Core Insights - Sunrise New Energy Co., Ltd. has received approval for a project focused on sodium-ion battery hard carbon anode materials, securing approximately $960,000 in funding from the Guizhou Provincial Department of Science and Technology [1][4] Company Overview - Sunrise is a leading innovator in battery materials, particularly in sodium-ion and lithium-ion battery technologies [1][5] - The company operates a manufacturing facility in Guizhou Province with a production capacity of 50,000 tons, utilizing renewable energy sources to minimize costs and environmental impact [5] Industry Context - Sodium-ion batteries are recognized for their cost-efficiency and performance in low temperatures, making them suitable for large-scale energy storage and electric vehicles, especially in colder regions [2] - The commercialization of sodium-ion batteries has faced challenges due to the lack of suitable anode materials, which Sunrise aims to address with its proprietary hard carbon anode technology [2][3] Technological Advancements - Sunrise's hard carbon anode technology boasts an initial Coulombic efficiency of ≥90% and a capacity retention rate of ≥85% after 1,000 cycles, which are significant improvements for sodium-ion battery development [3]

Unaudited Condensed Consolidated Financial Statements [Unaudited Condensed Consolidated Balance Sheets](index=1&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to **$141.6M**, liabilities to **$102.6M**, and equity to **$38.9M**, primarily from reclassifying non-controlling interests Condensed Consolidated Balance Sheet Summary (in USD) | Balance Sheet Item | June 30, 2024 | December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | **Total Current Assets** | $61,079,455 | $35,815,895 | +70.5% | | Cash and cash equivalents | $15,235,345 | $1,395,945 | +991.4% | | Inventories, net | $25,273,067 | $15,843,546 | +59.5% | | **Total Assets** | **$141,563,806** | **$120,504,530** | **+17.5%** | | **Total Current Liabilities** | $70,584,403 | $63,488,418 | +11.2% | | Accounts payable | $44,342,437 | $33,872,581 | +30.9% | | Long-term loan, non-current | $27,007,382 | $3,507,092 | +669.8% | | **Total Liabilities** | **$102,613,979** | **$75,172,766** | **+36.5%** | | Redeemable non-controlling interest | - | $34,543,186 | -100.0% | | **Total Equity** | **$38,949,827** | **$10,788,578** | **+261.0%** | [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Revenues rose **7.6%** to **$22.3M**, **gross profit** plunged **97.2%** to **$17K**, resulting in a **$6.0M net loss** Statement of Operations Summary (in USD) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenues | $22,283,171 | $20,708,491 | +7.6% | | Total Cost of Revenues | $22,265,782 | $20,089,164 | +10.8% | | **Gross Profit** | **$17,389** | **$619,327** | **-97.2%** | | Total Operating Expenses | $5,422,092 | $6,047,385 | -10.3% | | Loss from Operations | ($5,404,703) | ($5,428,058) | -0.4% | | **Net Loss** | **($6,040,235)** | **($5,827,309)** | +3.7% | | Net Loss Attributable to Shareholders | ($4,451,462) | ($4,709,149) | -5.5% | | **Loss Per Share (Basic & Diluted)** | **($0.21)** | **($0.21)** | **0.0%** | [Unaudited Condensed Consolidated Statements of Changes in Equity](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity increased to **$38.9M**, primarily from reclassifying **$35.5M** redeemable non-controlling interests to permanent equity - The primary driver for the increase in **total equity** was the extinguishment of **redeemable non-controlling interests**, which added **$35.5 million** to non-controlling interests[7](index=7&type=chunk) - The company's **accumulated deficit** worsened, increasing from **($30.5 million)** to **($34.9 million)** due to the **net loss** of **$4.45 million** attributable to ordinary shareholders during the period[7](index=7&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash and equivalents increased by **$13.0M**, fueled by **$18.1M** from financing despite **$6.9M** used in operations Cash Flow Summary (in USD) | Cash Flow Activity | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($6,949,921) | ($4,287,079) | | Net cash provided by (used in) investing activities | $2,045,759 | ($3,976,396) | | Net cash provided by financing activities | $18,067,381 | $10,957,860) | | **Net increase in cash and cash equivalents** | **$12,997,173** | **$2,411,448** | - The company raised **$27.8 million** from new **long-term loans**, which was the main source of financing cash flow[11](index=11&type=chunk) - A significant use of cash in operations was a **$12.7 million** increase in **inventories**[11](index=11&type=chunk) Notes to the Unaudited Condensed Consolidated Financial Statements [Note 1 – Organization and Business Description](index=6&type=section&id=NOTE%201%20%E2%80%93%20ORGANIZATION%20AND%20BUSINESS%20DESCRIPTION) EPOW, a Cayman Islands holding company, manufactures lithium battery materials in PRC and operates a VIE for knowledge sharing - The company's **primary business** is manufacturing lithium battery materials for clients in the PRC through its subsidiary, Sunrise Guizhou[19](index=19&type=chunk) - The company utilizes a **VIE structure** for its peer-to-peer knowledge sharing and enterprise services business, where it controls the entity (SDH) through contractual arrangements rather than equity ownership[20](index=20&type=chunk)[21](index=21&type=chunk) - The company acknowledges risks related to the **VIE structure**, as PRC government actions could negatively affect its ability to control the VIE and consolidate its financial results[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=12&type=section&id=NOTE%202%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Financial statements follow U.S. GAAP, recognizing graphite anode revenue upon delivery, with significant customer concentration - **Revenue** from the **primary business**, sales of graphite anode materials, is recognized at a point in time when the customer accepts the goods, generally at delivery[94](index=94&type=chunk) - The company has two operating segments: **graphite anode business** and **peer-to-peer knowledge sharing and enterprise business**[258](index=258&type=chunk) - There is significant **customer concentration risk**, with one client accounting for **59%** of **total revenues** for the six months ended June 30, 2024[128](index=128&type=chunk) [Note 3 – Going Concern](index=24&type=section&id=NOTE%203%20%E2%80%93%20GOING%20CONCERN) Recurring **net losses**, negative **operating cash flow**, and a **working capital deficit** raise substantial doubt, though a loan waiver was obtained - Adverse conditions including a **net loss** of **$6.0 million**, **net cash used in operations** of **$6.9 million**, and a **working capital deficit** of **$9.5 million** raise substantial doubt about the company's ability to continue as a going concern[138](index=138&type=chunk) - The company was in **default** of **financial covenants** on a **long-term loan** agreement with China Construction Bank (CCB) as of June 30, 2024, specifically for failing to maintain profitability and exceeding the asset-liability ratio limit[139](index=139&type=chunk)[193](index=193&type=chunk) - A written **waiver** for the **loan default** was obtained from CCB on September 30, 2024, preventing accelerated repayment[139](index=139&type=chunk) [Notes 16 & 17 – Debt and Financing](index=33&type=section&id=NOTE%2016%20%26%2017%20%E2%80%93%20DEBT%20AND%20FINANCING) Total loans reached **$32.3M**, largely from new CCB **long-term loans**, with a covenant default later waived - The company entered into several **sale-and-leaseback contracts** which are accounted for as debt financing arrangements, with a **total outstanding balance** of **$5.0 million** as of June 30, 2024[184](index=184&type=chunk) - In H1 2024, the company obtained two new **long-term loans** from China Construction Bank totaling RMB **200 million** (approx. **$27.3 million**), significantly increasing its **long-term debt**[187](index=187&type=chunk)[191](index=191&type=chunk) - The company was not in compliance with **financial covenants** for the CCB loan, including profitability and asset-liability ratio requirements, as of June 30, 2024[193](index=193&type=chunk) [Note 19 – Related Party Transactions](index=38&type=section&id=NOTE%2019%20%E2%80%93%20RELATED%20PARTY%20BALANCE%20AND%20TRANSACTIONS) Extensive related party transactions exist, with CEO Mr. Haiping Hu providing **personal guarantees** for substantial company debt - As of June 30, 2024, the company had **$5.8 million** due to related parties, with the largest balance of **$4.0 million** owed to Zhuhai Investment, a company controlled by CEO Mr. Haiping Hu[213](index=213&type=chunk) - CEO Mr. Haiping Hu and his spouse provide **personal guarantees** for numerous financing arrangements, including credit facilities with Everbright Bank, Post Bank, CCB, and various **sales-and-leaseback financing contracts**[218](index=218&type=chunk)[219](index=219&type=chunk)[224](index=224&type=chunk) [Note 20 – Redeemable Non-Controlling Interests](index=41&type=section&id=NOTE%2020%20%E2%80%93%20REDEEMABLE%20NON-CONTROLLING%20INTERESTS) An amendment reclassified **$35.5M** of **redeemable non-controlling interests** to **permanent equity**, boosting **total equity** - The **redeemable non-controlling interest** was related to a RMB **200 million** investment by New Kinetic Partnership in the subsidiary Sunrise Guizhou, which was redeemable upon certain events like failure to IPO[226](index=226&type=chunk)[227](index=227&type=chunk) - On June 18, 2024, the terms were amended to remove key redemption rights, leading to the **reclassification** of the equity interest from mezzanine to **permanent equity**[230](index=230&type=chunk) Movement of Redeemable Non-Controlling Interests (in USD) | Description | Six Months Ended June 30, 2024 | | :--- | :--- | | Balance at beginning of period | $34,543,186 | | Accretion to redemption value | $1,792,027 | | **Reclassification to permanent equity** | **($35,527,114)** | | Foreign exchange effect | ($808,099) | | **Balance at end of period** | **$0** | [Note 21 – Shareholders' Equity](index=42&type=section&id=NOTE%2021%20%E2%80%93%20SHAREHOLDERS%27%20EQUITY) Shares re-designated into Class A/B; a 1-for-10 reverse stock split approved; **$607K** share-based compensation recorded - In February 2024, the company re-designated its authorized share capital into **3.5 billion** Class A ordinary shares and **1.5 billion** Class B ordinary shares. Class B shares carry **20 votes** each, while Class A shares carry **1 vote** each[236](index=236&type=chunk)[238](index=238&type=chunk) - Shareholders approved a **1-for-10** share consolidation (reverse stock split) in September 2024, but it is not yet effective as of the report date[240](index=240&type=chunk) - **Share-based compensation expense** was **$607,742** for the six months ended June 30, 2024, down from **$1,348,581** in the prior year period[245](index=245&type=chunk) [Note 24 – Segment Reporting](index=46&type=section&id=NOTE%2024%20%E2%80%93%20SEGMENT%20REPORTING) The **graphite anode business** generated **$21.6M** revenue but incurred a **gross loss**, while **knowledge sharing** was profitable Segment Performance (in USD) | Segment | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | | **Graphite anode business** | Revenues | $21,561,285 | $20,467,706 | | | **Gross Profit (Loss)** | **($423,467)** | **$595,768** | | **Peer-to-peer knowledge sharing** | Revenues | $721,886 | $240,785 | | | **Gross Profit** | **$440,856** | **$23,559** | - The company's core **graphite anode business** became unprofitable at the **gross margin level** in the first half of 2024, indicating severe pressure on pricing or costs[260](index=260&type=chunk) [Note 26 – Condensed Financial Information of the Parent Company](index=47&type=section&id=NOTE%2026%20%E2%80%93%20CONDENSED%20FINANCIAL%20INFORMATION%20OF%20THE%20PARENT%20COMPANY) The parent company, a holding entity, holds **investments in subsidiaries and VIE**, reporting a **$4.5M net loss** Parent Company Condensed Balance Sheet (in USD) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $2,463,486 | $3,030,688 | | Investment in subsidiaries and VIE | $3,440,152 | $6,710,750 | | **Total Assets** | **$5,903,638** | **$9,741,438** | | Total Liabilities | $37,743 | $31,824 | | **Total Equity** | **$5,865,895** | **$9,709,614** | - The parent company's **net loss** of **$4.45 million** for H1 2024 includes **$3.27 million** from its **equity in the losses** of its subsidiaries and VIE[273](index=273&type=chunk)

Core Viewpoint - Sunrise New Energy Co., Ltd. has reported significant sales growth in the electric vehicle and energy storage sectors, with a 449.8% increase in sales volume in October 2024 compared to October 2023, and a cumulative sales increase of 131.1% from January to October 2024 [1][2]. Sales Performance - In October 2024, the company achieved a sales volume of 3,419 tons, reflecting a remarkable growth rate [1]. - Cumulative sales from January to October 2024 reached 22,476 tons, indicating a substantial increase compared to the same period in 2023 [1]. Partnerships and Market Position - The surge in orders is attributed to partnerships with leading battery manufacturers, including CATL, HiTHIUM Energy Storage, and Pylon Technologies, which are key players in the EV and energy storage markets [2]. - CATL holds approximately 40% of the global market share in the EV and energy storage battery sector [2]. Company Overview - Sunrise New Energy is headquartered in Zibo, Shandong Province, China, and specializes in manufacturing graphite anode material for lithium-ion batteries [4]. - The company has a manufacturing facility with a production capacity of 50,000 tons located in Guizhou Province, utilizing renewable energy sources to minimize environmental impact [4]. - The management team consists of industry experts with extensive experience in the graphite anode sector [4].

Company Overview - Sunrise New Energy Co., Ltd. is headquartered in Zibo, Shandong Province, China, and is engaged in the manufacturing and sale of graphite anode material for lithium-ion batteries [3] - The company operates a joint venture that has completed a manufacturing facility in Guizhou Province with a production capacity of 50,000 tons, utilizing inexpensive renewable energy [3] - The management team consists of experts with extensive experience in the graphite anode industry, and the company also runs a knowledge-sharing platform in China [3] Project Announcement - Sunrise announced that its project on "Key Technologies and Engineering for New Silicon-Carbon Anode Materials in Lithium-Ion Batteries" received approval from the Guizhou Provincial Department of Science and Technology [1] - The project was awarded a special technology fund of USD 1.04 million after multiple evaluations [1] - The project features advanced technology with a specific capacity of ≥1900mAh/g, a first coulomb efficiency of ≥91%, and a cycle life of 1000 cycles with a capacity retention rate of ≥80%, positioning it at the forefront of global battery technology [1] CEO Statement - The CEO of Sunrise, Mr. Haiping Hu, emphasized that this project is unique in Guizhou Province, being the only one led by an anode materials company to receive such funding [2] - He highlighted the company's commitment to research and production of cutting-edge anode materials for lithium batteries, aiming to create value and deliver strong returns to shareholders [2] - The achievement reflects the company's dedication and expertise in advancing battery technology [2]

Company Overview - Sunrise New Energy Co., Ltd. is a leading manufacturer of lithium-ion battery anode materials, holding over 70 patents globally [1][2] - The company offers a diverse range of anode materials, including synthetic graphite, natural graphite, composite graphite, soft carbon, hard carbon, and silicon-carbon, utilized in electronics, electric vehicles, and energy storage [1][2] - Sunrise has established strong R&D partnerships with multiple industry-leading enterprises across the value chain [1] Recent Performance - In the first half of 2024, Sunrise sold 10,400 tons of products, marking a 132% increase compared to the same period last year [2] - The company's production capacity is designed to meet the growing demand for high-end anode materials from its contracted leading enterprises [2] Technological and Environmental Commitment - The manufacturing facility in Guizhou Province has a production capacity of 50,000 tons and operates on inexpensive electricity from renewable sources, positioning Sunrise as a low-cost and environmentally friendly producer [3] - The company emphasizes technological innovation and industrialization, contributing positively to the economy of Guizhou Province [2]

Company Overview - Sunrise New Energy Co., Ltd. is headquartered in Zibo, Shandong Province, China, and is engaged in the manufacturing and sale of graphite anode material for lithium-ion batteries [3] - The company operates a joint venture that has completed a manufacturing facility in Guizhou Province with a production capacity of 50,000 tons, utilizing inexpensive electricity from renewable sources [3] - The management team consists of experts with extensive experience and a strong track record in the graphite anode industry [3] Financial Developments - Sunrise New Energy has secured an additional $13.75 million low-interest loan from China Construction Bank, bringing the total loans received from CCB in 2024 to $27.51 million [1] - The new funds will enhance the company's liquidity, allowing for quicker delivery of orders from major global lithium battery manufacturers such as CATL, BYD, and HiTHIUM [1] - The CEO of Sunrise New Energy, Mr. Haiping Hu, emphasized that this bank loan underscores the company's strong reputation and provides significant low-interest capital without diluting shareholder equity, enabling the company to take on more orders and increase revenue and profitability [2]

Core Viewpoint - Sunrise New Energy Co., Ltd. has developed two innovative silicon-carbon anode products aimed at meeting the increasing demands of electric vehicles and high-end 3C digital products, featuring high energy density and discharge rates [1][2]. Product Development - The new silicon-carbon anode products address the high expansion issues of silicon-based materials during charge and discharge cycles, improving upon previous generations of silicon anodes that suffered from low capacity and efficiency [2]. - The products have capacities of 1660mAh/g and 1800mAh/g, with initial efficiencies of 90% and over 91% respectively, and a cycle life exceeding 1500 cycles [1][3]. Market Application - These silicon-carbon anode materials are already being utilized in high-end 3C digital products and are in development for power batteries, with potential applications in solid-state batteries that could achieve a single-charge range exceeding 1000 kilometers [3][5]. Production Capacity - Sunrise New Energy is establishing a 500-ton production line for high-performance, high-purity resin-based porous carbon materials, expected to be operational by the end of the year [3]. - The company has developed automated equipment for continuous production, aimed at reducing equipment investment and energy consumption compared to competitors [3]. Technological Innovation - The production process involves introducing a high concentration of silane gas into a reactor with three-dimensional porous carbon materials, which helps suppress the expansion of nano-silicon during charge-discharge cycles [4]. - A dual-coating process creates a protective film on the silicon-carbon anode particles, enhancing initial efficiency and cycle life [4]. Industry Position - The demand for silicon-carbon anode materials is expected to rise with the growth of solid-state batteries in energy storage, consumer, and automotive sectors, positioning Sunrise New Energy as a leader in next-generation lithium battery anode materials [5].

ZIBO, China, July 15, 2024 (GLOBE NEWSWIRE) -- Sunrise New Energy Co., Ltd. ("Sunrise New Energy", the "Company", "we" or "our") (NASDAQ:EPOW), today announced the development of two innovative silicon-carbon anode products designed to meet the rapidly growing demands of electric vehicles and high-end 3C digital products. These products feature high energy density and high discharge rates. One product has a capacity of 1660mAh/g with an initial efficiency of 90%, while the other offers a capacity of 1800mAh ...

ZIBO, China, July 11, 2024 (GLOBE NEWSWIRE) -- Sunrise New Energy Co., Ltd. ("Sunrise New Energy", the "Company", "we" or "our") (NASDAQ:EPOW), today announced the successful development of a new generation of anode material for solid-state batteries. This innovative porous silicon-carbon material promises a long driving range of over 1000 kilometers for the electric vehicle and high capacity. The new anode material boasts an impressive first charging capacity of nearly 1800mAh/g and a first coulomb efficie ...

Core Insights - Sunrise New Energy Co., Ltd. has developed a new generation of porous silicon-carbon anode material for solid-state batteries, which enables electric vehicles to achieve a driving range of over 1000 kilometers [1][2] - The new anode material features a first charging capacity of nearly 1800mAh/g and a first coulomb efficiency of approximately 91%, along with a cycle life of around 1500 to 2000 cycles [1][2] Company Overview - Sunrise New Energy is headquartered in Zibo, Shandong Province, China, and is involved in the manufacturing and sale of graphite anode material for lithium-ion batteries [3] - The company has a joint venture that operates a manufacturing facility in Guizhou Province with a production capacity of 50,000 tons, utilizing inexpensive renewable electricity to minimize costs and environmental impact [3] - The management team includes industry experts with extensive experience in the graphite anode sector, and the company also runs a knowledge-sharing platform in China [3]