UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

~~[X]~~ ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended June 30, ~~2017~~ 2018

~~[ ]~~ ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-34515

CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC. (Exact name of registrant as specified in its charter)

Nevada		20-8468508
(State or other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

9 North West Fourth Ring Road Yingu Mansion Suite 1708 ~~1708Haidian~~Haidian District Beijing, People’s Republic of China 100190 (Address of Principal Executive Office and Zip Code)

Registrant’s telephone number, including area code: +86 10 82525361

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Name of Each Exchange On Which Registered
Common Stock, Par Value $0.001		NASDAQ Capital Market

Securities registered pursuant to Section 12(g) of the 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 ~~[X]~~ ☒

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 ~~[X]~~ ☒

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 ☒ ~~[X]~~ No ~~[ ]~~ ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ~~[X]~~ ☒

1Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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. (Check one):

Large accelerated filer [☐ ] Accelerated filer [☐ ] Non-accelerated filer [☐ ] Smaller reporting company ~~[X]~~☒ Emerging growth company ~~[ ]~~☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for ~~complying~~ 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 is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ ~~[ ]~~ No ~~[X]~~ ☒

At December 3029, ~~2016~~2017, the last business day of the registrant’s most recently completed second fiscal quarter, there were 2,387,658 shares of the registrant’s common stock outstanding, and the aggregate market value of such shares held by non-affiliates of the registrant (based upon the closing price of such shares as reported on the NASDAQ Capital Market) was approximately $36.4 million. Shares of the registrant’s common stock held by the registrant’s executive officers and directors have been excluded because such persons may be deemed to be affiliates of the registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

As of ~~September~~December 263, ~~2017~~2018, there were 2 5,~~387~~584,~~658~~626 shares of the Registrant’s common stock outstanding.

TABLE OF CONTENTS

		Page
Part I
Item 1.	Business	61
Item 1A.	Risk Factors	1713
Item 2.	Properties	3028
Item 3.	Legal Proceedings	3028
Item 4.	Mine Safety Disclosures	3032
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3133
Item 6.	Selected Financial Data	3133
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3134
Item 7A.	Quantitative and Qualitative Disclosure of Market Risk	4042
Item 8.	Financial Statements and Supplementary Data	4042
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	4042
Item 9A.	Controls and Procedures	4043
Item 9B.	Other Information	4145
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	4146
Item 11.	Executive Compensation	4449
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	4752
Item 13.	Certain Relationships and Related Transactions, and Director Independence	4852
Item 14.	Principal Accountant Fees and Services	4954
Item 15.	Exhibits, Financial Statements and Schedules	50
Part IV
Item 15.	Exhibits, Financial Statements and Schedules	55

INTRODUCTORY NOTE

In this report, unless indicated otherwise, references to

•● “China,” “Chinese” and “PRC,” are references to the People’s Republic of China; •● “BVI” refers to the British Virgin Islands; •● “China Advanced,” “China-ACM,” “the Company,” “we,” “us,” or “our,” are references to the combined business of China Advanced Construction Materials, Group, Inc. and its wholly-owned subsidiaries, BVI- ACM and China-ACMH, as well as Xin Ao and its wholly owned subsidiaries in China, including Heng Yuan Zhengke, Hong Sheng An, Heng Tai, Da Tong, and Luan Xian HengXin, but do not include the stockholders of China Advanced; •● “BVI-ACM” refers to Xin Ao Construction Materials, Inc; •● “China-ACMH” refers to Beijing Ao Hang Construction Materials Technology Co., Ltd.; •● “Xin Ao” refers to Beijing Xin Ao Concrete Group; •● “Heng Yuan ZhengKe” refers to Beijing Heng Yuan ZhengKe Technical Consulting Co., Ltd; •● “Hong Sheng An” refers to Beijing Hong Sheng An Construction Materials Co., Ltd; •● “Heng Tai” refers to Beijing Heng Tai Hong Sheng Construction Materials Co., Ltd; •● “Da Tong” refers to Da Tong Ao Hang Wei Ye Machinery and Equipment Rental Co., Ltd; •● “Luan Xian HengXin” refers to Luan Xian HengXin Technology Co., Ltd; •● “RMB” refers to the Renminbi, the legal currency of China; and •● “U.S. dollars,” “dollars” and “$” are references to the legal currency of the United States.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. You can identify such forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. These forward-looking statements include, among other things, statements relating to:

•● our expectations regarding the market for our concrete products and services; •● our expectations regarding the continued growth of the concrete industry; •● our beliefs regarding the competitiveness of our products; •● our expectations regarding the expansion of our manufacturing capacity; •● our expectations with respect to increased revenue growth and our ability to maintain profitability resulting from increases in our production volumes; •● our future business development, results of operations and financial condition; •● competition from other manufacturers of concrete products; •● the loss of any member of our management team; •● our ability to integrate acquired subsidiaries and operations into existing operations; •● market conditions affecting our equity capital; •● our ability to successfully implement our selective acquisition strategy; •● changes in general economic conditions; ~~and~~● • changes in accounting rules or the application of such rules.; ● any failure to comply with the periodic filing and other requirements of The Nasdaq Stock Market, or Nasdaq, for continued listing, ● any failure to identify and remediate the material weaknesses or other deficiencies in our internal control and disclosure control over financial reporting;

4● the initiation of any civil litigation, regulatory proceedings, government enforcement actions or other adverse effects as a result of the restatements of annual report on form 10-K for the fiscal year ended June 30, 2017 a and quarterly reports on form 10-Q for the periods ended March 31, 2018, December 31, 2017 and September 30, 2017 (herein referred to as “Restated Reports” or “Restatement”).

Also, forward-looking statements represent our estimates and assumptions only as of the date of this report. You should read this report and the documents that we reference in this report, or that we filed as exhibits to this report, in their entirety and with the understanding that our actual future results may be materially different from what we expect.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

5 iii

PART I

Item 1. Business

OUR BUSINESS

Overview

The Company is a holding company whose primary business operations are conducted through our wholly-owned subsidiaries BVI-ACM and China-ACMH, and our variable interest ~~entities~~ entity, Xin Ao and its subsidiaries. The Company engages in the production of advanced construction materials for large ~~scale~~ scale infrastructure, commercial and residential developments. The Company is primarily focused on engineering, producing, servicing, delivering and pumping a comprehensive range of advanced ready-mix concrete materials for highly technical, large scale, and environmentally-friendly construction projects. Ready-mixed concrete products are important building materials that are used in a vast majority of commercial, residential and public works construction projects. We are committed to conducting our operations with an emphasis on the ~~extensive~~ extensive use of recycled waste materials, extending product life, the efficient production of our concrete materials with minimal energy usage, dust and air pollution, and innovative products, methods and practices.

Our Corporate Structure

We own all of the issued and outstanding capital stock of Xin Ao Construction Materials, Inc., or “BVI-ACM”, a British Virgin Islands corporation, which in turn owns 100% of the outstanding capital stock of Beijing Ao Hang Construction Materials Technology Co., Ltd., or “China-ACMH”, a company incorporated under the laws of China. On November 28, 2007, China-ACMH ~~entered~~ entered into a series of contractual agreements with Beijing Xin Ao Concrete Group Co., Ltd., or “Xin Ao”, a company incorporated under the laws of China, and its two shareholders, in which China-ACMH effectively took over management of the ~~business~~ business activities of Xin Ao and has the right to appoint all executives and senior management and the members of the board of directors of Xin Ao. The contractual arrangements are comprised of a series of agreements, including an Exclusive Technical Consulting and Services Agreement and an Operating Agreement, through which China-ACMH has the right to advise, consult, manage and operate Xin Ao for an annual fee in the amount of Xin Ao’s yearly net profits after tax. Additionally, Xin Ao’s shareholders have pledged their rights, titles and equity interest in Xin Ao as security for China-ACMH to collect technical consulting and services fees provided to China-ACMH through an Equity Pledge Agreement. In order to further reinforce China-ACMH’s rights to control ~~and~~ and operate Xin Ao, Xin Ao’s shareholders have granted China-ACMH the exclusive right and option to acquire all of their equity interests in Xin Ao through an Option Agreement.

~~The following chart reflects our organizational structure as of the date of this report:~~1

6The following chart reflects our organizational structure as of the date of this report:

Our Corporate History

China Advanced Construction Materials Group, Inc. was founded as an unincorporated business on September 1, 2005, under the name TJS ~~Wood~~ Wood Flooring, Inc., and became a C corporation in the State of Delaware on February 15, 2007. On April 29, 2008, we changed our name to China Advanced Construction Materials Group, Inc. in response to a reverse acquisition transaction with BVI-ACM described below.

On April 29, 2008, we completed a reverse acquisition transaction with BVI-ACM whereby we issued to the stockholders of BVI-ACM 8,809,583 shares of our common stock in exchange for all of the issued and outstanding capital stock of BVI-ACM. BVI-ACM thereby became our wholly owned subsidiary and the former stockholders of BVI-ACM became our controlling stockholders.

On August 1, 2013, we consummated a reincorporation merger pursuant to which we merged with and into our wholly-owned subsidiary, ~~China~~ China Advanced Construction Materials Group, Inc., a newly formed Nevada corporation and the surviving entity in the merger, pursuant to the terms and conditions of an Agreement and Plan of Merger entered into as of August 1, 2013. As a result of the reincorporation the Company is now governed by the laws of the state of Nevada.

~~Background and History of BVI-ACM and China-ACMH~~ 2

~~BVI-ACM was established on October 9, 2007, under the laws of~~Background ~~British~~and ~~Virgin~~History ~~Islands. The majority shareholders~~ of BVI-ACM ~~are~~and ~~Chinese citizens who own 100% of Xin Ao, a limited liability company formed under laws of~~ China~~. BVI~~-~~ACM~~ACMH was established as a “special purpose vehicle” for foreign fund raising for Xin Ao. China State Administration of Foreign Exchange, or SAFE, requires the owners of any Chinese companies to obtain SAFE’s approval before establishing any offshore holding company structure for foreign financing as well as subsequent acquisition matters. On September 29, 2007, BVI-ACM was approved by local Chinese SAFE as a “special purpose vehicle” offshore company.

7BVI-ACM was established on October 9, 2007, under the laws of British Virgin Islands. The majority shareholders of BVI-ACM are Chinese citizens who own 100% of Xin Ao, a limited liability company formed under laws of China. BVI-ACM was established as a “special purpose vehicle” for foreign fund raising for Xin Ao. China State Administration of Foreign Exchange, or SAFE, requires the owners of any Chinese companies to obtain SAFE’s approval before establishing any offshore holding company structure for foreign financing as well as subsequent acquisition matters. On September 29, 2007, BVI-ACM was approved by local Chinese SAFE as a “special purpose vehicle” offshore company.

On November 23, 2007, BVI-ACM established a subsidiary, China-ACMH, in China as a wholly owned foreign limited liability company with registered capital of $5 million. Through China-ACMH and its variable interest entity Xin Ao, we are engaged in producing general ready-mixed concrete, ~~customized~~ customized mechanical refining concrete, and some other concrete-related products which are mainly sold in China. On September 20, 2010, China ~~ACM~~ ACMH established a 100% owned subsidiary, Advanced Investment Holdings Co., Inc., or AIH, in the State of Nevada. AIH never engaged in operations and the Company subsequently dissolved AIH on August 30, 2011.

In March and April 2010, Xin Ao established five 100% owned subsidiaries in China: Beijing Heng Yuan ZhengKe Technical Consulting Co., Ltd (“Heng Yuan ZhengKe”), Beijing Hong Sheng An Construction Materials Co., Ltd (“Hong Sheng An”), Beijing Heng Tai Hong Sheng Construction Materials Co., Ltd (“Heng Tai”), Da Tong Ao Hang Wei Ye Machinery and Equipment Rental Co., Ltd (“Da Tong”) and Luan Xian HengXin Technology Co., Ltd (“Luan Xian HengXin”). Total registered capital for these five subsidiaries was approximately $2.1 million (RMB 14 million) and none of these Xin Ao subsidiaries had ~~actual~~ actual operation. ~~The~~In ~~Company~~February ~~decided~~2017 ~~to dissolve these entities between March 2016~~ and ~~June~~ ~~2016. As of June 30~~prior, ~~2017,~~ all offive ~~these~~subsidiaries ~~entities~~were ~~have been~~ dissolved.

Our Business

Our concrete sales business is comprised of the formulation, production and delivery of the Company’s line of C10-C100 concrete mixtures primarily through our current fixed plant, a ready mix concrete batching plant in Beijing. The ready-mixed concrete sales business engages principally in the formulation, preparation and delivery of ready-mixed concrete to the worksites of our customers. ~~For~~We ~~this segment of our business, we~~ procure raw materials, ~~mix~~ mix them according to our measured mixing formula, ship the final products in mounted transit mixers to the destination work site, and, for more sophisticated structures, pump the mixture and set it into structural frame molds as per structural design parameters. The process of delivering and setting the ready mix concrete mixture cannot exceed 90 minutes because the chemistry of concrete mixture hardens thereafter. The deliverable radius of a concrete mixture from our ready mix plant in Beijing is approximately 25 kilometers. Traffic conditions would affect the timing and shipment of our concrete mixtures. Since the 2008 Olympics, there are alternating license plate traffic restrictions on many traffic routes in Beijing to ease traffic congestion and associated ~~exhaust~~ exhaust pollution. Due to the large amounts of working capital required for the acquisition of raw materials ~~associated for this business segment~~, a supply ~~shortage~~ shortage or degradation of supplier accounts payable credit terms would pose a potential risk to our business.

Our principal market, Beijing, has enjoyed stronger economic growth and a higher demand for construction than other regions of China. As a result, we ~~believe~~have witnessed that competitors ~~will~~expanding ~~try to expand~~ their sales and build up their distribution networks in our principal market. We anticipate that this trend will continue and likely accelerate. Increased competition may have a material adverse effect on our financial condition and operation results.

~~Our Industry~~ 3

Our ~~Industry was influenced by the decline in the macro economy~~ in recent periods. The concrete products industry experienced a slowdown in industry production and economic growth since September 2011. In 2014, the slowdown in the industry became more obvious month by month, with profit generally being squeezed by the greater pressure to maintain stable level of production and operation. Industry

China’s is ~~average~~already ~~annual~~among ~~GDP~~the ~~growth~~world’s ~~remained~~largest ~~approximately~~construction ~~10% over~~materials ~~the~~producers, ~~past~~ranking 31first ~~years.~~in ~~China has become~~ the world’s ~~second~~annual ~~largest~~output of ~~economy~~cement, ~~both~~ inflat ~~nominal~~glass, ~~GDP~~building ceramic and ~~Purchasing~~ceramic ~~Power~~sanitary ~~Parity~~ware. ~~terms,~~The ~~after~~construction ~~the~~materials ~~United~~market ~~States. In~~includes ~~line~~all ~~with~~manufacturers of ~~this~~sand, ~~macroeconomic~~gravel, ~~growth~~aggregates, ~~the~~cement, ~~Chinese~~concrete ~~construction~~ and ~~building material~~bricks. ~~industry~~The ~~has~~market ~~grown~~does ~~tremendously.~~not include other finished or semi-finished building materials.

~~China~~Our Industry iswas ~~already~~influenced ~~among~~by the ~~world’s~~decline ~~largest~~in ~~construction materials~~the ~~producers,~~macro ~~ranking~~economy ~~first~~ in ~~the~~recent ~~world’s~~periods. ~~annual~~The ~~output~~concrete ofproducts ~~cement,~~industry ~~flat~~experienced a slowdown ~~glass,~~in ~~building~~industry ~~ceramic~~production and ~~ceramic~~economic ~~sanitary~~growth ~~ware~~since September 2011. ~~The~~In ~~construction~~2014, ~~materials market~~the ~~includes~~slowdown ~~all~~in ~~manufacturers~~the ofindustry ~~sand,~~became ~~gravel,~~more ~~aggregates,~~obvious ~~cement~~month by month, ~~concrete and~~with ~~bricks.~~profit ~~The~~generally ~~market~~being ~~does~~squeezed ~~not~~by ~~include~~the ~~other~~greater ~~finished~~pressure orto ~~semi-finished~~maintain ~~building materials.~~stable level of production and operation.

8Demand for Ready-Mixed Concrete

~~Construction~~The demand ~~Demand~~for ready-mixed concrete is substantially effected by the economy scale, number of ongoing infrastructure projects as well as the environmental policies in China. Recently, the fixed asset investment has been slowed down in China and it actually causes a negative growth in the real estate investment industry. Meanwhile, China has strengthened its environmental protection, about 26.6% concrete companies have gone through a production suspension in 2017. The growth rate of the concrete product industry declined 21% based on a ten-month comparison (January to October) from 2017 to 2018. For this same period, the increase rate of sales in concrete industry has also suffered a year decline of about 22% by taking the increase of commodity price into consideration. Therefore, the demand of ready-mixed concrete in China may have a tendency of decrease in near future.

According to the Summary of Construction Outlook in China (the “Summary”), published in August 6, 2013 by the Freedonia Group, an industry research firm, construction expenditures in China are expected to increase 8.5 percent per year in real terms through 2017. Ongoing urbanization and industrialization, rising income levels, further population and household growth, and the government’s continuing efforts to expand and upgrade physical infrastructure in the country will support healthy growth in construction spending.4

~~Construction expenditures in China are nearly equally split~~Our ~~among~~Competitive ~~residential~~Strengths buildings, nonresidential buildings, and nonbuilding structures. Nonbuilding construction will experience the fastest growth (in real terms) through 2017. The increases will benefit from stated efforts to expand and upgrade the country’s transportation infrastructure, such as highways network, subway systems in major cities, and several airports. Utilities construction will also contribute to the expenditures on nonbuilding construction, particularly in rapidly growing urban areas, as the government continues to expand and improve access to such infrastructure like water supply, sewage treatment, rubbish disposal, and gas distribution. Further efforts to increase the country’s power generation capacity and improve electricity transmission networks will also drive spending on nonbuilding construction.

~~China’s~~Ready-mixed ~~Cement~~concrete &is ~~Concrete~~a ~~Demand~~highly versatile construction material that results from combining coarse and fine aggregates, such as gravel, crushed stone and sand, with water, various chemical admixtures and cement. We manufacture ready-mixed concrete in variations, which in each instance may reflect a specific design use. We generally maintain inventory of raw materials for a short period of time to coordinate our daily material purchases with the time-sensitive delivery requirements of our customers.

~~Demand~~The ~~for~~quality ~~cement~~of inready-mixed ~~China~~concrete ~~will be driven by rising, but~~is ~~decelerating,~~time-sensitive ~~construction~~as ~~expenditures~~it inbecomes ~~China.~~difficult ~~Further advances in cement manufacturing technology are also expected~~ to ~~stimulate~~place ~~sales~~within byhours ~~improving~~after ~~the quality~~mixing. ~~of the product~~Consequently, ~~stressing~~ the ~~versatility~~market offor ~~certain types of cement with excellent performance and/or price benefits over other types of cement across~~ a ~~range~~permanently ~~of construction applications. Regional cement markets reflect~~installed ~~differences~~ready-mixed inconcrete ~~construction~~plant ~~expenditures,~~is ~~which~~usually inlimited ~~turn are driven by local trends in demographics, industrial output and economic activity. The cement markets in Northwest and Southwest China are expected~~ to ~~grow~~an atarea awithin ~~faster pace, as~~ a ~~result~~certain radius of ~~the~~such ~~government~~plant’s ~~Great~~location. ~~Western~~We ~~Development~~produce ~~strategy, which aims~~ready-mixed toconcrete ~~promote investment~~ in ~~these~~batches ~~areas.~~at ~~Consumption~~our ofplant ~~cement~~and inuse ~~Central~~mixer and ~~Northern~~ ~~China~~other istrucks ~~also expected~~ to ~~exceed~~complete the ~~national~~production ~~average~~process, ~~supported~~then ~~by high~~distribute ~~levels of transportation infrastructure construction~~ and ~~booming urban~~deliver ~~markets~~the inconcrete ~~Beijing~~to ~~and~~the ~~Tianjin.~~worksites ~~(Summary~~ of ~~the~~our ~~Freedonia Group's January 2009 "Cement in China" report from Business Wire)~~customers.

~~Residential and non-residential buildings in China are~~Concrete ~~increasingly~~has ~~requiring~~many ~~much~~attributes ~~more~~that ~~concrete~~make ~~due~~it ~~to,~~a ~~among~~highly ~~other~~versatile ~~reasons,~~construction ~~the short supply of wood~~material. ~~China~~In isrecent ~~currently the largest consumption market of cement worldwide at over $200 billion annually. At the present rate~~years, itindustry isparticipants ~~presumed that~~have ~~China will continue to be an important player in the global construction~~developed ~~materials~~various ~~market~~uses for atconcrete ~~least the next two decades~~products.

~~Demand~~We generally ~~for~~obtain ~~Ready-Mixed~~contracts ~~Concrete~~through local sales and marketing efforts directed at concrete subcontractors, general contractors, property owners and developers, governmental agencies and home builders.

~~Construction~~Our competitors ~~contractors~~includes ~~are~~a ~~expected~~number toof ~~continuously~~state-owned ~~represent the~~and ~~largest~~large ~~market~~private ~~for~~PRC-based ~~cement.~~manufacturers ~~Economic~~and ~~downturns~~distributors orthat ~~reductions~~produce inand ~~government~~sell ~~funding~~products ofsimilar ~~infrastructure~~to ~~projects~~ours. ~~could~~We ~~significantly~~compete ~~reduce~~primarily ~~our~~on ~~revenues. However,~~the webasis ~~believe~~of ~~that~~quality, ~~the~~technological ~~ready-mix~~innovation ~~concrete~~and ~~market~~price. ~~exhibits~~Essentially ~~the~~all ~~strongest~~contracts ~~growth~~on inwhich ~~the~~we ~~cement~~bid ~~industry.~~are ~~Revenues~~awarded ~~are~~through ~~expected~~a tocompetitive bebid ~~received~~process ~~from government~~with ~~regulations~~awards ~~banning~~often ~~on-site~~made ~~concrete~~to ~~and~~the ~~mortar~~lowest ~~mixing.~~bidder, ~~Demand~~though ~~for~~other factors ~~cement~~such ~~used~~as inshorter ~~concrete~~completion ~~products~~time isor ~~expected~~prior toexperiences beare ~~driven~~often byjust ~~the~~as ~~increasing popularity~~important. ofWithin ~~precast~~our ~~concrete~~markets, we compete with many ~~construction~~national, regional ~~contractors.~~and Inlocal ~~addition~~state-owned and private construction corporations, ~~the~~ ~~phase-out~~some of ~~clay~~which ~~bricks~~have ~~will~~achieved ~~heighten~~greater ~~demand~~market ~~for~~penetration ~~concrete blocks.~~or ~~Recognizing~~have ~~the~~greater ~~significant~~financial ~~environmental~~and ~~impact~~other ~~created~~resources ~~from~~than ~~the~~us. ~~large-scale construction~~In ~~activities~~addition, ~~undertaken~~there inare ~~the~~a ~~past~~number ~~few~~of ~~decades,~~large ~~China’s~~national ~~government implemented~~companies ~~Decree~~in ~~#341~~our inindustry that ~~2004~~could ~~which~~potentially ~~bans~~enter ~~onsite~~into ~~concrete~~our ~~production~~markets inand ~~over 200~~compete ~~major~~with ~~cities~~us. ~~across~~If ~~China~~we inare ~~order~~unable to ~~reduce~~compete ~~environmental~~successfully ~~damage~~in ~~from~~our markets, our ~~onsite~~relative ~~cement~~market ~~mixing~~share and ~~improve~~profits ~~the~~would ~~quality~~be ~~of concrete used in construction~~reduced.

~~Our~~We believe ~~Competitive~~that ~~Strengths~~the following competitive strengths enable us to compete effectively and to capitalize on the remaining market for construction materials in China:

~~Ready-mixed~~● ~~concrete~~Large isScale aContractor ~~highly~~Relationships. ~~versatile~~We have contracts with major construction ~~material~~ ~~that~~contractors ~~results~~which ~~from~~are ~~combining~~constructing ~~coarse~~key infrastructure, commercial and ~~fine~~residential ~~aggregates,~~projects. ~~such~~Our assales ~~gravel, crushed~~efforts ~~stone~~focus on large-scale projects and ~~sand,~~large ~~with~~customers ~~water,~~which ~~various~~place ~~chemical~~large ~~admixtures~~recurring orders and ~~cement~~raise less credit risk to us. ~~We manufacture~~For ~~ready-mixed~~the ~~concrete~~year inended ~~variations~~June 30, ~~which~~2018, infive ~~each~~customers ~~instance~~accounted ~~may reflect~~for aapproximately ~~specific~~36.3% ~~design~~of ~~use.~~the WeCompany’s ~~generally~~sales ~~maintain~~and ~~inventory~~26.6% of ~~raw~~the ~~materials for~~Company’s aaccounts ~~short~~receivable ~~period~~as of ~~time~~June to30, ~~coordinate~~2018. ~~our~~Should ~~daily~~we ~~materials~~lose ~~purchases~~these ~~with~~customers in the ~~time-sensitive~~ ~~delivery~~future ~~requirements~~and ofare ~~our~~unable to obtain additional customers., our revenues will suffer.

9● Experienced Management. The technical knowledge and business relationships of our management give us the ability to secure major infrastructure projects, increase production volumes, and implement quality standards and environmentally sensitive policies, and it also provide us with leverage to acquire less sophisticated operators. If there is any significant turnover in our management, we would lose the institutional knowledge held by our existing senior management team.

~~The~~● ~~quality~~Innovation ofEfforts. ~~ready-mixed~~We ~~concrete~~strive isto ~~time-sensitive~~produce asthe ~~it becomes~~most ~~difficult~~technically toand ~~place~~scientifically ~~within~~advanced ~~hours~~products ~~after~~for ~~mixing.~~our ~~Consequently,~~customers ~~the~~hence ~~market for~~we amaintain ~~permanently~~close ~~installed~~relationships ~~ready-mixed~~with ~~concrete~~Tsinghua ~~plant~~University, isXi’an ~~usually~~University ~~limited~~of toArchitecture ~~an area~~and ~~within~~Technology ~~certain~~and ~~radius~~Beijing ofDongfang ~~such~~Jianyu ~~plant’s~~Institute ~~location.~~of WeConcrete ~~produce~~Science ~~ready-mixed concrete~~&Technology, inwhich ~~batches~~assist atus with our ~~plant~~research and ~~use~~development ~~mixer~~activities. ~~and~~During ~~other~~our ~~trucks~~five toyear ~~complete~~agreement with the ~~production~~ ~~process~~Institute, ~~then~~we ~~distribute~~obtain ~~and~~an ~~deliver~~advantageous ~~the~~status ~~concrete~~over many of our competitors by gaining access to ~~the~~a ~~worksites~~wide array of ~~our~~ ~~customers~~resources and knowledge. The Company incurred research & development expenses of approximately $1.2 million and $0.8 million for the years ended June 30, 2018 and 2017, respectively.

~~Concrete has many attributes that make it a highly versatile~~Our ~~construction~~Growth ~~material.~~Strategy ~~In recent years, industry participants have developed various uses for concrete products.~~

We ~~generally obtain contracts through local sales and marketing~~ ~~efforts~~are ~~directed~~committed atto ~~concrete~~enhancing ~~subcontractors,~~profitability ~~general contractors, property owners~~ and ~~developers,~~cash ~~governmental~~flows ~~agencies~~through ~~and~~the ~~home~~following ~~builders.~~strategies:

~~Our~~● ~~competitors~~Focusing ~~includes~~on aHigh ~~number~~Capacity ofUtilization. ~~state-owned~~We ~~and~~intend ~~large private~~to ~~PRC-based~~focus ~~manufacturers~~on ~~and~~achieving ~~distributors~~high ~~that~~capacity ~~produce~~utilization ~~and~~in ~~sell~~order ~~products similar~~ to ~~ours.~~efficiently Weoperate ~~compete~~our ~~primarily on the basis of quality~~plant, ~~technological innovation~~by ~~and~~increasing ~~price.~~capacity ~~Essentially~~utilization ~~all~~at ~~contracts~~our onexisting ~~which~~plant weor ~~bid~~expanding ~~are~~capacity ~~awarded through~~by abuilding ~~competitive~~new ~~bid~~plants ~~process with awards often made~~ to ~~the~~meet ~~lowest~~existing ~~bidder, though~~contracts ~~other~~and ~~factors~~anticipated ~~such~~increase asin ~~shorter completion time or prior experiences are often just as important~~demand. ~~Within~~As ~~our~~a ~~markets~~result, we ~~compete~~terminated ~~with~~our ~~many~~leased ~~national, regional~~station ~~and~~in ~~local~~the ~~state-owned~~eastern ~~and~~suburban ~~private~~area ~~construction corporations, some~~ of ~~which~~ ~~have~~Beijing ~~achieved~~based ~~greater~~on ~~market~~slowing ~~penetration~~demand orfor ~~have~~railway ~~greater~~construction ~~financial~~ and ~~other~~ ~~resources~~the ~~than~~suspension ~~us.~~of Innew ~~addition,~~and ~~there~~ongoing ~~are~~high aspeed ~~number~~railway ofprojects ~~large~~stemming ~~national companies~~from ina ~~our~~changing ~~industry~~policy ~~that~~announced ~~could~~by ~~potentially~~China’s ~~enter~~Ministry ~~into~~of ~~our~~Rail ~~markets~~ and ~~compete~~ ~~with~~national ~~us.~~development ~~If we are unable to compete successfully in our markets, our relative market share~~ and ~~profits~~reform ~~would be reduced~~commission.

~~We believe that the following competitive strengths enable us to compete effectively and to capitalize on the remaining market for construction materials in China:~~5

•● ~~Large~~Mergers ~~Scale~~and ~~Contractor Relationships~~Acquisitions. WeWhen ~~have~~capital ~~contracts~~permits, ~~with~~we ~~major~~intend ~~construction~~to ~~contractors~~capitalize ~~which are~~on ~~constructing~~the ~~key~~challenges ~~infrastructure,~~that ~~commercial~~smaller ~~and~~companies ~~residential~~are ~~projects.~~encountering ~~Our sales~~in ~~efforts~~our ~~focus~~industry onby ~~large-scale~~acquiring ~~projects~~complementary ~~and~~companies ~~large~~at ~~customers~~favorable ~~which~~prices. ~~place large~~We ~~recurring~~believe ~~orders~~that ~~and~~buying ~~raise~~rather ~~less~~than ~~credit~~building ~~risk~~capacity tois ~~us.~~an ~~For~~option ~~the~~that ~~year~~may ~~ended~~be ~~June 30,~~attractive ~~2017,~~to ~~five~~us ~~customers~~if ~~accounted~~replacement ~~for~~costs ~~approximately~~are ~~40%~~higher ofthan ~~the~~purchase ~~Company’s~~prices. ~~sales and~~We ~~28%~~continue ofto ~~the~~look ~~Company’s~~into ~~account~~acquiring ~~receivables~~smaller asconcrete ofmanufacturers ~~June~~in ~~30,~~China ~~2017.~~as ~~Should~~part weof ~~lose these~~our ~~customers~~expansion inplans. ~~the~~We ~~future~~have ~~and~~not ~~are~~identified ~~unable~~specific totargets ~~obtain~~or ~~additional~~entered ~~customers,~~into ~~our revenues~~any ~~will~~Letters-of-Intent ~~suffer~~at this time.

•● ~~Experienced~~Vertical ~~Management~~Integration. ~~The technical~~When ~~knowledge~~capital ~~and~~permits, ~~business~~we ~~relationships~~plan ofto ~~our~~acquire ~~management~~smaller ~~give~~companies uswithin the ~~ability~~ toconstruction ~~secure~~industry, ~~major~~develop ~~infrastructure~~more ~~projects,~~material ~~increase~~recycling ~~production volumes~~centers, and ~~implement~~hire ~~quality~~additional ~~standards~~highly ~~and~~qualified ~~environmentally~~employees. ~~sensitive~~In ~~policies~~order to accomplish this, ~~and~~we ~~it also~~may ~~provide~~need usto ~~with~~offer ~~leverage~~additional equity or debt securities. Certain companies we seek to acquire ~~less~~are ~~sophisticated~~suppliers ~~operators.~~of Ifthe ~~there is~~raw ~~any~~materials ~~significant~~we ~~turnover~~purchase into manufacture our ~~management,~~products. If we ~~would~~do ~~lose~~acquire ~~the~~such ~~institutional knowledge~~companies ~~held~~we bywill ~~our~~have ~~existing~~greater ~~senior~~control ~~management~~over ~~team~~our raw material costs.

•● ~~Innovation~~Supply ~~Efforts.~~Chain WeEfficiencies ~~strive to produce the most technically~~ and scientifically advanced products for our customers hence we maintain close relationships with Tsinghua University, Xi’an University of Architecture and Technology and Beijing Dongfang Jianyu Institute of Concrete Science &Technology, which assist us with our research and development activitiesScale. ~~During~~We ~~our~~intend ~~five~~to ~~year~~streamline ~~agreement with the Institute, we obtain an advantageous status over many of~~ our ~~competitors~~supply bychain ~~gaining~~process ~~access to a wide array of resources~~ and ~~knowledge.~~leverage ~~The~~our ~~Company incurred research & development expenses of approximately $0~~scale.~~8 million and $0.7 million for the years ended June 30, 2017 and 2016, respectively.~~

~~Our~~● ~~Growth~~New ~~Strategy~~Product Offerings. We plan to produce a lightweight aggregate concrete for use in projects and to expand product offerings to include pre-cast concrete.

~~We are committed to enhancing profitability and cash flows~~Our ~~through~~Operations ~~the following strategies:~~

~~• Focusing on High Capacity Utilization.~~ We ~~intend to focus on achieving high capacity utilization in~~ ~~order~~provide tomaterials ~~efficiently~~through ~~operate~~ our ~~plant,~~ready-mixed byconcrete ~~increasing capacity utilization at existing~~ plant ~~or expanding capacity by building new plants to meet existing contracts and anticipated increase~~ in ~~demand~~Beijing. We ~~were~~own ~~focused~~one ~~on our capacity utilization at our Beijing-based~~ concrete plant ~~in fiscal year 2016~~ and ~~2017.~~its ~~As a~~related result, we terminated our leased station based on slowing demand for railway construction and the suspension of new and ongoing high speed railway projects stemming from a changing policy announced by China’s Ministry of Rail and national development and reform commissionequipment.

10 Products

•As architectural ~~Mergers~~designs ~~and~~become ~~Acquisitions.~~more ~~When capital~~complex, ~~permits~~challenging, weand ~~intend~~modern toin ~~capitalize~~scope, on the ~~challenges~~need ~~that~~for ~~smaller~~ technology driven companies ~~are~~to ~~encountering~~provide high-end inspecialty ~~our~~concrete ~~industry~~mixtures byhas ~~acquiring~~rapidly ~~complementary~~accelerated. ~~companies at~~Increasing ~~favorable~~demand ~~prices.~~for Westate-of-the-art ~~believe~~cement ~~that~~mixtures ~~buying~~has ~~rather~~spurred our ~~than~~technological ~~building~~innovation ~~capacity~~and isour ~~an option~~ability ~~that~~to ~~may~~provide beadvanced ~~attractive~~mixtures toof usbuilding ifmaterials ~~replacement~~that ~~costs~~meet ~~are~~project ~~higher~~specific ~~than~~engineering ~~purchase~~and ~~prices~~environmental specifications. We ~~continue~~produce toa ~~look~~range ~~into~~of ~~acquiring~~C10 ~~smaller~~to C100 concrete ~~manufacturers~~ inmaterials ~~China~~and asspecialize ~~part~~in ofan ~~our~~array ~~expansion~~of ~~plans. We have not identified~~specialized ~~specified~~ready-mixed ~~targets~~concretes ortailored ~~entered~~to ~~into~~each ~~any~~project’s ~~Letters-of-Intent~~technical atspecifications ~~this~~and ~~time.~~environmental standards.

•We specialize ~~Vertical~~in ~~Integration.~~“ready-mixed ~~When capital permits~~concrete”, wea ~~plan~~concrete tomixture ~~acquire~~made ~~smaller~~at ~~companies~~our ~~within~~facility ~~the~~with ~~construction industry,~~complete ~~develop~~computerized ~~more material recycling centers, and hire additional highly~~operating ~~qualified employees~~systems. InSuch ~~order~~concrete toaccounts ~~accomplish~~for ~~this,~~nearly wethree-fourths ~~may~~of ~~need~~all toconcrete ~~offer additional equity or debt securities~~produced. ~~Certain~~Ready-mixed ~~companies~~concrete weis ~~seek~~mixed toon ~~acquire~~demand ~~are~~and ~~suppliers~~is ofshipped ~~the raw materials we purchase~~ to ~~manufacture~~worksites ~~our~~by ~~products.~~concrete Ifmixer ~~we do acquire such companies we will have greater control over our raw material costs~~trucks.

•Our ready-mixed ~~Supply~~concrete ~~Chain~~products ~~Efficiencies~~consist of proportioned mixes we prepare and deliver in an unhardened plastic state for placement ~~Scale~~and shaping into designed forms at the worksite. WeSelecting ~~intend~~the optimum mix for a worksite entails determining not only the ingredients with the desired permeability, strength, appearance and other properties after it hardened, but also the ingredients necessary to ~~streamline~~achieve ~~our~~a ~~supply~~workable ~~chain~~consistency ~~process~~considering the weather and ~~leverage~~other conditions at the worksite. We believe we can achieve product differentiation for the mixes we offer because of the variety of mixes we produce, our volume production capacity and our scheduling, ~~scale.~~delivery and placement reliability.

•We produce ~~New~~ready-mixed ~~Product~~concrete ~~Offering.~~by Wecombining ~~plan~~the desired type of cement, other cementitious materials and gravel and crushed stone towith ~~produce~~water aand, ~~lightweight~~typically, ~~aggregate~~one ~~concrete~~or ~~for~~more ~~use~~admixtures. inThese ~~projects~~admixtures, such as chemicals, minerals and tofibers, ~~expand~~determine the usefulness ~~product~~of ~~offerings~~the toproduct ~~include~~for ~~pre-cast~~particular ~~concrete~~applications.

~~Our~~We use ~~Operations~~a variety of chemical admixtures to relieve internal pressure, increase resistance to crack in subfreezing weather, retard the hardening process to make concrete more workable in hot weather, strengthen concrete by reducing its water content, accelerate the hardening process, reduce the time required for curing, and facilitate the placement of concrete acquiring low water content.

~~We provide materials through our ready-mixed concrete plant in Beijing. We own one concrete plant and its related equipment.~~6

~~Products~~We frequently use various mineral admixtures as supplements to cement, which we refer to as cementitious materials, to alter the permeability, strength and other properties of concrete.

AsThe ready-mixed ~~architectural~~concrete ~~designs~~sector ~~become~~in ~~more~~the ~~complex,~~market ~~challenging,~~is ~~and modern~~growing inat ~~scope,~~a ~~the~~fast ~~need~~rate, ~~for~~largely ~~technology~~due ~~driven~~to ~~companies~~the toChinese ~~provide~~government’s ~~high-end~~implementation ~~specialty~~of ~~concrete~~Decree ~~mixtures~~#341 ~~has~~in ~~rapidly accelerated~~2004. ~~Increasing~~This ~~demand~~law ~~for state~~bans on-~~of-the-art~~site ~~cement~~concrete ~~mixtures~~production ~~has~~in ~~spurred~~over ~~our~~200 ~~technological~~cities ~~innovation~~across ~~and our~~China, ~~ability~~with tothe ~~provide~~goal ~~advanced mixtures~~ of ~~building~~reducing ~~materials~~environmental damages ~~that~~from ~~meet~~onsite ~~project specific~~concrete ~~engineering~~mixing and ~~environmental~~improving ~~specifications.~~the Wequality ~~produce~~of aconcrete ~~range~~used in construction. The use of ~~C10~~ready-mix concrete tominimizes ~~C100~~worksite ~~concrete~~noise, ~~materials~~dirt and ~~specialize~~congestion, inand anmost ~~array~~additives ofused ~~specialized~~in ready-~~mixed concretes~~mix ~~tailored~~concrete are environmentally safe. Our goal is to ~~each~~continue ~~project’s~~the ~~technical~~use ~~specifications~~of ~~and~~at ~~environmental standards.~~least 30% recyclable components in our concrete mixtures.

We ~~specialize~~are inbuilding ~~“ready-mixed concrete”,~~ a ~~concrete~~comprehensive ~~mixture~~product ~~made~~portfolio atthat serves the diverse needs of our ~~facility~~developing ~~with~~customer ~~complete~~base ~~computerized~~and ~~operating~~all ~~systems.~~unique ~~Such~~construction ~~concrete~~and infrastructure projects. ~~accounts~~While ~~for~~we ~~nearly~~mainly ~~three-fourths~~specialize ofin ~~all~~ready-mix concrete ~~produced.~~formulations ~~Ready~~from controlled low-~~mixed~~strength ~~concrete is~~material ~~mixed~~to onhigh-strength ~~demand~~concrete, each ~~and~~of them is ~~shipped~~specifically formulated to ~~worksites~~meet bythe ~~concrete~~needs ~~mixer~~of ~~trucks~~each project. We provide both industry standard and highly innovative products, including:

Our ready-mixed concrete products consist of proportioned mixes we prepare and deliver in an unhardened plastic state for placement and shaping into designed forms at the worksite. Selecting the optimum mix for a worksite entails determining not only the ingredients with the desired permeability, strength, appearance and other properties after it hardened, but also the ingredients necessary to achieve a workable consistency considering the weather and other conditions at the worksite. We believe we can achieve product differentiation for the mixes we offer because of the variety of mixes we produce, our volume production capacity and our scheduling, delivery and placement reliability.

Common Industry Mixtures		Industry Leading Mixtures
(Customized to Project)		Highly Technical Blends

Ready-mixed Concrete Blends: C10 to C100		Compound Admixture Concrete
Controlled Low-Strength Material (CLSM)		Lightweight Aggregate Concrete
High-Strength Concrete with Customized Fibers		Energy-saving Phase change thermostat concrete
Soil Cement, Unique Foundation Concrete		C100 High Performance Concrete

~~We produce ready-mixed concrete by combining the desired type~~Our of cement, other cementitious materials and gravel and crushed stone with water and, typically, one or more admixtures. These admixtures, such as chemicals, minerals and fibers, determine the usefulness of the product for particular applications. Customers

WeFor the ~~use~~fiscal ayear ~~variety~~ended ofJune ~~chemical~~30, ~~admixtures~~2018, towe ~~relieve~~had ~~internal pressure~~one customer, ~~increase~~whose ~~resistance~~sales toaccounted ~~crack~~for inmore ~~subfreezing~~than ~~weather,~~10% ~~retard~~of our total sales. For the ~~hardening~~fiscal ~~process~~year toended ~~make~~June ~~concrete~~30, ~~more~~2017, ~~workable~~we inhad ~~hot~~one ~~weather~~customer, ~~strengthen concrete~~whose bysales ~~reducing~~accounted ~~its~~for ~~water~~more ~~content,~~than ~~accelerate~~10% ~~the~~of ~~hardening~~our ~~process,~~total ~~reduce~~sales. Five customers accounted for approximately 39.9% and 30.0% of the ~~time~~Company’s ~~required~~sales for ~~curing~~the years ended June 30, 2018 and ~~facilitate~~2017, ~~the~~respectively. The ~~placement~~total accounts receivable from these customers amounted to approximately $10.2 million and $13.5 million as of ~~concrete~~June ~~acquiring~~30, 2018 ~~low~~and ~~water~~2017, ~~content~~respectively.

11Developing New Relationships

WeOur business ~~frequently~~will ~~use~~be ~~various~~damaged ~~mineral~~if ~~admixtures~~project ascontracts ~~supplements~~with ~~to cement~~the Chinese government, for which we ~~refer~~may toact as ~~cementitious~~a ~~materials~~sub-contractor, are cancelled. Our sales strategy balances these risks by focusing on building new long-term cooperative relationships with some of China’s top construction companies in order to ~~alter~~enhance our reputation and to enter new markets. Our sales representatives are actively building relationships with the ~~permeability~~Chinese government, ~~strength~~ general contractors, architects, engineers, and other ~~properties~~potential sources of new ~~concrete~~business in target markets. Our sales efforts are further supported by our executive officers and engineering personnel, who have substantial experience in the design, formulation and implementation of advanced construction and concrete materials projects.

The ready-mixed concrete sector in the market is growing at a fast rate, largely due to the Chinese government’s implementation of Decree #341 in 2004. This law bans on-site concrete production in over 200 cities across China, with the goal of reducing environmental damages from onsite concrete mixing and improving the quality of concrete used in construction. The use of ready-mix concrete minimizes worksite noise, dirt and congestion, and most additives used in ready-mix concrete are environmentally safe. Our ~~goal is to~~ ~~continue the use of at least 30% recyclable components in our concrete mixtures.~~Suppliers

We rely ~~are~~on ~~building~~third aparty ~~comprehensive~~suppliers ~~product~~of ~~portfolio that serves~~ the ~~diverse~~raw ~~needs~~materials ofto manufacture our ~~developing~~products. ~~customer~~Our ~~base~~top ~~and~~five ~~all~~suppliers ~~unique~~accounted ~~construction~~for approximately 36% and ~~infrastructure~~48% ~~projects.~~of ~~While~~the weCompany’s ~~mainly~~purchases ~~specialize~~for inthe ~~ready-mix~~years ~~concrete formulations~~ended ~~from~~June ~~controlled~~30, ~~low-strength~~2018 ~~material~~and to2017, ~~high-strength~~respectively. ~~concrete, each~~The oftotal ~~them~~accounts ~~are~~payable to ~~specifically~~these ~~formulated~~suppliers amounted to ~~meet~~approximately ~~the~~$0.7 ~~needs~~million ofand ~~each project~~$4.5 ~~We provide~~million ~~both~~as ~~industry~~of ~~standard~~June ~~and~~30, ~~highly~~2018 ~~innovative~~and ~~products~~2017, ~~including:~~respectively.

	Common Industry Mixtures	Industry Leading Mixtures
	(Customized to Project)	Highly Technical Blends
	Ready-mixed Concrete Blends: C10 to C100	Compound Admixture Concrete
	Controlled Low-Strength Material (CLSM)	Lightweight Aggregate Concrete
	High-Strength Concrete with Customized Fibers	Energy-saving Phase change thermostat concrete
	Soil Cement, Unique Foundation Concrete	C100 High Performance Concrete

~~Our~~Sales and ~~Customers~~Marketing

~~For~~General ~~the~~contractors ~~fiscal~~typically ~~year~~select ~~ended~~their suppliers ~~June~~of ~~30,~~ready-mixed ~~2017,~~concrete weand ~~had~~precast ~~one~~concrete. ~~customer~~In large, ~~whose~~ ~~sales~~complex ~~accounted~~projects, ~~for~~an ~~more~~engineering ~~than~~firm ~~10%~~or ofdivision ~~our~~within ~~total~~a ~~sales.~~state transportation ~~For~~or ~~the~~public ~~fiscal~~works ~~year ended June 30~~department, ~~2016,~~may weinfluence ~~had~~the nopurchasing ~~customer~~decision, ~~whose~~particularly ~~sales~~if ~~accounted~~the ~~for~~concrete ~~more~~has ~~than 10%~~complicated ofdesign ~~our total sales~~specifications. ~~Five~~In ~~customers~~connection ~~accounted~~with ~~for~~large, ~~approximately~~complex ~~40%~~projects and ~~30%~~government-funded of projects, the ~~Company’s~~general ~~sales~~contractor ~~for~~or project engineer usually awards supply orders on the ~~years~~basis ~~ended~~of ~~June~~either ~~30,~~direct ~~2017~~negotiation ~~and~~or ~~2016,~~a ~~respectively~~competitive bidding process. ~~The~~ ~~total~~Our ~~accounts~~marketing efforts ~~receivable~~target ~~from~~on ~~these~~general ~~customers~~contractors, ~~amounted~~developers, todesign ~~approximately $18.9~~engineers, ~~million~~architects and ~~$13.5~~homebuilders ~~million~~whose asfocus extends beyond the price of ~~June~~our 30products to quality, ~~2017~~consistency and ~~2016,~~reducing ~~respectively~~the in-place cost.

~~Developing~~Our marketing ~~New~~efforts ~~Relationships~~are geared toward advancing China-ACMH as the supplier to build China’s most modern and challenging projects. The Company is constantly seeking ways to raise its profile and leverage additional publicity. To this end, the Company plans to expand its presence at leading construction industry events and in periodicals to build up successful reputation. The primary goal is to reinforce the sales efforts by promoting positive testimonials and successful stories from the Company’s high profile clients and projects. Our marketing and sales strategy emphasizes on the sale of value-added products and solutions to customers.

~~Our business will be damaged if project contracts with the~~Research Chinese government, for which we may act as a sub-contractor, are cancelled. Our sales strategy balances these risks by focusing on building new long-term cooperative relationships with some of China’s top construction companies in order to enhance our reputation and toDevelopment enter new markets. Our sales representatives are actively building relationships with the Chinese government, general contractors, architects, engineers, and other potential sources of new business in target markets. Our sales efforts are further supported by our executive officers and engineering personnel, who have substantial experience in the design, formulation and implementation of advanced construction and concrete materials projects.

Construction materials companies are under extreme pressure to respond quickly to industrial demands with new designs and product innovations that support rapidly changing technical demand and regulatory requirements. We devote a substantial amount of attention to the research and development of advanced construction materials that meet the specific needs of projects while striving to lead the industry in value, materials and processes. We have sophisticated in-house R&D and testing facilities, a highly technical onsite team, in cooperation with a leading research institution, experienced management and advisory experts. Our ~~Suppliers~~research and development expenses were approximately $1.2 million for the year ended June 30, 2018, as compared to $0.8 million for the year ended June 30, 2017.

~~We rely on third party suppliers of the raw materials to~~Beijing ~~manufacture~~Concrete ~~our~~Institute ~~products.~~Partnership Our top five suppliers accounted for approximately 48% and 28% of the Company’s purchases for the years ended June 30, 2017 and 2016, respectively. The total accounts payable to these suppliers amounted to approximately $4.5 million and $8.5 million as of June 30, 2017 and 2016, respectively.

~~Sales~~The Beijing Dongfang Jianyu Institute of Concrete Science & Technology, or Beijing Concrete Institute, has 40 employees, with five senior research fellows, and ~~Marketing~~15 mid-level researchers. The Institute and its staff have frequently participated and collaborated with national and local government agencies to establish the following industry standards:

~~General~~● ~~contractors~~Specification ~~typically~~For ~~select~~Mix ~~their~~Proportion ~~suppliers~~Design of ~~ready-mixed~~ ~~concrete~~Ordinary ~~and~~Concrete ~~precast~~JGJ55-2000 ~~concrete.~~● InCode ~~large,~~for ~~complex~~Acceptance ~~projects,~~of ~~an engineering~~Constructional ~~firm~~Quality orOf ~~division~~Concrete ~~within~~Structures aGB ~~state~~50204-2002 ~~transportation~~● orApplied ~~public~~Technical ~~works department,~~Specification ~~may~~of ~~influence~~Mineral ~~the~~Admixtures ~~purchasing~~In ~~decision,~~Concrete ~~particularly~~DBJ/T01-64-2002 if● ~~the~~Ready-Mixed ~~concrete has~~Concrete ~~complicated~~GB/T ~~design~~14902-2003 ~~specifications.~~● InPractice ~~connection~~Code ~~with~~for ~~large,~~Application ~~complex projects~~of ~~and government~~Ready-~~funded~~Mixed ~~projects,~~Mortar ~~the~~DBJ ~~general~~01-99-2005 ~~contractor~~● orManagement ~~project engineer~~Specification ~~usually awards supply orders on the basis~~ of ~~either~~Quality ~~direct~~for ~~negotiation or~~Ready-Mixed aConcrete ~~competitive~~● ~~bidding~~Technical ~~process.~~Requirement ~~Our~~for ~~marketing~~Environmental ~~efforts~~Labeling ~~target~~Products onReady-Mixed ~~general contractors,~~Concrete ~~developers,~~HJ/T412- ~~design~~2007 ~~engineers,~~● ~~architects~~High ~~and~~Performance ~~homebuilders~~Concrete ~~whose focus~~mineral ~~extends~~admixtures; ~~beyond~~GB/T18736-2012 ~~the~~● ~~price~~Test ofmethod ~~our~~for ~~product~~determining tocement ~~quality,~~density ~~consistency~~GB/T ~~and reducing the in~~208-~~place cost.~~ 2014

12 8

~~Our~~● ~~marketing~~Evaluation ~~efforts~~for ~~are~~Life ~~geared~~Cycle ~~toward advancing China~~Environment-~~ACMH~~friendly ~~as the~~Assessment ~~supplier~~of toconcrete ~~build~~products ~~China’s~~national ~~most~~standard ~~modern~~GB/T ~~and~~XXXX- ~~challenging~~20XX ~~projects.~~● ~~The~~Compound ~~Company is~~admixtures ~~constantly~~for ~~seeking~~concrete ~~ways to raise its profile and leverage additional publicity. To this end, the Company plans to expand its presence at leading construction~~ industry ~~events~~standard ~~and~~JG/T inXXXX-20XX ~~periodicals~~● ~~to build up successful reputation.~~ The ~~primary~~evaluation ~~goal~~system ison toclean ~~reinforce~~production ~~the~~of ~~sales~~ready-mixed ~~efforts~~concrete by● ~~promoting positive~~Safety ~~testimonials~~production ~~and~~management ~~successful~~regulation ~~stories~~of ~~from~~premixed ~~the~~concrete ~~Company’s~~● ~~high~~Technical ~~profile clients~~specifications ~~and projects. Our marketing and sales strategy emphasizes on the sale~~ of ~~value-added~~ ~~products~~waster ~~and~~concrete ~~solutions~~regeneration, tocommercial ~~customers.~~standard

~~Research~~We have a close association with the Beijing Concrete Institute and ~~Development~~have been able to incorporate many of these research findings into our operations, products, and procedures. We work closely with the institute and, in return for our sponsorships to multiple research initiatives, we have been granted exclusive works for the development of the materials used for our existing plant’ regional projects.

~~Construction materials companies~~ We are ~~under~~able ~~extreme pressure~~ to ~~respond~~ ~~quickly~~use tothe ~~industrial~~Research ~~demands~~Findings ~~with new designs~~ and ~~product~~Technical ~~innovations that~~Publication ~~support rapidly changing technical demand~~ and ~~regulatory~~Procedures ~~requirements. We devote a substantial amount~~ of ~~attention to~~ the ~~research~~Beijing ~~and~~Concrete ~~development~~Institute, University of ~~advanced~~Science ~~construction~~and ~~materials~~Technology ~~that~~Beijing, ~~meet~~Beijing ~~the~~University ~~specific needs~~ of ~~projects~~Technology, ~~while striving~~China toAcademy ~~lead~~of ~~the~~Building ~~industry in value~~Research, ~~materials~~China ~~and~~Building ~~processes. We have~~Materials ~~sophisticated~~Academy in~~-house~~ ~~R&D~~our ~~and testing facilities~~business, awhich ~~highly~~provides ~~technical~~us ~~onsite team, in cooperation~~ with aan ~~leading~~advantage ~~research~~over ~~institution,~~many ~~experienced~~of ~~management and~~our ~~advisory experts~~competitors. ~~Our~~Because ~~research~~of ~~and~~our ~~development~~contracts ~~expense~~with ~~was approximately $0.8 million for~~ the ~~year ended June 30~~institutes, our ~~2017,~~competitors asare ~~compared~~unable to ~~$0.7~~commercially ~~million~~utilize ~~for~~ the ~~year~~findings. ~~ended~~Some ~~June~~of ~~30,~~these ~~2016.~~findings include:

~~University~~● ~~Relationships~~Research on Compound Admixture HPC; 3rd Class Award for China Building Materials Science & ~~Cooperation~~Technology ~~Agreements~~ Progress. ● Research and Application of C100 HPC; 3rd Class Award for Beijing Science & Technology Progress. ● Research on pumping Light Aggregate Concrete; Innovation Award for China Building Materials Science& Technology. ● Research and Application of Green (nontoxic) HPC; First Prize for Beijing Science & Technology Progress. ● Construction Technology of HPC for the Capital International Airport. ● Research on Production and Construction Technology of Phase Change Energy-saving Thermostat Concrete and Mortar. ● Polycarboxylate Series High Performance Water Reducing Agent Compositing Technique. ● State Swimming Center for Concrete Cracking Control Technology. ● Research on construction waste recycled materials in concrete; Through the identification of the scientific and technological achievements with China Building Materials Science& Technology Progress. ● Research on the application of tailings waste rocks in the concrete. Through the scientific and technological achievements identification by China Building Materials Science & Technology. ● The research and application of alkali-free & high performance accelerator on concrete; Through the scientific and technological achievement identification by China Building Materials Science & Technology.

WeIn addition, ~~have~~we ~~strong~~collaborate ~~relationships~~closely with ~~Tsinghua University and~~ the ~~Xi’an~~ ~~University~~institute ~~of Architecture~~ and ~~Technology.~~its Weexecutives ~~signed~~who aplay ~~ten-year cooperation agreement with Xi’an University,~~ a ~~top~~strong ~~university~~role in ~~the~~recommending ~~fields~~industry ofstandards, ~~building~~advising ~~and~~on ~~material~~major ~~science~~infrastructure ~~research~~developments, and ~~education,~~creating onand ~~June~~maintaining ~~10,~~strong ~~2007,~~connections ~~so as to keep pace~~ with ~~the~~leading ~~global~~developers, ~~advancements~~construction companies, ~~of the cement~~ and ~~concrete~~governmental ~~industries~~officials.

~~Beijing Concrete Institute Partnership~~ 9

~~The Beijing Dongfang Jianyu Institute of Concrete Science &~~Successful Technology, or Beijing Concrete Institute, has 40 employees, with five senior research fellows, and 15 mid-level researchers. The Institute and its staff have frequently participated and collaborated with national and local government agencies to establish the following industry standards:Innovations

~~• Specification For Mix Proportion Design~~ Some of ~~Ordinary~~our ~~Concrete~~advanced JGJ55-2000 • Code for Acceptance of Constructional Quality Of Concrete Structures GB 50204-2002 • Applied Technical Specification of Mineral Admixtures In Concrete DBJ/T01-64-2002 • Ready-Mixed Concrete GB/T 14902-2003 • Practice Code for Application of Ready-Mixed Mortar DBJ 01-99-2005 • Management Specification of Quality for Ready-Mixed Concrete • Technical Requirement for Environmental Labeling Products Ready-Mixed Concrete HJ/T412- 2007 • High Performance Concrete mineral admixtures; GB/T18736-2012 • Test method for determining cement density GB/T 208-2014 • Evaluation for Life Cycle Environment-friendly Assessment of concrete products ~~national~~and ~~standard~~processes ~~GB/T~~are ~~XXXX-~~developed ~~20XX~~through •our ~~Compound~~relationships ~~admixtures~~with ~~for~~research ~~concrete~~institutes ~~industry~~and standard JG/T XXXX-20XX • The evaluation system on clean production of ready-mixed concrete • Safety production management regulation of premixed concrete • Technical specifications of waster concrete regenerationuniversities, ~~commercial standard~~including:

13C100 High Performance Concrete

WeHigh Strength ~~have~~Concrete ais ~~close~~often ~~association~~defined as concrete with ~~the~~a ~~Beijing~~compressive ~~Concrete~~strength ~~Institute and~~greater ~~have~~than ~~been~~6000 ~~able~~psi to(41 ~~incorporate~~MPa). ~~many~~The ofprimary ~~these~~difference between ~~research~~high-strength ~~findings~~concrete ~~into~~and ~~our operations,~~normal-strength ~~products,~~concrete ~~and~~is ~~procedures.~~the Wecompressive ~~work~~strength ~~closely~~that ~~with~~represent the ~~institute~~maximum ~~and, in~~resistance ~~return~~of ~~for~~a ~~our~~concrete ~~sponsorships~~sample to ~~multiple~~applied ~~research~~pressure. ~~initiatives,~~Manufacturing wehigh-strength ~~have~~concrete ~~been granted~~involves ~~exclusive~~making ~~works~~optimal ~~for~~use ~~the development~~ of the ~~materials~~basic ~~used for our~~ingredients ~~existing~~that ~~plant’~~constitute ~~regional~~normal-strength ~~projects~~concrete.

~~We are able to use the Research Findings and Technical~~Through ~~Publication~~our ~~and~~collaborative ~~Procedures of the Beijing Concrete Institute~~efforts, ~~University~~we ~~of Science~~have ~~and~~developed ~~Technology~~a ~~Beijing,~~high ~~Beijing~~performance ~~University~~concrete ofwhich ~~Technology,~~can ~~China~~be ~~Academy of~~produced ~~Building~~at ~~Research,~~an ~~China~~impermeable ~~Building~~grade ~~Materials~~above ~~Academy in our business~~P35, ~~which~~ ~~provides~~and uscan ~~with~~be anused ~~advantage~~as ~~over~~self-waterproofing ~~many~~concrete offor ~~our~~structural ~~competitors.~~engineering, ~~Because~~as ~~of our contracts with~~ the ~~institutes,~~water-cement ~~our~~(W/C) ~~competitors~~ratio ~~are~~and ~~unable~~carbonized ~~to commercially~~shrinking ~~utilize~~is ~~the~~minimal ~~findings.~~and ~~Some~~the ofstructure ~~these~~is ~~findings include:~~close-grained.

•Only a ~~Research~~limited onnumber ~~Compound Admixture HPC; 3rd Class Award for China Building Materials Science & Technology Progress. • Research and Application~~ of ~~C100~~corporations ~~HPC;~~in ~~3rd~~the ~~Class Award for~~ Beijing ~~Science~~are &equipped ~~Technology~~with Progress. • Research on pumping Light Aggregate Concrete; Innovation Award for China Building Materials Science& Technology. • Research and Application of Green (nontoxic) HPC; First Prize for Beijing Science & Technology Progress. • Construction Technology of HPC for the ~~Capital~~expertise ~~International~~to ~~Airport.~~produce •C100 ~~Research on Production and Construction Technology of Phase Change Energy-saving Thermostat Concrete and Mortar. • Polycarboxylate Series~~ High Performance ~~Water Reducing Agent Compositing Technique. • State Swimming Center for~~ Concrete ~~Cracking Control Technology~~. • Research on construction waste recycled materials in concrete; Through the identification of the scientific and technological achievements with China Building Materials Science& Technology Progress. • Research on the application of tailings waste rocks in the concrete. Through the scientific and technological achievements identification by China Building Materials Science & Technology. • The research and application of alkali-free & high performance accelerator on concrete; Through the scientific and technological achievement identification by China Building Materials Science & Technology.

~~In addition, we collaborate closely with the institute and its~~Compound ~~executives~~Admixture ~~who~~Concrete play a strong role in recommending industry standards, advising on major infrastructure developments, and creating and maintaining strong connections with leading developers, construction companies, and governmental officials.

~~Successful~~This compound ~~Innovations~~mineral mixture is a composite of coal powder, mineral powder and mineral activators blended to specific proportions. This mixture improves activity, filling, and super-additive effects of the concrete and also improves the compatibility between cement and aggregate.

~~Some of our advanced products and processes are developed~~Lightweight ~~through~~Aggregate ~~our~~Concrete ~~relationships~~& ~~with~~Innovative ~~research~~Pumping ~~institutes~~Technology ~~and universities, including:~~

~~C100~~This ~~High~~procedure ~~Performance~~involves ~~Concrete~~a pumping technology of lightweight aggregate. It is a pretreatment method of lightweight aggregate. Setting appropriate times and pressure, lightweight aggregate will reach an appropriate saturation state under pressure once it is put into a custom designed sealed pressure vessel. Lightweight aggregate concrete was prepared through the above pretreatment method, and would dry quicker under pumping pressure without losing consistency. Accordingly, lightweight aggregate concrete will be easily pumped when applied which shortens the construction time.

~~High Strength Concrete is often defined as concrete with a compressive strength greater than 6000 psi (41 MPa). The primary difference between high~~Energy-~~strength concrete and normal-strength concrete is the compressive~~saving ~~strength~~Technologies ~~that represent the maximum resistance~~ of aPhase ~~concrete~~Change ~~sample~~Thermostat toConcrete ~~applied pressure. Manufacturing high-strength concrete involves making optimal use of the basic ingredients that constitute normal-strength concrete.~~

~~Through~~Energy conservation ~~our~~concrete ~~collaborative~~may ~~efforts,~~adjust weand ~~have~~reflect ~~developed~~process atemperature, ~~high performance concrete~~ which ~~can~~would besolve ~~produced~~cracking atproblem anbrought ~~impermeable~~about ~~grade~~by ~~above~~cement ~~P35,~~heat ~~and~~of ~~can~~hydration bein ~~used as self~~large-~~waterproofing~~scale concrete ~~for structural engineering, as the water-cement (W/C) ratio and carbonized shrinking is minimal and the structure is close-grained~~pours.

~~Only a limited number of corporations in the Beijing are~~Polycarboxylate ~~equipped~~Series ~~with~~High ~~the~~Performance ~~expertise~~Water toReducing ~~produce~~Agent ~~C100~~Compositing ~~High~~Technique ~~Performance Concrete.~~

14The research and production of water reducing admixture would improve performance while lowering pollution and the environmental impact. Super plasticizer Polycarboxylate series which reduces water requirements is an attractive additive in that it enables high strength concrete, super-strength concrete, high fluidity and super plasticizer concrete, and self-defense concrete. The water reduction of Polycarboxylate may reach 20% to 25%, higher than the current industry standard -- the Naphthaline water reducing agent. The cost of the water reducing agent is highly competitive, as it may replace Naphthaline to be used for high strength and high performance concrete production.

~~Compound~~Application of ~~Admixture~~Reused Water in Concrete

~~This~~The re-use ~~compound~~of ~~mineral~~waste ~~mixture~~water isof a ~~composite~~concrete ofplant ~~coal~~to ~~powder~~mix concrete is significant as it can reduce production costs, ~~mineral~~ ~~powder~~minimize fresh water usage and ~~mineral~~introduce ~~activators~~an ~~blended~~efficient approach to ~~specific~~address ~~proportions~~industrial waste. ~~This mixture~~The ~~improves~~practical ~~activity,~~application ~~filling,~~of ~~and~~this ~~super-additive~~effort ~~effects~~is ofa ~~the~~further ~~concrete~~step ~~and~~towards ~~also improves~~ the ~~compatibility~~goal ~~between~~of ~~cement~~minimal pollution and ~~aggregate~~emissions.

~~Lightweight Aggregate Concrete & Innovative Pumping Technology~~ 10

~~This procedure involves a pumping technology of lightweight~~Our ~~aggregate.~~Competition It is a pretreatment method of lightweight aggregate. Setting appropriate times and pressure, lightweight aggregate will reach an appropriate saturation state under pressure once it is put into a custom designed sealed pressure vessel. Lightweight aggregate concrete was prepared through the above pretreatment method, and would dry quicker under pumping pressure without losing consistency. Accordingly, lightweight aggregate concrete will be easily pumped when applied which shorten the construction time.

~~Energy-saving~~Our principal ~~Technologies~~market, Beijing, has enjoyed stronger economic growth and a higher demand for construction than other regions of ~~Phase~~China. As ~~Change~~a ~~Thermostat~~result, we believe that competitors will try to expand their sales and build up their distribution networks in Beijing. Our ~~Concrete~~future success depends on our ability to establish and maintain a competitive position in the marketplace.

~~Energy~~We ~~conservation~~compete ~~concrete~~primarily ~~may~~on ~~adjust~~the basis of quality, technological innovation and ~~reflect~~price. Our main competitors include Beijing Construction Engineering Group, BBMG Group Co., LTD, Beijing Uni-Construction Group., and Jidong Concrete Group. Essentially all of the contracts we bid on are awarded through a competitive bid process with awards generally made to the lowest bidder, though other factors such as shorter completion time or prior experience ~~temperature~~are often just as important. Within our markets, ~~which~~we ~~would~~compete ~~solve~~with ~~cracking~~many ~~problem~~national, ~~brought~~regional ~~about~~and bylocal ~~cement~~construction ~~heat~~corporations. Some of these competitors have achieved greater market penetration or have greater financial and other resources than us. In addition, ~~hydration~~we incompete ~~large~~with a number of state-~~scale~~owned ~~concrete~~enterprises, ~~pours~~which have significantly greater financial resources and competitive advantage than us.

~~Polycarboxylate~~There ~~Series~~are ~~High~~approximately100 ~~Performance~~concrete ~~Water~~mixture stations ~~Reducing~~in ~~Agent~~the Beijing area. The concrete production industry is highly segmented, with no single supplier having greater than ~~Compositing~~a ~~Technique~~3% market share.

~~The research and production of water reducing admixture would~~Intellectual ~~improve~~Property performance while lowering pollution and environmental impact. Super plasticizer Polycarboxylate series which reduces water requirements is an attractive additive in that it enables high strength concrete, super-strength concrete, high fluidity and super plasticizer concrete, and self-defense concrete. The water reduction of Polycarboxylate may reach 20% to 25%, higher than the current industry standard -- the Naphthaline water reducing agent. The cost of the water reducing agent is highly competitive, as it may replace Naphthaline to be used for high strength and high performance concrete production.

~~Application~~We currently ofown ~~Reused~~the ~~Water~~following inintellectual ~~Concrete~~property rights:

The re-use of waste water of a concrete plant to mix concrete is significant as it can reduce production costs, minimize fresh water usage and introduce an efficient approach to address industrial waste. The practical application of this effort is a further step towards the goal of minimal pollution and emissions.

Name	Patent No.	Duration	Patent Owner
An ultra-fine powder and its preparation method active regeneration	ZL 2013 1 0070164.7	July 9, 2014- July 8, 2034	Xin Ao
A Polycarboxylate and preparation method used recycled aggregate concrete	ZL 2013 1 0072014.X	January 1, 2014- December 31, 2034	Xin Ao
An early strength of recycled aggregate concrete superplasticizer	ZL 2013 1 0072015.4	April 9, 2014- April 8, 2034	Xin Ao

~~Our~~Environmental Matters ~~Competition~~

~~Our~~We ~~principal~~are ~~market,~~obligated ~~Beijing,~~to ~~has~~comply ~~enjoyed~~with ~~stronger economic~~environmental ~~growth~~protection laws and aregulations ~~higher~~promulgated ~~demand~~by ~~for~~the ~~construction~~Ministry ~~than~~of ~~other~~Construction ~~regions~~and ofthe ~~China~~State Environmental Protection Administration. Some Asspecific aenvironmental regulations require sealed transportation of dust materials and final products, closed storage of ~~result~~sand and gravel, weas ~~believe~~well ~~that~~as ~~competitors~~reduction ~~will~~of ~~try~~noise toand ~~expand~~dust ~~their~~pollution ~~sales~~on worksites and ~~build~~encouragement upof the use of waste materials. ~~their~~The ~~distribution~~governmental ~~networks~~regulatory inauthorities ~~Beijing~~conduct periodic inspections. ~~Our~~We ~~future~~have ~~success~~met ~~depends~~all onthe ~~our ability~~requirements toin ~~establish~~the ~~and~~past ~~maintain~~inspections. We aare ~~competitive~~one ~~position~~of the 10 companies in the ~~marketplace~~industry that have been awarded the honor of “Green Concrete Producer” by the PRC government.

We compete primarily on the basis of quality, technological innovation and price. Our main competitors include Beijing Construction Engineering Group, BBMG Group Co., LTD, Beijing Uni-Construction Group., Jidong Concrete Group,. Regulation

~~Essentially~~The ~~all~~Company ofhas ~~the~~been ~~contracts~~in wecompliance ~~bid~~with onall ~~are~~registrations ~~awarded~~and ~~through a~~requirements ~~competitive~~for ~~bid~~the ~~process~~issuance ~~with~~and ~~awards~~maintenance of ~~generally~~all ~~made~~licenses toand certificates required by the ~~lowest~~applicable ~~bidder~~governing authorities, including the Ministry of Construction and the ~~though~~Beijing ~~other~~Administration ~~factors~~of ~~such~~Industry as& ~~shorter~~Commerce. ~~completion~~The ~~time~~Ministry orof ~~prior~~Construction ~~experiences~~awards ~~are~~Level II and Level III qualifications to ~~often~~concrete ~~just~~producers asin ~~important.~~the ~~Within~~PRC ~~our~~construction ~~markets~~industry, webased ~~compete~~on ~~with~~criteria ~~many~~such ~~national~~as production capacity, technical qualifications, registered ~~regional~~capital and ~~local~~capital ~~construction~~equipment, ~~corporations.~~as ~~Some~~well ofas ~~these~~performance ~~competitors~~on ~~have achieved~~their ~~greater~~past ~~market~~projects. ~~penetration~~Level orII ~~have~~companies ~~greater~~are ~~financial~~licensed ~~and~~to ~~other~~produce concrete ~~resources~~of ~~than~~all ~~us.~~strength Inlevels ~~addition~~as well as special concretes, weand ~~compete~~Level ~~with~~III aproducers ~~number~~are oflicensed ~~state-owned~~to produce concrete with strength level ~~enterprises,~~C60 ~~which~~and ~~have~~below. ~~significantly~~We ~~greater~~are ~~financial~~currently ~~resources~~a ~~and competitive~~Level ~~advantage~~II ~~than~~concrete usproducer.

~~There~~Additionally, ~~are~~to ~~approximately140~~make improvements at our currently existing plant, we do not need to apply for regulatory approval. However, should we build new concrete ~~mixture~~plants, ~~stations~~we will inneed to (i) apply for a business license from the local Administration of Industry and Commerce, (ii) receive environmental ~~Beijing~~approval from the local Environmental Protection Bureau in the relevant district area, and (iii) apply for an Industry Qualification Certificate from the local Municipal Construction Committee. The ~~concrete~~time ~~production~~estimated ~~industry~~to receive each of these approvals is ~~highly~~approximately one ~~segmented~~month. In the past, ~~with~~we ~~no single~~have ~~supplier~~not ~~having~~been ~~greater~~rejected ~~than~~by aany ~~10%~~of ~~market~~these ~~share~~three regulators for approval.

15Our Labor Force

~~Intellectual~~As ~~Property~~of June 30, 2018, we employed 269 full-time employees. The following table sets forth the number of our full-time employees by function as of June 30, 2018.

~~We currently own the following intellectual property rights:~~11

Name	Patent No.	Duration	Patent Owner
An ultra-fine powder and its preparation method active regeneration	ZL 2013 1 0070164.7	July 9, 2014- July 8, 2034	Xin Ao
A Polycarboxylate and preparation method used recycled aggregate concrete	ZL 2013 1 0072014.X	January 1, 2014- December 31, 2034	Xin Ao
An early strength of recycled aggregate concrete superplasticizer	ZL 2013 1 0072015.4	April 9, 2014- April 8, 2034	Xin Ao

Employees/Independent Contractors and their Functions

Environmental Matters

Management & Administrative Staff	56	20.82	%
Sales	19	7.06	%
Technical & Engineering Staff	32	11.90	%
Production Staff	40	14.87	%
Drivers & Heavy Equipment Operators	63	23.42	%
Sub-Total	210	78.07	%
Independent Contractors	59	21.93	%
Total	269	100.00	%

~~We are obliged to comply with environmental protection laws and~~As ~~regulations~~required ~~promulgated~~ by ~~the~~applicable ~~Ministry~~PRC oflaw, ~~Construction~~we ~~and~~have ~~the~~entered ~~State Environmental~~into ~~Protection~~employment ~~Administration.~~contracts ~~Some~~with ~~specific~~all ~~environmental~~our ~~regulations require sealed transportation of dust materials and final products~~officers, ~~closed storage~~managers ~~of sand~~ and ~~gravel, as well as reduction of noise and dust pollution on worksites and encouragement of the use of waste materials~~employees. ~~The governmental regulatory authorities conduct periodic inspections.~~ We ~~have met all the~~believe ~~requirements~~that inwe ~~the~~maintain ~~past~~a ~~inspections.~~satisfactory Weworking ~~are~~relationship ~~one~~with ofour ~~the~~employees 10and ~~companies~~we ~~in the industry that~~ have ~~been~~not ~~awarded~~experienced ~~the~~any ~~honor~~significant oflabor ~~“Green~~disputes or ~~Concrete~~any ~~Producer”~~difficulty byin ~~the PRC~~recruiting ~~government~~staff.

~~Regulation~~In addition, we are required by PRC law to cover employees in China with various types of social insurance and believe that we are in material compliance with the relevant laws.

~~The company has been in compliance with all registrations and~~Insurance requirements for the issuance and maintenance of all licenses and certificates required by the applicable governing authorities, including the Ministry of Construction and the Beijing Administration of Industry & Commerce. The Ministry of Construction awards Level II and Level III qualifications to concrete producers in the PRC construction industry, based on criteria such as production capacity, technical qualification, registered capital and capital equipment, as well as performance on their past projects. Level II companies are licensed to produce concrete of all strength levels as well as special concretes, and Level III producers are licensed to produce concrete with strength level C60 and below. We are currently a Level II concrete producer.

~~Additionally,~~We believe ~~to make improvements at~~ our ~~currently~~insurance ~~existing plant,~~coverage weis docustomary ~~not~~and ~~need~~standard ~~to apply~~ for ~~regulatory~~companies ~~approval. However, in order to build new concrete plants, we need to (i) apply for a business license from the local Administration~~ of ~~Industry~~comparable ~~and~~size ~~Commerce,~~in ~~(ii)~~comparable ~~receive~~industries ~~environmental approval from the local Environmental Protection Bureau~~ in ~~the relevant district area, and (iii) apply for an Industry Qualification Certificate from the local Municipal Construction Committee~~China. ~~The time estimated to receive each of these approvals is approximately one month. In the past, we have not been rejected by any of these three regulators for approval.~~

~~Our Labor Force~~ Proposed Re-domicile

AsOn September 26, 2018, we filed a definitive proxy statement to change our place of ~~June~~incorporation ~~30,~~from ~~2017~~Nevada to the Cayman Islands. The re-domicile is expected to involve the Company’s merger with a newly formed subsidiary, as a result of which we ~~employed~~will ~~322~~become ~~full-time~~a ~~employees~~wholly owned subsidiary of a Cayman Islands holding company (“CADC Cayman”). ~~The~~It is ~~following~~expected ~~table~~that ~~sets~~each ~~forth~~outstanding share of common stock of the ~~number~~Company will be converted into the right to receive one ordinary share of ~~our~~CADC ~~full-time~~Cayman, ~~employees~~which will be issued by ~~function~~CADC Cayman in connection with the merger pursuant to a registered offering. Following the merger, CADC Cayman, together with its subsidiaries, is expected to own and continue to conduct the Company’s business in substantially the same manner as is currently being conducted by the Company and its subsidiaries. While CADC Cayman will be taxed as a United States corporation, it is expected to qualify as a foreign private issuer for purposes of ~~June~~its 30reporting obligations with the SEC, ~~2017~~which we expect will reduce our compliance operating costs. The ordinary shares of CADC Cayman are expected to be listed on the NASDAQ Stock Market.

~~Employees/Independent Contractors~~ Restatement and ~~their~~Independent ~~Functions~~ Investigation

Management & Administrative Staff	75	23.29%
Sales	24	7.45%
Technical & Engineering Staff	31	9.63%
Production Staff	31	9.63%
Drivers & Heavy Equipment Operators	79	24.53%
Sub-Total	240	74.53%
Independent Contractors	82	25.47%
Total	322	100.00%

On October 6, 2018, the Audit Committee of the Board of Directors of the Company, after consultation with the Company’s then independent registered public accounting firm, Friedman LLP (“Friedman”) concluded, that the Company’s audited financial statements at and for the period ended June 30, 2017 contained in the Company’s Annual Reports on Form 10-K originally filed with the SEC on September 28, 2018 as well as the unaudited financial statements at and for the periods ended March 31, 2018, December 31, 2017 and September 30, 2017 contained in the Company’s Quarterly Reports on Form 10-Q originally filed on November 15, 2017, February 13, 2018 and May 15, 2018, respectively, should no longer be relied upon. The Company’s review of the above mentioned filings revealed that the financial statements in such filings contained errors primarily as a result of omission of certain contingencies.

16As a result of such review, the Company has decided to restate the financial statements for the fiscal year ended June 30, 2017 as well as those for the fiscal quarters ended March 31, 2018, December 31, 2017 and September 30, 2017.

As a ~~required~~result byof ~~applicable~~the ~~PRC~~errors ~~law~~described above, wemanagement ~~have~~has ~~entered~~concluded ~~into employment~~that ~~contracts~~the ~~with~~Company’s ~~all~~internal ~~our~~control ~~officers,~~over ~~managers~~financial reporting and ~~employees.~~its Wedisclosure ~~believe that~~controls weand ~~maintain~~procedures awere ~~satisfactory~~not ~~working~~effective ~~relationship~~as ~~with~~of ~~our~~the ~~employees~~ends ~~and~~of ~~we have~~each ~~not~~of ~~experienced~~the ~~any~~applicable ~~significant~~restatement ~~labor disputes or any difficulty in recruiting staff~~periods.

~~In addition, we are required by PRC law to cover employees in China with various types of social insurance and believe that we are in material compliance with the relevant laws.~~12

~~Insurance~~In connection with above finding, the Audit Committee commenced an independent investigation into the reasons that led to the Company’s conclusion that the previously filed financials should no longer be relied upon. Specially, the Audit Committee engaged an independent investigation team to investigate the circumstances surrounding errors in Company’s financial statements, which primarily resulted from the omission of certain actual and contingent legal liabilities. The investigation concluded in mid-November 2018. The investigation team found several reasons that appear to have caused, or contributed to, the failures to promptly identify and disclose the legal proceedings and contingencies, including, 1) the Head of the Legal Department’s significant lack of understanding of the important of timely disclosure of legal proceedings and the Legal Department’s problematic decision-making process with regard to reporting of legal proceedings; 2) the Company’s lack of accounting personnel trained in U.S. GAAP; 3) the Company’s need for a full-time CFO; 4) the ongoing lack of communication and coordination between executive management and the various departments within the Company; and 5) the Company’s failures to timely address significant deficiencies and material weaknesses in the Company’s internal control over financial reporting.

WeAs ~~believe~~of ~~our~~the ~~insurance~~date ~~coverage~~of this Annual Report, the Company is ~~customary~~in the process of conducting a comprehensive review of the issues identified by the investigation team and ~~standard~~intends ~~for~~to ~~companies~~take ofall ~~comparable~~remedial ~~size~~measures inrecommended ~~comparable~~by ~~industries~~the Audit Committee within its resources to cure the material weaknesses in ~~China~~its internal and disclosure control procedures.

~~Item~~Matters relating ~~1A.~~to ~~Risk~~or ~~Factors~~arising from the Audit Committee investigation and the associated material weaknesses identified in our internal control over financial reporting, including adverse publicity, have caused us to incur significant legal, accounting and other professional fees and other costs, have exposed us to greater risks associated with other civil litigation, regulatory proceedings and government enforcement actions, have diverted resources and attention that would otherwise be directed toward our operations and implementation of our business strategy and may have impacted our ability to attract and retain customers, employees and vendors.

~~An investment in our common stock involves a high degree of~~Item ~~risk~~1A. ~~You~~Risk should carefully consider the risks described below, together with all of the other information included in this report, before making an investment decision. If any of the following risks actually occurs, our business, financial condition or results of operations could suffer. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment. Factors

~~RISKS~~An investment ~~RELATED~~in TOour ~~OUR~~common ~~BUSINESS~~stock involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information included in this report, before making an investment decision. If any of the following risks actually occurs, our business, financial condition or results of operations could suffer. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

~~Our~~RISKS RELATED ~~business~~TO isOUR ~~subject to the risk of supplier concentration.~~ BUSINESS

~~Our~~We ~~top~~may five suppliers provide approximately 47.5% of the sourcing of the raw materials for our concrete production business for the year ended June 30, 2017. As a result of this concentration in our supply chain, our business and operations would be ~~negatively~~exposed ~~affected if any of our key suppliers were~~ to ~~experience~~liability ~~significant disruption affecting the price, quality,~~due availability or timely delivery of their products. The partial or complete loss of one of these suppliers, or a significant adverse change in our relationship with any of these suppliers, could result in lost revenue, added costs and distribution delays that could harm our business and customer relationships. In addition, concentration in our supply chain can exacerbate our exposure to ~~risks associated with~~ the ~~termination~~legal byproceedings ~~key~~involving ~~suppliers~~Xin ~~of our distribution agreements or any adverse change in the terms of such agreements, which could have an adverse impact on our revenues and profitability~~Ao.

WeAs ~~may~~of ~~experience~~June ~~major~~30, ~~accidents~~2018, Xin Ao was subject to several civil lawsuits with potential judgments in the ~~course~~amount of ~~our~~approximately $14.2 million and the likelihood of ~~operations~~the outcome of some of these lawsuits cannot be determined as of the date of this report. These lawsuits involved with the Company were mainly due to the personal guarantees by Mr. Xianfu Han, and Mr. Weili He, the Company’s shareholders and officers, which ~~may~~they ~~cause~~are ~~significant~~also ~~property~~the ~~damage~~shareholders of Xin Ao. Because Mr. Han and Mr. He are the controlling shareholders of Xin Ao and we are a U.S. public company, the plaintiffs included Xin Ao in the legal proceedings. Although Xin Ao was not involved in some of the lawsuits, it was named as co-defendant. In the event the companies Mr. Han and Mr. He previously provided personal guarantees too were involved in any new legal proceedings, Xin Ao may have additional exposure in such ~~injuries~~proceedings in the future. Although Mr. Han and Mr. He provided indemnity to Xin Ao pursuant to certain indemnification agreements to indemnify Xin Ao for the outstanding claims, Xin Ao may have exposure, to the extent there are any new or additional claims, Xin Ao may have additional exposure. In the event Mr. Han or Mr. He defaults on their Indemnification Agreements or are unable to fulfill their obligations under the Indemnification Agreements, Xin Ao may have exposure. Any Increase in the Company’s accrued liability for litigation could negatively affect our stockholders’ equity working capital and results of operations in the future.

~~Significant industry-related accidents and natural disasters~~Our ~~may~~business ~~cause~~is ~~interruptions~~subject to ~~various~~the ~~parts~~risk of ~~our~~supplier ~~operations, or could result in property or environmental damage, increase in operating expenses or loss of revenue~~concentration. The occurrence of such accidents and the resulting consequences may not be covered adequately, or at all, by the insurance policies we carry. In accordance with customary practice in China, we do not carry any business interruption insurance or third party liability insurance for personal injury or environmental damage arising from accidents on our property or relating to our operations other than our automobiles. Losses or payments incurred may have a material adverse effect on our operating performance if such losses or payments are not fully insured.

Our top ~~planned~~five ~~expansion~~suppliers ~~and~~provide ~~technical~~approximately ~~improvement~~36.3% ~~projects could~~of bethe ~~delayed~~sourcing orof ~~adversely~~the ~~affected~~raw bymaterials for our concrete production business for the year ended June 30, ~~among~~2018. ~~other~~As ~~things~~a result of this concentration in our supply chain, ~~failures~~our business and operations would be negatively affected if any of our key suppliers were to experience significant disruption affecting the price, quality, availability or timely ~~receive~~delivery ~~regulatory~~of ~~approvals~~their products. The partial or complete loss of one of these suppliers, ~~difficulties~~or a significant adverse change in ~~obtaining~~our ~~sufficient~~relationship with ~~financing~~any of these suppliers, could result in lost revenue, added costs and distribution delays that could harm our business and ~~technical~~customer ~~difficulties~~relationships. In addition, orconcentration ~~human~~in our supply chain can exacerbate our exposure to risks associated with the termination by key suppliers of our distribution agreements or ~~other~~any ~~resource~~adverse ~~constraints.~~change in the terms of such agreements, which could have an adverse impact on our revenues and profitability.

We may ~~intend~~experience tomajor ~~expand~~accidents ~~new~~in ~~production facilities during~~ the ~~next few~~course ~~years.~~of ~~The costs projected for~~ our ~~planned~~operations, ~~expansion~~which ~~and technical improvement projects and expansion~~ may ~~exceed~~cause ~~those~~significant ~~originally~~property ~~contemplated. Costs~~damage ~~savings~~ and ~~other~~personal ~~economic benefits expected from these projects may not materialize as a result of any such project delays, cost overruns or changes in market circumstances~~injuries.

17Significant industry-related accidents and natural disasters may cause interruptions to various parts of our operations, or could result in property or environmental damage, increase in operating expenses or loss of revenue. The occurrence of such accidents and the resulting consequences may not be covered adequately, or at all, by the insurance policies we carry. In accordance with customary practice in China, we do not carry any business interruption insurance or third party liability insurance for personal injury or environmental damage arising from accidents on our property or relating to our operations other than our automobiles. Losses or payments incurred may have a material adverse effect on our operating performance if such losses or payments are not fully insured.

To make improvements at our currently existing plant, we do not need to apply for regulatory approval. However, in order to build a new concrete plant, we will need to (i) apply for a business license from the local Administration of Industry and Commerce, (ii) apply for an Industry Qualification Certificate from the local Municipal Construction Committee, and (iii) receive environmental approval from the local Environmental Protection Bureau in the relevant district area. There is no guarantee that we will be able to obtain these regulatory approvals in a timely manner or at all. 13

~~Additionally, in order to construct a new concrete plant, we~~Our ~~may~~planned ~~need~~expansion toand ~~apply~~technical ~~for~~improvement aprojects ~~short~~could ~~term loan from a local commercial bank to~~ be ~~used for~~delayed ~~working~~or ~~capital.~~adversely ~~Because~~affected ~~the~~by, ~~lending~~among ~~policies~~other ~~of the local commercial banks are subject to change~~things, ~~there~~failures ~~is no guarantee that we will be able~~ to ~~obtain~~ ~~approval~~receive ~~for~~regulatory ~~such~~approvals, adifficulties ~~loan~~in ~~with~~obtaining ~~conditions~~sufficient ~~favorable~~financing, totechnical usdifficulties, inor ahuman ~~timely~~or ~~manner~~other orresource ~~at all~~constraints.

~~Failure~~We intend to ~~obtain~~expand ~~intended~~new ~~economic~~production ~~benefits~~facilities ~~from~~during ~~these~~the ~~new plants~~next ~~and~~few ~~technical~~years. ~~improvements~~The ~~projects,~~costs ~~either~~projected ~~due~~for toour ~~cost~~planned ~~overruns,~~expansion ~~our~~and technical ~~failure~~improvement toprojects ~~obtain~~and ~~the~~expansion ~~necessary~~may ~~regulatory~~exceed ~~approvals~~those ororiginally ~~our~~contemplated. ~~failure~~Costs tosavings ~~obtain~~and other economic benefits expected ~~necessary~~from ~~loan~~these ~~financing~~projects onmay ~~terms~~not ~~favorable~~materialize toas usa ~~could~~result ~~adversely~~of ~~affect~~any ~~our business~~such project delays, ~~financial~~cost ~~condition~~overruns ~~and~~or ~~operating~~changes ~~performances.~~in market circumstances.

WeTo make ~~cannot~~improvements ~~assure~~at ~~you~~our ~~that~~currently ~~our~~existing ~~growth~~plant, ~~strategy~~we do not need to apply for regulatory approval. However, in order to build a new concrete plant, we will beneed to (i) apply for a business license from the local Administration of Industry and Commerce, ~~successful~~(ii) apply for an Industry Qualification Certificate from the local Municipal Construction Committee, and (iii) receive environmental approval from the local Environmental Protection Bureau in the relevant district area. There is no guarantee that we will be able to obtain these regulatory approvals in a timely manner or at all.

One of our strategies is to grow through increasing the distribution and sales of our products by penetrating existing markets in China and entering new geographic markets in China. However, many obstacles to entering such new markets exist including, but not limited to, competition from established companies in such existing markets in the China. We ~~cannot,~~ ~~therefore,~~cannot assure you that ~~we will be able to successfully overcome such obstacles and establish~~ our ~~products in any additional markets. Our inability to implement this~~ growth strategy ~~successfully~~will ~~may~~be ~~have a negative impact on our growth, future financial condition, results of operations or cash flows~~successful.

IfOne weof ~~fail~~our strategies is to ~~effectively~~grow ~~manage~~through increasing the distribution and sales of our ~~growth~~products by penetrating existing markets in China and ~~expand~~entering new geographic markets ~~our~~in ~~operations~~China. However, many obstacles to entering such new markets exist including, but not limited to, competition from established companies in such existing markets in China. We cannot, therefore, assure you that we will be able to successfully overcome such obstacles and establish our ~~business~~products in any additional markets. Our inability to implement this growth strategy successfully may have a negative impact on our growth, future financial condition, results of operations ~~and prospects~~or ~~could~~cash ~~be adversely affected~~flows.

~~Our~~If we ~~future~~fail ~~success~~to ~~depends~~effectively onmanage our ~~ability~~growth toand expand our ~~business~~ tooperations, ~~address growth in demand for~~ our ~~products~~business, ~~and~~financial ~~services. In order to maximize potential growth in our current and potential markets~~condition, weresults ~~believe~~of ~~that we must expand our manufacturing and marketing~~ operations. ~~Our ability to~~and ~~accomplish~~prospects ~~these~~could ~~goals~~be isadversely ~~subject to significant risks and uncertainties, including:~~ affected.

•Our future ~~the~~success ~~need~~depends ~~for~~on ~~additional~~our ~~funding~~ability to expand our business to address growth in demand for our products and services. In order ~~construct~~to ~~additional~~maximize ~~manufacturing~~potential ~~facilities~~growth in our current and potential markets, ~~which~~we believe that we ~~may~~must beexpand ~~unable~~our tomanufacturing ~~obtain~~and marketing onoperations. ~~reasonable~~Our ~~terms~~ability orto ataccomplish ~~all;~~these goals is subject to significant risks and uncertainties, including:

•● ~~delays~~the ~~and~~need ~~cost~~for ~~overruns~~additional asfunding ato ~~result of~~construct aadditional ~~number~~manufacturing ~~of factors~~facilities, ~~many of~~ which we may be ~~beyond~~unable ~~our~~to ~~control,~~obtain ~~such~~on ~~as problems~~reasonable ~~with~~terms ~~equipment vendors and manufacturing services provided by third-party manufacturers~~ or ~~subcontractors;~~at all;

•● ~~our~~delays ~~receipt~~and cost overruns as a result of ~~any~~a ~~necessary government~~number ~~approvals~~of orfactors, ~~permits~~many ~~that~~of which may be ~~required~~beyond toour ~~expand~~control, ~~our~~such ~~operations~~as ~~in a~~problems ~~timely~~with ~~manner~~equipment orvendors atand ~~all~~manufacturing services provided by third-party manufacturers or subcontractors;

•● ~~diversion~~our receipt of ~~significant~~any ~~management attention~~necessary ~~and~~government ~~other~~approvals ~~resources;~~or ~~and~~permits that may be required to expand our operations in a timely manner or at all;

•● ~~failure~~diversion toof ~~execute~~significant ~~our~~management ~~expansion~~attention ~~plan effectively.~~and other resources; and

To● ~~accommodate~~failure ~~our growth, we will need~~ to ~~implement~~execute ~~a variety of new and upgraded operational and financial systems, procedures, and controls, including improvements to~~ our ~~accounting~~expansion ~~and~~plan ~~other internal management systems, by dedicating additional resources to our reporting and accounting function, and improvements to our record keeping and contract tracking system~~effectively. We will also need to recruit more personnel and train and manage our growing employee base. Furthermore, our management will be required to maintain and expand our relationships with our existing customers and find new customers for our services. There is no guarantee that our management can succeed in maintaining and expanding these relationships.

If we encounter any of the risks described above, or if we are otherwise unable to establish or successfully operate additional capacity or increase our output, we may be unable to grow our business and revenues, reduce our operating costs, maintain our competitiveness or improve our profitability and, consequently, our business, financial condition, results of operations, and prospects will be adversely affected. 14

18To accommodate our growth, we will need to implement a variety of new and upgraded operational and financial systems, procedures, and controls, including improvements to our accounting and other internal management systems, by dedicating additional resources to our reporting and accounting function, and improvements to our record keeping and contract tracking system. We will also need to recruit more personnel and train and manage our growing employee base. Furthermore, our management will be required to maintain and expand our relationships with our existing customers and find new customers for our services. There is no guarantee that our management can succeed in maintaining and expanding these relationships.

If we encounter any of the risks described above, or if we are otherwise unable to ~~accurately~~establish ~~estimate~~or ~~the~~successfully ~~overall~~operate ~~risks~~additional capacity or ~~costs~~increase ~~associated~~our ~~with~~output, awe ~~project~~may onbe ~~which~~unable weto ~~are~~grow ~~bidding~~our onbusiness and revenues, wereduce ~~may~~our ~~achieve~~operating acosts, maintain our competitiveness ~~profit~~or ~~lower~~improve ~~than~~our ~~anticipated~~profitability orand, ~~even~~consequently, ~~incur~~our abusiness, ~~loss~~financial oncondition, ~~the~~results ~~contract.~~of operations, and prospects will be adversely affected.

~~Substantially~~If we ~~all of our revenues and contract backlog~~ are ~~typically~~ ~~derived~~unable ~~from fixed unit price contracts. Fixed unit price contracts require us~~ to ~~perform~~accurately estimate the ~~contract~~overall ~~for~~risks aor ~~fixed unit price irrespective of our actual~~ costs. Asassociated awith ~~result, we realize~~ a ~~profit~~project on ~~these~~which ~~contracts only if~~ we ~~successfully~~ ~~estimate our costs and then successfully control actual costs and avoid cost overruns. If our cost estimates for a contract~~ are ~~inaccurate~~bidding on, ~~or if~~ we ~~do not execute the contract within our cost estimates, then cost overruns~~ may achieve ~~cause~~a ~~the~~profit ~~contract~~lower ~~not~~than toanticipated ~~be as profitable as we expected,~~ or ~~may~~even ~~cause us to~~ incur ~~losses.~~a ~~This,~~loss inon ~~turn,~~the ~~could negatively affect our cash flow, earnings and financial position~~contract.

~~The~~Substantially all ~~costs~~of ~~incurred~~our revenues and ~~gross~~contract ~~profit~~backlog ~~realized~~are ontypically ~~those~~derived from fixed unit price contracts ~~can~~. ~~vary,~~Fixed ~~sometimes~~unit ~~substantially,~~price ~~from~~contracts require us to perform the ~~original~~contract ~~projections~~for ~~due~~a tofixed unit price irrespective of our actual costs. As a result, we realize a profit on these ~~variety~~contracts ofonly ~~factors~~if we successfully estimate our costs and then successfully control actual costs and avoid cost overruns. If our cost estimates for a contract are inaccurate, ~~including~~or if we do not execute the contract within our cost estimates, ~~but~~then cost overruns may cause the contract not ~~limited~~to be as profitable as we expected, or may cause us to: incur losses. This, in turn, could negatively affect our cash flow, earnings and financial position.

• onsite conditions that differ from those assumed in the original bid; • delays caused by weather conditions; • later contract start dates than expected when we bid on the contract; • contract modifications creating unanticipated The costs ~~not~~incurred ~~covered by change orders; • changes in availability, proximity~~ and ~~costs~~gross ofprofit ~~materials,~~realized ~~including~~on ~~steel,~~those ~~concrete,~~contracts ~~aggregate~~can ~~and other construction materials (such as stone~~vary, ~~gravel~~sometimes ~~and sand)~~substantially, asfrom ~~well as fuel and lubricants for our equipment; • availability and skill level of workers in~~ the ~~geographic~~original ~~location~~projections ofdue to a ~~project;~~variety •of ~~our~~factors, ~~suppliers’~~including, orbut ~~subcontractors’~~not ~~failure~~limited to perform; • fraud or theft committed by our employees; • mechanical problems with our machinery or equipment; • citations issued by governmental authorities • difficulties in obtaining required governmental permits or approvals; • changes in applicable laws and regulations; and • claims or demands from third parties alleging damages arising from our work or from the project of which our work is part.:

~~Economic~~● ~~downturns~~onsite orconditions ~~reductions~~that differ from those assumed in ~~government~~the ~~funding~~original bid; ● delays caused by weather conditions; ● later contract start dates than expected when we bid on the contract; ● contract modifications creating unanticipated costs not covered by change orders; ● changes in availability, proximity and costs of ~~infrastructure~~ ~~projects~~materials, ~~could~~including ~~significantly~~steel, ~~reduce~~concrete, aggregate and other construction materials (such as stone, gravel and sand), as well as fuel and lubricants for our ~~revenues.~~equipment; ● availability and skill level of workers in the geographic location of a project; ● our suppliers’ or subcontractors’ failure to perform; ● fraud or theft committed by our employees; ● mechanical problems with our machinery or equipment; ● citations issued by governmental authorities ● difficulties in obtaining required governmental permits or approvals; ● changes in applicable laws and regulations; and ● claims or demands from third parties alleging damages arising from our work or from the project of which our work is part.

Our business is highly dependent on the amount of infrastructure work funded by various governmental entities, which, in turn, depends on the overall condition of the economy, the need for new or replacement infrastructure, the priorities placed on various projects funded by governmental entities and national or local government spending levels. Decreases in government funding of infrastructure projects could decrease the number of civil construction contracts available and limit our ability to obtain new contracts, which could reduce our revenues and profits. 15

~~The~~Economic downturns ~~worldwide~~or ~~recession~~reductions ~~and~~in ~~credit~~government ~~crisis~~funding of infrastructure projects could ~~impact~~ significantly reduce our ~~business~~revenues.

~~The~~Our business ~~tightening~~is ofhighly ~~credit~~dependent inon ~~financial~~the ~~markets~~amount ~~and~~of ~~the~~infrastructure ~~general economic~~work ~~downturn~~funded ~~could~~by ~~adversely~~various ~~affect~~governmental ~~the~~entities, ~~ability~~which, ofin ~~our customers~~turn, ~~and~~depends ~~suppliers~~on ~~to obtain~~ the ~~financing~~overall ~~they~~condition ~~need~~of tothe ~~make purchases from us~~economy, ~~to perform~~the ~~their~~need ~~obligations~~for ~~under~~new ~~agreements~~or ~~with~~replacement usinfrastructure, orthe ~~even~~priorities toplaced ~~continue~~on ~~their~~various projects ~~operations.~~funded ~~The~~by ~~credit~~governmental ~~tightening~~entities and ~~decreased~~national ~~cash~~or ~~availability~~local ~~could~~government ~~also result~~spending inlevels. anDecreases ~~increase~~ in ~~cancellation~~government funding of ~~orders for our products and services~~infrastructure ~~and/or~~projects acould decrease ~~in demand for our products and services in~~ the ~~markets~~number ~~in which~~of wecivil ~~operate.~~construction ~~While~~contracts weavailable ~~believe that the effects of the recession~~ and ~~credit crisis~~limit ~~have~~our ~~abated,~~ability ~~we are unable~~ to ~~predict~~obtain ~~potential~~new ~~future~~contracts, ~~economic~~which ~~conditions~~could ~~and~~reduce ~~disruptions in financial markets or their effect on~~ our ~~business and~~revenues ~~results of operations,~~ and ~~the consequences may be materially adverse~~profits.

19Our concrete production plant in Beijing may be subject to a general city rezoning plan which, if implemented in the future, may require us to relocate or possibly permanently shut down certain of this plant.

Our concrete production plant in Beijing may be subject to a general city rezoning plan which has been prepared by the Beijing municipal government. Under the rezoning plan, ifit is intended that the properties where this plant is located will be rezoned from industrial to commercial use. If and when implemented in ~~the~~respect ~~future~~of those properties, ~~may~~the ~~require~~rezoning plan may require us to vacate these properties and relocate orthe ~~possibly~~plant. ~~permanently~~In ~~shut~~the ~~down~~event we are required to vacate the plant, we would implement certain strategies to minimize any loss of ~~this~~production capacity during relocation. There can be no assurance that our strategies to deal with the relocation of the facilities can be implemented, or that such strategies can be implemented before we are required to vacate the plant due to the proposed general city rezoning plan. If we are required to relocate the plant, our results of operations and financial condition may be materially and adversely affected.

Our ~~concrete production plant in Beijing may be subject to a~~ ~~general~~exposure ~~city rezoning plan which has been prepared by the Beijing municipal government. Under the rezoning plan, it is intended that the properties where this plant is located will be rezoned from industrial~~ to ~~commercial~~financially ~~use.~~troubled Ifcustomers ~~and when~~or ~~implemented~~suppliers incould ~~respect~~harm of those properties, the rezoning plan may require us to vacate these properties and relocate the plant. In the event we are required to vacate the above properties, we would implement certain strategies to minimize any loss of production capacity during relocation. There can be no assurance that our ~~strategies to deal with the relocation of the facilities can be implemented~~business, or that such strategies can be implemented before we are required to vacate the above properties due to the proposed general city rezoning plan. If we are required to relocate the facilities, our results of operation and financial condition ~~may be materially~~ and ~~adversely~~operating ~~affected~~results.

~~Our~~We ~~exposure~~produce, sell and deliver ready-mix concrete, and rely on suppliers, that have in the past and may in the future experience financial difficulties, particularly in light of recent conditions in the credit markets and the overall economy that affected access to ~~financially~~capital ~~troubled~~and liquidity. As a result, we devote significant resources to monitor receivables and inventory balances with certain of our customers. If our customers experience financial difficulty, we could have difficulties recovering amounts owed to us from these customers, or demand for ~~suppliers~~our services from these customers could ~~harm~~decline. Furthermore, the government tightened monetary policy in order to regulate inflation, which in turn led to delayed payment on our ~~business~~housing construction projects. Due to concern over inflation, ~~financial~~the ~~condition~~Chinese government began to tighten its monetary policy from October of 2010, which affected the real estate and construction industries adversely. As a result, our accounts receivable increased and the provision for doubtful accounts also increased. Some of our customers appeared to suffer from declining business and shortage in cash. The allowance for doubtful accounts increased to approximately $19.3 million as of June 30, 2018, compared to approximately $15.8 million as of June 30, 2017. In fact, our provision for doubtful accounts, as a percentage of our overall accounts receivable, has increased from approximately 25% as of June 30, 2017, to approximately 31% as of June 30, 2018. The inability to collect on our outstanding accounts receivable could adversely affect our operating ~~results~~cash flows and reduce our working capital. As a result, we may suffer material write-offs on our accounts receivable. The inability of our suppliers to supply us with needed raw materials could adversely affect our production process and therefore, we may not be able to fulfill our contract arrangements with customers.

We ~~produce, sell and deliver ready-mix concrete, and~~ rely on ~~suppliers,~~ ~~that~~internal ~~have~~models ~~in the past and may in the future experience financial difficulty, particularly in light of recent conditions in the credit markets and the overall economy that affected access~~ to ~~capital~~manage ~~and liquidity. As a result~~risk, we ~~devote significant resources~~ to ~~monitor~~provide ~~receivables~~accounting ~~and~~estimates inventory balances with certain of our customers. If our customers experience financial difficulty, we could have difficulty recovering amounts owed to us from these customers, or demand for our services from these customers could decline. Furthermore, the government tightened monetary policy in order to regulate inflation, which in turn led to delayed payment on our housing construction projects. Due to concern over inflation, the Chinese government began to tighten its monetary policy from October of 2010, which affected the real estate and ~~construction industries adversely. As a result, our accounts receivable increased and the provision for doubtful accounts expense also increased. Some of our customers appeared~~ to ~~suffer~~ ~~from~~make ~~declining~~other business ~~and shortage in cash~~decisions. ~~The~~Our ~~allowance~~results for doubtful accounts increased to approximately $15.8 million as of June 30, 2017, compared to approximately $11.5 million as of June 30, 2016. In fact, our provision for doubtful accounts, as a percentage of our overall accounts receivable, has increased from approximately 22% as of June 30, 2016, to approximately 25% as of June 30, 2017. The inability to collect on our outstanding accounts receivable could ~~adversely affect our operating cash flows and reduce our working capital.~~ Asbe ~~a result, we may suffer material write-offs on our accounts receivable. The inability of our suppliers to supply us with needed raw material could~~ adversely ~~affect~~ ~~our~~affected ~~production~~if ~~process~~those ~~and~~models ~~therefore,~~do ~~we may~~ not beprovide ~~able~~reliable toestimates ~~fulfill~~or ~~our contract~~predictions ~~arrangements~~of ~~with~~future ~~customers~~activity.

We rely heavily on internal models in making a variety of decisions crucial to ~~manage~~the ~~risk~~successful operation of our business, toincluding ~~provide~~the allowance for doubtful accounts and other accounting estimates. It is therefore important that our models are accurate, and any failure in this regard could have a material adverse effect on our results. Models are inherently imperfect predictors of actual results because they are based on historical data available to ~~make~~us and our assumptions about factors such as credit demand, payment rates, default rates, delinquency rates and other ~~business~~factors ~~decisions~~that may overstate or understate future experience. Our ~~results~~models could beproduce unreliable results for a ~~adversely~~number ~~affected~~of ifreasons, ~~those~~including the limitations of historical data to predict results due to unprecedented events or circumstances, invalid or incorrect assumptions underlying the models, dothe ~~not~~need ~~provide~~for ~~reliable~~manual ~~estimates~~adjustments in response to rapid changes in economic conditions, incorrect coding of the models, incorrect data being used by the models or inappropriate application of a model to ~~predictions~~products or events outside of ~~future~~the ~~activity~~model’s intended use. In particular, models are less dependable when the economic environment is outside of historical experience, as has been the case recently. Due to the factors described above and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, we may, among other things, experience actual write-offs that exceed our estimates and which are possibly greater than our allowance for doubtful accounts, or which require material adjustments to the allowance. Unanticipated and excessive default and write-off experience can adversely affect our profitability and financial condition and adversely affect our ability to finance our business.

We rely heavily on internal models in making a variety of decisions crucial to the successful operation of our business, including allowances for doubtful accounts and other accounting estimates. It is therefore important that our models are accurate, and any failure in this regard could have a material adverse effect on our results. Models are inherently imperfect predictors of actual results because they are based on historical data available to us and our assumptions about factors such as credit demand, payment rates, default rates, delinquency rates and other factors that may overstate or understate future experience. Our models could produce unreliable results for a number of reasons, including the limitations of historical data to predict results due to unprecedented events or circumstances, invalid or incorrect assumptions underlying the models, the need for manual adjustments in response to rapid changes in economic conditions, incorrect coding of the models, incorrect data being used by the models or inappropriate application of a model to products or events outside of the model’s intended use. In particular, models are less dependable when the economic environment is outside of historical experience, as has been the case recently. Due to the factors described above and in "Management’s Discussion and Analysis of Financial Condition and Results of Operations", we may, among other things, experience actual charge-offs that exceed our estimates and which are possibly greater than our allowance for doubtful accounts, or which require material adjustments to the allowance. Unanticipated and excessive default and charge-off experience can adversely affect our profitability and financial condition and adversely affect our ability to finance our business. 16

20Our business will be damaged if project contracts with the Chinese government, for which we may act as a subcontractor are cancelled.

~~Our~~We do ~~business~~not ~~will~~enter beinto ~~damaged~~any ifcontracts ~~project~~directly with the Chinese government. For contracts ~~with~~ that are funded by the Chinese government, we ~~for~~place ~~which~~bids weand ~~may~~enter ~~act~~into assubcontracts with the private entity prime contractor. A sudden cancellation of a ~~subcontractor~~prime ~~are~~contract, ~~cancelled~~and in turn our subcontract, could cause our equipment and work crews to remain idle for a significant period of time until other comparable work becomes available. This idle time could have a material adverse effect on our business and results of operations.

~~We do not enter into any contracts directly with the Chinese~~Our ~~government.~~industry ~~For~~is ~~contracts~~highly ~~that are funded by the Chinese government~~competitive, wewith ~~place bids~~numerous ~~and~~larger ~~enter~~companies ~~into subcontracts~~ with ~~the~~greater ~~private~~resources ~~entity~~competing ~~prime~~with ~~contractor. A sudden cancellation of a prime contract~~us, and ~~in turn~~ our ~~subcontract,~~failure ~~could cause our equipment and work crews~~ to ~~remain~~compete effectively ~~idle~~could ~~for~~reduce athe ~~significant~~number ~~period~~ of ~~time~~ ~~until~~new ~~other~~contracts ~~comparable~~awarded ~~work~~to ~~becomes~~us ~~available.~~or ~~This~~adversely ~~idle~~affect ~~time~~our ~~could~~margins ~~have a material adverse effect~~ on ~~our~~contracts ~~business and results of operations~~awarded.

Our competition ~~industry~~includes isa ~~highly~~number of state-owned and large private PRC-based manufacturers and distributors that produce and sell products similar to ours. We compete primarily on the basis of quality, technological innovation and price. Essentially all of the contracts on which we bid are awarded through a competitive bid process, with ~~numerous~~awards ~~larger~~generally being made to the lowest bidder, ~~companies~~though other factors such as shorter schedules or prior experience with ~~greater~~the ~~resources~~customer ~~competing~~are often just as important. Within our markets, we compete with usmany national, regional and ~~our~~local ~~failure~~state-owned toand ~~compete~~private construction firms. Some of these competitors have achieved ~~effectively~~greater ~~could~~market ~~reduce~~penetration ~~the~~or have greater financial and other resources than us. In addition, there are a number of ~~new~~larger ~~contracts~~national companies ~~awarded~~in toour industry that could potentially establish a presence in our markets and compete with us orfor ~~adversely~~contracts. As a result, ~~affect~~we ~~our~~may need to accept lower contract margins onin ~~contracts~~order ~~awarded~~to compete against these competitors. If we are unable to compete successfully in our markets, our relative market share and profits could be reduced.

~~Our competition includes a number of state-owned and large private PRC-based manufacturers and distributors that produce and sell products similar to ours.~~ We ~~compete primarily on the basis of quality, technological~~ innovation and price. Essentially all of the contracts on which we bid are awarded through a competitive bid process, with awards generally being made to the lowest bidder, though other factors such as shorter schedules or prior experience with the customer are often just as important. Within our markets, we compete with many national, regional and local state-owned and private construction firms. Some of these competitors have achieved greater market penetration or have greater financial and other resources than us. In addition, there are a number of larger national companies in our industry that could ~~potentially~~ ~~establish~~face aincreased ~~presence~~competition in our ~~markets~~principal and compete with us for contracts. As a result, we may need to accept lower contract margins in order to compete against these competitors. If we are unable to compete successfully in our markets, our relative market ~~share and profits could be reduced~~.

WeOur principal ~~could~~market, ~~face~~Beijing, ~~increased~~has ~~competition~~enjoyed stronger economic growth and a higher demand for construction than other regions of China. As a result, we believe that competitors will try to expand their sales and build up their distribution networks in our principal market. We anticipate that this trend will continue and likely accelerate. Increased competition may have a material adverse effect on our financial condition and results of operations.

Our dependence ~~principal~~on ~~market,~~subcontractors ~~Beijing, has enjoyed stronger economic growth~~ and asuppliers ~~higher demand for construction than other regions~~ of ~~China.~~materials Ascould ~~a result,~~increase weour ~~believe~~costs ~~that competitors will try to expand their sales~~ and ~~build~~impair ~~up their distribution networks in~~ our ~~principal~~ability ~~market.~~to Wecompete ~~anticipate~~on ~~that this~~contracts ~~trend~~on ~~will~~a ~~continue~~timely ~~and~~basis ~~likely~~or ~~accelerate.~~at ~~Increased~~all, ~~competition~~which ~~may~~would ~~have~~adversely ~~a material~~affect ~~adverse effect on~~ our ~~financial~~profits ~~condition~~ and ~~results~~cash ~~of operations~~flow.

~~Our~~We rely ~~dependence~~ on third-party subcontractors ~~and~~to ~~suppliers~~perform some of ~~materials~~ ~~could~~the ~~increase~~work ~~our~~on ~~costs~~many ~~and~~of ~~impair~~ our ~~ability~~contracts. toWe ~~compete~~do not bid on contracts onunless awe have ~~timely~~the ~~basis~~necessary orsubcontractors committed for the anticipated scope of the contract and at ~~all~~prices that we have included in our bid. Therefore, ~~which~~to ~~would~~the ~~adversely~~extent ~~affect~~that we cannot obtain third-party subcontractors, our profits and cash flow. will suffer.

We ~~rely on third-party subcontractors to perform some of the~~ ~~work~~may ~~on many of our contracts. We do not bid on contracts unless we~~ have ~~the necessary~~inadvertently ~~subcontractors~~violated ~~committed~~Section ~~for~~13(k) ~~the anticipated scope~~ of the ~~contract~~Exchange Act and at ~~prices~~may ~~that~~be wesubject ~~have included in our bid. Therefore,~~ to ~~the~~sanctions ~~extent~~as ~~that~~a ~~we cannot obtain third-party subcontractors, our profits and cash flow will suffer~~result.

WeSection 13(k) ~~may~~of bethe ~~exposed~~Securities toExchange ~~liabilities~~Act ~~under~~of 1934 (Section 402 of the ~~Foreign~~Sarbanes-Oxley Act of 2002, (“Sarbanes-Oxley”) provides ~~Corrupt~~that ~~Practices~~it is unlawful for a company that has a class of securities registered under Section 12 of the Exchange Act to, ~~and~~directly or indirectly, including through any ~~determination~~subsidiary, ~~that~~extend weor ~~violated~~maintain credit in the ~~Foreign Corrupt~~form ~~Practices~~of ~~Act~~a personal loan to or ~~Chinese~~for ~~anti-corruption~~any ~~law~~director or executive officer of the company. We overlooked this prohibition and Xin Ao, our VIE, inadvertently made certain advances and provided a guarantee to Beijing Lianlv Technology Group Co. Ltd., an entity controlled by Mr. Han and Mr. He our chief executive and chief financial officers. Such advance and guarantee may have violated Section 13(k). Issuers who are found to have violated Section 13(k) may be subject to civil sanctions, including injunctive remedies and monetary penalties, as well as criminal sanctions. The imposition of any of such sanctions on the Company could have a material adverse effect on our business., financial position, results of operations or cash flows.

We are subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business. Chinese anti-corruption law also strictly prohibits bribery of government officials. We have operations, agreements with third parties and make sales in China, where corruption may occur. Our activities in China create the risk of unauthorized payments or offers of payments by one of the employees, consultants, sales agents or distributors of our Company, even though these parties are not always subject to our control. It is our policy to implement safeguards to prevent these practices by our employees. However, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants, sales agents or distributors of our Company may engage in conduct for which we might be held responsible. 17

~~Violations~~We have ofidentified ~~the~~material ~~FCPA~~weaknesses orin ~~other~~our ~~anti-corruption~~internal ~~laws~~control ~~may~~over ~~result in~~financial ~~severe~~reporting, ~~criminal~~and orwe ~~civil~~cannot ~~sanctions,~~provide ~~and~~assurances wethat ~~may~~these weaknesses will be ~~subject~~effectively toremediated ~~other liabilities,~~or ~~which~~that ~~could~~additional ~~negatively~~material ~~affect~~weaknesses ~~our~~will ~~business,~~not ~~operating~~occur ~~results~~in ~~and~~the future. If our internal control over financial ~~condition.~~reporting Inor ~~addition,~~our ~~the~~disclosure ~~United~~controls ~~States~~and ~~government~~procedures are not effective, we may ~~seek~~not be able to ~~hold~~accurately report our ~~Company~~financial ~~liable~~results, ~~for~~prevent ~~successor~~fraud ~~liability~~or ~~FCPA~~file ~~violations~~our ~~committed~~periodic byreports in a timely manner, which may cause investors to lose ~~companies~~confidence in our reported financial information and which wemay ~~invest~~lead orto ~~that~~a wedecline ~~acquire.~~in our stock price.

21On October 6, 2018, the Audit Committee of the Board of Directors, after consultation with the Company’s then independent registered public accounting firm, Friedman LLP (“Friedman”) concluded, that the Company’s audited financial statements at and for the year ended June 30, 2017 contained in the Company’s Annual Report on Form 10-K originally filed with the SEC on as well the unaudited financial statements at and for the periods ended March 31, 2018, December 31, 2017 and September 30, 2017 contained in the Company’s Quarterly Reports on Form 10-Q originally filed on November 15, 2017, February 13, 2018 and May 15, 2018, respectively, should no longer be relied upon. The Company’s review of the above-mentioned filings revealed that the financial statements in such filings contained errors primarily as a result of omission of certain contingencies. As a result of such review, the Company has decided to make certain corrections to include certain contingencies disclosure in the aforementioned consolidated financial statements and notes thereto. The Company also evaluated whether any of the contingencies’ losses should be recorded in the aforementioned consolidated financial statements and recorded $1.2 million of contingent liabilities for the year ended June 30, 2018. As a result of the errors described above, management has concluded that the Company’s internal control over financial reporting and its disclosure controls and procedures were not effective as of the ends of each of the applicable restatement periods.

WeFurthermore, as ~~depend~~discussed ~~heavily~~in on“Part ~~key personnel~~II, ~~and~~Item ~~turnover~~9A. ofControls ~~key employees~~ and ~~senior~~Procedures,” our management ~~could~~has ~~harm~~identified material weaknesses in our ~~business~~internal control over financial reporting, which were not remediated as of June 30, 2018. 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 registrant’s annual or interim financial statements will not be prevented or detected on a timely basis.

~~Our~~We did ~~future~~not ~~business~~maintain ~~and~~an ~~results~~effective ofcontrol ~~operations~~environment ~~depend~~as ~~in significant~~there ~~part~~was ~~upon~~an ~~the~~insufficient ~~continued~~complement ~~contributions~~ of ~~our~~personnel ~~key~~with ~~technical~~appropriate ~~and~~accounting ~~senior management personnel~~knowledge, ~~including~~experience ~~Xianfu~~and ~~Han~~competence, ~~our~~resulting ~~Chairman~~in ~~and~~incorrect ~~Chief Executive~~application ~~Officer~~of ~~and~~accounting ~~Weili~~principles ~~He,~~generally ~~our~~accepted ~~Vice-Chairman~~in ~~and~~the ~~interim Chief Financial~~United ~~Officer.~~States ~~They~~of ~~also~~America ~~depend~~(“U.S. inGAAP”). ~~significant~~This ~~part~~material ~~upon~~weakness ~~our~~contributed ~~ability~~ to ~~attract~~the ~~and retain~~following ~~additional~~material ~~qualified~~weaknesses. ~~management,~~We ~~technical,~~did ~~operational~~not maintain ~~and~~effective ~~support personnel~~controls ~~for~~over our ~~operations~~financial close process. IfAlso, we ~~lose~~did anot ~~key~~design ~~employee,~~and ifmaintain aeffective ~~key~~controls ~~employee~~over ~~fails~~the toreview ~~perform~~of insupporting ~~his~~information orto ~~her~~determine ~~current~~the ~~position,~~completeness orand ifaccuracy weof ~~are~~the ~~not~~accounting ~~able~~for tocomplex ~~attract~~transactions, ~~and~~specifically ~~retain~~related ~~skilled~~to ~~employees~~the ~~as needed, our~~ business ~~could~~combination ~~suffer.~~that ~~Significant turnover~~occurred inon ~~our~~September ~~senior~~9, ~~management~~2016, ~~could~~which ~~significantly~~resulted ~~deplete~~in ~~the~~an ~~institutional knowledge~~incorrect ~~held~~application byof ~~our existing senior management team~~U.S. ~~We depend on the skills~~GAAP ~~and~~that ~~abilities~~resulted ~~of these key employees~~ in ~~managing~~material ~~the~~misstatements ~~reclamation, technical,~~ and ~~marketing~~ ~~aspects~~a restatement of our ~~business,~~unaudited ~~any~~condensed ~~part~~consolidated offinancial ~~which~~statements ~~could~~for bethe three ~~harmed~~and bynine ~~turnover in~~months ~~the~~ended ~~future.~~September 30, 2016.

~~Certain~~As of the date of this Annual Report, we are re-assessing the design of our controls and modifying processes related to the identification and reporting for contingencies. However, there can be no assurance that we will be able to fully remediate our existing ~~stockholders~~material weaknesses ~~have~~or ~~substantial~~that our internal control over financial reporting will not suffer in the future from other material weaknesses, ~~influence~~thus making us unable to prevent or detect on a timely basis material misstatements in our periodic reports with the SEC. If we fail to remediate these material weaknesses or otherwise maintain effective internal control over financial reporting in the future, the existence of one or more internal control deficiencies could result in errors in our ~~company~~financial statements, and ~~their~~substantial costs ~~interests~~and resources may ~~not~~ be ~~aligned~~required to rectify internal control deficiencies. If we cannot produce reliable financial reports, we may have difficulty in filing timely periodic reports with the SEC, investors could lose confidence in our reported financial ~~interests~~information, the market price of our ~~other~~stock ~~stockholders~~could decline significantly, we may be unable to obtain additional financing to operate and expand our business, and our business and financial condition could be materially harmed. In addition, any failure to remediate the existing material weaknesses or a failure to maintain effective internal control over financial reporting could negatively impact our results of operations, cash flows and financial condition, subject us to potential litigation and regulatory inquiry and cause us to incur additional costs in future periods relating to the implementation of remedial measures.

~~Our~~Matters relating ~~Chairman,~~to ~~Xianfu~~or ~~Han,~~arising ~~owns~~from ~~approximately~~the ~~22.3%~~restatements, ofAudit ~~our outstanding~~Committee ~~voting~~investigation ~~securities~~ and ~~our~~the ~~Vice-Chairman,~~associated ~~Weili~~material ~~He,~~weaknesses ~~owns~~identified ~~approximately~~in ~~15.7% of~~ our ~~outstanding~~internal ~~voting~~control ~~securities~~over asfinancial ofreporting, ~~June~~including ~~30,~~adverse ~~2017~~publicity, ~~in a~~have ~~fully-diluted~~caused ~~share~~us ~~base.~~to Asincur asignificant ~~result~~legal, ~~each have significant influence over~~accounting ~~our~~and ~~business,~~other ~~including~~professional ~~decisions~~fees ~~regarding~~and ~~mergers,~~other ~~consolidations~~costs, ~~liquidations~~ ~~and~~have ~~the~~exposed ~~sale~~us ofto ~~all~~greater orrisks ~~substantially~~associated ~~all~~with ofother ~~our~~civil ~~assets~~litigation, ~~election of~~regulatory ~~directors~~proceedings and ~~other~~government ~~significant~~enforcement ~~corporate~~ actions., ~~This~~have ~~concentration~~diverted ~~of ownership~~resources ~~may~~and ~~also~~attention ~~have~~that ~~the~~would ~~effect~~otherwise ofbe ~~discouraging,~~directed ~~delaying~~toward our oroperations ~~preventing~~and ~~a future~~implementation ~~change~~ of ~~control,~~our ~~which~~business ~~could~~strategy ~~deprive~~and ~~our~~may ~~stockholders~~impact ofour anability ~~opportunity~~ to ~~receive~~attract aand ~~premium~~retain ~~for~~customers, ~~their~~employees and ~~shares~~vendors, asany ~~part~~ of which could have a ~~sale~~material ofadverse effect on our ~~company~~business, ~~and~~financial ~~might reduce~~condition ~~the~~and ~~price~~results of ~~our shares~~operations.

~~We may be exposed to uncertainty relating to our investments with various financial investment companies.~~ 18

We may ~~decide~~be toexposed pursue short-term or long-term investments depends on various business conditions or future developments. The level of risk associated with a particular investment or asset class varies, but investments are generally subject to ~~market~~liabilities ~~risk,~~under ~~default risk, Inflation risk and mortality risk. Due to these risks, investments generally subject to uncertainty of~~ the ~~return~~ ofForeign ~~proceeds~~Corrupt ~~and~~Practices ~~possibly principles. In addition~~Act, ~~hedging, insurance,~~ and ~~other~~ ~~ways~~any todetermination ~~manage~~that ~~risk~~we ~~are~~violated ~~not~~the ~~always~~Foreign ~~readily available. Any failure by the~~Corrupt ~~Company~~Practices toAct ~~collect returns~~ or ~~principles~~Chinese ofanti-corruption ~~its~~law ~~investments~~ could have a material adverse effect on our business~~, financial condition and results of operations~~.

We are ~~may~~subject ~~require~~to ~~additional~~the ~~capital~~Foreign Corrupt Practice Act, or FCPA, and weother laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business. Chinese anti-corruption law also strictly prohibits bribery of government officials. We have operations, agreements with third parties and make sales in China, where corruption may occur. Our activities in China create the risk of unauthorized payments or offers of payments by one of the employees, consultants, sales agents or distributors of our Company, even though these parties are not bealways ~~able~~subject to our control. It is our policy to implement safeguards to prevent these practices by our employees. However, our existing safeguards and any future improvements may prove to ~~obtain~~be itless onthan ~~acceptable~~effective, and ~~terms~~the employees, consultants, sales agents or atdistributors ~~all.~~of our Company may engage in conduct for which we might be held responsible.

~~We may require additional cash resources due to changed~~Violations ~~business~~of ~~conditions~~the FCPA or other ~~future~~anti-corruption ~~developments,~~laws ~~including any investments or acquisitions we~~ may ~~decide~~result toin ~~pursue.~~severe Ifcriminal ~~our~~or ~~resources~~civil ~~are insufficient to satisfy our cash requirements~~sanctions, and we may ~~seek~~be subject to ~~sell~~other ~~additional equity or debt~~liabilities, ~~securities~~which ~~or obtain additional credit facilities. The sale of additional equity securities~~ could ~~result~~negatively inaffect ~~dilution to~~ our ~~stockholders.~~business, ~~The~~operating ~~incurrence~~results ~~of indebtedness~~and ~~would~~financial ~~result~~condition. inIn ~~increased~~addition, ~~debt~~the ~~service~~United ~~obligations~~States ~~and could~~government ~~require~~may usseek to ~~agree~~hold toour ~~operating~~Company ~~and~~liable ~~financing~~for ~~covenants~~successor ~~that~~liability ~~would~~FCPA ~~restrict~~violations ~~our operations.~~committed ~~Our~~by ~~ability~~companies toin ~~obtain~~which ~~additional~~we ~~capital~~invest onor ~~acceptable terms is~~that ~~subject~~we ~~to a variety of uncertainties, including:~~ acquire.

•The relative ~~investors’~~lack ~~perception~~ of, ~~and~~public ~~demand~~company ~~for,~~experience ~~securities~~ of ~~Chinese-based~~our ~~companies~~management ~~involved~~team ~~in construction supply or concrete industries; • conditions of the U.S. and other capital markets in which we~~ may ~~seek~~put tous ~~raise~~at ~~funds;~~a •competitive ~~our future results of operations, financial condition and cash flows; and • economic, political and other conditions in China~~disadvantage.

~~Financing~~Our management ~~may~~team lacks U.S. public company experience, which could impair our ability to comply with legal and regulatory requirements such as those imposed by the Sarbanes-Oxley Act. Our senior management does not behave ~~available~~experience inmanaging ~~amounts~~a orU.S. publicly traded company and lacks knowledge about the Sarbanes-Oxley Act. Such responsibilities include complying with federal securities laws and making required disclosures on ~~terms~~a timely basis. Our senior management are unable to implement programs and policies in an effective ~~acceptable~~and timely manner or that adequately respond to usthe increased legal, ifregulatory atand ~~all~~reporting requirements associated with being a U.S. ~~Any~~publicly traded company. Our failure byto uscomply with all applicable requirements could lead to ~~raise~~the ~~additional~~imposition ~~funds~~of onfines and ~~terms~~penalties, ~~favorable~~distract our management from attending to ~~us,~~the ormanagement atand ~~all~~growth of our business, ~~could~~result ~~have~~in a ~~material~~loss ~~adverse~~of ~~effect~~investor onconfidence in our ~~business,~~ financial ~~condition~~reports and ~~results~~have ofan ~~operations.~~adverse effect on our business and stock price.

22We depend heavily on key personnel, and turnover of key employees and senior management could harm our business.

WeOur future ~~may~~business beand ~~exposed~~results of operations depend in significant part upon the continued financial and professional contributions of our key technical and senior management personnel, including Xianfu Han, our Chairman and Chief Executive Officer and Weili He, our Vice-Chairman and interim Chief Financial Officer. Mr. Han and Mr. He They also depend in significant part upon our ability to ~~potential~~attract ~~risks~~and ~~relating~~retain additional qualified management, technical, operational and support personnel for our operations. If we lose a key employee, if a key employee fails to perform in his or her current position, or if we are not able to attract and retain skilled employees as needed, our business could suffer. Significant ~~internal~~turnover ~~controls~~in ~~over~~our ~~financial~~senior ~~reporting~~management could significantly deplete the institutional knowledge held by our existing senior management team. We depend on the skills and abilities of these key employees in managing the reclamation, technical, and marketing aspects of our business, any part of which could be harmed by turnover in the future.

~~As directed by Section 404 of the Sarbanes-Oxley Act of 2002 or~~Certain ~~SOX 404, the SEC adopted rules requiring public companies to include a report~~ of ~~management~~ onour ~~the~~existing ~~company’s~~stockholders ~~internal~~have ~~controls~~substantial influence over ~~financial reporting in their annual reports. Under current law, the auditor attestation will not be required as long as~~ our ~~filing status remains as a smaller reporting~~ company, but we may cease to be a smaller reporting company in future years, in which case we will be subject to the auditor attestation requirement. We were subject to management report for the fiscal year ended June 30, 2017, and atheir ~~report~~interests ofmay ~~our management for the 2017 fiscal year is included under Item 9A of this annual report concluding that, as of June 30, 2017, our internal controls over financial reporting were~~ not ~~effective.~~be Ifaligned we cannot remediate the material weakness identified in a timely manner or, if and when we are subject to the auditor attestation report requirement, we are unable to receive a positive attestation from our independent auditors with ~~respect to our internal controls, investors and others may lose confidence in~~ the ~~reliability of our financial statements,~~interests ~~which could adversely affect the price~~ of our ~~common~~other ~~stock~~stockholders.

WeOur Chairman, ~~have~~Xianfu ~~limited~~Han, ~~insurance~~owns ~~coverage~~approximately ~~for~~2.8% of our ~~operations~~outstanding voting securities and our Vice-Chairman, Weili He, owns approximately 2.8% of our outstanding voting securities as of the date of this annual report, in a fully-diluted share base. As a result, ~~China~~each have significant influence over our business, including decisions regarding mergers, consolidations, liquidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions. This concentration of ownership may also have the effect of discouraging, delaying or preventing a future change of control, which could deprive our stockholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of our shares.

The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited insurance products. We have determined that the risks of disruption or liability from our business, the loss or damage to our property, including our facilities, equipment and office furniture, the cost of insuring for these risks, and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. As a result, we do not have any business liability, disruption, litigation or property insurance coverage for our operations in China except for insurance on some company owned vehicles. Any uninsured occurrence of loss or damage to property, or litigation or business disruption may result in the incurrence of substantial costs and the diversion of resources, which could have an adverse effect on our operating results. 19

We may ~~not~~require beadditional ~~current~~capital ~~in our payment of social insurance~~ and ~~housing~~we ~~accumulation~~may ~~fund~~not ~~for~~be ~~our~~able ~~employees~~to ~~and~~obtain ~~such~~it ~~shortfall~~on ~~may~~acceptable ~~expose~~terms ~~us to~~or ~~relevant~~at ~~administrative penalties~~all.

~~The~~We may ~~PRC laws and regulations~~ require ~~all~~additional ~~employers~~cash inresources ~~China~~due to ~~fully~~ ~~contribute~~changed ~~their~~business ~~own~~conditions ~~portion~~or ofother ~~the~~future ~~social~~developments, ~~insurance~~including ~~premium~~any ~~and housing~~investments ~~accumulation~~or ~~fund~~acquisitions ~~for~~we ~~their~~may ~~employees~~decide ~~within~~to apursue. ~~certain~~If ~~period~~our ofresources ~~time.~~are ~~Failure~~ insufficient to dosatisfy soour ~~may~~cash ~~expose~~requirements, ~~the~~we ~~employers~~may seek to ~~make~~sell additional ~~rectification~~equity ~~for~~or ~~the~~debt ~~accrued~~securities ~~premium and~~or ~~fund~~obtain byadditional ~~the~~credit ~~relevant~~facilities. ~~labor~~The ~~authority.~~sale ~~Also,~~of anadditional ~~administrative~~equity ~~fine~~securities ~~may~~could beresult ~~imposed~~in ondilution ~~the~~to ~~employers~~our asstockholders. ~~well~~The asincurrence ~~the~~of ~~key~~indebtedness ~~management~~would ~~members.~~result Asin ofincreased ~~June~~debt ~~30,~~service obligations and could require ~~2017,~~us ~~Xin~~to Aoagree ~~has~~to ~~fully~~operating ~~contributed~~and ~~the~~financing ~~social~~covenants ~~insurance~~that ~~premium~~would ~~and~~restrict ~~housing~~our operations. Our ability to obtain additional capital ~~accumulation~~on ~~fund~~acceptable ~~according~~terms is subject to ~~PRC~~a ~~laws~~variety ~~and~~of ~~regulations.~~uncertainties, including:

~~Our~~● ~~operations~~investors’ ~~may~~perception ~~incur~~of, ~~substantial~~and ~~liabilities~~demand for, securities of Chinese-based companies involved in construction supply or concrete industries; ● conditions of the U.S. and other capital markets in which we may seek to ~~comply~~ ~~with~~raise ~~environmental~~funds; ~~laws~~● our future results of operations, financial condition and ~~regulations.~~cash flows; and ● economic, political and other conditions in China.

~~Our concrete manufacturing operations are subject to laws and~~Financing ~~regulations~~may ~~relating~~not tobe ~~the~~available ~~release~~in oramounts ~~disposal of materials into the environment~~ or ~~otherwise~~on ~~relating~~terms toacceptable ~~environmental protection. Applicable law required that we obtain an environmental impact report and environmental approval from the environmental protection administration prior~~ to ~~obtaining~~us, ~~the business~~if ~~license~~at ~~and construction enterprise qualification certificate for Xin Ao~~all. ~~However,~~Any ~~the~~failure ~~local~~by ~~administration~~us ~~of industry and commerce and the Beijing Municipal Construction Commission did not require Xin Ao~~ to ~~provide~~raise ~~the environmental~~additional ~~impact~~funds ~~report~~on ~~and environmental approval, and Xin Ao has not~~terms ~~received~~favorable any notice of non-compliance nor has any fine or other penalty been assessed. However, the environmental protection administration may in the future require that Xin Ao provide the applicable report and apply for the required environment approval. Our failure to ~~have complied with the applicable laws regarding delivery of the report may result in the assessment of administrative~~us, ~~civil~~ ~~and criminal penalties, the incurrence of investigatory~~ or ~~remedial obligations~~at ~~and the imposition of injunctive relief. Resolution of these matters may require considerable management time and expense. In addition~~all, ~~changes in environmental laws and regulations occur frequently and any changes that result in more stringent or costly manufacturing, storage, transport, disposal or cleanup requirements~~ could ~~require us to make significant expenditures to reach and maintain compliance and may otherwise~~ have a material adverse effect on our ~~industry~~ inbusiness, ~~general~~financial condition and ~~on our own~~ results of operations~~, competitive position or financial condition~~.

IfWe may webe ~~are~~exposed ~~unable~~ to ~~realize~~potential ~~the~~risks ~~current~~relating ~~assets within the normal operating cycle, the Company may not have sufficient funds~~ to ~~meet~~ our ~~working~~ ~~capital~~internal ~~requirements~~controls ~~and~~over ~~debt~~financial ~~obligations as they become due~~reporting.

~~Our~~As directed ~~business~~by isSection ~~capital~~404 ~~intensive~~of ~~and~~the ~~highly~~Sarbanes-Oxley ~~leveraged.~~Act ~~Debt financing~~of in2002 ~~the~~or ~~form~~SOX of404, ~~short~~the ~~term~~SEC ~~bank~~adopted ~~loans,~~rules ~~loans~~requiring ~~from~~public ~~related~~companies ~~parties~~to ~~and~~include ~~bank~~a ~~acceptance~~report ~~notes,~~of ~~have~~management ~~been~~on ~~utilized~~the tocompany’s ~~finance~~internal ~~the~~controls ~~working~~over ~~capital requirements~~financial ~~and~~reporting ~~the~~in ~~capital~~their ~~expenditures~~annual ofreports. Under current law, the ~~Company.~~auditor ~~There~~attestation ~~are~~will anot ~~number~~be ~~of factors,~~required ~~such~~as long as ~~the~~our ~~demand~~filing ~~for~~status ~~the~~remains ~~Company’s~~as ~~products,~~a ~~economic~~smaller ~~conditions~~reporting company, ~~the~~but we ~~competitive~~may ~~pricing~~cease into ~~the~~be ~~concrete-mix~~a ~~industry,~~smaller ~~the~~reporting ~~Company’s~~company ~~operating results~~in ~~not~~future ~~continuing~~years, toin ~~deteriorate~~which ~~and~~case ~~the~~we ~~Company’s~~will ~~bank~~be ~~and~~subject ~~shareholders being~~to ~~able~~the toauditor ~~provide~~attestation ~~continued~~requirement. We ~~support,~~were ~~might~~subject ~~result~~to inmanagement ~~insufficient~~report ~~funds~~for ~~to meet~~the ~~our~~fiscal ~~working~~year ~~capital~~ended ~~requirements~~June 30, ~~operating~~2018, ~~expenses~~ and ~~capital expenditure~~a ~~obligations.~~report ~~Due~~of toour ~~recurring~~management ~~losses,~~for the ~~Company’s~~2018 ~~working capital~~fiscal ~~was~~year ~~approximately~~is ~~$7.5~~included ~~million~~under asItem 9A of ~~June~~this ~~30,~~annual ~~2017~~report asconcluding ~~compared~~that, ~~to $16.4 million~~ as of June 30, ~~2016.~~2018, Asour ofinternal ~~June~~controls ~~30,~~over ~~2017,~~financial reporting ~~cash~~were ~~on-hand~~not ~~balance~~effective. ofSpecifically, ~~approximately $0.2~~certain ~~million~~contingencies ~~and~~related ~~restricted~~to ~~cash~~legal ~~balance~~proceedings ofinvolving ~~approximately~~our ~~$4.2~~VIE ~~million~~entity, ~~with~~Xin ~~the~~Ao ~~remaining~~and/or ~~current~~our ~~assets~~executive ~~are~~officers, ~~mainly~~were ~~composed~~not ofidentified ~~accounts~~nor ~~receivables~~disclosed ~~and prepayments~~in ~~and~~a ~~advances~~timely manner. If we ~~fail~~cannot toremediate ~~realize~~ the ~~current~~material ~~assets~~weakness identified ~~within~~in ~~the normal~~a ~~operating~~timely ~~cycle,~~manner or, if and when we are ~~otherwise~~subject ~~unable~~ to ~~establish~~the ~~other available~~auditor ~~funds~~attestation report requirement, we ~~may~~are ~~not~~unable ~~have~~to ~~sufficient~~receive a ~~funds~~positive toattestation ~~meet~~from our ~~working~~independent ~~capital requirements~~auditors ~~and~~with ~~debt~~respect ~~obligations,~~to ~~grow~~ our ~~business~~internal controls, investors and ~~revenues,~~others ~~reduce~~may ~~our~~lose confidence ~~operating~~in ~~costs~~the ~~and,~~reliability ~~consequently,~~of our ~~business,~~ financial ~~condition~~statements, ~~results~~which ~~of operations,~~could ~~and~~adversely ~~prospects~~affect ~~will~~the beprice ~~adversely~~of ~~affected.~~our common stock.

23We have limited insurance coverage for our operations in China.

~~RISKS~~The insurance ~~RELATED~~industry TOin ~~DOING~~China ~~BUSINESS~~is INstill ~~CHINA~~at an early stage of development. Insurance companies in China offer limited insurance products. We have determined that the risks of disruption or liability from our business, the loss or damage to our property, including our facilities, equipment and office furniture, the cost of insuring for these risks, and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. As a result, we do not have any business liability, disruption, litigation or property insurance coverage for our operations in China except for insurance on some company owned vehicles. Any uninsured occurrence of loss or damage to property, or litigation or business disruption may result in the incurrence of substantial costs and the diversion of resources, which could have an adverse effect on our operating results.

~~In order to comply with PRC regulatory requirements, we~~We ~~operate~~may ~~our~~not ~~businesses~~be ~~through~~current ~~companies with which we have contractual relationships but~~ in ~~which~~our wepayment doof ~~not~~social ~~have~~insurance ~~controlling~~and ~~ownership.~~housing Ifaccumulation ~~the~~fund ~~PRC government~~for ~~determines that~~ our ~~agreements~~employees ~~with~~and ~~these~~such ~~companies~~shortfall ~~are~~may ~~not in~~expose ~~compliance~~us ~~with~~to ~~applicable~~relevant ~~regulations,~~administrative ~~our business in the PRC could be materially adversely affected~~penalties.

WeThe PRC dolaws ~~not~~and ~~have~~regulations ~~direct~~require orall ~~indirect~~employers ~~equity~~in ~~ownership~~China to fully contribute their own portion of ~~our~~the social insurance premium ~~variable~~and ~~interest~~housing ~~entity,~~accumulation orfund ~~VIE,~~for ~~Xin~~their ~~Ao,~~employees ~~which~~within ~~operates~~a ~~all~~certain ~~our~~period ~~businesses~~of ~~in China~~time. AtFailure ~~the~~to ~~same~~do ~~time,~~so ~~however,~~may weexpose ~~have~~the ~~entered~~employers ~~into~~to make ~~contractual~~rectification ~~arrangements with~~for ~~Xin~~the Aoaccrued premium and ~~its~~fund ~~individual~~by ~~owners~~the ~~pursuant~~relevant tolabor ~~which~~authority. weAlso, ~~received~~ an ~~economic~~administrative fine may be imposed ~~interest~~on ~~in,~~the ~~and~~employers ~~exert~~as awell ~~controlling~~as ~~influence~~the ~~over~~key management members. As of June 30, 2018, Xin Ao, inhas afully ~~manner~~contributed the social insurance ~~substantially~~premium ~~similar~~and housing accumulation fund according to aPRC ~~controlling~~laws ~~equity~~and ~~interest~~regulations.

Although we believe that our current business operations are in compliance with the current laws in China, we cannot be sure that the PRC government would view our operating arrangements to be in compliance with PRC regulations that may be adopted in the future. There have been recent reports of potential PRC government efforts to regulate or perhaps limit the use of VIE structures for new foreign investment, particularly in the internet and other telecommunications industries. We are monitoring developments in this area and do not believe any adverse impact on our operations is likely. 20

~~If we are determined not to be in compliance with future PRC~~Our ~~regulations, the PRC government could levy fines, revoke our business and operating licenses, require us to discontinue or restrict our~~ operations~~, restrict~~ ~~our right to collect revenues, require us to restructure our business, corporate structure or operations, impose additional conditions or requirements with which we~~ may ~~not~~incur besubstantial ~~able~~liabilities to comply, ~~impose~~with ~~restrictions~~environmental onlaws ~~our~~and ~~business operations or on our customers, or take other regulatory or enforcement actions against us that could be harmful to our business~~regulations. ~~As a result, our business in the PRC could be materially adversely affected.~~

AOur concrete ~~slowdown~~manufacturing operations are subject to laws and regulations relating to the release or disposal of materials into the environment or otherwise relating to environmental protection. Applicable law required that we obtain an environmental impact report and environmental approval from the environmental protection administration prior to obtaining the business license and construction enterprise qualification certificate for Xin Ao. However, the local administration of industry and commerce and the Beijing Municipal Construction Commission did not require Xin Ao to provide the environmental impact report and environmental approval, and Xin Ao has not received any notice of non-compliance nor has any fine or other ~~adverse~~penalty ~~developments~~been assessed. However, the environmental protection administration may in the ~~PRC~~future require that Xin Ao provide the applicable report and apply for the ~~economy~~required environment approval. Our failure to have complied with the applicable laws regarding delivery of the report may ~~materially~~result in the assessment of administrative, civil and ~~adversely~~criminal ~~affect~~penalties, ~~our~~the ~~customers~~incurrence of investigatory or remedial obligations and the imposition of injunctive relief. Resolution of these matters may require considerable management time and expense. In addition, changes ~~demand~~in ~~for~~environmental ~~our~~laws and regulations occur frequently and any changes that result in more stringent or costly manufacturing, ~~services~~storage, transport, disposal or cleanup requirements could require us to make significant expenditures to reach and maintain compliance and may otherwise have a material adverse effect on our ~~business.~~industry in general and on our own results of operations, competitive position or financial condition.

WeIf we are aunable ~~holding~~to ~~company.~~realize ~~All~~the ofcurrent ~~our~~assets ~~operations~~within ~~are~~the ~~conducted in~~normal operating cycle, the ~~PRC~~Company ~~and~~may ~~all~~not ofhave sufficient funds to meet our ~~revenues~~working ~~are~~capital ~~generated~~requirements ~~from~~and ~~sales~~debt inobligations ~~the~~as ~~PRC~~they become due.

~~According~~Our business tois ~~several~~capital ~~articles~~intensive ~~published~~and byhighly ~~the~~leveraged. ~~Wall~~Debt ~~Street Journal,~~financing ~~CNN,~~in ~~and~~the ~~BBC~~form ~~News~~of inshort ~~January~~term ~~2016~~bank loans, ~~after~~loans ~~experiencing~~from ~~rapid~~related ~~growth for~~parties ~~more~~and ~~than~~bank aacceptance ~~decade~~notes, ~~China's~~have ~~economy~~been ~~has~~utilized ~~been~~to ~~hit~~finance bythe ~~shrinking~~working ~~foreign~~capital requirements and the capital expenditures of the ~~domestic~~Company. ~~demand~~There are a number of factors, ~~weak~~such ~~investment~~as the demand for the Company’s products, ~~factory~~economic ~~overcapacity~~conditions, ~~and~~the ~~oversupply~~competitive pricing in the ~~property~~ ~~market~~concrete-mix industry, the Company’s operating results not continuing to deteriorate and ~~has~~the ~~experienced~~Company’s bank aand ~~painful~~shareholders ~~slowdown~~being able to provide continued support, might result in ~~the~~insufficient ~~last~~funds ~~two~~to ~~years.~~meet our working capital Inrequirements, ~~2016~~operating expenses and capital expenditure obligations. Due to recurring losses, ~~China'~~the Company’s ~~economy~~working ~~grew~~capital was byapproximately 6$9.7%2 million as of June 30, 2018 as compared ~~with~~to 6$7.9%5 amillion ~~year~~as ~~earlier~~of June 30, ~~marking~~ ~~its~~2017. ~~slowest~~As ~~growth~~of inJune a30, ~~quarter~~2018, cash on-hand balance of aapproximately ~~century~~$1.1 Asmillion with the ~~government~~remaining ~~tried~~current toassets are mainly composed of accounts receivables and ~~shift~~prepayments and advances. If we fail to realize the ~~growth~~current ~~engine~~assets ~~away~~within ~~from~~the ~~manufacturing~~normal operating cycle, or if we are otherwise unable to establish other available funds, we may not have sufficient funds to meet our working capital requirements and debt~~-fueled~~ ~~investment~~obligations, ~~toward~~grow ~~the~~our ~~services~~business ~~sector~~and revenues, reduce our operating costs and, ~~consumer~~consequently, ~~spending~~our business, ~~the~~financial ~~outlook~~condition, results of ~~the Chinese~~operations, ~~economy~~and isprospects ~~uncertain~~will be adversely affected.

~~In the next two to three years, China’s growth performance~~RISKS ~~could~~RELATED ~~deteriorate~~TO ~~because~~DOING ofBUSINESS ~~the~~IN overhang of its real estate bubble, massive manufacturing overcapacity, and the lack of new growth engines. The International Monetary Fund expected China's economy to grow by 6.5% in 2017. If China’s economy is further slowing down, it may negatively affect our business operation and financial results.CHINA

WeIn order ~~rely~~to oncomply ~~contractual~~with ~~arrangements~~PRC ~~with~~regulatory ~~our~~requirements, ~~VIEs~~we ~~for~~operate our businesses through companies with which we have contractual relationships ~~operations,~~but in which ~~may~~we do not behave ascontrolling ~~effective~~ownership. inIf ~~providing~~the ~~control~~PRC ~~over~~government determines that our agreements with these companies are ~~entities~~not asin ~~direct~~compliance ~~ownership.~~with applicable regulations, our business in the PRC could be materially adversely affected.

~~Our operations and financial results are dependent on our VIEs,~~We ~~Xin~~do Aonot ~~and~~have ~~its~~direct ~~subsidiaries,~~or inindirect ~~which we have no~~ equity ownership ~~interest and must rely on contractual arrangements to control and operate the businesses~~ of our ~~VIEs.~~variable ~~These~~interest ~~contractual arrangements are not as effective in providing control over the VIEs as direct ownership. For example~~entity, ~~the VIEs may be unwilling~~ or ~~unable~~VIE, toXin ~~perform its contractual obligations under our commercial agreements. Consequently~~Ao, wewhich ~~would~~operates ~~not~~all ~~be able to conduct~~ our ~~operations~~ businesses in ~~the manner currently planned~~China. InAt ~~addition,~~ the ~~VIEs~~same ~~may~~time, ~~seek~~however, ~~to renew their agreements on terms that are disadvantageous to us. Although~~ we have entered into acontractual ~~series~~arrangements ofwith ~~agreements~~Xin ~~that~~Ao ~~provide~~and usits ~~with~~individual ~~substantial~~owners ~~ability~~ pursuant to ~~control the~~which ~~VIEs,~~ we ~~may~~received ~~not~~an ~~succeed~~economic interest in, ~~enforcing our rights under them insofar as our contractual rights~~ and ~~legal~~exert ~~remedies~~a ~~under~~controlling ~~PRC~~influence ~~law~~over ~~are~~Xin ~~inadequate. In addition~~Ao, if wein ~~are~~a ~~unable~~manner tosubstantially ~~renew these agreements on favorable terms when these agreements expire or enter into~~ similar ~~agreements with other parties, our~~ ~~business may not be able~~ to ~~operate~~a orcontrolling ~~expand,~~equity ~~and our operating expenses may significantly increase~~interest.

24Although we believe that our current business operations are in compliance with the current laws in China, we cannot be sure that the PRC government would view our operating arrangements to be in compliance with PRC regulations that may be adopted in the future. There have been recent reports of potential PRC government efforts to regulate or perhaps limit the use of VIE structures for new foreign investment, particularly in the internet and other telecommunications industries. We are monitoring developments in this area and do not believe any adverse impact on our operations is likely.

InIf we ~~addition,~~are ~~the~~determined ~~VIE~~not ~~structure~~to isbe ~~subject~~in tocompliance ~~uncertainty~~with ~~amid the~~future PRC’s ~~changing~~regulations, ~~legislative~~the ~~practice.~~PRC Ingovernment ~~January~~could ~~2015~~levy fines, ~~China’s~~revoke ~~Ministry~~our ofbusiness ~~Commerce~~and ~~unveiled~~operating alicenses, ~~draft~~require ~~legislation~~us ~~that~~to ~~could~~discontinue ~~change~~or ~~how~~restrict ~~the~~our ~~government~~operations, ~~is regulating~~restrict ~~corporate~~our ~~structures,~~right ~~especially~~to ~~for~~collect ~~VIEs~~revenues, ~~controlled~~require us byto ~~foreign investments.~~restructure ~~Instead~~our ofbusiness, ~~looking~~corporate atstructure ~~“ownership”~~or operations, ~~the~~impose ~~draft~~additional ~~law~~conditions ~~focused~~or onrequirements ~~the entities~~with orwhich ~~individuals~~we may ~~hold~~not ~~control~~be ofable ato ~~VIE.~~comply, Ifimpose arestrictions ~~VIE~~on isour ~~deemed~~business tooperations ~~be controlled~~or byon ~~foreign~~our ~~investors~~customers, itor ~~may~~take beother ~~barred~~regulatory ~~from~~or ~~operating~~enforcement actions inagainst ~~restricted sectors~~us orthat ~~the~~could ~~prohibited~~be ~~sectors~~harmful ~~listed~~to onour abusiness. ~~“negative~~As ~~list”~~a result, ~~where~~our ~~only companies~~business ~~controlled~~in bythe ~~Chinese~~PRC ~~nationals~~ could ~~operate,~~be ~~even~~materially ifadversely ~~structured as VIEs~~affected.

In the event that the draft law is implemented in any form, and that the Company’s business is characterized as one of the “restricted” or “prohibited” sectors, Xin Ao and its subsidiaries may be barred from operation which will materially adversely affect our business.21

IfA slowdown weor ~~become~~other ~~directly~~adverse ~~subject~~developments toin the ~~recent~~PRC ~~scrutiny, criticism~~economy ~~and negative publicity involving certain U.S.-listed Chinese companies, we~~ may ~~have~~materially ~~to expend significant resources to investigate~~ and ~~resolve~~ ~~the~~adversely ~~matter~~affect ~~which could harm~~ our ~~business operations~~customers, ~~stock~~demand ~~price~~for ~~and reputation and could result in a loss of your investment in~~ our ~~stock,~~services ~~especially if such matter cannot be addressed~~ and ~~resolved~~our ~~quickly~~business.

~~Recently, U.S. public companies that have substantially all of~~We ~~their~~are ~~operations~~a inholding China, particularly companies like us which have completed so-called reverse merger transactions, have been the subject of intense scrutiny, criticism and negative publicity by investors, short sellers, financial commentators and regulatory agencies, such as the United States Securities and Exchange Commissioncompany. ~~Much~~All of ~~the~~our ~~scrutiny,~~operations ~~criticism~~are ~~and~~conducted negative publicity has centered around financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in ~~many~~ ~~cases, allegations of fraud. As a result of~~ the ~~scrutiny,~~PRC ~~criticism~~ and ~~negative~~ ~~publicity,~~all ~~the publicly traded stock~~ of many U.S. listed Chinese companies has sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits, SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what affect this sector-wide scrutiny, criticism and negative publicity will have on our ~~company, our~~revenues ~~business and our stock price. If we become the subject of any unfavorable allegations, whether such allegations~~ are ~~proven~~generated to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our company. This situation could be costly and time consuming and distract our management from ~~growing~~sales ~~our company. If such allegations are not proven to be groundless, our company and business operations will be severely impacted and your investment~~ in ~~our stock could be rendered worthless~~the PRC.

~~Adverse~~According to ~~changes~~several articles published by the Wall Street Journal, CNN, and BBC News in ~~political~~January 2016, after experiencing rapid growth for more than a decade, China’s economy has been hit by shrinking foreign and ~~economic~~domestic ~~policies~~demand, ofweak ~~the~~investment, factory overcapacity ~~PRC~~and ~~government~~oversupply ~~could~~in ~~impede~~the property market, and has experienced a painful slowdown in the ~~overall~~last ~~economic~~two ~~growth~~years. ofIn 2016, China’s economy grew by 6.7%, ~~which~~compared ~~could~~with 6.9% a year earlier, marking its slowest growth in a quarter of a century. As the government tried ~~reduce~~to shift the ~~demand~~growth ~~for~~engine ~~our~~away ~~products~~from manufacturing and ~~damage~~debt-fueled ~~our~~investment ~~business.~~toward the services sector and consumer spending, the outlook of the Chinese economy is uncertain.

WeIn the ~~conduct~~next ~~all~~two ofto ~~our~~three ~~operations~~years, ~~and~~China’s ~~generate~~growth ~~all~~performance could deteriorate because of ~~our revenue~~the inoverhang ~~China.~~of ~~Accordingly,~~its ~~our~~real ~~business~~estate bubble, massive ~~financial~~manufacturing ~~condition~~overcapacity, ~~results~~and the lack of ~~operations~~ ~~and~~new ~~prospects~~growth ~~are~~engines. ~~affected~~The ~~significantly~~International byMonetary ~~economic,~~Fund ~~political~~expected ~~and~~China’s ~~legal~~economy ~~developments~~to grow by 6.5% in ~~China~~2017. ~~The~~If ~~PRC~~China’s economy ~~differs~~is ~~from~~further ~~the~~slowing ~~economies~~down, ofit ~~most developed~~may ~~countries~~negatively inaffect ~~many~~our ~~respects,~~business operation ~~including:~~and financial results.

•We rely ~~the~~on ~~higher~~contractual ~~level~~arrangements ofwith ~~government~~our ~~involvement;~~VIEs •for ~~the~~our ~~early~~operations, ~~stage~~which ofmay ~~development~~not ofbe ~~the~~as ~~market-oriented~~effective ~~sector~~in ofproviding ~~the economy; • the rapid growth rate; • the higher level of~~ control over ~~foreign~~these entities ~~exchange;~~as ~~and~~direct ~~• the allocation of resources~~ownership.

AsOur operations ~~the~~and ~~PRC~~financial ~~economy~~results ~~has~~are ~~been~~dependent ~~transitioning~~on ~~from~~our aVIEs, ~~planned economy~~Xin toAo aand ~~more~~its ~~market-oriented economy~~subsidiaries, ~~the~~in ~~PRC~~which ~~government~~we ~~has~~have ~~implemented~~no equity ownership ~~various~~interest ~~measures~~and tomust ~~encourage~~rely ~~economic~~on ~~growth~~contractual arrangements to control and ~~guide~~operate the ~~allocation~~businesses of our VIEs. These contractual arrangements ~~resources~~are not as effective in providing control over the VIEs as direct ownership. ~~While~~For ~~these~~example, ~~measures~~the VIEs may ~~benefit~~be unwilling or unable to perform its contractual obligations under our commercial agreements. Consequently, we would not be able to conduct our operations in the ~~overall~~manner ~~PRC~~currently ~~economy~~planned. In addition, ~~they~~the VIEs may seek to renew their agreements on terms that are disadvantageous to ~~also~~us. Although we have entered into a ~~negative~~series ~~effect~~of onagreements that provide us with substantial ability to control the VIEs, we may not succeed in enforcing our rights under them insofar as our contractual rights and legal remedies under PRC law are inadequate. In addition, if we are unable to renew these agreements on favorable terms when these agreements expire or enter into similar agreements with other parties, our business may not be able to operate or expand, and our operating expenses may significantly increase.

~~Although~~ In addition, the VIE structure is subject to uncertainty amid the PRC’s ~~government~~changing ~~has~~legislative inpractice. ~~recent~~In ~~years~~January ~~implemented~~2015, China’s ~~measures~~Ministry ~~emphasizing~~of Commerce unveiled a draft legislation that could change how the ~~utilization~~government ofis ~~market~~regulating ~~forces~~corporate structures, especially for ~~economic~~VIEs ~~reform~~controlled by foreign investments. Instead of looking at “ownership”, the ~~PRC~~ ~~government~~draft ~~continues~~law tofocused ~~exercise~~on ~~significant~~the entities or individuals hold control ~~over~~of ~~economic~~a ~~growth~~VIE. ~~in China~~If ~~through~~a ~~the~~VIE ~~allocation~~is ofdeemed ~~resources,~~to ~~controlling~~be ~~payment~~controlled ofby foreign ~~currency-denominated~~ ~~obligations~~investors, ~~setting~~it ~~monetary~~may ~~policy~~be ~~and~~barred ~~imposing~~from ~~policies~~operating ~~that~~in ~~impact~~restricted ~~particular~~sectors ~~industries~~ or the prohibited sectors listed on a “negative list”, where only companies incontrolled ~~different~~by ~~ways.~~Chinese nationals could operate, even if structured as VIEs.

25In the event that the draft law is implemented in any form, and that the Company’s business is characterized as one of the “restricted” or “prohibited” sectors, Xin Ao and its subsidiaries may be barred from operation which will materially adversely affect our business.

Any adverse change in the economic conditions or government policies in China could have a material adverse effect on the overall economic growth and the level of new construction investments and expenditures in China, which in turn could lead to a reduction in demand for our services and consequently have a material adverse effect on our business and prospects. 22

~~Uncertainties~~If we ~~with~~become ~~respect~~directly subject to the ~~PRC~~recent ~~legal~~scrutiny, ~~system~~criticism ~~could~~and negative publicity involving certain U.S.-listed Chinese companies, ~~limit~~we ~~the~~may ~~legal~~have ~~protections~~to ~~available~~expend significant resources to ~~you~~investigate and ~~us.~~resolve the matter which could harm our business operations, stock price and reputation and could result in a loss of your investment in our stock, especially if such matter cannot be addressed and resolved quickly.

WeRecently, U.S. ~~conduct~~public companies that have substantially all of ~~our~~their ~~business~~operations ~~through our operating subsidiary~~ in ~~the~~China, ~~PRC.~~particularly ~~Our~~companies ~~operating~~like ~~subsidiaries~~us ~~are~~which ~~generally~~have completed ~~subject~~so-called toreverse ~~laws~~merger ~~and~~transactions, ~~regulations~~have ~~applicable~~been tothe ~~foreign~~subject ~~investments~~of inintense ~~China~~scrutiny, criticism and negative publicity by investors, inshort ~~particular~~sellers, ~~laws~~financial ~~applicable~~commentators toand ~~foreign-invested~~regulatory ~~enterprises.~~agencies, ~~The~~such ~~PRC~~as ~~legal system~~the isUnited ~~based~~States onSecurities ~~written~~and ~~statutes,~~Exchange ~~and~~Commission. ~~prior~~Much of ~~court~~the ~~decisions~~scrutiny, ~~may~~criticism beand ~~cited~~negative ~~for reference~~publicity ~~but~~has ~~have~~centered ~~limited~~around ~~precedential~~financial ~~value.~~and ~~Since~~accounting ~~1979~~irregularities and mistakes, a lack ~~series~~ of ~~new~~effective ~~PRC laws~~internal ~~and~~controls ~~regulations~~over ~~have~~financial ~~significantly~~accounting, ~~enhanced~~inadequate ~~the~~corporate ~~protections~~governance ~~afforded~~policies ~~to various~~or ~~forms~~a lack of ~~foreign~~adherence thereto ~~investments~~and, in ~~China.~~many ~~However~~cases, ~~since~~allegations ~~the~~of ~~PRC~~fraud. ~~legal system~~As ~~continues~~a toresult ~~rapidly~~of ~~evolve~~the scrutiny, criticism and negative publicity, the ~~interpretations~~publicly traded stock of many ~~laws, regulations~~U.S. ~~and~~listed ~~rules~~Chinese ~~are~~companies ~~not~~has ~~always~~sharply ~~uniform~~decreased ~~and~~in ~~enforcement~~value ofand, ~~these~~in ~~laws~~some cases, ~~regulations~~ ~~and~~has ~~rules~~become ~~involve~~virtually ~~uncertainties,~~worthless. Many ~~which~~of ~~may~~these ~~limit~~companies ~~legal~~are ~~protections available~~now subject to ~~you~~shareholder lawsuits, SEC enforcement actions and ~~us.~~are Inconducting ~~addition,~~internal ~~any~~and ~~litigation~~external investigations ininto ~~China~~the ~~may~~allegations. beIt ~~protracted and~~is ~~result~~not inclear ~~substantial~~what ~~costs~~affect ~~and~~this ~~diversion~~sector-wide ofscrutiny, ~~resources~~criticism and ~~management~~negative publicity will ~~attention.~~have Inon ~~addition~~our company, ~~all~~our ofbusiness and our ~~executive~~stock ~~officers~~price. ~~and~~If ~~almost~~we ~~all~~become the subject of ~~our directors~~any ~~are~~unfavorable ~~residents~~allegations, ofwhether ~~China~~such ~~and~~allegations are ~~not~~proven ofto ~~the~~be ~~United~~true ~~States~~or untrue, ~~and~~we ~~substantially all~~will ~~the~~have ~~assets~~to ofexpend ~~these~~significant ~~persons~~resources ~~are~~to ~~located~~investigate ~~outside~~such ~~the~~allegations ~~United~~and/or ~~States.~~defend ~~As a~~our ~~result,~~company. itThis situation could be ~~difficult~~costly ~~for~~and ~~investors~~time toconsuming ~~affect~~and ~~service~~distract ofour ~~process~~management infrom ~~the~~growing our company. If such allegations ~~United~~are ~~States~~not orproven to ~~enforce~~be agroundless, ~~judgment~~our ~~obtained~~company inand ~~the~~business ~~United~~operations ~~States~~will ~~against~~be severely impacted and your investment in our stock ~~Chinese~~could ~~operations~~be ~~and~~rendered ~~subsidiaries~~worthless.

~~The~~Adverse changes in political and economic policies of the PRC government ~~exerts~~could ~~substantial~~impede ~~influence~~the ~~over~~overall ~~the manner~~economic ingrowth of China, which wecould reduce ~~must~~the ~~conduct~~demand for our ~~business~~products ~~activities.~~and damage our business.

~~The PRC government has exercised and continues to exercise~~We ~~substantial~~conduct ~~control~~all ~~over virtually every sector~~ of ~~the~~our ~~Chinese~~operations ~~economy through regulation~~ and ~~state~~generate ~~ownership.~~all ~~Our~~of ~~ability~~our torevenue ~~operate~~ in China. ~~may be harmed by changes in its laws and regulations~~Accordingly, ~~including~~our ~~those relating to taxation~~business, ~~import~~ ~~and~~financial ~~export tariffs~~condition, ~~environmental regulations, land use rights, property~~results ~~and~~of ~~other matters. We believe that our~~ operations inand ~~China~~prospects are inaffected ~~material compliance~~significantly ~~with~~by ~~all~~economic, ~~applicable~~political ~~legal~~ and ~~regulatory~~legal ~~requirements.~~developments ~~However, the central or local governments of the jurisdictions~~ in ~~which~~China. weThe ~~operate~~PRC ~~may impose~~economy ~~new,~~differs ~~stricter~~from ~~regulations~~the oreconomies ~~interpretations~~ of ~~existing~~most ~~regulations~~developed ~~that~~countries ~~would require~~in ~~additional~~many ~~expenditures~~respects, ~~and efforts on our part to ensure our compliance with such regulations or interpretations.~~ including:

~~Accordingly,~~● ~~government actions in~~ the ~~future,~~higher ~~including~~level ~~any decision~~of ~~not~~government toinvolvement; ~~continue~~● tothe ~~support~~early ~~recent~~stage ~~economic~~of ~~reforms~~development ~~and~~of tothe ~~return~~market-oriented tosector ~~a more~~of ~~centrally~~the ~~planned~~ economy; or● ~~regional~~the orrapid ~~local~~growth ~~variations~~rate; in● the ~~implementation~~ ofhigher ~~economic~~level ~~policies,~~of ~~could~~control ~~have~~over aforeign ~~significant~~exchange; ~~effect on economic conditions in China or particular regions thereof~~ and ~~could~~● ~~require~~the usallocation ~~to divest ourselves~~ of ~~any interest we then hold in Chinese properties or joint ventures~~resources.

~~Restrictions~~As the onPRC ~~currency~~economy ~~exchange~~has ~~may~~been ~~limit~~transitioning ~~our~~from ~~ability~~a planned economy to a more market-oriented economy, the PRC government has implemented various measures to ~~receive~~encourage economic growth and ~~use~~guide ~~our~~the ~~sales~~allocation ~~revenue~~of ~~effectively~~resources. While these measures may benefit the overall PRC economy, they may also have a negative effect on us.

~~Most of our sales revenue and expenses are denominated in RMB.~~Although ~~Under PRC law,~~ the RMB is currently convertible under the “current account,” which includes dividends and trade and service-related foreign exchange transactions, but not under the “capital account,” which includes foreign direct investment and loans. Currently, our PRC ~~operating~~government ~~subsidiary~~has ~~may~~in ~~purchase foreign~~recent ~~currencies~~years ~~for~~implemented ~~settlement~~measures ofemphasizing ~~current account transactions, including payments of dividends to us, without~~ the ~~approval~~utilization of ~~the~~market ~~State~~forces ~~Administration~~for ~~of Foreign~~economic ~~Exchange~~reform, ~~or SAFE, by complying with certain procedural requirements.~~ ~~However,~~ the ~~relevant~~ PRC government ~~authorities~~continues ~~may~~to ~~limit~~exercise orsignificant ~~eliminate~~control ~~our ability~~over toeconomic ~~purchase~~growth ~~foreign~~in ~~currencies~~China inthrough the ~~future.~~allocation ~~Since~~of aresources, controlling ~~significant~~payment ~~amount~~ of ~~our~~foreign ~~future revenue will be~~ currency-denominated ~~in RMB~~obligations, ~~any~~setting ~~existing~~monetary policy and ~~future restrictions~~imposing onpolicies ~~currency~~that ~~exchange~~impact ~~may limit our ability to utilize revenue~~particular ~~generated~~industries inor ~~RMB~~companies ~~to fund our business activities outside China that are denominated~~ in ~~foreign~~different ~~currencies~~ways.

~~Foreign exchange transactions by PRC operating subsidiaries~~Any ~~under~~adverse ~~the~~change ~~capital~~in ~~account continue to be subject to significant foreign exchange controls and require~~ the ~~approval~~economic ofconditions or ~~need to register with PRC~~ government ~~authorities,~~ ~~including~~policies ~~SAFE.~~in InChina ~~particular,~~could ifhave ~~our~~a ~~PRC~~material ~~operating~~adverse ~~subsidiaries borrow~~effect ~~foreign~~on ~~currency~~the ~~through loans from us or other foreign lenders, these~~overall ~~loans~~economic ~~must~~growth ~~be registered with SAFE,~~ and ~~if we finance~~ the ~~subsidiaries~~level ~~by means~~ of ~~additional~~new ~~capital~~construction ~~contributions,~~investments ~~these~~and ~~capital~~expenditures ~~contributions~~in ~~must~~China, ~~be approved~~which byin ~~certain~~turn ~~government~~could ~~authorities,~~lead ~~including~~to ~~the~~a ~~Ministry of Commerce,~~reduction orin ~~MOFCOM,~~demand orfor ~~their~~our ~~respective~~services ~~local~~and ~~counterparts.~~consequently ~~These~~have ~~limitations~~a ~~could affect~~material ~~their~~adverse ~~ability~~effect toon ~~obtain~~our ~~foreign~~business ~~exchange~~and ~~through debt or equity financing~~prospects.

26Uncertainties with respect to the PRC legal system could limit the legal protections available to you and us.

We conduct substantially all of our business through our operating subsidiary in the PRC. Our operating subsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws applicable to foreign-invested enterprises. The PRC legal system is based on written statutes, and prior court decisions may be ~~unable~~cited tofor ~~complete~~reference but have limited precedential value. Since 1979, a ~~business~~series ~~combination~~of new PRC laws and regulations have significantly enhanced the protections afforded ~~transaction~~to ~~efficiently~~various orforms onof ~~favorable~~foreign ~~terms~~investments ~~due~~in China. However, since the PRC legal system continues to ~~complicated~~rapidly ~~merger~~evolve, ~~and~~the interpretations ~~acquisition~~of many laws, regulations ~~implemented~~and onrules ~~September~~are 8not always uniform and enforcement of these laws, ~~2006~~regulations and rules involve uncertainties, which may limit legal protections available to you and us. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention. In addition, all of our executive officers and almost all of our directors are residents of China and not of the United States, and substantially all the assets of these persons are located outside the United States. As a result, it could be difficult for investors to affect service of process in the United States or to enforce a judgment obtained in the United States against our Chinese operations and subsidiaries.

The recent PRC Regulation on Mergers and Acquisitions of Domestic Companies by Foreign Investors also governs the approval process by which a PRC company may participate in an acquisition of its assets or its equity interests. Depending on the structure of the transaction, the new regulation will require the Chinese parties to make a series of applications and supplemental applications to the government agencies. In some instances, the application process may require the presentation of economic data concerning a transaction, including appraisals of the target business and evaluations of the acquirer, which are designed to allow the government to assess the transaction. Government approvals will have expiration dates by which a transaction must be completed and reported to the government agencies. Compliance with the new regulations is likely to be more time consuming and expensive than in the past and the government can now exert more control over the combination of two businesses. Accordingly, due to the new regulation, our ability to engage in business combination transactions has become significantly more complicated, time consuming and expensive, and we may not be able to negotiate a transaction that is acceptable to our stockholders or sufficiently protect their interests in a transaction. 23

The ~~new regulation allows~~ PRC government ~~agencies~~exerts tosubstantial ~~assess~~influence ~~the economic~~over ~~terms of a business combination transaction. Parties to a business combination transaction may have to submit to MOFCOM and~~ the ~~other~~manner ~~government agencies~~in ~~an appraisal report, an evaluation report and the acquisition agreement, all of~~ which ~~form~~we part of the application for approval, depending on the structure of the transaction. The regulations also prohibit a transaction at an acquisition price obviously lower than the appraised value of the Chinese business or assets and in certain transaction structures, require that consideration must beconduct ~~paid within defined periods, generally not in excess of a year. The regulation also limits~~ our ability to negotiate various terms of the acquisition, including aspects of the initial consideration, contingent consideration, holdback provisions, indemnification provisions and provisions relating to the assumption and allocation of assets and liabilities. Transaction structures involving trusts, nominees and similar entities are prohibited. Therefore, such regulation may impede our ability to negotiate and complete a business ~~combination transaction on financial terms that satisfy our investors and protect our stockholders’ economic interests~~activities.

~~Fluctuations~~The PRC 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 in ~~exchange~~China ~~rates~~may ~~could~~be ~~adversely~~harmed ~~affect~~by ~~our~~changes in its laws and regulations, ~~business~~including those relating to taxation, import and export tariffs, environmental regulations, land use rights, property and other matters. We believe that our operations in China are in material compliance with all applicable legal and regulatory requirements. However, the ~~value~~central or local governments of the jurisdictions in which we operate may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our ~~securities.~~part to ensure our compliance with such regulations or interpretations.

~~The value of our common stock will be indirectly affected by~~Accordingly, ~~the~~government ~~foreign~~actions ~~exchange rate between U.S. dollars and RMB and between those currencies and other currencies~~ in ~~which~~the ~~our sales may be denominated. Because substantially all of our earnings and cash assets are denominated in RMB~~future, ~~fluctuations~~ inincluding ~~the~~any ~~exchange~~decision ~~rate~~not ~~between~~to ~~the~~continue ~~U.S.~~to ~~dollar~~support ~~and~~recent ~~the~~economic ~~RMB~~reforms ~~will affect our balance sheet~~ and ~~our~~to ~~earnings~~return ~~per~~to ~~share~~a more incentrally ~~U.S.~~planned ~~dollars.~~economy ~~In addition,~~or ~~appreciation~~regional or ~~depreciation~~local variations in the ~~value~~implementation of ~~the~~economic ~~RMB~~policies, ~~relative~~could tohave ~~the U.S.~~a ~~dollar would affect our financial results reported in U.S. dollar terms~~significant ~~without giving~~ effect toon ~~any~~economic ~~underlying~~conditions ~~change~~ in ~~our~~China ~~business~~ or ~~results~~particular ~~of operations.~~regions ~~Fluctuations~~thereof inand ~~the~~could ~~exchange~~require ~~rate~~us ~~will~~to ~~also~~divest ~~affect~~ourselves ~~the relative value~~ of any ~~dividend we issue that will be exchanged into U.S. dollars and~~interest ~~earnings from, and the value of, any U.S. dollar-denominated investments~~ we ~~make in~~then ~~the~~hold future. From June 30, 2016 to June 30, 2017, the PRC Government devalued its currency by approximately 2.1%, represented the largest yuan depreciation for 20 years. China weakened the value of RMB currency by 2.1% to 6.78 against the US dollar on June 30, 2017 from 6.64 against the US dollar on June 30, 2016. Concerns remain that China’s slowing economy, and in ~~particular~~Chinese ~~its~~properties ~~exports, will~~or ~~need~~joint ~~a stimulus that can only come from further cuts in the exchange rate~~ventures.

~~Very limited hedging transactions are available in China to~~Restrictions ~~reduce~~on ~~our~~currency ~~exposure to~~ exchange ~~rate~~may ~~fluctuations.~~limit ~~To date, we have not entered into any hedging transactions in an effort to reduce~~ our ~~exposure~~ability to ~~foreign currency~~receive ~~exchange risk. While we may enter into hedging transactions in the future, the availability~~ and ~~effectiveness~~use ~~of these transactions may be limited, and we may not be able to successfully hedge~~ our ~~exposure~~sales atrevenue ~~all~~effectively. ~~In addition, our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies.~~

~~Currently, some~~ Most of our ~~raw~~sales ~~materials~~revenue and ~~major~~expenses ~~equipment~~ are ~~imported~~ denominated in RMB. InUnder PRC law, the ~~event~~RMB ~~that~~is currently convertible under the ~~U.S.~~“current account,” ~~dollars~~which ~~appreciate~~includes ~~against~~dividends ~~RMB~~and trade and service-related foreign exchange transactions, ~~our~~but ~~costs~~not under the “capital ~~will~~account,” ~~increase~~which includes foreign direct investment and loans. IfCurrently, weour ~~cannot~~PRC ~~pass~~operating subsidiary may purchase foreign currencies for settlement of current account transactions, including payments of dividends to us, without the ~~resulting~~approval ~~costs~~of onthe State Administration of Foreign Exchange, or SAFE, by complying with certain procedural requirements. However, the relevant PRC government authorities may limit or eliminate our ability to purchase foreign currencies in the future. Since a significant amount of our ~~customers~~future revenue will be denominated in RMB, any existing and future restrictions on currency exchange may limit our ability ~~profitability~~to ~~and~~utilize ~~operating~~revenue ~~results~~generated ~~will~~in ~~suffer.~~RMB to fund our business activities outside China that are denominated in foreign currencies.

27Foreign exchange transactions by PRC operating subsidiaries under the capital account continue to be subject to significant foreign exchange controls and require the approval of or need to register with PRC government authorities, including SAFE. In particular, if our PRC operating subsidiaries borrow foreign currency through loans from us or other foreign lenders, these loans must be registered with SAFE, and if we finance the subsidiaries by means of additional capital contributions, these capital contributions must be approved by certain government authorities, including the Ministry of Commerce, or MOFCOM, or their respective local counterparts. These limitations could affect their ability to obtain foreign exchange through debt or equity financing.

~~Under the Current Enterprise Income Tax, or EIT, Law, we~~We may be ~~classified~~unable asto complete a ~~"resident~~business ~~enterprise"~~combination oftransaction ~~China.~~efficiently ~~Such~~or ~~classification~~on ~~will likely~~favorable ~~result~~terms indue ~~unfavorable~~to ~~tax~~complicated ~~consequences~~merger toand usacquisition regulations ~~and~~implemented ~~our~~on ~~non-PRC stockholders.~~September 8, 2006.

WeThe recent ~~are~~PRC Regulation on Mergers and Acquisitions of Domestic Companies by Foreign Investors also governs the approval process by which a ~~holding~~PRC company ~~incorporated~~may ~~under~~participate ~~the~~in ~~laws~~an acquisition of ~~Nevada~~its assets or its equity interests. We ~~conduct~~Depending ~~substantially~~on ~~all~~the structure of the ~~our~~transaction, ~~business~~the ~~through~~new ~~our~~regulation ~~wholly-owned~~will ~~and~~require ~~other consolidated~~the ~~entities~~Chinese inparties ~~China,~~to ~~and~~make wea ~~derive~~series ~~all~~ of ~~our~~applications ~~income~~and ~~from~~supplemental ~~these~~applications ~~entities.~~to ~~Prior~~the togovernment ~~January~~agencies. 1,In ~~2008~~some instances, ~~dividends~~the ~~derived~~application byprocess ~~foreign~~may ~~enterprises~~require the presentation of economic data concerning ~~from~~a transaction, including appraisals of the target business ~~operations~~and inevaluations ~~China~~of ~~were~~the ~~not~~acquirer, ~~subject~~which are designed to allow the ~~Chinese enterprise~~government ~~income~~to ~~tax~~assess the transaction. ~~However,~~Government ~~such~~approvals ~~tax~~will ~~exemption~~have ~~ceased~~expiration asdates ofby ~~January~~which 1,a ~~2008~~transaction must be completed and reported ~~thereafter~~to the government agencies. Compliance with the ~~effectiveness~~new regulations is likely to be more time consuming and expensive than in the past and the government can now exert more control over the combination of two businesses. Accordingly, due to the new ~~Enterprise~~regulation, our ~~Income~~ability ~~Tax~~to ~~Law~~engage in business combination transactions has become significantly more complicated, time consuming and expensive, and we may not be able to negotiate a transaction that is acceptable to our stockholders or ~~EIT~~sufficiently protect their interests ~~Law.~~in a transaction.

Under the EIT Law, if we are not deemed to be a “resident enterprise” for Chinese tax purposes, a withholding tax at the rate of 10% would be applicable to any dividends paid by our Chinese subsidiaries to us. However, if we are deemed to be a “resident enterprise” established outside of China whose “place of effective management” is located in China, we would be classified as a resident enterprise for Chinese tax purposes and thus would be subject to an enterprise income tax rate of 25% on all of our income, including interest income on the proceeds from this offering on a worldwide basis. 24

The new ~~regulations~~regulation ~~promulgated~~allows ~~pursuant~~PRC togovernment ~~the~~agencies ~~EIT~~to ~~Law~~assess ~~define~~ the ~~term~~ ~~“place~~economic terms of ~~effective~~a ~~management”~~business ascombination ~~“establishments~~transaction. ~~that~~Parties ~~carry~~to ~~out~~a ~~substantial~~business ~~and~~combination ~~overall~~transaction ~~management~~may ~~and~~have ~~control~~to ~~over~~submit ~~the~~to ~~manufacturing~~MOFCOM and ~~business~~ ~~operations,~~the ~~personnel,~~other ~~accounting,~~government ~~properties,~~agencies ~~etc. of~~ an ~~enterprise.” The~~appraisal ~~State Administration of Taxation issued a SAT Circular 82 on April 22~~report, ~~2009,~~an evaluation ~~which~~report ~~provides~~and ~~that~~ the ~~“place~~acquisition ofagreement, ~~effective~~all ~~management”~~ of awhich ~~Chinese-controlled overseas-incorporated~~form ~~enterprise~~part isof ~~located in China if~~ the ~~following requirements~~application ~~are~~for ~~satisfied:~~approval, ~~(i)~~depending on the ~~senior~~structure ~~management and core management departments in charge~~ of ~~its daily operations function are mainly located in~~ the ~~PRC;~~transaction. ~~(ii)~~The ~~its~~regulations ~~financial~~also ~~and~~prohibit ~~human~~a ~~resources~~transaction ~~decisions~~at ~~are~~an ~~subject~~acquisition ~~to determination~~price orobviously ~~approval~~lower bythan ~~persons or bodies located in~~ the ~~PRC;~~appraised ~~(iii)~~value ~~its major assets, accounting books, company seals, and minutes and files~~ of ~~its~~the ~~board~~Chinese ~~and~~business ~~shareholders’ meetings are located~~ or ~~kept~~assets ~~in the PRC;~~ and ~~(iv) no less than half of the enterprise’s directors or senior management with voting rights reside~~ in ~~the~~certain ~~PRC.~~transaction ~~SAT~~structures, ~~Circular~~require 82that ~~applies~~consideration ~~only~~must tobe ~~overseas~~paid ~~registered enterprises~~within ~~controlled~~defined ~~by PRC enterprises~~periods, generally not toin ~~those~~excess ~~controlled~~of bya ~~PRC individuals~~year. IfThe ~~the~~regulation ~~Company’s~~also ~~non-PRC~~limits ~~incorporated~~our ~~entities~~ability ~~are deemed PRC tax residents, such entities would be subject~~ to ~~PRC~~negotiate ~~tax~~various ~~under~~terms ~~the EIT Law. The Company has analyzed the applicability~~ of the ~~EIT Law and related regulations~~acquisition, including ~~and~~aspects ~~for each~~ of the ~~applicable~~initial ~~periods presented~~consideration, ~~the~~contingent ~~Company~~consideration, ~~has~~holdback ~~not accrued for PRC tax on such basis.. In addition~~provisions, ~~although~~indemnification ~~under~~provisions ~~the EIT Law~~ and ~~the~~provisions ~~related~~relating ~~regulations dividends paid~~ to usthe byassumption ~~our~~and ~~PRC~~allocation ~~subsidiaries~~of ~~would~~assets ~~qualify as~~and ~~“tax-exempted~~liabilities. ~~income,”~~Transaction westructures ~~cannot~~involving ~~assure you that such dividends will not be subject to a 10% withholding tax~~trusts, asnominees ~~the~~and ~~PRC foreign exchange control~~similar ~~authorities, which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound remittances to~~ entities ~~that~~ are ~~treated~~ ~~as resident enterprises for PRC enterprise income tax purposes~~prohibited. AsTherefore, ~~a result of~~ such ~~changes,~~regulation ~~our~~may ~~historical~~impede ~~operating results will not be indicative of~~ our ~~operating~~ability ~~results~~to ~~for~~negotiate ~~future periods~~ and ~~the~~complete ~~value~~a ofbusiness ~~our~~combination ~~shares of~~transaction ~~common~~on ~~stock~~financial ~~may~~terms bethat ~~adversely~~satisfy ~~affected.~~our Weinvestors ~~are actively monitoring the possibility of “resident enterprise” treatment~~ and ~~are~~protect ~~evaluating~~our ~~appropriate organizational~~stockholders’ ~~changes~~economic ~~to avoid this treatment, to the extent possible~~interests.

WeFluctuations in ~~may~~exchange berates ~~subject~~could toadversely ~~fines~~affect ~~and legal sanctions if we or~~ our ~~Chinese~~business ~~employees~~and ~~fail~~the tovalue ~~comply~~of ~~with~~our ~~PRC regulations relating to employee stock options granted by overseas listed companies to PRC citizens~~securities.

OnThe value ~~December~~of ~~25,~~our ~~2006,~~common ~~the~~stock ~~People’s~~will ~~Bank~~be ofindirectly ~~China~~affected ~~issued~~by the ~~Administration~~ ~~Measures~~foreign onexchange ~~Individual~~rate ~~Foreign~~between ~~Exchange~~U.S. ~~Control,~~dollars and ~~its Implementation~~RMB ~~Rules~~and ~~were~~between ~~issued~~those currencies byand ~~the~~other ~~State~~currencies ~~Administration~~in ofwhich ~~Foreign~~our ~~Exchange (“SAFE”)~~sales onmay ~~January~~be ~~5, 2007~~denominated. ~~Both~~Because ~~took~~substantially ~~effect~~all onof ~~February~~our 1,earnings ~~2007.~~and ~~Under~~cash ~~these~~assets ~~regulations,~~are ~~all~~denominated ~~foreign exchange matters involved~~ in ~~an employee stock holding plan~~RMB, ~~stock~~fluctuations ~~option plan or similar plan~~ in ~~which~~the ~~PRC~~exchange ~~citizens’~~rate ~~participation requires~~between ~~approval from~~ the ~~SAFE or its authorized branch~~U.S. Ondollar ~~March~~and ~~28, 2007,~~ the ~~SAFE~~ ~~issued~~RMB ~~the~~will ~~Application~~affect ~~Procedure~~our ~~for~~balance ~~Foreign~~sheet ~~Exchange Administration for~~and ~~Domestic~~our ~~Individuals~~earnings ~~Participating~~per share in ~~Employee~~U.S. ~~Stock~~dollars. ~~Holding~~In ~~Plans~~addition, appreciation or ~~Stock Option~~depreciation ~~Plans~~in the value of ~~Overseas~~the ~~Listed~~RMB ~~Companies,~~relative orto ~~Notice~~the 78U.S. dollar ~~Under~~would ~~Notice~~affect ~~78,~~our ~~PRC individuals~~financial ~~who~~results ~~participate~~reported in anU.S. ~~employee~~dollar ~~stock~~terms ~~option~~without ~~holding~~giving ~~plan~~effect orto aany ~~stock option~~underlying ~~plan~~change ofin anour business ~~overseas~~or ~~listed~~results ~~company~~of ~~are~~operations. ~~required,~~Fluctuations ~~through~~in athe ~~PRC~~exchange ~~domestic agent~~rate orwill ~~PRC~~also ~~subsidiary~~affect of the ~~overseas~~relative ~~listed~~value ~~company,~~of toany ~~register~~dividend ~~with~~we ~~the~~issue ~~SAFE~~that ~~and~~will ~~complete~~be ~~certain~~exchanged ~~other~~into ~~procedures~~U.S. Wedollars and ~~our~~earnings ~~Chinese~~from, ~~employees~~and ~~who have~~the ~~been~~value ~~granted~~of, ~~shares~~any orU.S. ~~stock~~dollar-denominated ~~options~~investments ~~pursuant~~we tomake in ~~our~~the ~~share~~future. ~~incentive~~From ~~plan are~~June ~~subject~~30, 2017 to ~~Notice~~June ~~78. However~~30, ~~in practice~~2018, ~~there~~the ~~are~~PRC ~~significant uncertainties~~Government ~~with~~increased ~~regard to~~ the ~~interpretation~~value ~~and~~of ~~implementation~~its ofcurrency ~~Notice~~by 78approximately 2.3%. WeChina ~~are~~strengthened ~~committed to complying with~~ the ~~requirements~~value of ~~Notice~~RMB ~~78.~~currency ~~However,~~by ~~we cannot~~2.3% ~~provide any assurance that we or our Chinese employees will be able~~ to ~~qualify~~ ~~for~~6.62 oragainst ~~obtain~~the ~~any~~US ~~registration~~dollar ~~required~~on byJune ~~Notice 78. In particular~~30, ~~if we~~2018 ~~and/or~~from ~~our~~6.78 ~~Chinese~~against ~~employees fail to comply with~~ the ~~provisions~~US ofdollar on ~~Notice~~June 7830, we ~~and/or~~2017. ~~our~~Concerns ~~Chinese~~remain ~~employees~~that ~~may~~China’s beslowing ~~subject~~economy, ~~to fines~~ and ~~legal~~in ~~sanctions imposed~~particular byits ~~the SAFE or other PRC government authorities~~exports, aswill need a ~~result~~stimulus ~~of which~~that ~~our~~can ~~business~~only ~~operations~~come ~~and~~from ~~employee~~further ~~option~~cuts ~~plans~~in ~~could~~the beexchange ~~materially and adversely affected~~rate.

28Very limited hedging transactions are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and we may not be able to successfully hedge our exposure at all. In addition, our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies.

~~The discontinuation~~Currently, some ~~reduction~~of orour ~~delay~~raw ofmaterials ~~any~~and ofmajor equipment are imported. In the ~~preferential~~ ~~tax~~event ~~treatments~~that ~~currently~~the ~~available~~U.S. todollars usappreciate inagainst ~~the~~RMB, ~~PRC~~our ~~could~~costs ~~materially~~will ~~and~~increase. ~~adversely~~If ~~affect~~we cannot pass the resulting costs on to our ~~business~~customers, ~~financial~~our ~~condition~~profitability and operating results ~~of operations.~~will suffer.

~~Prior to January 1, 2008, under the old enterprises income tax law, Xin Ao was subject to a 33% income tax rate, which was subject to certain tax holidays and preferential tax rates.~~ Under the ~~new~~Current ~~enterprise~~Enterprise ~~income~~Income ~~tax law effective January 1~~Tax, ~~2008,~~ or ~~the~~ EIT ~~Law~~, ~~both foreign-invested enterprises and domestic enterprises are subject to a unified 25% income tax rate. Under the EIT~~ Law, ~~preferential~~we ~~tax~~may ~~treatments will~~ be ~~granted~~classified ~~to enterprises that conduct business in certain encouraged sectors and to enterprises that qualify~~ as ~~“high and new technology enterprises”,~~ a ~~status~~“resident ~~reassessed every three years. In addition, an~~ enterprise” isof ~~entitled to a 0% value-added tax rate if it uses recycled raw materials to manufacture its products~~China. ~~Xin~~Such ~~Ao was recognized as a~~classification ~~high~~will ~~and~~likely ~~new~~result ~~technology enterprise~~ in ~~January~~unfavorable ~~2012 and was entitled to a 15% preferential income~~ tax ~~rate~~consequences ~~for the three-year period ended December 2014. In addition, Xin Ao uses recycled raw materials~~ to ~~manufacture~~us ~~its products~~ and ~~was entitled~~our ~~to a 0% value~~non-~~added~~PRC ~~tax (the “VAT tax”) rate from June 2013~~stockholders. The favored treatment of being exempted from the VAT tax expired in June 2015, therefore, we will be subject to the 3% industry-standard rate and our value-added tax expenses increase, which could have a material adverse effect on our net income and results of operations.

~~RISKS~~We are ~~RELATED~~a TOholding ~~THE~~company ~~MARKET~~incorporated ~~FOR~~under ~~OUR~~the ~~COMMON~~laws ~~STOCK~~of Nevada. We conduct substantially all of our business through our wholly-owned and other consolidated entities in China, and we derive all of our income from these entities. Prior to January 1, 2008, dividends derived by foreign enterprises from business operations in China were not subject to the Chinese enterprise income tax. However, such tax exemption ceased as of January 1, 2008 and thereafter with the effectiveness of the new Enterprise Income Tax Law, or EIT Law.

~~Our~~Under the ~~shares~~EIT ofLaw, ~~common~~if ~~stock~~we are ~~very~~not ~~thinly~~deemed ~~traded~~to be a “resident enterprise” for Chinese tax purposes, ~~and~~a withholding tax at the ~~there~~rate ~~can~~of 10% would be noapplicable ~~assurance~~to ~~that~~any ~~there~~dividends ~~will~~paid by our Chinese subsidiaries to us. However, if we are deemed to be ana ~~active~~“resident enterprise” ~~market~~established outside of China whose “place of effective management” is located in China, we would be classified as a resident enterprise for ~~our~~Chinese ~~shares~~tax purposes and thus would be subject to an enterprise income tax rate of ~~common~~25% ~~stock~~on inall of our income, including interest income on the ~~future.~~proceeds from this offering on a worldwide basis.

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 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 the 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. 25

WeThe regulations dopromulgated ~~not~~pursuant ~~intend~~ to ~~pay~~the ~~dividends~~EIT onLaw ~~shares~~define the term “place of ~~our~~effective ~~common~~management” as “establishments ~~stock~~that ~~for~~carry out substantial and overall management and control over the ~~foreseeable~~manufacturing ~~future~~and business operations, ~~but~~personnel, accounting, properties, etc. of an enterprise.” The State Administration of Taxation issued a SAT Circular 82 on April 22, 2009, which provides that the “place of effective management” of a Chinese-controlled overseas-incorporated enterprise is located in China if wethe ~~intend~~following requirements are satisfied: (i) the senior management and core management departments in charge of its daily operations function are mainly located in the PRC; (ii) its financial and human resources decisions are subject to dodetermination or soapproval ~~our~~by ~~holding~~persons or bodies located in the PRC; (iii) its major assets, accounting books, company seals, and minutes and ~~structure~~files ~~may~~of ~~limit~~its board and shareholders’ meetings are located or kept in the ~~payment~~PRC; and (iv) no less than half of the enterprise’s directors or senior management with voting rights reside in the PRC. SAT Circular 82 applies only to overseas registered enterprises controlled by PRC enterprises, not to those controlled by PRC individuals. If the Company’s non-PRC incorporated entities are deemed PRC tax residents, such entities would be subject to PRC tax under the EIT Law. The Company has analyzed the applicability of the EIT Law and related regulations, and for each of the applicable periods presented, the Company has not accrued for PRC tax on such basis. In addition, although under the EIT Law and the related regulations dividends paid to us by our ~~stockholders~~PRC subsidiaries would qualify as “tax-exempted income,” we cannot assure you that such dividends will not be subject to a 10% withholding tax, as the PRC foreign exchange control authorities, which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. As a result of such changes, our historical operating results will not be indicative of our operating results for future periods and the value of our shares of common stock may be adversely affected. We are actively monitoring the possibility of “resident enterprise” treatment and are evaluating appropriate organizational changes to avoid this treatment, to the extent possible.

We ~~have no direct business operations, other than our ownership~~ ofmay ~~our~~be ~~subsidiaries.~~subject ~~While we have no current intention of paying dividends, should we decide in the future~~ to dofines ~~so, as a holding company, our ability to pay dividends~~ and ~~meet~~legal ~~other~~sanctions ~~obligations~~if ~~depends~~we ~~upon the receipt of dividends~~ or ~~other payments from~~ our ~~operating~~Chinese ~~subsidiaries~~employees ~~and~~fail ~~other holdings and investments. In addition, our operating subsidiaries, from time~~ to ~~time,~~comply ~~may~~with ~~be subject~~PRC toregulations ~~restrictions~~relating ~~on their ability~~ to ~~make distributions to us, including~~employee asstock aoptions ~~result~~granted of restrictive covenants in loan agreements, restrictions on the conversion of local currency into U.S. dollars or other hard currency and other regulatory restrictions as discussed below. If future dividends are paid in RMB, fluctuations in the exchange rate for the conversion of RMB into U.S. dollars may reduce the amount received by ~~U.S.~~overseas ~~stockholders~~listed ~~upon~~companies ~~conversion~~to ofPRC ~~the dividend payment into U~~citizens.~~S. dollars.~~

~~Chinese~~On December ~~regulations~~25, ~~currently~~2006, ~~permit~~ the ~~payment~~People’s Bank of ~~dividends~~China issued the Administration Measures on Individual Foreign Exchange Control, ~~only~~and ~~out~~its Implementation Rules were issued by the State Administration of ~~accumulated~~Foreign ~~profits~~Exchange as(“SAFE”) ~~determined~~on January 5, 2007. Both took effect on February 1, 2007. Under these regulations, all foreign exchange matters involved in ~~accordance~~an ~~with~~employee ~~Chinese~~stock holding ~~accounting~~plan, ~~standards~~stock ~~and~~option ~~regulations~~plan or similar plan in which PRC citizens’ participation requires approval from the SAFE or its authorized branch. ~~Our~~On ~~subsidiaries~~March 28, 2007, the SAFE issued the Application Procedure for Foreign Exchange Administration for Domestic Individuals Participating in ~~China~~Employee ~~are~~Stock ~~also~~Holding Plans or Stock Option Plans of Overseas Listed Companies, or Notice 78. Under Notice 78, ~~required~~PRC toindividuals ~~set~~who ~~aside~~participate in an employee stock option holding plan or a ~~portion~~stock option plan of ~~their~~an ~~after~~overseas ~~tax~~listed ~~profits~~company are ~~according~~required, through a PRC domestic agent or PRC subsidiary of the overseas listed company, to ~~Chinese~~register with the SAFE and complete ~~accounting~~certain ~~standards~~other procedures. We and ~~regulations~~our Chinese employees who have been granted shares or stock options pursuant to ~~fund~~our ~~certain~~share ~~reserve~~incentive plan ~~funds~~are subject to Notice 78. ~~Currently~~However, ~~our~~ ~~subsidiaries~~ in ~~China~~practice, there are significant uncertainties with regard to the ~~only~~interpretation ~~sources~~and implementation of ~~revenues~~Notice or78. ~~investment holdings~~We ~~for~~are committed to complying with the ~~payment~~requirements of ~~dividends~~Notice 78. IfHowever, ~~they~~we docannot ~~not~~provide ~~accumulate sufficient~~any ~~profits~~assurance ~~under~~that we or our Chinese ~~accounting~~employees ~~standards~~will ~~and~~be ~~regulations~~able to ~~first~~qualify ~~fund~~for ~~certain reserve~~or ~~funds~~obtain asany registration required by Notice 78. In particular, if we and/or our Chinese ~~accounting~~employees ~~standards~~fail to comply with the provisions of Notice 78, we ~~will~~and/or beour ~~unable~~Chinese employees may be subject to fines and legal sanctions imposed by the SAFE or other PRC government authorities, as a result of which our business operations ~~pay~~and ~~any~~employee ~~dividends.~~option plans could be materially and adversely affected.

29The discontinuation, reduction or delay of any of the preferential tax treatments currently available to us in the PRC could materially and adversely affect our business, financial condition and results of operations.

WePrior to ~~may~~January be1, 2008, under the old enterprises income tax law, Xin Ao was subject to ~~penny~~a ~~stock~~33% ~~regulations~~income tax rate, which was subject to certain tax holidays and preferential tax rates. Under the new enterprise income tax law effective January 1, 2008, or the EIT ~~restrictions~~Law, both foreign-invested enterprises and ~~you~~domestic ~~may~~enterprises ~~have~~are ~~difficulty~~subject ~~selling~~to ~~shares~~a unified 25% income tax rate. Under the EIT Law, preferential tax treatments will be granted to enterprises that conduct business in certain encouraged sectors and to enterprises that qualify as “high and new technology enterprises”, a status reassessed every three years. In addition, an enterprise is entitled to a 0% value-added tax rate if it uses recycled raw materials to manufacture its products. Xin Ao was recognized as a high and new technology enterprise in January 2012 and was entitled to a 15% preferential income tax rate for the three-year period ended December 2014. In addition, Xin Ao uses recycled raw materials to manufacture its products and was entitled to a 0% value-added tax (the “VAT tax”) rate from June 2013. The favored treatment of being exempted from the VAT tax expired in June 2015, therefore, we will be subject to the 3% industry-standard rate and our ~~common~~value-added tax expenses increase, which ~~stock.~~could have a material adverse effect on our net income and results of operations.

The SEC has adopted regulations which generally define so-called “penny stocks” to be an equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. If our common stock becomes a “penny stock”, we may become subject to Rule 15g-9 under the Exchange Act, or the “Penny Stock Rule”. This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers and “accredited investors” (generally, individuals with a net worth in excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000 together with their spouses). For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in the secondary market. 26

~~For any transaction involving a penny stock, unless exempt, the~~RISKS ~~rules~~RELATED ~~require~~TO ~~delivery,~~THE ~~prior~~MARKET toFOR ~~any~~OUR ~~transaction~~COMMON in a penny stock, of a disclosure schedule prepared by the SEC relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock. STOCK

~~There~~We have ~~can~~not bebeen noin ~~assurance~~compliance ~~that~~with ~~our~~Nasdaq’s ~~common~~requirements ~~stock will qualify~~ for ~~exemption~~continued ~~from~~listing ~~the~~and ~~Penny~~as ~~Stock~~a ~~Rule.~~result ~~In any event, even if~~ our common stock ~~were~~ ~~exempt~~may ~~from~~be ~~the Penny Stock Rule, we would remain subject to Section~~delisted ~~15(b)(6)~~from oftrading ~~the~~on ~~Exchange Act~~Nasdaq, which ~~gives~~would ~~the~~have ~~SEC the authority to restrict any person from participating in~~ a ~~distribution~~material ofeffect ~~penny~~on ~~stock,~~us ifand ~~the~~our ~~SEC finds that such a restriction would be in the public interest~~stockholders.

~~Item~~We were 1Bdelinquent in the filing of our periodic reports with the SEC as a result of which we are not in compliance with listing requirements of The Nasdaq Stock Market LLC (“Nasdaq”) Listing Rule 5250(c)(1), which requires timely filing of periodic financial reports with the SEC. ~~Unresolved~~Under Nasdaq’s listing rules, we were permitted to submit to Nasdaq a plan to regain compliance with the Nasdaq listing rules. We have submitted such a plan to the Nasdaq Staff, ~~Comments~~and Nasdaq is yet to decide on whether to grant an extension for us to regain compliance. We expect to file the delinquent report for the quarter ended September 30, 2018 as promptly as practicable following this 10-K filing, however there can be no guarantee that Nasdaq will accept our compliance plan, grant us the extension or that we will be able to file by the extended compliance period, in which case our common stock may be subject to delisting by Nasdaq. If our common stock is delisted, there can no assurance whether or when it would be listed for trading on Nasdaq or any other exchange. If our common stock is delisted, the market price of our shares will likely decline and become more volatile, and our stockholders may find that their ability to trade in our stock will be adversely affected. Furthermore, institutions whose charters do not allow them to hold securities in unlisted companies might sell our shares, which could have a further adverse effect on the price of our stock.

~~Not~~The delayed ~~applicable~~filing of some of our periodic reports has made us currently ineligible to use a registration statement on Form S-3 to register the offer and sale of securities, which could adversely affect our ability to raise future capital or complete acquisitions.

~~Item~~As a 2result of the delayed filing of some of our periodic reports with the SEC, we will not be eligible to register the offer and sale of our securities using a registration statement on Form S-3 until 12 months after the delinquent filings have been made. Should ~~Properties~~we wish to register the offer and sale of our securities to the public prior to the time we are eligible to use Form S-3, both our transaction costs and the amount of time required to complete the transaction could increase, making it more difficult to execute any such transaction successfully and potentially harming our financial condition.

~~There~~Our shares isof nocommon ~~private~~stock ~~land ownership in China. Individuals and companies~~ are ~~permitted~~very tothinly ~~acquire land use rights for specific purposes. We lease our 44~~traded,~~041~~ ~~square~~and ~~meter~~there ~~facility~~can ~~located~~be atno ~~Jia~~assurance 1,that ~~SanTaiShan,~~there ~~XiaoHongMen County,~~will ~~ChaoYang~~be ~~District,~~an ~~Beijing,~~active ~~China,~~market ~~from Beijing SanTaiShan Chemical Trading & Logistics Co., who was granted land use rights from the PRC government. The lease provides~~ for aour ~~four-year term beginning on October 1,~~shares 2013, with the option to extend following expiration. The lease is extended to September 30, 2022. The annual rent on the property is approximately $414,000. We also have a lease agreement for roadway access to the west side entry of ~~the concrete~~common ~~service~~stock ~~plant~~in ~~with an unrelated party, which will expire on June 30, 2019, with annual payment of approximately $15,000. In addition, we have a lease agreement for office space from Mr. Weili He,~~ the ~~Company’s Interim Chief Financial Officer, through October 31, 2018, with annual payments of approximately $24,000~~future.

WeOur shares ~~have~~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 ~~extensive~~active ~~fleet~~market for our shares of 78common ~~transit~~stock ~~mounted~~in ~~concrete~~the future. The market liquidity will be dependent on the perception ~~mixers,~~of 10our ~~pump~~operating ~~trucks,~~business and weany ~~have~~steps ~~access~~that our management might take to anbring ~~additional~~us 11to ~~concrete~~the ~~mixers~~awareness of investors. There can be ~~and~~no 5assurance ~~pump~~given ~~truck~~that ~~vehicles~~there ~~for~~will ~~lease~~be inany ~~Beijing~~awareness ~~depending~~generated. onConsequently, ~~specific~~investors ~~project~~may not be able to liquidate their investment ~~requirements.~~or ~~More~~liquidate ~~than~~it ~~half~~at a price that reflects the value of the ~~vehicles~~business. ~~are~~If ~~equipped~~a ~~with~~more ~~GPS~~active ~~and~~market ~~tracking devices~~should ~~from~~develop, the ~~plant~~price ~~central~~may ~~dispatch~~be ~~center~~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 ~~order~~the securities. Even if an investor finds a broker willing to ~~optimize~~effect ~~capacity~~a transaction in the shares of our common stock, the combination ~~utilization~~of brokerage commissions, ~~production~~transfer fees, taxes, if any, and ~~delivery~~any ~~schedules~~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.

~~Item~~We do 3.not ~~Legal~~intend ~~Proceedings~~to pay dividends on shares of our common stock for the foreseeable future, but if we intend to do so our holding company structure may limit the payment of dividends to our stockholders.

~~From~~We have ~~time~~no todirect ~~time~~business operations, weother ~~may~~than our ownership of our subsidiaries. While we have ~~disputes~~no ~~that~~current ~~arise~~intention of paying dividends, should we decide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations ~~ordinary~~depends ~~course~~upon the receipt of dividends or other payments from our ~~business~~operating subsidiaries and other holdings and investments. ~~Currently~~In addition, ~~there~~our ~~are~~operating nosubsidiaries, ~~material~~from ~~legal proceedings~~time to ~~which~~time, wemay ~~are~~be asubject ~~party,~~to orrestrictions on their ability to ~~which~~make ~~any~~distributions to us, including as a result of ~~our~~restrictive ~~property~~covenants isin ~~subject~~loan agreements, restrictions on the conversion of local currency into ~~that~~U.S. wedollars ~~expect~~or toother ~~have~~hard acurrency ~~material~~and ~~adverse~~other ~~effect~~regulatory onrestrictions ~~our~~as ~~financial~~discussed ~~condition~~below. If future dividends are paid in RMB, ~~results~~fluctuations in the exchange rate for the conversion of ~~operations~~RMB orinto ~~cash~~U.S. ~~flows~~dollars may reduce the amount received by U.S. stockholders upon conversion of the dividend payment into U.S. dollars.

~~Item~~Chinese regulations 4currently permit the payment of dividends only out of accumulated profits as determined in accordance with Chinese accounting standards and regulations. ~~Mine~~Our ~~Safety~~subsidiaries ~~Disclosures~~in China are also required to set aside a portion of their after tax profits according to Chinese accounting standards and regulations to fund certain reserve funds. Currently, our subsidiaries in China are the only sources of revenues or investment holdings for the payment of dividends. If they do not accumulate sufficient profits under Chinese accounting standards and regulations to first fund certain reserve funds as required by Chinese accounting standards, we will be unable to pay any dividends.

~~Not Applicable.~~27

30We may be subject to penny stock regulations and restrictions and you may have difficulty selling shares of our common stock.

~~PART~~The SEC IIhas adopted regulations which generally define so-called “penny stocks” to be an equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. If our common stock becomes a “penny stock”, we may become subject to Rule 15g-9 under the Exchange Act, or the “Penny Stock Rule”. This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers and “accredited investors” (generally, individuals with a net worth in excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000 together with their spouses). For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in the secondary market.

~~Item~~For any 5transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in a penny stock, of a disclosure schedule prepared by the SEC relating to the penny stock market. ~~Market~~Disclosure ~~for~~is ~~Registrant’s~~also ~~Common~~required ~~Equity~~to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, ~~Related~~monthly ~~Stockholder~~statements ~~Matters~~are required to be sent disclosing recent price information for the penny stock held in the account and ~~Issuer~~information ~~Purchases~~on ofthe ~~Equity~~limited ~~Securities~~market in penny stock.

~~Market~~There can ~~Information~~be no assurance that our common stock will qualify for exemption from the Penny Stock Rule. In any event, even if our common stock were exempt from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a restriction would be in the public interest.

~~Our common stock is listed on the NASDAQ Capital Market under~~Item ~~the symbol “CADC”~~1B. OnUnresolved ~~February~~Staff 25, 2013, our common stock was transferred from the NASDAQ Global Market to the NASDAQ Capital Market. The following table sets forth the quarterly high and low sales prices of a share of our common stock as reported by NASDAQ for the periods indicated.Comments

Year	Quarter Ending		High		Low
2017	June 30	$	3.80	$	2.00
2017	March 31	$	3.15	$	2.00
2016	December 31	$	3.20	$	1.50
2016	September 30	$	5.68	$	2.24
2016	June 30	$	3.20	$	1.80
2016	March 31	$	2.19	$	1.46
2015	December 31	$	3.19	$	1.51
2015	September 30	$	4.02	$	2.63

Not applicable.

~~Holders~~Item 2. ~~of Common Stock~~Properties

AsThere is ofno private land ownership in China. Individuals and companies are permitted to acquire land use rights for specific purposes. We lease our 44,041 square meter facility located at Jia 1, SanTaiShan, XiaoHongMen County, ChaoYang District, Beijing, China, from Beijing SanTaiShan Chemical Trading & Logistics Co., who was granted land use rights from the PRC government. The lease provides for a four-year term beginning on October 1, 2013, with the option to extend following expiration. The lease is extended to September 2630, ~~2017~~2022. The annual rent on the property is approximately $414,000. ~~there~~We ~~were~~also have ~~386~~a ~~stockholders~~lease agreement for roadway access to the west side entry of ~~record~~the concrete service plant with an unrelated party, which will expire on June 30, 2019, with annual payment of ~~our~~approximately ~~common~~$15,000. ~~stock~~In addition, we have a lease agreement for office space from Mr. Weili He, the Company’s Interim Chief Financial Officer, through October 31, 2023, with annual payments of approximately $25,000. We also have a lease agreement for office space in New York through May 31, 2019, with annual payments of $27,600.

~~Dividends~~We have an extensive fleet of 78 transit mounted concrete mixers, 10 pump trucks, and we have access to an additional 11 concrete mixers and 5 pump truck vehicles for lease in Beijing depending on specific project requirements. More than half of the vehicles are equipped with GPS and tracking devices from the plant central dispatch center in order to optimize capacity utilization, production and delivery schedules.

~~We have never paid dividends on our common stock~~Item 3. ~~While~~Legal any future dividends will be determined by our directors after consideration of the earnings, financial condition, and other relevant factors, it is currently expected that available cash resources will be utilized in connection with our ongoing operations.Proceedings

~~Item~~From time 6to time, the Company is a party to various legal actions. ~~Selected~~The ~~Financial~~majority ~~Data~~of these claims and proceedings relate to or arise from, commercial disputes, labor contract complaints and sales contract complaints. The Company accrues costs related to these matters when they become probable and as a result the amount of loss can be reasonably estimated (See Dispute Matters Arising in the Ordinary Course of Business for more information). In determining whether a loss from a claim is probable, and if it is possible to estimate the loss, the Company reviews and evaluates its litigation and regulatory matters on at least a quarterly basis in light of potentially relevant factual and legal developments. If the Company determines a favorable outcome is probable, or that the amount of loss cannot be reasonably estimated, the Company does not accrue costs for a potential litigation loss. In those situations, the Company discloses an estimate of the probable losses or a range of possible losses, if such estimates can be made as indicated below (See Legal Matters). Currently, except as otherwise noted below, the Company does not believe that it is possible to estimate the potential losses incurred or a range of reasonably possible losses related to the outstanding claims. Legal costs incurred in connection with loss contingencies are expensed as incurred.

~~Not Applicable.~~28

~~Item~~As 7.of ~~Management~~June 30, 2018, the Company’s VIE, ~~Discussion~~Xin ~~and~~Ao, ~~Analysis~~was subject to several civil lawsuits for which the Company estimated that it is more than likely to pay judgments in the amount of ~~Financial~~approximately ~~Condition~~$4.4 million (including interest and ~~Results~~penalty of ~~Operations~~$0.2 million). These amounts are presented in the accompanying consolidated balance sheets (See Accrued Contingent Liabilities). During the year ended June 30, 2018, additional estimated claims charges of approximately $2.8 million for remaining claim balances are presented in the accompanying consolidated statements of operations under the caption “Estimated claims charges”.

~~Overview~~As of the date of this 10-K, the Company’s management does not expect any other material liability from the disposition of claims from litigation individually, or in the aggregate that would have a material adverse impact on the Company’s consolidated financial position, results of operations and cash flows.

WeDue ~~are~~to athe ~~holding~~Company’s ~~company whose primary business~~ operations ~~are conducted~~in ~~through~~the ~~our~~PRC ~~wholly-owned~~and ~~subsidiaries~~the ~~Xin~~legal Aoenvironment ~~Construction~~in ~~Materials, Inc.~~the ~~(“BVI-ACM”)~~PRC,~~Beijing~~ Aoit ~~Hang~~is ~~Construction Material Technology Co., Ltd.~~possible ~~(“China-ACMH”),~~that ~~and~~the ~~our~~Company’s ~~variable interest entity~~VIE, ~~Beijing XinAo Concrete Group (“~~Xin Ao~~”).We~~ ~~engage~~could inbe ~~the~~named ~~production~~as ~~and~~a ~~supply~~defendant ofin ~~advanced~~the ~~construction materials~~litigation ~~for~~based ~~large~~upon ~~scale~~the ~~commercial,~~guarantees ~~residential,~~of ~~and~~Mr. ~~infrastructure developments,~~Han and ~~are primarily focused on producing and supplying a wide range~~Mr. ofHe ~~advanced ready-mix concrete materials for highly technical, large scale,~~ and ~~environmentally-friendly~~/or ~~construction~~their ~~projects~~related ~~that are mainly sold in the People’s Republic of China (“PRC”)~~parties.

~~During~~(i) ~~the~~Disputes ~~year~~Arising ~~ended~~in ~~June~~the ~~30,~~Ordinary ~~2017,~~Course weof ~~supplied materials and provided services to our projects through one ready-mixed concrete plant in Beijing.~~ Business

~~Our~~As ~~management~~of ~~believes~~June ~~that~~30, we2018, ~~have~~ the ~~ability~~Company had toapproximately ~~capture~~$4.4 ~~a greater~~million ~~share~~in accrued contingent liabilities, net of ~~the~~litigation ~~Beijing~~paid ~~market~~by ~~via~~related ~~expanding~~party ~~relationships~~of approximately $1.3 million, and ~~networking~~an additional $2.8 million claims charges for the year ended June 30, ~~signing~~ ~~new~~2018. ~~contracts~~As of June 30, ~~and~~2018, ~~continually~~further ~~developing~~details regarding ~~market-leading~~the ~~innovative~~type of litigation disputes and ~~eco-friendly~~ ~~ready-mix~~accrued ~~concrete~~costs ~~products.~~associated with the claims are summarized as follows:

Dispute matter	Claims amount as of June 30, 2018		Interest and penalties		Total claims amount as of June 30, 2018
1) Guarantees	$	2,234,358	$	-	$	2,234,358
2) Sales		20,922		9,324		30,246
3) Purchase		1,139,424		125,761		1,265,185
4) Leases		2,066,269		95,987		2,162,256
5) Labor		27,003		-		27,003
6) Others		12,738		-		12,738
Total	$	5,500,714	$	231,072		5,731,786
Payments						(1,300,999	)
Accrued contingent liabilities					$	4,430,787

~~Principal~~(ii) ~~Factors~~Legal ~~Affecting Our Financial Performance~~ matters

WeAs ~~believe~~of ~~that~~June 30, 2018, the ~~following~~Company’s VIE, ~~factors~~Xin ~~will~~Ao, ~~continue~~was subject to ~~affect~~several civil lawsuits with potential judgments in the amount of approximately $14.2 million and the ~~our~~likelihood ~~financial~~of ~~performance:~~the outcome of these lawsuits cannot be determined as of the date of this report. Some of these lawsuits involved with the Company were mainly due to the personal guarantees by Mr. Xianfu Han, and Mr. Weili He, the Company’s shareholders and officers, which they are also the shareholders of Xin Ao. Because Mr. Han and Mr. He are the shareholders of Xin Ao, the plaintiffs included Xin Ao in the joint complaints. Xin Ao was not involved in any of the lawsuits but named as a joint defendant in the lawsuits. As a result, Xin Ao might have exposure to the pending judgements in the future under PRC laws.

-On ~~Large~~September ~~Scale Contractor Relationships. We have contracts with major construction contractors that are constructing key infrastructure~~28, commercial and residential projects. Our sales efforts focus on large-scale projects and large customers which place large recurring orders and present less credit risk to us. For the year ended June 302018, ~~2017, two customers accounted for approximately 12~~Mr.0% Han and 9Mr.2% ofHe ~~our~~signed ~~sales.~~an ~~Should~~agreement wewith ~~lose any large scale customers in~~ the ~~future~~Company ~~and are unable~~ to ~~obtain~~waive ~~additional customers, our revenues will suffer. - Experienced Management. Management’s technical knowledge and business relationships give us~~ the ~~ability~~liabilities toof secure major infrastructure projects, which provides us with leverage to acquire less sophisticated operators, increase production volumes, and implement quality standards and environmentally sensitive policies. If there were to be any significant turnover in our senior management, it could deplete the ~~institutional~~Company ~~knowledge held by our existing senior management team. - Innovation Efforts. We strive to produce the most technically~~ and ~~scientifically~~personally ~~advanced~~become ~~products~~responsible for all ~~our customers and maintain close relationships with Tsinghua University, Xi’an University~~ of ~~Architecture~~the ~~and~~pending ~~Technology~~potential ~~and~~judgements ~~Beijing~~amount ~~Dongfang~~from ~~Jianyu Institute of Concrete Science & Technology. We entered technical service contracts with~~ these ~~research~~related ~~institutes~~civil ~~to further improve our production and products~~lawsuits. IfBoth ~~our research and development efforts are not sufficient to adapt to the change in technology in the industry, our products may not compete effectively~~Mr. -Han ~~Competition. Our competition includes a number of state-owned~~ and ~~large private PRC-based manufacturers and distributors that produce and sell products similar to ours~~Mr. WeHe ~~compete~~agreed primarily on the basis of quality, technological innovation and price. Essentially, all of the contracts on which we bid are awarded through a competitive bid process, with award contracts often being made awarded to ~~the~~liquidate their ~~lowest~~personal ~~bidder,~~assets ~~though other factors such as shorter schedules~~ or ~~prior~~their ~~experience~~ownership ~~with~~interest ~~the~~in ~~customer~~their ~~are~~privately ~~often~~held ~~just~~companies asto ~~important.~~pay ~~Within~~for ~~our~~any ~~markets, we compete with many national, regional and local state- owned and private construction entities some~~ of ~~which~~the ~~have~~pending ~~achieved~~potential ~~greater~~judgements amounts ~~market penetration or have greater financial and other resources than us. In addition, there are a number~~ of ~~larger~~approximately ~~national companies in our industry that could potentially establish a presence in our markets and compete with us for contracts~~$14.2 ~~If we are unable to compete successfully in our markets, our relative market share and profits could be reduced~~million.

~~Consolidated~~The ~~Results~~type of ~~Operations~~litigation disputes with contingencies associated with are summarized as follows as of June 30, 2018:

Comparison of the years ended June 30, 2017 and 2016

Dispute matter	Claims amount as of June 30, 2018		Interest and penalties		Total claims amount as of June 30, 2018
1) Guarantees	$	58,126,066	$	10,442,814	$	68,568,880
2) Purchase		1,643,380		41,476		1,684,856
3) Leases		928,387		-		928,387
4) Labor		236,542		-		236,542
Total	$	60,934,375	$	10,484,290		71,418,665
Settled claims						(57,257,305	)
Remaining claims amount					$	14,161,360

~~The following table sets forth key components of our results of operations, in US dollars:~~29

					Year ended
					June 30,
										Percentage
		2017			2016			Change		Change
Total revenue	$	45,048,413		$	53,678,660		$	(8,630,247	)	(16	)%
Total cost of revenue		43,953,477			51,941,202			(7,987,725	)	(15	)%
Gross profit		1,094,936			1,737,458			(642,522	)	(37	)%
Provision for doubtful accounts		(3,352,063	)		(3,854,014	)		(501,951	)	(13	)%
Selling, general and administrative expenses		(5,669,702	)		(6,814,977	)		(1,145,275	)	(17	)%
Research and development expenses		(846,438	)		(707,492	)		138,946		20%
Loss on sale of assets group		-			(386,906	)		(386,906	)	(100	)%
Impairment loss of long-lived assets		-			(2,624,487	)		(2,624,487	)	(100	)%
Loss from operations		(8,773,267	)		(12,650,418	)		(3,877,151	)	(31	)%
Other expense, net		(997,560	)		(1,410,621	)		(413,061	)	(29	)%
Loss before provision for income taxes		(9,770,827	)		(14,061,039	)		(4,290,212	)	(31	)%
Provision for income taxes		-			(1,744,975	)		1,744,975		(100	)%
Net loss	$	(9,770,827	)	$	(15,806,014	)	$	6,035,187		(38	)%

The major legal cases are summarized as follows:

321) Claims Resulting from Executives’ Personal Guarantee to Affiliated Entities

~~Revenue~~(a) Mr. ~~Our~~Xianfu ~~revenue~~Han, isthe ~~primarily~~CEO ~~generated~~and ~~from sales~~director of ~~our~~the ~~advanced~~Company ~~ready-mix~~and ~~concrete~~a ~~products~~shareholder of Xin Ao, Mr. ~~For~~Weili He, the ~~year~~interim ~~ended~~CFO and director of the Company and a shareholder of Xin Ao, and Xin Ao (the “Defendants”) were parties to a lawsuit filed on June 3023, 2017, weby ~~generated~~China ~~total~~Cinda ~~revenue~~Asset ofManagement ~~approximately~~Co., ~~$45~~Ltd.0 ~~million,~~Beijing asBranch ~~compared~~(“Cinda Beijing Branch”) in the Beijing First Intermediate People’s Court (the “Beijing Intermediate Court”) to ~~approximately~~ ~~$53~~seek compensatory damages, liquidated damages, costs, and attorney’s fees for default in a certain loan repayment.7 ~~million~~The ~~during~~loan ~~the~~agreement ~~year~~was ~~ended~~entered into by and between Xin Ao Ecological Construction Materials Co., Ltd. (“Borrower”) and Cinda Beijing Branch dated as of June 3023, ~~2016~~2014 with Mr. Han and Mr. He acting as the guarantors for such loans (the “Guarantors”). Mr. Han and Mr. He together are the controlling shareholders of the Borrower, aholding ~~decrease~~an aggregate of 60% equity interests of the Borrower. The aggregate amount of the loan was RMB288,506,497 (approximately US$843.6 million,) orwith 16interest at 12.8% per annum (the “Loan”). ~~The~~Cinda ~~decrease~~Beijing inBranch ~~revenue~~alleged ~~was~~that ~~principally~~since ~~due~~ the Borrower breached its obligation to ~~decreased~~make ~~sales~~the ~~volume~~repayment of the Loan on the maturity date, the Guarantors, along with Xin Ao and those entities owned or controlled by ~~14%~~the Guarantors, ~~because~~should ofbe brought into the ~~strengthened~~lawsuit ~~result~~as co-defendants (the “Defendants”). On July 5, 2017, Beijing Intermediate Court ruled in favor of Cinda Beijing Branch and issued a judgment for execution to freeze the ~~PRC government~~Defendants’s ~~increased~~assets, ~~inspections~~an ofaggregate ~~overloaded~~amount ~~transportation~~of ~~vehicles~~RMB 304,972,608 (approximately US$46.1 million) which ~~also~~ ~~affected~~shall ~~our~~be ~~sales~~used for the repayment of ~~our~~the ~~concrete~~Loan, ~~truck~~the ~~transportation~~liquidated ~~services.~~damages, ~~The decrease~~the ininterest ~~revenue~~on ~~was~~the ~~offset~~Loan, and other costs and expenses undertaken by Cinda Beijing Branch. Following the ~~increase~~mediation, inChina ~~our~~Cinda ~~selling~~Asset ~~price~~Management Co., Ltd. (“Cinda”), two shareholders of ~~concrete by~~Da 3%Tong ~~during~~Lianlv Technologies Co., Ltd. (“Datong Lianlv”), Beijing Ao Huan Fund Management Co., Ltd. (“Ao Huan”), and Shou Tai Jin Xin (Chang Xing) Investment Management Co., Ltd (“Jin Xin”) entered into a certain limited partnership agreement (the ~~year~~“Partnership ~~ended~~Agreement”) ~~June~~on 30December 22, 2017 to settle the lawsuit. Datong Lianlv is an affiliate of the Company and Xin Ao. Cinda is the parent company of Cinda Beijing Branch. As provided in the Partnership Agreement, asthe ~~compared~~distributions of the limited partnership shall be allocated to Cinda first, who made a capital contribution in the ~~same~~form ~~period~~of its rights, title and interests in ~~2016~~ and to the repayment of the Loan in an aggregate amount of RMB 322,435,300 (approximately US$48.7 ~~The~~million) ~~decrease~~(the ~~was~~“Capital ~~also~~Contribution”). ~~attributable~~Pursuant to the 6Partnership Agreement, payment shall be made until Cinda has received an amount equal to the aggregate of its unreturned Capital Contributions and a cumulative distribution equal to 7.5% ~~depreciation~~of all distributions made. Datong Lianlv made its capital contribution in cash in an aggregate amount of ~~the~~RMB ~~Chinese Renminbi~~150,000,000 ~~against~~(approximately US$22.5 million) along with its shareholders consent to transfer 99% of Datong Lianlv’s equity interests to the Ulimited partnership.S. ~~Dollar~~The ~~during~~PRC legal counsel of Xin Ao indicated Cinda and Cinda Beijing Branch orally confirmed that this claim was fully settled in the ~~year~~form ~~ended~~of ~~June~~the ~~30,~~Partnership ~~2017~~Agreement. In February 2018, the Cinda Beijing Branch filed an enforcement order with the court as ~~compared~~ the partnership has not been formed at that time. The partnership was subsequently formed in March 2018. No attempt to collect payment from Xin Ao has been made since the ~~same~~enforcement ~~period~~order was filed in ~~2016~~February 2018. Based upon the legal opinion issued by the Company’s PRC legal counsel, Xin Ao believes a favorable outcome is probable of the exposure to the pending judgements as the enforcement order has been resolved with the establishment of the Partnership.

~~Cost~~(b) ofOn ~~Revenue.~~July ~~Total~~11, ~~cost of revenue~~2018, ~~which~~ ~~consists~~Chengde ofCounty ~~direct~~Rural ~~labor,~~Cooperatives ~~rentals,~~Credit ~~depreciation,~~Union ~~other~~(the ~~overhead~~“Credit ~~and~~Union”) ~~raw materials,~~filed ~~including~~an ~~inbound~~arbitration ~~freight~~demand ~~charges,~~(“Arbitration ~~was~~Demand”) ~~approximately~~with ~~$44.0 million for~~ the ~~year~~People’s ~~ended~~Court ~~June~~of 30Shuangqiao District, ~~2017~~Chengde, asHebei ~~compared~~Province to(“Shuangqiao ~~approximately~~Court”) ~~$51.9~~against ~~million~~certain ~~for~~ entities and individuals (collectively the ~~year~~“Respondent”) ~~ended~~including ~~June~~Xin ~~30,~~Ao ~~2016,~~and aChengde ~~decrease~~Tianhang ofConcrete ~~approximately~~Co $7Ltd.9 ~~million,~~(“Chengde orTianhang”) ~~15%~~and Chengde Kaixuan Real Estate Development Co. ~~The~~ ~~decrease~~Ltd. (“Chengde Kaixuan”) in ~~cost~~connection ofwith ~~revenue~~Chengde ~~was~~Tianhang’s ~~primarily~~potential ~~associated~~default in its loan repayment. In accordance with the ~~decrease~~loan ~~of production~~agreement, ~~volume~~Mr. Weili He and ~~the~~Mr. ~~decrease~~Xianfu ofHan ~~unit~~together ~~production~~acted ~~costs~~as ~~mainly~~the ~~caused~~guarantors byfor ~~the decrease~~such ofloan. ~~concrete~~In ~~truck~~addition, ~~rental~~Mr. ~~expenses~~Han ~~after~~and Mr. He were the ~~sales~~controlling ofshareholders ~~our~~and ~~concrete~~officers ~~plant in~~of ~~the~~Xin ~~eastern~~Ao, ~~suburban~~which ~~area~~is a shareholder of ~~Beijing~~Chengde ~~and~~Tianhang. ~~because~~Mr. weHan ~~had~~and ~~fewer~~Mr. ~~repair~~He ~~expenses for~~were ~~our~~therefore ~~own~~named ~~trucks~~as co-respondents in ~~our~~the ~~manufacturing~~Arbitration ~~overhead~~Demand, ~~cost~~where ~~during~~ the ~~year~~Bank ~~ended~~sought ~~June 30~~property preservation. Shuangqiao Court, ~~2017~~accepting the Arbitration Demand of the Bank, asrendered ~~compared~~a decision to seize the ~~same~~bank ~~period~~deposits or equivalents of Respondent in ~~2016~~an aggregate amount of RMB 26,000,000 (approximately US$3.9 million).

~~Gross Profit. Total gross profit was approximately $1.1 million for the year ended June~~ 30, 2017, as compared to approximately $1.7 million in gross profit for the year ended June 30, 2016, a decrease of approximately $0.6 million, which was primarily a result of decreases in sales revenues during the year ended June 30, 2017, as compared to the same period in 2016.

~~Provision~~(c) ~~for~~On ~~Doubtful~~October ~~Accounts. We had provision for doubtful accounts charges of approximately $3.4 million for the year ended June 30~~9, 2017, asYong ~~compared~~Fan tofiled ~~approximately $3.9 million during the year ended June 30, 2016,~~ a ~~decrease~~lawsuit ofagainst ~~approximately~~Beijing ~~$0.5~~Lianlv ~~million,~~Technology orGroup ~~13%~~Co. ~~The~~Ltd ~~decrease was~~(“Beijing ~~attributable~~Lianlv”), toXin ~~the fact that fewer accounts receivable became over 720 days past due during the year ended June 30~~Ao, ~~2017,~~and ~~as compared to the same period in 2016~~Mr. AtWeili ~~the end of each quarter~~He, wein ~~conduct~~connection anwith ~~aging~~Beijing ~~analysis of each customer~~Lianlv’s ~~arrears~~failure to ~~determine~~pay ~~whether~~off the ~~allowance~~principal ~~for~~and ~~doubtful~~interest ~~accounts~~of ~~is adequate. In establishing the allowance for doubtful accounts~~RMB2,927,400 we(approximately ~~consider historical~~US$0.4 ~~experience,~~million) ~~the~~under ~~economic~~its ~~environment,~~loan ~~trends~~agreement in (the ~~construction industry,~~“Loan ~~expected~~Agreement”). ~~collectability~~Given ofthat ~~amounts~~Mr. ~~receivable~~Weili ~~that~~He ~~are~~acted ~~past~~as ~~due, and~~ the ~~expected~~guarantor ~~collectability~~for ofsuch ~~overdue~~loan, ~~receivables~~Mr. AnHe ~~estimate~~was ofbrought ~~doubtful accounts~~into isthe ~~recorded~~lawsuit ~~when~~as ~~collection~~one of the ~~full~~co-defendants. ~~amount~~Since ~~is no longer probable~~Mr. ~~Known~~ ~~bad~~He ~~debts~~is ~~are~~one ~~written~~of ~~off against~~ the ~~allowance~~controlling ~~for~~shareholders ~~doubtful~~of ~~accounts~~Xin ~~when identified. After reviewing individual balances~~Ao, weXin ~~provide~~Ao awas ~~provision~~also ofbrought ~~15% for~~into ~~accounts~~the ~~receivable~~lawsuit ~~past~~as ~~due more than 180 days but less than~~ one ~~year,~~of ~~40% for~~the ~~accounts~~co-defendants. ~~receivable~~The ~~past~~Court ~~due~~rendered ~~from~~a ~~one~~judgement toin ~~two~~May ~~years~~2018, ~~75%~~ruling ~~for accounts receivable past due beyond two years, 100% for accounts receivable past due beyond three years, plus additional amounts as necessary.~~that

As1) Beijing Lianlv shall pay Yong Fan the damages in an amount of ~~June~~RMB 302.895 million (approximately US$0.4 million) as principal of the loan and an amount of RMB32,400 ~~2017~~(approximately US$5,000) ~~our~~as ~~accounts~~interest ~~receivable~~of ~~aging~~the ~~are~~loan ~~as follows:~~(the amount of expected interest was computed on the basis of the amount of principal with a simple rate of 24%per annum. As of the date of the report, Beijing Lianlv has not made any payment);

		Balance			1-90		91-180		181-360			361-720			over 720			Over 1,080
					days		days		days			days			days			Days
Accounts and notes receivable	$	63,370,426		$	9,701,732	$	12,078,272	$	14,946,835		$	21,286,485		$	3,939,138		$	1,417,964
Allowance for doubtful accounts		(15,827,349	)		-		-		(2,242,025	)		(8,515,978	)		(3,651,382	)		(1,417,964	)
Accounts and notes receivable, net	$	47,543,077		$	9,701,732	$	12,078,272	$	12,704,810		$	12,770,507		$	287,756		$	-

Xin Ao and Mr. Weili He are entitled to the right of recourse to Beijing Lianlv.

~~Selling,~~(d) ~~General~~On ~~and~~January ~~Administrative~~8, ~~Expenses. Selling~~2018, ~~general~~Agricultural ~~and~~Bank ~~administrative~~of China Tangshan Branch (the “~~SG&A~~Bank”) ~~expenses~~filed ~~consist~~an ofarbitration ~~sales commissions,~~demand ~~advertising~~(“Arbitration ~~and~~Demand”) ~~marketing~~with ~~costs,~~People’s ~~office~~Court ~~rent~~of ~~and~~Fengrun ~~expenses~~District, ~~costs associated~~Tangshan, ~~with~~Hebei ~~staff~~Province ~~and~~(“Fengrun ~~support~~Court”) ~~personnel~~against ~~who~~certain ~~manage~~entities ~~our~~and ~~business~~individuals ~~activities,~~ including Xin Ao and ~~professional~~Tangshan ~~fees~~Xinglong ~~paid~~Technology Development Co. WeLtd. ~~incurred~~(“Xinlong”) ~~selling,~~in ~~general~~connection ~~and~~with ~~administrative expenses~~Xinlong’s breach of ~~approximately~~a $5loan agreement.7 ~~million~~In ~~for~~accordance with the ~~year~~loan ~~ended~~agreement, ~~June~~Xin 30Ao, ~~2017,~~ as ~~compared~~ tothe ~~approximately~~guarantor ~~$6.8~~on ~~million~~such ~~for~~loan from the ~~year ended June 30~~Bank, ~~2016,~~was ~~a decrease~~named ofas ~~approximately~~co-respondent ~~$1.1~~to ~~million.~~the ~~The~~Arbitration ~~decrease~~Demand, ~~was~~where ~~primarily~~the ~~due~~Bank tosought aproperty $0preservation.~~3 million~~ ~~decrease~~Fengrun inCourt, ~~professional~~accepting ~~fees,~~the ~~$0.2~~Arbitration ~~million~~Demand ~~decrease~~of inthe ~~deprecation~~Bank, ~~$0.2~~ ~~million~~rendered ~~decrease~~a indecision ~~stock-based~~to ~~compensation~~seize ~~expense,~~the ~~$0.1~~bank ~~million~~deposits ~~decrease in~~or ~~office~~equivalents ~~expenses,~~of ~~$0.1~~respondents ~~million~~in ~~decrease~~an inaggregate ~~meals~~amount ~~and~~of ~~entertainment~~RMB ~~expenses~~51, 000,000 (approximately USD $07.27 million) ~~decrease~~against inthe ~~other~~respondents. ~~various~~Mr. ~~G&A~~Han ~~expenses,~~and ~~which~~Mr. ~~was~~He ashave ~~compared to~~provided ~~the~~personal ~~year~~indemnity ~~ended~~for ~~June~~Xin’Ao’s ~~30,~~potential ~~2016~~guarantee liability.

33 31

~~Research~~2) ~~and~~Purchase Development Expenses. Research and development expenses were approximately $0.8 million for the year ended June 30, 2017, as compared to $0.7 million for the same period in 2016. The Company maintained its research and development expenditures during this period as compared to the same period in 2016.dispute

~~Loss~~(a) ~~from~~Beijing ~~Sales~~Jinlong ofDatong ~~Assets~~Trading ~~Group~~Co. ~~Effective February~~Ltd. ~~29,~~(“Jinlong”) ~~2016~~filed a lawsuit on April 6, we2017 ~~terminated~~against anBeijing ~~operating~~Yucheng ~~lease~~Jianda ~~for~~Concrete ~~our~~Co. ~~concrete~~Ltd. ~~plant~~(“Chengyu”) in the ~~eastern~~People’s ~~suburban~~Court ~~area~~in ofChangping District, Beijing ~~because~~(“Changping ~~the~~Court”) ~~plant~~to seek compensatory damages, interest and attorney’s fees (“Chengyu Action”). A Concrete Purchase Agreement was ~~not~~entered ~~operating~~into ~~at ideal~~by ~~capacity~~and between Chengyu and weLida ~~did~~Jiye ~~not~~Co. ~~anticipate~~Ltd. ~~that~~(“Lida”) iton ~~would~~April 30, 2016 for a construction project (the “Project”). The purchase price of the concrete supplied by Lida was in an aggregate amount of RMB 5,595,093.2 (approximately US$0.8 million), the ~~foreseeable future~~payment of which was overdue. WeOn April 5, 2017, Lida entered aninto a debt assignment agreement with aJinlong ~~third~~to ~~party~~assign toits ~~terminate~~right, title and interests in and to the ~~lease~~repayment of ~~the concrete~~such ~~plant~~overdue purchase price against Chengyu. ~~Under~~Chengyu ~~the~~was ~~agreement~~notified on such transaction on April 6, ~~the~~2017. ~~fair~~Xin ~~value~~Ao, as the contractor of ~~net~~the ~~assets~~Project and one of the interested parties whose material interests are directly related ~~operation~~ to the proceeding, was ~~determined~~bought tointo bethe ~~RMB~~lawsuit 13as a co-defendant.7 ~~million~~Xin ~~(approximately~~Ao ~~$2.1~~filed ~~million)~~a counterclaim for a jurisdiction challenge, ~~and~~ which was ~~settled~~denied ~~for~~by ~~RMB~~the 11Changping Court.2 ~~million~~The ~~(approximately~~Concrete ~~$1.7~~Purchase ~~million).~~Agreement Weprovided ~~recognized a~~that ~~loss~~“any dispute arising out of ~~approximately~~the ~~$0.4~~agreement ~~million~~shall ~~from~~be governed by the ~~termination~~court oflocated in the ~~lease~~place ~~for~~ the ~~year~~ ~~ended~~agreement ~~June~~was 30executed”, ~~2016~~which was Changping, Beijing. On January 10, 2018, Changping Court rendered a decision in favor of Xin Ao.

~~Impairment~~(b) ~~loss~~Nanling ofYirui ~~long-lived~~Materials ~~assets~~Supplier Co., ~~During~~Ltd. (Nanling Yirui”) filed a lawsuit against Sihong Jinghong Sheng Concrete Co., Ltd. (“Sihong”) on October 23, 2017 in the ~~year~~ ~~ended~~People’s ~~June~~Court 30in Nanling County, ~~2016~~Anhui Province, weto ~~performed~~seek ancompensatory ~~impairment~~damages, ~~testing~~interest onand ~~our~~attorney’s ~~long-lived assets~~fees. A Raw Material Purchase Agreement was entered into by and ~~recorded~~between Nanling Yirui and Sihong on April 30, 2017. The purchase price of raw materials supplied by Nanling Yirui was in an ~~impairment~~aggregate ~~loss~~amount ~~amounting~~of toRMB 3,452,799 (approximately US$20.65 million ), the payment of which was ~~mainly~~overdue. ~~caused~~Mr. byXianfu ~~the~~Han ~~decrease~~and inMr. ~~concrete~~Weili ~~selling~~He ~~prices~~are ~~during~~ the ~~fourth~~ ~~quarter~~shareholders of ~~this~~Sihong. ~~year~~Since ~~while~~Mr. ~~cost~~Han and Mr. He are the controlling shareholders of ~~cement~~Xin ~~has~~Ao, ~~increased~~Xin ~~recently~~Ao ~~which lead~~was toalso ~~projected~~brought ~~gross~~into ~~profits~~the tolawsuit beas ~~lower~~a co-defendant. WeThe ~~did~~Court ~~not~~rendered ~~have~~a ~~such~~final ~~impairment charges~~judgement ~~during~~in June 2018 in favor of Nanling Yirui. As of the ~~year~~date ~~ended~~of ~~June~~the 30report, ~~2017.~~Sihong has not made any payment.

~~Loss from Operations. We had incurred a loss from operations of approximately $8.8 million and $12.7 million for the years ended June 30, 2017 and 2016, respectively. This decrease of approximately $~~3~~.9 million~~) inLeasing loss from operations was primarily due to a $0.4 million of loss on sale of asset group and $2.6 million on impairment loss of long-lived assets during the year ended June 30, 2016 which we did not have such losses during the same period in 2017.disputes

~~Other~~On March ~~(Expense)~~6, ~~Income~~2018, ~~Net~~Beijing Chengda Yu Concrete Co., ~~Our~~Ltd ~~other~~(“Beijing ~~expense~~Chengda”) file a lawsuit against Xin Ao in connection ~~consists~~with Xin Ao’s breach of ~~interest~~a ~~income~~rental ~~(expense)~~lease. Beijing Chengda stated that on January 24, ~~finance~~2014 ~~expense~~both ~~and~~parties ~~other~~entered ~~non-operating~~into a lease ~~income~~agreement (~~expense~~the “Agreement”). WeA ~~had~~lease ~~other~~addendum ~~expense~~was oflater ~~approximately~~entered $1into on February 25, 2014.0 ~~million~~The ~~during~~Agreement ~~the~~provided ~~year~~that, ~~ended~~effective ~~June~~from July 18, 2013 to April 30, ~~2017~~2018, ~~consisting~~XinAo ~~primarily~~shall ofrent ~~aged~~Beijing ~~customer~~Chengda’s ~~deposits~~property, ~~that~~the weConcrete Station, ~~determined~~and ~~that~~assume weall ~~are~~credits noand ~~longer~~debts ~~required~~incurred toduring ~~repay~~the term of the lease agreement. Mr. Xianfu Han and ~~recognized~~Mr. asWeili ~~other~~He signed a personal ~~income~~guaranty ~~accordingly.~~agreement Wewith ~~earned~~Xin ~~interest~~Ao ~~income~~to undertake the liabilities of ~~approximately~~Xin ~~$30,000~~Ao ~~and~~in ~~$0.3 million~~the ~~for~~event of its breach on the ~~years~~lease ~~ended~~agreement. ~~June~~On 30March 31, 2017, ~~and~~Beijing ~~2016,~~Chengda ~~respectively.~~was ~~Approximately $0.8~~sued ~~million~~by ofBeijing ~~interest~~Zhongtong ~~expense~~Jiang ~~was~~Xin’hang ~~recorded~~Construction ~~for~~Materials ~~each~~Co., ofLtd ~~the~~for ~~years~~an ~~ended~~unpaid ~~June~~balance ~~30,~~in ~~2017~~an ~~and~~amount ~~2016,~~of ~~and~~RMB 6,246,059 (approximately US$0.69 million ~~and~~in ~~$0.9~~total) ~~million~~in ofconnection ~~finance~~with utilizing the Concrete Station. Beijing ~~expense~~Chengda ~~was~~then ~~recorded~~brought a lawsuit against Xin Ao for the ~~years~~payment ~~ended~~of ~~June~~such ~~30,~~unpaid ~~2017~~balance ~~and~~together ~~2016,~~with the legal fees in connection ~~respectively~~with the lawsuit. The case is still under review by the court, and no potential judgment amount has been decided.

~~Provision~~4) ~~for~~Labor Income Taxes. We did not incur provision for income taxes for the year ended June 30, 2017, because we had net operating losses on deferred tax assets for which we previously provided 100% allowance to be utilized during the period. We incurred approximately $1.7 million provision for income for the year ended June 30, 2016 represent 100% allowance that we previously capitalized as deferred tax assets. disputes

~~Net~~During 2017, ~~(Loss)~~Sihong ~~Income.~~Jinghong WeSheng ~~had~~Concrete ~~net~~Co., ~~loss~~Ltd. ~~of approximately~~(“Sihong”) ~~$9.8~~was ~~million~~subject ~~for~~to ~~the~~certain ~~year~~labor ~~ended~~disputes. ~~June~~The ~~30,~~potential ~~2017,~~total amounts asof ~~compared~~judgment tois ~~a net~~around ~~loss~~RMB of1,701,979 (approximately US$150.83 million). ~~for~~Mr. ~~the~~Xianfu ~~year~~Han ~~ended~~and ~~June~~Mr. ~~30,~~Weili ~~2016,~~He aare the shareholders ~~positive~~of ~~change~~Sihong. inSince Mr. Han and Mr. He are the ~~amount~~controlling shareholders of ~~approximately~~Xin ~~$6.0~~Ao, ~~million.~~Xin ~~Such~~Ao ~~change~~ was also brought into the lawsuit as a ~~result~~co-defendant. As of the ~~combination~~date of the ~~factors~~report, asSihong ~~discussed~~has ~~above~~not made any payment.

34Item 4. Mine Safety Disclosures

~~Liquidity and Capital Resources~~ Not Applicable.

As of June 30, 2017, we had cash and cash equivalents of approximately $0.2 million and restricted cash of approximately $4.2 million, which was held by subsidiaries located outside the U.S. We would be required to accrue and pay U.S. taxes if we were to repatriate these funds. Any company which is registered in mainland PRC must apply to the State Foreign Exchange Administration for approval in order to remit foreign currency to any foreign country. We currently do not intend to repatriate to the U.S. the cash held by our foreign subsidiaries. However, if we were to repatriate funds to the U.S., we would assess the feasibility and plan any transfer in accordance with foreign exchange regulations, taking into account tax consequences. As we conduct all of our operations in the PRC, the restriction on the conversion of cash held in RMB to other currencies should not affect our liquidity. 32

~~In assessing our liquidity, we monitor and analyze our cash~~PART ~~on-hand and our operating and capital expenditure commitments. Our liquidity needs are to meet our working capital requirements, operating expenses and capital expenditure obligations.~~ II

~~We engage in the production of advanced construction materials~~Item for large scale infrastructure, commercial and residential developments. Our business is capital intensive and we are highly leveraged. Debt financing in the form of short-term bank loans, loans from related parties and bank acceptance notes, have been utilized to finance our working capital requirements and capital expenditures. Because of recurring losses, working capital was approximately $7.5 ~~million as of June 30, 2017, as compared to $16~~.4 ~~million~~Market ~~as of~~for ~~June~~Registrant’s ~~30,~~Common ~~2016. As of June 30~~Equity, ~~2017,~~Related inStockholder ~~addition~~Matters ~~to cash on-hand~~ and ~~restricted~~ ~~cash,~~Issuer wePurchases ~~also have other current assets mainly composed~~ of ~~accounts receivables~~Equity ~~and prepayments and advances to suppliers.~~ Securities

~~Although we believe that we can realize our current assets, our~~Market ability to repay our current obligations will depend on the future realization of our current assets. Management has considered historical experience, the economic environment, trends in the construction industry, the expected collectability of accounts receivable and the realization of the prepayments on inventory, and provided for an allowance for doubtful accounts as of June 30, 2017. We expect to realize balances net of allowance within the normal operating cycle of a twelve-month period. If we are unable to realize our current assets within the normal twelve-month operating cycle, we may have to consider supplementing our available sources of funds through the following:Information

•Our common ~~Financial~~stock ~~support~~is ~~and~~listed ~~credit~~on ~~guarantee~~the ~~commitments~~NASDAQ ~~from~~Capital ~~our~~Market ~~shareholders~~under the symbol “CADC”. •On ~~Other~~February ~~available~~25, ~~sources~~2013, ofour ~~financing~~common stock was transferred from ~~PRC~~the ~~banks~~NASDAQ Global Market to the NASDAQ Capital Market. The following table sets forth the quarterly high and ~~other~~low ~~financial~~sales ~~institutions,~~prices ~~given~~of a share of our ~~credit~~common ~~history~~stock as reported by NASDAQ for the periods indicated.

Based on the above considerations, management is of the opinion that we have sufficient funds to meet our working capital requirements and debt obligations as they become due. However, there is no assurance that management will be successful in their plans. There are a number of factors that could potentially arise that could undermine the Company’s plans, such as changes in the demand for our products, economic conditions, competitive pricing in the concrete-mix industry, our operating results not continuing to deteriorate and our bank and shareholders being able to provide continued financial support.

Year	Quarter Ending		High		Low
2018		June 30	$	8.75	$	2.05
2018		March 31	$	5.35	$	2.10
2017		December 31	$	9.75	$	1.65
2017		September 30	$	2.50	$	1.55
2017		June 30	$	3.80	$	2.00
2017		March 31	$	3.15	$	2.00
2016		December 31	$	3.20	$	1.50
2016		September 30	$	5.68	$	2.24

~~The following table provides summary information about our net~~Unregistered ~~cash~~Sales ~~flow~~of ~~for financial statement periods presented in this report:~~Securities.

		For the years ended
		June 30,
		2017			2016
Net cash provided by operating activities	$	1,700,656		$	5,865,898
Net cash (used in) provided by investing activities		(210,962	)		4,923,410
Net cash used in financing activities		(2,248,081	)		(12,307,141	)
Effect of foreign currency translation on cash and cash equivalents		(23,904	)		(167,112	)
Net change in cash and cash equivalents	$	(782,291	)	$	(1,684,945	)

On May 4, 2018, the Company issued 985,889 and 896,766 restricted shares of common stock of the Company to Mr. Xianfu Han, the Chief Executive Officer and the Chairman of the Board of Directors of the Company and Mr. Weili He, Interim Chief Financial Officer and Chief Operating Officer (“COO”) and a director of the Company, respectively. The shares were issued in consideration of the CEO and COO’s forgiveness of $2,021,073.24 and $1,838,369.60, respectively, of debt accrued as of March 31, 2018. The issuances were approved by the Board. These shares were issued without registration under the Securities Act of 1933, as amended, (the “Securities Act”) in reliance upon the exemptions provided in Section 4(a)(2) and Regulation S thereunder.

~~Principal~~On May ~~demands~~29, ~~for~~2018, ~~liquidity~~the ~~are~~Company ~~for~~issued ~~purchase~~300,000 shares of ~~concrete~~common stock of the Company’s at the price of $2.00 per share pursuant ~~mixers~~to ~~and~~certain ~~pump~~Stock ~~trucks~~Purchase Agreement (the “SPA”) dated May 28, ~~working~~2018 ~~capital~~to certain “non-US persons” as defined in Regulation S promulgated under Securities Act (the “Purchasers”). The Shares issued in the Offering are exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act and/or ~~general~~Regulation S ~~corporate~~promulgated ~~purposes~~thereunder.

35On July 25, 2018, the Company sold 45,977 shares of common stock at the price of $6.525 per share for total proceeds of USD$300,000 to certain third-party individuals. The issuances were completed pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended.

~~Operating~~On ~~Activities.~~August ~~Net cash provided by operating activities totaled approximately $1.7 million for the year ended June 30~~23, ~~2017~~2018, ~~which~~the ~~was~~Company ~~primarily~~sold ~~attributable to net loss of $9.8 million~~50, ~~which~~000 ~~was~~shares ~~offset by the adjustments to reconcile to net cash provided by operating activities~~ of ~~$4.8~~common ~~million,~~stock ~~including~~at ~~adjustments~~the ~~for~~price ~~$1.2 million~~ of ~~depreciation,~~ $0.3 ~~million of stock-based compensation expense, and $3~~.4 million provision for doubtful accounts as well as $6.7 million cash inflow from a change in operating assets and liabilities. Net cash from changes in operating assets and liabilities resulted in a net cash inflow, which mainly included cash inflow for reduction in inventories of $0.4 ~~million,~~per ~~collection~~share ~~of other receivables of $7.5 million as we increased our efforts on other receivables collections, reduction of prepayments and advances of $12.3 million as we have already secured enough materials~~ for ~~production,~~total ~~additional~~proceeds ~~accounts payable~~ of ~~$0.01~~ ~~million, excluding non-cash offset of~~ USD$~~1.5 million~~150,000 ~~as we were in waiting for our accounts receivable collection and maturities of notes receivable~~ to ~~repay~~ ~~our~~certain ~~vendors, and additional other payables, including related~~ third-party ~~payables,~~ ~~of $0~~individual.6 ~~million, due to accrued research and development expenses,~~The ~~accrued~~issuances ~~salary~~were ~~and~~completed ~~rental~~pursuant ~~expense payable~~ to ~~our~~the ~~related~~exemption ~~parties,~~from ~~and~~registration ~~was primarily~~provided ~~offset~~ by ~~additional~~Regulation ~~accounts~~S ~~and~~promulgated ~~notes~~under ~~receivable~~the ~~of $13.5 million,~~Securities ~~excluding~~Act ~~a non-cash offset~~ of ~~$1.5 million~~1933, ~~due~~as ~~to delays in the receipt of customer payments, a reduction of customer deposits of approximately $3~~amended.~~6 million and a reduction of accrued liabilities of $0.6 million.~~

~~Investing Activities. Net cash used in investing~~Holders ~~activities was approximately $0.2 million for the year ended June 30, 2017, which was primarily attributable to the purchase~~ of ~~equipment.~~Common Stock

~~Financing Activities. Net cash used in financing~~As ~~activities~~of ~~totaled~~December ~~approximately $2.2 million for the year ended June 30~~3, ~~2017~~2018, ~~which~~ ~~was~~there ~~primarily~~were ~~attributable~~386 tostockholders $20.7 million in cash proceeds from bank loans and bank guarantees, $30.4 million in proceeds from notes payable and $0.1 million in borrowing from shareholders, which was offset by $19.2 million for the repayment of ~~bank~~record ~~loans and bank guarantees, $34.0 million for the repayment~~ of ~~notes~~our ~~payable,~~common $0stock.~~2 million of change in restricted cash.~~

Cash and cash equivalents. As of June 30, 2017, we had cash and cash equivalents of approximately $0.2 million as compared to approximately $1.0 million as of June 30, 2016. We believe that our cash and revenues from ongoing operations, in addition to the close management of our accounts payable and accounts receivable and our ability to obtain loan financing, will be sufficient to meet our liquidity and capital requirements for all of our ongoing operations. However, we may need to raise additional capital if we undertake any plans for expansion.Dividends

~~Loan~~We have ~~Facilities~~never paid dividends on our common stock. While any future dividends will be determined by our directors after consideration of the earnings, financial condition, and other relevant factors, it is currently expected that available cash resources will be utilized in connection with our ongoing operations.

~~We had a total of approximately $17.7 million and $16.6 million~~Item ~~outstanding on loans and credit facilities as of June 30, 2017 and 2016, respectively~~6. ~~See~~Selected ~~Note~~Financial ~~6 to our consolidated financial statements included elsewhere in this report.~~Data

~~Seasonality~~ Not Applicable.

Our operations are primarily located in northeastern China, which is extremely cold during the winter months. During such time, we are able to manufacture our advanced ready-mix concrete materials, however many construction projects operate on an abbreviated work schedule, if at all.33

~~Critical~~Item 7. ~~Accounting~~Management’s ~~Policies~~Discussion and ~~Estimates~~Analysis of Financial Condition and Results of Operations

While our significant accounting policies are more fully described in Note 2 to our consolidated financial statements included elsewhere in this report, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis:Overview

~~Principles~~We are a holding company whose primary business operations are conducted through our wholly-owned subsidiaries Xin Ao Construction Materials, Inc. (“BVI-ACM”), Beijing Ao Hang Construction Material Technology Co., Ltd. (“China-ACMH”), and our variable interest entity, Beijing XinAo Concrete Group (“Xin Ao”) and its subsidiaries. We engage in the production and supply of ~~consolidation~~advanced construction materials for large-scale commercial, residential, and infrastructure developments, and are primarily focused on producing and supplying a wide range of advanced ready-mix concrete materials for highly technical, large-scale, and environmentally-friendly construction projects that are only sold in the People’s Republic of China (“PRC”).

~~The accompanying consolidated financial statements include the~~During ~~financial statements of China ACM and its wholly owned subsidiaries, BVI-ACM, China-ACMH, and its variable interest entity Xin Ao (collectively,~~ the ~~“Company”).~~ ~~All~~year ~~significant~~ended ~~inter-company~~June ~~transactions and balances have been eliminated in consolidation. In accordance with FASB ASC 810~~30, ~~Consolidation of Variable Interest Entities~~2018, ~~variable~~we ~~interest~~supplied ~~entities,~~materials or VIEs, are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision making ability. All VIEs with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and ~~rewards of~~provided ~~the~~services ~~VIE. The primary beneficiary is required~~ to ~~consolidate~~our ~~the~~projects ~~VIE~~through ~~for financial~~one ~~reporting~~ready-mixed ~~purposes.~~concrete ~~In accordance with ASC810, the Company concludes~~plant ~~that~~in ~~Xin Ao is a VIE and China ACM is the primary beneficiary~~Beijing. ~~The financial statements of Xin Ao is consolidated with China ACM’s financial statements.~~

~~Use~~Our management believes that we have the ability to capture a greater share of ~~estimates~~the Beijing market via expanding relationships and networking, ~~assumptions~~signing new contracts, and continually developing market-leading innovative and eco-friendly ready-mix concrete products.

~~The preparation of financial statements in conformity with~~Principal ~~accounting~~Factors ~~principles~~Affecting ~~generally~~Our ~~accepted~~Financial in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The significant estimates and assumptions made in the preparation of the Company’s consolidated financial statements include allowance for doubtful accounts, deferred taxes, and prepayments and advances, stock-based compensation, fair value and useful lives of property, plant and equipment. Actual results could be materially different from those estimates.Performance

36We believe that the following factors will continue to affect our financial performance:

~~Revenue~~- ~~recognition~~Large-Scale Contractor Relationships. We have contracts with major construction contractors that are constructing key infrastructure, commercial and residential projects. Our sales efforts focus on large-scale projects and large customers which place large recurring orders and present less credit risk to us. For the year ended June 30, 2018, one customer accounted for approximately 11.4% our sales. Should we lose any large-scale customers in the future and are unable to obtain additional customers, our revenues will suffer. - Experienced Management. Management’s technical knowledge and business relationships give us the ability to secure major infrastructure projects, which provides us with leverage to acquire less sophisticated operators, increase production volumes, and implement quality standards and environmentally sensitive policies. If there were to be any significant turnover in our senior management, it could deplete the institutional knowledge held by our existing senior management team. - Innovation Efforts. We strive to produce the most technically and scientifically advanced products for our customers and maintain close relationships with Tsinghua University, Xi’an University of Architecture and Technology and Beijing Dongfang Jianyu Institute of Concrete Science & Technology. We entered into technical service contracts with these research institutes to further improve our production and products. If our research and development efforts are not sufficient to adapt to the change in technology in the industry, our products may not compete effectively. - Competition. Our competition includes a number of state-owned and large private PRC-based manufacturers and distributors that produce and sell products similar to ours. We compete primarily on the basis of quality, technological innovation and price. Essentially, all of the contracts on which we bid are awarded through a competitive bidding process, with award contracts often being made awarded to the lowest bidder, though other factors such as shorter schedules or prior experience with the customer are often just as important. Within our markets, we compete with many national, regional and local state- owned and private construction entities some of which have achieved greater market penetration or have greater financial and other resources than us. In addition, there are a number of larger national companies in our industry that could potentially establish a presence in our markets and compete with us for contracts. If we are unable to compete successfully in our markets, our relative market share and profits could be reduced.

~~Revenue is realized or realizable and earned when four criteria are met:~~34

•Consolidated Results ~~Persuasive evidence~~ of an arrangement exists (the Company considers its sales contracts to be pervasive evidence of an arrangement); • Delivery has occurred; • The seller’s price to the buyer is fixed or determinable; and • Collectability of payment is reasonably assured.Operations

~~The Company sells its concrete products primarily to major~~Comparison ~~local~~of ~~construction companies. Sales agreements are signed with each customer. The agreements list all terms and conditions with~~ the ~~exception~~years ofended ~~delivery~~June ~~date and quantity~~30, ~~which~~2018 ~~are evidenced separately in purchase orders. The purchase price of products is fixed in the agreement~~ and customers are not permitted to renegotiate after the contracts have been signed. Each agreement includes a cancellation clause if the Company or the customers breach the contract terms specified in the agreement.2017

The following ~~Company~~table ~~recognizes~~sets ~~revenue~~forth ~~when~~key ~~title~~components ~~and ownership~~ of ~~the goods~~our ~~are~~results ~~transferred~~of ~~upon~~operations ~~shipment~~for to the ~~customer~~years byended ~~the~~June ~~Company~~30, 2018 and ~~collectability~~ of2017, ~~payment~~in isUS ~~reasonably assured.~~ dollars:

The Company includes the shipping and handling fee in both revenue and cost of revenue.

	Years ended
	June 30,
										Percentage
	2018			2017			Change			Change
Revenue	$	45,734,647		$	45,048,413		$	686,234			2	%
Cost of revenue		39,022,360			43,953,477			(4,931,117	)		(11	)%
Gross profit		6,712,287			1,094,936			5,617,351			513	%
Provision for doubtful accounts		(2,184,221	)		(3,352,063	)		1,167,842			(35	)%
Selling, general and administrative expenses		(6,689,669	)		(5,669,702	)		(1,019,967	)		18	%
Research and development expenses		(1,182,133	)		(846,438	)		(335,695	)		40	%
Loss from operations		(3,343,736	)		(8,773,267	)		5,429,531			(62	)%
Other expense, net		(4,056,229	)		(2,264,853	)		(1,791,376	)		79	%
Loss before provision for income taxes		(7,399,965	)		(11,038,120	)		3,638,155			(33	)%
Provision for income taxes		-			-			-			-	%
Net loss	$	(7,399,965	)	$	(11,038,120	)	$	3,638,155			(33	)%

~~Financial~~Revenue. Our ~~instruments~~revenue is primarily generated from sales of our advanced ready-mix concrete products. For the year ended June 30, 2018, we generated revenue of approximately $45.7 million, as compared to approximately $45.0 million during the year ended June 30, 2017, an increase of approximately $0.7 million, or 2%. The increase in revenue was principally due to increased selling unit price by 21.7% resulting from the turnaround of the concrete industry. In late 2017, the local government shut down a number of small and non-qualified concrete manufactures, which led to less competition in the industry and drove up the selling price of the concrete as the supply of concrete was reduced. The increase was also due to the appreciation of Chinese Reminbi (“RMB”) against the U.S. dollar of 4.5%. The increase in revenue was offset by 20.3% decrease of sales volume due to the suspension or production limitation policy enforced by certain districts of the local government on some of our customers starting on November 15, 2017. The policy prohibits construction jobsites in certain areas from producing industrial waste or dust to aggravate winter haze weather during the winter time. Our production returned to normal levels on March 15, 2018 after the suspension and production limitations were removed from our customers.

USCost of ~~GAAP~~Revenue. ~~regarding~~Cost ~~fair~~of ~~value~~revenue, which consists of ~~financial~~direct ~~instruments~~labor, rentals, depreciation, other overhead and raw materials, ~~related~~including ~~fair~~inbound ~~value~~freight ~~measurements~~charges, ~~define~~was ~~fair~~approximately ~~value~~$39.0 million for the year ended June 30, ~~establish~~2018, aas ~~three-level~~compared to approximately ~~valuation~~$43.9 ~~hierarchy~~million ~~that~~for ~~requires~~the year ended June 30, 2017, an ~~entity~~decrease of approximately $4.9 million, or 11%. The decrease in cost of revenue was primarily associated with the decrease in our sales volume mainly due to ~~maximize~~the suspension or production limitation policies as discussed above partially offset by the ~~use~~increase of ~~observable~~unit production costs of 6.5%, which was principally caused by unit price ~~inputs~~inflation of our raw materials, such as cement, stone, slag powder and ~~minimize~~mine powder for the ~~use~~year ofended ~~unobservable~~June ~~inputs~~30, ~~when~~2018, ~~measuring~~as ~~fair~~compared ~~value~~to the same period in 2017.

~~The~~Gross Profit. ~~three~~Gross ~~levels~~profit was approximately $6.7 million for the year ended June 30, 2018, as compared to approximately $1.1 million of ~~inputs~~gross ~~are~~profit ~~defined~~for the year ended June 30, 2017, a positive change of approximately $5.6 million, which was primarily due to the increase of our selling price of concrete at a higher rate than the slight increase of unit production cost during the year ended June 30, 2018 as ~~follows:~~compared to the same period in 2017 for the reasons as discussed above.

~~Level~~Provision for Doubtful Accounts. We made a provision of doubtful accounts charge of approximately $2.2 million for the year ended June 30, 2018 as compared to provision of doubtful accounts charge of approximately $3.4 million during the year ended June 30, 2017, a decrease of approximately $1.2 ~~inputs~~million, or 35%. The change was attributable to the ~~valuation~~fact that we collected more of our ~~methodology~~aged ~~are~~accounts ~~quoted~~receivable ~~prices~~and ~~(unadjusted)~~other receivables that were over 720 days past due during the year ended June 30, 2018 as compared to the same period in 2017 and we correspondingly resulted in recovery for ~~identical~~doubtful ~~assets~~accounts orin ~~liabilities~~accordance with our allowance policy. The decrease was offset by an increase of the provision of doubtful accounts of prepayments – related party as the related party is being named as a joint defendant in ~~active~~one ~~markets;~~of our civil lawsuits, so we made approximately $0.3 million allowance for prepayments – related party.

~~Level~~Selling, General 2and ~~inputs~~Administrative toExpenses. ~~the~~Selling, ~~valuation~~general and administrative expenses consist of sales commissions, advertising ~~methodology~~and ~~include~~marketing ~~quoted~~costs, ~~prices~~office ~~for~~rent ~~similar~~and ~~assets~~expenses, costs associated with staff and ~~liabilities~~support inpersonnel ~~active~~who manage our business activities, ~~markets~~and professional fees paid to third parties. We incurred selling, general and ~~inputs~~administrative ~~that~~expenses ~~are~~of ~~observable~~approximately $6.7 million for the ~~asset~~year orended ~~liability~~June 30, ~~either directly~~2018 oras ~~indirectly,~~compared ~~for~~to ~~substantially~~approximately $5.7 million for the ~~full~~year ~~term~~ended June 30, 2017, an increase of ~~the~~approximately $1.0 ~~financial~~million. The increase was primarily due to a $0.1 million increase in legal expenses and $1.1 million increase in compensation ~~instrument;~~expense. The increase was offset by $0.1 million decrease in social insurance expense and $0.1 million decrease in meals and entertainment expense as compared to the year ended June 30, 2017.

~~Level 3 inputs to the valuation methodology are unobservable.~~35

~~Financial~~Research and ~~instruments~~Development ~~included~~Expenses. inResearch ~~current assets~~ and ~~current liabilities~~development ~~are~~expenses ~~reported~~were inapproximately ~~the~~$1.2 ~~consolidated~~million ~~balance~~for ~~sheets~~the atyear ~~face~~ended ~~value~~June ~~or cost~~30, 2018 ~~which~~as ~~approximate~~compared ~~fair~~to ~~value~~$0.8 ~~because~~million offor the ~~short~~same period ofin ~~time~~2017. ~~between the~~We ~~origination~~increased ofour ~~such~~research ~~instruments~~ and ~~their~~development ~~expected~~expenditures ~~realization~~during ~~and their~~this ~~current~~period ~~market~~as ~~rates~~we ofworked ~~interest~~to improve our competitive advantage with respect to our products.

~~Accounts~~Loss from ~~receivable~~Operations. We incurred a loss from operations of approximately $3.3 million and a loss of approximately $8.8 million for the years ended June 30, 2018 and 2017, respectively. The decrease of approximately $5.5 million was primarily due to the reasons previously discussed.

~~We extend unsecured credit to our customers in the normal~~Other ~~course~~Income ~~of business~~(Expense), ~~Accounts are considered past due after 30 days~~Net. ~~In establishing~~Our ~~the~~other ~~required~~income ~~allowance~~(expense) ~~for~~consists ~~doubtful~~of ~~accounts,~~interest ~~management~~income ~~considers historical experience~~(expense), ~~the~~finance ~~economic~~expense ~~environment, trends in the construction industry,~~ and ~~the~~other ~~expected collectability of the overdue receivable. Management~~non-operating ~~reviews~~income ~~its accounts receivable each reporting period to determine if the allowance for doubtful accounts is adequate~~(expense). AnWe ~~estimate~~had ~~for~~other ~~doubtful~~income ~~accounts is recorded when collection~~ of ~~the~~approximately ~~full~~$112,000 ~~amount~~and is$407,000 noduring ~~longer probable. Account balances are charged off against~~ the ~~allowance~~years ~~after~~ended ~~all~~June ~~means~~30, of2018 ~~collection have been exhausted~~ and ~~the~~2017, ~~potential for recovering is considered remote~~respectively. We ~~provide~~We aearned ~~provision~~interest ofincome ~~15%~~ of ~~the~~approximately ~~allowance~~$6,000 ~~for~~and ~~doubtful~~$30,000 ~~accounts~~ for ~~accounts receivable~~the ~~balance~~years ~~that~~ended ~~are~~June ~~past~~30, ~~due~~2018 ~~more~~and ~~than~~2017, ~~180~~respectively. ~~days~~Approximately $1,360,000 ~~but~~and ~~less than one year~~$831, ~~40%~~000 of ~~the~~interest ~~allowance~~expense ~~for~~was ~~doubtful~~recorded ~~accounts~~ for ~~accounts~~the ~~receivable~~years ~~past~~ended ~~due~~June ~~from one~~30, to2018 ~~two~~and ~~years~~2017, ~~75%~~and ofapproximately ~~the~~$5,000 ~~allowance for doubtful accounts for accounts~~and ~~receivable past due beyond two years~~$604,000 ~~100%~~ of ~~the~~finance ~~allowance~~expense ~~for~~was ~~doubtful accounts~~recorded for ~~accounts~~the ~~receivable~~years ~~past~~ended ~~due~~June ~~beyond three years~~30, ~~plus~~2018 ~~additional amount~~and as2017. ~~necessary,~~Approximately ~~which~~$2.8 ~~our~~million ~~collection~~and ~~department~~$1.3 ~~had determined the~~million ~~collection~~ of ~~the~~estimated ~~full~~claims ~~amount~~interest ischarges ~~remote~~were ~~with~~recorded for the ~~approval~~years ~~from~~ended ~~our~~June ~~management~~30, ~~to provide~~2018 aand ~~100%~~2017 ~~provision~~due ~~allowance~~to ~~for~~legal ~~doubtful~~actions ~~accounts.~~related ~~Our management have continued~~ to ~~evaluate the reasonableness of the valuation allowance policy and~~several ~~update~~lawsuits itagainst ifXin ~~necessary~~Ao.

37Provision for Income Taxes. We did not incur income tax expense for the years ended June 30, 2018 and 2017 as we had net operating losses.

~~Accounting~~On December ~~for~~22, ~~long~~2017, the “Tax Cuts and Jobs Act” (“The Act”) was enacted. Under the provisions of the Act, the U.S. corporate tax rate decreased from 35% to 21%. As we have a June 30 fiscal year-~~lived~~end, the lower corporate income tax rate will be phased in, resulting in a U.S. statutory federal rate of approximately 28% for our fiscal year ending June 30, 2018, and 21% for subsequent fiscal years. Accordingly, we have remeasured our deferred tax asset for net operating loss carryforward in the U.S at the lower enacted tax rate of 21%. However, this remeasurment has no effect on our income tax expense as we have provided a 100% valuation allowance on our deferred tax assets previously.

WeAdditionally, the ~~classify~~Tax ~~our~~Act ~~long~~imposes a one-~~lived~~time ~~assets~~transition ~~into:~~tax ~~(i)~~on ~~machinery~~deemed repatriation of historical earnings of foreign subsidiaries, and future ~~equipment;~~foreign ~~(ii)~~earnings ~~transportation~~are ~~equipment~~subject to U.S. taxation. However, ~~(iii)~~this ~~office~~one-time ~~and~~transition ~~equipment;~~tax ~~and~~had ~~(iv)~~no effect on our income tax expense as ~~buildings~~we ~~and~~have ~~improvements~~no undistributed foreign earnings through June 30, 2018 as we have cumulative foreign losses as of June 30, 2018.

~~Long-lived assets held and used by us are reviewed for~~Net ~~impairment~~Loss. ~~whenever~~We ~~events~~incurred ornet ~~changes~~loss ~~in circumstances indicate that the carrying value~~ of ~~such~~approximately ~~assets may not be fully recoverable~~$7.4 Itmillion isfor ~~possible~~the ~~that these~~year ~~assets~~ended ~~could~~June ~~become~~30, ~~impaired~~2018, as acompared ~~result~~to ofa ~~technological~~net orloss ~~other~~of ~~industry~~approximately ~~changes~~$11.0 Ifmillion ~~circumstances~~for ~~require~~the ayear ~~long-lived~~ended ~~asset~~June ~~or asset group to be tested for possible impairment~~30, we2017. ~~first~~This ~~compare~~change ~~undiscounted~~was ~~cash flows expected to be generated by that asset or asset group to its carrying value. If~~ the ~~carrying~~result ~~value~~ of the ~~long-lived~~combination ~~asset~~of ~~or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to~~ the ~~extent~~changes ~~that~~as ~~the~~discussed ~~carrying value exceeds its fair value~~above. ~~Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.~~

~~If the value of an asset is determined to be impaired, the~~Liquidity ~~impairment~~and toCapital be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or the fair value, less disposition costs.Resources

~~Due~~As of toJune ~~recurring~~30, ~~losses~~2018, ~~the~~we ~~deterioration~~had ofcash ~~the~~and ~~concrete-mix industry~~cash inequivalents ~~Beijing~~of approximately $1.1 million, ~~PRC~~which was held by our consolidated subsidiaries and ~~because~~VIE oflocated ~~competitive~~outside ~~pricing~~the ~~pressures,~~U.S. ~~we performed~~We anwould ~~impairment~~be ~~analysis~~required to accrue and ~~determined~~pay ~~our~~U.S. ~~long-lived~~taxes ~~assets~~if we were ~~impaired~~ to repatriate these funds. AsAny acompany which ~~result,~~is weregistered ~~recorded~~in anmainland ~~impairment~~PRC ~~charge~~must ofapply ~~$2.6~~to ~~million~~the State Foreign Exchange Administration for ~~the~~approval in order to remit foreign ~~year~~currency ~~ended~~to ~~June~~any ~~30,~~foreign ~~2016~~country. ~~These~~We ~~charges~~currently ~~were~~do ~~related~~not intend to repatriate to the ~~impairment~~U.S. ofthe ~~our~~cash and short-term investments held ~~transportation~~by ~~equipment~~our foreign subsidiaries. However, ~~plants~~if ~~and~~we ~~machinery~~were to repatriate funds to the U.S., ~~The~~we ~~loss~~would ~~was~~assess ~~determined~~the ~~using~~feasibility and plan any ~~Level~~transfer 3in ~~inputs~~accordance with foreign exchange regulations, taking into account tax consequences. ~~There~~As ~~was~~we noconduct ~~impairment~~all ~~charge~~of ~~for~~our operations in the ~~year~~PRC, ~~ended~~the ~~June~~restriction ~~30,~~on ~~2017.~~the conversion of cash and short-term investments held in RMB to other currencies should not affect our liquidity.

~~Competitive~~In assessing ~~pricing~~our ~~pressures~~liquidity, ~~and~~we ~~changes~~monitor inand ~~interest~~analyze ~~rates could~~our ~~materially~~cash on-hand and ~~adversely~~our ~~affect~~operating ~~the~~and ~~Company’s~~capital ~~estimates~~expenditure ofcommitments. ~~future~~Our ~~net cash~~liquidity ~~flows~~needs are to bemeet ~~generated~~our byworking ~~long-lived~~capital ~~assets~~requirements, ~~and~~operating ~~thus~~expenses ~~could~~and ~~result~~capital inexpenditure ~~future impairment losses~~obligations.

~~Income~~We engage ~~taxes~~in the production of advanced construction materials for large-scale infrastructure, commercial and residential developments. Our business is capital intensive and we are highly leveraged. Debt financing in the form of short-term bank loans, loans from related parties and bank acceptance notes, have been utilized to finance our working capital requirements and capital expenditures. Working capital was approximately $7.0 million as of June 30, 2018, as compared to $6.2 million as of June 30, 2017. As of June 30, 2018, in addition to cash on-hand, we also have other current assets mainly composed of accounts receivable and prepayments.

WeAlthough we ~~account~~believe ~~for~~that ~~income~~we ~~taxes~~can inrealize ~~accordance~~our ~~with~~current ~~ASC 740~~assets, ~~Income Taxes,~~our ~~which~~ability ~~requires~~to usrepay toour ~~use~~current ~~the~~obligations ~~assets~~will ~~and~~depend ~~liability~~on ~~method~~the offuture ~~accounting~~realization ~~for~~of ~~income~~our ~~taxes~~current assets. ~~Under~~Management ~~the~~has ~~assets~~considered ~~and~~historical ~~liability method~~experience, ~~deferred~~the ~~income~~economic ~~taxes are~~environment, ~~recognized~~trends ~~for~~in the ~~tax~~construction ~~consequences of temporary differences by applying~~industry, ~~enacted~~the ~~statutory~~expected ~~tax~~collectability ~~rates~~of ~~applicable~~accounts toreceivable ~~future~~and ~~years~~the torealization ~~differences~~of ~~between financial~~the ~~statement~~prepayments ~~carrying~~on ~~amounts~~inventory, and ~~the~~provided ~~tax~~for ~~bases~~an ~~of existing assets and~~allowance ~~liabilities~~for ~~and~~doubtful ~~operating~~accounts ~~loss~~as ~~and~~of ~~tax~~June ~~credit~~30, ~~carry forward~~2018. ~~Under~~We ~~this accounting~~expect ~~standard,~~to ~~the~~realize ~~effect~~balances onnet ~~deferred~~of ~~income~~allowance ~~taxes~~within ofthe anormal ~~change~~operating incycle ~~tax~~of ~~rates~~a istwelve-month ~~recognized in income in the~~ period. ~~that~~If ~~includes~~we ~~the~~are ~~enactment~~unable ~~date.~~to ~~A valuation~~realize ~~allowance~~our iscurrent ~~recognized~~assets ifwithin itthe isnormal ~~more~~twelve-month ~~likely~~operating ~~than~~cycle, ~~not~~we ~~that~~may ~~some~~have ~~portion,~~to orconsider ~~all~~supplementing ~~of,~~our aavailable ~~deferred~~sources ~~tax~~of ~~asset~~funds ~~will~~through ~~not~~the ~~be realized.~~following:

~~ASC~~● ~~740-10,~~Equity ~~Accounting~~financing. ~~for~~● ~~Uncertainty~~Other inavailable ~~Income~~sources ~~Taxes,~~of ~~defines uncertainty~~financing infrom ~~income~~PRC ~~taxes~~banks and ~~the~~other ~~evaluation~~financial ~~of a tax position as a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination~~institutions, ~~including~~given ~~the~~our ~~resolution~~credit ~~of any related appeals or litigation based on the technical merits of that position~~history. ~~The~~● ~~second~~Financial ~~step~~support isand tocredit ~~measure~~guarantee acommitments ~~tax~~from ~~position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements~~Mr. AXianfu ~~tax~~Han, ~~position~~and ~~is measured at the largest amount of benefit that is greater than 50 percent likelihood of being realized upon ultimate settlement~~Mr. ~~Tax~~Weili ~~positions~~He, ~~that previously failed to meet~~ the ~~more-likely-than-not~~Company’s ~~recognition~~shareholders threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and ~~interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred~~officers.

~~United~~Based on ~~States~~the ~~federal~~above considerations, ~~state~~management ~~and~~is ~~local~~of ~~income~~the ~~tax~~opinion ~~returns~~that ~~prior~~ we have sufficient funds to ~~2014~~meet ~~are~~our ~~not~~working ~~subject~~capital torequirements and ~~examination~~debt byobligations ~~any~~as ~~applicable~~they ~~tax~~become ~~authorities~~due. ~~PRC~~However, there is no assurance that management will be successful in their plans. There ~~tax~~are ~~returns~~a ~~filed~~number of factors that could potentially arise that could undermine the Company’s plans, such as changes in ~~2017~~the ~~and~~demand for ~~prior~~our ~~years~~products, ~~are~~economic ~~subject~~conditions, tocompetitive ~~examination~~pricing byin ~~any~~the ~~applicable~~concrete-mix ~~tax~~industry, our operating results not continuing ~~authorities.~~to deteriorate and our bank and shareholders being able to provide continued financial support.

38 36

~~Off-Balance~~In ~~Sheet~~addition, ~~Arrangements~~the Company is involved in various lawsuits, claims and disputes related to its operations and the personal guarantees of its executives to affiliated entities. The Company is actively defending these actions and attempting to mitigate the Company’s exposure to any liability in excess of the current provision of approximately $4.4 million, (see Note 12 in the accompanying notes to the consolidated financial statements). The ultimate outcome of these pending actions cannot presently be determined, but currently management is of the opinion that any potential additional liability would not have a material impact on the Company’s consolidated financial position. Nevertheless, due to the uncertainties with litigation, the PRC legal system, claims and disputes, it is at least reasonably possible that management’s view of the outcome could change in the near term.

WeFurthermore, doas ~~not~~of ~~have~~June ~~any~~30, ~~off-balance~~2018, ~~sheet~~the Company’s ~~arrangements~~VIE, ~~that~~Xin ~~have~~Ao, orwas subject to several civil lawsuits with potential judgments in the amount of approximately ~~are~~$14.2 ~~reasonably~~million ~~likely~~(see toNote ~~have~~12 ain ~~current~~the oraccompanying ~~future~~notes ~~effect~~to onthe ~~our~~consolidated financial statements) and the likelihood of the ~~condition~~outcome of these lawsuits cannot presently be determined. These lawsuits involve the Company principally due to the personal guarantees by Mr. Xianfu Han, ~~changes~~and inMr. ~~financial~~Weili ~~condition~~He, ~~revenues~~the orCompany’s ~~expenses~~shareholders and officers, ~~results~~because ofthey are also the ~~operations~~shareholders of Xin Ao. Because Mr. Han and Mr. He are the shareholders of Xin Ao, ~~liquidity~~the plaintiffs included Xin Ao in the joint complaints. Xin Ao was not involved in most of the lawsuits but named as a joint defendant in the lawsuits. As a result, ~~capital~~Xin ~~expenditures~~Ao might have exposure to any judgements in the future under PRC laws. Mr. Han and Mr. He have agreed to indemnify the Company for any amounts Xin Ao may have to pay. Should the outcome of these lawsuits require Xin Ao to pay because the other co-defendants of the lawsuits and Mr. Han. and Mr. He were unable to liquidate their personal assets or their ~~capital~~ownership ~~resources~~interest ~~that~~in istheir privately held companies timely to pay for the judgements, the Company’s working ~~material~~capital as of June 30, 2018 would be reduced from approximately $7.0 million to a ~~our~~net ~~stockholders~~working capital deficiency of approximately $7.2 million.

~~Recently~~The ~~issued~~management ~~accounting~~of ~~pronouncements~~the Company has considered whether there is a going concern issue due to the Company’s recurring losses from operations, the estimated claims charges and the possible additional exposure for pending actions against Company which is presently unknown. Based upon the personal indemnifications of Mr. Han and Mr. He and their agreement to provide the necessary funds to the Company to continue its operations should the need arise, the management of the Company believes that it has alleviated the going concern issue.

~~Refer~~The following totable ~~Note~~provides 2summary ofinformation ~~the~~about ~~consolidated~~our ~~financial~~net ~~statements~~cash flow for ~~a discussion~~financial ofstatement ~~recent~~periods ~~accounting~~presented ~~standards~~in ~~and~~this ~~pronouncements.~~report:

Interest Rate Risk

	For the years ended
	June 30,
	2018			2017
Net cash provided by operating activities	$	2,450,018		$	1,700,657
Net cash used in investing activities		(138,151	)		(210,962	)
Net cash used in financing activities		(1,409,812	)		(2,248,081	)
Effect of foreign currency translation on cash and cash equivalents		(28,043	)		(23,905	)
Net increase (decrease) in cash and cash equivalents	$	874,012		$	(782,291	)

~~We are exposed to interest rate risk while we have short-term~~Principal ~~bank~~demands ~~loans outstanding. Although interest rates~~ for ~~our~~liquidity ~~short-term loans~~ are ~~typically~~ ~~fixed~~ for ~~the~~working ~~terms~~capital ~~of the loans, the terms are typically twelve months~~ and ~~interest~~general ~~rates~~corporate ~~are subject to change upon renewal~~purposes. ~~Interest rates are approximately 4.35% for RMB bank loans with a term of twelve months or less.~~

~~Credit~~Operating Activities. ~~Risk~~Net cash provided by operating activities totaled approximately $2.5 million for the year ended June 30, 2018, which was attributable to a net loss of $7.4 million and adjustments to reconcile the net loss to net cash provided by operating activities of $4.8 million, including adjustments for $1.2 million of depreciation, $1.4 million of stock-based compensation expense, and $2.2 million of a provision for doubtful accounts. Net cash from changes in operating assets and liabilities resulted in a net cash inflow, which mainly included cash inflow for decrease of inventories of $0.2 million, decrease of other receivables of $1.5 million, reduction of prepayments and advances of $16.0 million from third parties and reduction of prepayments and advances of $4.2 million from a related party as we have already secured enough materials for production, the addition of $1.0 million in customer deposits, excluding non-cash offset of $0.7 million, addition of $0.7 million other payables-shareholders, excluding a non-cash offset of $1.0 million and an increase of $2.8 million in accrued liabilities and contingent liabilities, excluding a non-cash offset of $2.5 million. Net cash inflow was primarily offset by an increase of accounts receivable of $4.6 million, excluding a non-cash offset of $6.9 million, payments of accounts payable $12.8 million, excluding non-cash offset of $6.9 million, payments of other payables of $3.9 million, excluding a non-cash offset of $0.1 million, as we had sufficient cash flow to pay down our accounts payable and other payables when due,.

~~The~~Investing Activities. ~~Company~~Net ~~is exposed to credit risk from its~~ cash used in ~~bank~~investing ~~and fixed~~activities ~~deposits,~~was ~~and~~approximately ~~accounts~~$0.1 ~~and notes receivable~~million, ~~other~~excluding ~~receivables and advances on equipment purchases~~$0.1 ~~The~~million ~~credit risk on~~ non-cash ~~in bank and fixed~~offset ~~deposits~~of ~~is limited because the counterparties are recognized financial institutions~~$0.1 ~~However~~million, ~~the~~for ~~Company’s cash in bank deposited in~~ the ~~financial institutions~~year inended ~~the~~June ~~PRC~~30, ~~is not insured. Accounts and notes receivable~~2018, ~~other receivables and advances on inventory purchases are subjected to credit evaluations. An allowance has been made for estimated unrecoverable amounts~~ which ~~have~~was ~~been~~primarily ~~determined~~attributable ~~by reference~~ to ~~past default experience and~~ the ~~current~~ ~~economic~~purchase ~~environment~~of equipment.

~~Foreign~~Financing Activities. ~~Exchange~~Net ~~Risk~~cash used in financing activities totaled approximately $1.4 million for the year ended June 30, 2018, which was primarily attributable to $26.6 million for the repayments of bank loans, $14.6 million for the repayments of notes payable. Net cash outflow was offset by $34.7 million in new bank loans, $0.1 million borrowings from shareholders, excluding non-cash offset of $1.0 million, receipt of $0.6 million common stock and the release of $4.4 million of restricted cash.

~~The~~Cash and ~~value~~cash ~~of the RMB against the U~~equivalents.S. ~~dollar~~As ~~and~~of ~~other currencies~~June ~~is affected by~~30, ~~among other things~~2018, ~~changes~~we inhad ~~the~~cash ~~PRC’s political~~ and ~~economic~~cash ~~conditions.~~equivalents ~~The~~of ~~RMB~~approximately ~~does not fluctuate with the U~~$1.S.1 ~~dollar. Although~~million ~~the~~as ~~People’s Bank of China regularly intervenes in the foreign exchange~~compared ~~market~~ to ~~prevent~~approximately ~~significant~~$0.2 ~~short-term~~million ~~fluctuations~~as inof ~~the~~June ~~exchange rate~~30, ~~the RMB~~2017. ~~may~~We ~~appreciate~~believe orthat ~~depreciate~~our ~~significantly~~cash inand ~~value~~revenues ~~against~~from ~~the~~ongoing ~~U.S.~~operations, ~~dollar~~ in ~~the medium~~ addition to ~~long term. In August 2015,~~ the ~~PRC’s~~close ~~currency~~management ~~dropped by a cumulative 4.4% against the U.S. dollar on hopes~~ of ~~boosting~~our ~~the~~accounts ~~domestic economy,~~payable ~~making~~and ~~PRC~~accounts ~~exports~~receivable ~~cheaper~~ and ~~imports~~our ~~into~~ability ~~the~~to ~~PRC~~obtain ~~more~~loan ~~expensive~~financing, ~~by that~~will ~~amount. The effect on trade can~~ be ~~substantial. The trend of depreciation~~sufficient ofto ~~RMB~~meet ~~continued~~our inliquidity ~~the year 2016~~ and ~~2017. Compared~~capital ~~with~~requirements ~~the~~for ~~lowest~~all ~~point~~of ~~from~~our ~~RMB~~ongoing ~~versus U~~operations.S. ~~dollars in 2016~~However, ~~the~~we ~~RMB~~may ~~has depreciated~~need ~~by 4.3% compared~~ to ~~the~~raise ~~exchange~~additional ~~rate as of June 30, 2017. Moreover,~~capital itif iswe ~~possible~~undertake ~~that~~any inplans ~~the~~for ~~future, PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market~~expansion.

~~Because substantially all of our earnings and cash assets are~~Loan ~~denominated in RMB, but our reporting currency is the U~~Facilities.S. ~~dollar,~~We ~~fluctuations in~~had ~~the~~a ~~exchange~~total ~~rate~~of ~~between~~approximately ~~the U~~$26.S.1 ~~dollar~~million and ~~the~~$31.7 ~~RMB~~million ~~will~~outstanding ~~affect~~on ~~our~~loans ~~balance sheet~~ and ~~our~~credit ~~earnings per share in U.S. dollars. In addition, appreciation or~~facilities ~~depreciation~~as ~~in the value~~ of ~~the~~June ~~RMB~~30, ~~relative~~2018 toand ~~the~~June ~~U.S.~~30, ~~dollar~~2017, ~~would affect our financial results reported in U~~respectively.S. ~~dollar~~See ~~terms~~Note ~~without~~6 ~~giving effect~~ to ~~any underlying change in~~ our ~~business~~consolidated orfinancial ~~results~~statements ofincluded ~~operations.~~elsewhere ~~Fluctuations~~ in ~~the~~ ~~exchange~~this ~~rate will also affect the relative value of any dividend we might issue in the future that will be exchanged into U~~report.~~S. dollars and earnings from, and the value of, any dollar-denominated investments we make in the future.~~

Very limited hedging transactions are available in the PRC to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and we may not be able to successfully hedge our exposure at all. In addition, our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies.37

~~Most~~Critical Accounting ofPolicies ~~the transactions of the Company are settled in RMB~~ and ~~U.S.~~ ~~dollars. In the opinion of the directors, the Company is not exposed to significant foreign currency risk.~~Estimates

~~Inflation~~While our significant accounting policies are more fully described in Note 2 to our consolidated financial statements included elsewhere in this report, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis:

~~Inflationary factors, such as increases in the cost of raw~~Principles ~~materials and overhead costs, could impair our operating results. Inflation has had a material impact on our financial position or results~~ of operations for the year ended June 30, 2017, a high rate of inflation in the future may have a continued adverse effect on our ability to maintain current levels of gross margin and selling, general and administrative expenses as a percentage of sales revenue if the selling prices of our products do not increase with these increased costs.consolidation

39The accompanying consolidated financial statements include the financial statements of China ACM and its wholly owned subsidiaries, BVI-ACM, China-ACMH, and its variable interest entity Xin Ao (collectively, the “Company”). All significant inter-company transactions and balances have been eliminated in consolidation. In accordance with FASB ASC 810, Consolidation of Variable Interest Entities, variable interest entities, or VIEs, are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision making ability. All VIEs with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. In connection with the adoption of this ASC810, the Company concluded that Xin Ao is a VIE and China ACMH is the primary beneficiary. The financial statements of Xin Ao are consolidated with China ACM’s financial statements.

~~Item~~Use of ~~7A.~~estimates ~~Quantitative~~ and ~~Qualitative Disclosures About Market Risk~~assumptions

~~Not~~The preparation ~~Applicable~~of financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The significant estimates and assumptions made in the preparation of the Company’s consolidated financial statements include the allowance for doubtful accounts, the valuation allowance for deferred tax assets, and prepayments and advances, stock-based compensation, contingent liabilities, fair value and useful lives of property, plant and equipment. Actual results could be materially different from those estimates.

~~Item 8. Financial Statements and Supplementary Data~~Revenue recognition

~~The full text of our audited consolidated financial statements~~Revenue asis ofrealized ~~June~~or ~~30,~~realizable ~~2017~~ and ~~2016~~earned ~~begins~~when onthe ~~page~~following ~~F-1~~four ofcriteria ~~this~~are ~~report.~~met:

~~Item~~● 9.Persuasive ~~Changes~~evidence inof ~~and~~an ~~Disagreements~~arrangement ~~with~~exists ~~Accountants~~(the onCompany ~~Accounting~~considers its sales contracts to be pervasive evidence of an arrangement); ● Delivery has occurred; ● The seller’s price to the buyer is fixed or determinable; and ~~Financial~~● ~~Disclosure~~Collectability of payment is reasonably assured.

~~None~~The Company sells its concrete products primarily to major local construction companies. Sales agreements are signed with each customer. The agreements list all terms and conditions with the exception of the delivery date and quantity, which are evidenced separately in purchase orders. The purchase price of products is fixed in the agreement and customers are not permitted to renegotiate after the contracts have been signed. Each agreement includes a cancellation clause if the Company or the customer breach the contract terms specified in the agreement.

~~Item~~The Company ~~9A.~~recognizes ~~Controls~~revenue when title and ~~Procedures~~ownership of the goods are transferred upon shipment to the customer by the Company and collectability of payment is reasonably assured.

~~(a)~~The Company ~~Evaluation~~includes ofthe ~~Disclosure~~shipping ~~Controls~~and handling fee in both revenue and ~~Procedures~~cost of revenue.

~~We maintain disclosure controls and procedures (as defined in~~Accounts Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information that would be required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including to our Chief Executive Officer, Chief Operating Officer and interim Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.receivable

AsWe extend ~~required~~unsecured bycredit ~~Rule~~to ~~13a-15~~our ~~under~~customers in the ~~Exchange~~normal ~~Act,~~course ~~our~~of business. Accounts are considered past due after 30 days. In establishing the required allowance for doubtful accounts, management considers historical experience, ~~including~~the ~~our~~economic ~~Chief~~environment, trends ~~Executive~~in ~~Officer~~the construction industry, and ~~interim~~the ~~Chief~~expected ~~Financial~~collectability of the overdue receivable. Management reviews its accounts ~~Officer,~~receivable ~~evaluated~~each reporting period to determine if the ~~effectiveness~~allowance for doubtful accounts is adequate. An estimate for doubtful accounts is recorded when collection of the ~~design~~full ~~and~~amount ~~operation~~is ofno ~~our~~longer probable. Account balances are charged off against the allowance after ~~disclosure~~all ~~controls~~means of collection have been exhausted and ~~procedures~~the aspotential offor ~~June~~recovering ~~30,~~is ~~2017~~considered remote. ~~Based~~We onprovide ~~that~~a provision of a ~~evaluation~~15% allowance for past due receivables more than 180 days but less than one year, wea ~~concluded~~40% ~~that~~allowance asfor ofpast ~~June~~due 30receivables from one to two years, ~~2017~~a 75% allowance for past due receivables beyond two years, ~~our~~a ~~disclosure~~100% ~~controls~~allowance ~~and~~for past due receivables beyond ~~procedures~~three ~~were~~years, ~~not~~plus ~~effective~~additional toamounts ~~satisfy~~as necessary, when our collection department determines the ~~objectives~~collection ~~for~~of ~~which~~the ~~they~~full ~~are~~amount ~~intended~~is ~~due~~remote towith the ~~material~~approval ~~weaknesses~~from in our ~~internal~~management. ~~control~~Our ~~over~~management ~~financial~~has continued to evaluate the reasonableness of the valuation ~~reporting~~allowance ~~discussed~~policy ~~below~~and updates it if necessary.

~~(b) Management’s annual report on internal control over financial reporting~~38

~~Our management is responsible~~ Accounting for ~~establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a~~long-~~15(f) and~~lived 15d-15(f) under the Exchange Act. The Exchange Act defines internal control over financial reporting as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by the Board, 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 accounting principles generally accepted in the United States of America (“U.S. GAAP”) and includes those policies and procedures that:assets

•We classify ~~Pertain~~our tolong-lived ~~the~~assets ~~maintenance~~into: of(i) ~~records~~machinery ~~that in reasonable detail accurately~~ and ~~fairly~~equipment; ~~reflect~~(ii) ~~the~~transportation ~~transactions and dispositions of the assets of the Company~~equipment; •(iii) ~~Provide~~office ~~reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP,~~ and ~~that~~equipment; ~~our receipts~~ and (iv) ~~expenditures~~buildings ~~are being made only in accordance with authorizations of our management~~ and directors; and; • Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statementsimprovements.

~~All~~Long-lived assets ~~internal~~held ~~control~~and ~~systems,~~used noby ~~matter~~us ~~how~~are ~~well~~reviewed ~~designed,~~for ~~have~~impairment whenever events or changes in circumstances indicate that the carrying ~~inherent~~value ~~limitations~~of such assets may not be fully recoverable. ~~Therefore,~~It ~~even~~is ~~those~~possible ~~systems~~that ~~determined~~these toassets becould ~~effective~~become impaired as a result of technological ~~can~~or ~~provide~~other ~~only~~industry ~~reasonable~~changes. ~~assurance~~If ~~with~~circumstances ~~respect~~require a long-lived asset or asset group to ~~financial~~be ~~statement preparation~~tested ~~and~~for ~~presentation.~~possible ~~Also~~impairment, ~~projections~~we first ofcompare ~~any~~undiscounted ~~evaluation~~cash ~~of effectiveness~~flows expected to ~~future~~be ~~periods~~generated ~~are~~by ~~subject~~that asset or asset group to ~~the~~its ~~risk~~carrying ~~that~~value. ~~controls~~If ~~may~~the ~~become~~carrying ~~inadequate~~value ~~because~~ of ~~changes~~the inlong-lived ~~conditions,~~asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the ~~degree~~carrying ofvalue ~~compliance~~exceeds its fair value. Fair value is determined through various valuation techniques, including ~~with~~discounted ~~the~~cash ~~policies~~flow ormodels, ~~procedures~~quoted ~~may~~market ~~deteriorate~~values and third-party independent appraisals, as considered necessary.

40If the value of an asset is determined to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or the fair value, less disposition costs.

~~Management assessed the effectiveness of our internal control~~There ~~over~~was ~~financial~~no ~~reporting~~impairment ascharge offor ~~June 30, 2017. In making this assessment, management used~~ the ~~2013~~years ~~COSO~~ended framework set forth in the report entitled Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s internal control system, including (i) the 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 noted material weaknesses exist as of June 30, ~~2017. We do not have any full-time accounting personnel who have U.S. GAAP experience~~2018, and ~~because~~ we issued restricted shares before the performance obligation performed or specified and did not identify a related party on a timely basis, our management has considered these as material weaknesses and determined that as of June 30, 2017~~, the internal control over financial reporting was not effective~~.

InCompetitive pricing anpressures ~~effort~~and tochanges ~~remedy~~in ~~the~~interest ~~material~~rates ~~weaknesses~~could inmaterially and adversely affect the Company’s estimates of future, wenet ~~have~~cash ~~commenced~~flows to dobe ~~the~~generated ~~following:~~by long-lived assets, and thus could result in future impairment losses

• Develop a comprehensive training and development plan, for our finance, accounting and internal audit personnel, including our interim Chief Financial Officer, Financial Manager, and others, in the principles and rules of U.S. GAAP, SEC reporting requirements and the application thereof. • Design and implement a program to provide ongoing company-wide training regarding the Company’s internal controls, with particular emphasis on our finance and accounting staff. • Implement an internal review process over financial reporting to review all recent accounting pronouncements and to verify that the accounting treatment identified in such report have been fully implemented and confirmed by our internal control department. In the future, we will continue to improve our ongoing review and supervision of our internal control over financial reporting. • Hire an individual that possesses the requisite U.S. GAAP experience and education.Income taxes

~~Despite~~We account for income taxes in accordance with ASC 740, Income Taxes, which requires us to use the ~~material~~asset ~~weaknesses~~and ~~reported~~liability ~~above~~method of accounting for income taxes. Under the asset and liability method, ~~our~~deferred ~~management~~income taxes are recognized for the tax consequences ~~believes~~of ~~that~~temporary ~~our~~differences ~~consolidated~~by applying enacted statutory tax rates applicable to future years to differences between financial ~~statements~~statement carrying ~~included~~amounts inand ~~this~~the ~~report~~tax bases of existing assets and liabilities and operating loss and tax credit carry forwards. Under ~~fairly~~this ~~present~~accounting standard, the effect on deferred income taxes of a change in ~~all~~tax ~~material~~rates ~~respects~~is ~~our~~recognized ~~financial~~in ~~condition~~income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that some portion, ~~results~~or all of, a ~~operations~~deferred ~~and~~tax ~~cash~~asset ~~flows~~will ~~for~~not ~~the~~be ~~periods presented~~realized.

~~(c)~~ASC 740-10, ~~Changes~~Accounting for Uncertainty in ~~internal~~Income ~~control~~Taxes, ~~over~~defines uncertainty in income taxes and the evaluation of a tax position as a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest incurred related to the underpayment of income taxes are classified as income tax expense in the period incurred.

During the quarter ended June 30, 2017, there were no changes in our internal control over financial reporting identified in connection with the evaluation performed during the fiscal year covered by this report that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.39

~~Item~~Commitments and ~~9B.~~contingencies ~~Other Information~~

~~None~~Lease Commitments

~~PART~~The Company ~~III~~has a lease agreement for a concrete service plant with an unrelated party which will expire on September 30, 2022, with annual payments of approximately $424,000. The Company has a lease agreement for roadway access to the west side entry of the concrete service plant with an unrelated party, which will expire on June 30, 2019, with annual payments of approximately $15,000. The Company has a lease agreement for office space from Mr. Weili He, the Company’s Interim Chief Financial Officer, through October 31, 2023, with annual payments of approximately $25,000. The Company has a lease agreement for office space in New York through May 31, 2019, with annual payments of $27,600.

~~Item~~Operating lease ~~10.~~expenses ~~Directors~~are allocated between the cost of revenue and selling, ~~Executive~~general, ~~Officers~~and administrative expenses. Total operating lease expenses were approximately $0.4 million and ~~Corporate~~$0.2 ~~Governance~~million for the years ended June 30, 2018 and 2017.

Set forth below are the names of our directors, executive officers and significant employees of our company as of the date of this annual report, their ages, all positions and offices that they hold with us, the period during which they have served as such, and their business experience during at least the last five years. Contingencies

		Position with the	Term as Director
Name	Age	Company	of
			Company
Xianfu Han	57	Chairman, Chief Executive	April 2008 – Present
		Officer and Director
Weili He	59	Chief Operating Officer,	April 2008 – Present
		Interim Chief
		Financial Officer, Vice
		Chairman and
		Director
Tao Jin	49	Director	May 2011 – Present
Xinyong Gao	44	Director	June 2012 – Present
Ken Ren	41	Director	June 2012 – Present

From time to time, the Company is a party to various legal actions. The majority of these claims and proceedings relate to or arise from, commercial disputes, labor contract complaints and sales contract complaints. The Company accrues costs related to these matters when they become probable and as a result the amount of loss can be reasonably estimated (See Dispute Matters Arising in the Ordinary Course of Business for more information). In determining whether a loss from a claim is probable, and if it is possible to estimate the loss, the Company reviews and evaluates its litigation and regulatory matters on at least a quarterly basis in light of potentially relevant factual and legal developments. If the Company determines a favorable outcome is probable, or that the amount of loss cannot be reasonably estimated, the Company does not accrue costs for a potential litigation loss. In those situations, the Company discloses an estimate of the probable losses or a range of possible losses, if such estimates can be made as indicated below (See Legal Matters). Currently, except as otherwise noted below, the Company does not believe that it is possible to estimate the potential losses incurred or a range of reasonably possible losses related to the outstanding claims. Legal costs incurred in connection with loss contingencies are expensed as incurred.

41As of June 30, 2017, the Company’s VIE, Xin Ao, was subject to several civil lawsuits for which the Company estimated that it is more than likely to pay judgments in the amount of approximately US$4.4 million (including interest and penalty of US$0.2 million). These amounts are presented in the accompanying consolidated balance sheets (See Accrued Contingent Liabilities).

Name	Position with the Company and Principal Occupations
Xianfu Han	Mr. Han became our Chairman and Chief Executive Officer on April 29, 2008. From January 2003 to the present, Mr. Han has served as chairman of the board of directors of the Company’s subsidiary Beijing Xin Ao Concrete Group, or Xin Ao. His main responsibilities include daily board leadership and strategy initiatives. Since November 2002, Mr. Han has been Chairman at Beijing Tsinghua University Management School’s Weilun Club. His responsibilities involved daily management work. From January 2001 to March 2007, Mr. Han acted as Executive Vice Chairman of the Beijing Concrete Association. His primary functions involved public relations and communication with various governmental agencies. Mr. Han is a senior engineer with over 25 years of management experience in the building material industry. He contributed to the draft of the "Local Standard of Mineral Admixtures" regulations and was responsible for the "Research and Application of Green High Performance Concrete" published by the Ministry of Construction. Mr. Han has not held any other public company directorships during the past five years.
	Mr. Han graduated in 1995 from the Tsinghua University executive MBA program. Mr. Han received his Bachelor degree in engineering management in 1992 from Northern China University of Technology.
Weili He	Mr. He became our Vice-Chairman and Chief Operating Officer on April 29, 2008, and became our Interim Chief Financial Officer on September 21, 2012. His primary responsibility is large client development. From August 2007 to present, Mr. He has worked as Vice Chairman of the board of directors of Xin Ao. From January 2003 to August 2007, Mr. He worked as Chairman of the board of directors of Beijing Xinhang Construction Materials Co., Ltd. His primary responsibilities included strategic planning. Since 2007, Mr. He has served as Vice Chairman of the Beijing Concrete Associations. His primary functions included market research. Mr. He has extensive construction and concrete engineering experience in China and Japan on numerous high profile projects. His primary expertise is plant management and operations. Mr. He received a bachelor’s degree in law from Party School of the Central Committee of C.P.C. Mr. He has not held any other public company directorships during the past five years.
Tao Jin	Mr. Jin became a member of our Board of Directors on May 4, 2011. Mr. Jin is a partner at Vestasia Limited. Prior to that, he had been a senior partner with the Chinese law firm of Jincheng TongDa & Neal, based in Beijing, where he specialized in mergers and acquisitions, foreign investments in China and capital market transactions. Mr. Jin started his legal practice in 1996 at the New York office of Cleary, Gottlieb, Steen & Hamilton where he represented numerous investment banks and corporations in a variety of mergers and acquisitions and capital markets transactions. Mr. Jin joined Sullivan & Cromwell’s Hong Kong office in 1999 where he continued to focus on merger and acquisition transactions. His clients included major multinational corporations, investment banks, PRC corporations and private equity funds. Mr. Jin joined JP Morgan’s legal department in 2002 as head legal counsel for mergers and acquisitions and capital market transactions in China. Immediately prior to joining Jincheng TongDa, Mr. Jin was a partner with Jun He Law Offices from 2005 through 2010. Mr. Jin received his B.S. from Beijing University and his J.D. from Columbia University, and is fluent in English and Mandarin. Mr. Jin is admitted to the New York bar. Mr. Jin has not held any other public company directorships during the past five years.
	Mr. Jin serves as Chairman of our Compensation Committee and as a member of our Audit Committee and Nominating and Governance Committee.
Xinyong Gao	Mr. Gao is currently the Deputy General Manager of Beijing Capital Development Holding (Group) Co., Ltd., a real estate development company based in China, a position he has held since February 2013. From September 2011 to February 2013, he was the Operations Director of the same company. From July 1994 to September 2011, Mr. Gao served in various capacities, most recently the Deputy General Manager, International Engineering Contracting Dept., with Beijing Urban Construction Group Co. Ltd., a China-based construction company which built 41 structures for the 2008 Beijing Olympics. Mr. Gao received his B.A. from Shandong Normal University and his M.B.A. from the Open University of Hong Kong. Mr. Gao has not held any other public company directorships during the past five years.

During the year ended June 30, 2018, additional estimated claims charges amount of approximately $2.8 million for remaining claim balances are presented in the accompanying consolidated statements of operations under the caption “Estimated claims charges”.

42As of the date of this 10-K, the Company’s management does not expect any other material liability from the disposition of claims as of the date of this 10-K report from litigation individually, or in the aggregate that would have a material adverse impact on the Company’s consolidated financial position, results of operations and cash flows.

	Mr. Gao serves as Chairman of the Company’s Nominating and Governance Committee and as a member of our Audit Committee and Compensation Committee.
Ken Ren	Mr. Ren is currently the Chief Financial Officer of China Green Agriculture Inc., a position he has held since 2010. Previously, Mr. Ren served as a capital market analyst for the Federal Home Loan Bank of Des Moines, where he analyzed, priced, and assisted in trading investments and issuing debt, conducted hedges and performed analytical work for the bank’s $20 billion investment portfolio of mortgage whole loan and mortgage backed securities. Before this, Mr. Ren served as a senior investment associate at an asset management subsidiary of Wells Fargo, which provides money management services to institutional clients. Earlier, Mr. Ren worked at Residential Capital LLC, a subsidiary of Ally Financial, where he was responsible for risk analytics and reporting while managing its credit residual portfolio. Mr. Ren received Ph.D. in operations research in 2006, and M.S. in computational finance in 2004, both from Purdue University, West Lafayette. Mr. Ren has not held any other public company directorships during the past five years.
	Mr. Ren serves as Chairman of the Company’s Audit Committee and as a member of our Compensation Committee and Nominating and Governance Committee.

Due to the Company’s operations in the PRC and the legal environment in the PRC, it is possible that the Company’s VIE, Xin Ao could be named as a defendant in the litigation based upon the guarantees of Mr. Han and Mr. He and/or their related parties.

~~All directors of our company hold office until the next annual~~Legal meeting of our shareholders or until their successors have been elected and qualified. The executive officers of our company are appointed by the Board and hold office until their death, resignation or removal from office.matters

~~Summary~~As of ~~Qualifications~~June 30, 2018, the Company’s VIE, Xin Ao, was subject to several civil lawsuits with potential judgments of ~~Current~~approximately ~~Directors~~$14.2 million and the likelihood of the outcome of these lawsuits cannot be determined as of the date of this report. These lawsuits involved with the Company were mainly due to the personal guarantees by Mr. Xianfu Han, and Mr. Weili He, the Company’s shareholders and officers, because they are also the shareholders of our VIE, Xin Ao. Because Mr. Han and Mr. He are the shareholders of Xin Ao, the plaintiffs included Xin Ao in the joint complaints. Xin Ao was not involved in most of the lawsuits but named as a joint defendant in the lawsuits. As a result, Xin Ao might have exposure to the pending judgements in the future.

~~Set~~The ~~forth~~type ~~below is a summary~~ of ~~some~~litigation ofdisputes ~~the~~with ~~specific~~contingencies ~~qualifications,~~associated ~~attributes,~~are ~~skills~~summarized ~~and~~as ~~experiences~~follows as of ~~our~~June ~~directors which we believe qualify them to serve on our Board. For more detailed information~~30, ~~please~~ ~~refer to the biographical information for each director set forth above.~~ 2018:

Xianfu Han. Mr. Han has extensive senior management experience in the industry in which we operate, having served as our Chief Executive Officer and Chairman since September 2008 and as the Chairman of Xin Ao since 2003. Mr. Han has over 25 years of management experience in the building material industry, and has worked extensively with various governmental agencies on behalf of our industry in Beijing.

Dispute matter	Claims amount as of June 30, 2018		Interest and penalties		Total claims amount as of June 30, 2018
1) Guarantees	$	58,126,066	$	10,442,814	$	68,568,880
2) Purchase		1,643,380		41,476		1,684,856
3) Leases		928,387		-		928,387
4) Labor		236,542		-		236,542
Total	$	60,934,375	$	10,484,290		71,418,665
Settled claims						(57,257,305	)
Remaining claims amount					$	14,161,360

~~Weili He. Mr. He has extensive experience in the concrete and construction industry, and has specific expertise in strategic planning and plant management and operation.~~ 40

~~Tao Jin. Mr. Jin brings to the Board extensive legal and~~Off-Balance ~~transactional~~Sheet ~~capital markets experience and has worked extensively with both U.S. and PRC based companies, and has a high level of both legal and financial literacy and sophistication.~~ Arrangements

~~Xinyong~~Due to ~~Gao.~~the ~~Mr.~~Company’s ~~Gao~~consolidated ~~brings~~VIE tobeing named as a guarantor for certain agreements per the ~~Board~~courts ~~extensive~~in the PRC (see Note ~~experience~~12 for details), we may have some off-balance sheet arrangements that could have a current or future effect on our financial condition, changes in ~~the~~financial ~~construction~~condition, ~~industry~~revenues or expenses, ~~both~~results ~~within~~of ~~China~~operations, liquidity, capital expenditures and ~~internationally~~capital resources that is material to our stockholders. On September 28, 2018, Mr. Han and Mr. He signed an agreement with the Company to waive the liabilities of the Company and ~~years~~personally become responsible for all of ~~service~~the inpending ~~various~~potential ~~senior~~judgements ~~management~~amount ~~positions.~~from the civil lawsuits mentioned above.

~~Ken Ren. Mr. Ren brings to the Board extensive~~Recently ~~experience~~issued inaccounting ~~finance and banking and has a high level of financial literacy and sophistication.~~ pronouncements

~~Family~~Refer to ~~Relationships~~Note 2 of the consolidated financial statements for a discussion of recent accounting standards and pronouncements.

~~There is no family relationship among any of our officers or~~Interest ~~directors.~~Rate Risk

43We are exposed to interest rate risk while we have short-term bank loans outstanding. Although interest rates for our short-term loans are typically fixed for the terms of the loans, the terms are typically twelve months and interest rates are subject to change upon renewal. Interest rates are approximately 5.66% for our RMB bank loans with a term of twelve months or less.

~~Involvement in Certain Legal Proceedings~~ Credit Risk

ToThe Company ~~the~~is ~~best~~exposed ofto ~~our~~credit ~~knowledge~~risk from its cash in bank and fixed deposits, ~~none~~accounts ofreceivable, ~~our~~other ~~directors~~receivables, orand prepayments ~~executive~~and ~~officers~~advances ~~were~~on ~~involved~~inventory purchases. The credit risk on cash in ~~any~~bank ~~legal~~and ~~proceedings~~fixed ~~during~~deposits ~~the~~is ~~last~~limited 10because the counterparties ~~years~~are asrecognized ~~described~~financial ininstitutions. ~~Item~~Accounts ~~401(f)~~receivable, ofother ~~Regulation~~receivables, ~~S-K~~and prepayments and advances on inventory purchases are subjected to credit evaluations. An allowance has been made for estimated unrecoverable amounts which have been determined by reference to past default experience and the current economic environment.

~~Section 16(a) Beneficial Ownership Reporting~~Foreign ~~Compliance~~Exchange Risk

~~Section~~The value ~~16(a)~~ of the ~~Exchange~~RMB ~~Act~~against ~~requires~~the ~~directors,~~U.S. ~~executive officers~~dollar and ~~stockholders~~other ~~who~~currencies ~~own~~is ~~more~~affected ~~than~~by, ~~ten~~among ~~percent~~other ofthings, changes in the ~~outstanding~~PRC’s political ~~Common~~and ~~Stock~~economic conditions. The RMB does not fluctuate with the U.S. dollar. Although the People’s Bank of China regularly intervenes in the ~~Company~~foreign exchange market to ~~file~~prevent ~~with~~significant short-term fluctuations in the ~~SEC~~exchange ~~and~~rate, ~~Nasdaq~~the ~~reports~~RMB ofmay ~~ownership~~appreciate ~~and~~or ~~changes~~depreciate significantly in ~~ownership~~value ofagainst ~~voting~~the ~~securities~~U.S. dollar in the medium to long term. In August 2017, the PRC’s currency dropped by a cumulative 4.4% against the U.S. dollar on hopes of boosting the ~~Company~~domestic economy, making PRC exports cheaper and imports into the PRC more expensive by that amount. The effect on trade can be substantial. The RMB started to ~~furnish~~appreciate during ~~copies~~2017 and the trend of ~~such~~appreciation ~~reports~~fluctuated during the year ended June 30, 2018. Compared with the lowest point of RMB versus U.S. dollars in 2017, the RMB has appreciated by 4.5% compared to usthe exchange rate as of June 30, 2018. Moreover, it is possible that in the future, PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market. In addition, the value of RMB could be affected by the proposed tariffs regarding trade with the United States.

Based solely on a review of Forms 3, 4 and 5 (including amendments to such form) furnished to the Company during and with respect to the year ended June 30, 2017 and written representations from certain persons that no other reports were required for them, we believe that each of the Company’s directors, officers and more than ten-percent stockholders filed all such required forms on a timely basis. 41

~~Code~~Because substantially all of ~~Ethics~~our earnings and cash assets are denominated in RMB, but our reporting currency is the U.S. dollar, fluctuations in the exchange rate between the U.S. dollar and the RMB will affect our balance sheet and our earnings per share in U.S. dollars. In addition, appreciation or depreciation in the value of the RMB relative to the U.S. dollar would affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in our business or results of operations. Fluctuations in the exchange rate will also affect the relative value of any dividend we might issue in the future that will be exchanged into U.S. dollars and earnings from, and the value of, any dollar-denominated investments we make in the future.

~~The~~Very limited ~~Board~~hedging ~~has~~transactions ~~adopted~~are aavailable ~~Code~~in ofthe ~~Conduct~~PRC ~~and~~to ~~Ethics~~reduce ~~that~~our ~~applies~~ exposure to ~~the~~exchange ~~Company’s~~rate ~~directors~~fluctuations. To date, ~~officers~~we ~~and~~have ~~employees.~~not entered Ainto ~~copy~~any ofhedging ~~this~~transactions ~~policy~~in ~~is available~~an ~~via~~effort to reduce our ~~website~~exposure atto ~~www~~foreign currency exchange risk.~~China-ACM.com.~~ ~~Printed~~While ~~copies~~we ofmay ~~our~~enter ~~Code~~into hedging transactions in the future, the availability and effectiveness of ~~Ethics~~these transactions may be ~~obtained~~limited, ~~without~~and ~~charge,~~we bymay ~~contacting~~not be ~~the~~able ~~Corporate Secretary,~~to ~~China~~successfully ~~Advanced~~hedge ~~Construction~~our ~~Materials~~exposure ~~Group,~~at ~~Inc~~all., ~~Yingu~~In ~~Plaza~~addition, ~~9 Beisihuanxi~~foreign ~~Road,~~currency ~~Suite~~exchange ~~1708,~~losses ~~Haidian~~may ~~District,~~be ~~Beijing~~magnified ~~100080~~by the PRC. exchange control regulations that restrict our ability to convert RMB into foreign currencies.

~~Audit~~Most of ~~Committee~~the transactions of the Company are settled in RMB and U.S. dollars. In the opinion of management, the Company is not exposed to significant foreign currency risk.

Our audit committee consists of Mr. Ren, Mr. Jin and Mr. Gao, each of whom is “independent” as that term is defined under the Nasdaq listing standards. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company. Mr. Ren serves as our audit committee financial expert as that term is defined by Item 407 of Regulation S-K of the Exchange Act. The audit committee is responsible for, among other things: Inflation

•Inflationary ~~selecting~~factors, ~~our~~such ~~independent~~as ~~auditors~~increases in ~~and~~the ~~pre-approving~~cost ~~all~~of ~~auditing~~raw ~~and~~materials ~~non-auditing services permitted to be performed by our independent auditors; • reviewing with our independent auditors any audit problems or difficulties~~ and ~~management’s~~overhead ~~response; • reviewing and approving all proposed related-party transactions~~costs, ascould ~~defined~~impair inour ~~Item~~operating ~~404~~results. ofA ~~Regulation~~high S-rate ~~K under the Securities Act~~ of ~~1933,~~inflation asin ~~amended; • discussing~~ the ~~annual~~future ~~audited~~may have ~~financial~~a ~~statements~~continued ~~with~~adverse ~~management~~effect ~~and~~on our ~~independent~~ability ~~auditors; • reviewing major issues as~~ to ~~the~~maintain ~~adequacy~~current levels of ~~our~~gross ~~internal~~margin ~~controls~~ and ~~any~~selling, ~~special~~general ~~audit~~and ~~steps~~administrative expenses ~~adopted~~as ina ~~light~~percentage of ~~significant~~sales ~~internal~~revenue ~~control~~if ~~deficiencies; • annually reviewing and reassessing~~ the ~~adequacy~~selling prices of our ~~audit~~products ~~committee~~do ~~charter;~~not •increase ~~meeting separately and periodically~~ with ~~management~~these ~~and~~increased ~~our internal and independent auditors; and • reporting to the Board; and • such other matters that are specifically delegated to our audit committee by the Board from time to time~~costs.

Item 11 7A. ~~Executive~~Quantitative ~~Compensation~~and Qualitative Disclosures About Market Risk

~~Summary Compensation Table— Fiscal Years Ended June 30, 2017~~Not ~~and 2016~~Applicable.

~~The following table sets forth information concerning all cash~~Item and non-cash compensation awarded to, earned by or paid to our principal executive officer and our other most highly paid executive officer (the “named executive officers”) for services rendered in all capacities during the noted periods8. NoFinancial ~~other~~Statements ~~executive officers received total annual salary~~ and ~~bonus compensation~~Supplementary ~~in excess of $100,000 during the fiscal years ended June 30, 2017 and 2016.~~ Data

44The full text of our audited consolidated financial statements as of June 30, 2018 and 2017 begins on page F-1 of this report.

Name and	Year	Salary	Bonus	Stock	Option	Non-	Non-	All	Total
Principal	Ended	($)	($)	Awards	Awards	Equity	Qualified	Other	($)
Position	June 30			($)	($)	Incentive	Deferred	Comp
						Plan	Compensation	ensati
						Compensa	Earnings	on
						tion	($)	($)
						Earnings
						($)
Xianfu Han	2017	300,000							300,000
Chairman	2016	300,000	-	-	-	-	-	-	300,000
and CEO
Weili He,
Vice	2017	300,000							300,000
Chairman,	2016	300,000	-	-	-	-	-	-	300,000
interim
CFO
and COO

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

~~Employment~~(a) Resignation ~~Agreements~~of Previous Independent Registered Public Accounting Firm

InBy ~~connection~~letter ~~with~~dated ~~the~~(and ~~reverse~~received) ~~acquisition~~October ~~of BVI-ACM on April 29~~11, ~~2008~~2018, ~~Mr.~~our ~~Han~~independent ~~was~~registered ~~elected~~public asaccounting ~~our~~firm, ~~Chairman~~Friedman LLP ~~and~~(“Friedman”) ~~Chief~~notified ~~Executive~~the ~~Officer effective~~Audit ~~immediately.~~Committee Inof ~~January~~the ~~2011,~~Board weof ~~entered~~Directors ~~into~~of aChina ~~three-year~~Advanced ~~Employment Agreement~~Construction ~~with~~Materials MrGroup, Inc. ~~Han~~(the ~~pursuant~~“Company”, to“we”, ~~which~~or he“us”) ~~receives an annual salary~~ of ~~$140,000~~ ~~for~~its ~~service~~resignation as ~~our~~the ~~Chief~~Company’s ~~Executive~~independent ~~Officer.~~registered public ~~The~~accounting ~~initial~~firm. ~~term~~On ofOctober ~~three years~~11, as2018, ~~set~~the ~~forth~~Board inof ~~the~~Directors ~~agreement~~accepted ~~expired~~such ~~and~~resignation. ~~the~~The ~~Company~~auditor’s ~~and~~report ~~Mr.~~of ~~Han renewed~~Friedman on the ~~agreement~~Company’s ~~for~~consolidated ~~another~~financial ~~three~~statements ~~years~~as ~~from~~of ~~July~~and 1,for ~~2014~~the toyear ended June 30, ~~2017~~2016 ondid ~~the same~~not ~~terms~~contain ~~except~~an ~~for~~adverse opinion ~~the~~or ~~increased~~a ~~annual~~disclaimer ~~salary~~of ~~to $300~~opinion,~~000.~~ ~~The Company~~ and ~~Mr.~~ ~~Han~~was ~~renewed~~not ~~the~~qualified ~~agreement~~or ~~for~~modified ~~another~~as ~~three years from July 1, 2017~~ to ~~June 30~~uncertainty, ~~2020~~audit onscope ~~the~~or ~~same~~accounting ~~terms except for the increased annual salary to $360,000~~principles.

~~Upon~~On ~~termination~~October of6, ~~Mr.~~2018, ~~Han’s~~the ~~employment~~Audit ~~because~~Committee of the Board of ~~death~~Directors, ~~disability~~ orafter ~~for~~consultation ~~cause,~~with the Company’s ~~will~~then ~~pay~~independent orregistered ~~provide~~public toaccounting ~~Mr.~~firm, ~~Han~~Friedman LLP or(“Friedman”) ~~his estate~~concluded, asthat the ~~case~~Company’s ~~may~~audited befinancial ~~(i)~~statements ~~any~~at ~~unpaid~~and ~~base~~for ~~salary~~the ~~and~~year ~~any~~ended ~~accrued~~June ~~vacation~~30, ~~through~~2017 ~~the~~contained ~~date~~in ofthe ~~termination;~~Company’s ~~(ii)~~Annual ~~any~~Report ~~unpaid~~on ~~annual~~Form ~~bonus~~10-K ~~accrued~~originally filed with ~~respect~~ to the ~~fiscal~~SEC ~~year ending~~ on oras ~~preceding~~well the ~~date~~unaudited offinancial statements ~~termination;~~at ~~(iii) reimbursement~~and for ~~any~~the ~~unreimbursed~~periods ~~expenses~~ended ~~properly~~March ~~incurred~~31, ~~through~~2018, ~~the~~December 31, ~~date of~~2017 ~~termination;~~ and ~~(iv)~~September ~~all~~30, ~~other~~2017 ~~payments~~contained orin ~~benefits~~the toCompany’s Quarterly ~~which~~Reports ~~Mr.~~on ~~Han~~Form ~~may~~10-Q ~~be entitled~~originally ~~under~~filed ~~the~~on ~~terms~~November of15, ~~any~~2017, ~~applicable~~February ~~employee~~13, ~~benefit~~2018 ~~plan~~and May 15, ~~program~~2018, orrespectively, should ~~arrangement.~~no longer be relied upon.

~~Upon~~During the ~~termination~~two ofmost ~~Mr.~~recent ~~Han’s~~fiscal ~~employment by the Company~~years ~~without~~and ~~cause,~~through the ~~Company~~subsequent ~~will~~interim ~~pay~~period orpreceding ~~provide~~Friedman’s toresignation, ~~Mr.~~there ~~Han~~were no (i) ~~all amounts due as~~“disagreements” if(as ~~Mr.~~that ~~Han’s~~term ~~employment~~is ~~were~~defined ~~terminated~~in ~~because~~Item ~~of death, disability or for cause, and~~ 304(iia) ~~subject to Mr. Han’s execution~~ (~~and non-revocation~~1)(iv) of aRegulation ~~general release~~S-K) ofbetween ~~claims against~~ the Company and ~~its~~Friedman ~~affiliates~~on inany amatter ~~form~~of ~~reasonably~~accounting ~~requested~~principles byor ~~the Company~~practices, ~~(a)~~financial ~~continued~~statement ~~payment~~disclosure, ofor ~~his~~auditing ~~base~~scope ~~salary~~or ~~for~~procedures, ~~two months~~which ~~after termination~~disagreements, ~~payable~~if innot ~~accordance with the regular payroll~~resolved ~~practices~~to of the ~~Company,~~satisfaction ~~but off the payroll; and (b) payment~~ of ~~his~~Friedman ~~cost~~would ~~of continued~~have ~~medical~~caused ~~coverage~~Friedman ~~for~~to ~~two~~make ~~(2)~~reference ~~months~~to ~~after~~the ~~termination (~~subject tomatter ~~his co-payment~~thereof ~~of the costs~~ in ~~the~~its ~~same~~reports ~~proportion as~~ for such ~~costs~~fiscal ~~were~~years ~~shared immediately~~and ~~prior~~interim toperiods, ~~the~~or ~~date of termination~~(ii). ~~Payments~~“reportable ~~provided~~events” ~~under~~as ~~this Section~~that ~~6(d)~~term ~~shall~~is bedescribed in ~~lieu~~Item ~~of any termination or severance payments or~~304(a)(1)(v) ~~benefits for which Mr. Han may be eligible under any~~ of ~~the~~Regulation ~~plans, policies or programs of the Company~~S-K.

In January 2011, we also entered into a three year Employment Agreement with Mr. He pursuant to which he receives an annual salary of $109,169 for service as our Chief Operating Officer. The initial term of three years as set forth in the agreement expired and the Company and Mr. He renewed the agreement for another three years from July 1, 2014 to June 30, 2017 on the same terms except for the increased annual salary to $300,000. The Company and Mr. He renewed the agreement for another three years from July 1, 2017 to June 30, 2020 on the same terms except for the increased annual salary to $360,000. 42

~~Upon~~We ~~termination~~furnished ofa ~~Mr.~~copy ~~He’s employment because~~ of ~~death,~~this disclosure ~~disability~~to orFriedman ~~for~~and ~~cause,~~have ~~the~~requested ~~Company~~that ~~will~~Friedman ~~pay~~furnish orus ~~provide~~with toa ~~Mr.~~letter Headdressed orto ~~his estate, as~~ the ~~case~~Securities ~~may be (i) any unpaid base salary~~ and ~~any~~Exchange ~~accrued~~Commission ~~vacation through the date of termination;~~ (iithe “SEC”) ~~any~~stating ~~unpaid~~whether ~~annual~~such ~~bonus~~firm ~~accrued~~agrees with ~~respect~~ to the ~~fiscal~~above ~~year~~statements ~~ending~~or, onif ornot, ~~preceding~~stating the ~~date~~respects ofin ~~termination;~~which ~~(iii)~~it does ~~reimbursement~~not ~~for~~agree. ~~any~~We ~~unreimbursed~~have ~~expenses~~received ~~properly~~the ~~incurred~~requested ~~through~~letter ~~the~~from ~~date of~~Friedman, ~~termination;~~ and ~~(iv)~~a ~~all~~copy ~~other~~of ~~payments~~their orletter ~~benefits~~is tofiled ~~which~~with ~~Mr.~~the HeSecurities ~~may~~and beExchange ~~entitled~~Commission ~~under~~on ~~the~~October ~~terms~~16, of2018 ~~any~~in ~~applicable~~our ~~employee~~Current ~~benefit~~Report ~~plan,~~on ~~program~~Form ~~or arrangement.~~8-K as Exhibit 16.1.

~~Upon the termination of Mr. He’s employment by the Company without cause, the Company will pay or provide to Mr. He~~ (i) all amounts due as if Mr. He’s employment were terminated because of death, disability or for cause, and (ii) subject to Mr. He’s execution (and non-revocation) of a general release of claims against the Company and its affiliates in a form reasonably requested by the Company, (a) continued payment of his base salary for two months after termination, payable in accordance with the regular payroll practices of the Company, but off the payroll; and (b) ~~payment of his cost of~~ ~~continued~~Engagement ~~medical coverage for two (2) months after termination (subject to his co-payment~~ of ~~the~~New ~~costs~~Independent inRegistered ~~the~~Public ~~same~~Accounting proportion as such costs were shared immediately prior to the date of termination). Payments provided under this Section 6(d) shall be in lieu of any termination or severance payments or benefits for which Mr. He may be eligible under any of the plans, policies or programs of the Company. Firm

45On October 13, 2018, the Board of Directors approved the engagement of Wei Wei & Co., LLP (“WWC”) as the Company’s independent registered public accounting firm to audit the Company’s consolidated financial statements as of and for the fiscal year ended June 30, 2018 and 2017.

~~Cash~~During the ~~Compensation~~two ~~for~~most ~~Executive~~recent ~~Officers~~fiscal years and through the subsequent interim period preceding WWC’s engagement, the Company has not consulted with WWC regarding (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report was provided to the Company nor oral advice was provided that WWC concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue, or (ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).

~~On December 25, 2014, the compensation committee of the Board~~Item of9A. ~~Director~~Controls ofand ~~the Company, approved (i) a new cash compensation plan for the Company’s executive officers, effective immediately.~~ Procedures

~~Pursuant to the Cash Plan, the compensation committee determined that~~ (~~i) Mr. Xianfu Han, is entitled to~~ a ~~base salary of $300,000, (ii~~) ~~Mr. Weili He, is entitled to a base salary of $300,000. The Cash Plan also~~ ~~provided~~Evaluation ~~for aggregate cash bonuses (the “Cash Bonus”) payable to (i) Mr. Han in the amount~~ of upDisclosure toControls ~~160% of his base salary, or $480,000;~~ and (ii) Mr. He in the amount of up to 100% of his base salary, or $300,000. According to the Cash Plan, 80% of the Cash Bonus is payable at the end of each quarter of the year ending June 30, 2017 (the ”Quarterly Bonuses”), starting from the end of the second quarter ended December 31, 2014, and 20% of the Cash bonus is payable at the end of the fiscal year ending June 30, 2017 (the “Year-End Bonus”), if the Company achieves certain revenue and operating income targets set for each period. For the payment of the Quarterly Bonuses, both the revenue and operating income targets must be achieved for that quarter. In addition, total annual cash bonus pool should be no more than 10% of operating income or revenue, or $2 million for the full fiscal year, whichever is less.Procedures

~~With respect to the Year-End Bonus, the Cash Plan sets forth~~We ~~three~~maintain ~~target~~disclosure ~~levels~~controls ~~of revenue~~ and ~~operating~~procedures ~~income~~(as ~~targets~~defined ~~for~~in ~~the~~Rule ~~year ending June 30, 2017:~~ 13a-15(ie) under the ~~Base~~Exchange ~~Target, (ii~~Act) ~~the~~that ~~Threshold~~are ~~Target,~~designed ~~which~~to ~~equals 90%~~ensure ofthat ~~the~~information ~~revenue~~that ~~and~~would ~~operating~~be ~~income~~required ~~targets~~to ofbe ~~the~~disclosed ~~Base~~in ~~Target,~~Exchange ~~and~~Act ~~(iii)~~reports ~~the Maximum~~is ~~Target~~recorded, ~~which~~processed, ~~equals~~summarized ~~110% of the revenue~~ and ~~operating income targets of~~reported ~~the~~within ~~Base Target. If~~ the ~~Base~~time ~~Target~~period isspecified ~~achieved,~~in the ~~full~~SEC’s ~~Year-End~~rules ~~Bonus~~and ~~is payable; if the Threshold Target is achieved~~forms, ~~70% of the Year-End Bonus is payable;~~ and ifthat ~~the~~such ~~Maximum~~information ~~Target~~ is ~~achieved,~~accumulated ~~150%~~and ~~of the Year-End Bonus is~~communicated ~~payable.~~to ~~Additionally~~our management, ~~with~~including ~~respect~~ to ~~each~~our ofChief ~~these~~Executive ~~three target levels~~Officer, ~~if either~~Chief ~~revenue~~Operating orOfficer ~~income~~and ~~target~~interim ~~has~~Chief ~~been~~Financial ~~met~~Officer, ~~but~~as ~~not both~~appropriate, ~~for the full year,~~ ~~the~~to ~~Year-End~~allow ~~Bonus~~timely isdecisions ~~payable~~regarding inrequired ~~half~~disclosure.

~~Outstanding~~As required ~~Equity~~by ~~Awards~~Rule at13a-15 ~~Fiscal~~under ~~Year~~the ~~End~~Exchange Act, in connection with the restatement, our management, including our Chief Executive Officer and interim Chief Financial Officer, re-evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, ~~2017~~2018. Based on that evaluation, we concluded that as of June 30, 2018, due to the material weaknesses in our internal control over financial reporting discussed below, our disclosure controls and procedures were not effective.

~~None.~~(b) Management’s annual report on internal control over financial reporting

~~Director~~Our ~~Compensation~~management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Management assessed the effectiveness of our internal control over financial reporting as of June 30, 2018. In making this assessment, management used the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee Sponsoring Organizations of the Treadway Commission (COSO). Based on our assessment of internal control over financial reporting, management has concluded that, as of June 30, 2018, our internal control over financial reporting, because of the material weaknesses in our internal control over financial reporting described below, were not effective.

	Fees Earned or Paid in Cash	Stock Awards	Option Awards	Total
Name	($)	($) (1)	($) (1)	($)
Tao Jin	$25,000	–	–	$25,000
Xinyong Gao	$25,000	–	–	$25,000
Ken Ren	$25,000	–	–	$25,000

~~(1) The amounts in these columns represent the~~A ~~compensation~~material ~~cost~~weakness ofis ~~shares~~a ~~of restricted stock awarded by the Company during the fiscal year~~deficiency, ~~except~~or ~~that~~a ~~these~~combination ~~amounts do not include any estimate~~ of ~~forfeitures.~~ ~~The~~deficiencies, ~~aggregate~~in ~~grant~~internal ~~date~~control ~~fair~~over ~~value~~financial ofreporting ~~restricted~~such ~~stock~~that ~~awards~~there ~~granted~~is ~~were~~a ~~determined~~reasonable inpossibility ~~accordance~~that ~~with~~a ~~Financial~~material ~~Accounting~~misstatement ~~Standard~~of ~~Board Accounting~~the ~~Standards~~registrant’s ~~Codification~~annual ~~Topic~~or ~~718~~interim ~~(formerly~~financial ~~SFAS123(R))~~statements ~~and are~~will ~~recognized~~not asbe ~~compensation~~prevented ~~cost~~or ~~over~~detected ~~the~~on ~~requisite~~a ~~service~~timely ~~period~~basis.

OnAs ~~May 4, 2011, we entered into~~ a ~~director~~result ~~agreement~~of ~~with~~its ~~Tao Jin pursuant to which he is entitled to receive~~review, ~~annually,~~management concluded athat ~~fee~~we ofhad ~~$25,000~~material weaknesses in ~~cash~~ ~~and~~our ~~833~~internal ~~(10,000~~control onover afinancial ~~pre-split~~reporting ~~basis)~~process inconsisting ~~restricted shares~~ of the ~~Company’s common stock, which vested in four equal quarterly installments.~~ following:

46● the Head of the Legal Department’s significant lack of understanding of the importance of timely disclosure of legal proceedings and the Legal Department’s problematic decision-making process with regards to reporting of legal proceedings; ● The ongoing lack of communication and coordination between executive management and the various departments within the Company; ● The personnel primarily responsible for the preparation of our financial statements do not have requisite levels of knowledge, experience and training in the application of U.S. GAAP commensurate with our financial reporting requirements; ● Ineffective supervision of the Company’s internal and disclosure controls over financial reporting. ● The Company’s issuance of certain restricted shares prior to the obligation being specified or performed; and ● The Company’s failure to timely identify a related party.

~~On June 12, 2012, we entered into a director agreement with~~Remediation Xinyong Gao pursuant to which he is entitled to receive, annually, a fee of $25,000 in cash and 833 in restricted shares of the Company’s common stock, which vested in four equal quarterly installments.Plan

OnManagement is ~~June~~in ~~12,~~the ~~2012,~~process weof ~~entered~~re-assessing ~~into~~the adesign ~~director~~of ~~agreement~~certain ~~with~~control ~~Ken Ren~~activities ~~pursuant~~and todeveloping ~~which~~its heremediation isplan ~~entitled~~for the above identified weaknesses. The Company’s actions are subject to ~~receive,~~ongoing ~~annually~~senior management review, aas ~~fee~~well ofas ~~$25,000~~Audit inCommittee oversight. ~~cash~~The ~~and~~Company ~~833~~has inimplemented ~~restricted~~or ~~shares~~will ofimplement ~~the~~following ~~Company’s~~remedial ~~common~~measures ~~stock,~~within ~~which~~its ~~vested~~resources ~~in four~~as ~~equal~~soon ~~quarterly~~as ~~installments.~~practicable:

As● The prior Head of Legal Department has been terminated and management has commenced a search for a qualified replacement. ● The Board has commenced a search for a full-time bilingual CFO experienced in U.S. GAAP and in the ~~date~~reporting requirements for a U.S. publicly-listed company; ● The Nominating Committee has commenced a search for additional bilingual independent director fluent in U.S. GAAP requirements and knowledgeable of ~~this~~U.S. ~~report~~Securities ~~none~~law; ● Establishing an internal audit function or engage an external consulting firm, to assist with assessment of Sarbanes-Oxley compliance requirements and improvement of overall internal controls; ● Development of written internal controls and procedures relating to litigation management, including the ~~restricted~~review, ~~shares noted~~assessment, ~~above~~and ~~have~~reporting ~~been~~of ~~issued~~all of the Company’s legal proceedings to the CEO, CFO, Accounting Department, and independent ~~directors~~auditors; ● Implementation of a comprehensive training and development plan, for our finance, accounting, legal and internal control personnel, in the principles and rules of U.S. GAAP, SEC reporting requirements and the application thereof.

~~Changes~~As of the date of this 10-K, the Company is in ~~Control~~the process of conducting comprehensive review of the issues identified by the investigation team and intends to take all remedial measures recommended by the Audit Committee within its resources to cure the material weaknesses in its internal and disclosure control procedure.

~~There are no compensatory plans or arrangements with respect to~~(c) ~~any~~Changes ~~officer, director, manager or other executive which would~~ in ~~any~~internal ~~way result in payments to any such person because of his or her resignation, retirement, or other termination of employment with the Company, or any change in~~ control ~~of the~~over ~~Company,~~financial ~~or a change in the person’s responsibilities following a change of control of the Company.~~reporting

~~Item~~Except as ~~12.~~otherwise ~~Security~~disclosed ~~Ownership~~in this 10-K, during the fourth quarter of ~~Certain~~fiscal ~~Beneficial~~year ~~Owners~~ended ~~and~~June ~~Management~~30, ~~and~~2018, ~~Related~~there ~~Stockholder~~were ~~Matters~~no changes in our internal control over financial reporting identified in connection with the evaluation performed during the fiscal year covered by this report that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

The following table sets forth, as of September 26, 2017, certain information with respect to the beneficial ownership of our common shares by each shareholder known by us to be the beneficial owner of more than 5% of our common shares, as well as by each of our current directors and executive officers as a group. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership is determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934 and does not necessarily bear on the economic incidents of ownership or the rights to transfer the shares described below. Unless otherwise indicated, (a) each stockholder has sole voting power and dispositive power with respect to the indicated shares and (b) the address of each stockholder who is a director or executive officer is c/o Yingu Plaza, #1708, 9 Beisihuanxi Road, Haidian District, Beijing 100080, China. 44

Name & Address of	Office, If Any	Amount and Nature of	Percent of
Beneficial Owner	Officers and Directors	Beneficial Ownership	Class (1) (2)
Xianfu Han (3)	Chairman and CEO	533,378	22.3%
	Vice Chairman, COO and
Weili He (4)	Interim CFO	375,622	15.7%
Ken Ren (5)	Director	10,000	*
Tao Jin (6)	Director	--	--
Xinyong Gao (7)	Director	10,000	*
All officers and directors as a
group (5 persons named above)		929,000	38.9%

(d) Inherent Limitations on Effectiveness of Controls

*LessOur management, ~~than~~including 1%our Chief Executive Officer and Interim Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

~~(1)As of the close of business on September 26,~~Item ~~2017,~~9B. ~~there~~Other ~~were 2,387,658 shares of our common stock outstanding.~~Information

~~(2)In~~On July ~~determining~~5, ~~beneficial ownership of the common stock~~2018, the ~~number~~Company ofreceived ~~shares~~a ~~shown~~notification ~~includes~~letter ~~shares~~from ~~which~~ the ~~beneficial~~Nasdaq ~~owner~~Listing ~~may acquire~~Qualifications ~~within~~Staff ~~60 days upon exercise or conversion~~ of ~~convertible~~The ~~securities, warrants~~NASDAQ orStock ~~options. In accordance with Rule 13d-3 in determining the percentage~~Market ofLLC ~~common stock owned by a person on September 26, 2017~~ (a“Nasdaq”) ~~the~~indicating ~~numerator~~that, issince the ~~number~~ ofCompany ~~shares~~has ofnot ~~the~~yet ~~class~~held ~~beneficially~~an ~~owned~~annual bymeeting ~~such~~of ~~person,~~stockholders ~~including shares which the beneficial owner may acquire~~ within ~~60 days upon conversion or~~ ~~exercise~~twelve months of the ~~warrants~~end ~~and other convertible securities, and (b) the denominator is the sum~~ of ~~(i)~~ the ~~total~~Company’s ~~shares~~fiscal ofyear ~~that~~ended ~~class~~June ~~outstanding on September 26~~30, 2017, ~~and (ii)~~ the ~~total~~Company ~~number~~no oflonger ~~shares~~complies ~~that~~with ~~the~~Nasdaq ~~beneficial~~Listing ~~owner~~Rules ~~may~~5620(a) ~~acquire upon conversion or exercise of other securities. Unless otherwise stated, each beneficial owner has sole power to vote~~ and ~~dispose of the shares~~5810(c)(2)(G).

~~(3)~~The ~~On June 11, 2008, Mr. Han entered into a~~notification ~~Securities~~received ~~Escrow~~has ~~Agreement~~no byimmediate ~~and~~effect ~~among~~on the ~~investors~~listing toof the ~~private placement that closed on June 11, 2008, and American Stock Transfer & Trust~~ Company~~, or AST, whereby 291,667 shares (3,500,000 shares pre-reverse split) of the Company~~’s common stock ~~owned~~on ~~by Mr~~Nasdaq. ~~Han~~Under ~~were placed into escrow, with AST appointed as~~ the ~~escrow~~Nasdaq ~~agent.~~Listing ~~The 291~~Rules,~~667 shares were thereafter transferred~~ ~~into~~ the ~~name~~Company ofhad ~~AST~~until ~~and~~August ~~are to be held in escrow and released to Mr. Han if the Company does~~20, or2018 to ~~the~~submit ~~investors~~a ifplan the Company does not, meet certain performance milestones described in the Securities Escrow Agreement. Mr. Han maintains voting power over all 291,667 shares until such time as any such shares are transferred to ~~the~~regain ~~investors, at which time, such transferred shares will be beneficially owned by such investors~~compliance.

47The Company submitted a compliance plan on July 31, 2018 to the Staff. On August 8, 2018, the Staff, considering the Company was proposing to seek shareholder approval to re-domicile the Company in the Cayman Islands, determined to grant the Company an extension until December 27, 2018 to regain compliance with the Rule by holding an annual meeting of shareholders.

~~(4)~~ On ~~June~~October 1115, ~~2008,~~the ~~Mr.~~Company Hereceived a ~~entered~~notice ~~into~~from ~~a Securities~~the ~~Escrow~~NASDAQ ~~Agreement~~that, bybecause ~~and~~its ~~among~~Form 10-K for the ~~investors~~fiscal toyear ended June 30, 2018 (the ~~private~~“2018 ~~placement~~10-K”) ~~that~~was ~~closed~~not onfiled ~~June~~with ~~11,~~the ~~2008,~~Securities and ~~American~~Exchange ~~Stock~~Commission ~~Transfer~~by &the ~~Trust~~required ~~Company~~due date of October 15, or ~~AST~~2018, ~~whereby~~the ~~166,667~~Company ~~shares~~is ~~(2,000,000~~therefore not ~~shares~~in ~~pre-reverse~~compliance ~~split~~with the periodic filing requirements for continued listing set forth in NASDAQ Listing Rule 5250(c)(1). ofIn the ~~Company’s~~October ~~common~~15, ~~stock~~2018 ~~owned~~Notice, byNASDAQ ~~Mr.~~indicated Hethat ~~were~~due ~~placed~~to ~~into~~the ~~escrow~~Restatement and subsequently resignation of Friedman, ~~with~~NASDAQ ~~AST~~has applied ~~appointed~~more asstringent ~~the~~criteria ~~escrow~~pursuant ~~agent.~~to ~~The~~NASDAQ ~~166,667~~Listing ~~shares~~Rule ~~were~~5101 ~~thereafter~~and ~~transferred into~~therefore the ~~name~~Company ofhas ~~AST~~until ~~and~~November ~~are~~14, 2018 to besubmit ~~held~~a plan into ~~escrow~~regain ~~and~~compliance. ~~released~~The compliance plan was required to ~~Mr.~~also Heprovide ifa summary of the ~~Company~~ ~~does,~~independent orinvestigation tointo the reasons ~~investors~~that ifled to the Company’s ~~does~~conclusion ~~not,~~that ~~meet~~the ~~certain performance~~previously ~~milestones~~filed ~~described~~financials inshould ~~the~~no ~~Securities~~longer ~~Escrow~~be ~~Agreement.~~relied Mrupon. HeIf Nasdaq ~~maintains~~accepts ~~voting~~the ~~power~~Company’s ~~over all 166~~plan,~~667~~ ~~shares~~then ~~until~~Nasdaq ~~such~~may ~~time~~grant asthe ~~any~~Company ~~such shares~~up ~~are~~to ~~transferred~~180 todays from the ~~investors,~~prescribed atdue ~~which~~date ~~time,~~for ~~such~~filing ~~transferred shares~~the ~~will~~2018 be10-K, ~~beneficially~~or ~~owned~~April by15, ~~such~~2019, ~~investors~~to regain compliance.

~~(5)~~On ~~Mr.~~November ~~Ren~~15, is2018, ~~entitled~~the Company toreceived ~~receive~~a ~~833~~further ~~restricted shares~~notice offrom the NASDAQ notifying the Company’s ~~common~~that, ~~stock~~because ~~per~~its ~~annum~~Form ~~under~~10-Q ~~his~~for ~~director~~the ~~agreement~~period ~~but~~ended September as30, of2018 was not filed with the Securities and Exchange Commission by the required due date ~~hereof~~of ~~such~~November14, ~~shares~~2018, ~~have~~and the Company remains delinquent in filing its 2018 10-K, the Company is therefore not ~~yet~~in ~~been~~compliance ~~issued~~with the periodic filing requirements for continued listing set forth in NASDAQ Listing Rule 5250(c)(1). In the November 15, 2018 notice, NASDAQ granted the Company a two-day extension to submit the compliance plan by November 16, 2018.

~~(6)~~The ~~Mr. Jin is entitled to receive 833 restricted shares of the~~ Company’s ~~common~~submitted ~~stock per annum under his director agreement but~~the ascompliance ofplan ~~the~~on ~~date~~November ~~hereof~~16, ~~such shares have not yet been issued~~2018.

~~(7) Mr. Gao is entitled to receive 833 restricted shares of the Company’s common stock per annum under his director agreement but as of the date hereof such shares have not yet been issued.~~45

~~Item~~PART III ~~13. Certain Relationships and Related Transactions, and Director Independence~~

~~Transactions~~Item 10. ~~with~~Directors, ~~Related~~Executive ~~Party~~Officers and Corporate Governance

~~Mr.~~Set forth ~~Xianfu~~below ~~Han,~~are ~~and~~the ~~Mr.~~names ~~Weili~~of Heour directors, ~~the~~executive ~~Company’s~~officers ~~shareholders~~ and ~~officers,~~significant ~~are~~employees ~~holding~~of ~~positions~~our company as ~~president~~of ~~and~~the ~~director~~date of ~~Ningbo Lianlv~~this ~~Investment~~annual ~~Ltd.~~report, ~~respectively.~~their ~~This~~ages, ~~company~~all ~~owns~~positions ~~99%~~and ~~shares~~offices ofthat ~~Beijing~~they ~~Lianlv Technical~~hold ~~Group~~with ~~Ltd. (“Beijing Lianly”)~~us, the ~~Company’s~~period ~~supplier.~~during Aswhich ofthey ~~June~~have 30served as such, ~~2017~~ and ~~2016,~~their ~~the~~business ~~Company~~experience ~~prepaid~~during ~~$6,996,400~~at ~~and~~least ~~$1,136,546~~the tolast ~~Beijing~~five ~~Lianlv for inventory purchases, respectively~~years.

Transactions with Related Persons

Name	Age	Position with the Company	Term as Director of Company
Xianfu Han	57	Chairman, Chief Executive Officer and Director	April 2008 – Present
Weili He	59	Chief Operating Officer, Interim Chief Financial Officer, Vice Chairman and Director	April 2008 – Present
Tao Jin	49	Director	May 2011 – Present
Wei Pei	34	Director	March 2018 – Present
Jiehui Fan	38	Director	June 2018 – Present

Except as discussed below, since the beginning of the 2012, there have not been any transaction, nor is there any currently proposed transaction, in which we were or are to be a participant and the amount involved exceeded or exceeds $120,000, and in which any related person had or will have a direct or indirect material interest (other than compensation described under “Executive Compensation”).

Name		Position with the Company and Principal Occupations

Xianfu Han		Mr. Han became our Chairman and Chief Executive Officer on April 29, 2008. From January 2003 to the present, Mr. Han has served as chairman of the board of directors of the Company’s subsidiary Beijing Xin Ao Concrete Group, or Xin Ao. His main responsibilities include daily board leadership and strategy initiatives. Since November 2002, Mr. Han has been Chairman at Beijing Tsinghua University Management School’s Weilun Club. His responsibilities involved daily management work. From January 2001 to March 2007, Mr. Han acted as Executive Vice Chairman of the Beijing Concrete Association. His primary functions involved public relations and communication with various governmental agencies. Mr. Han is a senior engineer with over 25 years of management experience in the building material industry. He contributed to the draft of the “Local Standard of Mineral Admixtures” regulations and was responsible for the “Research and Application of Green High Performance Concrete” published by the Ministry of Construction. Mr. Han has not held any other public company directorships during the past five years.

		Mr. Han graduated in 1995 from the Tsinghua University executive MBA program. Mr. Han received his Bachelor degree in engineering management in 1992 from Northern China University of Technology.

Weili He		Mr. He became our Vice-Chairman and Chief Operating Officer on April 29, 2008, and became our Interim Chief Financial Officer on September 21, 2012. His primary responsibility is large client development. From August 2007 to present, Mr. He has worked as Vice Chairman of the board of directors of Xin Ao. From January 2003 to August 2007, Mr. He worked as Chairman of the board of directors of Beijing Xinhang Construction Materials Co., Ltd. His primary responsibilities included strategic planning. Since 2007, Mr. He has served as Vice Chairman of the Beijing Concrete Associations. His primary functions included market research. Mr. He has extensive construction and concrete engineering experience in China and Japan on numerous high profile projects. His primary expertise is plant management and operations. Mr. He received a bachelor’s degree in law from Party School of the Central Committee of C.P.C. Mr. He has not held any other public company directorships during the past five years.

Tao Jin		Mr. Jin became a member of our Board of Directors on May 4, 2011. Mr. Jin is a partner at Vestasia Limited. Prior to that, he had been a senior partner with the Chinese law firm of Jincheng TongDa & Neal, based in Beijing, where he specialized in mergers and acquisitions, foreign investments in China and capital market transactions. Mr. Jin started his legal practice in 1996 at the New York office of Cleary, Gottlieb, Steen & Hamilton where he represented numerous investment banks and corporations in a variety of mergers and acquisitions and capital markets transactions. Mr. Jin joined Sullivan & Cromwell’s Hong Kong office in 1999 where he continued to focus on merger and acquisition transactions. His clients included major multinational corporations, investment banks, PRC corporations and private equity funds. Mr. Jin joined JP Morgan’s legal department in 2002 as head legal counsel for mergers and acquisitions and capital market transactions in China. Immediately prior to joining Jincheng TongDa, Mr. Jin was a partner with Jun He Law Offices from 2005 through 2010. Mr. Jin received his B.S. from Beijing University and his J.D. from Columbia University, and is fluent in English and Mandarin. Mr. Jin is admitted to the New York bar. Mr. Jin has not held any other public company directorships during the past five years.

		Mr. Jin serves as Chairman of our Compensation Committee and as a member of our Audit Committee and Nominating and Governance Committee.

Mr. Xianfu Han, the Company’s Chief Executive Officer and Mr. Weili He, the Company’s Chief Operating Officer and interim Chief Financial Officer, had advanced funds to BVI-ACM, for working capital purposes. The loans are non-interest bearing, unsecured, and are payable in cash on demand. On December 2, 2014, the Board authorized the Company to issue 92,897 and 81,968 shares of common stock of the Company (collectively, the “Shares”), to each of Mr. Xianfu Han and Mr. Weili He, at $5.49 per share, the closing bid price quoted by Nasdaq on December 1, 2014. The Shares offset the payables advanced by the two executives in the amount of approximately $510,000 and $450,000, respectively, to the Company. Payable balance also include their annual salary of $300,000. Therefore, as of June 30, 2017, approximately $1,071,000 and $1,191,000 remained payable to Mr. Han and Mr. He, respectively.46

Certain short-term bank loans and bank guarantees are guaranteed by our officers and their spouse, see note 6 to the consolidated financial statements.

Wei Pei

Mr. Pei became a member of our Board of Directors on March 21, 2018. Mr. Pei has served as the Administrative Director of Wanda Picture Television & Media Co. since January 2017, responsible for the HR department and administrative office. He also assists the management work of some filming development projects of the Company. Before that, he worked at the Wanda Hotel Construction Co. since March 2010 in charge of the HR, project management and organizational work. Mr. Pei graduated from Harbin Institute of Technology with a bachelor degree in Business Management in 2006.

Mr. Pei serves as Chairman of the Company’s Nominating and Governance Committee and as a member of our Audit Committee and Compensation Committee.

Jiehui Fan

Ms. Fan is currently the Financial Manager of Hangzhou General Trade Co., Ltd., a position she has held since 2016. Previously, Ms. Fan served as a financial operator for Shanghai Yingzhi Investment Management Co., Ltd., where she raise and set up private equity funds, assist with due diligence, introduce funds, set up the fund’s financial account, and process daily clearing and settlement. Before this, Ms. Fan served as an investment manager at Far East International Leasing Co., Ltd., where she designs investment product structure, complete industry research and relevant research reports, select investment projects, discuss investment opportunities, and establish valuation models. Earlier, Ms. Fan worked at Ernst & Young PLL, where she was responsible for companies’ annual audit. Ms. Fan received her bachelor degree in Management in 2004 from Zhejiang University of Finance and Economics. Ms. Fan has not held any other public Company directorships during the past five years.

Ms. Fan will serve as Chairman of the Company’s Audit Committee and as a member of our Compensation Committee and Nominating and Governance Committee.

~~The~~All directors ~~Company~~of ~~has~~our acompany ~~lease~~hold ~~agreement~~office tountil ~~lease~~the ~~office~~next ~~space~~annual ~~from~~meeting of our shareholders or until their successors have been elected Mrand qualified. ~~Weili~~The ~~He,~~executive ~~the~~officers ~~Company’s~~of ~~Interim~~our ~~Chief~~company ~~Financial~~are ~~Officer,~~appointed ~~through~~by ~~October~~the ~~31, 2018,~~Board ~~which~~and ~~annual~~hold ~~payments~~office ofuntil ~~approximately~~their ~~$24~~death,~~000.~~ resignation or removal from office.

~~Independence~~ Summary of ~~the~~Qualifications ~~Board~~ of Current Directors

~~Our~~Set forth ~~Board~~below ~~has~~is ~~determined~~a ~~that~~summary ~~the~~of ~~majority~~some of the ~~Board~~specific ~~is comprised~~qualifications, ofattributes, ~~“independent~~skills ~~directors”~~and ~~within~~experiences ~~the~~of ~~meaning~~our ofdirectors ~~applicable~~which ~~Nasdaq~~we ~~listing~~believe ~~standards~~qualify ~~relating~~them to ~~Board~~serve ~~composition~~on ~~and~~our ~~Section~~Board. ~~301~~For ofmore ~~the Sarbanes-Oxley~~detailed ~~Act~~information, ofplease ~~2002.~~refer ~~Our~~to ~~independent~~the ~~directors~~biographical ~~are~~information ~~Mr.~~for ~~Jin,~~each director ~~Mr.~~set ~~Ren~~forth ~~and Mr~~above. ~~Gao.~~

48Xianfu Han. Mr. Han has extensive senior management experience in the industry in which we operate, having served as our Chief Executive Officer and Chairman since September 2008 and as the Chairman of Xin Ao since 2003. Mr. Han has over 25 years of management experience in the building material industry, and has worked extensively with various governmental agencies on behalf of our industry in Beijing.

~~Promoters~~Weili He. Mr. He has extensive experience in the concrete and ~~Certain~~construction ~~Control~~industry, ~~Persons~~and has specific expertise in strategic planning and plant management and operation.

WeTao Jin. ~~did~~Mr. ~~not~~Jin ~~have~~brings ~~any~~to ~~promoters~~the atBoard ~~any~~extensive ~~time~~legal ~~during~~and ~~the~~transactional ~~past~~capital ~~five~~markets experience and has worked extensively with ~~fiscal~~both ~~years~~U.S. and PRC based companies, and has a high level of both legal and financial literacy and sophistication.

~~Except as set forth in our discussion above, none of our~~Xinyong ~~directors,~~Pei. ~~director~~Mr. ~~nominees~~Pei orbrings ~~executive~~to ~~officers~~the ~~has~~Board ~~been~~extensive ~~involved~~experience in ~~any transactions~~the ~~with~~construction usindustry, orboth ~~any~~within ofChina ~~our~~and ~~directors~~internationally, ~~executive officers, affiliates or~~ ~~associates~~and ~~which~~years ~~are~~of ~~required~~service toin bevarious ~~disclosed~~senior ~~pursuant~~management ~~to the rules and regulations of the SEC~~positions.

~~Item~~Jiehui Fan. 14Ms. ~~Principal~~Fan ~~Accounting~~brings ~~Fees~~to the Board extensive experience in finance and ~~Services~~banking and has a high level of financial literacy and sophistication.

~~The following are the fees billed to us by our auditors during fiscal years ended June 30, 2017 and 2016:~~ 47

		Years Ended
		June 30,		June 30,
		2017		2016
Audit Fees	$	172,000	$	133,000
Audit related fees		-		-
Tax fees		-		-
All Other Fees		-		-
Total	$	172,000	$	133,000

Family Relationships

~~Total~~The ~~fees~~directors ~~billed~~above todo usnot byhave ~~Friedman,~~a ~~LLP~~family ~~was~~relationship ~~$172,000~~with ~~and $88,000~~any ~~during~~director ~~fiscal~~or ~~years~~executive ~~ended~~officer ~~June~~of ~~30,~~the ~~2017~~ Company and ~~2016,~~have ~~respectively.~~not ~~Total fees~~been ~~billed~~involved toin usany bytransaction ~~Kabani~~with &the Company, ~~Inc.~~during ~~was~~the ~~$45,000~~past ~~during~~two ~~the~~years ~~fiscal year~~that ~~ended~~would ~~June~~require ~~30,~~disclosure ~~2016.~~under Item 404(a) of Regulation S-K.

~~Audit~~Involvement ~~Fees consist of the aggregate fees billed for professional services rendered for the audit of our annual financial statements and the reviews of the financial statements included~~ in ~~our~~Certain ~~Forms~~Legal ~~10-Q and for any other services that were normally provided by our independent auditor, respectively, in connection with our statutory and regulatory filings or engagements.~~ Proceedings

~~Audit Related Fees consist of the aggregate fees billed~~Legal for professional services rendered for assurance and related services that were reasonably related to the performance of the audit or review of our financial statements and were not otherwise included in Audit Fees. matters

~~Tax~~As ~~Fees~~of ~~consist~~June 30, 2018, the Company’s VIE, Xin Ao, was subject to several civil lawsuits with potential judgments in the amount of approximately $14.2 million and the likelihood ~~aggregate~~of ~~fees~~the ~~billed~~outcome ~~for~~of these lawsuits cannot be determined as of the date of this report. These lawsuits involved with the ~~professional~~Company ~~services~~were ~~rendered~~mainly ~~for~~due ~~tax~~to ~~compliance~~the personal guarantees by Mr. Xianfu Han, ~~tax~~and ~~advice~~Mr. Weili He, the Company’s shareholders and ~~tax~~officers, which ~~planning~~they are also the shareholders of Xin Ao. Because Mr. Han and Mr. He are the shareholders of Xin Ao, the plaintiffs included ~~Included~~Xin Ao in ~~such~~the ~~Tax~~joint ~~Fees~~complaints. ~~were~~Xin ~~fees~~Ao ~~for~~was ~~preparation~~not involved in some of ~~our~~the ~~tax~~lawsuits ~~returns~~but ~~and consultancy~~named ~~and~~as ~~advice~~a onjoint ~~other~~defendant ~~tax~~in ~~planning~~the ~~matters~~lawsuits. As a result, Xin Ao might have exposure to the pending judgements in the future under PRC laws.

~~All~~The ~~Other~~type ~~Fees consist~~ of ~~the~~litigation ~~aggregate~~disputes ~~fees~~with ~~billed~~contingencies ~~for products~~associated ~~and~~summarized ~~services~~as ~~provided~~follows byas ~~our~~of ~~independent~~June ~~and not otherwise included in Audit Fees~~30, Audit Related Fees or Tax Fees. Included in such Other Fees were fees for services rendered by our independent auditor in connection with our private and public offerings conducted during such periods. 2018:

Our Audit Committee has considered whether the provision of the non-audit services described above is compatible with maintaining auditor independence and determined that such services are appropriate. Before auditors are engaged to provide us audit or non-audit services, such engagement is (without exception, required to be) approved by the Audit Committee of the Board.

Dispute matter	Claims amount as of June 30, 2018		Interest and penalties		Total claims amount as of June 30, 2018
1) Guarantees	$	58,126,066	$	10,442,814	$	68,568,880
2) Purchase		1,643,380		41,476		1,684,856
3) Leases		928,387		-		928,387
4) Labor		236,542		-		236,542
Total	$	60,934,375	$	10,484,290		71,418,665
Settled claims						(57,257,305	)
Remaining claims amount					$	14,161,360

~~Pre-Approval~~Section 16(a) ~~Policies~~Beneficial ~~and~~Ownership ~~Procedures~~Reporting Compliance

~~Under~~Section 16(a) of the ~~Sarbanes-Oxley~~Exchange Act ofrequires ~~2002~~directors, ~~all~~executive ~~audit~~officers and ~~non-audit services~~stockholders ~~performed~~who byown ~~our~~more ~~auditors~~than ~~must~~ten bepercent ~~approved~~of inthe ~~advance by our Audit~~outstanding ~~Committee~~Common toStock ~~assure~~of ~~that such services do not impair~~ the ~~auditors’~~Company ~~independence from~~to ~~us.~~file ~~In accordance~~ with ~~its~~the ~~policies~~SEC and ~~procedures,~~Nasdaq ~~the~~reports ~~Audit~~of ~~Committee pre-approved~~ownership ~~the~~and ~~audit~~changes ~~service~~in ~~performed~~ownership byof ~~Friedman~~voting ~~LLP for our consolidated~~securities ~~financial~~of ~~statements~~the asCompany of and ~~for~~to ~~the~~furnish ~~year~~copies ~~ended~~of ~~June~~such ~~30,~~reports ~~2017.~~to us.

~~The~~Based solely ~~Company’s~~on ~~principal~~a ~~accountant,~~review ~~Friedman~~of ~~LLP~~Forms 3, ~~did~~4 ~~not~~and 5 (including amendments to such form) furnished to the Company during and with respect to ~~engage~~the ~~any~~year ~~other~~ended June 30, 2018 and written representations from certain persons orthat ~~firms~~no other ~~than~~reports ~~the~~were ~~principal~~required ~~accountant~~for them, we believe that each of the Company’s ~~full-time~~ directors, ~~permanent~~officers ~~employees~~and more than ten-percent stockholders filed all such required forms on a timely basis.

49Code of Ethics

~~PART~~The Board IVhas adopted a Code of Conduct and Ethics that applies to the Company’s directors, officers and employees. A copy of this policy is available via our website at www.China-ACM.com. Printed copies of our Code of Ethics may be obtained, without charge, by contacting the Corporate Secretary, China Advanced Construction Materials Group, Inc., Yingu Plaza, 9 Beisihuanxi Road, Suite 1708, Haidian District, Beijing 100080 PRC.

~~Item 15. Exhibits, Financial Statement Schedules~~Audit Committee

(a)	Financial Statements
	(1)	Financial statements for the Company are listed in the index under Item 8 of this document
	(2)	All financial statement schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements or notes thereto.
(b)	Exhibits

Our audit committee consists of Ms. Fan, Mr. Jin and Mr. Pei, each of whom is “independent” as that term is defined under the Nasdaq listing standards. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our Company. Ms. Fan serves as our audit committee financial expert as that term is defined by Item 407 of Regulation S-K of the Exchange Act. The audit committee is responsible for, among other things:

Exhibit		Filed
Index	Description of Document	Herewith	Incorporated by Reference To:
2.1	Agreement and Plan of Merger, dated as of October 24, 2011, by and among the Company, Novel Gain Holdings Limited, CACMG Acquisition, Inc., Mr. Xianfu Han and Mr. Weili He.		Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on October 24, 2011.
3.1	Articles of Incorporation of the Registrant as filed with the Secretary of State of Nevada on July 25, 2013, and made effective on August 1, 2013, as amended to date.		Exhibits 3.2 the Registrant’s Current Report on Form 8-K filed on August 2, 2013.
3.2	Bylaws of the registrant.		Exhibits 3.3 the Registrant’s Current Report on Form 8-K filed on August 2, 2013.
4.1	Lock-Up Agreement amongst Registrant, Xianfu Han and Weili He dated June 11, 2008.		Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on June 13, 2008.
10.1	Employment Agreement with Weili He dated December 8, 2014		Exhibit 10.1 to the Registrant’s Annual Report on Form 10-K filed on September 25, 2015.
10.2	Employment Agreement with Xianfu Han dated December 8, 2014		Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K filed on September 25, 2015.
10.3	Form of Director Agreement		Exhibit 10.3 to the Registrant’s Annual Report on Form 10-K filed on September 23, 2014.
10.4	Subscription Escrow Agreement between the Registrant, Maxim Group, LLC and American Stock Transfer & Trust Company as Escrow Agent dated June 11, 2008.		Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 13, 2008.
10.5	Make Good Escrow Agreement by and among the Registrant, the Investors, the Investor Representative, Xianfu Han and Weili He, and American Stock Transfer & Trust Company as Escrow Agent, dated June 11, 2008		Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on June 13, 2008.
10.6	Form of Common Stock Purchase Warrant		Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on June 13, 2008.
10.7	Form of Placement Agent Stock Purchase Warrant		Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed on June 13, 2008.

	●	selecting our independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by our independent auditors;

	●	reviewing with our independent auditors any audit problems or difficulties and management’s response;

50 48

10.8	Escrow Agreement for IR and Dividends by and among the Registrant, the Investor Representative, Maxim Group, LLC and Anslow + Jaclin, LLP as Escrow Agent		Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed on June 13, 2008.
10.9	2009 Equity Incentive Plan, dated as of June 19, 2009, as amended on June 29, 2015		(1)Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 25, 2009. (2)Appendix B to the Registrant's Definitive Proxy Statement on Schedule 14A filed on May 27, 2015
10.10	Termination of Agreement and Plan of Merger dated July 9, 2012		Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on July 11, 2012.
21.1	List of Subsidiaries		Exhibit 21.1 to the Registrant’s Annual Report on Form 10-K filed on September 25, 2013.
23.1	Consent of Friedman LLP, Independent Registered Public Accounting Firm	[X]
31.1	Rule 13a-14(a)/15d-14(a) Certification Principal Executive Officer	[X]
31.2	Rule 13a-14(a)/15d-14(a) Certification Principal Financial Officer	[X]
32.1	Certification of Principal Executive Officers, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	[X]
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

	●	reviewing and approving all proposed related-party transactions, as defined in Item 404 of Regulation S- K under the Securities Act of 1933, as amended;

	●	discussing the annual audited financial statements with management and our independent auditors;

	●	reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of significant internal control deficiencies;

	●	annually reviewing and reassessing the adequacy of our audit committee charter;

	●	meeting separately and periodically with management and our independent auditors;

	●	reporting to the Board; and

	●	such other matters that are specifically delegated to our audit committee by the Board from time to time.

51Item 11. Executive Compensation

~~CHINA~~Summary Compensation ~~ADVANCED~~Table ~~CONSTRUCTION~~— ~~MATERIALS~~Fiscal ~~GROUP~~Years Ended June 30, ~~INC.~~2018 ~~AND SUBSIDIARIES~~and 2017

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS	PAGE
Report of independent Registered Public Accounting Firm	F-1
Consolidated Financial Statements
Consolidated Balance Sheets	F-2
Consolidated Statements of Operation and Comprehensive Loss	F-3
Consolidated Statements of Shareholders’ Equity	F-4
Consolidated Statements of Cash Flows	F-5
Notes to the Consolidated Financial Statements	F-6

The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to our principal executive officer and our other most highly paid executive officer (the “named executive officers”) for services rendered in all capacities during the noted periods. No other executive officers received total annual salary and bonus compensation in excess of $100,000 during the fiscal years ended June 30, 2018 and 2017.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Non-

Equity

Non-

Incentive

Qualified

Plan

Deferred

All

Name and

Year

Stock

Option

Compensation

Other

Principal

Ended

Salary

Filing Compare · China Advanced Construction Materials Group, Inc