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

~~FORM~~ ~~10-Q~~

☒
~~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, 2022

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

☐
~~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 charter)~~Its Charter)

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

6 Xinghan Road, 19th Floor,, Hanzhong City
Shaanxi Province, PRC723000
(Address of ~~principal executive offices) (Zip~~Principal Executive Offices, Zip Code)
+(86) (86) 091 ~~-62622612~~- 62622612
(Registrant’s ~~telephone number,~~Telephone Number, including ~~area code)~~Area Code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each ~~Class~~
class
Trading ~~Symbol(s)~~
symbol(s)
Name of each exchange on which
registered
Common Stock, $0.001 par value ~~$0.001 per share~~

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,”~~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 ⌧☒
As
The number of ~~August 15, 2022, there were 40,464,929~~ shares outstanding of each of the issuer’s classes of common ~~stock, par value $0.001 per share, outstanding.~~equity, as of February 9, 2023 is as follows :

Class of Securities Shares Outstanding
Common Stock, $0.001 par value 55,793,268

~~Table of Contents~~
~~GREEN GIANT INC.~~
~~Form 10-Q~~
~~For the Quarterly Period Ended June 30, 2022~~
~~Contents~~
TABLE OF CONTENTS

Page
PartPART I
~~Financial Information~~FINANCIAL INFORMATION
2
1

Item 11.
Unaudited Interim Financial Statements
2
1

Condensed Consolidated Balance Sheets ~~as of June 30,~~at December 31, 2022 (unaudited) and September 30, ~~2021~~2022
2
1

Condensed Unaudited Consolidated Statements of Income and Comprehensive Income for ~~the~~The Three Months ~~and Nine Months~~ Ended ~~June 30,~~December 31, 2022 and 2021
3
2

Condensed Unaudited Consolidated Statements of Changes in Stockholders’ Equity for ~~the~~The Three Months Ended ~~June 30,~~December 31, 2022 and 2021
4
3

Condensed Unaudited Consolidated Statements of Cash Flows for ~~the Nine~~The Three Months Ended ~~June 30,~~December 31, 2022 and 2021
5
4

Notes to Condensed Unaudited Consolidated Financial Statements
6
5-20
Item 22.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
22
21
Item 33.
Quantitative and Qualitative Disclosures about Market Risk
34
30
Item 44.
Controls and Procedures
35
30

~~Part~~PART II
~~Other Information~~OTHER INFORMATION
36
32

Item 11.
Legal Proceedings
36
32
Item 1A1A.
Risk Factors
36
32
Item 22.
Unregistered Sales of Equity Securities and Use of Proceeds
36
32
Item 33.
Defaults ~~Upon~~upon Senior Securities
36
32
Item 44.
Mine Safety Disclosures
36
32
Item 55.
Other Information
36
32
Item 6
Exhibits
37
33

~~Signature~~Signatures
38
34

i
~~Table of Contents~~
~~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,

2022

2021

(unaudited)

ASSETS


Current assets

Cash

$
1,463,797

$
170,001
Restricted cash

3,077,590

3,295,188
Contract assets

12,706,376

13,723,793
Prepayment for energy equipment

26,936,915

—
Real estate property development completed

79,173,943

86,908,870
Other assets

4,182,436

8,358,925
Total current assets

127,541,057

112,456,777

Noncurrent assets

Property, plant and equipment, net

519,106

558,086
Security deposits

1,880,854

1,955,202
Real estate property development completed, noncurrent

1,189,934

1,236,971
Real estate property under development

264,621,839

265,769,721
Due from local governments for real estate property development completed

2,908,823

3,023,806
Total noncurrent assets

��
271,120,556

272,543,876

Total Assets

$
398,661,613

$
385,000,563

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities

Construction loans

$
115,086,970

$
119,636,222
Accounts payable

11,281,306

18,259,151
Other payables

9,938,789

6,430,992
Construction deposits

1,906,980

1,982,644
Contract liabilities

1,645,272

1,886,075
Customer deposits

20,629,161

18,816,860
Accrued expenses

2,587,755

1,987,567
Taxes payable

12,924,345

14,071,864
Total current liabilities

176,000,578

183,071,375

Noncurrent Liabilities

Construction deposits, noncurrent

1,310,471

1,362,273
Customer deposits, noncurrent

949,523

987,057
Taxes payable, noncurrent

8,544,397

8,882,147
Total noncurrent liabilities

10,804,391

11,231,477

Total Liabilities

186,804,969

194,302,852

Commitments and Contingencies

Shareholders’ Equity

Common stock, $0.001 par value, 50,000,000 shares authorized, 40,464,929 and 25,617,807 shares issued and outstanding at June 30, 2022 and September 30, 2021, respectively

40,464

25,617
Additional paid-in capital

165,457,371

136,535,303
Statutory surplus

11,095,939

11,095,939
Retained earnings

40,358,474

40,691,955
Accumulated other comprehensive (loss) income

(5,095,604)

2,348,897
Total stockholders’ equity

211,856,644

190,697,711
Total Liabilities and Stockholders’ Equity

$
398,661,613

$
385,000,563
December 31, September 30,
2022 2022
(Unaudited)
ASSETS
Cash $ 934,153 $ 1,360,217
Restricted cash 2,855,072 3,007,960
Contract assets 7,559,801 7,628,770
Real estate property development completed 76,983,088 74,772,530
Other assets 3,960,081 3,767,190
Prepayment 32,136,915 26,936,915
Property, plant and equipment, net 492,624 483,219
Security deposits 1,826,559 1,771,019
Real estate property under development 151,200,938 145,300,588
Due from local governments for real estate property development completed 43,687,388 42,358,986

Total Assets $ 321,636,619 $ 307,387,394

LIABILITIES AND STOCKHOLDERS’ EQUITY
Construction loans $ 111,764,779 $ 108,366,351
Accounts payable 10,938,899 10,606,635
Other payables 15,413,653 13,578,713
Construction deposits 3,124,574 3,029,565
Contract liabilities 2,052,462 1,989,898
Customer deposits 20,156,075 19,842,768
Accrued expenses 10,859,071 10,547,436
Taxes payable 20,265,780 19,980,358
Total liabilities 194,575,293 187,941,724

Common stock, $0.001 par value, 200,000,000 shares authorized, 55,753,268 and 46,464,929 shares outstanding at December 31, 2022 and September 30, 2022 55,753 46,464
Additional paid-in capital 190,013,952 184,821,771
Statutory surplus 11,095,939 11,095,939
Retained earnings (68,006,449 ) (67,432,727 )
Accumulated other comprehensive income (6,097,869 ) (9,085,777 )
Total stockholders’ equity 127,061,326 119,445,670

Total Liabilities and Stockholders’ Equity $ 321,636,619 $ 307,387,394

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

2

~~Table of Contents~~

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE, INC.)

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

Three Months Ended June 30,

Nine Months Ended June 30,


2022

2021

2022

2021
Real estate sales, net of sales tax

$
1,164,954

$
31,626,560

$
8,286,940

$
52,521,230
Cost of real estate sales

(833,599)

(25,296,688)

(4,594,258)

(41,624,594)
Gross profit

331,355

6,329,872

3,692,682

10,896,636
Operating expenses:

Selling and distribution expenses

(40,261)

(81,002)

(289,919)

(177,168)
General and administrative expenses

(1,698,534)

(1,411,151)

(2,980,887)

(2,260,410)
Total operating expenses

(1,738,795)

(1,492,153)

(3,270,806)

(2,437,578)
Operating (loss) income

(1,407,440)

4,837,719

421,876

8,459,058
Interest income, net

1,705

2,858

3,910

6,395
Other (expense)

5,609

(1,354)

(245,592)

(273,782)
(Loss) income before income taxes

(1,400,126)

4,839,223

180,194

8,191,671
Provision for income taxes

(30,450)

(1,210,569)

(513,675)

(2,050,193)
Net (loss) income

(1,430,576)

3,628,654

(333,481)

6,141,478
Other comprehensive (loss) income

Foreign currency translation adjustment

(10,649,961)

2,757,738

(7,444,501)

9,011,466
Comprehensive (loss) income

$
(12,080,537)

$
6,386,392

$
(7,777,982)

$
15,152,944
Basic and diluted (loss) earnings per common share:

Basic

$
(0.04)

$
0.14

$
(0.01)

$
0.26
Diluted

$
(0.04)

$
0.14

$
(0.01)

$
0.26
Weighted average common shares outstanding:

Basic

40,464,929

25,102,455

33,672,274

23,378,298
Diluted

40,464,929

25,102,455

45,811,329

23,378,298

Three months ended
December 31,
2022 2021
Real estate sales $ 164,712 $ 2,879,215
Less: Sales tax (2,006 ) (60,221 )
Cost of real estate sales (130,292 ) (1,455,556 )
Gross profit 32,414 1,363,438
Operating expenses
Selling and distribution expenses 40,430 219,787
General and administrative expenses 566,817 631,927
Total operating expenses 607,247 851,714
Operating income (574,833 ) 511,724
Interest income, net 1,128 1,461
Other (expense), net (17 ) —
Income before income taxes (573,722 ) 513,185
Provision for income taxes — 148,875
Net income (573,722 ) 364,310
Other Comprehensive income
Foreign currency translation adjustment 2,987,908 2,167,401
Comprehensive income $ 2,414,186 $ 2,531,711
Basic and diluted income per common share
Basic $ (0.01 ) $ 0.01
Diluted $ (0.01 ) $ 0.01
Weighted average common shares outstanding
Basic 53,229,263 25,617,807
Diluted 71,191,157 25,617,807
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3
~~Table of Contents~~
GREEN GIANT INC.
(FORMERLY CHINA HGS REAL ESTATE, INC.)
CONDENSED CONSOLIDATED STATEMENTS OF ~~STOCKHOLDERS’~~CHANGES IN STOCKHOLDERS' EQUITY

Accumulated

Additional

other

Total

Common Stock

Paid-in

Statutory

Retained

comprehensive

stockholders’


Shares

Amount

Stocks

Reserve

Earnings

Income (loss)

equity
Balance, September 30, 2020

22,525,693

$
22,525

$
129,930,330

$
10,458,395

$
34,954,061

$
(7,039,490)

$
168,325,821
Net income

—

—

—

—

291,587

—

291,587
Foreign currency translation adjustments

—

—

—

—

—

6,991,159

6,991,159
Balance, December 31, 2020 - unaudited

22,525,693

$
22,525

$
129,930,330

$
10,458,395

$
35,245,648

(48,331)

$
175,608,567
Net income

—

—

—

—

2,221,237

—

2,221,237
Foreign currency translation adjustments

—

—

—

—

—

(737,431)

(737,431)
Balance, March 31, 2021 - unaudited

22,525,693

$
22,525

$
129,930,330

$
10,458,395

$
37,466,885

$
(785,762)

$
177,092,373
Issuance of common stocks for settlement of accounts payable

3,092,114

3,092

6,591,798

—

—

—

6,594,890
Net income

—

—

—

—

3,628,654

—

3,628,654
Foreign currency translation adjustments

—

—

—

—

—

2,757,738

2,757,738
Balance, June 30, 2021 - unaudited

26,617,807

$
26,617

$
136,522,128

$
10,458,395

$
41,095,539

$
1,971,976

$
190,073,655

Balance, September 30, 2021

25,617,807

$
25,617

$
136,535,303

$
11,095,939

$
40,691,955

$
2,348,897

$
190,697,711
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
Accumulated
Additional Other
Common Stock Paid-in Statutory Retained Comprehensive
Shares Amount Capital Surplus Earnings (loss) income Total
Balance at September 30, 2021 25,617,807 $ 25,617 $ 136,535,303 $ 11,095,939 $ 40,691,955 $ 2,348,897 $ 190,697,711
Net income for the period — — — — 364,310 — 364,310
Foreign currency translation adjustments — — — — — 2,167,401 2,167,401
Balance at December 31, 2021 (Unaudited) 25,617,807 $ 25,617 $ 136,535,303 $ 11,095,939 $ 41,056,265 $ 4,516,298 $ 193,229,422

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
Private placements 9,288,339 9,289 5,192,181 — — — 5,201,470
Net income for the period — — — — (573,722 ) — (573,722 )
Foreign currency translation adjustments — — — — — 2,987,908 2,987,908
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

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

4
~~Table of Contents~~
GREEN GIANT INC.
(FORMERLY CHINA HGS REAL ESTATE, INC.)
~~UNAUDITED~~
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended

June 30,


2022

2021
Cash Flows from Operating Activities:




Net income

$
(333,481)

$
6,141,478
Adjustments to reconcile net income to net cash used in operating activities:

Depreciation of property and equipment

18,440

37,342
Changes in operating assets and liabilities:

Contract assets

514,590

2,321,807
Real estate property development completed

4,600,277

6,688,702
Real estate property under development

(9,302,202)

(19,949,297)
Other current assets

4,013,019

(691,310)
Accounts payables

(6,525,103)

61,717
Other payables

3,895,841

419,675
Contract liabilities

(175,577)

137,771
Customer deposits

2,624,895

2,385,004
Accrued expenses

646,264

(29,542)
Taxes payables

(776,711)

2,224,269
Net Cash Used in Operating Activities

(799,748)

(252,384)

Cash Flows from Investing Activities:

Prepayment for energy equipment

(26,936,915)

—
Net Cash Used in Investing Activities

(26,936,915)

—

Cash Flows from Financing Activities:

Proceeds from private placements

28,936,915

—
Net Cash Provided by Financing Activities

28,936,915

—

Effect of exchange rate changes on cash and restricted cash

(124,054)

91,431
Net increase (decrease) in cash and restricted cash

1,076,198

(160,953)
Cash and restricted cash, beginning of period

3,465,189

3,867,536
Cash and restricted cash, end of period

$
4,541,387

$
3,706,583
Supplemental Cash Flow Information

Cash paid for interest expense

$
—

$
2,014,791
Cash paid for income tax

$
—

$
265,149

Non-cash Transactions of Investing and Financing Activities

Reclassification of interest payable to other liabilities

$
5,063,191

$
3,269,932
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

$
—

$
6,594,890
Real estate sales for settlement in real estate property under development

$
—

$
(14,503,991)

Reconciliation of cash and restricted cash

Cash, end of period

$
1,463,797

$
324,497
Restricted, end of period

3,077,590

3,382,086
Total cash and restricted cash, end of period

$
4,541,387

$
3,706,583

Cash, beginning of period

$
170,001

$
457,699
Restricted, beginning of period

3,295,188

3,409,837
Total cash and restricted cash, beginning of period

$
3,465,189

$
3,867,536
(Unaudited)
*
For the six months ended March 31, 2022, the Company settled accounts payable of $569,299 with a vender by disposal of certain real estate property completed in Hanzhong City Mingzhu Garden Phase II.. In addition, the Company settled certain accounts payable with other assets of $2,758,731 to venders for the six months ended March 31, 2022.
Three months ended
December 31,
2022 2021
Cash flows from operating activities:
Net income $ (573,722 ) $ 364,310
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 5,575 6,203
Changes in operating assets and liabilities:
Contract assets 298,902 578,638
Real estate property development completed 130,292 1,455,556
Real estate property under development (1,303,062 ) (1,940,302 )
Other current assets (78,177 ) 2,855,590
Accounts payables (355 ) (4,499,033 )
Other payables 1,387,232 698,061
Contract liabilities 154 (219,296 )
Customer deposits (299,642 ) 1,772,351
Accrued expenses (17,713 ) (647,892 )
Taxes payables (222,445 ) 177,909
Net cash provided by operating activities (672,961 ) 602,095

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 5,201,470 —
Proceeds from prepaid subscriptions for sale of units — 2,000,000
Net cash provided by financing activities 5,201,470 2,000,000

Effect of changes of foreign exchange rate on cash and restricted cash 92,539 (358,596 )
Net increase in cash and restricted cash (578,952 ) 2,243,499
Cash and restricted cash, beginning of period 4,368,177 3,465,189
Cash and restricted cash, end of period $ 3,789,225 $ 5,708,688

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

Representing:
Cash, end of period $ 934,153 $ 2,446,011
Restricted, end of period $ 2,855,072 $ 3,262,677
Total cash and restricted cash, end of period $ 3,789,225 $ 5,708,688

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

Non-cash activities:
Reclassification of interest payable to construction loan $ — $ —
Settlement of accounts payable with real estate property* $ — $ 569,299
Settlement of account payables and account receivables* $ — $ 2,758,731
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5
~~Table of Contents~~
GREEN GIANT INC.
(FORMERLY CHINA HGS REAL ESTATE, INC.)
NOTES TO ~~UNAUDITED~~ CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. ORGANIZATION AND ~~PRINCIPAL ACTIVITIES~~BASIS OF PRESENTATION
Green Giant Inc. ~~formerly China HGS Real Estate Inc.~~ (“~~GG”~~GGE” or the “Company” or “we”, “us”, “our”), through its subsidiaries and variable interest entity (“VIE”), engages in real estate development, and the construction 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 completed the change of its name from China HGS Real Estate Inc. to Green Giant Inc., effective immediately (the “Name Change”).
~~NOTE 2. LIQUIDITY~~
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, 2022 and 2021 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, 2022 filed with the SEC on January 13, 2023.
Liquidity
In recent years, the Chinese government has implemented measures to control overheating residential and commercial property prices including but not limited to restrictions on home purchases, increasing 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, control of the land supply and slowdown the construction land auction process, etc. In addition, in December 2019, a novel strain of coronavirus (COVID-19) surfaced. COVID-19 has spread rapidly throughout China and worldwide, 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’s and international 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, including, but not limited to, the temporary closure of the Company’s facilities and operations beginning in early February through early March 2020, 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 real estate property sales to customers on a timely basis. The Company had real estate sales of approximately ~~$8.3~~$0.2 million for the ~~nine~~three months ended ~~June 30,~~December 31, 2022, as compared with ~~$52.5~~$2.9 million in the same period of last year. Due to the negative impact from the COVID-19 pandemic and its spread, the development period of real estate properties and our operating cycle has been extended and we may not be able to liquidate our large balance of completed real estate properties within the short term as we originally expected. In addition, as of ~~June 30,~~December 31, 2022, we had large construction loans payable of approximately ~~$115.1~~$111.8 million and accounts payable of approximately ~~$11.3~~$10.9 million due to subcontractors.
Resurgence of COVID-19 and followed lock-down policies in some cities of PRC might cut the Company’s demand and revenue depending on length of lock-down. Starting on March 27, 2022, Shanghai city implements the lockdown policy, which did not have significant negative impact on the Company’s operation because the Company has no operation in Shanghai. The extent of the impact of COVID-19 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 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. 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.

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GREEN GIANT INC.
(FORMERLY CHINA HGS REAL ESTATE, INC.)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2. LIQUIDITY ~~(CONTINUED)~~
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,~~December 31, 2022, our total cash and restricted cash balance was approximately ~~$4.5~~$3.8 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 14,~~October 25, 2022, the Company closed a private placement with ~~net proceeds of approximately $24.3 million. On March 16, 2022, the Company completed another private placement with~~ gross proceeds of ~~$4.6~~$5.2 million. As of ~~June 30,~~December 31, 2022, we had approximately ~~$80.4~~$77 million of completed residential apartments and commercial units available for sale to potential buyers. Although we reported approximately ~~$11.3~~$10.9 million accounts payable as of ~~June 30,~~December 31, 2022 due to the long-term relationship with our construction suppliers and subcontractors, we were able to effectively manage cash spending on construction and negotiate with them to adjust the payment schedule based on our cash on hand. In addition, most of our existing real estate development projects relate to the old town renovation which are supported by the local government. As of ~~June 30,~~December 31, 2022, we reported approximately ~~$115.1~~$111.8 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 ~~and nine~~ months ended ~~June 30,~~December 31, 2022, we had 6six large ongoing construction projects (see Note 3,4, 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.

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~~GREEN GIANT INC.~~
~~(FORMERLY CHINA HGS REAL ESTATE, INC.)~~
~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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,~~December 31, 2022 and for the three ~~and nine~~ months ended ~~June 30,~~December 31, 2022 and 2021 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, ~~2021,~~2022, which was filed with the SEC on January 13, ~~2022.~~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, 2021. The results of operations for the three and nine months ended ~~June 30,~~December 31, 2022 and 2021 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.

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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 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.
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 30,~~December 31, 2022 and 2021, the Company did not have any construction in progress recognized under the percentage of completion method. For the three ~~and nine~~ months ended ~~June 30,~~December 31, 2022 and 2021, all revenues were generated from completed condominium real estate projects.
9

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GREEN GIANT INC.
(FORMERLY CHINA HGS REAL ESTATE, INC.)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue ~~recognitio~~nrecognition (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 3three 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.

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GREEN GIANT INC.
(FORMERLY CHINA HGS REAL ESTATE, INC.)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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,

2022

2021
Year-end spot rate

6.6981

6.4434
For three months ended
December 31, September 30,
2022 2021 2022
(Unaudited) (Unaudited)
Period end RMB:USD exchange rate 6.8972 6.3726 7.1135
Period average RMB:USD exchange rate 7.1120 6.3914 6.5532

For the Nine Months Ended

June 30,

2022

2021
Average rate

6.4504

6.5202

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.
Real estate property development completed and under development
Real estate property consists of finished residential unit sites, commercial offices and residential unit sites under development. The Company leases the land for the residential unit sites under land use right leases with various terms from the PRC government. The cost of land use rights is included in the development cost and allocated to each project. Real estate property development completed and real estate property under development are stated at the lower of cost or fair value.
Expenditures for land development, including cost of land use rights, deed tax, pre-development costs, and engineering costs, exclusive of depreciation, are capitalized and allocated to development projects by the specific identification method. Costs are allocated to specific units within a project based on the ratio of the sales area of units to the estimated total sales area of the project (or phase of the project) multiplied by the total cost of the project (or phase of the project).
Cost of amenities transferred to buyers is allocated to specific units as a component of total construction cost. The amenity cost includes landscaping, road paving, etc. Once the projects are completed, the amenities are under control of the property management companies.
Real estate property development completed and under development are subject to valuation adjustments when the carrying amount exceeds fair value. An impairment loss is recognized only if the carrying amount of the assets is not recoverable and exceeds its fair value. The carrying amount is not recoverable if it exceeds the sum of the undiscounted cash flows expected to be generated by the assets. The Company reviews all of its real estate projects for future losses and impairment by comparing the estimated future undiscounted cash flows for each project to the carrying value of such project. For the three ~~and nine~~ months ended ~~June 30,~~December 31, 2022 and 2021, the Company did not recognize any impairment loss for its real estate properties.

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GREEN GIANT INC.
(FORMERLY CHINA HGS REAL ESTATE, INC.)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Capitalization of Interest
Interest incurred during and directly related to real estate development projects is capitalized to the related real estate property under development during the active development period, which generally commences when borrowings are used to acquire real estate assets and ends when the properties are substantially complete or the property becomes inactive. Interest is capitalized based on the interest rate applicable to specific borrowings or the weighted average of the rates applicable to other borrowings during the period. Interest capitalized to real estate properties under development is recorded as a component of the cost of real estate sales when related units are sold. All other interest is expensed as incurred. For the three ~~and nine~~ months ended ~~June 30,~~December 31, 2022 and 2021, the total interest capitalized for real estate property development was ~~$1,618,659~~$1,442,425 and ~~$5,063,191,~~$1,733,224, respectively. ~~For the three and nine months ended June 30, 2021, the total interest capitalized in the real estate property development was $1,810,609 and $5,284,723, respectively.~~
Impairment of long-lived assets
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.
Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds the estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally determined by using the asset’s expected future discounted cash flows or market value. The Company estimates fair value of the assets based on certain assumptions such as budgets, internal projections, and other available information as considered necessary. There was 0no impairment of long-lived assets for the three ~~and nine~~ months ended ~~June 30,~~December 31, 2022 and 2021.

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GREEN GIANT INC.
(FORMERLY CHINA HGS REAL ESTATE, INC.)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 ~~June 30,~~December 31, 2022 and September 30, 2021.
The Company is a corporation organized under the laws of the State of Florida. However, all of the Company’s operations are conducted solely by its subsidiaries and VIE in the PRC. No income is earned in the United States and the management does not repatriate any earnings outside the PRC. As a result, the Company did not generate any U.S. taxable income for the three ~~and nine~~ months ended ~~June 30,~~December 31, 2022 and 2021. As of ~~June 30,~~December 31, 2022, the Chinese entities’ income tax returns filed in China for the years ended December 31, 2016 through ~~2020~~2022 are subject to examination by the Chinese taxing authorities.
The 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~~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 ~~June 30,~~December 31, 2022 and September 30, ~~2021,~~2022, including approximately $2.3 million provision on the deemed repatriation of undistributed foreign earnings and an additional $1.3 million provision for delinquent U.S. and State tax fillings. The Company plans to engage a tax professional to file its delinquent tax returns in ~~2022.~~2023. 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.
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GREEN GIANT INC.
(FORMERLY CHINA HGS REAL ESTATE, INC.)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Land appreciation tax (“LAT”)
In accordance with the relevant taxation laws in the PRC, the Company is subject to LAT based on progressive rates 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,~~December 31, 2022 and 2021 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.
On December 10, 2021, the Company entered into a certain securities purchase agreement with certain purchasers whom are “non-U.S. Persons” as defined in Regulation S of the Securities Act, pursuant to which the Company agreed to sell an aggregate of 10,247,122 units , each Unit consisting of one share of common stock, par value $0.001 per share 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 an aggregate purchase price of approximately $24.3 million. The Warrants are exercisable at any time after the six-month anniversary of the issuance date at an initial exercise price of $2.375 for cash. The Warrants may also be exercised cashlessly if at any time after the six-month anniversary of the issuance date, there is no effective registration statement registering, or no current prospectus available for, the resale of the Warrant Shares. The Warrants shall expire five and a half years from its date of issuance. The Warrants are subject to customary anti-dilution provisions reflecting stock dividends and splits or other similar transactions.
On October 5, 2022, the Company entered into certain securities purchase agreement with certain “non-U.S. Persons” as defined in Regulation S of the Securities Act of 1933, as amended, pursuant to which the Company agreed to sell 9,288,339 units, each consisting of one share of the common stock of the Company, par value $0.001 per share and a warrant to purchase three shares of Common Stock. The Warrants are exercisable at any time after the six-month anniversary of the issuance date at an initial exercise price of $0.875 for cash. The Warrants may also be exercised cashless if at any time after the nine-month anniversary of the issuance date., there is no effective registration statement registering, or no current prospectus available for, the resale of the Warrant Shares. The Warrants shall expire five and a half years from its date of issuance. The Warrants are subject to customary anti-dilution provisions reflecting stock dividends and splits or other similar transactions.
As of ~~June 30,~~December 31, 2022, there were outstanding warrants to purchase approximately ~~30,741,366~~58,606,383 shares of the Company’s common stock (September 30, 2021-NaN), which resulted in 12,139,055 dilutive shares for the nine months ended June 30, 2022. There were 0 dilutive shares for the three ended June 30, 2021 as the warrants to purchase approximately 30,741,366 shares of the Company’s common stock were anti-dilutive.There were 0 dilutive shares for the three and nine months ended June 30, 2021.stock.

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GREEN GIANT INC.
(FORMERLY CHINA HGS REAL ESTATE, INC.)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Concentration risk
The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC’s economy. The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittances abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company’s cash and restricted cash were on deposit at financial institutions in the PRC, which the management believes are of high credit quality. In May, 2015, China’s new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in China are required to purchase deposit insurance for deposits in RMB and in foreign currencies 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 $74,600). However, the Company believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon in China and the Company believes that the Chinese banks that hold the Company’s cash and restricted cash are financially sound based on public available information. The Company has not experienced any losses in its bank accounts.
For the three ~~and nine~~ months ended ~~June 30,~~December 31, 2022 and 2021, the Company did not have any individual customer that accounted for more than 10% of the Company real estate sales revenue for the related periods.

Recently issued accounting standards
The Company considers the applicability and impact of all ASUs. Management periodically reviews new accounting standards that are issued.
In June 2016, the FASB issued ASU ~~No.~~ 2016-13, Financial ~~Instruments – Credit~~Instruments-Credit Losses (Topic 326): ~~Measurement of Credit Losses on Financial Instruments~~~~. This ASU is intended~~, which requires entities to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This ASU requires the measurement ofmeasure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This ~~ASU requires enhanced disclosures~~replaces the existing incurred loss model and is applicable to ~~help investors and other financial statement users better understand significant estimates and judgments used in estimating~~the measurement of credit losses ~~as well as the credit quality~~on financial assets measured at amortized cost. ASU 2016-13 was subsequently amended by ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments — Credit Losses, ASU 2019-04 Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, Derivatives and ~~underwriting standards of the Company’s portfolio. These disclosures include qualitative~~Hedging, and ~~quantitative requirements that provide additional information about the amounts recorded in the consolidated financial statements. The~~Topic 825, Financial Instruments, and ASU 2019-05, Targeted Transition Relief. For public entities, ASU 2016-13 and its amendments is effective ~~date was~~for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. For all other entities, this guidance and its amendments will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal ~~years,~~years. As a smaller reporting company, the Company plans to adopt this guidance effective October 1, 2023.
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. The Board is issuing this Update as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). The objective of the Simplification Initiative is to identify, evaluate, and improve areas of U.S. GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements. The specific areas of potential simplification in this Update were submitted by stakeholders as part of the Simplification Initiative. For public business entities, ~~that meet~~ the ~~definition of an SEC filer~~amendments in this Update are effective for fiscal years, and eligible to be Smaller Reporting Companies, or SRC, as defined by the SEC and all non-public business entities. As a nonpublic company, the Company has elected to take advantage of the extended transition period provided in the Securities Act Section 7(a)(2)(B) for complying with new or revised accounting standards applicable to private companies.interim periods within those fiscal years, beginning after December 15, 2020. The Company ~~will adopt ASU 2016-13 and its related amendments effective January~~adopted this guidance on July 1, ~~2023,~~2021 and the ~~Company is in the process~~adoption of ~~evaluating the~~this ASU did not have a material impact ~~of adopting this standard~~ on its consolidated financial statements.
The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material impact on it’s the unaudited condensed consolidated financial position, statements of operations and cash flows.

~~NOTE 4. PREPAYMENTS FOR ENERGY EQUIPMENT~~

In January 2022, the Company entered into, with 2 third party vendors, 2 framework agreements for the purchase of 2 customized electronic generating systems at the estimated total consideration of approximately $492 million. The customized electronic generating systems are purchased for the purpose of developing the Company’s power station management business. The Company made prepayments of $26,936,915 during the nine months ended June 30, 2022. The customized electronic systems are expected to be delivered in several phases with the first phase expected to be delivered during the period from December 2022 to March 2023.

15
~~Table of Contents~~
GREEN GIANT INC.
(FORMERLY CHINA HGS REAL ESTATE, INC.)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06). The amendments in ASU 2020-06 simplify the accounting for convertible instruments by removing major separation models and removing certain settlement condition qualifiers for the derivatives scope exception for contracts in an entity’s own equity, and simplify the related diluted net income per share calculation for both Subtopics. ASU 2020-06 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023, for smaller reporting companies, as defined by the SEC. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.
In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which the amendments in this Update require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606.The amendments in this Update address how to determine whether a contract liability is recognized by the acquirer in a business combination. The ASU is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted, including early adoption in an interim period, for periods for which financial statements have not yet been issued.
Management has considered all other recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

GREEN GIANT INC.
(FORMERLY CHINA HGS REAL ESTATE, INC.)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5.4. REAL ESTATE PROPERTY DEVELOPMENT COMPLETED AND UNDER DEVELOPMENT
~~Real estate property development completed and under development were comprised of the following:~~


June 30,

September 30,

2022

2021

(unaudited)

Real estate property development completed




Real estate property development completed

$
79,173,943

$
86,908,870
Real estate property development completed, noncurrent portion

1,189,934

1,236,971

$
80,363,877

$
88,145,841

Real estate property under development

$
264,621,839

$
265,769,721

The following summarizes the components of real estate property development completed and under development as of ~~March~~December 31, 2022 and September 30, ~~2021:~~2022:


June 30,

September 30,

2022

2021

(unaudited)

Development completed:

Hanzhong City Mingzhu Garden Phase II

$
22,013,247

$
23,464,365
Hanzhong City Oriental Pearl Garden

18,516,805

19,435,711
Yang County Yangzhou Pearl Garden Phase II

2,166,422

2,250,388
Yang County Yangzhou Palace

37,667,403

42,995,377
Real estate property development completed

$
80,363,877

$
88,145,841
Under development:

Hanzhong City Liangzhou Road and related projects (a)

$
182,441,976

$
180,389,654
Hanzhong City Hanfeng Beiyuan East (b)

835,759

868,796
Hanzhong City Beidajie (b)

75,153,115

78,075,559
Yang County East 2^nd Ring Road (c)

6,190,989

6,435,712
Real estate property under development

$
264,621,839

$
265,769,721
Balance as of
December 31,
2022 September 30,
2022
(Unaudited)
Development completed:
Hanzhong City Mingzhu Garden Phase II $ 21,320,616 $ 20,672,000
Hanzhong City Oriental Pearl Garden 17,971,988 17,425,514
Yang County Yangzhou Pearl Garden Phase II 2,103,885 2,039,912
Yang County Yangzhou Palace 35,586,599 34,635,104
Real estate property development completed $ 76,983,088 $ 74,772,530
Under development:
Hanzhong City Liangzhou Road and related projects (a) $ 179,661,003 $ 173,289,941
Hanzhong City Hanfeng Beiyuan East (b) 811,634 786,954
Hanzhong City Beidajie (b) 32,673,188 31,144,446
Yang County East 2^nd Ring Road (c) 8,007,784 7,904,869
Real estate property under development $ 221,153,609 $ 213,126,210
Impairment (69,952,671 ) (67,825,622 )
Real estate property under development 151,200,938 145,300,588
(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 30,~~December 31, 2022, 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 30,~~December 31, 2022,, the actual costs incurred by the Company were approximately ~~$182.4~~ $179.7 million (~~September~~(September 30, ~~2021~~2022 - ~~$180.4~~ $173.3 million) and the incremental cost related to residence resettlements approved by the local government. The Company determined that the Company’s ~~investment~~Investment in the Liangzhou Road Project in exchange for interests in future land use rights is a barter transaction with commercial substance.
16
~~Table of Contents~~
~~GREEN GIANT INC.~~
~~(FORMERLY CHINA HGS REAL ESTATE, INC.)~~
~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~NOTE 5. REAL ESTATE PROPERTY DEVELOPMENT COMPLETED AND UNDER DEVELOPMENT (CONTINUED)~~
(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,~~December 31, 2022, 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 ~~December 2022.~~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 ~~(March~~(December 31, 2022 and 2021 – ~~4.75%)~~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,~~December 31, 2022 and is in process of the government’s review and approval.

GREEN GIANT INC.
(FORMERLY CHINA HGS REAL ESTATE, INC.)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5. PREPAYMENT
As of December 31, 2022, prepayments were as follows:
December 31, September 30,
2022 2022
(Unaudited)
Energy equipemts $ 26,936,915 $ 26,936,915
Professional service 5,200,000 -
Total $ 32,136,915 $ 26,936,915
(A) In 1^st 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.
(B) In 4^thquarter of fiscal 2022, the Company made the prepayment in $26.94 million to Golden Mainland Inc. and Golden Ocean Inc. for energy equipment purchase.
NOTE 6. CONSTRUCTION LOANS


June 30,

September 30,

2022

2021

(unaudited)

Loan A

$
97,361,172

$
101,209,744
Loan B

17,725,798

18,426,478
Total

$
115,086,970

$
119,636,222
December 31, September 30,
2022 2022
(Unaudited)
Loan A $ 94,550,668 $ 91,675,668
Loan B 17,214,111 16,690,683
Total $ 111,764,779 $ 108,366,351
(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 ~~$115.7~~$112.4 million ~~(RMB775,000,000)~~(RMB775 million) for a long term loan with interest at 4.75% to develop the Liangzhou Road Project. As of ~~June 30,~~December 31, 2022, the Company borrowed ~~approximately $97.4~~$94.6 million under this credit line (September 30, ~~2021~~ 2022 - ~~$101.2~~$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.~~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 ~~$37,667,403~~$35.6 million as of ~~June 30,~~December 31, 2022 (September 30, ~~2021- $42,995,377)~~2022- $34.6 million). For the three ~~and nine~~ months ended ~~June 30,~~December 31, 2022, the interest was ~~$1,483,704 and $4,648,426 (June 30,~~$0.86 million (December 31, 2021 - ~~$1,666,977 and $4,870,356)~~$1.59 million), ~~respectively,~~ 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 ~~$17.8~~$17.3 million ~~(RMB119,000,000)~~(RMB119 miilion) 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 ~~approximately $182.4~~$179.7 million as collateral for the loan. Total interest of ~~$54,625 and $167,881~~$0.05 million for the three ~~and nine~~ months ended ~~June 30,~~December 31, 2022 was capitalized into the development cost of the Hanzhong City Liangzhou Road Project ~~(June 30,~~(December 31, 2021- ~~$58,137 and $167,720), respectively.~~$0.06 miilion).

~~(C)~~ Additionally, in September 2017, the Urban Development Center Co., Ltd. approved a construction loan for the Company in the amount of approximately $26.1 million (RMB175,000,000) with an annual interest rate of 1.2% per year in connection with the Liangzhou Road and related Project. The Company is required to repay the loan in equal annual principal repayment of approximately $5 million commencing from December 2027 through May 2031 with the interest payable on an annual basis. The amount of this loan is available to be drawn down as soon as the land use rights of the Liangzhou Road Project are approved and the construction starts, which is expected to be completed before the end of 2022. As of June 30, 2022 and September 30, 2021, the outstanding loan balance was $nil. Interest charges for the three and nine months ended June 30, 2022 were $80,330 and $246,884 (June 30, 2021- $85,495 and $246,647), which was included in the construction capitalized costs.
Additionally, in September 2017, the Urban Development Center Co., Ltd. approved a construction loan for the Company in the amount of approximately $25.4 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 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. Interest charges for the three months ended December 31, 2022 and 2021 were $0.07 million and $0.08 million, respectively, which was included in the construction capitalized costs.

17
~~Table of Contents~~
GREEN GIANT INC.
(FORMERLY CHINA HGS REAL ESTATE, INC.)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7. 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,

2022

2021

(unaudited)

Mingzhu Garden (Mingzhu Nanyuan and Mingzhu Beiyuan)

$
8,884,894

$
8,210,839
Oriental Pearl Garden

3,194,517

2,780,917
Liangzhou road and related projects

295,606

617,686
Yangzhou Pearl Garden

776,554

827,426
Yang County East 2nd Ring Road

2,239,441

2,327,964
Yangzhou Palace

6,187,672

5,039,085
Total

$
21,578,684

$
19,803,917
Customer deposits, current

$
20,629,161

$
18,816,860
Customer deposits, noncurrent

$
949,523

$
987,057
December 31, September 30,
2022 2022
(Unaudited)
Customer deposits by real estate projects:
Mingzhu Garden (Mingzhu Nanyuan and Mingzhu Beiyuan) $ 8,561,191 $ 8,300,749
Oriental Pearl Garden 3,110,095 3,015,526
Liangzhou road and related projects 185,583 186,968
Yangzhou Pearl Garden 754,137 731,206
Yang County East 2nd Ring Road 2,174,796 2,108,667
Yangzhou Palace 5,370,273 5,499,652
Total $ 20,156,075 $ 19,842,768

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. TAXES
(A) ~~Value added taxes (“VAT”)~~Business sales tax and VAT
The Company is subject to a 5% VAT for its existing real estate projects based on the local tax authority’s practice. As of ~~June 30,~~December 31, 2022, ~~and September 30, 2021,~~ the Company had business VAT tax payable of ~~$4,212,042 and $5,660,149, respectively,~~$4.13 million (September 30, 2022 - $4.14 million), which is expected to be paid when the projects 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 30,~~December 31, 2022 and September 30, ~~2021,~~2022, the Company’s total income tax payable amounted to ~~$14,377,015~~$13,550,798 and ~~$14,326,646,~~$13,279,845, respectively, which included the income tax payable balances in the PRC of ~~$10,812,015~~$9,985,799 and ~~$10,761,646,~~$9,714,844, respectively and the Company expects to pay this income tax payable balance when the related real estate projects are completely sold.

18

~~Table of Contents~~
GREEN GIANT INC.
(FORMERLY CHINA HGS REAL ESTATE, INC.)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8. TAXES (continued)
B) Corporate income taxes (“CIT”) (continued)
The following table reconciles the statutory rates to the Company’s effective tax rate for the three months ended December 31, 2022 and 2021
For the three months ended
December 31,
2022 2021
(Unaudited) (Unaudited)
Chinese statutory tax rate 25.0 % $ 25.0 %
Other adjustments* (25.0 )% 4.0 %

Effective tax rate — % $ 29.0 %
* other adjustment mainly represented non-deductible expenses for the three months ended December 31, 2022 and 2021.
Income tax expense for the three ~~and nine~~ months ended ~~June 30,~~December 31, 2022 and 2021 is summarized as follows:

Three Months Ended June 30,

Nine Months Ended June 30,


2022

2021

2022

2021
Current tax provision

$
30,450

$
1,210,569

$
513,675

$
2,050,193
Total income tax expenses

$
30,450

$
1,210,569

$
513,675

$
2,050,193
For the three months ended
December 31,
2022 2021
(Unaudited) (Unaudited)
Current tax provision $ — $ 148,875
Deferred tax provision — —

Income tax provision $ — $ 148,875

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,~~December 31, 2022 and September 30, ~~2021,~~2022, the Company assessed that the related GILTI tax payable was ~~NaN,~~Nil, which is subject to the reassessment upon the Company’s filling of GILTI information.
For the year ended September 30, 2018, the Company recognized a one-time transition toll tax of approximately $2.3 million that represented management’s estimate of the amount of U.S. corporate income tax based on the deemed repatriation to the United States of the Company’s share of previously deferred earnings of certain non-U.S. subsidiaries and VIE of the Company mandated by the U.S. Tax Reform. The Company’s estimate of the onetime transition toll ~~tax~~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 ~~June 30,~~December 31, 2022 and September 30, ~~2021,~~2022, the Company provided ~~$1.3 million~~nil additional provision due to delinquent U.S. tax return fillings.

19

~~Table of Contents~~
GREEN GIANT INC.
(FORMERLY CHINA HGS REAL ESTATE, INC.)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8. TAXES (continued)
(C) Land Appreciation Tax (“LAT”)
Since January 1, 1994, LAT has been applicable at progressive tax rates ranging from 30% to 60% on the appreciation of land values, 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.
As at ~~June 30,~~December 31, 2022 and September 30, ~~2021,~~2022, the outstanding LAT payable balance was ~~NaN~~Nil with respect to completed real estate properties sold up to ~~June 30, 2022~~December 31,2022 and September 30, ~~2021, respectively~~.2022, respectively.
(D) Taxes payable consisted of the following:

June 30,

September 30,


2022

2021

(unaudited)

CIT payable

$
14,377,015

$
14,326,646
VAT payable

4,212,042

5,660,149
Other taxes and fees payable

2,879,685

2,967,216
Total

$
21,468,742

$
22,954,011
Taxes payable, current

$
12,924,345

$
14,071,864
Taxes payable, noncurrent

$
8,544,397

$
8,882,147
December 31, September 30,
2022 2022
(Unaudited) (Unaudited)

CIT $ 13,550,798 $ 13,279,845
Business tax 4,134,759 4,144,254
Other taxes and fees 2,580,223 2,556,259
Tax payable $ 20,265,780 $ 19,980,358

~~NOTE 9. 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 1 share of common stock, par value $0.001 per share (“Common Stock”) and a warrant to purchase 3 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 securities purchase agreement (the “SPA”) with certain purchasers whom are “non-U.S. Persons” (the “Investors”) as defined in Regulation S of the Securities Act, pursuant to which the Company agreed to sell an aggregate of 4,600,000 shares (the “Shares”) of common stock, par value $0.001 per share, for an aggregate purchase price of approximately $4.6 million (the “Offering”). On March 30, 2022, the transaction contemplated by the SPA closed.
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. As of the date of this report, the Company completed the increase of its authorized shares (Note 11).

20
~~Table of Contents~~
GREEN GIANT INC.
(FORMERLY CHINA HGS REAL ESTATE, INC.)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE ~~10.~~9. COMMITMENTS AND CONTINGENCIES
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 CompanyThe Company’s management does not ~~accrue costs for~~believe the liability from the disposition of such claims and litigation individually or in the aggregate would have a ~~potential litigation loss.~~
~~As of June 30, 2022,~~material adverse impact on the Company’s ~~VIE, Guangsha, was subject to several civil disputes with a supplier (the “General Contractor”), a general contractor~~consolidated financial position, results of the Company’s certain real estate projects. The total claim by the supplier is approximately $9.4 million, for which the Company estimated that it is more than likely to pay approximately $3.4 million which was included in the accounts payableoperations and other payables in the accompanying consolidated balance sheets. The General Contractor and the Company are in the process of negotiating a settlement. The Company believes it can reach a settlement with a favorable outcome.cash flows.
In addition, a certain subcontractor filed a lawsuit against the general contractor with a total claim approximately of $3.4 million. The Company was added as a joint defendant in the lawsuits. The Company was not involved in the transactions between the General Contractor and the related subcontractor. The Company disputes the allegations in the lawsuit and intends to vigorously defend itself in the action. The Company is unable to estimate a range of loss, if any, were there to be an adverse final decision.
Besides, the Company’s VIE, Guangsha, was subject to several civil disputes certain suppliers and customers. The total claim is approximately $1.4 million, all of which was accrued in the account of accrued expenses as Guangsha estimated that it is more than likely that it will make such payments.
As an industry practice, the Company provides guarantees to PRC banks with respect to loans procured by the purchasers of the Company’s real estate properties for the total mortgage loan amount until the buyer obtains the “Certificate of Ownership” of the properties from the government, which generally takes six to twelve months. Because the banks provide loan proceeds without getting the “Certificate of Ownership” as loan collateral during the six-to-twelve-month period, the mortgage banks require the Company to maintain, as restricted cash of at least 5% of the mortgage proceeds as security for the Company’s obligations under such guarantees. If a purchaser defaults on its payment obligations, the mortgage bank may deduct the delinquent mortgage payment from the security deposit and require the Company to pay the excess amount if the delinquent mortgage payments exceed the security deposit. If the delinquent mortgage payments exceed the security deposit, the banks may require us to pay the excess amount. If multiple purchasers’ default on their payment obligations at around the same time, we will be required to make significant payments to the banks to satisfy our guarantee obligations. If we are unable to resell the properties underlying defaulted mortgages on a timely basis or at prices higher than the amounts of our guarantees and related expenses, we will suffer financial losses. The Company has the required reserves in its restricted cash account to cover any potential mortgage defaults as required by the mortgage lenders. Since inception through the release of this report, the Company has not experienced any delinquent mortgage loans and has not experienced any losses related to these guarantees. As of ~~June~~December 31, 2022 and September 30, 2022, our outstanding guarantees in respect of our customers’ mortgage loans amounted to approximately ~~$62~~$25.7 million and 24.9 million, respectively. As of December 31, 2022 and September 30, 2022, the amount of restricted cash reserved for these guarantees was approximately ~~$3.1~~$2.9 million and $3.0 million, respectively, and the Company believes that such reserves are sufficient.

The Company has been named as a defendant in a number of lawsuits arising in its ordinary course of business. As of the date of this quarterly report, the Company continues to use all commercially reasonable efforts to defend itself in these proceedings and is undergoing on-going discussion with regulatory authorities.
1) Case between the labor contract dispute between Wangcang County Lexin Labor Service Co., Ltd. and Zhejiang Hongcheng Construction Group Co., Ltd., Zhejiang Hongcheng Construction Group Co., Ltd. Xi 'an Branch and Shaanxi Guangsha Investment Development Group Co., Ltd. Hongcheng Company was judged to compensate Lexin Company, and Shaanxi Guangsha Company was jointly and severally liable, with an execution amount of $3,479,673.
2) Related to the above Case 1 disputes between Zhejiang Hongcheng Construction Group Co., Ltd. and Shaanxi Guangsha Investment Development Group Co., Ltd. on the construction project contract. The execution target of this case is $9,376,994 million including $3,479,673 in Case 1.
3) Case between Hantai District Commuity Center Hanzhong Urban Counsel and Shaanxi Guangsha Investment Development Group Co., Ltd., which was ordered by Hanzhong Hantai District Court to the settle the amount of $135,621 and it is still outstanding as at December 31, 2022.
4) Dispute between a disclosed property buyer and Shaanxi Guangsha Investment Development Group Co., Ltd., which was ordered by local court to pay the plaintiff of $131,993 which is still outstanding as at December 31, 2022.
The Company has accrued $9,644,608 for the above four cases as of as of December 31, 2022.
NOTE ~~11.~~10. SUBSEQUENT EVENTS
~~Pursuant~~
On January 12, 2023, the Company and FT Global Capital Inc. (“FT Global”) entered into a settlement agreement (the “FT Global Settlement Agreement”), pursuant to ~~proposal four~~which FT Global has waived all claims and liabilities against the Company in connection with the Company’s private placement in October 2022 and terminated the Exclusive Placement Agent Agreement entered by and between the Company and FT Global in May 2022. Under the terms of ~~Green Giant Inc.’s (the “Company”) Definitive Proxy Statement,~~the FT Global Settlement Agreement, the Company is obligated to pay to FT Global cash compensation of $40,000 and ~~as approved by its shareholders on June 24, 2022, the Registrant filed an Articles~~share compensation of ~~Amendment to its Articles of Incorporation (the “Articles of Amendment”) on July 6, 2022 to increase the number of authorized~~40,000 shares of the Company’s restricted common ~~stock of the Company from 50,000,000 shares to 200,000,000 shares. On July 7, 2022 the Articles of Amendment was processed and accepted by the Florida Secretary of State.~~stock.

21
~~Table of Contents~~

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~~“China HGS Real Estate, Inc.”)~~. For~~ for the three ~~and nine~~ months ended ~~June 30,~~December 31, 2022 and 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 ~~“GG”~~“GGE” 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
We conduct substantially all of our business through Shaanxi Guangsha Investment and Development Group Co., Ltd, in Hanzhong, Shaanxi Province. Since the initiation of our business, we have been focused on expanding our business in certain Tier 3 and Tier 4 cities and counties in China.
For the ~~nine~~three months ended ~~June 30,~~December 31, 2022, our sales and gross profit were ~~$8.3~~$0.2 million and ~~$3.7~~$0.03 million, respectively, representing an approximate ~~84.2%~~94.2% and ~~66.1%~~97.6% decrease in sales and gross profit as compared to ~~nine~~three months ended ~~June 30,~~December 31, 2021, respectively. The decrease in sales and gross profit was mainly the result of less gross floor area (“GFA”) sold during the ~~nine~~three months ended ~~June 30,~~December 31, 2022.
For the ~~nine~~three months ended ~~June 30,~~December 31, 2022, the average selling price (“ASP”) for our real estate projects located in Yang County was approximately ~~$522~~$482 per square meter, decreased ~~from the ASP of $670~~$31 per square ~~meter for~~comparing to the ~~nine months ended June 30, 2021, which was mainly~~same period of last year due to lower ASP.

Market Outlook
On November 11, 2022, the ~~fact that we lowered our selling prices~~People’s Bank of China and the China Banking and Insurance Regulatory Commission issued “Yin Fa [2022] No. 254 “Notice on ~~certain commercial units to promote their sales. The ASP of our Hanzhong real estate projects was approximately $803 per square meter, significantly increased from~~Supporting the ~~ASP of $621 per square meter for the nine months ended June 30, 2021. The increase in ASP in Hanzhong real estate projects was mainly due to the fact that most~~Stable and Healthy Development of the ~~units sold in~~Real Estate Market” to support the ~~nine months ended June 30, 2022 were commercial units with higher ASP.~~
22
~~Table~~stable and healthy development of ~~Contents~~

~~Market Outlook~~
~~The Chinese government is expected to continue implementing measures to cool down~~ the real estate market. ~~These~~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 ~~may include restrictions on home purchase,~~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 ~~down-payment requirement against speculative buying, encourage~~real estate market. It is expected to positively affect the conservative attitude of commercial banks to intervene in the development of ~~low-cost rental housing properties to help low-income groups while reducing~~loan market and support the increasing demand ~~in the commercial housing market, increase the real estate property tax to discourage speculation, and control of the land supply and slowdown the construction land auction process. The pressure on~~from home ~~sales and prices will be especially obvious in third and fourth-tier cities, while the property market in the first and second-tier cities is expected to be resilient.~~buyers for mortagage loans.
The Company intends to remain focused on our existing construction projects in Hanzhong City and Yang County, deepening our institutional sales network, enhancing our cost and operational synergies and improving cash flows and strengthening our balance sheet.
The Company started the construction of the Liangzhou Road related projects after the approval by the local government of the road. These projects comprise residential ~~units~~ for end-users and upgraders, shopping malls as well as serviced apartments and offices to satisfy different market demands.
In December 2019, a novel strain of coronavirus (COVID-19) surfaced. COVID-19 has spread rapidly to many parts of the PRC and other parts of the world in the first quarter of 2020, which has caused significant volatility in the PRC and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the PRC and international economies. ~~The Company had real estate sales of approximately $8.3 million for~~For the ~~nine months~~quarter ended ~~June 30,~~December 31, 2022, ~~decreased from $52.5 million in~~ the ~~same period of last year. Resurgence of~~ COVID-19 and followed lock-down policies in some cities of PRC might cut the Company’s demand and revenue depending on length of lock-down. Starting on March 27, 2022, Shanghai city implements the lockdown policy, whichpandemic did not have ~~significant negative~~did have a material net impact on the Company’s financial position and operating results, especially Yang County which is operation ~~because~~was shut down. On and off from August 2022 onwards the ~~Company has no operation in Shanghai. 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.
~~Critical Accounting Policies and Estimates~~
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United ~~States (“U.S. GAAP”).~~States. 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.
We 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.
23
~~Table of Contents~~

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.

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;~~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,~~December 31, 2022 and 2021, the Company did not have any construction in progress ~~recognized~~meet the revenue recognition under ~~the~~ percentage of completion method. ~~For the three and nine months ended June 30, 2022 and 2021, all~~
Disaggregation of Revenues
Disaggregated revenues ~~were generated from completed condominium real estate projects.~~was as follows:
For the three months ended December 31,
2022 2021
(Unaudited) (Unaudited)

Revenue recognized for completed condominium real estate projects, net of sales taxes $ 162,706 $ 2,818,994
Revenue recognized for condominium real estate projects under development, net of sales taxes — —
Total revenue, net of sales taxes $ 162,706 $ 2,818,994
Contract balances
~~The timing~~
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 ~~commissions are~~commission is not expected to be recovered.
The Company provides “mortgage loan guarantees” only with respect to buyers who make ~~down payments~~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~~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.

24
~~Table of Contents~~

Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes, and disclosure of contingent liabilities at the date of the consolidated financial statements. Estimates are used for, but not limited to, the assumptions and estimates used by management in recognizing development revenue under the percentage of completion method, the selection of the useful lives of property and equipment, provision necessary for contingent liabilities, revenue recognition, taxes and budgeted costs. Management believes that the estimates utilized in preparing its consolidated financial statements are reasonable and prudent. Actual results could differ from these estimates.
Real estate property development completed and under development
Real estate property consists of finished residential unit sites, commercial offices and residential unit sites under development. The Company leases the land for the residential unit sites under land use right leases with various terms from the PRC government. The cost of land use rights is included in the development cost and allocated to each project. Real estate property development completed and real estate property under development are stated at the lower of cost or fair value.
Expenditures for land development, including ~~the~~ 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).
~~The cost~~
Cost of amenities transferred to buyers is allocated to specific units as a component of ~~the~~ total construction cost. The amenity cost includes landscaping, road paving, etc. Once the projects are completed, the amenities are under ~~the~~ 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~~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 ~~assets.~~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 ~~and nine~~ months ended ~~June 30,~~December 31, 2022 and 2021, the Company did not recognize any impairment loss for its real estate properties.
25
~~Table~~Appointment of ~~Contents~~Chief Operating Officer

Effective October 17, 2022, the Board appointed Ms. Sheng (Dorothy) Liu as the Chief Operating Officer of the Company with annual compensation of $25,000.
Ms. Sheng (Dorothy) Liu has served as the Chief Executive Officer of Zhongjintai Venture Capital (Shenzhen) Co., Ltd. since January 2019. From April 2017 to December 2020, Ms. Liu served as the General Manager of Shenzhen Zhaoyin Dinghong Investment Management Co., Ltd. Ms. Liu served as the General Manager of Vela-Industry (HK) Ltd. from February 2013 to March 2017. Ms. Liu graduated from Massey University of New Zealand with a bachelor’s degree in Financial Economics.
RESULTS OF OPERATIONS
Three Months Ended ~~June 30,~~December 31, 2022 compared to Three Months Ended ~~June 30,~~December 31, 2021
~~Revenues~~
~~For the three months ended June 30, 2022 and 2021, we generated revenues~~
Revenues
The following is a breakdown of ~~$1.2 million and $31.6 million, respectively, all of which derived from~~revenue:
For the three months ended
December 31,
2022 2021
(Unaudited) (Unaudited)

Revenue recognized for completed condominium real estate projects, net of sales taxes $ 162,706 $ 2,818,994
Revenue recognized for condominium real estate projects under development, net of sales taxes — —
Total revenue, net of sales taxes $ 162,706 $ 2,818,994

Revenue recognized for completed condominium real estate projects
The following table summarizes our revenue generated by different projects:


Three Months Ended June 30,






2022

2021

Variance


Revenue

%

Revenue

%

Amount

%

Nanyuan II Project

—

0.0

28,926,599

91.5

(28,926,599)

(100.0)

Oriental Garden

33,650

2.9

—

0.0

33,650

100.0

Yangzhou Palace

1,131,304

97.1

2,699,961

8.5

(1,568,657)

(58.1)

$
1,164,954

100.0

$
31,626,560

100.0

$
(30,461,606)

(96.3)

For Three Months Ended December 31,
2022 2021 Variance
Revenue % Revenue % Amount %
(Unaudited) (Unaudited)

Mingzhu Garden (Mingzhu Nanyuan & Mingzhu Beiyuan) Phase I and II $ — — % $ 815,863 28.3 % $ (815,863 ) (100.0 )%
Oriental Pearl Garden — — % 770,452 26.8 (770,452 ) (100.0 )%
Yangzhou Palace 164,712 100.0 % 1,292,900 44.9 % (1,128,188 ) (87.3 )%

Gross Real Estate Sales 164,712 100.0 % 2,879,215 100 % (2,714,503 ) (94.3 )%
Less: Sales Tax (2,006 ) (60,221 ) 58,215 (96.7 )%
Revenue, net of sales tax $ 162,706 $ 2,818,994 $ (2,656,288 ) (94.2 )%

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 before sales tax decreased by ~~96.3%~~94.3% from approximately $2.9 million to approximately ~~$1.2~~$0.2 million for the three months ended ~~June 30,~~December 31, 2022. The total GFA sold during three months ended December 31, 2022 was 342 square meters, decreased from ~~approximately $31.6 million, because we acquired Nanyuan II project under development from our affiliated entity in January 2021~~the 3,670 square meters completed and sold ~~certain completed residential units to~~during the ~~local government for residence reallocation purposes with total revenue~~same period of ~~approximately $28.9 million~~last year. The sales tax for the three months ended ~~June 30, 2021.~~ December 31, 2022 was approximately $2,000 decreased by 96.7% from same period of last year , consistent with the decreased revenue.
The ~~total GFA sold for~~year-over-year decrease in revenue was mainly caused by the ~~remaining~~following reasons: 1) The macro-control of the real estate ~~projects during~~market by the ~~three months ended June 30, 2022~~Chinese government, mainly suppressed in the past 12 months; 2)China's economic downturn due to recurring epidemic; 3) Lower disposable income resulted in the decreased demand for housing; 4) The Company is a real estate developer in the third and ~~2021 was 1,666 square meters~~fourth tier cities in China, the decline in house prices is especially obvious than that in the first tier and ~~4,056 square meters, respectively.~~second tier cities.
Cost of Sales
The following table sets forth a breakdown of our cost of sales:


Three Months Ended June 30,

2022

2021

Variance

Revenue

%

Revenue

%

Amount

%
Land use rights

$
129,327

15.5

$
2,327,295

9.2

$
(2,197,968)

94.4
Construction cost

704,272

84.5

22,969,393

90.8

(22,265,121)

96.9

$
833,599

100.0

$
25,296,688

100.0

$
(24,463,089)

96.7
For Three Months Ended December 31,
2022 2021 Variance
Cost % Cost % Amount %
(Unaudited) (Unaudited)

Land use rights $ 5,773 4.4 % $ 138,278 9.5 % $ (132,503 ) (95.8 )%
Construction cost 124,519 95.6 % 1,317,278 90.5 % (1,192,761 ) (90.6 )%
Total cost $ 130,292 100.0 % $ 1,455,556 100.0 % $ (1,325,264 ) (91.1 )%

Our cost of sales consists primarily of costs associated with land use rights and construction ~~costs, including capitalized interest.~~costs. Cost of sales are capitalized and allocated to development projects using a specific identification method. Costs are allocated to specific units within a project based on the ratio of the sales area of units to the estimated total sales area of the project or phase of the project times the total cost of the project or phase of the project.
~~The cost~~
Cost of sales was approximately ~~$0.8~~$0.1 million for the three months ended ~~June 30,~~December 31, 2022 compared to ~~$25.3~~$1.5 million for the same period of last year. The ~~$24.5 million~~ decrease in cost of sales was mainly attributable to ~~a decrease in sales revenues carryover areas~~less GFA sold during the three months ended ~~June 30,~~December 31, 2022.
26
~~Table of Contents~~

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 three months ended ~~June 30,~~December 31, 2022 and 2021 were approximately $0.006 million and $0.1 million, as compared to approximately $2.3 million for the three months ended June 30, 2021, representing a decrease of approximately $2.2 million 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.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 three months ~~ended June 30,~~ending December 31, 2022 were approximately ~~$0.7~~$0.1 million as compared to approximately ~~$23.0~~$1.3 million for the ~~same period of last year,~~three months ended December 31, 2021, representing a decrease of approximately ~~$22.3~~$1.2 million. The decrease in construction cost was due to less ~~real estate projects~~units sold during the quarter ended ~~June 30,~~December 31, 2022.
Gross Profit
Gross profit ~~was~~and gross margin were approximately ~~$0.3~~$0.03 million and 19.7 % respectively for the three months ended December 31, 2022 as compared to approximately $1.4 million and 47.4% respectively in the same period of last year due to the economic downturn caused by the epidemic control in China and aforementioned.
For three months ended December 31,
2022 2021
Gross Profit Gross Margin Gross Profit Gross Margin
(Unaudited) (Unaudited)
Mingzhu Garden (Mingzhu Nanyuan & Mingzhu Beiyuan) Phase I and II $ — — % $ 246,481 30.2 %
Oriental Garden — — % 613,688 79.7 %
Yangzhou Pearl Garden Phase I and II — — — — %
Yangzhou Palace 34,420 20.9 % 563,490 43.6 %
Sales Tax (2,006 ) (60,221 )
Total Gross Profit $ 32,414 19.7 % $ 1,363,438 47.4 %
Total Real Estate Sales before Sales Tax $ 164,712 $ 2,879,215
Operating Expenses
Total operating expenses decreased by 28.7% to approximately $0.6 million for the three months ended ~~June 30,~~December 31, 2022 ~~as compared to approximately $6.3~~from $0.9 million for the three months ended ~~June 30,~~December 31, 2021, ~~representing~~primarily as a result of a decrease of ~~$6.0~~$0.2 million ~~which was mainly attributable to $5.6~~in selling expenses and a decrease of $0.07 million gross profit from the sale of Nanyuan II project to the local government for residence reallocation purposes for the three months ended June 30, 2021. On the other side, most of real estate property units we sold in Hanzhong city were commercial units during the third quarter of fiscal 2022. As a result, our gross margin increased to 28.4% in the third quarter of fiscal 2022 from 20.0% in the third quarter of fiscal 2021.


Three Months Ended June 30,

2022

2021

Gross Profit

Gross Margin

Gross Profit

Gross Margin
Nanyuan II Project

—

0.0

5,570,525

19.3
Oriental Garden

4,201

12.5

—

0.0
Yangzhou Palace

327,154

28.9

759,347

28.1

$
331,355

28.4

$
6,329,872

20.0

27
~~Table of Contents~~

~~Operating Expenses~~
~~Total operating expenses increased by 16.5% to approximately $1.7 million for the three months ended June 30, 2022 from $1.5 million for the three months ended June 30, 2021, primarily due more~~ general ~~and~~ administrative ~~expense incurred for the three months ended June 30, 2021.~~expenses. Our general and administrative expense was approximately ~~$1.7~~$0.57 million for the three months ended ~~June 30,~~December 31, 2022, ~~increased~~decreased by ~~$0.3~~$0.63 million from the three months ended ~~June 30,~~December 31, 2021 due to ~~accrual of $1.4 million for claims from suppliers and customers for civil disputes, partially net off against less~~no professional and consulting ~~fee expenses incurred.~~fees incurred in the 1st quarter of fiscal 2023. Our total operating expenses accounted for ~~149.3%~~368.7% and ~~4.7%~~29.6% of our real estate sales before sales taxes for the three months ended ~~June 30,~~December 31, 2022 and 2021, respectively.


Three Months Ended June 30,

2022

2021

Operating expenses:

Selling and distribution expenses

$
40,261

$
81,002

General and administrative expenses

1,698,534

1,411,151

Total operating expenses

$
1,738,795

$
1,492,153

Real estate sales, net of sales tax

$
1,164,954

$
31,626,560

Total operating expenses as a % of real estate sales, net of sales tax

149.3
%

4.7
%
For three months ended
December 31,
2022 2021
(Unaudited) (Unaudited)

Selling expenses $ 40,430 $ 219,787
General and administrative expenses 566,817 631,927
Total operating expenses $ 607,247 $ 851,714
Percentage of Real Estate Sales before Sales Tax 368.7 % 29.6 %

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. For the three months ended December 31, 2022 and 2021, the Company’s effective income tax rate was nil and 29%.
Net ~~(loss) income~~Income
~~As a result of the foregoing, we~~
We reported net loss of approximately ~~$1.43~~$0.6 million for the three months ended ~~June 30,~~December 31, 2022, as compared to net income of approximately ~~$3.6~~$0.4 for the three months ended ~~June 30,~~December 31, 2021. The decrease in net income was primarily due to less revenue and more operating expenses as discussed above.
28
Other Comprehensive Income
~~Table~~
We operate primarily in the PRC and the functional currency of ~~Contents~~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.

~~Nine months ended June 30, 2022 compared~~Translation adjustments resulting from this process amounted to ~~Nine months ended June 30, 2021~~
~~Revenues~~
~~For the nine months ended June 30, 2022 and 2021, we generated revenues of $8.3~~$3.0 million and ~~$52.5 million, respectively, all of which derived from completed condominium real estate projects~~
~~The following table summarizes our revenue generated by different projects:~~


Nine Months Ended June 30,

2022

2021

Variance

Revenue

%

Revenue

%

Amount

%
Mingzhu Garden (Mingzhu Nanyuan & Mingzhu Beiyuan) Phase I and Phase II

$
974,309

11.8

$
188,250

0.4

$
786,059

417.6
Nanyuan II Project

—

0.0

43,261,650

82.4

(43,261,650)

(100.0)
Yangzhou Pearl Garden Phase I and Phase II

—

0.0

42,052

0.1

(42,052)

(100.0)
Oriental Garden

790,593

9.5

—

0.0

790,593

100.0
Yangzhou Palace

6,522,038

78.7

9,029,278

17.1

(2,507,240)

(27.8)

$
8,286,940

100.0

$
52,521,230

100.0

$
(44,234,290)

(84.2)

Our revenues are derived from the sale of residential buildings, commercial store-fronts and parking spaces in projects that we have developed. Compared to the same period of last year, revenues decreased by 84.2% to approximately $8.3$2.2 million for the ~~nine~~three months ended June 30, 2022 from approximately $52.5 million in the same period of last year, because we acquired Nanyuan II project under development from our affiliated entity in January 2021 and sold the residential units to the local government for residence reallocation purposes with total revenue of approximately $43.3 million in the nine months ended June 30, 2021. The total GFA sold for the remaining real estate projects during the nine months ended June 30, 2022 and 2021 was 13,449 and 13,949 square meters, respectively.
~~Cost of Sales~~
~~The following table sets forth a breakdown of our cost of sales:~~


Nine Months Ended June 30,

2022

2021

Variance

Revenue

%

Revenue

%

Amount

%

Land use rights

$
486,590

10.6

$
3,954,336

9.5

$
(3,467,746)

(87.7)

Construction cost

4,107,668

89.4

37,670,258

90.5

(33,562,590)

(89.1)

$
4,594,258

100.0

$
41,624,594

100.0

$
(37,030,336)

(89.0)

Our cost of sales consists primarily of costs associated with land use rights and construction costs, including capitalized interest. Cost of sales are capitalized and allocated to development projects using a specific identification method. Costs are allocated to specific units within a project based on the ratio of the sales area of units to the estimated total sales area of the project or phase of the project times the total cost of the project or phase of the project.
Cost of sales was approximately $4.6 million for the nine months ended June 30, 2022 compared to $41.6 million for the same period of last year. The $37.0 million decrease in cost of sales was mainly attributable to less GFA sold during the nine months ended June 30, 2022 which led to less cost of sales.
29
~~Table of Contents~~

~~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 months ended June 30, 2022 were approximately $0.5 million, as compared to approximately $4.0 million for the nine months ended June 30, 2021, representing a decrease of approximately $3.5 million from the same period of last year. The decrease was consistent with the fact that total GFA sold in the first nine months ended June 30, 2022 was significantly lower from the same period of last year.
~~Construction cost:~~ We outsource the construction of all of our projects to third party contractors, whom we select through a competitive tender process. Our construction contracts provide a fixed payment which covers substantially all labor, materials and equipment costs, subject to adjustments for some types of excess, such as design changes during construction or changes in government-suggested steel prices. Our construction costs consist primarily of the payments to our third-party contractors, which are paid over the construction period based on specified milestones. In addition, we purchase and supply a limited range of fittings and equipment, including elevators, window frames and door frames. Our construction costs for the nine months ended June 30, 2022 were approximately $4.1 million as compared to approximately $37.7 million for the same period of last year, representing a decrease of approximately $33.6 million. The decrease in construction cost was due to less real estate property units sold during the nine months ended June 30, 2022.
~~Gross Profit~~
Gross profit was approximately $3.7 million for the nine months ended June 30, 2022 as compared to approximately $10.9 million for the nine months ended June 30, 2021, representing a decrease of $7.2 million, which was mainly attributable to more GFA sold during the nine months ended June 30, 2021. On the other side, since most of real estate property units sold in Hanzhong city during the nine months ended June 30, 2022 were commercial units with higher gross margins, our gross margin increased to 44.6%, compared to 20.7% in the same period of fiscal 2021. For the nine months ended June 30, 2021, the ASP for our real estate projects (excluding sales of parking spaces) located in Hanzhong city was approximately $803 per square meter for our commercial units, significantly increased from the ASP of $621 per square meter for the nine months ended June 30, 2021.
~~The following table sets forth the gross margin of each of our projects:~~


Nine Months Ended June 30,

2022

2021

Gross Profit

Gross Margin

Gross Profit

Gross Margin
Mingzhu Garden (Mingzhu Nanyuan & Mingzhu Beiyuan) Phase I and Phase II

$
393,979

40.4

$
46,131

24.5
Nanyuan II Project

—

0.0

8,325,605

19.2
Yangzhou Pearl Garden Phase I and Phase II

—

0.0

5,006

11.9
Oriental Garden

603,838

76.4

—

0.0
Yangzhou Palace

2,694,865

41.3

2,519,894

27.9

$
3,692,682

44.6

$
10,896,636

20.7

30
~~Table of Contents~~

~~Operating Expenses~~
~~Total operating expenses were approximately $3.3 million and $2.4 million for the nine months ended June 30,~~December 31, 2022 and 2021, respectively. The ~~increase in selling expenses~~balance sheet amounts with the exception of ~~$0.1 million for nine months ended June~~equity at December 31, 2022 were translated at 6.8972 RMB to 1.00 USD as compared to 7.1135 RMB to 1.00 USD at September 30, ~~2022 was primarily attributed~~2022. The equity accounts were stated at their historical rate. The average translation rates applied to ~~more promotion activities. The 31.9% increase in general administration expense~~the income statements accounts for the ~~nine months~~periods ended June 30, 2022 was primarily due to accrual of $1.4 million for claims from suppliers and customers for civil disputes, partially net off against less office expenses and professional and consulting fee expenses incurred. Our total operating expenses accounted for 39.5% and 4.6% of our real estate sales for the nine months ended June 30,December 31, 2022 and 2021 were 7.1120 RMB and 6.3914 RMB, respectively.

Nine Months Ended June 30,

2022

2021

Operating expenses:

Selling and distribution expenses

$
289,919

$
177,168

General and administrative expenses

2,980,887

2,260,410

Total operating expenses

$
3,270,806

$
2,437,578

Real estate sales, net of sales tax

$
8,286,940

$
52,521,230

Total operating expenses as a % of real estate sales, net of sales tax

39.5
%

4.6
%

~~Income Taxes~~
~~PRC Taxes~~
Our Company is governed by the Enterprise Income Tax Law of the People’s Republic of China concerning private-run enterprises, which are generally subject to tax at a statutory rate of 25% on income reported in the statutory financial statements after appropriate tax adjustments. For the nine months ended June 30, 2022 and 2021, the Company is subject to income tax rate of 25% on taxable income. Although the possibility exists for reinterpretation of the application of the tax regulations by higher tax authorities in the PRC, potentially overturning the decision made by the local tax authority, the Company has not experienced any reevaluation of the income taxes for prior years. The PRC tax rules are different from the local tax rules and the Company is required to comply with local tax rules. The difference between the two tax rules will not be a liability of the Company. There will be no further tax payments for the difference.
~~Net Income~~
As a result of foregoing, we reported net income of approximately $1.1 million for the nine months ended June 30, 2022, as compared to net income of approximately $6.1 million for the nine months ended June 30, 2021.
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 mainly financed our operations primarily through cash flows from operations and borrowings from our principal shareholder.~~

31
~~Table of Contents~~

~~Liquidity~~
In recent years, the Chinese government has implemented measures to control overheating residential and commercial property prices including but not limited to restrictions on home ~~purchases,~~purchase, increasing 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, control of the land supply and slowdown the construction land auction process, etc. In addition, in December 2019, a novel strain of coronavirus (COVID-19) surfaced. COVID-19 has spread rapidly throughout China and worldwide, 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’s~~PRC and international 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, including, but not limited to, the temporary closure of the Company’s facilities and operations beginning in early February through early March 2020, 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 real estate property sales to customers on a timely ~~basis.~~basis, The Company experienced recovery of its real estate business in fiscal 2022 and the following period. The Company had real estate sales of approximately ~~$8.3~~$0.2 million for the ~~nine~~three months ended ~~June 30,~~December 31, 2022, ~~as compared with $52.5~~decreased from $2.9 million in the same period of last year. ~~Due~~Based on the assessment of the current economic environment, customer demand and sales trends, we believe that consumer spending has been restored in the local real estate market and real estate sales are expected to grow in the coming periods. On the other side, due to the negative impact offrom the COVID-19 pandemic and its ~~spread,~~variants, the development period of real estate properties and our operating cycle has been extended and we may not be able to liquidate our large balance of completed real estate properties within the short term as we originally expected. In addition, as of ~~June 30,~~December 31, 2022, we had large construction loans payable of approximately ~~$115.1~~$111.8 million and accounts payable of approximately ~~$11.3~~$10.9 million ~~due~~to be paid to subcontractors.
The resurgence of COVID-19 and followed lockdown policies in some cities of PRC might cut the Company’s demand and revenue depending on the length of lockdown. Starting on March 27, 2022, Shanghai city implemented the lockdown policy, which did not have significant negative impact on the Company’s operation because the Company has no operation in Shanghai. The extent of the impact of COVID-19 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 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. 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.
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,~~December 31, 2022, our total cash and restricted cash balance was approximately ~~$4.5 million.~~
$3.8 million, decreased from approximately $4.4 million as of September 30, 2022. 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 14,~~October 25, 2022, the Company closed a private placement with ~~net proceeds of approximately $24.3 million. On March 16, 2022, the Company completed another private placement with~~ gross proceeds of ~~$4.6~~$5.2 million. As of ~~June 30,~~December 31, 2022, we had approximately ~~$80.4~~$77.0 million of completed residential apartments and commercial units available for sale to potential buyers. Although we reported approximately ~~$11.3~~$10.9 million of accounts payable as of ~~June 30,~~December 31, 2022, due to the long-term relationship with our construction suppliers and subcontractors, we were able to effectively manage cash spending on construction and negotiate with them to adjust the payment schedule based on our cash on hand. In addition, most of our existing real estate development projects relate to the old town renovation which ~~are~~is supported by the local government. As of ~~June 30,~~December 31, 2022, we reported approximately ~~$115.1~~$111.8 million of construction loans borrowed from financial institutions controlled by the local government and such loans ~~could~~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 ~~and nine~~ months ended ~~June 30,~~December 31, 2022, we had six large ongoing construction projects (see Note 3,4, real estate properties under development) which were ~~under~~in 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.

32
~~Table of Contents~~

Cash Flow

For the Nine Months Ended

June 30,


2022

2021
Net Cash Used in Operating Activities

$
(799,748)

$
(252,384)
Net Cash Used in Investing Activities

(26,936,915)

—
Net Cash Provided by Financing Activities

28,936,915

—
Effect of exchange rate changes on cash

(124,054)

91,431
Net increase (decrease) in cash and restricted cash

1,076,198

(160,953)
Cash and restricted cash, beginning of period

3,465,189

3,867,536
Cash and restricted cash, end of period

$
4,541,387

$
3,706,583
Comparison of cash flows results is summarized as follows:
Three months ended
December 31,
2022 2021
(Unaudited) (Unaudited)

Net cash provided by operating activities $ (672,961 ) $ 602,095
Net Cash Used in Investing Activities (5,200,000 ) —
Net cash provided by financing activities 5,201,470 2,000,000
Effect of change of foreign exchange rate on cash and restricted cash 92,539 (358,596 )
Net increase in cash and restricted cash (578,952 ) 2,243,499
Cash and restricted cash, beginning of period 4,368,177 3,465,189
Cash and restricted cash, end of period $ 3,789,225 $ 5,708,688
Operating Activities
Net cash used inby operating activities during the ~~nine~~three months ended ~~June 30,~~December 31, 2022 was ~~$0.8~~approximately $0.7 million, consisting of net loss of approximately $0.3 million and net changes in our operating assets and liabilities, which mainly included an increase of spending in real estate property under development of $9.3 million, a decrease in accounts payable of $6.5 million due to more payments to our supplier, offset by decrease of real estate property completed of $4.6 million due to sales of real estate and a decrease in other assets of $4.0 million due to the reduction of receivables from housing buyers, an increase of $2.6 million in customer deposits received from real estate sales and a decrease of $0.6 ~~million in other payable and accrued expenses due to accrual of $1.4 million for claims from suppliers and customers for civil disputes during the nine months ended June 30, 2022.~~
~~Net cash used in operating activities during the nine months ended June 30, 2021 was approximately $0.3 million, consisting of net income of approximately $6.1~~ million and net changes in our operating assets and liabilities, which mainly included a decrease of other assets of approximately $0.08 million due to the reduction of receivables from housing buyers, a decrease in real estate property completed byof approximately ~~$6.7~~$0.08 million due to sales of our Yangzhou Palace ~~project,~~and other projects and an decrease in customer deposits received of $0.3 million, offset by payments of other payables of approximately of $1.4 million and additional spending in real estate under development of $1.3 million.
Net cash provided by operating activities during the three months ended December 31, 2021 was approximately $0.6 million, consisting of net income of approximately $0.4 million and net changes in our operating assets and liabilities, which mainly included a decrease of other assets of approximately $2.9 million due to the reduction of receivables from housing buyers, a decrease in ~~contract assets~~real estate property completed of approximately ~~$2.3~~$1.5 million due to ~~collection~~sales of ~~customers’ payments~~our Yangzhou Palace and other projects and an increase in customer ~~deposit~~deposits received of ~~$2.4 million and an increase in tax payable of $2.2~~$1.8 million, offset by payments of other payables of approximately of $4.5 million and additional spending ~~for~~in real estate under development of ~~$19.9~~$1.9 million.
Investing Activities
Net cash flows ~~used in~~provided by investing activities was approximately ~~$26.9~~$5.2 million and nil for ~~nine~~three months ended ~~June 30,~~December 31, 2022 ~~which was the prepayment made to purchase energy equipment.~~
~~There was no cash flows provided by or used in investing activities for nine months ended June 30,~~and 2021.
33
~~Table of Contents~~

Financing Activities
Net cash flows provided by financing activities was approximately ~~$28.9~~$5.2 million for ~~nine~~three months ended ~~June 30,~~December 31, 2022 ~~which was~~from the ~~proceeds received from two~~ private ~~placements closed in January 2022 and March 2022, respectively.~~placement completed on October 25, 2022.
~~There was no~~
Net cash flows provided by financing activities was approximately $2.0 million for ~~nine~~three months ended ~~June 30, 2021.~~December 31, 2021, which was advance proceeds from investors for the private placement sale of Units, which was completed on January 14, 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 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 ~~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 30,~~December 31, 2022 and September 30, ~~2021,~~2022, our outstanding guarantees in respect of our customers’ mortgage loans amounted to approximately ~~$62~~$25.7 million and ~~$66~~24.9 million, respectively. As of ~~June 30,~~December 31, 2022 and September 30, ~~2021,~~2022, the amount of restricted cash reserved for these guarantees was approximately ~~$3.1~~$2.9 million and ~~$3.3~~$3.0 million, respectively, and the Company believes that such reserves are sufficient.
~~Inflation~~
Inflation
Inflationary factors, such as increases in the cost of our products and overhead costs, could impair our operating results. Although we do not believe that inflation has ~~not~~ had a material impact on our ~~real estate business~~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.
We Conduct Substantially All Our Business in Foreign Country
Substantially all of our operations are conducted in China and ~~we do not expect inflation~~are subject to ~~have a material impact on our~~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 ~~near future.~~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 3. QUANTITATIVE AND QUALITATIVE ~~DISCLOSURES~~DISCLOSURE ABOUT MARKET RISK.
As a smaller reporting company, we are not required to provide the information required by this ~~information.~~item.

34
~~Table of Contents~~

ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
~~Disclosure~~
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, ~~(as~~as defined in 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 on Form 10-Q (the ~~“Exchange Act”~~“Evaluation Date”) ~~Rule 15d-15(e)) are designed with~~. The evaluation of our disclosure controls and procedures included a review of our processes and the ~~objective~~effect on the information generated for use in this Quarterly Report on Form 10-Q. In the course of ~~ensuring~~this evaluation, we sought to identify any material weaknesses in our disclosure controls and procedures and to confirm that any necessary corrective action, including process improvements, was taken. The purpose of this evaluation is to determine if, as of the Evaluation Date, our disclosure controls and procedures were operating effectively such that the information, required to be disclosed in our SEC reports ~~filed under the Exchange Act, such as this report, is~~(i) was recorded, processed, summarized and reported within the time periods specified in ~~the SEC’s~~SEC rules and ~~forms. Disclosure controls~~forms, and ~~procedures are also designed with the objective of ensuring that such information is~~(ii) was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

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,~~December 31, 2022. 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:
● Provide more U.S. GAAP knowledge and SEC reporting requirements training for the accounting department and establish formal policies and procedures.
The remedial measures being undertaken may not be fully effectuated or may be insufficient to address the significant deficiencies we identified, and there can be no assurance that significant deficiencies or material weaknesses in our internal control over financial reporting will not be identified or occur in the future. If additional significant deficiencies (or if material weaknesses) in our internal controls are discovered or occur in the future, among other similar or related effects: (i) the Company may fail to meet future reporting obligations on a timely basis, (ii) the Company’s consolidated financial statements may contain material misstatements, and (iii) the Company’s business and operating results may be harmed.
Changes in Internal Control ~~Over~~over Financial Reporting
Except for the matters described above to improve our internal controls over financial reporting, there were no changes in our internal control over financial reporting for the three months ended ~~June 30,~~December 31, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, however, the Company is in the process of designing and planning to change as described above.

35
~~Table of Contents~~

~~GREEN GIANT INC.~~
PART ~~II -~~II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We
There are ~~not currently involved in any material legal proceedings. From time-to-time we are, and we anticipate that we will be, involved in~~four on-going legal proceedings ~~claims, and litigation arising~~to which the Company is a party or in which any director, officer or affiliate of the ~~ordinary course~~Company, any owner of ~~our business and otherwise. The ultimate costs~~record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to ~~resolve any such matters could have~~the Company or has a material ~~adverse effect on our financial statements. We could be forced to incur material expenses with respect to these legal proceedings, and in the event that there is an outcome in any that is~~interest adverse to ~~us, our financial position and prospects could be harmed.~~the Company. Some of the Company’s property is the subject of on-going legal proceedings.

1) Case between the labor contract dispute between Wangcang County Lexin Labor Service Co., Ltd. and Zhejiang Hongcheng Construction Group Co., Ltd., Zhejiang Hongcheng Construction Group Co., Ltd. Xi 'an Branch and Shaanxi Guangsha Investment Development Group Co., Ltd. Hongcheng Company was judged to compensate Lexin Company, and Shaanxi Guangsha Company was jointly and severally liable, with an execution amount of $3,479,673.
2) Related to the above Case 1 disputes between Zhejiang Hongcheng Construction Group Co., Ltd. and Shaanxi Guangsha Investment Development Group Co., Ltd. on the construction project contract. The execution target of this case is $9,376,994 million including $3,479,673 in Case 1.
3) Case between Hantai District Commuity Center Hanzhong Urban Counsel and Shaanxi Guangsha Investment Development Group Co., Ltd., which was ordered by Hanzhong Hantai District Court to the settle the amount of $135,621 and it is still outstanding as at December 31, 2022.
4) Dispute between a disclosed property buyer and Shaanxi Guangsha Investment Development Group Co., Ltd., which was ordered by local court to pay the plaintiff of $131,993 which is still outstanding as at December 31, 2022.
~~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
~~None.~~
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.

36
~~Table of Contents~~

ITEM 6. EXHIBITS
~~The exhibits listed below are filed as part of this Quarterly Report on Form 10-Q.~~
~~Index to~~(a) Exhibits
Exhibit
Number

Description of Exhibit

~~Incorporated by Reference~~
~~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).

~~(Unless Otherwise Indicated)~~
~~Number~~

~~Exhibit Title~~
~~Form~~
~~File~~
~~Exhibit~~
~~Filing Date~~
~~31.1~~
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~~2002.

—

—

—

~~Filed herewith~~

~~31.2~~
31.2*

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002~~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~~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~~2002.

—

—

—

~~Furnished herewith~~

~~101~~
101.INS*

~~The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, 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
XBRL Instance Document.
—

—

—

~~Filed herewith~~
101.SCH*

Inline XBRL Taxonomy Extension Schema Document

~~104~~
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)
*
—

—

—

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.

37
~~Table of Contents~~

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 15, 2022~~
Green Giant Inc.

Date: February 13, 2023
By:
/s/ Neng Chen

Neng Chen

Chief Executive Officer
Date: February 13, 2023 By: /s/ Rongrong Dai
Rongrong Dai
Chief Financial Officer
34

38
0001158420 hgsh:AppropriationsToStatutoryReservesMember 2021-09-30


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


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

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

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

Class of Securities		Shares Outstanding
Common Stock, $0.001 par value		55,793,268

		Page
PartPART I	~~Financial Information~~FINANCIAL INFORMATION	2 1

Item 11.	Unaudited Interim Financial Statements	2 1
	Condensed Consolidated Balance Sheets ~~as of June 30,~~at December 31, 2022 (unaudited) and September 30, ~~2021~~2022	2 1
	Condensed Unaudited Consolidated Statements of Income and Comprehensive Income for ~~the~~The Three Months ~~and Nine Months~~ Ended ~~June 30,~~December 31, 2022 and 2021	3 2
	Condensed Unaudited Consolidated Statements of Changes in Stockholders’ Equity for ~~the~~The Three Months Ended ~~June 30,~~December 31, 2022 and 2021	4 3
	Condensed Unaudited Consolidated Statements of Cash Flows for ~~the Nine~~The Three Months Ended ~~June 30,~~December 31, 2022 and 2021	5 4
	Notes to Condensed Unaudited Consolidated Financial Statements	6 5-20
Item 22.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22 21
Item 33.	Quantitative and Qualitative Disclosures about Market Risk	34 30
Item 44.	Controls and Procedures	35 30

~~Part~~PART II	~~Other Information~~OTHER INFORMATION	36 32

Item 11.	Legal Proceedings	36 32
Item 1A1A.	Risk Factors	36 32
Item 22.	Unregistered Sales of Equity Securities and Use of Proceeds	36 32
Item 33.	Defaults ~~Upon~~upon Senior Securities	36 32
Item 44.	Mine Safety Disclosures	36 32
Item 55.	Other Information	36 32
Item 6	Exhibits	37 33
	~~Signature~~Signatures	38 34


	June 30,		September 30,
	2022		2021
	(unaudited)
ASSETS
Current assets
Cash	$	1,463,797	$	170,001
Restricted cash		3,077,590		3,295,188
Contract assets		12,706,376		13,723,793
Prepayment for energy equipment		26,936,915		—
Real estate property development completed		79,173,943		86,908,870
Other assets		4,182,436		8,358,925
Total current assets		127,541,057		112,456,777

Noncurrent assets
Property, plant and equipment, net		519,106		558,086
Security deposits		1,880,854		1,955,202
Real estate property development completed, noncurrent		1,189,934		1,236,971
Real estate property under development		264,621,839		265,769,721
Due from local governments for real estate property development completed		2,908,823		3,023,806
Total noncurrent assets	��	271,120,556		272,543,876

Total Assets	$	398,661,613	$	385,000,563

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Construction loans	$	115,086,970	$	119,636,222
Accounts payable		11,281,306		18,259,151
Other payables		9,938,789		6,430,992
Construction deposits		1,906,980		1,982,644
Contract liabilities		1,645,272		1,886,075
Customer deposits		20,629,161		18,816,860
Accrued expenses		2,587,755		1,987,567
Taxes payable		12,924,345		14,071,864
Total current liabilities		176,000,578		183,071,375

Noncurrent Liabilities
Construction deposits, noncurrent		1,310,471		1,362,273
Customer deposits, noncurrent		949,523		987,057
Taxes payable, noncurrent		8,544,397		8,882,147
Total noncurrent liabilities		10,804,391		11,231,477

Total Liabilities		186,804,969		194,302,852

Commitments and Contingencies
Shareholders’ Equity
Common stock, $0.001 par value, 50,000,000 shares authorized, 40,464,929 and 25,617,807 shares issued and outstanding at June 30, 2022 and September 30, 2021, respectively		40,464		25,617
Additional paid-in capital		165,457,371		136,535,303
Statutory surplus		11,095,939		11,095,939
Retained earnings		40,358,474		40,691,955
Accumulated other comprehensive (loss) income		(5,095,604)		2,348,897
Total stockholders’ equity		211,856,644		190,697,711
Total Liabilities and Stockholders’ Equity	$	398,661,613	$	385,000,563

	December 31,			September 30,
	2022			2022
	(Unaudited)
ASSETS
Cash	$	934,153		$	1,360,217
Restricted cash		2,855,072			3,007,960
Contract assets		7,559,801			7,628,770
Real estate property development completed		76,983,088			74,772,530
Other assets		3,960,081			3,767,190
Prepayment		32,136,915			26,936,915
Property, plant and equipment, net		492,624			483,219
Security deposits		1,826,559			1,771,019
Real estate property under development		151,200,938			145,300,588
Due from local governments for real estate property development completed		43,687,388			42,358,986

Total Assets	$	321,636,619		$	307,387,394

LIABILITIES AND STOCKHOLDERS’ EQUITY
Construction loans	$	111,764,779		$	108,366,351
Accounts payable		10,938,899			10,606,635
Other payables		15,413,653			13,578,713
Construction deposits		3,124,574			3,029,565
Contract liabilities		2,052,462			1,989,898
Customer deposits		20,156,075			19,842,768
Accrued expenses		10,859,071			10,547,436
Taxes payable		20,265,780			19,980,358
Total liabilities		194,575,293			187,941,724

Common stock, $0.001 par value, 200,000,000 shares authorized, 55,753,268 and 46,464,929 shares outstanding at December 31, 2022 and September 30, 2022		55,753			46,464
Additional paid-in capital		190,013,952			184,821,771
Statutory surplus		11,095,939			11,095,939
Retained earnings		(68,006,449	)		(67,432,727	)
Accumulated other comprehensive income		(6,097,869	)		(9,085,777	)
Total stockholders’ equity		127,061,326			119,445,670

Total Liabilities and Stockholders’ Equity	$	321,636,619		$	307,387,394


	Three Months Ended June 30,				Nine Months Ended June 30,
	2022		2021		2022		2021
Real estate sales, net of sales tax	$	1,164,954	$	31,626,560	$	8,286,940	$	52,521,230
Cost of real estate sales		(833,599)		(25,296,688)		(4,594,258)		(41,624,594)
Gross profit		331,355		6,329,872		3,692,682		10,896,636
Operating expenses:
Selling and distribution expenses		(40,261)		(81,002)		(289,919)		(177,168)
General and administrative expenses		(1,698,534)		(1,411,151)		(2,980,887)		(2,260,410)
Total operating expenses		(1,738,795)		(1,492,153)		(3,270,806)		(2,437,578)
Operating (loss) income		(1,407,440)		4,837,719		421,876		8,459,058
Interest income, net		1,705		2,858		3,910		6,395
Other (expense)		5,609		(1,354)		(245,592)		(273,782)
(Loss) income before income taxes		(1,400,126)		4,839,223		180,194		8,191,671
Provision for income taxes		(30,450)		(1,210,569)		(513,675)		(2,050,193)
Net (loss) income		(1,430,576)		3,628,654		(333,481)		6,141,478
Other comprehensive (loss) income
Foreign currency translation adjustment		(10,649,961)		2,757,738		(7,444,501)		9,011,466
Comprehensive (loss) income	$	(12,080,537)	$	6,386,392	$	(7,777,982)	$	15,152,944
Basic and diluted (loss) earnings per common share:
Basic	$	(0.04)	$	0.14	$	(0.01)	$	0.26
Diluted	$	(0.04)	$	0.14	$	(0.01)	$	0.26
Weighted average common shares outstanding:
Basic		40,464,929		25,102,455		33,672,274		23,378,298
Diluted		40,464,929		25,102,455		45,811,329		23,378,298

	Three months ended December 31,
	2022			2021
Real estate sales	$	164,712		$	2,879,215
Less: Sales tax		(2,006	)		(60,221	)
Cost of real estate sales		(130,292	)		(1,455,556	)
Gross profit		32,414			1,363,438
Operating expenses
Selling and distribution expenses		40,430			219,787
General and administrative expenses		566,817			631,927
Total operating expenses		607,247			851,714
Operating income		(574,833	)		511,724
Interest income, net		1,128			1,461
Other (expense), net		(17	)		—
Income before income taxes		(573,722	)		513,185
Provision for income taxes		—			148,875
Net income		(573,722	)		364,310
Other Comprehensive income
Foreign currency translation adjustment		2,987,908			2,167,401
Comprehensive income	$	2,414,186		$	2,531,711
Basic and diluted income per common share
Basic	$	(0.01	)	$	0.01
Diluted	$	(0.01	)	$	0.01
Weighted average common shares outstanding
Basic		53,229,263			25,617,807
Diluted		71,191,157			25,617,807


										Accumulated
				Additional						other		Total
	Common Stock			Paid-in		Statutory		Retained		comprehensive		stockholders’
	Shares	Amount		Stocks		Reserve		Earnings		Income (loss)		equity
Balance, September 30, 2020	22,525,693	$	22,525	$	129,930,330	$	10,458,395	$	34,954,061	$	(7,039,490)	$	168,325,821
Net income	—		—		—		—		291,587		—		291,587
Foreign currency translation adjustments	—		—		—		—		—		6,991,159		6,991,159
Balance, December 31, 2020 - unaudited	22,525,693	$	22,525	$	129,930,330	$	10,458,395	$	35,245,648		(48,331)	$	175,608,567
Net income	—		—		—		—		2,221,237		—		2,221,237
Foreign currency translation adjustments	—		—		—		—		—		(737,431)		(737,431)
Balance, March 31, 2021 - unaudited	22,525,693	$	22,525	$	129,930,330	$	10,458,395	$	37,466,885	$	(785,762)	$	177,092,373
Issuance of common stocks for settlement of accounts payable	3,092,114		3,092		6,591,798		—		—		—		6,594,890
Net income	—		—		—		—		3,628,654		—		3,628,654
Foreign currency translation adjustments	—		—		—		—		—		2,757,738		2,757,738
Balance, June 30, 2021 - unaudited	26,617,807	$	26,617	$	136,522,128	$	10,458,395	$	41,095,539	$	1,971,976	$	190,073,655

Balance, September 30, 2021	25,617,807	$	25,617	$	136,535,303	$	11,095,939	$	40,691,955	$	2,348,897	$	190,697,711
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

												Accumulated
					Additional							Other
	Common Stock				Paid-in		Statutory		Retained			Comprehensive
	Shares		Amount		Capital		Surplus		Earnings			(loss) income			Total
Balance at September 30, 2021		25,617,807	$	25,617	$	136,535,303	$	11,095,939	$	40,691,955		$	2,348,897		$	190,697,711
Net income for the period		—		—		—		—		364,310			—			364,310
Foreign currency translation adjustments		—		—		—		—		—			2,167,401			2,167,401
Balance at December 31, 2021 (Unaudited)		25,617,807	$	25,617	$	136,535,303	$	11,095,939	$	41,056,265		$	4,516,298		$	193,229,422

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
Private placements		9,288,339		9,289		5,192,181		—		—			—			5,201,470
Net income for the period		—		—		—		—		(573,722	)		—			(573,722	)
Foreign currency translation adjustments		—		—		—		—		—			2,987,908			2,987,908
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


	For the Nine Months Ended
	June 30,
	2022		2021
Cash Flows from Operating Activities:
Net income	$	(333,481)	$	6,141,478
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation of property and equipment		18,440		37,342
Changes in operating assets and liabilities:
Contract assets		514,590		2,321,807
Real estate property development completed		4,600,277		6,688,702
Real estate property under development		(9,302,202)		(19,949,297)
Other current assets		4,013,019		(691,310)
Accounts payables		(6,525,103)		61,717
Other payables		3,895,841		419,675
Contract liabilities		(175,577)		137,771
Customer deposits		2,624,895		2,385,004
Accrued expenses		646,264		(29,542)
Taxes payables		(776,711)		2,224,269
Net Cash Used in Operating Activities		(799,748)		(252,384)

Cash Flows from Investing Activities:
Prepayment for energy equipment		(26,936,915)		—
Net Cash Used in Investing Activities		(26,936,915)		—

Cash Flows from Financing Activities:
Proceeds from private placements		28,936,915		—
Net Cash Provided by Financing Activities		28,936,915		—

Effect of exchange rate changes on cash and restricted cash		(124,054)		91,431
Net increase (decrease) in cash and restricted cash		1,076,198		(160,953)
Cash and restricted cash, beginning of period		3,465,189		3,867,536
Cash and restricted cash, end of period	$	4,541,387	$	3,706,583
Supplemental Cash Flow Information
Cash paid for interest expense	$	—	$	2,014,791
Cash paid for income tax	$	—	$	265,149

Non-cash Transactions of Investing and Financing Activities
Reclassification of interest payable to other liabilities	$	5,063,191	$	3,269,932
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	$	—	$	6,594,890
Real estate sales for settlement in real estate property under development	$	—	$	(14,503,991)

Reconciliation of cash and restricted cash
Cash, end of period	$	1,463,797	$	324,497
Restricted, end of period		3,077,590		3,382,086
Total cash and restricted cash, end of period	$	4,541,387	$	3,706,583

Cash, beginning of period	$	170,001	$	457,699
Restricted, beginning of period		3,295,188		3,409,837
Total cash and restricted cash, beginning of period	$	3,465,189	$	3,867,536

	For three months ended
	December 31,				September 30,
	2022		2021		2022
	(Unaudited)		(Unaudited)
Period end RMB:USD exchange rate		6.8972		6.3726		7.1135
Period average RMB:USD exchange rate		7.1120		6.3914		6.5532

	Balance as of
	December 31, 2022			September 30, 2022
	(Unaudited)
Development completed:
Hanzhong City Mingzhu Garden Phase II	$	21,320,616		$	20,672,000
Hanzhong City Oriental Pearl Garden		17,971,988			17,425,514
Yang County Yangzhou Pearl Garden Phase II		2,103,885			2,039,912
Yang County Yangzhou Palace		35,586,599			34,635,104
Real estate property development completed	$	76,983,088		$	74,772,530
Under development:
Hanzhong City Liangzhou Road and related projects (a)	$	179,661,003		$	173,289,941
Hanzhong City Hanfeng Beiyuan East (b)		811,634			786,954
Hanzhong City Beidajie (b)		32,673,188			31,144,446
Yang County East 2^nd Ring Road (c)		8,007,784			7,904,869
Real estate property under development	$	221,153,609		$	213,126,210
Impairment		(69,952,671	)		(67,825,622	)
Real estate property under development		151,200,938			145,300,588

	For the three months ended
	December 31,
	2022			2021
	(Unaudited)			(Unaudited)
Chinese statutory tax rate		25.0	%	$	25.0	%
Other adjustments*		(25.0	)%		4.0	%

Effective tax rate		—	%	$	29.0	%

	For the three months ended December 31,
	2022		2021
	(Unaudited)		(Unaudited)

Revenue recognized for completed condominium real estate projects, net of sales taxes	$	162,706	$	2,818,994
Revenue recognized for condominium real estate projects under development, net of sales taxes		—		—
Total revenue, net of sales taxes	$	162,706	$	2,818,994

	For the three months ended December 31,
	2022		2021
	(Unaudited)		(Unaudited)

Revenue recognized for completed condominium real estate projects, net of sales taxes	$	162,706	$	2,818,994
Revenue recognized for condominium real estate projects under development, net of sales taxes		—		—
Total revenue, net of sales taxes	$	162,706	$	2,818,994

	For Three Months Ended December 31,
	2022						2021						Variance
	Revenue			%			Revenue			%			Amount			%
	(Unaudited)						(Unaudited)

Mingzhu Garden (Mingzhu Nanyuan & Mingzhu Beiyuan) Phase I and II	$	—			—	%	$	815,863			28.3	%	$	(815,863	)		(100.0	)%
Oriental Pearl Garden		—			—	%		770,452			26.8			(770,452	)		(100.0	)%
Yangzhou Palace		164,712			100.0	%		1,292,900			44.9	%		(1,128,188	)		(87.3	)%

Gross Real Estate Sales		164,712			100.0	%		2,879,215			100	%		(2,714,503	)		(94.3	)%
Less: Sales Tax		(2,006	)					(60,221	)					58,215			(96.7	)%
Revenue, net of sales tax	$	162,706					$	2,818,994					$	(2,656,288	)		(94.2	)%

	Three months ended
	December 31,
	2022			2021
	(Unaudited)			(Unaudited)

Net cash provided by operating activities	$	(672,961	)	$	602,095
Net Cash Used in Investing Activities		(5,200,000	)		—
Net cash provided by financing activities		5,201,470			2,000,000
Effect of change of foreign exchange rate on cash and restricted cash		92,539			(358,596	)
Net increase in cash and restricted cash		(578,952	)		2,243,499
Cash and restricted cash, beginning of period		4,368,177			3,465,189
Cash and restricted cash, end of period	$	3,789,225		$	5,708,688

Exhibit Number						Description of Exhibit
			~~Incorporated by Reference~~
~~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).		~~(Unless Otherwise Indicated)~~
~~Number~~	~~Exhibit Title~~		~~Form~~	~~File~~	~~Exhibit~~	~~Filing Date~~
~~31.1~~ 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~~2002.		—	—	—	~~Filed herewith~~

~~31.2~~ 31.2*	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002~~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~~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~~2002.		—	—	—	~~Furnished herewith~~

~~101~~ 101.INS*	~~The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, 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	XBRL Instance Document.	—	—	—	~~Filed herewith~~
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
~~104~~ 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)

~~Date: August 15, 2022~~	Green Giant Inc.

Date: February 13, 2023	By:	/s/ Neng Chen
		Neng Chen
		Chief Executive Officer

Date: February 13, 2023	By:	/s/ Rongrong Dai
		Rongrong Dai
		Chief Financial Officer