# EDGAR Filing Document

**Accession Number:** 0001158420
**File Stem:** 0001213900-23-002780
**Filing Date:** 2023-1
**Character Count:** 511842
**Document Hash:** 4b48a61da849b7e8a3ae3ed0499935d1
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-23-002780.hdr.sgml**: 20230113

**ACCESSION NUMBER**: 0001213900-23-002780

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 104

**CONFORMED PERIOD OF REPORT**: 20220930

**FILED AS OF DATE**: 20230113

**DATE AS OF CHANGE**: 20230113

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Green Giant Inc.
- **CENTRAL INDEX KEY:** 0001158420
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE [6500]
- **IRS NUMBER:** 330961490
- **STATE OF INCORPORATION:** F4
- **FISCAL YEAR END:** 0930

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-34864
- **FILM NUMBER:** 23528802

**BUSINESS ADDRESS:**
- **STREET 1:** 6 XINGHAN ROAD, 19TH FLOOR, HANZHONG
- **CITY:** SHAANXI
- **STATE:** F4
- **ZIP:** 723000
- **BUSINESS PHONE:** 8609162622612

**MAIL ADDRESS:**
- **STREET 1:** 6 XINGHAN ROAD, 19TH FLOOR, HANZHONG
- **CITY:** SHAANXI
- **STATE:** F4
- **ZIP:** 723000

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CHINA HGS REAL ESTATE INC.
- **DATE OF NAME CHANGE:** 20091009

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CHINA AGRO SCIENCES CORP.
- **DATE OF NAME CHANGE:** 20060504

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** M GAB DEVELOPMENT CORP
- **DATE OF NAME CHANGE:** 20010830

?xml version="1.0" encoding="ASCII"?

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

☐ 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)

<u>Florida</u> <u>33-0961490</u> <br> (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**

**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:

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| | |
|:---|:---|
| Title of each class registered: | 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 ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> 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. ☐

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, the last business day of the Company's second fiscal quarter, as reported by the Nasdaq Capital Market on that date, was $110 million. This calculation does not reflect a determination that certain persons are affiliates of the registrant for any other purpose.

As of January 13, 2023, the number of shares outstanding of the registrant's common stock was 55,753,268.

**DOCUMENTS INCORPORATED BY REFERENCE**

None.

**GREEN GIANT INC.**

**FORM 10-K**

**For the Fiscal Year Ended September 30, 2022**

INDEX

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| | | |
|:---|:---|:---|
|  |  | **Page** |
|  | [**PART I**](#a_001) |  |
| Item 1. | [Business](#a_002) | 1 |
| Item 1A. | [Risk Factors](#a_003) | 18 |
| Item 1B. | [Unresolved Staff Comments](#a_004) | 42 |
| Item 2. | [Properties](#a_005) | 42 |
| Item 3. | [Legal Proceedings](#a_006) | 43 |
| Item 4. | [Mine Safety Disclosure](#a_007) | 43 |
|  | [**PART II**](#a_008) |  |
| Item 5. | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#a_009) | 44 |
| Item 6. | [\[Reserved\]](#a_010) | 45 |
| Item 7. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_011) | 46 |
| Item 7A. | [Quantitative and Qualitative Disclosures About Market Risk](#item_001) | 56 |
| Item 8. | [Financial Statements and Supplementary Data](#a_012) | F-1 |
| Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#a_013) | 57 |
| Item 9A. | [Controls and Procedures](#a_014) | 57 |
| Item 9B. | [Other Information](#a_015) | 58 |
| Item 9C. | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#a_016) | 58 |
|  | [**PART III**](#a_017) |  |
| Item 10. | [Directors, Executive Officers and Corporate Governance](#a_018) | 59 |
| Item 11. | [Executive Compensation](#a_019) | 62 |
| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#a_020) | 64 |
| Item 13. | [Certain Relationships and Related Transactions, and Director Independence](#a_021) | 66 |
| Item 14. | [Principal Accountant Fees and Services](#a_022) | 66 |
|  | [**PART IV**](#a_023) |  |
| Item 15. | [Exhibits and Financial Statement Schedules](#a_024) | 67 |
| Item 16. | [Form 10-K Summary](#S_001) | 69 |
| [SIGNATURES](#a_025) | [SIGNATURES](#a_025) | 70 |

---

i

**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.

ii

**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 is set forth below:

![](image_001.jpg)

**Business Overview** 

Our Company engages in real estate development, primarily in the construction and sale of residential apartments, car parks and commercial properties. We conduct all of our business in mainland China. Shaanxi Guangsha Investment and Development Group Co., Ltd., or Guangsha, was founded by Mr. Xiaojun Zhu, and commenced operations in 1995 in Hanzhong, a prefecture-level city in Shaanxi Province.

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 Company is transforming itself from legacy business to a new energy corporation and has appointed a CEO in USA subsidiary to lead and operate the new business venture.

**Real Estate Industry Overview**

During 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. 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.

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| | |
|:---|:---|
| **Company Positioning**<br>The Company is headquartered in Hanzhong in the southwestern part of the Shaanxi province, in the center of the Hanzhong Basin, on the Han River, near the Sichuan border. According to the China City Statistical Yearbook, Hanzhong had a population of about 3.8 million. | ![](image_002.jpg) |

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Hanzhong is 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.

In accordance with Hanzhong Government's 2020 annual report, Hanzhong's GDP reached RMB 159.3 billion (approximately $24.0 billion) by 2020 calendar year, representing a 2.9% increase from 2019 calendar year. Residents' annual disposable income for 2020 calendar year was RMB34,417 (equivalent to $5,331), representing a 4.8% increase as compared to 2019 calendar year.

![](image_003.jpg)

![](image_004.jpg)

Many Tier 3 and Tier 4 cities and counties in China provide a major 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 permanent residents in the the Tier 1 and Tier 2 cities and travel back to their home towns during the national holidays. Based on Hanzhong Government's 2020 annual report, the number of Hanzhong's migration workers reached approximately 893,000 as of December 31, 2020 (2019 – 865,000).

On November 11, 2022 the People's Bank of China and the China Banking and Insurance Regulatory Commission issued "Yin Fa [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. The details are as follows:

A. Keeping real estate financing stable and order

1). Stabilize the issuance of real estate development loans.

Adhere to the "two unswerving", and treat all types of real estate enterprises such as state-owned and private enterprises equally. Encourage financial institutions to focus on supporting the steady development of real estate enterprises with sound governance, focus on their main business and good qualifications.

Financial institutions 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 with the principle of marketization on the premise of ensuring the safety of creditor's rights and the closed operation of funds. Support the project host bank and the syndicated loan model, strengthen the management of the whole process of loan approval, issuance and recovery, and effectively ensure the safety of funds.

2). Support the reasonable needs of individual housing loans.

Reasonably determine the down payment ratio of local personal housing loans and the lower limit of the loan interest rate policy to support rigid and improved housing demand.

Financial 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.

3). Stabilize the credit supply of construction enterprises.

4). Support the reasonable extension of existing financing such as development loans and trust loans

For 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.

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

5). Keep bond stable, and support high-quality real estate enterprises to issue bond. Promote professional credit enhancement agencies to provide credit enhancement support for bond issuance of real estate enterprises with overall 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.

6). Maintain stable financing of asset management products such as trusts.

B. Actively do a good job in "delivery guarantee building" financial services

7). Support development policy banks to provide special loans for "delivery guarantee building".

Support China Development Bank and Agricultural Development Bank in accordance with relevant policy arrangements and requirements. In accordance with the laws and regulations, the special insurance payment for "delivery guarantee building" is issued to the borrowers who have been reviewed and filed in an efficient and orderly manner, which is closed and dedicated. It is specially used to support the accelerated construction and delivery of overdue and difficult-to-deliver residential projects that have been sold.

8). Encourage financial institutions to provide supporting financing support.

Encourage financial institutions, especially the main financing commercial banks of the project personal housing loans or 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.

For the sale of the remaining value of goods, the project can be reviewed at the same time for special loans and new supporting financing, and the sales of the remaining value 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.

The subject of the newly added supporting financing should be consistent with the subject of the implementation of the special loan-supported project. The existing assets and liabilities of the project should be audited and evaluated by a qualified institution organized by the local government, and an implementation plan of "one building one policy" has been formulated. Commercial banks with the "special loan supporting financing" sub-section can be newly established under the real estate development loan for statistics and management. In principle, the supporting financing should not exceed the period of the corresponding special loan. For a maximum period of no more than 3 years, the project 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 financing. It is clearly 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 the newly-added supporting financing and special loans.

For commercial banks, in accordance with the requirements of this notice, within half a year from the date of issuance of this notice, the supporting financing issued to special fund-supported projects shall not be reduced in risk classification during the loan period; The main body management is not good for the newly issued supporting financing, and the relevant institutions and personnel have done their due diligence. Liability is waived.C. Actively cooperate with trapped real estate enterprises to deal with the risk disposal

9). Provide financial support for M&A of real estate projects.

Encourage commercial banks to carry 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.

Encourage 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.

10) Actively explore market-oriented support methods.For some projects that have entered judicial reorganization, financial institutions can assist in promoting project resumption and delivery by one enterprise and one policy according to the principles of independent decision-making, risk-taking, and self-responsibility for profits and losses.

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

D. Legally protect the legitimate rights and interests of housing finance consumers

11). Encourage independent negotiation and extension of principal and interest repayment in accordance with the law.

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.

For malicious evasion of financial debts, they will be dealt with in accordance with laws and regulations to maintain a good market order.

12). Effectively protect the personal credit investigation rights of deferred loans.

If the repayment arrangement of the personal housing loan has been adjusted, the financial institution shall submit the credit record according to the new repayment arrangement; if the judgment or ruling of the people's court determines that the adjustment should be made, the financial institution shall adjust the credit record and submit it according to the effective judgment or ruling of the people's court which has been reported to be adjusted.

E. Phased adjustment of some financial management policies

13). Extending the transition period of the real estate loan concentration management policy.

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

14). Periodically optimize the M&A financing policy for real estate projects.

Relevant financial institutions should make good use of the phased real estate financial management policies issued 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. Increase financial support for housing leasing

15). Optimize housing leasing credit services.

16). Broaden diversified financing channels in the housing leasing market.

Support 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.

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.

1) 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 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.

2) Extend the transition period of the real estate concentration 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 epidemic and other reasons, the transition 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.

3) Emphasis on doing a good job to provide financial services for "delivery guarantee 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) 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 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 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.

The upper limit of the replacement quota and the term of the letter of guarantee are clearly stipulated, and the bank risk is guaranteed. According to the "Notice on Pre-sale Supervision Funds", the replacement amount of the real estate enterprise shall not exceed 30% of the amount of funds required to ensure the completion and delivery of the project in the supervision account. At the same time, 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, 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-sale supervision funds, but also ensures the capital safety to the greatest extent and reduces the credit risk of banks.

The target market of the Company is in Western China. The Company continues to focus on Tier 3 and Tier 4 cities and counties in acquiring sizable quality land reserves at low cost in a flexible and diversified manner. There has been an increasing demand for high quality residential housing, largely driven by the "Go West" policy and accelerated urbanization. Many buyers in Tier 3 and Tier 4 cities and counties are first time home buyers. In order to mitigate default risk, the Company generally requires from its homebuyer customers a deposit in the range of 30%-50% of the purchase price, which is higher than the percentage required by the government for the mortgage down payment.

The Company received the National Grade-I real-estate development qualification granted by the Ministry of Housing and Urban-Rural Development of the People's 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:

a. Registered capital of at least RMB 50 million (approximately $7.3 million);

b. At least five years of experience in real estate development and operations;

c. 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

d. The completed real estate projects have no quality issues in each of the past five years; and an established, comprehensive quality control and guarantee system.

The National Grade-I real-estate development qualification provides significant opportunities for the Company to expand its operations beyond Shaanxi province into new regional real estate markets in China. Without the National Grade-I real-estate development qualification, a real estate developer shall not develop a real estate property in other cities or provinces in China. The Company is not required to periodically renew the National Grade-I real-estate development qualification after the Company passed the initial qualification application set out by the MOHURD.

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 potential. Leveraging on its unique competitive strengths, and under the direction and guidance of the government's macro policies, the Company expects to further replicate its successful business model into new high growth regions through strategic selection of project locations, a 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.

**Pre-Sales and Sales**

In the PRC, real estate developers are allowed to begin to market properties before construction is completed. Like other developers, we pre-sell properties prior to completion of construction. Under PRC pre-sales regulations, property developers must satisfy specific conditions before properties under construction can be pre-sold. These mandatory conditions include:

● the land premium must have been paid in full;

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

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

● the progress and the expected completion and delivery date of the construction must be fixed;

● the pre-sale permit must have been obtained; and

● the completion of certain milestones in the construction processes must be specified by the local government authorities.

These mandatory conditions are designed to require a certain level of capital expenditure and substantial progress in project construction before the commencement of pre-sales. Generally, the local governments 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 Services and Delivery**

We assist customers in arranging for and providing information related to financing. We also assist our customers in various title registration procedures related to their properties, and we have set up an ownership certificate team to 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 endeavor to deliver the units 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 delivery is set out in the sale and purchase agreements entered into with our customers, and we are subject to penalty payments to the purchasers for 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 requisite government inspections and is ready for delivery, we will notify our customers and hand over keys and possession of the properties.

**Marketing and Distribution Channel**

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.

Our marketing and sales team develops the 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.

We use various advertising media to market our developments and enhance our brand name, including newspapers, magazines, television, radio, e-marketing and outdoor billboards. We also participate in real estate exhibitions.

We have also developed a strong relationship with local institutional purchasers and governments. The Company has entered into various significant residential-apartment group-purchase agreements with local government and institutional purchasers.

A typical real 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 cash. 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.

For customers 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.

Like 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, 2022, the Company had security deposits for these guarantees of approximately $3.0 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 Property Development Operations**

We 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.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| LAND ACQUISITION PROCESS | LAND ACQUISITION PROCESS | LAND ACQUISITION PROCESS | Project <br> planning and <br> design | Project <br> construction <br> and <br> Management | Pre-sale, sale<br> and marketing | After-sale<br> and delivery |
|  |  |  | Project <br> planning and <br> design | Project <br> construction <br> and <br> Management | Pre-sale, sale<br> and marketing | After-sale<br> and delivery |
| Opportunity Identification | Initial Planning | Land Acquisition | Project <br> planning and <br> design | Project <br> construction <br> and <br> Management | Pre-sale, sale<br> and marketing | After-sale<br> and delivery |
| -Strategic planning | -Feasibility study | -Financial assessment | -Outsource architectural and engineering design | -Outsource<br> construction | -Pre-sale | -Delivery |
| -Geographic and market analysis | - Preliminary design<br>| -Internal approval<br>| -Design management | -Construction<br> supervision | -Marketing | -Feedback collection |
|  | -Project evaluation | -Bidding process | -Arrange financing | -Quality control | -Advertising |  |
|  |  |  |  | -Completion inspection |  |  |
|  |  |  |  | -Landscaping<br> and fixture installation |  |  |

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**Our Projects**

**Overview**

We develop the following three types of real estate projects, which may be developed in one or more phases:

● multi-layer apartment buildings, which are typically six stories or less;

● sub-high-rise apartment buildings, which are typically seven to 11 stories; and

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

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

● completed projects, meaning properties for which construction has been completed;

● properties under construction, meaning properties for which construction permits have been obtained but construction has not been completed; and

● properties under planning, meaning properties for which we have entered into land grant contracts and are in the process of obtaining the required permits to begin construction.

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

***Real Estate Projects located in Hanzhong City***

 ****

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| | |
|:---|:---|
| <u>Mingzhu Garden - Mingzhu Beiyuan</u><br> 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, 2022, the unsold GFA was 78,677 square meters; un-allocated costs was $20,672,000.  | ![](image_005.jpg) |

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| | |
|:---|:---|
| <u>Oriental Pearl Garden</u><br> 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, 2022, the unsold GFA was 53,506 square meters; un-allocated costs was $17,425,514. | ![](image_006.jpg) |

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***Real Estate Projects located in Yang County***

Yangzhou Pearl Garden

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 Palace

The 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 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.

The following table sets forth our real estate projects in the year ended September 30, 2022:

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| | | | | |
|:---|:---|:---|:---|:---|
| <br>**Project Name** | <br>**Location** | <br>**Type of Buildings** |<br>**GFA sold / disposed**<br>**during the year** | **Unsold GFA as**<br>**of September 30,**<br> **2022** |
| Mingzhu Garden |  |  |  |  |
| (Mingzhu Beiyuan) Phase II | Hanzhong City | High-rise residential | 1138 | 78677 |
| Oriental Pearl Garden | Hanzhong City | High-rise residential | 363 | 53506 |
| Yangzhou Pearl Garden Phase II | Yang County | High-rise residential |  | 10545 |
| Yangzhou Palace | Yang County | High-rise residential | 14681 | 87989 |
| Total |  |  | 16182 | 230717 |

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(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:

● for properties that are sold, the stated GFA is based on sales contracts relating to such property;

● for unsold properties that are completed, the stated GFA is calculated based on the detailed construction blueprint and the calculation method approved by the PRC government for saleable GFA, after necessary adjustments; and

● for properties that are under planning, the stated GFA is based on the land grant contract and our internal projections.

**Suppliers**

 

*Land Bank*

In 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 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.

 

*Land - under planning and development*

In May 2011, the Company entered into a development agreement with the local government. Pursuant to the agreement, the Company will prepay the development cost of approximately $16.8 million (RMB 119,700,000) and the 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, 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 the property. The Company expects to make payment of the remaining development cost based on the government's current work progress.

All land transactions are required to be reported to and authorized by 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 Suppliers***

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

**Competition**

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 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.

Nationally, there 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.

In the regional market, the Company's only direct competitor with meaningful market share in the market is Wanbang. This company generally undertakes medium and small scale projects and focuses on development of commercial real estate properties, such as hotels and shopping centers.

**Competitive Strength:**

We believe the following strengths allow us to compete effectively:

 

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

With the increase in consumer disposable income and urbanization rates, a growing middle-income consumer market has emerged driving demand for affordable and high quality housing in many cities across northwest China. We focus on building large communities of modern, 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.

 

*Standardized and Scalable Business Model.*

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.

 

*Experienced Management Team Supported by Trained and Motivated Workforce.*

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

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

 

*Strategies*

Our goal is to become the leading residential property developer focused on China's Tier 3 and Tier 4 cities and counties by implementing the following strategies:

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:

● Increasing urbanization rates and population growth;

● High economic growth and increasing individual income; and

● Sustainable land supply for future developments.

We 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.

**Quality Control**

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.

Our contractors are also subject to our quality 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.

**Environmental Matters**

As a developer of property in the PRC, we are subject to various environmental laws and 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, 2022, 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 projects are normally required to undergo an environmental impact assessment by government-appointed third parties, and a report of such assessment needs to be submitted to the relevant environmental authorities in order to obtain their approval before commencing construction.

Upon completion of each project, the relevant environmental authorities inspect the site to 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 records. Approval from the environmental authorities on such report is required before we can deliver our completed work to our customers. As of September 30, 2022, we have not experienced any difficulties in obtaining those approvals for commencement of construction and delivery of completed projects.

**Employees**

We currently have 90 full-time employees .

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

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**Contractual Arrangements between Shaanxi HGS and Guangsha**

Due 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 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 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.

All 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 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.

**Selected Condensed Consolidated Financial Schedule of the Company and its Subsidiaries and the VIE**

The following tables present selected condensed consolidating financial data of the Company and its subsidiaries and the VIE for the fiscal years ended September 30, 2022 and 2021, and balance sheet data as of September 30, 2022 and 2021, which have been derived from our consolidated financial statements for those years.

**SELECTED CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended September 30, 2022** | **For the Year Ended September 30, 2022** | **For the Year Ended September 30, 2022** | **For the Year Ended September 30, 2022** | **For the Year Ended September 30, 2022** |
|  | **The**<br>**Company** |<br>**Subsidiaries** |<br>**VIE** |<br>**Eliminations** | **Consolidated**<br>**Total** |
| Revenues | $&nbsp;&nbsp;&nbsp;&nbsp;— | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; — | $9577405 | $— | $9577405 |
| Income from equity method investment | $(87959503) | $— | $— | $87959503 | $— |
| Net income (loss) | $(108124682) | $(65) | $(87959438) | $87959503 | $(108124682) |
| Comprehensive income (loss) | $(119559356) | $(65) | $(99394112) | $99394177 | $(119559356) |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended September 30, 2021** | **For the Year Ended September 30, 2021** | **For the Year Ended September 30, 2021** | **For the Year Ended September 30, 2021** | **For the Year Ended September 30, 2021** |
|  | **The**<br>**Company** |<br>**Subsidiaries** |<br>**VIE** |<br>**Eliminations** | **Consolidated**<br> **Total** |
| Revenues | $— | $— | $58915239 | $— | $58915239 |
| Income from equity method investment | $6643438 | $— | $— | $(6643438) | $— |
| Net income (loss) | $6375438 | $(12000) | $6387438 | $(6375438) | $6375438 |
| Comprehensive income (loss) | $15763825 | $(12000) | $15775825 | $(15763825) | $15763825 |

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**SELECTED CONDENSED CONSOLIDATING BALANCE SHEETS**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **As of September 30, 2022** | **As of September 30, 2022** | **As of September 30, 2022** | **As of September 30, 2022** | **As of September 30, 2022** |
|  | **The**<br>**Company** |<br>**Subsidiaries** |<br>**VIE** |<br>**Eliminations** | **Consolidated**<br>**Total** |
| Cash | $1074440 | $2000 | $283777 | $— | $1360217 |
| Investments in subsidiaries and VIE | $94868534 | $— | $— | $(94868534) | $— |
| Total assets | $123043589 | $(70) | $280939924 | $(96596049) | $307387394 |
| Total liabilities | $3597919 | $669765 | $183674040 | $— | $187941724 |
| Total shareholders' equity | $119445670 | $(669835) | $97265884 | $(96596049) | $119445670 |
| Total liabilities and shareholders' deficit | $123043589 | $(70) | $280939924 | $(96596049) | $307387394 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **As of September 30, 2021** | **As of September 30, 2021** | **As of September 30, 2021** | **As of September 30, 2021** | **As of September 30, 2021** |
|  | **The**<br>**Company** |<br>**Subsidiaries** |<br>**VIE** |<br>**Eliminations** | **Consolidated**<br>**Total** |
| Cash | $— | $— | $170001 | $— | $170001 |
| Investments in subsidiaries and VIE | $194262711 | $— | $— | $(194262711) | $— |
| Total assets | $194262711 | $371230 | $384629333 | $(194262711) | $385000563 |
| Total liabilities | $3565000 | $1266921 | $189470931 | $— | $194302852 |
| Total shareholders' equity | $190697711 | $(895691) | $195158402 | $(194262711) | $190697711 |
| Total liabilities and shareholders' deficit | $194262711 | $371230 | $384629333 | $(194262711) | $385000563 |

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**SELECTED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended September 30, 2022** | **For the Year Ended September 30, 2022** | **For the Year Ended September 30, 2022** | **For the Year Ended September 30, 2022** | **For the Year Ended September 30, 2022** |
|  | **The**<br>**Company** |<br>**Subsidiaries** |<br>**VIE** |<br>**Eliminations** | **Consolidated**<br>**Total** |
| Net cash (used in) operating activities | $(925560) | $2000 | $166053 | $— | $(757507) |
| Net cash provided by investing activities | $(26936915) | $— | $— | $— | $(26936915) |
| Net cash used in financing activities | $28936915 | $— | $— | $— | $28936915 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended September 30, 2021** | **For the Year Ended September 30, 2021** | **For the Year Ended September 30, 2021** | **For the Year Ended September 30, 2021** | **For the Year Ended September 30, 2021** |
|  | **The**<br>**Company** |<br>**Subsidiaries** |<br>**VIE** |<br>**Eliminations** | **Consolidated**<br>**Total** |
| Net cash (used in) operating activities | $— | $— | $(604167) | $— | $(604167) |
| Net cash provided by investing activities | $— | $— | $— | $— | $— |
| Net cash used in financing activities | $— | $— | $— | $— | $— |

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**Transfers of Cash to and from Our VIE**

Green Giant Inc. is 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. 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.

Current PRC regulations permit our indirect PRC subsidiaries to pay dividends to HGS Investment only out of their accumulated profits, if 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 each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each of such entity in China is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate 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.

The 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.

Cash dividends, if any, on our common 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 our overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax at a rate of up to 10.0%.

In 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).

**PRC Limitation on Overseas Listing and Share Issuances**

Neither we, our subsidiaries nor our VIE are currently required to obtain approval from Chinese authorities, including the China Securities Regulatory Commission, or CSRC, or the Cybersecurity Administration Committee, or CAC, to list on U.S. exchanges or issue securities to foreign investors, however, if our VIE, subsidiaries or the holding company were required to obtain approval in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on a U.S. exchange, which would materially affect the interest of investors. It is uncertain when and whether the Company will be required to obtain permission from the PRC government to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. Although the Company is currently not required to obtain permission from any of the PRC federal or local governments to obtain such permission and has not received any denial to list on the U.S. exchange, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to its business or industry.

**ITEM 1A. RISK FACTORS**

**Risks Relating to Our Business and Industry**

**Our 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.**

Any slowdown in China's economic development might lead to tighter credit markets, increased market volatility, sudden drops in business and consumer confidence and dramatic changes in business and consumer behaviors. The current package of economic support policies is designed to stabilize the economy against slowing exports. Ongoing government regulatory measures, including the "Ten National Notices" announced in 2010, the "Eight National Notices" and property tax approved in January 2011, might have an adverse effect on our results of operations and the PRC property market. In 2022, the overall risk remained in Tier 3 and 4 cities despite initial signs of improvement in sales. In response to their perceived uncertainty in economic conditions, consumers might delay, reduce or cancel purchases of homes, and our homebuyers may also defer, reduce or cancel purchases of our units and our results of operations may be materially and adversely affected.

**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.**

Historically, our business and operations have been concentrated in Hanzhong City and other surrounding counties. 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.**

Property development is capital intensive. Our ability 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.

**We may be unable to acquire desired development sites at commercially reasonable costs.**

Our revenue depends on the completion and sale of our projects, which in turn depends on our ability to acquire development sites. Our land use rights costs are a major component of our cost of real estate sales and increases in such costs could diminish our gross margin. In China, the PRC government controls the supply of land and regulates land sales and transfers in the secondary market. As a result, the policies 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.

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.

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

We pre-sell properties before actual completion and, 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 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).

If a purchaser defaults on its payment obligations during the term of our guarantee, the 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.

**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.**

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.

**We rely on third-party contractors.**

Substantially all of our project construction and related 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.

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.

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:

● delays in obtaining necessary licenses, permits or approvals from government agencies or authorities;

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

● disputes with our third-party contractors;

● failure by our third-party contractors to comply with our designs, specifications or standards;

● difficult geological situations or other geotechnical issues; and

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

Any construction delays, or failure to complete a project according to our planned specifications or budget, may delay our property sales, which could harm our revenues, cash flows and our reputation.

**Changes of laws and regulations with respect to pre-sales may adversely affect our cash flow position and business performance.**

We depend on cash flows from pre-sale of properties as an important source of funding for our property projects and servicing our indebtedness. Under current PRC laws and regulations, property developers must fulfill certain conditions before they can commence pre-sale of the relevant properties and may only use pre-sale proceeds to finance the construction of specific developments (the "Pre-Sale Conditions and Usage"). Changes in laws and regulations or in their interpretation or the imposition of more stringent Pre-Sale Conditions and Usage could have a material adverse effect on our cash flow position and business performance.

**Our results of operations may fluctuate from period to period.**

Our results of operations tend to fluctuate from period to period. The number of properties that we can develop or complete during any particular period is limited due to the substantial capital required for land acquisition and construction, as well as the lengthy development periods required before positive cash flows may be generated. In addition, several properties that we have developed or that are under development are large scale and are developed in multiple phases over the course of one to several years. The selling prices of the residential units in larger scale property developments tend to change over time, which may impact our sales proceeds and, accordingly, our revenues for any given period.

**We rely on our key management members.**

We depend on the services provided by key management members. Competition for management talent is intense in the property development sector. In particular, we are highly dependent on Mr. Neng Chen, 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.

**Increases in the price of raw materials may increase our cost of sales and reduce our earnings.**

Our third-party 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 bricks, in the long run could be passed on to us by our contractors, which will increase our construction costs. Any such cost increase could reduce our earnings to the extent we are unable to pass these increased costs to our customers.

**Any unauthorized use of our brand or trademark may adversely affect our business.**

We own trademarks for "汉中广厦", in the form of Chinese characters and our Company logo. We rely on the PRC intellectual property and anti-unfair competition laws and contractual restrictions to 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, trademarks and other intellectual property rights could harm our competitive advantages and business. Historically, China has not protected intellectual property rights to the same extent as the United States, and infringement of intellectual property rights continues to pose a serious risk of doing business in China. Monitoring and preventing unauthorized use is difficult. The measures we take to protect our intellectual property rights may not be adequate. Furthermore, the application of laws governing intellectual property rights in China and abroad is uncertain and evolving, and could involve substantial risks to us. If we are unable to adequately protect our brand, trademarks and other intellectual property rights, our reputation may be harmed and our business may be adversely affected.

**We may fail to obtain or may experience material delays in obtaining necessary government approvals for any major property development, which will adversely affect our business.**

The real estate industry is strictly regulated by the PRC government. Property developers in China must abide by various laws and regulations, including implementation rules promulgated by local governments to enforce these laws and regulations. Before commencing, and during the course of, development of a property project, we need to apply for various licenses, permits, certificates and approvals, including land use rights certificates, construction site planning permits, construction 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 for these certificates and permits, but we 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 business and cash flows may be adversely affected.

**We may forfeit land to the PRC government if we fail to comply with procedural requirements applicable to land grants from the government or the terms of the land use rights grant contracts.**

According to 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 land fee on the land of 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 one-third of the total GFA of the project or the total capital invested is less 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 approval, the land will also be treated as idle land and be 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. 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 non-compliant GFA of our uncompleted and future property developments will be subject to governmental approval and additional payments.**

The local government authorities inspect property developments after their completion and issue the completion acceptance certificates if the developments are in compliance with the relevant laws and regulations. If the total constructed GFA of a property development exceeds the GFA originally authorized in the relevant land grant contracts or construction permit, or if the completed property contains built-up areas that do not conform with the plan authorized by the construction permit, the property developer 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.

**Our failure to assist our customers in applying for property ownership certificates in a timely manner may lead to compensatory liabilities to our customers.**

We are required to meet various requirements within 90 days after delivery of property, 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 submission of the required documents as a result of our failure to meet such requirements, and are required to compensate our customers for delays. In the case of serious delays on one or more property projects, we may be required to pay significant compensation to our customers and our reputation may be adversely affected.

**We are subject to potential environmental liabilities.**

We are 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.

**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.**

Effective internal controls 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 assure you that we will not, in the future, identify areas requiring improvement in our internal control over financial reporting. 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.

**As a public company, we are required to comply with the reporting obligations of the Exchange Act and Section 404 of the Sarbanes-Oxley Act of 2013. If we fail to comply with the reporting obligations of the Exchange Act and Section 404 of the Sarbanes-Oxley Act or if we fail to maintain adequate internal controls over financial reporting, our business, results of operations and financial condition could be materially adversely affected** **.**

As 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.

The Company assessed its internal control over financial reporting and still has significant and material deficiencies as of September 30, 2022. To 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 accounting department and establish formal policies and procedures for an internal audit function; and (ii) implementation of an ongoing initiative and training in the Company to ensure the importance of internal controls and compliance with established policies and procedures are fully understood throughout the organization and plan to provide continuous U.S. GAAP knowledge training to relevant employees involved to ensure the performance of and compliance with those procedures and policies. Any actions we have taken or may take to remediate these material weaknesses are subject to continued management review supported by testing, as well as oversight by the Audit Committee of our Board of Directors. We cannot assure you that these material weaknesses will not occur in the future and that we will be able to remediate such weaknesses in a timely manner, which could impair our ability to accurately and timely report our financial position, results of operations or cash flows. The management is committed to improving the internal controls over financial reporting and will undertake the consistent improvements or enhancements on an ongoing basis. However, we cannot assure you that our current remediation plan can resolve all the significant deficiencies and material weaknesses in the internal control over financial reporting. As a result, we may be required to implement further remedial measures and to design enhanced processes and controls to address issues identified through future reviews. This could result in significant delays and costs to us and require us to divert substantial resources, including management time, from other activities.

If we do not fully remediate the material weaknesses identified by management or fail to maintain the adequacy of our internal controls in the future, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with the Sarbanes-Oxley Act. Moreover, effective internal controls are necessary for us to produce reliable financial reports and are important to help prevent fraud. As a result, any failure to satisfy the requirements of Section 404 on a timely basis could result in the loss of investor confidence in the reliability of our financial statements, which in turn could harm our business and negatively impact the trading price of our common stock.

**We do not have business insurance coverage. Any future business liability, disruption or litigation we experience might divert management focus from our business and could significantly impact our financial results.**

Availability of business insurance products and coverage in China is limited, and most such products are expensive in relation to the coverage offered. We have determined that the risks of disruption, cost of such insurance and the difficulties associated with acquiring such insurances on commercially reasonable terms make it impractical for us to maintain such insurance. As a result, we do not have any business liability, disruption or litigation insurance coverage for our operations in China. Accordingly, a business disruption, litigation or natural disaster may result in substantial costs and divert management's attention from our business, which would have an adverse effect on our results of operations and financial condition.

**The PRC government may adopt further restrictive measures to slow the increase in prices of real property and real property development.**

Along with the economic growth in China, investments in the property sectors have increased significantly in the past few years. In response to concerns over the scale of the increase in property investments, the PRC government has introduced policies to curtail property development. We believe those regulations, among others, significantly affect the property industry in China.

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 be certain that the PRC government will not issue additional and more stringent regulations or measures, which could further slowdown property development in China and adversely affect our business and prospects.

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

The residential property industry in the PRC is still in a relatively early stage of development. Although demand for residential property in the PRC has been growing rapidly in recent years, such growth is often coupled with volatility in market conditions and fluctuation in property prices. It is extremely difficult to predict how much and when demand will develop, as many social, political, economic, legal and other factors, most of which are beyond our control, may affect the development of the market. The level of uncertainty is increased by the limited availability of accurate financial and market information as well as the overall low level of transparency in the PRC, especially in Tier 3 and 4 cities which have lagged in progress in these aspects when compared to Tier 1 cities.

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.

**We face intense competition from other real estate developers.**

The 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.

Competition among property developers may result in increased costs for the acquisition of land for development, increased costs for raw materials, shortages of skilled contractors, oversupply of properties, decrease in property prices in certain parts of the PRC, a slowdown 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 competitive in acquiring land through the auction process. If we cannot respond to changes in market 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 affected.

In addition, risk of property over-supply is increasing in parts of China, where property investment, trading and speculation have become overly active. We are exposed to the risk that in the event of actual or perceived over-supply, property prices may fall drastically, and our revenue and profitability will be adversely affected.

**Failure to make adequate contributions to various employee benefits plans as required by PRC regulations may subject us to penalties.**

Companies operating in China are required 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 plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of employees up to a maximum amount specified by the local 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 local governments in China given the different levels of economic development in different locations. As of September 30, 2022 and 2021, we have made adequate employee benefit payments in strict compliance with the relevant PRC regulations for and on behalf of our employees. 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 contributions for these plans as well as to pay late fees and fines. If we are subject to late fees or fines in relation to the underpaid employee benefits, our financial condition and results of operations may be adversely affected.

**Risks Relating to the Residential Property Industry and primary operation in China**

**Because all our operations are in China, our business is subject to the complex and rapidly evolving laws and regulations there. The Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and/or the value of our common stocks.**

As a business operating 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 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:

● delay or impede our development;

● result in negative publicity or increase the Company's operating costs;

● require significant management time and attention; and

● subject us to remedies, administrative penalties and even criminal liabilities that may harm our business, including fines assessed for our current or historical operations, or demands or orders that we modify or even cease our business practices.

The promulgation of new laws or regulations, or the new interpretation of existing laws and regulations, in each case that restrict or otherwise unfavorably impact the ability or way we conduct our business and could require us to change certain aspects of our business to ensure compliance, which could decrease demand for our products, reduce revenues, increase costs, require us to obtain more licenses, permits, approvals or certificates, or subject 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.

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

On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to enhance its enforcement against illegal activities 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-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the Chinese securities laws. 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.

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 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 has not developed a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular, the China legal system is based on written statutes and prior court decisions have limited value as precedents. Since these laws and regulations are relatively new and the China legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules may not be uniform and enforcement of these laws, regulations and rules involves uncertainties. These uncertainties may affect our judgment on the relevance of legal requirements and our 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 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 and may have a retroactive effect. As a result, we may not be aware of our violation of any of these policies and rules until sometime after the violation. In addition, any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention.

**We 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.**

On March 16, 2007, the National People's Congress of the PRC passed the Enterprise Income Tax Law of the PRC (''New Income Tax Law''), which took effect on January 1, 2008. On December 6, 2007, the Implementation Rules of Enterprise Income Tax Law of the PRC (''Implementation Rules'') were also enacted and took effect on January 1, 2008. In accordance with the new laws and regulations, a unified enterprise income tax rate of 25% and unified tax deduction standards will be applied equally to both domestic enterprises and foreign-invested enterprises.

Under the New Income Tax Law and the Implementation Rules, enterprises established 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. Under the Implementation Rules, ''de facto management body'' is defined as a body that has material and overall management and control over the manufacturing and 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 used by the PRC tax authorities to determine whether we are a ''de facto management body'' in China. All of our management personnel are located in the PRC, and all of our revenues arise from our operations in China. If the PRC tax authorities determine that we are a PRC resident enterprise, we will be subject to PRC tax on our worldwide income at the 25% uniform tax rate, which may have a material adverse effect on our financial condition and results of operations. Notwithstanding the foregoing provision, the New Income Tax Law also provides that, if a PRC resident enterprise already invests in another PRC resident enterprise, the dividends received by the investing resident enterprise from the invested resident enterprise are exempt from income tax, subject to certain qualifications. Therefore, if we are classified as a PRC resident enterprise, the dividends received from our 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.

**We face uncertainty from the Circular on Strengthening the Administration of Enterprise Income Tax on Non-resident Enterprises' Share Transfer ("Circular 698") released in December 2009 by China's State Administration of Taxation (SAT), effective as of January 1, 2008.**

Where a foreign investor indirectly transfers equity interests in a Chinese resident enterprise by selling the shares in an offshore holding company, and the latter is located in a country (jurisdiction) where the effective tax burden is less than 12.5% or where the offshore income of their residents is not taxable, the foreign investor is required to provide the tax authority in charge of that Chinese resident enterprise with the relevant information within 30 days of the transfers.

Where a foreign investor indirectly transfers equity interests in a Chinese resident enterprise through the abuse of form of 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 transfers of equity interest in China resident enterprises, excluding share in Chinese resident enterprises that are bought and sold openly on the stock exchange.

While the term "indirectly transfer" is not defined, we understand that the relevant PRC tax authorities have jurisdiction regarding requests for information over a wide range of foreign entities having no direct contact with China. The relevant authority has not yet promulgated any formal provisions or formally declared or stated how to calculate the effective tax in the country (jurisdiction) and the process of the disclosure 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 "reasonable commercial purpose," which can be utilized by us to determine if our company complies with the Circular 698.

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

On July 15, 2014, SAFE issued the Notice on Relevant Issues in the Foreign 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 the 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 reach of Circular 37 by (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 (5) making the domestic affiliate of the SPV responsible for the accuracy of certain documents which must be filed in connection with any such registration, notably, the business plan which describes the overseas financing and the use of proceeds. Amendments to registrations made under Circular 37 are required in connection with any increase or decrease of 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 have asked our stockholders, who are PRC residents 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. However, we cannot provide any assurances that they can 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, we cannot predict how it will affect our business operations or future strategies. For example, our present and prospective PRC subsidiaries' ability to conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated borrowings, may be subject to compliance with Circular 37 and Notice 106 by our PRC resident beneficial holders.

In addition, such PRC residents may not always be able to 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 resident beneficial holders or future PRC resident stockholders to comply with Circular 37 and Notice 106, if SAFE requires it, could subject these PRC resident beneficial holders to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our subsidiaries' ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.

In February 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound direct investments, including those required under SAFE Circular 37, must be filed with qualified banks instead of SAFE. Qualified banks should examine the applications and accept registrations under the supervision of SAFE. We have used our best efforts to notify PRC residents or entities who directly or indirectly hold shares in our 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, or failure by us to amend the foreign exchange registrations of our PRC subsidiaries, could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, and limit our PRC subsidiaries' ability to make distributions or pay dividends to us or affect our ownership structure, which could adversely affect our business and prospects.

Furthermore, as 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 process with respect to our foreign exchange activities, such as remittance of dividends 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 company, we cannot assure you that we or the owners of such company, as the case may be, will be able to obtain the 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.

**Changes in the policies, regulations, rules, and the enforcement of laws of the PRC government may be quick with little advance notice and could have a significant impact upon our ability to operate profitably in the PRC.**

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.

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

We 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 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 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 inflation in China may inhibit our activity to conduct business in China.**

In recent years, the Chinese economy has experienced periods of rapid expansion and high rates of inflation, which have led to the adoption by the Chinese government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth and contain inflation. While inflation has been more moderate since 1995, high inflation may in the future cause Chinese government to impose controls on credit and/or prices, or to take other action, which could inhibit economic activity in China, and thereby harm the market for our products.

Because Chinese law governs almost all of our material agreements, we may not be able to enforce our legal rights within China or elsewhere, which could result in a significant loss of business, business opportunities, or capital.

We cannot assure you that we will be able to enforce any of our material agreements or that remedies will be available outside of China. The system of laws and the enforcement of existing laws in China may not be as certain in implementation and interpretation as in the United States. The inability to enforce or obtain a remedy under any of our current or future agreements could result in a significant loss of business, business opportunities or capital. It will be extremely difficult to acquire jurisdiction and enforce liabilities against our officers, directors and assets based in China.

Substantially all of our assets are located in the PRC and all of our officers and most of our present directors reside outside of the United States. As a result, it may not be possible for United States investors to enforce their legal rights, to effect service of process upon our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties of our directors and officers under Federal securities laws. Moreover, we have been advised that China does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the United States. Further, it is unclear if extradition treaties now in effect between the United States and China would permit effective enforcement of criminal penalties of the Federal securities laws.

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

We are subject to the United States Foreign Corrupt Practices Act, which generally prohibits United States companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. Foreign companies, including some that may compete with us, are not subject to these prohibitions. Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices occur from time-to-time in the PRC. We can make no assurance, however, that our employees or other agents will not engage in such conduct for which we might be held responsible. If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties and other consequences that may have a material adverse effect on our business, financial condition and results of operations.

 **We may have difficulty establishing adequate management, legal and financial controls in the PRC.**

The 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.

**Although the audit report 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, as such, in the future investors may be deprived of the 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 PCAOB is unable to 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.**

As an auditor of companies that are registered with the SEC and publicly traded in the United States and a firm registered with the PCAOB, our auditor is required under the laws of the United States to undergo regular inspections by the PCAOB to assess their compliance with the laws of the United States and professional standards.

Although currently we operates substantially in mainland China, a jurisdiction where the PCAOB is currently unable to conduct inspections without the approval of the Chinese government authorities, our auditor, the independent registered public accounting firm that issues the audit report included elsewhere in this annual report, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess our auditor's compliance with the applicable professional standards. Inspections of other auditors conducted by the PCAOB outside mainland China have at times identified deficiencies in those auditors' audit procedures and quality control procedures, which may be addressed as part of 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 quality control procedures. As a result, if there is any component of our auditor's work papers become located in mainland China in the future, such work papers will not be subject to inspection by the PCAOB. 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.

As 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 U.S. Congress which, if passed, would require the SEC to maintain a list of issuers for which the PCAOB is not able to inspect or investigate the audit work performed by a foreign public accounting firm completely. 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, 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 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, 2020, 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 restriction imposed by a non-U.S. authority in the auditor's local jurisdiction. The U.S. House of Representatives passed the HFCA Act on December 2, 2020, and the HFCA Act was signed into law on December 18, 2020. Additionally, in July 2020, the U.S. President's Working Group on 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 companies listed on U.S. stock exchanges and their audit firms, in an effort to protect investors in the United States. In response, on November 23, 2020, 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 24, 2021, 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, including the listing and 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 inspected by the PCAOB for three consecutive years, and this ultimately could result in our common stock being delisted. Furthermore, on June 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 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 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 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 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 that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions. The PCAOB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the 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 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, not mainland China or Hong Kong and was not identified in this report as a firm subject to the PCAOB's determination. 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 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 by 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, the above amendments and any additional actions, proceedings, or new rules resulting from these efforts to increase U.S. regulatory access to audit information could create some uncertainty for investors, the market price of our common stock could be adversely affected, and we could be delisted if we and our auditor are unable to meet the PCAOB inspection requirement or being required to engage a new audit firm, which would require significant expense and management time.

On August 26, 2022, the PCAOB signed Statement of Protocol (the "SOP") Agreement with the CSRC and China's Ministry of Finance. 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.

**Recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact the operating entities' business and our offerings.**

On December 28, 2021, the CAC, together with 12 other governmental departments of the PRC, jointly promulgated the Cybersecurity Review Measures, which became effective on February 15, 2022. The Cybersecurity Review Measures provides that, in addition to critical information 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 Review Office of the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security risks that may be brought about by any procurement, data processing, or overseas listing. The Cybersecurity Review Measures further requires that CIIOs and data processing operators that possess personal data of at least one million users must apply for a review by the Cybersecurity Review Office of the PRC before conducting listings in foreign countries.

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.

As 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 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 and our offerings.

**The Opinions recently issued by the General 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.**

Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions, which were made available to the public on July 6, 2021. 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.

**Risks Relating to Our Corporate Structure**

**If the PRC government deems that the contractual arrangements in relation to Guangsha, our 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.**

We 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 our VIE. We control and receive the economic benefits of our VIE's business operations through certain contractual arrangements.

The VIE contributed 60% and 100% of the Company's consolidated results of operations for the years ended September 30, 2022 and 2021, respectively. As of September 30, 2022, the VIE accounted for approximately 93% of the consolidated total assets and 97% of total liabilities of the Company, respectively.

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 ownership of controlling equity interests would be in providing us with control over 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 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 option pursuant to these contractual arrangements, we may have to take a legal action to compel them to fulfill their contractual obligations.

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.

In 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 unable to continue some or all of our business activities, which could materially and adversely affect our business, financial condition and results of operations. If any of the 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 ability to operate our business, which could materially and adversely affect our business and our ability to generate revenues.

All 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 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.

These contractual arrangements may not be as effective as direct ownership in providing us with control over our VIE. 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. Such risks exist throughout the period in which we intend to operate certain portions of our business through the contractual arrangements with our VIE.

If our VIE or its shareholders fail to perform 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 shareholders of our VIE refuse to transfer their equity interest in our VIE to us or our designee if we exercise the purchase option pursuant to these contractual arrangements, or if they otherwise act in bad faith toward us, then we may have to take legal actions to compel them to perform their contractual obligations. In addition, if any third parties claim any interest in such shareholders' equity interests in our 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 our VIE and third parties were to impair our control over our VIE, our ability to consolidate the financial results of our VIE would be affected, which would in turn result in a material adverse effect on our business, operations and financial condition.

In the opinion of our PRC legal counsel, each of the contractual arrangements among our WFOE, our VIE and its shareholders governed by PRC laws are valid, binding and enforceable, and will not result in any violation of PRC laws or regulations currently in effect. However, our PRC legal counsel has also advised us that there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules. Accordingly, the PRC regulatory authorities may ultimately take a view that is contrary to the opinion of our PRC legal counsel. In addition, it is uncertain whether any new PRC laws or regulations relating to variable interest entity structures will be adopted or if adopted, what they would provide. PRC government authorities may deem that foreign ownership is directly or indirectly involved in our VIE's shareholding structure. If our corporate structure and contractual arrangements are deemed by the Ministry of Industry and Information Technology, MIIT, or the Ministry of Commerce, MOFCOM, or other regulators having competent authority to be illegal, either in whole or in part, we may lose control of our consolidated VIE and have to modify such structure to comply with regulatory requirements. However, there can be no assurance that we can achieve this without material disruption to our VIE's business. Furthermore, if we or our VIE is found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures, including, without limitation:

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

● discontinuing or placing restrictions or onerous conditions on our operations through any transactions among our WFOE and our VIE;

● imposing fines, confiscating the income from our WFOE, our VIE or its subsidiaries, or imposing other requirements with which we or our VIE may not be able to comply;

● placing restrictions on our right to collect revenues;

● requiring us to restructure our ownership structure or operations, 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; or

● taking other regulatory or enforcement actions against us that could be harmful to our business.

The imposition 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 on us and on our ability 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 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, we would no longer be able to consolidate the financial results of our 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 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.**

We are 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 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 the management and 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 PRC counsel, Shaanxi Jiameng Law Firm, has 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 are valid, binding and enforceable, and do 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 PRC Laws, and there can be no assurance that the PRC government will ultimately take a view that is consistent with such opinion.

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 or (iii) any variable interest entity or its shareholders fail to perform its/his/her obligations under these contractual arrangements, our business operations in China would be materially and adversely affected, and the value of your shares would substantially decrease. 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.

In 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 unable to continue some or all of our business activities, which could materially and adversely affect our business, financial condition and results of operations. If our variable interest entity undergoes a voluntary or involuntary liquidation 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.

All 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.

**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.**

We are a holding company and conduct substantially all of our business through our PRC subsidiary, which is a limited liability company established in China. We may rely on dividends to be paid by our PRC subsidiary to fund our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders, to 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.

Under PRC laws and regulations, our PRC subsidiary, which is a wholly foreign-owned enterprise in China, may pay dividends only out of its accumulated profits as determined in accordance with PRC accounting standards and regulations. In addition, a wholly foreign-owned enterprise is required to set aside at least 10% of its accumulated after-tax profits each year, if any, to fund a certain statutory reserve fund, until the aggregate amount of such fund reaches 50% of its registered capital.

Our PRC subsidiary generates primarily all of its revenue in Renminbi, which is not freely convertible into other currencies. As a result, any restriction on currency exchange may limit the ability of our PRC subsidiary to use its Renminbi revenues to pay dividends to us. The PRC government may continue to strengthen its capital controls, 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 materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises are incorporated. Any limitation on the ability of our PRC subsidiary to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

**We may 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.**

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.

**Because we rely on the Contractual Arrangements for our revenue, the termination of these agreements would severely and detrimentally affect our continuing business viability under our current corporate structure.**

We 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 our VIE may be subject to scrutiny by the PRC tax authorities and they may determine that we or our 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 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.

**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;

● discontinuing or restricting the operations;

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

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

● imposing fines or confiscating the income from our PRC subsidiaries or our 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 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.**

The shareholders 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 to breach, or refuse to renew, the existing Contractual Arrangements, which would have a material and adverse effect on our ability to effectively control our VIE and receive economic benefits from it. As a result, control over, and funds due from, our VIE may be jeopardized if the shareholders of our VIE breach, or refuse to renew, the Contractual Arrangements. For example, the shareholders may be able to cause our agreements with our 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 our 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 our VIE as its nominee shareholders because although they remain the holders of equity interests on record in our 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 our 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 our 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 our 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 our 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 our VIE through contractual arrangements are deemed as foreign investment in the future, and any business of our 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 our 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 our 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.

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.

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 contractual arrangement will be deemed to be in violation of the foreign investment access requirements and how the above-mentioned contractual arrangement will be handled are uncertain.

**The Chinese government may exercise significant oversight influence over the manner in which we must conduct our business activities. We are currently not required to obtain approval from Chinese authorities to list on U.S. exchanges, however, if our VIE or the holding company were required to obtain approval in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange, which would materially affect the interest of the investors.**

The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate 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 centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.

For example, the Chinese cybersecurity regulator announced on July 2021 that it had begun an investigation of Didi Global Inc. (NYSE: DIDI) and two days later ordered that the company's app was removed from smartphone app stores. On July 24, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly released the Guidelines for Further Easing the Burden of Excessive Homework and Off-campus Tutoring for Students at the Stage of Compulsory Education, pursuant to which foreign investment in such firms via mergers and acquisitions, franchise development, and variable interest entities are banned from this sector.

We believe that our operations in China are in material compliance with all applicable legal and regulatory requirements. However, the Company's business segments may be subject to various government and regulatory interference in the provinces in which they operate. The Company could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. The Company may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply, and such compliance or any associated inquiries or investigations or any other government actions may:

● delay or impede our development;

● result in negative publicity or increase the Company's operating costs;

● require significant management time and attention; and

Furthermore, it is uncertain when and whether the Company will be required to obtain permission from the PRC government to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. Although the Company is currently not required to obtain permission from any of the PRC federal or local government to obtain such permission and has not received any denial to list on the U.S. exchange, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to its business or industry, which could result in a material adverse change in the value of our securities, potentially rendering it worthless. As a result, both you and us face uncertainty about future actions by the PRC government that could significantly affect our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.

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

We currently conduct our operations in China through our Contractual Arrangements. As part of these arrangements, substantially all of our assets that are significant to the operation of our business are held by our VIE. If the becomes bankrupt and all or part of its become subject to liens or rights of third-party creditors, we may be unable to continue some or all of our business activities, which could materially and adversely affect our business, financial condition and results of operations. In addition, if any of our affiliated entities undergoes a voluntary or involuntary liquidation proceeding, its equity owner or unrelated third-party creditors may claim rights relating to some or all of these assets, which would hinder our ability to operate our business and could materially and adversely affect our business, our ability to generate revenue and the market price of our common stock.

**Risks Relating to our Securities**

**We have never paid cash dividends and are not likely to do so in the foreseeable future.**

We have never declared or paid any cash dividends on our common stock. We currently intend to retain any future earnings for use in the operation and expansion of our business. We do not expect to pay any cash dividends in the foreseeable future but will review this policy as circumstances dictate.

**We may be subject to the penny stock rules which will make the shares of our common stock more difficult to sell.**

We may be subject now and in the future to the SEC's "penny stock" rules if our shares of common stock sell below $1.00 per share. Penny stocks generally are equity securities with a price of less than $1.00. The penny stock rules require broker-dealers to deliver a standardized risk disclosure document prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson, and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing prior to completing the transaction and must be given to the customer in writing before or with the customer's confirmation.

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.

In addition, the penny stock rules require that prior to a transaction, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. The penny stock rules are burdensome and may reduce purchases of any offerings and reduce the trading activity for shares of our common stock. As long as our shares of common stock are subject to the penny stock rules, the holders of such shares of common stock may find it more difficult to sell their securities.

**Our shares of common stock are very thinly traded, and the price if traded may not reflect our value. There can be no assurance that there will be an active market for our shares of common stock either now or in the future.**

Our shares of common stock are very thinly traded, and the price if traded may not reflect our value. There can be no assurance that there will be an active market for our shares of common stock either now or in the future. The market liquidity will be dependent on the perception of our operating business and any steps that our management might take to bring us to the awareness of investors. There can be no assurance given that there will be any awareness generated. Consequently, investors may not be able to liquidate their investment or liquidate it at a price that reflects the value of our business. If a more active market should develop, the price may be highly volatile. Because there may be a low price for our shares of common stock, many brokerage firms may not be willing to effect transactions in the securities. Even if an investor finds a broker willing to effect a transaction in the shares of our common stock, the combination of brokerage commissions, transfer fees, taxes, if any, and any other selling costs may exceed the selling price. Further, many lending institutions will not permit the use of such shares of common stock as collateral for any loans.

In addition, the securities markets have from time to time 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 in a negative market fluctuation, they may not receive a price per share that is based solely upon our business performance. We cannot guarantee that shareholders will not lose some or all of their investment in our common stock.

**Currently, we are listed on the NASDAQ Capital Market. If our financial condition deteriorates, we may not meet continued listing standards on the NASDAQ Capital Market.**

The NASDAQ Capital Market requires companies to fulfill specific 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:

● Our stockholders' equity must be at least $2,500,000; or the market value of our listed securities must be at least $35,000,000; or our net income from continuing operations in our last fiscal year (or two of the last three fiscal years) must have been at least $500,000;

● The market value of our publicly held shares must be at least $1,000,000;

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

● We must have at least 300 stockholders;

● We must have at least 500,000 publicly held shares;

● We must have at least 2 market makers; and

● We must have adopted NASDAQ-mandated corporate governance measures, including a board of directors comprised of a majority of independent directors, an Audit Committee comprised solely of independent directors and the adoption of a code of ethics among other items.

Current, we are listed on the NASDAQ Capital Market, but if we are delisted from the NASDAQ Capital Market at some later date, our stockholders could find it difficult to sell our shares. In addition, if our common stock is delisted from the NASDAQ Capital Market at some later date, we may apply to have our common stock quoted on the Bulletin Board or in the "pink sheets" maintained by the National Quotation Bureau, Inc. The Bulletin Board and the "pink sheets" are generally considered to be less efficient markets than the NASDAQ Capital Market. In addition, if our common stock is not so listed or are delisted at some later date, our common stock may be subject 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 accredited investors and require the delivery of a disclosure schedule explaining the nature and risks of the penny stock market. As a result, the ability or willingness of broker-dealers to sell or make a market in our common stock might decline. If our common stock is delisted from the NASDAQ Capital Market at some later date or become subject to the penny stock regulations, it is likely that the price of our shares would decline and that our stockholders would find it difficult to sell their shares.

**The requirements of being a public company may strain our resources and divert management's attention, which could have a material adverse effect on our business.**

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.

As a result of disclosure of information in this annual report and in filings required of a public company, our business and financial condition will become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and operating results could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business, brand and reputation and results of operations.

**The obligation to disclose information publicly may put us at a disadvantage to competitors that are private companies which could have an adverse effect on our results of operations.**

We are a reporting company in the United States. As a reporting company, we are required to file periodic reports with the Securities and Exchange Commission upon the occurrence of matters that are material to our Company and stockholders. In some cases, we are required to disclose material agreements or results of financial operations that we would not be required to disclose if we were a private company. Our competitors may have access to this information, which would otherwise be confidential. This may give them advantages in competing with our Company. Similarly, as a U.S.-listed public company, we are governed by U.S. laws that our competitors, which are mostly private Chinese companies, are not required to follow. To the extent compliance with U.S. laws increases our expenses or decreases our competitiveness against such companies, this could affect our results of operations.

**Securities analysts may not publish favorable research or reports about our business or may publish no information at all, which could cause our stock price or trading volume to decline.**

The trading market will be influenced to some extent by the research and reports that industry or financial analysts publish about us and our business. We do not control these analysts. As we are a reporting company in the United States, we may attract research coverage and the analysts who publish information about our common stock will have had relatively little experience with us or our industry, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates. In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us provide inaccurate or unfavorable research or issue an adverse opinion regarding our stock price, our stock price could decline. If one or more of these analysts cease coverage of us or fail to publish reports covering us regularly, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline and result in the loss of all or a part of your investment in us.

**ITEM 1B. Unresolved Staff Comments**

None.

**ITEM 2. Properties**

The Company's principal administrative, sales, and marketing facilities are located at 6 Xinghan Road, 19th Floor, Hanzhong City, Shaanxi Province. The Company built the office building in which its headquarters are located and owns the floor that houses its headquarters. In addition, the Company also owns a sales office in Yang County. See Item 1. Business — Overview.

**ITEM 3. Legal Proceedings**

There are six on-going legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. Some of the Company's property is the subject of on-going legal proceedings.

1) Case between the labor contract dispute between Wangcang County Lexin Labor Service Co., Ltd. and Zhejiang Hongcheng Construction Group Co., Ltd., Zhejiang Hongcheng Construction Group Co., Ltd. Xi 'an Branch and Shaanxi Guangsha Investment Development Group Co., Ltd. Hongcheng Company was judged to compensate Lexin Company, and Shaanxi Guangsha Company was jointly and severally liable, with an execution amount of $3,373,867.

2) Related to the above Case 1 disputes between Zhejiang Hongcheng Construction Group Co., Ltd. and Shaanxi Guangsha Investment Development Group Co., Ltd. on the construction project contract. The execution target of this case is $9,091,868 million inchuding $3,373,867 in Case 1.

3) Case between Hantai District Commuity Center Hanzhong Urban Counsel and Shaanxi Guangsha Investment Development Group Co., Ltd., which was ordered by Hanzhong Hantai District Court to the settle the amount of $131,498 and it is still outstanding as at September 30, 2022..

4) Case between Hanzhong City Puyang Plumber Agency Co., Ltd and Shaanxi Guangsha Investment Development Group Co., Ltd., was settled.

5) Two individuals of property buyers Hanshen Lu & Xin Lu and Shaanxi Guangsha Investment Development Group Co., Ltd., was settled.

6) Dispute between an disclosed property buyer and Shaanxi Guangsha Investment Development Group Co., Ltd., which was ordered by local court to pay the plaintiff of $127,979 which is still outstanding as at September 30, 2022.

The Company acrrued $9,351,344 for the above six cases in the current fiscal year as the contingency liabilities could not be quantified till nearby current fiscal year or within current fiscal year as at September 30, 2022

**ITEM 4. Mine Safety Disclosure**

Not applicable.

**PART II**

**Item 5. Market For Registrant's Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities**

**Market Information**

Our common stock is currently quoted on the NASDAQ Capital Market under the symbol "GGE." Between September 13, 2010 and July 19, 2012, our common stock was quoted on the NASDAQ Global Market under the symbol "HGSH." Prior to our listing on the NASDAQ Global Market, our common stock was quoted on the OTC Bulletin Board under the symbol "CAHS." The following table sets forth the high and low sale prices for the Company's common stock for the periods indicated.

---

| | | |
|:---|:---|:---|
| FISCAL 2022 | High | Low |
| 1st Quarter Ended December 31, 2021 | $2.06 | $1.97 |
| 2nd Quarter Ended March 31, 2022 | $3.20 | $2.91 |
| 3rd Quarter Ended June 30, 2022 | $1.51 | $1.41 |
| 4th Quarter Ended September 30, 2022 | $1.21 | $1.05 |

---

---

| | | |
|:---|:---|:---|
| FISCAL 2021 | High | Low |
| 1st Quarter Ended December 31, 2020 | $5.40 | $0.99 |
| 2nd Quarter Ended March 31, 2021 | $3.38 | $1.51 |
| 3rd Quarter Ended June 30, 2021 | $2.61 | $1.53 |
| 4th Quarter Ended September 30, 2021 | $2.82 | $1.40 |

---

**Holders**

According to the records of our transfer agent, the Company had 310 stockholders of record as of September 30, 2022.

**Dividends**

All of our assets are located within the PRC. Under the laws of the PRC governing foreign invested enterprises, dividend distributions and liquidating distributions are allowed but subject to special procedures under relevant rules and regulations. Any dividend payment is subject to the approval of the Board of Directors and subject to foreign exchange rules governing such repatriation. Any liquidating distribution is subject to both the relevant government agency's approval and supervision, as well as foreign exchange controls.

We have never declared or paid any cash dividends on our common stock and we do not expect to pay any cash dividends in the foreseeable future. We expect to retain any earnings to support operations and to finance the growth and development of our business. Any future determination relating to our dividend policy will be made at the discretion of our Board of Directors and will depend on a number of factors, including future earnings, capital requirements, financial conditions and future prospects and other factors the Board of Directors may deem relevant. The payment of dividends from our subsidiaries to our parent company is subject to restrictions including primarily the restriction that foreign invested enterprises may only buy, sell and/or remit foreign currencies at those banks authorized to conduct foreign exchange business after providing valid commercial documents.

PRC regulations restrict the ability of our PRC subsidiary to make dividends and other payments to its offshore parent company. PRC legal restrictions permit payments of dividends by our PRC subsidiary only out of its accumulated after-tax profits, if any, determined in accordance with PRC accounting standards and regulations. Our PRC subsidiary is also required under PRC laws and regulations to allocate at least 10% of its annual after-tax profits determined in accordance with PRC GAAP to a statutory general reserve fund until the amounts in said fund reaches 50% of its registered capital. Allocations to this statutory reserve fund can only be used for specific purposes and are not transferable to us in the form of loans, advances or cash dividends. Any limitations on the ability of our PRC subsidiary to transfer funds to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends and otherwise fund and conduct our business.

**Stock Performance Graph**

The following graph presents a comparison of the performance of our common stock with that of the NASDAQ Composite Index and the NASDAQ Capital Market Composite Index from September 30, 2011 to September 30, 2022. The graph shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act.

![](image_007.jpg)

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **30-Sep-11** | **30-Sep-12** | **30-Sep-13** | **30-Sep-14** | **30-Sep-15** | **30-Sep-16** | **30-Sep-17** | **30-Sep-18** | **30-Sep-19** | **30-Sep-20** | **30-Sep-21** | **30-Sep-22** |
| Green Giant Inc. | 32.30 | 6.22 | 183.97 | 121.77 | 40.76 | 56.46 | 31.81 | 29.43 | 16.99 | 25.84 | 36.12 | 12.60 |
| Nasdaq Composite Index | 101.97 | 131.56 | 159.23 | 189.70 | 195.06 | 224.27 | 274.25 | 339.71 | 337.72 | 471.48 | 612.7 0 | 446.50 |
| NASDAQ Capital Market Composite | 85.00 | 109.49 | 134.77 | 129.00 | 109.75 | 113.45 | 140.98 | 160.45 | 136.85 | 162.44 | 220.42 | 113.50 |

---

\*$100 invested at closing prices on September 30, 2010 in our common stock or in a stock index.

**Equity Compensation Plan Information**

See "Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" for disclosure regarding our equity compensation plan.

**Purchase of Equity Securities by Our Company and Affiliated Purchases**

None.

**Recent Sales of Unregistered Securities**

During the fiscal years ended September 30, 2022 and 2021, we did not have sales of unregistered securities other than those already disclosed in the quarterly reports on Form 10-Q in the fiscal years 2022 and 2021 and current reports on Form 8-K.

**Item 6. [Reserved]**

Not applicable.

**Item 7. Management's Discussion and Analysis of Financial Conditions and Results of Operations.**

The following discussion and analysis of financial condition and results of operations relates to the operations and financial condition reported in the financial statements of Green Giant Inc. for the fiscal years ended September 30, 2022 and 2021 and should be read in conjunction with such financial statements and related notes included in this report.

**Preliminary Note Regarding Forward-Looking Statements.**

We make forward-looking statements in Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this report based on the beliefs and assumptions of our management and on information currently available to us. Forward-looking statements include information about our possible or assumed future results of operations which follow under the headings "Business and Overview," "Liquidity and Capital Resources," and other statements throughout this report preceded by, followed by or that include the words "believes," "expects," "anticipates," "intends," "plans," "estimates" or similar expressions.

Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed in these forward-looking statements, including the risks and uncertainties described below and other factors we describe from time to time in our periodic filings with the SEC. We therefore caution you not to rely unduly on any forward-looking statements. The forward-looking statements in this report speak only as of the date of this report, and we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. These forward-looking statements include, among other things, statements relating to:

● our ability to sustain our project development

● our ability to obtain additional land use rights at favorable prices;

● the market for real estate in Tier 3 and 4 cities and counties;

● our ability to obtain additional capital in future years to fund our planned expansion; or

● economic, political, regulatory, legal and foreign exchange risks associated with our operations.

**Our Business Overview**

We conduct substantially all of our business through Shaanxi Guangsha Investment and Development Group Co., Ltd, in Hanzhong, Shaanxi Province. Since the initiation of our business, we have been focused on expanding our business in certain Tier 3 and Tier 4 cities and counties in China.

**For the fiscal year of 2022, our sales and net loss were approximately $9.1 million and $108.1 million, representing a decrease of approximately 84.5% and 1796.0% from fiscal 2021, respectively. The year-over-year decrease was mainly caused by the following reasons: 1) The macro-control of the real estate market by the Chinese government, mainly suppressed in the past 12 months; 2) China's economic downturn due to repeated epidemic; 3) Lower disposable income resulted in the decreased demand for housing; 4) The Company is a real estate developer in the third and fourth tier cities in China, the decline in house prices is especially obvious than that in the first tier and second tier cities. For the** fiscal year of 2022, our average selling price ("ASP") for real estate projects located in Yang County was approximately $524 per square meter, decreased from ASP of $585.7 per square meter in fiscal 2021 due to less commercial units sold in Yangzhou Palace during fiscal 2022. The ASP of our Hanzhong real estate projects was approximately $629 per square meter for the fiscal year of 2022, compared to the ASP of $638 per square meter for fiscal 2021 due to the increased market price in the Hangzhong area.

**Market Outlook**

On November 11, 2022 the People's Bank of China and the China Banking and Insurance Regulatory Commission issued "Yin Fa [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.

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 positively affect the conservative attitude of commercial banks to intervene in the development of loan market and support the increasing demand from home buyers for mortagage loans.

The Company intends to remain focused on our existing construction projects in Hanzhong City and Yang County, deepening our institutional sales network, enhancing our cost and operational synergies and improving cash flows and strengthening our balance sheet.

The Company started the construction of the Liangzhou Road related projects after the approval by the local government of the road. These projects comprise residential for end-users and upgraders, shopping malls as well as serviced apartments and offices to satisfy different market demands.

In December 2019, a novel strain of coronavirus (COVID-19) surfaced. COVID-19 has spread rapidly to many parts of the PRC and other parts of the world in the first quarter of 2020, which has caused significant volatility in the PRC and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the PRC and international economies. For the year ended September 30, 2022, the COVID-19 pandemic did not have did have a material net impact on the Company's financial position and operating results, espeically Yang County which is operation was shut down. On and off from August 2022 onwards The extent of the impact on the Company's future financial results will be dependent on future developments such as the length and severity of the crisis, the potential resurgence of the pandemic, future government actions in response to the pandemic and the overall impact of the COVID-19 pandemic on the local economy and real estate markets, among many other factors, all of which remain highly uncertain and unpredictable. Given this uncertainty, the Company is currently unable to quantify the future impact of the COVID-19 pandemic on its future operations, financial condition, liquidity and results of operations if the current situation continues.

**Liangzhou road related projects**

In September 2013, the Company entered into an agreement ("Liangzhou Agreement") with the Hanzhong local government on the Liangzhou Road reformation and expansion project ("Liangzhou Road Project"). Pursuant to the Liangzhou Agreement, the Company was contracted to reform and expand the Liangzhou Road, a commercial street in downtown Hanzhong City, with a total length of 2,080 meters and width of 30 meters and to resettle the existing residents in the Liangzhou Road area. The government's original road construction budget was approximately $33million in accordance with the Liangzhou Agreement. The Company, in return, is being compensated by the local government to have an exclusive right on acquiring at least 394.5 Mu (approximately 65 acres) land use rights in a specified residential zone of Hanzhong City. The Liangzhou Road Project's road construction started at the end of 2013. In 2014, the original scope and budget on the Liangzhou Road reformation and expansion project was extended, because the local government included more area and resettlement residences into the project, which resulted in additional investments from the Company. In return, the Company was authorized by the local government to develop and manage the commercial and residential properties surrounding the Liangzhou Road project.

As of September 30, 2022, the actual costs incurred by the Company were approximately $173.3 million (September 30, 2021 - 180.4 million). The Liangzhou Road related projects mainly consists of Oriental Garden Phase II, Liangzhou Mansion and Pearl Commercial Plaza surrounding the Liangzhou road area:

**Oriental Garden Phase II**

Oriental Garden Phase II project is planned to consist of 8 high-rise residential buildings and 6 commercial buildings with total planned GFA of 370,298 square meters. The project will also include a farmer's market.

![](image_008.jpg)

---

| | |
|:---|:---|
| **Liangzhou Mansion**<br>Liangzhou Mansion project is planned to consist of 7 high-rise building and commercial shops on the first floor with total planned GFA of 160,000 square meters. | ![](image_009.jpg) |
| **Pearl Commercial Plaza**<br>Pearl Commercial Plaza is planned to consist one office building, one service apartment (or hotel), classical architecture style of Chinese traditional houses and shopping malls with total planned GFA of 124,191 square meters. | ![](image_010.jpg) |

---

The Company plans to start these three real estate projects in 2022 after the road construction passes the local government's inspection and approval. These related projects may take 2-3 years to be fully completed.

**Road Construction** 

Other road construction projects mainly included the Yang County East 2nd Ring Road construction project. The Company was engaged by the Yang County local government to construct the East 2nd Ring Road with a total length of 2.15 km. The local government is required to repay the Company's project investment costs within 3 years after completion of the project with interest at the interest rate based on the commercial borrowing rate with the similar term published by the China Construction Bank (which as of September 30, 2022 –was 4.75%). The local government's repayment could be used by the Company to reduce local surcharges or taxes otherwise required in the real estate development. The road construction was substantially completed as of September 30, 2021 and is in the process of government review and approval. For the year ended September 30, 2022, the Company received local government' installment payments of approximately $2.1 million and the final payment approximately of $4.5 million is pending the local government's approval . The installment received was included in the Company's customer deposits as of September 30, 2022.

In September 2012, the Company was approved by the Hanzhong local government to construct four municipal roads with a total length of approximately 1,192 meters. The project was deferred and then restarted during the quarter ended March 31, 2014. As of September 30, 2022, the local government was still in the process of assessing the budget for these projects, which is expected to be completed in fiscal 2023.

---

| | |
|:---|:---|
| **Under development:** | **Estimated Completion time of construction** |
| Hanzhong City Hanfeng Beiyuan East Road | The road construction was substantially completed and is pending local government's acceptance. |
| Hanzhong City Liangzhou Road related projects | The road construction was substantially completed and is pending local government's acceptance. |
| Hanzhong City Beidajie project | Under planning stage and waiting for local government's zoning plan |
| Yang County East 2<sup>nd</sup> Ring Road | The road construction was substantially completed and is pending local government's acceptance. |

---

**RESULTS OF OPERATIONS**

**Year ended September 30, 2022 as compared to year ended September 30, 2021**

**Revenues**

The following is a breakdown of revenue for the years ended September 30, 2022 and 2021:

---

| | | |
|:---|:---|:---|
|  | **For the years ended<br> September 30,** | **For the years ended<br> September 30,** |
|  | **2022** | **2021** |
| Revenue recognized for completed condominium real estate projects, | $9577405 | $58915239 |
| Less: sales tax | (505652) | (424074) |
| Revenue net of sales tax | $9071753 | $58491165 |

---

**Revenue recognized for completed condominium real estate projects**

The following table summarizes our revenue generated by different projects:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Years Ended September 30,** | **For the Years Ended September 30,** | **For the Years Ended September 30,** | **For the Years Ended September 30,** | **For the Years Ended September 30,** | |
|  | **2022** | **2022** | **2021** | **2021** | | |
|  | **Revenue** | **%** | **Revenue** | **%** |<br>**Variance** |<br>**Variance %** |
| **Projects:** |  |  |  |  |  |  |
| Yangzhou Pearl Garden Phase I and II | $— | —% | $564758 | 1.0% | $(564758) | (100.0)% |
| Oriental Pearl Garden | 810220 | 8.5% | 2186355 | 3.7% | (1376135) | (62.9)% |
| Nanyuan II Project |  | —% | 43625590 | 74.0% | (43625590) | (100.0)% |
| Mingzhu Garden (Nanyuan and Beiyuan) Phase I and II | 1063278 | 11.1% | 768494 | 1.3% | 294784 | 38.4% |
| Yangzhou Palace | 7703907 | 80.4% | 11770042 | 20.0% | (4066135) | (34.6)% |
| Total Revenue | 9577405 | 100.0% | 58915239 | 100% | (49337834) | (83.7)% |
| Sales Tax | (505652) |  | (424074) |  | (81578) | (19.2)% |
| Revenue net of sales tax | $9071753 |  | $58491165 |  | $(49419412) | (84.5)% |

---

Our revenues are derived from the sale of residential buildings, commercial store-fronts and parking spaces in projects that we have developed. Compared to last year, revenues before sales tax decreased by $49.4 million to approximately $9.6 million for the year ended September 30, 2022. The total GFA sold for the remaining real estate projects during the year September 30, 2022 and 2021 was 16,182 square meters and 25,687 square meters, respectively. The sales tax for the years ended September 30, 2022 was approximately $0.5 million, decreased by 19.2% from fiscal 2021, consistent with the decreased revenue in fiscal 2022.

The year-over-year decrease in revenue was mainly caused by the following reasons: 1) The macro-control of the real estate market by the Chinese government, mainly suppressed in the past 12 months; 2)China's economic downturn due to recurring epidemic; 3) Lower disposable income resulted in the decreased demand for housing; 4) The Company is a real estate developer in the third and fourth tier cities in China, the decline in house prices is especially obvious than that in the first tier and second tier cities.

**Cost of sales**

The following table sets forth a breakdown of our cost of revenues for the years indicated.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Years Ended September 30,** | **For the Years Ended September 30,** | **For the Years Ended September 30,** | **For the Years Ended September 30,** | **For the Years Ended September 30,** | |
|  | **2022** | **2022** | **2021** | **2021** | | |
|  | **Cost** | **Percentage** | **Cost** | **Percentage** |<br>**Variance** |<br>**Variance %** |
| Land use rights | $582548 | 10.6% | $4418450 | 9.5% | $(3835902) | (86.8)% |
| Construction costs | 4906863 | 89.4% | 42091551 | 90.5% | (37184688) | (88.3)% |
| Total | $5489411 | 100.0% | $46510001 | 100% | $(41020590) | (88.2)% |

---

Our cost of sales consists primarily of costs associated with land use rights and construction costs. Cost of sales are capitalized and allocated to development projects using a specific identification method. Costs are allocated to specific units within a project based on the ratio of the sales area of units to the estimated total sales area of the project or phase of the project times the total cost of the project or phase of the project.

Cost of sales was approximately $5.5 million for the year ended September 30, 2022 compared to $46.5 million for last year. It was mainly attributable to limited GFA sold for the year ended September 30, 2022.

 

*Land use rights cost:* The cost of land use rights includes the land premium we pay to acquire land use rights for our property development sites, plus taxes. Our land use rights cost varies for different projects according to the size and location of the site and the minimum land premium set for the site, all of which are influenced by government policies, as well as prevailing market conditions. Costs for land use rights for the year ended September 30, 2022 were approximately $0.6 million, as compared to approximately $4.4 million for fiscal 2021, representing an decrease of approximately $3.8 million from the same period of last year. The decrease was consistent with the fact that total GFA sold in fiscal 2022 was significantly decreased from previous year.

 

*Construction cost:* We outsource the construction of all of our projects to third party contractors, whom we select through a competitive tender process. Our construction contracts provide a fixed payment which covers substantially all labor, materials and equipment costs, subject to adjustments for some types of excess, such as design changes during construction or changes in government-suggested steel prices. Our construction costs consist primarily of the payments to our third-party contractors, which are paid over the construction period based on specified milestones. In addition, we purchase and supply a limited range of fittings and equipment, including elevators, window frames and door frames. Our construction costs for the year ended September 30, 2022 were approximately $4.9 million as compared to approximately $42.1 million for last year, representing a decrease of approximately $37.2 million. The decrease in construction cost was due to less real estate property units sold during fiscal 2022.

**Gross profits**

Gross profit was approximately $3.6million for the year ended September 30, 2022 as compared to gross profit of approximately $12.0 million in the prior year, representing an decrease of $8.4 million. The gross margin was 37.4% in fiscal 2022 as compared to gross margin of 17.1% in last year due to the revenue structure change. The GFA of commercial store-fronts is higher than residential buildings in fiscal 2022 and the average selling price of commercial store-fronts is also much higher than previous year.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the Year Ended September 30** | **For the Year Ended September 30** | **For the Year Ended September 30** | **For the Year Ended September 30** | **For the Year Ended September 30** | |
| | **2022** | **2022** | **2021** | **2021** | | |
| <br>**Project** | **Gross**<br>**Profit** | **Gross**<br>**Margin** | **Gross**<br>**Profit** | **Gross**<br>**Margin** |<br>**Variance** |<br>**Variance %** |
| Yangzhou Pearl Garden Phase I and II | $— |  | $122007 | 22% | $(122007) | (100.0)% |
| Yangzhou Palace | 3028858 | 39.3% | 2822485 | 24% | 206373 | 7.3% |
| Mingzhu Garden (Mingzhu Nanyuan and Beiyuan) Phase I and II | 431523 | 40.6% | 211825 | 28% | 219698 | 103.7% |
| Nanyuan II project | —% |  | 8619750 | 20% | (8619750) | (100.0)% |
| Oriental Pearl Garden | 627613 | 77.5% | 629171 | 29% | (1558) | (0.2)% |
| Sales Tax | (505652) |  | (424074) |  | (81578) | (19.2)% |
| Impairment losses on real estate property development completed |  |  |  |  |  | —% |
| Total Gross Profit | $3582342 | 37.4% | $11981164 | 20.3% | $(8398822) | (70.1)% |

---

**Operating expenses**

The following table presents our operating expenses by nature for the periods indicated:

---

| | | |
|:---|:---|:---|
|  | **For the years ended<br> September 30,** | **For the years ended<br> September 30,** |
|  | **2022** | **2021** |
| General and administrative expenses | $31198365 | $2691170 |
| Selling expenses | 361746 | 186886 |
| Impairment of contract assets | 5264748 |  |
| Impairment of real estate property under development | 73624727 |  |
| Total operating expenses | $110449586 | $2878056 |
| Percentage of revenue after sales tax | 1217.5% | 4.9% |

---

General and administrative expenses were $31,198,365 for 2022 compared to $2,691,170 for 2021. The year-on-year increase for 2022 was $28,507,195 mainly attributable to the issuance of 5,990,000 common shares to the Consultants being fully paid in RMB126.9 million (US$19.4 million) when issued and litigation case of construction contract dispute with Zhejiang Hongcheng Construction Group Co., Ltd. in amount of RMB64.68 million (US$9.87 million)

**Interest expense, net**

Net interest income was less than $0.1 million for the year ended September 30, 2022 and 2021.

**Other income, net**

For the year ended September 30, 2022, the Company had other expense of $1.3 million due to the fact that the payment for laws.

**Income taxes**

**PRC Taxes**

Our Company is governed by the Enterprise Income Tax Law of the People's Republic of China concerning private-run enterprises, which are generally subject to tax at a statutory rate of 25% on income reported in the statutory financial statements after appropriate tax adjustments. For the years ended September 30, 2022 and 2021, the Company is subject to income tax rate of 25% on taxable income. Although the possibility exists for reinterpretation of the application of the tax regulations by higher tax authorities in the PRC, potentially overturning the decision made by the local tax authority, the Company has not experienced any reevaluation of the income taxes for prior years. The PRC tax rules are different from the local tax rules and the Company is required to comply with local tax rules. The difference between the two tax rules will not be a liability of the Company. There will be no further tax payments for the difference. For the years ended September 30, 2022, the Company's effective income tax rate was 6%, increased from effective income tax rate of 28% for the year ended September 30, 2021. The lower effective income tax rate in fiscal 2022 was caused by the loss in fiscal year 2022.

**Net income**

We reported net loss of approximately $108.1million for the year ended September 30, 2022, as compared to the net income approximately $6.4 million for fiscal 2021. The decrease of $114.5 million in our net income was primarily due to more revenue reported for fiscal 2021 as discussed above under Revenues and Gross Profit

**Other comprehensive income**

We operate primarily in the PRC and the functional currency of our operating subsidiary is the Chinese Renminbi ("RMB"). The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation.

Translation adjustments amounted to approximately $11.4 million and $9.4million for the years ended September 30, 2022 and 2021, respectively. The balance sheet amounts with the exception of equity at September 30, 2022 were translated at RMB7.1135 to 1.00 USD as compared to 6.4434 RMB to 1.00 USD at September 30, 2021. The equity accounts were stated at their historical rate. The average translation rates applied to the income statements accounts for the years ended September 30, 2022 and 2021 were 6.5532 RMB to 1.00 USD and 6.5072 RMB to 1.00 USD, respectively.

**Liquidity and Capital Resources**

Cash Flow

**Year ended September 30, 2022 as compared to year ended September 30, 2021**

Comparison of cash flows results for the fiscal year ended September 30, 2022 and fiscal year ended September 30, 2021 are summarized as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **For the years ended<br> September 30,** | **For the years ended<br> September 30,** | |
|  | **2022** | **2021** |<br>**Variance** |
| Net cash (used in) provided by operating activities | $(757507) | $(604167) | $(153340) |
| Net Cash Used in Investing Activities | (26936915) |  | (26936915) |
| Net cash (used in) provided by financing activities | $28936915 | $— | $28936915 |
| Effect of changes of foreign exchange rate on cash | $(339505) | $201820 | $(541325) |
| Net (decrease) in cash | $902988 | $(402347) | $1305335 |

---

**Operating activities**

Net cash used in operating activities during fiscal 2022 was approximately $0.8 million, consisting of net loss of approximately $108.1 million, net changes in our operating assets and liabilities, which mainly included a decrease in real estate property completed of approximately $5.5 million due to the sales of real estate properties, a $8.4 million increase in other payables to suppliers and an increase of $9.5 million in Accrued expenses.

**Investing activities**

Net cash used in investing activities during fiscal 2022 was approximately $26.9 million, which mainly included the payment for energy equipment.

**Financing activities**

Net cash provided by financing activities during fiscal 2022 was $28.9 million while net cash provided by financing activities during fiscal 2021 was nil.

**Off-Balance Sheet Arrangements**

We do not have any off-balance sheet arrangements.

As an industry practice, the Company provides guarantees to PRC banks with respect to loans procured by the purchasers of the Company's real estate properties for the total mortgage loan amount until the completion of obtaining the "Certificate of Ownership" of the properties from the government, which generally takes six to twelve months. Because the banks provide loan proceeds without getting the "Certificate of Ownership" as loan collateral during the six to twelve months' period, the mortgage banks require the Company to maintain, as security for the Company's obligations under such guarantees, restricted cash of at least 5% of the mortgage proceeds. If a purchaser defaults on its payment obligations, the mortgage bank may deduct the delinquent mortgage payment from the security deposit and require the Company to pay the excess amount if the delinquent mortgage payments exceed 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. The Company has made necessary reserves in its restricted cash account to cover any potential mortgage defaults as required by the mortgage lenders. 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 September 30, 2021, our outstanding guarantees in respect of our customers' mortgage loans amounted to approximately $24.87 million and $66.0 million, respectively. As of September 30, 2022 and September 30, 2021, the amount of security deposits provided for these guarantees was approximately $1.78 million and $3.3 million, respectively, and the Company believes that such reserves are sufficient.

**Inflation**

Inflation has not had a material impact on our business and we do not expect inflation to have a material impact on our business in the near future.

**Critical Accounting Policies and Management Estimates**

**Revenue recognition**

The Company adopted FASB ASC Topic 606 Revenue from Contracts with Customers ("ASC 606") on October 1, 2018 using the modified retrospective approach. Under ASC 606, Revenue from Contracts with Customers, revenue is recognized in accordance with the transfer of goods and services to customers at an amount that reflects the consideration that the Company expects to be entitled to for those goods and services. The Company determines revenue recognition through the following steps:

● identification of the contract, or contracts, with a customer;

● identification of the performance obligations in the contract;

● determination of the transaction price, including the constraint on variable consideration;

● allocation of the transaction price to the performance obligations in the contract; and

● recognition of revenue when (or as) the Group satisfy a performance obligation.

Most of the Company's revenue is derived from real estate sales of condominiums and commercial property in the PRC. The majority of the Company's contracts contain a single performance obligation involving significant real estate development activities that are performed together to deliver a real estate property to customers. Revenues arising from real estate sales are recognized when or as the control of the asset is transferred to the customer. The control of the asset may transfer over time or at a point in time. For the sales of individual condominium units in a real estate development projects, the Company has an enforceable right to payment for performance completed to date, revenue is recognized over time by measuring the progress towards complete satisfaction of that performance obligation ("percentage completion method"). Otherwise, revenue is recognized at a point in time when the customer obtains control of the asset.

Under percentage completion method, revenue and profit from the sales of long-term real estate development properties is recognized by the percentage of completion method on the sale of individual units when all the following criteria are met:

&nbsp;&nbsp;&nbsp;&nbsp;a. Construction is beyond a preliminary stage.

&nbsp;&nbsp;&nbsp;&nbsp;b. The buyer is committed to the extent of being unable to require a refund except for non-delivery of the unit or interest.

&nbsp;&nbsp;&nbsp;&nbsp;c. Sufficient units have already been sold to assure that the entire property will not revert to rental property.

&nbsp;&nbsp;&nbsp;&nbsp;d. Sales prices are collectible.

&nbsp;&nbsp;&nbsp;&nbsp;e. Aggregate sales proceeds and costs can be reasonably estimated.

If any of the above criteria is not met, proceeds shall be accounted for as deposits until the criteria are met.

Under the percentage of completion method, revenues from individual real estate condominium units sold under development and related costs are recognized over the course of the construction period, based on the completion progress of a project. The progress towards complete satisfaction of the performance obligation is measured based on the Company's efforts or inputs to the satisfaction of the performance obligation, by reference to the contract costs incurred up to the end of reporting period as a percentage of total estimated costs for each contract. In relation to any project, revenue is determined by calculating the ratio of incurred costs, including land use rights costs and construction costs, to total estimated costs and applying that ratio to the contracted sales amounts. Cost of sales is recognized by determining the ratio of contracted sales during the period to total estimated sales value and applying that ratio to the incurred costs. Current period amounts are calculated based on the difference between the life-to-date project totals and the previously recognized amounts.

Any changes in significant judgments and/or estimates used in determining construction and development revenue could significantly change the timing or amount of construction and development revenue recognized. Changes in total estimated project costs or losses, if any, are recognized in the period in which they are determined.

Revenue from the sales of completed real estate condominium units is recognized at the time of the closing of an individual unit sale. This occurs when the customer obtains the physical possession, the legal title, or the significant risks and rewards of ownership of the assets and the Company has present right to payment and the collection of the consideration is probable. For municipal road construction projects, fees are generally recognized at the time of the projects are completed.

Contract balances

Timing of revenue recognition may differ from the timing of billing and cash receipts from customers. The Company records a contract asset when revenue is recognized prior to invoicing, or a contract liability when cash is received in advance of recognizing revenue. A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets include billed and billable receivables, which are the Company's unconditional rights to consideration other than to the passage of time. Contract liabilities include cash collected in excess of revenues. Customer deposits are excluded from contract liabilities.

The Company has elected to apply the optional practical expedient for costs to obtain a contract which allows the Company to immediately expense sales commissions (included under selling expenses) because the amortization period of the asset that the Company otherwise would have used is one year or less. Contract assets and liabilities are generally classified as current based on our contract operating cycle.

The Company provides "mortgage loan guarantees" only with respect to buyers who make down-payments of 20%-50% of the total purchase price of the property. The period of the mortgage loan guarantee begins on the date the bank approves the buyer's mortgage and we receive the loan proceeds in our bank account and ends on the date the "Certificate of Ownership" evidencing that title to the property has been transferred to the buyer. The procedures to obtain the Certificate of Ownership take six to twelve months (the "Mortgage Loan Guarantee Period"). If, after investigation of the buyer's income and other relevant factors, the bank decides not to grant the mortgage loan, our mortgage-loan based sales contract terminates and there will be no guarantee obligation. If, during the Mortgage Loan Guarantee Period, the buyer defaults on his or her monthly mortgage payment for three consecutive months, we are required to return the loan proceeds back to the bank, although we have the right to keep the customer's deposit and resell the property to a third party. Once the Certificate of Property has been issued by the relevant government authority, our loan guarantee terminates. If the buyer then defaults on his or her mortgage loan, the bank has the right to take the property back and sell it and use the proceeds to pay off the loan. The Company is not liable for any shortfall that the bank may incur in this event. To date, no buyer has defaulted on his or her mortgage payments during the Mortgage Loan Guarantee Period and the Company has not returned any loan proceeds pursuant to its mortgage loan guarantees.

**Use of estimates**

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes, and disclosure of contingent liabilities at the date of the consolidated financial statements. Estimates are used for, but not limited to, the assumptions and estimates used by management in recognizing development revenue under the percentage of completion method, the selection of the useful lives of property and equipment, provision necessary for contingent liabilities, revenue recognition, taxes and budgeted costs. Management believes that the estimates utilized in preparing its consolidated financial statements are reasonable and prudent. Actual results could differ from these estimates.

**Real estate property development completed and under development**

Real estate property consists of finished residential unit sites, commercial offices and residential unit sites under development. The Company leases the land for the residential unit sites under land use right leases with various terms from the PRC government. The cost of land use rights is included in the development cost and allocated to each project. Real estate property development completed and real estate property under development are stated at the lower of cost or fair value.

Expenditures for land development, including cost of land use rights, deed tax, pre-development costs, and engineering costs, exclusive of depreciation, are capitalized and allocated to development projects by the specific identification method. Costs are allocated to specific units within a project based on the ratio of the sales area of units to the estimated total sales area of the project (or phase of the project) multiplied by the total cost of the project (or phase of the project).

Cost of amenities transferred to buyers is allocated to specific units as a component of total construction cost. The amenity cost includes landscaping, road paving, etc. Once the projects are completed, the amenities are under control of the property management companies.

Real estate property development completed and under development are subject to valuation adjustments when the carrying amount exceeds fair value. An impairment loss is recognized only if the carrying amount of the asset is not recoverable and exceeds fair value. The carrying amount is not recoverable if it exceeds the sum of the undiscounted cash flows expected to be generated by the asset. The Company reviewed all of its real estate projects for future losses and impairment by comparing the estimated future undiscounted cash flows for each project to the carrying value of such project. For the years ended September 30, 2022, the Company recognized $67.8 million impairment for real estate property under development.

**Capitalization of Interest**

Interest incurred during and directly related to real estate development projects is capitalized to the related real estate property under development during the active development period, which generally commences when borrowings are used to acquire real estate assets and ends when the properties are substantially complete or the property becomes inactive. Interest is capitalized based on the interest rate applicable to specific borrowings or the weighted average of the rates applicable to other borrowings during the period. Interest capitalized to real estate property under development is recorded as a component of cost of real estate sales when related units are sold. All other interest is expensed as incurred.

**Subsequent Events**

On January 12, 2023, the Company and FT Global Capital Inc. ("FT Global") entered into a settlement agreement (the "FT Global Settlement Agreement"), pursuant to which FT Global has waived all claims and liabilities against the Company in connection with the Company's private placement in October 2022 and terminated the Exclusive Placement Agent Agreement entered by and between the Company and FT Global in May 2022. Under the terms of the FT Global Settlement Agreement, the Company is obligated to pay to FT Global cash compensation of $40,000 and share compensation of 40,000 shares of the Company's restricted common stock.

**Item 7A. Quantitative and Qualitative Disclosures about Market Risk**

Not applicable.

**Item 8. Financial Statements and Supplementary Data**

**GREEN GIANT INC.**

**TABLE OF CONTENTS**

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| | |
|:---|:---|
| [Report of Independent Registered Public Accounting Firms](#F_001) | F-2 |
| [Consolidated Balance Sheets as of September 30, 2022 and 2021](#F_002) | F-8 |
| [Consolidated Statements of Income and Comprehensive Income (Loss) for the Years ended September 30, 2022 and 2021 respectively](#F_003) | F-9 |
| [Consolidated Statements of Stockholders' Equity for the Years ended September 30, 2022 and 2021](#F_004) | F-10 |
| [Consolidated Statements of Cash Flows for the Years ended September 30, 2022 and 2021](#F_005) | F-11 |
| [Notes to Consolidated Financial Statements](#F_006) | F-12 - F-32 |

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<br> **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**<br>To the Board of Directors and Shareholders of<br> Green Giant Inc. (formerly China HGS Real Estate Inc.)<br>**Opinion on the Financial Statements**<br>We have audited the accompanying consolidated balance sheets of Green Giant. Inc. (formerly China HGS Real Estate Inc.) and subsidiaries (the "Company") as of September 30, 2022, and the related consolidated statements of operations and comprehensive loss, changes in stockholders' equity, and cash flows for the year ended September 30, 2022, and the related notes (collectively referred to as the "financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2022, and the results of its operations and its cash flows for the year ended September 30, 2022, in conformity with accounting principles generally accepted in the United States of America.<br>**Explanatory Paragraph – Going Concern**<br>The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. At September 30, 2022, the Company's real estate sales was $9.6 million decreased by 83.7% from 58.9 million in the previous period, and the operating losses is $106.9 million. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.<br>**Basis for Opinion**<br>These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.<br>We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.<br>Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Critical Audit Matters**<br>The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.<br> ****<br> ***Going concern***<br>Description of the Matter<br>At September 30, 2022, the Company's real estate sales was $9.6 million. decreased by 83.7% from $58.9 million in the previous period, and the operating losses is $106.9 million. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management plans to transforming and expanding to provide an energy storage integrated solution. However, there is no assurance that the measures can be achieved as planned.<br>This significant unusual situation is a critical audit matter as it relates to a material disclosure of going concern and involved complex estimation by management and its judgement.<br>How we Addressed the Matter in Our Audit<br> Our principal audit procedures included, among others:<br>&nbsp;&nbsp;&nbsp;&nbsp;●&nbsp;&nbsp;&nbsp;&nbsp; Obtaining an understanding, and evaluating management's assessment on whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time;<br>&nbsp;&nbsp;&nbsp;&nbsp;●&nbsp;&nbsp;&nbsp;&nbsp; Assessing the management's plans and obtaining sufficient appropriate audit evidence to determine whether or not substantial doubt can be alleviated or still exists;<br>&nbsp;&nbsp;&nbsp;&nbsp;●&nbsp;&nbsp;&nbsp;&nbsp; Reviewing the relevant disclosures to the consolidated financial statements.<br>***Impairment of long-lived assets related to Real estate property under development***<br>Description of the Matter<br>At September 30, 2022, the Company's book value of Real estate property under development was $145.3 million. As discussed in Note 2 to the consolidated financial statements, real estate property under development is tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.<br>The principal considerations for our determination that performing procedures relating to the impairment of long-lived assets related to Real estate property under development is a critical audit matter as there was significant judgment made by management estimating the discount rate and discounting period. This in turn led to a high degree of auditor judgment, and effort in performing procedures to evaluate the significant assumptions in the value in use estimate.<br>How we Addressed the Matter in Our Audit<br> Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These audit procedures included:<br>&nbsp;&nbsp;&nbsp;&nbsp;●&nbsp;&nbsp;&nbsp;&nbsp; evaluating the estimation methodology and testing the aforementioned significant assumptions and the completeness, accuracy, and relevance of underlying data used.<br>&nbsp;&nbsp;&nbsp;&nbsp;●&nbsp;&nbsp;&nbsp;&nbsp; significant assumptions were compared to current available economic trends data and known regulatory changes and evaluations were made of how changes to such assumptions, and other factors would affect the outcomes.<br>&nbsp;&nbsp;&nbsp;&nbsp;●&nbsp;&nbsp;&nbsp;&nbsp; assess the arithmetical correctness of the valuation model and the completeness of disclosures in the consolidated financial statements.<br>

***Revenue Recognition***<br>As disclose on Note 2 to the consolidated financial statements, The Company follows the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606- "Revenue from Contracts with Customers," ("ASC 606"). Under ASC 606, revenue is recognized in accordance with the transfer of goods and services to customers at an amount that reflects the consideration that the Company expects to be entitled to for those goods and services.<br>The Company generates revenue from real estate sales of condominiums and commercial properties which are recognized when or as the control of the asset is transferred to the customer. Other than the sale of individual condominium units for which there were no sales during the year ended September 30, 2022, revenue is recognized at a point in time when the customer obtains control of the asset.<br>How we Addressed the Matter in Our Audit<br>We identified revenue recognition as a critical audit matter due to the significant management judgment in determining revenue recognition for these customer agreements. This required a high degree of professional judgment and additional effort was required in performing the audit procedures to evaluate the methodology.<br>The primary procedure we performed to address this critical audit matter included the following: We obtained an understanding and evaluated the design of internal control that addressed the risks of material misstatement relating to revenue recognition. We evaluated management's significant accounting policies related to these customer agreements for reasonableness. We obtained and read a sample of the agreements and evaluated management's assumptions used to identify performance obligations and stand-alone prices for each distinct performance obligation, identified and reviewed unique contract terms that may impact the timing and amount of revenue recognized and identified the pattern of delivery, transfer of control and appropriateness of management's application of accounting policies in accordance with ASC Topic 606.<br>*/s/ OneStop Assurance PAC*<br>We have served as the Company's auditors since 2022.<br>Singapore<br> January 13, 2023<br> PCAOB Register Number 6732<br>

![](image_011.jpg)

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| | |
|:---|:---|
| ![](image_012.jpg) | **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**<br>To the Board of Directors and Shareholders of<br> Green Giant Inc. (formerly China HGS Real Estate Inc.)<br>**Opinion on the Financial Statements**<br>We have audited the accompanying consolidated balance sheet of Green Giant Inc. (formerly China HGS Real Estate Inc.) (the "Company") as of September 30, 2021, and the related consolidated statements of income and comprehensive income (loss), changes in stockholders' equity, and cash flows for the year ended September 30, 2021, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2021 and the results of its operations and its cash flows for the year ended September 30, 2021, in conformity with accounting principles generally accepted in the United States of America.<br>**Basis for Opinion**<br>These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.<br>We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.<br>Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.<br>**Critical Audit Matters**<br>The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. |

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![](image_013.jpg)

***Valuation of real estate property***<br>As described in Note 2 to the consolidated financial statements, the Company tests real estate completed and under development for recoverability when events or changes in circumstances indicate that its carrying value may not be recoverable. Management determines whether impairment has occurred by comparing each property's fair value determined utilizing future estimated undiscounted cash flows to the property's carrying value.<br>The Company's undiscounted future estimated cash flows analysis requires management to make significant estimates and assumptions. If the expected future cash flows is less than the carrying value of the property, the Company will recognize an impairment charge. Fair value is determined based on independent appraisals, selling prices of comparable properties, sale agreements under negotiation, and/or final selling prices.<br>We identified the valuation and impairment of real estate as a critical audit matter not only because of the materiality in the consolidated financial statements, but also due to significant estimates and assumptions management makes to evaluate the recoverability of its real estate properties. Given these factors, the related audit effort in evaluating management's assumptions in determining the recoverability of real estate assets was extensive and required a high degree of auditor judgment.<br>The primary procedures we performed to address this critical audit matter included the following: We obtained an understanding and evaluated the design of control over management's evaluation of recoverability of real estate property assets, including key inputs utilized in estimating the undiscounted future cash flows from sales. We reviewed and tested the undiscounted cash flow analysis, including estimates of timing of sales and estimated sales proceeds, for each real estate asset with possible impairment indicators by evaluating the source information and assumptions used by management and tested the mathematical accuracy of the calculations. We made inquiries of management regarding the current state of potential transactions and about management's judgments to understand the probability of future events that could affect the cash flow assumptions utilized for the properties. We also obtained and reviewed the independent valuation reports issued by the independent valuation firm on the properties, noting the valuation methodology and assumptions used in the determination of the related fair value of the property as well as the relevant qualifications, and experience of the firm in the preparation of the valuation reports.<br>***Revenue Recognition***<br> ****<br> As disclosed in Note 2 to the consolidated financial statements, the Company follows the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606- "Revenue from Contracts with Customers," ("ASC 606"). Under ASC 606, revenue is recognized in accordance with the transfer of goods and services to customers at an amount that reflects the consideration that the Company expects to be entitled to for those goods and services.<br>

![](image_013.jpg)

The Company generates revenue from real estate sales of condominiums and commercial properties which are recognized when: a) construction is beyond a preliminary stage; b) the buyer is committed to the extent of being unable to require a refund except for non-delivery of the unit or interest; c) sufficient units have already been sold to assure that the entire property will not revert to rental property; d) sale prices are collectible; and e) aggregate sales proceeds and costs can be reasonably estimated. Other than the sale of individual condominium units for which there were no sales during the year ended September 30, 2021, revenue is recognized at a point in time when the customer obtains control of the asset.<br>We identified revenue recognition as a critical audit matter due to the significant management judgment in determining revenue recognition for these customer agreements. This required a high degree of auditor judgment and additional effort was required in performing the audit procedures to evaluate the methodology.<br>The primary procedures we performed to address this critical audit matter included the following: We obtained an understanding and evaluated the design of internal control that addressed the risks of material misstatement relating to revenue recognition. We evaluated management's significant accounting policies related to these customer agreements for reasonableness. We obtained and read a sample of the agreements and evaluated management's assumptions used to identify performance obligation and the price for the performance obligation, identified and reviewed unique contract terms that may impact the timing and amount of revenue recognized and identified the pattern of delivery, transfer of control and appropriateness of management's application of accounting policies in accordance with ASC Topic 606.<br>*/s/ Wei, Wei & Co., LLP*<br>We have served as the Company's auditors from December 2020 to August 2022.<br>Flushing, New York<br> January 13, 2022<br> PCAOB ID: 2388<br>

**GREEN GIANT INC.**

**CONSOLIDATED BALANCE SHEETS**

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| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2022** | **September 30,**<br>**2021** |
| **ASSETS** |  |  |
| Cash | $1360217 | $170001 |
| Restricted cash | 3007960 | 3295188 |
| Contract assets | 7628770 | 13723793 |
| Real estate property-development completed | 74772530 | 88145841 |
| Other assets | 3767190 | 8358925 |
| Prepayment for energy equipment | 26936915 |  |
| Property,plant and equipment,net | 483219 | 558086 |
| Security deposits | 1771019 | 1955202 |
| Real estate property under development | 145300588 | 222458149 |
| Due from local government- property development completed | 42358986 | 46335378 |
| &nbsp;&nbsp;&nbsp;**Total Assets** | $307387394 | $385000563 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Construction loans | $108366351 | $119636222 |
| Accounts payable | 10606635 | 18259151 |
| Other payables | 13578713 | 6430992 |
| Construction deposits | 3029565 | 3344917 |
| Contract liabilities | 1989898 | 1886075 |
| Customer deposits | 19842768 | 19803917 |
| Accrued expenses | 10547436 | 1987567 |
| Taxes payable | 19980358 | 22954011 |
| &nbsp;&nbsp;&nbsp;**Total liabilities** | 187941724 | 194302852 |
| **Commitments and Contingencies** |  |  |
| Stockholders' equity\* |  |  |
| Commons stock,$0.001 par value,200,000,000 shares authorized;46,464,929 and 25,617,807 shares outstanding as at September 30, 2022 and September 30, 2021 | 46464 | 25617 |
| Additional paid-in capital | 184821771 | 136535303 |
| Statutory surplus | 11095939 | 11095939 |
| Retained earnings | (67432727) | 40691955 |
| Accumulated other comprehensive loss | (9085777) | 2348897 |
| **Total stockholders' equity** | 119445670 | 190697711 |
| **Total Liabilities and Stockholders' Equity** | $307387394 | $385000563 |

---

The accompanying notes are an integral part of these consolidated financial statements

**GREEN GIANT INC.**

**CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME** 

**FOR THE YEARS ENDED SEPTEMBER 30, 2022 and 2021**

---

| | | |
|:---|:---|:---|
|  | **2022** | **2021** |
| **Real estate sales** | $9577405 | $58915239 |
| Less: Sales tax | (505652) | (424074) |
| Cost of real estate sales | 5489411 | 46510001 |
| **Gross profit** | 3582342 | 11981164 |
| Operating expenses |  |  |
| Selling and distribution expenses | 361746 | 186886 |
| General and administrative expenses | 31198365 | 2691170 |
| Impairment of contract assets | 5264748 |  |
| Impairment of real estate property under development | 73624727 |  |
| **Total operating expenses** | 110449586 | 2878056 |
| **Operating (loss)income** | (106867244) | 9103108 |
| **Interest income, net** | 5927 | 5690 |
| **Other expense, net** | (1263365) | (246814) |
| **Income before income taxes** | (108124682) | 8861984 |
| Provision for income taxes |  | 2486546 |
| **Net (loss)income** | (108124682) | 6375438 |
| Other comprehensive income: |  |  |
| Foreign currency translation adjustment | (11434674) | 9388387 |
| **Comprehensive (loss) income** | $(119559356) | $15763825 |
| **Basic and diluted income per common share\*:** |  |  |
| Basic | $(2.99) | $0.27 |
| Diluted | $(2.16) | $0.27 |
| **Weighted average common shares outstanding\*:** |  |  |
| Basic | 36189189 | 23944328 |
| Diluted | 50055537 | 23944328 |

---

The accompanying notes are an integral part of these consolidated financial statements

**GREEN GIANT INC.**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**

**FOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | | | |
|  | **Shares\*** | **Amount** |<br>**Additional**<br>**Paid-in**<br>**Capital** |<br>**Statutory**<br>**Reserve** |<br>**Retained**<br>**Earnings(Deficit)** | **Accumulated**<br>**Other**<br>**Comprehensive**<br>**Income (Loss)** |<br><br>**Total** |
| Balance at September 30, 2020 | 22525693 | 22525 | 129930330 | 10458395 | 34954061 | (7039490) | 168325821 |
| Issurance of shares for debt settlement | 3092114 | 3092 | 6604973 |  |  |  | 6608065 |
| Net income |  |  |  |  | 6375438 |  | 6375438 |
| Appropriation to statutory reserve |  |  |  | 637544 | (637544) |  |  |
| Foreign currency translation adjustments |  |  |  |  |  | 9388387 | 9388387 |
| Balance at September 30, 2021 | 25617807 | $25617 | $136535303 | $11095939 | $40691955 | $2348897 | $190697711 |
| Private placements | 14847122 | 14847 | 28922068 |  |  |  | 28936915 |
| Net income |  |  |  |  | (108124682) |  | (108124682) |
| Appropriation to statutory reserve |  |  |  |  |  |  |  |
| Share-based compensation | 6000000 | 6000 | 19364400 |  |  |  | 19370400 |
| Foreign currency translation adjustments |  |  |  |  |  | (11434674) | (11434674) |
| Balance at September 30, 2022 | 46464929 | $46464 | $184821771 | $11095939 | $(67432727) | $(9085777) | $119445670 |

---

The accompanying notes are an integral part of these consolidated financial statements

**GREEN GIANT INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**FOR THE YEARS ENDED SEPTEMBER 30, 2022 and 2021**

---

| | | |
|:---|:---|:---|
|  | **2022** | **2021** |
| **Cash flows from operating activities:** |  |  |
| Net (loss) income | $(108124682) | $6375438 |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: |  |  |
| Depreciation | 24201 | 43510 |
| Impairment | 78889475 |  |
| Share based compensation | 19370400 |  |
| Contract assets | (51931) | 1284745 |
| Real estate property development completed | 5503345 | 11498195 |
| Real estate property under development | (13039391) | 21526902 |
| Due from local government- property development completed | - | (43311572) |
| Other assets | 4143409 | 208522 |
| Accounts payables | (6439990) | (1830135) |
| Other payables | 8357875 | 2165081 |
| Contract liabilities | 305561 | (60288) |
| Customer deposits | 2067231 | (637942) |
| Construction deposits |  | (29601) |
| Accrued expenses | 9482260 |  |
| Taxes payables | (1245270) | 2162978 |
| **Net cash (used in) operating activities** | (757507) | (604167) |
| Cash Flows from Investing Activities: |  |  |
| Prepayment for energy equipment | (26936915) |  |
| Net Cash (used in) Investing Activities | (26936915) |  |
| **Cash flow from financing activities:** |  |  |
| Proceeds from private placements | 28936915 |  |
| **Net cash provide by financing activities** | 28936915 |  |
| **Effect of changes in foreign exchange rate on cash** | (339505) | 201820 |
| **Net increase (decrease) in cash** | 902988 | (402347) |
| **Cash, restricted cash, beginning of year** | 3465189 | 3867536 |
| **Cash, restricted cash, end of year** | $4368177 | $3465189 |
| **Supplemental disclosures of cash flow information:** |  |  |
| Interest paid | $— | $2018918 |
| Income taxes paid | $18733 | $266999 |
| Cash | $1360217 | $170001 |
| Restricted cash | $3007960 | $3295188 |
|  | $4368177 | $3465189 |
| **Non-cash financing activities:** |  |  |
| Reclassification of interest payable to construction loan | $6612142 | $5024385 |
| Settlements of accounts payable with real estate property under development | $— | $(14532967) |
| Issuance of stock for settlement of accounts payable | $— | $6608065 |

---

The accompanying notes are an integral part of these consolidated financial statements

**GREEN GIANT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION**

Green Giant Inc (Formerly known as China HGS Real Estate Inc.) (the "Company" or "GGE" or "we", "our", "us") is a corporation organized under the laws of the State of Florida.

GGE does not conduct any substantive operations of its own. Instead, through its subsidiary, Shaanxi HGS Management and Consulting Co., Ltd ("Shaanxi HGS"), it entered into certain exclusive contractual agreements with the owners of the Company's PRC operating subsidiary, 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.

Based on these contractual arrangements, management believes that Guangsha should be considered a "Variable Interest Entity" ("VIE") under the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 810 "Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51", because the equity investors in Guangsha no longer have the characteristics of a controlling financial interest, and the Company, through Shaanxi HGS, is the primary beneficiary of Guangsha. Accordingly, Guangsha has been consolidated.

The Company, through its subsidiaries and VIE, engages in real estate development, in the construction and sale of residential apartments, parking lots and commercial properties. Total assets and liabilities presented on the consolidated balance sheets and sales, cost of sales, net income presented on Consolidated Statement of Income and Comprehensive Income (Loss) as well as the cash flows from operations, investing and financing activities presented on the Consolidated Statement of Cash Flows are substantially the financial position, operations and cash flow of Guangsha. The Company has not provided any financial support to Guangsha for the years ended September 30, 2022 and 2021. The following assets,liabilities and impairment loss of the consolidated VIE are included in the accompanying consolidated financial statements of the Company as of September 30, 2022 and 2021:

---

| | | |
|:---|:---|:---|
|  | **Balance as of** | **Balance as of** |
|  | **September 30,**<br>**2022** | **September 30,**<br>**2021** |
| Total assets | $280939924 | $385000583 |
| Total liabilities | $183674040 | $189470931 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2022** | **2022** | **2021** | **2021** |
| Impairment loss | | 78,889,475 | |  |

---

**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Principles of consolidation and basis of presentation**

The Company's consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The consolidated financial statements include the accounts of Green Giant Inc. (the "Company" or "China HGS"), China HGS Investment Inc. ("HGS Investment"), Shaanxi HGS Management and Consulting Co., Ltd. ("Shaanxi HGS") and its variable interest entity ("VIE"), Shaanxi Guangsha Investment and Development Group Co., Ltd. ("Guangsha"). All inter-company transactions and balances between the Company and its subsidiaries have been eliminated upon consolidation.

The Company's operations involve real estate development and sales. Starting from the year ended September 30, 2020, the Company has been involved in larger real estate property development with an extended development cycle. As a result, it is not possible to precisely measure the duration of its operating cycle. The accompanying consolidated balance sheets of the Company have been prepared on an unclassified basis in accordance with real estate industry practice.

**GREEN GIANT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**Liquidity**

In assessing the liquidity, management monitors and analyzes the Company's cash on-hand, its ability to generate sufficient revenue sources in the future, and its operating and capital expenditure commitments. As of September 30, 2022, our total cash and restricted cash balance was approximately $4.37 million, a increase from approximately $3.5 million as of September 30, 2021. With respect to capital funding requirements, the Company budgeted its capital spending based on ongoing assessments of needs to maintain adequate cash. As of September 30, 2022, we had approximately $74.8 million of completed residential apartments and commercial units available for sale to potential buyers. Although we reported approximately $10.6 million accounts payable as of September 30, 2022, due to the long-term relationship with our construction suppliers and subcontractors, we were able to effectively manage cash spending on construction and negotiate with them to adjust the payment schedule based on our cash on hand. In addition, most of our existing real estate development projects relate to the old town renovation which are supported by the local government. As of September 30, 2022, we reported approximately $108.4 million of construction loans borrowed from financial institutions controlled by the local government and such loans can only be used on the old town renovation related project development. We expect that we will be able to renew all of the existing construction loans upon their maturity and borrow additional new loans from local financial institutions, when necessary, based on our past experience and the Company's good credit history. Also, the Company's cash flows from pre-sales and current sales should provide financial support for our current development projects and operations. For the year ended September 30, 2022, we had six large ongoing construction projects (see Note 3, real estate properties under development) which were under the preliminary development stage due to delayed inspection and acceptance of the development plans by the local government. In June 2020, we completed the residence relocation surrounding the Liangzhou Road related projects and launched the construction of these projects in December 2020. For the other four projects, we expect we will be able to obtain the government's approval of the development plans on these projects in the coming fiscal year and start the pre-sale of the real estate properties to generate cash when certain property development milestones have been achieved.

**Revenue recognition**

The Company follows FASB ASC Topic 606 "Revenue from Contracts with Customers" ("ASC 606"). Under ASC 606, Revenue from Contracts with Customers, revenue is recognized in accordance with the transfer of goods and services to customers at an amount that reflects the consideration that the Company expects to be entitled to for those goods and services. The Company determines revenue recognition through the following steps:

● identification of the contract, or contracts, with a customer;

● identification of the performance obligations in the contract;

● determination of the transaction price, including the constraint on variable consideration;

● allocation of the transaction price to the performance obligations in the contract; and

● recognition of revenue when (or as) the Company satisfies a performance obligation.

**GREEN GIANT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

Most of the Company's revenue is derived from real estate sales of condominiums and commercial properties in the PRC. The majority of the Company's contracts contain a single performance obligation involving significant real estate development activities that are performed together to deliver a real estate property to its customers. Revenues arising from real estate sales are recognized when or as the control of the asset is transferred to the customer. The control of the asset may transfer over time or at a point in time. For the sales of individual condominium units in a real estate development project, the Company has an enforceable right to payment for performance completed to date, revenue is recognized over time by measuring the progress towards complete satisfaction of that performance obligation ("percentage completion method"). Otherwise, revenue is recognized at a point in time when the customer obtains control of the asset. For the years ended September 30, 2022 and 2021, the Company did not have any construction in progress meet the revenue recognition under percentage completion method.

Under the percentage completion method, revenue and profit from the sales of long-term real estate development properties is recognized by the percentage of completion method on the sale of individual units when all the following criteria are met:

&nbsp;&nbsp;&nbsp;&nbsp;a. Construction is beyond a preliminary stage.

&nbsp;&nbsp;&nbsp;&nbsp;b. The buyer is committed to the extent of being unable to require a refund except for non-delivery of the
unit or interest.

&nbsp;&nbsp;&nbsp;&nbsp;c. Sufficient units have already been sold to assure that the entire property will not revert to rental property.

&nbsp;&nbsp;&nbsp;&nbsp;d. Sale prices are collectible.

&nbsp;&nbsp;&nbsp;&nbsp;e. Aggregate sales proceeds and costs can be reasonably estimated.

If any of the above criteria are not met, proceeds shall be accounted for as deposits until the criteria are met.

Under the percentage of completion method, revenues from individual real estate condominium units sold under development and related costs are recognized over the course of the construction period, based on the completion progress of a project. The progress towards complete satisfaction of the performance obligation is measured based on the Company's efforts or inputs to the satisfaction of the performance obligation, by reference to the contract costs incurred up to the end of reporting period as a percentage of total estimated costs for each contract. In relation to any project, revenue is determined by calculating the ratio of incurred costs, including land use rights costs and construction costs, to total estimated costs and applying that ratio to the contracted sales amounts. Cost of sales is recognized by determining the ratio of contracted sales during the period to total estimated sales value and applying that ratio to the incurred costs. Current period amounts are calculated based on the difference between the life-to-date project totals and the previously recognized amounts.

Any changes in significant judgments and/or estimates used in determining construction and development revenue could significantly change the timing or amount of construction and development revenue recognized. Changes in total estimated project costs or losses, if any, are recognized in the period in which they are determined.

Revenue from the sales of previously completed real estate condominium units is recognized at the time of the closing of an individual unit sale. This occurs when the customer obtains the physical possession, the legal title, or the significant risks and rewards of ownership of the property and the Company has the right to payment and the collection of the consideration is probable. For municipal road construction projects, revenues are generally recognized at the time the projects are completed.

 

**GREEN GIANT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

*Disaggregation of Revenues*

Disaggregated revenues are as follows:

---

| | | |
|:---|:---|:---|
|  | **For the years ended September 30,** | **For the years ended September 30,** |
|  | **2022** | **2021** |
| Revenue recognized for completed condominium real estate projects, net of sales taxes | $9071753 | $15179593 |
| Revenue recognized for completed condominium real estate projects sold to government, net of sales taxes |  | 43311572 |
| Total revenue, net of sales taxes | $9071753 | $58491165 |

---

*Contract balances*

Timing of revenue recognition may differ from the timing of billing and cash receipts from customers. The Company records a contract asset when revenue is recognized prior to invoicing, or a contract liability when cash is received in advance of recognizing revenue. A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets include billed and billable receivables, which are the Company's unconditional rights to consideration other than the passage of time. Contract liabilities include cash collected in advance and in excess of revenue recognized. Customer deposits are excluded from contract liabilities.

The Company has elected to apply the optional practical expedient for costs to obtain a contract which allows the Company to immediately expense sales commissions (included under selling expenses) because the amortization period of the asset that the Company otherwise would have used is one year or less.

The Company provides "mortgage loan guarantees" only with respect to buyers who make down-payments of 20%-50% of the total purchase price of the property. The period of the mortgage loan guarantee begins on the date the bank approves the buyer's mortgage and we receive the loan proceeds in our bank account and ends on the date the "Certificate of Ownership" evidencing that title to the property has been transferred to the buyer. The procedures to obtain the Certificate of Ownership take six to twelve months (the "Mortgage Loan Guarantee Period"). If, after investigation of the buyer's income and other relevant factors, the bank decides not to grant the mortgage loan, our mortgage-loan based sales contract terminates and there will be no guarantee obligation. If, during the Mortgage Loan Guarantee Period, the buyer defaults on his or her monthly mortgage payment for three consecutive months, we are required to return the loan proceeds back to the bank, although we have the right to keep the customer's deposit and resell the property to a third party. Once the Certificate of Ownership has been issued by the relevant government authority, our loan guarantee terminates. If the buyer then defaults on his or her mortgage loan, the bank has the right to take the property back and sell it and use the proceeds to pay off the loan. The Company is not liable for any shortfall that the bank may incur in this event. To date, no buyer has defaulted on his or her mortgage payments during the Mortgage Loan Guarantee Period and the Company has not returned any loan proceeds pursuant to its mortgage loan guarantees.

**Use of estimates**

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes, and disclosure of contingent liabilities at the date of the consolidated financial statements. Estimates are used for, but not limited to, the assumptions and estimates used by management in recognizing development revenue under the percentage of completion method, the selection of the useful lives of property and equipment, provision necessary for contingent liabilities, revenue recognition, taxes and budgeted costs. Management believes that the estimates utilized in preparing its consolidated financial statements are reasonable and prudent. Actual results could differ from these estimates.

Changes of estimated gross profit margins related to revenue recognized under the percentage of completion method are made in the period in which circumstances requiring the revisions become known. For the year ended September 30, 2022 and 2021, the Company did not change the estimated revenue and related gross profit margin.

**Going Concern** 

The Company's financial statements are prepared assuming that the Company will continue as a going concern.

The Company incurred operating losses of $106.9 million and had negative operating cash flows of $0.8 million and may continue to incur operating losses and generate negative cash flows as the Company implements its future business plan. In order to meet its working capital needs through the next twelve months and to fund the growth of the Company, the Company may consider plans to raise additional funds through the issuance of equity or debt. Although the Company intends to obtain additional financing to meet its cash needs, the Company may be unable to secure any additional financing on terms that are favorable or acceptable to it, if at all.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully execute its new business strategy and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.

The Company is transforming itself from legacy business to a new energy corporation and has appointed a CEO in USA subsidiary to lead and operate the new business venture.

**GREEN GIANT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 ****

**Fair value of financial instruments**

The Company follows the provisions of ASC Topic 820, "Fair Value Measurements and Disclosures." It clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3-Inputs are unobservable inputs which reflect the reporting entity's own assumptions or what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts reported in the accompanying consolidated balance sheets for cash, restricted cash and all other current assets, security deposits for land use rights, loans and all current liabilities approximate their fair value based on the short-term maturity of these instruments. The fair value of the customer, construction and security deposits approximate their carrying amounts because the deposits are received in cash. It was impractical to estimate the fair value of the amount due from the local government and the other payables.

**Foreign currency translation**

The Company's financial information is presented in U.S. dollars. The functional currency of the Company's operating VIE is Renminbi ("RMB"), the currency of the PRC. The consolidated financial statements of the Company have been translated into U.S. dollars in accordance with ASC Topic 830-30 "Translation of Financial Statements". The financial information is first prepared in RMB and then is translated into U.S. dollars at year-end exchange rates as to assets and liabilities and average exchange rates as to revenue,expenses and cash flows. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive income (loss) in stockholders' equity.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2022** | **2022** | **2021** | **2021** |
| Year end RMB : USD exchange rate |  | 7.1135 |  | 6.4434 |
| Annual average RMB : USD exchange rate | | 6.5532 | | 6.5072 |

---

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into U.S. dollars at the rates used in translation.

**Cash**

Cash includes cash on hand and demand deposits in accounts maintained with large reputable commercial banks within the PRC. The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents.

**Restricted cash**

The restricted cash is required by the banks as collateral for mortgage loans given to the home buyers before obtaining the certificates of ownership of the properties as collateral. In order to provide the banks with the certificates of ownership, the Company is required to complete certain procedures with the Chinese government, which normally takes six to twelve months. Because the banks provide the loan proceeds to the Company without obtaining certificates of ownership as loan collateral during this six to twelve month period, the mortgage banks require the Company to maintain, as restricted cash, 5% to 10% of the mortgage proceeds as security for the Company's obligations under such guarantees. The restricted cash is released by the banks once they receive the certificate of ownership. These deposits are not covered by insurance. The Company has not experienced any losses in such accounts and management believes its restricted cash account is not exposed to any significant risks.

**GREEN GIANT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** 

**Security deposits for land use rights**

Security deposits for land use rights consist of deposits held by the PRC government for the purchase of land use rights and the deposits held by an unrelated party to transfer its land use rights to the Company. The deposits will be reclassified to real estate property under development upon the transfer of legal title.

**Real estate property development completed and under development**

Real estate property consists of finished residential unit sites, commercial offices and residential unit sites under development. The Company leases the land for the residential unit sites under land use right leases with various terms from the PRC government. The cost of land use rights is included in the development cost and allocated to each project. Real estate property development completed and real estate property under development are stated at the lower of cost or fair value.

Expenditures for land development, including cost of land use rights, deed tax, pre-development costs, and engineering costs, exclusive of depreciation, are capitalized and allocated to development projects by the specific identification method. Costs are allocated to specific units within a project based on the ratio of the sales area of units to the estimated total sales area of the project (or phase of the project) multiplied by the total cost of the project (or phase of the project).

Cost of amenities transferred to buyers is allocated to specific units as a component of total construction cost. The amenity cost includes landscaping, road paving, etc. Once the projects are completed, the amenities are under control of the property management companies.

Real estate property development completed and under development are subject to valuation adjustments when the carrying amount exceeds fair value. An impairment loss is recognized only if the carrying amount of the assets is not recoverable and exceeds its fair value. The carrying amount is not recoverable if it exceeds the sum of the undiscounted cash flows expected to be generated by the assets. The Company reviews all of its real estate projects for future losses and impairment by comparing the estimated future undiscounted cash flows for each project to the carrying value of such project. For the years ended September 30, 2022 and 2021, the Company recognized $73.6 million and nil impairment loss for its real estate properties, respectively.

**Capitalization of interest**

Interest incurred during and directly related to real estate development projects is capitalized to the related real estate property under development during the active development period, which generally commences when borrowings are used to acquire real estate assets and ends when the properties are substantially complete or the property becomes inactive. Interest is capitalized based on the interest rate applicable to specific borrowings or the weighted average of the rates applicable to other borrowings during the period. Interest capitalized to real estate property under development is recorded as a component of cost of real estate sales when related units are sold. All other interest is expensed as incurred. For the years ended September 30, 2022 and 2021, the total interest capitalized in the real estate property development was $6,612,142 and $7,043,303, respectively.

**Property, plant and equipment, net**

Property, plant and equipment are recorded at cost less accumulated depreciation and any impairment losses. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets, less any estimated residual value. Estimated useful lives of the assets are as follows:

Buildings 39 years <br> Machinery and office equipment 5-10 years <br> Vehicles 8 years

**GREEN GIANT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

Any gain or loss on disposal or retirement of a fixed asset is recognized in the profit and loss account and is the difference between the net sales proceeds and the net carrying amount of the asset. When property and equipment are retired or otherwise disposed of, the asset and accumulated depreciation are removed from the accounts and the resulting profit or loss is reflected in income (loss).

Maintenance, repairs and minor renewals are charged directly to expense as incurred unless such expenditures extend the useful life or represent a betterment, in which case they are capitalized.

**Impairment of long-lived assets**

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally determined by using the asset's expected future discounted cash flows or market value. The Company estimates fair value of the assets based on certain assumptions such as budgets, internal projections, and other available information as considered necessary. There impairment of long-lived assets is $78.9 million and nil for the years ended September 30, 2022 and 2021.

For contract assets and prepayment of uncompleted projects, the Company adopts aging analysis and discounted cash flow by attaching a percentage rate to calculate impair loss respecctively.

**Customer deposits**

Customer deposits consist of amounts received from customers relating to the sale of residential units in the PRC. In the PRC, customers will generally obtain permanent financing for the purchase of their residential unit prior to the completion of the project. The lending institution will provide the funding to the Company upon the completion of the financing rather than the completion of the project. The Company receives these funds and recognizes them as a liability until the revenue can be recognized.

**Property warranties**

The Company provides its customers with warranties which cover major defects of the building structure and certain fittings and facilities of properties sold. The warranty period varies from two years to five years, depending on different property components the warranty covers. The Company continually estimates potential costs for materials and labor with regard to warranty-type claims expected to be incurred subsequent to the delivery of a property. Reserves are determined based on historical data and trends with respect to similar property types and geographical areas. The Company continually monitors the warranty reserve and makes adjustments to its pre-existing warranties, if any, in order to reflect changes in trends and historical data as information becomes available. The Company may seek further recourse against its contractors or any related third parties if it can be proved that the faults are caused by them. In addition, the Company also withholds up to 2% of the contract cost from sub-contractors for periods of two to five years. These amounts are included in construction deposits, and are only paid to the extent that there has been no warranty claim against the Company relating to the work performed or materials supplied by the subcontractors. For the years ended September 30, 2022 and 2021, the Company had not recognized any warranty costs in excess of the amount retained from subcontractors and therefore, no warranty reserve is considered necessary at the balance sheet dates.

**Construction deposits**

Construction deposits are the warranty deposits the real estate contractors provide to the Company upon signing the construction contracts. The Company can use such deposits to reimburse customers in the event of customer claims due to construction defects. The remaining balance of the deposits are returned to the contractors when the terms of the after-sale property warranty expires, which normally occurs within two to five years after the date of the deposit.

**Income taxes**

In accordance with FASB ASC Topic 740 "Income Taxes," deferred tax assets and liabilities are for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowances is established, when necessary, to reduce net deferred tax assets to the amount expected to be realized.

**GREEN GIANT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

ASC 740-10-25 prescribes a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax positions taken (or expected to be taken) in a tax return. It also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, years open for tax examination, accounting for income taxes in interim periods and income tax disclosures. There are no material uncertain tax positions as of September 30, 2022 and September 30, 2021.

The Company is a corporation organized under the laws of the State of Florida. However, all of the Company's operations are conducted solely by its subsidiaries and VIE in the PRC. No income is earned in the United States and the management does not repatriate any earnings outside the PRC. As a result, the Company did not generate any U.S. taxable income for the years ended September 30, 2022 and 2021. As of September 30, 2022, the Chinese entities' income tax returns filed in China for the years ended December 31, 2021, 2020, 2019, 2018, 2017 and 2016 are subject to examination by the Chinese taxing authorities.

The parent Company, China HGS Real Estate Inc.'s both U.S. federal tax returns and Florida state tax returns are delinquent since 2009. Its tax years ended September 30, 2009 through September 30, 2021 remain open for statutory examination by U.S. federal and state tax authorities.

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the "Act") was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a U.S. corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. Due to the complexity involved in applying the provisions of the Tax Act, we made reasonable estimates of the effects and recorded accrued amounts in our consolidated financial statements as of September 30, 2022 and 2021, including an approximately $2.3 million provision on the deemed repatriation of undistributed foreign earnings and an additional $0.8 million provision for delinquent U.S. and State tax fillings. The Company is in the process of engaging a tax professional to file its delinquent tax returns. Failure to furnish any income tax and information returns with respect to any foreign business entity required, within the time prescribed by the IRS, subjects the Company to civil penalties.

**Land appreciation tax ("LAT")**

In accordance with the relevant taxation laws in the PRC, the Company is subject to LAT based on progressive rates ranging from 30% to 60% on the appreciation of land value, which is calculated as the proceeds of sales of properties less deductible expenditures including borrowing costs and all property development expenditures. LAT is exempted if the appreciation values do not exceed certain thresholds specified in the relevant tax laws.

The whole project must be completed before the LAT obligation can be assessed. Accordingly, the Company should record the liability and the total related expense at the completion of a project unless the tax authorities impose an assessment at an earlier date. The methods to implement this tax law vary among different geographic areas. Hanzhong, where the projects Mingzhu Garden, Nan Dajie and Central Plaza are located, implements this tax rule by requiring real estate companies prepay the LAT based upon customer deposits received. The tax rate in Hanzhong is 1%. Yang County, where the Yangzhou Pearl Garden and Yangzhou Palace projects are located, has a tax rate of 0.5%.

**Comprehensive income (loss)**

In accordance with ASC 220-10-55, comprehensive income (loss) is defined as all changes in equity except those resulting from investments by owners and distributions to owners. The Company's only components of comprehensive income (loss) for the years ended September 30, 2022 and 2021 were net income and foreign currency translation adjustments.

**Advertising expenses**

Advertising costs are expensed as incurred. For the years ended September 30, 2022 and 2021, the Company recorded advertising expenses of $4,593 and $59,481, respectively.

**GREEN GIANT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**Share-based Compensation**

The Company accounts for share-based awards to employees and nonemployees directors and consultants in accordance with the provisions of ASC 718, Compensation—Stock Compensation, and under the recently issued guidance following FASB's pronouncement, ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. Under ASC 718, and applicable updates adopted, for employee stock-based awards, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight-line basis over the requisite service period for the entire award. For the non-employee stock-based awards, the fair value of the awards to non-employees are measured every reporting period based on the value of the Company's common stock.

**Basic and diluted earnings (loss) per share**

The Company computes earnings (loss) per share ("EPS") in accordance with the FASB ASC Topic 260, "Earnings per share," which requires companies to present basic and diluted EPS. Basic EPS is measured as net income (loss) divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. As of September 30, 2022, there were outstanding warrants to purchase approximately 30,741,366 shares of the Company's common stock (September 30, 2021-nil), which resulted in 13,866,348 dilutive shares for the twelve months ended September 30, 2022.

**Concentration risk**

The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC's economy. The Company's operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittances abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company's cash and restricted cash were on deposit at financial institutions in the PRC, which the management believes are of high credit quality. In May, 2015, China's new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in China are required to purchase deposit insurance for deposits in RMB and in foreign currency placed with them. Such Deposit Insurance Regulation would not be effective in providing complete protection for the Company's accounts, as its aggregate deposits are much higher than the compensation limit of RMB500,000 (approximately $77,599). However, the Company believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon in China and the Company believes that the Chinese banks that hold the Company's cash and restricted cash are financially sound based on public available information. The Company has not experienced any losses in its bank accounts.

For the year ended September 30, 2022, the Company had real estate sales revenue of $nil related to sales to the local government for residence reallocation purposes, representing 0% of the Company's total real estate sales revenue for the year ended September 30, 2022.

**Recent Accounting Pronouncements**

The Company considers the applicability and impact of all ASUs. Management periodically reviews new accounting standards that are issued.

In June 2016, the FASB issued ASU 2016-13, *Financial Instruments-Credit Losses* (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. ASU 2016-13 was subsequently amended by ASU 2018-19, *Codification Improvements to Topic 326, Financial Instruments — Credit Losses*, ASU 2019-04 *Codification Improvements to Topic 326, Financial Instruments — Credit Losses*, Topic 815, *Derivatives and Hedging*, and Topic 825, *Financial Instruments*, and ASU 2019-05, *Targeted Transition Relief*. For public entities, ASU 2016-13 and its amendments is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. For all other entities, this guidance and its amendments will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. As a smaller reporting company, the Company plans to adopt this guidance effective October 1, 2023.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. The Board is issuing this Update as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). The objective of the Simplification Initiative is to identify, evaluate, and improve areas of U.S. GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements. The specific areas of potential simplification in this Update were submitted by stakeholders as part of the Simplification Initiative. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted this guidance on July 1, 2021 and the adoption of this ASU did not have a material impact on its consolidated financial statements.

**GREEN GIANT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

In August 2020, the FASB issued ASU 2020-06, *Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity (ASU 2020-06)*. The amendments in ASU 2020-06 simplify the accounting for convertible instruments by removing major separation models and removing certain settlement condition qualifiers for the derivatives scope exception for contracts in an entity's own equity, and simplify the related diluted net income per share calculation for both Subtopics. ASU 2020-06 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023, for smaller reporting companies, as defined by the SEC. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which the amendments in this Update require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606.The amendments in this Update address how to determine whether a contract liability is recognized by the acquirer in a business combination. The ASU is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted, including early adoption in an interim period, for periods for which financial statements have not yet been issued.

Management has considered all other recent accounting pronouncements issued. The Company's management believes that these recent pronouncements will not have a material effect on the Company's financial statements.

**NOTE 3. PREPAYMENT FOR EQUIPMENT**

As of September 30, 2022 and 2021, prepayment for energy equipment was as follows:

---

| | | |
|:---|:---|:---|
|  | **As of September 30,** | **As of September 30,** |
|  | **2022** | **2021** |
| Energy Equipments | 26936915 | - |
| Total | $26936915 | $- |

---

The above prepayment was for the Company's new business on green energy. The counterparties are Golden Mainland Inc. and Golden Ocean Inc.

**NOTE 4. REAL ESTATE PROPERTY COMPLETED AND UNDER DEVELOPMENT**

The following summarizes the components of real estate property completed and under development as of September 30, 2022 and 2021:

---

| | | |
|:---|:---|:---|
|  | **Balance as of:** | **Balance as of:** |
|  | **September 30,**<br>**2022** | **September 30,**<br>**2021** |
| **Development completed:** |  |  |
| Hanzhong City Mingzhu Garden Phase II | $20672000 | $23464365 |
| Hanzhong City Oriental Pearl Garden | 17425514 | 19435711 |
| Yang County Yangzhou Pearl Garden Phase II | 2039912 | 2250388 |
| Yang County Yangzhou Palace | 34635104 | 42995377 |
| **Real estate property development completed** | $74772530 | $88145841 |
| **Under development:** |  |  |
| Hanzhong City Liangzhou Road and related projects (a) | $173289941 | $180389654 |
| Hanzhong City Hanfeng Beiyuan East (b) | 786954 | 868796 |
| Hanzhong City Beidajie (b) | 31144446 | 34763987 |
| Yang County East 2<sup>nd</sup> Ring Road (c) | 7904869 | 6435712 |
| **Real estate property under development** | $213126210 | $222458149 |
| **Impairment** | (67825622) | - |
| **Real estate property under development** | $145300588 | $222458149 |

---

(a) In September 2013, the Company entered into an agreement ("Liangzhou Agreement") with
the Hanzhong local government on the Liangzhou Road reformation and expansion project (Liangzhou Road Project"). Pursuant to the
agreement, the Company is contracted to reform and expand the Liangzhou Road, a commercial street in downtown Hanzhong City, with a total
length of 2,080 meters and a width of 30 meters and to resettle the existing residences in the Liangzhou road area. The government's
original road construction budget was approximately $33 million in accordance with the Liangzhou Agreement. The Company, in return, is
being compensated by the local government to have an exclusive right on acquiring at least 394.5 Mu land use rights in a specified location
of Hanzhong City. The Liangzhou Road Project's road construction started at the end of 2013. In 2014, the original scope and budget
on the Liangzhou road reformation and expansion project was extended, because the local government included more area and resettlement
residences into the project, which resulted in additional investments from the Company. In return, the Company is authorized by the local
government to develop and manage the commercial and residential properties surrounding the Liangzhou Road project. The Company launched
the construction of the Liangzhou Road related projects in December 2020. As of September 30, 2022, the main Liangzhou road construction
is substantially completed.

**GREEN GIANT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

The Company's development cost incurred on Liangzhou Road Project is treated as the Company's deposit on purchasing the related land use rights, as agreed by the local government. As of September 30, 2022, the actual costs incurred by the Company were approximately $173.3 million (September 30, 2021 - $180.4 million) and the incremental cost related to residence resettlements approved by the local government. The Company determined that the Company's Investment in the Liangzhou Road Project in exchange for interests in future land use rights is a barter transaction with commercial substance.

(b) In September 2012, the Company was approved by the Hanzhong local government to construct four municipal
roads with a total length of approximately 1,192 meters. The project was deferred and then restarted during the quarter ended June 30,
2014. As of September 30, 2021, the local government has not completed the budget for these projects therefore the delivery for these
projects for the government's acceptance and related settlement were extended to 2022. Due to delays in the government approval
and slow development progress, in January 2021, the Company disposed of certain construction properties in the Beidajie project at carrying
value to Hanzhong Guangsha Real Estate Development Inc. ("Hanzhong Guangsha") an entity controlled by the Company's
former chairman and Chief executive officer, Mr. Xiaojun Zhu to settle the payable of approximately $28.2 million related to Hanzhong
Guangsha in connection with the acquisition of the Hanzhong Nanyuan II Project disclosed below.

On January 20, 2021, the Company entered into agreement with Hanzhong Guangsha, an entity controlled by Mr. Xiaojun Zhu, to acquire certain real estate under development in the Hanzhong Nanyuan II Project in the amount of approximately $28.2 million, for the local government's residence reallocation related to the Liangzhou road and affiliated project. All the real estate property in Hanzhong Nanyuan II project was completed and sold to the local government for residence reallocation purposes by September 30, 2021.

(c) The Company was engaged by the Yang County local government to construct the Eas<sup>t</sup>2nd Ring Road with a total length of 2.15 km. The local government is required to repay the Company's project investment costs within 3 years with interest at the interest rate based on the commercial borrowing rate with the similar term published by the China Construction Bank (September 30, 2022 and 2021 - 4.75%). The local government has approved a refund to the Company by reducing local surcharges or taxes otherwise required in the real estate development. The road construction was substantially completed as of September 30, 2021 and is in process of the government's review and approval. For the year ended September 30, 2022, the Company received the local government's installment payments of approximately $2.1 million, which was included in the Company's customer deposits as of September 30, 2022.

**NOTE 5. PROPERTY, PLANT AND EQUIPMENT, NET**

As of September 30, 2022 and 2021, property, plant and equipment was as follows:

---

| | | |
|:---|:---|:---|
|  | **As of September 30,** | **As of September 30,** |
|  | **2022** | **2021** |
| Buildings | $768544 | $848471 |
| Automobiles |  |  |
| Total | 768544 | 848471 |
| Less: accumulated depreciation | (285325) | (290385) |
| Property, plant and equipment, net | $483219 | $558086 |

---

Depreciation expense for the years ended September 30, 2022 and 2021 was $24,201 and $43,510, respectively. For the year ended September 30, 2022, the Company disposed of the automobile which was fully depreciated, with no gain or loss recognized.

**GREEN GIANT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 6. RECEIVABLE FROM LOCAL GOVERNMENT**

In June 2012, the Company was approved by the Hanzhong local government to construct two municipal roads with a total length of 1,064 meters. The Company completed and delivered these two roads to the local government on March 21, 2014 with the local government's approval. The Company recognized such revenue during the year ended September 30, 2014. As of September 30, 2022, a receivable balance from the Hanzhong local government was $2,738,960 (September 30, 2021 $3,023,806) and the Company expects to realize the receivable to offset municipal surcharges from the local government for the Liangzhou Road related projects when the Company started the Liangzhou Road related real estate property construction in 2022 and later years. During the fiscal year of 2021, the Company purchased a building from a third party and spent money in putting everything in good conditions to sell it to local governments for the amount of $43,311,572. For the fiscal year ended Setpember 30, 2022, the exchange rate of RMB against US$ depreciated over the year, the translated amount in dollars became $39,620,027 as at September 30, 2022, as compared to $43,311,572 the same period of last year. The Company believes it is collectable and hence no bad debt provision is provided during the fiscal year.

The reclassifications have been made to the prior year financial statements to conform to the current year presentation. The reclassification increased "Due from local government - property development completed" by $43,311,572 and decreased "Real estate property under development" by the same amount on the previous years balance sheet and cash flow statements. The reclassification had no impact on previously reported net loss and comprehensive loss.

**NOTE 7. SECURITY DEPOSITS**

As of September 30, 2022 and 2021, security deposits were as follows:

---

| | | |
|:---|:---|:---|
|  | **As of September 30,** | **As of September 30,** |
|  | **2022** | **2021** |
| Security deposit for land use right <sup>(1)</sup> | $1771019 | $1955202 |

---

(1) In May 2011, the Company entered into a development agreement
with the Hanzhong local government. Pursuant to the agreement, the Company prepaid $1,771,019 and $1,955,202 to Hanzhong Urban Construction
Investment Development Co., Ltd to acquire certain land use rights through public bidding as of September 30, 2022 and 2021, respectively.
The Company currently expects to make payment of the remaining development cost as the government's work progresses.

**NOTE 8. CONSTRUCTION LOANS**

---

| | | |
|:---|:---|:---|
|  | **September 30,<br> 2022** | **September 30,<br> 2021** |
| Loan A (i) | $91675668 | $101209744 |
| Loan C (ii) | 16690683 | 18426478 |
|  | $108366351 | $119636222 |

---

(i) On June 26, 2015 and March 10, 2016, the Company signed phase I and Phase II agreements with Hanzhong Urban Construction Investment Development Co., Ltd, a state-owned Company, to borrow up to approximately $118.8 million (RMB775,000,000) for a long term loan with interest at 4.75% to the develop Liangzhou Road Project. As of September 30, 2022, the Company borrowed $91,675,668 under this credit line (September 30, 2021 - $101,209,744). Due to the local government's delay in the reallocation of residences in the Liangzhou Road Project and related area, the Hanzhong Urban Construction Investment Development Co., Ltd has not released all the funds available to the Company and additional withdrawals will be based on the project's development progress and the Company expects the loan will be extended upon maturity. The loan is guaranteed by Hanzhong City Hantai District Municipal Government and pledged by the Company's Yang County Yangzhou Palace project with a carrying value of $34,635,104 as of September 30, 2022 (September 30, 2021 - $42,995,377). For the year ended September 30, 2022, the interest was $6,066,302 (September 30, 2021 - $6,488,162), which was capitalized into the development cost of the Liangzhou Road Project.

(ii) In December 2016, the Company signed a loan agreement with Hantai District Urban Construction Investment Development Co., Ltd, a state-owned Company, to borrow up to approximately $18.4 million (RMB119,000,000) for the development of the Hanzhong City Liangzhou Road Project. The interest is 1.2% and due on June 20, 2031. The Company is required to repay the loan in equal annual principal repayments of approximately $3.3 million commencing from December 2027 through June 2031 with interest payable on an annual basis. The Company pledged the assets of the Liangzhou Road related projects with a carrying value of $173,289,941 as collateral for the loan. Total interest of $220,935 for the year ended September 30, 2022 was capitalized into the development cost of the Hanzhong City Liangzhou Road Project (September 30, 2021 - $224,700).

**GREEN GIANT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

Additionally, in September 2017, the Urban Development Center Co., Ltd. approved a construction loan for the Company in the amount of approximately $27.1 million (RMB175,000,000) with an annual interest rate of 1.2% per year in connection with the Liangzhou Road and related Project. The Company is required to repay the loan in equal annual principal repayment of approximately $5 million commencing from December 2027 through May 2031 with the interest payable on an annual basis. The amount of this loan is available to be drawn down as soon as the land use rights of the Liangzhou Road Project are approved and the construction starts, which is expected to be completed before the end of 2022. As of September 30, 2022 and 2021, the outstanding balance of the loan was Nil. Interest charges for the year ended September 30, 2022 and 2021 were $324,905 and $330,441, respectively, which was included in the construction capitalized costs.

**NOTE 9. OTHER PAYABLES**

The following table presents the other payables balances as of September 30, 2022 and 2021.

---

| | | |
|:---|:---|:---|
|  | **As of September 30,** | **As of September 30,** |
|  | **2022** | **2021** |
| Accrued interest expense | 7790654 | 1747755 |
| Maintenance Funds | 2002289 | 2214360 |
| Others | 3785770 | 2468877 |
| Total | $13578713 | $6430992 |

---

**NOTE 10. CONTRACT LIABILITIES**

The following table presents the contract balances as of September 30, 2022 and 2021.

---

| | | |
|:---|:---|:---|
|  | **As of September 30,** | **As of September 30,** |
|  | **2022** | **2021** |
| Contract liabilities | 1989898 | 1886075 |
| Total | $1989898 | $1886075 |

---

**NOTE 11. CUSTOMER DEPOSITS**

Customer deposits consist of amounts received from customers for the pre-sale of residential units in the PRC. The details of customer deposits are as follows:

---

| | | |
|:---|:---|:---|
|  | **As of September 30,** | **As of September 30,** |
|  | **2022** | **2021** |
| Customer deposits by real estate projects: |  |  |
| Mingzhu Garden (Mingzhu Nanyuan and Mingzhu Beiyuan) | $8300749 | $8210839 |
| Oriental Pearl Garden | 3015526 | 2780917 |
| Liangzhou road related projects | 186968 | 617686 |
| Yang County Pearl Garden | 731206 | 827426 |
| Yang County Eas<sup>t</sup> 2nd Ring Road | 2108667 | 2327964 |
| Yangzhou Palace | 5499652 | 5039085 |
| Total | $19842768 | $19803917 |

---

Customer deposits are typically 10% - 20% of the unit selling price for those customers who purchase properties in cash and 30%-50% of the unit selling price for those customers who purchase properties with mortgages.

**NOTE 12. TAXES**

(A) Business sales tax and VAT

The Company is subject to a 5% VAT for its existing real estate projects based on the local tax authority's practice. As of September 30, 2022, the Company had business VAT tax payable of $4,144,254 (September 30, 2021 - $5,660,149), which is expected to be paid when the projects are completed and assessed by the local tax authority.

**GREEN GIANT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

(B) Corporate income taxes ("CIT")

The Company's PRC subsidiary and VIE are governed by the Income Tax Law of the People's Republic of China concerning the privately run enterprises, which are generally subject to income tax on income reported in the statutory financial statements after appropriate tax adjustments. The Company's CIT rate is 25% on taxable income. Although the possibility exists for reinterpretation of the application of the tax regulations by higher tax authorities in the PRC, potentially overturning the decision made by the local tax authority, the Company has not experienced any reevaluation of the income taxes for prior years. The PRC tax rules are different from the local tax rules and the Company is required to comply with local tax rules. The difference between the two tax rules will not be a liability of the Company. There will be no further tax payments for the difference. As of September 30, 2022 and September 30, 2021, the Company's total income tax payable amounted to $13,279,845 and $14,326,646, respectively, which included the income tax payable balances in the PRC of $9,714,844 and $10,761,646, respectively and the Company expects to pay this income tax payable balance when the related real estate projects are completely sold.

The following table reconciles the statutory rates to the Company's effective tax rate for the years ended September 30, 2022 and 2021:

---

| | | |
|:---|:---|:---|
|  | **For the years ended<br> September 30,** | **For the years ended<br> September 30,** |
|  | **2022** | **2021** |
| Chinese statutory tax rate | 25.0% | 25.0% |
| Impairment | (18.2)% | —% |
| Valuation allowance change\* | (2.1)% | —% |
| Net impact of tax exemption and other adjustments | (4.7)% | 3.1% |
| Effective tax rate | —% | 28.1% |

---

\* Valuation allowance change for the year ended September 30, 2020 were primarily related to valuation allowance changes on historical losses. For years ended September 30, 2022 and 2021, the change in valuation allowance of $25,411,557 and $nil, respectively.

Income tax expense for the years ended September 30, 2022 and 2021 is summarized as follows:

---

| | | |
|:---|:---|:---|
|  | **For the years ended<br> September 30,** | **For the years ended<br> September 30,** |
|  | **2022** | **2021** |
| Current tax provision | $— | $2486546 |
| Deferred tax provision |  |  |
| Income tax expense | $— | $2486546 |

---

Recent U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the "U.S. Tax Reform"), was signed into law on December 22, 2017. The U.S. Tax Reform significantly modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transition tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. Taxpayers may elect to pay the one-time transition tax over eight years or in a single lump sum. The U.S. Tax Reform also includes provisions for a new tax on Global Intangible Low-Taxed Income ("GILTI") effective for tax years of foreign corporations beginning after December 31, 2017. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of controlled foreign corporations ("CFCs"), subject to the possible use of foreign tax credits and a deduction equal to 50 percent to offset the income tax liability, subject to some limitations. As of September 30, 2022 and 2021, the Company's GILTI tax payable was Nil.

For the year ended September 30, 2018, the Company recognized a one-time transition toll tax of approximately $2.3 million that represented management's estimate of the amount of U.S. corporate income tax based on the deemed repatriation to the United States of the Company's share of previously deferred earnings of certain non-U.S. subsidiaries and VIE of the Company mandated by the U.S. Tax Reform. The Company's estimate of the onetime transition toll Tax is subject to the finalization of management's analysis related to certain matters, such as developing interpretations of the provisions of the Tax Act and amounts related to the earnings and profits of certain foreign VIEs and the filing of our tax returns. U.S. Treasury regulations, administrative interpretations or court decisions interpreting the Tax Act may require further adjustments and changes in our estimates. As of September 30, 2022 and 2021, the Company provided an additional $0.8 million provision due to delinquent U.S. tax return fillings.

**GREEN GIANT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

Composition of deferred tax assets and liabilities:

---

| | |
|:---|:---|
|  | **As of**<br>**September 30,<br> 2022** |
| Deferred tax assets |  |
| Impairment | 19722369 |
| Tax losses carried forward and other | 7308802 |
|  | 27031171 |
| Valuation allowance | (27031171) |
| Total deferred tax assets | - |

---

(C) Land appreciation tax ("LAT")

Since January 1, 1994, LAT has been applicable at progressive tax rates ranging from 30% to 60% on the appreciation of land values, which is calculated as the proceeds of sales of properties less deductible expenditures including borrowing costs and all property development expenditures. LAT is exempted if the appreciation values do not exceed certain thresholds specified in the relevant tax laws.

The whole project must be completed before the LAT obligation can be assessed. Accordingly, the Company should record the liability and the total related expense at the completion of a project unless the tax authorities impose an assessment at an earlier date. The methods to implement this tax law vary among different geographic areas. Hanzhong, where the projects Mingzhu Garden, Nan Dajie and Central Plaza are located, implements this tax rule by requiring real estate companies prepay the LAT based upon customer deposits received. The tax rate in Hanzhong is 1%. Yang County, where the Yangzhou Pearl Garden and Yangzhou Palace projects are located, has a tax rate of 0.5%.

As at September 30, 2022 and 2021, the outstanding LAT payable balance was Nil with respect to completed real estate properties sold up to September 30, 2022 and 2021, respectively.

(D) Taxes payable consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2022** | **September 30,**<br>**2021** |
| CIT | $13279845 | $14326646 |
| Business tax | 4144254 | 5660149 |
| Other taxes and fees | 2556259 | 2967216 |
| Total taxes payables | $19980358 | $22954011 |

---

**NOTE 13. STOCKHOLDERS' EQUITY**

(a) Common stock

On August 19, 2020, the Company filed an Amendment to the Company's Articles of Incorporation (the "Certificate of Amendment") with the Florida Secretary of State to affect a one-for-two reverse split of the Company's authorized and issued and outstanding shares of common stock (the "Reverse Stock Split"). The Reverse Stock Split became effective in accordance with the terms of the Certificate of Amendment on August 20, 2020 (the "Effective Time"). At the Effective Time, every two shares of the Company's common stock authorized issued and outstanding were automatically combined into one share of common stock, without any change in the par value per share. The Company will not issue any fractional shares in connection with the Reverse Stock Split. Instead, fractional shares will be rounded up to the nearest full share. The Company had a total of 45,050,000 shares of common stock issued and outstanding prior to the Reverse Stock Split.

On April 19, 2021 (the "Closing Date"), pursuant to the terms of the Equity Acquisition Agreement between the "Company and Shaanxi Tianhao Construction Engineer Co., Ltd ("Shaanxi Tianhao") (the "Purchaser") (the "Equity Acquisition Agreement"), the Company issued 3,092,114 shares of common stock to the Purchaser in exchange for the settlement of its accounts payable balance. In accordance with the Equity Acquisition Agreement, the Purchaser received on a pro rata basis the Company's common stock equivalent consideration of approximately $6.6 million (RMB 43 million) based on a conversion price of $2.13 which was the average price of the Company's stock during the five (5) trading days preceding to the Closing Date.

**GREEN GIANT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

On December 10, 2021, China HGS Real Estate Inc. (the "Company") entered into a certain securities purchase agreement (the "SPA") with certain purchasers whom are "non-U.S. Persons" (the "Investors") as defined in Regulation S of the Securities Act, pursuant to which the Company agreed to sell an aggregate of 10,247,122 units (the "Units"), each Unit consisting of one share of common stock, par value $0.001 per share ("Common Stock") and a warrant to purchase three shares of Common Stock (the "Warrant") with an initial exercise price of $2.375 at a price of $2.375 per Unit, for an aggregate purchase price of approximately $24.3 million (the "Offering").

The Warrants are exercisable at any time after the six-month anniversary of the issuance date at an initial exercise price of $2.375 for cash (the "Warrant Shares"). The Warrants may also be exercised cashlessly if at any time after the six-month anniversary of the issuance date, there is no effective registration statement registering, or no current prospectus available for, the resale of the Warrant Shares. The Warrants shall expire five and a half years from its date of issuance. The Warrants are subject to customary anti-dilution provisions reflecting stock dividends and splits or other similar transactions.

On January 14, 2022, the transaction contemplated by the SPA closed.

On March 16, 2022, the Company entered into a certain securities purchase agreement (the "SPA") with certain purchasers whom are "non-U.S. Persons" (the "Investors") as defined in Regulation S of the Securities Act, pursuant to which the Company agreed to sell an aggregate of 4,600,000 shares (the "Shares") of common stock, par value $0.001 per share, for an aggregate purchase price of approximately $4.6 million (the "Offering").

On March 30, 2022, the transaction contemplated by the SPA closed.

On September 25, 2012, our shareholders approved the Company's 2012 Omnibus Securities and Incentive Plan (the "2012 Plan"). The 2012 Plan provides for the grant of awards which are distribution equivalent rights, incentive stock options, non-qualified stock options, performance shares, performance units, restricted shares of common stock, restricted stock units, stock appreciation rights ("SARs"), tandem stock appreciation rights, unrestricted shares of common stock or any combination of the foregoing, to key management employees and nonemployee directors of, and nonemployee consultants of, the Company or any of its subsidiaries (each a "participant"). We have reserved a total of 1,000,000 shares of common stock for issuance under the 2012 Plan. The number of shares of common stock for which awards which are options or SARs may be granted to a participant under the 2012 Plan during any calendar year is limited to 500,000.

The Company awards common stocks to a director and three consultants pursuant to the 2022 Equity Incentive Plan, which was registered on the Form S-8.. Compensation cost related to such awards is measured based on the fair value of the instrument on the grant date. These common stocks are vested immediately after granted.

On August 10, 2022, Board of directors of the Company issued an aggregate of 5,990,000 registered common stock of the Company, par value $0.001 per share ("Common Stock'), from the Company's current registration statement on Form S-8 (Form S-8), to the Consultants or their designees namely, Aizhen Wei, Jun Liao and Youbing Li on the terms and conditions setforth in the Agreements, immediately vested upon grant. We record stock-based compensation expense for non-employees at fair value on the grant date as the consideration for service received. On August 10, 2022 the grant date, the Company's share price closed at $3.23 per share, hence total share-based compensation is equal to $19,347,700;

On September 6, 2022, the Company awarded Jia Zhang, one of the independent directors of the Board, of 10,000 common shares as annual compensation for his role with the Board immediately vested upon the grant date. On September 6, 2022/the grant date, the Company's share price closed at $2.27 per share, hence total share-based compensation is equal to $22,700.

Total share-based compensation amounts to $19,370,400 for three individuals plus the independent director.

**(b) Statutory surplus reserves**

The Company is required to make appropriations to reserve funds, comprising the statutory surplus reserve and discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC ("PRC GAAP").

Appropriations to the statutory surplus reserve is required to be at least 10% of the after tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entities' registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. The statutory surplus reserve fund is non-discretionary other than during liquidation and can be used to fund previous years' losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of shares currently held by them, provided that the remaining statutory surplus reserve balance after such issue is not less than 25% of the registered capital before the conversion. The Company is required to appropriate 10% of its net profits as statutory surplus reserve. As of September 30, 2022 and 2021, the balance of statutory surplus reserve was $11,095,939 and $11,095,939, respectively.

The discretionary surplus reserve may be used to acquire fixed assets or to increase the working capital to expend on production and operations of the business. The Company's Board of Directors decided not to make an appropriation to this reserve for the years ended September 30, 2022 and 2021.

**GREEN GIANT INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 14. CONTINGENCIES AND COMMITMENTS**

From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. The Company's management does not believe the liability from the disposition of such claims and litigation individually or in the aggregate would have a material adverse impact on the Company's consolidated financial position, results of operations and cash flows.

As an industry practice, the Company provides guarantees to PRC banks with respect to loans procured by the purchasers of the Company's real estate properties for the total mortgage loan amount until the buyer obtains the "Certificate of Ownership" of the properties from the government, which generally takes six to twelve months. Because the banks provide loan proceeds without getting the "Certificate of Ownership" as loan collateral during the six to twelve month period, the mortgage banks require the Company to maintain, as restricted cash of at least 5% of the mortgage proceeds as security for the Company's obligations under such guarantees. If a purchaser defaults on its payment obligations, the mortgage bank may deduct the delinquent mortgage payment from the security deposit and require the Company to pay the excess amount if the delinquent mortgage payments exceed 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. The Company has the required reserves in its restricted cash account to cover any potential mortgage defaults as required by the mortgage lenders. 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. 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 restricted cash reserved for these guarantees was approximately $3.0 million and $3.3 million, respectively, and the Company believes that such reserves are sufficient.

The Company has been named as a defendant in a number of lawsuits arising in its ordinary course of business. As of the date of this annual report, the Company continues to use all commercially reasonable efforts to defend itself in these proceedings and is undergoing on-going discussion with regulatory authorities.

1) Case between the labor contract dispute between Wangcang County Lexin Labor Service Co., Ltd. and Zhejiang Hongcheng Construction Group Co., Ltd., Zhejiang Hongcheng Construction Group Co., Ltd. Xi 'an Branch and Shaanxi Guangsha Investment Development Group Co., Ltd. Hongcheng Company was judged to compensate Lexin Company, and Shaanxi Guangsha Company was jointly and severally liable, with an execution amount of $3,373,867.

2) Related to the above Case 1 disputes between Zhejiang Hongcheng Construction Group Co., Ltd. and Shaanxi Guangsha Investment Development Group Co., Ltd. on the construction project contract. The execution target of this case is $9,091,868 million inchuding $3,373,867 in Case 1.

3) Case between Hantai District Commuity Center Hanzhong Urban Counsel and Shaanxi Guangsha Investment Development Group Co., Ltd., which was ordered by Hanzhong Hantai District Court to the settle the amount of $131,498 and it is still outstanding as at September 30, 2022..

4) Case between Hanzhong City Puyang Plumber Agency Co., Ltd and Shaanxi Guangsha Investment Development Group Co., Ltd., was settled.

5) Two individuals of property buyers Hanshen Lu & Xin Lu and Shaanxi Guangsha Investment Development Group Co., Ltd., was settled.

6) Dispute between an disclosed property buyer and Shaanxi Guangsha Investment Development Group Co., Ltd., which was ordered by local court to pay the plaintiff of $127,979 which is still outstanding as at September 30, 2022.

The Company acrued $9,351,344 for the above six cases in the current fiscal year as the contingency liabilities could not be quantified till nearby current fiscal year or within current fiscal year as at September 30, 2022.

**Note 15. Subsequent Events**

On October 5, 2022, the Company entered into a certain securities purchase agreement with certain purchasers whom are "non-U.S. Persons" as defined in Regulation S of the Securities Act, pursuant to which the Company agreed to sell an aggregate of 9,288,339 units, each consisting of one share of the common stock of the Company, par value $0.001 per share and a warrant to purchase three shares of Common Stock, for an aggregate purchase price of approximately $5.2 million. On October 25, 2022, the transaction contemplated by the SPA closed.

On October 17, 2022, the Board appointed Ms. Sheng (Dorothy) Liu as the Chief Operating Officer of the Company. Ms. Sheng (Dorothy) Liu does not have a family relationship with any director or executive officer of the Company and has not been involved in any transaction with the Company during the past two years that would require disclosure under Item 404(a) of Regulation S-K.

On November 2, 2022, the Company entered into certain Management Services Agreement with Incrementum Management LLC (the "Consultant"), and Mr. Junaid Ali (the "Executive"), pursuant to which the Company shall engage the management services of the Consultant and the Executive to implement its plan to engage in the green energy or carbon free energy sector in the U.S. The Executive will be appointed as Chief Executive Officer of the Company.

On January 12, 2023, the Company and FT Global Capital Inc. ("FT Global") entered into a settlement agreement (the "FT Global Settlement Agreement"), pursuant to which FT Global has waived all claims and liabilities against the Company in connection with the Company's private placement in October 2022 and terminated the Exclusive Placement Agent Agreement entered by and between the Company and FT Global in May 2022. Under the terms of the FT Global Settlement Agreement, the Company is obligated to pay to FT Global cash compensation of $40,000 and share compensation of 40,000 shares of the Company's restricted common stock.

**GREEN GIANT INC.**

**SCHEDULE I- PARENT COMPANY BALANCE SHEETS**

(UNAUDITED)

---

| | | |
|:---|:---|:---|
|  | **September 30,** | **September 30,** |
|  | **2022** | **2021** |
| ASSETS |  |  |
| Cash | $1074440 |  |
| Other assets | 161700 |  |
| Prepayment for energy equipment | 26936915 |  |
| Amount due from related party | 2000 |  |
| Investment in subsidiary and VIE | $94868534 | $194262711 |
| **Total assets** | $123043589 | $194262711 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| LIABILITIES |  |  |
| Accrued expenses | $17528 |  |
| Other payables | 15391 |  |
| Tax payable | 3565000 | $3565000 |
| **Total liabilities** | 3597919 | 3565000 |
| Stockholders' equity\*: |  |  |
| Commons stock,$0.001 par value,200,000,000 shares authorized;46,464,929 and 25,617,807 shares outstanding as at September 30, 2022 and September 30, 2021 | 46464 | 25617 |
| Additional paid-in capital | 184821771 | 136535303 |
| Statutory surplus | 11095939 | 11095939 |
| Retained earnings | (67432727) | 40691955 |
| Accumulated other comprehensive income (loss) | (9085777) | 2348897 |
| **Total stockholders' equity** | 119445670 | 190697711 |
| **Total Liabilities and Stockholders' Equity** | $123043589 | $194262711 |

---

\* Adjusted to give retroactive effect to a one-for-two reverse stock split effective on August 20, 2020.

The accompanying notes are integral part of Schedule I

**GREEN GIANT INC.**

**SCHEDULE I – PARENT COMPANY STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)**

**FOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021**

(UNAUDITED)

---

| | | |
|:---|:---|:---|
|  | **2022** | **2021** |
| Equity in profit of subsidiary and VIE | $(87959503) | $6643438 |
| General and administrative expenses | (20164709) |  |
| Interest expense | (470) |  |
| **(Loss) income before income taxes** | (108124682) | 6643438 |
| Provision for income taxes |  | 268000 |
| **Net (loss) income** | (108124682) | 6375438 |
| Other comprehensive loss |  |  |
| Foreign currency translation adjustment | (11434674) | 9388387 |
| **Comprehensive loss** | $(119559356) | $15763825 |

---

The accompanying notes are integral part of Schedule I

**GREEN GIANT INC.**

**SCHEDULE I -PARENT COMPANY STATEMENTS OF CASH FLOWS**

**FOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021**

(UNAUDITED)

---

| | | |
|:---|:---|:---|
|  | **2022** | **2021** |
| **Cash flows from operating activities** |  |  |
| Net (loss) income | $(108124682) | $6375438 |
| Adjustments to reconcile net income to net cash used in operating activities: |  |  |
| Share based compensation | 19370400 |  |
| Equity in profit of subsidiary and VIE | 87959503 | (6643438) |
| Changes in assets and liabilities: |  |  |
| Taxes payable |  | 268000 |
| Other assets | (161700) |  |
| Other payables | 15391 |  |
| Accrued expenses | 17528 |  |
| Interco | (2000) |  |
| **Net cash used in operating activities** | (925560) |  |
| **Cash Flows from Investing Activities:** |  |  |
| Prepayment for energy equipment | (26936915) |  |
| **Net Cash Used in Investing Activities** | (26936915) |  |
| **Cash flow from financing activities:** |  |  |
| Proceeds from private placements | 28936915 |  |
| **Net cash (used in) financing activities** | 28936915 |  |
| **Net increase (decrease) in cash** | 1074440 |  |
| **Cash, beginning of year** |  |  |
| **Cash, end of year** | $1074440 | $— |
| Supplemental disclosures of cash flow information: |  |  |
| Interest paid | $— | $— |
| Income taxes paid | $— | $— |

---

The accompanying notes are integral part of Schedule I

**GREEN GIANT INC.**

**NOTES TO SCHEDULE I**

**NOTE 1. BASIS OF PRESENTATION**

Certain information and footnote disclosures normally included in financial statements prepared in conformity with generally accepted accounting principles have been condensed or omitted. The Company's investment in subsidiary and variable interest entity ("VIE") is stated at cost plus equity income (loss) in undistributed earnings (loss) of subsidiaries and VIE.

**NOTE 2. RESTRICTED ASSETS**

The Company's PRC VIE and subsidiary are restricted in their ability to transfer a portion of their net assets to the Company. The payment of dividends by entities organized in China is subject to limitations, procedures and formalities. Regulations in the PRC currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China. The Company's subsidiary and its VIE are also required to set aside at least 10% of their after-tax profit based on PRC accounting standards each year to their statutory reserve accounts until the accumulated amount of such reserves reaches 50% of their respective registered capital. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends.

In addition, the Company's operations and revenues are conducted and generated in China, all of the Company's revenues being earned and currency received are denominated in RMB. RMB is subject to the foreign exchange control regulations in China, and, as a result, the Company may be unable to distribute any dividends outside of China due to PRC foreign exchange control regulations that restrict the Company's ability to convert RMB into US Dollars.

Schedule I of Article 5-04 of Regulation S-X requires the condensed financial information of registrant shall be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of the above test, restricted net assets of consolidated subsidiaries and VIEs shall mean that amount of the registrant's proportionate share of net assets of consolidated subsidiaries and VIEs (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries and VIEs in the form of loans, advances or cash dividends without the consent of a third party. The condensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X as the restricted net assets of the Company's PRC subsidiary and VIE exceed 25% of the consolidated net assets of the Company.

**NOTE 3. COMMITMENTS**

The Company did not have any significant commitments or long-term obligations as at September 30, 2022 and 2021.

**Item 9. Changes and Disagreements with Accountants on Accounting and Financial Disclosure**

None.

**Item 9A. Controls and Procedures**

(a) Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we carried out an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in SEC Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on such evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures were not effective as of September 30, 2022, because of the material weakness in our internal control over financial reporting as described below.

(b) Management's Report on Internal Control over Financial Reporting

The Company's management is responsible for establishing and maintaining internal controls over financial reporting. Internal Control Over Financial Reporting is a process designed by, and under the supervision of, the Company's principal executive and principal financial officers, or persons performing similar functions, and effected by the Company's 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 and includes those policies and procedures that:

&nbsp;&nbsp;&nbsp;&nbsp;1. Pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;2. Provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts
and expenditures of the Company are being made only in accordance with authorizations of its management and board of directors; and

&nbsp;&nbsp;&nbsp;&nbsp;3. Provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on its financial
statements.

Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our consolidated financial statements would be prevented or detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, including our chief executive officer and chief financial officer, has conducted a self-assessment, including attestation of the design and operational effectiveness of the Company's internal controls over financial reporting as of September 30, 2022. In making its assessment, management used the *2013 Internal Control—Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission (the "2013 COSO Framework"). The 2013 COSO Framework outlines the 17 underlying principles and the following fundamental components of a company's internal control: (i) control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Our management has implemented and tested our internal control over financial reporting based on these criteria and identified certain material weaknesses set forth below.

Based on this evaluation, our management concluded that our internal control over financial reporting as of September 30, 2022 was ineffective.

A material weakness is a deficiency or a combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

Management identified the following material weaknesses in its assessment of the effectiveness of internal control over financial reporting as of September 30, 2022:

● Lack of full-time accounting staffs in our accounting department with sufficient knowledge of U.S. GAAP and SEC reporting experience and lack of internal audit function

**Remediation Efforts to Address Significant Deficiencies**

To 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:

● Provide more U.S. GAAP knowledge and SEC reporting training for the accounting department and establish formal policies and procedures in internal audit function.

● Implementation of an ongoing initiative and training in the Company to ensure the importance of internal controls and compliance with established policies and procedures that are fully understood throughout the organization and plans to provide continuous U.S. GAAP knowledge training to relevant employees involved to ensure the performance of and compliance with those procedures and policies.

Any actions we have taken or may take to remediate these material weaknesses are subject to continued management review supported by testing, as well as oversight by the Audit Committee of our Board of Directors. We cannot assure you that these material weaknesses will not occur in the future and that we will be able to remediate such weaknesses in a timely manner, which could impair our ability to accurately and timely report our financial position, results of operations or cash flows. See the Risk Factor included in this Annual Report on Form 10-K.

(c) Changes in Internal Controls over Financial Reporting

The management is committed to improving the internal controls over financial reporting and will undertake consistent improvements and enhancements on an ongoing basis. Except as described above, there has been no change to our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

**Item 9B. Other Information**

On October 5, 2022, the Company entered into a certain securities purchase agreement with certain purchasers whom are "non-U.S. Persons" as defined in Regulation S of the Securities Act, pursuant to which the Company agreed to sell an aggregate of 9,288,339 units, each consisting of one share of the common stock of the Company, par value $0.001 per share and a warrant to purchase three shares of Common Stock, for an aggregate purchase price of approximately $5.2 million. On October 25, 2022, the transaction contemplated by the SPA closed.

 

On October 17, 2022, the Board appointed Ms. Sheng (Dorothy) Liu as the Chief Operating Officer of the Company. Ms. Sheng (Dorothy) Liu does not have a family relationship with any director or executive officer of the Company and has not been involved in any transaction with the Company during the past two years that would require disclosure under Item 404(a) of Regulation S-K.

On November 2, 2022, the Company entered into certain Management Services Agreement with Incrementum Management LLC (the "Consultant"), and Mr. Junaid Ali (the "Executive"), pursuant to which the Company shall engage the management services of the Consultant and the Executive to implement its plan to engage in the green energy or carbon free energy sector in the U.S. The Executive will be appointed as Chief Executive Officer of the Company.

**Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections**

None.

**PART III**

**Item 10. Directors, Executive Officers and Corporate Governance**

**Directors**

The Board of Directors is presently composed of five (5) members: Neng Chen, Rongrong Dai, Xinping Li, Jian Zhang, and Qingfeng Zhou Mr. Chen serves as Chairman of the Board of Directors. The Board of Directors has determined that Xinping Li, Jian Zhang, and Qingfeng Zhou are independent directors within the meaning set forth in the NASDAQ listing rules and as required by the rules and regulations of the SEC, as currently in effect.

Below you will find a tabular summary of our entire Board, their age, the year they were each elected, and the year in which their term ends.

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| | | | |
|:---|:---|:---|:---|
| **Name** | **Age** | **Position** | **Director Since** |
| Neng Chen | 40 | President, Chief Executive Officer and Chairman of the Board of Directors | **2021** |
| Rongrong Dai | 28 | Chief Financial Officer and Director | **2022** |
| Xinping Li | 57 | Director | **2021** |
| Jian Zhang | 31 | Director | **2022** |
| Qingfeng Zhou | 54 | Director | **2022** |

---

The following paragraphs provide information about each director, including all positions he or she holds, his or her principal occupation and business experience for the past five years, and the names of other publicly-held companies of which he or she currently serves as a director or has served as a director during the past five years.

**Neng Chen,** has severed as the President and Chief Executive Officer of the Company since October, 2021. Mr. Chen is the founder of Hunan Qingqing Consulting Co., Ltd. and served as its general manager from June 2019 to September 2021. From June 2012 to January 2019, Mr. Chen served as the general manager of Yiyang Huamei Real Estate Development Co., Ltd. Mr. Chen graduated from the University of Regina in Canada with a bachelor's degree in economics.

**Rongrong Dai**, has severed as the Chief Financial Officer of the Company and the director since April 2022. She has served as the manager of Hunan Chenyifang Clothing Co., Ltd. since January 2021. From July 2016 to December 2020, Ms. Rongrong Dai served as the Senior Auditor of Mazars Group in China. Ms. Dai graduated from Hunan University of Finance and Economics in China with a bachelor's degree in accounting.

**Jian Zhang**, has served as a director since February 2022. He has served as the head of Greater China of Shanghai Branch of Standard International Bank of United States since December 2020. From November 2017 to December 2020, Mr. Zhang served as a vice president of China Industrial GuoXin Asset Management Co., Ltd... From December 2015 to November 2017, Mr. Zhang served as a vice president of sub-branch of Shanghai Branch of China Construction Bank. From September 2013 to November 2015, Mr. Zhang served as an associate of Shanghai Branch of China Construction Bank. Mr. Zhang graduated from ZhongNan University of Economics and Law in China with a Bachelor's degree in Economics.

**Xinping Li** has served as a director since November 2021. Dr. Li has served as the vice-dean of Shaoyang University's School of Economics and Management since March 2005. From July 2002 to March 2005, Mr. Li served as a professor and researcher at Jiangxi Jiujiang University's Business School. Mr. Li graduated from Shaoyang University in China with a bachelor's degree in mathematics. He later obtained a master's degree in investment economics from Guangxi Normal University's School of Economics in China, and a doctoral degree in economics from Liaoning University in China.

**Qingfeng Zhou** has served as a director since January 2022. He has served as the owner of Cangze Consulting Co., Ltd. since March 2018. Since April 2016 and March 2016, Mr. Zhou has served as an overseas director of Engas Australasia Pty. Co., Ltd. and a supervisor of Sinuo Investment Management Ltd., respectively. From April 2015 to April 2019, Mr. Zhou served as the owner of Gold Longrich Limited Hong Kong. Since February 1999, Mr. Zhou has served as the general manager and co-founder of Marquis Shanghai Limited. Mr. Zhou graduated from Shanghai Jiaotong University in China with a Bachelor's degree in Mechanics.

**Family Relationships**

No family relationships exist among our directors, executive officers, or persons nominated or chosen by us to become directors or executive officers.

All directors hold office until the next annual stockholders' meeting or until their death, resignation, retirement, removal, disqualification, or until their successors have been elected and are qualified. Our officers serve at the will of the Board of Directors.

**Involvement in Certain Legal Proceedings**

To the best of our knowledge, none of our directors or executive officers have been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. Except as set forth in our discussion below in "Certain Relationships and Related Transactions," none of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

**Code of Ethics**

The Board of Directors has adopted a Code of Conduct which sets forth the standards by which the Company's employees, officers and directors should conduct themselves. The Company will disclose any amendment to the Code of Conduct or waiver of a provision of the Code of Conduct that applies to the Company's Chief Executive Officer, Chief Financial Officer and any other principal financial officer, and any other person performing similar functions and relates to certain elements of the Code of Conduct, including the name of the officer to whom the waiver was granted.

**Insider Trading Policy**

Effective October 25, 2022, we adopted a new insider trading policy that applies to all our executive officers, directors and employees. The insider trading policy codifies the legal and ethical principles that govern trading in our securities by persons associated with the Company that may possess material nonpublic information relating to Green Giant Inc.

**Committees of the Board of Directors**

The Board of Directors has the following standing committees: Audit, Compensation, and Nominating and Corporate Governance. The Board of Directors has adopted written charters for each of these committees. All members of the committees appointed by the Board of Directors are non-employee directors and the Board of Directors has determined that all such members are independent under the applicable rules and regulations of NASDAQ and the SEC, as currently in effect. In addition, all directors who served on a committee during any portion of the fiscal year ended September 30, 2022 were independent under the applicable rules and regulations of NASDAQ and the SEC during such director's period of service.

The following chart details the membership of each standing committee as of September 30, 2022 and the number of meetings each committee held in fiscal year 2022

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | | | | **Nominating &** | **Nominating &** |
| | | | | | **Corporate** | **Corporate** |
| <br>**Name of Director** | **Audit** | **Audit** | **Compensation** | **Compensation** | **Governance** | **Governance** |
| Xinping Li |  | M |  | M |  | C |
| Jian Zhang |  | C |  | M |  | M |
| Qingfeng Zhou |  | M |  | C |  | M |
| Number of Meetings in Fiscal 2022 |  | 1 |  | 2 |  | 1 |

---

M = Member C = Chair

**Executive Officers**

Our executive officers and their age as of September 30, 2022 are as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **Ages** | **Ages** | **Position** |
| Neng Chen \* |  | 40 | President, Chief Executive Officer and Chairman of the Board of Directors |
| Rong Rong Dai\*\* |  | 33 | Chief Financial Officer |

---

\* Mr. Chen's background and business experience is described above under "Directors"

\*\* Rongrong Dai has been the Chief Financial Officer of the Company since April 2022. Prior to join GGE, Ms. Rongrong Dai has four years of experience as an audit manager and two years of CEO experience. As an auditor,she has a profound professional audit technical background and a global vision. She also has a strong professional ability in the auditing major and has a strong logical thinking ability. As the CEO, she led the company's business planning, business policy and operation form, and established and improved the company's efficient organizational system and working mode. She received her degree from Hunan University of Finance and Economics in 2016 and a finalist of Association of Chartered Certified Accountants, UK.

**Audit Committee**

The Audit Committee oversees our accounting, financial reporting and audit processes; appoints, determines the compensation of, and oversees, the Company's independent registered public accounting firm; pre-approves audit and non-audit services provided by the independent registered public accountants; reviews the results and scope of audit and other services provided by the independent registered public accountants; reviews the accounting principles and practices and procedures used in preparing our financial statements; and reviews our internal controls.

The Audit Committee works closely with management and our independent registered public accountants. The Audit Committee also meets with our independent registered public accountants without members of management present, on a quarterly basis, following completion of our independent registered public accountants' quarterly reviews and annual audit and prior to our earnings announcements, to review the results of their work. The Audit Committee also meets with our independent registered public accountants to approve the annual scope and fees for the audit and review services to be performed.

The Board of Directors has determined that Jian Zhang is an "audit committee financial expert" as defined by SEC rules, as currently in effect.

**Section 16(a) Beneficial Ownership Reporting Compliance**

Section 16(a) of the Exchange Act, requires the executive officers and directors of the Company and every person who is directly or indirectly the beneficial owner of more than 10% of any class of security of the Company to file reports of ownership and changes in ownership with the SEC. Such persons also are required to furnish our company with copies of all Section 16(a) forms they file.

Based solely on our review of copies of such forms received by us, we believe that during the fiscal year 2022, the executive officers and directors of the Company and every person who is directly or indirectly the beneficial owner of more than 10% of any class of security of the Company complied with the filing requirements of Section 16(a) of the Exchange Act.

**Item 11. Executive Compensation**

**Compensation of Executive Officers**

Compensation Discussion and Analysis

Our primary goal with respect to our compensation programs has been to attract and retain the most talented and dedicated employees in key positions in order to compete effectively in the market place, successfully execute our growth strategies, and create lasting shareholder value. The Compensation Committee evaluates both individual and Company performance when determining the compensation of our executives. Our executives' overall compensation is tied to the Company's financial and operational performance, as measured by revenues and net income, as well as to accomplishing strategic goals such as merger and acquisitions and fund raising. We apply our compensation policies consistently for determining compensation of our Chief Executive Officer as we do with the other executives. The Compensation Committee assesses the performance of our Chief Executive Officer annually and determines the base salary and incentive compensation of our Chief Executive Officer. Our Chief Executive Officer is primarily responsible for the assessment of our other executive officers' performance.

Summary Compensation Table

The following identified persons (the "Named Executive Officers") of the Company received compensation in the amounts set forth in the chart below for the fiscal years ended September 30, 2022 and 2021. All compensation listed is in US dollars. No other item of compensation was paid to any officer or director of the Company other than reimbursement of expenses.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**Name and Principal Position** | <br>**Year** |<br>**Salary<br> ($)** |<br>**Bonus<br> ($)** | **All Other**<br>**Compensation<br> ($)** |<br>**Totals <br> ($)** |
| Neng Chen, Chief Executive Officer and Chairman of the Board <sup>(1)</sup> | **2022** | **30519** |  |  | **30519** |
|  | **2021** | **—** |  |  | **—** |
| Xiaojun Zhu, Former Chief Executive Officer and Chairman of the Board <sup>(1)</sup> | 2022 |  |  |  |  |
|  | 2021 | 30735 |  |  | 30735 |
| Rongrong Dai, Chief Financial Officer <sup>(2)</sup> | 2022 |  |  |  |  |
|  | 2021 |  |  |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Mr. Chen became our Chief executive office on October 29, 2021, therefore
no compensation was paid to Mr. Chen for the year ended September 30, 2021. Our former chief executive officer, Mr. Xiaojun Zhu was paid
in Renminbi. His annual salary was RMB200,000 for fiscal 2021. The amounts reflected in this column have been converted to U.S. dollars
at the exchange rate of RMB6.5532 to the U.S. dollar for fiscal 2022 and RMB6.5072 to the U.S. dollar for fiscal 2021.

Option Grants Table. There were no individual grants of stock options to purchase our common stock made to the executive officers named in the Summary Compensation Table in fiscal 2022 and 2021.

Aggregated Option Exercises and Fiscal Year-End Option Value Table. There were no stock options exercised during fiscal 2022 and 2021 by any executive officer named in the Summary Compensation Table.

Long-Term Incentive Plan ("LTIP") Awards Table. There were no awards made to a Named Executive Officer in fiscal 2022 and 2021 under any LTIP.

Our executive officers are reimbursed by us for any out-of-pocket expenses incurred in connection with activities conducted on our behalf. There is no limit on the amount of these out-of-pocket expenses and there will be no review of the reasonableness of such expenses by anyone other than our board of directors, which includes persons who may seek reimbursement, or a court of competent jurisdiction if such reimbursement is challenged.

**Employment Contracts and Termination of Employment**

The Company is under a contract with Ms. Rongrong Dai to serve as Chief Financial Officer of the Company for a term of two years, which automatically renews for additional one-year term unless previously terminated on three months written notice by either party. Pursuant to the contract, Ms. Dai does not have an initial base salary. Ms. Dai did not receive bonus or restricted stock for the years ended September 30, 2022 and 2021. We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive officer, such as conviction or plea of guilty to a felony or grossly negligent or dishonest acts to our detriment, or misconduct or a failure to perform agreed duties. In such case, the executive officer will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination, and the executive officer's right to all other benefits will terminate, except as required by any applicable law. We may also terminate an executive officer's employment without cause upon one-month advance written notice. In such case of termination by us, we are required to provide compensation to the executive officer, including (1) a lump sum cash payment equal to 1 months of the Executive's base salary as of the date of such termination; (2) a lump sum cash payment equal to a pro-rated amount of her target annual bonus for the year immediately preceding the termination, if any; (3) payment of premiums for continued health benefits under the Company's health plans for 12 months fo1lowing the termination, if any; and (4) immediate vesting of 100% of the then-unvested portion of any outstanding equity awards held by Ms. Dai.

**Outstanding Equity Awards at Fiscal 2022 Year End**

None.

**Compensation of Directors**

The following table provides information regarding compensation earned by non-employee directors who served during fiscal 2022.

**FISCAL 2022 DIRECTOR COMPENSATION**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| <br>**Name** |<br>**Fees Earned**<br>**or Paid in**<br>**Cash<br> ($)** |<br>**Stock**<br>**Awards <br> ($)** |<br>**Option**<br>**Awards<br> ($)** |<br>**Non-Equity**<br>**Incentive Plan**<br>**Compensation<br> ($)** | **Nonqualified**<br>**Deferred**<br>**Compensation**<br>**Earnings<br> ($)** |<br>**All Other**<br>**Compensation<br> ($)** |<br><br>**Total<br> ($)** |
| Xinping Li <sup>(1)</sup> | $2767 |  |  |  |  |  | $2767 |
| Qingfeng Zhou <sup>(2)</sup> |  |  |  |  |  |  |  |
| Jian Zhang <sup>(3)</sup> |  |  |  |  |  |  |  |
| Christy Young Shue, former director <sup>(4)</sup> |  |  |  |  |  |  |  |
| Yuankai Wen, former director <sup>(5)</sup> |  |  |  |  |  |  | $— |
| Shenghui Luo, former director <sup>(6)</sup> |  |  |  |  |  |  |  |
| John Chen <sup>(7)</sup> | $18000 |  |  |  |  |  | $18000 |

---

These amounts reflect the value determined by the Company for accounting purposes for these awards and do not reflect whether the recipient has actually realized a financial benefit from the award (such as by exercising stock options). These amounts represent compensation expense for fiscal year 2022 and is based on an exchange rate of RMB6.5532 to the U.S. dollar.

&nbsp;&nbsp;&nbsp;&nbsp;(4) Ms. Christy Young Shue resigned from her positions as an Independent Director of the Board and as the Chairwoman of the Nominating Committee, and member of the Audit Committee and Compensation Committee on November 8, 2021. Ms. Shue received annual compensation in the amount of $24,000 before her resignation.

&nbsp;&nbsp;&nbsp;&nbsp;(5) Mr. Yuankai Wen resigned from his positions as an Independent Director of the Board and as the Chairman of the Compensation Committee, and member of the Audit Committee and Nominating Committee on January 24, 2022. Mr. Wen received annual compensation in the amount of RMB 100,000 before his resignation.

&nbsp;&nbsp;&nbsp;&nbsp;(6) Ms. Shenghui Luo resigned from her positions as an Independent Director of the Board on February 23, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;(7) Mr. John Chen resigned from his positions as an Independent Director of the Board and as the Chairman of the Audit Committee, and member of the Nominating Committee and Compensation Committee on April 25, 2022. Mr. Chen received annual compensation in the amount of $36,000 before his resignation.

**Independent Director Agreements**

The Company has entered into Independent Director Agreements with Dr. Li, and Messrs. Zhou and Zhang pursuant to which the Company has agreed to pay each of these directors annual cash compensation in the amount of $24,000, $12,000 and $12,000, respectively. In addition, the Company has agreed to reimburse each director for all reasonable, out-of-pocket expenses, subject to the advance approval of the Company incurred in connection with the performance of Director's duties.

**Board Leadership Structure and Role in Risk Oversight**

One person currently holds the positions of principal executive officer and chairman of the Board of Company. The Board does not have a policy on whether or not the roles of the Chief Executive Officer and Chairman should be separate. Instead, the Company's By-Laws provide that the directors may designate a Chairman of the Board from among any of the directors. Accordingly, the Board reserves the right to vest the responsibilities of the Chief Executive Officer and Chairman in the same person or in two different individuals depending on what it believes is in the best interest of the Company. The Board has determined that the consolidation of these roles is appropriate because it allows Mr. Chen to bring a wider perspective to the deliberations of the Board on matters of corporate strategy and policy. The Board believes that there is no single Board leadership structure that would be most effective in all circumstances and therefore retains the authority to modify this structure to best address the Company's and the Board's then current circumstances as and when appropriate.

The Company's management is responsible for identifying, assessing and managing the material risks facing the business. The Board and, in particular, the Audit Committee are responsible for overseeing the Company's processes for assessing and managing risk. Each of the Chief Executive Officer and Chief Financial Officer, with input as appropriate from other appropriate management members, report and provide relevant information directly to either the Board and/or the Audit Committee on various types of identified material financial, reputational, legal, operational, environmental and business risks to which the Company is or may be subject, as well as mitigation strategies for certain salient risks. In accordance with NASDAQ requirements and as set forth in its charter, the Audit Committee periodically reviews and discusses the Company's business and financial risk management and risk assessment policies and procedures with senior management, the Company's independent auditor. The Audit Committee reports its risk assessment function to the Board. The roles of the Board and the Audit Committee in the risk oversight process have not affected the Board leadership structure. Although the board has not formally designated a lead independent director, Mr. Zhang, the chairman of the audit committee, has led the meetings of the audit committee which include at least a majority of the independent directors and at which matters appropriate for consideration at executive sessions of the board of directors were discussed.

**Item 12. Security Ownership of Certain Beneficial Owners and Management**

The following table sets forth information regarding the beneficial ownership of our common stock as of September 30, 2022 as to (i) each person who is known by us to own beneficially more than 5% of our outstanding common stock, (ii) each of the executive officers and other persons named in the Summary Compensation Table, (iii) each director and nominee for director, and (iv) all directors and executive officers as a group. Except as otherwise indicated in the footnotes, all information with respect to share ownership and voting and investment power has been furnished to us by the persons listed. Except as otherwise indicated in the footnotes, each person listed has sole voting power with respect to the shares shown as beneficially owned. Unless otherwise indicated, the address of each listed shareholder is c/o Green Giant Inc., 6 Xinghan Road, 19th Floor, Hanzhong City, Shaanxi Province, PRC 723000.

---

| | | |
|:---|:---|:---|
| <br>**Name and Address of Beneficial Owner** | **Amount and**<br>**Nature of**<br>**Beneficial**<br>**Ownership(1)** |<br>**Percent of**<br>**Class(2)** |
| **5% Holders:** | | |
| Goldenmountain Solution Inc. | 14900000 | 26.72% |
| Liping Zhu | 3092114 | 5.55% |
| **Directors and Officers** |  |  |
| Qingfeng Zhou |  |  |
| Xinping Li |  |  |
| Jian Zhang | 10000 | \*% |
| Rongrong Dai |  |  |
| Neng Chen |  |  |
| **All directors and executive officers as a group (5 persons)** | **10000** | **\*%** |

---

\* Less than 1%

(1) Except as indicated in the footnotes
to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power
with respect to all shares of common stock owned by such person. The number of shares beneficially owned includes common stock that such
individual has the right to acquire as of January 13, 2023 or within 60 days thereafter, including through the exercise of stock options.

(2) Percentage of beneficial ownership is based upon 55,753,268 shares of common stock outstanding as of January 13, 2023. For each named person, this percentage includes comermon stock that the person has the right to acquire either currently or within 60 days of January 13, 2023, including through the exercise of an option; however, such common stock is not deemed outstanding for the purpose of computing the percentage owned by any other person.

**Securities Authorized for Issuance Under Equity Compensation Plans**

On September 25, 2012, our shareholders approved the Company's 2012 Omnibus Securities and Incentive Plan (the "2012 Plan"). The 2012 Plan provides for the grant of awards which are distribution equivalent rights, incentive stock options, non-qualified stock options, performance shares, performance units, restricted shares of common stock, restricted stock units, stock appreciation rights ("SARs"), tandem stock appreciation rights, unrestricted shares of common stock or any combination of the foregoing, to key management employees and nonemployee directors of, and nonemployee consultants of, the Company or any of its subsidiaries (each a "participant"). We have reserved a total of 1,000,000 shares of common stock for issuance as or under awards to be made under the 2012 Plan. The number of shares of common stock for which awards which are options or SARs may be granted to a participant under the 2012 Plan during any calendar year is limited to 500,000.

The following table summarizes information with respect to shares of the Company's common stock that may be issued under the Company's existing equity compensation plans as of September 30, 2022

---

| | | | |
|:---|:---|:---|:---|
| **Plan Category** | **Number of<br> securities<br> to be issued upon<br> exercise of<br> outstanding<br> options,<br> warrants and <u>rights</u>** | **Weighted-<br> average<br> exercise <br> price of<br> outstanding<br> options,<br> warrants <br> <u>and rights</u>** | **Number of<br> securities<br> remaining<br> available for<br> future <br> issuance<br> under equity<br> compensation<br> plans<br> (excluding securities<br> reflected in <br> <u>column (a))</u>** |
| Equity compensation plans approved by security holders |  | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; — | 1000000 |
| Total |  | $— | 1000000 |

---

For additional information concerning our equity compensation plans, see the discussion in "Note 13— Stockholders' Equity."

**Changes in Control**

There are no arrangements known to us, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in control of the Company.

**Item 13. Certain Relationships and Related Transactions, and Director Independence**

**Certain Relationships and Related Transactions**

The Audit Committee is responsible for reviewing, approving or ratifying all material transactions between us and any related person. Related persons can include any of our directors or executive officers, certain of our shareholders, and any of their immediate family members. This obligation is set forth in our Audit and Finance Committee Charter. Although we do not have a formal written policy with respect to our Audit Committee's policies and procedures for reviewing related party transactions, in evaluating such transactions, the Audit Committee members apply the same standards of good faith and fiduciary duty they apply to their general responsibilities as a committee of the board and as individual directors. In any transaction involving a related party, our Audit Committee considers all available material facts and circumstances of the transaction, including: (i) the direct and indirect interests of the related party; (ii) if the related party is a director (or immediate family member of a director or an entity with which a director is affiliated), the impact such transaction would have on the director's independence; (iii) the risks, costs and benefits to us; and (iv) whether any alternative transactions for comparable purposes are available. Our Audit Committee then makes a determination as to whether the proposed terms of the transaction are in the best interests of the Company and otherwise consistent with arm's length dealings with unrelated third-parties.

**Director Independence**

The Board of Directors has determined that Xinping Li, Qingfeng Zhou, and Jian Zhang are independent directors within the meaning set forth in the NASDAQ listing rules, as currently in effect.

**Item 14. Principal Accountant Fees and Services**

Onestop Assurance PAC and Wei, Wei & Co., LLP shall serve as the Company's independent registered public accounting firm for fiscal 2022 and 2021 respectively. Fees (excluding reimbursements for out-of-pocket expenses) paid to our independent registered public accounting firm for services in fiscal 2022 and 2021 were as follows:

---

| | | |
|:---|:---|:---|
|  | **2022** | **2021** |
| Audit Fees | $250000 | $265000 |
| Audit-Related Fees | 0 |  |
| Tax Fees | 0 |  |
| All Other Fees | 0 |  |
| Total | $250000 | $265000 |

---

"Audit Fees" consisted of fees for the audit of our annual financial statements, review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the independent registered public accountants in connection with statutory and regulatory filings or engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements, statutory audits required by non-U.S. jurisdiction, the preparation of an annual "management letter" on internal control matters and assurance services provided in connection with the assessment and testing of internal controls with respect to Section 404 of the Sarbanes-Oxley Act of 2002.

"Audit-Related Fees" consisted of assurance and related services by Onestop Assurance PAC that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under "Audit Fees."

"Tax Fees" consisted of professional services rendered by Onestop Assurance PAC for tax compliance and tax planning. The services for the fees disclosed under this category include tax return preparation and technical tax advice.

The above amounts relate to services provided in the indicated fiscal years, irrespective of when they were billed. The Audit Committee considered the compatibility of non-audit services by Onestop Assurance PAC and Wei, Wei & Co., LLP respectively with the maintenance of that firm's independence and determined, in each case, that at all times, Onestop Assurance PAC and Wei Wei & Co., LLP remained independent.

The Audit Committee Charter establishes a policy governing our use of Onestop Assurance PAC for audit and non-audit services. Under the Charter, the Audit Committee is required to pre-approve all audit and non-audit services performed by the Company's independent registered public accountants in order to ensure that the provision of such services does not impair the public accountants' independence. The Audit Committee pre-approves certain audit and audit-related services, subject to certain fee levels. Any proposed services that are not a type of service that has been pre-approved or that exceed pre-approval cost levels require specific approval by the Audit Committee in advance. The Audit Committee has approved all audit and audit-related services to be performed by Onestop Assurance PAC in 2022.

**Part IV**

**ITEM 15 Exhibits and Financial Statement Schedules**

---

| | |
|:---|:---|
| **Exhibit No.** | **Title of Document** |
| 3.1 | [Articles of Incorporation(1)](http://www.sec.gov/Archives/edgar/data/1158420/000113543201500168/doc2.txt) |
| 3.2 | [Articles of incorporation of the registrant as amended with the Secretary of State of Florida on October 8, 2009(2)](http://www.sec.gov/Archives/edgar/data/1158420/000101376210001967/ex32.pdf) |
| 3.3 | [Bylaws(1)](http://www.sec.gov/Archives/edgar/data/1158420/000113543201500168/doc3.txt) |
| 3.4 | [Articles of Amendment to Articles of Incorporation to effect 1 share for 2 shares reverse split (18)](http://www.sec.gov/Archives/edgar/data/1158420/000110465920100199/tm2029520d1_ex3-1.htm) |
| 3.5 | [Articles of Amendment to Articles of Incorporation to change the name of the Company to "Green Giant Inc." (19)](http://www.sec.gov/Archives/edgar/data/1158420/000110465922036795/tm2210235d1_ex3-1.htm) |
| 3.6 | [Articles of Amendment to Articles of Incorporation for the increase of the authorized shares of common stock (20)](http://www.sec.gov/Archives/edgar/data/1158420/000110465922078828/tm2220736d1_ex3-1.htm) |
| 4.1\* | [Description of Securities](f10k2022ex4-1_greengiant.htm) |
| 10.1 | [Share Exchange Agreement by and between the Company, China HGS Investment, Inc., and Rising Pilot, Inc. dated August 21, 2009 (3)](http://www.sec.gov/Archives/edgar/data/1158420/000140677409000103/exhibit101.htm) |
| 10.2 | [Entrusted Management Agreement, dated as of September 18, 2009, by and among the Company, Mr. Xiaojun Zhu and his management staff (English translation) (4)](http://www.sec.gov/Archives/edgar/data/1158420/000140677409000114/exhibit101.htm) |
| 10.3 | [Independent Director Agreement between Green Giant Inc. (formerly "China HGS Real Estate Inc.") and Yuankai Wen (2)](http://www.sec.gov/Archives/edgar/data/1158420/000101376210001967/ex103.htm) |
| 10.4 | [Form of Indemnification Agreement (2)](http://www.sec.gov/Archives/edgar/data/1158420/000101376210001967/ex104.htm) |
| 10.5 | [Form of Nonstatutory Stock Option Agreement (5)](http://www.sec.gov/Archives/edgar/data/1158420/000101376211000626/ex101.htm) |
| 10.6 | [Residential Apartment Bulk Purchasing Agreement dated May 28, 2011 between Hanzhong Municipal Public Security Bureau and Shaanxi Guangsha Investment and Development Group Co., Ltd. (English translation) (6)](http://www.sec.gov/Archives/edgar/data/1158420/000101376211001629/ex101.htm) |
| 10.7 | [Residential Apartment Bulk Purchasing Agreement dated June 8, 2011 between Hanzhong Municipal Bureau of Justice and Shaanxi Guangsha Investment and Development Group Co., Ltd. (English translation) (7)](http://www.sec.gov/Archives/edgar/data/1158420/000101376211001719/ex101.htm) |
| 10.8 | [USD Shareholder Loan Agreement by and between the Company and Mr. Xiaojun Zhu dated July 28, 2011(English translation) (8)](http://www.sec.gov/Archives/edgar/data/1158420/000114420411047298/v231768_ex10-2.htm) |
| 10.9 | [Land Use Rights Transfer Agreement between Shaanxi Guangsha Investment and Development Group Co., Ltd. and Hanzhong Guangxia Real Estate Development Limited dated March 16, 2011 (English translation) (9)](http://www.sec.gov/Archives/edgar/data/1158420/000114420411071513/v243909_ex10-1.htm) |
| 10.10 | [Loan Agreement by and between Shaanxi Guangsha Investment and Development Group Co. and Mr. Xiaojun Zhu dated November 14, 2011 (English translation) (9)](http://www.sec.gov/Archives/edgar/data/1158420/000114420411071513/v243909_ex10-2.htm) |
| 10.11 | [Independent Director Agreement by and between Green Giant Inc. (formerly "China HGS Real Estate Inc.") and John Chen, dated August 22, 2012 (11)](http://www.sec.gov/Archives/edgar/data/1158420/000114420412047535/v322189_ex10-1.htm) |
| 10.12 | [Independent Director Agreement by and between Green Giant Inc. (formerly "China HGS Real Estate Inc.") and Christy Young Shue, dated August 22, 2012 (12)](http://www.sec.gov/Archives/edgar/data/1158420/000114420412047535/v322189_ex10-2.htm) |
| 10.13 | [Labor Contract by and between Shaanxi Guangsha Investment and Development Group Co., Ltd. and Wei (Samuel) Shen, dated May 28, 2012 (13)](http://www.sec.gov/Archives/edgar/data/1158420/000114420412032124/v314709_ex10-1.htm) |
| 10.14 | [Form of Indemnification Agreement (14)](http://www.sec.gov/Archives/edgar/data/1158420/000114420413015222/v338147_ex10-1.htm) |
| 10.15 | [Loan Amendment Agreement by and between Green Giant Inc. (formerly "China HGS Real Estate Inc.") and Mr. Xiaojun Zhu, dated July 19, 2013 (15)](http://www.sec.gov/Archives/edgar/data/1158420/000114420413040372/v350490_ex10-1.htm) |
| 10.16 | [Loan Agreement by and between Shaanxi Guangxia Investment Development Group Co., Ltd. and China Construction Bank, dated August 23, 2013 (16)](http://www.sec.gov/Archives/edgar/data/1158420/000114420413055043/v357313_ex10-1.htm) |
| 10.17 | [Loan Agreement between dated December 31, 2013 by and between Shaanxi Guangsha Investment and Development Group Co., Ltd and Mr. Xiaojun Zhu (17)](http://www.sec.gov/Archives/edgar/data/1158420/000114420414000878/v364805_ex10-1.htm) |
| 14.1 | [Code of Conduct (10)](http://www.sec.gov/Archives/edgar/data/1158420/000101376210000143/ex994.htm) |
| 14.2\* | [Insider Trading Policy](f10k2022ex14-2_greengiant.htm) |
| 16.1 | [Letter from Wei, Wei & Co., LLP to the Securities and Exchange Commission dated August 8, 2022 (21)](http://www.sec.gov/Archives/edgar/data/1158420/000110465922087380/tm2222858d1_ex16-1.htm) |
| 21.1\* | [List of subsidiaries of Green Giant Inc.](f10k2022ex21-1_greengiant.htm) |
| 23.1\* | [Consent of Onestop Assurance PAC](f10k2022ex23-1_greengiant.htm) |
| 23.2\* | [Consent of Wei, Wei & Co., LLP](f10k2022ex23-2_greengiant.htm) |
| 31.1\* | [Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer](f10k2022ex31-1_greengiant.htm) |
| 31.2\* | [Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer](f10k2022ex31-2_greengiant.htm) |
| 32.1\* | [Section 1350 Certification of Chief Executive Officer](f10k2022ex32-1_greengiant.htm) |
| 32.2\* | [Section 1350 Certification of Chief Financial Officer](f10k2022ex32-2_greengiant.htm) |
| 101.INS\* | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104\* | Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |

---

**\*** Filed herewith

&nbsp;&nbsp;&nbsp;&nbsp;(1) Incorporated herein by reference to the SB-2 Registration Statement filed on August 31, 2001.

(2) Incorporated by reference to Exhibit 3.2 to registrant's quarterly report on Form 10-Q filed on August 16, 2010.

(3) Incorporated herein by reference to the current report on Form 8-K filed on August 21, 2009.

(4) Incorporated herein by reference to the current report on Form 8-K filed on September 18, 2009.

(5) Incorporated herein by reference to Exhibit 10.1 to the current report on Form 8-K filed on March 17, 2011.

(6) Incorporated herein by reference to Exhibit 10.1 to the current report on Form 8-K filed on June 3, 2011.

(7) Incorporated herein by reference to Exhibit 10.1 to the current report on Form 8-K filed on June 14, 2011.

(8) Incorporated herein by reference to registrant's quarterly report on Form 10-Q filed August 15, 2011.

(9) Incorporated herein by reference to the current report on Form 8-K filed on December 23, 2011.

(10) Incorporated herein by reference to the current report on Form 8-K filed on January 22, 2010.

(11) Incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed on August 22, 2012.

(12) Incorporated by reference to Exhibit 10.2 to the current report on Form 8-K filed on August 22, 2012.

(13) Incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed on May 29, 2012.

(14) Incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed on March 15, 2013.

(15) Incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed on July 22, 2013.

(16) Incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed on October 15, 2013.

(17) Incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed on January 7, 2014.

(18) Incorporated by reference to Exhibit 3.1 to the current report on Form 8-K filed on September 1, 2020

(19) Incorporated by reference to Exhibit 3.1 to the current report on Form 8-K filed on March 23, 2022

(20) Incorporated by reference to Exhibit 3.1 to the current report on Form 8-K filed on July 11, 2022

(21) Incorporated by reference to Exhibit 16.1 to the current report on Form
8-K filed on August 8, 2022

**ITEM 16 Form 10-K Summary**

None.

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | Green Giant Inc.<br> (Formerly known as China HGS Real Estate Inc.) | Green Giant Inc.<br> (Formerly known as China HGS Real Estate Inc.) |
| Date: January 13, 2023 | By: | /s/ Neng Chen |
|  |  | Neng Chen |
|  |  | President, Chief Executive Officer, and<br> Chairman of the Board of Directors |
| Date: January 13, 2023 | By: | /s/ Rongrong Dai |
|  |  | Rongrong Dai |
|  |  | Chief Financial Officer |

---

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| /s/ Neng Chen | President, Chief Executive Officer, <br> and Chairman of the Board of Directors | January 13, 2023 |
| Neng Chen | (Principal Executive Officer) |  |
| /s/ Rongrong Dai | Chief Financial Officer | January 13, 2023 |
| Rongrong Dai | (Principal Financial and Accounting Officer) |  |
| /s/ Xinping Li | Director | January 13, 2023 |
| Xinping Li |  |  |
| /s/ Qingfeng Zhou | Director | January 13, 2023 |
| Qingfeng Zhou |  |  |
| /s/ Jian Zhang | Director | January 13, 2023 |
| Jian Zhang |  |  |

---

## Exhibit 4.1

**Exhibit 4.1**

**DESCRIPTION OF THE REGISTRANT'S SECURITIES**

**REGISTERED PURSUANT TO SECTION 12 OF THE**

**SECURITIES EXCHANGE ACT OF 1934**

The following description sets forth certain material terms and provisions of Green Giant Inc.'s (the "Company," "we," "us," and "our") securities that are registered under Section 12 of the Securities Exchange Act of 1934, as amended.

**DESCRIPTION OF CAPITAL STOCK**

The following description of our common stock and preferred stock summarizes the material terms and provisions of our common stock and preferred stock. It is subject to, and qualified in its entirety by reference to, our Articles of Incorporation, as amended (the "Articles of Incorporation"), and our Bylaws, as amended (our "Bylaws"), each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part. The Florida Business Corporation Act (the "FBCA") may also affect the terms of these securities.

**Authorized Capital Stock** 

Our authorized capital stock consists of

● 200,000,000 shares of common stock, $0.001 par value per share; and

● 5,000,000 shares of preferred stock, $0.001 par value per share.

**Common Stock** 

 

*Voting Rights*. Our common stock has one vote per share. The holders of our common stock are entitled to vote on all matters to be voted on by stockholders. Shares of the Company owned by a subsidiary shall not be entitled to vote on any matter.

 

*Listing*. Our common stock is listed on the Nasdaq under the symbol "GGE."

 

*Transfer Agent and Registrar*. The transfer agent for our common stock is Securities Transfer Corporation.

*Dividends.* We have never declared or paid any cash dividends on our common stock. We do not anticipate paying any cash dividends to stockholders in the foreseeable future. In addition, any future determination to pay cash dividends will be at the discretion of the Board of Directors and will be dependent upon our financial condition, results of operations, capital requirements, and such other factors as the Board of Directors deem relevant.

As of September 30, 2022, 46,464,929 shares of common stock issued and outstanding.

**Preferred Stock** 

The shares of preferred stock may be issued from time to time in one or more series. The board of directors of the Company is expressly authorized to provide for the issue of all or any of the shares of the preferred stock in one or more series, and to fix the number of shares and to determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designations, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the board of directors providing for the issue of such shares (a "Preferred Stock Designation") and as may be permitted by the laws of the State of Florida. The board of directors is also expressly authorized to increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series. In case the number of shares of any such series shall be so decreased, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series."

As of September 30, 2022, all 5,000,000 shares of preferred stock remain unissued and no shares of preferred stock are authorized for any specific series.

The summaries above of selected provisions of our common stock and preferred stock are qualified entirely by the provisions of our Articles of Incorporation, and our Bylaws, all of which are included or incorporated by reference as exhibits to our Annual Report on Form 10-K. You should read our Articles of Incorporation and our Bylaws.

**Anti-Takeover Effects of Florida Law, Our Articles of Incorporation and Our Bylaws** 

Some provisions of Florida law, our Articles of Incorporation and our Bylaws contain provisions that could make the following transactions more difficult: acquisitions of us by means of a tender offer, a proxy contest or otherwise or removal of our incumbent officers and directors. These provisions may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish or could deter transactions that shareholders may otherwise consider to be in their best interest or in our best interests, including transactions that might result in a premium over the market price for our shares.

These provisions are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with us. We believe that the benefits of increased protection and our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging these proposals because, among other things, negotiation of these proposals could result in an improvement of their terms.

*Anti-Takeover Effects of Florida Law* 

The following summarizes certain anti-takeover effects of Florida Law.

 

*Authorized but Unissued Stock.* Our authorized but unissued shares of preferred stock will be available for future issuance without shareholder approval. The existence of authorized but unissued shares of stock may enable our board of directors to issue shares of stock to persons friendly to existing management. This may have the effect of discouraging attempts to obtain control of the Company. The perception in the market of a large number of authorized but unissued shares of our common and preferred stock could have a negative impact on the price of our common stock.

 

*Evaluation of Impact of Acquisition Proposals on Non-Shareholder Constituencies.* The FBCA expressly permits our board of directors, when evaluating any proposed tender or exchange offer, any merger, consolidation or sale of substantially all of our assets, or any similar extraordinary transaction, to consider in addition to shareholder interests all relevant factors, including, without limitation, the social, legal, and economic effects on our employees, customers and suppliers and our subsidiaries, on the communities and geographical areas in which they operate. Our board of directors may also consider the amount of consideration being offered in relation to the then current market price for outstanding shares of capital stock and our then current value in a freely negotiated transaction. Our board of directors believes that these provisions are in our long-term best interests and those of our shareholders.

The Company has sought to elect out of the provisions of Section 607.0901 of the FBCA, pertaining to affiliates transactions, and Section 607.0902 of the FBCA, pertaining to control-share acquisitions.

 

*Our Articles of Incorporation and Our Bylaws* 

Among other things, our Articles of Incorporation and Bylaws:

● provide that our Bylaws (other than any Bylaw that is adopted by our shareholders) can be amended by our board of directors other than an amendment to the Bylaws changing the authorized number of directors.

In addition, our Bylaws provide for advance notice and related requirements in connection with the shareholders meeting. Notice of any shareholders meeting, annual or special, shall be given in writing not less than 10 days nor more than 60 days before the date of the meeting to shareholders entitled to vote. Notice of any meeting of shareholders shall specify the place, the day and the hour of meeting, and (i) in case of a special meeting, the general nature of the business to be transacted and that no other business may be transacted, or (ii) in the case of an annual meeting, those matters which the board of directors, at the date of mailing of notice, intends to present for action by the shareholders. At any meetings where Directors are elected, notice shall include the names of the nominees, if any, intended at the date of notice to be presented for election. If action is proposed to be taken at any meeting for approval of (i) contracts or transactions in which a director has a direct or indirect financial interest, (ii) an amendment to the Articles of Incorporation, (iii) a reorganization of the Company, (iv) dissolution of the Corporation, or (v) a distribution to preferred shareholders, the notice shall also state the general nature of such proposal.

**Indemnification Provisions**

Florida law authorizes a Florida corporation to indemnify its directors and officers in certain instances against certain liabilities which they may incur by virtue of their relationship with the corporation. Additionally, a Florida corporation is authorized to provide further indemnification or advancement of expenses to any of its directors, officers, employees, or agents, except for acts or omissions that constitute:

● a violation of the criminal law unless the individual had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful,

● a transaction in which the individual derived an improper personal benefit,

● in the case of a director, a circumstance under which certain liability provisions of the FBCA are applicable related to payment of dividends or other distributions or repurchases of shares in violation of the FBCA, or

● willful or intentional misconduct or a conscious disregard for the best interests of the corporation in a proceeding by or in the right of the corporation to procure a judgment in its favor or in a proceeding by or in the right of a corporation shareholder.

A Florida corporation also is authorized to purchase and maintain liability insurance for its directors, officers, employees and agent.

Our Articles of Incorporation provide that to the fullest extent permitted by law, no director or officer of the Company shall be personally liable to the Company or its shareholders for damages for breach of any duty owed to the Company or its shareholders. In addition, the Company shall have the power, in its Bylaws or in any resolution of its stockholders or directors, to undertake to indemnify the officers and directors of this Company against any contingency or peril as may be determined to be in the best interests of this Company, and in conjunction therewith, to procure, at this Company's expense, policies of insurance.

**Rule 144**

Pursuant to Rule 144 of the Securities Act ("Rule 144"), a person who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell their securities, *provided* that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale.

Persons who have beneficially owned restricted shares of our common stock for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:

● one percent (1%) of the total number of shares of common stock then outstanding; or

● the average weekly reported trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.

## Exhibit 14.2

**Exhibit 14.2**

**Insider Trading Compliance Manual**

**Green Giant Inc.**

Adopted October 25, 2022

In order to take an active role in the prevention of insider trading violations by its officers, directors, employees, consultants, advisors, and other related individuals, the Board of Directors (the "**Board**") of Green Giant Inc., a Florida corporation (the "**Company**"), has adopted the policies and procedures described in this Insider Trading Compliance Manual.

**I. <u>Adoption of Insider Trading Policy</u>.**

Effective as of the date written above, the Company has adopted the Insider Trading Policy (the "**Policy**"), which prohibits trading based on material, nonpublic information regarding the Company and its subsidiaries ("**Inside Information**"). The Policy covers all officers and directors of the Company and its subsidiaries, all other employees of the Company and its subsidiaries, all secretaries and assistants supporting such officers, directors, or employees and consultants or advisors to the Company or its subsidiaries who have or may have access to Inside Information and members of the immediate family or household of any such person. The Policy (and/or a summary thereof) is to be delivered to all new officers, directors, employees, consultants, advisors and related individuals who are within the categories of covered persons upon the commencement of their relationships with the Company, and is to be circulated to all covered personnel at least annually.

**II. <u>Designation of Certain Persons</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A. <u>Insiders</u>** Section 16 of the Securities Exchange Act of 1934, as amended (the "**Exchange Act**") prohibits "short-swing" profits by all directors and executive officers of the Company, and direct or indirect beneficial owner of 10% or more of the Company's any class of any equity security (collectively, the "**Insiders**") and such insiders in addition to any beneficial owners of 5% or more of the Company's any class of registered securities are subject to the reporting and liability provisions of Section 13(d) of the Securities Exchange and the rules and regulations promulgated thereunder (collectively, the "**Section 13(d) Individuals**").

Under Sections 13(d) and 13(g) of the Exchange Act, and the Securities and Exchange Commission's (the "**SEC**") related rules, subject to certain exemptions, any person who after acquiring, directly or indirectly the beneficial ownership of a certain class of equity securities, becomes, either directly or indirectly, the beneficial owner of more than 5% of such class must deliver a statement to the issuer of the security and to each exchange where the security is traded. Delivery to each exchange can be satisfied by making a filing on EDGAR. In addition, Section 13(d) Individuals must file with the SEC a statement containing certain information, as well as any additional information that the SEC may deem necessary or appropriate in the public interest or for the protection of investors. Attached hereto as <u>Exhibit A</u> is a separate memorandum which discusses the relevant terms of Section 13.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B. <u>Other Persons Subject to Policy</u>.** In addition, certain employees, consultants, and advisors of the Company as described in Section I above have, or are likely to have, from time to time access to Inside Information and together with the Insiders, are subject to the Policy.

**III. <u>Appointment of Chief Compliance Officer</u>.**

The Company has appointed Rongrong Dai as the Company's Chief Compliance Officer (the "**Compliance Officer**").

**IV. <u>Duties of the Compliance Officer</u>.**

The Compliance Officer has been designated by the Board to handle any and all matters relating to the Company's insider trading compliance program. Certain of those duties may be delegated to outside counsel with special expertise in securities issues and relevant law. The duties of the Compliance Officer shall include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Pre-clearing all transactions involving the Company's securities by the Insiders and those individuals having regular access to Inside Information, defined for these purposes to include all officers, directors, and employees of the Company and its subsidiaries and members of the immediate family or household of any such person, in order to determine compliance with the Policy, insider trading laws, Section 13 and Section 16 of the Exchange Act and Rule 144 promulgated under the Securities Act of 1933, as amended. Attached hereto as <u>Exhibit C</u> is a Pre-Clearance Checklist to assist the Compliance Officer in the performance of his or her duties hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Assisting in the preparation and filing of Section 13(d) reports for all Section 13(d) Individuals although the filings are their individual obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Serving as the designated recipient at the Company of copies of reports filed with the SEC by Section 13(d) Individuals under Section 13(d) of the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Performing periodic reviews of available materials, which may include Schedule 13D, Schedule 13G, Form 144, officers' and directors' questionnaires, as applicable, and reports received from the Company's stock administrator and transfer agent, to determine trading activity by officers, directors and others who have, or may have, access to Inside Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Circulating the Policy (and/or a summary thereof) to all covered employees, including the Insiders, on an annual basis, and providing the Policy and other appropriate materials to new officers, directors and others who have, or may have, access to Inside Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. Assisting the Board in implementing the Policy and Sections I and II of this manual.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. Coordinating with Company counsel regarding all securities compliance matters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H. Retaining copies of all appropriate securities reports, and maintaining records of his or her activities as Compliance Officer.

**ACKNOWLEDGMENT**

I hereby acknowledge that I have received a copy of Green Giant Inc.'s **Insider Trading Compliance Manual** (the "**Insider Trading Manual**"). Further, I certify that I have reviewed the Insider Trading Manual, understand the policies and procedures contained therein and agree to be bound by and adhere to these policies and procedures.

Dated:   <br> Name:

**GREEN GIANT INC.**

**Insider Trading Policy**

and Guidelines with Respect to Certain Transactions in Company Securities

**Section I** 

**APPLICABILITY** **OF POLICY**

This Policy applies to all transactions in the Company's securities, including common stock, options and warrants to purchase shares of common stock, and any other securities the Company may issue from time to time, such as preferred stock, and convertible debentures, as well as derivative securities relating to the Company's stock, whether or not issued by the Company, such as exchange-traded options. It applies to all officers and directors of the Company, all other employees of the Company and its subsidiaries, all secretaries and assistants supporting such directors, officers, and employees, and consultants or advisors to the Company or its subsidiaries who have or may have access to Material Nonpublic Information (as defined below) regarding the Company and members of the immediate family or household of any such person. This group of people is sometimes referred to in this Policy as "Insiders." This Policy also applies to any person who receives Material Nonpublic Information from any Insider.

Any person who possesses Material Nonpublic Information regarding the Company is an Insider for so long as such information is not publicly known.

**Section II**

**DEFINITION OF MATERIAL NONPUBLIC INFORMATION**

It is not possible to define all categories of material information. However, information should be regarded as "material" if there is a reasonable likelihood that it would be considered important to an investor in making an investment decision regarding the purchase or sale of the Company's securities. Material information may be positive or negative. "Nonpublic information" is information that has not been previously disclosed to the general public and is otherwise not available to the general public.

While it may be difficult to determine whether particular information is material, there are various categories of information that are particularly sensitive and, as a general rule, should always be considered material. Examples of such information may include:

● Financial results;

● Entry into a material agreement or discussions regarding entry into a material agreement;

● Projections of future earnings or losses;

● Major contract awards, cancellations or write-offs;

● Joint ventures or commercial ventures with third parties;

● News of a pending or proposed merger or acquisition;

● News of the disposition of material assets;

● Impending bankruptcy or financial liquidity problems;

● Gain or loss of significant line of credit;

● New business or services announcements of a significant nature;

● Stock splits;

● New equity or debt offerings;

● Significant litigation exposure due to actual or threatened litigation;

● Changes in senior management or the Board;

● Capital investment plans; and

● Changes in dividend policy.

All of the foregoing categories of information and any similar information should be considered "Material Nonpublic Information" for purposes of this Policy. **If there are any questions regarding whether a particular item of information is Material Nonpublic Information, please consult the Compliance Officer or the Company's legal counsel before taking any action with respect to such information.**

**Section III**

**CERTAIN EXCEPTIONS**

For purposes of this Policy, the Company considers that the exercise of stock options under the Company's stock incentive plan (but <u>not</u> the sale of any such shares) is exempt from this Policy, since the other party to the transaction is the Company itself and the price does not vary with the market but is fixed by the terms of the option agreement or the plan.

**Section IV**

**STATEMENT OF POLICY**

**<u>General Policy</u>**

It is the policy of the Company to prohibit the unauthorized disclosure of any nonpublic information acquired in the workplace and the misuse of Material Nonpublic Information in securities trading.

**<u>Specific Policies</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. <u>Trading on Material Nonpublic Information</u>.** With certain exceptions, no officer or director of the Company, no employee of the Company or its subsidiaries and no consultant or advisor to the Company or any of its subsidiaries and no members of the immediate family or household of any such person, shall engage in any transaction involving a purchase or sale of the Company's securities, including any offer to purchase or offer to sell, during any period commencing with the date that he or she possesses Material Nonpublic Information concerning the Company, and ending at the close of business on the second Trading Day following the date of public disclosure of that information, or at such time as such nonpublic information is no longer material. However, see "Permitted Trading Period" below for a full discussion of trading pursuant to a pre-established plan or by delegation.

As used herein, the term "Trading Day" shall mean a day on which national stock exchanges are open for trading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. <u>Tipping</u>.** No Insider shall disclose ("**tip**") Material Nonpublic Information to any other person (including family members) where such information may be used by such person to his or her profit by trading in the securities of companies to which such information relates, nor shall such Insider or related person make recommendations or express opinions on the basis of Material Nonpublic Information as to trading in the Company's securities.

Regulation FD (Fair Disclosure) is an issuer disclosure rule implemented by the SEC that addresses selective disclosure. The regulation provides that when the Company, or person acting on its behalf, discloses material nonpublic information to certain enumerated persons (in general, securities market professionals and holders of the Company's securities who may well trade on the basis of the information), it must make public disclosure of that information. The timing of the required public disclosure depends on whether the selective disclosure was intentional or unintentional: for an intentional selective disclosure, the Company must make public disclosures simultaneously; for a non-intentional disclosure, the Company must make public disclosure promptly. Under the regulation, the required public disclosure may be made by filing or furnishing a Form 8-K, or by another method or combination of methods that is reasonably designed to effect broad, non-exclusionary distribution of the information to the public.

It is the Company's policy that all communications with the press be handled through its CEO or investor/public relations firm. Please refer all press, analyst or similar requests for information to the Company's CEO and do not respond to any inquiries without prior authorization from the Company's CEO. If the Company's CEO is unavailable, the Company's CFO will fill this role.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. <u>Confidentiality of Nonpublic Information</u>.** Nonpublic information relating to the Company is the property of the Company and the unauthorized disclosure of such information (including, without limitation, via email or by posting on Internet message boards or blogs, anonymously or otherwise) is strictly forbidden.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4. <u>Duty to Report Inappropriate and Irregular Conduct</u>.** All employees, and particularly executives, managers and/or supervisors, have a responsibility for maintaining financial integrity within the Company, consistent with generally accepted accounting principles and both federal and state securities laws. Any employee who becomes aware of any incidents involving financial or accounting manipulation or irregularities, whether by witnessing the incident or being told of it, must report it to their immediate supervisor and to the chairman of the Company's Audit Committee of the Board (or to the Chairman of the Board, if an Audit Committee has not been established). For a more complete understanding of this issue, employees should consult their employee manual and or seek the advice of the Company's general counsel or outside counsel. Our outside securities counsel is Hunter Taubman Fischer & Li LLC, attention: Joan Wu, Esq. at (212) 530-2208, email jwu@htflawyers.com.

**Section V**

**POTENTIAL CRIMINAL AND CIVIL LIABILITY**

**AND/OR DISCIPLINARY ACTION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. <u>Liability for Insider Trading</u>.** Insiders may be subject to penalties of up to $1,000,000 and up to ten (10) years in jail for engaging in transactions in the Company's securities at a time when they possess Material Nonpublic Information regarding the Company, regardless of whether such transactions were profitable. In addition, the SEC has the authority to seek a civil monetary penalty of up to three times the amount of profit gained or loss avoided by illegal insider trading. "Profit gained" or "loss avoided" generally means the difference between the purchase or sale price of the Company's stock and its value as measured by the trading price of the stock a reasonable period after public dissemination of the nonpublic information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. <u>Liability for Tipping</u>.** Insiders may also be liable for improper transactions by any person (commonly referred to as a "**tippee**") to whom they have disclosed Material Nonpublic Information regarding the Company or to whom they have made recommendations or expressed opinions on the basis of such information as to trading in the Company's securities. The SEC has imposed large penalties even when the disclosing person did not profit from the trading. The SEC, the stock exchanges and the Financial Industry Regulatory Authority, Inc. use sophisticated electronic surveillance techniques to monitor *all trades* and uncover insider trading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. <u>Possible Disciplinary Actions</u>.** Individuals subject to the Policy who violate this Policy shall also be subject to disciplinary action by the Company, which may include suspension, forfeiture of perquisites and ineligibility for future participation in the Company's equity incentive plans and/or termination of employment.

**Section VI**

**PERMITTED TRADING PERIOD**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. <u>Black-Out Period and Trading Window</u>.**

To ensure compliance with this Policy and applicable federal and state securities laws, the Company requires that all officers, directors, employees, and all members of the immediate family or household of any such person refrain from conducting any transactions involving the purchase or sale of the Company's securities, other than during the period in any fiscal quarter commencing at the close of business on the second Trading Day following the date of public disclosure of the financial results for the prior fiscal quarter or year and ending on the twenty-fifth day of the third month of the fiscal quarter (the "**Trading Window**"). Notwithstanding the foregoing, persons subject to this Policy may submit a request to the Company to purchase or sell the Company's securities outside the Trading Window on the basis that they do not possess any Material Nonpublic Information. The Compliance Officer shall review all such requests and may grant such requests on a case-by-case basis if he or she determines that the person making such request does not possess any Material Nonpublic Information at that time.

If such public disclosure occurs on a Trading Day before the markets close, then such date of disclosure shall be considered the first Trading Day following such public disclosure. For example, if such public disclosure occurs at 1:00 p.m. EST on June 10, then June 10 shall be considered the first Trading Day following such disclosure.

**Please be advised that these guidelines are merely estimates. The actual trading window may be different because the Company's quarterly report may be filed earlier or later.** The filing date of a quarterly report may fall on a weekend or the Company may delay filing a quarterly report due to an extension. Please check with the Compliance Officer to confirm whether the trading window is open.

The safest period for trading in the Company's securities, assuming the absence of Material Nonpublic Information, is generally the first ten Trading Days of the Trading Window. It is the Company's policy that the period when the Trading Window is "closed" is a particularly sensitive periods of time for transactions in the Company's securities from the perspective of compliance with applicable securities laws. This is because officers, directors and certain other employees are, as any quarter progresses, increasingly likely to possess Material Nonpublic Information about the expected financial results for the quarter. The purpose of the Trading Window is to avoid any unlawful or improper transactions or even the appearance of any such transactions.

It should be noted that even during the Trading Window, any person possessing Material Nonpublic Information concerning the Company shall not engage in any transactions in the Company's securities until such information has been known publicly for at least two Trading Days. The Company has adopted the policy of delaying trading for "at least two Trading Days" because the securities laws require that the public be informed <u>effectively</u> of previously undisclosed material information before Insiders trade in the Company's stock. Public disclosure may occur through a widely disseminated press release or through filings, such as Form 8-K, with the SEC. Furthermore, in order for the public to be effectively informed, the public must be given time to evaluate the information disclosed by the Company. Although the amount of time necessary for the public to evaluate the information may vary depending on the complexity of the information, generally two Trading Days is a sufficient period of time.

From time to time, the Company may also require that directors, officers, selected employees, and others suspend trading because of developments known to the Company and not yet disclosed to the public. In such event, such persons may not engage in any transaction involving the purchase or sale of the Company's securities during such period and may not disclose to others the fact of such suspension of trading.

Although the Company may from time to time require during a Trading Window that directors, officers, selected employees, and others suspend trading because of developments known to the Company and not yet disclosed to the public, ***each person is individually responsible at all times for compliance with the prohibitions against insider trading. Trading in the Company's securities during the Trading Window should <u>not</u> be considered a "safe harbor," and all directors, officers and other persons should use good judgment at all times.***

Notwithstanding these general rules, Insiders may trade <u>outside</u> of the Trading Window provided that such trades are made pursuant to a pre-established plan or by delegation; these alternatives are discussed in the next section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **2. Trading According to a Pre-established Plan or by Delegation.**

Trading which is not "on the basis of" material non-public information may not give rise to insider trading liability. The SEC has adopted Rule 10b5-1 under which insider trading liability can be avoided if Insiders follow very specific procedures. In general, such procedures involve trading according to pre-established instructions (a "**Pre-established Trade**").

Pre-established Trades must:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a) Be documented by a contract, written plan, or formal instruction which provides that the trade take place in the future.** For example, an Insider can contract to sell his or her shares on a specific date, or simply delegate such decisions to an investment manager, 401(k) plan administrator or similar third party. This documentation must be provided to the Compliance Officer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b) Include in its documentation the specific amount, price and timing of the trade, or the formula for determining the amount, price and timing.** For example, the Insider can buy or sell shares in a specific amount and on a specific date each month, or according to a pre-established percentage (of the Insider's salary, for example) each time that the share price falls or rises to pre-established levels. In the case where trading decisions have been delegated, the specific amount, price and timing need <u>not</u> be provided;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c) Be implemented at a time when the Insider does not possess material non-public information.** As a practical matter, this means that the Insider may set up Pre-established Trades, or delegate trading discretion, <u>only</u> during a "Trading Window" (discussed in Section 1, above); and,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d) Remain beyond the scope of the Insider's influence after implementation.** In general, the Insider must allow the Pre-established Trade to be executed without changes to the accompanying instructions, and the Insider cannot later execute a hedge transaction that modifies the effect of the Pre-established Trade. An Insider wishing to change the amount, price or timing of a Pre-established Trade, or terminate a Pre-established Trade, can do so <u>only</u> during a "Trading Window" (discussed in Section 1, above). If the Insider has delegated decision-making authority to a third party, the Insider cannot subsequently influence the third party in any way and such third party must not possess material non-public information at the time of any of the trades.

Prior to implementing a pre-established plan for trading, all officers and directors must receive the approval for such plan from the Compliance Officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. <u>Pre-Clearance of Trades</u>.**

Even during a Trading Window, all officers, directors, employees, as well as members of the immediate family or household of such individuals, must comply with the Company's "pre-clearance" process prior to trading in the Company's securities, implementing a pre-established plan for trading, or delegating decision-making authority over the Insider's trades. To do so, each officer and director must contact the Compliance Officer prior to initiating any of these actions. Trades executed pursuant to a properly implemented Pre-Established Plan approved by the Compliance Officer do not need to be pre-cleared. The Company may also find it necessary, from time to time, to require compliance with the pre-clearance process from certain individuals other than those mentioned above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4. <u>Individual Responsibility</u>.** 

As Insiders, every person subject to this Policy has the individual responsibility to comply with this Policy against insider trading, regardless of whether the Company has established a Trading Window applicable to that Insider or any other Insiders of the Company. Each individual, and not necessarily the Company, is responsible for his or her own actions and will be individually responsible for the consequences of their actions. Therefore, appropriate judgment, diligence and caution should be exercised in connection with any trade in the Company's securities. An Insider may, from time to time, have to forego a proposed transaction in the Company's securities even if he or she planned to make the transaction before learning of the Material Nonpublic Information and even though the Insider believes he or she may suffer an economic loss or forego anticipated profit by waiting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. <u>Exceptions to the Policy</u>.** 

Any exceptions to this Policy may only be made by advance written approval of each of: (i) the CEO, (ii) the Compliance Officer and (iii) the Chairman of the Audit Committee of the Board (or the Chairman of the Board of Directors if an Audit Committee has not been established). Any such exceptions shall be immediately reported to the remaining members of the Board.

**Section VII**

**APPLICABILITY OF POLICY TO INSIDE INFORMATION**

**REGARDING OTHER COMPANIES**

This Policy and the guidelines described herein also apply to Material Nonpublic Information relating to other companies, including the Company's customers, vendors or suppliers or potential acquisition targets ("**business partners**"), when that information is obtained in the course of employment or performance of other services on behalf of the Company. Civil and criminal penalties, as well as termination of employment, may result from trading on inside information regarding the Company's business partners. All employees should treat Material Nonpublic Information about the Company's business partners with the same care as is required with respect to information relating directly to the Company.

**Section VIII**

**PROHIBITION AGAINST BUYING AND SELLING**

**COMPANY COMMON STOCK WITHIN A SIX-MONTH PERIOD**

**Insiders**

Generally, purchases and sales (or sales and purchases) of Company common stock occurring within any six-month period in which a mathematical profit is realized result in illegal "short-swing profits." The prohibition against short-swing profits is found in Section 16 of the Exchange Act. Section 16 was drafted as a rather arbitrary prohibition against profitable "insider trading" in a company's securities within any six-month period regardless of the presence or absence of material nonpublic information that may affect the market price of those securities. Each executive officer, director and 10% or greater stockholder of the Company is subject to the prohibition against short-swing profits under Section 16. The measure of damages is the profit computed from any purchase and sale or any sale and purchase within the short-swing (i.e., six-month) period, without regard to any setoffs for losses, any first-in or first-out rules, or the identity of the shares of common stock. This approach sometimes has been called the "lowest price in, highest price out" rule and can result in a realization of "profits" for Section 16 purposes even when the insider has suffered a net loss on his or her trades.

**Section IX**

**INQUIRIES**

Please direct your questions as to any of the matters discussed in this Policy to the Compliance Officer.

**<u>Exhibit A</u>**

**Section 13 Memorandum**

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| | |
|:---|:---|
| **To:** | **All Officers, Directors and 5% or greater Stockholders** |

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| | |
|:---|:---|
| **Re:** | **Overview of Section 13 Under the Exchange Act of 1934, as amended** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A. <u>Introduction</u>.**

This Memorandum provides an overview of Section 13 of the Exchange Act of 1934, as amended (the "**Exchange Act**"), and the related rules promulgated by the SEC.

***Each executive officer, director and 5% or greater stockholder (commonly called a "Section 13(d) Individual") of Green Giant Inc. (the "Company") is personally responsible for complying with the provisions of Section 13, and failure by a Section 13(d) Individual to comply strictly with his or her reporting requirements will result in an obligation by the Company to publicly disclose such failure.*** Moreover, Congress has granted to the SEC authority to seek monetary court-imposed fines on Section 13(d) Individuals who fail to timely comply with their reporting obligations.

Under Section 13 of the Exchange Act, reports made to the SEC are filed on Schedule 13D, Schedule 13G, Form 13F, and Form 13H. A securities firm (and, in some cases, its parent company or other control persons) generally will have a Section 13 reporting obligation if the firm directly or indirectly:

● beneficially owns, in the aggregate, more than 5% of a class of the voting, equity securities (the "Section 13(d) Securities"):

● registered under Section 12 of the Exchange Act,

● issued by any closed-end investment company registered under the Investment Company Act of 1940, as amended (the "Investment Company Act"), or

● issued by any insurance company that would have been required to register its securities under Section 12 of the Exchange Act but for the exemption under Section 12(g)(2)(G) thereof (see Schedules 13D and 13G: Reporting Significant Acquisition and Ownership Positions below);

● manages discretionary accounts that, in the aggregate, hold equity securities trading on a national securities exchange with an aggregate fair market value of $100 million or more; or

● manages discretionary accounts that, in the aggregate, purchase or sell any NMS securities (generally exchange-listed equity securities and standardized options) in an aggregate amount equal to or greater than (i) 2 million shares or shares with a fair market value of over $20 million during a day, or (ii) 20 million shares or shares with a fair market value of over $200 million during a calendar month.

Ex A-1

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B. <u>Reporting Requirements Under Section 13(d) and 13(g)</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. *<u>General</u>*.** Sections 13(d) and 13(g) of the Exchange Act require any person or group of persons<sup>1</sup> who directly or indirectly acquires or has beneficial ownership<sup>2</sup> of more than 5% of a class of an issuer's Section 13(d) Securities (the "**5% threshold**") to report such beneficial ownership on Schedule 13D or Schedule 13G, as appropriate. Both Schedule 13D and Schedule 13G require background information about the reporting persons and the Section 13(d) Securities listed on the schedule, including the name, address, and citizenship or place of organization of each reporting person, the amount of the securities beneficially owned and aggregate beneficial ownership percentage, and whether voting and investment power is held solely by the reporting persons or shared with others. Reporting persons that must report on Schedule 13D are also required to disclose a significant amount of additional information, including certain disciplinary events, the source and amount of funds or other consideration used to purchase the Section 13(d) Securities, the purpose of the acquisition, any plans to change or influence the control of the issuer, and a list of any transactions in the securities effected in the last 60 days. A reporting person may use the less burdensome Schedule 13G if it meets certain criteria described below.

In general, Schedule 13G is available to any reporting person that falls within one of the following three categories:

● *Exempt Investors*. A reporting person is an "Exempt Investor" if the reporting person beneficially owns more than 5% of a class of an issuer's Section 13(d) Securities at the end of a calendar year, but its acquisition of the securities is exempt under Section 13(d)(6) of the Exchange Act. For example, a person that acquired all of its Section 13(d) Securities prior to the issuer's registration of such securities (or class of securities) under the Exchange Act, or acquired no more than 2% of the Section 13(d) Securities within a 12-month period, is considered to be an Exempt Investor and would be eligible to file reports on Schedule 13G.

● *Qualified Institutions*. Along with certain other institutions listed under the Exchange Act<sup>3</sup>, a reporting person that is a registered investment adviser or broker-dealer may file a Schedule 13G as a "Qualified Institution" if it (a) acquired its position in a class of an issuer's Section 13(d) Securities in the ordinary course of its business, (b) did not acquire such securities with the purpose or effect of changing or influencing control of the issuer, nor in connection with any transaction with such purpose or effect (such purpose or effect, an "activist intent"), and (c) promptly notifies any discretionary account owner on whose behalf the firm holds more than 5% of the Section 13(d) Securities of such account owner's potential reporting obligation.

● *Passive Investors.* A reporting person is a "Passive Investor" if it beneficially owns more than 5% but less than 20% of a class of an issuer's Section 13(d) Securities and (a) the securities were not acquired or held with an activist intent, and (b) the securities were not acquired in connection with any transaction having an activist intent. There is no requirement that a Passive Investor limit its acquisition of Section 13(d) Securities to purchases made in the ordinary course of its business. In addition, a Passive Investor does not have an obligation to notify discretionary account owners on whose behalf the firm holds more than 5% of such Section 13(d) Securities of such account owner's potential reporting obligation.

<sup>1</sup> A "group" is defined in Rule 13d-5 as "two or more persons [that] agree to act together for the purpose of acquiring, holding, voting or disposing of equity securities of an issuer." See, for example, the persons described above in *Reporting Obligations of "Control Persons*". An agreement to act together does not need to be in writing and may be inferred by the SEC or a court from the concerted actions or common objective of the group members.

<sup>2</sup> Under Rule 13d-3, "**beneficial ownership**" of a security exists if a person, directly or indirectly, through any contract, arrangement, understanding, or relationship or otherwise, has or shares voting power and/or investment power over a security. "**Voting power**" means the power to vote or direct the voting of a security. **"Investment power"** means the power to dispose of or direct the disposition of a security. Under current SEC rules, a person holding securities-based swaps or other derivative contracts may be deemed to beneficially own the underlying securities if the swap or derivative contract provides the holder with voting or investment power over the underlying securities. Please contact us if you would like guidance regarding the application of Section 13 to securities-based swaps or other derivative contracts.

<sup>3</sup> Under Rule 13d-1, a reporting person also qualifies as a Qualified Institution if it is a bank as defined in Section 3(a)(6) of the Exchange Act, an insurance company as defined in Section 3(a)(19) of the Exchange Act, an investment company registered under the Investment Company Act, or an employee benefit plan, savings association, or church plan. The term "Qualified Institution" also includes a non-U.S. institution that is the functional equivalent of any of the foregoing entities and the control persons and parent holding companies of an entity that qualifies as a Qualified Institution.

Ex A-2

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. *<u>Method of Filing</u>.***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) A Section 13(d) Individual must file Section 13 schedules in electronic format via the Commission's Electronic Data Gathering Analysis and Retrieval System (EDGAR) in accordance with EDGAR rules set forth in Regulation S-T.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Filing Date</u>. Schedules are deemed filed with the SEC or the applicable exchange on the date recognized by EDGAR. For Section 13 purposes, filings may be made up to 10 p.m. EST. In the event that a due date falls on a weekend or SEC holiday, the filing will be deemed timely filed if it is filed on EDGAR by the next business day after such weekend or holiday. A Section 13(d) Individual must first obtain several different identification codes from the SEC before the filings can be submitted. In order to receive such filing codes, the Section 13(d) Individual first submits a Form ID to the SEC. The Form ID must be signed, notarized, and submitted electronically through the SEC's Filer Management website, which can be accessed at https://www.filermanagement.edgarfiling.sec.gov. The Section 13(d) Individual is required to retain a manually signed hard copy of all EDGAR filings (and related documents like powers of attorney) in its records available for SEC inspection for a period of five years after the date of filing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Company</u>. In addition, the rules under Section 13 require that a copy of the applicable filing be sent to the issuer of the security at its principal executive office by registered or certified mail. A copy of Schedules filed pursuant to §§ 240.13d-1(a) and 240.13d-2(a) shall also be sent to each national securities exchange where the security is traded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Securities to be Reported</u>. A person who is subject to Section 13 must only report as beneficially owned those securities in which he or she has a pecuniary interest. See the discussion of "beneficial ownership" below at Section D.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. *<u>Initial Report of Ownership – Schedule 13D or 13G</u>.*** Under Section 13, Section 13(d) Individuals are required to make an initial report on Schedule 13D or Schedule 13G to the SEC of their holdings of all equity securities of the corporation (whether or not such equity securities are registered under the Exchange Act). This would include all traditional types of securities, such as Common Stock, Preferred Stock and Junior Stock, as well as all types of derivative securities, such as warrants to purchase stock, options to purchase stock, puts and calls. Even Section 13(d) Individuals who do not beneficially own any equity securities of the Company must file a report to that effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Initial Filing Deadline</u>. A Section 13(d) Individual who is not eligible to use Schedule 13G must file a Schedule 13D within 10 days of such reporting person's direct or indirect acquisition of beneficial ownership of more than 5% of a class of an issuer's Section 13(d) Securities.

● A reporting person that is an Exempt Investor is required to file its initial Schedule 13G within 45 days of the end of the calendar year in which the person exceeds the 5% threshold.

● A reporting person that is a Qualified Institution also is required to file its initial Schedule 13G within 45 days of the end of the calendar year in which the person exceeds the 5% threshold. Since the 5% threshold for a Qualified Institution is calculated as of the end of a calendar year, a Qualified Institution that acquires directly or indirectly more than 5% of a class of an issuer's Section 13(d) Securities during a calendar year, but as of December 31 has reduced its interest below the 5% threshold, will not be required to file an initial Schedule 13G. However, a Qualified Institution that acquires direct or indirect beneficial ownership of more than 10% of a class of an issuer's Section 13(d) Securities prior to the end of a calendar year must file an initial Schedule 13G within 10 days after the first month in which the person exceeds the 10% threshold.

● A reporting person that is a Passive Investor must file its initial Schedule 13G within 10 days of the date on which it exceeds the 5% th reshold.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Switching from Schedule 13G to Schedule 13D</u>. If a Section 13(d) Individual that previously filed a Schedule 13G no longer satisfies the conditions to be an Exempt Investor, Qualified Institution, or Passive Investor, the person must switch to reporting its beneficial ownership of a class of an issuer's Section 13(d) Securities on a Schedule 13D (assuming that the person continues to exceed the 5% threshold). This could occur in the case of (1) a Section 13(d) Individual that changes from acquiring or holding Section 13(d) Securities for passive investment to acquiring or holding such securities with an activist intent, (2) a Section 13(d) Individual that is a Qualified Institution that deregisters as an investment adviser pursuant to an exemption under the Investment Advisers Act of 1940, as amended, or applicable state law, or (3) a Section 13(d) Individual that is a Passive Investor that acquires 20% or more of a class of an issuer's Section 13(d) Securities. In each case, the Section 13(d) Individual must file a Schedule 13D within 10 days of the event that caused it to no longer satisfy the necessary conditions (except that, if a former Qualified Institution is able to qualify as a Passive Investor, such person may simply amend its Schedule 13G within 10 days to switch its status).

A Section 13(d) Individual is required to switch to reporting on a Schedule 13D will be subject to a "cooling off" period from the date of the event giving rise to a Schedule 13D obligation (such as the change to an activist intent or acquiring 20% of a class of an issuer's Section 13(d) Securities) until 10 calendar days after the filing of Schedule 13D. During the "cooling off" period, the reporting person may not vote or direct the voting of the Section 13(d) Securities or acquire additional beneficial ownership of such securities. Consequently, a person should file a Schedule 13D as soon as possible once it is obligated to switch from a Schedule 13G to reduce the duration of the "cooling off" period.

Ex A-3

The Section 13(d) Individual will thereafter be subject to the Schedule 13D reporting requirements with respect to the Section 13(d) Securities until such time as the former Schedule 13G reporting person once again qualifies as a Qualified Institution or Passive Investor with respect to the Section 13(d) Securities or has reduced its beneficial ownership interest below the 5% threshold. However, only a reporting person that was originally eligible to file a Schedule 13G and was later required to file a Schedule 13D may switch to reporting on Schedule 13G.<sup>4</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4. *<u>Changes in Ownership – Amendments to Schedule 13D or 13G</u>*.**

*Amendments to Schedule 13D*. If there has been any material change to the information in a Schedule 13D previously filed by a Section 13(d) Individual<sup>5</sup>, the person must promptly file an amendment to such Schedule 13D. A material change includes, without limitation, a reporting person's acquisition or disposition of 1% or more of a class of the issuer's Section 13(d) Securities, including as a result of an issuer's repurchase of its securities. An acquisition or disposition of less than 1% may be considered a material change depending on the circumstances. A disposition that reduces a reporting person's beneficial ownership interest below the 5% threshold, but is less than a 1% reduction, is not necessarily a material change that triggers an amendment to Schedule 13D. However, an amendment in such a circumstance is recommended to eliminate the reporting person's filing obligations if the reporting person does not in the near term again expect to increase its ownership above 5%. "Promptly" is generally considered to be within 2 to 5 calendar days of the material change, depending on the facts and circumstances.

*Amendments to Schedule 13G.*

 

● **Annual**. If a reporting person previously filed a Schedule 13G and there has been any change to the information reported in such Schedule 13G as of the end of a calendar year, then an amendment to such Schedule 13G must be filed within 45 days of the calendar year end. A reporting person is not required to make an annual amendment to Schedule 13G if there has been no change since the previously filed Schedule 13G or if the only change results from a change in the person's ownership percentage as a result of a change in the aggregate number of Section 13(d) Securities outstanding (e.g., due to an issuer's repurchase of its securities).

● **Other than Annual (Qualified Institutions)**. A reporting person that previously filed a Schedule 13G as a Qualified Institution reporting beneficial ownership of less than 10% of a class of an issuer's Section 13(d) Securities, must file an amendment to its Schedule 13G within 10 days of the end of the first month such Qualified Institution is the direct or indirect beneficial owner of more than 10% of a class of the issuer's Section 13(d) Securities. Thereafter, within 10 days after the end of any month in which the person's direct or indirect beneficial ownership of such securities increases or decreases by more than 5% of the class of securities (computed as of the end of the month), the person must file an amendment to Schedule 13G.

● **Other than Annual (Passive Investors)**. A reporting person that previously filed a Schedule 13G as a Passive Investor must promptly file an amendment any time it directly or indirectly acquires more than 10% of a class of an issuer's Section 13(d) Securities. Thereafter, the reporting person must file an amendment to Schedule 13G promptly after its direct or indirect beneficial ownership of such securities increases or decreases by more than 5%.

<sup>4</sup> See Question 103.07 (September 14, 2009), Regulation 13D-G C&DIs.

<sup>5</sup> This includes a change in the previously reported ownership percentage of a reporting person even if such change results solely from an increase or decrease in the aggregate number of outstanding securities of the issuer.

Ex A-4

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. *Reporting Identifyi*** ***ng Information for Large Traders - Form 13H*.** Rule 13h-1 of the Exchange Act requires a Form 13H to be filed with the SEC by any individual or entity (each, a "**Large Trader**") that, directly or indirectly, exercises investment discretion over one or more accounts and effects transactions in NMS Securities (as defined below) for those accounts through one or more registered broker-dealers that, in the aggregate, equal or exceed (a) 2 million shares or $20 million in fair market value during any calendar day, or (b) 20 million shares or $200 million in fair market value during any calendar month (each, an "**identifying activity level**"). Under Regulation NMS, an "NMS Security" is defined to include any U.S. exchange-listed equity securities and any standardized options, but does not include any exchange-listed debt securities, securities futures, or shares of open-end mutual funds that are not currently reported pursuant to an effective transaction reporting plan under the Exchange Act. A Large Trader must file an initial Form 13H promptly after effecting aggregate transactions equal to or greater than one of the identifying activity levels. The SEC has indicated that filing within 10 days will be deemed a prompt filing. Amendments to Form 13H must be filed within 45 days after the end of each full calendar year and then promptly following the end of a calendar quarter if any of the information on Form 13H becomes inaccurate.

Form 13H requires that a Large Trader, reporting for itself and for any affiliate that exercises investment discretion over NMS securities, list the broker-dealers at which the Large Trader and its affiliates have accounts and designate each broker-dealer as a "prime broker," an "executing broker," and/or a "clearing broker." Form 13H filings with the SEC are confidential and exempt from disclosure under the United States Freedom of Information Act. The information is, however, subject to disclosure to Congress and other federal agencies and when ordered by a court. If a securities firm has multiple affiliates in its organization that qualify as Large Traders, Rule 13h-1 permits the Large Traders to delegate their reporting obligation to a control person that would file a consolidated Form 13H for all of the Large Traders it controls. Otherwise, each Large Trader in the organization will be required to file a separate Form 13H.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6. *<u>Reporting Obligations of Control Persons and Clients</u>*.**

*The Firm's Obligations*. As discussed above, a securities firm is deemed to be the beneficial owner of Section 13(d) Securities in all accounts over which it exercises voting and/or investment power. Therefore, a firm will be a reporting person if it directly or indirectly acquires or has beneficial ownership of more than 5% of a class of an issuer's Section 13(d) Securities. Unless a securities firm has an activist intent with respect to the issuer of the Section 13(d) Securities, the firm generally will be able to report on Schedule 13G as either a Qualified Institution or as a Passive Investor.

Ex A-5

*Obligations of a Firm's Control Persons.* Any control person (as defined below) of a securities firm, by virtue of its ability to direct the voting and/or investment power exercised by the firm, may be considered an indirect beneficial owner of the Section 13(d) Securities. Consequently, the direct or indirect control persons of a securities firm may also be reporting persons with respect to a class of an issuer's Section 13(d) Securities. The following persons are likely to be considered "control persons" of a firm:

● any general partner, managing member, trustee, or controlling shareholder of the firm; and

● the direct or indirect parent company of the firm and any other person that indirectly controls the firm (e.g., a general partner, managing member, trustee, or controlling shareholder of the direct or indirect parent compan y).

If a securities firm (or parent company) is directly or indirectly owned by two partners, members, trustees, or shareholders, generally each such partner, member, trustee, or shareholder is deemed to be a control person. For example, if a private fund that beneficially owns more than 5% of a class of an issuer's Section 13(d) Securities is managed by a securities firm that is a limited partnership, the general partner of which is an LLC that in turn is owned in roughly equal proportions by two managing members, then each of the private fund, the securities firm, the firm's general partner, and the two managing members of the general partner likely will have an independent Section 13 reporting obligation.

*Availability of Filing on Schedule 13G by Control Persons*. Any direct and indirect control person of a securities firm may file a Schedule 13G as an Exempt Investor, a Qualified Institution or as a Passive Investor to the same extent as any other reporting person as described above. In order for a control person to file a Schedule 13G as a Qualified Institution, however, no more than 1% of a class of an issuer's Section 13(d) Securities may be held (i) directly by the control person or (ii) directly or indirectly by any of its subsidiaries or affiliates that are not Qualified Institutions. For example, a direct or indirect control person of a securities firm will not qualify as a Qualified Institution if more than 1% of a class of an issuer's Section 13(d) Securities is held by a private fund managed by the firm or other affiliate because a private fund is not among the institutions listed as a Qualified Institution under the Exchange Act.

A securities firm that has one of its control persons serving on an issuer's board of directors may not be eligible to qualify as a Passive Investor with respect to such issuer. Even though the securities firm may not otherwise have an activist intent, the staff of the SEC has stated "the fact that officers and directors have the ability to directly or indirectly influence the management and policies of an issuer will generally render officers and directors unable to certify to the requirements" necessary to file as a Passive Investor.<sup>6</sup>

<sup>6</sup> See Question 103.04 (September 14, 2009), Exchange Act Sections 13(d) and 13(g) and Regulation 13D-G Beneficial Ownership Reporting Compliance and Disclosure Interpretations of the Division of Corporation Finance of the SEC (the "Regulation 13D-G C&DIs").

Ex A-6

*Obligations of a Firm's Clients.* If a client of a securities firm (including a private or registered fund or a separate account client) by itself beneficially owns more than 5% of a class of an issuer's Section 13(d) Securities, the client has its own independent Section 13 reporting obligation.

*Availability of Joint Filings by Reporting Persons.* As discussed above, each reporting person has an independent reporting obligation under Section 13 of the Exchange Act. The direct and indirect beneficial owners of the same Section 13(d) Securities may satisfy their reporting obligations by making a joint Schedule 13D or Schedule 13G filing, provided that:

● each reporting person is eligible to file on the Schedule used to make the Section 13 report (e.g., each person filing on a Schedule 13G is a Qualified Institution, Exempt Investor, or Passive Investor);

● each reporting person is responsible for the timely filing of the Schedule 13D or Schedule 13G and for the completeness and accuracy of its own information in such filing<sup>7</sup>; and

● the Schedule 13D or Schedule 13G filed with the SEC (i) contains all of the required information with respect to each reporting person; (ii) is signed by each reporting person in his, her, or its individual capacity (including through a power of attorney); and (iii) has a joint filing agreement attached.

**C. <u>Determining Beneficial Ownership</u>** **.**

In determining whether a securities firm has crossed the 5% threshold with respect to a class of an issuer's Section 13(d) Securities8, it must include the positions held in any proprietary accounts and the positions held in all discretionary client accounts that it manages (including any private or registered funds, accounts managed by or for principals and employees, and accounts managed for no compensation), and positions held in any accounts managed by the firm's control persons (which may include certain officers and directors) for themselves, their spouses, and dependent children (including IRA and most trust accounts).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. *<u>Determining Who is a Five Percent Holder</u>*.** Beneficial ownership in the Section 13 context is determined by reference to Rule 13d-3, which provides that a person is the beneficial owner of securities if that person has or shares voting or disposition power with respect to such securities, or can acquire such power within 60 days through the exercise or conversion of derivative securities.

<sup>7</sup> If the reporting persons are eligible to file jointly on Schedule 13G under separate categories (e.g., a private fund as a Passive Investor and its control persons as Qualified Institutions), then the reporting persons must comply with the earliest filing deadlines applicable to the group in filing any joint Schedule 13G. In the example above, the reporting persons would be required to file a Schedule 13G initially within 10 days of exceeding the 5% threshold and thereafter promptly upon any transaction triggering an amendment (i.e., the filing deadlines applicable to a Passive Investor) and not the later deadlines applicable to a Qualified Institution.

<sup>8</sup> In calculating the 5% test, a person is permitted to rely upon the issuer's most recent quarterly or annual report for purposes of determining the amount of outstanding voting securities of the issuer, unless the person knows or has reason to believe that such information is inaccurate.

Ex A-7

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. *<u>Determining Beneficial Ownership for Reporting and Short-Swing Profit Liability</u>*.** For all Section 13 purposes other than determining who is a five percent holder, beneficial ownership means a direct or indirect pecuniary interest in the subject securities through any contract, arrangement, understanding, relationship or otherwise. "Pecuniary interest" means the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in the subject securities. Discussed below are several of the situations that may give rise to an indirect pecuniary interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Family Holdings</u>. A Section 13(d) Individual is deemed to have an indirect pecuniary interest in securities held by members of the Section 13(d) Individual's immediate family sharing the same household. Immediate family includes grandparents, parents (and step-parents), spouses, siblings, children (and step-children) and grandchildren, as well as parents-in-laws, siblings-in-laws, children-in-law and all adoptive relationships. A Section 13(d) Individual may disclaim beneficial ownership of shares held by members of his or her immediate family, but the burden of proof will be on the Section 13(d) Individual to uphold the lack of a pecuniary interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Partnership Holdings</u>. Beneficial ownership of a partnership's securities is attributed to the general partner of a limited partnership in proportion of such person's partnership interest. Such interest is measured by the greater of the general partner's share of partnership profits or of the general partner's capital account (including any limited partnership interest held by the general partner).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Corporate Holdings</u>. Beneficial ownership of securities held by a corporation will not be attributed to its stockholders who are not controlling stockholders and who do not have or share investment control over the corporation's portfolio securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Derivative Securities</u>. Ownership of derivative securities (warrants, stock appreciation rights, convertible securities, options and the like) is treated as indirect ownership of the underlying equity securities. Acquisition of derivative securities must be reported. If the derivative securities are acquired pursuant to an employee plan, the timing of such reporting depends upon the Rule 16b-3 status of the employee plan under which the grant was made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D. <u>Delinquent Filings</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. *<u>Correcting Late Filings</u>*.** In the case of a Section 13(d) Individual that has failed to make required amendments to its Schedule 13D or Schedule 13G in a timely manner (i.e., any material changes), the Section 13(d) Individual must immediately amend its schedule to disclose the required information. The SEC Staff has explained that, "[r]egardless of the approach taken, the security holder must ensure that the filings contain the information that it should have disclosed in each required amendment, including the dates and details of each event that necessitated a required amendment." However, the SEC Staff has also affirmed that, irrespective of whether a security holder takes any of these actions, a security holder may still face liability under the federal securities laws for failing to promptly file a required amendment to a Schedule 13D or Schedule 13G.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. *<u>Potential Liability</u>*.** The SEC may bring an enforcement action, in the context of a Schedule 13D or Schedule 13G filing, for violations of Section 13(d), Section 13(g), Rule 10b-5 and Section 10(b), provided that the SEC specifically shows: (1) a material misrepresentation or omission made by the defendant; (2) scienter on the part of the defendant; and (3) a connection between a misrepresentation or omission and purchase or sale of a security regarding the Rule 10b-5 claim it brings. The SEC may seek civil remedies in the form of injunctive relief, a cease and desist order, monetary penalties, and other forms of equitable relief (e.g., disgorgement of profits). Under Section 32 of the Exchange Act, criminal sanctions may also extend to the willful violation of Section 13(d) and Section 13(g). The U.S. Department of Justice, which prosecutes criminal offenses under the Exchange Act, may seek numerous penalties against any person that violates the Exchange Act and any rules thereunder, including a monetary fine of up to $5,000,000, imprisonment for up to 20 years and/or disgorgement.

Ex A-8

**<u>Exhibit B</u>**

**Green Giant Inc.**

**Insider Trading Compliance Program - Pre-Clearance Checklist**

**Individual Proposing to Trade:_________________________**

**Number of Shares covered by Proposed Trade:_________________________**

**Date:_________________________**

☐ <u>Trading Window</u>. Confirm that the trade will be made during the Company's "trading window."

☐ <u>Section 13 Compliance</u>. Confirm, if the individual is subject to Section 13, that the proposed trade will not give rise to any potential liability under Section 13 as a result of matched past (or intended future) transactions. Also, ensure that an amendment to Schedule 13D or 13G has been or will be completed and will be timely filed.

☐ <u>Prohibited Trades</u>. Confirm, if the individual is subject to Section 13, that the proposed transaction is not a "short sale," put, call or other prohibited or strongly discouraged transaction.

☐ <u>Rule 144 Compliance</u>. Confirm that:

☐ Current public information requirement has been met;

☐ Shares are not restricted or, if restricted, the six-month holding period has been met;

☐ Volume limitations are not exceeded (confirm that the individual is not part of an aggregated group);

☐ The manner of sale requirements has been met; and

☐ The Notice of Form 144 Sale has been completed and filed.

☐ <u>Rule 10b-5 Concerns</u>. Confirm that (i) the individual has been reminded that trading is prohibited when in possession of any material information regarding the Company that has not been adequately disclosed to the public, and (ii) the Compliance Officer has discussed with the individual any information known to the individual or the Compliance Officer which might be considered material, so that the individual has made an informed judgment as to the presence of inside information.

Signature of Compliance Officer

Ex B-1

**Transactions Report**

Officer or Director:  

I. TRANSACTIONS:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**☐ No transactions.** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**☐ No transactions.** | **☐ The transactions described below.** | **☐ The transactions described below.** | **☐ The transactions described below.** | **☐ The transactions described below.** |
| **Owner of Record** | **Transaction Date <sup>(1)</sup>** **Transaction Code <sup>(2)</sup>** | **Security (Common, Preferred)** | **Number of Securities Acquired** | **Number of Securities Disposed of** | **Purchase/ Sale Unit Price** |

---

(1) (a) Brokerage transactions - trade date (d) Acquisitions under stock bonus plan - date of grant

(b) Other purchases and sales - date firm commitment is made (e) Conversion - date of surrender of convertible security

(c) Option and SAR exercises - date of exercise (f) Gifts - date on which gift is made

(2) Transaction Codes:

(P) Pre-established Purchase or Sale (Q) Transfer pursuant to marital settlement

(N) Purchase or Sale (not "Pre-established") (U) Tender of shares

(G) Gift (W) Acquisition or disposition of will

(M) Option exercise (in-the-money option) (J) Other acquisition or disposition (specify)

II. SECURITIES OWNERSHIP FOLLOWING TRANSACTION

&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Company Securities Directly or Indirectly Owned (other than stock options noted below)</u>:

---

| | | | |
|:---|:---|:---|:---|
| **Title of Security<br> (*e.g.*, Preferred, Common, etc.)** | **Number of Shares/Units** | **Record Holder (if not Reporting Person)** | **Relationship to Reporting Person** |

---

&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Stock Option Ownership</u>:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Date of Grant** | **Number of Shares** | **Exercise Price** | **Vesting Dates** | **Expiration Date** | **Exercises to Date (Date, No. of Shares**) |

---

Ex B-2

**<u>Exhibit C</u>**

**Green Giant Inc.**

**Transaction Reminder**

TO: [Name of Officer or Director]

FROM:

DATED:

---

| | |
|:---|:---|
| RE: | **Amendment to Schedule 13D filing** |

---

This is to remind you that if there is a change in your beneficial ownership of common stock or other securities of Green Giant Inc. (the "Company"), you must file an amendment to Schedule 13D with the Securities and Exchange Commission (the "SEC") within 2-5 business days following the transaction.

Our records indicate that on __________ (specify date) you had the transactions in the Company's securities indicated on the attached exhibit.

1. Please advise us whether the information on the attached exhibit is correct:

☐ The information is complete and correct.

☐ This information is <u>not</u> complete and correct. I have marked the correct information on the attached exhibit.

2. Please
 advise us if w e should assist you by preparing the amendment to Schedule 13D for your
 signature and filing it for you with the SEC based upon the information you provided to us,
 or if you will prepare and file the amendment to Schedule 13D yourself. (Please note that
 we have prepared and attached for your convenience an amendment to Schedule 13D reflecting
 the information we have, which (if it is complete and correct), you may sign and return in
 the envelope enclose d.)

☐ The Company should prepare and file the amendment to Schedule 13D on my behalf after receiving my signature on the form.

☐ I shall prepare and file the amendment to Schedule 13D myself.

Signed

Dated

If you have any questions, contact Rongrong Dai, the Company's Compliance Officer.

I understand that my amendment to Schedule 13D must be filed as follows: (i) on EDGAR (the SEC Electronic Data-Gathering, Analysis and Retrieval system) and (ii) one copy with the Company's Compliance Officer.

Ex C-1

## Exhibit 21.1

**Exhibit 21.1** 

**SUBSIDIARIES OF AND CONSOLIDATED ENTITIES OF** 

**GREEN GIANT INC.**

**As of September 30, 2022**

---

| | |
|:---|:---|
| Name of Entity | Jurisdiction of Incorporation or Organization |
| **Subsidiaries** |  |
| Green Giant Ltd. | Delaware, United States |
| Green Giant Energy Texas Inc. | Texas, United States |
| Green Giant International Limited | Hong Kong |
| China HGS Investment Inc. | Delaware, United States |
| Shaanxi HGS Management Consulting Co., Ltd | People's Republic of China |
| **VIE** |  |
| Shaanxi Guangsha Investment and Development Group Co., Ltd | People's Republic of China |

---

## Exhibit 23.1

**Exhibit 23.1**

---

| | |
|:---|:---|
| ![](ex23-1_001.jpg) | ***Onestop Assurance PAC*** <br> ***10 Anson Road*** <br> ***#13-09 International Plaza*** <br> ***Singapore 079903*** <br> ***Tel: 9644 9531*** <br> ***Email: audit@onestop-ca.com*** <br> ***Website: www.onestop-ca.com***<br>|

---

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the incorporation by reference in the Registration Statement on Form S-8 (File No. 333-266373) of our report dated January 13, 2023, relating to the consolidated financial statements of Green Giant Inc. (formerly known as "China HGS Real Estate Inc.") as of and for the year ended September 30, 2022, which appears in this Annual Report on Form 10-K. Our report contains an explanatory paragraph regarding the Company's ability to continue as a going concern.

We also consent to the reference to us under the heading "Expert" in such Registration Statements.

Very truly yours

/s/ OneStop Assurance PAC

Singapore

January 13, 2023

## Exhibit 23.2

**Exhibit 23.2**

![](ex23-2_001.jpg)

---

| | |
|:---|:---|
| ![](ex23-2_002.jpg) | INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S CONSENT<br>We consent to the incorporation by reference in the Registration Statement of Green Giant Inc. formerly known as China HGS Real Estate Inc. (the "Company") on Form S-8, file No. 333-266373 of our report dated January 13, 2022, with respect to our audit of the consolidated financial statements of the Company for the year ended September 30, 2021, which report is included in this Annual Report on Form 10-K of the Company for the year ended September 30, 2022. We were dismissed as auditors on August 3, 2022 and, accordingly, we have not performed any audit or review procedures with respect to any financial statements appearing in any Registration Statement for any periods after the date of our dismissal. <br>*/s/ Wei, Wei & Co., LLP*<br>Flushing, New York<br> January 13, 2023 |

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION**

I, Neng Chen, the Chief Executive Officer of the registrant, certify that:

(1) I have reviewed this Annual Report on Form 10-K of Green Giant Inc. for the fiscal year ended September 30, 2022.

(2) Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15a-15(f)) for the registrant
and have:

&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;b. Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed under our supervision, 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:

&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected,
or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(5) The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: January 13, 2023

---

| |
|:---|
| /s/ Neng Chen |
| Name: Neng Chen |
| Title: Chief Executive Officer (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION**

I, Rong Rong Dai, the Chief Financial Officer of the registrant, certify that:

(1) I have reviewed this Annual Report on Form 10-K of Green Giant Inc. for the fiscal year ended September 30, 2022.

(2) Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15a-15(f)) for the registrant
and have:

&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;b. Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed under our supervision, 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:

&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected,
or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(5) The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: January 13, 2023

---

| |
|:---|
| /s/ Rong Rong Dai |
| Name: Rong Rong Dai |
| Title: Chief Financial Officer <br> (Principal Financial and Accounting Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

The undersigned hereby certifies, in his capacity as an officer of Green Giant Inc. (the "Company"), for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Annual Report of the Company on Form 10-K for the fiscal year ended September 30, 2022 (the "Report")
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.

Date: January 13, 2023

---

| |
|:---|
| /s/ Neng Chen |
| Neng Chen |
| Chairman of the Board of Directors, <br> Chief Executive Officer, and <br> President (Principal Executive Officer) |

---

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

The undersigned hereby certifies, in her capacity as an officer of Green Giant Inc. (the "Company"), for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of her knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Annual Report of the Company on Form 10-K for the fiscal year ended September 30, 2022 (the "Report")
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.

Date: January 13, 2023

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| |
|:---|
| /s/ Rongrong Dai |
| Rongrong Dai |
| Chief Financial Officer (Principal Financial Officer) |

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The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.