~~UNITED~~ STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, ~~2022~~ 2023

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File No. 001-34864

GREEN GIANT INC.

(Exact Name of Registrant as Specified in its Charter)

Florida		33-0961490
(State or Other Jurisdiction of Incorporation)		(I.R.S. Employer Identification Number)

6 Xinghan Road, 19th Floor, Hanzhong City

Shaanxi Province, PRC 723000

(Address of principal executive offices) (zip code)

Registrant’s phone number, including area code

+(86)091-62622612

~~Neng Chen~~Yuhuai Luo

Chief Executive Officer

6 Xinghan Road, 19th Floor, Hanzhong City

Shaanxi Province, PRC 723000

(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act:

Title of each class registered:		Trading Symbol		Name of each exchange on which registered:
Common Stock, par value $0.001		GGE		Nasdaq Capital Market

Securities registered under Section 12(g) of the Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "“emerging growth company"” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging Growth Company	☐

If and emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based upon the closing price of the registrant’s common stock on March 31, ~~2022~~ 2023, the last business day of the Company’s second fiscal quarter, as reported by the Nasdaq Capital Market on that date, was $~~110~~ 158 million. This calculation does not reflect a determination that certain persons are affiliates of the registrant for any other purpose.

As of ~~January~~December 1327, 2023, ~~the~~there ~~number~~were of113,534,447 shares ~~outstanding~~ of ~~the~~Common ~~registrant’s~~Stock, ~~common~~par ~~stock~~value ~~was~~$0.001 55per share,~~753,268~~ outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

GREEN GIANT INC.

FORM 10-K

For the Fiscal Year Ended September 30, ~~2022~~2023

INDEX

		Page
	PART I
Item 1.	Business	1
Item 1A.	Risk Factors	1820
Item 1B.	Unresolved Staff Comments	4247
Item 2.	Properties	4247
Item 3.	Legal Proceedings	4348
Item 4.	Mine Safety Disclosure	4348
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	4449
Item 6.	[Reserved]	4550
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4650
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	5663
Item 8.	Financial Statements and Supplementary Data	F-1
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	5764
Item 9A.	Controls and Procedures	5764
Item 9B.	Other Information	5865
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	5865
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	5966
Item 11.	Executive Compensation	6269
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	6471
Item 13.	Certain Relationships and Related Transactions, and Director Independence	6673
Item 14.	Principal Accountant Fees and Services	6673
	PART IV
Item 15.	Exhibits and Financial Statement Schedules	6774
Item 16.	Form 10-K Summary	6975
SIGNATURES		7076

FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K (the “Report”) and other reports (collectively the “Filings”) filed by the registrant from time to time with the Securities and Exchange Commission (the “SEC”) contain or may contain forward looking statements and information that are based upon beliefs of, and information currently available to, the registrant’s management as well as estimates and assumptions made by the registrant’s management. When used in the filings the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan” or the negative of these terms and similar expressions as they relate to the registrant or the registrant’s management identify forward looking statements. Such statements reflect the current view of the registrant with respect to future events and are subject to risks, uncertainties, assumptions and other factors (including the risks contained in the section of this Report entitled “Risk Factors”) relating to the registrant’s industry, the registrant’s operations and results of operations and any businesses that may be acquired by the registrant. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.

Although the registrant believes that the expectations reflected in the forward looking statements are reasonable, the registrant cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, the registrant does not intend to update any of the forward-looking statements to conform these statements to actual results. The following discussion should be read in conjunction with the registrant’s financial statements and the related notes thereto included in this Report.

In this Report, “we,” “our,” “us,” “Green Giant Inc. or the “Company” sometimes refers collectively to Green Giant Inc. and its subsidiaries and affiliated companies.

PART I

ITEM 1. BUSINESS

Our Organization

Green Giant Inc. (formerly China HGS Real Estate Inc., the “Company” or “GGE,” “we”, “our”, “us”), is a corporation organized under the laws of the State of Florida.

China HGS Investment Inc. is a Delaware corporation and owns 100% of the equity interest in Shaanxi HGS Management and Consulting Co., Ltd. (“Shaanxi HGS”), a wholly owned foreign entity incorporated under the laws of the People’s Republic of China (“PRC” or “China”).

GGE does not conduct any substantive operations of its own. Instead, through its subsidiary, Shaanxi HGS, it entered into certain exclusive contractual agreements with Shaanxi Guangsha Investment and Development Group Co., Ltd. (“Guangsha”). Pursuant to these agreements, Shaanxi HGS is obligated to absorb a majority of the risk of loss from Guangsha’s activities and entitles Shaanxi HGS to receive a majority of Guangsha’s expected residual returns. In addition, Guangsha’s shareholders have pledged their equity interest in Guangsha to Shaanxi HGS, irrevocably granted Shaanxi HGS an exclusive option to purchase, to the extent permitted under PRC Law, all or part of the equity interests in Guangsha and agreed to entrust all the rights to exercise their voting power to the person(s) appointed by Shaanxi HGS.

Our Company engages in real estate development, primarily in the construction and sale of residential apartments, car parks and commercial properties.

Guangsha was organized in August 1995 as a limited liability company under the laws of the PRC. Guangsha is headquartered in the city of Hanzhong, Shaanxi Province. Guangsha is engaged in developing large scale and high quality commercial and residential projects, including multi-layer apartment buildings, sub-high-rise apartment buildings, high-rise apartment buildings, and office buildings.

On November 29, 2021, Green Giant Ltd. was incorporated in Delaware.

Green Giant Energy Texas Inc. was incorporated in Texas on October 3, 2022 which is a wholly owned subsidiary of Green Giant Ltd.

Green Giant International Limited (Hong Kong) was incorporated in Hong Kong on December 9, 2021 as a wholly owned subsidiary of Green Giant Ltd.

Our corporate structure as of September 30, ~~2022~~ 2023 is set forth below:

Business Overview

~~Our~~The Company ~~engages~~currently operates in ~~real~~two ~~estate development~~segments, ~~primarily~~ in the ~~construction~~real ~~and~~estate ~~sale~~development ofbusiness ~~residential apartments, car parks~~ and ~~commercial~~green ~~properties~~energy business. WeThe ~~conduct~~Company ~~all~~engages ~~of our business~~ in ~~mainland~~real ~~China.~~estate ~~Shaanxi~~development through ~~Guangsha~~the ~~Investment and Development Group Co.~~VIE, ~~Ltd.~~Guangsha, orin ~~Guangsha~~mainland China, ~~was~~and ~~founded~~is bytransitioning ~~Mr.~~itself ~~Xiaojun~~from ~~Zhu,~~its ~~and~~real ~~commenced operations~~estate indevelopment ~~1995~~business into ~~Hanzhong,~~ a ~~prefecture-level~~new ~~city~~energy ~~in Shaanxi Province~~corporation.

Currently, we are operating in Hanzhong, a prefecture-level city in Shaanxi Province, and Yang County, a county in Hanzhong. Our management has been focused on expanding our business in Tier 3 and Tier 4 cities and counties in China that we strategically select based on population and urbanization growth rates, general economic conditions and growth rates, income and purchasing power of resident consumers, anticipated demand for private residential properties, availability of future land supply and land prices, and governmental urban planning and development policies. Initially, these Tier 3 and Tier 4 cities and counties will be located in the Shaanxi province, China. We utilize a standardized and scalable model that emphasizes rapid asset turnover, efficient capital management and strict cost control. We plan to expand into strategically selected Tier 3 and Tier 4 cities and counties with real estate development potential in Shaanxi Province, and expect to benefit from rising demand for residential housing as a result of increasing income levels of consumers and growing populations in these cities and counties due to urbanization.

In September 2020, the Company started land leveling and construction process for the Oriental Garden Phase II and Liangzhou Mansion real estate properties in the Liangzhou Road related projects. The Company started the construction of the Liangzhou Road related projects, which consist of residential buildings, office buildings and a commercial plaza, after the approval by the local government of the road. Upon completion, the Liangzhou Road related projects will become a new city center of Hanzhong city.

~~The~~Since November 2022, the Company isstarted ~~transforming~~to ~~itself~~explore ~~from~~the ~~legacy business~~possibility toof aentering ~~new~~into the green energy ~~corporation~~sector in the U.S. As the usage of electric vehicles and ~~has~~other ~~appointed~~battery-powered technologies surges, the demand for batteries correspondingly rises. This growth cycle presents both a ~~CEO~~challenge and inan ~~USA~~opportunity ~~subsidiary~~when these batteries reach their end-of-life stage. Our solution to this challenge lies in our innovative battery recycling process. We have been searching for a warehouse for our battery recycling production. During the recycling process, valuable metal such as lithium, nickel, and cobalt are extracted from the used batteries. These metals are then converted into lead ingots and ~~operate~~blocks. The global market for these metals is dynamic, with prices fluctuating in response to the ~~new~~constantly ~~business~~changing ~~venture~~supply and demand. We have started the trading of metal, the end-product of battery recycling, in April 2023, to leverage the fluctuation in their prices. The Company recorded $0.79 million revenue from the green energy segment for the fiscal year ended September 30, 2023.

~~Real~~Furthermore, the ~~Estate~~Company ~~Industry~~is ~~Overview~~planning to enter the medical industry through selling medical devices like vitro short-wave radiometer, high-pressure syringe and related consumables. In the future, it also plans to sell high-end medical equipment including gamma knife and apparatus for kidney.

~~During~~Green ~~the~~Energy ~~volatile real estate market, the Company has been capitalizing on its inherent strengths~~ and ~~market~~Battery ~~opportunities~~Recycling ~~in Tier 3 and Tier 4 cities and counties to deliver value for~~Industry our shareholders. We feel confident and also competent to take on every challenge and grasp every opportunity during market consolidation. We expect to provide rapid response to the market on the basis of our projected business plans together with a flexible approach in seizing market opportunities; strict investment standards and prudent attitude towards investment opportunities, and appropriate replenishment of quality land resources in existing regions to realize value within the Tier 3 and Tier 4 cities and counties in Western China.Overview

~~Company~~Since ~~Positioning~~November ~~The~~2022, the Company ishas ~~headquartered~~been inexploring business ~~Hanzhong~~opportunities in the ~~southwestern~~green ~~part~~energy ofsector in the ~~Shaanxi~~U.S. ~~province,~~and inhas ~~the~~entered ~~center~~into ofthis ~~the~~industry ~~Hanzhong~~with ~~Basin,~~a focus on the ~~Han~~battery ~~River,~~recycling business. ~~near~~The ~~the~~global ~~Sichuan~~green ~~border.~~energy ~~According~~and tobattery recycling industry is experiencing significant growth because of the ~~China~~global ~~City~~shift ~~Statistical~~towards sustainable ~~Yearbook,~~energy ~~Hanzhong~~and ~~had~~the aincreasing ~~population~~demand offor ~~about~~electric ~~3.8~~vehicles ~~million~~(EVs).

~~Hanzhong~~Green isEnergy a key transportation hub connecting China’s Middle Economic zone and Western Economic Zone. The travel time from Xi’an, the provincial capital of Shaanxi province, to Hanzhong takes less than 2 hours. The airport in Hanzhong was completed and put into service in 2014. The airport handled approximately 650,000 passengers and 2,200 tons of cargo on annual basis. Xicheng, a high-speed railway between Chengdu, the provincial capital of Sichuan province, and Xi’an with a major stop in Hanzhong was completed in 2017. It takes 1.5 hours from Hanzhong to Xi’an and 2.5 hours from Hanzhong to Chengdu. The railway passenger’s volume was around 6 million in 2020.Industry

2Renewable Energy Sources: This sector includes solar, wind, hydroelectric, and geothermal power. The declining cost of technology, especially in solar and wind, has accelerated adoption.

InEnergy ~~accordance~~Storage ~~with~~Solutions: ~~Hanzhong~~With ~~Government’s~~the variability ~~2020~~of ~~annual~~renewable ~~report~~sources, ~~Hanzhong’s~~energy ~~GDP~~storage ~~reached~~systems, ~~RMB~~like ~~159.3~~lithium-ion ~~billion (approximately $24.0 billion) by 2020 calendar year~~batteries, ~~representing~~play a ~~2.9%~~ ~~increase~~crucial ~~from~~role ~~2019~~in ~~calendar~~ensuring ~~year. Residents’ annual disposable income for 2020 calendar year was RMB34,417 (equivalent to $5,331), representing~~ a ~~4.8%~~steady ~~increase~~energy ~~as compared to 2019 calendar year~~supply.

~~Many~~Government ~~Tier~~Policies 3 and ~~Tier 4 cities and counties in~~ ~~China~~Incentives: ~~provide~~Many agovernments ~~major~~worldwide source of migration workers (the “Migration Workers”)for the Tier 1 and Tier 2 cities in China. Income from migration workers is becoming a significant factor in supporting the hometown economy. Migration workers are ~~not~~promoting ~~permanent~~green ~~residents in~~energy ~~the~~through ~~the~~subsidies, ~~Tier~~tax 1incentives, and ~~Tier~~regulations ~~2 cities and travel back~~ to ~~their~~reduce ~~home towns during the national holidays. Based on Hanzhong Government’s~~carbon ~~2020 annual report, the number of Hanzhong’s migration workers reached approximately 893,000 as of December 31, 2020 (2019 – 865,000)~~emissions.

OnTechnological ~~November~~Innovations: ~~11,~~Continuous ~~2022 the People’s Bank of China and the China~~advancements ~~Banking~~in ~~and~~technology ~~Insurance~~are ~~Regulatory~~making ~~Commission~~renewable ~~issued~~energy ~~“Yin~~more Faefficient ~~[2022] No. 254 “Notice on Supporting the Stable~~ and ~~Healthy Development of the Real Estate Market” to support the stable and healthy development of the real estate market~~cost-effective. ~~The details are as follows:~~

~~A. Keeping real estate financing stable and order~~2

~~1).~~Battery ~~Stabilize the issuance of real estate development~~Recycling ~~loans.~~　　Industry

~~Adhere~~Growing toDemand ~~the~~for ~~“two~~Battery ~~unswerving”,~~Recycling: ~~and~~The ~~treat~~surge ~~all~~in ~~types~~EVs ofand ~~real~~portable ~~estate~~electronics ~~enterprises~~has ~~such~~led asto ~~state-owned~~a ~~and~~higher ~~private~~need ~~enterprises~~for ~~equally.~~battery ~~Encourage~~recycling ~~financial institutions~~ to ~~focus on~~manage ~~supporting~~waste ~~the~~and ~~steady~~recover ~~development~~valuable ofmaterials ~~real~~like lithium, ~~estate enterprises with sound governance~~cobalt, ~~focus on their main business~~ and ~~good qualifications~~nickel.　　

~~Financial~~Technological ~~institutions~~Advancements ~~should reasonably distinguish the risks of project subsidiaries from the risks of group holding companies, and meet the reasonable financing needs of real estate projects~~ in ~~accordance~~Recycling: ~~with the principle of marketization on the premise of ensuring the safety of creditor’s rights and the closed operation~~Companies ofare ~~funds.~~developing ~~Support~~more ~~the~~efficient ~~project host bank~~ and ~~the~~environmentally ~~syndicated~~friendly ~~loan~~recycling ~~model~~methods, ~~strengthen~~including ~~the~~hydrometallurgical ~~management~~processes ~~of the whole process of loan approval, issuance~~ and ~~recovery,~~direct ~~and effectively ensure the safety of funds~~recycling.

~~2).~~Regulatory ~~Support~~Framework: ~~the~~Regulations ~~reasonable~~concerning battery ~~needs~~disposal and recycling are becoming more stringent, encouraging the development of ~~individual housing~~the ~~loans~~recycling industry.

~~Reasonably~~Supply ~~determine~~Chain ~~the~~Sustainability: ~~down~~Recycling ~~payment ratio of~~is ~~local~~seen ~~personal~~as ~~housing~~key ~~loans~~to ~~and~~reducing the ~~lower~~environmental ~~limit~~impact of ~~the~~battery ~~loan~~production ~~interest~~and ~~rate~~ensuring ~~policy~~a tosustainable ~~support~~supply ~~rigid~~of ~~and~~raw ~~improved housing demand~~materials.

~~Financial~~Challenges ~~institutions are encouraged to reasonably determine the specific down payment ratio~~ and ~~interest rate level for individual housing loans based on the lower limit of urban policies~~ ~~in light of their own business conditions, customer risk status and credit conditions, etc.~~Opportunities

~~3).~~Supply ~~Stabilize~~Chain ~~the~~Issues: ~~credit~~The ~~supply~~reliance ofon ~~construction~~specific ~~enterprises~~countries for raw materials poses risks. Recycling can help mitigate these risks by providing a more localized supply chain.

~~4).~~Investment ~~Support~~and ~~the~~Infrastructure: ~~reasonable~~Significant investment ~~extension~~is ofneeded ~~existing financing~~to ~~such~~scale asup ~~development~~renewable ~~loans~~energy infrastructure and ~~trust~~recycling ~~loans~~facilities.

3Technological Challenges: Both industries face challenges in improving efficiency, reducing costs, and minimizing environmental impacts.

~~For~~Future real estate enterprise development loans, trust loans and other existing financing, on the premise of ensuring the safety of creditor’s rights, financial institutions and real estate enterprises are encouraged to negotiate independently based on commercial principles, and actively support through the extension of existing loans, adjustment of repayment arrangements, etc., to promote the completion of the project deliver.Outlook

~~From~~Integration ~~the date~~ of ~~issuance~~Renewable ofEnergy ~~the~~and ~~notice, those~~Storage: ~~due~~As ~~within~~ the ~~next~~penetration ~~six~~of ~~months~~renewable ~~may~~energy ~~be allowed to extend for one more year beyond the original regulations~~grows, ~~and~~ the ~~loan~~integration ~~classification may~~with ~~not~~efficient bestorage ~~adjusted,~~solutions ~~and~~will ~~the loan classification submitted to the credit reporting system should~~ be ~~consistent with it~~crucial.

~~5).~~Circular ~~Keep~~Economy ~~bond~~in ~~stable,~~Batteries: ~~and support high-quality~~Emphasizing ~~real~~a ~~estate~~circular ~~enterprises~~economy towhere ~~issue~~batteries ~~bond.~~are ~~Promote~~reused, ~~professional~~repurposed, ~~credit~~and ~~enhancement~~recycled ~~agencies~~will tobecome ~~provide~~increasingly ~~credit enhancement support for bond issuance of real estate enterprises with overall financial health and short-term difficulties~~important.

~~Encourage~~Overall, ~~bond~~the ~~issuers~~green ~~to communicate with holders~~energy ~~in advance~~ and ~~make~~battery ~~arrangements~~recycling ~~for~~industries ~~borrowing~~are ~~bonds~~at tothe ~~redeem~~forefront ~~funds.~~of Ifthe itglobal istransition ~~really difficult~~ to ~~make~~a ~~payment~~more onsustainable ~~time, reasonable arrangements such as extension~~ and ~~replacement~~environmentally ~~shall~~friendly ~~be made through negotiation to proactively resolve risks~~energy future.

~~6).~~Real ~~Maintain~~Estate ~~stable~~Industry ~~financing of asset management products such as trusts.~~Overview

BDuring the volatile real estate market, the Company has been capitalizing on its inherent strengths and market opportunities in Tier 3 and Tier 4 cities and counties to deliver value for our shareholders. ~~Actively~~We dofeel confident and also competent to take on every challenge and grasp every opportunity during market consolidation. We expect to provide rapid response to the market on the basis of our projected business plans together with a ~~good~~flexible ~~job~~approach in ~~“delivery~~seizing ~~guarantee~~market opportunities; strict investment standards and prudent attitude towards investment opportunities, ~~building”~~and ~~financial~~appropriate ~~services~~replenishment of quality land resources in existing regions to realize value within the Tier 3 and Tier 4 cities and counties in Western China.

~~7). Support development policy banks to provide special loans for “delivery guarantee building”.~~3

~~Support~~According to China ~~Development~~Galaxy ~~Bank~~Securities ~~and~~Research ~~Agricultural~~Report dated October ~~Development~~25, ~~Bank~~2023, inthe ~~accordance~~sixth ~~with~~session ~~relevant~~of ~~policy~~China’s ~~arrangements~~14th National People’s Congress Standing Committee voted and ~~requirements.~~passed Inresolutions ~~accordance~~on ~~with~~incremental issuance of treasury bonds by the ~~laws~~state council and ~~regulations,~~adjustment ~~the~~scheme ~~special~~of central government’s 2023 budget. The central finance ~~insurance~~will ~~payment~~additionally ~~for~~issue ~~“delivery~~1 ~~guarantee~~trillion ~~building”~~treasury isbonds ~~issued~~of to2023 in the ~~borrowers~~fourth ~~who~~quarter ~~have~~2023, ~~been~~and ~~reviewed~~all ~~and~~of ~~filed~~the intreasury anbonds ~~efficient and~~issued ~~orderly~~will ~~manner,~~be ~~which~~arranged to islocal ~~closed~~governments ~~and~~through ~~dedicated~~transfer payments. ItThis iswill ~~specially~~generate ~~used~~impacts to ~~support~~economy ~~the~~in ~~accelerated~~following ~~construction~~aspects: to assist reconstruction of disaster areas and ~~delivery~~economic ofresurgence, ~~overdue~~and will directly drive investment growth in local infrastructure, the directions concentrated on drainage and ~~difficult-to-deliver~~flood ~~residential~~control projects ~~that~~and ~~have~~farmland ~~been~~construction ~~sold~~related to water conservancy engineering.

~~8).~~According ~~Encourage~~to ~~financial~~CNR ~~institutions~~Cultural Media dated November 23, 2023, responsible officer from the ministry of finance stated that according to ~~provide~~plan of the State Council and related work arrangement, part ~~supporting~~of increased 2024 debt limit of local governments was released in advance, to reasonably guarantee local financing ~~support~~need. The institutions predicted that the limit approved in advance may exceed 2.7 trillion and may continue to tilt towards east region in good fiscal condition. From the usage of special debit published by ministry of finance, fields of livelihood services, transportation infrastructure, infrastructure for municipal administration and Industrial Park, agriculture, forestry, and water conservancy accounted for 64.9%、23.8%、6.0% and 3.6% respectively.

~~Encourage~~Company ~~financial~~Positioning ~~institutions,~~The ~~especially~~Company ~~the main~~is ~~financing~~headquartered ~~commercial~~in ~~banks~~Hanzhong ofin the ~~project~~southwestern ~~personal~~part ~~housing~~of ~~loans or~~ the ~~syndicates~~Shaanxi ~~they lead to form~~province, in ~~accordance~~the ~~with~~center of the ~~principles of~~Hanzhong ~~marketization~~Basin, ~~and~~on the ~~rule~~Han ~~of law~~River, tonear ~~provide~~the ~~new~~Sichuan ~~supporting~~border. ~~financing~~According ~~support~~to ~~for~~the ~~special~~China ~~loan~~City ~~support~~Statistical ~~projects~~Yearbook, ~~and~~Hanzhong ~~promote~~had ~~the~~a ~~resolution~~ population of ~~unfinished~~about ~~personal~~3.8 ~~housing loan risks~~million.

~~For~~Hanzhong is ~~the~~a ~~sale~~key oftransportation ~~the~~hub ~~remaining~~connecting ~~value~~China’s ofMiddle ~~goods, the~~Economic ~~project~~zone ~~can~~and beWestern ~~reviewed~~Economic atZone. ~~the~~The ~~same~~travel time ~~for~~from ~~special~~Xi’an, the ~~loans~~provincial ~~and~~capital ~~new~~of ~~supporting~~Shaanxi ~~financing~~province, ~~and~~to ~~the~~Hanzhong ~~sales~~takes ofless ~~the~~than ~~remaining~~2 ~~value~~hours. ofThe ~~goods~~airport in Hanzhong was completed and put into service ~~cannot~~in ~~cover~~2014. ~~both~~The ~~the~~airport ~~special~~handled ~~loan~~approximately 650,000 passengers and ~~the~~2,200 ~~new~~tons ~~supporting~~of ~~financing,~~cargo ~~but~~on itannual ~~has~~basis. ~~been~~Xicheng, ~~clarified~~a ~~that~~high-speed railway between Chengdu, the ~~new~~provincial ~~supporting~~capital ~~financing~~of Sichuan province, and ~~special financing~~Xi’an ~~The~~with ~~loan~~a ~~matching~~major ~~mechanism~~stop ~~arranges~~in ~~and~~Hanzhong ~~implements~~was ~~the~~completed ~~project~~in of2017. ~~the~~It takes ~~source~~1.5 ofhours ~~repayment,~~from Hanzhong to Xi’an and ~~encourages~~2.5 ~~financial~~hours ~~institutions~~ from Hanzhong to ~~actively~~Chengdu. ~~provide~~According ~~new~~to ~~matching~~urban ~~financing~~big ~~support~~data ~~under~~platform, GuangJunTong, the ~~premise~~railway ofpassenger’s ~~commercial~~volume ~~voluntary~~was around 44.65 million in 2022.

~~The~~According ~~subject~~to ofStatistical ~~the~~Bulletin ~~newly added supporting financing should be consistent with the subject~~ of ~~the~~National ~~implementation~~Economic ~~of the special loan-supported project. The existing assets~~ and ~~liabilities~~Social ofDevelopment ~~the~~Hanzhong ~~project~~City, ~~should~~Hanzhong’s beGDP ~~audited~~reached ~~and~~RMB ~~evaluated~~190.55 bybillion a(approximately ~~qualified~~$29.1 ~~institution~~billion) ~~organized~~ by ~~the~~2022 ~~local~~calendar ~~government~~year, ~~and an implementation plan~~representing ofa ~~“one~~4.3% ~~building~~increase ~~one~~from ~~policy”~~2021 ~~has~~calendar ~~been formulated~~year. ~~Commercial~~Resident’s ~~banks~~annual ~~with~~disposable ~~the~~income ~~“special loan supporting financing” sub-section can be newly established under the real estate development loan~~ for ~~statistics~~2022 ~~and~~calendar ~~management.~~year Inwas ~~principle~~RMB38,776 ~~the~~(equivalent ~~supporting~~to ~~financing should not exceed the period of the corresponding special loan. For a maximum period of no more than 3 years~~$5,917 ~~the~~) ~~project~~representing ~~sales receipts shall be transferred to~~ a special project account opened with the main financing commercial bank or other commercial banks, and the special project account shall be jointly managed by the commercial bank that provides additional financing4.5% Itincrease isas ~~clearly~~compared ~~stated that in accordance with the principle of “last-in, first-out”, the sales receipts of the remaining value of the project should be given priority~~ to ~~repay~~2021 ~~the~~calendar ~~newly-added supporting financing and special loans~~year.

~~For~~On November ~~commercial banks~~11, in2022 ~~accordance~~the ~~with~~People’s ~~the~~Bank ~~requirements~~ of ~~this~~China ~~notice,~~and ~~within half a year from~~ the ~~date~~China ofBanking ~~issuance~~and ofInsurance ~~this~~Regulatory ~~notice,~~Commission ~~the supporting financing~~ issued to“Yin ~~special~~Fa ~~fund-supported~~[2022] ~~projects~~No. ~~shall~~254 ~~not~~“Notice beon ~~reduced~~Supporting ~~in risk classification during~~ the ~~loan~~Stable ~~period;~~and ~~The~~Healthy ~~main~~Development ~~body~~of ~~management is not good for~~ the ~~newly~~Real ~~issued supporting~~Estate ~~financing,~~Market” ~~and~~to support the ~~relevant~~stable ~~institutions~~ and ~~personnel have done their due diligence. Liability is waived.C. Actively cooperate~~healthy ~~with~~development ~~trapped~~of the real estate ~~enterprises~~market. toThe ~~deal~~details ~~with~~are ~~the~~as ~~risk disposal~~follows:

9)A. ~~Provide~~Keeping ~~financial~~real ~~support~~estate financing ~~for~~stable ~~M&A~~and ~~of real estate projects.~~order

~~Encourage~~ ~~commercial~~1). ~~banks~~Stabilize tothe ~~carry~~issuance ~~out M&A loan business for real estate projects in a stable and orderly manner, and focus on supporting high-quality real estate enterprises to merge and acquire projects~~ of ~~distressed~~ real estate ~~enterprises~~development loans.　　

~~Encourage~~Adhere ~~financial~~to ~~asset~~the ~~management companies~~“two unswerving”, and ~~local~~treat ~~asset~~all ~~management~~types ~~companies~~of ~~(hereinafter~~real ~~collectively~~estate ~~referred~~enterprises tosuch as ~~asset~~state-owned ~~management~~and ~~companies)~~private toenterprises ~~use~~equally. ~~their~~Encourage ~~experience and~~financial ~~capabilities~~institutions into ~~non-performing~~focus ~~asset~~on ~~management~~supporting ~~and~~the ~~risk~~steady ~~management,~~development ~~and~~of ~~jointly~~real ~~negotiate~~estate ~~risk~~enterprises ~~resolution models~~ with ~~local~~sound ~~governments~~governance, ~~commercial~~ ~~banks,~~focus ~~and~~on ~~real~~their ~~estate~~main ~~companies,~~ business and ~~promote~~good ~~accelerate asset disposal~~qualifications.　　

~~10)~~Financial ~~Actively~~institutions ~~explore~~should ~~market-oriented~~reasonably ~~support~~distinguish ~~methods.For~~the ~~some~~risks ~~projects~~of ~~that~~project ~~have~~subsidiaries ~~entered~~from ~~judicial~~the ~~reorganization~~risks of group holding companies, ~~financial~~and ~~institutions~~meet ~~can~~the reasonable financing ~~assist~~needs of real estate projects in ~~promoting~~accordance ~~project~~with ~~resumption~~the principle of marketization on the premise of ensuring the safety of creditor’s rights and ~~delivery~~the byclosed ~~one~~operation ~~enterprise~~of funds. Support the project host bank and ~~one~~the ~~policy~~syndicated ~~according~~loan tomodel, strengthen the ~~principles~~management of ~~independent~~the ~~decision-making~~whole process of loan approval, ~~risk-taking~~issuance and recovery, and ~~self-responsibility~~effectively ~~for~~ensure ~~profits~~the ~~and~~safety ~~losses~~of funds.

~~Encourage~~ ~~asset management companies to participate in project disposal by acting as bankruptcy administrators, reorganization investors, etc~~2)., ~~and~~Support ~~support qualified financial institutions to prudently explore~~ the ~~establishment~~reasonable ofneeds ~~funds and other methods to resolve the risks~~ of ~~distressed~~individual ~~real~~housing ~~estate enterprises in accordance with laws and regulations, and support project completion and delivery~~loans.

D.Reasonably ~~Legally~~determine the ~~protect~~down ~~the~~payment ~~legitimate~~ratio ~~rights~~of local personal housing loans and ~~interests~~ the lower limit of ~~housing~~the ~~finance~~loan ~~consumers~~interest rate policy to support rigid and improved housing demand.

~~11).~~Financial ~~Encourage~~institutions are ~~independent~~encouraged ~~negotiation~~to ~~and~~reasonably ~~extension of~~determine ~~principal~~the specific down payment ratio and interest ~~repayment~~rate inlevel ~~accordance~~for ~~with~~individual housing loans based on the ~~law~~lower limit of urban policies in light of their own business conditions, customer risk status and credit conditions, etc.

For individuals who have lost their source of income due to hospitalization or isolation due to the epidemic, or who have lost their income due to the closure of business due to the epidemic, as well as personal housing loans due to changes or cancellations of housing purchase contracts, financial institutions can follow the market-based approach. Based on the principle of rule of law, negotiate with the buyers independently, and make adjustments such as postponement and extension.5

~~For~~ ~~malicious~~3). ~~evasion~~Stabilize ofthe ~~financial~~credit ~~debts,~~supply ~~they will~~of beconstruction ~~dealt with in accordance with laws and regulations to maintain a good market order~~enterprises.

12 4). ~~Effectively~~Support ~~protect~~ the ~~personal~~reasonable ~~credit~~extension ~~investigation rights~~ of ~~deferred~~existing financing such as development loans. and trust loans

IfFor ~~the~~real ~~repayment~~estate ~~arrangement of the personal housing~~enterprise ~~loan~~development ~~has been adjusted~~loans, ~~the~~trust ~~financial~~loans ~~institution~~and ~~shall~~other ~~submit~~existing ~~the~~financing, ~~credit~~on ~~record according to~~ the ~~new~~premise ~~repayment~~of ~~arrangement;~~ensuring if the ~~judgment or~~safety ~~ruling~~ of ~~the people~~creditor’s ~~court~~rights, ~~determines~~financial institutions ~~that~~and ~~the~~real ~~adjustment~~estate ~~should~~enterprises beare ~~made,~~encouraged ~~the~~to ~~financial~~negotiate ~~institution~~independently ~~shall~~based ~~adjust~~on ~~the~~commercial ~~credit~~principles, ~~record~~ and ~~submit~~actively itsupport through ~~according to~~ the ~~effective~~extension ~~judgment~~of orexisting ~~ruling~~loans, adjustment of ~~the~~repayment ~~people’s~~arrangements, ~~court~~etc., ~~which~~to ~~has~~promote ~~been~~the ~~reported~~completion toof bethe ~~adjusted~~project deliver.

E.From ~~Phased~~the ~~adjustment~~date of ~~some~~issuance of ~~financial~~the ~~management~~notice, those due within the next six months may be allowed to extend for one more year beyond the original regulations, and the ~~policies~~loan classification may not be adjusted, and the loan classification submitted to the credit reporting system should be consistent with it.

135). ~~Extending~~Keep ~~the~~bond ~~transition~~stable, and ~~period~~support ofhigh-quality ~~the~~ real estate enterprises to issue bond. Promote professional credit enhancement agencies to provide credit enhancement support for bond issuance of real estate ~~loan~~enterprises ~~concentration~~with ~~management~~overall ~~policy~~financial health and short-term difficulties. Encourage bond issuers to communicate with holders in advance and make arrangements for borrowing bonds to redeem funds. If it is really difficult to make payment on time, reasonable arrangements such as extension and replacement shall be made through negotiation to proactively resolve risks.

~~For~~ ~~banking~~6). ~~financial~~Maintain ~~institutions~~stable ~~that~~financing ~~cannot meet the requirements~~ of ~~real~~asset ~~estate loan concentration~~ management asproducts ~~scheduled due to objective reasons~~ such as ~~the epidemic, the transition period will be reasonably extended based on the actual situation and objective assessment~~trusts.

5B. Actively do a good job in “delivery guarantee building” financial services

14 7). ~~Periodically~~Support ~~optimize~~development ~~the~~policy ~~M&A~~banks ~~financing policy~~to provide special loans for ~~real~~“delivery ~~estate~~guarantee ~~projects~~building”.

~~Relevant~~Support ~~financial~~China ~~institutions~~Development Bank ~~should~~and ~~make~~Agricultural ~~good~~Development Bank in accordance with relevant policy arrangements and requirements. In accordance with the laws ~~use~~and ofregulations, the ~~phased~~special ~~real~~insurance ~~estate~~payment ~~financial~~for ~~management~~“delivery ~~policies~~guarantee building” is issued byto the ~~People’s~~borrowers ~~Bank~~who ofhave ~~China~~been reviewed and ~~the~~filed ~~China~~in ~~Banking~~an efficient and ~~Insurance~~orderly ~~Regulatory Commission~~manner, which ~~are~~is ~~applicable~~closed toand ~~major~~dedicated. ~~commercial~~It ~~banks~~is ~~and~~specially ~~national~~used ~~financial~~to ~~asset~~support ~~management~~the ~~companies,~~accelerated construction and ~~accelerate~~delivery ~~the marketization~~ of ~~real~~overdue ~~estate~~and ~~risks~~difficult-to-deliver residential projects that have been sold.

F 8). ~~Increase~~Encourage financial ~~support~~institutions ~~for~~to ~~housing~~provide ~~leasing~~supporting financing support.

~~15).~~Encourage ~~Optimize~~financial institutions, especially the main financing commercial banks of the project personal housing ~~leasing~~loans ~~credit~~or ~~services~~the syndicates they lead to form, in accordance with the principles of marketization and the rule of law, to provide new supporting financing support for special loan support projects, and promote the resolution of unfinished personal housing loan risks.

~~16).~~For ~~Broaden~~the ~~diversified~~sale of the remaining value of goods, the project can be reviewed at the same time for special loans and new supporting financing, ~~channels~~and inthe sales of the ~~housing~~remaining ~~leasing~~value ~~market~~of goods cannot cover both the special loan and the new supporting financing, but it has been clarified that the new supporting financing and special financing The loan matching mechanism arranges and implements the project of the source of repayment, and encourages financial institutions to actively provide new matching financing support under the premise of commercial voluntary.

~~Support~~The ~~housing~~subject ~~rental~~of ~~and~~the ~~sales~~newly added ~~enterprises~~supporting tofinancing should be consistent with the subject of the implementation of the special loan-supported project. The existing ~~issue~~assets ~~credit~~and ~~bonds~~liabilities of the project should be audited and ~~guaranteed~~evaluated ~~bonds~~by a qualified institution organized by the local government, and an ~~other~~implementation ~~direct~~plan of “one building one policy” has been formulated. Commercial banks with the “special loan supporting financing” ~~products,~~sub-section ~~which~~can ~~are~~be ~~specially~~newly ~~used~~established ~~for~~under the ~~construction~~real estate development loan for statistics and ~~operation~~management. In principle, the supporting financing should not exceed the period of ~~rental~~the ~~housing,~~corresponding ~~and~~special ~~Gupin~~loan. ~~Commercial~~For ~~Bank~~a ~~issues~~maximum ~~financial~~period ~~bonds~~of tono ~~support~~more ~~housing~~than ~~rental~~3 toyears, the ~~raise~~project ~~funds~~sales receipts shall be transferred to ~~increase~~a ~~housing~~special ~~rental~~project account opened with the main financing commercial bank or other ~~development~~commercial banks, and ~~construction~~the ~~loans~~special ~~and~~project ~~business~~account ~~operations~~shall be jointly managed by the commercial bank that provides additional financing. It ~~Loans~~is ~~were~~clearly ~~provided~~stated that in accordance with the principle of “last-in, ~~and~~first-out”, the ~~pilot~~sales ~~program~~receipts of ~~real~~the ~~estate~~remaining ~~investment trusts~~value ~~(REITs)~~of ~~was~~the ~~steadily~~project ~~promoted~~should be given priority to repay the newly-added supporting financing and special loans.

On November 14, 2022 China Banking and Insurance Regulatory Commission, the Ministry of Housing and Urban-Rural Development and the Central Bank issued the “Notice on the Relevant Work of Commercial Banks Issuing letters of Guarantee to Replace the Pre-sale Supervision Funds” (the “Pre-sale Supervision Funds Notice”). Commercial banks’ house related credit business is expected to expand. The “Financial Support for Real Estate Notice” issued sixteen measures to generate power at both supply and demand ends, it further clarifies the support policies for housing credit. Many policies have been implemented at the document system level for the first time, or will push banks to increase their support for the real estate market. It is expected to modify the conservative attitude of commercial banks to intervene in the development loan market and support the reasonable demand for individual housing loans.6

1)For ~~The~~commercial ~~existing~~banks, in ~~debt~~accordance ~~financing~~with ofthe ~~real~~requirements ~~estate~~of ~~enterprises~~this ~~shall~~notice, bewithin ~~reasonably~~half ~~extended.~~a ~~Reasonable~~year ~~extension~~from ~~arrangements will be made for~~ the ~~existing~~date ~~financing~~of ~~such~~issuance asof ~~real~~this ~~estate development loans and trust loans~~notice, ~~with an additional extension of one year for those due in~~ the ~~next~~supporting ~~six~~financing issued ~~months,~~to ~~and~~special ~~the~~fund-supported ~~credit~~projects ~~rating~~shall ~~will~~ not be ~~downgraded~~reduced orin ~~credit~~risk ~~information~~classification ~~will~~during ~~not~~the beloan ~~changed.~~period; The ~~“Financial~~main ~~Support~~body ~~for Real Estate Notice”~~ management is ~~the~~not ~~first~~good ~~time~~for ~~to mention~~ the ~~support~~newly ~~policy~~issued ~~for~~supporting ~~trust loans~~financing, ~~which~~and ~~may help banks to enhance~~ the ~~risk~~relevant ~~appetite~~institutions ofand ~~house~~personnel ~~related~~have ~~businesses,~~done ~~especially~~their ~~private~~due ~~real~~diligence. ~~estate~~Liability is ~~enterprises~~waived.

2)C. ~~Extend~~Actively ~~the~~cooperate ~~transition~~with ~~period~~trapped ~~of the~~ real estate ~~concentration~~enterprises management policy arrangement. For the real estate concentration management requirements of banking financial institutions established by the end of 2020 that cannot meet the standards as scheduled due to ~~the~~deal ~~epidemic~~with ~~and other reasons,~~ the ~~transition~~risk period can be reasonably extended based on the actual situation through objective assessment. The phased “relaxation” of management requirements will help banks to participate in the real estate credit market in a reasonable manner based on the actual situation.disposal

3 9). ~~Emphasis~~Provide ~~on doing a good job to provide~~ financial ~~services~~support for ~~“delivery~~M&A ~~guarantee~~of ~~building”. Supporting the State Development bank, the Agricultural Development Bank and other institutions to provide special loans for~~ real estate ~~enterprises to “delivery guarantee building” and providing supporting financing for special loans~~ projects~~, will further resolve the risks of individual housing loans that are not yet delivered~~.

4)Encourage ~~Add~~commercial banks ~~exemption clause~~ to ~~relieve~~carry ~~worries.~~out IfM&A ~~the~~loan ~~participation~~business infor the newly issued supporting financing of the delivery guarantee building is bad, the relevant institutions and personnel shall perform their duties and be exempted from liability, which will boost the initiative of the relevant institutions to participate in such projects. With the introduction of the policy of replacing pre-sale supervision funds with letters of guarantee, real estate ~~enterprises~~projects ~~are~~in ~~facing significate liquidity benefits. According to the “Notice on Pre-sale Supervision Funds”, high-quality real estate enterprises can apply to banks for~~ a ~~letter~~stable of guarantee to replace the pre-sale supervision funds, which is a significant benefit to the short-term liquidity of real estate. According to the regulatory requirements, the replacement funds of real estate enterprises are given priority to use for project construction and repayment of debts due. On the one hand, the replacement funds can directly relieve the liquidity pressure of real estate enterprises and improve the cash flow of enterprises; On the other hand, it is good for real estate enterprises to activate the pre-sale funds to complete the project delivery, promote the “delivery guarantee building” in an orderly manner, ~~strengthen the signal “stability maintenance” in the real estate market,~~ and ~~promote~~focus ~~the~~on ~~recovery~~supporting ~~of the sales side, so as to substantially improve the debt repayment ability of~~ high-quality real estate enterprises, ~~especially~~to ~~private~~merge ~~real estate enterprises,~~ and ~~the~~acquire ~~risks~~projects of ~~banks~~distressed ~~involved in~~ real estate ~~can be mitigated~~enterprises.

6Encourage financial asset management companies and local asset management companies (hereinafter collectively referred to as asset management companies) to use their experience and capabilities in non-performing asset management and risk management, and jointly negotiate risk resolution models with local governments, commercial banks, and real estate companies, and promote accelerate asset disposal.

~~The~~ ~~upper~~10) ~~limit~~Actively ofexplore ~~the~~market-oriented ~~replacement~~support ~~quota~~methods. ~~and~~For ~~the term~~some ofprojects ~~the~~that ~~letter~~have ofentered ~~guarantee~~judicial ~~are clearly stipulated~~reorganization, ~~and~~financial ~~the~~institutions ~~bank~~can ~~risk~~assist isin ~~guaranteed.~~promoting ~~According~~project toresumption ~~the~~and ~~“Notice~~delivery onby ~~Pre-sale~~one ~~Supervision Funds”, the replacement amount of the real estate~~ enterprise ~~shall~~and ~~not~~one ~~exceed~~policy ~~30%~~according ~~of the amount of funds required~~ to ~~ensure~~ the ~~completion~~ ~~and~~principles ~~delivery~~ of ~~the~~independent ~~project in the supervision account. At the same time~~decision-making, ~~the term of the letter of guarantee shall be matched with the project construction period to ensure that the replacement funds are used for the project construction. At the regulatory level~~risk-taking, ~~there~~ ~~are clear provisions on the quota for the replacement of real estate enterprises~~ and ~~the term of the letter of guarantee, which not only improves the utilisation efficiency of the use of pre~~self-~~sale~~responsibility ~~supervision~~for ~~funds,~~profits ~~but also ensures the capital safety to the greatest extent~~ and ~~reduces the credit risk of banks~~losses.

~~The~~Encourage ~~target~~asset ~~market of the Company is in Western~~management ~~China.~~companies ~~The Company continues~~ to ~~focus~~participate ~~on Tier 3 and Tier 4 cities and counties~~ in ~~acquiring~~project ~~sizable~~disposal ~~quality~~by ~~land~~acting ~~reserves~~as atbankruptcy ~~low~~administrators, ~~cost in~~reorganization ainvestors, ~~flexible and diversified manner~~etc. ~~There has been an increasing demand for high quality residential housing~~, ~~largely driven by the “Go West” policy~~ and ~~accelerated~~support ~~urbanization. Many buyers in Tier 3 and Tier 4 cities and counties are first time home buyers.~~qualified Infinancial ~~order~~institutions to ~~mitigate~~prudently ~~default~~explore ~~risk,~~ the ~~Company~~establishment ~~generally~~of ~~requires~~funds ~~from~~and ~~its~~other ~~homebuyer~~methods ~~customers~~to aresolve ~~deposit in~~ the ~~range~~risks of ~~30%-50%~~distressed ofreal ~~the~~estate ~~purchase~~enterprises ~~price,~~in ~~which~~accordance iswith ~~higher~~laws ~~than~~and ~~the~~regulations, ~~percentage~~and ~~required~~support byproject ~~the~~completion ~~government~~and ~~for the mortgage down payment~~delivery.

~~The~~D. ~~Company~~Legally ~~received~~protect the ~~National Grade-I real-estate development qualification~~ ~~granted~~legitimate byrights ~~the Ministry of Housing~~ and ~~Urban-Rural~~interests ~~Development~~ of ~~the~~housing ~~People’s~~finance Republic of China (“MOHURD”) on October 12, 2011. The Company is not required to renew the National Grade-I real-estate development qualification after it passed the initial qualification application set out by the MOHURD. The Grade-I real-estate development qualification is the highest qualification for real-estate developers in China and requires meeting several strict criteria, including:consumers

a 11). ~~Registered~~Encourage ~~capital~~independent negotiation and extension of atprincipal ~~least~~and ~~RMB~~interest 50repayment ~~million (approximately~~in ~~$7.3~~accordance ~~million);~~with the law.

bFor individuals who have lost their source of income due to hospitalization or isolation due to the epidemic, or who have lost their income due to the closure of business due to the epidemic, as well as personal housing loans due to changes or cancellations of housing purchase contracts, financial institutions can follow the market-based approach. AtBased ~~least~~on ~~five~~the ~~years~~principle of ~~experience~~rule inof ~~real~~law, ~~estate~~negotiate with the buyers independently, and ~~development~~make adjustments such as postponement and ~~operations;~~extension.

c.For ~~The~~malicious ~~completion~~ evasion of ~~construction~~financial ~~of a total over 300~~debts,~~000~~ ~~square~~they ~~meters.~~will ofbe ~~ground~~dealt ~~floor~~with ~~area~~in ~~(GFA)~~accordance ~~within~~with ~~the~~laws ~~last three years~~ and, inregulations ~~the~~to ~~most~~maintain ~~recent~~a ~~year,~~good ~~developed~~market ~~real estate projects of at least 150,000 square meters; and~~order.

d 12). ~~The~~Effectively ~~completed~~protect ~~real~~the ~~estate~~personal ~~projects~~credit ~~have~~investigation ~~no quality~~rights ~~issues in each~~ of ~~the~~deferred ~~past five years; and an established, comprehensive quality control and guarantee system~~loans.

~~The~~If ~~National~~the ~~Grade-I~~repayment ~~real-estate~~arrangement of ~~development~~the ~~qualification provides~~personal ~~significant~~housing ~~opportunities~~loan ~~for~~has ~~the~~been ~~Company~~adjusted, tothe ~~expand~~financial ~~its~~institution ~~operations~~shall ~~beyond~~submit ~~Shaanxi~~the ~~province~~credit ~~into~~record ~~new~~according ~~regional~~to ~~real~~the ~~estate~~new ~~markets~~repayment inarrangement; ~~China.~~if ~~Without~~ the ~~National~~judgment ~~Grade-I~~or ~~real-estate~~ruling ~~development~~of ~~qualification,~~the apeople’s ~~real~~court ~~estate~~determines ~~developer~~that ~~shall~~the ~~not~~adjustment ~~develop~~should abe ~~real~~made, ~~estate property~~the infinancial ~~other~~institution shall ~~cities~~adjust orthe ~~provinces~~credit inrecord ~~China.~~and ~~The~~submit ~~Company~~it isaccording ~~not required~~ to ~~periodically renew~~ the ~~National~~effective ~~Grade-I~~judgment ~~real-estate~~or ~~development qualification~~ruling ~~after~~of the ~~Company~~people’s ~~passed~~court ~~the~~which ~~initial~~has ~~qualification~~been reported ~~application~~to ~~set~~be ~~out by the MOHURD~~adjusted.

Looking ahead, the Company will continue to focus on developing high quality and large scale real estate projects in the suburban areas of Tier 3 and Tier 4 cities and counties with promising economic growth potentialE. ~~Leveraging~~Phased ~~on its unique competitive strengths, and under the direction and guidance of the government’s~~adjustment ~~macro policies, the Company expects to further replicate its successful business model into new high growth regions through strategic selection~~ of ~~project~~some ~~locations,~~financial amanagement short project development schedule characterized by fast asset turnover and excellent execution ability, as well as innovative product offering closely in line with market demand. The Company aims at becoming a leading large-scale residential property developer in Western China and a well-recognized brand name.policies

~~Pre-Sales~~ ~~and~~13). ~~Sales~~Extending the transition period of the real estate loan concentration management policy.

InFor ~~the~~banking ~~PRC, real estate developers are allowed~~financial toinstitutions ~~begin~~that tocannot ~~market~~meet ~~properties~~the ~~before~~requirements ~~construction~~of isreal ~~completed.~~estate ~~Like~~loan ~~other~~concentration ~~developers,~~management weas ~~pre-sell~~scheduled ~~properties~~due ~~prior~~ to ~~completion~~objective ofreasons ~~construction.~~such ~~Under~~as ~~PRC~~the ~~pre-sales regulations~~epidemic, ~~property~~the ~~developers~~transition ~~must~~period ~~satisfy~~will ~~specific~~be ~~conditions~~reasonably ~~before~~extended ~~properties~~based ~~under~~on ~~construction~~the ~~can~~actual besituation ~~pre-sold. These~~and ~~mandatory~~objective ~~conditions include:~~assessment.

~~● the land premium must have been paid in full;~~7

● ~~the~~14). ~~land~~Periodically ~~use~~optimize ~~rights certificate,~~ the ~~construction~~M&A ~~site~~financing ~~planning~~policy ~~permit,~~for ~~the~~real ~~construction~~estate ~~work planning permit and the construction permit must have been obtained;~~projects.

●Relevant atfinancial ~~least~~institutions should ~~25%~~make good use of the ~~total~~phased ~~project~~real ~~development~~estate ~~cost~~financial ~~must~~management ~~have~~policies ~~been~~issued ~~incurred;~~by the People’s Bank of China and the China Banking and Insurance Regulatory Commission, which are applicable to major commercial banks and national financial asset management companies, and accelerate the marketization of real estate risks.

●F. ~~the~~Increase ~~progress~~financial support ~~and~~for ~~the~~housing ~~expected completion and delivery date of the construction must be fixed;~~leasing

● ~~the~~15). ~~pre-sale~~Optimize ~~permit~~housing ~~must~~leasing ~~have~~credit ~~been obtained; and~~services.

● ~~the~~16). ~~completion~~Broaden ofdiversified ~~certain~~financing ~~milestones~~channels in the ~~construction~~housing ~~processes~~leasing ~~must be specified by the local government authorities~~market.

7Support housing rental and sales enterprises to issue credit bonds and guaranteed bonds and other direct financing products, which are specially used for the construction and operation of rental housing, and Gupin Commercial Bank issues financial bonds to support housing rental to raise funds to increase housing rental development and construction loans and business operations. Loans were provided, and the pilot program of real estate investment trusts (REITs) was steadily promoted.

~~These~~On November ~~mandatory~~14, ~~conditions~~2022 ~~are~~China ~~designed~~Banking toand ~~require a~~Insurance ~~certain~~Regulatory ~~level~~Commission, the Ministry of ~~capital~~Housing ~~expenditure~~and Urban-Rural Development and ~~substantial~~the ~~progress~~Central Bank inissued ~~project~~the ~~construction~~“Notice ~~before~~on the ~~commencement~~Relevant Work of ~~pre~~Commercial Banks Issuing letters of Guarantee to Replace the Pre-~~sales.~~sale ~~Generally,~~Supervision Funds” (the ~~local~~“Pre-sale ~~governments~~Supervision ~~also~~Funds ~~require~~Notice”). ~~developers~~Commercial ~~and~~banks’ ~~property~~house ~~purchasers~~related credit business is expected to ~~have~~expand. ~~standard~~The ~~pre-sale~~“Financial ~~contracts~~Support ~~prepared~~for ~~under~~Real ~~the~~Estate ~~auspices~~Notice” issued sixteen measures to generate power at both supply and demand ofends, it further clarifies the ~~government~~support policies for housing credit. ~~Developers~~Many ~~are~~policies ~~required~~have tobeen ~~file~~implemented ~~all~~at ~~pre-sale~~the ~~contracts~~document ~~with~~system ~~local~~level for ~~land~~the ~~bureaus~~first ~~and~~time, or will push banks to increase their support for the real estate ~~administrations~~market. ~~after~~It is expected to modify the conservative ~~entering~~attitude ~~into~~of ~~such~~commercial ~~contracts~~banks to intervene in the development loan market and support the reasonable demand for individual housing loans.

~~After-Sale~~1) ~~Services~~The existing debt financing of real estate enterprises shall be reasonably extended. Reasonable extension arrangements will be made for the existing financing such as real estate development loans and ~~Delivery~~trust loans, with an additional extension of one year for those due in the next six months, and the credit rating will not be downgraded or credit information will not be changed. The “Financial Support for Real Estate Notice” is the first time to mention the support policy for trust loans, which may help banks to enhance the risk appetite of house related businesses, especially private real estate enterprises.

We2) ~~assist~~Extend ~~customers~~the intransition ~~arranging~~period ~~for~~of ~~and~~the ~~providing information~~real ~~related~~estate toconcentration ~~financing~~management policy arrangement. WeFor ~~also~~the ~~assist~~real ~~our~~estate ~~customers~~concentration inmanagement ~~various~~requirements ~~title~~of ~~registration~~banking ~~procedures~~financial ~~related~~institutions toestablished ~~their~~by ~~properties,~~the ~~and we~~end ~~have~~of ~~set~~2020 upthat ancannot ~~ownership~~meet ~~certificate~~the ~~team~~standards toas ~~assist~~scheduled ~~purchasers~~due to ~~obtain~~the ~~their~~epidemic ~~property~~and ~~ownership~~other ~~certificates.~~reasons, Wethe ~~offer~~transition ~~various~~period ~~communication channels~~can tobe ~~customers~~reasonably toextended ~~facilitate~~based ~~customer~~on ~~feedback~~the ~~collection.~~actual Wesituation ~~also~~through ~~cooperate~~objective ~~with~~assessment. ~~property~~The ~~management~~phased ~~companies~~“relaxation” ~~that~~of ~~manage~~management ~~our properties~~requirements ~~and~~will ~~ancillary~~help ~~facilities,~~banks to ~~handle~~participate ~~customer~~in ~~feedback~~the real estate credit market in a reasonable manner based on the actual situation.

We3) ~~endeavor~~Emphasis ~~to deliver the units to our customers~~ on doing a ~~timely~~good ~~basis.~~job ~~We closely monitor the progress of construction of our property projects and conduct pre-delivery property inspections~~ to ~~ensure~~provide ~~timely~~financial ~~delivery.~~services ~~The time frame~~ for “delivery isguarantee ~~set~~building”. ~~out~~Supporting in the ~~sale~~State ~~and~~Development ~~purchase~~bank, ~~agreements~~the ~~entered~~Agricultural ~~into~~Development ~~with~~Bank ~~our customers,~~ and weother ~~are~~institutions ~~subject~~ to ~~penalty~~provide ~~payments~~special toloans ~~the purchasers~~ for ~~any~~real ~~delay~~estate inenterprises to “delivery ~~caused~~guarantee bybuilding” ~~us.~~and ~~The~~providing ~~Company~~supporting ~~has~~financing ~~never~~for ~~incurred~~special ~~any~~loans ~~delay penalties. Once a property development has been completed~~projects, ~~has passed the requisite government inspections and is ready for delivery, we~~ will ~~notify~~further ~~our~~resolve ~~customers~~the ~~and~~risks ~~hand~~of ~~over~~individual ~~keys~~housing ~~and~~loans ~~possession~~that ofare ~~the~~not ~~properties~~yet delivered.

~~Marketing~~4) Add exemption clause to relieve worries. If the participation in the newly issued supporting financing of the delivery guarantee building is bad, the relevant institutions and ~~Distribution~~personnel ~~Channel~~shall perform their duties and be exempted from liability, which will boost the initiative of the relevant institutions to participate in such projects. With the introduction of the policy of replacing pre-sale supervision funds with letters of guarantee, real estate enterprises are facing significate liquidity benefits. According to the “Notice on Pre-sale Supervision Funds”, high-quality real estate enterprises can apply to banks for a letter of guarantee to replace the pre-sale supervision funds, which is a significant benefit to the short-term liquidity of real estate. According to the regulatory requirements, the replacement funds of real estate enterprises are given priority to use for project construction and repayment of debts due. On the one hand, the replacement funds can directly relieve the liquidity pressure of real estate enterprises and improve the cash flow of enterprises; On the other hand, it is good for real estate enterprises to activate the pre-sale funds to complete the project delivery, promote the “delivery guarantee building” in an orderly manner, strengthen the signal “stability maintenance” in the real estate market, and promote the recovery of the sales side, so as to substantially improve the debt repayment ability of real estate enterprises, especially private real estate enterprises, and the risks of banks involved in real estate can be mitigated.

We maintain a marketing and sales force for our development projects, which at September 30, 2022 consisted of 38 employees specializing in marketing and sales. We also train and use outside real estate agents to market and increase the public awareness of our projects, and spread the acceptance and influence of our brand. However, our marketing and sales are primarily conducted by our own sales force because we believe our own dedicated sales representatives are better motivated to serve our customers as well as to control our property pricing and selling expenses.8

~~Our~~The ~~marketing~~upper limit of the replacement quota and ~~sales~~the ~~team~~term ~~develops~~of the ~~appropriate advertising~~letter of guarantee are clearly stipulated, and ~~selling~~the ~~plan~~bank ~~for~~risk ~~each~~is ~~project~~guaranteed. WeAccording ~~develop~~to ~~public~~the ~~awareness~~“Notice on ~~through~~Pre-sale ~~marketing~~Supervision ~~and~~Funds”, ~~advertising~~the asreplacement ~~well~~amount asof ~~referrals~~the ~~from customers.~~real Weestate ~~utilize~~enterprise ashall ~~customer~~not ~~relationship~~exceed ~~management~~30% ~~system~~of the amount of funds required to ~~track~~ensure ~~customer~~the ~~profiles~~completion and delivery of the project in the supervision account. At the same time, ~~which~~the ~~helps~~term usof the letter of guarantee shall be matched with the project construction period to ~~forecast~~ensure ~~future~~that ~~customer requirements~~the ~~and~~replacement ~~general~~funds ~~demand~~are used for ~~our~~the ~~projects~~project construction. At ~~This~~the ~~allows~~regulatory uslevel, tothere ~~have~~are ~~real-time~~clear ~~information~~provisions on the ~~status~~quota for the replacement of ~~individual~~real ~~customer~~estate ~~transactions as~~enterprises ~~well~~and asthe ~~available~~term ~~inventory~~of bythe ~~project~~letter of guarantee, which ~~enables~~not usonly toimproves ~~better~~the ~~anticipate~~utilization efficiency of the ~~preferences~~use of ~~current~~pre-sale supervision funds, but also ensures the capital safety to the greatest extent and ~~future~~reduces ~~customers~~the credit risk of banks.

WeThe ~~use~~target ~~various~~market ~~advertising~~of the ~~media~~Company is in Western China. The Company continues to ~~market~~focus ~~our~~on Tier 3 and Tier 4 cities and counties in acquiring sizable quality ~~developments~~land reserves at low cost in a flexible and ~~enhance~~diversified ~~our~~manner. ~~brand~~There ~~name,~~has ~~including~~been ~~newspapers,~~an ~~magazines,~~increasing ~~television,~~demand ~~radio~~for high quality residential housing, largely ~~e-marketing~~driven by the “Go West” policy and ~~outdoor~~accelerated ~~billboards~~urbanization. WeMany ~~also~~buyers in Tier 3 and Tier 4 cities and counties ~~participate~~are first time home buyers. In order to mitigate default risk, the Company generally requires from its homebuyer customers a deposit in ~~real~~the ~~estate~~range ~~exhibitions~~of 30%-50% of the purchase price, which is higher than the percentage required by the government for the mortgage down payment.

WeThe ~~have~~Company ~~also~~received the ~~developed~~National aGrade-I ~~strong~~real-estate ~~relationship~~development ~~with local~~qualification ~~institutional~~granted ~~purchasers~~by the Ministry of Housing and ~~governments.~~Urban-Rural Development of the People’s Republic of China (“MOHURD”) on October 12, 2011. The Company ~~has~~is ~~entered~~not ~~into~~required ~~various~~to ~~significant~~renew the ~~residential~~National Grade-~~apartment~~I real-estate ~~group~~development qualification after it passed the initial qualification application set out by the MOHURD. The Grade-~~purchase~~I real-estate ~~agreements~~development ~~with~~qualification ~~local~~is ~~government~~the highest qualification for real-estate developers in China and ~~institutional~~requires ~~purchasers.~~meeting several strict criteria, including:

~~A typical real estate property sales transaction usually consists of three steps. First, the customer pays~~ a ~~deposit to the Company~~. ~~Within~~Registered acapital week, after paying the deposit, the customer will sign a purchase contract with us and make a down payment to us in cash. After making the down payment, the customer arranges for a mortgage loan for the balance of ~~the~~at ~~purchase~~least ~~price.~~RMB ~~Once~~50 ~~the~~million ~~loan~~(approximately ~~is approved, the mortgage loan proceeds are paid to us directly by the bank~~$7.3 ~~Finally, we deliver the property to the customer. Legal title, as evidenced by a property ownership certificate issued by local land and construction bureaus, will be delivered to the customer.~~million);

~~For~~b. ~~customers~~At ~~purchasing~~least ~~properties~~five ~~with~~years ~~mortgage financing, under current PRC laws, their minimum down payment is 30%~~ of ~~the~~experience ~~total~~in ~~purchase~~real ~~price~~estate ~~for~~development ~~the purchase of the first self-use residential unit with total GFA of 90 square meters (about 970 square feet) or more on all existing units~~ and those yet to be completed, and a down payment of 20% on the first residential units for self-use with total GFA of under 90 square meters. In order to mitigate the default risk, the Company requires from its homebuyer customers deposits ranging from 30% - 50% of the purchase price, which is higher than the percentage required by the government for the mortgage down payment.operations;

8c. The completion of construction of a total over 300,000 square meters. of ground floor area (GFA) within the last three years and, in the most recent year, developed real estate projects of at least 150,000 square meters; and

~~Like~~d. ~~most~~The completed real estate ~~companies~~projects inhave ~~China,~~no wequality ~~generally provide~~issues ~~guarantees to mortgagee banks~~ in ~~respect~~each of the ~~mortgage~~past ~~loans~~five ~~provided~~years; toand ~~the~~an ~~purchasers of our properties up until completion of the registration of the mortgage with the relevant mortgage registration authorities. As of September 30~~established, ~~2022,~~comprehensive ~~the~~quality ~~Company~~control ~~had~~and ~~security deposits~~guarantee ~~for these guarantees of approximately $3~~system.0 million. Guarantees for mortgages on residential properties are typically discharged when the individual property ownership certificates are issued. In our experience, the issuance of the individual property ownership certificates typically takes six to twelve months, so our mortgage guarantees typically remain outstanding for up to twelve months after we deliver the underlying property.

~~Our~~Pre-Sales ~~Property~~and ~~Development Operations~~Sales

WeIn ~~have~~the aPRC, ~~systematic~~real ~~and~~estate developers ~~standardized~~are ~~process of~~allowed ~~project~~to ~~development,~~begin ~~which~~to wemarket ~~implement~~properties ~~through~~before ~~several~~construction ~~well-defined~~is ~~phases~~completed. ~~One~~Like ~~critically~~other ~~significant~~developers, ~~portion~~we ofpre-sell ~~our~~properties prior ~~process~~to iscompletion ~~the land~~of ~~acquisition~~construction. ~~process,~~Under ~~which~~PRC ispre-sales ~~segmented~~regulations, ~~into~~property ~~three~~developers ~~stages:~~must ~~(i) opportunity~~satisfy ~~identification,~~specific ~~(ii) initial~~conditions ~~planning~~before ~~and budgeting,~~properties ~~and~~under ~~(iii) land~~construction ~~use~~can ~~rights~~be ~~acquisition~~pre-sold. ~~The~~These ~~following~~mandatory ~~diagram~~conditions ~~sets forth the key stages of our property development process.~~include:

~~LAND~~● ~~ACQUISITION~~the ~~PROCESS~~land ~~Project~~premium ~~planning~~must ~~and~~have ~~design~~been ~~Project~~paid ~~construction~~in and Management Pre-sale, sale and marketing After-sale and delivery Opportunity Identification Initial Planning Land Acquisition -Strategic planning -Feasibility study -Financial assessment -Outsource architectural and engineering design -Outsource construction -Pre-sale -Delivery -Geographic and market analysis - Preliminary design -Internal approval -Design management -Construction supervision -Marketing -Feedback collection -Project evaluation -Bidding process -Arrange financing -Quality control -Advertising -Completion inspection -Landscaping and fixture installationfull;

~~Our~~● ~~Projects~~the land use rights certificate, the construction site planning permit, the construction work planning permit and the construction permit must have been obtained;

~~Overview~~● at least 25% of the total project development cost must have been incurred;

We● ~~develop~~ the ~~following~~progress ~~three~~and ~~types~~the ofexpected ~~real~~completion ~~estate projects,~~and ~~which~~delivery ~~may~~date beof ~~developed~~the inconstruction ~~one~~must orbe ~~more phases:~~fixed;

● ~~multi~~the pre-~~layer~~sale ~~apartment~~permit ~~buildings,~~must ~~which~~have ~~are~~been ~~typically six stories or less~~obtained; and

● ~~sub-high-rise~~the ~~apartment~~completion ~~buildings,~~of ~~which~~certain ~~are~~milestones ~~typically~~in ~~seven~~the toconstruction 11processes ~~stories;~~must ~~and~~be specified by the local government authorities.

~~● high-rise apartment buildings, which are typically 12 to 33 stories.~~9

AtThese ~~any~~mandatory ~~one~~conditions are ~~time,~~designed ~~our~~to ~~projects~~require ~~(or~~a ~~phases~~certain level of ~~our projects)~~capital ~~are~~expenditure and substantial progress in ~~one~~project construction before the commencement of pre-sales. Generally, the ~~following~~local ~~three~~governments ~~stages:~~also require developers and property purchasers to have standard pre-sale contracts prepared under the auspices of the government. Developers are required to file all pre-sale contracts with local land bureaus and real estate administrations after entering into such contracts.

●After-Sale ~~completed~~Services ~~projects,~~and ~~meaning properties for which construction has been completed;~~Delivery

●We ~~properties~~assist ~~under~~customers in ~~construction,~~arranging ~~meaning~~for ~~properties~~and ~~for~~providing ~~which~~information ~~construction~~related ~~permits~~to financing. We also assist our customers in various title registration procedures related to their properties, and we have ~~been~~set ~~obtained~~up ~~but~~an ~~construction~~ownership ~~has~~certificate ~~not~~team ~~been~~to ~~completed;~~assist purchasers to obtain their property ownership certificates. We offer various communication channels to customers to facilitate customer feedback collection. We also cooperate with property management companies that manage our properties and ancillary facilities, to handle customer feedback.

●We ~~properties~~endeavor ~~under~~to ~~planning,~~deliver the ~~meaning~~units ~~properties~~to our customers on a timely basis. We closely monitor the progress of construction of our property projects and conduct pre-delivery property inspections to ensure timely delivery. The time frame for ~~which~~delivery weis ~~have~~set out in the sale and purchase agreements entered into with ~~land~~our ~~grant~~customers, ~~contracts~~ and we are insubject to penalty payments to the ~~process~~purchasers offor ~~obtaining~~any delay in delivery caused by us. The Company has never incurred any delay penalties. Once a property development has been completed, has passed the ~~required~~requisite ~~permits~~government toinspections ~~begin~~and is ~~construction~~ready for delivery, we will notify our customers and hand over keys and possession of the properties.

~~Our~~Marketing ~~main projects located in Hanzhong City are: Mingzhu Beiyuan, Oriental Pearl Garden~~ and ~~Liangzhou~~Distribution ~~Road related projects. In Yang County, our project is Yangzhou Pearl Garden and Yangzhou Palace. Most projects are being developed in multiple phases.~~Channel

9We maintain a marketing and sales force for our development projects, which at September 30, 2023 consisted of 43 employees specializing in marketing and sales. We also train and use outside real estate agents to market and increase the public awareness of our projects, and spread the acceptance and influence of our brand. However, our marketing and sales are primarily conducted by our own sales force because we believe our own dedicated sales representatives are better motivated to serve our customers as well as to control our property pricing and selling expenses.

~~Real~~Our ~~Estate~~marketing ~~Projects~~and ~~located~~sales team indevelops ~~Hanzhong~~the ~~City~~appropriate advertising and selling plan for each project. We develop public awareness through marketing and advertising as well as referrals from customers. We utilize a customer relationship management system to track customer profiles, which helps us to forecast future customer requirements and general demand for our projects. This allows us to have real-time information on the status of individual customer transactions as well as available inventory by project, which enables us to better anticipate the preferences of current and future customers.

~~Mingzhu~~We ~~Garden~~use -various ~~Mingzhu~~advertising media ~~Beiyuan~~to ~~This~~market ~~project~~our isdevelopments ~~located~~and inenhance ~~the~~our ~~southwest~~brand ~~part~~name, ofincluding ~~Hanzhong~~newspapers, ~~City.~~magazines, ~~The~~television, ~~Phase I project includes two high-rise residential buildings with commercial shops located on the first floor with unsold GFA of Nil square meters as of September 30~~radio, ~~2020. The Phase II Mingzhu Beiyuan project includes 17 high~~e-~~rise~~marketing ~~residential~~and ~~buildings with GFA of 358,058 square meters~~outdoor billboards. ~~The~~We ~~Company~~also ~~started~~participate ~~construction~~ in ~~the~~real ~~third~~estate ~~quarter of fiscal 2012 and completed the construction in the last quarter of fiscal 2015~~exhibitions. ~~As of September 30, 2022, the unsold GFA was 78,677 square meters; un-allocated costs was $20,672,000.~~

~~Oriental~~We ~~Pearl~~have ~~Garden~~also ~~This~~developed a ~~project~~strong isrelationship ~~located~~with inlocal ~~the~~institutional ~~downtown~~purchasers ofand ~~Hanzhong City~~governments. The Company ~~started~~has ~~construction~~entered ininto ~~the~~various ~~third~~significant ~~quarter of fiscal 2012. It consists of 12 high~~residential-~~rise~~apartment group-purchase ~~residential~~agreements ~~buildings~~ with ~~commercial~~local ~~shops~~government ~~on the first~~ and ~~second~~institutional ~~floors with GFA of approximately 275,014 square meters~~purchasers. ~~The project was fully completed in fiscal 2016. As of September 30, 2022, the unsold GFA was 53,506 square meters; un-allocated costs was $17,425,514.~~

~~Real~~A ~~Estate~~typical ~~Projects~~real ~~located~~estate property sales transaction usually consists of three steps. First, the customer pays a deposit to the Company. Within a week, after paying the deposit, the customer will sign a purchase contract with us and make a down payment to us in ~~Yang~~cash. ~~County~~After making the down payment, the customer arranges for a mortgage loan for the balance of the purchase price. Once the loan is approved, the mortgage loan proceeds are paid to us directly by the bank. Finally, we deliver the property to the customer. Legal title, as evidenced by a property ownership certificate issued by local land and construction bureaus, will be delivered to the customer.

~~Yangzhou~~For ~~Pearl~~customers ~~Garden~~purchasing properties with mortgage financing, under current PRC laws, their minimum down payment is 30% of the total purchase price for the purchase of the first self-use residential unit with total GFA of 90 square meters (about 970 square feet) or more on all existing units and those yet to be completed, and a down payment of 20% on the first residential units for self-use with total GFA of under 90 square meters. In order to mitigate the default risk, the Company requires from its homebuyer customers deposits ranging from 30% - 50% of the purchase price, which is higher than the percentage required by the government for the mortgage down payment.

Yangzhou Pearl Garden mainly consists of multi-layer residential buildings and sub-high-rise residential buildings with commercial shops on the first floors. As of September 30, 2021, the remaining unsold GFA of Phase I of Yangzhou Pearl Garden, which includes multi-layer residential buildings, commercial units, sub-high-rise and high-rise residential buildings was a total GFA of Nil square meters. Yangzhou Pearl Garden Phase II consists of five high-rise residential buildings and one multi-layer residential building, with a total GFA of 67,991 square meters. The construction was completed in fiscal 2015. As of September 30, 2022, the unsold GFA of Yangzhou Pearl Garden Phase II was 10~~,545 square meters; un-allocated costs was $2,039,912.~~

~~Yangzhou~~Like ~~Palace~~most real estate companies in China, we generally provide guarantees to mortgagee banks in respect of the mortgage loans provided to the purchasers of our properties up until completion of the registration of the mortgage with the relevant mortgage registration authorities. As of September 30, 2023, the Company had security deposits for these guarantees of approximately $2.6 million. Guarantees for mortgages on residential properties are typically discharged when the individual property ownership certificates are issued. In our experience, the issuance of the individual property ownership certificates typically takes six to twelve months, so our mortgage guarantees typically remain outstanding for up to twelve months after we deliver the underlying property.

~~The~~Our ~~Company~~Property isDevelopment currently constructing 9 high-rise residential buildings and 16 sub-high-rise residential and multi-layer residential buildings with total GFA of 297,059 square meters in Yangzhou Palace located in Yang County. The construction started in the fourth quarter of fiscal 2013 and was completed during the year ended September 30, 2021. The Company received the pre-sale license on September 1, 2016 and started to promote and sell the property in November 2016. As of September 30, 2022, the remaining unsold GFA of Yangzhou Palace, which includes multi-layer residential buildings, commercial units, sub-high-rise and high-rise residential buildings was a total GFA of 87,989 square meters; un-allocated costs was $34,635,104.Operations

10We have a systematic and standardized process of project development, which we implement through several well-defined phases. One critically significant portion of our process is the land acquisition process, which is segmented into three stages: (i) opportunity identification, (ii) initial planning and budgeting, and (iii) land use rights acquisition. The following diagram sets forth the key stages of our property development process.

~~The~~LAND ~~following~~ACQUISITION ~~table~~PROCESS ~~sets~~Project ~~forth~~planning ~~our~~and ~~real~~design ~~estate projects~~Project inconstruction ~~the~~and ~~year~~Management ~~ended~~Pre-sale, ~~September~~sale ~~30,~~and ~~2022:~~marketing After-sale and delivery Opportunity Identification Initial Planning Land Acquisition -Strategic planning -Feasibility study -Financial assessment -Outsource architectural and engineering design -Outsource construction -Pre-sale -Delivery -Geographic and market analysis - Preliminary design -Internal approval -Design management -Construction supervision -Marketing -Feedback collection -Project evaluation -Bidding process -Arrange financing -Quality control -Advertising -Completion inspection -Landscaping and fixture installation

Unsold GFA as

GFA sold / disposed

of September 30,

Project Name

Location

Type of Buildings

during the year

2022

Mingzhu Garden

(Mingzhu Beiyuan) Phase II

Hanzhong City

High-rise residential

1,138

78,677

Oriental Pearl Garden

Hanzhong City

High-rise residential

363

53,506

Yangzhou Pearl Garden Phase II

Yang County

High-rise residential

10,545

Yangzhou Palace

Yang County

High-rise residential

14,681

87,989

Total

16,182

230,717

Our Projects

~~(1) The amounts for “total GFA” in this table are the amounts of total saleable gross floor area and are derived on the following basis:~~Overview

●We ~~for~~develop ~~properties~~the ~~that~~following three ~~are~~types ~~sold,~~of ~~the~~real ~~stated~~estate ~~GFA~~projects, iswhich ~~based~~may onbe ~~sales~~developed ~~contracts~~in ~~relating~~one toor ~~such~~more ~~property;~~phases:

● ~~for~~multi-layer ~~unsold~~apartment ~~properties~~buildings, ~~that~~which are ~~completed,~~typically ~~the~~six ~~stated~~stories ~~GFA~~or ~~is calculated based on the detailed construction blueprint and the calculation method approved by the PRC government for saleable GFA, after necessary adjustments~~less; ~~and~~

● ~~for~~sub-high-rise ~~properties~~apartment ~~that are under planning~~buildings, ~~the~~which ~~stated~~are ~~GFA~~typically isseven ~~based~~to on11 ~~the~~stories; ~~land grant contract~~ and ~~our internal projections.~~

~~Suppliers~~● high-rise apartment buildings, which are typically 12 to 33 stories.

~~Land~~At ~~Bank~~any one time, our projects (or phases of our projects) are in one of the following three stages:

In● ~~China,~~completed ~~the supply of land is controlled by the government. Since the early 2000s~~projects, ~~the~~meaning ~~real~~properties ~~estate~~for ~~industry~~which inconstruction ~~China~~ has been transitioning from an arranged system controlled by the PRC government to a more market-oriented system. At present, although the Chinese government still owns all urban land in China, land use rights with terms of up to 70 years can be granted to, owned or leased by, private individuals and companies.completed;

~~Land~~● -properties under ~~planning~~construction, ~~and~~meaning ~~development~~properties for which construction permits have been obtained but construction has not been completed; and

In● ~~May 2011,~~properties ~~the~~under ~~Company entered into a development agreement with the local government. Pursuant to the agreement~~planning, ~~the~~meaning ~~Company~~properties ~~will~~for ~~prepay~~which ~~the~~we ~~development~~have ~~cost~~entered ofinto ~~approximately~~land ~~$16.8~~grant ~~million~~contracts ~~(RMB 119,700,000)~~ and ~~the~~are ~~Company~~in ~~has~~ the right to acquire the land use rights through public bidding. The prepaid development cost will be deducted from the final purchase price of the land use rights. As of September 30, 2022, a deposit of approximately $2.2 million was paid by the Company (2021- $2.0 million). The local government is still in a slow process of ~~re-zoning~~obtaining the ~~property.~~required ~~The~~permits ~~Company expects~~ to ~~make~~ ~~payment~~begin ~~of the remaining development cost based on the government’s current work progress~~construction.

~~All~~Our ~~land~~main ~~transactions~~projects ~~are required to be reported~~located toin ~~and~~Hanzhong ~~authorized~~City byare: ~~the~~Mingzhu ~~local~~Beiyuan, ~~Bureau~~Oriental ofPearl ~~Land~~Garden and ~~Natural~~Liangzhou ~~Resources.~~Road ~~With~~related ~~respect~~projects. In toYang ~~real~~County, ~~estate~~our project ~~design and construction services,~~is ~~the~~Yangzhou ~~Company~~Pearl ~~typically~~Garden ~~selects~~and ~~the~~Yangzhou ~~lowest-cost provider based on quality selected through an open bidding process~~Palace. ~~Such~~Most ~~service~~projects ~~providers~~ are ~~numerous~~being indeveloped ~~China and the Company foresees no difficulties~~ in ~~securing~~multiple ~~alternative sources of services as needed~~phases.

~~Other Suppliers~~11

~~The~~Real ~~Company~~Estate ~~uses~~Projects ~~various~~located ~~suppliers~~ in ~~the construction~~Hanzhong ~~of its projects. For the year ended September 30, 2022 and 2021, no suppliers accounted for more than 10% of the total project expenditures~~City

11Mingzhu Garden - Mingzhu Beiyuan This project is located in the southwest part of Hanzhong City. The Phase I project includes two high-rise residential buildings with commercial shops located on the first floor with unsold GFA of Nil square meters as of September 30, 2020. The Phase II Mingzhu Beiyuan project includes 17 high-rise residential buildings with GFA of 358,058 square meters. The Company started construction in the third quarter of fiscal 2012 and completed the construction in the last quarter of fiscal 2015. As of September 30, 2023, the unsold GFA was 78,677 square meters; un-allocated costs was $20,151,590.

~~Competition~~Oriental Pearl Garden This project is located in the downtown of Hanzhong City. The Company started construction in the third quarter of fiscal 2012. It consists of 12 high-rise residential buildings with commercial shops on the first and second floors with GFA of approximately 275,014 square meters. The project was fully completed in fiscal 2016. As of September 30, 2023, the unsold GFA was 53,506 square meters; un-allocated costs was $16,989,637.

The real estate industry in China is highly competitive. In the Tier 3 and Tier 4 cities and counties that we focus on, the markets are relatively more fragmented than in the Tier 1 or Tier 2 cities. We compete primarily with regional property developers and an increasing number of large national property developers who have also started to enter these markets. Competitive factors include the geographical location of the projects, the types of products offered, brand recognition, price, designing and quality. In the regional markets in which we operate, our major competitors include regional real estate developers Wanbang Real Estate ~~Development~~Projects ~~Co.~~located Ltd. (“Wanbang”), Jingtai Real Estate Development Co. Ltd. (“Jingtai”) and Shaanxi Fenghui Real Estate Development Co. Ltd. (“Fenghui”) as well as other national real estate developers such as Evergrande Real Estate Group (“Evergrande”) who have also started their projects in ~~these local markets.~~Yang County

~~Nationally,~~Yangzhou ~~there~~Pearl are numerous national real estate developers that have real estate projects across China. There are many housing and land development companies listed on the Shanghai and Shenzhen Stock Exchanges. However, such companies usually undertake large scale projects and are unlikely to compete with the Company for business as the Company targets small to medium sized projects in Tier 3 and Tier 4 cities and counties.Garden

InYangzhou Pearl Garden mainly consists of multi-layer residential buildings and sub-high-rise residential buildings with commercial shops on the ~~regional~~first ~~market~~floors. As of September 30, 2021, the ~~Company’s~~remaining ~~only direct~~unsold ~~competitor~~GFA ~~with~~of ~~meaningful~~Phase ~~market~~I ~~share~~of inYangzhou ~~the~~Pearl ~~market~~Garden, iswhich ~~Wanbang.~~includes ~~This~~multi-layer ~~company~~residential ~~generally~~buildings, commercial ~~undertakes~~units, ~~medium~~sub-high-rise and ~~small~~high-rise ~~scale~~residential ~~projects~~buildings was a total GFA of Nil square meters. Yangzhou Pearl Garden Phase II consists of five high-rise residential buildings and ~~focuses~~one onmulti-layer ~~development~~residential building, with a total GFA of ~~commercial~~67,991 ~~real~~square ~~estate~~meters. The ~~properties~~construction was completed in fiscal 2015. As of September 30, ~~such~~2023, asthe ~~hotels~~unsold ~~and~~GFA ~~shopping~~of ~~centers~~Yangzhou Pearl Garden Phase II was 10,455 square meters; un-allocated costs was $1,981,727.

~~Competitive~~Yangzhou ~~Strength:~~Palace

WeThe ~~believe~~Company is currently constructing 9 high-rise residential buildings and 16 sub-high-rise residential and multi-layer residential buildings with total GFA of 297,059 square meters in Yangzhou Palace located in Yang County. The construction started in the ~~following~~fourth ~~strengths~~quarter ~~allow~~of usfiscal 2013 and was completed during the year ended September 30, 2021. The Company received the pre-sale license on September 1, 2016 and started to promote and sell the property in November 2016. As of September 30, 2023, the remaining unsold GFA of Yangzhou Palace, which ~~compete~~includes ~~effectively:~~multi-layer residential buildings, commercial units, sub-high-rise and high-rise residential buildings was a total GFA of 86,541 square meters; un-allocated costs was $33,009,114.

~~Well Positioned to Capture Opportunities in Tier 3 and Tier 4 Cities and Counties.~~12

~~With~~The ~~the~~following ~~increase in consumer disposable income~~table ~~and~~sets ~~urbanization~~forth ~~rates,~~our areal ~~growing~~estate ~~middle-income~~projects ~~consumer market has emerged driving demand for affordable and high quality housing~~ in ~~many~~ ~~cities~~the ~~across~~year ~~northwest~~ended ~~China.~~September ~~We focus on building large communities of modern~~30, mid-sized residential properties for this market segment and have accumulated substantial knowledge and experience about the residential preferences and demands of mid-income customers. We believe we can leverage our experience to capture the growth opportunities in the markets.2023:

Standardized and Scalable Business Model.

Unsold
GFA as of

GFA sold / disposed

September 30,

Project Name

Location

Type of Buildings

during the year

2023

Mingzhu Garden

(Mingzhu Beiyuan) Phase II

Hanzhong City

High-rise residential

—

78,677

Oriental Pearl Garden

Hanzhong City

High-rise residential

—

53,506

Yangzhou Pearl Garden Phase II

Yang County

High-rise residential

10,455

Yangzhou Palace

Yang County

High-rise residential

1,448

86,541

Total

1,538

229,179

Our business model focuses on a standardized property development process designed for rapid asset turnover. We break up the overall process into well-defined stages and closely monitor costs and development schedules through each stage. These stages include (i1) ~~identifying~~ ~~land,~~The ~~(ii) pre-planning~~amounts ~~and~~for ~~budgeting,~~“total ~~(iii) land acquisition,~~GFA” ~~(iv) detailed~~in ~~project~~this ~~design,~~table ~~(v) construction~~are ~~management, (vi) pre-sales, sales and (vii) after-sale services. We commence pre-planning and budgeting prior to~~ the ~~land~~amounts ~~acquisition,~~of ~~which~~total ~~enables~~saleable usgross tofloor ~~acquire~~area ~~land at costs that meet our pre-set investment targeted returns~~ and toare ~~quickly~~derived ~~begin the development process upon acquisition. Our enterprise resource planning enables us to collect and analyze information~~ on ~~a real-time basis throughout~~ the ~~entire~~following ~~property development process. We utilize our customer relationship management system to track customer profiles and sales to forecast future individual preferences and market demand.~~basis:

~~Experienced~~● ~~Management~~for ~~Team~~properties ~~Supported~~that byare ~~Trained and~~sold, ~~Motivated~~the ~~Workforce.~~stated GFA is based on sales contracts relating to such property;

~~Our~~● ~~management~~for ~~and~~unsold ~~workforce~~properties that are ~~well-trained and~~completed, ~~motivated.~~the ~~Employees~~stated ~~receive~~GFA is calculated based on~~-going~~ ~~training~~the indetailed ~~their~~construction ~~areas~~blueprint ofand ~~specialization~~the atcalculation ~~our~~method ~~head~~approved ~~office~~by inthe ~~Hanzhong.~~PRC government for saleable GFA, after necessary adjustments; and

~~Guangsha~~● isfor ~~also~~properties anthat ~~“AAA~~are ~~Enterprise~~under inplanning, ~~Shaanxi Construction~~the ~~Industry”~~stated asGFA ~~recognized~~is bybased on the ~~Credit~~land ~~Association~~grant ofcontract ~~Agricultural~~and ~~Bank~~our ofinternal ~~China, Shaanxi Branch~~projections.

12Suppliers

~~Strategies~~Land Bank

~~Our~~In ~~goal~~China, the supply of land is controlled by the government. Since the early 2000s, the real estate industry in China has been transitioning from an arranged system controlled by the PRC government to ~~become~~a more market-oriented system. At present, although the ~~leading~~Chinese ~~residential~~government still ~~property~~owns ~~developer~~all ~~focused~~urban onland in China’s, ~~Tier~~land 3use ~~and~~rights ~~Tier~~with 4terms ~~cities~~of ~~and~~up ~~counties~~to by70 ~~implementing~~years ~~the~~can ~~following~~be ~~strategies:~~granted to, owned or leased by, private individuals and companies.

~~Continue~~Land ~~Expanding~~- inunder ~~Selected Tier 3 and Tier~~planning ~~4 Cities. We believe that Tier 3~~ and ~~Tier 4 cities and counties present~~ development opportunities that are well suited for our scalable business model of rapid asset turnover. Furthermore, Tier 3 and Tier 4 cities and counties currently tend to be in an early stage of market maturity and have fewer large national developers. We believe that the fragmented market and relative abundance of land supply in Tier 3 and Tier 4 cities, as compared to Tier 1 and Tier 2 cities, offer more opportunities for us to generate attractive margins. And we also believe that our experience affords us the opportunity to emerge as a leading developer in these markets. In the near future, we plan to enter into other Tier 3 and Tier 4 cities that have:

●In May 2011, ~~Increasing~~the ~~urbanization~~Company ~~rates~~entered into a development agreement with the local government. Pursuant to the agreement, the Company will prepay the development cost of approximately $16.4 million (RMB 119,700,000) and ~~population~~the ~~growth;~~Company has the right to acquire the land use rights through public bidding. The prepaid development cost will be deducted from the final purchase price of the land use rights. As of September 30, 2023, a deposit of approximately $2.1 million was paid by the Company (2022- $2.2 million). The local government is still in a slow process of re-zoning the property. The Company expects to make payment of the remaining development cost based on the government’s current work progress.

●All ~~High~~land ~~economic~~transactions are ~~growth~~required to be reported to and ~~increasing~~authorized ~~individual~~by ~~income;~~the local Bureau of Land and Natural Resources. With respect to real estate project design and construction services, the Company typically selects the lowest-cost provider based on quality selected through an open bidding process. Such service providers are numerous in China and the Company foresees no difficulties in securing alternative sources of services as needed.

●Other ~~Sustainable land supply for future developments.~~Suppliers

WeThe ~~plan~~Company touses ~~continue to closely monitor our capital~~various ~~and~~suppliers ~~cash~~in ~~positions~~the ~~and carefully manage our cost for land use rights,~~ construction ~~costs~~of ~~and~~its ~~operating expenses~~projects. WeFor ~~believe~~the ~~that~~year weended ~~will be~~September ~~able~~30, to2023 ~~use~~and ~~our working capital more efficiently by adhering to prudent cost management~~2022, ~~which~~no ~~will~~suppliers ~~help~~accounted ~~to maintain our profit margins. When selecting a property project~~ for ~~development,~~more wethan ~~will continue to follow our established internal evaluation process, including utilizing~~10% ~~the analysis and input~~ of ~~our~~the ~~experienced~~total ~~management~~project ~~team and choosing third-party contractors through a tender process open only to bids which meet our budgeted costs.~~expenditures

~~Quality Control~~13

We emphasize quality control to ensure that our buildings and residential units meet our standards and provide high quality service. We select only experienced design and construction companies. We, through our contracts with construction contractors, provide customers with warranties covering the building structure and certain fittings and facilities of our property developments in accordance with the relevant regulations. To ensure construction quality, our construction contracts contain quality warranties and penalty provisions for poor work quality. In the event of delay or poor work quality, the contractor may be required to pay pre-agreed damages under our construction contracts. Our construction contracts do not allow our contractors to subcontract or transfer their contractual arrangements with us to third parties. We typically withhold 2% of the agreed construction fees for two to five years after completion of the construction as security to guarantee quality, which provides us with assurance for our contractors’ work quality.Competition

~~Our~~Real ~~contractors~~Estate ~~are also subject to our quality~~Development control procedures, including examination of materials and supplies, on-site inspection and production of progress reports. We require our contractors to comply with relevant PRC laws and regulations, as well as our own standards and specifications. We set up a profile for each and every unit constructed and monitor the quality of such unit throughout its construction period until its delivery. We also employ independent surveyors to supervise the construction progress. In addition, the construction of real estate projects is regularly inspected and supervised by the PRC governmental authorities.Business

~~Environmental~~The ~~Matters~~real estate industry in China is highly competitive. In the Tier 3 and Tier 4 cities and counties that we focus on, the markets are relatively more fragmented than in the Tier 1 or Tier 2 cities. We compete primarily with regional property developers and an increasing number of large national property developers who have also started to enter these markets. Competitive factors include the geographical location of the projects, the types of products offered, brand recognition, price, designing and quality. In the regional markets in which we operate, our major competitors include regional real estate developers Wanbang Real Estate Development Co. Ltd. (“Wanbang”), Jingtai Real Estate Development Co. Ltd. (“Jingtai”) and Shaanxi Fenghui Real Estate Development Co. Ltd. (“Fenghui”) as well as other national real estate developers such as Evergrande Real Estate Group (“Evergrande”) who have also started their projects in these local markets.

~~As a developer of property in the PRC~~Nationally, wethere are ~~subject~~numerous tonational ~~various~~real ~~environmental~~estate ~~laws~~developers ~~and~~that ~~regulations~~have ~~set~~real byestate ~~the~~projects ~~PRC~~across ~~national, provincial and municipal governments~~China. ~~These~~There ~~include~~are ~~regulations on~~many ~~air~~housing ~~pollution,~~and ~~noise~~land ~~emissions,~~development ascompanies listed ~~well~~on asthe ~~water~~Shanghai and ~~waste~~Shenzhen ~~discharge~~Stock Exchanges. As ~~of September 30~~However, ~~2022, we have never paid any penalties associated with the breach of any~~ such ~~laws~~companies ~~and~~usually ~~regulations.~~undertake ~~Compliance~~large ~~with~~scale ~~existing~~projects ~~environmental laws~~ and ~~regulations~~are ~~has not had a~~unlikely ~~material~~to ~~adverse~~compete ~~effect~~with onthe ~~our~~Company ~~financial~~for ~~condition~~business ~~and~~as ~~results~~the ofCompany ~~operations,~~targets ~~and~~small weto domedium ~~not~~sized ~~believe~~projects itin ~~will~~Tier ~~have~~3 ~~such~~and anTier ~~impact~~4 incities ~~the future~~and counties.

~~Our~~In ~~projects~~the ~~are~~regional ~~normally~~market, the ~~required~~Company’s toonly ~~undergo an~~direct ~~environmental~~competitor ~~impact~~with ~~assessment~~meaningful bymarket ~~government-appointed~~share ~~third~~in ~~parties,~~the ~~and~~market ais ~~report~~Wanbang. ofThis ~~such~~company ~~assessment~~generally ~~needs~~undertakes tomedium and besmall ~~submitted~~scale toprojects ~~the relevant~~and ~~environmental~~focuses ~~authorities~~on indevelopment ~~order~~of tocommercial ~~obtain~~real ~~their~~estate ~~approval~~properties, ~~before~~such ~~commencing~~as ~~construction~~hotels and shopping centers.

13New Energy Business

~~Upon~~Some ~~completion~~prominent ofcompetitors ~~each~~in ~~project,~~lithium ~~the relevant~~battery ~~environmental~~recycling ~~authorities~~sector ~~inspect~~include ~~the~~Contemporary ~~site~~Amperex toTechnology ensure the applicable environmental standards have been complied with, and the resulting report is presented together with other specified documents to the relevant construction administration authorities for their approval and recordsCo. ~~Approval from the environmental authorities on such report is required before we can deliver our completed work to our customers~~Ltd. As of(CATL), ~~September~~Li-Cycle 30Corp, ~~2022~~Redwood Materials, weAmerican ~~have~~Manganese ~~not~~Inc ~~experienced any difficulties in obtaining those approvals for commencement of construction~~ and ~~delivery~~ ofRetriev ~~completed~~Technologies ~~projects~~etc.

~~Employees~~CATL is a leading global player in the development and manufacturing of lithium-ion batteries for electric vehicles (EVs) and energy storage systems. Headquartered in Ningde, Fujian, China, CATL has rapidly grown to become one of the world’s largest suppliers of EV batteries, boasting a significant market share. The company is known for its strong focus on research and development, leading to advancements in battery technology, lifespan, and energy density.

WeLi-Cycle ~~currently~~Corp ~~have~~is 90based ~~full~~in Canada but with significant operations in the U.S., Li-~~time~~Cycle ~~employees~~ is known for its patented Spoke & Hub Technologies, which allow for the recovery of high-grade materials from used lithium batteries.

Department
Management			15
Accounting Staff			11
Sales and marketing staff			38
Administrative			26
Total			90

Redwood Materials was founded by a former Tesla CTO, Redwood Materials is gaining attention for its advanced recycling processes and focus on creating a closed-loop supply chain for battery materials.

~~Contractual~~American ~~Arrangements~~Manganese ~~between~~Inc ~~Shaanxi~~specializes ~~HGS~~in ~~and~~using its ~~Guangsha~~patented process for recycling lithium-ion battery cathode materials.

~~Due~~With toover ~~PRC~~30 ~~legal~~years ~~restrictions~~of ~~on foreign ownership~~experience, ~~neither~~ ~~we nor our subsidiaries own any direct equity interest in Guangsha. Instead, we control and receive the economic benefits of Guangsha’s~~Retriev ~~business~~Technologies ~~operation~~(formerly ~~through~~Toxco ~~a series of contractual arrangements~~Inc.) ~~Shaanxi~~is ~~HGS, Guangsha and the Guangsha shareholders entered into~~ a ~~series of~~veteran ~~contractual arrangements, also known as VIE Agreements. The VIE agreements are designed to provide Shaanxi HGS with the power, rights and obligations equivalent~~ in ~~all~~battery ~~material respects to those it would possess as the sole equity holder of Guangsha~~recycling, including ~~absolute control~~lithium ~~rights and the rights to the assets, property and revenue of Guangsha~~batteries. If Guangsha or the Guangsha’s shareholders fail to perform their respective obligations under the contractual arrangements, we could be limited in our ability to enforce the contractual arrangements that give us effective control over Guangsha and its subsidiary. Furthermore, if we are unable to maintain effective control, we would not be able to continue to consolidate the financial results of our variable interest entity in our financial statements.

~~Although~~Competitive we took every precaution available to effectively enforce the contractual and corporate relationship above, these contractual arrangements may still be less effective than direct ownership and that the Company may incur substantial costs to enforce the terms of the arrangements. For example, our VIE and its shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations in an acceptable manner or taking other actions that are detrimental to our interests. If we had direct ownership of our VIE, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of our VIE, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level. However, under the current contractual arrangements, we rely on the performance by our VIE and its shareholders of their obligations under the contracts to exercise control over our VIE. The shareholders of our consolidated VIE may not act in the best interests of our Company or may not perform their obligations under these contracts. In addition, failure of our VIE shareholders to perform certain obligations could compel the Company to rely on legal remedies available under PRC laws, including seeking specific performance or injunctive relief, and claiming damages, which may not be effective.Strength:

14We believe the following strengths allow us to compete effectively:

~~All~~Real ofEstate ~~these~~Development contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC. The legal environment in the PRC is not as developed as in some other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements. In the event we are unable to enforce these contractual arrangements, we may not be able to exert effective control over our operating entities and we may be precluded from operating our business, which would have a material adverse effect on our financial condition and results of operations. In addition, there is uncertainty as to whether the courts of the Cayman Islands or the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state.Business

~~Selected~~Well ~~Condensed~~Positioned ~~Consolidated~~to Capture ~~Financial~~Opportunities ~~Schedule~~in ofTier ~~the~~3 ~~Company~~ and ~~its~~Tier ~~Subsidiaries~~4 Cities and ~~the VIE~~Counties.

~~The~~With ~~following~~the ~~tables~~increase ~~present~~in consumer ~~selected~~disposable ~~condensed consolidating~~income ~~financial~~and ~~data~~urbanization ofrates, ~~the~~a ~~Company~~growing ~~and~~middle-income ~~its~~consumer ~~subsidiaries~~market ~~and~~has ~~the~~emerged ~~VIE~~driving demand for ~~the~~affordable and ~~fiscal~~high ~~years~~quality ~~ended~~housing ~~September~~in ~~30,~~many ~~2022~~cities ~~and~~across ~~2021~~northwest China. We focus on building large communities of modern, ~~and~~mid-sized residential ~~balance~~properties ~~sheet~~for ~~data~~this asmarket ofsegment ~~September~~and ~~30,~~have ~~2022~~accumulated substantial knowledge and ~~2021,~~experience ~~which~~about ~~have~~the ~~been~~residential ~~derived~~preferences ~~from~~and demands of mid-income customers. We believe we can leverage our ~~consolidated~~experience ~~financial~~to ~~statements~~capture ~~for~~the ~~those~~growth ~~years~~opportunities in the markets.

~~SELECTED~~Standardized ~~CONDENSED CONSOLIDATING STATEMENTS~~and OFScalable ~~INCOME~~Business ~~AND COMPREHENSIVE INCOME (LOSS)~~Model.

	For the Year Ended September 30, 2022
	The											Consolidated
	Company			Subsidiaries			VIE			Eliminations		Total
Revenues	$	—		$	—		$	9,577,405		$	—	$	9,577,405
Income from equity method investment	$	(87,959,503	)	$	—		$	—		$	87,959,503	$	—
Net income (loss)	$	(108,124,682	)	$	(65	)	$	(87,959,438	)	$	87,959,503	$	(108,124,682	)
Comprehensive income (loss)	$	(119,559,356	)	$	(65	)	$	(99,394,112	)	$	99,394,177	$	(119,559,356	)

Our business model focuses on a standardized property development process designed for rapid asset turnover. We break up the overall process into well-defined stages and closely monitor costs and development schedules through each stage. These stages include (i) identifying land, (ii) pre-planning and budgeting, (iii) land acquisition, (iv) detailed project design, (v) construction management, (vi) pre-sales, sales and (vii) after-sale services. We commence pre-planning and budgeting prior to the land acquisition, which enables us to acquire land at costs that meet our pre-set investment targeted returns and to quickly begin the development process upon acquisition. Our enterprise resource planning enables us to collect and analyze information on a real-time basis throughout the entire property development process. We utilize our customer relationship management system to track customer profiles and sales to forecast future individual preferences and market demand.

	For the Year Ended September 30, 2021
	The										Consolidated
	Company		Subsidiaries			VIE		Eliminations			Total
Revenues	$	—	$	—		$	58,915,239	$	—		$	58,915,239
Income from equity method investment	$	6,643,438	$	—		$	—	$	(6,643,438	)	$	—
Net income (loss)	$	6,375,438	$	(12,000	)	$	6,387,438	$	(6,375,438	)	$	6,375,438
Comprehensive income (loss)	$	15,763,825	$	(12,000	)	$	15,775,825	$	(15,763,825	)	$	15,763,825

15Experienced Management Team Supported by Trained and Motivated Workforce.

~~SELECTED~~Our ~~CONDENSED~~management ~~CONSOLIDATING~~and ~~BALANCE~~workforce are ~~SHEETS~~well-trained and motivated. Employees receive on-going training in their areas of specialization at our head office in Hanzhong.

	As of September 30, 2022
	The										Consolidated
	Company		Subsidiaries			VIE		Eliminations			Total
Cash	$	1,074,440	$	2,000		$	283,777	$	—		$	1,360,217
Investments in subsidiaries and VIE	$	94,868,534	$	—		$	—	$	(94,868,534	)	$	—
Total assets	$	123,043,589	$	(70	)	$	280,939,924	$	(96,596,049	)	$	307,387,394
Total liabilities	$	3,597,919	$	669,765		$	183,674,040	$	—		$	187,941,724
Total shareholders’ equity	$	119,445,670	$	(669,835	)	$	97,265,884	$	(96,596,049	)	$	119,445,670
Total liabilities and shareholders’ deficit	$	123,043,589	$	(70	)	$	280,939,924	$	(96,596,049	)	$	307,387,394

Guangsha is also an “AAA Enterprise in Shaanxi Construction Industry” as recognized by the Credit Association of Agricultural Bank of China, Shaanxi Branch.

	As of September 30, 2021
	The										Consolidated
	Company		Subsidiaries			VIE		Eliminations			Total
Cash	$	—	$	—		$	170,001	$	—		$	170,001
Investments in subsidiaries and VIE	$	194,262,711	$	—		$	—	$	(194,262,711	)	$	—
Total assets	$	194,262,711	$	371,230		$	384,629,333	$	(194,262,711	)	$	385,000,563
Total liabilities	$	3,565,000	$	1,266,921		$	189,470,931	$	—		$	194,302,852
Total shareholders’ equity	$	190,697,711	$	(895,691	)	$	195,158,402	$	(194,262,711	)	$	190,697,711
Total liabilities and shareholders’ deficit	$	194,262,711	$	371,230		$	384,629,333	$	(194,262,711	)	$	385,000,563

Strategies

~~SELECTED~~Our ~~CONDENSED~~goal ~~CONSOLIDATING~~is ~~STATEMENTS~~to become OFthe ~~CASH~~leading ~~FLOWS~~residential property developer focused on China’s Tier 3 and Tier 4 cities and counties by implementing the following strategies:

	For the Year Ended September 30, 2022
	The									Consolidated
	Company			Subsidiaries		VIE		Eliminations		Total
Net cash (used in) operating activities	$	(925,560	)	$	2,000	$	166,053	$	—	$	(757,507	)
Net cash provided by investing activities	$	(26,936,915	)	$	—	$	—	$	—	$	(26,936,915	)
Net cash used in financing activities	$	28,936,915		$	—	$	—	$	—	$	28,936,915

Continue Expanding in Selected Tier 3 and Tier 4 Cities. We believe that Tier 3 and Tier 4 cities and counties present development opportunities that are well suited for our scalable business model of rapid asset turnover. Furthermore, Tier 3 and Tier 4 cities and counties currently tend to be in an early stage of market maturity and have fewer large national developers. We believe that the fragmented market and relative abundance of land supply in Tier 3 and Tier 4 cities, as compared to Tier 1 and Tier 2 cities, offer more opportunities for us to generate attractive margins. And we also believe that our experience affords us the opportunity to emerge as a leading developer in these markets. In the near future, we plan to enter into other Tier 3 and Tier 4 cities that have:

	For the Year Ended September 30, 2021
	The									Consolidated
	Company		Subsidiaries		VIE			Eliminations		Total
Net cash (used in) operating activities	$	—	$	—	$	(604,167	)	$	—	$	(604,167	)
Net cash provided by investing activities	$	—	$	—	$	—		$	—	$	—
Net cash used in financing activities	$	—	$	—	$	—		$	—	$	—

●

Increasing urbanization rates and population growth;

~~Transfers~~● ofHigh ~~Cash~~economic togrowth and ~~from~~increasing ~~Our~~individual ~~VIE~~income; and

~~Green~~● ~~Giant~~Sustainable ~~Inc.~~land issupply ~~a holding company with no operations of its own. We conduct our operations in China primarily through our subsidiary and VIE in China. As a result, although other means are available~~ for us to obtain financing at the holding company level, Green Giant Inc.’s ability to pay dividends to its shareholders and to service any debt it may incur may depend upon dividends paid by our PRC subsidiaries and license and service fees paid by our PRC consolidated affiliated entities. If any of our subsidiaries incurs debt on its own in the future, ~~the instruments governing such debt may restrict its ability to pay dividends to Green Giant Inc~~developments. In addition, our PRC subsidiary and VIE are required to make appropriations to certain statutory reserve funds, which are not distributable as cash dividends except in the event of a liquidation of the companies.

16We plan to continue to closely monitor our capital and cash positions and carefully manage our cost for land use rights, construction costs and operating expenses. We believe that we will be able to use our working capital more efficiently by adhering to prudent cost management, which will help to maintain our profit margins. When selecting a property project for development, we will continue to follow our established internal evaluation process, including utilizing the analysis and input of our experienced management team and choosing third-party contractors through a tender process open only to bids which meet our budgeted costs.

~~Current PRC regulations permit our indirect PRC subsidiaries to pay dividends to HGS Investment only out of their accumulated profits~~Nevertheless, ifdue ~~any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China is required~~ to ~~set aside at least 10% of its after-tax~~ ~~profits~~the ~~each~~global ~~year,~~economy ifslowdown ~~any,~~and todeteriorating ~~fund~~real aestate ~~statutory~~property ~~reserve~~market ~~until such reserve reaches 50% of its registered capital. Each of such entity~~ in ~~China~~ ismainland ~~also required to further set aside a portion of its after-tax profits to fund the employee welfare fund~~China, ~~although~~ the ~~amount to~~Company ~~be set aside, if any,~~ is ~~determined~~adjusting ~~at the discretion of~~ its ~~board~~property ofdevelopment strategy ~~directors.~~from ~~Although~~aggressive ~~the~~expansion ~~statutory reserves can be used, among other ways,~~ to ~~increase~~survive ~~the~~through ~~registered~~this ~~capital~~critical and ~~eliminate~~challenging ~~future~~period ~~losses in excess of retained earnings of the respective companies, the reserve funds are not distributable~~ as ~~cash~~its ~~dividends except in the event of liquidation~~priority.

~~The PRC government also imposes controls on the~~New ~~conversion~~Energy of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore, if our subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. If we or our subsidiaries are unable to receive all of the revenues from our operations through the current VIE Agreements, we may be unable to pay dividends on our common stock.Business

~~Cash~~The ~~dividends,~~company ifhas ~~any~~strategically leveraged its resources by deploying experienced personnel from mainland China, onrenowned ~~our~~for ~~common~~its ~~stock~~advanced ~~will be~~and ~~paid~~sophisticated inlithium ~~U.S.~~production and ~~dollars~~recycling technology. IfThis wemove ~~are~~not ~~considered~~only ensures access to cutting-edge methodologies but also embeds a ~~PRC~~deep ~~tax~~understanding ~~resident~~of ~~enterprise~~the industry ~~for~~within ~~tax~~the ~~purposes~~company’s operational framework. Furthermore, ~~any~~the ~~dividends~~firm wehas ~~pay~~assembled toa ~~our~~senior ~~overseas~~management ~~shareholders~~team, each member ~~may~~handpicked befor ~~regarded~~their asextensive ~~China-sourced~~industry ~~income~~experience. ~~and~~This asleadership ais ~~result~~instrumental ~~may~~in besteering ~~subject~~the company’s operations towards efficiency and innovation, harnessing their collective expertise to ~~PRC~~navigate ~~withholding~~the ~~tax~~complexities atof athe ~~rate~~lithium production and recycling sector. This combination of upskilled manpower and seasoned leadership distinctly positions the company to 10excel in a competitive market.~~0%.~~

InQuality order for us to pay dividends to our shareholders, we will be dependent on payments made from Guangsha to Shaanxi HGS, pursuant to VIE Agreements between them, and the distribution of such payments to HGS Investment as dividends from Shaanxi HGS. Certain payments from Guangsha to Shaanxi HGS are subject to PRC taxes, including business taxes and VAT. During the year ended September 30, 2022 and 2021, Guangsha made no payments to Shaanxi HGS. For the years ended September 30, 2022 and 2021, there was no cash transferred between the Company and Guangsha (our VIE).Control

~~PRC~~We ~~Limitation~~emphasize onquality control ~~Overseas~~to ~~Listing~~ensure that our buildings and ~~Share~~residential units meet our standards and provide high quality service. We select only experienced ~~Issuances~~design and construction companies. We, through our contracts with construction contractors, provide customers with warranties covering the building structure and certain fittings and facilities of our property developments in accordance with the relevant regulations. To ensure construction quality, our construction contracts contain quality warranties and penalty provisions for poor work quality. In the event of delay or poor work quality, the contractor may be required to pay pre-agreed damages under our construction contracts. Our construction contracts do not allow our contractors to subcontract or transfer their contractual arrangements with us to third parties. We typically withhold 2% of the agreed construction fees for two to five years after completion of the construction as security to guarantee quality, which provides us with assurance for our contractors’ work quality.

~~Neither~~Our ~~we,~~contractors ~~our subsidiaries nor our VIE~~ are ~~currently~~ ~~required~~also subject to ~~obtain~~our ~~approval~~quality ~~from~~control ~~Chinese authorities~~procedures, including ~~the~~examination ~~China~~of ~~Securities~~materials ~~Regulatory~~and ~~Commission~~supplies, oron-site ~~CSRC,~~inspection orand ~~the~~production ~~Cybersecurity~~of ~~Administration~~progress ~~Committee, or CAC, to list on U~~reports.S. ~~exchanges~~We orrequire ~~issue~~our ~~securities~~contractors to ~~foreign~~comply ~~investors,~~with ~~however,~~relevant ifPRC ~~our~~laws ~~VIE~~and regulations, ~~subsidiaries~~as orwell ~~the~~as ~~holding~~our ~~company~~own ~~were~~standards ~~required to obtain approval in the future~~ and ~~were denied permission from Chinese authorities to list on U~~specifications.S. We ~~exchanges,~~set weup ~~will~~a ~~not~~profile befor ~~able~~each toand ~~continue listing~~every onunit aconstructed ~~U.S.~~and ~~exchange,~~monitor ~~which would materially affect~~ the ~~interest~~quality of ~~investors.~~such Itunit isthroughout ~~uncertain~~its ~~when~~construction ~~and~~period ~~whether the Company will~~until beits ~~required~~delivery. toWe ~~obtain~~also ~~permission~~employ ~~from~~independent ~~the~~surveyors ~~PRC government~~ to ~~list~~supervise ~~on U.S. exchanges in~~ the ~~future,~~construction ~~and~~progress. ~~even~~In ~~when such permission is obtained~~addition, ~~whether~~ ~~it will be denied or rescinded. Although~~ the ~~Company~~construction ~~is currently not required to obtain permission from any~~ of ~~the~~real ~~PRC federal~~estate orprojects ~~local~~is ~~governments~~regularly toinspected ~~obtain such permission~~ and ~~has~~supervised ~~not~~by ~~received any denial to list on~~ the ~~U.S.~~PRC ~~exchange,~~governmental ~~our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to its business or industry~~authorities.

1715

~~ITEM~~Environmental ~~1A. RISK FACTORS~~Matters

~~Risks~~As ~~Relating~~a developer of property in the PRC, we are subject to ~~Our~~various ~~Business~~environmental laws and ~~Industry~~regulations set by the PRC national, provincial and municipal governments. These include regulations on air pollution, noise emissions, as well as water and waste discharge. As of September 30, 2023, we have never paid any penalties associated with the breach of any such laws and regulations. Compliance with existing environmental laws and regulations has not had a material adverse effect on our financial condition and results of operations, and we do not believe it will have such an impact in the future.

Our ~~business~~projects isare ~~sensitive~~normally required to ~~China’s economy~~undergo ~~and~~an ~~China~~environmental ~~real~~impact ~~estate~~assessment ~~policies.~~by Agovernment-appointed ~~downturn~~third inparties, ~~China’s~~and ~~economy~~a ~~and~~report ~~restrictive~~of ~~real~~such ~~estate~~assessment ~~polices~~needs ~~could~~to be ~~materially~~submitted ~~and~~to ~~adversely affect~~the ~~our~~relevant ~~revenues~~environmental ~~and~~authorities ~~results~~in oforder ~~operations~~to obtain their approval before commencing construction.

~~Any~~Upon ~~slowdown~~completion inof ~~China’s economic development~~each ~~might~~project, ~~lead~~the torelevant ~~tighter~~environmental ~~credit~~authorities ~~markets,~~inspect ~~increased~~the ~~market~~site ~~volatility,~~to ~~sudden~~ensure ~~drops~~the inapplicable ~~business~~environmental ~~and~~standards ~~consumer~~have ~~confidence~~been ~~and dramatic changes~~complied inwith, ~~business~~ and ~~consumer~~the ~~behaviors.~~resulting ~~The~~report ~~current~~is ~~package~~presented oftogether ~~economic~~with ~~support~~other ~~policies~~specified isdocuments ~~designed~~ to ~~stabilize~~ the ~~economy~~relevant ~~against~~construction ~~slowing exports.~~administration ~~Ongoing government regulatory measures, including the “Ten National Notices” announced in 2010, the “Eight~~authorities ~~National~~for ~~Notices”~~their ~~and~~approval ~~property tax approved in January 2011, might have an adverse effect on our results of operations~~ and ~~the PRC property market~~records. InApproval ~~2022,~~from the ~~overall~~environmental ~~risk~~authorities ~~remained~~on insuch ~~Tier~~report 3is ~~and~~required 4before ~~cities~~we ~~despite~~can ~~initial~~deliver ~~signs~~our ofcompleted work ~~improvement~~to inour ~~sales~~customers. InAs ~~response to~~of ~~their~~September ~~perceived uncertainty in economic conditions~~30, ~~consumers might delay~~2023, ~~reduce~~we orhave ~~cancel~~not ~~purchases~~experienced ofany ~~homes,~~difficulties ~~and~~in ~~our~~obtaining ~~homebuyers may~~those ~~also~~approvals ~~defer,~~for ~~reduce or cancel purchases~~ commencement of ~~our~~construction ~~units~~ and ~~our~~delivery ~~results~~ of ~~operations~~completed ~~may be materially and adversely affected~~projects.

~~If we are unable to successfully manage our expansion into other Tier 3 and Tier 4 cities, we will not be able to execute our business plan.~~Employees

~~Historically,~~We currently ~~our business and operations~~ have ~~been~~ ~~concentrated~~95 infull-time ~~Hanzhong City and other surrounding counties~~employees. If we are unable to successfully develop and sell projects outside Hanzhong City, our future growth may be limited and we may not generate adequate returns to cover our investments in these Tier 3 and Tier 4 cities. In addition, as we expand our operations to Tier 3 and Tier 4 cities with higher land prices, our costs may increase, which may lead to a decrease in our profit margin.

We require substantial capital resources to fund our land use rights acquisitions and property developments, which may not be available.

Department
Management			15
Accounting Staff			11
Sales and marketing staff			43
Administrative			26
Total			95

~~Property~~Contractual ~~development~~Arrangements isbetween ~~capital intensive. Our~~Shaanxi ~~ability~~HGS ~~to secure sufficient financing for land use rights acquisition~~ and property development depends on a number of factors that are beyond our control, including market conditions in the capital markets, the PRC economy and the PRC government regulations that affect the availability and cost of financing for real estate companies.Guangsha

WeDue ~~may~~to PRC legal restrictions on foreign ownership, neither we nor our subsidiaries own any direct equity interest in Guangsha. Instead, we control and receive the economic benefits of Guangsha’s business operation through a series of contractual arrangements. Shaanxi HGS, Guangsha and the Guangsha shareholders entered into a series of contractual arrangements, also known as VIE Agreements. The VIE agreements are designed to provide Shaanxi HGS with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Guangsha, including absolute control rights and the rights to the assets, property and revenue of Guangsha. If Guangsha or the Guangsha’s shareholders fail to perform their respective obligations under the contractual arrangements, we could be limited in our ability to enforce the contractual arrangements that give us effective control over Guangsha and its subsidiary. Furthermore, if we are unable to ~~acquire~~maintain ~~desired~~effective ~~development~~control, we would not be able to continue to consolidate the financial results of our variable ~~sites~~interest atentity ~~commercially~~in ~~reasonable~~our ~~costs~~financial statements.

~~Our~~Although ~~revenue~~we ~~depends~~took onevery precaution available to effectively enforce the ~~completion~~contractual and ~~sale of~~corporate ~~our~~relationship ~~projects~~above, ~~which~~these incontractual ~~turn~~arrangements ~~depends~~may onstill ~~our~~be ~~ability~~less toeffective ~~acquire~~than ~~development~~direct ~~sites.~~ownership ~~Our~~and that ~~land~~the ~~use~~Company ~~rights~~may incur substantial costs ~~are~~to aenforce ~~major~~the ~~component~~terms of ~~our~~ ~~cost~~the ofarrangements. ~~real~~For ~~estate~~example, ~~sales~~the VIE and ~~increases~~its inshareholders ~~such~~could breach ~~costs~~their ~~could~~contractual ~~diminish~~arrangements ~~our~~with ~~gross~~us ~~margin.~~by, Inamong ~~China~~other things, ~~the~~failing ~~PRC~~to ~~government~~conduct ~~controls~~their ~~the~~operations ~~supply~~in an acceptable manner or taking ofother ~~land~~actions ~~and~~that ~~regulates~~are ~~land~~detrimental ~~sales~~to ~~and~~our ~~transfers~~interests. inIf we had direct ownership of the ~~secondary~~VIE, ~~market.~~we Aswould be able to exercise our rights as a ~~result,~~shareholder to effect changes in the ~~policies~~board of directors of the ~~PRC~~VIE, ~~government~~which in turn could implement changes, ~~including~~subject ~~those~~to any applicable ~~related~~fiduciary toobligations, ~~land~~at ~~supply~~the management and ~~urban~~operational ~~planning~~level. However, ~~affect~~under ~~our~~the ~~ability~~current tocontractual ~~acquire~~arrangements, we rely on the performance by the VIE and ~~our~~its ~~costs~~shareholders of ~~acquiring,~~their ~~land~~obligations ~~use~~under ~~rights~~the ~~for~~contracts ~~our~~to ~~projects~~exercise control over the VIE. The shareholders of our consolidated InVIE ~~recent~~may ~~years,~~not act in the ~~PRC~~best ~~government~~interests ~~has~~of ~~introduced~~our ~~various~~Company ~~measures~~or ~~attempting~~may not perform their obligations under these contracts. In addition, failure of the VIE shareholders to ~~moderate~~perform ~~investment~~certain inobligations could compel the ~~property~~Company ~~market~~to inrely ~~China~~on legal remedies available under PRC laws, including seeking specific performance or injunctive relief, and claiming damages, which may not be effective.

Although we believe that these measures are generally targeted at the luxury property market and speculative purchases of land and properties, the PRC government could introduce other measures in the future that may adversely affect our ability to obtain land for development. We currently acquire our development sites primarily by bidding for government land. Under current regulations, land use rights acquired from government authorities for commercial and residential development purposes must be purchased through a public tender, auction or listing-for-sale. Competition in these bidding processes has resulted in higher land use rights costs for us. We may also need to acquire land use rights through acquisition, which could increase our costs. Moreover, the supply of potential development sites in any given city will diminish over time and we may find it increasingly difficult to identify and acquire attractive development sites at commercially reasonable costs in the future.16

WeAll ~~provide~~of ~~guarantees~~these contractual arrangements are governed by PRC law and provide for the ~~mortgage~~resolution ~~loans~~ of disputes through arbitration in the PRC. The legal environment in the PRC is not as developed as in some other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit our ~~customers~~ability to enforce these contractual arrangements. In the event we are unable to enforce these contractual arrangements, we may not be able to exert effective control over our operating entities and we may be precluded from operating our business, which would ~~expose~~have usa material adverse effect on our financial condition and results of operations. In addition, there is uncertainty as to ~~risks~~whether the courts of ~~default~~the byCayman ~~our~~Islands ~~customers~~or the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state.

WeSelected ~~pre-sell~~Condensed ~~properties~~Consolidated ~~before actual completion~~Financial ~~and,~~Schedule in accordance with industry practice, our customers’ mortgage banks require us to guarantee our customers’ mortgage loans. Typically, we provide guarantees to PRC banks with respect to loans procured by the purchasers of ~~our properties for~~ the ~~total~~Company ~~mortgage loan~~and ~~amount~~its ~~until~~Subsidiaries the completion of the registration of the mortgage with the relevant mortgage registration authorities, which generally occurs within six to twelve months after the purchasers take possession of the relevant properties. In line with what we believe to be industry practice, we rely on the credit evaluation conducted by mortgagee banks and ~~do not conduct our own independent credit checks on our customers. The mortgagee banks typically require us to maintain, as restricted cash, 5% to 10% of~~ the ~~mortgage proceeds paid to us as security for our obligations under such guarantees (the security deposit).~~VIE

18The following tables present selected condensed consolidating financial data of the Company and its subsidiaries and the VIE for the fiscal years ended September 30, 2023 and 2022, and balance sheet data as of September 30, 2023 and 2022, which have been derived from our consolidated financial statements for those years.

IfSELECTED ~~a purchaser defaults on its payment obligations~~CONDENSED ~~during~~CONSOLIDATING ~~the~~STATEMENTS ~~term~~OF ofINCOME ~~our~~AND ~~guarantee,~~COMPREHENSIVE ~~the~~INCOME mortgagee bank may deduct the delinquent mortgage payment from the security deposit. If the delinquent mortgage payments exceed the security deposit, the banks may require us to pay the excess amount. If multiple purchasers default on their payment obligations at around the same time, we will be required to make significant payments to the banks to satisfy our guarantee obligations. If we are unable to resell the properties underlying defaulted mortgages on a timely basis or at prices higher than the amounts of our guarantees and related expenses, we will suffer financial losses. For the years ended September 30, 2022 and 2021, the Company has not experienced any delinquent mortgage loans and has not experienced any losses related to this guarantee. As of September 30, 2022 and 2021, our outstanding guarantees in respect of our customers’ mortgage loans amounted to approximately $24.87 million and $66 million, respectively. As of September 30, 2022 and 2021, the amount of security deposits provided for these guarantees was approximately $2.2 million and $3.3 million, respectively, and the Company believes that such reserves are sufficient. Since inception through the release of this report, the Company has not experienced any delinquent mortgage loans and has not experienced any losses related to these guarantees.(LOSS)

A large portion of our loan portfolio is tied to the real estate market and we may be negatively impacted by downturns in that market.

	For the Year Ended September 30, 2023
	The											Consolidated
	Company			Subsidiaries			VIE			Eliminations		Total

Revenues	$	—		$	788,582		$	754,598		$	—	$	1,543,180
(Loss)/Income from equity method investment	$	(104,086,934	)	$	—		$	—		$	104,086,934	$	—
Net income (loss)	$	(110,121,478	)	$	(311,764	)	$	(103,775,170	)	$	104,086,934	$	(110,121,478	)
Comprehensive income (loss)	$	(109,059,183	)	$	(311,764	)	$	(102,712,875	)	$	103,024,639	$	(109,059,183	)

As of September 30, 2022, we had large construction loans payable of approximately $108.37 million . These loans generally have a higher degree of risk than long-term financing of existing properties because repayment depends on the completion of the project and usually on the sale of the property. In addition, these loans are often “interest-only loans,” which normally require only the payment of interest accrued prior to maturity. Interest-only loans carry greater risk than principal and interest loans because no principal is paid prior to maturity. This risk is particularly apparent during periods of rising interest rates and declining real estate values. If there is a significant decline in the real estate market due to a material increase in interest rates or for other reasons, many of these loans could default and result in foreclosure. Moreover, most of these loans are for projects located in our primary market area. If we are forced to foreclose on a project prior to completion, we may not be able to recover the entire unpaid portion of the loan or we may be required to fund additional money to complete the project or hold the property for an indeterminate period of time. Any of these outcomes may result in losses and reduce our earnings.

	For the Year Ended September 30, 2022
	The											Consolidated
	Company			Subsidiaries			VIE			Eliminations		Total

Revenues	$	—		$	—		$	9,577,405		$	—	$	9,577,405
(Loss)/Income from equity method investment	$	(87,959,503	)	$	—		$	—		$	87,959,503	$	—
Net income (loss)	$	(108,124,682	)	$	(65	)	$	(87,959,438	)	$	87,959,503	$	(108,124,682	)
Comprehensive income (loss)	$	(119,559,356	)	$	(65	)	$	(99,394,112	)	$	99,394,177	$	(119,559,356	)

~~We rely on third-party contractors.~~17

~~Substantially~~SELECTED ~~all of our project construction~~CONDENSED ~~and~~CONSOLIDATING ~~related~~BALANCE work are outsourced to third-party contractors. We are exposed to risks that the performance of our contractors may not meet our standards or specifications. Negligence or poor work quality by any contractors may result in defects in our buildings or residential units, which could in turn cause us to suffer financial losses, harm our reputation or expose us to third-party claims. We work with multiple contractors on different projects and we cannot guarantee that we can effectively monitor their work at all times.SHEETS

Although our construction and other contracts contain provisions designed to protect us, we may be unable to successfully enforce these rights and, even if we are able to successfully enforce these rights, the third-party contractor may not have sufficient financial resources to compensate us. Moreover, the contractors may undertake projects from other property developers, engage in risky undertakings or encounter financial or other difficulties, such as supply shortages, labor disputes or work accidents, which may cause delays in the completion of our property projects or increases in our costs.

	As of September 30, 2023
	The											Consolidated
	Company			Subsidiaries			VIE			Eliminations		Total
Cash	$	2,193		$	45,572		$	45,368		$	—	$	93,133
Investments in subsidiaries and VIE	$	(10,383,477	)	$	—		$	—		$	10,383,477	$	—
Total assets	$	18,443,202		$	442,545		$	178,996,918		$	7,209,803	$	205,092,468
Total liabilities	$	2,749,245		$	2,162,144		$	184,487,122		$	—	$	189,398,511
Total shareholders’ equity	$	15,693,957		$	(1,719,599	)	$	(5,490,204	)	$	7,209,803	$	15,693,957
Total liabilities and shareholders’ deficit	$	18,443,202		$	442,545		$	178,996,918		$	7,209,803	$	205,092,468

We may be unable to complete our property developments on time or at all. The progress and costs for a development project can be adversely affected by many factors, including, without limitation:

	As of September 30, 2022
	The										Consolidated
	Company		Subsidiaries			VIE		Eliminations			Total
Cash	$	1,074,440	$	2,000		$	283,777	$	—		$	1,360,217
Investments in subsidiaries and VIE	$	94,868,534	$	—		$	—	$	(94,868,534	)	$	—
Total assets	$	123,043,589	$	(70	)	$	280,939,924	$	(96,596,049	)	$	307,387,394
Total liabilities	$	3,597,919	$	669,765		$	183,674,040	$	—		$	187,941,724
Total shareholders’ equity	$	119,445,670	$	(669,835	)	$	97,265,884	$	(96,596,049	)	$	119,445,670
Total liabilities and shareholders’ deficit	$	123,043,589	$	(70	)	$	280,939,924	$	(96,596,049	)	$	307,387,394

●SELECTED ~~delays~~CONDENSED CONSOLIDATING inSTATEMENTS ~~obtaining~~OF ~~necessary~~CASH ~~licenses, permits or approvals from government agencies or authorities;~~FLOWS

● shortages of materials, equipment, contractors and skilled labor;

	For the Year Ended September 30, 2023
	The										Consolidated
	Company			Subsidiaries			VIE		Eliminations		Total
Net cash (used in) operating activities	$	(6,279,717	)	$	(56,428	)	$	855,047	$	—	$	(5,481,098	)
Net cash provided by investing activities	$	(100,000	)	$	100,000		$	—	$	—	$	—
Net cash used in financing activities	$	5,307,470		$	—		$	—	$	—	$	5,307,470

● disputes with our third-party contractors;

	For the Year Ended September 30, 2022
	The									Consolidated
	Company			Subsidiaries		VIE		Eliminations		Total
Net cash (used in) operating activities	$	(925,560	)	$	2,000	$	166,053	$	—	$	(757,507	)
Net cash provided by investing activities	$	(26,936,915	)	$	—	$	—	$	—	$	(26,936,915	)
Net cash used in financing activities	$	28,936,915		$	—	$	—	$	—	$	28,936,915

●Transfers ~~failure~~of ~~by our third-party contractors~~ Cash to ~~comply~~and ~~with~~from ~~our~~The ~~designs, specifications or standards;~~VIE

●Green ~~difficult~~Giant ~~geological~~Inc. ~~situations~~is a orholding company with no operations of its own. We conduct our operations in China primarily through our subsidiary and VIE in China. As a result, although other ~~geotechnical~~means ~~issues;~~are available for us to obtain financing at the holding company level, Green Giant Inc.’s ability to pay dividends to its shareholders and to service any debt it may incur may depend upon dividends paid by our PRC subsidiaries and license and service fees paid by our PRC consolidated affiliated entities. If any of our subsidiaries incurs debt on its own in the future, the instruments governing such debt may restrict its ability to pay dividends to Green Giant Inc. In addition, our PRC subsidiary and VIE are required to make appropriations to certain statutory reserve funds, which are not distributable as cash dividends except in the event of a liquidation of the companies.

~~● onsite labor disputes or work accidents; and natural catastrophes or adverse weather conditions.~~18

~~Any~~Current ~~construction~~PRC ~~delays~~regulations permit our indirect PRC subsidiaries to pay dividends to HGS Investment only out of their accumulated profits, orif ~~failure~~any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China is required to ~~complete~~set aside at least 10% of its after-tax profits each year, if any, to fund a ~~project~~statutory ~~according~~reserve until such reserve reaches 50% of its registered capital. Each of such entity in China is also required to ~~our~~further ~~planned~~set ~~specifications~~aside ora ~~budget~~portion of its after-tax profits to fund the employee welfare fund, ~~may~~although ~~delay~~the ~~our~~amount ~~property~~to ~~sales~~be set aside, ~~which~~if ~~could~~any, ~~harm~~is ~~our~~determined ~~revenues~~at the discretion of its board of directors. Although the statutory reserves can be used, ~~cash~~among ~~flows~~other ways, to increase the registered capital and ~~our~~eliminate ~~reputation~~future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation.

19The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore, if our subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. If we or our subsidiaries are unable to receive all of the revenues from our operations through the current VIE Agreements, we may be unable to pay dividends on our common stock.

~~Changes~~Cash ofdividends, ~~laws~~if ~~and~~any, on ~~regulations~~our ~~with~~common ~~respect~~stock will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we pay to ~~pre~~our overseas shareholders may be regarded as China-~~sales~~sourced income and as a result may ~~adversely~~be ~~affect~~subject ~~our~~to ~~cash~~PRC ~~flow~~withholding ~~position~~tax ~~and~~at ~~business~~a ~~performance~~rate of up to 10.0%.

WeIn ~~depend~~order onfor ~~cash~~us ~~flows~~to ~~from~~pay ~~pre-sale~~dividends ofto ~~properties as~~our anshareholders, ~~important~~we ~~source~~will ofbe ~~funding~~dependent on ~~for~~payments ~~our~~made ~~property~~from Guangsha ~~projects~~to ~~and~~Shaanxi ~~servicing~~HGS, ~~our~~pursuant ~~indebtedness.~~to ~~Under~~VIE ~~current~~Agreements ~~PRC~~between ~~laws~~them, and ~~regulations,~~the ~~property developers~~distribution ~~must~~of ~~fulfill~~such ~~certain~~payments ~~conditions~~to HGS ~~before~~Investment ~~they~~as ~~can~~dividends ~~commence~~from ~~pre-sale~~Shaanxi ofHGS. ~~the~~Certain ~~relevant~~payments ~~properties~~from ~~and~~Guangsha ~~may~~to ~~only~~Shaanxi ~~use~~HGS ~~pre-sale~~are ~~proceeds~~ subject to ~~finance~~PRC ~~the~~taxes, ~~construction~~including ofbusiness taxes ~~specific~~and ~~developments~~VAT. (During the ~~“Pre-Sale~~year ~~Conditions~~ended ~~and~~September ~~Usage”).~~30, ~~Changes~~2023 inand ~~laws~~2022, ~~and~~Guangsha ~~regulations or~~made inno ~~their~~payments ~~interpretation~~to orShaanxi ~~the~~HGS. ~~imposition~~For ofthe ~~more~~years ~~stringent~~ended ~~Pre-Sale~~September 30, ~~Conditions~~2023 and ~~Usage~~2022, ~~could~~there ~~have~~was ano ~~material~~cash ~~adverse~~transferred ~~effect~~between onthe ~~our cash~~Company ~~flow position~~ and ~~business~~Guangsha ~~performance~~(the VIE).

~~Our~~PRC ~~results~~Limitation ofon Overseas ~~operations~~Listing ~~may~~and ~~fluctuate~~Share ~~from period to period.~~Issuances

~~Our~~Neither ~~results~~we, ofour ~~operations~~subsidiaries ~~tend~~nor the VIE are currently required to obtain ~~fluctuate~~approval from ~~period~~ toChinese ~~period.~~authorities, ~~The~~including ~~number~~the ofChina ~~properties~~Securities ~~that~~Regulatory weCommission, ~~can~~or ~~develop~~CSRC, or ~~complete~~the ~~during~~Cybersecurity Administration Committee, ~~any~~or ~~particular~~CAC, ~~period~~to islist ~~limited~~on ~~due~~U.S. exchanges or issue securities to foreign investors, however, if the ~~substantial~~VIE, subsidiaries or the holding ~~capital~~company were required ~~for~~to ~~land~~obtain ~~acquisition~~approval ~~and~~in ~~construction,~~the asfuture ~~well~~and aswere ~~the~~denied ~~lengthy~~permission ~~development~~from ~~periods~~Chinese ~~required~~authorities ~~before~~to ~~positive~~list ~~cash~~on ~~flows~~U.S. exchanges, ~~may~~we will not be ~~generated.~~able Into ~~addition,~~continue ~~several~~listing ~~properties~~on ~~that~~a weU.S. ~~have~~exchange, ~~developed~~which orwould ~~that~~materially ~~are~~affect ~~under~~the ~~development~~interest ~~are~~of ~~large~~investors. ~~scale~~It ~~and~~is ~~are~~uncertain ~~developed~~when inand ~~multiple~~whether ~~phases~~the ~~over~~Company ~~the~~will ~~course~~be ofrequired ~~one~~to obtain permission from the PRC government to ~~several~~list ~~years~~on U.S. ~~The~~exchanges ~~selling~~in ~~prices~~the offuture, and even when such permission is obtained, whether it will be denied or rescinded. Although the ~~residential~~Company ~~units~~is incurrently ~~larger~~not ~~scale~~required ~~property~~to ~~developments~~obtain permission ~~tend~~from any of the PRC federal or local governments to ~~change~~obtain ~~over~~such ~~time,~~permission ~~which~~and ~~may~~has ~~impact~~not received any denial to list on the U.S. exchange, our ~~sales~~operations ~~proceeds~~could ~~and~~be adversely affected, ~~accordingly~~directly or indirectly, ~~our~~by ~~revenues~~existing ~~for~~or ~~any~~future ~~given~~laws ~~period~~and regulations relating to its business or industry.

~~We rely on our key management members.~~19

WeITEM ~~depend on the services provided by key management members~~1A. ~~Competition for management talent is intense in the property development sector. In particular, we are highly dependent on Mr. Neng~~ ~~Chen,~~RISK our Chairman and Chief Executive Officer. We do not maintain key employee insurance. In the event that we lose the services of any key management member, we may be unable to identify and recruit suitable successors in a timely manner or at all, which will adversely affect our business and operations. Moreover, we need to employ and retain more management personnel to support our expansion into other Tier 3 and Tier 4 cities and counties. If we cannot attract and retain suitable human resources, especially at the management level, our business and future growth will be adversely affected.FACTORS

~~Increases~~Risks inRelating ~~the price of raw materials may~~to ~~increase~~Our ~~our~~Business ~~cost of sales~~ and ~~reduce our earnings.~~Industry

~~Our~~We ~~third-party~~have contractors are responsible for procuring almost all of the raw materials used in our project developments. Our construction contracts typically provide for fixed or capped payments, but the payments are subject to changes in government-suggested steel prices. The increase in steel prices could result in an ~~increase in our construction costs. In addition, the increases in the price of raw materials, such as cement, concrete blocks and~~evolving ~~bricks,~~business inmodel ~~the~~with ~~long~~still ~~run~~untested ~~could~~growth ~~be passed on to us by our contractors, which will increase our construction costs~~initiatives. ~~Any such cost increase could reduce our earnings to the extent we are unable to pass these increased costs to our customers.~~

~~Any~~We ~~unauthorized~~have ~~use~~an ofevolving business model and intend to implement new strategies to grow our ~~brand~~business in the future. There can be no assurance that we will be successful in developing new product categories or ~~trademark~~in entering ~~may~~new ~~adversely~~specialty ~~affect~~markets or in implementing any other growth strategies. Similarly, there can be no assurance that we already have or will be able to obtain or retain any employees, consultants or other resources with any specialized skills or relationships to successfully implement our ~~business~~strategies in the future.

WeDue ~~own~~to ~~trademarks for “汉中广厦”, in~~ the ~~form~~significant decrease of ~~Chinese characters and our Company logo. We rely on~~ the ~~PRC intellectual property and anti-unfair competition laws and~~ ~~contractual~~fair ~~restrictions~~market tovalue ~~protect brand name and trademarks. We believe our brand, trademarks and other intellectual property rights are important to our success. Any unauthorized use~~ of our ~~brand~~fixed assets, ~~trademarks~~in ~~and~~line ~~other~~with ~~intellectual~~best ~~property rights could harm our competitive advantages and business. Historically~~practice, ~~China~~we ~~has~~may ~~not~~be ~~protected~~required ~~intellectual property rights~~ to ~~the~~take ~~same~~write-downs ~~extent~~or aswrite-offs ~~the~~in ~~United States, and~~connection ~~infringement~~with ofour ~~intellectual~~real ~~property~~estate ~~rights~~business ~~continues~~that tocould ~~pose~~have a ~~serious~~significant ~~risk~~negative ofeffect ~~doing~~on ~~business in China. Monitoring and preventing unauthorized use is difficult. The measures we take to protect~~ our ~~intellectual~~financial ~~property rights may not be adequate. Furthermore~~condition, ~~the~~results ~~application~~ of ~~laws~~ ~~governing~~operations ~~intellectual property rights in China~~ and ~~abroad~~our share ~~is uncertain and evolving~~price, ~~and~~which could ~~involve~~cause ~~substantial~~you ~~risks~~ to ~~us. If~~lose wesome ~~are~~or ~~unable~~all toof ~~adequately~~your ~~protect our brand, trademarks and other intellectual property rights, our reputation may be harmed and our business may be adversely affected~~investment.

20As a result of the overall downturn in China’s real estate industry, particularly in non-first and second-tier cities, and the significant two-step impairment test we performed, it has been determined that the sum of the undiscounted future net cash flows expected from the utilization and disposition of our real estate assets is significant lower than its carrying value, and therefore we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges in connection with our real estate business that could result in our reporting losses. Even though these charges may not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities.

WeAccordingly, our ~~may~~shareholders ~~fail~~could suffer a reduction in the value of their securities. Such shareholders are unlikely to ~~obtain~~have ora ~~may~~remedy ~~experience~~for ~~material~~such ~~delays~~reduction in ~~obtaining~~value ~~necessary~~unless ~~government~~they ~~approvals~~are ~~for~~able ~~any~~to ~~major~~successfully ~~property~~claim ~~development~~that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, ~~which~~or ~~will~~if ~~adversely~~they ~~affect~~are able to successfully bring a private claim under securities laws that our ~~business~~disclosures contained an actionable material misstatement or material omission.

The ~~real estate industry is strictly regulated~~Company’s bylithium-ion ~~the~~battery ~~PRC~~recycling ~~government.~~business ~~Property~~is ~~developers in China must abide by various laws~~ and ~~regulations,~~will ~~including~~be ~~implementation~~dependent ~~rules promulgated by~~on ~~local~~its ~~governments~~recycling ~~to enforce these laws and regulations~~facilities. ~~Before~~If ~~commencing,~~one ~~and~~or ~~during~~more ~~the course~~ of, ~~development~~its offuture afacilities ~~property project,~~become ~~we need to apply for various licenses~~inoperative, ~~permits,~~capacity ~~certificates~~constrained ~~and~~or ~~approvals,~~if ~~including~~operations ~~land~~are ~~use rights certificates~~disrupted, ~~construction~~its ~~site planning permits~~business, ~~construction~~results work planning permits, construction permits, pre-sale permits and completion acceptance certificates. We need to satisfy various requirements to obtain these certificates and permits. To date, we have not encountered serious delays or difficulties in the process of ~~applying~~operations ~~for these certificates~~ and ~~permits,~~financial ~~but~~condition wecould cannot guarantee that we will not encounter serious delays or difficulties in the future. In the event that we fail to obtain the necessary governmental approvals for any of our major property projects, or a serious delay occurs in the government’s examination and approval progress, we may not be ~~able to maintain our development schedule and~~ ~~our~~materially ~~business and cash flows may be~~ adversely affected.

WeThe Company conducts its lithium-ion battery recycling business through Green Giant Energy, the operating entity in Texas. The Company’s lithium-ion battery recycling business revenue is and will be dependent on the operations of its future facilities, including the planned facility in Houston Texas and any other facilities it may ~~forfeit~~develop ~~land~~in tothe future. To the ~~PRC~~extent ~~government~~that the Company experiences any operational risk ifevents weincluding, ~~fail~~among other things, fire and explosions, severe weather and natural disasters (such as floods, windstorms, wildfires and earthquakes), failures in water supply, major power failures, equipment failures (including any failure of its process equipment, information technology, air conditioning, and cooling and compressor systems), a cyber-attack or other incident, failures to comply with applicable ~~procedural~~regulations ~~requirements~~and ~~applicable~~standards, labor force and work stoppages, including those resulting from local or global pandemics or otherwise, or if its future facilities become capacity constrained, the Company may be required to ~~land~~make ~~grants~~capital expenditures even though it may not have sufficient available resources at such time. Additionally, there is no guarantee that the proceeds available from any of the ~~government~~Company’s insurance policies will be sufficient to cover such capital expenditures. The Company’s insurance coverage and available resources may prove to be inadequate for events that may cause significant disruption to its operations. Any disruption in the Company’s recycling processes could result in delivery delays, scheduling problems, increased costs or production interruption, which, in turn, may result in its customers deciding to send their end-of-life lithium-ion batteries and battery manufacturing scrap to the ~~terms~~Company’s competitors. The Company is and will be dependent on its future facilities, which will in the future require a high degree of capital expenditures. If one or more of the ~~land~~Company’s ~~use~~current ~~rights~~or ~~grant~~future facilities become inoperative, capacity constrained or if operations are disrupted, ~~contracts~~its business, results of operations and financial condition could be materially adversely affected.

~~According~~The todevelopment ~~the relevant PRC regulations, if we fail to develop a property project according to the terms~~ of ~~the land use rights grant contract, including those relating to the payment~~ of land premiums, specified use of the land and the time for commencement and completion of the property development, the PRC government may issue a warning, may impose a penalty or may order us to forfeit the land. Specifically, under current PRC law, if we fail to commence development within one year after the commencement date stipulated in the land use rights grant contract, the relevant PRC land bureau may issue a warning notice to us and impose an ~~idle~~alternative ~~land~~chemical ~~fee on the land of~~ make-up ~~to 20%~~ of the land premium. If we fail to commence development within two years, the land will be subject to forfeiture to the PRC government, unless the delay in development is caused by government actions or force majeure. Even if the commencement of the land development is compliant with the land use rights grant contract, if the developed GFA on the land is less than onelithium-~~third~~ion ofbatteries ~~the total GFA of the project~~ or ~~the~~battery ~~total~~alternatives ~~capital~~could ~~invested~~materially isadversely ~~less~~affect ~~than one-fourth of~~ the ~~total investment of the project and the suspension of the development of the land continues for more than one year without government~~Company’s ~~approval,~~revenues ~~the land will also be treated as idle land~~ and beresults ~~subject to penalty or forfeiture. We cannot assure you that circumstances leading to significant delays in our development schedule or forfeiture~~ of ~~land will not arise in the future~~operations. If we forfeit land, we will not only lose the opportunity to develop the property projects on such land, but may also lose all past investments in such land, including land premiums paid and development costs incurred.

~~Any~~The ~~non-compliant~~development ~~GFA~~and adoption of ~~our~~alternative ~~uncompleted~~ battery technologies could materially adversely affect the Company’s prospects and future ~~property~~revenues. ~~developments~~Current ~~will~~and next generation high energy density lithium-ion batteries for use in products such as EVs use nickel and cobalt as significant inputs. Cobalt and nickel tend to be ~~subject~~in lower supply and therefore command higher prices than certain other raw materials. Alternative chemical makeups for lithium-ion batteries or battery alternatives are being developed and some of these alternatives could be less reliant on cobalt and nickel or use other lower-priced raw materials such as lithium-iron phosphate chemistries, which contain neither cobalt nor nickel. A shift in production to ~~governmental~~batteries ~~approval~~using lower-priced raw materials could affect the value of the end products produced by the Company, lowering its revenues and ~~additional~~negatively ~~payments~~impacting its results of operations.

The ~~local~~Company ~~government~~is ~~authorities~~subject ~~inspect~~to ~~property developments after their completion and issue~~ the ~~completion~~risk ~~acceptance certificates if the developments are in compliance with the relevant laws and regulations. If the total constructed GFA~~ of alitigation ~~property development exceeds the GFA originally authorized in the relevant land grant contracts~~ or ~~construction~~regulatory ~~permit~~proceedings, ~~or if the completed property contains built-up areas that do not conform with the plan authorized~~ bywhich ~~the~~could ~~construction~~materially ~~permit,~~adversely ~~the~~impact ~~property~~its ~~developer~~financial ~~may be required to pay additional amounts or take corrective actions with respect to such non-compliant GFA before a completion acceptance certificate can be issued to the property development~~results.

~~Our~~All ~~failure~~industries, including the green energy and lithium-ion battery recycling industry, are subject to ~~assist~~legal ~~our~~claims, ~~customers~~with or without merit. From time to time, we are subject to various litigation and regulatory proceedings arising in ~~applying~~the normal course of business. Due to the inherent uncertainty of the litigation process, we may not be able to predict with any reasonable degree of certainty the outcome of any litigation or the potential for ~~property~~future ~~ownership~~litigation. ~~certificates~~Regardless inof the outcome, any legal or regulatory proceeding could have a ~~timely~~material ~~manner~~adverse ~~may~~impact ~~lead~~on tothe ~~compensatory~~Company’s ~~liabilities~~business, prospects, financial conditions and results of operations due to ~~our~~defense ~~customers~~costs, the diversion of management resources, potential reputational harm and other factors.

WeThe ~~are~~Company ~~required~~may ~~to meet various requirements within~~not 90be ~~days~~able ~~after delivery of property, or such other period contracted with our customers, in order for our customers~~ to ~~apply~~complete ~~for~~its ~~their property~~recycling ~~ownership~~processes ~~certificates,~~as ~~including~~quickly ~~passing various governmental clearances, formalities and procedures. Under our sales contract, we are liable for any delay in the submission of the required documents~~ as ~~a result of our failure to meet such requirements, and are required to compensate our~~ customers ~~for~~may ~~delays. In the case of serious delays on one or more property projects~~require, wewhich ~~may~~could because ~~required~~it to ~~pay~~ ~~significant~~lose ~~compensation~~supply tocontracts ~~our customers~~ and ~~our~~could harm ~~reputation~~its ~~may be adversely affected~~reputation.

21The Company may not be able to complete its recycling processes to meet the supply it receives from its customers. Operating delays and interruptions can occur for many reasons, including, but not limited to:

We● ~~are~~equipment ~~subject to potential environmental liabilities.~~failures;

We● ~~are~~personnel subject to a variety of laws and regulations concerning the protection of health and the environment. The particular environmental laws and regulations that apply to any given development site vary significantly according to the site’s location and environmental conditions, the present and former uses of the site and the nature of the adjoining properties. Environmental laws and conditions may result in delays, may cause us to incur substantial compliance and other costs and can prohibit or severely restrict project development activity in environmentally-sensitive regions or areas. Although the environmental investigations conducted by local environmental authorities have not revealed any environmental liabilities that we believe would have a material adverse effect on our business, financial condition or results of operations to date, it is possible that these investigations did not reveal all environmental liabilities and that there are material environmental liabilities of which we are unaware. We cannot assure you that future environmental investigations will not reveal material environmental liabilities. Also, we cannot assure you that the PRC government will not change the existing laws and regulations or impose additional or stricter laws or regulations, the compliance with which may cause us to incur significant capital expenditures.shortage;

We need to improve our internal financial reporting controls. If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our common stock.20

~~Effective~~● ~~internal~~labor ~~controls~~disputes; ~~are necessary for us to provide reliable financial reports and effectively prevent fraud. We maintain a system of internal control over financial reporting, which is defined as a process designed by,~~ or under the supervision of, our principal executive officer and principal financial officer, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

We● ~~cannot~~transportation ~~assure you that we will not, in the future, identify areas requiring improvement in our internal control over financial reporting~~disruptions. We cannot assure you that the measures we will take to remediate any areas in need of improvement will be successful or that we will implement and maintain adequate controls over our financial processes and reporting in the future as we continue our growth.

AsThe recycling process afor ~~public~~lithium-ion ~~company,~~batteries weis ~~are~~complex. ~~required~~If tothe ~~comply~~Company ~~with~~fails ~~the~~to ~~reporting~~complete ~~obligations~~its ofrecycling ~~the~~processes ~~Exchange~~in ~~Act~~a ~~and~~timely ~~Section 404~~fashion, ofits ~~the~~reputation ~~Sarbanes-Oxley~~may ~~Act~~be ~~of 2013~~harmed. IfAny wefailure ~~fail~~by tothe ~~comply~~Company ~~with~~to ~~the~~complete ~~reporting~~its ~~obligations~~recycling ofprocesses ~~the~~in ~~Exchange~~a ~~Act~~timely ~~and~~fashion ~~Section 404~~may ofalso ~~the~~jeopardize ~~Sarbanes-Oxley~~existing ~~Act~~orders orand ifcause wethe ~~fail~~Company to ~~maintain~~lose ~~adequate~~potential ~~internal~~supply ~~controls~~contracts ~~over financial reporting, our business, results of operations~~ and ~~financial condition could~~ be ~~materially~~forced ~~adversely~~to ~~affected~~pay penalties.

AsThe aCompany ~~public~~operates ~~company,~~in wean ~~are required to comply with the periodic reporting obligations of the Securities Exchange Act of 1934~~emerging, ~~as amended (the “Exchange Act”), including~~competitive ~~preparing~~industry ~~annual reports~~ and ~~quarterly~~if ~~reports.~~it ~~Our~~is ~~failure~~unable to ~~prepare~~compete ~~and~~successfully ~~disclose~~its ~~this~~revenue ~~information in a timely manner could subject us to penalties under U.S. federal securities laws, expose us to lawsuits~~ and ~~restrict~~profitability ~~our~~will ~~ability~~be tomaterially ~~access~~adversely ~~financing~~affected. In addition, we are required under applicable law and regulations to design and implement internal controls over financial reporting, and evaluate our existing internal controls with respect to the standards adopted by the U.S. Public Company Accounting Oversight Board.

The ~~Company~~green ~~assessed~~energy ~~its~~and ~~internal~~lithium-ion ~~control~~recycling ~~over~~market ~~financial~~is ~~reporting and still has significant and material deficiencies as of September 30, 2022~~competitive. ToAs ~~remediate~~ the ~~material~~industry ~~weaknesses described~~evolves ~~above~~ and ~~to prevent similar deficiencies in~~ the ~~future,~~demand ~~we are currently evaluating additional controls and procedures~~increases, ~~which may~~the ~~include:~~Company ~~(i)~~anticipates ~~provide~~that ~~more~~competition Uwill increase.S. ~~GAAP knowledge and SEC reporting requirement training for~~ the ~~accounting department and establish formal~~Company ~~policies~~currently ~~and~~faces ~~procedures~~competition ~~for~~primarily anfrom ~~internal~~companies ~~audit~~that ~~function;~~focus ~~and~~on ~~(ii)~~one ~~implementation~~type of anlithium-ion ~~ongoing~~material ~~initiative~~recycling, ~~and~~some ~~training~~of inwhich ~~the~~have ~~Company to~~more ~~ensure~~expertise in the ~~importance~~recycling of ~~internal~~that ~~controls~~material ~~and~~than ~~compliance with established policies and procedures are fully understood throughout~~ the ~~organization~~ ~~and plan to provide continuous U~~Company.S. ~~GAAP~~The ~~knowledge~~Company ~~training~~also tocompetes ~~relevant~~against ~~employees~~companies ~~involved~~that tohave ~~ensure~~a ~~the~~substantial ~~performance~~competitive advantage because of ~~and compliance~~longer ~~with~~operating ~~those~~histories ~~procedures~~ and ~~policies.~~larger ~~Any actions we have taken or may take to remediate these material weaknesses are subject to continued management review supported by testing~~budgets, as well as ~~oversight~~greater byfinancial ~~the~~and ~~Audit~~other ~~Committee of our Board of Directors~~resources. WeNational ~~cannot~~or global ~~assure~~competitors ~~you~~could ~~that~~enter ~~these~~the ~~material~~market ~~weaknesses~~with ~~will~~more ~~not~~substantial ~~occur~~financial ~~in the future~~ and ~~that~~workforce ~~we will be able to remediate such weaknesses in a timely manner~~resources, ~~which~~stronger ~~could~~existing ~~impair~~customer ~~our ability to accurately~~ relationships, and ~~timely~~greater ~~report~~name ~~our~~recognition. ~~financial~~Competitors ~~position,~~could ~~results~~focus oftheir ~~operations~~substantial orresources ~~cash~~on ~~flows.~~developing ~~The management~~a ismore ~~committed~~efficient torecovery ~~improving~~solution than the ~~internal~~Company’s ~~controls~~solutions. ~~over~~Competition ~~financial~~also ~~reporting~~places ~~and~~downward ~~will~~pressure ~~undertake~~on the ~~consistent~~Company’s ~~improvements~~contract ~~or enhancements~~prices onand angross ~~ongoing basis. However~~margins, wewhich presents ~~cannot~~it ~~assure~~with ~~you~~significant ~~that~~challenges ~~our~~in ~~current~~its ~~remediation~~ability ~~plan~~to ~~can~~maintain ~~resolve~~strong ~~all~~growth ~~the~~rates ~~significant deficiencies~~ and ~~material~~acceptable ~~weaknesses~~gross ~~in the internal control over financial reporting~~margins. AsIf athe ~~result,~~Company weis unable ~~may be required~~ to ~~implement~~meet ~~further~~these ~~remedial measures~~competitive ~~and~~challenges, toit ~~design~~could ~~enhanced~~lose ~~processes~~market ~~and~~share ~~controls~~ to ~~address~~its ~~issues~~competitors ~~identified through future reviews. This could result in significant delays~~ and ~~costs~~experience toa usmaterial ~~and~~adverse ~~require~~impact us to its ~~divert substantial resources~~business, ~~including~~financial ~~management~~condition ~~time,~~and ~~from~~results ~~other~~of ~~activities~~operations.

22Our business is sensitive to China’s economy and China real estate policies. A downturn in China’s economy and restrictive real estate polices could materially and adversely affect our revenues and results of operations.

IfAny weslowdown doin ~~not~~China’s economic ~~fully~~development ~~remediate~~might ~~the~~lead ~~material~~to ~~weaknesses identified~~tighter bycredit ~~management~~markets, orincreased ~~fail~~market tovolatility, ~~maintain~~sudden ~~the~~drops ~~adequacy~~in ofbusiness ~~our~~and ~~internal~~consumer ~~controls~~confidence and dramatic changes in ~~the~~business ~~future,~~and weconsumer ~~may~~behaviors. ~~not~~The becurrent ~~able~~package toof ~~ensure~~economic ~~that~~support ~~we can~~policies ~~conclude~~is ondesigned anto ~~ongoing~~stabilize ~~basis~~the economy ~~that~~against weslowing ~~have~~exports. ~~effective~~Ongoing ~~internal~~government ~~controls~~regulatory ~~over~~measures, ~~financial~~including ~~reporting~~the in“Ten ~~accordance~~National ~~with~~Notices” ~~the~~announced ~~Sarbanes-Oxley~~in ~~Act. Moreover~~2010, ~~effective~~the ~~internal~~“Eight ~~controls~~National ~~are~~Notices” ~~necessary~~and ~~for~~property ustax toapproved ~~produce~~in ~~reliable~~January ~~financial~~2011, ~~reports~~might ~~and~~have ~~are~~an ~~important~~adverse toeffect ~~help~~on ~~prevent~~our results ~~fraud.~~of Asoperations aand ~~result,~~the ~~any~~PRC ~~failure~~property tomarket. ~~satisfy~~In 2023, the ~~requirements~~overall ofrisk ~~Section 404~~remained onin aTier ~~timely~~3 ~~basis~~and ~~could~~4 ~~result~~cities indespite ~~the~~initial ~~loss~~signs of ~~investor~~improvement ~~confidence~~in sales. In response to their perceived uncertainty in ~~the~~economic ~~reliability~~conditions, consumers might delay, reduce or cancel purchases of homes, and our ~~financial~~homebuyers ~~statements~~may also defer, ~~which~~reduce inor ~~turn~~cancel ~~could~~purchases ~~harm~~of our ~~business~~units and ~~negatively~~our ~~impact~~results ~~the~~of ~~trading~~operations ~~price of~~may ~~our~~be ~~common~~materially ~~stock~~and adversely affected.

WeIf dowe ~~not~~are ~~have~~unable ~~business insurance coverage.~~to ~~Any~~successfully ~~future~~manage ~~business~~our ~~liability,~~expansion ~~disruption~~into orother ~~litigation~~Tier we3 ~~experience~~and ~~might~~Tier ~~divert~~4 ~~management~~cities, ~~focus~~we ~~from~~will ~~our~~not ~~business~~be ~~and~~able ~~could~~to ~~significantly impact~~execute our ~~financial~~business ~~results~~plan.

~~Availability~~Historically, ofour business and ~~insurance~~operations ~~products~~have ~~and coverage~~been concentrated in ~~China~~Hanzhong isCity ~~limited,~~ and ~~most~~other ~~such~~surrounding ~~products~~counties. ~~are~~If ~~expensive~~we inare ~~relation~~unable to ~~the~~successfully ~~coverage~~develop ~~offered.~~and Wesell projects ~~have~~outside ~~determined~~Hanzhong ~~that~~City, ~~the~~our ~~risks of~~future ~~disruption,~~growth ~~cost~~may ofbe ~~such~~limited ~~insurance~~ and ~~the~~we ~~difficulties~~may ~~associated~~not ~~with~~generate ~~acquiring~~adequate ~~such~~returns ~~insurances~~to oncover ~~commercially~~our ~~reasonable~~investments ~~terms~~in ~~make~~these itTier ~~impractical~~3 ~~for~~and usTier to4 ~~maintain such insurance~~cities. AsIn ~~a result~~addition, as we doexpand ~~not have any business liability, disruption or litigation insurance coverage for~~ our operations into ~~China.~~Tier ~~Accordingly,~~3 aand ~~business~~Tier ~~disruption,~~4 ~~litigation~~cities orwith ~~natural~~higher ~~disaster~~land ~~may~~prices, ~~result~~our ~~in substantial~~ costs ~~and~~may ~~divert management’s attention from our business~~increase, which ~~would~~may ~~have~~lead anto ~~adverse~~a ~~effect~~decrease onin our ~~results~~profit ~~of operations and financial condition~~margin.

~~The~~We ~~PRC~~require ~~government may adopt further restrictive~~substantial ~~measures~~capital resources to ~~slow~~fund ~~the~~our ~~increase~~land inuse ~~prices~~rights ofacquisitions ~~real~~and property ~~and~~developments, ~~real~~which ~~property~~may ~~development~~not be available.

~~Along~~Property ~~with~~development is ~~the~~capital ~~economic~~intensive. ~~growth~~Our inability ~~China,~~to ~~investments in~~secure ~~the~~sufficient ~~property~~financing ~~sectors~~for ~~have~~land ~~increased~~use ~~significantly~~rights inacquisition ~~the~~and ~~past~~property ~~few~~development ~~years.~~depends Inon ~~response~~a number toof ~~concerns~~factors ~~over~~that ~~the~~are ~~scale~~beyond ofour ~~the~~control, ~~increase~~including market conditions in ~~property~~ ~~investments~~the capital markets, the PRC ~~government~~economy ~~has~~and ~~introduced~~the ~~policies~~PRC togovernment regulations ~~curtail~~that ~~property~~affect ~~development.~~the Weavailability ~~believe~~and ~~those~~cost ~~regulations,~~of ~~among others,~~financing ~~significantly~~for ~~affect~~real ~~the~~estate ~~property industry in China~~companies.

These restrictive regulations and measures could increase our operating costs in adapting to these regulations and measures, limit our access to capital resources or even restrict our business operations. We ~~cannot~~may be ~~certain~~unable ~~that the PRC government will not issue additional and more stringent regulations or measures,~~to ~~which~~acquire ~~could~~desired ~~further slowdown property~~ development insites ~~China~~at ~~and~~commercially ~~adversely~~reasonable ~~affect our business and prospects~~costs.

WeOur ~~are~~revenue ~~heavily~~depends ~~dependent~~on the completion and sale of our projects, which in turn depends on ~~the~~our ~~performance~~ability to acquire development sites. Our land use rights costs are a major component of ~~the~~our ~~residential~~cost ~~property~~of ~~market~~real estate sales and increases in such costs could diminish our gross margin. In China, ~~which~~the isPRC government atcontrols the supply of land and regulates land sales and transfers in the secondary market. As a ~~relatively~~result, ~~early~~the ~~development~~policies ~~stage~~of the PRC government, including those related to land supply and urban planning, affect our ability to acquire, and our costs of acquiring, land use rights for our projects. In recent years, the PRC government has introduced various measures attempting to moderate investment in the property market in China.

~~The~~Although ~~residential~~we ~~property~~believe ~~industry~~that these inmeasures ~~the~~are ~~PRC~~generally ~~is still~~targeted inat athe ~~relatively~~luxury ~~early~~property ~~stage~~market and speculative purchases of ~~development.~~land ~~Although~~and ~~demand~~properties, ~~for~~the ~~residential~~PRC ~~property~~government could introduce other measures in the ~~PRC~~future ~~has~~that ~~been~~may ~~growing~~adversely ~~rapidly~~affect inour ~~recent years,~~ability ~~such~~to ~~growth~~obtain island ~~often~~for ~~coupled~~development. ~~with~~We ~~volatility~~currently inacquire our ~~market~~development ~~conditions~~sites ~~and~~primarily ~~fluctuation~~by inbidding ~~property~~for ~~prices~~government land. ItUnder iscurrent ~~extremely~~regulations, ~~difficult to~~land ~~predict~~use ~~how~~rights ~~much~~acquired ~~and~~from ~~when~~government ~~demand~~authorities for ~~will~~commercial ~~develop,~~and asresidential ~~many~~development ~~social,~~purposes ~~political,~~must ~~economic,~~be ~~legal~~purchased ~~and~~through ~~other~~a ~~factors~~public tender, ~~most~~auction ofor ~~which~~listing-for-sale. ~~are beyond~~Competition ~~our~~in ~~control,~~these ~~may~~bidding ~~affect~~processes ~~the~~has ~~development~~resulted ofin ~~the~~higher ~~market.~~land ~~The~~use ~~level~~rights ofcosts ~~uncertainty~~for isus. ~~increased~~We bymay ~~the~~also ~~limited~~need ~~availability~~to ofacquire ~~accurate~~land ~~financial~~use rights through acquisition, ~~and~~which ~~market~~could ~~information~~increase asour ~~well~~costs. asMoreover, the ~~overall~~supply ~~low~~of ~~level~~potential ofdevelopment ~~transparency~~sites in ~~the~~any ~~PRC,~~given ~~especially~~city inwill ~~Tier~~diminish 3over time and 4we ~~cities~~may find ~~which~~it ~~have~~increasingly ~~lagged in~~difficult ~~progress~~to inidentify ~~these~~and ~~aspects~~acquire ~~when~~attractive ~~compared~~development tosites ~~Tier~~at 1commercially ~~cities~~reasonable costs in the future.

The lack of a liquid secondary market for residential property may discourage investors from acquiring new properties. The limited amount of property mortgage financing available to PRC individuals may further inhibit demand for residential developments.21

23We provide guarantees for the mortgage loans of our customers which expose us to risks of default by our customers.

We ~~face~~pre-sell ~~intense~~properties before ~~competition~~actual ~~from~~completion ~~other~~and, ~~real~~in accordance with industry practice, our customers’ mortgage banks require us to guarantee our customers’ ~~estate~~mortgage ~~developers~~loans. Typically, we provide guarantees to PRC banks with respect to loans procured by the purchasers of our properties for the total mortgage loan amount until the completion of the registration of the mortgage with the relevant mortgage registration authorities, which generally occurs within six to twelve months after the purchasers take possession of the relevant properties. In line with what we believe to be industry practice, we rely on the credit evaluation conducted by mortgagee banks and do not conduct our own independent credit checks on our customers. The mortgagee banks typically require us to maintain, as restricted cash, 5% to 10% of the mortgage proceeds paid to us as security for our obligations under such guarantees (the security deposit).

~~The~~If a ~~property~~purchaser ~~industry~~defaults inon its payment obligations during the ~~PRC~~term isof ~~highly~~our ~~competitive.~~guarantee, the mortgagee bank may deduct the delinquent mortgage Inpayment from the ~~Tier~~security 3deposit. ~~and~~If ~~Tier~~the 4delinquent ~~cities~~mortgage wepayments ~~focus~~exceed onthe security deposit, ~~local~~the ~~and~~banks ~~regional~~may ~~property~~require ~~developers~~us ~~are~~to ~~our~~pay ~~major~~the excess ~~competitors~~amount. If multiple purchasers default on their payment obligations at around the same time, ~~and~~we anwill ~~increasing~~be ~~number~~required to make significant ofpayments ~~large~~to ~~state-owned~~the ~~and~~banks ~~private~~to ~~national~~satisfy ~~property~~our ~~developers~~guarantee ~~have~~obligations. ~~started~~If ~~entering~~we ~~these~~are ~~markets.~~unable ~~Many~~to resell the properties underlying defaulted mortgages on a timely basis or at prices higher than the amounts of our ~~competitors~~guarantees and related expenses, ~~especially~~ we will suffer financial losses. For the years ~~state-owned~~ended ~~and~~September ~~private~~30, ~~national~~2023 ~~property~~and ~~developers~~2022, ~~are~~the ~~well~~Company ~~capitalized~~has ~~and~~not ~~have~~experienced ~~greater~~any ~~financial,~~delinquent ~~marketing~~mortgage loans and ~~other~~has ~~resources~~not experienced any losses ~~than~~related weto ~~have~~this guarantee. ~~Some~~As ~~also~~of ~~have~~September ~~larger~~30, ~~land~~2023 ~~banks~~and 2022, ~~greater~~our ~~economies~~outstanding guarantees in respect of ~~scale,~~our ~~broader~~customers’ ~~name~~mortgage loans ~~recognition~~amounted to approximately $24.2 million and $24.9 million, arespectively. ~~longer~~As ~~track~~of ~~record~~September 30, 2023 and ~~more~~2022, ~~established~~the amount of security deposits provided for these guarantees was ~~relationships~~approximately in$1.7 ~~certain~~million ~~markets~~and $1.8 Inmillion, ~~addition~~respectively, and the ~~PRC~~Company ~~government’s~~believes ~~recent~~that ~~measures~~such ~~designed~~reserves toare ~~reduce~~sufficient. ~~land~~Since ~~supply~~inception through ~~further~~the ~~increased competition~~release ~~for~~of ~~land~~this ~~among~~report, ~~property~~the ~~developers~~Company has not experienced any delinquent mortgage loans and has not experienced any losses related to these guarantees.

~~Competition~~A ~~among~~large ~~property~~portion ~~developers may result in increased costs for the acquisition~~ of ~~land for development, increased costs for raw materials, shortages of skilled contractors, oversupply~~ ofour ~~properties,~~loan ~~decrease~~portfolio inis ~~property~~tied ~~prices~~to ~~in certain parts of~~ the ~~PRC,~~real aestate ~~slowdown~~market ~~in the rate at which new property developments will be approved~~ and~~/or~~ reviewed by the relevant government authorities and an increase in administrative costs for hiring or retaining qualified personnel, any of which may adversely affect our business and financial condition. Furthermore, property developers that are better capitalized than we ~~are~~ may be ~~more~~negatively ~~competitive~~impacted inby ~~acquiring~~downturns ~~land through the auction process. If we cannot respond to changes~~ in ~~market~~that conditions as promptly and effectively as our competitors, or effectively compete for land acquisition through the auction systems and acquire other factors of production, our business and financial condition will be adversely affectedmarket.

InAs ~~addition~~of September 30, 2023, we had large construction loans payable of approximately $105.66 million. These loans generally have a higher degree of risk than long-term financing of existing properties because repayment depends on the completion of the project and usually on the sale of the property. In ~~over~~addition, these loans are often “interest-~~supply~~only loans,” which normally require only the payment of interest accrued prior to maturity. Interest-only loans carry greater risk than principal and interest loans because no principal is ~~increasing~~paid prior to maturity. inThis ~~parts~~risk is particularly apparent during periods of ~~China,~~rising ~~where~~interest ~~property~~rates ~~investment~~and declining real estate values. If there is a significant decline in the real estate market due to a material increase in interest rates or for other reasons, ~~trading~~many of these loans could default and ~~speculation~~result ~~have~~in ~~become~~foreclosure. ~~overly~~Moreover, ~~active~~most of these loans are for projects located in our primary market area. WeIf we are ~~exposed~~forced to foreclose on a project prior to completion, we may not be able to recover the ~~risk~~entire ~~that~~unpaid inportion of the loan or we may be required to fund additional ~~event~~money ofto ~~actual~~complete the project or ~~perceived~~hold ~~over-supply,~~the property ~~prices~~for ~~may~~an ~~fall~~indeterminate ~~drastically,~~period ~~and~~of ~~our~~time. ~~revenue~~Any ~~and~~of ~~profitability~~these ~~will~~outcomes bemay ~~adversely~~result ~~affected~~in losses and reduce our earnings.

~~Failure~~We torely ~~make~~on ~~adequate contributions to various~~third-party ~~employee benefits plans as required by PRC regulations may subject us to penalties~~contractors.

~~Companies~~Substantially ~~operating~~all ~~in China are required to participate~~of inour ~~various~~project ~~government~~construction ~~sponsored employee benefit plans, including certain social insurance, housing funds~~ and ~~other~~related ~~welfare-oriented~~work ~~payment obligations,~~are ~~and~~outsourced ~~contribute~~ to ~~the~~third-party ~~plans~~contractors. inWe ~~amounts~~are ~~equal~~exposed to ~~certain~~risks ~~percentages~~that ofthe ~~salaries,~~performance ~~including bonuses and allowances,~~ of ~~employees~~our upcontractors tomay anot ~~maximum~~meet ~~amount~~our ~~specified~~standards byor ~~the local government from time to time at locations where they operate their businesses~~specifications. ~~The~~Negligence ~~requirement of~~or ~~employee~~poor ~~benefit~~work ~~plans~~quality ~~has not been implemented consistently~~ by ~~the~~any ~~local~~contractors ~~governments~~may result in ~~China~~defects ~~given the different levels of economic~~in ~~development~~our inbuildings ~~different~~or ~~locations.~~residential ~~As of September 30~~units, ~~2022~~which ~~and~~could ~~2021, we have made adequate employee benefit payments~~ in ~~strict~~turn ~~compliance with~~cause ~~the~~us ~~relevant~~to ~~PRC~~suffer ~~regulations~~financial ~~for~~losses, ~~and~~harm ~~on behalf of~~ our ~~employees.~~reputation Ifor weexpose ~~fail~~us to ~~make contributions to various employee benefits plans~~third-party inclaims. ~~strict~~We ~~compliance~~work with ~~applicable~~multiple ~~PRC~~contractors ~~labor-related~~on ~~laws~~different ~~and~~projects ~~regulations may subject us to late payment penalties,~~ and we ~~could~~cannot ~~also be~~guarantee ~~required~~that ~~to make up the contributions for these plans as well as to pay late fees and fines. If~~ we ~~are~~can ~~subject~~effectively tomonitor ~~late~~their ~~fees~~work ~~or fines~~at inall ~~relation to the underpaid employee benefits, our financial condition and results of operations may be adversely affected~~times.

~~Risks~~Although ~~Relating~~our construction and other contracts contain provisions designed to protect us, we may be unable to successfully enforce these rights and, even if we are able to successfully enforce these rights, the ~~Residential~~third-party ~~Property~~contractor may not have sufficient financial resources to compensate us. Moreover, ~~Industry~~the ~~and~~contractors ~~primary~~may ~~operation~~undertake projects from other property developers, engage in ~~China~~risky undertakings or encounter financial or other difficulties, such as supply shortages, labor disputes or work accidents, which may cause delays in the completion of our property projects or increases in our costs.

~~Because~~We ~~all~~may ~~our~~be ~~operations~~unable ~~are~~to ~~in China, our~~complete ~~business~~our isproperty ~~subject~~developments toon ~~the~~time ~~complex~~or ~~and~~at ~~rapidly evolving laws and regulations there~~all. The ~~Chinese~~progress ~~government may exercise significant oversight~~ and ~~discretion~~costs ~~over~~for ~~the~~a ~~conduct~~development ofproject ~~our~~can ~~business~~be ~~and~~adversely ~~may~~affected ~~intervene~~by inmany ~~or influence our operations at any time~~factors, ~~which could result in a~~ ~~material~~including, ~~change~~without ~~in our operations and/or the value of our common stocks.~~limitation:

As● adelays ~~business operating~~ in ~~China,~~obtaining wenecessary ~~are subject to the laws and regulations of the PRC~~licenses, ~~which~~permits ~~can~~or beapprovals ~~complex~~from ~~and evolve rapidly. The PRC~~ government has the power to exercise significant oversight and discretion over the conduct of our business, and the regulations to which we are subject may change rapidly and with little notice to us or our shareholders. As a result, the application, interpretation, and enforcement of new and existing laws and regulations in the PRC are often uncertain. In addition, these laws and regulations may be interpreted and applied inconsistently by different agencies or ~~authorities, and inconsistently with our current policies and practices. New laws, regulations, and other government directives in the PRC may also be costly to comply with, and such compliance~~ or ~~any associated inquiries or investigations or any other government actions may:~~authorities;

● ~~delay~~shortages orof ~~impede~~materials, ~~our~~equipment, ~~development~~contractors and skilled labor;

● ~~result~~disputes inwith ~~negative~~our ~~publicity~~third-party ~~or increase the Company’s operating costs~~contractors;

● ~~require~~failure ~~significant~~by ~~management~~our ~~time~~third-party ~~and~~contractors ~~attention;~~to ~~and~~comply with our designs, specifications or standards;

● ~~subject~~difficult usgeological tosituations ~~remedies, administrative penalties and even criminal liabilities that may harm our business, including fines assessed for our current~~ or ~~historical~~other ~~operations,~~geotechnical orissues; ~~demands or orders that we modify or even cease our business practices.~~and

24● onsite labor disputes or work accidents; and natural catastrophes or adverse weather conditions.

~~The~~Any ~~promulgation~~construction ~~of new laws or regulations~~delays, or ~~the~~ ~~new~~failure ~~interpretation~~to ofcomplete a ~~existing~~project ~~laws~~according ~~and~~to ~~regulations,~~our inplanned ~~each~~specifications ~~case that restrict~~ or ~~otherwise~~budget, ~~unfavorably~~may ~~impact~~delay ~~the ability or way we conduct~~ our ~~business~~property ~~and could require us to change certain aspects of our business to ensure compliance~~sales, which could ~~decrease~~harm ~~demand for~~ our ~~products, reduce~~ revenues, ~~increase~~cash ~~costs,~~flows ~~require us to obtain more licenses, permits, approvals or certificates, or subject~~and ~~us to additional liabilities. To the extent any new or more stringent measures are required to be implemented,~~ our ~~business, financial condition and results of operations could be adversely affected as well as materially decrease the value of our common stock, potentially rendering it worthless~~reputation.

~~The uncertainties in the China legal system could materially and adversely affect us.~~22

OnChanges ~~July 6, 2021, the General Office~~ of ~~the Communist~~laws ~~Party of China Central Committee~~ and ~~the General Office of the State Council jointly issued a document to enhance its enforcement~~ ~~against~~regulations ~~illegal~~with ~~activities~~respect ~~in the securities markets and promote the high-quality development of the capital markets, which, among other things, requires the relevant governmental authorities~~ to ~~strengthen cross~~pre-~~border~~sales ~~oversight~~may ofadversely ~~law-enforcement~~affect ~~and~~our ~~judicial~~cash ~~cooperation, to~~flow ~~enhance~~position ~~supervision over China-based companies listed overseas,~~ and tobusiness ~~establish and improve the system of extraterritorial application of the Chinese securities laws~~performance. Since this document is relatively new, uncertainties exist in relation to how soon legislative or administrative regulation-making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on companies like us.

ItWe isdepend ~~especially~~on ~~difficult~~cash ~~for us to accurately~~flows ~~predict~~from ~~the~~pre-sale ~~potential impact to the Company~~ of ~~new~~properties ~~legal~~as ~~requirements~~an inimportant ~~China~~source ~~because~~of ~~the~~funding ~~China~~for ~~legal~~our ~~system~~property isprojects aand ~~civil~~servicing ~~law~~our ~~system based on written statutes~~indebtedness. ~~Unlike~~Under ~~the common law system, prior court decisions under the civil law system may be cited for reference but have~~current ~~limited~~PRC ~~precedential value. In 1979, the Chinese government began to promulgate a comprehensive system of~~ laws and regulations governing economic matters in general. The overall effect of legislation over the past four decades has significantly enhanced the protections afforded to various forms of foreign investments in China. However, ~~China~~property ~~has~~developers ~~not~~must ~~developed~~fulfill acertain ~~fully~~conditions ~~integrated~~before ~~legal~~they ~~system,~~can ~~and~~commence ~~recently~~pre-sale ~~enacted laws and regulations may not sufficiently cover all aspects~~ of ~~economic activities in China. In particular,~~ the ~~China~~relevant ~~legal system is~~properties ~~based on written statutes~~ and ~~prior~~may ~~court~~only ~~decisions~~use ~~have~~pre-sale ~~limited~~proceeds ~~value as precedents. Since these laws and regulations are relatively new and the China legal system continues~~ to ~~rapidly~~finance ~~evolve,~~ the ~~interpretations~~construction of ~~many~~specific ~~laws,~~developments ~~regulations~~(the ~~and~~“Pre-Sale ~~rules~~Conditions ~~may not be uniform~~ and ~~enforcement of these laws, regulations and rules involves uncertainties~~Usage”). ~~These uncertainties may affect our judgment on the relevance~~ ofChanges ~~legal~~in ~~requirements~~laws and ~~our~~regulations ~~ability to enforce our contractual rights~~ or ~~tort claims. In addition, the regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats~~ in ~~attempts~~their tointerpretation ~~extract payments~~ or ~~benefits from us. Furthermore,~~ the ~~China~~imposition ~~legal system is based in part on government policies and internal rules, some~~ of ~~which~~more ~~are~~stringent ~~not~~Pre-Sale ~~published~~Conditions ~~on a timely basis or at all~~ and ~~may~~Usage ~~have~~could have a ~~retroactive~~material adverse effect. Ason ~~a result, we may not be aware of~~ our ~~violation~~cash offlow ~~any~~position ~~of these policies~~ and ~~rules~~business ~~until sometime after the violation~~performance. ~~In addition, any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention.~~

WeOur ~~may~~results ~~be deemed a PRC resident enterprise for PRC tax purposes under the Enterprise Income Tax Law, which could result in the imposition~~ of ~~a 25% enterprise income tax payable~~operations onmay ~~our~~fluctuate ~~taxable~~from ~~global~~period ~~income~~to period.

OnOur ~~March 16,~~results ~~2007,~~of ~~the~~operations tend ~~National~~to ~~People’s Congress~~fluctuate from period to period. The number of ~~the~~properties ~~PRC~~that ~~passed~~we ~~the~~can ~~Enterprise~~develop ~~Income~~or ~~Tax~~complete ~~Law~~during ofany particular period is limited due to the ~~PRC~~substantial ~~(’‘New~~capital ~~Income~~required ~~Tax~~for ~~Law’’)~~land acquisition and construction, ~~which~~as ~~took~~well ~~effect~~as the lengthy development periods required before onpositive ~~January 1,~~cash ~~2008~~flows may be generated. OnIn ~~December 6~~addition, ~~2007,~~several ~~the~~properties ~~Implementation~~that ~~Rules of~~we ~~Enterprise~~have ~~Income~~developed ~~Tax~~or ~~Law~~that ofare ~~the~~under ~~PRC~~development ~~(’‘Implementation~~are large scale ~~Rules’’)~~and ~~were~~are ~~also~~developed ~~enacted~~in ~~and~~multiple ~~took~~phases ~~effect~~over onthe ~~January 1,~~course ~~2008~~of one to several years. InThe ~~accordance~~selling ~~with~~prices of the ~~new~~residential ~~laws~~units ~~and~~in ~~regulations,~~larger ~~a unified~~scale ~~enterprise~~property ~~income~~developments ~~tax~~tend ~~rate~~to ofchange ~~25%~~over ~~and~~time, ~~unified~~which ~~tax~~may ~~deduction~~impact ~~standards~~our ~~will~~sales beproceeds ~~applied~~and, ~~equally~~accordingly, toour ~~both~~revenues ~~domestic~~for ~~enterprises~~any ~~and~~given ~~foreign-invested enterprises~~period.

25We rely on our key management members.

~~Under~~We ~~the~~depend ~~New~~on ~~Income Tax Law and~~ the ~~Implementation~~services ~~Rules,~~provided ~~enterprises~~by ~~established~~key ~~under the laws of foreign jurisdictions other than the PRC may nevertheless be considered as PRC-resident enterprises for tax purposes if these enterprises have their ’‘de facto~~ management ~~body’’ within the PRC~~members. ~~Under the~~Competition ~~Implementation~~for ~~Rules, ’‘de facto~~ management ~~body’’~~talent is ~~defined~~intense asin ~~a body that has material and overall management and control over~~ the ~~manufacturing~~property ~~and~~development ~~business operations, personnel and human resources, finances and treasury, and acquisition and disposition of properties and other assets of an enterprise~~sector. AtIn ~~present~~particular, ~~it is unclear what factors will be used by the PRC tax authorities to determine whether~~ we are ahighly ~~’‘de~~dependent ~~facto~~on ~~management body’’ in China~~Mr. Yuhuai ~~All~~Luo, of our ~~management~~Chairman ~~personnel are located in the PRC,~~ and ~~all~~Chief ofExecutive ~~our~~Officer. ~~revenues~~We ~~arise~~do ~~from~~not ~~our~~maintain ~~operations~~key inemployee ~~China~~insurance. IfIn the event ~~PRC~~that ~~tax~~we ~~authorities~~lose ~~determine~~the ~~that~~services weof ~~are~~any akey ~~PRC~~management ~~resident enterprise~~member, we ~~will~~may be ~~subject~~unable to ~~PRC~~identify ~~tax~~and onrecruit ~~our~~suitable ~~worldwide~~successors ~~income~~in ata ~~the~~timely manner ~~25%~~or ~~uniform~~at ~~tax rate~~all, which ~~may~~will ~~have~~adversely aaffect ~~material adverse effect on~~ our ~~financial~~business ~~condition~~ and ~~results of~~ operations. ~~Notwithstanding the foregoing provision~~Moreover, ~~the~~we ~~New~~need ~~Income~~to ~~Tax~~employ ~~Law~~and ~~also~~retain ~~provides~~more ~~that, if~~management ~~a PRC resident enterprise already invests in another PRC resident enterprise, the dividends received by the investing resident enterprise~~personnel ~~from~~to ~~the~~support ~~invested~~our ~~resident~~expansion ~~enterprise~~into ~~are~~other ~~exempt~~Tier ~~from~~3 ~~income~~and ~~tax,~~Tier ~~subject~~4 tocities ~~certain~~and ~~qualifications~~counties. ~~Therefore,~~If if we ~~are~~cannot ~~classified~~attract ~~as a~~and ~~PRC~~retain ~~resident~~suitable ~~enterprise,~~human ~~the dividends received from our PRC subsidiaries may be exempt from income tax. However~~resources, ~~due to the limited~~especially ~~history~~at of the ~~New~~management ~~Income Tax Law~~level, itour isbusiness ~~unclear as to (i) the detailed qualification requirements for such exemption~~ and ~~(ii) whether dividend~~future ~~payments~~growth ~~by our PRC subsidiaries to us~~ will ~~meet~~be ~~such~~adversely ~~qualification requirements, even if we are considered a PRC resident enterprise for tax purposes~~affected.

WeIncreases ~~face~~in ~~uncertainty from~~ the ~~Circular on~~price ~~Strengthening the Administration~~ of ~~Enterprise~~raw ~~Income~~materials ~~Tax~~may onincrease ~~Non-resident~~our ~~Enterprises’~~cost ~~Share Transfer (“Circular 698”) released in December 2009 by China’s State Administration~~ of ~~Taxation~~sales ~~(SAT),~~and ~~effective~~reduce asour ~~of January 1, 2008~~earnings.

~~Where~~Our athird-party ~~foreign~~contractors are ~~investor~~responsible ~~indirectly~~for ~~transfers equity~~procuring ~~interests~~almost inall aof ~~Chinese~~the ~~resident~~raw ~~enterprise~~materials byused ~~selling~~in ~~the~~our ~~shares~~project indevelopments. anOur ~~offshore~~construction ~~holding~~contracts ~~company~~typically provide for fixed or capped payments, ~~and~~but the ~~latter~~payments isare ~~located~~subject to changes in ~~a country~~government-suggested ~~(jurisdiction)~~steel ~~where~~prices. ~~the~~The ~~effective~~increase ~~tax~~in ~~burden~~steel isprices could ~~less~~result ~~than~~in 12an increase in our construction costs.5% orIn ~~where~~addition, the ~~offshore~~increases ~~income~~in the price of ~~their~~raw ~~residents~~materials, issuch ~~not~~as ~~taxable~~cement, concrete blocks and bricks, in the ~~foreign~~long ~~investor~~run iscould ~~required~~be topassed ~~provide~~on ~~the~~to ~~tax~~us ~~authority~~by inour ~~charge~~contractors, ofwhich ~~that~~will ~~Chinese~~increase ~~resident~~our ~~enterprise~~construction ~~with~~costs. ~~the~~Any ~~relevant~~such ~~information~~cost ~~within~~increase 30could ~~days~~reduce ofour earnings to the ~~transfers~~extent we are unable to pass these increased costs to our customers.

~~Where~~Any aunauthorized ~~foreign investor indirectly transfers~~use ~~equity interests in a Chinese resident enterprise through the abuse~~ of ~~form~~our ofbrand organization and there are no reasonable commercial purposes such that the corporate income tax liability is avoided, the tax authority has the power to re-assess the nature of the equity transfer in accordance with the “substance-over-form” principle and deny the existence of the offshore holding company that is used for tax planning purposes. “Income derived from equity transfers” as mentioned in this circular refers to income derived by non-resident enterprises from direct or ~~indirect~~trademark ~~transfers~~may ofadversely ~~equity~~affect ~~interest~~our ~~in China resident enterprises, excluding share in Chinese resident enterprises that are bought and sold openly on the stock exchange~~business.

~~While~~We ~~the~~own ~~term~~trademarks for “~~indirectly transfer~~汉中广厦” is, ~~not~~in ~~defined,~~the weform ~~understand~~of ~~that~~Chinese ~~the~~characters ~~relevant~~and our Company logo. We rely on the PRC ~~tax~~intellectual property ~~authorities~~and ~~have~~anti-unfair ~~jurisdiction~~competition ~~regarding~~laws ~~requests~~and ~~for~~contractual ~~information~~restrictions ~~over~~to aprotect ~~wide~~brand ~~range~~name and trademarks. We believe our brand, trademarks ofand ~~foreign~~other ~~entities~~intellectual ~~having~~property norights ~~direct~~are ~~contact~~important ~~with~~to ~~China~~our success. ~~The~~Any ~~relevant~~unauthorized ~~authority~~use ~~has~~of ~~not~~our ~~yet~~brand, ~~promulgated~~trademarks ~~any~~and ~~formal~~other ~~provisions~~intellectual property orrights ~~formally declared~~could orharm ~~stated~~our ~~how~~competitive toadvantages ~~calculate~~and ~~the~~business. ~~effective~~Historically, ~~tax~~China inhas not protected intellectual property rights to the ~~country~~same ~~(jurisdiction)~~extent ~~and~~as the ~~process~~United States, and infringement of ~~the~~intellectual ~~disclosure~~property rights continues to ~~the~~pose ~~tax~~a ~~authority in~~serious ~~charge~~risk of ~~that~~doing ~~Chinese~~business in ~~resident enterprise~~China. ~~Meanwhile,~~Monitoring ~~there~~and ~~are~~preventing nounauthorized ~~formal~~use ~~declarations~~is ~~with~~difficult. ~~regard~~The tomeasures ~~how~~we take to ~~decide~~protect ~~“abuse~~our ofintellectual property rights may ~~form~~not be adequate. Furthermore, the application of ~~organization”~~laws governing intellectual property rights in China and ~~“reasonable~~abroad ~~commercial~~is ~~purpose~~uncertain and evolving,” and ~~which~~could ~~can~~involve besubstantial ~~utilized~~risks byto us. If we are unable to ~~determine~~adequately ifprotect our ~~company~~brand, ~~complies~~trademarks and other intellectual property ~~with~~rights, ~~the~~our ~~Circular~~reputation ~~698~~may be harmed and our business may be adversely affected.

2623

~~Failure~~We may fail to ~~comply~~obtain or ~~with~~may ~~PRC~~experience ~~regulations~~material ~~relating to~~delays ~~the~~in ~~establishment~~obtaining ofnecessary ~~offshore~~government ~~special~~approvals ~~purpose~~for ~~companies~~any bymajor ~~PRC~~property ~~residents~~development, ~~may~~which ~~materially~~will adversely affect usour business.

OnThe ~~July 15,~~real ~~2014,~~estate ~~SAFE issued the Notice~~industry onis ~~Relevant~~strictly ~~Issues~~regulated inby the ~~Foreign~~PRC ~~Exchange~~government. ~~Control~~Property ~~over~~developers ~~Investment,~~in ~~Financing~~China ~~and~~must ~~Return~~abide ~~Investment Through Special Purpose Companies~~ by ~~Residents~~various ~~Inside~~laws ~~China,~~and ~~generally referred to as Circular 37~~regulations, ~~which~~including ~~required~~implementation rules promulgated ~~PRC~~by ~~residents to register with the competent~~ local ~~SAFE branch~~governments ~~before~~to ~~establishing~~enforce orthese ~~acquiring~~laws ~~control~~and ~~over~~regulations. anBefore ~~offshore special purpose company~~commencing, orand ~~SPV,~~during ~~for~~ the ~~purpose~~course of, ~~engaging in an equity~~development ~~financing outside~~ of ~~China~~a onproperty ~~the~~project, ~~strength~~we ofneed ~~domestic~~to ~~PRC~~apply ~~assets~~for ~~originally~~various ~~held~~licenses, ~~by those residents. Internal implementing guidelines issued by SAFE~~permits, ~~which~~certificates ~~became~~and ~~public in June 2007 (known as Notice 106)~~approvals, ~~expanded~~including ~~the~~land ~~reach~~use ofrights ~~Circular 37 by (1) purporting~~certificates, toconstruction ~~cover~~site ~~the~~planning ~~establishment~~permits, orconstruction ~~acquisition~~work ofplanning ~~control~~permits, byconstruction ~~PRC residents of offshore entities which merely acquire “control” over domestic companies or assets~~permits, ~~even~~pre-sale inpermits ~~the~~and ~~absence~~completion ~~of legal ownership; (2) adding requirements relating to the source of the~~acceptance ~~PRC~~certificates. ~~resident’s~~We ~~funds~~need ~~used~~ to ~~establish~~satisfy orvarious ~~acquire~~requirements ~~the offshore entity; (3) covering the use of existing offshore entities for offshore financings; (4) purporting~~ to ~~cover~~obtain ~~situations~~these incertificates ~~which~~and anpermits. ~~offshore~~To ~~SPV~~date, ~~establishes~~we ahave ~~new~~not ~~subsidiary~~encountered ~~in China or acquires~~serious andelays ~~unrelated company~~ or ~~unrelated~~difficulties ~~assets~~ in ~~China; and (5) making~~ the ~~domestic~~process ~~affiliate~~ of ~~the~~applying ~~SPV responsible~~ for ~~the~~these ~~accuracy of~~certificates ~~certain~~and ~~documents which must be filed in connection with any such registration~~permits, ~~notably,~~but ~~the~~we ~~business~~cannot ~~plan~~guarantee ~~which~~that ~~describes~~we ~~the~~will ~~overseas financing~~not ~~and the use of proceeds. Amendments to registrations made under Circular 37 are required in connection with any increase or~~encounter ~~decrease~~serious ofdelays ~~capital, transfer of shares, mergers and acquisitions, equity investment~~ or ~~creation~~difficulties ~~of any security interest~~ in ~~any assets located in China to guarantee offshore obligations and Notice 106 makes~~ the ~~offshore SPV jointly responsible for these filings~~future. In the ~~case~~ ofevent an SPV which was established, and which acquired a related domestic company or assets, before the implementation date of Circular 37, a retroactive SAFE registration was required to have been completed before March 31, 2006. This date was subsequently extended indefinitely by Notice 106, which also required that ~~the~~we ~~registrant~~fail ~~establish that all foreign exchange transactions undertaken by the SPV and its affiliates were in compliance with applicable laws and regulations. Failure~~ to ~~comply~~obtain ~~with~~ the ~~requirements~~necessary ofgovernmental ~~Circular~~approvals ~~37, as applied by SAFE in accordance with Notice 106, may result in fines and other penalties under PRC laws~~ for ~~evasion~~any of ~~applicable foreign~~our ~~exchange~~major ~~restrictions.~~property ~~Any~~projects, ~~such~~or ~~failure~~a ~~could~~serious ~~also~~delay ~~result~~occurs in the ~~SPV~~government’s ~~affiliates~~examination ~~being impeded or prevented from distributing their profits~~ and ~~the~~approval ~~proceeds from any reduction in capital~~progress, ~~share~~we ~~transfer~~may ornot ~~liquidation~~be able to maintain ~~the~~our ~~SPV,~~development orschedule ~~from~~and ~~engaging~~our inbusiness ~~other~~and ~~transfers of~~cash ~~funds~~flows ~~into~~may orbe ~~out~~adversely ~~of China~~affected.

We ~~have~~may ~~asked~~forfeit ~~our stockholders, who are PRC residents~~land ~~as defined in Circular 37,~~ to ~~register with~~ the ~~relevant branch of SAFE, as currently required, in connection with their equity interests in us and our acquisitions of equity interests in our~~ PRC ~~subsidiary.~~government ~~However,~~if we ~~cannot~~fail ~~provide~~to ~~any~~comply ~~assurances~~with ~~that~~procedural ~~they~~requirements ~~can~~applicable obtain the above SAFE registrations required by Circular 37 and Notice 106. Moreover, because of uncertainty over how Circular 37 will be interpreted and implemented, and how or whether SAFE will apply it to ~~us,~~land wegrants ~~cannot~~from ~~predict~~the ~~how~~government ~~it will affect our business operations~~ or ~~future~~the ~~strategies. For~~terms ~~example, our present and prospective PRC subsidiaries’ ability to conduct foreign exchange activities, such as~~ of the ~~remittance of~~land ~~dividends~~use ~~and~~rights ~~foreign~~grant ~~currency-denominated borrowings, may be subject to compliance with Circular 37 and Notice 106 by our PRC resident beneficial holders~~contracts.

InAccording ~~addition,~~to ~~such~~the relevant PRC ~~residents~~regulations, ~~may~~if ~~not~~we ~~always be~~fail ~~able~~to develop a property project according to ~~complete~~the terms of the ~~necessary~~land ~~registration~~use ~~procedures~~rights ~~required~~grant bycontract, ~~Circular~~including 37those relating to the payment of land premiums, specified use of the land and ~~Notice~~the ~~106.~~time Wefor ~~also~~commencement ~~have~~and ~~little~~completion ~~control~~of ~~over~~the ~~either~~property development, ~~our~~the ~~present~~PRC orgovernment ~~prospective~~may ~~direct~~issue ora ~~indirect~~warning, ~~stockholders~~may impose a penalty or ~~the~~may ~~outcome~~order ofus ~~such~~to ~~registration~~forfeit ~~procedures~~the land. ASpecifically, ~~failure~~under bycurrent ~~our~~ PRC ~~resident~~law, ~~beneficial~~if ~~holders~~we orfail ~~future~~to commence development within one year after the commencement date stipulated in the land use rights grant contract, the relevant PRC ~~resident~~land ~~stockholders~~bureau tomay ~~comply~~issue ~~with~~a ~~Circular~~warning 37notice to us and ~~Notice~~impose ~~106,~~an ifidle ~~SAFE~~land ~~requires~~fee iton the land of up to 20% of the land premium. If we fail to commence development within two years, ~~could~~the land will be subject ~~these~~ to forfeiture to the PRC ~~resident~~government, ~~beneficial~~unless ~~holders~~the todelay ~~fines~~in development is caused by government actions or ~~legal~~force ~~sanctions~~majeure. Even if the commencement of the land development is compliant with the land use rights grant contract, ~~restrict~~if ~~our~~the ~~overseas~~developed GFA on the land is less than one-third of the total GFA of the project or ~~cross~~the total capital invested is less than one-~~border~~fourth of the total investment ~~activities~~of the project and the suspension of the development of the land continues for more than one year without government approval, ~~limit~~the ~~our~~land ~~subsidiaries’~~will also be treated as idle land and be subject to penalty or forfeiture. We cannot assure ~~ability~~you that circumstances leading to ~~make~~significant ~~distributions~~delays orin ~~pay~~our ~~dividends~~development schedule or ~~affect~~forfeiture ~~our~~of ~~ownership~~land ~~structure~~will not arise in the future. If we forfeit land, ~~which~~we ~~could~~will ~~adversely~~not ~~affect~~only ~~our~~lose ~~business~~the opportunity to develop the property projects on such land, but may also lose all past investments in such land, including land premiums paid and ~~prospects~~development costs incurred.

27Any non-compliant GFA of our uncompleted and future property developments will be subject to governmental approval and additional payments.

InThe ~~February~~local ~~2015, SAFE promulgated a Notice on~~government ~~Further~~authorities ~~Simplifying~~inspect ~~and~~property ~~Improving~~developments ~~Foreign~~after ~~Exchange~~their ~~Administration~~completion ~~Policy on Direct Investment, or SAFE Notice 13. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments~~ and ~~outbound~~issue ~~direct investments, including those required under SAFE Circular 37, must be filed with qualified banks instead of SAFE. Qualified banks should examine~~ the ~~applications~~completion ~~and accept~~acceptance ~~registrations~~certificates ~~under~~if the ~~supervision of SAFE. We have used our best efforts to notify PRC residents or entities who directly or~~developments ~~indirectly~~are ~~hold shares~~ in ~~our~~compliance ~~Cayman~~with ~~Islands~~the ~~holding~~relevant ~~company~~laws and ~~who~~regulations. ~~are~~If ~~known~~the tototal usconstructed asGFA ~~being~~of ~~PRC~~a ~~residents~~property todevelopment ~~complete~~exceeds the ~~foreign~~GFA ~~exchange~~originally ~~registrations.~~authorized ~~However,~~in ~~we may not be informed of~~ the ~~identities~~relevant ofland ~~all~~grant ~~the~~contracts ~~PRC residents~~ or ~~entities~~construction ~~holding~~permit, ~~direct~~ or ~~indirect~~if ~~interest in~~the ~~our~~completed ~~Company,~~property ~~nor~~contains ~~can~~built-up weareas ~~compel our beneficial owners to comply with SAFE registration requirements. We cannot assure you~~ that ~~all~~do ~~other~~not ~~shareholders~~conform ~~or beneficial owners of ours who are PRC residents or entities have complied~~ with, ~~and will in~~ the ~~future~~plan ~~make,~~authorized ~~obtain or update any applicable registrations or approvals required~~ by, ~~SAFE~~the ~~regulations.~~construction ~~Failure by such shareholders or beneficial owners to comply with SAFE regulations~~permit, ~~or failure by us to amend~~ the ~~foreign~~property ~~exchange~~developer ~~registrations~~may ofbe ~~our~~required ~~PRC subsidiaries, could subject us~~ to ~~fines or~~pay ~~legal~~additional ~~sanctions,~~amounts ~~restrict our overseas~~ or ~~cross-border investment activities, and limit our PRC subsidiaries’ ability to make~~take ~~distributions~~corrective oractions ~~pay~~with ~~dividends~~respect to ussuch ornon-compliant ~~affect~~GFA ~~our~~before ~~ownership~~a ~~structure,~~completion ~~which~~acceptance ~~could~~certificate ~~adversely~~can ~~affect~~be ~~our~~issued ~~business~~to ~~and~~the ~~prospects~~property development.

~~Furthermore,~~Our asfailure these foreign exchange and outbound investment related regulations are relatively new and their interpretation and implementation has been constantly evolving, it is unclear how these regulations, and any future regulations concerning offshore or cross-border investments and transactions, will be interpreted, amended and implemented by the relevant government authorities. For example, we may be subject to ~~a more stringent review and approval~~assist ~~process with respect to~~ our ~~foreign~~customers ~~exchange~~in ~~activities,~~applying ~~such~~for asproperty ~~remittance~~ownership ofcertificates ~~dividends~~in and foreign-currency-denominated borrowings, which may adversely affect our financial condition and results of operations. We cannot assure you that we have complied or will be able to comply with all applicable foreign exchange and outbound investment related regulations. In addition, if we decide to acquire a ~~PRC domestic~~timely ~~company,~~manner ~~we cannot assure you that we or the owners of such company, as the case~~ may ~~be,~~lead ~~will be able~~ to ~~obtain~~compensatory ~~the~~liabilities ~~necessary approvals or complete the necessary filings and registrations required by the foreign exchange regulations. This may restrict our ability~~ to ~~implement~~ our ~~acquisition strategy and could adversely affect our business and prospects~~customers.

~~Changes~~We inare ~~the~~required ~~policies,~~to ~~regulations~~meet various requirements within 90 days after delivery of property, ~~rules~~or such other period contracted with our customers, in order for our customers to apply for their property ownership certificates, including passing various governmental clearances, formalities and procedures. Under our sales contract, we are liable for any delay in the ~~enforcement~~submission of ~~laws~~the required documents as a result of our failure to meet such requirements, and are required to compensate our customers for delays. In the ~~PRC~~case ~~government~~of ~~may~~serious bedelays ~~quick~~on ~~with~~one ~~little~~or ~~advance~~more ~~notice~~property ~~and~~projects, ~~could~~we ~~have~~may abe required to pay significant ~~impact~~compensation ~~upon~~to our ~~ability~~ tocustomers ~~operate~~and ~~profitably~~our inreputation ~~the~~may ~~PRC~~be adversely affected.

All of our operations are located in China. Accordingly, our business, prospects, financial condition and results of operations may be influenced to a significant degree by political, economic, legal developments and social conditions in China generally and by continued economic growth in China as a whole. Policies, regulations, rules, and the enforcement of laws of the PRC government can have significant effects on economic conditions in the PRC and the ability of businesses to operate profitably. Our ability to operate profitably in the PRC may be adversely affected by changes in policies by the PRC government, including changes in laws, regulations or their interpretation, particularly those dealing with security, intellectual property, money laundering, taxation and other laws that affect our post-combination entity’s ability to operate its business.24

~~Changes~~We inare ~~foreign~~subject ~~exchange regulations may~~to ~~adversely~~potential ~~affect~~environmental ~~our results of operations~~liabilities.

We ~~currently~~are ~~receive~~subject ~~all~~to ofa ~~our revenues in RMB.~~variety ~~The~~of ~~PRC~~laws ~~government~~and ~~regulates~~regulations concerning the ~~conversion~~protection ~~between~~of ~~RMB~~health and ~~foreign~~the ~~currencies~~environment. ~~Over~~The ~~the~~particular ~~years,~~environmental ~~the~~laws ~~government~~and ~~has~~regulations ~~significantly reduced~~that ~~its~~apply ~~control~~to ~~over~~any ~~routine~~given ~~foreign~~development ~~exchange~~site ~~transactions~~vary ~~under~~significantly ~~current~~according ~~accounts,~~to ~~including~~the ~~trade~~site’s location and ~~service-related~~environmental ~~foreign~~conditions, ~~exchange~~the ~~transactions,~~present ~~payment~~and former uses of ~~dividends~~the site and ~~service~~the nature of ~~foreign~~the ~~debt~~adjoining properties. ~~However,~~Environmental ~~foreign~~laws ~~exchange~~and ~~transactions~~conditions bymay ~~our~~result ~~PRC~~in ~~subsidiaries~~delays, ~~under~~may ~~capital accounts~~cause ~~continue~~us to beincur ~~subject~~substantial tocompliance ~~significant~~and ~~foreign~~other ~~exchange~~costs ~~controls~~ and ~~require~~can ~~the~~prohibit ~~approval~~or ~~of,~~severely orrestrict ~~registration~~project ~~with,~~development ~~PRC~~activity ~~governmental~~in ~~authorities.~~environmentally-sensitive ~~There~~regions ~~can~~or beareas. noAlthough ~~assurance~~the ~~that~~environmental ~~these~~investigations ~~PRC~~conducted ~~laws~~by ~~and~~local ~~regulations~~environmental onauthorities ~~foreign~~have ~~investment will~~ not ~~cast~~revealed ~~uncertainties~~any onenvironmental liabilities ~~our~~that ~~financing~~we ~~and~~believe ~~operating plans~~would inhave ~~China.~~a ~~Under~~material ~~current~~adverse ~~foreign~~effect ~~exchange~~on ~~regulations~~our ~~in China~~business, ~~subject~~financial tocondition ~~the~~or ~~relevant~~results ~~registration~~of atoperations ~~SAFE, we will be able~~ to date, ~~pay~~it ~~dividends~~is inpossible ~~foreign~~that ~~currencies,~~these ~~without~~investigations ~~prior~~did ~~approval~~not ~~from~~reveal ~~SAFE,~~all byenvironmental ~~complying~~liabilities ~~with~~and ~~certain~~that ~~procedural~~there ~~requirements.~~are ~~However,~~material ~~there~~environmental liabilities ~~can~~of bewhich nowe ~~assurance~~are ~~that~~unaware. ~~the~~We ~~current~~cannot ~~PRC~~assure ~~foreign~~you ~~exchange~~that ~~policies~~future ~~regarding~~environmental ~~debt~~investigations ~~service~~will ~~and~~not ~~payment~~reveal ofmaterial ~~dividends~~environmental ~~in foreign currencies~~liabilities. ~~will~~Also, ~~continue~~we incannot ~~the~~assure ~~future.~~you ~~Changes~~that inthe PRC ~~foreign~~government ~~exchange~~will ~~policies~~not ~~might~~change ~~have~~the aexisting ~~negative~~laws ~~impact~~and onregulations ~~our~~or ~~ability~~impose toadditional ~~service~~or ~~our foreign~~stricter ~~currency-denominated~~laws ~~indebtedness~~or regulations, ifthe ~~any,~~compliance ~~and~~with towhich ~~distribute~~may ~~dividends~~cause us to ~~our~~incur ~~shareholders~~significant incapital ~~foreign currencies~~expenditures.

~~Future~~We ~~inflation~~need into ~~China~~improve our ~~may~~internal ~~inhibit~~financial ~~our~~reporting ~~activity~~controls. If we are unable to ~~conduct~~establish appropriate internal financial reporting controls and procedures, ~~business~~it could cause us to fail to meet our reporting obligations, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in ~~China~~our reported financial information and have a negative effect on the market price for shares of our common stock.

InEffective ~~recent~~internal ~~years,~~controls are ~~the~~necessary ~~Chinese~~for ~~economy~~us ~~has~~to ~~experienced periods~~provide ofreliable ~~rapid~~financial ~~expansion~~reports and ~~high~~effectively ~~rates~~prevent offraud. ~~inflation,~~We ~~which~~maintain ~~have~~a ~~led~~system toof ~~the~~internal ~~adoption~~control byover financial ~~the Chinese government~~reporting, ~~from~~which ~~time~~is todefined ~~time,~~as ~~of various~~a ~~corrective~~process ~~measures~~ designed toby, ~~restrict~~or under the ~~availability~~supervision of, ~~credit~~our orprincipal ~~regulate~~executive ~~growth~~officer and ~~contain~~principal financial ~~inflation.~~officer, ~~While~~or ~~inflation has~~persons ~~been~~performing ~~more~~similar ~~moderate~~functions, ~~since~~and ~~1995,~~effected ~~high~~by ~~inflation~~our ~~may~~board inof ~~the~~directors, ~~future~~management ~~cause~~and ~~Chinese~~other ~~government~~personnel, to provide ~~impose~~reasonable ~~controls~~assurance onregarding ~~credit~~the ~~and/or~~reliability ~~prices, or~~of tofinancial ~~take~~reporting ~~other~~and ~~action,~~the ~~which~~preparation ~~could~~of ~~inhibit~~financial ~~economic~~statements ~~activity~~for external purposes in ~~China,~~accordance ~~and~~with ~~thereby~~generally ~~harm~~accepted ~~the~~accounting ~~market for our products~~principles.

~~Because~~We ~~Chinese~~cannot ~~law~~assure ~~governs~~you that ~~almost~~we ~~all~~will ofnot, in the future, identify areas requiring improvement in our internal control over financial reporting. We cannot assure ~~material~~you ~~agreements,~~that wethe ~~may~~measures ~~not~~we bewill ~~able~~take to ~~enforce~~remediate ~~our~~any ~~legal~~areas ~~rights~~in ~~within~~need ~~China~~of orimprovement ~~elsewhere,~~will ~~which~~be ~~could~~successful ~~result~~or inthat awe ~~significant~~will ~~loss~~implement and maintain ofadequate ~~business,~~controls ~~business~~over ~~opportunities,~~our orfinancial ~~capital~~processes and reporting in the future as we continue our growth.

WeAs ~~cannot~~a ~~assure~~public ~~you that~~ company, we ~~will~~are berequired ~~able~~ to ~~enforce any~~comply ofwith ~~our~~the ~~material~~reporting ~~agreements~~obligations ~~or that remedies will be available outside~~ of ~~China.~~the ~~The~~Exchange ~~system~~Act ~~of laws~~ and ~~the~~Section 404 ~~enforcement~~ of ~~existing laws~~the inSarbanes-Oxley ~~China~~Act ~~may~~of ~~not be as certain in implementation and interpretation as in the United States~~2013. ~~The~~If we ~~inability~~fail to ~~enforce~~comply orwith ~~obtain~~the ~~a remedy~~reporting ~~under~~obligations ~~any~~ of ~~our~~the ~~current~~Exchange orAct ~~future~~and ~~agreements~~Section 404 ~~could result in a significant loss~~ of ~~business,~~the ~~business~~Sarbanes-Oxley ~~opportunities~~Act or ~~capital. It~~if ~~will~~we befail ~~extremely difficult~~ to ~~acquire~~maintain adequate ~~jurisdiction~~internal ~~and~~controls ~~enforce~~over ~~liabilities~~financial ~~against~~reporting, our ~~officers~~business, ~~directors~~results of operations and ~~assets~~financial ~~based~~condition incould ~~China~~be materially adversely affected.

28As a public company, we are required to comply with the periodic reporting obligations of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including preparing annual reports and quarterly reports. Our failure to prepare and disclose this information in a timely manner could subject us to penalties under U.S. federal securities laws, expose us to lawsuits and restrict our ability to access financing. In addition, we are required under applicable law and regulations to design and implement internal controls over financial reporting, and evaluate our existing internal controls with respect to the standards adopted by the U.S. Public Company Accounting Oversight Board.

~~Substantially~~The ~~all~~Company assessed its internal control over financial reporting and still has significant and material deficiencies as of ~~our~~September 30, ~~assets~~2023. ~~are~~To ~~located~~remediate the material weaknesses described above and to prevent similar deficiencies in the future, we are currently evaluating additional controls and procedures, which may include: (i) provide more U.S. GAAP knowledge and SEC reporting requirement training for the ~~PRC~~accounting department and ~~all~~establish offormal ~~our~~policies ~~officers~~and procedures for an internal audit function; and ~~most~~(ii) implementation of ~~our~~an ~~present~~ongoing ~~directors~~initiative ~~reside~~and ~~outside~~training in ofthe Company to ensure the ~~United~~importance ~~States. As~~of ainternal ~~result,~~controls itand ~~may~~compliance ~~not~~with beestablished policies and procedures are fully understood ~~possible~~throughout ~~for~~the ~~United~~organization ~~States~~and ~~investors~~plan to ~~enforce~~provide ~~their~~continuous ~~legal~~U.S. ~~rights,~~GAAP knowledge training to ~~effect~~relevant ~~service~~employees involved to ensure the performance of ~~process~~and ~~upon~~compliance ~~our~~with ~~directors~~those orprocedures ~~officers~~and policies. Any actions we have taken or may take to remediate these material weaknesses are ~~enforce~~subject ~~judgments~~to continued management review supported by testing, as well as oversight by the Audit Committee of ~~United~~our ~~States~~Board ~~courts~~of ~~predicated~~Directors. ~~upon~~We cannot ~~civil~~assure ~~liabilities~~you that these material weaknesses will not occur in the future and ~~criminal~~that ~~penalties~~we ofwill be able to remediate such weaknesses in a timely manner, which could impair our ~~directors~~ability to accurately and ~~officers~~timely ~~under~~report our financial position, results of operations or cash ~~Federal~~flows. ~~securities~~The ~~laws~~management is committed to improving the internal controls over financial reporting and will undertake the consistent improvements or enhancements on an ongoing basis. ~~Moreover~~However, we ~~have~~cannot ~~been~~assure ~~advised~~you that ~~China~~our ~~does~~current ~~not~~remediation ~~have~~plan ~~treaties~~can ~~providing~~resolve ~~for~~all the ~~reciprocal~~significant ~~recognition and~~deficiencies ~~enforcement~~and ofmaterial ~~judgments~~weaknesses ofin ~~courts~~the ~~with~~internal ~~the~~control ~~United~~over ~~States~~financial reporting. ~~Further~~As a result, itwe ismay ~~unclear~~be ifrequired ~~extradition~~to ~~treaties~~implement ~~now~~further inremedial measures ~~effect~~and ~~between~~to ~~the~~design ~~United~~enhanced processes and controls to address issues identified through future reviews. This could result in significant ~~States~~delays and ~~China~~costs ~~would~~to ~~permit~~us ~~effective~~and ~~enforcement~~require ofus ~~criminal~~to ~~penalties~~divert ofsubstantial ~~the~~resources, ~~Federal~~including ~~securities~~management ~~laws~~time, from other activities.

~~Failure to comply with the United States Foreign Corrupt Practices Act could subject us to penalties and other adverse consequences.~~25

WeIf ~~are~~we ~~subject~~do tonot fully remediate the ~~United~~material ~~States~~weaknesses ~~Foreign~~identified ~~Corrupt Practices~~by ~~Act,~~management ~~which~~or ~~generally~~fail ~~prohibits~~to ~~United~~maintain ~~States~~the ~~companies~~adequacy ~~from~~of ~~engaging~~our ininternal ~~bribery~~controls orin ~~other~~the ~~prohibited~~future, ~~payments~~we tomay ~~foreign~~not ~~officials~~be ~~for~~able ~~the~~to ~~purpose~~ensure ofthat ~~obtaining~~we orcan ~~retaining~~conclude ~~business.~~on ~~Foreign~~an ~~companies,~~ongoing ~~including~~basis ~~some~~ that ~~may~~we ~~compete~~have ~~with~~effective ~~us,~~internal ~~are~~controls ~~not~~over ~~subject~~financial toreporting ~~these~~in accordance ~~prohibitions.~~with ~~Corruption,~~the ~~extortion,~~Sarbanes-Oxley ~~bribery,~~Act. ~~pay-offs~~Moreover, ~~theft~~effective ~~and~~internal ~~other~~controls ~~fraudulent~~are ~~practices~~necessary ~~occur~~for ~~from~~us ~~time-~~to~~-time~~ inproduce ~~the~~reliable ~~PRC.~~financial Wereports ~~can~~and are ~~make~~important noto ~~assurance,~~help ~~however,~~prevent ~~that~~fraud. ~~our~~As ~~employees~~a orresult, ~~other~~any ~~agents~~failure ~~will~~to ~~not~~satisfy ~~engage~~the inrequirements ~~such~~of ~~conduct~~Section 404 ~~for~~on ~~which~~a wetimely ~~might~~basis becould ~~held responsible.~~result Ifin ~~our~~the ~~employees~~loss orof ~~other~~investor ~~agents~~confidence ~~are~~in ~~found~~the toreliability ~~have~~of ~~engaged~~our infinancial ~~such practices~~statements, wewhich in turn could ~~suffer~~harm ~~severe~~our ~~penalties~~business and ~~other consequences~~negatively ~~that~~impact ~~may~~the ~~have~~trading aprice ~~material~~of ~~adverse effect on~~ our ~~business,~~common ~~financial condition and results of operations~~stock.

We ~~may~~do not have ~~difficulty~~business insurance ~~establishing~~coverage. ~~adequate~~Any ~~management~~future business liability, ~~legal~~ disruption or litigation we experience might divert management focus from our business and ~~financial~~could ~~controls~~significantly inimpact ~~the~~our ~~PRC~~financial results.

~~The~~Availability ~~PRC~~of ~~historically~~business insurance ~~has~~products ~~been~~and ~~deficient~~coverage in ~~Western style~~China ~~management~~is limited, and ~~financial~~most ~~reporting~~such ~~concepts~~products ~~and~~are ~~practices,~~expensive asin ~~well~~relation asto inthe ~~modern~~coverage ~~banking,~~offered. ~~computer~~We ~~and~~have determined ~~other~~that ~~control~~the ~~systems.~~risks ~~We may~~of ~~have~~disruption, ~~difficulty~~cost inof ~~hiring~~such insurance and ~~retaining~~the adifficulties ~~sufficient~~associated ~~number~~with ofacquiring ~~qualified~~such ~~employees~~insurances toon ~~work~~commercially reasonable interms ~~the~~make ~~PRC~~it impractical for us to maintain such insurance. As a result, ofwe ~~these~~do ~~factors~~not have any business liability, disruption weor ~~may~~litigation ~~experience~~insurance ~~difficulty~~coverage for our operations in ~~establishing~~China. ~~management~~Accordingly, ~~legal~~a ~~and~~business ~~financial controls~~disruption, ~~collecting~~litigation ~~financial~~or ~~data~~natural ~~and~~disaster ~~preparing~~may ~~financial~~result ~~statements,~~in ~~books~~substantial ofcosts ~~account~~ and ~~corporate~~divert ~~records~~management’s ~~and~~attention ~~instituting~~from our business, ~~practices~~which ~~that~~would ~~meet~~have ~~Western~~an ~~standards.~~adverse Weeffect ~~may~~on ~~have~~our ~~difficulty establishing~~results ~~adequate~~of ~~management, legal~~ operations and financial ~~controls in the PRC~~condition.

~~Although~~The ~~the~~PRC ~~audit report included in this~~government ~~annual~~may ~~report~~adopt isfurther ~~prepared~~restrictive bymeasures ~~U.S.~~to ~~auditors~~slow ~~who are currently inspected by~~ the ~~PCAOB,~~increase ~~there is no guarantee that future audit reports will be prepared by auditors inspected by the PCAOB and, as such,~~ in ~~the~~prices ~~future investors may be deprived~~ of ~~the~~real ~~benefits~~property of such inspection. Furthermore, trading in our securities may be prohibited under the HFCA Act if the SEC subsequently determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely, and asreal aproperty ~~result, U~~development.S. national securities exchanges, such as the Nasdaq, may determine to delist our securities. Furthermore, on December 29, 2022, the Consolidated Appropriations Act, was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things, an identical provision to AHFCAA, which reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two.

AsAlong anwith ~~auditor~~the ofeconomic growth ~~companies~~in ~~that~~China, ~~are~~investments ~~registered with~~in the ~~SEC~~property ~~and~~sectors ~~publicly~~have ~~traded~~increased significantly in the ~~United~~past ~~States~~few ~~and~~years. aIn ~~firm~~response ~~registered~~to ~~with~~concerns over the ~~PCAOB,~~scale ~~our~~of ~~auditor~~the isincrease ~~required~~in ~~under~~property ~~the~~investments, ~~laws of~~ the ~~United~~PRC ~~States~~government tohas ~~undergo~~introduced ~~regular~~policies ~~inspections~~to bycurtail ~~the~~property ~~PCAOB~~development. toWe ~~assess~~believe those ~~their~~regulations, ~~compliance~~among ~~with~~others, ~~the~~significantly ~~laws~~affect of the ~~United~~property ~~States~~industry ~~and~~in ~~professional standards~~China.

~~Although~~These ~~currently~~restrictive ~~we operates substantially in~~regulations ~~mainland~~and ~~China,~~measures acould ~~jurisdiction~~increase ~~where the PCAOB is currently unable to conduct inspections without the approval of the Chinese government authorities,~~ our ~~auditor,~~operating ~~the~~costs ~~independent registered public accounting firm that issues the audit report included elsewhere~~ in ~~this~~adapting ~~annual report, is subject~~ to ~~laws~~these inregulations ~~the~~and ~~United~~measures, ~~States~~limit ~~pursuant~~our toaccess ~~which the PCAOB conducts regular inspections~~ to ~~assess~~capital ~~our~~resources ~~auditor’s~~or ~~compliance~~even ~~with~~restrict ~~the~~our ~~applicable~~business ~~professional standards~~operations. ~~Inspections~~We ofcannot ~~other~~be ~~auditors~~certain ~~conducted~~that by the ~~PCAOB~~PRC ~~outside~~government ~~mainland~~will ~~China~~not ~~have at~~issue ~~times~~additional ~~identified deficiencies in those auditors’ audit procedures~~ and ~~quality~~more ~~control~~stringent ~~procedures~~regulations or measures, which ~~may~~could befurther ~~addressed~~slowdown asproperty ~~part of~~development ~~the inspection process to improve future audit quality. The lack of the PCAOB inspections of audit work undertaken~~ in ~~mainland~~ China ~~prevents~~ ~~the PCAOB from regularly evaluating auditors’ audits~~ and ~~their~~adversely ~~quality~~affect ~~control procedures. As a result, if there is any component of~~ our ~~auditor’s~~business ~~work~~and ~~papers become located in mainland China in the future, such work papers will not be subject to inspection by the PCAOB~~prospects. ~~As a result, investors would be deprived of such PCAOB inspections, which could result in limitations or restrictions to our access of the U.S. capital markets.~~

29We are heavily dependent on the performance of the residential property market in China, which is at a relatively early development stage.

AsThe ~~part~~residential ofproperty industry ~~a continued regulatory focus~~ in the ~~United~~ ~~States~~PRC onis ~~access~~still ~~to audit and other information currently protected by national law,~~ in ~~particular mainland China’s, in June 2019,~~ a ~~bipartisan~~relatively ~~group~~early ofstage ~~lawmakers introduced bills in both houses~~ of ~~the U~~development.S. ~~Congress~~Although ~~which,~~demand ~~if passed, would require the SEC to maintain a list of issuers~~ for ~~which~~residential ~~the~~property ~~PCAOB~~in ~~is not able to inspect or investigate~~ the ~~audit~~PRC ~~work~~has ~~performed by a foreign public accounting~~been ~~firm~~growing ~~completely.~~rapidly The proposed Ensuring Quality Information and Transparency for Abroad-Based Listings on our Exchanges (“EQUITABLE”) Act prescribes increased disclosure requirements for these issuers and, beginning in ~~2025,~~recent ~~the delisting from U.S. national securities exchanges such as the Nasdaq of issuers included on the SEC’s list for three consecutive~~ years~~. It is unclear if this proposed legislation will be enacted. Furthermore~~, ~~there~~such ~~have~~growth been recent deliberations within the U.S. government regarding potentially limiting or restricting China-based companies from accessing U.S. capital markets. On May 20, 2020, the U.S. Senate passed the HFCA Act, which includes requirements for the SEC to identify issuers whose audit work is ~~performed~~often bycoupled ~~auditors~~with ~~that~~volatility ~~the PCAOB is unable to inspect or investigate completely because of a restriction imposed by a non-U.S. authority~~ in ~~the~~market ~~auditor’s~~conditions ~~local jurisdiction. The U.S. House of Representatives passed the HFCA Act on December 2, 2020,~~ and ~~the~~fluctuation ~~HFCA Act was signed into law on December 18, 2020. Additionally,~~ in ~~July~~property ~~2020, the U~~prices.S. ~~President’s~~It ~~Working~~is ~~Group~~extremely ondifficult ~~Financial Markets issued recommendations for actions that can be taken by the executive branch, the SEC, the PCAOB or other federal agencies and department with respect~~ to ~~Chinese~~predict ~~companies~~how ~~listed~~much ~~on U.S. stock exchanges~~ and ~~their~~when ~~audit firms,~~demand inwill ~~an effort to protect investors in the United States. In response~~develop, onas ~~November~~many 23social, ~~2020~~political, the SEC issued guidance highlighting certain risks (and their implications to U.S. investors) associated with investments in China-based issuers and summarizing enhanced disclosures the SEC recommends China-based issuers make regarding such risks. On March 24economic, ~~2021,~~legal ~~the SEC adopted interim final rules relating to the implementation of certain disclosure~~ and documentation requirements of the HFCA Act. We will be required to comply with these rules if the SEC identifies us as having a “non-inspection” year (as defined in the interim final rules) under a process to be subsequently established by the SEC. The SEC is assessing how to implement other ~~requirements of the HFCA Act~~factors, ~~including the listing and trading prohibition~~ ~~requirements~~most ~~described~~of ~~above.~~which ~~Under~~are ~~the~~beyond ~~HFCA~~our ~~Act~~control, ~~our securities~~ may beaffect ~~prohibited from trading on~~ the ~~Nasdaq~~development orof ~~other U.S. stock exchanges if our auditor is not inspected by~~ the ~~PCAOB for three consecutive years, and this ultimately could result in our common stock being delisted~~market. ~~Furthermore,~~ onThe ~~June~~level 22, 2021, the U.S. Senate passed the AHFCAA, which, if enacted, would amend the HFCA Act and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to the PCAOB inspections for two consecutive years instead of ~~three~~uncertainty and would reduce the time before our securities may be prohibited from trading or delisted. On September 22, 2021, the PCAOB adopted a final rule implementing the AHFCAA, which provides a framework for the PCAOB to use when determining, as contemplated under the AHFCAA, whether the Board is ~~unable~~increased ~~to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken~~ by ~~one or more authorities in that jurisdiction. On November 5, 2021,~~ the ~~SEC~~limited ~~approved the PCAOB’s~~availability ~~Rule~~of ~~6100,~~accurate ~~Board~~financial ~~Determinations Under the HFCA Act. On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission~~ and ~~disclosure~~market ~~requirements~~information inas ~~the~~well ~~HFCA Act The rules apply to registrants that the SEC identifies~~ as ~~having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that~~ the ~~PCAOB is~~overall ~~unable~~low tolevel ~~inspect or investigate completely because~~ of atransparency ~~position taken by an authority~~ in ~~foreign~~the ~~jurisdictions. The PCAOB issued a Determination Report on December 16~~PRC, ~~2021~~especially ~~which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered~~ in: ~~(1)~~Tier ~~mainland~~3 ~~China of the PRC,~~ and ~~(2)~~4 ~~Hong Kong. In addition, the PCAOB’s report identified~~cities ~~the specific registered public accounting firms~~ which ~~are~~have ~~subject~~lagged to these determinations. On December 29, 2022, the Consolidated Appropriations Act, was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things, an identical provision to AHFCAA, which reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two. Our auditor, OneStop Assurance PAC, is headquartered in ~~Singapore,~~progress ~~not mainland China or Hong Kong and was not identified~~ in ~~this~~these ~~report~~aspects aswhen acompared ~~firm subject~~ to ~~the~~Tier ~~PCAOB’s~~1 ~~determination~~cities. ~~Therefore, our auditor is not currently subject to the determinations announced by the PCAOB on December 16, 2021, and it is currently subject to the PCAOB inspections.~~

~~While~~The our auditor is based in the U.S. and is registered with the PCAOB and has been inspected by the PCAOB on a regular basis, in the event it is later determined that the PCAOB is unable to inspect or investigate completely our auditor because of a position taken by an authority in a foreign jurisdiction, then such lack of ~~inspection could cause trading in the our securities to be prohibited under the HFCA Act, and ultimately result in~~ a ~~determination~~liquid bysecondary a securities exchange to delist our securities. In addition, the recent developments would add uncertainties to the listing of our securities and we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. It remains unclear what the SEC’s implementation process related to the above rules will entail or what further actions the SEC, the PCAOB or Nasdaq will take to address these issues and what impact those actions will have on U.S. companies that have significant operations in the PRC and have securities listed on a U.S. stock exchange (including a national securities exchange or over-the-counter stock market~~). In~~ ~~addition,~~for ~~the~~residential ~~above~~property ~~amendments~~may ~~and~~discourage ~~any~~investors ~~additional~~from ~~actions,~~acquiring ~~proceedings, or~~ new ~~rules resulting from these efforts to increase U~~properties.~~S. regulatory~~ ~~access~~The tolimited ~~audit~~amount ~~information could create some uncertainty for investors, the market price~~ of ~~our~~property ~~common stock could be adversely~~mortgage ~~affected,~~financing ~~and~~available ~~we could be delisted if we and our auditor are unable~~ to ~~meet~~PRC ~~the~~individuals ~~PCAOB~~may ~~inspection~~further ~~requirement~~inhibit ordemand ~~being~~for ~~required~~residential ~~to engage a new audit firm, which would require significant expense and management time~~developments.

OnWe ~~August~~face ~~26,~~intense ~~2022, the PCAOB signed Statement~~competition offrom ~~Protocol~~other ~~(the~~real ~~“SOP”)~~estate ~~Agreement with the CSRC and China’s Ministry of Finance~~developers. The SOP Agreement, together with two protocol agreements (collectively, “SOP Agreements”), governs inspections and investigations of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination. Delisting of our common stock would force holders of our common stock to sell their shares of common stock. The market price of our common stock could be adversely affected as a result of anticipated negative impacts of these executive or legislative actions upon, as well as negative investor sentiment towards, companies with significant operations in China that are listed in the United States, regardless of whether these executive or legislative actions are implemented and regardless of our actual operating performance.

30The property industry in the PRC is highly competitive. In the Tier 3 and Tier 4 cities we focus on, local and regional property developers are our major competitors, and an increasing number of large state-owned and private national property developers have started entering these markets. Many of our competitors, especially the state-owned and private national property developers, are well capitalized and have greater financial, marketing and other resources than we have. Some also have larger land banks, greater economies of scale, broader name recognition, a longer track record and more established relationships in certain markets. In addition, the PRC government’s recent measures designed to reduce land supply further increased competition for land among property developers.

~~Recent~~Competition ~~greater~~among ~~oversight~~property developers bymay result in increased costs for the ~~CAC~~acquisition ~~over~~of ~~data security~~land for development, ~~particularly~~increased costs for ~~companies~~raw ~~seeking~~materials, toshortages ~~list~~of skilled oncontractors, oversupply of properties, decrease in property prices in certain parts of the PRC, a ~~foreign~~slowdown ~~exchange~~in the rate at which new property developments will be approved and/or reviewed by the relevant government authorities and an increase in administrative costs for hiring or retaining qualified personnel, ~~could~~any of which may adversely ~~impact~~affect our business and financial condition. Furthermore, property developers that are better capitalized than we are may be more competitive in acquiring land through the ~~operating~~auction ~~entities’~~process. ~~business~~If we cannot respond to changes in market conditions as promptly and effectively as our ~~offerings~~competitors, or effectively compete for land acquisition through the auction systems and acquire other factors of production, our business and financial condition will be adversely affected.

OnIn ~~December 28~~addition, ~~2021,~~risk ~~the~~of property ~~CAC,~~over-supply ~~together~~is ~~with~~increasing ~~12 other~~in ~~governmental~~parts ~~departments~~ of ~~the PRC~~China, ~~jointly~~where ~~promulgated~~property ~~the~~investment, ~~Cybersecurity~~trading ~~Review~~and ~~Measures,~~speculation ~~which~~have ~~became~~become ~~effective~~overly onactive. ~~February 15,~~We ~~2022.~~are ~~The~~exposed ~~Cybersecurity Review Measures provides that, in addition~~ to ~~critical~~the ~~information~~risk ~~infrastructure operators (“CIIOs”)~~ that ~~intend to purchase Internet products and services, data processing operators engaging~~ in ~~data processing activities that affect or may affect national security must be subject to cybersecurity review by~~ the ~~Cybersecurity~~event ~~Review Office~~ of ~~the~~actual ~~PRC.~~or ~~According~~perceived ~~to the Cybersecurity Review Measures~~over-supply, aproperty ~~cybersecurity~~prices ~~review assesses potential national security risks that~~ may befall ~~brought about by any procurement~~drastically, ~~data processing, or overseas listing. The Cybersecurity Review Measures further requires that CIIOs~~ and ~~data~~our ~~processing~~revenue ~~operators that possess~~and ~~personal~~profitability ~~data~~will ofbe atadversely ~~least one million users must apply for a review by the Cybersecurity Review Office of the PRC before conducting listings in foreign countries~~affected.

On November 14, 2021, the CAC published the Security Administration Draft, which provides that data processing operators engaging in data processing activities that affect or may affect national security must be subject to network data security review by the relevant Cyberspace Administration of the PRC. According to the Security Administration Draft, data processing operators who possess personal data of at least one million users or collect data that affects or may affect national security must be subject to network data security review by the relevant Cyberspace Administration of the PRC. The deadline for public comments on the Security Administration Draft was December 13, 2021.26

AsFailure ~~of the date of this annual report, we have not received any notice from any authorities identifying any of the operating entities as a CIIO or requiring any of the operating entities~~ to gomake ~~through cybersecurity review or network data security review by the CAC. As the Cybersecurity Review~~adequate ~~Measures~~contributions became effective and if the Security Administration Draft is enacted as proposed, we believe that our operating entity, Guangsha’s operations and our listing will not be affected and that the operating entities are not subject to ~~cybersecurity review~~various oremployee ~~network~~benefits ~~data~~plans security review by the CAC, given that: (i) Guangsha engages in real estate development, primarily in the construction and sale of residential apartments, car parks and commercial properties, therefore it is unlikely to be classified as ~~a CIIO~~required by ~~the~~ PRC ~~regulatory~~regulations agencies; (ii) Guangsha possesses personal data of fewer than one million individual clients in its business operations as of the date of this annual report and do not anticipate that Guangsha will be collecting over one million users’ personal information in the near future, which we understand might otherwise subject Guangsha to the Cybersecurity Review Measures; and (iii) since Guangsha are in real estate development, data processed in their business is unlikely to have a bearing on national security and therefore is unlikely to be classified as core or important data by the authorities. There remains uncertainty, however, as to how the Cybersecurity Review Measures and the Security Administration Draft will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Security Administration Draft. If any such new laws, regulations, rules, or implementation and interpretation come into effect, the operating entities will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on them. We cannot guarantee, however, that our operating entity in mainland China will not be subject tous ~~cybersecurity review and network data security review in the future. During such reviews, our operating entity in mainland China may be required~~ to ~~suspend its operations or experience other disruptions to its operations~~penalties. Cybersecurity review and network data security review could also result in negative publicity with respect to our Company and diversion of Guangsha’s managerial and financial resources, which could materially and adversely affect its business, financial conditions, and results of operations and our offerings.

~~The~~Companies ~~Opinions~~operating ~~recently~~in China ~~issued~~are byrequired to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the ~~General~~plans in amounts equal to certain percentages of salaries, ~~Office~~including bonuses and allowances, of employees up to a maximum amount specified by the ~~Central~~local ~~Committee~~government from time to time at locations where they operate their businesses. The requirement of employee benefit plans has not been implemented consistently by the ~~Communist~~local ~~Party~~governments in China given the different levels of ~~China~~economic development in different locations. As of September 30, 2023 and 2022, we have made adequate employee benefit payments in strict compliance with the ~~General~~relevant ~~Office~~PRC regulations for and on behalf of ~~the~~our ~~State~~employees. ~~Council~~If we fail to make contributions to various employee benefits plans in strict compliance with applicable PRC labor-related laws and regulations may subject us to late payment penalties, and we could also be required to make up the ~~operating~~contributions for these plans as well as to pay late fees and ~~entities~~fines. If we are subject to ~~additional~~late ~~compliance~~fees ~~requirement~~or fines in relation to the ~~future~~underpaid employee benefits, our financial condition and results of operations may be adversely affected.

~~Recently,~~We ~~the~~may ~~General~~not ~~Office~~effectively ofmanage ~~the~~our ~~Central Committee of the Communist~~growth ~~Party~~in ~~of China and~~ the ~~General~~two ~~Office~~business ~~of the State Council jointly issued the Opinions~~segments, which ~~were~~could ~~made~~materially ~~available~~harm toour ~~the public on July 6, 2021~~business. The Opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies. These opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents facing China-based overseas-listed companies and the demand for cybersecurity and data privacy protection. The aforementioned policies and any related implementation rules to be enacted may subject the operating entities to additional compliance requirement in the future. As the Opinions were recently issued, official guidance and interpretation of the Opinions remain unclear in several respects at this time. Therefore, we cannot assure you that the operating entities will remain fully compliant with all new regulatory requirements of the Opinions or any future implementation rules on a timely basis, or at all.

31We expect that our business will continue to grow, which may place a significant strain on our management, personnel, systems and resources. We must continue to improve our operational and financial systems and managerial controls and procedures, and we will need to continue to expand, train and manage our technology and workforce. We must also maintain close coordination among our compliance, accounting, finance, marketing and sales organizations. We cannot assure you that we will manage our growth effectively. If we fail to do so, our business could be materially harmed.

~~Risks~~Our ~~Relating~~continued growth will require an increased investment by us in technology, facilities, personnel and financial and management systems and controls. It also will require expansion of our procedures for monitoring and assuring our compliance with applicable regulations, and we will need to ~~Our~~integrate, ~~Corporate~~train ~~Structure~~and manage a growing employee base. The expansion of our existing businesses, any expansion into new businesses and the resulting growth of our employee base will increase our need for internal audit and monitoring processes that are more extensive and broader in scope than those we have historically required. Further, unless our growth results in an increase in our revenues that is proportionate to the increase in our costs associated with this growth, our operating margins and profitability will be adversely affected.

IfRisks ~~the PRC government deems that the contractual arrangements~~Relating ~~in relation~~ to ~~Guangsha,~~Doing ~~our~~Business ~~consolidated variable interest entity, do not comply with PRC regulatory restrictions on foreign investment~~ in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.PRC

WeThe ~~are~~Opinions, ~~a holding company incorporated under~~ the Trial ~~laws~~Measures, ofand the ~~State~~revised ofProvisions ~~Florida.~~recently Asissued aby ~~holding~~the ~~company~~PRC ~~with~~authorities nomay ~~material~~subject ~~operations~~us ofto ~~our~~additional ~~own,~~compliance ~~we conduct all of our operations through~~requirements ~~our subsidiaries established~~ in ~~PRC and our VIE. We control and receive~~ the ~~economic benefits of our VIE’s business operations through certain contractual arrangements~~future.

The ~~VIE~~General ~~contributed~~Office ~~60%~~of the Central Committee of the Communist Party of China and ~~100%~~the General Office of the ~~Company’s~~State Council jointly issued the “Opinions on ~~consolidated~~Severely ~~results~~Cracking ofDown ~~operations~~on ~~for~~Illegal Securities Activities According to Law,” or the ~~years~~“Opinions,” ~~ended~~which ~~September~~were 30made available to the public on July 6, ~~2022~~2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities and the ~~2021,~~supervision ~~respectively~~on overseas listings by China-based companies. AsThe ofOpinions ~~September~~proposed 30to take effective measures, ~~2022~~such as promoting the construction of relevant regulatory systems, to deal with the ~~VIE~~risks ~~accounted~~and incidents facing China-based overseas-listed companies and the demand for ~~approximately~~cybersecurity ~~93%~~and ofdata privacy protection. The aforementioned policies and any related implementation rules to be enacted may subject us to additional compliance requirements in the ~~consolidated~~future. ~~total~~On ~~assets~~February 17, 2023, the CSRC promulgated the Trial Measures and ~~97%~~five supporting ofguidelines, ~~total~~which ~~liabilities~~came into effect on March 31, 2023. Pursuant to the Trial Measures, the companies that have already been listed on overseas stock exchanges, shall complete filing procedures with the CSRC pursuant to the requirements of the ~~Company~~Trial Measures within three working days after the subsequent securities offerings are completed in the same offshore market. Thus, ~~respectively~~the filing shall be made within 3 working days after this offering is completed.

WeBreaches ~~rely~~of onthe ~~and~~Trial Measures, ~~expect~~such toas ~~continue~~offering toand ~~rely~~listing onsecurities ~~our wholly~~overseas ~~owned~~without ~~PRC~~fulfilling ~~subsidiary’s~~the ~~contractual~~filing ~~arrangements~~procedures, ~~with Guangsha~~shall ~~and~~bear ~~its~~legal ~~shareholders~~liabilities, ~~to operate our business. These contractual~~including ~~arrangements~~a ~~may~~fine ~~not~~between beRMB as1.0 ~~effective~~million in(approximately ~~providing~~$150,000) usand ~~with~~RMB ~~control~~10.0 ~~over~~million ~~Guangsha~~(approximately as$1.5 ~~ownership~~million), ofand ~~controlling~~the ~~equity~~Trial ~~interests~~Measures ~~would be~~heighten inthe ~~providing~~cost usfor ~~with~~offenders ~~control~~by ~~over~~enforcing oraccountability ~~enabling~~with usadministrative topenalties ~~derive~~and ~~economic~~incorporating ~~benefits from~~ the ~~operations~~compliance status of ~~Guangsha.~~relevant ~~Under the current contractual~~market ~~arrangements,~~participants asinto ~~a legal matter, if Guangsha or any of its shareholders executing~~ the ~~VIE~~Securities ~~Agreements~~Market ~~fails~~Integrity toArchives. ~~perform~~Such ~~its,~~rules ~~his~~have orbeen ~~her respective~~issued ~~obligations~~that ~~under~~means ~~these~~the ~~contractual~~Chinese ~~arrangements,~~government we may ~~have~~exert tomore oversight ~~incur substantial costs~~ and ~~resources~~control toover ~~enforce~~overseas ~~such~~public ~~arrangements, and~~offerings ~~rely~~conducted onby ~~legal~~China-based ~~remedies available under PRC laws~~issuers, ~~including~~which ~~seeking~~could ~~specific~~significantly ~~performance~~limit or ~~injunctive~~completely ~~relief, and claiming damages,~~hinder ~~which~~our weability ~~cannot assure you will be effective. For example, if shareholders of a variable interest entity were~~ to ~~refuse~~offer toor ~~transfer~~continue ~~their equity interests in such variable interest entity~~ to usoffer or our ~~designated~~securities ~~persons when we exercise the purchase option pursuant~~ to ~~these contractual~~investors ~~arrangements,~~and wecould ~~may~~cause ~~have~~the tovalue ~~take~~of aour ~~legal~~securities ~~action~~ to ~~compel~~significantly ~~them~~decline or tobecome ~~fulfill their contractual obligations~~worthless.

If (i) the applicable PRC authorities invalidate these contractual arrangements for violation of PRC laws, rules and regulations, (ii) any variable interest entity or its shareholders terminate the contractual arrangements (iii) any variable interest entity or its shareholders fail to perform its/his/her obligations under these contractual arrangements, or (iv) if these regulations change or are interpreted differently in the future, our business operations in China would be materially and adversely affected, and the value of your shares would substantially decrease or even become worthless. Further, if we fail to renew these contractual arrangements upon their expiration, we would not be able to continue our business operations unless the then current PRC law allows us to directly operate businesses in China.27

InAs ~~addition~~of the date of this annual report, ifnone ~~any~~of ~~variable~~the ~~interest~~Company, ~~entity~~our orPRC ~~all~~subsidiary, or ~~part~~the ofVIE ~~its~~have ~~assets~~applied ~~become~~for, ~~subject~~received, toor ~~liens~~been ordenied ~~rights~~approval offrom ~~third-party~~any ~~creditors,~~PRC weauthorities ~~may~~to beissue ~~unable~~our securities to ~~continue~~foreign investors, ~~some~~nor received any inquiry, notice, warning, or ~~all~~sanctions ofregarding issuing our securities to foreign investors from the CSRC, ~~business~~the ~~activities~~CAC, ~~which~~or ~~could~~any ~~materially~~other ~~and~~PRC ~~adversely~~governmental ~~affect~~authorities. As advised by our ~~business~~PRC counsel, ~~financial~~Shaanxi ~~condition~~Jiameng ~~and~~Law ~~results~~Firm, ofapart ~~operations.~~from Ifthe ~~any of~~filing with the ~~variable~~CSRC ~~interest~~as ~~entities~~per ~~undergoes~~requirement aof ~~voluntary~~the orTrial ~~involuntary~~Measures, ~~liquidation proceeding~~we, ~~its~~our ~~shareholders~~subsidiaries, orand ~~unrelated~~the ~~third-party creditors~~VIE ~~may~~are ~~claim~~not ~~rights~~required to ~~some~~obtain orany ~~all~~other ofpermission from ~~these~~the ~~assets~~CSRC, ~~thereby~~the ~~hindering~~CAC, ~~our~~or ~~ability~~any other Chinese authorities to ~~operate~~issue our ~~business,~~securities ~~which~~to ~~could~~foreign ~~materially and~~investors ~~adversely~~based ~~affect~~on ~~our~~PRC ~~business~~laws and ~~our~~regulations currently ~~ability~~in ~~to generate revenues~~effect.

~~All~~On February 24, 2023, the CSRC, together with the MOF, National Administration of ~~these~~State ~~contractual~~Secrets ~~arrangements~~Protection ~~are~~and ~~governed~~National Archives Administration of China, revised the Provisions issued by ~~PRC~~the ~~law~~CSRC and ~~provide~~National ~~for~~Administration of State Secrets Protection and National Archives Administration of China in 2009. The revised Provisions were issued under the ~~resolution~~title the “Provisions on Strengthening Confidentiality and Archives Administration of ~~disputes~~Overseas ~~through~~Securities ~~arbitration~~Offering inand Listing by Domestic Companies,” and came into effect on March 31, 2023 together with the ~~PRC~~Trial Measures. ~~The~~One ~~legal~~of ~~environment~~the inmajor revisions to the ~~PRC~~revised Provisions is ~~not~~expanding astheir ~~developed as~~application into ~~some~~cover ~~other~~indirect ~~jurisdictions,~~overseas ~~such~~offering and listing, as is consistent with the ~~United~~Trial ~~States~~Measures. AsThe revised Provisions require that, among other things, (a) ~~result~~a domestic company that plans to, ~~uncertainties~~either indirectly ~~the~~or ~~PRC~~indirectly ~~legal~~through ~~system~~its ~~could~~overseas ~~limit~~listed ~~our~~entity, ~~ability~~publicly disclose or provide to relevant individuals or entities, including securities companies, securities service providers, and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to ~~enforce~~law, ~~these~~and ~~contractual~~file ~~arrangements.~~with the Insecrecy administrative department at the ~~event~~same welevel; ~~are~~and ~~unable~~(b) toa ~~enforce~~domestic ~~these~~company ~~contractual~~that ~~arrangements~~plans to, weeither ~~may~~directly ~~not~~or beindirectly ~~able~~through its overseas listed entity, publicly disclose or provide to relevant individuals and entities, including securities companies, securities ~~exert~~service ~~effective~~providers, ~~control~~and ~~over~~overseas ~~our~~regulators, ~~operating~~any ~~entities~~other documents and wematerials ~~may~~that, if leaked, will be ~~precluded~~detrimental ~~from~~to ~~operating~~national ~~our~~security or ~~business~~public interest, ~~which~~shall ~~would~~strictly ~~have~~fulfill arelevant ~~material~~procedures ~~adverse~~stipulated by applicable national regulations. After March 31, 2023, any ~~effect~~failure onor perceived failure by our ~~financial~~Company, ~~condition~~our subsidiaries, or the VIE to comply with the above confidentiality and ~~results~~archives administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities being held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of ~~operations~~committing a crime.

32The Opinions, the Trial Measures, the revised Provisions and any related implementing rules to be enacted may subject us to additional compliance requirements in the future. As there are still uncertainties regarding the interpretation and implementation of such regulatory guidance, we cannot assure you that we will be able to comply with all new regulatory requirements of the Opinions, the Trial Measures, the revised Provisions, or any future implementing rules on a timely basis, or at all.

~~These~~You ~~contractual arrangements~~ may ~~not~~experience bedifficulties ~~as effective as direct ownership~~ in ~~providing us with control over our VIE. For example, our VIE and its shareholders could breach their contractual~~effecting ~~arrangements~~service ~~with~~of uslegal byprocess, ~~among~~enforcing ~~other~~foreign ~~things~~judgments, ~~failing to conduct their operations in an acceptable manner~~ or ~~taking~~bringing ~~other~~ actions ~~that are detrimental to our interests. If we had direct ownership of our VIE, we would be able to exercise our rights as a shareholder to effect changes~~ in ~~the~~China ~~board~~against ofus ~~directors~~or of our ~~VIE, which in turn could implement changes, subject to any applicable fiduciary obligations, at the~~ management ~~and~~based ~~operational level. However, under the current contractual arrangements, we rely~~ on ~~the~~foreign ~~performance by our VIE and~~laws. ~~its~~It ~~shareholders of their obligations under the contracts to exercise control over our VIE. The shareholders of our consolidated VIE~~ may ~~not~~ ~~act~~also inbe ~~the~~difficult ~~best~~for ~~interests~~you ~~of our company~~ or ~~may~~overseas ~~not~~regulators ~~perform their obligations under these contracts. Such risks exist throughout the period in which we intend~~ to ~~operate~~conduct ~~certain~~investigations ~~portions~~or ofcollect ~~our~~evidence ~~business~~within ~~through the contractual arrangements with our VIE~~China.

IfWe ~~our~~are ~~VIE~~a orcompany ~~its~~incorporated ~~shareholders~~under ~~fail~~the tolaws ~~perform~~of ~~their respective obligations under~~ the ~~contractual~~state ~~arrangements~~of Florida, ~~we may have to incur substantial costs~~ and ~~expend~~we ~~additional~~conduct ~~resources to~~most ~~enforce~~of ~~such~~our ~~arrangements.~~operations ~~For~~in ~~example,~~China ifand ~~the~~most ~~shareholders~~ of our ~~VIE~~assets ~~refuse~~are tolocated ~~transfer their equity interest~~ in ~~our~~China. ~~VIE~~In toaddition, usall orof our ~~designee~~directors ifand weofficers ~~exercise~~are ~~the~~nationals ~~purchase~~or ~~option~~residents ~~pursuant~~of tothe ~~these~~PRC ~~contractual~~and ~~arrangements,~~all or ifa ~~they~~substantial ~~otherwise~~portion ~~act~~of ~~in bad faith toward us, then we may have to take legal actions to compel them to perform~~ their ~~contractual~~assets ~~obligations.~~are Inlocated ~~addition, if any third parties~~outside ~~claim~~the ~~any~~U.S. ~~interest~~As ina ~~such shareholders’ equity interests in our VIE~~result, ~~our~~it ~~ability~~may tobe ~~exercise~~difficult ~~shareholders’~~for ~~rights~~you ~~or foreclose the share pledge according~~ to ~~the~~effect ~~contractual~~service ~~arrangements~~of ~~may~~process beupon ~~impaired.~~us ~~If these~~ or ~~other~~those ~~disputes~~persons ~~between~~inside ~~the~~mainland ~~shareholders~~China. ofIn ~~our~~addition, ~~VIE~~there ~~and~~is ~~third~~uncertainty ~~parties~~as ~~were~~ to ~~impair~~whether ~~our~~the ~~control~~courts ~~over~~of ~~our~~the ~~VIE,~~PRC ~~our~~would ~~ability~~recognize toor ~~consolidate~~enforce ~~the~~judgments ~~financial~~of ~~results~~U.S. ofcourts ~~our~~against ~~VIE~~us ~~would~~or besuch ~~affected,~~persons ~~which~~predicated ~~would~~upon inthe ~~turn~~civil ~~result~~liability inprovisions aof ~~material~~U.S. ~~adverse~~securities ~~effect~~laws onor ~~our~~those ~~business,~~of ~~operations~~any ~~and~~U.S. ~~financial condition~~state.

InThe ~~the~~recognition ~~opinion~~and enforcement of ~~our~~foreign ~~PRC~~judgments are ~~legal~~provided ~~counsel,~~for ~~each of~~under the ~~contractual~~PRC ~~arrangements~~Civil ~~among~~Procedures ~~our~~Law. ~~WFOE, our VIE and its shareholders governed by~~ PRC ~~laws~~courts ~~are~~may ~~valid,~~recognize ~~binding~~ and ~~enforceable, and~~enforce ~~will~~foreign ~~not~~judgments ~~result~~ in ~~any~~accordance ~~violation~~with ofthe ~~PRC laws or regulations currently in effect. However, our PRC legal counsel has also advised us~~requirements ~~that~~of ~~there are substantial uncertainties regarding~~ the ~~interpretation~~PRC ~~and~~Civil ~~application~~Procedures ofLaw ~~current~~based ~~and~~either ~~future~~on ~~PRC~~treaties ~~laws,~~between ~~regulations~~China and ~~rules.~~ ~~Accordingly,~~ the ~~PRC~~country ~~regulatory~~where ~~authorities~~the ~~may~~judgment ~~ultimately take a view that~~ is ~~contrary~~made toor ~~the~~on ~~opinion~~principles of reciprocity ~~our~~between ~~PRC legal counsel~~jurisdictions. In ~~addition,~~China itdoes isnot ~~uncertain~~have ~~whether~~ any ~~new~~treaties ~~PRC laws~~ or ~~regulations~~other ~~relating~~forms toof ~~variable~~written ~~interest~~arrangement ~~entity~~with ~~structures~~the ~~will be adopted or if adopted, what they would provide~~U.S. ~~PRC government authorities may deem~~ that ~~foreign~~provide ~~ownership is directly or indirectly involved in~~for ~~our~~the ~~VIE’s~~reciprocal ~~shareholding~~recognition ~~structure. If our corporate structure~~ and ~~contractual~~enforcement ~~arrangements are deemed by the Ministry~~ of ~~Industry and~~foreign ~~Information~~judgments. ~~Technology,~~In ~~MIIT~~addition, oraccording to the ~~Ministry~~PRC ofCivil ~~Commerce,~~Procedures ~~MOFCOM~~Law, orthe ~~other~~PRC ~~regulators~~courts will ~~having~~not ~~competent~~enforce ~~authority~~a toforeign bejudgment ~~illegal,~~against ~~either in~~us ~~whole~~ or ~~in part, we may lose control of~~ our ~~consolidated~~directors ~~VIE~~ and ~~have~~officers toif ~~modify~~they ~~such~~decide ~~structure to comply with regulatory requirements. However, there can be no assurance~~ that wethe ~~can~~judgment ~~achieve~~violates ~~this~~the ~~without~~basic ~~material disruption to our VIE’s business. Furthermore, if we~~principles ~~or our VIE is found to be in violation~~ of ~~any existing or future~~ PRC laws or ~~regulations~~national sovereignty, security, or ~~fail~~public tointerest. ~~obtain~~As ora ~~maintain~~result, ~~any~~it ofis ~~the~~uncertain ~~required permits~~whether orand ~~approvals,~~on ~~the~~what ~~relevant~~basis a PRC ~~regulatory authorities~~ court would ~~have~~enforce ~~broad~~a ~~discretion~~judgment torendered ~~take~~by ~~action~~a court in ~~dealing~~the ~~with~~U.S. ~~such~~See ~~violations or~~“Enforceability ~~failures,~~of ~~including,~~Civil ~~without limitation:~~Liabilities.”

~~● revoking the business license and/or operating licenses of our WFOE or our VIE;~~28

●It ~~discontinuing~~may also be difficult for you or ~~placing~~overseas ~~restrictions~~regulators to conduct investigations or ~~onerous~~collect ~~conditions~~evidence onwithin ~~our~~China. ~~operations~~For ~~through~~example, ~~any~~in ~~transactions~~China, ~~among~~there ~~our~~are ~~WFOE~~significant legal and ~~our~~other ~~VIE;~~obstacles to obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign entities. Although the authorities in China may establish a regulatory cooperation mechanism with its counterparts of another country or region to monitor and oversee cross-border securities activities, such regulatory cooperation with the securities regulatory authorities in the U.S. may not be efficient in the absence of a practical cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law, or “Article 177,” which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigations or evidence collection activities within the territory of the PRC. Article 177 further provides that Chinese entities and individuals are not allowed to provide documents or materials related to securities business activities to foreign agencies without prior consent from the securities regulatory authority of the PRC State Council and the competent departments of the PRC State Council. While detailed interpretation of or implementing rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your interests.

●Because ~~imposing~~all ~~fines~~our operations are in China, ~~confiscating~~our business is subject to the ~~income~~complex ~~from~~and ~~our~~rapidly ~~WFOE,~~evolving laws and regulations there. The Chinese government may exercise significant oversight and discretion over the conduct of our ~~VIE~~business orand ~~its~~may ~~subsidiaries,~~intervene in or ~~imposing~~influence ~~other~~our ~~requirements~~operations ~~with~~at any time, which could weresult orin a material change in our ~~VIE~~operations ~~may~~and/or ~~not~~the bevalue ~~able~~of toour ~~comply;~~common stocks.

●As ~~placing~~a ~~restrictions~~business onoperating in China, we are subject to the laws and regulations of the PRC, which can be complex and evolve rapidly. The PRC government has the power to exercise significant oversight and discretion over the conduct of our ~~right~~business, and the regulations to ~~collect~~which ~~revenues;~~we are subject may change rapidly and with little notice to us or our shareholders. As a result, the application, interpretation, and enforcement of new and existing laws and regulations in the PRC are often uncertain. In addition, these laws and regulations may be interpreted and applied inconsistently by different agencies or authorities, and inconsistently with our current policies and practices. New laws, regulations, and other government directives in the PRC may also be costly to comply with, and such compliance or any associated inquiries or investigations or any other government actions may:

● ~~requiring~~delay ~~us to restructure our ownership structure~~ or ~~operations,~~impede ~~including terminating the contractual arrangements with~~ our ~~VIE and deregistering the equity pledges of our VIE, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control over our VIE~~development; or

● ~~taking~~result ~~other~~in ~~regulatory~~negative publicity or ~~enforcement~~increase ~~actions~~the ~~against~~Company’s usoperating ~~that could be harmful to our business.~~costs;

33● require significant management time and attention; and

~~The~~● ~~imposition~~subject ofus ~~any~~to ofremedies, ~~these~~administrative penalties ~~would result in a material~~ and ~~adverse~~even ~~effect~~criminal onliabilities ~~our~~that ~~ability~~may toharm ~~conduct~~ our business~~. In addition~~, itincluding isfines ~~unclear~~assessed ~~what~~for ~~impact the PRC government actions would have on us and on~~ our ~~ability~~current to consolidate the financial results of our VIE in our consolidated financial statements, if the PRC government authorities were to find our corporate structure and contractual arrangements to be in violation of PRC laws and regulations. If the imposition of any of these government actions causes us to lose our right to direct the activities of our VIE or ~~our right~~historical ~~to receive substantially all the economic benefits and residual returns from our VIE and we are not able to restructure our ownership structure and~~ operations ~~in a satisfactory manner~~, weor ~~would~~demands ~~no longer be able to consolidate the financial results of our VIE in our consolidated financial statements. Either of these results,~~ or ~~any~~orders ~~other significant penalties~~ that ~~might~~we bemodify ~~imposed~~or oneven uscease ~~in this event, would have a material adverse effect on~~ our ~~financial~~business ~~condition and results of operations~~practices.

We rely on contractual arrangements with our variable interest entity and its subsidiary in China for our business operations, which may not be as effective in providing operational control or enabling us to derive economic benefits as through ownership of controlling equity interests.29

WeThe ~~are~~promulgation ~~a holding company with no material operations~~ of ~~our own. We conduct a substantial majority of our operations through our subsidiaries established and the VIE in the PRC. We rely on~~new ~~and~~laws ~~expect~~or to continue to rely on our wholly owned PRC subsidiary’s contractual arrangements with Guangsha and its shareholders to operate our business. These contractual arrangements may not be as effective in providing us with control over Guangsha as direct ownership in providing us with control over Guangsharegulations, or ~~enabling us to derive economic benefits from~~ the ~~operations~~new ofinterpretation ~~Guangsha. Under the current contractual arrangements, as a legal matter, if Guangsha or any~~ of ~~Guangsha~~existing ~~Shareholders~~laws ~~fails to perform its, his or her respective obligations under these contractual arrangements, we may have to incur substantial costs~~ and ~~resources to enforce such arrangements~~regulations, ~~and~~ ~~rely~~in oneach ~~legal~~case ~~remedies~~that ~~available~~restrict ~~under PRC laws, including seeking specific performance~~ or ~~injunctive~~otherwise ~~relief,~~unfavorably ~~and claiming damages,~~impact ~~which~~the weability ~~cannot assure you will be effective. For example, if Guangsha Shareholders were to refuse to transfer their equity interests in Guangsha to us~~ or ~~our~~way ~~designated persons when~~ we ~~exercise~~conduct ~~the~~our ~~purchase~~business ~~option~~and ~~pursuant~~could torequire ~~these~~us ~~contractual arrangements, we may have~~ to ~~take~~change acertain ~~legal~~aspects ~~action to compel them to fulfill their contractual obligations. Furthermore, if we had direct ownership~~ of ~~Guangsha, we would be able to exercise~~ our ~~rights~~business ~~as a shareholder~~ to ~~effect~~ensure ~~changes in the board of directors of Guangsha~~compliance, which ~~in turn could~~ ~~implement~~could ~~changes,~~decrease ~~subject~~demand tofor ~~any~~our ~~applicable fiduciary obligations~~products, atreduce ~~the management and operational level. However~~revenues, ~~under~~increase ~~the VIE Agreements~~costs, we ~~rely~~require onus ~~the performance by Guangsha and its shareholders of their obligations under the contracts~~ to ~~exercise~~obtain ~~control~~more ~~over~~licenses, ~~Guangsha. The~~permits, ~~shareholders~~approvals ~~of Guangsha may not act in the best interests of our Company~~ or ~~may not perform their obligations under these contracts.~~certificates, ~~Such~~or ~~risks~~subject ~~exist~~us ~~throughout the period in which we intend~~ to ~~operate~~additional ~~certain~~liabilities. ~~portions~~To ~~of our business through~~ the ~~contractual~~extent ~~arrangements with Guangsha. In addition, if~~ any ~~third~~new ~~parties claim any interest in such shareholders’ equity interests in the VIE, our ability to exercise shareholders’ rights~~ or ~~foreclose~~more ~~the~~stringent ~~share~~measures ~~pledge~~are ~~according~~required to ~~the contractual arrangements may~~ be ~~impaired. If these or other disputes between the shareholders of the VIE and third parties were to impair our control over the VIE~~implemented, our ~~ability to consolidate~~business, ~~the~~ financial condition and results of ~~the~~operations ~~VIE~~could ~~would~~ be adversely affected, ~~which~~as ~~would~~well inas ~~turn~~materially ~~result~~decrease inthe avalue ~~material~~of ~~adverse~~our ~~effect~~common ~~on the business~~stock, ~~operations~~ ~~and~~potentially ~~financial~~rendering ~~condition~~it worthless.

~~Our~~The ~~PRC counsel, Shaanxi Jiameng Law Firm, has~~uncertainties ~~advised us that the ownership structure of the PRC entities does not violate PRC laws or regulations currently~~ in ~~effect, and that~~ the ~~contractual~~ ~~arrangements~~China ~~are~~legal ~~valid,~~system ~~binding~~could ~~and~~materially ~~enforceable,~~ and doadversely ~~not~~affect ~~result in any violation of PRC laws or regulations currently in effect~~us. However, there are substantial uncertainties regarding the interpretation and application of current PRC Laws, and there can be no assurance that the PRC government will ultimately take a view that is consistent with such opinion.

IfOn ~~(i)~~July 6, 2021, the ~~applicable~~General ~~PRC~~Office ~~authorities~~of ~~invalidate these~~the ~~contractual~~Communist ~~arrangements~~Party ~~for violation~~ of ~~PRC~~China ~~laws,~~Central ~~rules~~Committee and ~~regulations,~~the ~~(ii)~~General ~~any~~Office ~~variable~~of ~~interest~~the ~~entity~~State orCouncil ~~its~~jointly ~~shareholders~~issued a document ~~terminate~~to enhance its enforcement against illegal activities in the ~~contractual~~securities ~~arrangements~~markets orand ~~(iii)~~promote ~~any~~the ~~variable~~high-quality ~~interest~~development ~~entity~~of orthe ~~its~~capital markets, ~~shareholders~~which, ~~fail~~among other things, requires the relevant governmental authorities to ~~perform~~strengthen ~~its/his/her~~cross-border ~~obligations under~~oversight ~~these~~of ~~contractual~~law-enforcement and ~~arrangements~~judicial cooperation, ~~our~~to ~~business~~enhance ~~operations~~supervision inover China-based ~~would~~companies belisted ~~materially~~overseas, and ~~adversely~~to ~~affected,~~establish and improve the ~~value~~system of ~~your~~ ~~shares~~extraterritorial ~~would~~application ~~substantially~~of ~~decrease~~the Chinese securities laws. ~~Further~~Since this document is relatively new, ifuncertainties weexist ~~fail~~in relation to how ~~renew~~soon ~~these~~legislative ~~contractual~~or ~~arrangements~~administrative ~~upon~~regulation-making ~~their~~bodies ~~expiration,~~will werespond ~~would~~and ~~not~~what beexisting or new laws or regulations or detailed ~~able~~implementations toand ~~continue~~interpretations ~~our~~will ~~business~~be ~~operations~~modified ~~unless~~or promulgated, if any, and the ~~then~~potential ~~current~~impact ~~PRC~~such ~~law~~modified ~~allows~~or usnew tolaws ~~directly~~and ~~operate~~regulations will ~~businesses~~have inon ~~China~~companies like us.

It is especially difficult for us to accurately predict the potential impact to the Company of new legal requirements in China because the China legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have limited precedential value. In ~~addition~~1979, ifthe ~~any~~Chinese ~~variable~~government ~~interest~~began ~~entity~~to orpromulgate a comprehensive system of laws ~~all~~and orregulations ~~part~~governing economic matters in general. The overall effect of ~~its~~legislation ~~assets~~over ~~become~~the ~~subject~~past tofour ~~liens~~decades orhas ~~rights~~significantly enhanced the protections afforded to various forms of ~~third-party~~foreign ~~creditors~~investments in China. However, weChina ~~may~~has benot ~~unable~~developed toa ~~continue~~fully ~~some~~integrated legal orsystem, and recently enacted laws and regulations may not sufficiently cover all aspects of ~~our business~~economic activities in China. In particular, the ~~which~~China ~~could~~legal ~~materially~~system is based on written statutes and ~~adversely~~prior ~~affect~~court ~~our~~decisions ~~business~~have limited value as precedents. Since these laws and regulations are relatively new and the China legal system continues to rapidly evolve, ~~financial~~the ~~condition~~interpretations of many laws, regulations and ~~results~~rules may not be uniform and enforcement of ~~operations~~these laws, regulations and rules involves uncertainties. IfThese uncertainties may affect our ~~variable~~judgment ~~interest~~on ~~entity~~the ~~undergoes~~relevance aof ~~voluntary~~legal requirements and our ability to enforce our contractual rights or ~~involuntary~~tort ~~liquidation~~claims. ~~proceeding~~In addition, ~~its~~the ~~shareholders~~regulatory uncertainties may be exploited through unmerited or ~~unrelated~~frivolous ~~third-party~~legal ~~creditors~~actions ~~may~~or ~~claim rights~~threats in attempts to extract payments or benefits from us. Furthermore, the China legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all ofand ~~their~~may ~~assets~~have a retroactive effect. As a result, ~~thereby~~we ~~hindering~~may ~~our~~not ~~ability~~be toaware ~~operate~~of our ~~business,~~violation ~~which~~of ~~could~~any ~~materially~~of these policies and ~~adversely~~rules ~~affect~~until sometime ~~our~~after ~~business~~the violation. In addition, any administrative and ~~our~~court ~~ability~~proceedings toin ~~generate~~China ~~revenues~~may be protracted, resulting in substantial costs and diversion of resources and management attention.

34We may be deemed a PRC resident enterprise for PRC tax purposes under the Enterprise Income Tax Law, which could result in the imposition of a 25% enterprise income tax payable on our taxable global income.

~~All~~On ofMarch 16, ~~these contractual arrangements are governed~~2007, bythe ~~PRC~~National ~~law~~People’s ~~and~~Congress ~~provide~~of ~~for~~ the ~~resolution~~PRC ofpassed ~~disputes through arbitration in~~ the ~~PRC.~~Enterprise ~~The~~Income ~~legal~~Tax ~~environment~~Law inof the PRC is(“New ~~not~~Income asTax ~~developed~~Law’’), aswhich intook ~~some~~effect ~~other~~on ~~jurisdictions~~January 1, ~~such as the United States~~2008. AsOn aDecember 6, ~~result~~2007, ~~uncertainties in~~ the ~~PRC~~Implementation ~~legal~~Rules of ~~system~~Enterprise ~~could~~Income ~~limit~~Tax ~~our~~Law ~~ability to~~of ~~enforce these contractual arrangements. In~~ the PRC ~~event~~(“Implementation weRules’’) ~~are~~were ~~unable~~also toenacted ~~enforce~~and ~~these~~took ~~contractual~~effect ~~arrangements~~on January 1, we2008. ~~may~~In ~~not~~accordance bewith ~~able to~~the ~~exert~~new ~~effective~~laws ~~control~~and ~~over~~regulations, ~~our~~a ~~operating~~unified ~~entity~~enterprise ~~and~~income wetax ~~may~~rate beof ~~precluded~~25% ~~from~~and ~~operating~~unified ~~our~~tax ~~business,~~deduction ~~which~~standards ~~would~~will ~~have~~be aapplied ~~material~~equally ~~adverse~~to both ~~effect~~domestic onenterprises ~~our financial condition~~ and ~~results~~foreign-invested ~~of operations~~enterprises.

We are a holding company, and will rely on dividends paid by our subsidiaries for our cash needs. Any limitation on the ability of our subsidiaries to make dividend payments to us, or any tax implications of making dividend payments to us, could limit our ability to pay our parent company expenses or pay dividends to holders of our common stock.30

WeUnder ~~are~~the aNew ~~holding~~Income Tax ~~company~~Law and ~~conduct~~the ~~substantially all~~Implementation Rules, enterprises established under the laws of ~~our~~foreign ~~business~~jurisdictions ~~through~~other ~~our~~than the PRC ~~subsidiary~~may nevertheless be considered as PRC-resident enterprises for tax purposes if these enterprises have their “de facto management body’’ within the PRC. Under the Implementation Rules, ~~which~~“de facto management body’’ is defined as a ~~limited~~body ~~liability~~that ~~company~~has ~~established~~material and inoverall ~~China.~~management Weand ~~may~~control ~~rely~~over onthe ~~dividends~~manufacturing toand business operations, personnel and human resources, finances and treasury, and acquisition and disposition of properties and other assets of an enterprise. At present, it is unclear what factors will be ~~paid~~used by the ~~our~~ PRC ~~subsidiary~~tax authorities to ~~fund~~determine whether we are a “de facto management body’’ in China. All of our ~~cash~~management personnel ~~and~~are ~~financing~~located ~~requirements~~in the PRC, ~~including~~and ~~the~~all ~~funds~~of ~~necessary~~our torevenues ~~pay~~arise ~~dividends~~from ~~and~~our ~~other~~operations ~~cash~~in China. If the PRC tax authorities determine that ~~distributions~~we toare ~~our~~a ~~shareholders~~PRC resident enterprise, we will be subject to ~~service~~PRC ~~any~~tax ~~debt~~on weour worldwide income at the 25% uniform tax rate, which may ~~incur~~have ~~and~~a material toadverse ~~pay~~effect on our ~~operating~~financial ~~expenses~~condition and results of operations. IfNotwithstanding ~~our~~the ~~PRC~~foregoing ~~subsidiary~~provision, ~~incurs~~the ~~debt~~New Income onTax ~~its~~Law ~~own~~also ~~behalf~~provides that, if a PRC resident enterprise already invests in ~~the~~another ~~future~~PRC resident enterprise, the ~~instruments~~dividends ~~governing~~received by the ~~debt~~investing ~~may~~resident ~~restrict~~enterprise ~~its~~from ~~ability~~the invested resident enterprise are exempt from income tax, subject to ~~pay~~certain qualifications. Therefore, if we are classified as a PRC resident enterprise, the dividends orreceived ~~make~~from ~~other~~our ~~distributions~~PRC subsidiaries may be exempt from income tax. However, due to the limited history of the New Income Tax Law, it is unclear as to (i) the detailed qualification requirements for such exemption and (ii) whether dividend payments by our PRC subsidiaries to us will meet such qualification requirements, even if we are considered a PRC resident enterprise for tax purposes.

~~Under~~We ~~PRC~~face ~~laws and regulations, our PRC subsidiary,~~uncertainty ~~which~~from isthe aCircular ~~wholly~~on ~~foreign-owned~~Strengthening ~~enterprise~~the inAdministration ~~China, may pay dividends only out~~ of ~~its~~Enterprise ~~accumulated~~Income ~~profits~~Tax ason ~~determined in accordance with PRC accounting standards and regulations. In addition, a wholly foreign~~Non-~~owned~~resident ~~enterprise~~Enterprises’ isShare ~~required~~Transfer ~~to set aside at least 10% of~~(“Circular ~~its~~698”) ~~accumulated~~released ~~after-tax~~in ~~profits~~December 2009 ~~each~~by ~~year,~~China’s ifState ~~any,~~Administration toof ~~fund~~Taxation ~~a certain statutory reserve fund~~(SAT), ~~until~~effective ~~the~~as ~~aggregate amount~~ of ~~such~~January 1, ~~fund reaches 50% of its registered capital~~2008.

~~Our~~Where ~~PRC~~a ~~subsidiary~~foreign ~~generates~~investor indirectly ~~primarily~~transfers ~~all~~equity ~~of its~~interests ~~revenue~~ in ~~Renminbi, which is not freely convertible into other currencies. As~~ a ~~result,~~Chinese ~~any~~resident ~~restriction~~enterprise onby ~~currency~~selling ~~exchange may limit~~ the ~~ability~~shares ofin ~~our~~an ~~PRC~~offshore ~~subsidiary~~holding ~~to use its Renminbi revenues to pay dividends to us. The PRC government may continue to strengthen its capital controls~~company, and ~~more~~the ~~restrictions~~latter is ~~and~~located ~~substantial~~in ~~vetting~~a ~~process~~country ~~may~~(jurisdiction) bewhere ~~put~~the ~~forward~~effective bytax ~~State~~burden ~~Administration~~is ofless ~~Foreign~~than ~~Exchange for~~12.5% ~~cross-border~~or ~~transactions~~where ~~falling under both~~ the ~~current~~offshore ~~account~~income ~~and~~of ~~the~~their ~~capital~~residents is ~~account.~~not ~~Any~~taxable, ~~limitation on~~ the ~~ability~~foreign ofinvestor ~~our~~is ~~PRC subsidiary~~required to ~~pay~~provide ~~dividends~~the ortax ~~make~~authority ~~other~~in ~~kinds~~charge of ~~payments~~that toChinese usresident ~~could~~enterprise ~~materially~~with ~~and~~the ~~adversely limit our ability to grow, make investments~~relevant orinformation ~~acquisitions~~within ~~that~~30 ~~could~~days beof ~~beneficial~~the ~~to our business, pay dividends, or otherwise fund and conduct our business~~transfers.

InWhere ~~addition,~~a ~~the~~foreign ~~Enterprise Income Tax Law and~~investor ~~its~~indirectly ~~implementation~~transfers ~~rules~~equity ~~provide~~interests ~~that~~in a ~~withholding~~Chinese ~~tax~~resident ~~rate~~enterprise ofthrough upthe toabuse ~~10%~~of ~~will~~form beof ~~applicable~~organization toand ~~dividends~~there ~~payable~~are byno ~~Chinese companies~~reasonable tocommercial ~~non-PRC-resident~~purposes ~~enterprises~~such ~~unless~~that ~~otherwise~~the ~~exempted~~corporate orincome ~~reduced~~tax ~~according~~liability tois ~~treaties~~avoided, orthe ~~arrangements~~tax ~~between~~authority has the ~~PRC~~power ~~central~~to ~~government and~~re-assess ~~governments~~the nature of the ~~other~~equity ~~countries~~transfer orin ~~regions~~accordance ~~where~~with the ~~non~~“substance-~~PRC~~over-form” ~~resident~~principle ~~enterprises~~and ~~are~~deny ~~incorporated.~~the ~~Any~~existence ~~limitation~~of on the ~~ability~~offshore ofholding ~~our~~company ~~PRC~~that ~~subsidiary~~is toused ~~pay~~for ~~dividends~~tax orplanning ~~make~~purposes. ~~other~~“Income ~~distributions~~derived tofrom usequity ~~could~~transfers” ~~materially~~as ~~and~~mentioned ~~adversely~~in ~~limit~~this ~~our~~circular ~~ability~~ refers to ~~grow,~~income ~~make~~derived ~~investments~~ by non-resident enterprises from direct or ~~acquisitions~~indirect ~~that~~transfers ~~could~~of beequity ~~beneficial~~interest toin ~~our~~China ~~business~~resident enterprises, ~~pay~~excluding share ~~dividends,~~in orChinese ~~otherwise~~resident ~~fund~~enterprises that are bought and ~~conduct~~sold ~~our~~openly ~~business~~on the stock exchange.

WeWhile ~~may~~the term “indirectly transfer” is not bedefined, ~~able~~we tounderstand ~~consolidate~~that the ~~financial~~relevant PRC tax authorities have jurisdiction regarding requests ~~results~~for information over a wide range of ~~our~~foreign ~~affiliated~~entities ~~companies~~having no direct contact with China. The relevant authority has not yet promulgated any formal provisions or ~~such~~formally ~~consolidation~~declared ~~could~~or ~~materially~~stated how to calculate the effective tax in the country (jurisdiction) and ~~adversely~~the ~~affect~~process of ~~our~~the ~~operating~~disclosure ~~results~~to the tax authority in charge of that Chinese resident enterprise. Meanwhile, there are no formal declarations with regard to how to decide “abuse of form of organization” and ~~financial~~“reasonable ~~condition~~commercial purpose,” which can be utilized by us to determine if our company complies with the Circular 698.

Our business is conducted through Guangsha, which is considered a VIE for accounting purposes, and we, through Shaanxi HGS, are considered the primary beneficiary, thus enabling us to consolidate our financial results in our consolidated financial statements. In the event that in the future a company we hold as a VIE no longer meets the definition of a VIE under applicable accounting rules, or we are deemed not to be the primary beneficiary, we would not be able to consolidate line by line that entity’s financial results in our consolidated financial statements for reporting purposes. Also, if in the future an affiliate company becomes a VIE and we become the primary beneficiary, we would be required to consolidate that entity’s financial results in our consolidated financial statements for accounting purposes. If such entity’s financial results were negative, this would have a corresponding negative impact on our operating results for reporting purposes.31

35Failure to comply with PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may materially adversely affect us.

~~Because~~On weJuly 15, ~~rely~~2014, SAFE issued the Notice on Relevant Issues in the ~~Contractual~~Foreign ~~Arrangements~~Exchange Control over Investment, Financing and Return Investment Through Special Purpose Companies by Residents Inside China, generally referred to as Circular 37, which required PRC residents to register with the competent local SAFE branch before establishing or acquiring control over an offshore special purpose company, or SPV, for ~~our~~the ~~revenue~~purpose of engaging in an equity financing outside of China on the strength of domestic PRC assets originally held by those residents. Internal implementing guidelines issued by SAFE, which became public in June 2007 (known as Notice 106), expanded the ~~termination~~reach of ~~these~~Circular ~~agreements~~37 ~~would~~by ~~severely~~(1) purporting to cover the establishment or acquisition of control by PRC residents of offshore entities which merely acquire “control” over domestic companies or assets, even in the absence of legal ownership; (2) adding requirements relating to the source of the PRC resident’s funds used to establish or acquire the offshore entity; (3) covering the use of existing offshore entities for offshore financings; (4) purporting to cover situations in which an offshore SPV establishes a new subsidiary in China or acquires an unrelated company or unrelated assets in China; and ~~detrimentally~~(5) making ~~affect~~the ~~our~~domestic ~~continuing~~affiliate of the SPV responsible for the accuracy of certain documents which must be filed in connection with any such registration, notably, the business ~~viability~~plan which describes the overseas financing and the use of proceeds. Amendments to registrations made under ~~our~~Circular 37 are required in connection with any increase or ~~current~~decrease ~~corporate~~of ~~structure~~capital, transfer of shares, mergers and acquisitions, equity investment or creation of any security interest in any assets located in China to guarantee offshore obligations and Notice 106 makes the offshore SPV jointly responsible for these filings. In the case of an SPV which was established, and which acquired a related domestic company or assets, before the implementation date of Circular 37, a retroactive SAFE registration was required to have been completed before March 31, 2006. This date was subsequently extended indefinitely by Notice 106, which also required that the registrant establish that all foreign exchange transactions undertaken by the SPV and its affiliates were in compliance with applicable laws and regulations. Failure to comply with the requirements of Circular 37, as applied by SAFE in accordance with Notice 106, may result in fines and other penalties under PRC laws for evasion of applicable foreign exchange restrictions. Any such failure could also result in the SPV’s affiliates being impeded or prevented from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to the SPV, or from engaging in other transfers of funds into or out of China.

We ~~are~~have aasked ~~holding company, and all of~~ our ~~business~~stockholders, who ~~operations~~ are ~~conducted~~PRC ~~through~~residents ~~the~~as ~~Contractual~~defined ~~Arrangements.~~in ~~Although~~Circular ~~Guangsha~~37, ~~does~~to ~~not~~register ~~have~~with ~~termination rights~~the ~~pursuant~~relevant tobranch ~~the~~of ~~Contractual Arrangements~~SAFE, itas ~~could~~currently ~~terminate~~required, orin ~~refuse~~connection towith their ~~perform~~equity ~~under,~~interests ~~the~~in ~~Contractual~~us ~~Arrangements.~~and ~~Because neither we, nor~~ our ~~subsidiaries,~~acquisitions ~~own~~of equity interests ofin ~~Guangsha,~~our ~~the~~PRC ~~termination~~subsidiary. orHowever, ~~non-performance~~we ofcannot ~~the~~provide ~~Contractual~~any ~~Arrangements~~assurances ~~would~~that ~~sever~~they ~~our~~can ~~ability~~obtain tothe ~~consolidate~~above ~~Guangsha~~SAFE ~~and~~registrations torequired ~~receive~~by ~~payments~~Circular ~~from~~37 ~~them~~and ~~under~~Notice ~~our~~106. ~~current~~Moreover, ~~holding~~because ~~company~~of ~~structure.~~uncertainty ~~While~~over wehow Circular ~~are~~37 ~~currently~~will ~~not~~be ~~aware~~interpreted ofand ~~any~~implemented, ~~event~~and how or ~~reason~~whether ~~that~~SAFE ~~may~~will ~~cause~~apply ~~the~~it ~~Contractual Arrangements~~ to ~~terminate~~us, we cannot ~~assure~~predict ~~you~~how ~~that~~it ~~such an~~will ~~event~~affect orour ~~reason~~business operations ~~will~~or ~~not~~future ~~occur~~strategies. inFor ~~the~~example, ~~future.~~our Inpresent ~~the~~and ~~event~~prospective ~~that~~PRC ~~the~~subsidiaries’ ~~Contractual~~ability ~~Arrangements~~to ~~are~~conduct ~~terminated~~foreign exchange activities, ~~this~~such ~~would~~as ~~have~~the aremittance ~~severe and~~of ~~detrimental~~dividends ~~effect~~and onforeign ~~our~~currency-denominated ~~continuing~~borrowings, ~~business~~may ~~viability~~be ~~under~~subject ~~our~~to ~~current~~compliance ~~corporate~~with ~~structure,~~Circular 37 ~~which,~~and inNotice ~~turn,~~106 ~~would~~by ~~affect~~our ~~the~~PRC ~~value of~~resident ~~your~~beneficial ~~investment~~holders.

~~Contractual~~In ~~arrangements~~addition, insuch ~~relation to our~~PRC ~~VIE~~residents may not always be ~~subject~~able to ~~scrutiny~~complete the necessary registration procedures required by Circular 37 and Notice 106. We also have little control over either our present or prospective direct or indirect stockholders or the outcome of such registration procedures. A failure by our PRC ~~tax~~resident ~~authorities~~beneficial holders or future PRC resident stockholders to comply with Circular 37 and ~~they~~Notice ~~may~~106, ~~determine~~if ~~that~~SAFE requires weit, could subject these PRC resident beneficial holders to fines or legal sanctions, restrict our ~~VIE~~overseas ~~owe~~or ~~additional~~cross-border ~~taxes~~investment activities, ~~which~~limit ~~could negatively~~our subsidiaries’ ability to make distributions or pay dividends or affect our ~~financial~~ownership ~~condition~~structure, ~~and~~which ~~the~~could adversely ~~value~~affect ofour ~~your~~business ~~investment~~and prospects.

Under applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities within ten years after the taxable year when the transactions are conducted. We could face material and adverse tax consequences if the PRC tax authorities determine that the VIE contractual arrangements were not entered into on an arm’s-length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and adjust the income of our VIE in the form of a transfer pricing adjustment. The PRC tax authorities could effectively disregard our VIE structure, resulting in increased tax liabilities. A transfer pricing adjustment could, among other things, result in a reduction of expense deductions recorded by our VIE for PRC tax purposes, which could in turn increase tax liabilities without reducing our tax expenses. In addition, the PRC tax authorities may impose late payment fees and other penalties on our VIE for the adjusted but unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected if our VIE’s tax liabilities increase or if it is required to pay late payment fees and other penalties.32

WeIn ~~conduct~~February ~~our~~2015, ~~business~~SAFE promulgated ~~through~~a ~~Guangsha~~Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice by13. ~~means~~Under SAFE Notice 13, applications for foreign exchange registration of ~~Contractual~~inbound ~~Arrangements~~foreign direct investments and outbound direct investments, including those required under SAFE Circular 37, must be filed with qualified banks instead of SAFE. IfQualified banks should examine the applications and accept registrations under the supervision of SAFE. We have used our best efforts to notify PRC ~~courts~~residents or ~~administrative~~entities who ~~authorities~~directly ~~determine~~or ~~that~~indirectly ~~these~~hold ~~contractual~~shares ~~arrangements~~in doour Cayman Islands holding company and who are known to us as being PRC residents to complete the foreign exchange registrations. However, we may not be informed of the identities of all the PRC residents or entities holding direct or indirect interest in our Company, nor can we compel our beneficial owners to comply with SAFE registration requirements. We cannot assure you that all other shareholders or beneficial owners of ours who are PRC residents or entities have complied with, and will in the future make, obtain or update any applicable registrations or approvals required by, SAFE regulations. Failure by such shareholders or beneficial owners to comply with SAFE regulations, weor ~~could~~failure beby ~~subject~~us to ~~severe~~amend ~~penalties~~the ~~and~~foreign exchange registrations of our ~~business~~PRC subsidiaries, could besubject ~~adversely~~us ~~affected.~~to Infines ~~addition~~or legal sanctions, ~~changes~~ inrestrict ~~such~~our ~~PRC~~overseas ~~laws~~or cross-border investment activities, and ~~regulations~~limit ~~may~~our ~~materially~~PRC ~~and~~subsidiaries’ ability to make distributions or pay dividends to us or affect our ownership structure, which could adversely affect our business and prospects.

~~There~~Furthermore, ~~are~~as ~~uncertainties~~these foreign ~~regarding~~exchange ~~the interpretation~~ and ~~application~~outbound ofinvestment ~~PRC~~related ~~laws, rules and~~ regulations, ~~including~~are ~~the~~relatively ~~laws,~~new ~~rules~~ and ~~regulations~~their ~~governing~~interpretation ~~the~~and ~~validity~~implementation ~~and~~has ~~enforcement~~been ofconstantly ~~the~~evolving, ~~Contractual~~it ~~Arrangements~~is ~~between Shaanxi~~unclear ~~HGS~~how ~~and~~these ~~Guangsha.~~regulations, Weand ~~have~~any ~~been~~future ~~advised~~regulations byconcerning ~~our~~offshore ~~PRC~~or ~~counsel,~~cross-border ~~the~~investments ~~Shaanxi~~and ~~Jiameng~~transactions, will ~~Law~~be ~~Firm~~interpreted, ~~based~~ onamended ~~their~~and ~~understanding~~implemented ofby the ~~current~~relevant ~~PRC~~government ~~laws,~~authorities. ~~rules~~For ~~and regulations~~example, ~~that~~we ~~(i)~~may ~~the~~be ~~structure~~subject ~~for~~to ~~operating~~a ~~our~~more ~~business in China~~stringent ~~(including~~review ~~our corporate structure~~ and ~~Contractual~~approval ~~Arrangements~~process with ~~Shaanxi~~respect ~~HGS,~~to ~~Guangsha~~our ~~and~~foreign ~~its~~exchange ~~shareholders)~~activities, ~~will~~such ~~not~~as ~~result~~remittance ~~in any violation~~ of ~~PRC~~dividends ~~laws or regulations currently in effect;~~ and ~~(ii) the Contractual Arrangements among Shaanxi HGS and Guangsha and its~~foreign-currency-denominated ~~shareholders~~borrowings, ~~governed~~which bymay ~~PRC~~adversely ~~law~~affect ~~are~~our ~~valid,~~financial ~~binding~~condition and ~~enforceable,~~results ~~and~~of ~~will~~operations. ~~not~~We ~~result~~cannot inassure ~~any~~you ~~violation~~that ofwe ~~PRC~~have ~~laws~~complied or ~~regulations currently~~ inwill ~~effect.~~be ~~However,~~able ~~there~~to ~~are~~comply ~~substantial~~with ~~uncertainties~~all ~~regarding~~applicable ~~the~~foreign ~~interpretation~~exchange and ~~application~~outbound ofinvestment ~~current~~related ~~or future PRC laws and~~ regulations. ~~concerning~~In ~~foreign investment in the PRC~~addition, ~~and~~if ~~their~~we ~~application~~decide to acquire ~~and~~a ~~effect~~PRC ondomestic ~~the legality~~company, ~~binding~~we ~~effect~~cannot ~~and~~assure ~~enforceability of~~you ~~the~~that ~~contractual arrangements. In particular,~~ we ~~cannot~~or ~~rule out~~ the ~~possibility~~owners ~~that~~of ~~PRC~~such ~~regulatory authorities~~company, ~~courts~~as orthe ~~arbitral tribunals~~case may inbe, ~~the~~will ~~future~~be ~~adopt~~able ato ~~different~~obtain the ornecessary ~~contrary~~approvals ~~interpretation~~ or ~~take~~complete athe ~~view~~necessary ~~that~~filings isand ~~inconsistent~~registrations ~~with~~required by the ~~opinion~~foreign ofexchange ~~our PRC legal counsel~~regulations. ~~Therefore,~~This ~~the Contractual Arrangements~~ may berestrict our ~~determined~~ability ~~by PRC authorities~~ to beimplement ~~inconsistent~~our ~~with~~acquisition ~~the~~strategy ~~laws~~ and ~~regulations of~~could ~~the~~adversely ~~PRC,~~affect ~~including~~our ~~those~~business ~~related~~and ~~to foreign investment in certain industries~~prospects.

IfChanges ~~any~~in ofthe ~~our PRC entities or their ownership~~policies, ~~structure~~regulations, orrules, and the ~~Contractual~~enforcement ~~Arrangements are determined to be in violation~~ of ~~any existing or future PRC~~ laws, ~~rules or regulations, or any~~ of ~~our~~the PRC ~~entities~~government ~~fail~~may tobe ~~obtain~~quick orwith ~~maintain~~little ~~any~~advance ofnotice ~~the~~and ~~required~~could ~~governmental~~have ~~permits~~a orsignificant impact ~~approvals,~~upon ~~the~~our ~~relevant~~ability ~~PRC~~to ~~regulatory authorities~~operate ~~would~~profitably ~~have broad discretion~~ in ~~dealing~~the ~~with such violations, including:~~PRC.

●All ~~revoking~~of ~~the~~our operations are located in China. Accordingly, our business, prospects, financial condition and ~~operating~~results ~~licenses;~~of operations may be influenced to a significant degree by political, economic, legal developments and social conditions in China generally and by continued economic growth in China as a whole. Policies, regulations, rules, and the enforcement of laws of the PRC government can have significant effects on economic conditions in the PRC and the ability of businesses to operate profitably. Our ability to operate profitably in the PRC may be adversely affected by changes in policies by the PRC government, including changes in laws, regulations or their interpretation, particularly those dealing with security, intellectual property, money laundering, taxation and other laws that affect our post-combination entity’s ability to operate its business.

36Changes in foreign exchange regulations may adversely affect our results of operations.

●We ~~discontinuing~~currently receive all of our revenues in RMB. The PRC government regulates the conversion between RMB and foreign currencies. Over the years, the government has significantly reduced its control over routine foreign exchange transactions under current accounts, including trade and service-related foreign exchange transactions, payment of dividends and service of foreign debt. However, foreign exchange transactions by our PRC subsidiaries under capital accounts continue to be subject to significant foreign exchange controls and require the approval of, or ~~restricting~~registration with, PRC governmental authorities. There can be no assurance that these PRC laws and regulations on foreign investment will not cast uncertainties on our financing and operating plans in China. Under current foreign exchange regulations in China, subject to the ~~operations;~~relevant registration at SAFE, we will be able to pay dividends in foreign currencies, without prior approval from SAFE, by complying with certain procedural requirements. However, there can be no assurance that the current PRC foreign exchange policies regarding debt service and payment of dividends in foreign currencies will continue in the future. Changes in PRC foreign exchange policies might have a negative impact on our ability to service our foreign currency-denominated indebtedness, if any, and to distribute dividends to our shareholders in foreign currencies.

●Future ~~imposing~~inflation ~~conditions~~in orChina ~~requirements~~may ~~with~~inhibit ~~which~~our activity ~~the~~to ~~PRC~~conduct ~~entities~~business ~~may~~in ~~not be able to comply;~~China.

●In ~~requiring~~recent usyears, the Chinese economy has experienced periods of rapid expansion and ~~our~~high ~~PRC~~rates ~~entities~~of inflation, which have led to ~~restructure~~the adoption by the ~~relevant~~Chinese government, ~~ownership~~from ~~structure~~time orto ~~operations~~time, ~~including~~of ~~termination~~various ofcorrective measures designed to restrict the ~~contractual~~availability ~~arrangements~~of ~~with~~credit ~~our~~or ~~VIE~~regulate growth and ~~deregistering~~contain inflation. ~~the~~While ~~equity~~inflation ~~pledge~~has ofbeen ~~our~~more ~~VIE~~moderate since 1995, ~~which~~high inflation may in ~~turn~~the ~~would~~future ~~affect~~cause ~~our~~Chinese ~~ability~~government to ~~consolidate~~impose controls on credit and/or prices, ~~derive~~or to take other action, which could inhibit economic ~~interests~~activity ~~from~~in China, orand ~~exert~~thereby ~~effective~~harm ~~control~~the ~~our~~market ~~VIE;~~for our products.

●Because ~~imposing~~Chinese ~~fines~~law orgoverns almost ~~confiscating~~all ~~the~~of ~~income~~our ~~from~~material agreements, we may not be able to enforce our ~~PRC~~legal ~~subsidiaries~~rights within China or ~~our~~elsewhere, ~~VIE~~which could result in a significant loss of business, business opportunities, or capital.

~~The~~We ~~imposition~~cannot ofassure you that we will be able to enforce any of ~~these~~our ~~penalties~~material ~~would~~agreements or that remedies will be available outside of China. The system of laws ~~severely~~and ~~disrupt~~the ~~our~~enforcement ~~ability~~of toexisting ~~conduct~~laws ~~business~~in China may not be as certain in implementation and ~~have~~interpretation as in the United States. The inability to enforce or obtain a ~~material~~remedy ~~adverse~~under ~~effect~~any onof our ~~financial~~current ~~condition,~~or ~~results~~future agreements could result in a significant loss of ~~operations~~business, business opportunities or capital. It will be extremely difficult to acquire jurisdiction and ~~prospects~~enforce liabilities against our officers, directors and assets based in China.

The shareholders of our VIE may have actual or potential conflicts of interest with us and as a result may refuse to perform, or may breach, the Contractual Arrangements, which may materially and adversely affect our business and financial condition.33

~~The~~Substantially ~~shareholders~~all of ~~our VIE may have actual or~~ ~~potential conflicts of interest with us. These shareholders may refuse to perform or sign or may breach, or cause~~ our ~~VIE~~assets toare ~~breach,~~located ~~or refuse~~in ~~to renew,~~ the ~~existing~~PRC ~~Contractual Arrangements, which would have a material~~ and ~~adverse~~all ~~effect~~of on our ~~ability~~officers ~~to effectively control our VIE~~ and ~~receive~~most ~~economic~~of ~~benefits from it. As a result, control over, and funds due from,~~ our ~~VIE~~present ~~may~~directors bereside ~~jeopardized~~outside ~~if the shareholders~~ of ~~our VIE breach, or refuse to renew,~~ the ~~Contractual~~United ~~Arrangements~~States. As a ~~For example~~result, ~~the~~it ~~shareholders~~ may benot ~~able to cause our agreements with our VIE to~~ be ~~performed~~possible infor aUnited ~~manner~~States ~~adverse~~investors to usenforce ~~by,~~their ~~among~~legal ~~other things~~rights, ~~failing~~ to ~~remit~~effect ~~payments~~service ~~due~~of ~~under~~process ~~the~~upon ~~contractual~~our ~~arrangements~~directors toor usofficers onor ato ~~timely~~enforce ~~basis.~~judgments ~~We cannot assure you that when conflicts~~ of ~~interest~~United ~~arise~~States ~~any~~courts orpredicated ~~all~~upon ofcivil ~~these~~liabilities ~~shareholders~~and ~~will~~criminal ~~act~~penalties ~~in the best interests~~ of our ~~Company~~directors and orofficers ~~such~~under ~~conflicts~~Federal ~~will~~securities ~~be resolved in our favor~~laws. ~~Currently~~Moreover, we dohave ~~not~~been ~~have~~advised ~~any~~that ~~arrangements~~China todoes ~~address~~not ~~potential conflicts~~have oftreaties ~~interest~~providing ~~between~~for ~~these~~the ~~shareholders~~reciprocal recognition and ~~our~~enforcement ~~Company.~~of Ifjudgments ~~we cannot resolve any conflict~~ of ~~interest~~courts orwith ~~dispute~~the ~~between~~United ~~us and~~States. ~~these shareholders~~Further, weit ~~would~~is ~~have~~unclear toif ~~rely~~extradition ontreaties ~~legal~~now ~~proceedings, which could result~~ in ~~disruption~~effect between ofthe ~~our~~United ~~business~~States and ~~subject~~China uswould ~~to substantial~~permit ~~uncertainty~~effective asenforcement toof ~~the~~criminal ~~outcome~~penalties of ~~any~~the ~~such~~Federal ~~legal~~securities ~~proceedings~~laws.

~~Any~~Failure ~~failure by our VIE or its shareholders~~ to ~~perform their obligations~~comply ~~under~~with the ~~Contractual~~United ~~Arrangements,~~States orForeign ~~any~~Corrupt ~~unauthorized~~Practices ~~use~~Act ofcould ~~indicia~~subject ofus ~~corporate~~to ~~power~~penalties orand ~~authority,~~other ~~would have a material~~ adverse ~~effect~~ ~~on our business~~consequences.

We ~~refer~~are subject to the ~~shareholders of our VIE as its~~ ~~nominee~~United ~~shareholders~~States ~~because~~Foreign ~~although~~Corrupt ~~they~~Practices ~~remain~~Act, ~~the~~which ~~holders~~generally ofprohibits ~~equity~~United ~~interests~~States oncompanies ~~record~~from engaging in ~~our~~bribery ~~VIE,~~or ~~pursuant~~other prohibited payments to ~~the~~foreign ~~terms~~officials offor the ~~relevant power~~purpose of ~~attorney,~~obtaining ~~such~~or ~~shareholders~~retaining ~~have~~business. ~~irrevocably~~Foreign ~~authorized~~companies, ~~the~~including ~~individual~~some ~~appointed~~that bymay ~~Shaanxi~~compete ~~HGS to exercise their rights as a~~with ~~shareholder~~us, ofare ~~the~~not ~~VIE.~~subject ~~If our VIE or its shareholders fail~~ to ~~perform~~these ~~their~~prohibitions. ~~respective~~Corruption, ~~obligations~~extortion, ~~under~~bribery, ~~the Contractual Arrangements or if any physical instruments~~pay-offs, ~~such~~theft ~~as chops~~ and ~~seals, or~~ other ~~indicia~~fraudulent ofpractices ~~corporate~~occur ~~power~~from ~~or authority, are used without our authorization,~~time-to-time wein ~~may~~the ~~have~~PRC. toWe ~~incur~~can ~~substantial~~make ~~costs~~no ~~and~~assurance, ~~expend~~however, ~~additional~~that ~~resources~~our toemployees ~~seek~~or ~~legal~~other ~~remedies~~agents ~~under~~will ~~PRC~~not ~~laws,~~engage ~~including~~in ~~specific~~such ~~performance or~~conduct ~~injunctive~~for ~~relief, and/or claiming damages,~~ which we ~~cannot~~might ~~assure you will~~ be held ~~effective under PRC laws~~responsible. ~~For~~If ~~example,~~our ifemployees ~~the~~or ~~shareholders of~~other ~~our~~agents ~~VIE~~are ~~were~~found to ~~refuse~~have toengaged ~~transfer their equity interest~~ in ~~the~~such ~~VIE~~practices, ~~to us or our designee if~~ we ~~exercise~~could ~~the~~suffer ~~purchase~~severe ~~option~~penalties ~~pursuant~~and other toconsequences ~~the~~that ~~Contractual~~may ~~Arrangements,~~have ora ifmaterial ~~they~~adverse ~~were~~effect ~~otherwise~~on toour ~~act in bad faith toward us~~business, ~~then~~financial wecondition ~~may~~and ~~have~~results toof ~~take legal action to compel them to perform their contractual obligations~~operations.

~~The~~We ~~Contractual~~may ~~Arrangements~~have ~~are~~difficulty ~~governed by PRC~~establishing ~~laws.~~adequate ~~Accordingly~~management, ~~any disputes would be resolved in accordance with PRC~~ legal ~~procedures.~~and ~~The~~financial ~~legal~~controls ~~environment~~ in the PRC ~~is not as developed as in other jurisdictions, such as the U~~.S. As a result, uncertainties in the PRC legal system could limit our ability to enforce the Contractual Arrangements or could affect the validity of the Contractual Arrangements, and as a result we may not be able to exert effective control over our VIE, and our ability to conduct our business may therefore be materially adversely affected.

37The PRC historically has been deficient in Western style management and financial reporting concepts and practices, as well as in modern banking, computer and other control systems. We may have difficulty in hiring and retaining a sufficient number of qualified employees to work in the PRC. As a result of these factors, we may experience difficulty in establishing management, legal and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet Western standards. We may have difficulty establishing adequate management, legal and financial controls in the PRC.

~~Our~~Although ~~current~~the ~~corporate~~audit report ~~structure~~included in this annual report is prepared by U.S. auditors who are currently inspected by the PCAOB, there is no guarantee that future audit reports will be prepared by auditors inspected by the PCAOB and, ~~business~~as ~~operations~~such, in the future investors may be deprived of the ~~affected~~benefits of such inspection. Furthermore, trading in our securities may be prohibited under the HFCA Act if the SEC subsequently determines our audit work is performed by auditors that the ~~newly~~PCAOB ~~enacted~~is ~~Foreign~~unable ~~Investment~~to ~~Law~~inspect or investigate completely, and as a result, U.S. national securities exchanges, such as the Nasdaq, may determine to delist our securities. Furthermore, on December 29, 2022, the Consolidated Appropriations Act, was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things, an identical provision to AHFCAA, which reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two.

OnAs ~~March~~an ~~15,~~auditor ~~2019,~~of ~~the~~companies that ~~National~~are ~~People’s Congress~~registered ~~approved~~with the ~~Foreign~~SEC ~~Investment~~and ~~Law,~~publicly ~~which~~traded ~~took effect on January 1, 2020. Since it is relatively new, uncertainties exist~~ in ~~relation~~ tothe ~~its~~United ~~interpretation~~States and ~~its~~a ~~implementation~~firm ~~rules~~registered ~~that~~with ~~are~~the yet to be issued. The Foreign Investment Law does not explicitly classify whether variable interest entities that are controlled through contractual arrangements would be deemed as foreign-invested enterprises if they are ultimately “controlled” by foreign investors. HoweverPCAOB, itour ~~has~~auditor ais ~~catch-all provision~~ required under ~~definition~~the laws of ~~“foreign investment”~~the ~~that~~United ~~includes~~States ~~investments~~to ~~made~~undergo byregular ~~foreign~~inspections ~~investors in China through other means as provided~~ by ~~laws, administrative regulations or~~ the ~~State~~PCAOB ~~Council~~to ofassess ~~the~~their ~~PRC,~~compliance orwith the ~~State Council. Therefore, it still leaves leeway for future~~ laws, ~~administrative regulations or provisions~~ of the ~~State Council to provide for contractual arrangements as a form of foreign investment. Therefore, there can be no~~United ~~assurance~~States ~~that~~and ~~our~~professional ~~control over our VIE through contractual arrangements will not be deemed as a foreign investment in the future~~standards.

~~The~~Although ~~Foreign~~currently ~~Investment~~we operates ~~Law~~substantially ~~grants~~in ~~national~~mainland ~~treatment to foreign-invested entities~~China, ~~except~~a ~~for~~jurisdiction ~~those~~where ~~foreign-invested~~the ~~entities~~PCAOB ~~that~~is ~~operate~~currently inunable ~~industries~~to ~~specified~~conduct asinspections ~~either~~without ~~“restricted”~~the approval orof ~~“prohibited”~~the ~~from~~Chinese ~~foreign~~government ~~investment~~authorities, inour aauditor, ~~“negative~~the ~~list”.~~independent ~~The~~registered ~~Foreign~~public ~~Investment~~accounting ~~Law~~firm ~~provides~~ that ~~foreign-invested entities~~issues ~~operating~~the audit report included elsewhere in ~~“restricted”~~this orannual ~~“prohibited”~~report, ~~industries~~is ~~will~~subject ~~require~~to ~~market~~laws ~~entry~~in ~~clearance~~the ~~and~~United ~~other~~States ~~approvals from~~pursuant ~~relevant~~to ~~PRC~~which ~~government~~the ~~authorities.~~PCAOB Ifconducts ~~our~~regular ~~control~~inspections ~~over~~to assess our ~~VIE~~auditor’s ~~through~~compliance ~~contractual~~with ~~arrangements~~the ~~are~~applicable ~~deemed~~professional asstandards. ~~foreign~~Inspections ~~investment in~~of ~~the~~other ~~future,~~auditors ~~and~~conducted ~~any~~by ~~business~~the ofPCAOB ~~our~~outside mainland ~~VIE~~China ishave ~~“restricted”~~at ortimes ~~“prohibited”~~identified ~~from~~deficiencies ~~foreign~~in ~~investment~~those ~~under~~auditors’ ~~the~~audit ~~“negative list”~~procedures ~~effective~~and atquality ~~the~~control ~~time~~procedures, wewhich may be ~~deemed~~addressed toas bepart ~~in violation~~ of the ~~Foreign~~inspection ~~Investment~~process ~~Law,~~to ~~the~~improve ~~contractual~~future ~~arrangements~~audit ~~that allow~~quality. usThe tolack ~~have~~of ~~control~~the ~~over~~PCAOB ~~our~~inspections ~~VIE~~of ~~may~~audit bework ~~deemed~~undertaken in asmainland ~~invalid~~China ~~and~~prevents ~~illegal,~~the ~~and~~PCAOB wefrom ~~may~~regularly beevaluating ~~required~~auditors’ toaudits ~~unwind such contractual arrangements~~ and~~/or~~ ~~restructure~~their ~~our~~quality ~~business~~control ~~operations,~~procedures. ~~any~~As ~~of which may have~~ a ~~material adverse effect on our business operations. In addition~~result, asif ~~the~~there ~~Chinese~~is ~~government~~any ~~has~~component ~~been~~of ~~updating~~our ~~the~~auditor’s ~~Negative~~work ~~List~~papers inbecome ~~recent~~located ~~years~~in ~~and~~mainland ~~reducing~~China in the ~~sectors~~future, ~~prohibited~~such orwork ~~restricted~~papers ~~for~~will ~~foreign~~not ~~investment,~~be itsubject isto ~~probable~~inspection inby the ~~future~~PCAOB. ~~that,~~As ~~even~~a ifresult, ~~our~~investors ~~VIE~~would isbe ~~identified~~deprived asof asuch ~~FIE~~PCAOB inspections, itwhich iscould ~~still~~result ~~allowed~~in tolimitations or ~~acquire~~restrictions orto ~~hold~~our ~~equity~~access of ~~enterprises~~ inthe ~~sectors~~U.S. ~~currently~~capital ~~prohibited or restricted for foreign investment~~markets.

Furthermore, the PRC Foreign Investment Law provides that foreign invested enterprises established according to the existing laws regulating foreign investment may maintain their structure and corporate governance within five years after the implementing of the PRC Foreign Investment Law.34

InAs ~~addition~~part of a continued regulatory focus in the United States on access to audit and other information currently protected by national law, in particular mainland China’s, in June 2019, a bipartisan group of lawmakers introduced bills in both houses of the ~~PRC~~U.S. ~~Foreign~~Congress ~~Investment~~which, ~~Law~~if ~~also~~passed, would ~~provides~~require ~~several~~the ~~protective~~SEC ~~rules~~to ~~and~~maintain ~~principles~~a list of issuers for which the PCAOB is not able to inspect or investigate the audit work performed by a foreign ~~investors~~public accounting firm completely. The proposed Ensuring Quality Information and ~~their~~Transparency ~~investments~~for Abroad-Based Listings on our Exchanges (“EQUITABLE”) Act prescribes increased disclosure requirements for these issuers and, beginning in 2025, the ~~PRC~~delisting from U.S. national securities exchanges such as the Nasdaq of issuers included on the SEC’s list for three consecutive years. It is unclear if this proposed legislation will be enacted. Furthermore, ~~including~~there have been recent deliberations within the U.S. government regarding potentially limiting or restricting China-based companies from accessing U.S. capital markets. On May 20, ~~among~~2020, ~~others~~the U.S. Senate passed the HFCA Act, which includes requirements for the SEC to identify issuers whose audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely because of a ~~foreign~~restriction ~~investor~~imposed ~~may~~by ~~freely~~a ~~transfer~~non-U.S. ~~into~~authority orin ~~out~~the auditor’s local jurisdiction. The U.S. House of ~~China,~~Representatives inpassed ~~Renminbi~~the orHFCA aAct ~~foreign~~on ~~currency~~December 2, ~~its~~2020, ~~contributions~~and the HFCA Act was signed into law on December 18, ~~profits~~2020. Additionally, ~~capital~~in ~~gains~~July 2020, ~~income~~ ~~from~~the ~~disposition~~U.S. ofPresident’s ~~assets,~~Working ~~royalties~~Group ofon ~~intellectual~~Financial ~~property~~Markets ~~rights~~issued recommendations for actions that can be taken by the executive branch, ~~indemnity~~the SEC, the PCAOB or ~~compensation~~other ~~lawfully~~federal ~~acquired,~~agencies and ~~income~~department with respect to Chinese companies listed ~~from~~on ~~liquidation~~U.S. stock exchanges and their audit firms, ~~among~~in ~~others~~an effort to protect investors in the United States. In response, ~~within~~on ~~China;~~November ~~local~~23, ~~governments~~2020, the ~~shall~~SEC ~~abide~~issued byguidance highlighting certain risks (and their ~~commitments~~implications to U.S. investors) associated with investments in China-based issuers and summarizing enhanced disclosures the ~~foreign~~SEC ~~investors;~~recommends ~~governments~~China-based issuers make regarding such risks. On March 24, 2021, the atSEC ~~all~~adopted ~~levels~~interim final rules relating to the implementation of certain disclosure and ~~their~~documentation ~~departments~~requirements ~~shall~~of ~~enact~~the ~~local~~HFCA ~~normative~~Act. ~~documents~~We will ~~concerning~~be ~~foreign~~required ~~investment~~to comply with these rules if the SEC identifies us as having a “non-inspection” year (as defined in ~~compliance~~the interim ~~with~~final ~~laws~~rules) ~~and~~under ~~regulations~~a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCA Act, including the listing and ~~shall~~trading prohibition requirements described above. Under the HFCA Act, our securities may be prohibited from trading on the Nasdaq or other U.S. stock exchanges if our auditor is not ~~impair~~inspected ~~legitimate~~by ~~rights~~the ~~and~~PCAOB ~~interests~~for three consecutive years, ~~impose~~and ~~additional~~this ~~obligations~~ultimately ~~onto~~could ~~FIEs~~result in our common stock being delisted. Furthermore, ~~set~~on ~~market~~June ~~access~~22, ~~restrictions~~2021, ~~and~~the ~~exit~~U.S. Senate passed the ~~conditions~~AHFCAA, orwhich, ~~intervene~~if ~~with~~enacted, would amend the ~~normal~~HFCA ~~production~~Act and ~~operation~~require ~~activities~~the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to the PCAOB inspections for two consecutive years instead of ~~FIEs;~~three ~~except~~and would reduce the time before our securities may be prohibited from trading or delisted. On September 22, 2021, the PCAOB adopted a final rule implementing the AHFCAA, which provides a framework for ~~special~~the ~~circumstances~~PCAOB to use when determining, as contemplated under the AHFCAA, whether the Board is unable to inspect or investigate completely registered public accounting firms located in ~~which~~a ~~case~~foreign jurisdiction because of a position taken ~~statutory~~by ~~procedures~~one ~~shall~~or bemore ~~followed~~authorities in that jurisdiction. On November 5, 2021, the SEC approved the PCAOB’s Rule 6100, Board Determinations Under the HFCA Act. On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and ~~fair~~disclosure requirements in the HFCA Act The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and ~~reasonable~~that ~~compensation~~the ~~shall~~PCAOB beis ~~made~~unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions. The PCAOB issued a ~~timely~~Determination ~~manner~~Report on December 16, ~~expropriation~~2021 which found that the PCAOB is unable to inspect or ~~requisition~~investigate completely registered public accounting firms headquartered in: (1) mainland China of the ~~investment~~PRC, and (2) Hong Kong. In addition, the PCAOB’s report identified the specific registered public accounting firms which are subject to these determinations. On December 29, 2022, the Consolidated Appropriations Act, was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things, an identical provision to AHFCAA, which reduce the number of consecutive ~~foreign~~non-inspection ~~investors~~years required for triggering the prohibitions under the HFCA Act from three years to two. Our auditor, OneStop Assurance PAC, is ~~prohibited;~~headquartered in Singapore, not mainland China or Hong Kong and ~~mandatory~~was ~~technology~~not ~~transfer~~identified in this report as a firm subject to the PCAOB’s determination. Therefore, our auditor is ~~prohibited~~not currently subject to the determinations announced by the PCAOB on December 16, 2021, and it is currently subject to the PCAOB inspections.

~~Notwithstanding~~While our auditor is based in the ~~above~~U.S. and is registered with the PCAOB and has been inspected by the PCAOB on a regular basis, in the ~~PRC~~event ~~Foreign~~it ~~Investment Law~~is ~~stipulates~~later determined that ~~foreign~~the ~~investment~~PCAOB ~~includes~~is “unable to inspect or investigate completely our auditor because of a position taken by an authority in a foreign ~~investors~~jurisdiction, then ~~invest~~such ~~through~~lack ~~any~~of ~~other~~inspection ~~methods~~could cause trading in the our securities to be prohibited under ~~laws~~the HFCA Act, ~~administrative~~and ~~regulations or~~ultimately ~~provisions~~result ~~prescribed~~in a determination by ~~the~~a ~~State~~securities ~~Council”~~exchange to delist our securities. ~~Therefore~~In addition, ~~there~~the ~~are~~recent ~~possibilities~~developments ~~that~~would ~~future~~add ~~laws,~~uncertainties ~~administrative~~to ~~regulations~~the listing of our securities and we cannot assure you whether Nasdaq or ~~provisions~~regulatory ~~prescribed~~authorities bywould ~~the~~apply ~~State~~additional ~~Council~~and ~~may~~more ~~regard~~stringent ~~contractual~~criteria to ~~arrangements~~us asafter aconsidering ~~form~~the effectiveness of ~~foreign~~our ~~investment~~auditor’s audit procedures and quality control procedures, adequacy of personnel and ~~then~~training, ~~whether~~or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. It remains ~~contractual~~unclear ~~arrangement~~what the SEC’s implementation process related to the above rules will beentail ~~recognized~~or aswhat afurther ~~foreign~~actions ~~investment~~the SEC, ~~whether~~the ~~our~~PCAOB or ~~contractual~~Nasdaq ~~arrangement~~will take to address these issues and what impact those actions will behave ~~deemed~~on toU.S. becompanies that have significant operations in ~~violation~~the PRC and have securities listed on a U.S. stock exchange (including a national securities exchange or over-the-counter stock market). ofIn addition, the ~~foreign~~above ~~investment~~amendments and any additional actions, proceedings, or new rules resulting from these efforts to increase U.S. regulatory access ~~requirements~~to ~~and~~audit ~~how~~information could create some uncertainty for investors, the ~~above-mentioned~~market ~~contractual~~price ~~arrangement~~of ~~will~~our common stock could be ~~handled~~adversely affected, and we could be delisted if we and our auditor are ~~uncertain~~unable to meet the PCAOB inspection requirement or being required to engage a new audit firm, which would require significant expense and management time.

3835

On August 26, 2022, the PCAOB signed Statement of Protocol (the “SOP”) Agreement with the CSRC and China’s Ministry of Finance. The ~~Chinese~~SOP Agreement, ~~government~~together ~~may~~with ~~exercise~~two ~~significant~~protocol agreements (collectively, “SOP Agreements”), governs inspections and investigations ~~oversight influence~~of ~~over~~audit ~~the~~firms ~~manner~~based in ~~which~~mainland weChina ~~must~~and ~~conduct~~Hong ~~our~~Kong, ~~business~~taking ~~activities~~the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. WePursuant ~~are~~to ~~currently~~the ~~not~~fact ~~required~~sheet with respect to ~~obtain~~the ~~approval~~Protocol ~~from~~disclosed ~~Chinese~~by ~~authorities~~the SEC, the PCAOB shall have independent discretion to ~~list~~select onany Uissuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC.S. ~~exchanges~~On December 15, ~~however~~2022, ifthe ~~our~~PCAOB ~~VIE~~Board ordetermined that the ~~holding~~PCAOB ~~company~~was ~~were~~able ~~required~~to secure complete access to ~~obtain~~inspect ~~approval~~and investigate registered public accounting firms headquartered in ~~the future~~mainland China and ~~were~~Hong ~~denied~~Kong ~~permission~~and voted ~~from~~to ~~Chinese~~vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to ~~list~~facilitate the onPCAOB’s ~~U.S.~~access ~~exchanges~~in the future, wethe PCAOB Board will ~~not~~consider bethe ~~able~~need to ~~continue~~issue ~~listing~~a onnew Udetermination.S Delisting of our common stock would force holders of our common stock to sell their shares of common stock. The market price of our common stock could be adversely ~~exchange~~affected as a result of anticipated negative impacts of these executive or legislative actions upon, ~~which~~as ~~would~~well ~~materially~~as ~~affect~~negative investor sentiment towards, companies with significant operations in China that are listed in the ~~interest~~United States, regardless of ~~the~~whether ~~investors~~these executive or legislative actions are implemented and regardless of our actual operating performance.

~~The~~Recent ~~Chinese~~greater ~~government has exercised and continues~~oversight toby ~~exercise~~the ~~substantial~~CAC ~~control~~ over ~~virtually~~data ~~every~~security, ~~sector~~particularly offor ~~the~~companies ~~Chinese~~seeking ~~economy through regulation and state ownership. Our ability~~ to ~~operate~~list through our VIE in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations, land use rights, property and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a ~~more~~foreign ~~centrally planned economy or regional or local variations in the implementation of economic policies~~exchange, could ~~have~~adversely aimpact ~~significant~~the ~~effect on economic conditions in China or particular regions thereof, and could require~~operating usentities’ ~~to divest ourselves of any interest we then hold in Chinese properties~~business.

~~For~~On ~~example~~December 28, 2021, the ~~Chinese~~CAC, ~~cybersecurity~~together ~~regulator~~with 12 other governmental departments of the PRC, jointly promulgated the Cybersecurity Review Measures, which became ~~announced~~effective on ~~July~~February ~~2021~~15, ~~that~~2022. itThe ~~had~~Cybersecurity ~~begun~~Review anMeasures ~~investigation~~provides ofthat, ~~Didi~~in ~~Global~~addition ~~Inc.~~to ~~(NYSE:~~critical ~~DIDI~~information infrastructure operators (“CIIOs”) that intend to purchase Internet products and ~~two~~services, ~~days~~data ~~later~~processing ~~ordered~~operators ~~that~~engaging ~~the~~in ~~company’s~~data processing activities ~~app~~that ~~was~~affect ~~removed~~or ~~from~~may ~~smartphone~~affect ~~app~~national ~~stores.~~security Onmust ~~July~~be ~~24,~~subject ~~2021,~~to cybersecurity review by the ~~General~~Cybersecurity Review Office of the ~~Communist~~PRC. ~~Party~~According to ofthe ~~China~~Cybersecurity ~~Central~~Review ~~Committee~~Measures, ~~and the~~a ~~General~~cybersecurity ~~Office~~review ofassesses ~~the~~potential ~~State~~national ~~Council~~security ~~jointly~~risks ~~released~~that ~~the~~may ~~Guidelines~~be ~~for~~brought ~~Further~~about ~~Easing~~by ~~the~~any procurement, ~~Burden~~data ofprocessing, ~~Excessive~~or ~~Homework~~overseas listing. The Cybersecurity Review Measures further requires that CIIOs and ~~Off-campus Tutoring~~data ~~for~~processing ~~Students~~operators that atpossess ~~the~~personal ~~Stage~~data of ~~Compulsory~~at ~~Education,~~least ~~pursuant~~one tomillion ~~which~~users ~~foreign~~must ~~investment~~apply infor ~~such~~a ~~firms~~review ~~via~~by ~~mergers~~the ~~and~~Cybersecurity ~~acquisitions, franchise~~Review ~~development,~~Office ~~and~~of ~~variable~~the ~~interest~~PRC ~~entities~~before conducting ~~are~~listings ~~banned~~in ~~from~~foreign ~~this sector~~countries.

WeOn ~~believe~~November ~~that~~14, ~~our~~2021, the ~~operations~~CAC inpublished ~~China~~the ~~are~~Security ~~in material~~Administration ~~compliance~~Draft, ~~with~~which ~~all~~provides ~~applicable~~that ~~legal~~data ~~and~~processing ~~regulatory~~operators ~~requirements. However,~~engaging ~~the~~in ~~Company’s~~data ~~business~~processing ~~segments~~activities that affect or may affect national security must be subject to ~~various~~network ~~government~~data ~~and~~security ~~regulatory~~review ~~interference~~by in the ~~provinces~~relevant inCyberspace ~~which~~Administration of ~~they~~the ~~operate~~PRC. ~~The~~According ~~Company~~to ~~could~~the beSecurity ~~subject~~Administration toDraft, ~~regulation by~~data ~~various~~processing ~~political~~operators ~~and~~who ~~regulatory~~possess ~~entities,~~personal ~~including~~data ~~various~~of ~~local~~at ~~and~~least ~~municipal~~one ~~agencies~~million users ~~and~~or ~~government~~collect ~~sub-divisions.~~data ~~The~~that ~~Company may~~affects ~~incur~~or ~~increased~~may ~~costs~~affect ~~necessary~~national tosecurity ~~comply~~must ~~with~~be ~~existing~~subject ~~and~~to ~~newly~~network ~~adopted~~data ~~laws~~security ~~and~~review ~~regulations~~by orthe ~~penalties~~relevant ~~for~~Cyberspace Administration ~~any~~of ~~failure~~the toPRC. ~~comply, and such~~The ~~compliance~~deadline orfor ~~any~~public ~~associated~~comments ~~inquiries~~on orthe ~~investigations~~Security orAdministration ~~any~~Draft ~~other~~was ~~government~~December ~~actions~~13, ~~may:~~2021.

●As ~~delay~~of the date of this annual report, we have not received any notice from any authorities identifying any of the operating entities as a CIIO or ~~impede~~requiring any of the operating entities to go through cybersecurity review or network data security review by the CAC. As the Cybersecurity Review Measures became effective and if the Security Administration Draft is enacted as proposed, we believe that our operating entity, Guangsha’s operations and our listing will not be affected and that the operating entities are not subject to cybersecurity review or network data security review by the CAC, given that: (i) Guangsha engages in real estate development, primarily in the construction and sale of residential apartments, car parks and commercial properties, therefore it is unlikely to be classified as a CIIO by the PRC regulatory agencies; (ii) Guangsha possesses personal data of fewer than one million individual clients in its business operations as of the date of this annual report and do not anticipate that Guangsha will be collecting over one million users’ personal information in the near future, which we understand might otherwise subject Guangsha to the Cybersecurity Review Measures; and (iii) since Guangsha are in real estate development, data processed in their business is unlikely to have a bearing on national security and therefore is unlikely to be classified as core or important data by the authorities. There remains uncertainty, however, as to how the Cybersecurity Review Measures and the Security Administration Draft will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Security Administration Draft. If any such new laws, regulations, rules, or implementation and interpretation come into effect, the operating entities will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on them. We cannot guarantee, however, that our operating entity in mainland China will not be subject to cybersecurity review and network data security review in the future. During such reviews, our operating entity in mainland China may be required to suspend its operations or experience other disruptions to its operations. Cybersecurity review and network data security review could also result in negative publicity with respect to our Company and diversion of Guangsha’s managerial and financial resources, which could materially and adversely affect its business, financial conditions, and results of operations.

~~● result in negative publicity or increase the Company’s operating costs;~~36

●The ~~require~~Opinions ~~significant~~recently issued ~~management~~by ~~time~~the ~~and~~General ~~attention;~~Office of the Central Committee of the Communist Party of China and the General Office of the State Council may subject the operating entities to additional compliance requirement in the future.

~~Furthermore~~Recently, itthe isGeneral Office ~~uncertain~~of ~~when and whether~~ the ~~Company~~Central ~~will~~Committee beof ~~required~~the toCommunist ~~obtain~~Party ~~permission~~of ~~from~~China and the ~~PRC~~General ~~government~~Office toof ~~list~~the onState ~~U.S.~~Council ~~exchanges~~jointly inissued the ~~future~~Opinions, which ~~and~~were ~~even~~made ~~when~~available ~~such permission~~to isthe ~~obtained~~public on July 6, ~~whether~~2021. itThe ~~will~~Opinions beemphasized ~~denied~~the orneed ~~rescinded.~~to ~~Although~~strengthen the ~~Company~~administration isover ~~currently~~illegal securities ~~not~~activities ~~required~~and tothe ~~obtain~~supervision ~~permission~~on ~~from any~~overseas oflistings ~~the~~by ~~PRC~~China-based ~~federal~~companies. orThese ~~local~~opinions ~~government~~proposed to ~~obtain~~take effective measures, such ~~permission~~as ~~and~~promoting ~~has~~the ~~not~~construction ~~received~~of ~~any~~relevant ~~denial~~regulatory systems, to ~~list~~deal onwith the ~~U.S.~~risks ~~exchange,~~and ~~our~~incidents facing China-based overseas-listed ~~operations~~companies ~~could~~and bethe ~~adversely~~demand ~~affected,~~for ~~directly~~cybersecurity orand ~~indirectly,~~data byprivacy ~~existing~~protection. orThe ~~future~~aforementioned ~~laws~~policies and ~~regulations~~any ~~relating~~related implementation rules to ~~its~~be ~~business~~enacted ~~or industry,~~may ~~which~~subject ~~could~~the ~~result~~operating inentities ato ~~material~~additional ~~adverse~~compliance ~~change~~requirement in the ~~value~~future. ofAs ~~our~~the ~~securities,~~Opinions ~~potentially~~were ~~rendering~~recently itissued, official ~~worthless.~~guidance Asand ainterpretation ~~result, both~~of ~~you~~the ~~and~~Opinions usremain ~~face~~unclear ~~uncertainty~~in ~~about~~several ~~future~~respects ~~actions~~at bythis ~~the~~time. ~~PRC~~Therefore, ~~government~~we ~~that~~cannot ~~could~~assure ~~significantly~~you that ~~affect~~the ~~our~~operating ~~ability~~entities towill ~~offer~~remain orfully ~~continue to~~compliant ~~offer~~with ~~securities~~all tonew ~~investors~~regulatory ~~and~~requirements ~~cause~~of the ~~value~~Opinions ofor ~~our~~any ~~securities~~future toimplementation rules ~~significantly~~on ~~decline~~a timely basis, or beat ~~worthless~~all.

IfRisks ~~any~~Relating ~~of our affiliated entities becomes the subject of a bankruptcy or liquidation proceeding, we may lose the ability~~ to ~~use~~Our ~~and~~Corporate ~~enjoy assets held by such entity, which could materially and adversely affect our business, financial condition and results of operations.~~Structure

WeIf ~~currently~~the ~~conduct~~PRC ~~our operations in China through~~government ~~our~~deems ~~Contractual Arrangements. As part of these arrangements, substantially all of our assets~~ that ~~are significant to~~ the ~~operation~~contractual ~~of our~~arrangements ~~business~~in ~~are~~relation ~~held by our VIE. If the becomes bankrupt and all or part of its become subject~~ to ~~liens or rights of third-party creditors~~Guangsha, we ~~may~~our beconsolidated ~~unable~~variable tointerest ~~continue some or all of our business activities~~entity, ~~which~~do ~~could~~not ~~materially~~comply ~~and~~with ~~adversely~~PRC ~~affect our business, financial~~regulatory ~~condition~~restrictions ~~and~~on ~~results~~foreign ofinvestment ~~operations.~~in Inthe ~~addition,~~relevant ~~if any of our affiliated entities undergoes a voluntary or involuntary liquidation proceeding~~industries, ~~its~~ ~~equity owner~~ or ~~unrelated~~if ~~third-party~~these ~~creditors~~regulations ~~may claim rights relating to some~~ or ~~all~~the interpretation of ~~these~~existing ~~assets,~~regulations ~~which would hinder our ability~~change toin ~~operate~~the ~~our~~future, ~~business~~we ~~and~~ could ~~materially~~be ~~and~~subject ~~adversely~~to ~~affect~~severe ~~our~~penalties ~~business,~~or ~~our~~be ~~ability~~forced to ~~generate~~relinquish ~~revenue~~our ~~and~~interests ~~the~~in ~~market~~those ~~price of our common stock~~operations.

39We are a holding company incorporated under the laws of the State of Florida. As a holding company with no material operations of our own, we conduct all of our operations through our subsidiaries established in PRC and the VIE. We control and receive the economic benefits of the VIE’s business operations through certain contractual arrangements.

~~Risks~~The ~~Relating~~VIE tocontributed ~~our~~94% and ~~Securities~~60% of the Company’s consolidated results of operations for the years ended September 30, 2023 and 2022, respectively. As of September 30, 2023, the VIE accounted for approximately 87% of the consolidated total assets and 97% of total liabilities of the Company, respectively.

We ~~have~~rely ~~never~~on ~~paid~~and ~~cash~~expect to ~~dividends~~continue to rely on our wholly owned PRC subsidiary’s contractual arrangements with Guangsha and ~~are~~its shareholders to operate our business. These contractual arrangements may not ~~likely~~be as effective in providing us with control over Guangsha as ownership of controlling equity interests would be in providing us with control over or enabling us to doderive soeconomic benefits from the operations of Guangsha. Under the current contractual arrangements, as a legal matter, if Guangsha or any of its shareholders executing the VIE Agreements fails to perform its, his or her respective obligations under these contractual arrangements, we may have to incur substantial costs and resources to enforce such arrangements, and rely on legal remedies available under PRC laws, including seeking specific performance or injunctive relief, and claiming damages, which we cannot assure you will be effective. For example, if shareholders of a variable interest entity were to refuse to transfer their equity interests in such variable interest entity to us or our designated persons when we exercise the purchase ~~foreseeable~~option ~~future~~pursuant to these contractual arrangements, we may have to take a legal action to compel them to fulfill their contractual obligations.

WeIf ~~have~~(i) ~~never~~the ~~declared~~applicable PRC orauthorities ~~paid~~invalidate these contractual arrangements for violation of PRC laws, rules and regulations, (ii) any ~~cash~~variable ~~dividends~~interest onentity ~~our~~or ~~common~~its ~~stock.~~shareholders Weterminate ~~currently~~the ~~intend~~contractual toarrangements ~~retain~~(iii) any ~~future~~variable ~~earnings~~interest ~~for~~entity ~~use~~or its shareholders fail to perform its/his/her obligations under these contractual arrangements, or (iv) if these regulations change or are interpreted differently in the future, ~~operation~~our business operations in China would be materially and ~~expansion~~adversely affected, and the value of ~~our~~your ~~business~~shares would substantially decrease or even become worthless. WeFurther, doif we fail to renew these contractual arrangements upon their expiration, we would not be ~~expect~~able to ~~pay~~continue ~~any~~our ~~cash~~business ~~dividends~~operations inunless the ~~foreseeable~~then ~~future~~current ~~but~~PRC ~~will~~law ~~review~~allows ~~this~~us ~~policy~~to asdirectly ~~circumstances~~operate ~~dictate~~businesses in China.

WeIn addition, if any variable interest entity or all or part of its assets become subject to liens or rights of third-party creditors, we may be ~~subject~~unable to ~~the~~continue some ~~penny~~or ~~stock~~all ~~rules~~ of our business activities, which could materially and adversely affect our business, financial condition and results of operations. ~~will~~If ~~make~~any of the ~~shares~~variable interest entities undergoes a voluntary or involuntary liquidation proceeding, its shareholders or unrelated third-party creditors may claim rights to some or all of these assets, thereby hindering our ~~common~~ability ~~stock~~to ~~more~~operate ~~difficult~~our business, which could materially and adversely affect our business and our ability to ~~sell~~generate revenues.

WeAll ~~may~~of bethese ~~subject~~contractual ~~now~~arrangements ~~and~~are ingoverned by ~~the~~PRC ~~future~~law toand ~~the SEC’s~~provide ~~“penny~~for ~~stock”~~the ~~rules if~~resolution ~~our shares~~ of ~~common~~disputes ~~stock~~through ~~sell~~arbitration ~~below~~in ~~$1.00~~the ~~per share~~PRC. ~~Penny stocks generally are equity securities with a price of less than $1.00.~~ The ~~penny~~legal ~~stock~~environment ~~rules require~~in ~~broker-dealers~~the toPRC ~~deliver~~is anot ~~standardized~~as ~~risk disclosure~~developed ~~document~~as ~~prepared~~in bysome ~~the~~other ~~SEC~~jurisdictions, ~~which~~such ~~provides~~as ~~information about penny stocks and~~ the ~~nature~~United ~~and~~States. ~~level~~As ofa ~~risks~~result, uncertainties in the ~~penny~~PRC ~~stock~~legal ~~market. The~~system ~~broker-dealer~~could ~~must~~limit ~~also~~our ~~provide~~ability to ~~the~~enforce ~~customer~~these ~~with~~contractual ~~current~~arrangements. ~~bid~~In ~~and offer quotations for~~ the ~~penny~~event ~~stock,~~we ~~the~~are ~~compensation~~unable ofto ~~the~~enforce ~~broker-dealer and~~these ~~its~~contractual ~~salesperson~~arrangements, ~~and~~we ~~monthly~~may ~~account~~not ~~statements~~be ~~showing~~able ~~the~~to exert ~~market~~effective ~~value~~control ofover ~~each~~our ~~penny~~operating ~~stock~~entities ~~held~~and inwe ~~the~~may ~~customer’s~~be ~~account. The~~precluded ~~bid~~from ~~and~~operating ~~offer~~our ~~quotations~~business, ~~and~~which ~~the~~would ~~broker-dealer~~have ~~and~~a ~~salesperson~~material ~~compensation information must be given to the customer orally or in~~adverse ~~writing~~effect ~~prior~~on toour ~~completing~~financial ~~the~~condition ~~transaction~~ and ~~must~~results beof ~~given to the customer in writing before or with the customer’s confirmation~~operations.

On June 21, 2019, the “Company received a letter from the Listing Qualifications staff of The Nasdaq Stock Market (“Nasdaq”) notifying the Company that it is no longer in compliance with the minimum bid price requirement for continued listing on the Nasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires listed companies to maintain a minimum bid price of $1.00 per share. The letter noted that the bid price of the Company’s common stock was below $1.00 for the 30-day period ending June 20, 2019. The notification letter has no immediate effect on the Company’s listing on the Nasdaq Capital Market. Nasdaq has provided the Company with 180 days, or until January 14, 2020, to regain compliance with the minimum bid price requirement by having a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days. On December 19, 2019, Nasdaq determined that the Company is eligible for an additional 180 calendar day period, or until June 15, 2020, to regain compliance. Given the extraordinary market conditions caused by COVID-19, Nasdaq has determined to toll the compliance periods for bid price and market value of publicly held shares requirements through June 30, 2020. In that regard, on April 16, 2020, Nasdaq filed an immediately effective rule change with the Securities and Exchange Commission. Accordingly, the Company had until August 31, 2020, to regain compliance. On November 2, 2020, NASDAQ advised the Company that so long as it remains in compliance with NASDAQ continued listing standards until March 1, 2021, NASDAQ would grant the Company continued listing on NASDAQ. Should the company fail to demonstrate compliance with Nasdaq Listing Rule 5550(a)(2) by that date, the Panel will issue a final delist determination and the Company will be suspended from trading on The Nasdaq Stock Market. The Company maintained compliance through March 1, 2021.37

InThese ~~addition~~contractual arrangements may not be as effective as direct ownership in providing us with control over the VIE. For example, the ~~penny~~VIE ~~stock~~and ~~rules require~~its shareholders could breach their contractual ~~that~~arrangements ~~prior~~with tous aby, ~~transaction~~among other things, ~~the~~failing ~~broker-dealer~~to ~~must~~conduct ~~make~~their aoperations ~~special~~in ~~written~~an ~~determination~~acceptable manner or taking other actions that are detrimental to our interests. If we had direct ownership of the ~~penny~~VIE, ~~stock~~we iswould be able to exercise our rights as a ~~suitable~~shareholder ~~investment~~to effect ~~for~~changes in the ~~purchaser~~board ~~and~~of ~~receive~~directors of the ~~purchaser’s~~VIE, ~~written~~which ~~agreement~~in turn could implement changes, subject to any applicable fiduciary obligations, at the ~~transaction~~management and operational level. ~~The~~However, ~~penny~~under ~~stock~~the ~~rules are~~current ~~burdensome~~contractual ~~and may~~arrangements, ~~reduce~~we ~~purchases~~rely ofon ~~any~~the ~~offerings~~performance by the VIE and its ~~reduce~~shareholders of their obligations under the ~~trading~~contracts ~~activity~~to ~~for~~exercise ~~shares~~control over the VIE. The shareholders of our ~~common~~consolidated ~~stock.~~VIE Asmay not ~~long~~act asin ~~our~~the ~~shares~~best interests of ~~common stock~~our ~~are~~company ~~subject~~or tomay ~~the~~not ~~penny~~perform ~~stock~~their ~~rules,~~obligations under these contracts. Such risks exist throughout the period ~~holders~~in ofwhich ~~such~~we ~~shares~~intend ofto ~~common~~operate ~~stock~~certain ~~may~~portions ~~find~~of itour ~~more~~business ~~difficult~~through tothe ~~sell~~contractual ~~their~~arrangements ~~securities~~with the VIE.

~~Our~~If ~~shares~~the ofVIE ~~common~~or ~~stock~~its ~~are~~shareholders ~~very~~fail ~~thinly~~to perform ~~traded~~their respective obligations under the contractual arrangements, we may have to incur substantial costs and expend additional resources to enforce such arrangements. For example, if the ~~price~~shareholders of the VIE refuse to transfer their equity interest in the VIE to us or our designee if ~~traded~~we exercise the purchase option pursuant to these contractual arrangements, or if they otherwise act in bad faith toward us, then we may ~~not~~have ~~reflect~~to ~~our~~take ~~value~~legal actions to compel them to perform their contractual obligations. ~~There~~In ~~can~~addition, beif noany ~~assurance~~third ~~that~~parties claim ~~there~~any ~~will~~interest bein ansuch ~~active~~shareholders’ ~~market~~equity ~~for~~interests in the VIE, our ~~shares~~ability to exercise shareholders’ rights or foreclose ofthe ~~common~~share ~~stock~~pledge ~~either~~according ~~now~~to the contractual arrangements may be impaired. If these or inother disputes between the ~~future~~shareholders of the VIE and third parties were to impair our control over the VIE, our ability to consolidate the financial results of the VIE would be affected, which would in turn result in a material adverse effect on our business, operations and financial condition.

~~Our~~In ~~shares~~the opinion of ~~common~~our ~~stock~~PRC ~~are~~legal ~~very thinly traded~~counsel, each ~~and~~of the ~~price~~contractual ifarrangements ~~traded~~among ~~may~~our ~~not~~WFOE, ~~reflect~~the ~~our~~VIE ~~value.~~and ~~There~~its ~~can~~shareholders begoverned noby ~~assurance~~PRC ~~that~~laws ~~there~~are ~~will~~valid, bebinding anand ~~active~~enforceable, and ~~market~~will ~~for~~not ~~our~~result ~~shares~~in ofany ~~common stock~~violation ~~either~~of ~~now~~PRC laws or inregulations ~~the~~currently ~~future~~in effect. ~~The~~However, ~~market~~our ~~liquidity~~PRC ~~will~~legal becounsel ~~dependent~~has onalso advised us that there are substantial uncertainties regarding the ~~perception~~interpretation ofand ~~our~~application ~~operating~~of ~~business~~current and ~~any~~future ~~steps~~PRC ~~that~~laws, regulations and ~~our~~rules. ~~management~~Accordingly, ~~might~~the PRC regulatory authorities may ultimately take toa ~~bring~~view usthat is contrary to the ~~awareness~~opinion of ~~investors~~our PRC legal counsel. In ~~There~~addition, ~~can~~it beis nouncertain ~~assurance~~whether ~~given~~any ~~that~~new ~~there~~PRC laws or regulations relating to variable interest entity structures will be ~~any~~adopted ~~awareness~~or ~~generated.~~if ~~Consequently~~adopted, ~~investors~~what ~~may~~they ~~not~~would beprovide. ~~able~~PRC togovernment ~~liquidate~~authorities ~~their~~may ~~investment~~deem orthat ~~liquidate~~foreign itownership atis adirectly ~~price~~or ~~that~~indirectly ~~reflects~~involved in the ~~value~~VIE’s ~~of our~~shareholding ~~business~~structure. If aour ~~more~~corporate ~~active~~structure ~~market~~and ~~should~~contractual ~~develop,~~arrangements are deemed by the ~~price~~Ministry ~~may~~of beIndustry and ~~highly~~Information ~~volatile.~~Technology, ~~Because~~MIIT, ~~there~~or ~~may~~the beMinistry aof ~~low~~Commerce, ~~price~~MOFCOM, ~~for~~or ~~our~~other ~~shares of~~regulators ~~common~~having ~~stock~~competent authority to be illegal, ~~many~~either in ~~brokerage~~whole ~~firms~~or in part, we may ~~not~~lose becontrol ~~willing~~of our consolidated VIE and have to ~~effect~~modify ~~transactions~~such instructure ~~the~~to ~~securities~~comply with regulatory requirements. However, ~~Even~~there ifcan anbe ~~investor~~no ~~finds~~assurance athat ~~broker willing~~we tocan ~~effect~~achieve athis ~~transaction~~without inmaterial ~~the~~disruption ~~shares~~to ofthe ~~our~~VIE’s ~~common~~business. ~~stock~~Furthermore, if we or the ~~combination~~VIE ofis ~~brokerage~~found ~~commissions,~~to ~~transfer~~be ~~fees,~~in ~~taxes,~~violation if of any existing or future PRC laws or regulations, ~~and~~or ~~any~~fail ~~other~~to ~~selling~~obtain ~~costs~~or ~~may~~maintain ~~exceed~~any of the ~~selling~~required permits ~~price.~~or ~~Further~~approvals, ~~many~~the ~~lending~~relevant ~~institutions~~PRC ~~will~~regulatory ~~not~~authorities ~~permit~~would ~~the~~have ~~use~~broad ofdiscretion ~~such~~to ~~shares of~~take ~~common~~action ~~stock~~in asdealing ~~collateral~~with ~~for~~such ~~any~~violations or ~~loans.~~failures, including, without limitation:

40● revoking the business license and/or operating licenses of our WFOE or the VIE;

In● ~~addition,~~discontinuing ~~the~~or ~~securities~~placing ~~markets~~restrictions ~~have~~or ~~from time~~onerous toconditions ~~time~~on ~~experienced price and volume fluctuations that are not related to the operating performance of particular companies. As a result, to the extent shareholders sell~~ our ~~shares~~operations inthrough aany ~~negative~~transactions ~~market~~among ~~fluctuation, they may not receive a price per share that is based solely upon~~ our ~~business~~WFOE ~~performance.~~and Wethe ~~cannot guarantee that shareholders will not lose some or all of their investment in our common stock.~~VIE;

~~Currently,~~● weimposing ~~are~~fines, ~~listed~~confiscating on the ~~NASDAQ~~income ~~Capital Market.~~from If our ~~financial~~WFOE, ~~condition~~the ~~deteriorates~~VIE or its subsidiaries, weor ~~may~~imposing ~~not~~other ~~meet~~requirements ~~continued~~with ~~listing~~which ~~standards~~we onor the ~~NASDAQ~~VIE ~~Capital~~may ~~Market.~~not be able to comply;

~~The~~● ~~NASDAQ~~placing ~~Capital~~restrictions ~~Market~~on ~~requires~~our ~~companies~~right to ~~fulfill~~ ~~specific~~collect ~~requirements in order for their shares to continue to be listed. In order to qualify for continued listing on the NASDAQ Capital Market, we must meet the following criteria:~~revenues;

● ~~Our~~requiring ~~stockholders’~~us ~~equity~~to ~~must~~restructure beour atownership ~~least~~structure ~~$2,500,000;~~ or ~~the~~operations, ~~market~~including ~~value~~terminating ofthe ~~our~~contractual ~~listed~~arrangements ~~securities~~with ~~must~~the beVIE atand ~~least~~deregistering ~~$35,000,000;~~the orequity ~~our~~pledges ~~net~~of ~~income~~the ~~from~~VIE, ~~continuing~~which ~~operations~~ in ~~our~~turn ~~last~~would ~~fiscal~~affect ~~year~~our ~~(or~~ability ~~two~~to ofconsolidate, ~~the~~derive ~~last~~economic ~~three~~interests ~~fiscal~~from, ~~years)~~or ~~must~~exert ~~have~~effective ~~been~~control atover ~~least~~the ~~$500,000~~VIE; or

● ~~The~~taking ~~market~~other ~~value~~regulatory ofor ~~our~~enforcement ~~publicly~~actions ~~held~~against ~~shares~~us ~~must~~that could be atharmful ~~least~~to ~~$1,000,000;~~our business.

~~● The minimum bid price for our shares must be at least $1.00 per share;~~38

●The Weimposition ~~must~~of any of these penalties would result in a material and adverse effect on our ability to conduct our business. In addition, it is unclear what impact the PRC government actions would have aton ~~least~~us ~~300~~and ~~stockholders;~~on our ability to consolidate the financial results of the VIE in our consolidated financial statements, if the PRC government authorities were to find our corporate structure and contractual arrangements to be in violation of PRC laws and regulations. If the imposition of any of these government actions causes us to lose our right to direct the activities of the VIE or our right to receive substantially all the economic benefits and residual returns from the VIE and we are not able to restructure our ownership structure and operations in a satisfactory manner, we would no longer be able to consolidate the financial results of the VIE in our consolidated financial statements. Either of these results, or any other significant penalties that might be imposed on us in this event, would have a material adverse effect on our financial condition and results of operations.

● We ~~must~~rely ~~have~~on atcontractual ~~least~~arrangements ~~500~~with our variable interest entity and its subsidiary in China for our business operations,~~000~~ ~~publicly~~which ~~held~~may ~~shares;~~not be as effective in providing operational control or enabling us to derive economic benefits as through ownership of controlling equity interests.

●We are a holding company with no material operations of our own. We ~~must~~conduct a substantial majority of our operations through our subsidiaries established and the VIE in the PRC. We rely on and expect to continue to rely on our wholly owned PRC subsidiary’s contractual arrangements with Guangsha and its shareholders to operate our business. These contractual arrangements may not be as effective in providing us with control over Guangsha as direct ownership in providing us with control over Guangsha, or enabling us to derive economic benefits from the operations of Guangsha. Under the current contractual arrangements, as a legal matter, if Guangsha or any of Guangsha Shareholders fails to perform its, his or her respective obligations under these contractual arrangements, we may have to incur substantial costs and resources to enforce such arrangements, and rely on legal remedies available under PRC laws, including seeking specific performance or injunctive relief, and claiming damages, which we cannot assure you will be effective. For example, if Guangsha Shareholders were to refuse to transfer their equity interests in Guangsha to us or our designated persons when we exercise the purchase option pursuant to these contractual arrangements, we may have to take a legal action to compel them to fulfill their contractual obligations. Furthermore, if we had direct ownership of Guangsha, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of Guangsha, which in turn could implement changes, subject to any applicable fiduciary obligations, at ~~least~~the 2management ~~market~~and ~~makers;~~operational level. However, under the VIE Agreements, we rely on the performance by Guangsha and its shareholders of their obligations under the contracts to exercise control over Guangsha. The shareholders of Guangsha may not act in the best interests of our Company or may not perform their obligations under these contracts. Such risks exist throughout the period in which we intend to operate certain portions of our business through the contractual arrangements with Guangsha. In addition, if any third parties claim any interest in such shareholders’ equity interests in the VIE, our ability to exercise shareholders’ rights or foreclose the share pledge according to the contractual arrangements may be impaired. If these or other disputes between the shareholders of the VIE and third parties were to impair our control over the VIE, our ability to consolidate the financial results of the VIE would be affected, which would in turn result in a material adverse effect on the business, operations and financial condition.

●Our WePRC ~~must~~counsel, ~~have~~Shaanxi ~~adopted~~Jiameng ~~NASDAQ-mandated~~Law ~~corporate~~Firm, ~~governance~~has advised ~~measures,~~us ~~including~~that athe ~~board~~ownership structure of ~~directors~~the ~~comprised~~PRC ofentities adoes ~~majority~~not violate PRC laws or regulations currently in effect, and that the contractual arrangements are valid, binding and enforceable, and do not result in any violation of ~~independent~~PRC ~~directors~~laws or regulations currently in effect. However, anthere ~~Audit~~are ~~Committee~~substantial ~~comprised~~uncertainties ~~solely~~regarding the interpretation and application of ~~independent~~current ~~directors~~PRC Laws, and there can be no assurance that the ~~adoption~~PRC ofgovernment will ultimately take a ~~code~~view ofthat ~~ethics~~is ~~among~~consistent ~~other~~with ~~items~~such opinion.

~~Current,~~If we(i) ~~are listed on~~ the ~~NASDAQ~~applicable ~~Capital~~PRC ~~Market,~~authorities invalidate ~~but~~these ifcontractual wearrangements ~~are~~for ~~delisted~~violation ~~from~~of ~~the~~PRC ~~NASDAQ Capital Market at some later date~~laws, ~~our~~rules ~~stockholders~~and ~~could find it difficult to sell our shares. In addition~~regulations, if(ii) ~~our~~any ~~common~~variable ~~stock~~interest isentity ~~delisted~~or ~~from~~its ~~the NASDAQ Capital Market at some later date, we may apply to have our common stock~~shareholders ~~quoted~~terminate on the ~~Bulletin~~contractual ~~Board~~arrangements or in(iii) ~~the~~any ~~“pink~~variable ~~sheets”~~interest ~~maintained~~entity byor ~~the~~its ~~National~~shareholders ~~Quotation~~fail ~~Bureau,~~to ~~Inc.~~perform ~~The~~its/his/her ~~Bulletin Board~~obligations ~~and~~under ~~the~~these ~~“pink~~contractual ~~sheets” are generally considered to be less efficient markets than the NASDAQ Capital Market. In addition~~arrangements, if our ~~common~~business ~~stock~~operations isin ~~not~~China sowould ~~listed or are delisted at some later date, our common stock may~~ be ~~subject~~materially ~~to the “penny stock” regulations. These rules impose additional sales practice requirements on broker-dealers that sell low-priced securities to persons other than established customers~~ and ~~institutional~~adversely ~~accredited~~affected, ~~investors~~ and ~~require~~ the ~~delivery~~value of ~~a disclosure schedule explaining the nature~~your ~~and~~shares ~~risks~~would ofsubstantially ~~the penny stock market~~decrease. ~~As a result~~Further, ~~the~~if ~~ability~~we orfail ~~willingness~~to ofrenew ~~broker-dealers~~these tocontractual ~~sell~~arrangements orupon ~~make~~their aexpiration, ~~market~~we inwould ~~our~~not ~~common~~be ~~stock~~able ~~might~~to ~~decline.~~continue If our ~~common~~business ~~stock~~operations isunless ~~delisted from~~ the ~~NASDAQ~~then ~~Capital~~current ~~Market~~PRC atlaw ~~some~~allows ~~later~~us ~~date or become subject~~ to ~~the~~directly ~~penny stock~~operate ~~regulations,~~businesses itin ~~is likely that the price of our shares would decline and that our stockholders would find it difficult to sell their shares~~China.

~~The~~In ~~requirements~~addition, ofif ~~being~~any avariable ~~public~~interest ~~company~~entity or all or part of its assets become subject to liens or rights of third-party creditors, we may ~~strain~~be ~~our~~unable ~~resources~~to ~~and~~continue ~~divert~~some ~~management’s~~or ~~attention~~all of our business activities, which could ~~have~~materially and adversely affect our business, financial condition and results of operations. If our variable interest entity undergoes a ~~material~~voluntary ~~adverse~~or ~~effect~~involuntary onliquidation proceeding, its shareholders or unrelated third-party creditors may claim rights to some or all of their assets, thereby hindering our ability to operate our business, which could materially and adversely affect our business and our ability to generate revenues.

As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the securities exchange on which we list, and other applicable securities rules and regulations. Despite recent reforms made possible by the JOBS Act, compliance with these rules and regulations will nonetheless increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating results.39

41All of these contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC. The legal environment in the PRC is not as developed as in some other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements. In the event we are unable to enforce these contractual arrangements, we may not be able to exert effective control over our operating entity and we may be precluded from operating our business, which would have a material adverse effect on our financial condition and results of operations.

AsWe aare ~~result of disclosure of information in this annual report and in filings required of~~ a ~~public~~holding company, ~~our business~~ and ~~financial condition~~ will ~~become~~rely ~~more visible, which we believe~~on ~~may~~dividends ~~result~~paid ~~in threatened or actual litigation, including~~ by ~~competitors~~our ~~and~~subsidiaries ~~other~~for ~~third parties. If such claims are successful,~~ our ~~business and~~cash ~~operating~~needs. ~~results~~Any ~~could~~limitation beon ~~harmed, and even if~~ the ~~claims~~ability doof ~~not~~our ~~result~~subsidiaries into ~~litigation~~make ordividend ~~are~~payments ~~resolved in our favor~~to us, ~~these~~or ~~claims, and~~any ~~the~~tax ~~time~~implications ~~and~~of ~~resources~~making ~~necessary~~dividend payments to ~~resolve them~~us, could ~~divert~~limit ~~the~~our ~~resources~~ability ofto pay our ~~management~~parent ~~and~~company ~~adversely~~expenses ~~affect~~or ~~our~~pay ~~business,~~dividends ~~brand~~to ~~and~~holders ~~reputation~~of ~~and~~our ~~results~~common ~~of operations~~stock.

~~The~~We ~~obligation~~are toa ~~disclose~~holding ~~information~~company ~~publicly~~and conduct substantially ~~may~~all ~~put~~of usour atbusiness through our PRC subsidiary, which is a ~~disadvantage~~limited liability company established in China. We may rely on dividends to be ~~competitors~~paid ~~that~~by ~~are~~our ~~private~~PRC ~~companies~~subsidiary ~~which~~to ~~could~~fund ~~have~~our ancash ~~adverse~~and ~~effect~~financing onrequirements, including the funds necessary to pay dividends and other cash distributions to our ~~results~~shareholders, ofto ~~operations~~service any debt we may incur and to pay our operating expenses. If our PRC subsidiary incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us.

WeUnder ~~are~~PRC alaws ~~reporting company~~and inregulations, ~~the~~our ~~United~~PRC ~~States.~~subsidiary, which Asis a ~~reporting~~wholly ~~company,~~foreign-owned weenterprise ~~are~~in ~~required~~China, tomay ~~file~~pay ~~periodic~~dividends ~~reports~~only ~~with~~out ~~the~~of ~~Securities~~its ~~and~~accumulated ~~Exchange~~profits ~~Commission upon~~as ~~the~~determined ~~occurrence~~in ofaccordance with ~~matters~~PRC ~~that~~accounting ~~are~~standards ~~material to our Company~~ and ~~stockholders~~regulations. In ~~some cases~~addition, wea ~~are~~wholly ~~required~~foreign-owned toenterprise ~~disclose~~is ~~material agreements or results of financial operations that we would not be~~ required to ~~disclose~~set ifaside weat ~~were~~least a10% ~~private company. Our competitors~~of ~~may~~its ~~have~~accumulated ~~access~~after-tax toprofits ~~this~~each ~~information~~year, ~~which~~if ~~would otherwise be confidential. This may give them advantages in competing with our Company. Similarly~~any, asto fund a ~~U.S.-listed~~certain ~~public~~statutory ~~company,~~reserve ~~we are governed by U.S. laws that our competitors~~fund, ~~which~~until ~~are mostly private Chinese companies, are not required to follow. To~~ the ~~extent~~aggregate ~~compliance~~amount ~~with~~of ~~U.S. laws increases our expenses or decreases our competitiveness against~~ such fund ~~companies,~~reaches ~~this~~50% ~~could~~of ~~affect~~its ~~our~~registered ~~results of operations~~capital.

~~Securities~~Our ~~analysts~~PRC ~~may~~subsidiary generates primarily all of its revenue in Renminbi, which is not ~~publish~~freely ~~favorable~~convertible into other currencies. As a result, any restriction on currency exchange may ~~research~~limit orthe ~~reports~~ability ~~about~~of our ~~business~~PRC orsubsidiary to use its Renminbi revenues to pay dividends to us. The PRC government may ~~publish~~continue noto ~~information~~strengthen its atcapital ~~all~~controls, ~~which~~and more restrictions and substantial vetting process may be put forward by State Administration of Foreign Exchange for cross-border transactions falling under both the current account and the capital account. Any limitation on the ability of our PRC subsidiary to pay dividends or make other kinds of payments to us could ~~cause~~materially and adversely limit our ~~stock~~ability ~~price~~to grow, make investments or ~~trading~~acquisitions ~~volume~~that could be beneficial to ~~decline~~our business, pay dividends, or otherwise fund and conduct our business.

~~The~~In ~~trading~~addition, ~~market~~the ~~will~~Enterprise beIncome ~~influenced~~Tax toLaw ~~some~~and ~~extent~~its byimplementation ~~the~~rules ~~research~~provide ~~and reports~~ that ~~industry or financial analysts publish about us and our business. We do not control these analysts. As we are~~ a ~~reporting~~withholding ~~company~~tax inrate ~~the~~of ~~United~~up ~~States,~~to we10% ~~may~~will ~~attract~~be ~~research~~applicable ~~coverage~~to ~~and~~dividends ~~the~~payable ~~analysts~~by ~~who~~Chinese ~~publish information about our~~companies ~~common~~to ~~stock~~non-PRC-resident ~~will~~enterprises ~~have~~unless ~~had~~otherwise ~~relatively~~exempted ~~little experience with us~~ or ~~our~~reduced ~~industry,~~according ~~which could affect their ability~~ to ~~accurately~~treaties ~~forecast our~~or ~~results~~arrangements ~~and~~between ~~could make it more likely that we fail to meet their estimates. In~~ the ~~event~~PRC wecentral ~~obtain securities or industry analyst~~government ~~coverage,~~and ifgovernments ~~any~~ of ~~the~~other ~~analysts~~countries ~~who~~or ~~cover~~regions uswhere ~~provide~~the ~~inaccurate~~non-PRC orresident ~~unfavorable~~enterprises ~~research~~are orincorporated. ~~issue~~Any anlimitation ~~adverse~~on ~~opinion~~the ~~regarding~~ability ~~our stock~~of ~~price,~~ our ~~stock~~PRC ~~price~~subsidiary ~~could~~to ~~decline.~~pay Ifdividends ~~one~~ or ~~more~~make ofother ~~these~~distributions ~~analysts cease coverage of us or fail~~ to ~~publish reports covering~~ us ~~regularly, we~~ could ~~lose~~materially ~~visibility~~and inadversely ~~the~~limit ~~market,~~our ~~which~~ability into ~~turn~~grow, ~~could~~make ~~cause~~investments or ~~our~~acquisitions ~~stock~~that ~~price~~could orbe ~~trading~~beneficial ~~volume~~ to ~~decline~~our ~~and~~business, ~~result~~pay individends, ~~the loss of all~~ or aotherwise ~~part~~fund ofand ~~your~~conduct ~~investment~~our ~~in us~~business.

~~ITEM 1B. Unresolved~~We ~~Staff~~may ~~Comments~~not be able to consolidate the financial results of our affiliated companies or such consolidation could materially and adversely affect our operating results and financial condition.

~~None~~Our business is conducted through Guangsha, which is considered a VIE for accounting purposes, and we, through Shaanxi HGS, are considered the primary beneficiary, thus enabling us to consolidate our financial results in our consolidated financial statements. In the event that in the future a company we hold as a VIE no longer meets the definition of a VIE under applicable accounting rules, or we are deemed not to be the primary beneficiary, we would not be able to consolidate line by line that entity’s financial results in our consolidated financial statements for reporting purposes. Also, if in the future an affiliate company becomes a VIE and we become the primary beneficiary, we would be required to consolidate that entity’s financial results in our consolidated financial statements for accounting purposes. If such entity’s financial results were negative, this would have a corresponding negative impact on our operating results for reporting purposes.

~~ITEM 2. Properties~~40

~~The~~Because ~~Company’s~~we ~~principal~~rely ~~administrative, sales, and marketing~~on ~~facilities~~the ~~are~~Contractual ~~located~~Arrangements atfor 6our ~~Xinghan Road~~revenue, ~~19th Floor, Hanzhong City, Shaanxi Province. The Company built~~ the ~~office~~termination ~~building~~of inthese ~~which its~~agreements ~~headquarters~~would ~~are~~severely ~~located~~ and ~~owns~~detrimentally ~~the~~affect ~~floor~~our ~~that~~continuing business ~~houses~~viability ~~its~~under ~~headquarters.~~our Incurrent ~~addition,~~corporate ~~the Company also owns a sales office in Yang County~~structure. ~~See Item 1. Business — Overview.~~

42We are a holding company, and all of our business operations are conducted through the Contractual Arrangements. Although Guangsha does not have termination rights pursuant to the Contractual Arrangements, it could terminate, or refuse to perform under, the Contractual Arrangements. Because neither we, nor our subsidiaries, own equity interests of Guangsha, the termination or non-performance of the Contractual Arrangements would sever our ability to consolidate Guangsha and to receive payments from them under our current holding company structure. While we are currently not aware of any event or reason that may cause the Contractual Arrangements to terminate, we cannot assure you that such an event or reason will not occur in the future. In the event that the Contractual Arrangements are terminated, this would have a severe and detrimental effect on our continuing business viability under our current corporate structure, which, in turn, would affect the value of your investment.

Contractual arrangements in relation to the VIE may be subject to scrutiny by the PRC tax authorities and they may determine that we or the VIE owe additional taxes, which could negatively affect our financial condition and the value of your investment.

Under applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities within ten years after the taxable year when the transactions are conducted. We could face material and adverse tax consequences if the PRC tax authorities determine that the VIE contractual arrangements were not entered into on an arm’s-length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and adjust the income of the VIE in the form of a transfer pricing adjustment. The PRC tax authorities could effectively disregard the VIE structure, resulting in increased tax liabilities. A transfer pricing adjustment could, among other things, result in a reduction of expense deductions recorded by the VIE for PRC tax purposes, which could in turn increase tax liabilities without reducing our tax expenses. In addition, the PRC tax authorities may impose late payment fees and other penalties on the VIE for the adjusted but unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected if the VIE’s tax liabilities increase or if it is required to pay late payment fees and other penalties.

We conduct our business through Guangsha by means of Contractual Arrangements. If the PRC courts or administrative authorities determine that these contractual arrangements do not comply with applicable regulations, we could be subject to severe penalties and our business could be adversely affected. In addition, changes in such PRC laws and regulations may materially and adversely affect our business.

There are uncertainties regarding the interpretation and application of PRC laws, rules and regulations, including the laws, rules and regulations governing the validity and enforcement of the Contractual Arrangements between Shaanxi HGS and Guangsha. We have been advised by our PRC counsel, the Shaanxi Jiameng Law Firm, based on their understanding of the current PRC laws, rules and regulations, that (i) the structure for operating our business in China (including our corporate structure and Contractual Arrangements with Shaanxi HGS, Guangsha and its shareholders) will not result in any violation of PRC laws or regulations currently in effect; and (ii) the Contractual Arrangements among Shaanxi HGS and Guangsha and its shareholders governed by PRC law are valid, binding and enforceable, and will not result in any violation of PRC laws or regulations currently in effect. However, there are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations concerning foreign investment in the PRC, and their application to and effect on the legality, binding effect and enforceability of the contractual arrangements. In particular, we cannot rule out the possibility that PRC regulatory authorities, courts or arbitral tribunals may in the future adopt a different or contrary interpretation or take a view that is inconsistent with the opinion of our PRC legal counsel. Therefore, the Contractual Arrangements may be determined by PRC authorities to be inconsistent with the laws and regulations of the PRC, including those related to foreign investment in certain industries.

If any of our PRC entities or their ownership structure or the Contractual Arrangements are determined to be in violation of any existing or future PRC laws, rules or regulations, or any of our PRC entities fail to obtain or maintain any of the required governmental permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations, including:

●

revoking the business and operating licenses;

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discontinuing or restricting the operations;

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imposing conditions or requirements with which the PRC entities may not be able to comply;

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requiring us and our PRC entities to restructure the relevant ownership structure or operations, including termination of the contractual arrangements with the VIE and deregistering the equity pledge of the VIE, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control the VIE;

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imposing fines or confiscating the income from our PRC subsidiaries or the VIE.

The imposition of any of these penalties would severely disrupt our ability to conduct business and have a material adverse effect on our financial condition, results of operations and prospects.

The shareholders of the VIE may have actual or potential conflicts of interest with us and as a result may refuse to perform, or may breach, the Contractual Arrangements, which may materially and adversely affect our business and financial condition.

The shareholders of the VIE may have actual or potential conflicts of interest with us. These shareholders may refuse to perform or sign or may breach, or cause the VIE to breach, or refuse to renew, the existing Contractual Arrangements, which would have a material and adverse effect on our ability to effectively control the VIE and receive economic benefits from it. As a result, control over, and funds due from, the VIE may be jeopardized if the shareholders of the VIE breach, or refuse to renew, the Contractual Arrangements. For example, the shareholders may be able to cause our agreements with the VIE to be performed in a manner adverse to us by, among other things, failing to remit payments due under the contractual arrangements to us on a timely basis. We cannot assure you that when conflicts of interest arise any or all of these shareholders will act in the best interests of our Company or such conflicts will be resolved in our favor. Currently, we do not have any arrangements to address potential conflicts of interest between these shareholders and our Company. If we cannot resolve any conflict of interest or dispute between us and these shareholders, we would have to rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings.

Any failure by the VIE or its shareholders to perform their obligations under the Contractual Arrangements, or any unauthorized use of indicia of corporate power or authority, would have a material adverse effect on our business.

We refer to the shareholders of the VIE as its nominee shareholders because although they remain the holders of equity interests on record in the VIE, pursuant to the terms of the relevant power of attorney, such shareholders have irrevocably authorized the individual appointed by Shaanxi HGS to exercise their rights as a shareholder of the VIE. If the VIE or its shareholders fail to perform their respective obligations under the Contractual Arrangements or if any physical instruments, such as chops and seals, or other indicia of corporate power or authority, are used without our authorization, we may have to incur substantial costs and expend additional resources to seek legal remedies under PRC laws, including specific performance or injunctive relief, and/or claiming damages, which we cannot assure you will be effective under PRC laws. For example, if the shareholders of the VIE were to refuse to transfer their equity interest in the VIE to us or our designee if we exercise the purchase option pursuant to the Contractual Arrangements, or if they were otherwise to act in bad faith toward us, then we may have to take legal action to compel them to perform their contractual obligations.

The Contractual Arrangements are governed by PRC laws. Accordingly, any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in other jurisdictions, such as the U.S. As a result, uncertainties in the PRC legal system could limit our ability to enforce the Contractual Arrangements or could affect the validity of the Contractual Arrangements, and as a result we may not be able to exert effective control over the VIE, and our ability to conduct our business may therefore be materially adversely affected.

Our current corporate structure and business operations may be affected by the newly enacted Foreign Investment Law.

On March 15, 2019, the National People’s Congress approved the Foreign Investment Law, which took effect on January 1, 2020. Since it is relatively new, uncertainties exist in relation to its interpretation and its implementation rules that are yet to be issued. The Foreign Investment Law does not explicitly classify whether variable interest entities that are controlled through contractual arrangements would be deemed as foreign-invested enterprises if they are ultimately “controlled” by foreign investors. However, it has a catch-all provision under definition of “foreign investment” that includes investments made by foreign investors in China through other means as provided by laws, administrative regulations or the State Council of the PRC, or the State Council. Therefore, it still leaves leeway for future laws, administrative regulations or provisions of the State Council to provide for contractual arrangements as a form of foreign investment. Therefore, there can be no assurance that our control over the VIE through contractual arrangements will not be deemed as a foreign investment in the future.

The Foreign Investment Law grants national treatment to foreign-invested entities, except for those foreign-invested entities that operate in industries specified as either “restricted” or “prohibited” from foreign investment in a “negative list”. The Foreign Investment Law provides that foreign-invested entities operating in “restricted” or “prohibited” industries will require market entry clearance and other approvals from relevant PRC government authorities. If our control over the VIE through contractual arrangements are deemed as foreign investment in the future, and any business of the VIE is “restricted” or “prohibited” from foreign investment under the “negative list” effective at the time, we may be deemed to be in violation of the Foreign Investment Law, the contractual arrangements that allow us to have control over the VIE may be deemed as invalid and illegal, and we may be required to unwind such contractual arrangements and/or restructure our business operations, any of which may have a material adverse effect on our business operations. In addition, as the Chinese government has been updating the Negative List in recent years and reducing the sectors prohibited or restricted for foreign investment, it is probable in the future that, even if the VIE is identified as a FIE, it is still allowed to acquire or hold equity of enterprises in sectors currently prohibited or restricted for foreign investment.

In addition, the PRC Foreign Investment Law also provides several protective rules and principles for foreign investors and their investments in the PRC, including, among others, that a foreign investor may freely transfer into or out of China, in Renminbi or a foreign currency, its contributions, profits, capital gains, income from disposition of assets, royalties of intellectual property rights, indemnity or compensation lawfully acquired, and income from liquidation, among others, within China; local governments shall abide by their commitments to the foreign investors; governments at all levels and their departments shall enact local normative documents concerning foreign investment in compliance with laws and regulations and shall not impair legitimate rights and interests, impose additional obligations onto FIEs, set market access restrictions and exit conditions, or intervene with the normal production and operation activities of FIEs; except for special circumstances, in which case statutory procedures shall be followed and fair and reasonable compensation shall be made in a timely manner, expropriation or requisition of the investment of foreign investors is prohibited; and mandatory technology transfer is prohibited.

Notwithstanding the above, the PRC Foreign Investment Law stipulates that foreign investment includes “foreign investors invest through any other methods under laws, administrative regulations or provisions prescribed by the State Council”. Therefore, there are possibilities that future laws, administrative regulations or provisions prescribed by the State Council may regard contractual arrangements as a form of foreign investment, and then whether our contractual arrangement will be recognized as a foreign investment, whether our contractua

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