UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

~~WASHINGTON~~Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30~~December 31, 2023

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

For the transition period from_______ to ________

Commission File Number: 001-34864

GREEN GIANT INC.

(Exact ~~name~~Name of ~~registrant~~ Registrant as ~~specified~~Specified in ~~its~~Its ~~charter~~Charter)

Florida		33-0961490
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
(State or Other Jurisdiction of Incorporation)		(I.R.S. Employer Identification Number)

6 Xinghan Road, 19th Floor, Hanzhong City

Shaanxi Province, PRC 723000

(Address of ~~principal executive~~Principal ~~offices)~~Executive (Offices, Zip Code)

+(86) 091 - 62622612

(Registrant’s ~~telephone number~~Telephone Number, including Area ~~area code~~Code)

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

Title of each Class	Trading Symbol(s)	Name of each exchange on which registered
Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	GGE	The NASDAQ Capital Market
Common Stock, $0.001 par value	GGE	The NASDAQ Capital Market

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~~past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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

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

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

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

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

AsThe number of ~~June~~shares ~~30,~~outstanding ~~2023,~~of each of the ~~there~~issuer’s ~~were 55,793,268 shares~~classes of ~~Common~~common ~~Stock~~equity, ~~par~~as ~~value~~of ~~$0.001~~February ~~per share~~2, 2024 is ~~outstanding.~~as follows :

GREEN GIANT INC.

Class of Securities		Shares Outstanding
Common Stock, $0.001 par value		143,451,155

~~Form~~TABLE ~~10-Q~~OF CONTENTS

For the Quarterly Period Ended June 30, 2023

		Page
PART I	FINANCIAL INFORMATION	1

Item 1.	Unaudited Interim Financial Statements	1
	Condensed Consolidated Balance Sheets at December 31, 2023 (unaudited) and September 30, 2022	1
	Condensed Unaudited Consolidated Statements of Income and Comprehensive Income for The Three Months Ended December 31, 2023 and 2022	2
	Condensed Unaudited Consolidated Statements of Changes in Stockholders’ Equity for The Three Months Ended December 31, 2023 and 2022	3
	Condensed Unaudited Consolidated Statements of Cash Flows for The Three Months Ended December 31, 2023 and 2022	4
	Notes to Condensed Unaudited Consolidated Financial Statements	5-21
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	31
Item 4.	Controls and Procedures	31

PART II	OTHER INFORMATION	33

Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6	Exhibits	34
	Signatures	35

Contents

		Page
Part I	Financial Information	1
Item 1	Unaudited Interim Financial Statements	1
	Condensed Consolidated Balance Sheets as of June 30, 2023 (unaudited) and September 30, 2022	1
	Condensed Unaudited Consolidated Statements of Income and Comprehensive Income for the Three Months and Nine Months Ended June 30, 2023 and 2022	2
	Condensed Unaudited Consolidated Statements of Changes in Equity for the Three Months Ended June 30, 2023 and 2022	3
	Condensed Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2023 and 2022	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3	Quantitative and Qualitative Disclosures about Market Risk	34
Item 4	Controls and Procedures	35
Part II	Other Information	36
Item 1	Legal Proceedings	36
Item 1A	Risk Factors	36
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3	Defaults Upon Senior Securities	36
Item 4	Mine Safety Disclosures	36
Item 5	Other Information	36
Item 6	Exhibits	37
	Signature	38

GREEN GIANT INC.

PART I: FINANCIAL INFORMATION

ITEM 1. INTERIM FINANCIAL STATEMENTS

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,			September 30,
	December 31,			September 30,
	2023			~~2022~~2023
ASSETS	(Unaudited)
	(Unaudited)
Cash	$	105,659		$	1,360,217
ASSETS
Restricted cash		2,754,200			3,007,960
Cash	$	4,754,893		$	93,133
Contract assets		7,081,099			7,628,770
Restricted cash		2,489,086			2,584,557
Prepayment		32,694,702			26,936,915
Contract assets		7,087,856			6,920,884
Real estate property development completed		7274,~~677~~013,~~725~~771			7472,~~772~~132,~~530~~068
Other assets		3,894,869			3,767,190
Inventory		7,272			7,272
Property, plant and equipment, net		460,349			483,219
Other assets		1,839,933			2,454,530
Security deposits		1,737,364			1,771,019
Prepayment		26,936,915			26,952,415
Real estate property under development		59,691,056			145,300,588
Property, plant and equipment, net		456,222			449,395
Due from local governments for real estate property development completed		41,554,018			42,358,986
Security deposits		1,784,637			1,726,720
Total Assets	$	222,651,041		$	307,387,394
Real estate property under development		80,322,680			76,857,916
Due from local government- property development completed		15,325,493			14,913,578
Total Assets	$	215,018,758		$	205,092,468
LIABILITIES AND STOCKHOLDERS’ EQUITY
Construction loans	$	~~106~~108,~~307~~573,~~012~~929		$	~~108~~105,~~366~~655,~~351~~707
Accounts payable		10,~~390~~611,~~360~~926			10,~~606~~326,~~635~~702
Other payables		1720,~~156~~268,~~617~~558			1318,~~578~~243,~~713~~185
Amount due to related parties		~~400~~4,~~000~~466			—414,466
Construction deposits		23,~~971~~035,~~993~~368			32,~~029~~953,~~565~~784
Contract liabilities		1,~~933~~956,~~651~~380			1,~~989~~910,~~898~~327
Customer deposits		19,~~341~~815,~~039~~342			19,~~842~~226,~~768~~695
Accrued expenses		1112,~~641~~392,~~475~~387			1012,~~547~~031,~~436~~621
Taxes payable		18,~~856~~029,~~414~~514			1918,~~980~~636,~~358~~024
Total liabilities		~~188~~194,~~998~~687,~~561~~870			~~187~~189,~~941~~398,~~724~~511
Commitments and Contingencies
Common stock, $0.001 par value, 200,000,000 shares authorized, 124,916,103 and 55,753,268 shares outstanding at December 31, 2023 and September 30, 2023		124,916			55,793
Stockholders’ equity
Additional paid-in capital		197,797,800			190,119,912
Common stock, $0.001 par value, 200,000,000 shares authorized, 55,793,268 and 46,464,929 shares issued and outstanding at June 30, 2023 and September 30, 2022, respectively		55,793			46,464
Additional paid-in capital		190,119,912			184,821,771
Statutory surplus		11,095,939			11,095,939
Retained earnings		(~~160~~180,~~040~~465,~~608~~351	)		(67177,~~432~~554,~~727~~205	)
Accumulated other comprehensive income		(78,~~578~~222,~~556~~416	)		(98,~~085~~023,~~777~~482	)
Total stockholders’ equity		3320,~~652~~330,~~480~~888			~~119~~15,~~445~~693,~~670~~957
Total Liabilities and Stockholders’ Equity	$	~~222~~215,~~651~~018,~~041~~758		$	~~307~~205,~~387~~092,~~394~~468

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

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

~~UNAUDITED~~ CONDENSED CONSOLIDATED STATEMENTS OF ~~INCOME~~ OPERATIONS AND COMPREHENSIVE ~~(LOSS)~~ INCOME

	Three Months Ended June 30,						Nine Months Ended June 30,
	2023			2022			2023			2022
Real estate sales, net of sales tax	$	206,096		$	1,164,954		$	858,679		$	8,286,940
Revenue from Battery Recycling		224,226			-			224,226			-
Cost of real estate sales		(165,535	)		(833,599	)		(699,197	)		(4,594,258	)
Cost of Battery Recycling		(223,386	)		—			(223,386	)		—
Gross profit		41,401			331,355			160,322			3,692,682
Operating expenses:
Selling and distribution expenses		(37,291	)		(40,261	)		(140,152	)		(289,919	)
General and administrative expenses		(804,743	)		(1,698,534	)		(2,555,639	)		(2,980,887	)
Impairment losses on real estate property development completed		(89,914,582	)		-			(89,914,582	)		-
Total operating expenses		(90,756,616	)		(1,738,795	)		(92,610,373	)		(3,270,806	)
Operating (loss) income		(90,715,215	)		(1,407,440	)		(92,450,051	)		421,876
Interest income, net		1,313			1,705			3,365			3,910
Other (expense)		(15,178	)		5,609			(161,195	)		(245,592	)
(Loss) income before income taxes		(90,729,080	)		(1,400,126	)		(92,607,881	)		180,194
Provision for income taxes		—			(30,450	)		—			(513,675	)
Net (loss) income		(90,729,080	)		(1,430,576	)		(92,607,881	)		(333,481	)
Other comprehensive (loss) income
Foreign currency translation adjustment		(1,894,958	)		(10,649,961	)		1,507,221			(7,444,501	)
Comprehensive (loss) income	$	(92,624,038	)	$	(12,080,537	)	$	(91,100,660	)	$	(7,777,982	)
Basic and diluted (loss) earnings per common share:
Basic	$	(1.63	)	$	(0.04	)	$	(1.69	)	$	(0.01	)
Diluted	$	(1.63	)	$	(0.04	)	$	(1.69	)	$	(0.01	)
Weighted average common shares outstanding:
Basic		55,793,268			40,464,929			54,925,252			33,672,274
Diluted		55,793,268			40,464,929			54,925,252			33,672,274

(Unaudited)

	Three months ended December 31,
	2023			2022
Real estate sales	$	185,111		$	164,712
Less: Sales tax		(1,642	)		(2,006	)
Cost of real estate sales		(108,682	)		(130,292	)
Gross profit		74,787			32,414
Operating expenses
Selling and distribution expenses		6,648			40,430
General and administrative expenses		2,979,812			566,817
Total operating expenses		2,986,460			607,247
Operating income		(2,911,673	)		(574,833	)
Interest income, net		527			1,128
Other (expense), net		—			(17	)
Income before income taxes		(2,911,146	)		(573,722	)
Provision for income taxes		—			—
Net income		(2,911,146	)		(573,722	)
Other Comprehensive income		—
Foreign currency translation adjustment		(198,934	)		2,987,908
Comprehensive income	$	(3,110,080	)	$	2,414,186
Basic and diluted income per common share
Basic	$	(0.02	)	$	(0.01	)
Diluted	$	(0.02	)	$	(0.01	)
Weighted average common shares outstanding
Basic		124,916,103			53,229,263
Diluted		124,916,103			53,229,263

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

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

												Accumulated
					Additional							~~other~~Other			~~Total~~
	Common Stock				Paid-in		Statutory		Retained			~~comprehensive~~Comprehensive			~~stockholders’~~
	Shares		Amount		~~Stocks~~Capital		~~Reserve~~Surplus		Earnings			~~Income~~ (loss) income			~~equity~~Total
Balance, September 30, 2021		25,617,807	$	25,617	$	136,535,303	$	11,095,939	$	40,691,955		$	2,348,897		$	190,697,711
Balance at September 30, 2022		46,464,929	$	46,464	$	184,821,771	$	11,095,939	$	(67,432,727	)	$	(9,085,777	)	$	119,445,670
Net income		—		—		—		—		364,310			—			364,310
Foreign currency translation adjustments		—		—		—		—		—			2,167,401			2,167,401
Balance, December 31, 2021 - unaudited		25,617,807	$	25,617	$	136,535,303	$	11,095,939	$	41,056,265		$	4,516,298		$	193,229,422
Issuance of common stocks in connection with private placements		14,847,122		14,847		28,922,068		—		—			—			28,936,915
Net income		—		—		—		—		732,785			—			732,785
Foreign currency translation adjustments		—		—		—		—		—			1,038,059			1,038,059
Balance, March 31, 2022 - unaudited		40,464,929	$	40,464	$	165,457,371	$	11,095,939	$	41,789,050		$	5,554,357		$	223,937,181
Net loss		—		—		—		—		(1,430,576	)		—			(1,430,576	)
Foreign currency translation adjustments		—		—		—		—		—			(10,649,961	)		(10,649,961	)
Balance, June 30, 2022 - unaudited		40,464,929	$	40,464	$	165,457,371	$	11,095,939	$	40,358,474		$	(5,095,604	)	$	211,856,644
Balance, September 30, 2022		46,464,929	$	46,464	$	184,821,771	$	11,095,939	$	(67,432,727	)	$	(9,085,777	)	$	119,445,670
Private placements		9,288,339		9,289		5,192,181		—		—			—			5,201,470
Net income		—		—		—		—		(573,722	)		—			(573,722	)
Net income for the period		—		—		—		—		(573,722	)		—			(573,722	)
Foreign currency translation adjustments		—		—		—		—		—			2,987,908			2,987,908
Balance, December 31, 2022 - unaudited		55,753,268	$	55,753	$	190,013,952	$	11,095,939	$	(68,006,449		$	(6,097,869	)	$	127,061,326
Balance at December 31, 2022 (Unaudited)		55,753,268	$	55,753	$	190,013,952	$	11,095,939	$	(68,006,449	)	$	(6,097,869	)	$	127,061,326
Private placements		40,000		40		105,960		—		—			—			106,000
Balance at September 30,2023		55,793,268	$	55,793	$	190,119,912	$	11,095,939	$	(177,554,205	)	$	(8,023,482	)	$	15,693,957
Net income		—		—		—		—		(1,305,079	)		—			(1,305,079	)
Private placements		69,122,835		69,123		7,677,888		—		—			—			7,747,011
Foreign currency translation adjustments		—		—		—		—		—			414,271			414,271
Net income for the period		—		—		—		—		(2,911,146	)		—			(2,911,146	)
Balance, March 31, 2023 - unaudited		55,793,268	$	55,793	$	190,119,912	$	11,095,939	$	(69,311,528	)	$	(5,683,598	)	$	126,276,518
Foreign currency translation adjustments		—		—		—		—		—			(198,934	)		(198,934	)
Net loss		—		—		—		—		(90,729,080	)		—			(90,729,080	)
Balance at December 31, 2023 (Unaudited)		124,916,103	$	124,916	$	197,797,800	$	11,095,939	$	(180,465,351	)	$	(8,222,416	)	$	20,330,888
Foreign currency translation adjustments		—		—		—		—		—			(1,894,958	)		(1,894,958	)
Balance, June 30, 2023 - unaudited		55,793,268	$	55,793	$	190,119,912	$	11,095,939	$	(160,040,608	)	$	(7,578,556	)	$	33,652,480

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

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

~~UNAUDITED~~ CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Nine Months Ended
	June 30,
	2023			2022
Cash Flows from Operating Activities:
Net income	$	(92,607,881	)	$	(333,481	)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation of property and equipment		14,201			18,440
Impairment loss		89,914,582			—
Changes in operating assets and liabilities:
Contract assets		417,835			514,590
Real estate property development completed		699,197			4,600,277
Real estate property under development		(3,952,017	)		(9,302,202	)
Other current assets		(200,605	)		4,013,019
Accounts payables		(15,265	)		(6,525,103	)
Other payables		3,966,769			3,895,841
Amount due to related parties		400,000			—
Contract liabilities		(19,125	)		(175,577	)
Customer deposits		(129,333	)		2,624,895
Accrued expenses		1,342,254			646,264
Taxes payables		(842,518	)		(776,711	)
Net Cash Used in Operating Activities		(1,011,906	)		(799,748	)
Cash Flows from Investing Activities:
Prepayment for energy equipment		(5,757,787	)		(26,936,915	)
Net Cash Used in Investing Activities		(5,757,787	)		(26,936,915	)
Cash Flows from Financing Activities:
Proceeds from private placements		5,307,470			28,936,915
Net Cash Provided by Financing Activities		5,307,470			28,936,915
Effect of exchange rate changes on cash and restricted cash		(46,095	)		(124,054	)
Net increase (decrease) in cash and restricted cash		(1,508,318	)		1,076,198
Cash and restricted cash, beginning of period		4,368,177			3,465,189
Cash and restricted cash, end of period	$	2,859,859		$	4,541,387
Supplemental Cash Flow Information
Cash paid for interest expense	$	—		$	—
Cash paid for income tax	$	—		$	—
Non-cash Transactions of Investing and Financing Activities
Reclassification of interest payable to other liabilities	$	—		$	5,063,191
Settlement of accounts payable with real estate property*	$	—		$	569,299
Settlement of accounts payable and accounts receivable*	$	—		$	2,758,731
Settlement of accounts payable with issuance of stocks	$	—		$	—
Real estate sales for settlement in real estate property under development	$	—		$	—
Reconciliation of cash and restricted cash
Cash, end of period	$	105,659		$	1,463,797
Restricted, end of period		2,754,200			3,077,590
Total cash and restricted cash, end of period	$	2,859,859		$	4,541,387
Cash, beginning of period	$	1,360,217		$	170,001
Restricted, beginning of period		3,007,960			3,295,188
Total cash and restricted cash, beginning of period	$	4,368,177		$	3,465,189

(Unaudited)

	Three months ended December 31,
	2023			2022
Cash flows from operating activities:
Net income	$	(2,911,146	)	$	(573,722	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		5,488			5,575
Changes in operating assets and liabilities:
Contract assets		(166,972	)		298,902
Real estate property development completed		(1,881,703	)		130,292
Real estate property under development		(3,464,764	)		(1,303,062	)
Other current assets		614,597			(78,177	)
Prepayment		15,500			—
Security deposits		(57,917	)		—
Accounts payables		285,224			(355	)
Amount due to related parties		(410,000	)		—
Other payables		2,025,373			1,387,232
Contract liabilities		46,053			154
Customer deposits		588,647			(299,642	)
Accrued expenses		360,766			(17,713	)
Construction deposits		81,584			—
Taxes payables		(606,510	)		(222,445	)
Net cash used in operating activities		(5,475,780	)		(672,961	)

Cash Flows from Investing Activities:
Prepayment		—			(5,200,000	)
Net Cash Used in Investing Activities		—			(5,200,000	)

Cash flow from financing activities:
Proceeds from private placements		7,747,011			5,201,470
Proceeds from prepaid subscriptions for sale of units		—			—
Net cash provided by financing activities		7,747,011			5,201,470

Effect of changes of foreign exchange rate on cash and restricted cash		2,295,058			92,539
Net increase in cash and restricted cash		4,566,289			(578,952	)
Cash and restricted cash, beginning of period		2,677,690			4,368,177
Cash and restricted cash, end of period	$	7,243,979		$	3,789,225

Supplemental disclosures of cash flow information:
Interest paid	$	—		$	—
Income taxes paid	$	—		$	—

Representing:
Cash, end of period	$	4,754,893		$	934,153
Restricted, end of period	$	2,489,086		$	2,855,072
Total cash and restricted cash, end of period	$	7,243,979		$	3,789,225

Cash, beginning of period	$	93,133		$	1,360,217
Restricted, beginning of period		2,584,557			3,007,960
Total cash and restricted cash, beginning of period	$	2,677,690		$	4,368,177

Non-cash activities:
Reclassification of interest payable to construction loan	$	1,249,552		$	1,442,425

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

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION

Green Giant Inc., ~~formerly~~ (Formerly known as China HGS Real Estate Inc.) (the “GGCompany” or ~~the~~ “~~Company~~GGE” or “we”, “~~us”, “~~our”), ~~through its subsidiaries and variable interest entity (~~“~~VIE~~us”), is ~~engages~~a incorporation ~~real~~organized ~~estate~~under ~~development, and~~ the ~~construction~~laws ~~and sales~~ of ~~residential apartments, parking spaces and commercial properties in Tier 3 and Tier 4 cities and counties in China. On March 23, 2022,~~ the ~~Company~~State ~~completed the change~~ of ~~its name from China HGS Real Estate Inc~~Florida. ~~to Green Giant Inc., effective immediately (the “Name Change”).~~

~~The~~GGE ~~accompanying unaudited~~does ~~condensed~~not ~~consolidated~~conduct ~~financial~~any ~~statements~~substantive ~~have~~operations ~~been~~of ~~prepared~~its inown. ~~accordance~~Instead, ~~with~~through ~~the~~its ~~U.S.~~subsidiary, ~~generally~~Shaanxi ~~accepted~~HGS ~~accounting~~Management ~~principles~~and Consulting Co., Ltd (“~~GAAP~~Shaanxi HGS”) ~~and~~, ~~the~~it ~~applicable~~entered ~~rules~~into ~~and~~certain ~~regulations~~exclusive ofcontractual ~~the~~agreements ~~Securities~~with ~~and~~the ~~Exchange~~owners ~~Commission~~of ~~for~~the ~~interim~~Company’s ~~financial~~PRC ~~reporting.~~operating ~~Accordingly~~subsidiary, ~~they~~ doShaanxi ~~not~~Guangsha ~~include~~Investment ~~all of the information~~ and ~~footnotes~~Development ~~required~~Group ~~by generally accepted accounting principles for complete financial statements~~Co. ~~In the opinion of management~~, ~~all~~Ltd ~~adjustments~~ (~~consisting~~“Guangsha”). ~~only~~Pursuant ofto ~~normal~~these ~~recurring~~agreements, ~~accruals)~~Shaanxi ~~considered~~HGS ~~necessary~~is ~~for a fair presentation~~obligated ~~have~~to ~~been~~absorb ~~included.~~a ~~Operating~~majority ~~results~~of ~~for~~ the ~~three~~risk ~~and~~of ~~nine~~loss ~~months~~from ~~ended~~Guangsha’s ~~June~~activities ~~30,~~and ~~2023~~entitles ~~and~~Shaanxi ~~2022~~HGS ~~are~~to ~~not~~receive ~~necessarily~~a ~~indicative~~majority of ~~the~~Guangsha’s ~~results~~expected ~~that~~residual ~~may~~returns. beIn ~~expected~~addition, ~~for~~Guangsha’s ~~the~~shareholders ~~full~~have ~~year.~~pledged ~~The~~their ~~information~~equity ~~included~~interest in ~~this~~Guangsha ~~Form~~to ~~10-Q~~Shaanxi ~~should~~HGS, beirrevocably granted ~~read~~Shaanxi inHGS ~~conjunction~~an ~~with~~exclusive ~~Management’s Discussion~~option ~~and~~to ~~Analysis~~purchase, ofto ~~Financial~~the ~~Condition~~extent ~~and~~permitted ~~Results~~under ofPRC ~~Operations~~Law, ~~and~~all ~~the~~or ~~financial~~part ~~statements~~of ~~and~~the ~~notes~~equity ~~thereto~~interests ~~included~~ in ~~the~~Guangsha ~~Company’s~~and ~~Annual~~agreed ~~Report~~to onentrust ~~Form~~all ~~10-K for~~ the ~~fiscal~~rights ~~year~~to ~~ended~~exercise ~~September~~their ~~30,~~voting ~~2022~~power ~~filed~~to ~~with~~ the ~~U.S. Securities and Exchange Commission~~ person(~~the “SEC”~~s) appointed onby ~~January~~Shaanxi ~~13, 2023~~HGS.

~~NOTE~~Based 2on these contractual arrangements, management believes that Guangsha should be considered a “Variable Interest Entity” (“VIE”) under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, because the equity investors in Guangsha no longer have the characteristics of a controlling financial interest, and the Company, through Shaanxi HGS, is the primary beneficiary of Guangsha. ~~LIQUIDITY~~Accordingly, Guangsha has been consolidated.

InThe ~~recent years~~Company, ~~the~~ ~~Chinese~~through ~~government~~its ~~has~~subsidiaries ~~implemented measures to control overheating residential~~ and ~~commercial property prices including but not limited to restrictions on home purchases~~VIE, ~~increasing~~engages ~~the down-payment requirement against speculative buying, development of low-cost rental housing properties to help low-income groups while reducing the demand~~ in ~~the commercial housing market, increasing~~ real estate ~~property taxes to discourage speculation~~development, ~~control~~in of the ~~land~~construction ~~supply~~ and ~~slowdown~~sale ~~the construction land auction process, etc. In addition, in December 2019, a novel strain~~ of ~~coronavirus~~residential ~~(COVID-19) surfaced. COVID-19 has spread rapidly throughout China and worldwide~~apartments, ~~which has caused~~parking ~~significant~~lots ~~volatility in the PRC~~ and ~~international~~commercial ~~markets~~properties. ~~There~~Total isassets ~~significant uncertainty around the breadth~~ and ~~duration~~liabilities ofpresented ~~business disruptions related to COVID-19, as well as its impact~~ on the ~~PRC’s~~consolidated ~~and~~balance ~~international~~sheets ~~economies. To reduce the spread of COVID-19, the Chinese government has employed measures including city lockdowns, quarantines, travel restrictions, suspension of business activities~~ and ~~school closures. Due to difficulties resulting from the COVID-19 pandemic~~sales, ~~including,~~cost ~~but not limited to, the closure~~ of the Company’s facilities and operations beginning in early February 2020 and ending in December 2022, limited support from the Company’s employees, delayed access to construction raw material supplies, reduced customer visits to the Company’s sales ~~office~~, ~~and inability to promote~~net ~~real~~income ~~estate~~presented ~~property sales to customers~~ on aConsolidated ~~timely~~Statement ~~basis. The Company had real estate sales~~ of ~~approximately~~Income ~~$0.9 million~~and ~~for~~Comprehensive ~~the nine~~Income ~~months~~(Loss) ~~ended~~as ~~June~~well ~~30, 2023,~~ as ~~compared with $8.3 million in~~ the ~~same~~cash ~~period~~flows offrom ~~last year. Based on the assessment of the current economic environment~~operations, ~~customer demand~~ investing and ~~sales~~financing ~~trends,~~activities wepresented ~~believe~~on ~~that consumer spending has been restored in~~ the ~~local~~Consolidated ~~real~~Statement ~~estate~~of ~~market and~~Cash ~~real~~Flows ~~estate sales~~ are ~~expected~~substantially ~~to grow in~~ the ~~coming~~financial ~~periods. On the other side~~position, ~~due~~operations ~~to the negative impact from the COVID-19 pandemic~~ and ~~its variants, the development period of real estate properties and our operating cycle has been extended and we may not be able to~~ ~~liquidate~~cash ~~our~~flow ~~large balance~~ of ~~completed real estate properties within the short term as we originally expected~~Guangsha. ~~In addition, as of June 30, 2023, we had large construction loans payable of approximately $106.3 million and accounts payable of approximately $10.4 million to be paid to subcontractors.~~ The ~~extent~~Company ofhas ~~the~~not ~~impact~~provided ofany ~~COVID-19 on the Company’s future~~ financial ~~results~~support ~~will be dependent on future developments such as the length and severity of the crisis, the potential resurgence of the crisis, future government actions in response~~ to ~~the~~Guangsha ~~crisis~~for ~~and~~ the three ~~overall~~months ~~impact~~ended ofDecember ~~the COVID-19 pandemic on the local economy and real estate markets~~31, ~~among many other~~2023 ~~factors, all of which remain highly uncertain~~ and ~~unpredictable~~2022. Given this uncertainty, the Company is currently unable to quantify the expected impact of the COVID-19 pandemic on its future operations, financial condition, liquidity and results of operations if the current situation continues. The above-mentioned facts raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date of this filing.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the U.S. generally accepted accounting principles (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended December 31, 2023 and 2022 are not necessarily indicative of the results that may be expected for the full year. The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023 filed with the SEC on December 28, 2023.

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. ~~LIQUIDITY (CONTINUED)~~SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

InPrinciples assessing its liquidity, management monitors and analyzes the Company’s cash on-hand, its ability to generate sufficient revenue sources in the future, and its operating and capital expenditure commitments. As of ~~June 30, 2023, our total cash and restricted cash balance was approximately $2.9 million.~~consolidation With respect to capital funding requirements, the Company budgeted its capital spending based on ongoing assessments of its needs to maintain adequate cash. On January 27, 2023, the Company closed a private placement with net proceeds of approximately $0.1 million. As of June 30, 2023, we had approximately $72.7 million of completed residential apartments and ~~commercial~~basis ~~units available for sale to potential buyers. Although we reported approximately $10.4 million accounts payable as~~ of June 30, 2023, due to the long-term relationship with our construction suppliers and subcontractors, we were able to effectively manage cash spending on construction and negotiate with them to adjust the payment schedule based on our cash on hand. In addition, most of our existing real estate development projects relate to the old town renovation which are supported by the local government. As of June 30, 2023, we reported approximately $106.3 million of construction loans borrowed from financial institutions controlled by the local government and such loans can only be used on the old town renovation related project development. We expect that we will be able to renew all of the existing construction loans upon their maturity and borrow additional new loans from local financial institutions, when necessary, based on our past experience and the Company’s good credit history. Also, the Company’s cash flows from pre-sales and current sales should provide financial support for our current development projects and operations. For the three months ended June 30, 2023, we had six large ongoing construction projects (see Note 3, real estate properties under development) which were under the preliminary development stage due to delayed inspection and acceptance of the development plans by the local government. In June 2020, we completed the residence relocation surrounding the Liangzhou Road related projects and launched the construction of these projects in December 2020. For the other four projects, we expect we will be able to obtain the government’s approval of the development plans on these projects in the coming fiscal year and start the pre-sale of the real estate properties to generate cash when certain property development milestones have been achieved.presentation

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

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

Liquidity

In assessing the liquidity, management monitors and analyzes the Company’s cash on-hand, its ability to generate sufficient revenue sources in the future, and its operating and capital expenditure commitments. As of December 31, 2023, our total cash and restricted cash balance was approximately $7.2 million, an increase from approximately $4.6 million as of September 30, 2023. With respect to capital funding requirements, the Company budgeted its capital spending based on ongoing assessments of needs to maintain adequate cash. As of December 31, 2023, we had approximately $74.0 million of completed residential apartments and commercial units available for sale to potential buyers. Although we reported approximately $10.6 million accounts payable as of December 31, 2023, due to the long-term relationship with our construction suppliers and subcontractors, we were able to effectively manage cash spending on construction and negotiate with them to adjust the payment schedule based on our cash on hand. In addition, most of our existing real estate development projects relate to the old town renovation which are supported by the local government. As of December 31, 2023, we reported approximately $108.6 million of construction loans borrowed from financial institutions controlled by the local government and such loans can only be used on the old town renovation related project development. We expect that we will be able to renew all of the existing construction loans upon their maturity and borrow additional new loans from local financial institutions, when necessary, based on our past experience and the Company’s good credit history. Also, the Company’s cash flows from pre-sales and current sales should provide financial support for our current development projects and operations. For the year ended December 31, 2023, we had four large ongoing construction projects (see Note 3, real estate properties under development) which were under the preliminary development stage due to delayed inspection and acceptance of the development plans by the local government. In June 2020, we completed the residence relocation surrounding the Liangzhou Road related projects and launched the construction of these projects in December 2020.

On December 12, 2023, the Company entered into a securities purchase agreement with certain accredited investors to sell $5.95 million of its units, each consisting of one share of its common stock, $0.001 par value per share, one Class A common warrant to purchase one share of common stock and one Class B common warrant to purchase one share of common stock, and pre-funded units, each consisting of one pre-funded warrant, one Class A common warrant to purchase one share of common stock and one Class B common warrant to purchase one share of common stock. Under the terms of the securities purchase agreement, GGE has agreed to sell 35,000,000 units at a per unit purchase price of $0.17. The Offering closed on December 14, 2023 with net proceeds of $5.29 million.

Segment Reporting

The Company’s segments are business units that offer different services and are reviewed separately by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s operating decision maker is the Company’s Chief Executive Officer.

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 32. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Basis of presentation

The interim unaudited condensed consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States (“US GAAP”).

The unaudited condensed consolidated financial information as of June 30, 2023 and for the three and nine months ended June 30, 2023 and 2022 has been prepared without audit, pursuant to the rules and regulations of the SEC and pursuant to Regulation S-X. Certain information and footnote disclosures, which are normally included in annual financial statements prepared in accordance with US GAAP, have been omitted pursuant to those rules and regulations. The unaudited interim financial information should be read in conjunction with the audited financial statements and the notes thereto, included in the Form 10-K for the fiscal year ended September 30, 2022, which was filed with the SEC on January 13, 2023.

In the opinion of the management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which are necessary for a fair presentation of financial results for the interim periods presented. The Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements have been prepared using the same accounting policies as used in the preparation of the Company’s consolidated financial statements for the year ended September 30, 2022. The results of operations for the three and nine months ended June 30, 2023 and 2022 are not necessarily indicative of the results for the full years.

Principles of consolidation

The unaudited condensed consolidated financial statements include the financial statements of the Company, China HGS Investment Inc. (“HGS Investment”), Shaanxi HGS Management and Consulting Co., Ltd. (“Shaanxi HGS”) and its variable interest entity (“VIE”), Shaanxi Guangsha Investment and Development Group Co., Ltd. (“Guangsha”). All inter-company transactions and balances between the Company and its subsidiaries and VIE have been eliminated upon consolidation.

Use of estimates

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

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair value of financial instruments

The Company follows the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, “Fair Value Measurements and Disclosures.” It clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

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

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

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

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

Revenue recognition

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

●

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

●

identification of the performance obligations in the contract;

●

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

●

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

●

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

~~The~~Most ~~Company~~of ~~currently~~the ~~operates~~Company’s inrevenue ~~two~~is ~~segments,~~derived ~~the~~from real estate ~~development~~sales ~~business~~of condominiums and ~~green~~commercial ~~energy~~properties ~~business~~in the PRC. The majority of the Company’s ~~engages~~contracts incontain a single performance obligation involving significant real estate development ~~through~~activities ~~the~~that ~~VIE,~~are ~~Guangsha, in~~performed ~~mainland~~together ~~China,~~to ~~and~~deliver isa ~~transitioning~~real ~~itself~~estate ~~from~~property to its customers. Revenues arising from real estate ~~development~~sales ~~business~~are recognized when or as the control of the asset is transferred to the customer. The control of the asset may transfer over time or at a ~~new~~point ~~energy~~in ~~corporation~~time. ~~and~~For the sales of individual condominium units in a real estate development project, the Company has ~~appointed~~an enforceable right to payment for performance completed to date, revenue is recognized over time by measuring the progress towards complete satisfaction of that performance obligation (“percentage completion method”). Otherwise, revenue is recognized at a ~~CEO~~point in ~~its~~time ~~Delaware~~when ~~subsidiary~~the tocustomer ~~lead~~obtains control of the asset. For the three months ended December 31, 2023 and ~~operate~~2022, the ~~green~~Company ~~energy~~did ~~business~~not have any construction in progress recognized under the percentage of completion method. For the three months ended December 31, 2023 and 2022, all revenues were generated from completed condominium real estate projects.

~~For~~Contract the three months ended June 30, 2023, revenues were generated from lead ingots or blocks sales and completed condominium real estate projects. The Company controls of the lead ingots or blocks. Revenues are recognized in gross amount at the point of time when they are delivered to the customers. The majority of the Company’s contracts contain a single performance obligation involving significant real estate development activities that are performed together to deliver a real estate property to its customers. Revenues arising from real estate sales are recognized when or as the control of the asset is transferred to the customer. The control of the asset may transfer over time or at a point in time. For the sales of individual condominium units in a real estate development project, the Company has an enforceable right to payment for performance completed to date, revenue is recognized over time by measuring the progress towards complete satisfaction of that performance obligation (“percentage completion method”). Otherwise, revenue is recognized at a point in time when the customer obtains control of the asset. For the three and nine months ended June 30, 2023 and 2022, the Company did not have any construction in progress recognized under the percentage of completion method.balances

8Timing of revenue recognition may differ from the timing of billing and cash receipts from customers. The Company records a contract asset when revenue is recognized prior to invoicing, or a contract liability when cash is received in advance of recognizing revenue. A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets include billed and billable receivables, which are the Company’s unconditional rights to consideration other than the passage of time. Contract liabilities include cash collected in advance and in excess of revenue recognized. Customer deposits are excluded from contract liabilities.

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

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 32. SUMMARY OF SIGNIFICANT ~~ACCOUNTING~~ ACCOUNTING POLICIES (~~CONTINUED~~continued)

Revenue recognition (continued)

Contract balances

Timing of revenue recognition may differ from the timing of billing and cash receipts from customers. The Company records a contract asset when revenue is recognized prior to invoicing, or a contract liability when cash is received in advance of recognizing revenue. A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets include billed and billable receivables, which are the Company’s unconditional rights to consideration other than the passage of time. Contract liabilities include cash collected in advance and in excess of revenue recognized. Customer deposits are excluded from contract liabilities. The Company immediately expenses sales commissions (included under selling expenses) because sales commission are not expected to be recovered.

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

9Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes, and disclosure of contingent liabilities at the date of the consolidated financial statements. Estimates are used for, but not limited to, the assumptions and estimates used by management in recognizing development revenue under the percentage of completion method, the selection of the useful lives of property and equipment, provision necessary for contingent liabilities, revenue recognition, taxes and budgeted costs. The Company will enter the medical industry selling medical device like vitro short-wave radiometer, high-pressure syringe and related consumables. In future, it will also enter high-end products including gamma knife and apparatus for kidney. Management believes that the estimates utilized in preparing its consolidated financial statements are reasonable and prudent. Actual results could differ from these estimates.

Changes of estimated gross profit margins related to revenue recognized under the percentage of completion method are made in the period in which circumstances requiring the revisions become known. For the three months ended December 31, 2023 and 2022, the Company did not change the estimated revenue and related gross profit margin.

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

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 32. SUMMARY OF SIGNIFICANT ~~ACCOUNTING~~ ACCOUNTING POLICIES (~~CONTINUED~~continued)

Fair value of financial instruments

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

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

Foreign currency translation

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

	June 30,		September 30,
	For three months ended
	2023		2022
	December 31,				September 30,
Year-end spot rate		7.2513		7.1135
	2023		2022		2023
	(Unaudited)		(Unaudited)
Period end RMB:USD exchange rate		7.0999		6.8972		7.2960
Period average RMB:USD exchange rate		7.2247		7.1120		7.0533

	For the Nine Months Ended
	June 30,
	2023		2022
Average rate		6.9886		6.4504

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

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Cash

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

Restricted cash

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

Security deposits for land use rights

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

Real estate property development completed and under development

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

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

Real estate property ~~development~~consists ~~completed~~of ~~and~~finished residential ~~under~~unit ~~development~~sites, ~~are~~commercial ~~subject~~offices toand ~~valuation~~residential ~~adjustments~~unit ~~when~~sites ~~the~~under ~~carrying amount exceeds fair value~~development. AnThe ~~impairment~~Company ~~loss~~leases ~~is recognized only if~~ the ~~carrying~~land ~~amount~~for of the ~~assets is not recoverable and exceeds its fair value. The~~residential ~~carrying~~unit ~~amount~~sites isunder ~~not~~land ~~recoverable~~use ifright itleases ~~exceeds~~with ~~the~~various ~~sum~~terms offrom the ~~undiscounted~~PRC ~~cash flows expected to be generated by the assets~~government. The ~~Company reviews~~cost ~~all~~ of ~~its~~land ~~real~~use ~~estate~~rights ~~projects~~is ~~for~~included ~~future~~in ~~losses and impairment by comparing~~ the ~~estimated~~development cost ~~future~~and ~~undiscounted~~allocated ~~cash~~to ~~flows for~~ each project. toReal ~~the~~estate ~~carrying~~property ~~value~~development ofcompleted ~~such~~and ~~project.~~real ~~For~~estate ~~the~~property ~~three~~under ~~and~~development ~~nine~~are ~~months~~stated ~~ended June 30, 2023,~~at the ~~Company~~lower ~~recognized~~of ~~$89.9~~cost ~~million~~or ~~impairment~~fair ~~with respect to real estate property under development~~value.

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 32. SUMMARY OF SIGNIFICANT ~~ACCOUNTING~~ ACCOUNTING POLICIES (~~CONTINUED~~continued)

~~Capitalization~~Real ofestate ~~Interest~~property development completed and under development (continued)

~~Interest~~Expenditures ~~incurred~~for ~~during and~~land ~~directly related to real estate~~ development, ~~projects~~including iscost of ~~capitalized~~land touse ~~the~~rights, ~~related~~deed ~~real~~tax, ~~estate property under~~ pre-development ~~during~~costs, ~~the active~~and ~~development~~engineering ~~period~~costs, ~~which~~exclusive ~~generally~~of ~~commences~~depreciation, ~~when borrowings~~ are ~~used~~capitalized ~~to acquire real estate assets~~ and ~~ends~~allocated ~~when the properties~~to ~~are~~development ~~substantially~~projects ~~complete~~by or the ~~property~~specific ~~becomes~~identification ~~inactive~~method. ~~Interest~~Costs isare ~~capitalized~~allocated ~~based on the interest rate applicable~~ to specific ~~borrowings~~ orunits ~~the~~within ~~weighted~~a ~~average~~project ofbased ~~the~~on ~~rates applicable to other borrowings during~~ the ~~period. Interest capitalized to real estate~~ratio ~~properties under development is recorded as a component~~ of the ~~cost of real estate~~ sales ~~when~~area ~~related~~of units ~~are~~to ~~sold.~~the ~~All~~estimated ~~other~~total ~~interest is~~sales ~~expensed~~area asof ~~incurred. For~~ the ~~three~~project ~~and~~(or ~~nine~~phase ~~months~~of ~~ended~~the ~~June~~project) ~~30,~~multiplied ~~2023,~~by the total ~~interest~~cost ~~capitalized for real estate property development~~of ~~was $1,343,290 and $4,208,313, respectively. For~~ the ~~three~~project ~~and~~(or ~~nine~~phase ~~months~~of ~~ended June 30, 2022,~~ the ~~total interest capitalized in the real estate property development was $1,618,659 and $5,063,191, respectively~~project).

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

InReal estate property development completed and ~~accordance~~under ~~with~~development ~~the~~are ~~FASB~~subject ~~ASC~~to ~~360-10,~~valuation ~~Accounting~~adjustments ~~for~~when the ~~Impairment~~carrying oramount ~~Disposal~~exceeds offair ~~Long-Lived~~value. ~~Assets,~~An ~~long-lived~~impairment ~~assets,~~loss ~~such~~is asrecognized ~~property,~~only ~~plant~~if ~~and~~the ~~equipment~~carrying ~~and~~amount ~~purchased~~of ~~intangibles~~the ~~subject~~assets tois ~~amortization~~not ~~are~~recoverable ~~reviewed~~and ~~for~~exceeds ~~impairment~~its ~~whenever~~fair ~~events~~value. orThe ~~changes~~carrying inamount ~~circumstances indicate~~is ~~that~~not ~~the~~recoverable ~~carrying~~if ~~value~~it exceeds the sum of anthe ~~asset~~undiscounted ~~may~~cash ~~not~~flows expected to be ~~recoverable~~generated by the assets. ItThe isCompany ~~reasonably~~reviews ~~possible~~all ~~that~~of ~~these~~its ~~assets~~real ~~could~~estate ~~become~~projects ~~impaired~~for asfuture alosses ~~result~~and ofimpairment ~~technological~~by orcomparing ~~other~~the ~~industrial~~estimated ~~changes.~~future ~~Determination~~undiscounted ofcash ~~recoverability~~flows offor ~~assets~~each project to bethe ~~held~~carrying ~~and~~value ~~used~~of issuch project. byFor ~~comparing~~ the ~~carrying~~three ~~amount~~months ofended anDecember ~~asset~~31, to2023 ~~future~~and ~~net~~2022, ~~undiscounted~~the ~~cash~~Company ~~flows~~did tonot berecognize ~~generated~~any byimpairment ~~the~~loss ~~assets~~for its real estate properties.

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

~~Assets~~Interest incurred ~~are~~during ~~grouped~~ and ~~evaluated~~directly atrelated ~~the~~to ~~lowest~~real ~~level~~estate ~~for~~development ~~their~~projects ~~identifiable cash~~is ~~flows~~capitalized ~~that~~to ~~are largely independent of~~ the ~~cash~~related ~~flows~~real ofestate ~~other~~property ~~groups~~under ~~of assets. The Company considers historical performance and~~development ~~future~~during ~~estimated~~the ~~results~~active indevelopment ~~its~~period, ~~evaluation~~which ofgenerally ~~potential~~commences ~~impairment~~when ~~and~~borrowings ~~then~~are ~~compares~~used ~~the~~to ~~carrying~~acquire ~~amount~~real ofestate ~~the~~assets ~~asset~~and toends ~~the~~when ~~future estimated~~the ~~cash~~properties ~~flows~~are ~~expected~~substantially tocomplete ~~result~~or ~~from~~ the ~~use~~property ofbecomes ~~the asset~~inactive. IfInterest ~~the~~is ~~carrying~~capitalized ~~amount~~based ofon the ~~asset~~interest ~~exceeds~~rate ~~the estimated expected undiscounted~~applicable ~~future~~to ~~cash~~specific ~~flows,~~borrowings ~~the~~or ~~Company measures~~ the ~~amount~~weighted average of ~~impairment~~the byrates ~~comparing~~applicable ~~the~~to ~~carrying~~other ~~amount~~borrowings ofduring the ~~asset~~period. toInterest ~~its~~capitalized ~~fair value. The~~to ~~estimation~~real ofestate ~~fair~~property ~~value~~under development is ~~generally~~recorded ~~determined~~as bya ~~using~~component ~~the~~of ~~asset’s~~cost ~~expected~~of ~~future~~real ~~discounted~~estate ~~cash~~sales ~~flows~~when orrelated ~~market~~units ~~value~~are sold. ~~The~~All other ~~Company~~interest ~~estimates~~is ~~fair~~expensed ~~value~~as ofincurred. For the ~~assets~~three ~~based~~months onended ~~certain assumptions such as budgets~~December 31, ~~internal~~2023 ~~projections,~~ and ~~other~~2022, ~~available~~the ~~information as~~total ~~considered~~interest ~~necessary.~~capitalized ~~The~~for ~~Company recognized $89.9 million impairment with respect to~~ real estate property ~~under~~ development ~~for~~ ~~three~~was ~~months ended June 30~~$1,249,552 and $1,442,425, ~~2023~~respectively.

Property, plant and equipment, net

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

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

Buildings			39 years
Vehicles			8 years

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

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

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 32. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (~~CONTINUED~~continued)

~~Income~~Impairment ~~taxes~~of long-lived assets

InThe ~~accordance with FASB~~Company ~~ASC~~reviews ~~Topic~~its ~~740~~long-lived ~~“Income Taxes,” deferred tax~~ assets ~~and liabilities are~~ for ~~the~~impairment ~~expected~~whenever ~~future tax consequences of~~ events ~~that have been included in the financial statements~~ or ~~tax~~changes ~~returns. Under this method, deferred income taxes are recognized for the tax consequences~~ in ~~future~~circumstances ~~years~~indicate ofthat ~~differences between~~ the ~~tax~~carrying ~~bases~~amount of ~~assets~~an ~~and liabilities and their financial reporting amounts at each period end~~asset ~~based~~may onnot ~~enacted~~be ~~tax~~recoverable ~~laws~~through ~~and~~the ~~statutory~~estimated ~~tax~~undiscounted ~~rates~~cash ~~applicable~~flows expected to ~~the~~result ~~periods~~from ~~in which~~ the ~~differences~~use ~~are~~and ~~expected~~eventual todisposition ~~affect~~of ~~taxable~~the ~~income~~assets. AWhenever ~~valuation~~any ~~allowances~~such isimpairment ~~established~~exists, ~~when~~an ~~necessary,~~impairment toloss ~~reduce~~will ~~net~~be ~~deferred~~recognized ~~tax~~for ~~assets~~the toamount by which the ~~amount~~carrying ~~expected~~value toexceeds bethe ~~realized~~fair value.

~~ASC~~Assets ~~740-10-25 prescribes~~are agrouped ~~more-likely-than-not~~and ~~threshold~~evaluated at the lowest level for ~~consolidated~~their ~~financial~~identifiable ~~statement~~cash ~~recognition~~flows ~~and~~that ~~measurement~~are largely independent of athe ~~tax~~cash ~~positions~~flows ~~taken~~of ~~(or~~other ~~expected~~groups toof beassets. ~~taken)~~The Company considers historical performance and future estimated results in aits ~~tax~~evaluation ~~return.~~of Itpotential ~~also~~impairment ~~provides~~and ~~guidance~~then compares onthe carrying amount of the ~~recognition~~asset to the future estimated cash flows expected to result from the use of ~~income~~the ~~tax~~asset. ~~assets~~If ~~and~~the ~~liabilities~~carrying amount of the asset exceeds estimated expected undiscounted future cash flows, ~~classification~~the Company measures the amount of ~~current~~impairment by comparing ~~and~~the ~~deferred~~carrying ~~income~~amount ~~tax~~of ~~assets~~the ~~and~~asset ~~liabilities,~~to ~~accounting~~its ~~for~~fair ~~interest~~value. ~~and~~The ~~penalties~~estimation ~~associated~~of ~~with~~fair ~~tax~~value ~~positions,~~is ~~years~~generally ~~open~~determined ~~for~~by ~~tax~~using the asset’s expected ~~examination,~~future ~~accounting~~discounted ~~for~~cash ~~income~~flows ~~taxes~~or inmarket ~~interim~~value. ~~periods~~The ~~and~~Company ~~income~~estimates ~~tax~~fair ~~disclosures.~~value ~~There~~of ~~are~~the noassets ~~material~~based ~~uncertain~~on ~~tax~~certain ~~positions~~assumptions such as budgets, internal projections, and other available information as considered necessary. There was no impairment of ~~June~~long-lived assets ~~30,~~for ~~2023~~the ~~and~~three ~~September~~months 30ended December 31, 2023 and 2022.

~~The~~For ~~Company~~contract assets isand aprepayment ~~corporation organized under the laws~~ of ~~the~~uncompleted ~~State of Florida. However~~projects, ~~all of~~ the Company’s ~~operations~~adopts ~~are~~aging ~~conducted~~analysis ~~solely by its subsidiaries~~ and ~~VIE~~discounted incash ~~the~~flow ~~PRC.~~by Noattaching ~~income is earned in the United States and the management does not repatriate any earnings outside the PRC. As~~ a ~~result,~~percentage ~~the Company did not generate any~~rate U.S. taxable income for the three and nine months ended June 30, 2023 and 2022. As of June 30, 2023, the Chinese entities’ income tax returns filed in China for the years ended December 31, 2016 through 2020 are subject to ~~examination~~calculate byimpair ~~the Chinese~~loss ~~taxing authorities~~respectively.

~~The~~Customer parent Company, Green Giant’s both U.S. federal tax returns and Florida state tax returns are delinquent since 2009. Its tax years ended September 30, 2009 through September 30, 2021 remain open for statutory examination by U.S. federal and state tax authorities.deposits

~~On December 22, 2017,~~Customer ~~the~~deposits ~~Tax~~consist ~~Cuts and Jobs Act~~ of ~~2017~~amounts ~~(the~~received ~~“Act”)~~from ~~was~~customers ~~signed~~relating ~~into law making significant changes~~ to the ~~Internal~~sale ~~Revenue~~of ~~Code. Changes~~residential ~~include,~~units ~~but~~in ~~are~~the ~~not limited to, a U~~PRC.S. ~~corporate~~In ~~tax~~the ~~rate~~PRC, ~~decrease~~customers ~~from 35% to 21% effective~~will ~~for tax years~~generally ~~beginning~~obtain ~~after~~permanent ~~December~~financing ~~31,~~for ~~2017,~~ the ~~transition~~purchase of ~~U.S~~their ~~international~~residential ~~taxation~~unit ~~from~~prior ~~a worldwide tax system~~ to ~~a territorial system, and a one-time transition tax on~~ the ~~mandatory~~completion ~~deemed repatriation~~ of ~~cumulative~~the ~~foreign~~project. ~~earnings~~The aslending ofinstitution will ~~December~~provide ~~31,~~the ~~2017.~~funding ~~Due~~ to the ~~complexity involved~~Company inupon ~~applying~~ the ~~provisions~~completion of the ~~Tax~~financing ~~Act,~~rather wethan ~~made reasonable estimates of~~ the ~~effects~~completion ~~and recorded accrued amounts in our consolidated financial statements as~~ of ~~June 30, 2023 and September 30, 2022, including approximately $2.3 million provision on~~ the ~~deemed repatriation of undistributed foreign earnings and an additional $1~~project.~~3 million~~ ~~provision for delinquent U.S. and State tax fillings.~~ The Company ~~plans~~receives these tofunds ~~engage a tax professional to file its delinquent tax returns in 2022. Failure to furnish any income tax~~ and ~~information returns~~recognizes ~~with~~them ~~respect~~as toa liability ~~any~~until ~~foreign business entity required, within~~ the ~~time~~revenue ~~prescribed~~can bybe ~~the IRS, subjects the Company to civil penalties~~recognized.

Property warranties

The Company provides its customers with warranties which cover major defects of the building structure and certain fittings and facilities of properties sold. The warranty period varies from two years to five years, depending on different property components the warranty covers. The Company continually estimates potential costs for materials and labor with regard to warranty-type claims expected to be incurred subsequent to the delivery of a property. Reserves are determined based on historical data and trends with respect to similar property types and geographical areas. The Company continually monitors the warranty reserve and makes adjustments to its pre-existing warranties, if any, in order to reflect changes in trends and historical data as information becomes available. The Company may seek further recourse against its contractors or any related third parties if it can be proved that the faults are caused by them. In addition, the Company also withholds up to 2% of the contract cost from sub-contractors for periods of two to five years. These amounts are included in construction deposits, and are only paid to the extent that there has been no warranty claim against the Company relating to the work performed or materials supplied by the subcontractors. For the three months ended December 31, 2023 and 2022, the Company had not recognized any warranty costs in excess of the amount retained from subcontractors and therefore, no warranty reserve is considered necessary at the balance sheet dates.

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 32. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (~~CONTINUED~~continued)

Construction deposits

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

Income taxes

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

ASC 740-10-25 prescribes a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax positions taken (or expected to be taken) in a tax return. It also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, years open for tax examination, accounting for income taxes in interim periods and income tax disclosures. There are no material uncertain tax positions as of December 31, 2023 and 2022.

The Company is a corporation organized under the laws of the State of Florida. However, all of the Company’s operations are conducted solely by its subsidiaries and VIE in the PRC. No income is earned in the United States and the management does not repatriate any earnings outside the PRC. As a result, the Company did not generate any U.S. taxable income for the three moths ended December 31, 2023 and 2022. As of December 31, 2023, the Chinese entities’ income tax returns filed in China for the years ended December 31, 2022, 2021, 2020, 2019 and 2018 are subject to examination by the Chinese taxing authorities.

The parent Company, China HGS Real Estate Inc.’s both U.S. federal tax returns and Florida state tax returns are delinquent since 2009. Its tax years ended September 30, 2009 through September 30, 2022 remain open for statutory examination by U.S. federal and state tax authorities.

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a U.S. corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. Due to the complexity involved in applying the provisions of the Tax Act, we made reasonable estimates of the effects and recorded accrued amounts in our consolidated financial statements as of December 31, 2023 and 2022, including an approximately $2.3 million provision on the deemed repatriation of undistributed foreign earnings and an additional $0.8 million provision for delinquent U.S. and State tax fillings. The Company is in the process of engaging a tax professional to file its delinquent tax returns. Failure to furnish any income tax and information returns with respect to any foreign business entity required, within the time prescribed by the IRS, subjects the Company to civil penalties.

Land appreciation tax (“LAT”)

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

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

Comprehensive income (loss)

In accordance with ASC 220-10-55, comprehensive income (loss) is defined as all changes in equity except those resulting from investments by owners and distributions to owners. The Company’s only components of other comprehensive income (loss) for the three and nine months ended June 30, 2023 and 2022 were net income and foreign currency translation adjustments.

Basic and diluted earnings (loss) per share

The Company computes earnings (loss) per share (“EPS”) in accordance with the ASC 260, “Earnings per share”, which requires companies to present basic and diluted EPS. Basic EPS is measured as net income (loss) divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

As of June 30, 2023, there were outstanding warrants to purchase approximately 55,793,268 shares of the Company’s Common Stock (September 30, 2022-46,464,929), which resulted in 55,793,268 dilutive shares for the nine months ended June 30, 2023. There were no dilutive shares for the three months ended June 30, 2023.

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 32. SUMMARY OF SIGNIFICANT ~~ACCOUNTING~~ ACCOUNTING POLICIES (~~CONTINUED~~continued)

Land appreciation tax (“LAT”) (continued)

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

Comprehensive income (loss)

In accordance with ASC 220-10-55, comprehensive income (loss) is defined as all changes in equity except those resulting from investments by owners and distributions to owners. The Company’s only components of comprehensive income (loss) for the three months ended December 31, 2023 and 2022 were net income and foreign currency translation adjustments.

Share-based Compensation

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

Basic and diluted earnings (loss) per share

The Company computes earnings (loss) per share (“EPS”) in accordance with the FASB ASC Topic 260, “Earnings per share,” which requires companies to present basic and diluted EPS. Basic EPS is measured as net income (loss) divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. Diluted loss per share is the same as basic loss per share due to the lack of dilutive items in the Company for the years ended December 31, 2023. The number of warrants is omitted excluded from the computation as the anti-dilutive effect As of December 31, 2023, there were outstanding warrants to purchase approximately 124,916,103 shares of the Company’s common stock (September 30, 2023-58,606,383).

Concentration risk

The Company’s ~~operations~~ operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be ~~influenced~~ influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC’s economy. The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittances abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company’s cash and restricted cash were on deposit at financial institutions in the PRC, which the management believes are of high credit quality. In May, 2015, China’s new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in China are required to purchase deposit insurance for deposits in RMB and in foreign ~~currencies~~currency placed with them. Such Deposit Insurance Regulation would not be effective in providing complete protection for the Company’s accounts, as its aggregate deposits are much higher than the compensation limit of RMB500,000 (approximately $7468,~~600~~531). However, the Company believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon in China and the Company believes that the Chinese banks that hold the Company’s cash and restricted cash are financially sound based on public available information. The Company has not experienced any losses in its bank accounts.

~~For~~Impact ~~the three and nine months ended June 30, 2023 and 2022, the Company did not have any individual customer that accounted for more than 10%~~ of ~~the~~Recent ~~Company~~Accounting ~~real estate sales revenue for the related periods.~~Pronouncements

~~NOTE~~The 4.accounting ~~PREPAYMENT~~standards that we adopted beginning October 1, 2022 did not have a significant impact on our consolidated financial statements.

As of June 30, 2023, prepayments were as follows:

	June 30,		September 30,
	2023		2022
	(Unaudited)
Energy equipments	$	26,936,915	$	26,936,915
Professional service		5,200,000		—
Mental Scrap		557,787		—
Total	$	32,694,702	$	26,936,915

(A) In April, 2023, Green Giant Energy Texas Inc. (“Green Giant Energy”), an indirect wholly owned subsidiary of Green Giant Inc., entered into a sales contract with AGR Enterprises Inc. (“AGR”), pursuant to which Green Giant Energy agreed to purchase, and AGR agreed to sell to Green Giant Energy, 279.35 MT Aluminium Scrap Zorba and 40 MT Non Ferrous Metal Scrap Zurik, with the unit price of $1,827 per MT and $1,185 per MT respectively. Green Giant Energy prepaid $557,787 after both parties signed the agreement.

(B) In 1st quarter of fiscal 2023, the Company made the prepayment in $5.2 million to Vocob Inc. for the consulting services on executing and performing acquisition of the renewable energy entities and C&I solar sites. The contract was signed on October 15, 2022. The agreement is subject to annual review by both parties, the company may declare the agreement is void, rescind the contract and reserves the right to take back the US$5.2 million if Vocob Inc. fails to refer appropriate projects to the Company at the anniversary date. Vocob Inc. will deduct its commission at 3% on gross amount of the deal on per successfully referred project basis from the prepayment; the Company is also entitled to have the remaining balance of prepayment back at the end of the contract terms.

(C) In 4th quarter of fiscal 2022, the Company made the prepayment in $26.9 million to Golden Mainland Inc. and Golden Ocean Inc. for energy equipment purchase.

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 3. REAL ESTATE PROPERTY DEVELOPMENT COMPLETED AND UNDER DEVELOPMENT

The following summarizes the components of real estate property development completed and under development as of ~~June~~December 3031, 2023 and September 30, ~~2022~~2023:

	Balance as of
	June 30, 2023			September 30, 2022
	December 31, 2023			September 30, 2023
	(Unaudited)
Development completed:
Hanzhong City Mingzhu Garden Phase II	$	20,~~279~~708,~~475~~179		$	20,~~672~~151,~~000~~590
Hanzhong City Oriental Pearl Garden		17,~~094~~458,~~368~~893			1716,~~425~~989,~~514~~637
Yang County Yangzhou Pearl Garden Phase II		12,~~993~~036,~~943~~462			21,~~039~~981,~~912~~727
Yang County Yangzhou Palace		33,~~309~~810,~~939~~237			3433,~~635~~009,~~104~~114
Real estate property development completed	$	7274,~~677~~013,~~725~~771		$	7472,~~772~~132,~~530~~068
Under development:
Hanzhong City Liangzhou Road and related projects (a)	$	~~172~~177,~~551~~893,~~954~~662		$	~~173~~172,~~289~~277,~~941~~097
Hanzhong City Hanfeng Beiyuan East (b)		~~771~~788,~~999~~462			~~786~~767,~~954~~270
Hanzhong City Beidajie (b)		3233,~~054~~710,~~541~~769			3132,~~144~~334,~~446~~013
Yang County East 2nd Ring Road (c)		7,~~506~~666,~~417~~486			7,~~904~~460,~~869~~428
Real estate property under development	$	~~212~~220,~~884~~059,~~911~~379		$	~~213~~212,~~126~~838,~~210~~808
Impairment		(~~153~~139,~~193~~736,~~855~~699	)		(67135,~~825~~980,~~622~~892	)
Real estate property under development	$	5980,~~691~~322,~~056~~680		$	~~145~~76,~~300~~857,~~588~~916

(a) In September 2013, the Company entered into an agreement (“Liangzhou Agreement”) with the Hanzhong local government on the Liangzhou Road reformation and expansion project (Liangzhou Road Project”). Pursuant to the agreement, the Company is contracted to reform and expand the Liangzhou Road, a commercial street in downtown Hanzhong City, with a total length of 2,080 meters and a width of 30 meters and to resettle the existing residences in the Liangzhou road area. The government’s original road construction budget was approximately $33 million in accordance with the Liangzhou Agreement. The Company, in return, is being compensated by the local government to have an exclusive right on acquiring at least 394.5 Mu land use rights in a specified location of Hanzhong City. The Liangzhou Road Project’s road construction started at the end of 2013. In 2014, the original scope and budget on the Liangzhou road reformation and expansion project was extended, because the local government included more area and resettlement residences into the project, which resulted in additional investments from the Company. In return, the Company is authorized by the local government to develop and manage the commercial and residential properties surrounding the Liangzhou Road project. The Company launched the construction of the Liangzhou Road related projects in December 2020. As of ~~June~~September 30, 2023, the main Liangzhou road construction is substantially completed.

The Company’s development cost incurred for the Liangzhou Road Project is treated as the Company’s deposit on purchasing the related land use rights, as agreed by the local government. As of ~~June~~December 3031, 2023, the actual costs incurred by the Company were approximately $~~172~~177.69 million (September 30, ~~2022~~2023 - $~~173~~172.3 million) and the incremental cost related to residence resettlements approved by the ~~local~~ local government. The Company determined that the Company’s ~~investment~~Investment in the Liangzhou Road Project in exchange for interests in ~~future~~ future land use rights is a barter transaction with commercial substance.

(b)

In September 2012, the Company was approved by the Hanzhong local government to construct four municipal roads with a total length of approximately 1,192 meters. The project was deferred and then restarted during the quarter ended June 30, 2014. As of June 30, 2023, the local government has not completed the budget for these projects therefore the delivery for these projects for the government’s acceptance and related settlement were extended to June 2023.

(c)

The Company was engaged by the Yang County local government to construct the East 2nd Ring Road with a total length of 2.15 km. The local government is required to repay the Company’s project investment costs within 3 years with interest at the interest rate based on the commercial borrowing rate with the similar term published by the China Construction Bank (June 30, 2023 and 2022 – 4.75%). The local government has approved a refund to the Company by reducing local surcharges or taxes otherwise required in the real estate development. The road construction was substantially completed as of June 30, 2023 and is in process of the government’s review and approval.

(b)

On January 20, 2021, the Company entered into agreement with Hanzhong Guangsha, an entity controlled by Mr. Xiaojun Zhu, to acquire certain real estate under development in the Hanzhong Nanyuan II Project in the amount of approximately $27.5 million, for the local government’s residence reallocation related to the Liangzhou road and affiliated project. All the real estate property in Hanzhong Nanyuan II project was completed and sold to the local government for residence reallocation purposes by September 30, 2021.

(c)

The Company was engaged by the Yang County local government to construct the East 2nd Ring Road with a total length of 2.15 km. The local government is required to repay the Company’s project investment costs within 3 years with interest at the interest rate based on the commercial borrowing rate with the similar term published by the China Construction Bank (December 31, 2023 and 2022 – 4.75%). The local government has approved a refund to the Company by reducing local surcharges or taxes otherwise required in the real estate development. The road construction was substantially completed as of September 30, 2021 and is in process of the government’s review and approval. For the year ended December 31, 2023, the Company received the local government’s installment payments of approximately $2.2 million, which was included in the Company’s customer deposits as of December 31, 2023.

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 64. ~~CONSTRUCTION LOANS~~PREPAYMENT

	June 30,		September 30,
	2023		2022
	(unaudited)
Loan A	$	89,933,511	$	91,675,668
Loan B		16,373,501		16,690,683
Total	$	106,307,012	$	108,366,351

As of December 31, 2023, prepayments were as follows:

(A) On June 26, 2015 and March 10, 2016, the Company signed phase I and Phase II agreements with Hanzhong Urban Construction Investment Development Co., Ltd, a state-owned Company, to borrow up to approximately $106.9 million (RMB775.0 million) for a long term loan with interest at 4.75% to develop the Liangzhou Road Project. As of June 30, 2023, the Company borrowed approximately $89.9 million under this credit line (September 30, 2022 - $91.7 million). Due to the local government’s delay in the relocation of residences in the Liangzhou Road Project and related area, the Hanzhong Urban Construction Investment Development Co., Ltd has not released all the funds available to the Company and additional withdrawals will be based on the project’s development progress. The loan is guaranteed by Hanzhong City Hantai District Municipal Government and pledged by the Company’s Yang County Yangzhou Palace project with a carrying value of $33,309,939 as of June 30, 2023 (September 30, 2022 - $34,635,104). For the three and nine months ended June 30, 2023, the interest was $787,151 and $2,494,955 (June 30, 2022 - $1,483,704 and $4,648,426), respectively, which was capitalized into the development cost of the Liangzhou Road Project.

	December 31,		September 30,
	2023		2023
	(Unaudited)
Energy equipments	$	26,936,915	$	26,936,915
Professional service		—		15,500
Total	$	26,936,915	$	26,952,415

~~(B)~~The Inprepayment of ~~December~~Energy ~~2016,~~equipment ~~the~~was ~~Company signed a loan agreement with Hantai District Urban Construction Investment Development Co., Ltd, a state-owned Company, to borrow up to approximately $16.4 million (RMB119.0 million)~~ for the ~~development of the Hanzhong City Liangzhou Road Project. The interest is 1.2% and due on June 20, 2031. The~~ Company’s isnew ~~required~~business ~~to repay the loan in equal annual principal repayments of approximately $3.3 million commencing from December 2027 through June 2031 with interest payable~~ on angreen ~~annual basis~~energy. The ~~Company~~counterparties ~~pledged~~are ~~the~~Golden ~~assets~~Mainland ~~of the Liangzhou Road related projects with a carrying value of approximately $172~~Inc.6 ~~million as collateral for the loan. Total interest of $52,037~~ and ~~$154,952~~Golden ~~for the three and nine months ended June 30, 2023 was capitalized into the development cost of the Hanzhong City Liangzhou Road Project (June 30, 2022 - $54,625 and $167,881), respectively~~Ocean Inc.

Additionally, in September 2017, the Urban Development Center Co., Ltd. approved a construction loan for the Company in the amount of approximately $24.1 million (RMB175.0 million) with an annual interest rate of 1.2% per year in connection with the Liangzhou Road and related Project. The Company is required to repay the loan in equal annual principal repayment of approximately $NOTE 5 ~~million commencing from December 2027 through May 2031 with the interest payable on an annual basis~~. ~~The~~CONSTRUCTION amount of this loan is available to be drawn down as soon as the land use rights of the Liangzhou Road Project are approved and the construction starts, which is expected to be completed before the end of 2022. As of June 30, 2023 and September 30, 2022, the outstanding loan balance was $nil. Interest charges for the three and nine months ended June 30, 2023 were $76,525 and $227,871 (June 30, 2022 - $80,330 and $246,884), respectively, which was included in the construction capitalized costs.LOANS

	December 31,		September 30,
	2023		2023
	(Unaudited)
Loan A	$	91,851,275	$	89,382,520
Loan B		16,722,654		16,273,187
Total	$	108,573,929	$	105,655,707

(A)

On June 26, 2015 and March 10, 2016, the Company signed phase I and Phase II agreements with Hanzhong Urban Construction Investment Development Co., Ltd, a state-owned Company, to borrow up to approximately $109.2 million (RMB775 million) for a long term loan with interest at 4.75% to develop the Liangzhou Road Project. As of December 31, 2023, the Company borrowed $95.0 million under this credit line (September 30, 2023 - $89.4 million). Due to the local government’s delay in the relocation of residences in the Liangzhou Road Project and related area, the Hanzhong Urban Construction Investment Development Co., Ltd has not released all the funds available to the Company and additional withdrawals will be based on the project’s development progress and the Company expects the loan will be extended upon maturity. The loan is guaranteed by Hanzhong City Hantai District Municipal Government and pledged by the Company’s Yang County Yangzhou Palace project with a carrying value of $33.8 million as of December 31, 2023 (September 30, 2023- $33.0 million). For the three months ended December 31, 2022, the interest was $0.72 million (December 31, 2022 - $0.86 million), which was capitalized into the development cost of the Liangzhou Road Project.

(B)

In December 2016, the Company signed a loan agreement with Hantai District Urban Construction Investment Development Co., Ltd, a state-owned Company, to borrow up to approximately $16.8 million (RMB119 million) for the development of the Hanzhong City Liangzhou Road Project. The interest is 1.2% and due on June 20, 2031. The Company is required to repay the loan in equal annual principal repayments of approximately $3.3 million commencing from December 2027 through June 2031 with interest payable on an annual basis. The Company pledged the assets of the Liangzhou Road related projects with a carrying value of $177.9 million as collateral for the loan. Total interest of $0.05 million for the three months ended December 31, 2023 was capitalized into the development cost of the Hanzhong City Liangzhou Road Project (December 31, 2022- $0.05 million).

Additionally, in September 2017, the Urban Development Center Co., Ltd. approved a construction loan for the Company in the amount of approximately $24.6 million (RMB175 million) with an annual interest rate of 1.2% per year in connection with the Liangzhou Road and related Project. The Company is required to repay the loan in equal annual principal repayment of approximately $5 million commencing from December 2027 through May 2031 with the interest payable on an annual basis. The Company pledged the assets of the Liangzhou Road related projects with a carrying value of $177.9 million as collateral for the loan. Interest charges for the three months ended December 31, 2023 and 2022 were $0.07 million and $0.07 million, respectively, which was included in the construction capitalized costs.

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 6. CUSTOMER DEPOSITS

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

	June 30,		September 30,
	December 31,		September 30,
	2023		~~2022~~2023
	(unaudited)
	(Unaudited)
Mingzhu Garden (Mingzhu Nanyuan and Mingzhu Beiyuan)	$	8,140,369	$	8,300,749
Customer deposits by real estate projects:
Oriental Pearl Garden		2,957,531		3,015,526
Mingzhu Garden (Mingzhu Nanyuan and Mingzhu Beiyuan)	$	8,314,736	$	8,091,255
Liangzhou road and related projects		176,520		186,968
Oriental Pearl Garden		3,020,598		2,939,411
Yangzhou Pearl Garden		717,587		731,206
Liangzhou road and related projects		180,284		175,439
Yang County East 2nd Ring Road		2,068,595		2,108,667
Yangzhou Pearl Garden		732,889		713,190
Yangzhou Palace		5,280,437		5,499,652
Yang County East 2nd Ring Road		2,112,706		2,055,921
Total	$	19,341,039	$	19,842,768
Yangzhou Palace		5,254,129		5,251,479
Other		200,000		—
Total	$	19,815,342	$	19,226,695

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

NOTE 8 7. TAXES

(A) Business ~~Value~~sales ~~added~~tax ~~taxes (“~~and VAT”)

The Company is subject to a 5% VAT for its existing real estate projects based on the local tax authority’s practice. As of ~~June 30~~December 31, 2023 ~~and September 30~~, ~~2022,~~ the Company had business VAT tax payable of $~~3,581,542~~2.8 ~~and~~million (September $430,~~144,254,~~ ~~respectively~~2023 - $3.3 million), which is expected to be paid when the projects ~~are~~ are completed and assessed by the local tax authority.

(B) Corporate income taxes (“CIT”)

The Company’s PRC subsidiary and VIE are governed by the Income Tax Law of the People’s Republic of China for privately run enterprises, which are generally subject to income tax on income reported in the statutory financial statements after appropriate tax adjustments. The Company’s CIT rate is 25% on taxable income. Although the possibility exists for reinterpretation of the application of the tax regulations by higher tax authorities in the PRC, potentially overturning the decision made by the local tax authority, the Company has not experienced any reevaluation of the income taxes for prior years. The PRC tax rules are different from the local tax rules and the Company is required to comply with local tax rules. The difference between the two tax rules will not be a liability of the Company. There will be no further tax payments for the difference. As of ~~June~~December 3031, 2023 and September 30, ~~2022~~2023, the Company’s total income tax payable amounted to $1213,~~979~~148,~~639~~552 and $1312,~~279~~907,~~845~~040, respectively, which included the income tax payable balances in the PRC of $9,~~414~~583,~~638~~552 and $9,~~714~~342,~~844~~041, respectively and the Company expects to pay this income tax payable balance when the related real estate projects are completely sold.

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 7. TAXES (continued)

~~Income~~B) ~~tax~~Corporate ~~expense~~income ~~for the~~taxes ~~three and nine months ended June 30, 2023 and 2022 is summarized as follows:~~(“CIT”) (continued)

	Three Months Ended June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Current tax provision	$	—	$	30,450	$	—	$	513,675
Total income tax expenses	$	—	$	30,450	$	—	$	513,675

The following table reconciles the statutory rates to the Company’s effective tax rate for the three months ended December 31, 2023 and 2022

Recent U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “U.S. Tax Reform”), was signed into law on December 22, 2017. The U.S. Tax Reform significantly modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transition tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. Taxpayers may elect to pay the one-time transition tax over eight years or in a single lump sum. The U.S. Tax Reform also includes provisions for a new tax on Global Intangible Low-Taxed Income (“GILTI”) effective for tax years of foreign corporations beginning after December 31, 2017. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of controlled foreign corporations (“CFCs”), subject to the possible use of foreign tax credits and a deduction equal to 50 percent to offset the income tax liability, subject to some limitations. As of June 30, 2023 and September 30, 2022, the Company assessed that the related GILTI tax payable was $nil, which is subject to the reassessment upon the Company’s filling of GILTI information.

	For the three months ended
	December 31,
	2023			2022
	(Unaudited)			(Unaudited)
Chinese statutory tax rate		25.0	%	$	25.0	%
Other adjustments*		(25.0	)%		(25.0	)%

Effective tax rate		—	%	$	—

~~For~~* ~~the~~other ~~year~~adjustment ~~ended~~mainly ~~September 30, 2018, the Company recognized a one-time transition toll tax of approximately $2.3 million that~~ represented ~~management’s estimate of the amount of U.S. corporate income tax based on the deemed repatriation to the United States of the Company’s share of previously deferred earnings of certain~~ non-~~U.S.~~deductible ~~subsidiaries~~expenses ~~and~~for ~~VIE of~~ the ~~Company~~three ~~mandated~~months byended ~~the~~December ~~U.S. Tax Reform. The Company’s estimate of the onetime transition toll tax is subject to the finalization of management’s analysis related to certain matters~~31, ~~such~~2023 ~~as developing interpretations of the provisions of the Tax Act~~ and amounts related to the earnings and profits of certain foreign VIEs and the filing of our tax returns. U.S. Treasury regulations, administrative interpretations or court decisions interpreting the Tax Act may require further adjustments and changes in our estimates. As of June 30, 2023 and September 30, 2022~~, the Company provided $2~~.~~3 million provision due to delinquent U.S. tax return fillings.~~

~~(C)~~Income ~~Land~~tax expense for the three months ended ~~Appreciation~~December ~~Tax~~31, ~~(“LAT”)~~2023 and 2022 is summarized as follows:

Since January 1, 1994, LAT has been applicable at progressive tax rates ranging from 30% to 60% on the appreciation of land values, with an exemption provided for the sales of ordinary residential properties if the appreciation values do not exceed certain thresholds specified in the relevant tax laws. However, the Company’s local tax authority in Hanzhong City has not imposed the regulation on real estate companies in its area of administration. Instead, the local tax authority has levied the LAT at the rate of 0.5% in Yang County and 1.0% in Hanzhong against total cash receipts from sales of real estate properties, rather than according to the progressive rates.

	For the three months ended
	December 31,
	2023		2022
	(Unaudited)		(Unaudited)
Current tax provision	$	—	$	—
Deferred tax provision		—		—

Income tax provision	$	—	$	—

AsRecent ~~at June~~U.S. federal tax legislation, commonly 30referred to as the Tax Cuts and Jobs Act (the “U.S. Tax Reform”), ~~2023~~was signed into law on December ~~and~~22, ~~September~~2017. 30The U.S. Tax Reform significantly modified the U.S. Internal Revenue Code by, ~~2022~~among other things, reducing the ~~outstanding~~statutory ~~LAT~~U.S. ~~payable~~federal ~~balance~~corporate income ~~was~~tax rate from ~~$nil~~35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with ~~respect~~a one-time transition tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to ~~completed~~certain ~~real~~limitations, ~~estate~~generally ~~properties~~eliminating U.S. corporate ~~sold~~income uptax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. Taxpayers may elect to pay the one-time transition tax over eight ~~June~~years 30or in a single lump sum. The U.S. Tax Reform also includes provisions for a new tax on Global Intangible Low-Taxed Income (“GILTI”) effective for tax years of foreign corporations beginning after December 31, ~~2023~~2017. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of controlled foreign corporations (“CFCs”), subject to the possible use of foreign tax credits and a deduction equal to 50 percent to offset the income tax liability, subject to some limitations. As of December 31, 2023 and September 30, ~~2022~~2023, the Company assessed ~~respectively~~that the related GILTI tax payable was Nil, which is subject to the reassessment upon the Company’s filling of GILTI information.

~~(D)~~For the year ended September ~~Taxes~~30, ~~payable~~2018, the ~~consisted~~Company recognized a one-time transition toll tax of approximately $2.3 million that represented management’s estimate of the amount ~~following:~~of U.S. corporate income tax based on the deemed repatriation to the United States of the Company’s share of previously deferred earnings of certain non-U.S. subsidiaries and VIE of the Company mandated by the U.S. Tax Reform. The Company’s estimate of the onetime transition toll Tax is subject to the finalization of management’s analysis related to certain matters, such as developing interpretations of the provisions of the Tax Act and amounts related to the earnings and profits of certain foreign VIEs and the filing of our tax returns. U.S. Treasury regulations, administrative interpretations or court decisions interpreting the Tax Act may require further adjustments and changes in our estimates. As of December 31, 2023 and September 30, 2023, the Company provided nil additional provision due to delinquent U.S. tax return fillings.

	June 30,		September 30,
	2023		2022
	(unaudited)
CIT payable	$	12,979,639	$	13,279,845
VAT payable		3,581,542		4,144,254
Other taxes and fees payable		2,295,233		2,556,259
Total	$	18,856,414	$	19,980,358

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 7. ~~RELATED~~TAXES ~~PARTY BALANCES AND TRANSACTIONS~~(continued)

~~The~~(C) Land ~~table~~Appreciation ~~below~~Tax ~~sets forth major related parties of the Group and their relationships with the Group:~~(“LAT”)

~~Entity~~Since orJanuary 1, ~~individual~~1994, ~~name~~LAT ~~Relationship~~has been applicable at progressive tax rates ranging from 30% to 60% on the appreciation of land values, with an exemption provided for the ~~Group~~sales of ~~Goldenmountain~~ordinary ~~Solution~~residential ~~Inc~~properties ~~Share~~if ~~holder~~the appreciation values do not exceed certain thresholds specified in the relevant tax laws. However, the Company’s local tax authority in Hanzhong City has not imposed the regulation on real estate companies in its area of administration. Instead, the local tax authority has levied the LAT at the rate of 0.5% in Yang County and 1.0% in Hanzhong against total cash receipts from sales of real estate properties, rather than according to the progressive rates.

~~Transactions~~As at December 31, 2023 and September 30, 2023, the outstanding LAT payable balance was Nil with respect to completed real estate properties sold up to December 31,2023 and September 30, 2023, respectively.

	June 30,
Name	2023
Goldenmountain Solution Inc		400,000

(D) Taxes payable consisted of the following:

Balance

	December 31,		September 30,
	2023		2023
	(Unaudited)

CIT	$	13,148,552	$	12,907,040
Business tax		2,763,053		3,330,804
Other taxes and fees		2,117,909		2,398,180
Tax payable	$	18,029,514	$	18,636,024

	June 30,
Name	2023
Goldenmountain Solution Inc		400,000

On May 1, 2023, a loan agreement of $0.4 million was entered into between Goldenmountain Solution Inc and Green Giant Energy.

NOTE 10. COMMON STOCK

On January 14, 2022, the Company closed a private placement with certain investors. In connection with the private placement, the Company issued an aggregate of 10,247,122 units (the “Units”), each Unit consisting of one share of common stock, par value $0.001 per share (“Common Stock”) and a warrant to purchase three shares of Common Stock with an initial exercise price of $2.375 at a price of $2.375 per Unit, for gross proceeds of approximately $24.3 million. The warrants expire five and a half years from its date of issuance. The warrants are subject to customary anti-dilution provisions reflecting stock dividends and splits or other similar transactions.

On March 16, 2022, the Company entered into a certain securities purchase agreement (the “SPA”) with certain purchasers whom are “non-U.S. Persons” (the “Investors”) as defined in Regulation S of the Securities Act, pursuant to which the Company agreed to sell an aggregate of 4,600,000 shares of Common Stock, par value $0.001 per share, for an aggregate purchase price of approximately $4.6 million. On March 30, 2022, the transaction contemplated by the SPA closed.

In connection with the private placement of 10,247,122 units that closed on January 14, 2022, the Company issued warrants to purchase 30,741,366 shares of Common Stock at $2.375 per share. These warrants are not exercisable until six months from the date of issuance and required the reservation of common shares for their issuance. With the sales these units and other sales of Common Stock, the Company does not have the necessary authorized shares should these warrants be converted and was not able to reserve the Common Stock underlying these warrants. The Company is planning to increase their authorized shares prior to the warrants becoming exercisable. If the Company has not increased the authorized shares sufficiently, these warrants will be reflected at their fair value as a liability which could be material.

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

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

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

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

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 8. ~~COMMON~~COMMITMENTS ~~STOCK~~AND ~~(continued)~~CONTINGENCIES

OnFrom ~~September~~time 6,to ~~2022~~time, the Company ~~awarded~~is ~~Jian~~a ~~Zhang,~~party ~~one~~to ofvarious ~~the~~legal ~~independent~~actions ~~directors~~arising ofin the ~~Board,~~ordinary course of ~~10,000 common~~ ~~shares~~business. asThe ~~annual~~Company ~~compensation for~~accrues ~~his~~costs ~~role~~ associated with ~~the~~these ~~Board~~matters ~~immediately~~when ~~vested~~they ~~upon~~become probable and the ~~grant~~amount ~~date~~can be reasonably estimated. On ~~September~~Legal 6,costs ~~2022/the~~incurred ~~grant~~in ~~date,~~connection ~~the~~with loss contingencies are expensed as incurred. The Company’s ~~share~~management does not believe the liability from the disposition of such claims ~~price~~and ~~closed~~litigation atindividually ~~$2.27 per~~or ~~share,~~in ~~hence~~the ~~total~~aggregate ~~share-based~~would ~~compensation~~have isa ~~equal~~material toadverse ~~$22~~impact on the Company’s consolidated financial position,~~700~~ results of operations and cash flows.

~~Total~~As ~~share-based~~an industry ~~compensation~~practice, the Company provides guarantees to PRC banks with respect to loans procured by the purchasers of the Company’s real estate properties for the total mortgage loan amount until the buyer obtains the “Certificate of Ownership” of the properties from the government, which generally takes six to twelve months. Because the banks provide loan proceeds without getting the “Certificate of Ownership” as loan collateral during the six to twelve months period, the mortgage banks require the Company to maintain, as restricted cash of at least 5% of the mortgage proceeds as security for the Company’s obligations under such guarantees. If a purchaser defaults on its payment obligations, the mortgage bank may deduct the delinquent mortgage payment from the security deposit and require the Company to pay the excess amount if the delinquent mortgage payments exceed the security deposit. If the delinquent mortgage payments exceed the security deposit, the banks may require us to pay the excess amount. If multiple purchasers’ default on their payment obligations at around the same time, we will be required to make significant payments to the banks to satisfy our guarantee obligations. If we are unable to resell the properties underlying defaulted mortgages on a timely basis or at prices higher than the amounts of our guarantees and related expenses, we will suffer financial losses. The Company has the required reserves in its restricted cash account to ~~$19~~cover any potential mortgage defaults as required by the mortgage lenders. Since inception through the release of this report,~~370~~ the Company has not experienced any delinquent mortgage loans and has not experienced any losses related to these guarantees. As of December 31,~~400~~ 2023 and 2022, our outstanding guarantees in respect of our customers’ mortgage loans amounted to approximately $24.9 million and $24.2 million, respectively. As of December 31, 2023 and 2022, the amount of restricted cash reserved for ~~three~~these ~~individuals~~guarantees ~~plus~~was approximately $2.7 million and $2.6 million, respectively, and the ~~independent~~Company ~~director~~believes that such reserves are sufficient.

OnThe ~~January~~Company ~~27,~~has ~~2023,~~been ~~the~~named ~~company~~as ~~granted 40,000 shares~~a ofdefendant ~~GGE’s~~in ~~restricted~~a ~~stock~~number toof ~~FTGC~~lawsuits orarising in its ~~designee~~ordinary ~~for~~course ~~the~~of ~~termination~~business. As of the date of this quarterly report, ~~Exclusion~~the ~~Placement~~Company ~~Agent~~continues ~~Agreement~~to use all commercially reasonable efforts to defend itself in these proceedings and is undergoing on-going discussion with regulatory authorities.

~~NOTE 11.~~There were ~~COMMITMENTS~~additional ~~AND~~4 ~~CONTINGENCIES~~new cases in the first quarter of fiscal 2024 totaled in RMB0.19 million ($0.03 million).

From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs related to these matters when they become probable and as a result the amount of loss can be reasonably estimated. 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.

There are 135 cases against the Company, the total claims of year to day amounts to $10.5 million according to the judgement outcome from local courts as of July 15, 2023, of which approximately $9.4 million was accrued for the month ended December 31, 2022. The difference of $1.1 million was accrued for the nine months ended June 30, 2023. The Company disputes the allegations in the lawsuit and intends to vigorously defend itself in the action.

As an industry practice, the Company provides guarantees to PRC banks with respect to loans procured by the purchasers of the Company’s real estate properties for the total mortgage loan amount until the buyer obtains the “Certificate of Ownership” of the properties from the government, which generally takes six to twelve months. Because the banks provide loan proceeds without getting the “Certificate of Ownership” as loan collateral during the six-to-twelve-month period, the mortgage banks require the Company to maintain as restricted cash, at least 5% of the mortgage proceeds as security for the Company’s obligations under such guarantees. If a purchaser defaults on its payment obligations, the mortgage bank may deduct the delinquent mortgage payment from the security deposit and require the Company to pay the excess amount if the delinquent mortgage payments exceed the security deposit. If the delinquent mortgage payments exceed the security deposit, the banks may require us to pay the excess amount. If multiple purchasers’ default on their payment obligations at around the same time, we will be required to make significant payments to the banks to satisfy our guarantee obligations. If we are unable to resell the properties underlying defaulted mortgages on a timely basis or at prices higher than the amounts of our guarantees and related expenses, we will suffer financial losses. The Company has the required reserves in its restricted cash account to cover any potential mortgage defaults as required by the mortgage lenders. Since inception through the release of this report, the Company has not experienced any delinquent mortgage loans and has not experienced any losses related to these guarantees. As of June 30, 2023 and September 30, 2022, our outstanding guarantees in respect of our customers’ mortgage loans amounted to approximately $25.7 million. As of June 30, 2023 and September 30, 2022, the amount of restricted cash reserved for these guarantees was approximately $3.0 million and the Company believes that such reserves are sufficient.

NOTE 12. SUBSEQUENT EVENTS

In accordance with ASC Topic 855, “Subsequent Events” which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred up to the date the unaudited financial statements were available to issue. Based upon this review, the Company has not identified any subsequent events that would have required adjustment or disclosure in the condensed financial statements.

NOTE 13. GOING CONCERN

As of June 30, 2023, the Company had cash balance of $0.1 million. In addition to the cash balance, the Company has restricted cash of $2.8 million, contract assets of $7.1 million, security deposits of $1.7 million and due from local governments for real estate property development completed of $41.6 million. The balances of these assets are expected to be repaid on maturity dates and will also be used for working capital for daily operation in the twelve months to come.

On November 14, 2022, the company announced to transform itself into the new energy business. In March and April 2023, the Company reached purchase agreements with AGR Enterprises Inc. delivered battery recycle products. On April 16, 2023, the Company entered a sales contract with ACE Recycling Pte Ltd. sold lead ingots and blocks. The Company believes it will generate more revenue from its new business.

On May 1, 2023, a loan agreement of $0.4 million was entered into between Goldenmountain Solution Inc and Green Giant Energy.

The management will enable to meet the operating expenses obligation for the next twelve months from self-generated positive cashflow and external fund raising by private equity financing or direct public offering. The registration statement on Form S-3 was declared effective on May 2, 2023 by SEC, and the Company is ready to raise fund through direct public offering to support cash shortfall, if any.

Going forward there are no conditions or events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern for one year after the financial statement issuance date.

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9. SUBSEQUENT EVENTS

On January 16, 2024, the Company received a notice from Nasdaq stating that the Staff has determined, unless the Company timely requests an appeal of the Staff’s determination, before Nasdaq’s Hearing Panel (the “Panel”), by January 23, 2024, to delist the Company’s common stock from the Nasdaq Capital Market because the Company is not in compliance with the $1.00 minimum bid price requirement for continued listing set forth in the Nasdaq Listing Rule 5550(a)(2) and had a closing bid price of $0.10 or less for at least ten consecutive trading days from December 22, 2023 to January 12, 2024 set forth in Nasdaq Listing Rule 5810(c)(3)(A)(iii).

The notice has no immediate impact on the Company’s listing and trading, as the Company has requested a panel hearing and it will be held on April 4, 2024. The Company will continue to be listed after meeting the minimum bid price requirement prior to the hearing date.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion and analysis of financial condition and results of operations relates to the operations and financial condition reported in the unaudited condensed consolidated financial statements of Green Giant Inc. (formerly ~~known as~~ “China HGS Real Estate, Inc.”). ~~For~~ for the three ~~and nine~~ months ended ~~June 30~~December 31, ~~2023~~2022 and ~~2022~~ 2021 and should be read in conjunction with such financial statements and related notes included in this report.

As used in this report, the terms “Company,” “we,” “our,” “us” and “GGGGE” refer to Green Giant Inc. and its subsidiaries.

Preliminary Note Regarding Forward-Looking Statements.

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

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

●

our ability to sustain our project development

●

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

●

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

●

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

●

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

Business Overview

The Company currently operates in two segments, the real estate development business and green energy business. The Company engages in real estate development through the VIE, Guangsha, in mainland China, and is transitioning itself from its real estate development business to a new energy corporation ~~and has appointed a CEO in its Delaware subsidiary to lead and operate the green energy business~~.

~~The~~Currently, ~~Company~~we ~~engages~~are inoperating ~~real~~in ~~estate~~Hanzhong, ~~development~~a prefecture-level city in Shaanxi Province, ~~primarily~~and Yang County, a county in ~~the~~Hanzhong. ~~construction~~Our management has been focused on expanding our business in Tier 3 and ~~sale~~Tier 4 cities and counties in China that we strategically select based on population and urbanization growth rates, general economic conditions and growth rates, income and purchasing power of resident consumers, anticipated demand for private residential ~~apartments~~properties, ~~car~~availability ~~parks~~of future land supply and ~~commercial~~land ~~properties~~prices, inand ~~mainland China~~governmental ~~through~~urban ~~Guangsha~~planning and development policies. Initially, ~~Guangsha~~these ~~was~~Tier ~~founded~~3 byand ~~Mr.~~Tier ~~Xiaojun~~4 ~~Zhu,~~cities and ~~commenced~~counties ~~operations~~will inbe ~~1995~~located in ~~Hanzhong~~the Shaanxi province, China. We utilize a ~~prefecture-level~~standardized ~~city~~and scalable model that emphasizes rapid asset turnover, efficient capital management and strict cost control. We plan to expand into strategically selected Tier 3 and Tier 4 cities and counties with real estate development potential in Shaanxi Province, and expect to benefit from rising demand for residential housing as a result of increasing income levels of consumers and growing populations in these cities and counties due to urbanization.

~~Currently,~~In weSeptember ~~conduct~~2020, the ~~our~~Company ~~real~~started ~~estate~~land ~~development~~leveling ~~business~~and ~~through~~construction process for the ~~VIE,~~Oriental Garden Phase II and Liangzhou Mansion real estate properties in the ~~Hanzhong,~~Liangzhou ~~Shaanxi~~Road ~~Province~~related projects. ~~Since~~The Company started the ~~initiation~~construction of ~~our~~the ~~real~~Liangzhou ~~estate~~Road ~~development~~related projects, which consist of residential ~~business~~buildings, weoffice ~~have~~buildings ~~been~~and ~~focused~~a oncommercial ~~expanding~~plaza, ~~our~~after ~~business~~the inapproval ~~certain~~by ~~Tier~~the 3local ~~and~~government ~~Tier~~of 4the ~~cities~~road. ~~and~~Upon ~~counties~~completion, inthe ~~China~~Liangzhou Road related projects will become a new city center of Hanzhong city.

~~For~~Since November 2022, the ~~nine~~Company ~~months~~started ~~ended June~~to ~~30,~~explore ~~2023,~~the ~~our~~possibility ~~sales~~of ~~and~~entering ~~gross~~into ~~profit~~the ~~were~~green $1energy sector in the U.1S. ~~million~~As the usage of electric vehicles and ~~$0.2million,~~other ~~respectively~~battery-powered technologies surges, ~~representing~~the andemand ~~approximate~~for 86batteries correspondingly rises.9% This growth cycle presents both a challenge and 95an opportunity when these batteries reach their end-of-life stage.~~7% decrease~~ Our solution to this challenge lies in ~~sales~~our ~~and~~innovative ~~gross~~battery ~~profit~~recycling process. asWe ~~compared~~have tobeen ~~nine~~searching ~~months~~for ~~ended~~a ~~June~~warehouse 30for our battery recycling production. During the recycling process, ~~2022~~valuable metal such as lithium, ~~respectively~~nickel, and cobalt are extracted from the used batteries. ~~The~~These ~~decrease~~metals inare ~~sales~~then converted into lead ingots and ~~gross~~blocks. ~~profit~~The ~~was~~global ~~mainly~~market ~~the~~for ~~result~~these ofmetals ~~less~~is ~~gross~~dynamic, ~~floor~~with ~~area~~prices ~~(“GFA”)~~fluctuating ~~sold~~in ~~during~~response to the ~~first~~constantly ~~three~~changing ~~quarters~~supply ofand ~~fiscal 2023~~demand.

21Furthermore, the Company is planning to enter the medical industry through selling medical devices like vitro short-wave radiometer, high-pressure syringe and related consumables. In the future, it also plans to sell high-end medical equipment including gamma knife and apparatus for kidney.

For the nine months ended June 30, 2023, the average selling price (“ASP”) for our real estate projects located in Yang County was approximately $552 per square meter, increased from the ASP of $522 per square meter for the nine months ended June 30, 2022, which was mainly attributable to the following:

1. Central and local governments relax control measures over real estate development sector in an attempt to stimulate housing market, e.g. lift up quote for home buyers, lower interest rate on mortgage loans, special policies form low income earners etc.

2. The Company are selling completed house of Yang County project, not blue-prints and so in high demand; it also attracts home buyers who are willing to pay for a higher price; Yang County project targets high-end market, which has better location than residential complex.

3. Yang County project targets high-end market, which has better location than residential complex.

Market Outlook

On November 11, 2022, the People’s Bank of China and the China Banking and Insurance Regulatory Commission issued “Yin Fa [2022] No. 254 “Notice on Supporting the Stable and Healthy Development of the Real Estate Market” to support the stable and healthy development of the real estate market. On November 14, 2022, China Banking and Insurance Regulatory Commission, the Ministry of Housing and Urban-Rural Development and the Central Bank issued the “Notice on the Relevant Work of Commercial Banks Issuing letters of Guarantee to Replace the Pre-sale Supervision Funds” (the “Pre-sale Supervision Funds Notice”). Commercial banks’ house related credit business is expected to expand. The “Financial Support for Real Estate Notice” issued sixteen measures to generate power at both supply and demand ends, it further clarifies the support policies for housing credit. Many policies have been implemented at the document system level for the first time, or will push banks to increase their support for the real estate market. It is expected to positively affect the conservative attitude of commercial banks to intervene in the development of loan market and support the increasing demand from home buyers for mortgage loans.

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

According to China Galaxy Securities Research Report dated October 25, 2023, the sixth session of China’s 14th National People’s Congress Standing Committee voted and passed resolutions on incremental issuance of treasury bonds by the state council and adjustment scheme of central government’s 2023 budget. The central finance will additionally issue 1 trillion treasury bonds of 2023 in the fourth quarter 2023, and all of the treasury bonds issued will be arranged to local governments through transfer payments. This will generate impacts to economy in following aspects: to assist reconstruction of disaster areas and economic resurgence, and will directly drive investment growth in local infrastructure, the directions concentrated on drainage and flood control projects and farmland construction related to water conservancy engineering.

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

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

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

~~Critical~~In ~~Accounting~~December ~~Policies~~2019, a novel strain of coronavirus (COVID-19) surfaced. COVID-19 has spread rapidly to many parts of the PRC and ~~Estimates~~other parts of the world in the first quarter of 2020, which has caused significant volatility in the PRC and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the PRC and international economies. For the year three months ended December 31, 2023 and 2022, the COVID-19 pandemic did not have did have a material net impact on the Company’s financial position and operating results, especially Yang County which is operation was shut down. On and off from August 2022 onwards The extent of the impact on the Company’s future financial results will be dependent on future developments such as the length and severity of the crisis, the potential resurgence of the pandemic, future government actions in response to the pandemic and the overall impact of the COVID-19 pandemic on the local economy and real estate markets, among many other factors, all of which remain highly uncertain and unpredictable. Given this uncertainty, the Company is currently unable to quantify the future impact of the COVID-19 pandemic on its future operations, financial condition, liquidity and results of operations if the current situation continues.

~~The~~CRITICAL ~~discussion~~ACCOUNTING ~~and~~POLICIES ~~analysis of~~AND our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect our reported assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an on-going basis and base them on historical experience and various other assumptions that are believed to be reasonable under the circumstances as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates because of different and changing assumptions or conditions.ESTIMATES

WeThe ~~believe~~discussion ~~the~~and ~~following~~analysis of our financial condition ~~critical~~and ~~accounting~~results ~~policies~~of ~~affect~~operations are based upon our ~~significant~~condensed ~~estimates~~consolidated ~~and~~financial ~~judgments~~statements, ~~used~~which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of ~~our~~these condensed consolidated financial statements. ~~These~~requires us ~~policies~~to ~~should~~make beestimates ~~read~~and injudgments ~~conjunction~~that ~~with~~affect ~~Note 2~~our reported assets, liabilities, revenues and expenses, and related disclosure of ~~the~~contingent assets ~~notes~~and liabilities. We evaluate our estimates on an on-going basis and base them on historical experience and various other assumptions that are believed to be reasonable under the ~~unaudited~~circumstances ~~condensed~~as ~~consolidated~~the ~~financial~~basis for making judgments about the carrying values of assets and liabilities ~~statements~~that are not readily apparent from other sources. Actual results may differ from these estimates because of different and changing assumptions or conditions.

22We believe the following critical accounting policies affect our significant estimates and judgments used in the preparation of our condensed consolidated financial statements. These policies should be read in conjunction with Note 3 of the notes to the unaudited condensed consolidated financial statements.

Revenue recognition

●

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

●

identification of the performance obligations in the contract;

●

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

●

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

●

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

The Company currently operates in two segments, the real estate development business and green energy business. For the three months ended June 30, 2023, revenues were generated from lead ingots or blocks sales and completed condominium real estate projects.24

~~The Company controls of the lead ingots or blocks. Revenues are recognized in gross amount at the point of time when they are delivered to the customers.~~ Most of the Company’s revenue is derived from real estate sales of condominiums and commercial properties in the PRC. The majority of the Company’s contracts contain a single performance obligation involving significant real estate development activities that are performed together to deliver a real estate property to its customers. Revenues arising from real estate sales are recognized when or as the control of the asset is transferred to the customer. The control of the asset may transfer over time or at a point in time. For the sales of individual condominium units in a real estate development project, the Company has an enforceable right to payment for performance completed to date, revenue is recognized over time by measuring the progress towards complete satisfaction of that performance obligation (“percentage completion method”). Otherwise, revenue is recognized at a point in time when the customer obtains control of the asset. For the three ~~and nine~~ months ended ~~June~~December 3031, 2023 and 2022, the Company did not have any construction in progress ~~recognized~~meet ~~under~~ the ~~percentage~~revenue ofrecognition under percentage completion method.

23Disaggregation of Revenues

~~Disaggregation~~Disaggregated ofrevenues ~~Revenue~~was as follows:

Disaggregated revenues are as follows:

	For the three months ended December 31,
	2023		2022
	(Unaudited)		(Unaudited)

Revenue recognized for completed condominium real estate projects, net of sales taxes	$	183,469	$	162,706
Revenue recognized for condominium real estate projects under development, net of sales taxes		—		—
Total revenue, net of sales taxes	$	183,469	$	162,706

	For the three months ended June 30,
	2023		2022
Revenue recognized for completed condominium real estate projects, net of sales tax	$	206,096	$	1,164,954
Revenue recognized for condominium real estate projects under development, net of sales tax		—		—
Revenue from Battery Recycling		224,226		—
Total revenue, net of sales tax	$	430,322	$	1,164,954

	For the nine months ended June 30,
	2023		2022
Revenue recognized for completed condominium real estate projects, net of sales tax	$	858,679	$	8,286,940
Revenue recognized for condominium real estate projects under development, net of sales tax		—		—
Revenue from Battery Recycling		224,226
Total revenue, net of sales tax	$	1,082,905	$	8,286,940

Contract balances

The Company immediately expenses sales commissions (included under selling expenses) because sales commission ~~are~~is not expected to be recovered.

2425

Use of estimates

Real estate property development completed and under development

Cost of amenities transferred to buyers is allocated to specific units as a component of total construction cost. The amenity cost includes landscaping, road paving, etc. Once the projects are completed, the amenities are under control of the property management companies. Real estate property development completed and under development are subject to valuation adjustments when the carrying amount exceeds fair value. An impairment loss is recognized only if the carrying amount of the assets is not recoverable and exceeds its fair value. The carrying amount is not recoverable if it exceeds the sum of the undiscounted cash flows expected to be generated by the assets. The Company reviews all of its real estate projects for future losses and impairment by comparing the estimated future undiscounted cash flows for each project to the carrying value of such project. For the three and nine months ended June 30, 2023, the Company did recognize $89.9 million impairment loss for its real estate properties.

25Real estate property development completed and under development are subject to valuation adjustments when the carrying amount exceeds fair value. An impairment loss is recognized only if the carrying amount of the asset is not recoverable and exceeds its fair value. The carrying amount is not recoverable if it exceeds the sum of the undiscounted cash flows expected to be generated by the asset. The Company reviews all of its real estate projects for future losses and impairment by comparing the estimated future undiscounted cash flows for each project to the carrying value of such project. For the three months ended December 31, 2023 and 2022, the Company did not recognize any impairment loss for its real estate properties.

RESULTS OF OPERATIONS

Three Months Ended ~~June~~ 30December 31, 2023 compared to Three Months Ended ~~June~~December 3031, 2022

Revenues

~~We derive our revenues from two operating segments, (i) sales of lead ingots or blocks, and (ii) real estate.~~ The following ~~table~~is ~~sets forth our revenues by segment and as~~ a ~~percentage~~breakdown of ~~total revenues for the periods indicated~~revenue:

	Three Months Ended June 30,
	For the three months ended December 31,
	2023		2022		~~2022~~				~~Variance~~
	Revenue		%		Revenue		%		Amount			%
	(Unaudited)		(Unaudited)
Oriental Garden		—		—		33,650		2.9		(33,650	)		(100.0	)
Revenue recognized for completed condominium real estate projects, net of sales taxes	$	183,469	$	162,706
Yangzhou Palace		206,096		47.9		1,131,304		97.1		(925,208	)		(81.8	)
Revenue recognized for condominium real estate projects under development, net of sales taxes		—		—
Battery Recycling		224,226		52.1		—		—		224,226			100.0
Total revenue, net of sales taxes	$	183,469	$	162,706
	$	430,322		100.0	$	1,164,954		100.0	$	(734,632	)		(63.1	)

Our revenues decreased by 63.1% from $1.2 million for the three months ended June 30, 2022 to $0.4 million for the three months ended June 30, 2023, primarily due to the decline in the sales of real estate projects, which contributed to 47.9% of our total revenues. The total GFA sold for the remaining real estate projects during the three months ended June 30, 2023 and 2022 was 293 square meters and 1,666 square meters, respectively.

Cost of Sales

The following table sets forth a breakdown of our cost of sales:

	Three Months Ended June 30,
	2023				2022				Variance
	Revenue		%		Revenue		%		Amount			%
Land use rights	$	16,776		4.3	$	129,327		15.5	$	(112,551	)		(87.0	)
Construction cost		148,759		38.3		704,272		84.5		(555,513	)		(78.9	)
Battery Recycling		223,386		57.4		—		—		223,386			100.0
	$	388,921		100.0	$	833,599		100.0	$	(444,678	)		(53.3	)

Our cost of revenues decreased by 53.3% from $0.8 million for the three months June 30, 2022 to $0.4 million for the three months ended June 30, 2023 because cost of revenues for real estate segment decreased by 80.1% from $0.8 million for the three months ended June 30, 2022 to $0.2 million for the three months ended June 30, 2023. The decrease was in line with the reduction in the sales of the condominiums and commercial properties.

~~Land~~Revenue ~~use~~recognized ~~rights cost: The cost of land use rights includes the land premium we pay to acquire land use rights~~ for ~~our~~completed ~~property~~condominium ~~development sites, plus taxes. Our~~real ~~land~~estate ~~use rights cost varies for different~~ projects according to the size and location of the site and the minimum land premium set for the site, all of which are influenced by government policies, as well as prevailing market conditions. Costs for land use rights for the three months ended June 30, 2023 were approximately $16.8k, as compared to approximately $129.3k for the three months ended June 30, 2022, representing a decrease of approximately $112.5k from the same quarter last year. The decrease was consistent with the fact that total GFA sold in this quarter significantly decreased from the same period of last year.

~~Construction~~The ~~cost: We outsource~~following ~~the~~table ~~construction~~summarizes ~~of all of~~ our ~~projects~~revenue ~~to third party contractors, whom we select through a competitive tender process. Our~~generated ~~construction~~by ~~contracts~~different provide a fixed payment which covers substantially all labor, materials and equipment costs, subject to adjustments for some types of excess, such as design changes during construction or changes in government-suggested steel prices. Our construction costs consist primarily of the payments to our third-party contractors, which are paid over the construction period based on specified milestones. In addition, we purchase and supply a limited range of fittings and equipment, including elevators, window frames and door frames. Our construction costs for the three months ended June 30, 2023 were approximately $0.1 million as compared to approximately $0.7 million for the same period of last year, representing a decrease of approximately $0.6 million. The decrease in construction cost was due to less real estate projects ~~sold during the quarter ended June 30, 2023.~~:

Gross Profit

	For Three Months Ended December 31,
	2023						2022						Variance
	Revenue			%			Revenue			%			Amount		%
	(Unaudited)						(Unaudited)

Yangzhou Palace	$	185,111			100.0	%	$	164,712			100.0	%	$	20,399		12.4	%

Gross Real Estate Sales		185,111			100.0	%		164,712			100.0	%		20,399		12.4	%
Less: Sales Tax		(1,642	)					(2,006	)					364		(18.1	)%
Revenue, net of sales tax	$	183,469					$	162,706					$	20,763		12.8	%

Our revenues are derived from the sale of residential buildings, commercial store-fronts and parking spaces in projects that we have developed. Comparing to the same period of last year, revenues after sales tax increased by 12.8% from $162,706 to $183,469 for the three months ended December 31, 2023. The ~~following~~total ~~table~~GFA ~~sets~~sold during three months ended December 31, 2023 was 345 square meters, increased 3 square meters from the 342 ~~forth~~square ameters ~~breakdown~~completed and sold in the same period of ~~our~~last ~~gross~~year. ~~profits:~~The sales tax for the three months ended December 31, 2023 was $1,641, decreased by 18.1% from same period of last year mainly attributable to the decline of the advance payments from the customers (sales tax was accrued as 1% of the advance payments).

	Three Months Ended June 30,
	2023				2022
	Gross Profit		Gross Margin		Gross Profit		Gross Margin
Nanyuan II Project		—		—		—		—
Oriental Garden		—		—		4,201		12.5
Yangzhou Palace		40,561		19.8		327,154		28.9
Battery Recycling		840		0.4		—
	$	41,401		9.6	$	331,355		28.4

Our gross profit decreased by 87.5% from $0.3 million for the three months ended June 30, 2022 to $0.04 million for the three months ended June 30, 2023 which was mainly due to the economic downturn caused by the epidemic control in China.

Operating Expenses

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

	Three Months Ended June 30,
	2023			2022
Operating expenses:
Selling and distribution expenses	$	37,291		$	40,261
General and administrative expenses		804,743			1,698,534
Impairment of Real estate property under development		89,914,582			—
Total operating expenses	$	90,756,616		$	1,738,795
Total Revenue	$	430,322		$	1,164,954
Total operating expenses as a % of total revenues		21,090.4	%		149.3	%

Total operating expenses increased by 5119.51% from $1.7 million for the three months ended June 30, 2022 to $90.8 million for the three months ended June 30, 2023 which was mainly attributable to the impairment loss of $89.9 million with respect to real estate property development completed.

Income Taxes

PRC Taxes

The Company’s PRC subsidiary and VIE are governed by the Income Tax Law of the People’s Republic of China concerning the privately run enterprises, which are generally subject to income tax on income reported in the statutory financial statements after appropriate tax adjustments. The Company’s CIT rate is 25% on taxable income. Although the possibility exists for reinterpretation of the application of the tax regulations by higher tax authorities in the PRC, potentially overturning the decision made by the local tax authority, the Company has not experienced any reevaluation of the income taxes for prior years. The PRC tax rules are different from the local tax rules and the Company is required to comply with local tax rules. The difference between the two tax rules will not be a liability of the Company. There will be no further tax payments for the difference.

Net Income (Loss)

As a result of the foregoing, we reported net loss of approximately $90.7 million for the three months ended June 30, 2023, as compared to net loss of approximately $1.4 million for the three months ended June 30, 2022.

Nine months ended June 30, 2023 compared to Nine months ended June 30, 2022

Revenues

The following table sets forth our revenues by segment and as a percentage of total revenues for the periods indicated:

	Nine Months Ended June 30,
	2023				2022				Variance
	Revenue		%		Revenue		%		Amount			%
Mingzhu Garden (Mingzhu Nanyuan & Mingzhu Beiyuan) Phase I and Phase II	$	8,699		0.8	$	974,309		11.8	$	(965,610	)		(99.1	)
Oriental Garden		—		—		790,593		9.5		(790,593	)		(100.0	)
Yangzhou Palace		849,980		78.5		6,522,038		78.7		(5,672,058	)		(87.0	)
Battery Recycling		224,226		20.7		—		—		224,226
	$	1,082,905		100.0	$	8,286,940		100.0	$	(7,204,035	)		(86.9	)

For the nine months ended June 30, 2023 and 2022, we generated revenues of $1.1 million and $8.3 million, respectively, derived from two operating segments, (i) sales of lead ingots or blocks, and (ii) real estate.

Our revenues decreased by 86.9% from $8.3 million for the nine months ended June 30, 2022 to $1.1 million for the nine months ended June 30, 2023, primarily due to the decline in the sales of real estate projects, which contributed to 79.3% of our total revenues. The total GFA sold for the remaining real estate projects during the nine months ended June 30, 2023 and 2022 was 1,338 and 13,449 square meters, respectively.

Cost of Sales

The following table sets forth a breakdown of our cost of sales:

	Nine Months Ended June 30,
	For Three Months Ended December 31,
	2023					2022					Variance
	Revenue		%			Revenue		%			Amount			%
	Cost		%			Cost		%			Amount			%
Land use rights	$	70,428		7.6		$	486,590		10.6		$	(416,162	)		(85.5	)
	(Unaudited)					(Unaudited)
Construction cost		628,769		68.2			4,107,668		89.4			(3,478,899	)		(84.7	)
Land use rights	$	10,989		10.1	%	$	5,773		4.4	%	$	5,216			90.4	%
Battery Recycling		223,386		24.2			—		—			223,386			100.0
Construction cost		97,693		89.9	%		124,519		95.6	%		(26,826	)		(21.5	)%
	$	922,583		100.0		$	4,594,258		100.0		$	(3,671,675	)		(79.9	)
Total cost	$	108,682		100.0	%	$	130,292		100.0	%	$	(21,610	)		(16.6	)%

Our cost of ~~revenues~~sales ~~decreased~~consists byprimarily ~~79.9%~~of ~~from~~costs ~~$4.6~~associated ~~million~~with ~~for~~land ~~the~~use ~~nine~~rights ~~months~~and ~~June~~construction ~~30,~~costs. ~~2022~~Cost toof ~~$0.9~~sales ~~million~~are ~~for~~capitalized ~~the~~and ~~nine~~allocated ~~months~~to ~~ended~~development ~~June~~projects ~~30,~~using ~~2023~~a ~~because~~specific identification ~~cost~~method. ofCosts ~~revenues~~are ~~for~~allocated ~~real estate~~to ~~segment~~specific ~~decreased~~units bywithin ~~84.8%~~a ~~from~~project ~~$4.5~~based ~~million~~on ~~for~~ the ~~nine~~ratio ~~months~~of ~~ended~~the ~~June~~sales ~~30,~~area ~~2022~~of units to ~~$0.7 million for~~ the ~~nine months ended~~estimated ~~June~~total ~~30,~~sales ~~2023.~~area ~~The~~of ~~decrease~~the ~~was~~project inor ~~line~~phase ~~with~~of the ~~reduction~~project intimes the ~~sales~~total cost of the ~~condominiums~~project ~~and~~or ~~commercial~~phase ~~properties~~of the project.

29Cost of sales was $108,682 for the three months ended December 31, 2023, a decrease of $21,610, or approximately 16.6%, as compared to $130,292 for the same period of last year as a result of the decrease in construction costs due to the economic downturn.

Land use rights cost: The cost of land use rights includes the land premium we pay to acquire land use rights for our property development sites, plus taxes. Our land use rights cost varies for different projects according to the size and location of the site and the minimum land premium set for the site, all of which are influenced by government policies, as well as prevailing market conditions. Costs for land use rights for the ~~nine~~three months ended ~~June 30~~December 31, 2023 and 2022 were approximately $~~70.4k~~10,989 asmillion ~~compared~~and ~~to approximately~~ $~~486.6k for the nine months ended June 30~~5, ~~2022,~~773 ~~representing a decrease of approximately $416.2k from the same period of last year. The decrease was consistent with the fact that total GFA sold in the first three quarters ended June 30~~million, ~~2023 was declined significantly compared to the same period last year~~respectively.

Construction cost: We outsource the construction of all of our projects to third party contractors, whom we select through a competitive tender process. Our construction contracts provide a fixed payment which covers substantially all labor, materials and equipment costs, subject to adjustments for some types of excess, such as design changes during construction or changes in government-suggested steel prices. Our construction costs consist primarily of the payments to our third-party contractors, which are paid over the construction period based on specified milestones. In addition, we purchase and supply a limited range of fittings and equipment, including elevators, window frames and door frames. Our construction costs for the nine months ended June 30, 2023 were approximately $0.6 million as compared to approximately $4.1 million for the same period of last year, representing a decrease of approximately $3.5 million. The decrease in construction cost was due to less real estate property units sold for the nine months ended June 30, 2023.27

Construction cost: We outsource the construction of all of our projects to third party contractors, whom we select through a competitive tender process. Our construction contracts provide a fixed payment which covers substantially all labor, materials and equipment costs, subject to adjustments for some types of excess, such as design changes during construction or changes in government-suggested steel prices. Our construction costs consist primarily of the payments to our third-party contractors, which are paid over the construction period based on specified milestones. In addition, we purchase and supply a limited range of fittings and equipment, including elevators, window frames and door frames. Our construction costs for the three months ending December 31, 2023 were approximately $97,692 as compared to approximately $124,519 for the three months ended December 31, 2022, representing a decrease of approximately $26,827. The decrease in construction cost was primarily due to the economic downturn and sluggish real estate market.

Gross Profit

~~The~~Gross profit ~~following~~and ~~table~~gross margin were $74,787 and 40.4 % respectively for the three months ended December 31, 2023 as compared to $32,414 ~~sets~~and ~~forth~~19.7% arespectively ~~breakdown~~in the same period of ~~our~~last ~~gross~~year ~~profits:~~as aforementioned.

	Nine Months Ended June 30,
	For three months ended December 31,
	2023						2022
	Gross Profit			Gross Margin			Gross Profit			Gross Margin
Mingzhu Garden (Mingzhu Nanyuan & Mingzhu Beiyuan) Phase I and Phase II	$	1,225			14.1		$	393,979			40.4
	(Unaudited)						(Unaudited)
Oriental Garden		—			—			603,838			76.4
Yangzhou Palace	$	76,429			41.3	%	$	34,420			20.9	%
Yangzhou Palace		158,257			18.6			2,694,865			41.3
Sales Tax		(1,642	)					(2,006	)
Battery Recycling		840			0.4			—			—
Total Gross Profit	$	74,787			40.4	%	$	32,414			19.7	%
	$	160,322			14.8		$	3,692,682			44.6
Total Real Estate Sales before Sales Tax	$	185,111					$	164,712

Our gross profit decreased by 95.6% from $3.7 million for the nine months ended June 30, 2022 to $0.2 million for the nine months ended June 30, 2023 which was mainly due to the economic downturn caused by the epidemic control in China and aforementioned.

Operating Expenses

The following table ~~presents~~sets forth the breakdown of our operating expenses ~~by nature~~ for the ~~periods~~ ~~indicated~~three months ended December 31, 2023 and 2022, respectively:

	Nine Months Ended June 30,
	For three months ended
	December 31,
	2023			2022
Operating expenses:
	(Unaudited)			(Unaudited)
Selling and distribution expenses	$	140,152		$	289,919
Selling expenses	$	6,648		$	40,430
General and administrative expenses		2,~~555~~979,~~639~~812			2566,~~980,887~~817
Impairment of Real estate property under development		89,914,582			2,980,887
Total operating expenses	$	2,986,460		$	607,247
Total operating expenses	$	92,610,373		$	3,270,806
Percentage of Real Estate Sales before Sales Tax		1613.3	%		368.7	%
Total Revenue	$	1,082,905		$	8,286,940
Total operating expenses as a % of total revenues		8,552.0	%		39.5	%

Total operating expenses increased by ~~2,731~~391.48% ~~from~~ to $~~3.3 million for the nine months ended June 30~~2,986,460 ~~2022 to $92.6 million~~ for the ~~nine~~three months ended ~~June~~December 3031, 2023 ~~which~~ ~~was~~from ~~mainly attributable to the impairment loss of~~ $~~89.9~~607,247 ~~million~~for ~~with respect to real estate property development completed recorded in~~ the three months ended ~~June~~December 3031, ~~2023.~~2022

Selling expenses

Our selling expenses decreased by $33,782, or 83.6%, from $40,430 for the three months ended December 31, 2022 to $6,648 for the three months ended December 31, 2023. As the Company did not have new premises to develop, the expenditures for surveying and mapping were reduced accordingly.

General and administrative expenses

Our general and administrative expenses increased by $2,412,995, or 425.7%, from $566,817 for the three months ended December 31, 2022 to $2,979,812 for the three months ended December 31, 2023. The increase was mainly attributable to the share-based compensation to the Consultants.

Income Taxes

PRC Taxes

~~Our~~The Company’s isPRC subsidiary and VIE are governed by the ~~Enterprise~~ Income Tax Law of the People’s Republic of China concerning ~~private-~~the privately run enterprises, which are generally subject to income tax ~~at a statutory rate of 25%~~ on income as reported in the statutory financial statements after appropriate tax adjustments. ~~For~~The ~~the~~Company’s ~~nine~~CIT ~~months ended June 30, 2023 and 2022, the Company~~rate is ~~subject to income tax rate of~~ 25% on taxable income. Although the possibility exists for reinterpretation of the application of the tax regulations by higher tax authorities in the PRC, potentially overturning the decision made by the local tax authority, the Company has not experienced any reevaluation of the income taxes for prior years. The PRC tax rules are different from the local tax rules and the Company is required to comply with local tax rules. The difference between the two tax rules will not be a liability of the Company. There will be no further tax payments for the difference.

Net Income ~~(Loss)~~

AsWe ~~a result of the foregoing, we~~ reported net loss of approximately $922.69 million for the ~~nine~~three months ended ~~June~~December 3031, 2023, as compared to net loss of approximately $0.36 million for the ~~nine~~three months ended ~~June 30~~December 31, 2022. The increase in net loss was primarily due to more operating expenses as discussed above.

Other Comprehensive Income

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

Translation adjustments resulting from this process amounted to negative $0.2 million and $3.0 million for the three months ended December 31, 2023 and 2022, respectively. The balance sheet amounts with the exception of equity at December 31, 2023 were translated at 7.0999 RMB to 1.00 USD as compared to 7.2960 RMB to 1.00 USD at September 30, 2023. The equity accounts were stated at their historical rate. The average translation rates applied to the income statements accounts for the periods ended December 31, 2023 and 2022 were 7.2247 RMB and 7.1120 RMB, respectively.

Liquidity and Capital Resources

Our principal need for liquidity and capital resources is to maintain working capital sufficient to support our operations and to make capital expenditures to finance the growth of our business. ~~Historically, we have primarily financed our operations primarily through cash flows from operations and borrowings from our principal shareholder.~~

3129

~~Liquidity~~In assessing the liquidity, management monitors and analyzes the Company’s cash on-hand, its ability to generate sufficient revenue sources in the future, and its operating and capital expenditure commitments. As of December 31, 2023, our total cash and restricted cash balance was approximately $7.2 million, an increase from approximately $4.6 million as of September 30, 2023. With respect to capital funding requirements, the Company budgeted its capital spending based on ongoing assessments of needs to maintain adequate cash. As of December 31, 2023, we had approximately $74.0 million of completed residential apartments and commercial units available for sale to potential buyers. Although we reported approximately $10.6 million accounts payable as of December 31, 2023, due to the long-term relationship with our construction suppliers and subcontractors, we were able to effectively manage cash spending on construction and negotiate with them to adjust the payment schedule based on our cash on hand. In addition, most of our existing real estate development projects relate to the old town renovation which are supported by the local government. As of December 31, 2023, we reported approximately $108.6 million of construction loans borrowed from financial institutions controlled by the local government and such loans can only be used on the old town renovation related project development. We expect that we will be able to renew all of the existing construction loans upon their maturity and borrow additional new loans from local financial institutions, when necessary, based on our past experience and the Company’s good credit history. Also, the Company’s cash flows from pre-sales and current sales should provide financial support for our current development projects and operations. For the year ended December 31, 2023, we had four large ongoing construction projects (see Note 3, real estate properties under development) which were under the preliminary development stage due to delayed inspection and acceptance of the development plans by the local government. In June 2020, we completed the residence relocation surrounding the Liangzhou Road related projects and launched the construction of these projects in December 2020.

InOn ~~recent~~December 12, ~~years~~2023, the ~~Chinese~~ ~~government~~Company ~~has~~entered ~~implemented~~into ~~measures~~a tosecurities ~~control~~purchase ~~overheating~~agreement ~~residential~~with ~~and~~certain ~~commercial~~accredited ~~property~~investors ~~prices including but not limited~~ to ~~restrictions~~sell on$5.95 million ~~home purchases, increasing the down-payment requirement against speculative buying, development~~ of ~~low-cost rental~~its ~~housing properties to help low-income groups while reducing the demand in the commercial housing market~~units, ~~increasing~~each ~~real~~consisting ~~estate~~of ~~property taxes~~one toshare ~~discourage speculation, control~~ of its ~~the~~common ~~land supply and slowdown the construction land auction process~~stock, ~~etc~~$0.001 par Invalue ~~addition,~~per ~~in December 2019~~share, aone ~~novel~~Class ~~strain~~A ofcommon ~~coronavirus~~warrant ~~(COVID-19)~~to ~~surfaced. COVID-19 has spread rapidly throughout China and worldwide, which has caused~~purchase ~~significant~~one ~~volatility~~share inof ~~the~~common ~~PRC~~stock and ~~international~~one ~~markets.~~Class ~~There~~B iscommon ~~significant~~warrant ~~uncertainty~~to ~~around~~purchase ~~the~~one ~~breadth~~share ~~and duration~~ of ~~business disruptions~~common ~~related to COVID-19~~stock, ~~as well as its impact on the PRC’s~~ and ~~international economies. To reduce the spread of COVID~~pre-~~19, the~~funded ~~Chinese government has employed measures including city lockdowns~~units, ~~quarantines,~~each ~~travel restrictions, suspension~~ consisting of ~~business~~one ~~activities and school closures. Due to difficulties resulting from the COVID~~pre-19funded ~~pandemic~~warrant, ~~including,~~one ~~but~~Class ~~not~~A ~~limited~~common ~~to,~~warrant ~~the closure of the Company’s facilities and operations beginning in early February 2020 through December 2022, limited support from the Company’s employees, delayed access~~ to ~~construction~~purchase ~~raw~~one ~~material~~share ~~supplies,~~of ~~reduced~~common ~~customer~~stock ~~visits to the Company’s sales office,~~ and ~~inability~~one toClass ~~promote real~~B ~~estate~~common ~~property~~warrant ~~sales~~ to ~~customers on a timely basis. The Company had real estate sales of approximately $0.9 million for the~~purchase ~~nine~~one ~~months~~share ~~ended June 30, 2023, as compared with $8.3 million in the same period~~ of ~~last~~common ~~year~~stock. ~~Based~~Under on the ~~assessment~~terms of the ~~current economic~~securities ~~environment,~~purchase ~~customer demand and sales trends~~agreement, weGGE ~~believe that consumer spending~~ has ~~been~~agreed ~~restored in the local real estate market and real estate sales are expected~~ to ~~grow in the coming periods. On the other side~~sell 35, ~~due to the negative impact from the COVID-19 pandemic and its variants~~000,000 units ~~the development period of real estate properties and our operating cycle has been extended and we may not be able to~~at ~~liquidate~~a ~~our~~per ~~large~~unit ~~balance~~purchase ofprice ~~completed real estate properties within the short term as we originally expected. In addition, as~~ of ~~June 30, 2023, we had large construction loans payable of approximately~~ $~~106~~0.~~3 million and accounts payable of approximately $10~~17.4 ~~million to be paid to subcontractors.~~ The ~~extent~~Offering ofclosed ~~the impact of COVID-19~~ on ~~the~~December ~~Company’s future financial results will be dependent on future developments such as the length and severity of the crisis~~14, ~~the~~2023 ~~potential~~with ~~resurgence~~net ofproceeds ~~the crisis, future government actions in response to the crisis and the overall impact~~ of ~~the COVID-19 pandemic on the local economy and real estate markets, among many other factors, all of which remain highly uncertain and unpredictable~~$5. Given this uncertainty, the Company is currently unable to quantify the expected impact of the COVID-19 pandemic on its future operations, financial condition, liquidity and results of operations if the current situation continues29 million. ~~The above-mentioned facts raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date of this filing.~~

In assessing its liquidity, management monitors and analyzes the Company’s cash on-hand, its ability to generate sufficient revenue sources in the future, and its operating and capital expenditure commitments. As of June 30, 2023, our total cash and restricted cash balance was approximately $2.9 million. With respect to capital funding requirements, the Company budgeted its capital spending based on ongoing assessments of its needs to maintain adequate cash. On January 27, 2023, the Company closed a private placement with net proceeds of approximately $0.1 million. As of June 30, 2023, we had approximately $72.7 million of completed residential apartments and commercial units available for sale to potential buyers. Although we reported approximately $10.4 million accounts payable as of June 30, 2023, due to the long-term relationship with our construction suppliers and subcontractors, we were able to effectively manage cash spending on construction and negotiate with them to adjust the payment schedule based on our cash on hand. In addition, most of our existing real estate development projects relate to the old town renovation which are supported by the local government. As of June 30, 2023, we reported approximately $106.3 million of construction loans borrowed from financial institutions controlled by the local government and such loans can only be used on the old town renovation related project development. We expect that we will be able to renew all of the existing construction loans upon their maturity and borrow additional new loans from local financial institutions, when necessary, based on our past experience and the Company’s good credit history. Also, the Company’s cash flows from pre-sales and current sales should provide financial support for our current development projects and operations. For the three months ended June 30, 2023, we had six large ongoing construction projects (see Note 3, real estate properties under development) which were under the preliminary development stage due to delayed inspection and acceptance of the development plans by the local government. In June 2020, we completed the residence relocation surrounding the Liangzhou Road related projects and launched the construction of these projects in December 2020. For the other four projects, we expect we will be able to obtain the government’s approval of the development plans on these projects in the coming fiscal year and start the pre-sale of the real estate properties to generate cash when certain property development milestones have been achieved.

Cash Flow

	For the Nine Months Ended
	June 30,
	2023			2022
Net Cash Used in Operating Activities	$	(1,011,906	)	$	(799,748	)
Net Cash Used in Investing Activities		(5,757,787	)		(26,936,915	)
Net Cash Provided by Financing Activities		5,307,470			28,936,915
Effect of exchange rate changes on cash		(46,095	)		(124,054	)
Net increase (decrease) in cash and restricted cash		(1,508,318	)		1,076,198
Cash and restricted cash, beginning of period		4,368,177			3,465,189
Cash and restricted cash, end of period	$	2,859,859		$	4,541,387

Comparison of cash flows results is summarized as follows:

	Three months ended
	December 31,
	2023			2022
	(Unaudited)			(Unaudited)

Net cash used in operating activities	$	(5,475,780	)	$	(672,961	)
Net Cash Used in Investing Activities		—			(5,200,000	)
Net cash provided by financing activities		7,747,011			5,201,470
Effect of change of foreign exchange rate on cash and restricted cash		2,295,058			92,539
Net increase in cash and restricted cash		4,566,289			(578,952	)
Cash and restricted cash, beginning of period		2,677,690			4,368,177
Cash and restricted cash, end of period	$	7,243,979		$	3,789,225

Operating Activities

Net cash used in by operating activities during the three ~~nine~~ months ended ~~June~~December 3031, 2023 was approximately $15.05 million, consisting of net loss of approximately $922.69 million and net changes in our operating assets and liabilities, which mainly included a decrease of ~~impairment~~other assets of approximately $~~90.~~0.6 million due to the reduction of receivables from housing buyers, an increase of in real estate property under development of ~~$4.0~~approximately ~~million a decrease of~~ $5.3 .5 million ~~in other payable and accrued expenses~~.

Net cash used in operating activities during the ~~nine~~three months ended ~~June~~December 3031, 2022 was approximately $0.87 million, consisting of net loss of approximately $0.36 million and net changes in our operating assets and liabilities, which mainly included ana ~~increase~~decrease of ~~spending~~other inassets ~~real estate property under development~~ of approximately $90.308 million, andue ~~increase~~to inthe ~~accounts~~reduction ~~payable~~ of ~~$6.5~~receivables ~~million~~from ~~due~~housing ~~to more payments to our supplier~~buyers, ~~offset~~a by decrease ofin real estate property completed of approximately $40.6 08 million due to sales of ~~real~~our ~~estate and~~Yangzhou aPalace ~~decrease~~and in other ~~assets~~projects ofand ~~$4.0~~an ~~million due to the reduction of receivables from housing buyers, a~~ decrease ~~of $2.6 million~~ in customer deposits received ~~from real estate sales and a decrease~~ of $0.63 million, offset inby ~~other~~payments ~~payable~~of ~~and~~other ~~accrued~~payables ~~expenses~~of ~~due~~approximately ~~to accrual~~ of $1.4 million ~~for claims from suppliers~~ and ~~customers~~additional ~~for~~spending ~~civil~~in ~~disputes during~~real ~~the~~estate ~~nine~~under ~~months~~development ~~ended~~of ~~June 30, 2022~~$1.3 million.

Investing Activities

Net cash flows used in investing activities was approximately nil and $5.82 million for ~~nine~~three months ended ~~June~~December 3031, 2023, ~~which was the prepayment made to professional service fee~~ and ~~Mental Scrap~~2022.

Net cash flows used in investing activities was approximately $26.9 million for nine months ended June 30, 2022, which was the prepayment made to purchase energy equipment.

Financing Activities

Net cash flows provided by financing activities was approximately $57.37 million for ~~nine~~three months ended ~~June~~December 3031, 2023 ~~which~~from ~~was~~ the ~~proceeds received from two~~ private ~~placements~~ ~~completed by the Company during the first half of fiscal 2023~~placement.

Net cash flows provided by financing activities was approximately $285.92 million for ~~nine~~three months ended ~~June~~December 3031, 2022, ~~which~~from ~~was~~ the ~~proceeds~~private ~~received from two~~placement ~~private~~completed ~~placements~~on ~~closed~~October ~~in January 2022 and March 2022~~25, ~~respectively~~2022.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

As an industry practice, the Company provides guarantees to PRC banks with respect to loans procured by the purchasers of the Company’s real estate properties for the total mortgage loan amount until the buyer obtains the “Certificate of Ownership” of the properties from the government, which generally takes six to twelve months. Because the banks provide loan proceeds without getting the “Certificate of Ownership” as loan collateral during the six-to-twelve-month period, the mortgage banks require the Company to maintain, as restricted cash of at least 5% of the mortgage proceeds as security for the Company’s obligations under such guarantees. If a purchaser defaults on its ~~payment~~ payment obligations, the mortgage bank may deduct the delinquent mortgage payment from the security deposit and require the Company to pay the excess amount if the delinquent mortgage payments exceed the security deposit. If the delinquent mortgage payments exceed the ~~security~~ security deposit, the banks may require us to pay the excess amount. If multiple purchasers’ default on their payment obligations at around the same time, we will be required to make significant payments to the banks to satisfy our guarantee obligations. If we are unable to resell the properties underlying defaulted mortgages on a timely basis or at prices higher than the amounts of our guarantees and related expenses, we will suffer financial losses. The Company has the required reserves in its restricted cash account to cover any ~~potential~~ potential mortgage defaults as required by the mortgage lenders. Since ~~its~~ inception through the release of this report, the Company has not experienced any delinquent mortgage loans and has not experienced any losses related to these guarantees. As of ~~June~~December 3031, 2023 and ~~September~~ September 30, ~~2022~~2023, our outstanding guarantees in respect of our customers’ mortgage loans amounted to approximately $2524.79 million and $24.2 million, respectively. As of ~~June~~December 3031, 2023 and September 30, ~~2022~~2023, the amount of restricted cash reserved for these guarantees was approximately $2.87 million and $32.06 million, respectively, and the Company believes that such reserves are sufficient.

Inflation

~~Inflation~~Inflationary ~~has~~factors, ~~not~~such ~~had a~~as ~~material~~increases ~~impact~~in onthe cost of our ~~real~~products ~~estate~~and ~~business~~overhead incosts, ~~China~~could ~~and~~impair our operating results. Although we do not ~~expect~~believe that inflation tohas ~~have~~had a material impact on our ~~business~~financial position or results of operations to date, a high rate of inflation in the ~~near~~ future may have an 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.

~~ITEM~~We 3.Conduct ~~QUANTITATIVE~~Substantially ~~AND~~All ~~QUALITATIVE~~Our ~~DISCLOSURES~~Business ~~ABOUT~~in ~~MARKET RISK.~~Foreign Country

~~Inflation~~Substantially all of our operations are conducted in China and are subject to various political, economic, and other risks and uncertainties inherent in conducting business in China. Among other risks, our Company and our subsidiaries’ operations are subject to the risks of restrictions on transfer of funds; export duties, quotas, and embargoes; domestic and international customs and tariffs; changing taxation policies; foreign exchange restrictions; and political conditions and governmental regulations.

~~Inflationary~~ITEM ~~factors, such as increases in the cost of our products and overhead costs, could impair our operating results~~3. ~~Although~~QUANTITATIVE weAND doQUALITATIVE ~~not~~DISCLOSURE ~~believe~~ABOUT ~~that inflation~~MARKET has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an 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.RISK

WeAs ~~Conduct~~a ~~Substantially~~smaller ~~All~~reporting ~~Our~~company, ~~Business~~we are not required into ~~Foreign~~provide ~~Country~~the information required by this item.

Substantially all of our operations are conducted in China and are subject to various political, economic, and other risks and uncertainties inherent in conducting business in China. Among other risks, our Company and our subsidiaries’ operations are subject to the risks of restrictions on transfer of funds; export duties, quotas, and embargoes; domestic and international customs and tariffs; changing taxation policies; foreign exchange restrictions; and political conditions and governmental regulations.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we ~~conducted~~carried anout ~~evaluation~~an evaluation of the effectiveness of ~~the design and operation of~~ our disclosure controls and procedures, (as such term is defined in SEC Rules 13a-15(e) and 15d-15(e) ~~under~~) ~~the Securities Exchange Act of 1934,~~ as ~~amended, as~~ of the end of the period covered by this ~~Quarterly~~report. ~~Report~~Based on ~~Form 10-Q~~ ~~(the~~such ~~“Evaluation Date”). The~~ evaluation, of our ~~disclosure~~management, ~~controls~~including ~~and~~our ~~procedures~~Chief ~~included a review of our~~Executive ~~processes~~Officer and ~~the~~Chief ~~effect~~Financial ~~on the information generated for use in this Quarterly Report on Form 10-Q. In the course of this evaluation~~Officer, we ~~sought~~has toconcluded ~~identify~~that ~~any material weaknesses in~~ our disclosure controls and procedures ~~and~~were tonot ~~confirm~~effective ~~that any necessary corrective action, including process improvements, was taken. The purpose of this evaluation is to determine if,~~ as of ~~the~~December ~~Evaluation Date~~31, ~~our disclosure controls and procedures were operating effectively such that the information~~2023, ~~required to be disclosed in our SEC reports (i) was~~ ~~recorded,~~because ~~processed,~~of ~~summarized and reported within~~ the ~~time~~material ~~periods~~weakness ~~specified~~ in ~~SEC rules and forms, and (ii) was accumulated and communicated to~~ our ~~management,~~internal ~~including~~control ~~our~~over ~~Chief~~financial ~~Executive~~reporting ~~Officer and Chief Financial Officer,~~ as ~~appropriate~~described ~~to allow timely decisions regarding required disclosure~~below.

Management conducted its evaluation of disclosure controls and procedures under the supervision of our chief executive officer and our chief financial officer. Based upon this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of June 30, 2023. Management is committed to improving the internal controls over financial reporting and will undertake the consistent improvements or enhancements on an ongoing basis. To remediate the material weakness and significant deficiencies and to prevent similar deficiencies in the future, we are currently evaluating additional controls and procedures, which may include:31

● Management’s ~~Provide~~Report ~~more~~on ~~U.S.~~Internal Control ~~GAAP~~over ~~knowledge~~Financial ~~and SEC reporting requirements training for the accounting department and establish formal policies and procedures.~~Reporting

The ~~remedial~~Company’s ~~measures~~management ~~being~~is ~~undertaken~~responsible ~~may~~for ~~not~~establishing beand ~~fully~~maintaining ~~effectuated~~internal orcontrols ~~may~~over befinancial ~~insufficient~~reporting. toInternal ~~address~~Control ~~the~~Over ~~significant~~Financial ~~deficiencies we identified, and there~~Reporting ~~can~~is bea noprocess ~~assurance~~designed ~~that~~by, ~~significant~~and ~~deficiencies~~under orthe ~~material~~supervision ~~weaknesses~~of, inthe ~~our~~Company’s ~~internal~~principal ~~control~~executive ~~over~~and principal financial ~~reporting~~officers, ~~will~~or ~~not be~~persons ~~identified~~performing orsimilar ~~occur~~functions, inand ~~the~~effected ~~future.~~by Ifthe ~~additional~~Company’s ~~significant~~board ~~deficiencies~~of ~~(or~~directors, ifmanagement ~~material~~and ~~weaknesses)~~other inpersonnel, ~~our~~to ~~internal~~provide ~~controls are discovered~~reasonable orassurance ~~occur~~regarding in the ~~future,~~reliability ~~among~~of ~~other~~financial ~~similar~~reporting orand ~~related effects: (i)~~ the ~~Company~~preparation ~~may~~of ~~fail~~financial tostatements ~~meet~~for ~~future~~external ~~reporting~~purposes ~~obligations~~in onaccordance awith ~~timely~~generally ~~basis,~~accepted ~~(ii) the~~accounting ~~Company’s~~principles ~~consolidated~~and ~~financial~~includes ~~statements~~those ~~may~~policies ~~contain material misstatements,~~ and ~~(iii) the Company’s~~procedures ~~business and operating results may be harmed.~~that:

~~Changes~~1. Pertain to the maintenance of records that in ~~Internal~~reasonable ~~Control Over~~detail ~~Financial~~accurately ~~Reporting~~and fairly reflect the transactions and dispositions of the assets of the Company;

~~Except for~~2. ~~the~~Provide ~~matters~~reasonable ~~described~~assurance ~~above~~that totransactions ~~improve~~are ~~our~~recorded ~~internal~~as ~~controls~~necessary ~~over~~to ~~financial~~permit ~~reporting,~~preparation ~~there~~of ~~were~~financial nostatements ~~changes~~ in ~~our~~accordance ~~internal~~with ~~control over~~generally ~~financial~~accepted ~~reporting~~accounting ~~for the three months ended June 30~~principles, ~~2023~~and that ~~materially~~receipts ~~affected,~~and orexpenditures ~~are~~of ~~reasonably~~the ~~likely~~Company toare ~~materially affect,~~being ~~our~~made ~~internal~~only ~~control~~in ~~over~~accordance ~~financial~~with ~~reporting,~~authorizations ~~however,~~of ~~the~~its ~~Company~~management isand inboard ~~the process~~ of ~~designing~~directors; and ~~planning to change as described above.~~

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

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

~~PART~~Our IImanagement, including our chief executive officer and chief financial officer, has conducted a self-assessment, ~~OTHER~~including ~~INFORMATION~~attestation of the design and operational effectiveness of the Company’s internal controls over financial reporting as of December 31, 2023. In making its assessment, management used the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “2013 COSO Framework”). The 2013 COSO Framework outlines the 17 underlying principles and the following fundamental components of a company’s internal control: (i) control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Our management has implemented and tested our internal control over financial reporting based on these criteria and identified certain material weaknesses set forth below.

Based on this evaluation, our management concluded that our internal control over financial reporting as of December 31, 2023 was ineffective.

PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

WeThere ~~may~~are be116 ~~subject~~on-going legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or ~~from~~beneficially ~~time~~of tomore ~~time~~than 5% of any class of voting securities of the Company, ~~various~~or ~~legal~~security ~~proceedings~~holder ~~relating~~is a party adverse to ~~claims~~the ~~arising~~Company ~~out~~or has ofa ~~our~~material ~~operations~~interest inadverse to the ~~ordinary~~Company. ~~course~~Some of ~~our~~the ~~business~~Company’s property is the subject of on-going legal proceedings.

There were additional ~~are~~4 ~~135~~new cases ~~against the~~in ~~Company,~~ the ~~total~~first ~~claims~~quarter of ~~year~~fiscal to2024 ~~day~~totaled ~~amounts~~in ~~to $10~~RMB0.5 19 million ~~according to the judgement outcome from local courts as of July 15, 2023, of which approximately~~ ($90.403 million ~~was accrued for the month ended December 31, 2022~~). ~~The difference of $1.1 million was accrued for the nine months ended June 30, 2023. The Company disputes the allegations in the lawsuit and intends to vigorously defend itself in the action.~~

~~Item~~ ITEM 1A. ~~Risk~~ ~~Factors~~RISK FACTORS

As a smaller reporting company, we are not required to provide the information required by this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Other than any sales previously reported in the Company’s Current Reports on Form 8-K, the Company did not sell any unregistered securities during the period covered by this report.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

~~Not applicable~~None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

~~The~~(a) ~~exhibits listed below are filed as part of this Quarterly Report on Form 10-Q.~~Exhibits

Index to Exhibits

Exhibit Number		Description of Exhibit
3.1		Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the SB-2 Registration Statement filed with SEC on August 31, 2001).
3.2		Bylaws (incorporated by reference to Exhibit 3.2 to the SB-2 Registration Statement filed with SEC on August 31, 2001).
3.3		Articles of Amendment to Articles of Incorporation changing the name of the Company to China Agro Sciences Corp. (incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K filed with SEC on May 5, 2006).
3.3		Articles of incorporation of the registrant as amended with the Secretary of State of Florida on October 8, 2009 (incorporated by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q filed with SEC on August 16, 2010).
3.4		Articles of Amendment to Articles of Incorporation to effect 1 share for 2 shares reverse split (incorporated by reference to Exhibit 3.1 to the current report on Form 8-K filed with SEC on September 1, 2020).
3.5		Articles of Amendment to Articles of Incorporation to change the name of the Company to “Green Giant Inc.” (incorporated by reference to Exhibit 3.1 to the current report on Form 8-K filed with SEC on March 23, 2022).
3.6		Articles of Amendment to Articles of Incorporation for the increase of the authorized shares of common stock (incorporated by reference to Exhibit 3.1 to the current report on Form 8-K filed with SEC on July 11, 2022).
4.1		Description of Securities (incorporated by reference to Exhibit 4.1 to the Annual Report on Form 10-K filed with SEC on January 13, 2023).
31.1*		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		Inline XBRL Instance Document.
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

		Incorporated by Reference
Exhibit		(Unless Otherwise Indicated)
Number	Exhibit Title	Form	File	Exhibit	Filing Date
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	Filed herewith
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	Filed herewith
32.1*	Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	—	—	—	Furnished herewith
32.2*	Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	—	—	—	Furnished herewith
101	The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, formatted in Inline XBRL: (i) Condensed Unaudited Consolidated Balance Sheets, (ii) Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income, (iii) Condensed Unaudited Consolidated Statements of Changes in Equity, (iv) Condensed Unaudited Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags	—	—	—	Filed herewith
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)	—	—	—	Filed herewith

*	Filed herewith

**	Furnished herewith

* In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibits 32.1 and 32.2 herewith are deemed to accompany this Form 10-Q and will not be deemed filed for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 10, 2023	Green Giant Inc.
	By:	/s/ Yuhai Luo
		Yuhai Luo
		Chief Executive Officer
	Green Giant Inc.
	By:	/s/ Rongrong Dai
Date: February 5, 2024	By:	/s/ Yuhuai Luo
		Yuhuai Luo
		Chief Executive Officer
Date: February 5, 2024	By:	/s/ Rongrong Dai
		Rongrong Dai
		Chief Financial Officer

3835

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