.53 million for the fiscal year ended December 31, 2021, from approximately
$2.38 million for the fiscal year ended December 31, 2020. Such increase was
primarily attributable to an increase in the Company's R&D investment in higher
value and more sophisticated products and electrification products.



Income from Operations



As a result of the foregoing, income from operations for the fiscal year ended
December 31, 2021 was approximately $8.25 million, representing an increase of
approximately $1.54 million, from approximately $6.71 million for the fiscal
year ended December 31, 2020.

Interest Income and Interest Expenses

Greenland's interest income was approximately $0.07 million for the fiscal year
ended December 31, 2021, representing an increase of approximately $0.07
million, or 2,482.04%, from approximately $0 million for the fiscal year ended
December 31, 2020. The increase in interest income was because more cash was
deposited in banks during the year ended December 31, 2021 as compared to the
fiscal year ended December 31, 2020.



Greenland's interest expenses were approximately $0.59 million for the fiscal
year ended December 31, 2021, a decrease of approximately $0.34 million, or
36.90%, as compared to approximately $0.93 million for the fiscal year ended
December 31, 2020. The decrease was primarily due to a reduction of our
short-term loans for the year ended December 31, 2021, as compared to the year
ended December 31, 2020.



Other Income



Greenland's other income was approximately $1.38 million for the fiscal year
ended December 31, 2021, an increase of approximately $0.38 million, or 37.50%,
as compared to approximately $1.00 million of other income for the fiscal year
ended December 31, 2020. The increase was primarily due to an increase in
ancillary products and services offered by Zhejiang Zhongchai for the year ended
December 31, 2021 as compared to the fiscal year ended December 31, 2020.

Remeasurement Gain from Change in Functional Currency





The Company incurred a one-time gain on remeasurement of foreign currency as the
result of the Company changing the functional currency of its subsidiary
Zhongchai Holding (Hong Kong) Limited from RMB to USD. The one-time gain, which
amounted to approximately $1.94 million, significantly impacted the net result
of operations for the Company during the year ended December 31, 2020.



Income Taxes



Greenland's income tax was approximately $1.84 million for the fiscal year ended
December 31, 2021, compared to approximately $2.27 million for the fiscal year
ended December 31, 2020.




Zhejiang Zhongchai obtained a "high-tech enterprise" status near the end of the
fiscal year of 2019. Such status allows Zhejiang Zhongchai to enjoy a reduced
statutory income tax rate of 15%, rather than the standard PRC corporate income
tax rate of 25%. The "high-tech enterprise" status is reevaluated by relevant
Chinese government agencies every three years. Zhejiang Zhongchai's current
"high-tech enterprise" will be reevaluated near the end of 2022.



                                       46





Greenland's other PRC subsidiaries are subject to different income tax rates.
Hengyu, the 62.5% owned subsidiary of Zhongchai Holding, is subject to the 25%
standard income tax rate. Hangzhou Greenland, the wholly owned subsidiary of
Zhongchai Holding, is subject to the 25% standard income tax rate.



Greenland is a holding company registered in the British Virgin Islands and is
not subject to tax on income or capital gains under the current British Virgin
Islands law. In addition, upon payment of dividends to its shareholders, the
Company will not be subject to any British Virgin Islands withholding tax.



On January 14, 2020, Greenland established Greenland Tech, its wholly owned
subsidiary in the state of Delaware. Greenland Tech promotes sales of
sustainable alternative products for the heavy industrial equipment industry,
including electric industrial vehicles, in the North American market. On
December 22, 2017, the U.S. federal government enacted the 2017 Tax Act. The
2017 Tax Act includes a number of changes in existing tax law impacting
businesses, including the transition tax, a one-time deemed repatriation of
cumulative undistributed foreign earnings and a permanent reduction in the U.S.
federal statutory rate from 35% to 21%, effective on January 1, 2018. ASC 740
requires companies to recognize the effect of tax law changes in the period of
enactment, and accordingly, the effects must be recognized on companies'
calendar year-end financial statements, even though the effective date for most
provisions is January 1, 2018. Since Greenland Tech was established in 2020, the
one-time transition tax did not have any impact on the Company's tax provision
and there was no undistributed accumulated earnings and profits as of December
31, 2021.



Net Income



As a result of the foregoing, Greenland's net income was approximately $7.27
million for the fiscal year ended December 31, 2021, representing an increase of
approximately $0.90 million, from the net income of approximately $6.37 million
for the fiscal year ended December 31, 2020.

Liquidity and Capital Resources

Greenland is a holding company incorporated in the British Virgin Islands.
Current PRC regulations permit our PRC subsidiaries to pay dividends to us only
out of their accumulated profits, if any, determined in accordance with PRC
accounting standards and regulations. In addition, our PRC subsidiaries are
required to set aside at least 10% of their respective accumulated profits each
year, if any, to fund certain reserve funds until the total amount set aside
reaches 50% of their respective registered capital. Our PRC subsidiaries may
also allocate a portion of their after-tax profits based on PRC accounting
standards to employee welfare and bonus funds at their discretion. These
reserves are not distributable as cash dividends.



We have funded working capital and other capital requirements primarily by
equity contributions, cash flow from operations, short-term bank loans and bank
acceptance notes, and long-term bank loans. Cash is required primarily to
purchase raw materials, repay debts and pay salaries, office expenses, income
taxes and other operating expenses.



For the fiscal year ended December 31, 2021, our PRC subsidiary, Zhejiang
Zhongchai, has paid off approximately $18.72 million in bank loan, approximately
$4.05 million in related parties loan, approximately $0.31 million in third
parties loan, and maintained $17.80 million cash on hand. We plan to maintain
the current debt structure and rely on governmentally supported loans with

lower
cost, if necessary.



The government 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. Government subsidies are
recognized when there is reasonable assurance that the subsidy will be received
and all conditions be completed. Total government subsidies recorded under
long-term liabilities were $2.21 million and $2.34 million as of December 31,
2021 and 2020, respectively.




The Company currently plans to fund its operations mainly through cash flow from
its operations, renewal of bank borrowings, additional equity financing, and
continuation of financial support from its shareholders and affiliates
controlled by its principal shareholders, if necessary. The Company might
implement a stricter policy on sales to less creditworthy customers and plans to
continue to improve its collection efforts on accounts with outstanding
balances. The Company is actively working with customers and suppliers and
expects to fully collect the remaining balance.



                                       47





We believe that the Company has sufficient cash, even with uncertainty in the
Company's manufacturing and sale of electric industrial vehicles in the future
and decline on sale of transmission products. However, our capital contribution
from existing funding sources, to operate for the next 12 months will be
sufficient. We remain confident and are expected to generate positive cash

flow
from our operations.



We may need additional cash resources in the future, if the Company experiences
failure in collecting account receivables, changes in business condition,
changes in financial condition, or other developments. We may also need
additional cash resources, if the Company wishes to pursue opportunities for
investment, acquisition, strategic cooperation, or other similar actions. If the
Company's management and its board of directors determine that the cash required
for specific corporate activities exceed Greenland's cash and cash equivalents
on hand, the Company may issue debt or equity securities to raise cash.



Historically, we have expended considerable resources on building a new factory
and paid off a considerable amount of debt, resulting in less available cash.
However, we anticipate that our cash flow will continue to improve for the
fiscal year 2022. In specific, Zhejiang Zhongchai has completed the construction
of a new factory, and our PRC subsidiaries have received COVID-19 related
government subsidies. Furthermore, Zhejiang Zhongchai pledged the deed of its
new factory as a collateral to banks in order to obtain additional loans,
refinance expiring loans, restructure short-term loans, and fund other working
capital needs upon acceptable terms to Greenland.



Cash and Cash Equivalents

Cash equivalents refers to all highly liquid investments purchased with original maturity of three months or less. As of December 31, 2021, Greenland had approximately $11.06 million of cash and cash equivalents, an increase of approximately $3.90 million, or 54.53%, as compared to approximately $7.16 million as of December 31, 2020. The increase of cash was mainly due to an increase in accounts payable and notes payable, as compared to that as of December 31, 2020.





Restricted Cash

Restricted cash represents the amount held by a bank as security for bank acceptance notes and therefore is not available for use until the bank acceptance notes are fulfilled or expired, which typically takes less than twelve months. As of December 31, 2021, Greenland had approximately $6.74 million of restricted cash, an increase of approximately $4.50 million, or 200.28%, as compared to approximately $2.24 million as of December 31, 2020. The increase of restricted cash was due to an increase in mortgaged assets.





Accounts Receivable



As of December 31, 2021, Greenland had approximately $15.92 million of accounts
receivables, an increase of approximately $3.51 million, or 28.26%, as compared
to approximately $12.41 million as of December 31, 2020. The increase in
accounts receivable was due to our slowed-down efforts in receivables
collections due to the COVID-19 pandemic and our increase in sales volume.



Greenland recorded approximately $0.86 million of provision for doubtful
accounts as of December 31, 2021. Greenland conducted an aging analysis of each
customer's delinquent payments to determine whether allowance for doubtful
accounts is adequate. In establishing the allowance for doubtful accounts,
Greenland considers historical experience, economic environment, and expected
collectability of past due receivables. An estimate of doubtful accounts is
recorded when collection of the full amount is no longer probable. When bad
debts are identified, such debts are written off against the allowance for
doubtful accounts. Greenland will continuously assess its potential losses based
on the credit history of and relationships with its customers on a regular basis
to determine whether its bad debt allowance on its accounts receivables is
adequate. Greenland believes that its collection policies are generally in line
with the transmissions industry's standard in the PRC.



                                       48





Due from Related Party
Due from related party was $39.68 million and $38.54 million as of December 31,
2021 and December 31, 2020, respectively. The current portion of due from
related party was $39.68 million as of December 31, 2021, the non-current
portion of due from related party was $0 million as of December 31, 2021. We
expect the amount due from our controlling shareholder, Cenntro Holding Limited,
to be paid back based on certain payment schedules, with the last payment to be
made by June 30, 2024, as the Company and Cenntro Holding Limited mutually
agreed to an extension of repayment deadline from April 27, 2022.



However, there is no guarantee that such amount will be repaid in whole or in
part before the end of June 2024, if at all. Such failure to pay back by Cenntro
Holding Limited could have a material negative impact on our balance sheet.




Notes Receivable



As of December 31, 2021, Greenland had approximately $37.55 million of notes
receivables, which will be collected by us within twelve months. The increase
was approximately $6.75 million, or 21.90%, as compared to approximately $30.80
million as of December 31, 2020.



Working Capital



Our working capital was approximately $53.84 million as of December 31, 2021, as
compared to $28.84 million as of December 31, 2020. The increase in working
capital of $25.01 million in the fiscal year 2021 as compared with the fiscal
year 2020 was primarily contributed to an increase in notes receivables and

inventories.



Cash Flow



                                                                  For the Fiscal Year Ended
                                                                         December 31,
                                                                   2021                2020

Net cash provided by operating activities                      $  (5,755,940 )     $  2,695,570
Net cash (used in) investing activities                        $    (638,980 )     $   (822,769 )
Net cash (used in) financing activities                        $

14,462,981 $ 2,307,164 Net increase (decrease) in cash and cash equivalents and restricted cash

$   8,068,063       $  4,179,965
Effect of exchange rate changes on cash and cash equivalents   $     329,778       $   (494,119 )
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 year $ 17,800,892 $ 9,403,053






Operating Activities



Greenland's net cash provided by operating activities was approximately $(5.76)
million and $2.70 million for the fiscal years ended December 31, 2021 and

2020,
respectively.




In the fiscal year ended December 31, 2021, the main sources of cash inflow from
operating activities were net income of $7.27 million, changes in accounts
payable of $6.46 million, and depreciation and amortization of $2.51 million.
The main causes of changes in cash outflow were changes in notes receivable of
approximately $5.95 million and changes in inventories of $9.97 million.



In the fiscal year ended December 31, 2020, the main sources of cash inflow from
operating activities were net income of $6.37 million, changes in accounts
payable of $5.94 million, and due to related parties of $4.77 million. The main
causes of changes in cash outflow were changes in notes receivable of $12.79
million and changes in inventories of $4.33 million.



Investing Activities




Investing activities resulted a cash outflow of approximately $0.64 million for
the fiscal year ended December 31, 2021. Cash used in investing activities for
the fiscal year ended December 31, 2021 was mainly due to $0.26 million in
proceeds from government subsidies for Zhejiang Zhongchai's construction
activities, offset by approximately $0.90 million used for purchases of
long-term assets.



                                       49






Investing activities resulted a cash outflow of approximately $0.82 million for
the fiscal year ended December 31, 2020. Cash used in investing activities for
the fiscal year ended December 31, 2020 was mainly due to $0.25 million in
proceeds from government grants for construction, offset by approximately $1.08
million used for purchases of long-term assets.



Financing Activities




Financing activities resulted a cash inflow of approximately $14.46 million for
the fiscal year ended December 31, 2021, which was mainly attributable to
approximately $8.67 million in proceeds from short-term bank loans,
approximately $5.39 million in investment proceeds from an entity with
non-controlling interests, and approximately $8.21 million in proceeds from
equity and debt financing. Such amounts were further offset by repayment of
loans due to third parties in the amount of approximately $4.05 million, and
repayment of short-term bank loans in the amount of approximately $18.72
million.



Net cash provided by financing activities resulted a cash inflow of
approximately $2.31 million for the fiscal year ended December 31, 2020, which
was mainly attributable to approximately $21.13 million in proceeds from
short-term bank loans and approximately $4.38 million in proceeds from third
parties. Such amounts were further offset by repayment of loans lent by third
parties for approximately $5.72 million, and repayment of short-term bank loans
for approximately $21.56 million.



Credit Risk




Credit risk is one of the most significant risks for Greenland's business.
Accounts receivable are typically unsecured and derived from revenues earned
from customers, thereby exposing Greenland to credit risk. Credit risk is
controlled by the application of credit approvals, limits, and monitoring
procedures. Greenland identifies credit risk collectively based on industry,
geography, and customer type. This information is monitored regularly by the
Company's management. In measuring the credit risk of sales to customers,
Greenland mainly reflects the "probability of default" by the customer on its
contractual obligations and considers the current financial position of the
customer and the exposures to the customer and its future development.



Liquidity Risk



Greenland is exposed to liquidity risk when it is unable to provide sufficient
capital resources and liquidity to meet its commitments and/or business needs.
Liquidity risk is managed by the application of financial position analysis to
test if Greenland is in danger of liquidity issues and also by application of
monitoring procedures to constantly monitor its conditions and movements. When
necessary, Greenland resorts to other financial institutions to obtain
additional short-term funding to meet the liquidity shortage.



Inflation Risk



Greenland is also exposed to inflation risk. Inflationary factors, such as
increases in raw material and overhead costs, could impair Greenland's operating
results. Although Greenland does not believe that inflation has had a material
impact on its financial position or results of operations to date, a high rate
of inflation in the future may have an adverse effect on its ability to maintain
current levels of gross margin and operating expenses as a percentage of sales
revenues if the selling prices of its products do not increase with such
increased costs.

Critical Accounting Policies and Estimates





We prepare our consolidated financial statements in accordance with U.S. GAAP.
In applying accounting principles, it is often required to use estimates. These
estimates consider the facts, circumstances and information available, and may
be based on subjective inputs, assumptions and information known and unknown to
us. Material changes in certain of the estimates that we use could potentially
affect, by a material amount, our consolidated financial position and results of
operations. Although results may vary, we believe our estimates are reasonable
and appropriate. See Note 2 to our consolidated financial statements included in
"Item 8. Financial Statements and Supplementary Data" for a summary of our
significant accounting policies. The following describes certain of our
significant accounting policies that involve more subjective and complex
judgments where the effect on our consolidated financial position and operating
performance could be material.



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Revenue Recognition




In accordance with ASC Topic 606, "Revenue from Contracts with Customers," the
Company recognizes revenues when goods or services are transferred to customers
in an amount that reflects the consideration which the Company expects to
receive in exchange for those goods or services. In determining when and how
revenues are recognized from contracts with customers, the Company performs the
following five-step analysis: (i) identification of contract with customer? (ii)
determination of performance obligations? (iii) measurement of the transaction
price? (iv) allocation of the transaction price to the performance obligations,
and (v) recognition of revenues when (or as) the Company satisfies each
performance obligation. The Company derives revenues from the processing,
distribution and sale of its products. The Company recognizes its revenues net
of VAT. The Company is subject to VAT which had been levied at the rate of 17%
on the invoiced value of sales until April 30, 2018, after which date the rate
was reduced to 16%. VAT rate was further reduced to 13% starting from April 1,
2019. Output VAT is borne by customers in addition to the invoiced value of
sales and input VAT is borne by the Company in addition to the invoiced value of
purchases to the extent not refunded for export sales.



Revenues are recognized at a point in time once the Company has determined that
the customer has obtained control over the product. Control is typically deemed
to have been transferred to the customer when the performance obligation is
fulfilled, usually at the time of customers' acceptance or consumption, at the
net sales price (transaction price) and each of the criteria under ASC 606 have
been met. Contract terms may require the Company to deliver the finished goods
to the customers' location or the customer may pick up the finished goods at the
Company's factory. International sales are recognized when shipment clears
customs and leaves the port.



The Company 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.



Business Combination




On October 24, 2019, we consummated our Business Combination with Zhongchai
Holding following a special meeting, where the shareholders of Greenland
considered and approved, among other matters, a proposal to adopt and entered
into the Share Exchange Agreement, dated as of July 12, 2019, among (i)
Greenland, (ii) Zhongchai Holding, (iii) the Sponsor in the capacity as the
Purchaser Representative, and (iv) Cenntro Holding Limited, the sole member

of
Zhongchai Holding.



Pursuant to the Share Exchange Agreement, Greenland acquired from the Seller all
of the issued and outstanding equity interests of Zhongchai Holding in exchange
for 7,500,000 newly issued ordinary shares, no par value of Greenland, to the
Seller. 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.

Pursuant to the Finder Agreement, 50,000 newly issued ordinary shares issued to Zhou Hanyi is the finder fee for the Business Combination.





Inventories




Inventories are stated at the lower of cost or net realizable value, which is
based on estimated selling prices less any further costs expected to be incurred
for completion and disposal. Cost of raw materials is calculated using the
weighted average method and is based on purchase cost. Work-in-progress and
finished goods costs are determined using the weighted average method and
comprise direct materials, direct labor and an appropriate proportion of
overhead.



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Income Taxes



The Company accounts for income taxes following the liability method pursuant to
FASB ASC 740 "Income Taxes". Under this method, deferred tax assets and
liabilities are determined based on the difference between the financial
reporting and tax bases of assets and liabilities using enacted tax rates that
will be in effect in the period in which the differences are expected to
reverse. The Company records a valuation allowance to offset deferred tax assets
if, based on the weight of available evidence, it is more-likely-than-not that
some portion, or all, of the deferred tax assets will not be realized. The
effect on deferred taxes of a change in tax rate is recognized in income in the
period that includes the enactment date.



The Company also follows FASB ASC 740, which addresses the determination of
whether tax benefits claimed or expected to be claimed on a tax return should be
recorded in the financial statements. The Company may recognize the tax benefit
from an uncertain tax position only if it is more likely than not that the tax
position will be sustained on examination by the taxing authorities, based on
the technical merits of the position. The tax benefits recognized in the
financial statements from such a position should be measured based on the
largest benefit that has a greater than fifty percent likelihood of being
realized upon ultimate settlement. ASC 740 also provides guidance on
recognition, classification, interest and penalties on income taxes, accounting
in interim periods and requires increased disclosures. As of December 31, 2021,
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.



Emerging Growth Company




Pursuant to the JOBS Act, an emerging growth company is provided the option to
adopt new or revised accounting standards that may be issued by FASB or the SEC
either (i) within the same periods as those otherwise applicable to non-emerging
growth companies or (ii) within the same time periods as private companies. We
intend to continue to take advantage of the exemption for complying with new or
revised accounting standards within the same time periods as private companies.
Accordingly, the information contained herein may be different than the
information you receive from other public companies. We also intend to continue
to take advantage of some of the reduced regulatory and reporting requirements
of emerging growth companies pursuant to the JOBS Act so long as we qualify as
an emerging growth company, including, but not limited to, not being required to
comply with the auditor attestation requirements of Section 404(b) of the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation, and exemptions from the requirements of holding non-binding
advisory votes on executive compensation and golden parachute payments.

Off Balance Sheet Arrangements

None.

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