As filed with the Securities and Exchange Commission on September 17, 2009

(Registration No. 333-________)

UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549

Amendment No. 3 to


FORM S-1


REGISTRATION STATEMENTUNDER THE SECURITIES ACT OF 1933

GOA SWEET TOURS LTDXIANGTIAN (USA) AIR POWER CO., LTD..


(Exact name of registrant as specified in its charter)

Nevada
(State or other jurisdiction of incorporation or organization)

2870

98-0632932

Delaware

7990

98-0632932

(State or Other Jurisdiction of

Incorporation or Organization)

(Primary Standard Industrial

(I.R.S. Employer Identification Number)

Classification Code Number)

 

(I.R.S. Employer

Identification No.)

No. 6 Longda Road Yanjiao Development Zone

Chuntan Vernekar

President/Treasurer/Secretary

H. no. 889, Ascona, Patem,

Benaulim, Goa, India 403716

Sanhe City, Hebei Province, China 065201

Telephone: (011) 91989-055-77-27 Facsimile: (011) 91832-27-89-49

 (Address,+86 (316) 575-5518
Address, including zip code, and telephone number, including area code, of registrant’sregistrant's principal executive offices)

Zhou Deng Hua

Vcorp Services, LLC

1811 SilversideChief Executive Officer
No. 6 Longda Road

Wilmington, Delaware 19810

Telephone: 775-884-0490

Yanjiao Development Zone
Sanhe City, Hebei Province, China 065201
+86 (316) 575-5518
(Name, address,
, including zip code, and telephone number, including area code, of agent for service)

Copies to:

David E. Danovitch, Esq.

Kristin J. Angelino, Esq.

Gersten Savage
Steven W. Schuster
McLaughlin & Stern, LLP

600 Lexington
260 Madison Avenue, - 9th Floor

18 FL, New York, New York, 1002210036 U.S.A.
Tel: (212) 448-1100

Telephone: 212-752-9700

Fax: (212) 980-5192


Approximate date of commencement of proposed sale to the public:As soon as practicable after the effective date of this registration statement.Registration Statement
(Approximate date of commencement of proposed sale to the public)

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.box: [X]

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [__]offering: [   ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [__][   ]



1


If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [__][   ]

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [   ]

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

Large accelerated filer [   ]Accelerated filer                   [X]

Large Accelerated Filer

Non-accelerated filer   [   ]
Smaller reporting company [   ]

[   ]

Accelerated Filer

Emerging growth company [   ]

Non-accelerated Filer

[   ]

Smaller reporting company

[X]

(Do not check if a smaller reporting 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 to Section 7(a)(2)(B) of the Securities Act.  [   ]

     Proposed  Proposed    
     maximum  maximum    
     offering  aggregate  Amount of 
Title of each class of securities to be registered Amount to be  price per  offering  registration 
  registered  share(1)  price  fee 
             
Total Common Stock, par value $.001 per share 100,000,000 $2.25 $225,000,000 $ 26,077.50 

CALCULATION OF REGISTRATION FEE


Title of Each Class

of Securities to

Be Registered

Amount to Be

Registered

Proposed Maximum

Offering Price

per Share(1)

Proposed Maximum

Aggregate Offering

Price

Amount of

Registration

Fee(2)

Common Stock

3,000,000

$0.01

$30,000

$1.67

Total

3,000,000

$0.01

$30,000

$1.67

(1)

This price was arbitrarily determined by us.

(2)

Estimated solely for the purposepurposes of calculating the registration fee in accordance with Rule 457457(c) under the Securities Act.


The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or untilusing the registration statement shall become effectiveaverage of high and low prices as reported on such date as the commission, acting pursuant to SectionOTCQB on March 3, 2017.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), may determine.MAY DETERMINE.








2


The information in this prospectusProspectus is not complete and may be changed. The selling shareholderstockholder may not sell these securities until the registration statement is filed with the Securities and Exchange Commission and becomes effective. This Prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the sale is not permitted.

SUBJECT TO COMPLETION, DATED SEPTEMBER 13, 2017

XIANGTIAN (USA) AIR POWER CO., LTD.

100,000,000 Shares of Common Stock

This Prospectus relates to the sale by the selling security holder listed herein of up to 100,000,000 shares of common stock of XIANGTIAN (USA) AIR POWER CO., LTD. (“Xiangtian” or the “Company”, par value $0.001 per share. The selling stockholder may sell common stock from time to time in the principal market on which the stock is traded at the prevailing market price or in negotiated transactions. The selling stockholder may be deemed underwriters of the shares of common stock, which they are offering. We will pay the expenses of registering these shares.

We are not selling any shares of common stock in this offering and therefore will not receive any proceeds from the sale of common stock hereunder. Our common stock is currently quoted on the over-the-counter OTCQB Market under the symbol “XTNY”. The last reported sales price per share of our common stock as reported by the OTCQB on September 12, 2017 was $4.15.

No underwriter or person has been engaged to facilitate the sale of shares of common stock in this offering. None of the proceeds from the sale of stock by the selling stockholders will be placed in escrow, trust or any similar account.

We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read the entire prospectus and any amendments or supplements carefully before you make your investment decision.

Investing in the common stock of Xiangtian involves a high degree of risk. See “Risk Factors” beginning on page 7.

The information in this prospectus is incomplete and may be changed. We will not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, dated September 17, 2009

PRELIMINARY PROSPECTUS

GOA SWEET TOURS LTD.


3,000,000 SHARES

OF

COMMON STOCK



This prospectus relates to the offering by Goa Sweet Tours Ltd. (“Goa Tours,” “we,” “our,” the “Company” or the “Registrant”) of a total of 3,000,000 shares (the “Shares”) of our common stock on a "self-underwritten" basis at a fixed price of $.01 per share.  The offering will commence promptly after the date of this prospectus and close no later than 180 days from the date of this prospectus. There is no minimum number of Shares required to be purchased. We intend to open a standard bank checking account to be used for the deposit of funds received from the sale of shares in this offering. This offering is on a best efforts, all-or-none basis, meaning if all shares are not sold and the total offering amount is not deposited by the expiration date of the offering, all monies will be returned to investors, without interest or deduction, however there is no assurance we will be able to do so. See "Use o f Proceeds" and "Plan of Distribution."


Prior to this offering there has been no public market for our common stock and we have not applied for listing or quotation on any public market.  After the effective date of the registration statement, we intend to seek a listing of our common stock on the Over-The-Counter Bulletin Board (“OTCBB”), which is maintained by the Financial Industry Regulatory Authority, Inc. (“FINRA”).


The expenses of the offering are estimated at $16,000 and will be paid by us.


THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK. SEE “RISK FACTORS” BEGINNING ON PAGE 3 BEFORE INVESTING IN THE SHARES.


Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.


You should rely only on the information contained in this prospectus and the information we have referred you to. We have not authorized any person to provide you with any information about this offering, Goa Sweet Tours Ltd., or the Shares offered hereby that is different from the information included in this prospectus. If anyone provides you with different information, you should not rely on it.

The date of this prospectusProspectus is               _______________, 2009., 2017.



3





TABLE OF CONTENTS

Prospectus Summary6
The Offering7
Risk Factors7
Description of Business16
Management's Discussion and Analysis of Financial Condition or Plan of Operations36
Market Price Of And Dividends On Registrant's Common Equity And Related Stockholder Matters43
Selected Consolidated Financial Data46
Related Party Transactions47
Selling Security Holders49
Directors and Executive Officers50
Compensation Discussion and Analysis55
Security Ownership of Certain Beneficial Owners and Management59
Plan of Distribution60
Dividend Policy61
Description of Securities61
Legal Matters61
Experts62
Where You Can Find Additional Information62
Consolidated Financial StatementsF-1 – F-44

4


ABOUT THIS PROSPECTUS

The following table of contents has been designed to help you findYou should rely only on the information contained in this prospectus. We encouragehave not authorized anyone to provide you with any information or to readmake any representations about us, the entire prospectus.

Page

SUMMARY

1

RISK FACTORS

3

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

9

TAX CONSIDERATIONS

10

USE OF PROCEEDS

10

DETERMINATION OF THE OFFERING PRICE

10

MARKET FOR OUR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

10

DIVIDEND POLICY

11

DILUTION

12

SELLING STOCKHOLDERS

13

PLAN OF DISTRIBUTION

13

DESCRIPTION OF SECURITIES TO BE REGISTERED

15

SHARES ELIGIBLE FOR FUTURE RESALE

16

EXPERTS

16

LEGAL REPRESENTATION

16

DESCRIPTION OF OUR BUSINESS

17

LEGAL MATTERS

22

MANAGEMENT

22

EXECUTIVE COMPENSATION

23

COMPENSATION OF DIRECTORS

24

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

24

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

25

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION

25

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

26

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

30

WHERE YOU CAN GET MORE INFORMATION

30

FINANCIAL STATEMENTS

F-1







i






SUMMARY


This summary highlights someselling stockholders, the securities or any matter discussed in this prospectus, other than the information fromand representations contained in this prospectus. ItIf any other information or representation is given or made, such information or representation may not contain allbe relied upon as having been authorized by us or any selling stockholder.

The selling stockholders are offering to sell shares of the information that is important to you. You should read the entire prospectus carefully, including the more detailed information regarding our company, the risks of purchasing our common stock, discussedonly in jurisdictions where offers and sales are permitted. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy the securities in any circumstances under “Risk Factors,”which the offer or solicitation is unlawful.

The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock. Neither the delivery of this prospectus nor any distribution of securities in accordance with this prospectus shall, under any circumstances, imply that there has been no change in our affairs since the date of this prospectus. The prospectus will be updated and our financial statementsupdated prospectuses made available for delivery to the extent required by the federal securities laws.

Currency, exchange rate, “China” and their accompanying notes.other references

Unless otherwise noted, all currency figures in this prospectus are in U.S. dollars. References to "yuan" or "RMB" are to the Chinese yuan, which is also known as the renminbi. References in this prospectus to the “PRC” or “China” are to the People’s Republic of China.

In this prospectus, unless otherwise specified, the words “Xiangtian US”, “Goa Tours”, “the Company,” “we,” “us,”“Company”, “we”, “us” or “our” are references to the combined business of Xiangtian (USA) Air Power Co., Ltd. and “our,” refer to Goa Sweet Tours Ltd., unless the context otherwise requires. Unless otherwise indicated, the term “fiscal year” refers to our fiscal year ending July 31. Unless otherwise indicated, the term “commonits direct and indirect subsidiaries. “Common stock” refers to shares of the Company’s common stock, par value $0.001 per share.

The Company5


FORWARD-LOOKING STATEMENTS

Goa Sweet Tours Ltd. was incorporatedThis Prospectus contains forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by forward-looking words such as "may", "expect", "plans", "intends", "anticipate", "believe", "estimate" and "continue" or similar words and are intended to identify forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. You should read statements that contain these words carefully because they discuss our future expectations contain projections of our future results of operations or of our financial condition or state other "forward-looking" information. We believe that it is important to communicate our future expectations to our investors. However, there may be events in the State of Delaware on September 2, 2008. We were formedfuture that we are not able to provide personalized concierge tour packages to tourists who visit the State of Goa, India. We initially plan to market our packages to tourists alreadyaccurately predict or control. The factors listed above in the Statesection captioned "Risk Factors", as well as any cautionary language in this Prospectus, provide examples of Goa throughrisks, uncertainties and events that may cause our actual results to differ materially from the relationships with travel agents and resort operatorsexpectations described in our forward-looking statements. Before you invest in our common stock, you should be aware that our President, Mr. Chuntan Vernekar, has developed through his years of experience in the tour business. We will also develop a website for advertising our services.

We are a development stage company. We are a company without revenues or operations, we have minimal assets and have incurred losses since inception. Our limited start-up operations have consistedoccurrence of the formation ofevents described as risk factors and elsewhere in this Prospectus could have a material adverse effect on our business, planoperating results and identification of our target market. We plan to develop a website that will be the virtual business card and portfolio for the Company. It will showcase the variety of services that we will offer. Our business plan anticipates that our sales will begin in October 2010, the start of the tourist season. Currently our President devotes approximately 5 hours a week to the Company. We will require the funds from this offering in order to fully implement our business plan as discussed in the "Plan of Operation" section of this prospectus. We have been issued a "substantial doubt" going concern opinion from our auditors and our only asset is our cash balance of $9,741 consisting of $25,000 generated from the issu ance of shares to our director, less costs incurred to date.financial condition.

Our administrative offices are currently located at the premises of our President, Chuntan Vernekar, who provides such space to us on a rent-free basis at H. no. 889, Ascona, Patem, Benaulim, Goa, India. We plan to use these offices until we require larger space.


Summary Financial Information


PROSPECTUS SUMMARY

The following tables set forth a summary of the Company’s financial information as providedis qualified in its year-end financial statements.  You should read thisentirety by the more detailed information together with our audited financial statements and the notes thereto appearing elsewhere in this prospectusProspectus.

Our Business

We utilize a proprietary compressed air energy storage power generation technology that can store energy for other alternative energy sources (for example, using solar, wind, geothermal, and tidal as raw power to regenerate electricity power without the information under “Management’s Discussionuse of fossil fuels or other chemical methods.) The power produced by compressed air energy storage and Analysispower release can enhance the power production capabilities of Financial Conditionalternative energy sources. If alternative energy sources cannot be fully utilized, there will be waste sources. We believe that we utilize compressed air energy storage installations in conjunction with the power generation system of alternative energy sources that could ensure the stable power supply of alternative energy generation system and Resultsprovide customers with an advanced power generation capability with no carbon or toxic emissions. Thus, our Company’s compressed air energy storage power generation technology provides a distinct and novel method for alternative energy sources.

The power generated from our system can either be used for the operation of Operations.”our customers or be sold to the State Grid Corporation of China (“State Grid”). We also utilize proprietary technology to enhance the power production capabilities of the photovoltaic solar panels (“PV panels”) that have been used in conjunction with our current projects, including projects that involve only the installation of PV panels without the installation of equipment for compressed air energy technology.


 

July 31, 2009

Revenue

$

-

Operating Expenses

$

19,525

Net Loss for the Period

$

(19,525)

Cash

$

9,741

Total Assets

$

9,741

Total Liabilities

$

4,266

Total Stockholder’s Equity

$

5,475


We have completed construction of 13 projects, two of which utilize our compressed air energy technology in conjunction with PV panels power system (equipment) and eleven of which involve only PV panels power system equipment.


6


The Offering


Shares of common stock offered by the selling security holders

Securities Being Offered

Up to 3,000,000100,000,000 shares of common stock.








stock, par value $0.001

 Offering Price

$0.01 per share

Offering Period

Common stock to be issued and outstanding after the offering

591,042,000 shares(1)

Use of proceedsThe shares are being offered for a periodCompany will not to exceed 180 days. Inreceive any proceeds from the event we do not sell allsale of the shares beforeof common stock offered by the expiration date of the offering, all funds raised will be promptly returnedselling security holders to the investors, without interest or deduction.

public.

Number of Common Stock Issued and Outstanding Before Offering

5,000,000 shares of our common stock are issued and outstanding as of the date of this prospectus.

Number of Common Stock to be Issued and Outstanding After Offering

OTCQB Ticker Symbol


8,000,000 shares

Net Proceeds to Our Company

$30,000

Use of Proceeds

We intend to use the proceeds to develop our business operations.

Risk Factors

The securities offered hereby involve a high degree of risk and should not be purchased by investors who cannot afford the loss of their entire investment. See “Risk Factors” beginning on page 3.

Dividend Policy

We have not declared or paid any dividends on our common stock since our inception, and we do not anticipate paying any such dividends for the foreseeable future.

XTNY


(1)The above information regarding common stock to be outstanding after the offering is based on 591,042,000 shares of common stock outstanding as of September 12, 2017.

Our sole officer, director, control person and/or his affiliates do not intend to purchase any shares in this offering.







RISK FACTORS


An investment in our common stock involves a high degree of risk.significant risks. You should carefully consider the following risks described below and theall other information set forth in this prospectus before investingdeciding to invest in shares of our common stock. If any of the followingevents or developments described below occurs, our business, financial condition and results of operations may suffer. In that case, the value of our common stock may decline and you could lose all or part of your investment.

Our business operations are conducted entirely in the PRC. Because China’s economy and its laws, regulations and policies are different from those typically found in the west and are continually changing, we face certain risks, including but not limited to those summarized below.

Risks Related to our Business

There is Concern about our Ability to Continue as a Going Concern due To Recurring Losses from Operations, All of Which Means That We may not be Able to Continue Operations.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company incurred a loss of $608,184 in the fiscal year ended July 31, 2016 and has incurred losses since its inception resulting in an accumulated deficit of $812,935 at July 31, 2016. For the nine months period ended April 30, 2017, the Company incurred a loss of $1,446,555 and has incurred losses since its inception resulting in an accumulated deficit of $1,893,532 at April 30, 2017. While the Company is continuing to generate revenue from new projects, further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. The Company expects to finance operations primarily through cash flow from revenue and capital contributions from principal shareholders. There can be no assurance that the Company will be successful in its plans described above or in attracting equity or alternative financing on acceptable terms, or if at all.

7


We Have only Generated Limited Revenue from the Sale of our Products.

We have 17 projects that are completed, under construction or under contract to commence construction, including 13 completed projects that generated revenues. We recognized revenue of $4,329,466 and $9,009,326 for the nine months ended April 30, 2017 and 2016, a decline of 52%, and $10,839,955 and $20,772,028 for the years ended July 31, 2016 and 2015, a decline of 48% that resulted from the larger projects being completed in the fiscal year ended July 31, 2015. There can be no assurance that we will complete additional projects in the future and generate significant revenues or that there will not be unexpected difficulties that will require additional resources to solve and delay our growth. Contracts may be cancelled, in addition to the eight projects cancelled because of the Company’s concern that the customers lacked the ability to meet their payment obligations.

Our Business may be Affected by the Economic Growth of China.

Demand for our products is affected by the general economic conditions in China. Our projects generally require significant upfront capital expenditures, and our customers may rely on internally generated funds or on financing for the purchase of our systems. As a result of weakened macroeconomic conditions and in particular the adverse credit market conditions, our customers may experience difficulty in generating capital or in obtaining financing on attractive terms or at all. To the extent that any of the foregoing should occur, our revenues and our growth could be adversely affected.

We may be Unable to Maintain Internal Funds or Obtain Financing in the Future.

Adequate financing is one of the major factors that can affect our ability to execute our business operating resultsplan. We intend to finance our business mainly through internal funds, bank loans or raising equity funds. There is no guarantee that we will always have internal funds available for future developments or we will not experience difficulties in obtaining financing and obtaining credit facilities granted by financial institutions in the future. In addition, there may be a delay in equity fundraising activities. We may not be able to secure additional sources of financing on commercially acceptable terms, if at all. If we cannot raise additional capital on acceptable terms, we may not be able to develop or enhance our products, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements. To fully realize our business objectives and potential, we may require additional financing. Additional financing may be debt, equity or a combination of debt and equity. If equity is used, it could result in significant dilution to our shareholders.

A Substantial Increase in the Cost of Solar Panels Could Adversely Affect our Growth.

We rely on third parties to supply our solar panels. Some of our competitors are vertically integrated and produce their own, giving them a cost advantage which limits the advantage of our solar installation and air energy storage power generation technologies. In addition, solar panels are in ample supply due to increased capacity, particularly in China, in recent years. A shortage of supply could result in increased costs and increase the cost advantage of our vertically integrated competitors.

We are Dependent on our Executive Officers. Any Loss in their Services without Suitable Replacement may Adversely Affect our Operations.

Zhou Deng Huahas served as our Chief Executive Officer since April 30, 2016 and has been a member of our Board of Directors since June 2, 2012. Zhiqi Zhang, the Company’s former Chief Executive Officer remains as our general counsel. Zhou Jian, became Chairman in July 2014. Paul Kam Shing Chiu has served as our Chief Financial Officer since January 25, 2017.Our continued success is dependent, to a large extent, on our ability to retain their services.

The continued success of our business is also dependent on our key management and operational personnel. We rely on their experience in the alternate energy industry, product development, sales and marketing and on their relationships with our customers and suppliers.

8


The loss of the services of any of our executive directors or executive officers without suitable replacement or the inability to attract and retain qualified personnel will adversely affect our operations and hence, our revenue and profits.

We have identified material weaknesses in our internal control over financial reporting, and our business and stock price may be adversely affected if we do not adequately address those weaknesses or if we have other material weaknesses or significant deficiencies in our internal control over financial reporting.

We have identified material weaknesses in our internal control over financial reporting. In particular, we concluded that the Company’s management, including our Chief Executive Officer and our Chief Financial Officer, has identified material weaknesses in the control environment of the Company. The material weaknesses are a (i) lack of accounting personnel with appropriate knowledge of accounting principles generally accepted in the United States of America, or U.S. GAAP, (ii) lack of comprehensive accounting policies and procedures manual in accordance with U.S. GAAP, and (iii) lack of a risk assessment process.

Although we are undertaking steps to address these material weaknesses, the existence of a material weakness is an indication that there is more than a remote likelihood that a material misstatement of our financial statements will not be prevented or detected in the current or any future period. The design and establishment of the internal control documents, including risk control matrices, narratives, flowcharts, as well as policies for corporate governance and financial conditionstatement accounts has been completed. We anticipate the full implementation of the internal control to be finished by December 31, 2017. Until implementation of our internal controls is completed, some or all of the material weaknesses will continue.

In addition, we may in the future identify further material weaknesses in our internal control over financial reporting that we have not discovered to date. Although we are engaged in remediation efforts with respect to the material weaknesses, the existence of one or more material weaknesses could result in errors in our financial statements, and substantial costs and resources may be seriously harmed. The tradingrequired to rectify these or other internal control deficiencies. If we cannot produce reliable financial reports, investors could lose confidence in our reported financial information, the market price of our common stock could decline duesignificantly, we may be unable to any of these risks, and you may lose part or all of your investment.


Risks Related to Our Business


1.

We need to continue as a going concern if our business is to succeed.


Our  independent auditors state in their audit  report, dated August 26, 2009, and included with this prospectus, that since we have no business operations to date and must secureobtain additional financing to commence our plan of operations, these matters raise substantial  doubt  about our ability  to continue as a going concern. To date, we have completed only part ofoperate and expand our business, plan and weour business and financial condition could be harmed. We cannot assure you that we will be able to generate enough revenueremediate these material weaknesses in a timely manner.

If We Do not Manage our Growth, We may not be Able to achieve profitability. At this time, we cannot predict with assuranceOperate our Business Effectively.

We expect significant expansion will be required to address potential growth in our customer base, the potential successbreadth of our business.


2.

service offerings, and other opportunities. This expansion could strain our management, operations, systems and financial resources. To manage any future growth of our operations and personnel, we must improve and effectively utilize operational, management, marketing and financial systems and successfully recruit, hire, train and manage personnel and maintain close coordination among our technical, finance, marketing, sales and recruitment staffs. We have never sold any tour packagesalso will need to manage an increasing number of complex relationships with customers, strategic partners, advertisers and may never be able to do so profitably.other third parties. Our failure to sellmanage growth could disrupt our packages profitably will drain available cashoperations and eventually forceultimately prevent us from generating the revenue we expect.


Risks Related to cease operations.Protection and Infringement of Intellectual Property Rights.


Our ability to compete depends, in part, on our ability to obtain and enforce intellectual property protection for our technology in China and internationally. We formed Goa Tourscurrently rely primarily on September 2, 2008a combination of trade secrets, patents, copyrights, trademarks and therelicenses to protect our intellectually property. While the Chinese government is no meaningful historical data for an investor to evaluate.  The revenue and income potentialmore supportive in recent years of our business and the market for online salesprotection of our tour packages has not been proven. We will encounter risks and difficulties commonly faced by early-stage companies in new and rapidly evolving markets. We intend to make significant investments in our infrastructure, website and affiliates. As a result, we will have a net loss from operations and may not be able to reach or sustain profitability in the future. Ifintellectual property rights, if we fail to become profitable, we willenforce our intellectual property rights, our businesses may suffer. We, or our suppliers, may be forcedsubject to cease operations.third-party claims of infringement on intellectual property rights. These claims, if successful, may require us to redesign affected products, enter into costly settlement or license agreements, pay damage awards, or face a temporary or permanent injunction prohibiting us from marketing or selling certain of our products.

3.

We are solely dependent upon the fundsRisks Related to be raised in this offering to start our business, the proceedsLack of which may be insufficient to achieve revenues. We may need to obtain additional financing which may not be availableProperty and Casualty and Employee Injury Insurance..

We needmay be held liable if any product we or our suppliers develop causes injury or property damage to employees or others. We do not have property and casualty insurance and injury insurance for employees. If we choose to obtain property and casualty insurance and injury insurance for employees but cannot obtain sufficient insurance coverage at an acceptable cost or otherwise protect against potential claims, the proceeds from this offeringcommercialization of products that we develop may be prevented or inhibited. If we are sued for any property damage or injury caused by our products or the construction of our power systems, our liability could deplete our total assets.

If We Are Unable to startContinue to Operate in Our Facilities, Our Operations Could Be Adversely Affected.

The land on which our operations. Iffactory, office and dormitory in Sanhe City are located is designated for agricultural use, and not for office, factory and dormitory space. However, the $30,000area has also been designated a development zone where other factories are located and additional non-agricultural development is raised, this amount will enable us, after paying the expensesexpected upon completion of this offering, to acquire a tour car and begingovernment planning. We are in the process of locating, sourcing and negotiating with resorts, hotels and other providers of luxury services to form strategic alliances. It will also enable us to initiate development on our website, beginapplying for the gathering of information for our database, initiate the development of our marketing plans and initiate the development of marketing and support material such as brochures, flyers and “fact sheets.”  We may need additional funds to complete further development of our business plan to achieve a sustainable sales level where ongoing operations can be funded out of revenues. There is no assurance that any additional financing will be available or if available, on terms that will be acceptable to us.

4.

Because we have not yet commenced business operations, it makes evaluating our business difficult.


We were incorporated on September 2, 2008 and to date have been involved primarily in organizational activities.  We have not earned revenues as of the date of this prospectus and have incurred total losses of $19,525 from our incorporation to July 31, 2009.


Accordingly, you cannot evaluate our business or our future prospects, due to our lack of operating history.  To date, our business development activities have consisted solely of organizational activities.  Potential investors should be aware of the difficulties normally encountered by development stage companies and the high rate of failure of such enterprises.  In addition, there is no guarantee that we will commence business operations.  Even if we do commence operations, at present, we do not know when.


Furthermore, we anticipate that we will incur increased operating expenses without realizing any revenues.  We therefore expect to incur significant losses into the foreseeable future.  We recognize that ifland use approval. If we are unablenot able to





generate significant revenues from obtain the development ofland use approval to use the land as our website and from any tours,manufacturing facility, we will not be able to earn profits or continueobtain the environmental assessment report and permits that are necessary for our operations.


5.

Because we operate in a foreign country, our business is subject to currency fluctuations and risks which could impact our revenues and results of operations.  Also since we hold our cash reserves in US dollars, we may experience weakened purchasing power in Indian rupees terms and may not be able to afford to conduct our planned program.


We hold our cash reserves in US dollars. Due to foreign exchange rate fluctuations, In the value of these reserves can result in both translation gains and losses in terms of Indian rupees. If there was to be a significant decline in the US Dollar versus Indian rupees, our Indian rupees purchasing power in US dollars would also significantly decline. We have not entered into derivative instruments to offset the impact of foreign exchange fluctuations.


6.

Securing travel agencies and resorts as affiliates, which we have not done to date, is critical to our ability to have our tour packages represented for sale in the various markets.


Before we can secure one or more affiliates to sell our tour packages, a number of important steps are:

·

Establishing recognition to attract the attention of affiliates as well as the tourist;

·

Offering sufficient financial incentives and marketing resources to attract affiliates;

·

Successfully contracting with appropriate affiliates.


Identifying and contracting with appropriate affiliates involves the successful execution of the above steps, which requires capital and human resources.  We have not made any efforts to put affiliates under contract to date. We may not have sufficient capital or human resources to successfully accomplish these steps. If we fail to identify, contract with and retain appropriate affiliates, we will not have a successful product offering and will not attract customers, without whom we will not derive revenues and will be unable to continue operations.


7.

We must build a website offering travel tour packages in order to be able to sell these tour packages to the public.


In order to establish these venues to market specialty tour packages we must establish an Internet website highlighting our tour packages and the specialty services being offered for sale.


All of these projects are in the early stages of development and require substantial time and resources to complete.  We intend to launch a basic interim website, which will feature our current business plan. A domain name has not yet been chosen.  We hope this website can generate sufficient capital to develop our planned program and e-commerce website.  In addition, we may sell our tour packages through other means in order to raise the necessary capital. We currently do not have any preliminary agreement with any agency. In addition, we currently do not have the funds to open a travel agency.


8.

The tour and travel industry is highly competitive as there are no substantial barriers to enter such industries. Also we may not be able to compete effectively against dominant companies in the tourism and travel business or the online specialty tour package business because we lack the equipment, staff, strategic alliances and experience. If we cannot develop desirable tour packages, we will not be able to compete successfully, our business may be adversely affected and we may not be able to generate any revenue.


The tour industry is intensely competitive.  There are numerous, well-financed competitors who offer tour packages for sale through agencies and/or web sites which will directly compete with us for the traveler, tourist and tour group operators.  Several competitors have larger staffs, more resources, more strategic alliances, more sophisticated equipment and more experience in the field of providing tour packages to the public than we do. We have not demonstratedevent that we currently can compete successfully against these competitors and we may not be able to compete in the future.  If we are unable to effectively compete inuse the travel industry,space due to the failure of obtaining the land use approval and the environmental report and permits, we intend to move our results would be negatively affected,operations to the facility currently leased from Sanhe Dong Yi Glass Machine Company Limited. In the event we may beare unable to implementuse our planprincipal factory and we might ultimately fail.






In addition, although we believe our tour packages will be unique and desirable, we cannot stop unauthorized persons from copying aspects of our business, including our website design or functionality, tour package information or marketing materials.


9.

Our business operations could be severely impactedoffice space as a result of politicalthis usage issue, the lease provides that LuckSky Group will use every effort to complete and perfect the ownership and usage rights, or economic instability and/or terrorist activities, which could result inprovide Sanhe with equivalent space. However, such a loss of any investment inmove would be potentially costly and disruptive.

Risks Related to our Shares.


Any terrorist or threatened terrorist activities in or near where we offer our travel packages could severely restrict our business operations and reduce possible revenues. At this time, there are no threats or pending threats to the areas where we plan to conduct our operations or where the courses are located. In addition, any adverse changes to the current economy, political climate, currency, environment for foreign businesses or security could result in the closure of our business and loss of revenues, which would result in a total loss of your investment.


10.

If our President leaves prior to securing replacements, we will be left without management and our business operations would cease.


We depend on the services of our President, Chuntan Vernekar, and our success depends on the decisions made by him.  The loss of the services of our President could have an adverse effect on our business, financial condition and results of operations.  There is no assurance that our President will not leave us or compete against us in the future, as we presently have no employment agreement with him.  In such circumstance, we may have to recruit qualified personnel with competitive compensation packages, equity participation and other benefits that may affect the working capital available for our operations. Our failure to attract additional qualified employees or to retain the services of Mr. Vernekar could have a material adverse effect on our operating results and financial condition.  Even if we are able to find additional personnel, it is uncertain whether we could find someone who could develop the tour packages, provide the translation and cultural component o f our packages, complete the website and secure affiliates for us. We will fail without appropriate replacements.


11.Securities

Our management has no prior experienceCommon Stock Is A "Penny Stock" Which May Restrict the Ability of Stockholders to Sell Our Common Stock in the marketing of products and services via the internet and therefore may not be able to successfully manage the development or growth of our company in this field.Secondary Market.


Our management has no experience in marketing an internet tour travel business. Although Mr. Vernekar has extensive experience with traditional tours, this experience may not be useful in developing and marketing products that are appealing to the internet browser.  Our inexperience may cause us to make serious mistakes in the development or implementation of our business plan. Our management may be unable to develop or grow a business in this field due to its inexperience.

12.

Because our sole officer and director has no formal training in financial accounting and management, in the future, our disclosure and accounting controls may not be effective to comply with applicable laws and regulations, which could result in fines, penalties and assessments against us.

We have only one officer and director.  He has no formal training in financial accounting and management; however, he has been preparing the financial statements that have been audited and reviewed by our auditors and included in this prospectus.  Furthermore, he is responsible for our managerial and organizational structure, which will include preparation of disclosure and accounting controls pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (the “SOX Act”).  Accordingly, he may be incapable of creating and implementing the disclosure and accounting controls which are required under the SOX Act, which could result in fines, penalties and assessments against us and which ultimately could cause you to lose your entire investment.

13.

If our estimates related to expenditures are erroneous or inaccurate, our business will fail and you could lose your entire investment.

Our success is dependent in part upon the accuracy of our management’s estimates of expenditures for legal and accounting services, including those we expect to incur as a publicly reporting company, software development, website development and advertising and administrative expenses, which management estimates to aggregate a minimum of approximately $40,000 over the next 12 months. If such estimates are erroneous or inaccurate, or we





encounter unforeseen expenses and delays, we may not be able to carry out our business plan, which could result in the failure of our business and a loss of your entire investment.


14.

We are subject to the many risks of doing business internationally including but not limited to the difficulty of enforcing liabilities in a foreign jurisdiction.


Our sole officer and director resides outside of the United States and a substantial amount of our assets are located outside of the United States.  We are a Delaware corporation and, as such, are subject to the jurisdiction of the State of Delaware and the United States courts for purposes of any lawsuit, action or proceeding by investors herein. Also, we are registered as a foreign corporation doing business in India and are subject to the local laws of India governing investors' ability to bring actions in foreign courts and enforce liabilities against a foreign private issuer, or any person, based on U.S. federal securities laws.


Risks Relating to Our Common Stock


15.

We have the right to issue up to 100,000,000 shares of "blank check” preferred stock, which may adversely affect the voting power of the holders of other of our securities and may deter hostile takeovers or delay changes in management control.


We may issue up to 100,000,000 shares of our preferred stock from time to time in one or more series, and with such rights, preferences and designations as our board of directors may determine from time to time. To date, we have not issued any shares of preferred stock.  Our board of directors, without further approval of our common stockholders, is authorized to fix the dividend rights and terms, conversion rights, voting rights, redemption rights, liquidation preferences and other rights and restrictions relating to any series of our preferred stock. Issuances of additional shares of preferred stock, while providing flexibility in connection with possible financings, acquisitions and other corporate purposes, could, among other things, adversely affect the voting power of the holders of other of our securities and may, under certain circumstances, have the effect of deterring hostile takeovers or delaying changes in management control.

16.

Because our sole officer and director, who is also our sole promoter, will own more than 50% of the outstanding shares after this offering, he will retain control of us and be able to elect directors which could decrease the price and marketability of the Shares.

Even if we sell all 3,000,000 shares of common stock in this offering, Mr. Vernekar will still own 5,000,000 shares and will continue to control us. As a result, Mr. Vernekar will have significant influence to:

·

elect or defeat the election of our directors;

·

amend or prevent amendment of our articles of incorporation or bylaws;

·

effect or prevent a merger, sale of assets or other corporate transaction; and

·

affect the outcome of any other matter submitted to the stockholders for vote.

Moreover, because of the significant ownership position held by our insider, new investors may not be able to effect a change in the Company’s business or management, and therefore, shareholders would be subject to decisions made by management and the majority shareholder.


In addition, sales of significant amounts of shares held by Mr. Vernekar, or the prospect of these sales, could adversely affect the market price of our common stock. Management’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.


17.

We are selling this offering without an underwriter and may be unable to sell all of the shares, in which case, we may have to seek alternative financing to implement our business plans and you would receive a return of your entire investment.


This offering is self-underwritten, that is, we are not going to engage the services of an underwriter to sell the





shares; we intend to sell them through our officer and director, who will receive no commissions. He will offer the shares to friends, relatives, acquaintances and business associates; however, there is no guarantee that he will be able to sell any of the shares. In the event we do not sell all of the shares before the expiration date of the offering, all funds raised will be promptly returned to the investors, without interest or deduction.


18.

You will incur immediate and substantial dilution of the price you pay for your shares.


Our existing stockholder acquired his shares at a cost of $.005 per share, a cost per share that is substantially less than the amount you will pay for the shares you purchase in this offering. Accordingly, any investment you make in these shares will result in the immediate and substantial dilution of the net tangible book value of those shares from the $.01 you pay for them. Upon completion of the offering, the net tangible book value of your shares will be $.0067 per share, $.0033 less than what you paid for them.


19.

There is currently no public market for our securities, and there can be no assurance that any public market will develop or that our common stock will be quoted for trading.

There is no public market for our securities and there can be no assurance that an active trading market for the securities offered herein will develop after this offering by the selling stockholders, or, if developed, be sustained. After the effective date of the registration statement of which this prospectus is a part, we intend to identify a market maker to file an application with the Financial Industry Regulatory Authority (“FINRA”) to have our common stock quoted on the Over-the-Counter Bulletin Board. We will have to satisfy certain criteria in order for our application to be accepted.  We do not currently have a market maker that is willing to participate in this application process, and even if we identify a market maker, we cannot assure you that we will meet the requisite criteria or that our application will be accepted. Our common stock may never be quoted on the Over-the-Counter Bulletin Board, or, even if quoted, a public market may not materialize.

If our securities are not eligible for initial quotation, or if quoted, are not eligible for continued quotation on the Over-the-Counter Bulletin Board or a public trading market does not develop, purchasers of the shares of common stock may have difficulty selling or be unable to sell their securities should they desire to do so, rendering their shares effectively worthless and resulting in a complete loss of their investment.

20.

Because we will be subject to “penny stock” rules once our shares are quoted on the Over-the-Counter Bulletin Board, the level of trading activity in our stock may be reduced.

Broker-dealer practices in connection with transactions in “penny stocks” are regulated by penny stock rules adopted by theThe Securities and Exchange Commission. Penny stocksCommission has adopted regulations which generally aredefine "penny stock" to be an equity securities withsecurity that has a market price, as defined, of less than $5.00 per share, or an exercise price of less than $5.00 (other than securities registeredper share, subject to certain exceptions, including an exception of an equity security that is quoted on somea national securities exchanges)exchange. Our Common Stock is not now quoted on a national exchange but is traded on the OTCQB of the OTC Markets (“OTCQB”). The penny stockThus, they are subject to rules that impose additional sales practice requirements on broker-dealers who sell these securities. For example, the broker-dealer must make a special suitability determination for the purchaser of such securities and have received the purchaser's written consent to the transactions prior to the purchase. Additionally, the rules require a broker-dealer,the delivery, prior to the transaction, of a transaction in a penny stock not otherwise exempt fromdisclosure schedule prepared by the rules,SEC relating to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must providedisclose the customer withcommissions payable to both the broker-dealer and the registered underwriter, and current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction,securities, and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’sbroker-dealer's presumed control over the market, andmarket. Finally, among other requirements, monthly account statements showingmust be sent disclosing recent price information for the market value of each penny stock held in the customer’s account. In addition, broker-dealersaccount and information on the limited market in penny stocks. The "penny stock" rules, may restrict the ability of our stockholders to sell our Common Stock and warrants in the secondary market.

10 


Our Common Stock Has Been Very Thinly Traded, Liquidity Is Limited, and We May Be Unable to Obtain Listing of Our Common Stock on a More Liquid Market.

Our Common Stock is quoted on the OTCQB, which provides significantly less liquidity than a securities exchange (such as the NYSE MKT, New York Stock Exchange or the NASDAQ). There is uncertainty that we will ever be accepted for a listing on a national securities exchange.

There is currently a very limited volume of trading in our Common Stock, and on many days there has been no trading activity. The purchasers of shares of our Common Stock may find it difficult to resell their shares at prices quoted in the market or at all.

Two Persons Have Significant Voting Power and May Take Actions That May Not Be in the Best Interests of Other Stockholders.

Zhou Jian, our Chairman, and Zhou Deng Hua, our Chief Executive Officer, who sell these securitiesare also on our Board of Directors, control 62.9% of our voting securities. If Zhou Jian and Zhou Deng Hua act together, they will be able to persons other than established customersexert significant control over the Company's management and “accredited investors” must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. Consequently, these requirementsaffairs requiring stockholder approval, including approval of significant corporate transactions. This concentration of ownership may have the effect of reducing the level of trading activity, if any,delaying or preventing a change in the secondary market for a security subject to the penny stock rules. If a trading market does develop for our common stock, these regulations will likely be applicable,control and investors in our common stock may find it difficult to sell their shares.

21.

FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.

FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information.





Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for certain customers. FINRA requirements will likely make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity in our common stock. As a result, fewer broker-dealers may be willing to make a market in our common stock, reducing a stockholder’s ability to resell shares of our common stock.

22.

State securities laws may limit secondary trading, which may restrict the states in which you can sell the shares offered by this prospectus.

If you purchase shares of our common stock sold pursuant to this offering, you may not be able to resell the shares in a certain state unless and until the shares of our common stock are qualified for secondary trading under the applicable securities laws of such state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in such state. There can be no assurance that we will be successful in registering or qualifying our common stock for secondary trading, or identifying an available exemption for secondary trading in our common stock in every state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, our common stock in any particular state, the shares of common stock could not be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our common stock, the market for the common stock will be limited, which could drive downmight adversely affect the market price of our common stock and reduce the liquidityCommon Stock. This concentration of the shares of our common stock and a stockholder’s ability to resell shares of our common stock at all or at current market prices, which could increase a stockholder’s risk of losing some or all of his investment.

23.

If quoted, the price of our common stock may be volatile, which may substantially increase the risk that youownership may not be able to sell your shares at or above the price that you may pay for the shares.

Even if our shares are quoted for trading on the Over-the-Counter Bulletin Board following this offering and a public market develops for our common stock, the market price of our common stock may be volatile. It may fluctuate significantly in response to the following factors:

·

variations in quarterly operating results;

·

our announcements of significant commissions and achievement of milestones;

·

our relationships with other companies or capital commitments;

·

additions or departures of key personnel;

·

sales of common stock or termination of stock transfer restrictions;

·

changes in financial estimates by securities analysts, if any; and

·

fluctuations in stock market price and volume.


Your inability to sell your shares during a decline in the pricebest interests of our stock may increase losses that you may suffer as a resultall of your investment.

the Company's stockholders.

24.

Because we do not intendRisks Related to pay any dividends on our common stock, holders of our common stock must rely on stock appreciation for any return on their investment.

We have not declared or paid any dividends on our common stock since our inception, and we do not anticipate paying any such dividends forDoing Business in the foreseeable future. Accordingly, holders of our common stock will have to rely on capital appreciation, if any, to earn a return on their investment in our common stock.

25.

Additional issuances of our securities may result in immediate dilution to existing shareholders.

We must raise additional capital in order for our business plan to succeed. Our most likely source of additional capital will be through the sale of additional shares of common stock. We are authorized to issue up to 100,000,000 shares of common stock and 100,000,000 shares of preferred stock, of which 5,000,000 shares of common stock and 0 shares of preferred stock are currently issued and outstanding. Our Board of Directors has the authority to cause us to issue additional shares of common and preferred stock, and to determine the rights, preferences and privilege of such shares, without consent of any of our stockholders. We may issue shares in





connection with financing arrangements or otherwise. Any such issuances will result in immediate dilution to our existing shareholders’ interests, which will negatively affect the value of your shares.


26.PRC

We May Be Affected by Environmental Changes in China and Global Climate Change or by Legal, Regulatory or Market Responses to Such Changes.

The growing political and scientific sentiment is that increased concentrations of carbon dioxide and other greenhouse gases in the atmosphere are influencing global weather patterns. Concern over climate change, including global warming, and environmental degradation in China has led to legislative and regulatory initiatives directed at limiting greenhouse gas (GHG) emissions and subsidizing alternate energy production, which have been beneficial to our business. Laws enacted that directly or indirectly affect electricity generation or our production, distribution, and cost of raw materials could all impact our business and financial results. Reductions in the subsidies provided by the government of the PRC for the use of our products would adversely affect our operations, revenue and growth.

We Face the Risk That Changes in the Policies of the PRC Government Could Have a Significant Impact upon the Business We May Be Able to Conduct in the PRC and the Profitability of Such Business.

The PRC’s economy is in a transition from a planned economy to a market oriented economy subject to five-year and annual plans adopted by the central government that set national economic development goals. Policies of the PRC government can have significant effects on the economic conditions of the PRC. The PRC government has confirmed that economic development will follow the model of a market economy. Under this direction, we believe that the PRC will continue to strengthen its economic and trading relationships with foreign countries and business development in the PRC will follow market forces. While we believe that this trend will continue, we cannot assure you that this will be the case. A change in policies by the PRC government could adversely affect our interests by, among other factors: changes in laws, regulations or the interpretation thereof, confiscatory taxation, restrictions on currency conversion, imports or sources of supplies, or the expropriation or nationalization of private enterprises. Although the PRC government has been pursuing economic reform policies for more than two decades, we cannot assure you that the government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption, or other circumstances affecting the PRC's political, economic and social environment.

11


Introduction of New Laws or Changes to Existing Laws by the PRC Government May Adversely Affect Our Business.

The PRC legal system is a codified legal system made up of written laws, regulations, circulars, administrative directives and internal guidelines. Unlike common law jurisdictions like the U.S., decided cases (which may be exposed to potential risks resulting from new requirements under Section 404taken as reference) do not form part of the Sarbanes-Oxley Actlegal structure of 2002.the PRC and thus have no binding effect on subsequent cases with similar issues and fact patterns.

Inflation in the PRC Could Negatively Affect Our Profitability and Growth.


Pursuant to Section 404While the PRC economy has experienced rapid growth, such growth has been uneven among various sectors of the SOX Act, we will be required, beginning with our fiscal year ending July 31, 2009, to includeeconomy and in our annual report our assessmentdifferent geographical areas of the effectivenesscountry. Rapid economic growth can lead to growth in the money supply and rising inflation. In order to control inflation in the past, the PRC government has imposed controls on bank credits, limits on loans for fixed assets and restrictions on state bank lending. Such an austere policy can lead to a slowing of economic growth, which may have an adverse effect on our business operations and financial condition.

Governmental Control of Currency Conversion May Affect the Value of Your Investment.

The PRC government imposes controls on the convertibility of Renminbi, or RMB, into foreign currencies and, in certain cases, the remittance of currency out of the PRC. We receive all of our internal control over financial reporting asrevenues in RMB, which is currently not a freely convertible currency. Shortages in the availability of the end of fiscal 2009. Furthermore,foreign currency may restrict our independent registered public accounting firm will be requiredability to attestremit sufficient foreign currency to whether our assessment of the effectiveness of our internal control over financial reporting is fairly stated in all material respects and separately report on whether it believes we have maintained, in all material respects, effective internal control over financial reporting as of July 31, 2010. We expect to incur additionalpay expenses and diversiondividends, or otherwise satisfy foreign currency dominated obligations. Under existing PRC foreign exchange regulations, payments of management's timecurrent account items, including profit distributions, interest payments and expenditures from the transaction, can be made in foreign currencies without prior approval from the PRC State Administration of Foreign Exchange, or SAFE, by complying with certain procedural requirements. However, approval from appropriate governmental authorities is required where RMB is to be converted into foreign currency and remitted out of PRC to pay capital expenses such as a resultthe repayment of performingbank loans denominated in foreign currencies.

The PRC government also may at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system and process evaluation, testing and remediation required in orderprevents us from obtaining sufficient foreign currency to comply with the management certification and auditor attestation requirements.


We currently do not have a sufficient number of employees to segregate responsibilities and may be unable to afford increasingsatisfy our staff or engaging outside consultants or professionals to overcome our lack of employees. During the course of our testing, we may identify other deficiencies thatcurrency demands, we may not be able to remediatepay certain of our expenses as they come due.

The Fluctuation of RMB May Materially and Adversely Affect Your Investment.

The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in timethe PRC's political and economic conditions. As we rely entirely on revenues earned in the PRC, any significant revaluation of RMB may materially and adversely affect our cash flows, revenues and financial condition. For example, to meet the deadline imposedextent that we need to convert U.S. dollars we receive from an offering of our securities into RMB for our operations, appreciation of the RMB against the U.S. dollar could cause the RMB equivalent of U.S. dollars to be reduced and therefore could have a material adverse effect on our business, financial condition and results of operations. Conversely, if we decide to convert our RMB into U.S. dollars for the purpose of making dividend payments on our common stock or for other business purposes and the U.S. dollar appreciates against the RMB, the U.S. dollar equivalent of the RMB we convert would be reduced. Recently, the RMB has depreciated against the U.S. dollar. In addition, the depreciation of significant U.S. dollar denominated assets could result in a change to our operations and a reduction in the value of these assets.

12


Because Our Principal Assets Are Located Outside of the United States and All of Our Directors and All Our Officers Reside Outside of the United States, It May Be Difficult for You to Enforce Your Rights Based on U.S. Altered, Especially in the Event of a Change in Leadership, Social or Political Disruption, or Other Circumstances Affecting the PRC's Political, Economic and Social Environment.

All of our directors and officers reside outside of the United States. In addition, substantially all of our assets are located outside of the United States. It may therefore be difficult for investors in the United States to enforce their legal rights based on the civil liability provisions of the U.S. Federal securities laws against us in the courts of either the U.S. or the PRC and, even if civil judgments are obtained in U.S. courts, to enforce such judgments in PRC courts. Further, it is unclear if extradition treaties now in effect between the United States and the PRC would permit effective enforcement against us or our officers and directors of criminal penalties, under the U.S. Federal securities laws or otherwise.

Failure to Comply with the U.S. Foreign Corrupt Practices Act and Chinese Anti-Corruption Laws Could Subject Us to Penalties and Other Adverse Consequences.

We are required to comply with China’s anti-corruption laws and the United States Foreign Corrupt Practices Act, which generally prohibits U.S. companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. In addition, we are required to maintain records that accurately and fairly represent our transactions and have an adequate system of internal accounting controls. Foreign companies, including some of our competitors, are not subject to these prohibitions. Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices occur from time-to-time in mainland China. If our competitors engage in these practices, they may receive preferential treatment from personnel of some companies, giving our competitors an advantage in securing business or from government officials who might give them priority in obtaining new licenses, which would put us at a disadvantage. Although we inform our personnel that such practices are illegal, we cannot assure you that our employees or other agents will not engage in such conduct for which we might be held responsible. If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties and other consequences that may have a material adverse effect on our business, financial condition and results of operations. In addition, our brand and reputation, our sales activities or the price of our ordinary shares could be adversely affected if we become the target of any negative publicity as a result of actions taken by our employees or other agents.

We Do not have Liability Business Interruption, Litigation or Natural Disaster Insurance.

The insurance industry in China is still at an early stage of development. In particular, PRC insurance companies offer limited business products. As a result, we do not have any product liability, business liability, disruption insurance or any other forms of insurance coverage for our operations in China. Any potential liability, business interruption, litigation or natural disaster may result in our business incurring substantial costs and the diversion of resources.

Restrictions Under PRC Law on Our PRC Subsidiary's Ability to Make Dividends and Other Distributions Could Materially and Adversely Affect Our Ability to Grow, Make Investments or Complete Acquisitions That Could Benefit Our Business, Pay Dividends to You, and Otherwise Fund and Conduct Our Businesses.

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

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Our Independent Registered Public Accounting Firm’s Audit Documentation related to their Audit Report included in this Registration Statement may include Audit Documentation Located in the People’s Republic of China. The Public Company Accounting Oversight Board Currently cannot Inspect Audit Documentation Located in China and, as such, you may be Deprived of the Benefits of such Inspection.

Our independent registered public accounting firm that issues the audit reports included in our annual reports filed with the U.S. Securities and Exchange Commission, as an auditor of companies that are traded publicly in the United States and a firm registered with the Public Company Accounting Oversight Board (“PCAOB”), is required by the SOX Act forlaws of the United States to undergo regular inspections by the PCAOB to assess its compliance with the requirementslaws of Section 404. In addition, if we failthe United States and professional standards. Our operations are conducted in China, a jurisdiction where the PCAOB is currently unable to achieveconduct inspections without the approval of the Chinese authorities. Accordingly, no audit documentation located in China related to our independent registered public accounting firm’s reports included in our filings with the U.S. Securities and maintainExchange Commission is currently inspected by the adequacyPCAOB.

Inspections conducted by the PCAOB outside of China have identified deficiencies in those firms’ audit procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality. This lack of PCAOB inspections in China prevents the PCAOB from regularly evaluating audit documentation located in China and its related quality control procedures. As a result, investors may be deprived of the benefits of PCAOB inspections.

The inability of the PCAOB to conduct inspections in China makes it more difficult to evaluate the effectiveness of our internal controls,auditor’s audit procedures or quality control procedures as such standardscompared to auditors outside of China that are modified, supplemented or amended from timesubject to time, wePCAOB inspections. Investors may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the SOX Act.  Moreover, effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to help prevent financial fraud. If we cannot provi de reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information and procedures and the tradingquality of our financial statements.

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Risks Related to the VIE Agreements

The PRC Government may Determine that the VIE Agreements are not in Compliance with Applicable PRC Laws, Rules and Regulations.

Details of the VIE Agreements are set out in the under “Description of Business – Acquisition of Sanhe”. There are risks involved with the operation of our business in reliance on the VIE Agreements, including the risk that the VIE Agreements may be determined by PRC regulators or courts to be unenforceable. Our PRC counsel has provided a legal opinion that the VIE Agreements are binding and enforceable under PRC law, but has further advised that if the VIE Agreements were for any reason determined to be in breach of any existing or future PRC laws or regulations, the relevant regulatory authorities would have broad discretion in dealing with such breach, including:

  • imposing economic penalties;

  • discontinuing or restricting the operations of Sanhe;

  • imposing conditions or requirements in respect of the VIE Agreements with which Sanhe may not be able to comply;

  • requiring our Company to restructure the relevant ownership structure or operations;

  • taking other regulatory or enforcement actions that could adversely affect our Company’s business; and

  • revoking the business licenses and/or the licenses or certificates of Sanhe, and/or voiding the VIE Agreements.

Any of these actions could adversely affect our ability to manage, operate and gain the financial benefits of Sanhe, which would have a material adverse impact on our business, financial condition and results of operations.

Our Ability to Control Sanhe Under the VIE Agreements May Not Be as Effective as Direct Ownership.

We conduct our business in the PRC and currently generate virtually all of our revenues through the VIE Agreements. Our plans for future growth are based substantially on growing the operations of Sanhe. However, the VIE Agreements may not be as effective in providing us with control over Sanhe as direct ownership. The VIE Agreements provide us with day-to-day control over the operations of Sanhe as we provide Sanhe with complete business support and technical support and related management, training and consulting services. Under the current VIE arrangements, as a legal matter, if Sanhe fails to perform its obligations under these contractual arrangements, we may have to (i) incur substantial costs and resources to enforce such arrangements, and (ii) rely on legal remedies under PRC law, which we cannot be sure would be effective. Therefore, if we are unable to effectively control Sanhe, it may have an adverse effect on our ability to achieve our business objectives and grow our revenues.

As the VIE Agreements are governed by PRC law, we would be required to rely on PRC law to enforce our rights and remedies under them; PRC law may not provide us with the same rights and remedies as are available in contractual disputes governed by the law of other jurisdictions.

The VIE Agreements are governed by PRC law and provide for the resolution of disputes through the jurisdiction of the courts in the PRC. If Sanhe or its shareholders fail to perform the obligations under the VIE Agreements, we would be required to resort to legal remedies available under PRC law, including seeking specific performance or injunctive relief, or claiming damages. We cannot be sure that such remedies would provide us with effective means of causing Sanhe or its shareholders to meet their obligations, or recovering any losses or damages as a result of non-performance. Further, the legal environment in China is not as developed as in other jurisdictions. Uncertainties in the application of various laws, rules, regulations or policies in PRC legal system could limit our liability to enforce the VIE Agreements and protect our interests.

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The Payment Arrangement under the VIE Agreements may be Challenged by the PRC Tax Authorities.

We generate our revenues through the payments we receive pursuant to the VIE Agreements. Currently, all of our operations reside in the VIE which is required to pay our wholly owned subsidiary, Luck Sky Shen Zhen, 100% of the total annual net profit, as defined. We could face adverse tax consequences if the PRC tax authorities determine that the VIE Agreements were not entered into based on arm’s length negotiations. For example, PRC tax authorities may adjust our income and expenses for PRC tax purposes which could result in our being subject to higher taxes liability, or cause other adverse financial consequences.

DESCRIPTION OF BUSINESS

Business Overview

We utilize a proprietary compressed air energy storage power generation technology that can store energy for other alternative energy sources (for example, using solar, wind, geothermal, and tidal as raw power to regenerate electricity power without the use of fossil fuels or other chemical methods). The power produced by compressed air energy storage and power release can enhance the power production capabilities of alternative energy sources. If alternative energy sources cannot be fully utilized, there will be waste sources. We believe that we utilize compressed air energy storage installations in conjunction with the power generation system of alternative energy sources that could ensure the stable power supply of alternative energy generation system and provide customers with an advanced power generation capability with no carbon or toxic emissions. Thus, our compressed air energy storage power generation technology provides a distinct and novel method for alternative energy sources.

The power generated from our system can either be used for the operation of our customers or be sold to the State Grid Corporation of China (the “State Grid”). We also utilize proprietary technology to enhance the power production capabilities of the photovoltaic solar panels (“PV panels”) that have been used in conjunction with our current projects, including projects that involve only the installation of PV panels without the installation of equipment for compressed air energy technology.

Our initial focus is industrial users. We have 17 project contracts, exclusive of eight projects that were cancelled. Of the 17 contracts, 13 projects are completed, three are under construction and one is to start within the next few months.

The two largest projects involved installation of PV panels in conjunction with our compressed air energy storage technology, and they consist of an installation at a factory in Shandong Province with a capacity of nine megawatts and a power plant in Hubei Province with a capacity of six megawatts. The sale price for the largest Shandong project was $20,290,835 (RMB126,000,000). The sale price for the largest Hubei project was $10,628,553 (RMB66,000,000), exclusive of additional phases of four and eight megawatts. The other projects use PV panels without air compression technology, and their capacities are between one and two megawatts. We are also developing smaller compressed air energy storage power generation equipment for use with PV that will be appropriate for smaller commercial buildings and private homes.

We produce our systems in China primarily for Chinese customers and are also exploring foreign markets. We benefit from the Chinese government’s incentives for the production of green energy. We operate a factory in Hebei province to produce components for the compressed air energy storage power generation systems, but we also purchase certain components, such as PV panels and diesel engines from third party suppliers, which we modify to operate with compressed air. We have a distribution network of third-party distributors and sales agencies in 24 provinces in China.

Recent Developments

First, we achieved significant improvement through research and testing on the air compression power generation system. We developed enhanced air compression (liquid power) generation system based on the original models. The primary mechanism is to utilize the compressed air as a power source and the green biodegradable medium of oil as a power transmitter to support the engine running and generating power. The tested output comprehensive conversion efficiency reached 46%-65%. The research improved the conversion efficiency of our air power generation system, laying the foundation for mass industrialization and commercial marketization.

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In order to obtain government approval of the commercialization of our air compression energy storage products, we have submitted three enterprise standards, namely, air compression (liquid power) power generation system, air compression (liquid power) power generation unit and air compression radial engine. We are establishing an enterprise standard because these products have no ISO or other qualifying standard for the industry. The certification is therefore based on our design specifications.

We hope that future air power compressed products in this field will follow and adhere to our standards, which we anticipate will become the industrial standards and national standards. We expect that if we become the industry and national standards, our market competitiveness will be enhanced. The declaration we submitted for these three standards is being reviewed by the Provincial Industrial and Information Department of the Sanhe Technical Service Bureau.

Second, to improve sales and marketing, we intensified our efforts to promote the air power products. We also seek to benefit from the national government’s “Helping-the-Poor” Project established in 2016. The Chinese government has announced plans to release over three to five years US$14.7 billion (100 billion RMB) worth of future electricity generating capacity to support poverty alleviation and development through low cost loans and power subsidies with more than 60% of which will be for Photovoltaic (PV) technology. Through 2017, the Company will concentrate its efforts to build and market our patented products, and take advantage of the government sponsored “Helping-the-Poor Project.”

Accordingly, we established a wholly-owned subsidiary, Xianning Xiangtian Air Energy Electric Co., Ltd., in Hubei Province to produce PV panels and products. In September 2017, we completed an advanced automatic PV panel production line with an annual capacity of 200 megawatts of PV panels. As of July 31, 2017, 12,000,000 RMB (approximately US$1,776,000) had been paid to install the production line and an additional 3,000,000 RMB (approximately US$440,000) remains to be paid.

Third, on July 19, 2017, the Company dismissed its independent registered public accounting firm, Yichien Yeh CPA (“Yichien Yeh”). The Company’s Board of Directors adopted resolutions on July 19, 2017 and approved the Audit Committee’s recommendation to dismiss Yichien Yeh.

Yichien Yeh’s reports on the Company’s financial statements for the fiscal years ended July 31, 2016 and 2015 did not contain an adverse opinion or disclaimer of opinion, nor were such reports qualified or modified as to uncertainty, audit scope or accounting principles, except that Yichien Yeh did not express an opinion on the Company’s internal control over financial reporting.

During the years ended July 31, 2016 and 2015 and during the period from August 1, 2016 through July 19, 2017, the date of dismissal, (i) there were no disagreements with Yichien Yeh on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which, if not resolved to the satisfaction of Yichien Yeh, would have caused Yichien Yeh to make reference to the subject matter of the disagreement in their reports on the Company’s financial statements for such years, and (ii) there were no “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K. Yichien Yeh furnished the Company with a letter addressed to the SEC stating that it agreed with the statements regarding its dismissal.

Effective upon the dismissal of Yichien Yeh, CPA, the Company, engaged Weinberg & Company, P.A. as the new independent registered public accounting firm of the Company.

During the two most recent fiscal years, ended July 31, 2015 and July 31, 2016 and for the period from August 1, 2016 through July 19, 2017, neither the Company nor anyone on its behalf consulted Weinberg & Company, P.A. regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on Company’s financial statements, nor has Weinberg & Company, P.A. provided to the Company a written report or oral advice regarding such principles or audit opinion; or (ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions thereto) or a reportable event (as described in Item 304(a) (1)(v) of Regulation S-K).

Our Business History and Background

Xiangtian (USA) Air Power Co., Ltd. was originally incorporated as Goa Sweet Tours Ltd. in the State of Delaware on September 2, 2008. We were originally formed to provide personalized concierge tour packages to tourists who visit the State of Goa, India. On April 17, 2012, Goa Sweet Tours, Ltd. entered into Share Purchase Agreements (the “Purchase Agreements”), with Luck Sky International Investment Holdings Limited, an entity owned and controlled by Zhou Deng Rong, and certain of our former stockholders who owned, in the aggregate, 7,200,000 shares of our common stock if(90% of the then outstanding shares). Luck Sky International Investment Holdings Limited purchased such shares for an aggregate consideration of $235,000. The sale of such shares closed on May 15, 2012.

On May 25, 2012, Goa Sweet Tours, Ltd. formed a market ever develops, could drop significantly.


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statementscorporation under the laws of the State of Delaware called Xiangtian (USA) Air Power Co., Ltd. ("Merger Sub") for the purpose of changing its name. On the same day, we acquired one hundred percent of the total outstanding shares of Merger Sub's common stock for cash. As such, Merger Sub became our wholly-owned subsidiary. Effective as of May 29, 2012, Merger Sub was merged with and information relatinginto the Company. As a result of the merger, the Company’s corporate name was changed to our business that are based on our beliefs“Xiangtian (USA) Air Power Co., Ltd.” Prior to the merger, Merger Sub had no liabilities and nominal assets and, as well as assumptions made by us or based upon information currently available to us. These statements reflect our current views and assumptions with respect to future events and are subject to risks and uncertainties. Forward-looking statements are often identified by words like: “believe,” “expect,” “estimate,” “anticipate,” “intend,” “project” and similar expressions or words which, by their nature, refer to future events. In some cases, you can also identify forward-looking statements by terminology such as “may,” “will,” “should,” “plans,” “predicts,” “potential” or “continue” ora result of the negativemerger, the separate existence of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties an d other factors, including the risksMerger Sub ceased. The Company was the surviving corporation in the section entitled Risk Factors beginning on page 3, that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. In addition, you are directed to factors discussedmerger and, except for the name change provided for in the “Management’s DiscussionAgreement and AnalysisPlan of Financial ConditionMerger, there was no change in the directors, officers, capital structure or business of the Company.

Lucksky Holding (Group) Co. Ltd (“LuckSky Group”), formerly named Xiangtian Kelitai Air Powered Machinery Co., Ltd., (“Xiangtian Kelitai”) was established in 2000 by Zhou Deng Rong after he obtained a series of patents and Resultsdeveloped the compressed air energy storage and related technology. Zhou Deng Rong served as our CEO through July 31, 2014, when he was replaced by Zhiqi Zhang. Upon the merger of Operation” section beginningLuck Sky (Hong Kong) Shares Limited (“Luck Sky HK”) into the Company on page 29,September 30, 2013, the Company acquired all of the shares of LuckSky HK, received 148,158,864 shares of common stock of the Company and the section entitled “Our Business” beginning on page 19, as well as those discussed elsewhereremaining shareholder of LuckSky HK received 101,831,136 shares of common stock of the Company in this prospectus. Other factors include, among others: general economicexchange for their shares of LuckSky HK. LuckSky HK had no operations but the Company succeeded to the $250,000 in registered capital of LuckSky HK.

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On May 30, 2014, the Company entered into the Stock Purchase Agreement with Zhou Jian, the sole shareholder of Luck Sky (Hong Kong) Aerodynamic Electricity Limited (“LuckSky Aerodynamic”). Effective May 30, 2014, the Company purchased 100% of the issued and outstanding shares of common stock of Luck Sky Aerodynamic, and the Company paid Zhou Jian a purchase price in the amount of HKD $10,000.00 (approximately USD$1,290) in cash. Luck Sky Aerodynamic and Luck Sky Shen Zhen, its subsidiary organized in the PRC, had no operating business, conditions; industry capacity; industry trends; competition; changes in business strategy or development plans; project performance; availability, terms,no liabilities and deployment of capital; and availability of qualified personnel.

These forward-looking statements speak onlynominal assets as of the date of the acquisition. LuckSky Aerodynamic was organized to enter into the variable interest agreements (the “VIE Agreements”) with Sanhe. As a result of the acquisition, Luck Sky Aerodynamic became our wholly owned subsidiary and Luck Sky Shen Zhen became our indirect subsidiary through Luck Sky Aerodynamic.

Sanhe was established in July 2013 and was under common control with LuckSky Group. Sanhe had no operating business and no liabilities. On July 18, 2013, Sanhe borrowed RMB 7,722,000, pursuant to a loan agreement with Xiangtian Kelitai, a division of LuckSky Group.

During the three months ended July 31, 2014, LuckSky Group provided Sanhe with additional working capital and transferred to Sanhe its assets and liabilities related to the compressed air energy storage power generation technology and PV panel installations, but retained its other assets. On April 1, 2014, LuckSky Group loaned Sanhe RMB 3,000,000. In April and May 2014, Sanhe purchased the inventory, the equipment, including machinery, and office equipment from Xiangtian Kelitai at their book or historical values. Sanhe entered into leases with Lucksky Group for a portion of the factory, office space and dormitory located in Sanhe City and a lease with Dong Yi Glass Machine Company Limited, which is owned by Zhou Deng Rong, for a second factory and office space, on May 1, 2014 and April 1, 2014, respectively. Also, 48 employees transferred from LuckSky Group to Sanhe, including all personnel related to the projects under construction and development and administrative and finance personnel. See “Business-Properties” and “Certain Relationships and Related Party Transactions.”

We reincorporated in Nevada effective October 31, 2016 as a result of a merger of Xiangtian (USA) Air Power Co., Ltd., a Delaware corporation, with its wholly-owned subsidiary, Xiangtian (USA) Air Power Co., Ltd., a Nevada corporation.

Acquisition of Sanhe

On July 25, 2014, prior to the Acquisition, Sanhe and Luck Sky Shen Zhen and Sanhe’s current shareholders entered into a series of agreements known as VIE Agreements pursuant to which Sanhe became Luck Sky Shen Zhen’s contractually controlled affiliate. The purpose and effect of the VIE Agreements is to provide Luck Sky Shen Zhen (our indirect wholly-owned subsidiary) with all of the management, control and net profits of Sanhe. While Luck Sky Shen Zhen does not actually own any of the equity and shares in Sanhe, the purpose and effect of the VIE Agreements is to instill in Luck Sky Shen Zhen, the Company’s indirect wholly-owned subsidiary, total management and voting control of Sanhe for all material purposes. The use of VIE agreements is a common structure used to acquire PRC corporations, particularly in certain industries in which foreign investment is restricted or forbidden by the PRC government.

The VIE Agreements include:

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(1)

Framework Agreement on Business Cooperation, entered between Luck Sky Shen Zhen and Sanhe, pursuant to which Luck Sky Shen Zhen and Sanhe have agreed to enter into a series of VIE agreements and to cooperate in all prospective of Sanhe’s business operation and management;

(2)

Exclusive Management, Consulting and Training and Technical Service Agreement, entered between Luck Sky Shen Zhen and Sanhe, pursuant to which Luck Sky Shen Zhen has agreed to provide Sanhe with complete business support and technical support and related management, training and consulting services. In consideration for such services, Luck Sky Shen Zhen is entitled to receive an amount equal to 100% of Sanhe’s net income.

(3)

Exclusive Option Agreement, entered among Luck Sky HK, Luck Sky Shen Zhen, Zhou Deng Rong, Zhou Jian and Sanhe, pursuant to which Zhou Deng Rong and Zhou Jian, the owners of Sanhe, have granted to Luck Sky Shen Zhen and Luck Sky HK the irrevocable right and option to acquire all of their equity interests in Sanhe;

(4)

Equity Pledge Agreement, entered among Luck Sky Shen Zhen, Zhou Deng Rong, Zhou Jian, and Sanhe, pursuant to which Zhou Deng Rong and Zhou Jian, the owners of Sanhe, have pledged all of their rights, titles and interests in Sanhe to Luck Sky Shen Zhen to guarantee Sanhe’s performance of its obligations under all the other VIE Agreements;

(5)

Know-How Sub-License Agreement, entered between Luck Sky Shen Zhen and Sanhe, pursuant to which Luck Sky Shen Zhen has granted Sanhe an exclusive right to use and develop in China a series of aerodynamics related patents and technologies with respect to electrical generation for commercial and residential structures, not including automobiles and wind towers. Luck Sky Shen Zhen possesses the rights licensed under this agreement through two license agreements dated July 25, 2014 with Zhou Deng Rong, Zhou Jian and LuckSky Group, the owners of the aforesaid patents and technologies. For the sublicense agreement, Sanhe will pay Luck Sky Shen Zhen an annual royalty of five percent of revenue; and

(6)

Power of Attorney. Pursuant to a power of attorney, each of the Sanhe stockholders agreed to irrevocably entrust LuckSky Shen Zhen with his stockholder voting rights and other stockholder rights for representing him to exercise such rights at the stockholders’ meeting of Sanhe in accordance with applicable laws and its Article of Association, including, but not limited to, the right to sell or transfer all or any of his equity interest in Sanhe, and appoint and vote for the directors and Chairman of Sanhe as the authorized representative of the Sanhe stockholders. The term of each proxy and voting agreement is as long as each of the Sanhe stockholders is a shareholder of Sanhe and is binding on any transferee.

The Framework Agreement and the Exclusive Management Agreement have initial terms of ten years but each contains a renewal provision that allows Luck Sky Shen Zhen to extend the term of such agreements at its sole option by written notice with no limitation as to such extensions. The other agreements are of unlimited duration.

The foregoing description of the terms of the Framework Agreement on Business Cooperation, the Exclusive Management Agreement, Consulting and Training and Technical Service Agreement, the Exclusive Option Agreement, the Equity Pledge Agreement, the Know-How Sub-License Agreement and the Power-of- Attorney is qualified in its entirety by reference to the provisions of the agreements previously filed with the SEC in August 2014, which are incorporated by reference herein.

On July 25, 2014, we agreed to issue 264,850,740 shares and 8,191,260 shares of our common stock to Zhou Jian and Zhou Deng Rong, respectively, the sole shareholders of Sanhe, in consideration for the execution of the VIE Agreements and the Acquisition of Sanhe.

See “Certain Relationships and Related Transactions” for further information on our contractual arrangements with these parties.

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Because of the common control between us, LuckSky Shen Zhen and Sanhe, for accounting purposes, the acquisition of these entities has been treated as a combination between entities under common control with no adjustment to the historical basis of their assets and liabilities. Since there is a change of reporting entity after the acquisition takes place, the Company accounts for business combinations pursuant to Accounting Standard Codification (“ASC”) 805-50 which generally requires the entity that receives net assets or equity interests to recognize the carrying amounts of the net assets transferred in its accounting for the combination and to combine the financial statements of the entities under common control for all periods presented and to eliminate any intercompany balances and transactions.

Our Corporate Structure

All of our business operations are conducted through our Hong Kong and Chinese subsidiaries and controlled affiliate. The chart below presents our corporate structure:

Industry Background

According to the National Energy Administration, consumption of electricity in China has grown from 5.32 trillion kWh in 2013 to 5.92 trillion kWh in 2016, with consumption in 2016 representing a five percent increase over 2015. The electricity generated by grid-connected solar in 2016 was 66.2 billion kWh with an increase of 72% from 2015.

Electricity in China is distributed by the State Grid, which is required to purchase electricity. The percent of the utilization of the renewable energy in 2014 is shown below:

Total Generation Capacity of Renewable Energy in the P.R.C.

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*The data is from the NEA’s report of total consumption of electricity in 2014 (published in 2015)

We are a pioneer in the field of Compressed Air Energy Storage in China. The only other effort in China of which we are aware is a pilot project established by the Chinese Academy of Science (the “CAS”) of compressed air storage energy generation in Wuhu city in November 2014.

We are producing electricity generation systems that combine our compressed air storage technology with PV panels to achieve a continuous supply of power, especially under weather conditions that are unfavorable to the generation of electricity from PV panels alone. We chose to initially utilize PV panels to produce the raw power because China has abundant solar energy resources. Many parts of China have long durations of sunshine; and China has vast vacant spaces that are available for the installation of solar energy systems.

The installation of PV systems is developing quickly in China. In 2016, the cumulative installed PV capacity reached 77.42 Gigawatts (“GW”), the most of any nation. According to the 13th Five Year Plan (published in 2015), the government hopes to add 65 Gigawatts (“GW”) of PV during the 2016 – 2020 period. In its guidance on promoting the healthy development of the Solar Industry (2013), the State Council of China raised the target of capacity of solar power to 35 GW in 2015 from the original 2015 target of 21 GW set by the National Energy Administration of China in 2012. China had only one GW of PV installations in 2010.

The Chinese solar market has grown rapidly, driven by a favorable policy environment intended to meet a greater portion of the country’s growing energy needs from cleaner sources, while also driving demand for domestic solar panel manufacturers. In July 2013, the State Council of China published the Opinion on Promoting the Healthy Development of PV Industry (the “Opinion”) which initiated establishment of the PV systems in the national level. In addition to setting targets for the increase in installed PV systems, grid-connection, power acquisition, subsidy, and land policies were further detailed in the Opinion. The Opinion standardized the tax benefit and feed-in tariff for the PV industry on a national level and it also set the target of promoting distributed PV (DPV) system. The feed in tariffs for large-scale ground mounted power plants are between 0.9 yuan ($0.14) and 1 yuan ($0.16) per kilowatt-hour (kWh) of energy generated, based on the radiation levels at the location of the plant. Distribution projects get a payment of between 0.62 yuan ($0.10) to 0.78 yuan ($ 0.12) per kWh. These subsidies will be valid for the next 20 years and will benefit project developers such as ourselves, since the subsidies protect the rate of return on PV projects. In October 2013, China adopted a tax benefit policy which allows a refund of 50% value-added tax for selling the solar photovoltaic power products. China also provides other incentives, including free grid connectivity for small and medium-scale distributed PV solar power producers.

The promotion of the DPV module is encouraging the manufacture and installation of PV in China. The government started to promote the distributed PV (the “DPV”) model in the proposal of the Opinion in 2012. The DPV systems are smaller PV system installed on the rooftop of building. This system generally can provide the sufficient energy for the building where it is located. On the national level, the national government allows the DPV system to be connected to the State Grid. In this prospectus. Althoughcase, the DPV owner can either use the electricity or sell the electricity to the State Grid with feed-in tariff (around 1 CN per kWh).

The solar panel industry in China is highly competitive, with around 20 to 30 companies providing installation service and 50 manufacturers. In 2014, six of the 10 largest PV panel manufacture were located in China However, we believe that we are the expectations reflectedonly company that offers an electrical generation system that combines compressed air energy storage power generation technology.

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Our Competitive Advantages

We believe that we possess the following competitive advantages that allow us to maintain our strong market position and will aid our profit growth in the forward-looking statementsfuture:

Environmental Protection:We believe that if alternative energy sources cannot be fully utilized, including instances when the electricity they produce cannot be economically stored or the source is unstable, then some productive capacity will be wasted. We utilize compressed air energy storage equipment in conjunction with the power generation system of alternative energy sources to produce electricity, which is a novel approach and provides customers with an advanced power generation capability with no carbon or toxic emissions. When power generated by the alternate energy sources, such as solar energy or wind energy, becomes unstable or fluctuates, the compressed air power generation system can start functioning and ensure a stable power supply and better utilize the productive capacity of the alternate energy source. . Our compressed air energy storage power generation technology provides a new and unique method for alternative energy source power generation.

Flexibility: Our compressed air technology can be used with any other power sources. We can use solar energy, wind energy, geothermal energy, tidal energy, water energy and all the available natural energy as a raw power in conjunction with our compressed air energy storage technology. The collected mechanical energy from the raw power source is converted into compressed air and is then converted and released into direct current power. Through our ultra-wide voltage and high-performance power inverter, we produce an output of stable power in compliance with the Chinese national interconnection standards.

Enhancement of Use of PV Panels and other Energy Sources: The use of the compressed air energy storage technology helps overcome structural limitations of the use of PV panels and providing power to the State Grid. The use of PV panels is limited by the capacity of the State Grid, which limits the amount of energy that can be purchased from the PV industry and other sources of alternate energy that lack the capacity to efficiently store electricity but produce more power that can be used when generated. The expansion of the capacity of the PV industry could be constrained by the inability of the power grid to purchase the additional energy and the compressed air energy storage technology allows the energy to be stored until the electricity can be sold to the State Grid when PV panels are reasonable, we cannot guarantee future results,not producing electricity, such as when there is insufficient sunshine.

Patent Protection:Zhou Deng Rong, our founder and former Chief Executive Officer, and Zhou Jian, our Chairman of the Board, and LuckSky Group are the holders of 48 patents and 13 patent applications in China with respect to various aspects of the compressed air energy storage power generation technology, including improvements to the solar power generation system, the installation of solar energy systems, the inverters, and generators. Sanhe obtained a Chinese patent in August 2014 for utility module regarding photovoltaic power generation system. In addition, the patents, patent applications and related know-how and trade secrets are subject to an exclusive license for worldwide use to Luck Sky Shen Zhen, our indirect wholly-owned subsidiary.

Government Incentives:The development of alternative sources of energy to reduce the amount of pollution in China caused by burning fossil fuels, particularly the use of coal to generate electric power, is a priority of the Chinese government. The Chinese government offers tax and rebate incentives for the construction of PV production facilities and has become stricter regarding the construction of power plants that rely on coal.

Technical Advantage Compared to Conventional Battery Technologies:The use of conventional batteries to store excess electricity produced by solar power or other alternative energy sources is less attractive than the compressed air energy storage power generation technology. The most important disadvantages to standard batteries are that industrial batteries lose their capacity to store electricity over time, and also present environmental risks with respect to their production and disposal. Tank storage technology is estimated to have a 30 year lifespan and the steel can be recycled.

Technical Advantage Compare to Conventional Solar Panels and Inverter/Converters:Our patented technologies increase the efficiency of PV panels to generate DC current by enhancing their ability to operate at levels of activity, or achievements. Except as required by applicable law, includinglower sunlight and also increase the securities lawsefficiency of the United States,inverter/converter that converts the DC current to AC current by operating at a wider range of DC current than conventional inverter/converters. One licensed patent applies to the array of the PV panels.

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Technical Advantage Compare to Conventional Grid-connected Photovoltaic Power Generation:We adopted smart micro-grid technology which increases the efficiency of the power generation of the PV systems and significantly reduced the project costs of power plants. The micro-grid technology also helps us to improve the flexibility of PV systems, realize real zero emission of our power plant, improve reliability and help to restore power more quickly when the macro-grid is down.

Reduced Electrical Costs:Customers who generate electricity using alternate energy systems that is intermittent or subject to periods of low production need to be linked to the State Grid to meet their power requirements. Our compressed air energy storage power generation system allows consumers to limit or eliminate their reliance on the State Grid; by producing power during periods of peak pricing by the State Grid and storing the surplus energy produced by their alternate energy systems when prices charged by the State Grid are less expensive.

Scalability:The compressed air energy storage power generation system in conjunction with a PV panel installation is easily expanded thru the addition of additional solar panels, more storage tanks and/or bigger generators and engines.

Our Growth Strategy

Chinese demand for electricity is expected to increase by nearly 300 % between 2010 and 2040 according to the U.S. Energy Information Administration (http://www.eia.gov/countries/country-data.cfm?fips=CH). We believe demand for electricity and solar energy production will continue to grow domestically and globally, thus affording us opportunity to grow and expand our business operations.

We intend to pursue the following strategies:

1)

Sell systems to construct large-scale power plants that sell power to the State Grid or service zones that are off the grid and benefit from government subsidy policies.

2)

Sell power system to industrial consumers with large electricity demand, in excess of one megawatt, to establish their own power generation facilities to benefit from government subsidy polices to reduce operating costs by either being off the State Grid, reducing their purchased from the grid during peak periods or being able to store energy when the grid is not purchasing power.

3)

Sell systems to industrial and mining companies operating in remote locations which lack connections to the State Grid to create self- sufficient systems.

4)

Complete development of prototypes and commercialize smaller air compression power generation systems designed for standalone homes and smaller factories and commercial structures.

5)

Produce, sell and install PV products without air compression technology.

Products

Our principal product is a system that combines our air compression power generation systems with a PV installation that is custom designed for industrial users such as factories and power plants. We also offer PV systems without the air compression generation technology based on certain technological innovations that we expressly disclaim any obligation or undertakingbelieve increase the efficiency of our PV systems compared to disseminate any update or revisionsthose of competitors.

The air compression power generation systems can be used with multiple forms of natural energy production, including solar, wind, biomass, geothermal and tidal and the selection of the appropriate natural source depends on their relative availability at the customer’s location. Although use of any of these natural energy sources is feasible, we have initially focused on linking our air compression technology to PV installations. The installation of the forward-looking statementssolar power systems generally requires the lowest investment and shortest building time, in part because the area for building the facility is flexible as solar installations can be used anywhere outdoors and take advantage of a customer’s room. Wind power is not stable as the turbines may be inoperable at low or high winds. Nuclear and hydropower facilities are only feasible for producing power for the State Grid and are not feasible for individual factories and homes

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1.Basic PV Installation. Conventional PV power generation technology is designed based upon the assumption that the minimum sun exposure would be 200W and the range of maximum power point tracking (the “MPPT”) is from DC480v to reflect any changeDC580v. When sun exposure is reduced and voltage drops below the DC480v, the problem with the conventional system is that it stops working; and the residual power in the photovoltaic panels that are generated under the lower light exposure cannot be utilized. The Company’s new intelligent photovoltaic technology improves power generation and shortens investment recovery time. The PV system uses a variable PV array technology and wide voltage intelligent inverter device developed by the Company. Customers can produce an additional 15% - 30% electricity each year as the system can operate in lower light environments than conventional PV technology.

We sell the PV installation that includes the solar panels installation and solar energy generation converter equipment with proprietary technology without the air compression for customers who do not need to store energy. The conversion advantage provides a higher capacity that allows the solar array to be used more effectively.

2.Compressed Air Energy Storage Technology.The power consumption rate of PV systems interconnected into the State Grid varies greatly and the active energy cannot be fully consumed, which causes significant energy waste. Generally, systems interconnected to the State Grid consume only 70% of the produced power and enterprises not connected to the State Grid consume only 60% - 70% of the produced power, and the residual power is wasted. Utilizing our expectationscompressed air energy storage system with regard theretophotovoltaic power generation system improves the efficiency of power generation and reduces the waste of residual power.

Our air compression energy storage generation technology is also designed for customers whose alternative energy source provides intermittent or unstable power. The systems are sold in conjunction with a PV installation. A portion of the electricity produced by the PV panels is used to conform these statementscompress air into the cylinders, which effectively store the energy until it is released. The system includes compression equipment, storage tanks and a modified engine that is linked to actual results.a generator. The surplus power generated by the air compression technology may either be used by the customer it its operations or sold to the State Grid.





The following chart illustrates an air compression power generation system that is linked with a PV installation, although the compression system can be linked to other alternative energy sources, such as wind farms, biomass, tidal or geothermal.


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TAX CONSIDERATIONSElectricity Generation Process

            1.        Energy collection – photovoltaic power generation.

Photovoltaic power generation is greatly affected by the amount of sunlight the PV system receives. The changes in the intensity of sunlight affect the power generation, which causes direct current to fluctuate. Therefore, actions to offset the fluctuation are essential. When fluctuation or disruption in photovoltaic power occurs, or during the night or when power in the storage system is exhausted, the power supply must be converted to a voltage transformer. However, based upon the current power supply equipment in power plants, energy cannot be instantly converted on a per megawatt basis. Therefore, frequent conversions are needed, which might obstruct system security and power production. Our design of the AC/DC non-contact converter rectifier can resolve this issue at a low cost. If DC power is below DC430v, DC offset is automatically incorporated into the electricity network and the transformer photovoltaic power will be shared with the power supply. The inverter won’t lose electricity and the entire system will not fluctuate or have the power shut off.

The system offers double power selection by utilizing a backup switch to ensure that the power supply does not stop. Should the generation of the solar power become unstable or intermittent, the system switches to operate using the air compression generation technology or, if available, to rely on the State Grid.

            2.        Compression Storage System

A. Compressor – fills storage tanks with air.

B. Plasma Heater – heats air being stored into tanks to a temperature of 300 to 400 degrees Fahrenheit to increase the amount of stored energy.

C. Storage Tanks – stores compressed air. Our storage tanks are built with carbon steel to withstand higher pressures. Each one megawatt of generated electricity requires 2 tanks, each with an average capacity of 30 m3 of compressed air. The standard tank is 50 meters long and 1.5 meters in diameter. The energy capacity per tank is dependent on the temperature and pressure of the air and the capacity of the e cylinder. The quality of the storage tanks are based on ISO standards.

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D. Air Engine – we utilize our patented technology to modify diesel engines purchased from outside vendors to enable the engine to operate on compressed air. A pressure regulator within the air engine turns the generator. Unlike a conventional combustion engine that explodes fossil fuel to create energy, the compressed air engine utilizes the heat and compression of the air to release energy.

E. Generator – Our proprietary generator utilizes patented and other proprietary technology was developed in 2012 for our air compression storage generation system. The device affords stability by maintaining a consistent supply despite changes in the air pressure that may cause inefficiency in the engine (for example, a piston misfiring). Our tests indicated that the generator is more efficient that the industry standard in maintaining a stable flow of voltage.

The air compression technology is used to produce electricity primarily at night or at other times when the electricity produced by the PV panels is intermittent or unstable. At such times, the compressed air is sent first from the storage tanks to the thermal heater, then to the engine. The engine then spins a flywheel attached to the generator.

Projects

Currently, we have 17 project contracts. Thirteen are completed, three are under constructions, and one is expected to start within several months. In addition, we have had eight project cancelled because of our concern that the customers may fail to meet their payment obligations. Three projects in Shandong province commenced operations in 2015, one project in Fujian province commenced operation in February 2016, the two projects in Hubei and Zhejiang commenced operations in March 2016 and one in Hubei commenced in April 2016. The project in Heilongjiang commenced operations in February 2017. Three projects in Hubei commenced operations in March and April 2017. The project in Dezhou and a project in Hubei (representing the second phase of the new power plant) commenced operations in July 2017. Two systems in Shandong and Hubei provinces include compressed air energy storage power generation systems in conjunction with a PV panel installation. The remaining projects only involve PV systems. The contracts typically provide for payments in installments, with approximately 35% paid upon the commencement of construction, and the balance in two equal installments approximately 6 and 18 months later.

In Shandong Province, we designed and installed a new power supply system with a capacity of 8.5 megawatts (the “Haide Group Project”) that includes our air compression technology. Pursuant to an agreement executed by Sanhe with Binzhou Xintuo Natural Energy Electrical Engineering Limited (“Binzhou Xintuo”) on April 18, 2014, Sanhe transferred the Haide Group Project in turn-key condition to Binzhou Xintuo after the completion of the installation and construction. The project included the installation of 15 tanks and eight engines. The project began to produce electricity from the PV panels in June 2014 and was completed in June 2015. The project was connected to the State Grid on September 1, 2016. The customer anticipates utilizing the power produced by the compressed air technology when production from the solar panels is insufficient and when electricity from the State Grid is either too expensive during peak hours or not available. The customer may also generate revenue by selling power to the State Grid. The sale price for the project was $20,290,835 (RMB 126,000,000), which was paid as of July 31, 2016.

In Hubei province, we completed construction of a facility with 10 megawatts of production capacity at the new power plant using air compression technology and PV panels (the “Hubei Xianning Project”). The initial six megawatts project was connected to the State Grid on December 3, 2015, and completed in March 2016 after a three months runtime check. We completed the second phases of construction of four megawatts, and delivered a total of 15 storage tanks and PV panels and generators as of July 31, 2017 for the production of a total of 10 megawatts. Under Sanhe’s contract with Xianning Auspicious Day Air Energy Power Company Limited dated April 25, 2014, Sanhe was responsible for designing, installing and constructing the project. The sale price for the six megawatt project was $10,628,553 (RMB66,000,000), which has been fully paid, and the sale price for the four megawatt project was $4,520,046 (RMB 30,000,000), of which we have recognized revenue of $3,761,888 (RMB 25,641,026) as of August 31, 2017. For the Hubei Xianning Project, Zhejiang Bowei Industrial and Trading Co., Ltd., provided the PV panels and engaged a third-party contractor to provide the installation. The facility’s capacity can be expanded, should the parties agree, to 18 megawatts, which will require an additional 15 storage tanks.

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The following chart summarizes our current projects:

Projects completed:

No.Project LocationCapacityContract AmountTime ofRevenueCost
   (including VAT tax)CompletionRecognizedRecognized
1Binzhou,8.5 MW$20,290,835June 2015$17,402,419$14,954,205
 Shandong     
   (RMB (RMB(RMB
   126,000,000) 107,692,308)92,541,899)
2Xianning, Hubei6 MW$10,628,553March 2016$8,705,527$7,752,526
       
 (Phase I) (RMB (RMB(RMB
   66,000,000) 56,410,256)50,234,981)
3Weihai,1 MW$1,288,307February 2015$1,104,915$914,236
 Shandong     
   (RMB 8,000,000) (RMB(RMB
     6,837,607)5,657,615)
4Dezhou,2 MW$2,641,029July 2015$2,265,077$1,863,028
 Shandong     
   (RMB (RMB(RMB
   16,400,000) 14,017,094)11,529,076)
5Zhuji, Zhejiang0.15 MW$206,129March 2016$168,834$126,494
       
   (RMB 1,280,000) (RMB(RMB 819,658)
     1,094,017) 
6Fuzhou, Fujian10 KW$14,493February 2016$11,871$10,903
       
   (RMB 90,000) (RMB 76,923)(RMB 70,649)
7Sanhe, Hebei12 KW$11,273April 2016$9,233$7,256
       
   (RMB 70,000) (RMB 59,829)(RMB 47,019)
8Jiamusi,1 MW$1,280,680February 2017$234,556$206,961
 Heilongjiang     
   (RMB 8,500,000) (RMB(RMB
     1,598,291)1,410,256)
9Xianning, Hubei3 MW$3,390,035April 2017$2,822,199$2,366,177
       
   (RMB 22,500,000) (RMB(RMB
     19,230,769)16,123,384)
10Xianning, Hubei90 KW$104,700March 2017$90,310$80,617
       
   (RMB 720,000) (RMB 615,385)(RMB 549,335)
11Xianning, Hubei165 KW$145,138March 2017$125,431$97,184
       
   (RMB 1,000,000) (RMB 854,701)(RMB 662,225)
12Xianning, Hubei (Phase II of Project No. 2)4 MW$4,520,046
(RMB 30,000,000)
July 2017$3,761,888
(RMB 25,641,026)
$3,356,282
(RMB 22,894,866)
13Dezhou Dongdi1.89 MW$2,281,148
(RMB 15,687,000)
July 2017$1,967,091
(RMB 13,407,692)
$1,657,354
(RMB 11,296,525)

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Projects under construction:

No.
Project Location
Capacity
Contract Amount (including VAT tax)
Estimate Time
of Completion
1Sanhe Kelitai75 KW$83,044 (RMB 562,500)October 2017
2Sanhe Kelitai93 KW$100,229 (RMB 678,900)October 2017
3Sanhe Kelitai365 KW$398,760 (RMB 2,701,000)October 2017

Project not yet started:

No.Project LocationCapacityContract Amount (including VAT tax)
1Zhejiang1 MW$1,084,811 (RMB 7,200,000)

Marketing

We market our products through third-party distributors in 24 provinces and through employees for direct sales. The distributors exclusively sell our products and receive commissions based on the value of the contracts but no salary. We utilize three classes of distributors based on the size of their territory – provincial, city and town. The distributors target both factories and power plants, but also local governments which may encourage local industry to utilize alternate energy sources. Our marketing focus is on:

1)

Large scale power plants that sell power to the State Grid or service zones that are off the grid and benefit from government subsidy policies.

2)

Industrial concerns with large electricity demand, in excess of one megawatt, to establish their own power generation facilities to benefit from government subsidy policy to reduce operating costs by either being off the State Grid, reducing their purchased from the grid during peak periods or being able to store energy when the grid is not purchasing power.

3)

Industrial and mining companies operating in remote locations which lack connections to the State Grid to create self- sufficient systems.

4)

In 2016, we intend to commence marketing a smaller air energy compression generation and PV system to smaller commercial structures and stand- alone homes using the same distribution network.

Manufacturing

We produce and assemble our PV installations and air energy compression generation systems at our factory in Sanhe. We produce many components, including the brackets and supports for the PV panels, an ultra-wideband voltage power inverter and converter, parts to modify the engines to operate using air compression, low-speed aerodynamic generators, and isothermal air compressor and thermal heaters. Other parts, such as solar panels, power cords, engines, carbon fiber tanks and generators and compressors are purchased from third parties and used to assemble our systems.

Our factory is based in Hebei Province Sanhe City, Yanjiao Economic Development Zone, with a production workshop of 7500 square meters for our core-technology equipment that can supply solar energy systems. We produce the engine generators and related components, but not the PV panels. The factory has a total capacity of up to 7 megawatts each month, based on one –eight hour shift working six days per week. Capacity can readily be expanded by adding additional shifts or building up to three more production lines at our facility.

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In May 2016, we established a wholly-owned subsidiary, Xianning Xiangtian Air Energy Electric Co., Ltd., in Xianning in Hubei Province, to manufacture PV panels and related products. We completed the advanced production line with an annual capacity of 200 megawatts of PV panels in September 2017. As of July 31, 2017, we had paid 12,000,000 RMB (approximately US$1,776,000) to install the production line and an additional 3,000,000 RMB (approximately US$440,000) remains due.

Suppliers

We are not providingdependent on any tax advice assingle supplier for any important product. We purchase our solar panels from six suppliers, engines from one supplier, and carbon fiber storage tanks from two suppliers. We have a good relationship with each supplier. We believe that many suitable alternate producers of these products are available should we need an alternate supplier. We also purchase electrical components to the acquisition, holding or dispositioninverter/converters, generators, compressors and control panels that we manufacture and believe that alternate suppliers of such components are also readily available.

Patents and Technology

Zhou Deng Rong and Zhou Jiang are the inventors for all of our technologies. On July 25, 2014, Luck Sky Shen Zhen, our Chinese subsidiary, obtained an exclusive, worldwide, royalty free license from Zhou Deng Rong and Zhou Jian (his son) and a second exclusive, worldwide royalty free license from LuckSky Group to 48 Chinese patents and 13 patent applications and trade secrets, including the technology underlying the patent applications for power stations, commercial buildings and residences in China, but not for other uses, including wind towers, vehicles and trains (the “Technology”). The Technology represents all of licensors’ patents with respect to PV power generation installations, the air energy storage power generation technology and trade secrets. Effective as of July 31, 2015, Beijing XiangTian Huachuang Aerodynamic Force Technology Research Institute Company (“XiangTian Huachuang”), granted Luck Sky Shen Zhen an exclusive worldwide license to four foreign patents that it had recently obtained. XiangTian Huachuang obtained three patents in Japan and one patent in Australia in March 2015. XiangTian Huachuang is owned 30% by Zhou Jian and 70% by Zhou Deng Rong.

LuckSky Shen Zhen granted an exclusive sub-license to the use and exploitation of the securities offered herein.Technology in China to Sanhe in July 2014, which sub-license provides for a licensing fee of five percent of Sanhe’s revenues. In making an investment decision, investorsaddition, Sanhe obtained a patent in August 2014 for utility module regarding photovoltaic power generation system.

Research and Development

Our Technology was originally developed principally by Zhou Deng Rong. Sanhe obtained the legal right to use and develop the Technology through the Agreement on Know-How Sub-Licensing executed on July 25, 2014 with Luck Sky Shen Zhen, and Luck Sky Shen Zhen was granted a license to use and sublease the Technology through licensing agreements with Zhou Deng Rong, Zhou Jian, and LuckSky Group, owners of the Technology.

As of September 12, 2017 and July 31, 2016, the research and development department had 5 and 2 employees, respectively. The Company is focusing on the development of its project installation team and sales promotion team and it is relying on LuckSky Group, a licensor, for its research and development.

Warranty

We provide a five-year limited warranty on all models of compressed air energy generators produced by us, and on the parts we manufacture, such as the inverter/converter and plasma heater. Components that we purchase from third party suppliers, such as the PV panels, storage tanks and the unmodified portions of the engines, are strongly encouragedgoverned by the suppliers’ warranties.

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Competition

We compete against larger, better capitalized and better known competitors that have become, or are becoming, vertically integrated in the PV industry value chain, from module manufacturing to consultPV system sales and installation, such as Yingli Green Energy, one of the largest vertically integrated PV module suppliers in the world. China has about 20 to 30 companies providing PV installation service and 50 PV manufacturers. In 2014, six of the 10 largest PV panel manufacturers were located in China The ability of the vertically integrated competitors to produce modules and sometimes also be polysilicon manufacturers gives them a cost advantage with respect to the price of PV modules, which we purchase, and which could erode our competitive advantage resulting from our PV installation and air compression technologies. Furthermore, we face competition from conventional energy and non-solar renewable energy providers.

With respect to large integrated PV system projects, we compete primarily in terms of price, design and construction experience, aesthetics and conversion efficiency. We face competition from other providers of renewable energy solutions, including developers of PV, solar thermal and concentrated solar power systems, and developers of other forms of renewable energy projects, including wind, hydropower, geothermal, biomass, and tidal. We also face competition from other EPC companies and joint venture type arrangements between EPC companies and solar companies. While the decline in PV modules prices over the last several years has increased demand in solar electricity worldwide, competition at the systems level can be intense, thereby exerting downward pressure on systems level profit margins industry-wide, to the extent competitors are willing and able to bid aggressively low prices for new projects and power purchase agreements, or PPAs, using low cost assumptions for modules, components, installation, maintenance and other costs. We face intense competition in the PV system markets and our PV and compressed air energy generation systems compete with different solar energy systems as well as other renewable energy sources in the alternative energy market.”

Also, air power technologies are being developed in Italy, Germany, the United Stated, and France.

Environmental Matters

We have installed various types of anti-pollution equipment in our facilities to reduce, treat, and where feasible, recycle the wastes generated in our manufacturing process. We contain and treat waste water generated in our production process. The other major environmental contaminant we generate is gaseous waste. We treat such gas in our special facilities to reduce the contaminant level to below the applicable environmental protection standard before discharging the gas into the atmosphere. Our operations are subject to regulation and periodic monitoring by local environmental protection authorities. The Chinese national and local environmental laws and regulations impose fees for the discharge of waste substances above prescribed levels, impose fines for serious violations and provide that the Chinese national and local governments may at their own discretion close or suspend the operation of any facility that fails to comply with orders requiring it to cease or remedy operations causing environmental damage.

In May 2014, as required by PRC law, we obtained the Environmental Assessment Report on Construction Projects for the manufacturing space that we lease from Dong Yi Glass Machine Company Limited, which is used as our second factory and offices. This report was issued by an independent qualified evaluation company with a conclusion that the operations conducted by Sanhe comply with relevant environmental laws in China, which will not cause detrimental environmental impacts. However, since our primary manufacturing and office space leased from LuckSky Group in Sanhe City has a zoning restriction that only permits agricultural use, we are still in the process of obtaining the approval for the manufacturing use.

No penalties have been imposed on us or our subsidiaries, and we believe we are currently in compliance with present environmental protection requirements in all material respects, and have obtained or been in the process of obtaining all necessary environmental permits for our production facility. We are not aware of any pending or threatened environmental investigation proceeding or action by any governmental agency or third party.

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Insurance

We do not maintain property and casualty insurance, product liability insurance or insurance covering injury to our employees.

PRC Governmental Regulations

This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China. Other regulations and requirements, such as those relating to foreign currency exchange, dividend distribution, regulation of foreign exchange in certain onshore and offshore transactions, and regulations of overseas listings, may affect our shareholders’ right to receive dividends and other distributions from us.

Renewable Energy Law and Other Government Directives

In February 2005, China enacted its Renewable Energy Law, which became effective on January 1, 2006, or the 2006 Renewable Energy Law. The 2006 Renewable Energy Law sets forth the national policy to encourage and support the use of solar and other renewable energy and the use of on-grid generation. On December 26, 2009, the Standing Committee of the National People’s Congress adopted an amendment to the 2006 Renewable Energy Law, or the Amended Renewable Energy Law, which became effective on April 1, 2010. While the 2006 Renewable Energy Law has laid the legal foundation for developing renewable energy in China, the Amended Renewable Energy Law has introduced practical implementing measures to enhance such development.

The Amended Renewable Energy Law details the principles, main content and key issues of the renewable energy development and utilization plans, further elaborates the requirements for grid companies to purchase the full amount of electricity generated from renewable energy by setting out the responsibilities and obligations of the government, the power companies and the grid companies, respectively, and also clarifies that the state will set up a special fund, referred to as the renewable energy development fund, to compensate the difference between the tariff for electricity generated from renewable energy and that generated from conventional energy sources. The proceeds of the renewable energy development fund may also be used to support renewable energy scientific research, finance rural clean energy projects, build independent power systems in remote areas and islands, and build information networks to exploit renewable energy. It is anticipated that China will publish more detailed implementing rules for the Amended Renewable Energy Law and make corresponding changes to those existing implementing rules relating to renewable energy.

The current rebates available for our customers include a rebate of 0.42 RMB per kilowatt for 20 years for factories and 1 RMB per kilowatt for 20 years for power plants.

China’s Ministry of Construction issued a directive in June of 2005, which seeks to expand the use of solar energy in residential and commercial buildings and encourages the increased application of solar energy in townships. In addition, China’s State Council promulgated a directive in June of 2005, which sets forth specific measures to conserve energy resources and encourage exploration, development and use of solar energy in China’s western areas, which are not fully connected to electricity transmission grids, and other rural areas. In July 2007, the PRC State Electricity Regulatory Commission issued the Supervision Regulations on the Purchase of All Renewable Energy by Power Grid Enterprises which became effective on September 1, 2007. To promote the use of renewable energy for power generation, the regulations require that electricity grid enterprises must in a timely manner set up connections between the grids and renewable power generation systems and purchase all the electricity generated by renewable power generation systems. The regulations also provide that power dispatch institutions shall give priority to renewable power generation companies in respect of power dispatch services provision.

On August 31, 2007, the NDRC implemented the National Medium- and Long-Term Programs for Renewable Energy, or MLPRE, which highlights the government’s long-term commitment to the development of renewable energy.

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On April 1, 2008, the PRC Energy Conservation Law came into effect. Among other objectives, this law encourages the utilization and installation of solar power facilities in buildings for energy-efficiency purposes.

On March 23, 2009, the MOF, issued the Provisional Measures for Administration of Government Subsidy Funds for Application of Solar Photovoltaic Technology in Building Construction, which outline a subsidy program dedicated to rooftop PV systems with a minimum capacity of 50 kilowatt-peak.

In July 2010, the Ministry of Housing and Urban-Rural Development issued the “City Illumination Administration Provisions” or the Illumination Provision. The Illumination Provisions encourage the installation and use of renewable energy system such as PV systems in the process of construction and re- construction of city illumination projects.

On July 24, 2011, the NDRC issued the Notice on Improving the On-grid Tariff Policy for Photovoltaic Generation. Under this Notice, it is required that a uniform national benchmark on-grid tariff for solar energy photovoltaic generation be formulated. Furthermore, for PV projects that had been approved before July 1, 2011 and would be completed by December 31, 2011, the feed-in tariff would be RMB1.15/kWh, including value-added tax, advisoror VAT. Except for PV projects that are constructed in Tibet, for PV projects that are approved after July 1, 2011 and PV projects that had been approved before July 1, 2011 but would not be completed by December 31, 2011, the feed-in tariff including VAT would be RMB1/kWh.

On March 14, 2012, the MOF, the NDRC and the National Energy Administration, or the NEA, jointly issued interim measures for the management of additional subsidies for renewable-energy power prices, according to determinewhich relevant renewable-energy power generation enterprises are entitled to apply for subsidies for their renewable power generation projects that satisfy relevant requirements set forth in the U.S. federal,measures.

On January 1, 2013, the State Council adopted a Circular on the Twelfth Five-Year Plan for the Energy Development, which sets out key development objectives for the industry during the 12th Five-Year Plan. In accordance with this plan, to optimize the structure of energy consumption, the proportion of non- fossil energy consumption shall be increased to 11.4 percent of total energy consumption by 2015.

In March 2013, NDRC issued the Notice on Improving the Pricing Scheme for Photovoltaic Power Generation. According to this notice, the NDRC proposed to reduce the feed-in tariff for utility scale PV projects from RMB 1/kWh to RMB 0.75/kWh, RMB 0.85/kWh and RMB 0.95/kWh, depending on the project’s location of construction. The feed-in tariff for PV projects constructed in specific regions would remain at RMB 1/kWh. In addition, the NDRC proposed a subsidy of RMB 0.35/kWh for distributed PV generation projects and the purchase price of electricity generated to be in line with the coal-electricity tariffs.

In March 2013, NDRC, the NEA and the MOF, jointly issued measures to standardize settlement of feed-in tariffs, which are believed to help address the delay in payment of solar subsidies and settlement of accounts payable experienced by solar project developers. In addition, pursuant to a July 2013 MOF notice, starting from August 2013, subsidies for distributed PV power generation stations (excluding distributed PV power generation projects) are required to be paid directly from the MOF to the State Grid Corporation of China and the China Southern Power Grid Co., Ltd., rather than through the MOF’s provincial counterparts. As a result of such measures, the collection period for feed-in-tariffs is expected to be significantly shortened.

The MOF has proposed to almost double the renewable energy surcharge for end-users of electricity from RMB0.008 per kWh to RMB0.015 per kWh, effective since September 25, 2013.

On August 26, 2013, the Department of Price of the NDRC released subsidy details for PV projects. Transmission-grid-connected projects will receive a feed-in-tariff of RMB0.90 to RMB1.00 per kWh, and distribution-grid-connected projects will receive a premium of RMB0.42 per kWh in addition to the desulphurized coal benchmark price. Distribution-grid-connected projects are expected to represent the majority of China’s new PV installation in the next few years. Unlike the rest of the world, capital expenditures for distribution-grid-connected projects are higher than transmission-grid-connected projects, since labor costs for scaffolding and work on rooftops are low in China and rooftop space is currently free. Meanwhile, the NDRC announced that the feed-in tariff will be valid, in principle, for 20 years.

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On September 23, 2013, the MOF and the State Administration of Taxation jointly issued a notice that ordered a 50% refund of value-added tax on sales by PV manufacturers of their PV products. This VAT refund will be effective from October 1, 2013 through December 31, 2015.

On November 26, 2013, the MOF announced that the electricity generated by the distributed PV system for its own use is exempted from paying four governmental charges. On the same date, the NEA promulgated the “Interim Measures for the Administration of PV Power Generation.”, which clarify that the state department in charge of energy and its local counterparts are responsible for the supervision of PV projects.

On February 12, 2014, the NEA circulated the target of national solar installations for 2014 to be 14GW, 6GW of which would be targeted for utility scale, 8GW for distributed generation.

On the same day, the NEA released a list of 81 “New Energy Demonstration Cities” and eight “industrial demonstration parks” in 28 and 8 provinces respectively. These cities and zones are required to achieve their respective mandatory targets in terms of solar PV installations and the percentage of installed renewable energy power generation capacities by the end of 2015, or the end of the 12th Five-Year-Plan.

In February 2014, the Certification and Accreditation Administration and the NEA jointly issued the “Implementation Opinions on Strengthening the Testing and Certification of PV Products.” The implementation opinions provide that only certified PV products may be connected to the public grid or receive government subsidies. The institutions that certify PV products must be approved by the Certification and Accreditation Administration. According to the implementation opinions, PV products that are subject to certification include PV battery parts, inverters, control devices, confluence devices, energy storage devices and independent PV systems.

In 2016, the government enacted the “Helping the Poor” Project. The National Poverty Alleviation Office has set an objective for the provinces and cities to alleviate poverty in the next three years through government investment to construct household power stations for poor families and to subsidize electricity charges for poor families to alleviate poverty.

Environmental Regulations

We are subject to a variety of governmental regulations related to the storage, use and disposal of hazardous materials. The major environmental regulations applicable to us include the Environmental Protection Law of the PRC, the Law of the PRC on the Prevention and Control of Water Pollution and its implementation rules, the Law of the PRC on the Prevention and Control of Air Pollution and its implementation rules, the Law of PRC on the Prevention and Control of Solid Waste Pollution and the Law of the PRC on the Prevention and Control of Noise Pollution and the PRC Law on Appraising Environment Impacts.

In addition, under the Environmental Protection Law of the PRC, the Ministry of Environmental Protection sets national pollutant emission standards. However, provincial governments may set stricter local standards, which are required to be registered at the State Administration for Environmental Protection. Enterprises are required to comply with the stricter of the two standards.

The relevant laws and regulations generally impose discharge fees based on the level of emission of pollutants. These laws and regulations also impose fines for violations of laws, regulations or decrees and provide for possible closure by the central or local government of any enterprise which fails to comply with orders requiring it to rectify the activities causing environmental damage.

We have received the environmental certification from the government related to our manufacturing process.

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Product Quality Certification

Our air energy storage power generation products require certification by the National Quality Supervision Department. As our air compression products are nonstandard, there is no ISO or other qualifying standard for the industry. The certification is therefore based on our design specifications. We have provided the government with our design specifications and begun discussions with the standard. We believe that there is no material risk that the government will not accept our product as the government is encouraging new technology in power generation.

Employees

We set out below the total number of our employees and the various functions which they serve as of September 12, 2017.

Functions

Sales, Purchasing and Marketing9
Finance and Administration24
Research and Development5
Production and Quality Control33
Engineering and Project17
TOTAL88

All of our employees are based in the PRC. Our PRC permanent employees are not unionized. We have not experienced any strikes, labor disputes or work stoppages by our employees and believe our relationship with our employees is good.

Seasonality

Our business is not seasonal, except to the extent that construction projects in northern China are more likely to be delayed by weather.

Property

Sanhe leases its principal office, factory and dormitory from LuckSky Group in Sanhe City, Hebei Province. LuckSky Group is owned by Zhou Deng Rong, our former CEO and Zhou Jian, our General Manager and Chairman of the Board. The space in the office, factory and dormitory being leased are 1296, 5160 and 1200 square meters, respectively. The office and factory space are leased for a rent of $105,053 (RMB 697,248) per year and the dormitory is leased for a rent of $19,527 (RMB 129,600) per year. The leases expire in April 30, 2024 and are subject to renewal with a prior two-month written notice. LuckSky Group is in the process of obtaining the land use approval and ownership certificate of the leased building.

On April 28, 2012, Zhou Jian obtained the right of usage to 44.3 acres of agricultural land where our principal office, factory and dormitory are located for 18 years and 8 months, starting May 1, 2012. The annual price paid for such usage rights is $5,200 (RMB 34,510). On May 1, 2012, Zhou Jian signed a commitment letter that allowed Xiangtian Kelitai, Yanjiao Branch, a division of LuckSky Group to use this agricultural land. LuckSky Group constructed the buildings on such agricultural land. In the event we are unable to use our principal factory and office space as a result of this usage issue, the lease provides that LuckSky Group will use every effort to complete and perfect the ownership and usage rights, or provide Sanhe with equivalent space.

On July 27, 2016, Xianning Xiangtian Air Energy Electric Co., Ltd. (“Xianning Xiangtian”), the wholly-owned subsidiary of the Company, entered into a rental agreement with Xianning Lucksky. The space in the factory  in Xianning in Hubei Province being leased is 4628 square meters. The factory space is leased for a rent of $83,132 (RMB 555,360) per year. The lease expires on July 31, 2018 and is subject to renewal with a prior one-month written notice.

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Website Access to our SEC Reports

You may obtain a copy of the following reports, free of charge through the SEC’s website at www.sec.gov as soon as reasonably practicable after electronically filing them with, or furnishing them to, the SEC: our previous Annual Reports on Form 10-K; our Quarterly Reports on Form 10-Q; our Current Reports on Form 8-K; and amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

The public may also read and copy any materials filed with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The Public Reference Room may be contact at (800) SEC-0330. You may also access our other reports via that link to the SEC website.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTSOFOPERATIONS

WE URGE YOU TO READ THE FOLLOWING DISCUSSION IN CONJUNCTION WITH OUR CONSOLIDATED FINANCIAL STATEMENTS AND THE NOTES THERETO BEGINNING ON PAGE F-1. THIS DISCUSSION MAY CONTAIN FORWARD-LOOKING STATEMENTS THAT INVOLVE SUBSTANTIAL RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS COULD DIFFER MATERIALLY FROMTHOSE EXPRESSED OR IMPLIED BY THE FORWARD-LOOKING STATEMENTS AS A RESULT OF ANUMBER OF FACTORS, INCLUDING BUT NOT LIMITED TO THE RISKS AND UNCERTAINTIES DISCUSSED UNDER THE HEADING “RISK FACTORS” HEREIN AND IN OUR OTHER FILINGS WITH THE SEC. SEE “CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS .”

Overview

Xiangtian (USA) Air Power Co., Ltd. was originally incorporated as Goa Sweet Tours Ltd. in the State of Delaware on September 2, 2008. We were originally formed to provide personalized concierge tour packages to tourists who visit the State of Goa, India.

On April 17, 2012, Goa Sweet Tours, Ltd. entered into Share Purchase Agreements (the “Purchase Agreements”), with Luck Sky International Investment Holdings Limited, an entity owned and controlled by Zhou Deng Rong, and certain of our former stockholders who owned, in the aggregate, 7,200,000 shares of our common stock (90% of the then outstanding shares). Luck Sky International Investment Holdings Limited purchased such shares for an aggregate consideration of $235,000. The sale of such shares closed on May 15, 2012.

On May 25, 2012, Goa Sweet Tours, Ltd. formed a corporation under the laws of the State of Delaware called Xiangtian (USA) Air Power Co., Ltd. ("Merger Sub") for the purpose of changing its name. On the same day, we acquired one hundred percent of the total outstanding shares of Merger Sub's common stock for cash. As such, Merger Sub became our wholly-owned subsidiary.

Effective as of May 29, 2012, Merger Sub was merged with and into the Company. As a result of the merger, the Company’s corporate name was changed to “Xiangtian (USA) Air Power Co., Ltd.” Prior to the merger, Merger Sub had no liabilities and nominal assets and, as a result of the merger, the separate existence of the Merger Sub ceased. The Company was the surviving corporation in the merger and, except for the name change provided for in the Agreement and Plan of Merger, there was no change in the directors, officers, capital structure or business of the Company.

On September 24, 2013, the Company acquired all of the shares of common stock of Lucksky (Hong Kong) Shares Limited, a Hong Kong corporation, for 250,000,000 shares of common stock of the Company, and agreed to acquire 100% of the shares of Sanhe City LuckSky Electrical Engineering Limited (“Sanhe”) common stock for the Company’s common stock. As of the acquisition merger, Lucksky (Hong Kong) Shares Limited and Sanhe had no liabilities and nominal assets. Effective as of September 24, 2013, Lucksky (Hong Kong) Shares Limited was merged with and into the Company and the Company was the surviving entity. The Company acquired Sanhe in July 2014.

On May 30, 2014, the Company entered into the Stock Purchase Agreement with Zhou Jian, the sole shareholder of Luck Sky (Hong Kong) Aerodynamic Electricity Limited (LuckSky Aerodynamic”). Effective May 30, 2014 the Company purchased 100% of the issued and outstanding shares of common stock of Luck Sky Aerodynamic , and the Company paid Zhou Jian a purchase price in the amount of HKD $10,000.00 (approximately USD$1,289.98) in cash (the “Acquisition”). Neither Luck Sky Shen Zhen nor Luck Sky Aerodynamic had any operating business and nominal or liabilities and nominal assets as of the date of the Acquisition. As a result of the Acquisition, Luck Sky Aerodynamic became our wholly owned subsidiary and Luck Sky Shen Zhen became our indirect subsidiary through Luck Sky Aerodynamic.

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LuckSky Group was established in 2000 by Zhou Deng Rong after he obtained a series of patents and developed the air compression and related technology. Sanhe was established in July 2013 and was under common control with LuckSky Group. Since inception, Sanhe served as a distributor of products of the LuckSky Group and its subsidiaries.

During the three months ended June 30, 2014, LuckSky Group provided Sanhe with additional working capital and transferred to Sanhe its assets and liabilities related to the compressed air energy storage power generation technology and PV panel installations, but retained its other assets. On April 1, 2014, LuckSky Group loaned Sanhe RMB3,000,000. The equipment, including machinery, was sold to Sanhe for RMB7,681,000, its book value, Xiangtian Kelitai, Yanjiao Branch, a division of LuckSky Group on May 26, 2014. On April 30, 2014, the inventory was sold to Sanhe by Xiangtian Kelitai, Yanjiao Branch, and a division of LuckSky Group for RMB 130,918.80, its historical value. On May 19, 2014, Sanhe entered into an office equipment transfer (purchase) agreement with Xiangtian Kelitai, Yanjiao Branch, a division of LuckSky Group for a purchase price of RMB162, 900. Sanhe entered into leases with LuckSky Group for a portion of the factory, office space and dormitory located in Sanhe City and a lease with Dong Yi Glass Machine Company Limited, which is owned by Deng Zhou Rong, our former CEO, for a second factory and office space. In addition, 48 employees transferred from LuckSky Group to Sanhe, including all personnel related to the projects under construction and development and administrative and fiancé personnel.

We reincorporated in Nevada effective October 31, 2016 as a result of a merger of Xiangtian (USA) Air Power Co., Ltd., a Delaware corporation, with its wholly-owned subsidiary, Xiangtian (USA) Air Power Co., Ltd., a Nevada corporation.

Acquisition of Sanhe

On July 25, 2014, Sanhe and Luck Sky Shen Zhen and Sanhe’s shareholders entered into a series of agreements known as variable interest agreements (the “VIE Agreements”) pursuant to which Sanhe became LuckSky Shen Zhen’s contractually controlled affiliate. The VIE Agreements include the Framework Agreement on Business Cooperation, the Exclusive Management Consulting and Training and Technical Services Agreement, the Exclusive Option Agreement, the Equity Pledge Agreement, the Know-How Sub-License Agreement and the Power-of-Attorney. The purpose and effect of the VIE Agreements is to provide LuckSky Shen Zhen (our indirect wholly-owned subsidiary) with all of the management and control of Sanhe and all of its net income. While LuckSky Shen Zhen does not actually own at present any of the equity and shares in Sanhe, the purpose and effect of the VIE Agreements is to instill in Luck Sky Shen Zhen total management and voting control of Sanhe for all material purposes. The use of VIE agreements is a common structure used to acquire PRC corporations, particularly in certain industries in which foreign investment is restricted or forbidden by the PRC government.

Results of Operations

The following discussion should be read in conjunction with the unaudited condensed consolidated Financial Statement of the Company for the years ended July 31, 2016, 2015 and 2014, and for the nine-month period ended April 30, 2017, and related notes thereto.

Revenue

We have recognized $10,839,955, $20,772,028 and $0 revenue for the years ended July 31, 2016, 2015 and 2014. The project in Xianning, Hubei Province and some small projects were completed for the year July 31, 2016. The project in Weihai was completed in February 2015, project in Binzhou was completed in June 2015 and project in Dezhou was completed in July 2015. None of the projects was completed in 2014. The decrease in 2016 was because projects with bigger capacity were completed during the year ended July 31, 2015.

For the year ended July 31, 2016, percentage-of completion method is used for one contract which was not completed as of July 31, 2016. We recognized the related revenue and cost of the other projects completed during the current period according to our revenue recognition policy by completed contract method.

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We have recognized $4,329,466 and $9,009,326 in revenue for the nine months ended April 30, 2017 and 2016. The project of 3MW PV panel installations in Hubei and a couple of small projects were completed in this period. The project in Xianning, Hubei Province and another three projects were completed during the three-month period ended April 30, 2016. The decrease was because projects with bigger capacity were completed during the comparison period.

Cost of Sales

We have recognized $9,642,803, $17,781,011 and $0 cost of revenue for the years ended July 31, 2016, 2015 and 2014. As with revenue, percentage-of completion method is used for one contract and the other completed projects in accordance to the completed contract method.

We have recognized $3,670,799 and $8,020,566 cost of revenue for the nine months ended April 30, 2017 and 2016. The increase in cost of sales is due to increase in sales. .

Gross Profit

Gross profit was $1,197,152, $2,991,017 and $0 for the years ended July 31, 2016, 2015 and 2014. Percentage-of completion method is used for one contract. We recognized the completed projects based on the completed contract method.

Gross profit was $658,667 for the nine months ended April 30, 2017, compared to $988,760 for the nine months ended April 30, 2016.

Operating Expenses

For the year ended July 31, 2016, we incurred total operating expenses in the amount of $1,723,863, which was mainly comprised of selling expenses of $24,184, professional fees of $657,045, salary expenses of $501,294, rental fees of $133,835, accounts receivable impairment loss of $60,242 and general and administrative expenses of $347,263. For the year ended July 31, 2015, we incurred total operating expenses in the amount of $1,237,953, which was mainly comprised of selling expenses of $21,912, professional fees of $318,848, salary expenses of $477,696, rental fees of $144,361 and general and administrative expenses of $275,136. For the year ended July 31, 2014, we have incurred total operating expenses in the amount of $750,606 which was mainly comprised of selling expenses of $5,479, professional fees totaling $280,908, and general and administrative expenses totaling $464,219.

The substantial increase of $485,910, or 39% in 2016 was primarily due to an increase of $338,197 in professional expense (including an increase in the audit fee by $20,000, corporate consulting fee by $181,751, legal fees by $103,291, and consultancy fees related to reporting obligations by $33,155, respectively) and an accrued accounts receivable impairment loss of $60,242. The substantial increase of $487,347, or 65% in 2015 was primarily due to increased amounts of professional expense, as well as salary and rental fees incurred by the operational entity Sanhe after it was acquired by the Company in July 2014.

We have not incurred any expenses for research and development from inception through July 31, 2016. Company employees only conduct basic research and do not work on a specific plan or project to which expenses can be allocated.

As a result of operating losses, there has been no provision for the payment of income taxes from the date of inception. The Company has a certain deferred tax asset that is available to offset against future taxable income.

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For the nine months ended April 30, 2017, we incurred total operating expenses in the amount of $1,736,419, which mainly comprised selling expenses of $23,527, professional expenses of $434,580, salary expenses of $643,777, rental fees of $116,796, depreciation expenses of $198,869 and general and administrative expenses totaling $318,870. For the nine-month period ended April 30, 2016, we incurred total operating expenses in the amount of $1,043,536, which mainly comprised of selling expenses of $16,015, professional expenses of $371,230, salary expenses of $350,313, rental fees of $100,784, depreciation expenses of $18,409 and general and administrative expenses totaling $186,785. The increase in operating expenses by $692,883, or 66.4%, was primarily due to the increase amounts of salary and depreciation expenses for a larger scale of operations in Sanhe and its subsidiary Xianning Xiangtian.

Capital Commitments

The Company purchased property, plant and equipment which the payment was due within one year. As of April 30, 2017, July 31, 2016, 2015 and 2014, the Company had a capital commitment of $15,764,399, $9,247,569, $17,697,627, and $27,777,872 respectively.

The increase of capital commitments between April 30, 2017 and July 31, 2016 was caused by the increase of principal projects from thirteen to twenty five .Funds will be generated from the customers in line with the projects' construction progress, and will be used to pay for our capital commitments.

Operation Commitments

The total future minimum lease payments under the non-cancellable operating lease with respect to the office and the dormitory as of July 31, 2016 are payable as follows:

Year ending July 31, 2017124,580
Year ending July 31, 2018124,580
Year ending July 31, 2019124,580
Year ending July 31, 2020124,580
After 2020467,174
Total$ 965,494

Rental expense of the Company for the nine months ended April 30, 2017, for the year ended July 31, 2016, 2015, and 2014 were $152,134, $127,835, $344,736, and $89,760 respectively.

Liquidity and Capital Resources

As of April 30, 2017, we had a cash balance of $191,279. During the nine months ended April 30, 2017, net cash provided by operating activities totaled $582,763. Net cash used in investing activities totaled $1,711,348. Net cash provided by financing activities during the period totaled $551,444. The resulting change in cash for the period was a decrease of $1,034,941, which was primarily due to cash outflow to purchase inventory and fixed assets, albeit we had a cash inflow from related parties and customers.

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As of April 30, 2016, we had a cash balance of $44,553. During the nine-month period ended April 30, 2016, net cash used in operating activities totaled $828,660. Net cash used in investing activities totaled $67,197. Net cash provided by financing activities during the period totaled $643,388. The change in the use of net cash for the period was a decrease of $457,476, which was primarily due to a decline in cash outflow of prepayment and purchasing inventory coupled with a decline in cash inflow of the amounts due from customers, accounts receivable.

As of April 30, 2017, we had current liabilities of $9,749,425, which was mainly comprised of accounts payable and accrued liabilities of $5,176,910, amount due to directors of $415,652, amount due to shareholders of $84,180, amount due to related parties of $2,333,015, advance from customers of $117,126, deferred tax liabilities of $16,437, other payables of $293,281, income tax payable of $415,633 and net advance billings of $897,191.

As of July 31, 2016, we had current liabilities of $8,275,631, which was mainly comprised of accounts payable and accrued liabilities of $4,851,630, amount due to directors of $414,876, amount due to related parties of $1,716,734, advance from customers of $620,814, deferred tax liabilities of $107,609, other payables of $234,791 and income tax payable of $329,177.

We had net assets of $7,060,279 and $8,502,334 as of April 30, 2017 and July 31, 2016, respectively.

Currently, we have 17 project contracts. Thirteen are completed, three are under construction, and one is expected to start within a few months. In addition, we have had eight projects cancelled because of our concern that the customers may fail to meet their payment obligations. The contracts typically provide for payments in installments, with approximately 35% paid upon the commencement of construction, and the balance in two equal installments approximately 6 and 18 months later. We are dependent on our projects for all our projected revenue until we obtain additional customers and any applicable foreign tax consequences relatingmaterial delay or reduction in the projected cash receipts will adversely affect our operations. While we expect to their investmentgenerate revenue on the completion of our projects to meet the liquidity and capital resources of our operations, delayed receipts or increased costs may cause going concern issues, particularly in light of our securities.limited available cash.

USE OF PROCEEDS


When all the shares are sold, the gross proceeds from this offering will be $30,000. We expect to disbursefinance operations from progress billings from ongoing projects and through non-interest bearing loans from the proceedsCompany’s directors. We estimate that our cash and cash equivalents and projected cash receipts from this offeringoperations are sufficient to fund operations for the next nine months. However, additional funds may be required given our continued losses from operations. Additional funding may come from equity financing from the sale of our common stock or from borrowings, but there can be no assurance that such financing will be available on acceptable terms. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest in our company. We have no current commitments for additional financing.

The Company has incurred losses since its inception resulting in an accumulated deficit of $1,893,532 as of April 30, 2017 and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. Our future financial results are also uncertain due to a number of factors, some of which are outside our control. These risk factors include, but are not limited to:

  • our ability to raise additional funding;

  • the results of our proposed operations.

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Going Concern Consideration

Our operations and financial results are subject to numerous various risks and uncertainties that could adversely affect our business, financial condition and results of operations.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.

Critical Accounting Policies and Estimates

Use of Estimates and Assumptions

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

Fair Value Measurements

The Company applies the provisions of ASC Subtopic 820-10, “Fair Value Measurements”, for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority set forth below, withinto unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the first 12 months after successfullowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

[   ]        Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

[   ]        Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

[   ]        Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

There were no assets or liabilities measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of April 30, 2017, July 31, 2016, 2015 and 2014.

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Billings in Excess of Costs

Billings in excess of costs is comprised of cash collected from customers and billings to customers on contracts in advance of work performed, including advance payments negotiated as a contract condition. Generally, unearned project-related costs will be earned over the next twelve months.

Revenue Recognition

Sales of power generation system in conjunction of system installation are recognized under accounting for construction-type contracts, based on the nature of the contract using the

Completed-Contract Method

The reason for selecting completed-contract method is (a) The Company’s contract is duration is less than one year and financial position and results of operations would not vary materially from those resulting from use of the percentage-of completion method. (b) Reasonably dependable estimate cannot be made due to nature of this offering:


Proceeds to us

$30,000

Cash on hand

9,741

Total

$39,741

Legal Counsel and Auditor

$17,741

Brochures, Marketing and Promotion

6,000

Website Development

6,000

Office and Administration

5,000

Computer and Equipment

3,000

Miscellaneous Administrative Expenses

2,000

Total

$39,741

Uponcontracts. Accordingly, revenue is recognized upon the completion of the construction, provided persuasive evidence of an arrangement exists, title and risk of loss has transferred, the fee is fixed and determinable, and collection is reasonably assured. We provide for any loss that we expect to incur on these contracts when that loss is probable.

Percentage-of Completion Method

For contracts with long duration and it is practical to make reasonable estimate, percentage-of completion method is used. Revenue is recognized based on the percentage of total income. The percentage is based on incurred costs to date bearing to estimate total cost after giving effect to estimates of cost to complete based on most recent information. We provide for any loss that we expect to incur on these contracts when that loss is probable.

Warranty and Returns

The Company generally provides limited warranties for work performed under its contracts. The warranty periods typically extend for a limited duration following substantial completion of the Company's work on a project. At the time a sale is recognized, we record estimated future warranty costs. Such estimated costs for warranties are included in the individual project cost estimates for purposes of accounting for long-term contracts. The warranty cost is estimated based on our experience with the type of work and any known risks relative to the project and was not material during the periods ended April 30, 2017, July 31, 2016, 2015 and 2014.

No right of return exists on sales of equipment. Replacement part returns are estimable and accrued at the time a sale is recognized.

Recent Accounting Pronouncements

In July 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which modifies existing requirements regarding measuring inventory at the lower of cost or market. Under existing standards, the market amount requires consideration of replacement cost, net realizable value (NRV), and NRV less an approximately normal profit margin. The new ASU replaces market with NRV, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This eliminates the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. The amendments are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The Company is currently assessing this offering,ASU’s impacts on the Company’s consolidated results of operations and financial condition.

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The new consolidation standard changes the way reporting enterprises evaluate whether (a) they should consolidate limited partnerships and similar entities, (b) fees paid to a decision maker or service provider are variable interests in a VIE, and (c) variable interests in a VIE held by related parties of the reporting enterprise require the reporting enterprise to consolidate the VIE. The guidance is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2015. Early adoption is allowed, including early adoption in an interim period. A reporting entity may apply a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption or may apply the amendments retrospectively. The Company is currently assessing the impact of the adoption of this guidance on the consolidated financial statements.

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In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements— Going Concern (Subtopic 205-40). This standard is intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments contained in this ASU apply to all companies and not-for-profit organizations. The amendments are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The Company is currently assessing this ASU’s impact on the Company’s consolidated results of operations and financial condition.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which provides a single comprehensive model to be used in the accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The standard’s stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle the ASU includes provisions within a five step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when (or as) an entity satisfies a performance obligation. The standard also specifies the accounting for some costs to obtain or fulfill a contract with a customer and requires expanded disclosures about revenue recognition. The standard provides for either full retrospective adoption or a modified retrospective adoption by which it is applied only to the most current period presented. This ASU is effective January 1, 2017. The Company is currently assessing this ASU’s impact on the Company’s consolidated results of operations and financial condition.

The Company believes that there were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations.

MARKET PRICE OF AND DIVIDENDS ON REGISTRANT'S COMMON EQUITY ANDRELATEDSTOCKHOLDERMATTERS

Market Information

Our common stock, $0.0001 par value per share, began trading on the OCT Market on June 28, 2012, where its prices are quoted under the symbol “XTNY.”

The following table sets forth the reported high and low sales prices of our common stock for the indicated periods, as regularly quoted on the OCT Market: The price range per share of common stock presented below represents the highest and lowest intra-day sales prices for the Company's common stock on the OTCQB. Since our common stock is traded infrequently, such over-the-counter market quotations may reflect inter-dealer prices, without markup, markdown or commissions and do not represent a liquid trading market.

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  Year Ended  Year Ended  Year Ended  Year Ended  Year Ended 
  July 31, 2013  July 31, 2014  July 31, 2015  July 31, 2016  July 31, 2017 
                               
  High  Low  High  Low  High  Low  High  Low  High  Low 
First Quarter$ 2.05 $ 0.80 $ 1.01 $ 0.60 $ 4.06 $ 2.99 $ 4.12 $ 1.18 $ 5.36 $ 2.00 
Second Quarter$ 1.50 $ 0.52 $ 1.01 $ 1.01 $ 3.05 $ 2.99 $ 4.12 $ 1.00 $ 5.00 $ 2.21 
Third Quarter$ 0.60 $ 0.52 $ 3.05 $ 0.99 $ 3.05 $ 1.70 $ 4.03 $ 4.03 $ 3.18 $ 2.20 
Fourth Quarter$ 1.01 $ 0.60 $ 3.75 $ 2.10 $ 3.65 $ 1.70 $ 4.89 $ 2.88 $4.00 $2.71 

Empire Stock Transfer Co., Inc. of Henderson, Nevada is our stock transfer agent. They can be contacted by telephone at (702) 818-5898 and by facsimile at (702) 974-1444.

Holders

As of September 12, 2017, 591,042,000 shares of common stock were issued and outstanding and there were 362 shareholders of record our common stock, including 262,092,740 shares beneficially owned by Zhou Jian, the Chairman of the Board, and 101,831,136 owned by Zhou Deng Hua, our Chief Executive Officer and Director. Except for the 100,000,000 shares of Zhou Jian being offered hereby, the shares owned by Zhou Jian and Zhou Deng Hua may only be resold in compliance with Rule 144 of the Securities Act of 1933.

Recent Sales of Unregistered Securities- None

Dividends

We have never declared or paid any cash dividends on our common stock. For the foreseeable future, we intend to immediately initiateretain any earnings to finance the development and expansion of our website.We intendbusiness, and we do not anticipate paying any cash dividends on its common stock. Any future determination to hire an outside web designer to assist us in designing and building our website.

Marketing and advertisingpay dividends will be focusedat the discretion of the Board of Directors and will be dependent upon then existing conditions, including our financial condition and results of operations, capital requirements, contractual restrictions, business prospects, and other factors that the board of directors considers relevant.

The payment of dividends is contingent on promotingthe ability of our toursPRC based operating subsidiary to obtain approval to send monies out of the PRC. The PRC's national currency, the Yuan or renminbi, is not a freely convertible currency. The PRC government imposes controls on the convertibility of renminbi into foreign currencies and, websitein certain cases, the remittance of currency out of the PRC. Shortages in the availability of foreign currency may restrict our ability to travel agencies, resortsremit sufficient foreign currency to pay dividends.

Securities authorized for issuance under equity compensation plans

In June 2017, the Company adopted a stock incentive plan, the Xiangtian (USA) Air Power Co. Ltd. 2017 Stock Incentive Plan, but has no pension plan, non-equity incentive plan or deferred compensation arrangement. We have not made any awards under the plan. We adopted the plan to attract and touristsretain members of management, directors or key employees.

44


Stock Price Performance Graph

This performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated by reference into any filing of Xiangtian (USA) Air Power Co., Ltd. under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in Goa. Our advertising campaign will includesuch filing.

            This performance chart compares the designcumulative total return on our common stock with that of the NASDAQ Composite Index and printingthe NASDAQ Clean Edge U.S. Liquid Series Index, or NASDAQ CELS Index. The chart assumes $100 was invested on June 31, 2012 in the common stock of various sales materials.

Xiangtian (USA) Air Power Co., Ltd., the NASDAQ Composite Index and the NASDAQ CELS Index, and assumes the reinvestment of any dividends. We intend to establish an officehave a very limited volume of trading in our president’s premises to maintain the websiteCommon Stock, and database. This will include physical office space, computer equipment, telephones and other assets as required to maintain the operations.

DETERMINATION OF OFFERING PRICE


The offering price of the shareson many days there has been determined arbitrarily by us.no trading activity. The stock price doesperformance on the following graph is not bear any relationship to our assets, book value, earnings, or other established criteria for valuing a privately held company. In determining the numbernecessarily indicative of sharesfuture stock price performance.

     Indexed  Indexed  Indexed  Indexed  Indexed 
 Base  Returns  Returns  Returns  Returns  Returns 
  Period  Period ended  Period ended  Period ended  Period ended  Period ended 
Company/Index 07/31/2012  7/31/2013  7/31/2014  7/31/2015  7/31/2016  7/31/2017 
Xiangtian                  
     (USA)                  
     Air Power                  
     Co.,                  
     Ltd.$ 100.00 $49.27 $182.92 $178.05 $238.54 $126.83 
NASDAQ                  
     Composite                  
     Index$ 100.00 $123.37 $148.66 $174.46 $175.61 $215.96 
NADAQ                  
     Clean                  
     Edge                  
     Green                  
     Energy                  
     Index$ 100.00 $178.92 $217.48 $194.81 $175.83 $214.97 

Penny Stock Regulations

Our common stock is considered to be offered anda “penny stock” under the offering price, we took into consideration our capital structure and the amountSecurities Exchange Act of money we would need to implement our business plans. Accordingly, the offering price should not be considered an indication of the actual value of our securities.


MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS


Upon the effectiveness of the registration statement of which this prospectus forms a part, we intend to seek a market maker to file an application with the FINRA to have our stock quoted on the OTC Bulletin Board. However, we cannot assure you that our shares will be quoted on the OTC Bulletin Board or, if quoted, that a public market will materialize.





1934. The Securities and Exchange CommissionSEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system,Stock Market System, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the Securities and Exchange Commission, that:

-

contains a description of the nature and level of risks in the market for penny stocks in both public offerings and secondary trading;

-

contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of Securities’ laws; contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;

-

contains a toll-free telephone number for inquiries on disciplinary actions;

-

defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and

(a)45

contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

(b)

contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws;

(c)

contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;

(d)

contains a toll-free telephone number for inquiries on disciplinary actions;

(e)

defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and

(f)



-

contains such other information and is in such form, including language, type, size and format, as the Securities and Exchange Commission shall require by rule or regulation.

The broker or dealerbroker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with:

(a)

bid and offer quotations for the penny stock;

(b)

the compensation of the broker-dealer and its salesperson in the transaction;

(c)

the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and

(d)

a monthly account statement
-

bid and offer quotations for the penny stock;

-

the compensation of the broker-dealer and its salesperson in the transaction;

-

the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the marker for such stock; and

-

monthly account statements showing the market value of each penny stock held in the customer’s account.

In addition, the penny stock rules that require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgmentacknowledgement of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably written statement.


These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock. Therefore, if

SELECTED CONSOLIDATED FINANCIAL DATA

            You should read the following selected consolidated financial data below in conjunction withManagement’s Discussion and Analysis of Financial Condition and Results of Operationsand the consolidated financial statements, the accompanying notes and other financial information included elsewhere in this registration statement. The selected consolidated financial data in this section are not intended to replace the consolidated financial statements and are qualified in their entirety by the consolidated financial statements and the accompanying notes included elsewhere in this elsewhere in this registration statement.

            The consolidated statements of operations data for the years ended July 31, 2016, 2015, and 2014 and the consolidated balance sheets data as of July 31, 2016, 2015, and 2014 are derived from our audited consolidated financial statements included elsewhere in this registration statement. The consolidated statements of operations data for the years ended July 31, 2013 and 2012 and the consolidated balance sheets data as of July 31, 2013 and 2012 are derived from our audited consolidated financial statements not included this registration statement, which are stated on a basis consistent with our audited consolidated financial statements included herein. Our historical results are not necessarily indicative of the results that may be expected in any future period.

  Year Ended July 31, 
  2016  2015  2014  2013  2012 
                
Consolidated statement of operations data:               
Revenue 10,839,955  20,772,028  -  -  - 
Cost of revenue 9,642,803  17,781,011  -  -  - 
Gross profit 1,197,152  2,991,017  -  -  - 
Operating expenses 1,723,863  1,237,953  750,606  87,589  30,551 
Net loss (608,184) 657,460  (681,194) (87,589) (30,944)
Net (loss) income per share attributable to common stockholders:          
Basic$ 0.00 $0.00 $ (0.00)$(0.01)$(0.00)

(1)

Under U.S. generally accepted accounting principles, we are required to present the impact of a hypothetical liquidation of our joint ventures on our consolidated statements of operations. For a more detailed discussion of this accounting treatment, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Components of Results of Operations—Net Income (Loss) Attributable to Stockholders.”

46



  As of July 31, 
  2016  2015  2014  2013  2012 
                
Consolidated balance sheet data:               
Cash and cash equivalents$ 1,226,220 $ 502,029 $ 556,788 $ 1,640,007 $ 97 
Accounts receivable 2,848,904  4,720,093  -  -  - 
Advances to suppliers 4,594,299  5,173,680  7,490,564  -  - 
Inventory 2,080,853  1,463,856  1,142,726  -  - 
Total current assets$ 12,078,613 $ 13,553,476 $ 11,111,425 $ 1,640,007 $ 36,560 
                
Property, plant and equipment, net$ 4,520,735 $ 7,679,323 $ 6,779,256 $ - $ - 
Deposit for property, plant and equipment 178,617  90,826  1,590,581  -  - 
Total assets$ 16,777,965 $ 21,323,625 $ 19,481,262 $ 1,640,007 $ 36,560 
Total current liabilities$ 8,275,631 $ 9,086,256 $ 7,884,626 $ 107,609 $ 53,028 
Capital lease obligations - non-current$ - $ 2,687,887 $ 2,718,106 $ - $ - 
Total stockholders' equity (deficit)$ 8,502,334 $ 9,549,482 $ 8,878,530 $ 1,532,398 $ (16,468)

RELATED PARTY TRANSACTIONS

On July 25, 2014, Luck Sky Shen Zhen obtained an exclusive, worldwide, royalty free license from Zhou Deng Rong and Zhou Jian (his son) and a second exclusive, worldwide royalty free license from LuckSky Group to an aggregate of 48 Chinese patents and related know how and trade secrets, including the technology underlying 13 patent applications (the “Technology”). The Technology represents all of the patents, patent applications and related know how and trade secrets owned by the licensors with respect to PV installations and the air energy storage power generation technology as applied to commercial and residential buildings, but not wind towers. On July 25, 2014, Luck Sky Shen Zhen granted Sanhe an exclusive sublicense with respect to the use of the Technology for commercial and residential buildings, but not for other uses, including wind towers, vehicles and trains, which sublicense also provides for a royalty payment to Luck Sky Shen Zhen equal of five percent of Sanhe’s revenues.

On July 25, 2014, prior to the Acquisition, Sanhe and LuckSky Shen Zhen and Sanhe’s shareholders entered into a series of VIE Agreements, pursuant to which Sanhe became LuckSky Shen Zhen’s contractually controlled affiliate. The VIE Agreements include the Framework Agreement on Business Cooperation, the Exclusive Management, Consulting and Training and Technical Services Agreement, the Exclusive Option Agreement, the Equity Pledge Agreement, the Know-How Sub-License Agreement and the Power-of-Attorney. The purpose and effect of the VIE Agreements is to provide LuckSky Shen Zhen (the Company’s indirect wholly-owned subsidiary) with all of the management and control of Sanhe and all of its net income. While LuckSky Shen Zhen does not actually own at present any of the equity and shares in Sanhe, the purpose and effect of the VIE Agreements is to instill in LuckSky Shen Zhen total management and voting control of Sanhe for all material purposes. The use of VIE agreements is a common structure used to acquire PRC corporations, particularly in certain industries in which foreign investment is restricted or forbidden by the PRC government.

Due from related parties

On January 19, 2017, Luck Sky Shen Zhen entered into a loan agreement with Sanhe Keilitai with an amount of $72,569 at 0.45% interest rate per month. The loan was paid on July 19, 2017 when it matured.

On April 25, 2015, Sanhe entered into a loan agreement with Xiangtian Kelitai, Yanjiao Branch, a division of LuckSky Group, which is owned by Zhou Deng Rong, former CEO and Sanhe’s former general manager and former majority shareholder of the Company, with a total amount of $507,917 (RMB3,150,000). The loan is unsecured and matured on December 31, 2015. Since the maturity date, Sanhe has been entitled to receive interest at 5% per annum after the maturity date. The loan was repaid during the fiscal year ended July 31, 2016. Sanhe has been working on a construction project for Xiangtian Kelitai where Sanhe was promised to be reimbursed for the cost of the project. The accumulated cost on the construction project was $579,671 as of July 31, 2015. As of July 31, 2016, the project was completed and $811,197 of revenue and $730,141 of cost of sales were recognized.

47


Due to related parties

Prior to the incorporation of Sanhe, Kelitai Air Powered Machinery Co., Ltd. (“Kelitai”), a subsidiary of LuckSky Group, an entity owned by Zhou Deng Rong, former general manager and former majority shareholder of the Company, executed various purchase agreements (the “Agreements”) with Beijing Hengruier Machinery Company Limited (“Hengruier”) and made certain prepayments on behalf of the Company. On July 15, 2013, Kelitai, Hengruier and the Company executed a tripartite agreement to transfer the rights and obligations of the Agreements to the Company. The outstanding amounts due to related parties were $0, $0 and $1,242,198 (RMB 7,722,000) as of July 31, 2016, 2015 and 2014, respectively.. These amounts were unsecured, non-interest bearing, and due on demand.

In May 2014, Sanhe entered into an agreement with Kelitai, to purchase some of Keizai’s fixed assets for the use in its own production. The total amount for the fixed assets and inventory was $1,261,872 (RMB 7,844,300) and Sanhe paid $47,265 (RMB 162,900) for equipment and $21,000 (RMB 130,919) for inventory. The outstanding amount due to related party – Kelitai – were $0, $0 and $1,235,667 (RMB 7,681,400) as of July 31, 2016, 2015 and 2014. The amount was unsecured, non-interest bearing, and due on demand.

Sanhe leases its principal office, factory and dormitory from LuckSky Group in Sanhe City, Hebei Province. LuckSky Group is owned by Zhou Deng Rong, our former CEO and Zhou Jian, our General Manager and Chairman of the Board. The space in the office, factory and dormitory being leased are 1296, 5160 and 1200 square meters, respectively. The office and factory space are leased for a rent of $105,053 (RMB 697,248) per year and the dormitory is leased for a rent of $19,527 (RMB 129,600) per year. The leases expire in April 30, 2024 and are subject to renewal with a prior two-month written notice. LuckSky Group is in the process of obtaining the land use approval and ownership certificate of the leased building. As of July 31, 2016, 2015 and 2014, the lease payables to LuckSky Group were $280,304, $166,443 and $33,253, respectively. As of April 30, 2017, the lease payables to LuckSky Group were $360,021.

Until August 1, 2015, Sanhe leased a second factory and office in Sanhe City from Sanhe Dong Yi Glass Machine Company Limited, which is owned by Zhou Deng Rong. A portion of this facility was used by Sanhe to demonstrate its products but the facility was primarily intended as a backup to the first facility in Sanhe City and/or for expansion. The factory and office are 4,748.96 square meters. The rent paid by Sanhe for the factory and the office was RMB1, 306,500 per year. As of April 30, 2017and July 31, 2016, the lease payables to Sanhe Dong Yi Glass Machine Company Limited were $237,028 and $246,060, respectively. On August 1, 2015, the two parties terminated the finance lease. As the Company no longer needs the factory and office, the assets were returned to the lessor effective August 1, 2015.

On July 27, 2016, Xianning Xiangtian Air Energy Electric Co., Ltd. (“Xianning Xiangtian”), the wholly-owned subsidiary of the Company, entered into a rental agreement with Xianning Lucksky. The space in the factory being leased is 4,628 square meters. The factory space is leased for a rent of $81,924 (RMB 555,360) per year. The lease expires on July 31, 2018 and is subject to renewal with a prior one-month written notice.

On January 26, 2017, Xianning Lucksky lent $21,771 to Xianning Xiangtian. The Company used the funds for its operations. These advances are due on demand, unsecured and non-interest bearing.

From November 2016, Xianning Lucksky prepaid $18,902 expenses for Xianning Xiangtian. From time to time, Mr. Zhou Deng Rong prepaid some expenses for the Company. As of April 30, 2017 and July 31, 2016, amounts due to related parties were as follows:

  April 30,  July 31, 
  2017  2016 
  (Unaudited)    
Rental fees:      
LuckSky Group 360,021  280,304 
Sanhe Dong Yi (Capital lease payable) 237,028  246,060 
Xianning Lucksky 60,453  - 
       
Prepaid expenses on behalf of the company:      
Zhou Deng Rong 1,634,840  1,190,370 
Xianning Lucksky 18,902  - 
       
Borrowings:      
Xianning Lucksky$ 21,771 $ - 
       
Total$ 2,333,015 $ 1,716,734 

48


Due to Shareholders

Since inception to April 2014, a shareholder of the Company has paid several employees’ salaries on behalf of the Company. As of April 30, 2017, July 31, 2016, 2015 and 2014, the amount due to shareholders was $84,180, $0, $18,934 and $18,934, respectively. These advances are due on demand, unsecured and non-interest bearing.

Due to Directors

From time to time, the Company receives advances from its directors. As of April 30, 2017 and July 31, 2016, the Company received $415,652 and $414,876, respectively. The Company used the funds for its operations. These advances are due on demand, unsecured and non-interest bearing.

SELLING SECURITY HOLDERS

The shares offered by this prospectus may be offered from time to time by the selling security holder listed in the following table. The selling security holder will determine the number of shares to be sold and the timing of the sales. The selling security holder may also pledge the shares as collateral for a loan to the selling security holder. Our registration of the shares does not necessarily mean that the selling security holder will sell all or any of the shares. Because the selling security holder may offer all, some or none of his shares, no definitive estimate as to the number of shares thereof that will be held by the selling security holder after such offering can be provided, and the following table has been prepared on the assumption that all shares of common stock offered under this prospectus will ultimately be sold. The selling stockholder is not a broker dealer or an affiliate of a broker dealer.

              Percentage 
  Number of     Percentage     (%) of 
  Shares  Beneficial  (%) of  Beneficial  Common 
  Owned  Ownership  Common Stock  Ownership  Stock Owned 
  Prior to  Before the  Owned Before  After the  After 
Name Offering(1)  Offering(1)  Offering(3)  Offering  Offering 
Zhou Jian(4) 264,850,740  264,850,740  44.811  164,850,740-  27.892 

(1) For purposes of these columns only, we have included all shares of common stock owned or beneficially owned by the selling security holder. The selling security holder owns no shares of common stock issuable upon exercise of any warrants, options or other rights owned or beneficially owned by such selling security holder. The selling security holder’s ownership in this column is based on 591,042,000 shares of our common stock becomesoutstanding as of September 12, 2017.

(2)The percentages set forth in this column are based on 591,042,000 shares of our common stock outstanding as of September 12, 2017. The number and percentage of shares beneficially owned is determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, beneficial ownership includes any shares as to which the selling security holder has sole or shared voting power or investment power and also any shares, which the selling security holder has the right to acquire within 60 days.

(3) Assumes that all securities registered will be sold.

(4) Mr. Zhou disclaims beneficial ownership of 15,191,260 shares directly and beneficially owned by Zhou Deng Rong, his father.

Relationships between the Company and Selling Security Holders and Affiliates

The Company hereby confirms that a description of the relationships and arrangements between and among those parties already is presented in the prospectus and that all agreements between and/or among those parties are included as exhibits to the registration statement or otherwise incorporated by reference to the Company’s prior filings with the Securities and Exchange Commission.

49


DIRECTORS AND EXECUTIVE OFFICERS

The following are our officers and directors as of the date hereof. Some of our officers and directors are residents of the PRC and, therefore, it may be difficult for investors to effect service of process within the U.S. upon them or to enforce judgments against them obtained from the U.S. courts.

Directors and Executive Officers of Xiangtian:

NameAgePosition
Zhou Deng Hua51Chief Executive Officer
Zhou Jian39

Chairman of the Board General Manager and Director of the Company, Executive Director of Sanhe

Marco Ku Hon Wai43Director of the Company
Yizhao Zhang47Director of the Company
Jiehua Zhang44Director of the Company
Paul Kam Shing Chiu71Chief Financial Officer
Zhiqi Zhang52General Counsel
Xiping Zheng53Manager of Sanhe Manufacturing Department
Tianyu Ma46Engineer at Sanhe Technology Department
Lei Sha33Manager of Sanhe Sales Department
Chunyin Shi44Manager of Sanhe Accounting Department
Xudong Wang34Manager of Sanhe Procurement Department
Xiangdong Liu47Project Manager

Business Experience

The following is a brief account of the education and business experience during at least the past five years of our director, executive officer and key employee of our company, indicating his principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.

Zhou Deng Huahas served as our Chief Executive Officer since April 30, 2016 and he has been a member of our Board of Directors since June 2, 2012. Mr. Zhou previously served as Chief Financial Officer (from April 30, 2016 to January 24, 2017), Vice General Manager, and Project Manager of the Company. Mr. Zhou had been a General Manager of Hong Kong Xiangtian International Investment Group Co., Ltd. from October 2005 to December 2007, and Chairman of the Board of Directors of Liaoning Xiangtian Vehicle Air Hybrid Co., Ltd., a company doing research on air power research, from April 2009 to June 2012. Mr. Zhou is qualified to be a member of our Board of Directors due to his extensive experience in the field of air power generation.

Zhou Jianhas served as our Chairman of the Board since July 29, 2014, our General Manager since May 15, 2012 and a member of our Board of Directors since June 2, 2012 and the Executive Director of Sanhe since April 12, 2014. From2005 to 2009, Mr. Zhou has been the Chief Financial Officer of Hong Kong Xiangtian International Investment Group Co., Ltd. In addition, he has been the Chairman of the Board of Directors of Xiangtian Kelitai Air Power Machinery Ltd. (“Xiangtian Keltai”) from 2011 to 2012 and the Chairman of the Board of Directors of Beijing Xiangtian Hua-Chuang Air Power Science and Technology Institute Co., Ltd. (“Hua-Chuang”) since March 2012. Xiangtian Keltai is involved in air power research and development. Hua-Chuang is currently dormant. Mr. Zhou received a Bachelor’s degree in Accounting from Southwest Finance University (China). Mr. Zhou has extensive experience in finance and accounting, which we believe makes him well qualified to sit on our Board of Directors.

Marco Ku Hon Wai has served as a director of the Company since June 2017. Mr. Ku is the founder of Sensible Investment Company Limited, an investment consulting firm based in Hong Kong founded in 2013. Mr. Ku has served on the Board of Directors of Orient Paper, Inc. (NYSE MKT: ONP) since November 2014. He was previously Chief Financial Officer of Borneo Resource Investments Limited (OTC: BRNE) from October 2014 to July 2015 and China Marine Food Group Limited (OTC: CMFO) from July 2007 to October 2013, respectively. Prior to his position at China Marine Food Group Limited, Mr. Ku cofounded KISS Catering Group, a food and beverage business in Beijing from October 2005 to April 2007. Mr. Ku worked at KPMG LLP from 1996 to 2000, where his last held position was Assistant Manager. Mr. Ku received a bachelor’s degree in finance from the Hong Kong University of Science and Technology in 1996, and is currently a fellow member of the Hong Kong Institute of Certified Public Accountants.

50 


Yizhao Zhanghas served as a director of the Company since June 2017. He has been a director of China Carbon Graphite Inc. since 2009. He is also a director of Kaisa Group Holdings Ltd. (HK: 1638) and HH Biotechnology Holdings Company (OTC BB: HHBT). Mr. Zhang has over 18 years of experience in accounting and internal control, corporate finance, and portfolio management. Previously, Mr. Zhang was the CFO or director at various public companies listed in the US, Hong Kong and Tokyo. Mr. Zhang also had experiences in portfolio management and asset trading at Guangdong South Financial Services Corporation from 1993 to 1999. He is a Certified Public Accountant of the State of Delaware, and a member of the American Institute of Certified Public Accountants (AICPA). He also has the Chartered Global Management Accountant (CGMA) designation. Mr. Zhang graduated with a bachelor’s degree in economics from Fudan University, Shanghai in 1992 and received a Master of Business Administration with concentrations in financial analysis and accounting from the State University of New York at Buffalo in 2003.

Jiehua Zhang has served as a director of the Company since June 2017. Ms. Zhang has over 10 years of experience in accounting. Ms. Zhang has been the financial manager for Cheung Hong Source Co. Ltd. since 2014. She was the financial manager of Luck Sky International Investment Holding Limited from 2012 to 2014. Ms. Zhang worked as an accountant at the Finance Department of Sanbaimen Administrative Committee from 1997 to 2012, after she earned her Bachelor degree from Sun Yat-Sen University.

Paul Kam Shing Chiu has served as our Chief Financial Officer since January 25, 2017. Mr. Chiu has over 30 years of experience in financial accounting and auditing, U.S. GAAP reporting and SEC compliance in addition to management experience in banking and financial services. Mr. Chiu served as the CFO of Caroline-Fargo Capital Ltd. from January 2015 to September 2016. Prior to that, he served asa director of Wai Chong Gold Company Ltd. from January 2011 to December 2014, an independent director of Sino Clean Energy Inc. from August 2011 to December 2012, and an independent director of China Ritar Power Corp. from August 2011 to September 2012. From December 2005 to December 2010, Mr. Chiu was a financial consultant for Lightscape Technologies Inc. and served as a director for the company for June 2011 to June 2013. Mr. Chiu received a bachelor of commerce degree in accounting and business studies from the University of Ottawa in Canada in 1969. He received an MBA from the University of British Columbia in Canada in 1970. Mr. Chiu became a Chartered Accountant of Canada in 1972. He is also a member of Ontario Institute of Chartered Professional Accountants (CPA) and Canadian Institute of Chartered Professional Accountants.

Zhiqi Zhanghas served as our General Counsel since April 30, 2016. Before that, he served as the Chief Executive Officer since July 29, 2014 and our Acting Chief Financial Officer since April 7, 2015. Mr. Zhang has approximately 22 years’ experience in the legal industry. Mr. Zhang worked as an attorney at Heibei Jianan Law Firm from 2008 through July 31, 2014, when he ceased all operational activities at the firm, but has kept his attorney position at the firm while he works full time for the Company. Heibei Jianan Law Firm has served as the Company’s outside general counsel since May 2013 and the outside general counsel for Sanhe City Lucksky Electrical Engineering Co., Ltd. since January 2014. Between 2000 and 2008, Mr. Zhang was an attorney at Hebei Landao Law Firm. From 1992 to 2000, Mr. Zhang was an attorney at Heibei Chengde Second Law Firm.

Xiangdong Liuhas served as the project manager since June 5, 2014. Mr. Liu worked as the Vice Manager of Liaoning Xiangtian Pneumatic hybrid car Co., Ltd, where he was responsible for the management of the company and implementing various company regulations and documentary requirements. Between 2011 and 2013, Mr. Liu was employed at Xiangtian Kelitai Air Power Mechanical Co., Ltd. (now renamed to Luck Sky Holdings (Group) Co., Ltd.). From 2013 to April 12, 2014, Mr. Liu worked at served as the project manager with Xiangtian Kelitai Air Power Mechanical Co., Ltd.

Xiping Zhenghas served as the manager of the manufacturing department of Sanhe since June 5, 2014. Mr. Zheng has over 20 years’ working experience in vehicle and large equipment repair and maintenance. Between 1980 and 2010, Mr. Zheng worked at Hubei Xianning Hengguoqiao Loading and Unloading Transportation Company where he was responsible for the repair and maintenance of all kinds of vehicles, and also provides technical guidance and supervision. Mr. Zheng jointed Luck Sky Holdings (Group) Co., in 2011 and he was responsible the assembly of the engine workshop. In 2012, Mr. Zheng was promoted to the manager of the workshop.

51


Tianyu Mahas served as an Engineer at Sanhe’s technology department since June 5, 2014. From 2010 through June 5, Mr. Ma worked at LuckSky as the vice director of the technology department. Mr. Ma has over 10 years’ experience in machine designing and manufacturing, with a particular focus on aerodynamic research and development. Mr. Ma is a mechatronics assistant engineer and senior electrician.

Lei Sha has served as the manager of Sanhe’s sales department since October 1, 2016. Previously, Mr. Sha worked as the vice manager at Shopping Center of Dalian Bangda Business Management Co., Ltd from October 2012 to April 2016, where he was responsible for commercial real estate project management. From April 2009 to August 2012, he worked as the marketing director at Harbin Ganglong Real Estate Development Company, where he was responsible for the sales of shopping and office properties. From April 2008 to March 2010, Mr. Sha worked as the leasing manager at Changchun Saide Shopping Center.

Chunying Shihas served as the manager of Sanhe’s accounting department since joining Sanhe on June 5, 2014. Between January 2009 and May 2013, she served as the general manager of the accounting department of Sanhe Dong Yi Glass Machine Limited Liability Company, where she managed the company’s overall financial activities. Ms. Shi has over 15 years’ experience in accounting area with a particular focus on industrial accounting area and 10 years’ experience in managing accounting department. Ms. Shi graduated from Inner Mongolia Finance and Economics College. She is a certified accountant and assets appraiser.

Xudong Wanghas served as the manager of the procurement department of Sanhe since June 5, 2014. Mr. Wang has served as the marketing manager with Beijing Kanghengde Technology Co., Ltd. from 2013 until he joined Sanhe. Between 2011 and 2013, Mr. Wang served as the manager of the marketing department of Beijing Kang Heng De Technology Co., Ltd., where he was responsible for the business negotiation of the procurement projects and he was also responsible for the establishment for the company’s local store in Beijing. Between 2008 and 2011, Mr. Wang served as the manager of the North China area at Beijing Zhi Ming De Biological Co., Ltd., where he was responsible for market developing and managing, establishing sales channel, drafting relevant company policies related to the sale channels, strategizing the marketing plan and also recruiting, training and managing distributors.

Mr. Wang graduated from Hebei Baoding Teachers College and obtained a bachelor degree in mathematics education.

No agreements or arrangements were entered into by us in connection with the appointment of the foregoing persons as our officers and directors. None of such persons has previously entered into any transaction with us.

Family relationships

Zhou Deng Hua is Zhou Jian’s uncle.

Involvement in certain legal proceedings

None of our directors, executive officers, or control persons has been involved in any of the following events during the past five years:

  • Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of bankruptcy or within two years prior to that time;

  • Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

  • Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

  • Being found by a court of competent jurisdiction (in a civil violation), the pennySEC or the Commodity Future Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

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BoardCommittees

The Board of Directors is composed of five directors: Mr.Zhou Jian, Mr. Zhou Deng Hua, Mr. Marco Wai Ku Hon, Mr. Yizhao Zhang and Ms. Jiehua Zhang. All board action requires the approval of a majority of directors in attendance at a meeting at which a quorum is present.

The Company has established a Compensation Committee of the Board. Zhou Jian served as the only member of the Compensation Committee from May 2016 to June 22, 2017. On June 23, 2017, Mr. Zhou Jian, Mr. Marco Wai Ku Hon, Mr. Yizhao Zhang, and Ms. Jiehua Zhang were elected to be members of the Compensation Committee.

The Compensation Committee is primarily responsible for reviewing and approving our salary and benefit policies (including equity plans), including compensation of executive officers.

On June 22, 2017, the Company established an Audit Committee of the Board. Mr. Marco Hon Wai Ku, Mr. Yizhao Zhang, and Ms. Jiehua Zhang were elected to be members of the Audit Committee and shall serve the Audit Committee until their successors are duly elected and qualified. Mr. Marco Hon Wai Ku was elected to be the chairman of the Audit Committee.

The Audit Committee is primarily responsible for assisting the Board in fulfilling its oversight role regarding the Company’s financial reporting process, its system of internal control and its compliance with applicable laws, regulations and company policies.

On June 22, 2017, the Company also established a Nominating and Corporate Governance Committee. Mr. Zhou Jian, Mr. Marco Wai Ku Hon Mr. Yizhao Zhang, and Ms. Jiehua Zhang were elected to be members of the Nominating and Corporate Governance Committee and shall serve the Nominating and Corporate Governance Committee until their successors are duly elected and qualified.

The Nominating and Corporate Governance Committee is primarily responsible for overseeing the creation and implementation of the corporate governance policies and procedures; nominating directors and setting policies and procedures for the nomination of directors. The Company does not have procedures by which security holders may recommend nominees to the Company’s Board of Directors.

Compliance with section 16(A) of the Securities Exchange Act of 1934

Section 16(a) of the Securities and Exchange Act of 1934 requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities, to file with the SEC initial statements of beneficial ownership on Form 3, reports of changes in ownership on Form 4 and annual reports concerning their ownership on Form 5. Executive officers, directors and greater than 10% stockholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports they file.

Code of ethics

We adopted a Code of Ethics pursuant to Section 406 of the Sarbanes-Oxley Act of 2002. Our Standards of Business Conduct and Finance Code of Professional Conduct apply to our officers, directors and all employees. Our Standard of Business Conduct provides guidelines to employees to report any suspected or known violations of the Finance Code of Professional Conduct, the Standards of Business Conduct, or other Company policies. Under the Code of Ethics and Standards of Business Conduct, all employees will:

  • Act with honesty and integrity, avoiding actual or apparent conflicts of interest in their personal and professional relationships.

  • Provide shareholders with information that is accurate, complete, objective, fair, relevant, timely, and understandable, including information in our filings with and other submissions to the U.S. Securities and Exchange Commission and other public bodies.

  • Comply with rules and regulations of federal, state, provincial and local governments, and of other appropriate private and public regulatory agencies.

  • Action in good faith, responsibly, with due care, competence, and diligence, without misrepresenting material facts or allowing one’s independent judgment to be subordinated.

  • Respect the confidentiality of information acquired in the course of one’s work except when authorized or otherwise legally obligated to disclose.

53


  • Not use confidential information acquired in the course of one’s work for personal advantage.

  • Share knowledge and maintain professional skills importance and relevancy to shareholders’ needs.

  • Proactively promote and be an example of ethical behavior as a responsible individual among peers, in the working environment and the community.

  • Exercise responsible use, control, and stewardship over all Company assets and resources that are employed by or entrusted to us.

  • Not coerce, manipulate, mislead, or unduly influence any authorized audit or interfere with any auditor engaged in the performance of an internal or independent audit of Company’s system of internal controls, financial statements, or accounting books and records.

This Finance Code of Professional Conduct embodies principles which we are expected to adhere to and advocate. These principles of ethical business conduct encompass rules regarding both individual and peer responsibilities, as well as responsibilities to the Company’s shareholders and the public. The CEO, CFO, and all employees are expected to abide by this Code. Any violations of the Finance Code of Professional Conduct may result in disciplinary action, up to and including termination of employment.

54


COMPENSATION DISCUSSION AND ANALYSIS

Background and Compensation Philosophy

Our Compensation Committee consists of Zhou Jian, Marco Wai Ku Hon, Yizhao Zhang and Jiehua Zhang. Marco Wai Ku Hon, Yizhao Zhang, Jiehua Zhang are independent directors.

The Compensation Committee determines the compensation to be paid to our executive officers and the compensation payable to the key employees of Sanhe, our operating subsidiary based on our financial and operating performance and prospects. Each of the named officers will be measured by a series of performance criteria by the Board of Directors, or the compensation committee, on a yearly basis. Such criteria will be set forth based on certain objective parameters such as job characteristics, required professionalism, management skills, interpersonal skills, related experience, personal performance and overall corporate performance.

Our Board of Directors and Compensation Committee have not adopted or established a formal policy or procedure for determining the amount of compensation paid to our executive officers. The Compensation Committee makes an independent evaluation of appropriate compensation to key employees, with input from management. The Compensation Committee has oversight of executive compensation plans, policies and programs.

Elements of Compensation

The Board of Directors' goal in determining compensation levels is to adequately reward the efforts and achievements of executive officers for the management of the Company. The Company has adopted a stock rules,incentive plan named Xiangtian (USA) Air Power Co. Ltd. 2017 Stock Incentive Plan, but has no pension plan, non-equity incentive plan or deferred compensation arrangement. The Company has not used a compensation consultant in any capacity.

Our compensation program for our executive officers and all other employees is designed such that it will not incentivize unnecessary risk-taking. The base salary component of our compensation program is a fixed amount and does not depend on performance. The Compensation Committee also has authority to grant bonuses in the form of cash or equity, but has concluded that no bonuses have been warranted based upon the Company’s performance to date.

Employment Agreements

None of the executive officers except Paul Kam Shing Chiu has an employment agreement with the Company. In the absence of such employment agreements, the PRC Labor Laws provide for employment related terms such as the term of employment, the provision of labor-related insurance, termination for cause, termination on 30 days' notice and termination without notice and the labor-related benefits.

The employment agreement between the Company and Mr. Chiu provides for compensation at the rate of RMB 66,000 (approximately USD 9,816) per month and is terminable by either party upon 60 days’ notice. The term of the employment ends on December 31, 2017.

Elements of Compensation

Base Salary

We provide certain of our executive officers with a base salary. To date, we have relied upon Zhou Deng Hua, our Chief Executive Officer, also being a principal shareholder to align his interest in managing the Company with the interest of shareholders.

The Board of Directors awarded Mr. Zhou Deng Hua compensation at the rate of RMB 20,000 (approximately USD 3,087) per month commencing in April 2016 for his services as our Chief Executive Officer, and he continues to be paid at such rate. Previously, Mr. Zhou received compensation at the rate of RMB 7,000 (approximately USD 1,131) per month from September 2014 through March 2016 while he served as the Vice General Manger and Project Manager of the Company. Mr. Zhou received compensation at the rate of RMB 8,500 (approximately USD 1,375) per month from June 2014 through August 2014.

The Board of Directors awarded Mr. Zhang Zhiqi compensation at the rate of RMB 20,000 (approximately USD 3,087) per month commencing on April 2016, for his services as our General Counsel, and he continues to be paid at such rate. Previously, Mr. Zhang received compensation at the rate of RMB 60,000 (approximately USD 9,663) per quarter from July 2014 through April 2016, for his services as the Chief Executive Officer and Acting Chief Financial Officer.

The Board of Directors awarded Mr. Chiu, our Chief Financial Officer, compensation at the rate of RMB 66,000 (approximately USD 9,816) per month. His employment commenced January 25, 2017.

55


Sanhe, our operating affiliate, maintains employment contracts with certain key employees. On June 5, 2014, and July 1, 2014, Sanhe, entered into employment agreements with certain significant employees 1) Xiping Zheng, manager of the manufacturing, 2) Tianyu Ma, engineer at the research and development department, 3) Xiaoqin Zhou, manager of the sales department, 4) Chunyin Shi, manager of the accounting department 5) Xudong Wang, manager of the procurement department, and 6) Xiangdong Liu, vice project manager, 7) Xiaoqin Fan, engineer at the research and development department, 8) Yunshan Qi, engineer in the technology department, and 10) Xuelian Zhang, manager of the administration department. None of such key employees earn base salaries of more than RMB120,000 (approximately USD 18,519) per year.

Under these agreements, either party may terminate the employment agreement in accordance with the China Employment Law. Upon termination, the executive officer is generally entitled to severance pay if allowed by the China Employment Law. Other than the salary and necessary social benefits required by the government, which are defined in the employment agreement, Sanhe does not provide other benefits to the officers and employees at this time.

Each major employee has also entered into a confidentiality and non-compete agreement with Sanhe, pursuant to which each effective officer has agreed to hold, both during and subsequent to the terms of his or her agreement, in confidence and not to use, except in pursuance of his or her duties in connection with employment, any of Sanhe’s confidential information, technological secrets, commercial secrets and know-how, to disclose to Sanhe all inventions, designs and techniques resulting from work performed by them, to assign Sanhe all right, title and interest in such inventions, designs and techniques, not to perform services within two years after the termination of the employment for any person or entity that engages in any business activity in or similar to which Sanhe is then engaged or proposes to engage, and not to solicit or encourage any employees of Sanhe to terminate employment with Sanhe in order to engages in any business activity in or similar which Sanhe is then engaged or proposes to engage.

Equity Incentives

In June 2017, the Board of Directors adopted a stock incentive plan named Xiangtian (USA) Air Power Co. Ltd. 2017 Stock Incentive Plan (the “Plan”).

The Plan is intended to benefit the stockholders of the Company by providing a means to attract, retain and reward individuals who can and do contribute to the longer-term financial success of the Company. Further, the recipients of stock-based awards under the Plan should identify their success with that of the company's shareholders and therefore will be encouraged to increase their proprietary interest in the Company. The Compensation Committee (the “Committee”) administers the Plan.

The Plan provides for the granting of up to 30,000,000 restricted shares, non-qualified stock options, incentive stock options (within the meaning of Section 422 of the Code), stock appreciation rights ("SARs"), stock award and stock unit awards, performance shares and other cash or share-based awards. In the event of any merger, reorganization, recapitalization, stock split, stock dividend, or other change in corporate structure that affects our common stock, an adjustment may be made to the (a) maximum number of shares available for grants under the plan and/or kind of shares that may be delivered under the plan, (b) the individual award limits under the plan and (c) number, kind and/or price of shares subject to outstanding awards granted under the plan, by the Committee or the Board of Directors, to prevent dilution or enlargement of rights. Shares of stock covered by an award under the plan that is cancelled, expired, forfeited or settled in cash will again be available for issuance in connection with future grants of awards under the Plan.

The Committee or Board of Directors has broad authority to administer the plan, including the authority to determine when and to whom awards will be made, determine the type and size of awards, determine the terms and conditions of awards, construe and interpret the plan and award agreements, establish rates and resolutions for the plan's administration, and amend outstanding awards. Generally, the plan is open to directors, employees and consultants who are selected by the Committee or Board of Directors.

The Plan may be amended, suspended or terminated at any time by our Board of Directors, provided that suspension or termination shall not of itself impair any outstanding award granted under the plan or the applicable participant's rights regarding such award.

As of September 12, 2017, we had not made any awards under the Plan. In the future, we may adopt and establish an equity incentive plan pursuant to which awards may be granted if our Compensation Committee determines that it is in the best interests of our stockholders and the Company to do so.

Option Grants in the Last Fiscal Year

We did not grant any options or stock appreciation rights to our named executive officers or directors in the fiscal year ended July 31, 2017.

Retirement Benefits

Our executive officers are not presently entitled to company-sponsored retirement benefits.

Perquisites

We have not provided our executive officers with any material perquisites and other personal benefits and, therefore, we do not view perquisites as a significant or necessary element of our executive’s compensation.

56


Deferred Compensation

We do not provide our executives the opportunity to defer receipt of annual compensation.

Compensation Committee Report

The Compensation Committee of the Company has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and, based on such review and discussions, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this prospectus.

The Compensation Committee

/s/Zhou Jian

/s/Marco Wai Ku Hon

/s/Yizhao Zhang

/s/Jiehua Zhang

Summary Compensation Table

The following table sets forth the compensation paid by us for the fiscal years ended July 31, 2015, July 31, 2016, and July 31, 2017 for our principal executive officers and directors. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid to our named executive officers.

      All Other 
Name and Principal SalaryBonusStock AwardsOption AwardsCompensationTotal
PositionYear   ($)($)($)($)($)($)
 2017 $ 35,714     $ 35,714
Zhou Deng Hua2016 $ 20,988----$ 20,988
CEO, Acting CFO and2015 $ 13,816----$ 13,816
     Director(1)       
        
 2017-    -
Zhou Jian2016      
General Manager and2015------
     Director       
      
 2017 $ 35,714     $ 35,714
Zhiqi Zhang2016$37,038    $ 37,038
General Counsel(2)2015 $ 38,652   $ 38,652
        
        
Roy Thomas Phillips2015------
Former Chief       
     Operating Officer and       
     Acting Chief       
     Financial Officer(3)2014------
 2017 $60,000     $60,000
Paul Kam Shing Chiu2016------
Chief Financial Officer2015------
        
 2017$3,500    $3,500
Marco Ku Hon Wai2016------
Director2015------
        
 2017$3,500    $3,500
Yizhao Zhang2016------
Director2015------
        
 2017$3,500    $3,500
Jiehua Zhang2016------
Director2015------

(1)

Prior to April 30, 2016, Zhou Deng Hua was Vice General Manager.

(2)

Prior to April 30, 2016, Zhiqi Zhang was CEO and Acting CFO.

(3)

Mr. Phillips received no compensation for his duties as Acting Chief Financial Officer or Chief Operating Officer during the fiscal year ended July 31 2014. He was appointed Acting Chief Financial Officer on July 29, 2014 and resigned from all positions on March 29, 2015. Fiduciary Consultants, an entity in which Mr. Thomas is a principal, received $546,859 through June 22, 2014 from Bezalel International LLC (USA), a consulting firm that is not affiliated with the Company, for advisory services to LuckSky Group, an affiliate of the Company.

57


Director Compensation

Effective as of June 23, 2017, Marco Hon Wai Ku, Mr. Yizhao Zhang, and Ms. Jiehua Zhang were elected as independent directors of the Company's Board of Directors, with a term of office expiring at the Company's next annual meeting of stockholders and the election of successors. Each independent director will receive USD 3,500 per month as compensation for their services as independent directors of the Company's Board of Directors. The board has not implemented a plan to award options to any director. The Company has entered into agreements with each independent Director with respect to such compensation.

INDEBTEDNESS OF DIRECTORS, SENIOR OFFICERS, EXECUTIVE OFFICERS AND OTHER MANAGEMENT

Our directors and executive officers or any associate or affiliate of our company during the last two fiscal years, is not or has been indebted to our company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.

INDEMNIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS

Our bylaws provide for the indemnification of our present and prior directors and officers or any person who may have difficulty selling those securities.served at our request as a director or officer of another corporation in which we own shares of capital stock or of which we are a creditor, against expenses actually and necessarily incurred by them in connection with the defense of any actions, suits or proceedings in which they, or any of them, are made parties, or a party, by reason of being or having been director(s) or officer(s) of us or of such other corporation, in the absence of negligence or misconduct in the performance of their duties. In addition, we have entered into indemnification agreements with each of the independent Directors. This indemnification policy could result in substantial expenditure by us, which we may be unable to recoup.

Insofar as indemnification by us for liabilities arising under the Securities Exchange Act of 1934 may be permitted to our directors, officers and controlling persons pursuant to provisions of the Amended Articles of Incorporation and Bylaws, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy and is, therefore, unenforceable. In the event that a claim for indemnification by such director, officer or controlling person of us is in the successful defense of any action, suit or proceeding is asserted by such director, officer or controlling person in connection with the securities being offered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

HoldersAt the present time, there is no pending litigation or proceeding involving a director, officer, employee or other agent of ours in which indemnification would be required or permitted. We are not aware of any threatened litigation or proceeding which may result in a claim for such indemnification.


58


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

We had one holder of recordThe following tables set forth information regarding beneficial ownership of our common stock as of September 11, 2009.  


Securities Authorized For Issuance under Equity Compensation Plans


We do not have any securities authorized for issuance under any equity compensation plans.



DIVIDEND POLICY

We have not paid any dividends since12, 2017 (i) by each person who is known to us to beneficially own more than 5% of our incorporationcommon stock; (ii) by each of our officers and do not anticipate the paymentdirectors; and (iii) by all of dividends in the foreseeable future. At present, our policy is to retain earnings, if any, to developofficers and market our product. The





payment of dividends in the future will depend upon, among other factors, our earnings, capital requirements, and operating financial conditions.

DILUTION


Dilution represents the difference between the offering price and the net tangible book value per share immediately after completion of this offering. Net tangible book value is the amount that results from subtracting total liabilities and intangible assets from total assets. Dilution arises mainlydirectors as a result of our arbitrary determination of the offering price of the shares being offered. Dilution of the value of the shares you purchasegroup. Beneficial ownership is also a result of the lower book value of the shares held by our existing stockholders.


As of July 31, 2009, the net tangible book value of our shares was $5,475 or approximately $0.00 per share, based upon 5,000,000 shares outstanding.


Upon completion of this offering, but without taking into account any changedetermined in the net tangible book value after completion of this offering other than that resulting from the sale of the shares and receipt of the total proceeds of $30,000, the net tangible book value of the 8,000,000 shares to be outstanding will be $35,475, or approximately $.0044 per share. Accordingly, the net tangible book value of the shares held by our existing stockholder (5,000,000 shares) will be increased by $.0034 per share without any additional investment on his part. The purchasers of Shares in this offering will incur immediate dilution (a reduction in the net tangible book value per share from the offering price of $.01 per share) of $0.0056 per share. As a result, after completion of the offering, the net tangible book value of the Shares held by purchasers in this offering would be $.0044 per share, reflecting an immediate reduction in the $.01 price per share they paid for their Shares.


After completion of the offering, the existing shareholder will own 62.5% of the total number of shares then outstanding, for which he will have made a cash investment of $25,000, or $.005 per share. Upon completion of the offering, the purchasers of the Shares offered hereby will own 37.5% of the total number of shares then outstanding, for which they will have made a cash investment of $30,000, or $.01 per share.


The following table illustrates the per share dilution to the new investors and does not give any effect to the results of any operations subsequent to July 31, 2009:


Existing Stockholder

   Price per share 

0.0050

    Net tangible book value per share before offering  

0.0010

    Potential gain to existing shareholder 

20,000

    Net tangible book value per share after offering 

0.0044

   Capital contributions 

55,000

   Number of shares outstanding before the offering 

5,000,000

   Number of shares outstanding after offering assuming the sale of all of the shares 

 8,000,000

   Percentage of ownership after offering 

62.50


Purchasers of Shares in this Offering

    Price per share 

0.010

    Dilution per share 

(0.0056)

    Capital contributions 

55,000

   Number of shares after offering held by public investors 

3,000,000

    Percentage of capital contributions by existing shareholders 

45.45

    Percentage of capital contributions by new investors 

54.55

   Percentage of ownership after offering 

37.50




The following table summarizes the number and percentage of shares purchased the amount and percentage of consideration paid and the average price per share paid by our existing stockholder and by new investors in this offering:






 

Price per Share

Total Number of Shares Held

Percentage of Ownership

Consideration Paid

Existing Stockholder

$0.005

5,000,000

62.5%

$25,000

Investors in This Offering

$0.01

3,000,000

37.5%

$30,000



SELLING STOCKHOLDERS

There are no selling stockholders.


PLAN OF DISTRIBUTION


This is a self-underwritten offering. There are no plans or arrangements to enter into any contracts or agreements to sell the Sharesaccordance with a broker or dealer. Mr. Vernekar, our officer and director, will sell the shares and intends to offer them to friends, family members and business acquaintances with no commission or other remuneration payable to him for any Shares he sells. In offering the securities on our behalf, he will rely on the safe harbor from broker-dealer registration set out in Rule 3a4-113d-3 under the Securities Exchange Act of 1934.1934 and does not necessarily bear on the economic incidents of ownership or the rights to transfer the shares described below. Unless otherwise indicated each stockholder has sole voting power and dispositive power with respect to the indicated shares.

Name & Address ofOffice, If ApplicableAmount andPercent of Class
Beneficial Owner(1) Nature of 
  Beneficial Ownership 
Executive Officers
     and Directors



Zhou Jian(2)General Manager, Director264,850,74044.8%
Zhou Deng HuaChief Executive Officer101,831,13617.2%
Marco Hon Wai KuDirector00%
Yizhao ZhangDirector00%
Jiehua ZhangDirector00%
Zhiqi ZhangGeneral Counsel00%
Paul Kam Shing ChiuChief Financial Officer00%
Global Select Advisors Ltd. 60,000,000(3)10.2%
Lifang Zhao   
Dong Chang Fu Qu Zheng,
     Jia Zhen Zhao JiaCun
     236, Liao Cheng, SH-
     252000, China






52,691,675



8.9%
Executive officers and
     directors as a group


366,681,876

62.9%

(1)

Unless otherwise indicated, the address for each director and officer is c/o Lucky Sky International Investment Holdings Limited, Unit 602, Causeway Bay Common Bldg 1, Sugar Street, Causeway Bay, Hong Kong.

(2)

Mr. Zhou disclaims beneficial ownership of 15,191,260 shares owned by Zhou Deng Rong, his father.

(3)

On September 23, 2013, the Company issued 60,000,000 shares of restricted common stock at $0.001 per share to Mr. Roy Thomas Phillips, who was a consultant to the Company and then served as the acting CFO of the Company beginning July 29, 2014. The shares were subsequently transferred to Global Select Advisors Ltd., a company controlled by Mr. Phillips. The shares were issued in contemplation of a secondary offering. The Company’s position is that these shares should be cancelled since no secondary offering was consummated. Mr. Phillips advised the Company that he would return 55,000,000 shares for cancellation and that he is evaluating the 5,000,000 shares to make an accommodation with respect to such shares, but has made no specific request. The Company intends to have the 60,000,000 shares cancelled.

Change of control


There are currently no arrangements which would result in a change in control of us.

He will not register as a broker-dealer pursuant59


PLAN OF DISTRIBUTION

The selling security holder and any of his pledgees, assignees and successors-in-interest may, from time to Section 15time, sell any or all of the Securities Exchange Actshares of 1934, in reliance upon Rule 3a4-1,common stock offered by this prospectus on any stock exchange or automated interdealer quotation system on which sets forth those conditions under which a person associated with an issuer may participate in the offering of the issuer's securities and not be deemed to be a broker-dealer.  Our sole officer and director satisfies the requirements of Rule 3a4-1, because he:


a.

common stock is not subject to a statutory disqualification, as that term is defined in Section 3(a)(39)of the Act,listed or quoted at the time of his participation; and

b.

will notsale, in the over-the-counter market, in privately negotiated transactions or otherwise, at fixed prices that may be compensated in connection with his participation by the payment of commissions or other remuneration based either directly or indirectly on transactions in securities; and

c.

is not, nor will he bechanged, at market prices prevailing at the time of his participation in the offering, an associated person of a broker-dealer; and

d.

meets the conditions of paragraph (a)(4)(ii) of Rule 3a4-1sale, at prices related to prevailing market prices or at prices otherwise negotiated. The selling security holder may use any one or more of the Exchange Act, in that he (A) primarily performs, or is intended primarily to perform at the end of the offering, substantial duties for or on behalf of our company, other than in connection with transactions in securities; and (B) is not a broker or dealer, or been associated person of a broker or dealer, within the preceding twelve months; and (C) has not participated infollowing methods when selling and offering securities for any Issuer more than once every twelve months other than in reliance on Paragraphs (a)(4)(i) or (a)(4)(iii).

Only after our registration statement is declared effective by the SEC, do we intend to advertise, through tombstones, and hold investment meetings in India. We will not utilize the internet to advertise our offering. Mr. Vernekar will also distribute the prospectus to potential investors at the meetings, to business associates and to his friends and relatives who are interested in us and a possible investment in the offering. No Shares purchased in this offering will be subject to any kind of lock-up agreement.

Our officer, director, control person and his affiliates do not intend to purchase any Shares in this offering.


We intend to sell our Shares outside the United States, particularly in India.

Section 15(g) of the Exchange Act

Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rules 15g-1 through 15g-6 and Rule 15g-9 promulgated thereunder, impose additional sales practice requirements on broker/dealers who sell our securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). While Section 15(g) and Rules 15g-1 through 15g-6 apply to brokers-dealers, they do not apply to us.





Rule 15g-1 exempts a number of specific transactions from the scope of the penny stock rules. Rule 15g-2 declares unlawful broker/dealer transactions in penny stocks unless the broker/dealer has first provided to the customer a standardized disclosure document.

Rule 15g-3 provides that it is unlawful for a broker/dealer to engage in a penny stock transaction unless the broker/dealer first discloses and subsequently confirms to the customer current quotation prices or similar market information concerning the penny stock in question.

Rule 15g-4 prohibits broker/dealers from completing penny stock transactions for a customer unless the broker/dealer first discloses to the customer the amount of compensation or other remuneration received as a result of the penny stock transaction.

Rule 15g-5 requires that a broker/dealer executing a penny stock transaction, other than one exempt under Rule 15g-1, disclose to its customer, at the time of or prior to the transaction, information about the sales persons compensation.

Rule 15g-6 requires broker/dealers selling penny stocks to provide their customers with monthly account statements.

Rule 15g-9 requires broker/dealers to approve the transaction for the customer's account; obtain a written agreement from the customer setting forth the identity and quantity of the stock being purchased; obtain from the customer information regarding his investment experience; make a determination that the investment is suitable for the investor; deliver to the customer a written statement for the basis for the suitability determination; notify the customer of his rights and remedies in cases of fraud in penny stock transactions; and, the FINRA’s toll free telephone number and the central number of the North American Securities Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons.


The application of the penny stock rules may affect your ability to resell your Shares.


Terms of the Offering


The Shares will be sold at the fixed price of $0.01 per share until the completion of this offering. There is no minimum amount of subscription required per investor, and subscriptions, once received, are irrevocable.


This offering will commence on the date of this prospectus and continue for a period not to exceed 180 days (the "Expiration Date").


Deposit of Offering Proceeds


This is a "best efforts," "all or none" offering and, as such, we will not be able to spend any of the proceeds unless and until all Shares are sold and all proceeds are received. We intend to hold all monies collected for subscriptions in a bank account until the total amount of $30,000 has been received. At that time, the funds will be used in the implementation of our business plans. In the event the offering is not sold out prior to the Expiration Date, all monies will be returned to investors, without interest or deduction.


Procedures and Requirements for Subscription


If you decide to subscribe for any shares in this offering, you will be required to execute a Subscription Agreement and tender it, together with a check or certified funds to us. Subscriptions, once received by the company, are irrevocable. All checks for subscriptions should be made payable to “Goa Sweet Tours Ltd.”


Right to Reject Subscriptions


We maintain the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will be returned immediately by us to the subscriber, without interest or deductions. Subscriptions for securities will be accepted or rejected within 48 hours of our having received them.






DESCRIPTION OF SECURITIES TO BE REGISTERED


Capital Stock


Our authorized capital stock consists of 200,000,000 shares of stock, consisting of (i) 100,000,000 shares of common stock, par value $0.001 per share., and (ii) 100,000,000 shares of preferred stock, par value $0.001 per share, with such designations, relative rights, preferences or limitations as shall be decided by the Board of Directors.


Common Stock


The holders of our common stock:

shares:

ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

·purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

Have equal ratable rightsan exchange distribution in accordance with the rules of the applicable exchange;

privately negotiated transactions;

settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part;

Broker-dealers may agree with the• selling security holders to dividends from funds legally available therefor, when, as and if declared by our Boardsell a specified number of Directors;such shares at a stipulated price per share;

through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

a combination of any such methods of sale; or

any other method permitted pursuant to applicable law.

·

Are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs;

·

Do not have pre-emptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights; and

·

Are entitled to one non-cumulative vote per share on all matters on which stockholders may vote.

The shares of common stock are not subject to any future call or assessment and all have equal voting rights. There are no special rights or restrictions of any nature attached to any of the common shares and they all rank at equal rate or  pari passu , each with the other, as to all benefits, which might accrue to the holders of the common shares. All registered stockholders are entitled to receive a notice of any general annual meeting to be convened by our Board of Directors.

Holders of common stock do not have cumulative voting rights. Therefore, holders of a majority of the shares of our common stock voting for the election of directors can elect all of the directors. Holders of our common stock representing a majority of the voting power of our capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidations, mergers or amendments to our articles of incorporation.

We refer you to our Articles of Incorporation and Bylaws, copies of which were filed with the registration statement of which this prospectus is a part, and to the applicable statutes of the State of Delaware for a more complete description of the rights and liabilities of holders of our securities.

Options, Warrants and Rights

There are no outstanding options, warrants, or similar rights to purchase any of our securities.


Transfer Agent

The Company does not currently have a Transfer Agent but is in the process of retaining one.





SHARES ELIGIBLE FOR FUTURE RESALE

General


There is no public market for our common stock. We cannot predict the effect, if any, that market sales of shares of our common stock or the availability of shares of our common stock for sale will have on the market price of our common stock. Sales of substantial amounts of our common stock in the public market could adversely affect the market prices of our common stock and could impair our future ability to raise capital through the sale of our equity securities.

Upon completion of this offering, based on our outstanding shares as of September 11, 2009, we will have outstanding an aggregate of 8,000,000 shares of our common stock. Of these shares, upon effectiveness of the registration statement of which this prospectus forms a part, the 3,000,000 shares covered hereby will be freely transferable without restriction or further registration under the Securities Act.

The remaining 5,000,000 restricted shares of common stock to be outstanding are owned by our sole officer and director, known as our “affiliate,” andselling security holder may not be resold in the public market except in compliance with the registration requirements of the Securities Act or under an exemptionalso sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus.

Broker-dealers engaged by the selling security holder may arrange for other broker dealers to participate in sales. Broker-dealers may receive commissions or otherwise.discounts from the selling security holders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The selling security holder does not expect these commissions and discounts to exceed what is customary in the types of transactions involved.


A selling security holder may from time to time pledge or grant a security interest in some or all of the shares or common stock owned by him and, if the selling security holder defaults in the performance of the secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time under this prospectus, or under an amendment to this prospectus under Rule 144

424(b)(3) or other applicable provision of the Securities Act amending the list of selling security holders to include the pledgee, transferee or other successors in interest as selling security holders under this prospectus.

In general, under Rule 144 as currently in effect, a person who is not oneconnection with the sale of our affiliates and who is not deemed to have been onecommon stock or interests therein, the selling security holder may enter into hedging transactions with broker-dealers or other financial institutions which may in turn engage in short sales of our affiliates at any time duringcommon stock in the three months preceding a sale and who has beneficially ownedcourse of hedging the positions they assume. The selling security holder may, after the date of this prospectus, also sell shares of our common stock short and deliver these securities to close out his short positions, or loan or pledge their common stock to broker-dealers that in turn may sell these securities. The selling security holder may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The selling security holder and any broker-dealers or agents that are involved in selling the shares may be deemed restricted securities for at least six months wouldto be entitled after"underwriters" within the meaning of the Securities Act in connection with such six-month holding period to sell the common stock heldsales. In such event, any commissions received by such person,broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.

Because the selling security holder may be deemed to be an "underwriters within the meaning of the Securities Act, any selling security holder will be subject to the continued availabilityprospectus delivery requirements of current public information about us (which current public information requirement is eliminated after a one-year holding period).

A person who is onethe Securities Act. Federal securities laws, including Regulation M, may restrict the timing of our affiliates, or has been an affiliate of ours at any time during the three months preceding a sale,purchases and who has beneficially owned sharessales of our common stock thatby the selling security holder and any other persons who are deemed restricted securities for at least six months would be entitled, after such six-month holding period, to sell his or her securities, provided that he or she sells an amount that does not exceed 1%involved in the distribution of the shares of common stock pursuant to this prospectus.

60


There is no underwriter or coordinating broker acting in connection with the proposed sale of the shares by the selling security holder.

The shares will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

DIVIDEND POLICY

We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future.

DESCRIPTION OF SECURITIES

The total number of common shares authorized that may be issued by the Company is 1,000,000,000 shares with a par value of $0.001 per share. The number of shares of common stock outstanding as of September 12, 2017 was 591,042,000.

Common Stock

The total number of common shares authorized that may be issued by the Company is 1,000,000,000 shares with a par value of $0.001 per share.

On September 30, 2013, the Company issued 250,000,000 shares of common stock to the shareholders of LuckSky HK, in exchange of 250,000,000 shares of LuckSky HK shares.

On July 25, 2014, we entered into the Stock Purchase Agreement in connection with the acquisition of Sanhe with Zhou Jian and Zhou Deng Rong, the owners of 97% and 3%, respectively, of Sanhe. We issued to Zhou Jian and Zhou Deng Rong 264,850,740 and 8,191,260 shares, respectively, of our common stock, thenrepresenting 45.7% of our issued and outstanding immediately after this offering (or, ifshares of common stock.

Preferred Stock

The total number of preferred shares authorized that may be issued by the Company is 100,000,000 shares with a par value of $0.001 per share. The preferred stock may be issued in one or more series, from time to time, with each series to have such designation, relative rights, preference or limitations, as adopted by the Company’s Board of Directors. No preferred shares have been issued.

LEGAL PROCEEDINGS

There are no material pending legal proceedings to which we are a party or to which any of our property is subject and to the best of our knowledge, no such actions against us are contemplated or threatened.

UNDERWRITING

None.

LEGAL MATTERS

The validity of the common stock is listed on a national securities exchange, the average weekly trading volume of the shares during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale), subject to the continued availability of current public information about us, compliance with certain manner of sale provisions, and the filing of a Form 144 notice of sale if the sale is for an amount in excess of 5,000 shares or for an aggregate sale price of more than $50,000 in a thre e-month period.offered hereby will be passed upon by McLaughlin & Stern, LLP.

Rule 144 is not available for re-sales of restricted securities of shell companies or former shell companies until one year elapses from the time that such company is no longer considered a shell company.


61


EXPERTS


No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.


The financial statements included herewith have been audited by LBB & Associates Ltd., LLP, located at 2500 Wilcrest Dr., Suite 150, Houston, TX 77042 to the extent and for the periods set forth in their report appearing elsewhere in this document and in the registration statement filed with the Securities and Exchange Commission,





and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.

LEGAL REPRESENTATIONMATTERS


The validity of the common stock offered by this prospectus and certain legal matters in connection with this offeringhereby will be passed upon for us by our counsel, Gersten Savage LLP, located at 600 Lexington Avenue, New York, New York 10022, included in the opinion letter filed as an exhibit to the registration statement of which this prospectus forms a part.McLaughlin & Stern, LLP.

DESCRIPTION OF OUR BUSINESS


Overview


We were incorporated on September 2, 2008 in the State of Delaware.  We have never been involved in any reclassification, merger, consolidation or purchase or sale of a significant amount of assets nor have we ever declared bankruptcy, been in receivership, or been involved in any legal action or proceedings.  We are not a blank check registrant as that term is defined in Rule 419(a) (2) of Regulation C of the Securities Act of 1933, since we have a specific business plan or purpose and we have no intentions or plans to merge with or acquire another company to be used as a vehicle for a reverse acquisition in the foreseeable future.


Neither our Company nor our officers, directors, promoters or affiliates, have had preliminary contact or discussions with, nor are there any present plans, proposals, arrangements or understandings with any representatives of the owners of any business or company regarding the possibility of an acquisition or merger.


Business of Issuer


We intend to develop all-inclusive travel packages that will provide professional, concierge-style personalized service for the visitor who travels to Goa. Our clients may be from other parts of India, the United Kingdom, Germany, Russia, North America and any other part of the world. A key component of our planned personalized service is that the personal tour guide will be fluent in the language of the visitor. We intend to source destination venues, and add to the travel experience by providing adventurous, fun and informative tours.


We hope to create strategic partnerships with hotels and resorts that will recommend our services to the visitors to Goa. The partnerships that we plan to develop will enable us to grow our customer base and expand our business BY increasing exposure to our website to the consumers that view our sponsors’ websites.  To date, we have not secured a domain name. We plan to secure one and then we intend to work with a website developer to develop a functional and unique site that will keep users interested in our site. Our goal is to have a website that is pleasing to look at and easy to navigate.

We expect that our customers will be able to choose from tour packages that involve travel throughout State of Goa. The tours may include nature adventures, shopping sprees and relaxing, tranquil getaways.  We plan to use trilingual guides (in English, Konkani and Hindi) for each package. If required, we will attempt to provide a guide who can communicate to the client in their language. Our tours will also include car, chauffeur, and dinner reservations to places of our guests’ choosing.

We have no plans to change our planned business activities or to combine with another business, and we are not aware of any events or circumstances that might cause these plans to change.

We have not conducted any market research into the likelihood of success of our operations or the acceptance of our products or services by the public.

Chuntan Vernekar, our president, will be devoting approximately 15 hours a week of his time to our operations. Once we begin operations, and are able to attract more and more clients to use our services, Mr. Vernekar has agreed to commit more time as required.





Overview of Goa

Goa is one of the most popular tourist destinations in the world, receiving over 2.5 million tourists every year from all parts of the world.1  It is widely known as the "Pearl of the Orient" and a "Tourist Paradise."  Goa as a destination was discovered by pioneering hippies looking for peace and love. Lavishly gifted by nature, Goa also boasts a rich cultural and historical heritage. Although it is a melting pot of eastern and western cultures, Goa was a Portuguese colony for over four centuries and the Portuguese rule left its imprint everywhere. There still is a Mediterranean atmosphere in the towns with their red-tiled roofs and narrow streets and the fishing villages surrounded by coconut groves.


Goa’s natural boundaries, the Arabian Sea and the mountains, had sheltered it from much of India’s inland turmoil, while its strategic location on the newly discovered trade route to the East made it even more attractive. Tucked away between the hills of the Western Ghats on the East, Arabian Sea to the West, Maharashtra’s coastline to the North, and Karnataka’s coastline to the South, this tiny territory covers 1350sq miles (3500 sq km) with a population of 1.5 million. It provides spectacular views with bottle-green hills wooded with jackfruit, mango, and cashew groves, cut across by river and edged by miles of sun-drenched beaches.


Goa serves as a perfect holiday during the winter months of the northern hemisphere.


Beaches of Goa


Goa’s beaches are strung along its 60-mile (100km) coastline edging the aquamarine expanse of the Arabian Sea. An unbroken four-mile (7km) crescent of sun-drenched sand marks the twin beaches of Candolin and Calangute, north of Panjim and the Aguada headland. Tourist literature often refers to Calangute as the 'Queen' of Goa's beaches.  Baga, a little further north, is a better beach and a more relaxed place to stay. There is a concentration of resorts, hotels, beach huts, bars, restaurants, and souvenir stalls.  In South Goa, there are the Colva and the Benaulim beaches. The Dona Paula, Vagator and Chapora beaches are also worth visiting.


Feasts, fairs and festivals

Goa abounds in festivals and fairs around temples and churches, which reflect its confluence of cultures as the Christian religions have mingled with traditional Indian practices of folk worship. Goans celebrate and enjoy the festivals of various religions such as Diwali, Christmas, Easter and Idd.

Wildlife of Goa

Presently Goa has five wildlife sanctuaries: Bondla (8 square km), Mollem (Bhagwan Mahavir sanctuary covering 133 square km), Cotigao (86 square km), Chorao Island (Salim Ali bird sanctuary covering 1.78 square km of mangroves in the Mandovi river), and Mollem National Park (107 square km). Combined, they cover an area of 755 square km, or around 60 per cent of forest area and 20 per cent of the geographical area of the state.  

Culture and Cuisine of Goa

A meeting of cultures produced the modern-day Goan cuisine. Alongside tandoori, rice and dal, Goan restaurants offer chourisso (pickled pig’s liver cooked in vinegar with tamarind) and vindalho (spicy pork). Chilies and cashew nuts were introduced by the Portuguese, and plantains were brought from Africa.  Goans use coconut sauces.


Goan folklore comprises folk songs, dances, music, visual arts and folktales rich in content and variety.  Many old-time taverns in Panaji have background music, traditional or otherwise. Much Goan music is derived from Portuguese love songs, but many musicians have also taken to hard rock and many work the nightclub circuit of India’s big cities.

1 http://www.liveindia.com/goa/02may08.html





Languages of Goa

Goa is a multilingual state thanks to its history which has seen people of various regions, ethnic races and religions from India and abroad settling in Goa and influencing the local language. Konkani is the mother tongue of Goans, while Marathi also is widely spoken.

In major towns, English is widely used in writing and conversation. Portuguese, the language of the colonial rulers and the official language of Goa until 1961, failed to make a permanent dent in the majority of Goans. Only a small percentage of the older generation still speaks Portuguese.

Brief History of Goa


Over the centuries various dynasties have ruled Goa: Rashtrakutas, Kadambas, Silaharas, Chalukyas, Bahamani Muslims and, most famously, the Portuguese. Goa has a multi-hued and distinctive lifestyle quite different from the rest of India. Hindu and Catholic communities make up almost the entire population with minority representation of Muslims and other religions.


After more than four centuries of Portuguese rule, Goa was liberated by the Indian Army on December 19, 1961 and became a union territory. On May 30, 1987, Goa was conferred statehood and became the 25th state of the Indian Republic.


Our Principal Products and Services


We plan to provide all-inclusive travel packages with a personalized assistant to take care of every aspect of the trip.  

We intend to offer the following services:

Concierge tours

*

Trip itinerary planning

*

Customized tour packages to resorts, beaches,  and retreats

*      

Cruise, theater and sporting events referral and tickets

*      

Dinners and massage/spa referral and reservations

*      

Gift or Shopping Coordination

*      

Ground Transportation

Website

 Currently our website is undeveloped. We do not intend to initiate the development of our website until this offering is completed.

Upon completion of our public offering, we intend to hire an Indian technology provider to develop our website. We expect that the IT company will provide the following services and products for the website: disk space, bandwidth, 155 mbit backbone, pop mailboxes, e-mail forwarding, e-mailing aliasing, auto responder and front page support. It will describe the variety of services that we offer and will contain links to the service providers with whom we have entered into strategic alliances.61


Other than investigating potential technologies in support of our business purpose and the preparation of our plan of operations, we have had no material business operations since our inception in September 2008. At present, we have yet to acquire or develop the necessary technology assets in support of our business purpose.






Marketing Strategy

We intend to negotiate strategic alliances with larger service providers such as travel agencies, resorts and hotels. We will offer direct advertising of those resorts that we enter into strategic alliances with through a link on our website, through flyers and promotional material that we create, and through personal selling in exchange for a commission-based percentage of the sale of rooms, tours or other services booked by a client introduced by us.

We also plan to develop strategic relationships with travel agents, convention centers and spas for a similar commission based percentage of any booking made by a client introduced by us.

Competition and Competitive Strategy


We expect to face significant competition in the tourism industry. This would include traditional travel agencies, internet travel sites and established tour companies. Many of these competitors have greater financial, marketing and other resources, as well as more experience in the tourism industry.

Most hotels and resorts have their own tour services and websites and we will be competing with the foregoing. We intend to differentiate ourselves by offering a much more personalized service. We intend to act as a personal concierge or executive assistant throughout the duration of the trip.

Although we will be differentiated from the others by offering personalized services, we cannot guarantee that we will be able to compete effectively and because we have not yet begun operations we do not have a competitive position relative to these other companies. Once we launch operations we hope to compete on the basis of price, quality and personalized service. Our operations and our ability to generate revenues will be harmed if we are unable to establish a reputation as a provider of quality tour services.

Our competitive position within the industry is negligible in light of the fact that we have not started our operations.

Subsidiaries


Since we are proposing to do business in India, we intend to operate our business in India through an Indian incorporated subsidiary. To date, this subsidiary has not been incorporated.


Sources and Availability of Products and Supplies


Although we currently have no customers, we believe that with our President’s industry experience and connections will be able to develop the various aspects of the business.  Mr. Vernekar has experience with the travel industry and also experience in arranging promotion and marketing packages.  


We believe there are no constraints on the sources or availability of products and supplies related to the development of our website and internet based business.


Dependence on One or a Few Major Customers


Although we currently have no customers, we believe that, because of the potentially broad base of customers for our services, we will not rely on one or few major customers.


Patent, Trademark, License & Franchise Restrictions and Contractual Obligations & Concessions


There are no inherent factors or circumstances associated with this industry, or any of the products or services that we expect to be providing that would give rise to any patent, trademark or license infringements or violations.  We have not entered into any franchise agreements or other contracts that have given, or could give rise to obligations or concessions.






We do not own, either legally or beneficially, any patents or trademarks, nor do we intend to apply for any in the near future.


Governmental Controls and Approvals


We do not require any government approval for our services except for certain business operating licenses, which all companies are required to hold regardless of the type of business. We will ensure that we have the necessary business license and are members in good standing with the local government.


Governmental and Industry Regulations


We will be subject to federal and state laws and regulations that relate directly or indirectly to our operations including federal securities laws. We will also be subject to common business and tax rules and regulations pertaining to the operation of our business.


Existing or Probable Government Regulations


Other than the licensing  requirements discussed above, there are no other types of  government  regulations  existing  nor are we aware of any such  regulations being contemplated that adversely affect our ability to operate.


Research and Development Activities and Costs


Other than time spent researching our proposed business we have not spent any funds on research and development activities to date. We have plans to undertake certain research and development activities during the first year of operations related to the development of our website.

Compliance with Environmental Laws


Our operations are not subject to any environmental laws.


Facilities


We do not own or rent facilities of any kind. At present operations are being conducted from the office of our President and he provides this space free of charge.  We believe this space is sufficient for our purposes and will be sufficient for the foreseeable future.

Employees


We have commenced only limited operations, and therefore currently have no employees other than our executive officer, who spends approximately 15 hours a week on our business. We will consider retaining full-time management and administrative support personnel as our business and operations increase.


Reports to Stockholders

We are not currently a reporting company, but upon effectiveness of the registration statement of which this prospectus forms a part, we will be required to file reports with the SEC pursuant to the Securities Exchange Act of 1934, as amended. These reports include annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. You may obtain copies of these reports from the SEC’s Public Reference Room at 100 F Street, NE., Washington, DC 20549, on official business days during the hours of 10 a.m. to 3 p.m. or on the SEC’s website, at www.sec.gov. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

We will also make these reports available on our website once our website is completed and launched.





Description of Property


We do not currently own any property. We are currently operating out of the premises of our President, on a rent-free basis during our development stage. We consider our current principal office space arrangement adequate and will reassess our needs based upon the future growth of the Company.


LEGAL MATTERS


The validity of the common stock offered hereby will be passed upon by McLaughlin & Stern, LLP.

We know61


EXPERTS

The consolidated financial statements of no existing or pending legal proceedings against us, nor are we involved as a plaintiff in any proceeding or pending litigation. There are no proceedings in which any of our director, officer or any of their respective affiliates, or any beneficial stockholder, is an adverse party or has a material interest adverse to our interest. Our address for service of process in Delaware is Vcorp Services LLC, 1811 Silverside Road, Wilmington, Delaware 19810.

MANAGEMENT


Our sole executive officer and director and his ageXiangtian (USA) Air Power Co., Ltd. as of the date of this prospectus is as follows:


 Name

Age

Position

Chuntan Vernekar

31

President, Secretary/Treasurer, Chief Executive Officer and sole member of the Board of Directors.

The person named above has held his offices/positions since the inception of our company and is expected to hold his offices/positions until the next annual meeting of our stockholders.

Biographical Information


Set forth below is a brief description of the background and business experience of our sole executive officer and director:


Chuntan Vernekar has been our President, Secretary, Treasurer and a member of the Board of Directors since our inception on September 2, 2008.  From 2002 to present, Mr. Vernekar has been owner and manager of a private chauffeur company, Goa Sweet Tours, which owns and operates three vehicles, one of which provides shuttle services to a five-star hotel in Goa, while the other two provide services to customers of various hotels and travel agencies.  From 1998 to 2002, Mr. Vernekar was employed by Taj Exotica Hotel in Goa as the general manager’s personal chauffeur. From 1996 to 1998, Mr. Vernekar was a chauffeur for the staff of the Leela Kempinski Goa Hotel. Both hotels are designatedyear ended July 31, 2014 have been audited by Jimmy P. Lee, CPA P.C., independent registered public accountants, as 5 star hotels.


Mr. Vernekar reads and speaks English, Hindi and Konkani fluently.  Management believes that Mr. Vernekar’s understanding of the English language, and his familiarity with British, American and Indian culture, will enable him to deal with a myriad of issues involving customer service.


Mr. Vernekar’s schedule allows him to spend up to 15 hours a week on the operations of our company. He has indicated to us that he will be willing to spend more time with the business as it grows.


Mr. Vernekar is not an officer or director of any reporting company that files annual, quarterly, or periodicin their reports with respect thereto, and are in reliance upon the United States Securitiesauthority of said firm as experts in accounting and Exchange Commission.


Board Composition

Our Bylaws provide thatauditing. The consolidated financial statements of Xiangtian (USA) Air Power Co., Ltd. as of and for the Board of Directors shall consist of at least one member,year ended July 31, 2015 and that our shareholders shall determine the number of directors from time to time. Each director serves for a term that expires until the next





annual meeting of shareholders and until his successor shall2016 have been elected and qualified, or until his earlier resignation, removal from office, or death.


Committees of the Board of Directors

We do not presently have a separately constituted audit committee, compensation committee, nominating committee, executive committee or any other committees of our Board of Directors. Nor do we have an audit committee “financial expert.” As such, our entire Board of Directors actsaudited by Yichien Yeh, CPA, independent registered public accountants, as our audit committee and handles matters related to compensation and nominations of directors.

Potential Conflicts of Interest

Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our sole director, who is also our sole executive officer. Thus, there is an inherent conflict of interest.

Director Independence

We are not subject to listing requirements of any national securities exchange or national securities association and, as a result, we are not at this time required to have our board comprised of a majority of “independent directors.” Our determination of independence of directors is made using the definition of “independent director” containedindicated in Rule 4200(a)(15) of the Marketplace Rules of the NASDAQ Stock Market (“NASDAQ”), even though such definitions do not currently apply to us because we are not listed on NASDAQ. We have determined that our sole director does not currently meet the definition of “independent” as within the meaning of such rules as a result of his current position as our executive officer.

Significant Employees

We have no significant employees other than the sole executive officer described above.

Involvement in Certain Legal Proceedings

No director, person nominated to become a director, executive officer, promoter or control person of our company has, during the last five years: (i) been convicted in or is currently subject to a pending a criminal proceeding (excluding traffic violations and other minor offenses); (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to any federal or state securities or banking or commodities laws including, without limitation, in any way limiting involvement in any business activity, or finding any violationtheir reports with respect to such law, nor (iii) any bankruptcy petition been filed by or againstthereto, and are in reliance upon the businessauthority of which such person was an executive officer or a general partner, whether at the time of the bankruptcy or for the two years prior thereto.

Stockholder Communications with the Board

We have not implemented a formal policy or procedure by which our stockholders can communicate directly with our Board of Directors. Nevertheless, every effort will be made to ensure that the views of stockholders are heard by the Board of Directors,said firm as experts in accounting and that appropriate responses are provided to stockholders in a timely manner. During the upcoming year, our Board will continue to monitor whether it would be appropriate to adopt such a process.

EXECUTIVE COMPENSATION


Since our incorporation on September 2, 2008, we have not compensated and have no arrangements to compensate our sole officer and director Mr. Vernekar for his services to us as an officer. We have not granted any stock options to Mr. Vernekar; there are no stock option, retirement, pension, or profit sharing plans for the benefit of Mr.





Vernekar; and, we have not entered into any employment or consulting agreements with Mr. Vernekar. In addition, we do not pay Mr. Vernekar any compensation for serving as our director.

The following table sets forth the compensation paid by us for the period from inception until the fiscal year ending July 31, 2009 for our sole officer and director. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid to our named executive officers.

  

  

  

  

  

  

 

Non- 

Nonqualified 

  

  

  

  

  

  

  

  

  

Equity 

Deferred 

All 

  

Name 

  

  

  

  

  

  

Incentive 

Compensa- 

Other 

  

and 

  

  

  

Stock 

Option 

  

Plan 

tion 

Compen- 

  

Principal 

Fiscal 

   Salary          Bonus           Awards                Awards                          Compensation 

Earnings 

sation 

Total 

Position 

Year 

(US$) 

(US$) 

(US$) 

(US$) 

  

(US$) 

(US$) 

(US$) 

(US$) 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

  

(g) 

(h) 

(i) 

(j) 

Chuntan Vernekar, President

2009 

  


Outstanding Equity Awards at 2009 Fiscal Year-End

We do not currently have a stock option plan nor any long-term incentive plans that provide compensation intended to serve as an incentive for performance. No individual grants of stock options or other equity incentive awards have been made to our sole executive officer and director since our inception; accordingly, none were outstanding at July 31, 2009.

Employment Contracts, Termination of Employment, Change-in-Control Arrangements

There are currently no employments or other contracts or arrangements with our executive officer. There are no compensation plans or arrangements, including payments to be made by us, with respect to our sole officer or director that would result from the resignation, retirement or any other termination of such person from us. There are no arrangements for our sole director or officer that would result from a change-in-control.


Long-Term Incentive Plan Awards

We do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance.

COMPENSATION OF DIRECTORS

The sole member of our board of directors is not compensated for his services as a director. The board has not implemented a plan to award options to any directors. There are no contractual arrangements with any member of the board of directors. We have no director's service contracts.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


On September 2, 2008, we issued an aggregate of 5,000,000 shares of our common stock to our sole officer and director, Chuntan Vernekar, for a purchase price of $0.005 per share or for aggregate consideration of $25,000. The shares were issued under Section 4(2) of the Securities Act of 1933, as amended, and/or Regulation D promulgated by the Securities and Exchange Commission.


We have not entered into any other transaction, nor are there any proposed transactions, in which our sole director and executive officer, or any significant stockholder, or any member of the immediate family of any of the foregoing, had or is to have a direct or indirect material interest.






Our sole officer and director may be considered a promoter of the Company due to his participation in and management of the business since our incorporation.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


On September 2, 2008, we issued an aggregate of 5,000,000 shares of our common stock to our sole officer and director for aggregate consideration of $25,000.


The following table sets forth information regarding the beneficial ownership of our common stock as of September 11, 2009 for our sole officer and director.  There is no other person or group of affiliated persons, known by us to beneficially own more than 5% of our common stock.


We have determined beneficial ownership in accordance with the rules of the Securities and Exchange Commission. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Unless otherwise indicated, the person identified in this table has sole voting and investment power with respect to all shares shown as beneficially owned by him, subject to applicable community property laws, and the address for each person listed in the table is c/o Goa Sweet Tours Ltd., H.no 889, Ascona, Patem, Benaulim, Goa, India, 403716.

The percentage ownership information shown in the table below is calculated based on 5,000,000 shares of our common stock issued and outstanding as of September 11, 2009. We do not have any outstanding options, warrants or other securities exercisable for or convertible into shares of our common stock.


Name and Address of Beneficial Owner

No. of  Common Stock

Before Offering

No. of Common Stock

After Offering

Percentage of Ownership

Before Offering

Percentage of Ownership

After Offering

Chuntan Vernekar

H. no. 889, Ascona, Patem,

Benaulim, Goa, India

5,000,000     

5,000,000       

100%

62.5%

 

 

 

 

 

All Officers and

Directors as a Group

5,000,000     

5,000,000                

100%      

62.5%

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own more than ten percent of our common stock, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes of ownership of our common stock. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.


We do not have any issued and outstanding securities that are convertible into common stock. Other than the shares covered by the registration statement of which this prospectus is a part, we have not registered any shares for sale by stockholders under the Securities Act.


auditing.

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION

FOR SECURITIES ACT LIABILITIES

Insofar as indemnification for liabilities arising under the Securities Act of 1933 as amended,(the "Act" or "Securities Act") may be permitted to our directors, officers or persons controlling us,our Company pursuant to the foregoing provisions, or otherwise, we have been advised that it isin the opinion of the Securities and Exchange Commission’s opinion thatCommission, such indemnification is against public policy as expressed in such actthe Act and is, therefore, unenforceable.





WHERE YOU CAN FIND ADDITIONAL INFORMATION


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


The following discussion of our financial conditionWe file reports and results of operations should be read in conjunctionother information with the financial statements and related notes that appear elsewhere in this prospectus. This discussion contains forward-looking statements and information relating to our business that reflect our current views and assumptions with respect to future events and are subject to risks and uncertainties, including the risks in the section entitled Risk Factors beginning on page 5, that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

These forward-looking statements speak only as of the date of this prospectus. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, or achievements. Except as required by applicable law, including the securities laws of the United States, we expressly disclaim any obligation or undertaking to disseminate any update or revisions of any of the forward-looking statements to reflect any change in our expectations with regard thereto or to conform these statements to actual results.

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with accounting principles generally accepted in the United States.

Overview

We are a development stage company and have not commenced operations or generated or realized any revenues.

Because we have not generated any revenues and no revenues are anticipated until we implement our business plan, our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital.

We believe that we will be able to raise enough money through this offering to begin operations but we cannot assure you that we will stay in business after our operations have commenced. If we are unable to successfully negotiate strategic alliances with purveyors of services to enable us to offer these services to our clients, or if we are unable to attract enough clients to utilize our services, we may quickly use up the proceeds from this offering and will need to find alternative sources, like a second public offering, a private placement of securities, or loans from our officer or others in order for us to maintain our operations. At the present time, we have not made any arrangements to raise additional cash, other than through this offering.

Results of Operations

From Inception on September 2, 2008 to July 31, 2009

We have not generated any revenues since our inception on September 2, 2008.  During the period from inception to July 31, 2009, our operating expenses were primarily comprised of professional fees of $16,266. We currently anticipate that our legal and accounting fees will increase over the next 12 months as a result of becoming a reporting company with the SEC, and will be approximately $10,000. We have prepared an internal business plan.

We have not started our proposed business operations and do not expect to do so until approximately 180 days after we have completed this offering.

Since inception, we sold 5,000,000 shares of common stock to our sole officer and director for $25,000.

Activities to Date





A substantial portion of our activities to date has involved developing a business plan and establishing contacts and visibility in the marketplace.  Management has been preparing the conceptual design of the “information only web site”. We have not registered our web site domain name. Further, we have researched the market for our tour services, and have determined that present office space is deemed to be adequate.


Plan of Operation


We are a development stage company with no operations, no revenues, no financial backing and few assets. We are in the process of establishing a business, which provides customers with an all-inclusive tour package covering the state of Goa, India for people looking for adventure, relaxation, romance, or simply to escape for whatever reason.


While we have not yet developed our tour programs, our president has conducted a limited amount of research regarding the sites of interest, festivals and areas of interest suitable for the tours. We intend to continue to identify specific services. We will then begin to develop our website with the funds provided by this offering.


We will begin to design an information page which will utilize artwork and a logo on a website. The e-brochure will outline our services, products, fee structure, and ordering instructions as well as highlight the past experience of Mr. Vernekar.  We plan to distribute an e-brochure electronically via the internet in accordance with all laws governing online solicitation known as spam mail. We plan to obtain the email addresses from various alliances such as hotel operators and travel agents. We will contract web space from a local Internet service provider.


We intend to register and list our web address with widely used search engines and directories. When registering, we plan to include keyword sensitive content referred to as metatags, or words that describe the content of the site, as well as titles to attempt to ensure that our domain name is listed prominently in search results in most search returns.


The first stage of our business plan is to develop our website, produce the print media, and develop relationships with Goan hotels and travel agencies, as follows:


a.

Presently we have not secured relationships with the hotels and service providers; we will have conducted a limited amount of research regarding availability and suitability. We will have identified specific hotels and service providers. We expect that our travel costs to begin our promotions to begin within three months after this registration statement becomes effective. The initial budget is $4,000.

b.

We will begin developing our website which is expected to take 2 to 4 months.  The initial cost will be $4,000. This website will utilize artwork and a logo and include the mission statement, brief bios on our President, pictures of locations, fee structure, contact and ordering instructions.  

c.

We will develop a colorful brochure which will mirror our website. These brochures will be given to travel agents, hotels and resorts. We anticipate the cost for the development and printing of brochures will be $2,000.


Our budget for the first stage of our business plan is as follows:


Proceeds to us

$30,000

Working capital on hand

5,475

Total

$35,475

Legal Counsel and Auditor

$13,475

Brochures, Marketing and Promotion

6,000

Website Development

6,000

Office and Administration

5,000

Computer and Equipment

3,000

Miscellaneous Administrative Expenses

2,000








Total

$35,475


We do not expect to realize any revenues during the first six months of operations, which are not expected to commence until winter 2010, when the Goan tourist season commences.


After the 2009 winter tourist season and depending on the success of the first stage of our plan, we plan to:

·

begin upgrading our website, which is expected to take two to four months with a maximum total cost of $18,000 to complete the website; and

·

continue to develop and enhance our relationship with tour and hotel operators and staff.



We also may acquire a luxury four-by-four cruiser vehicle.


During the first stages of our growth, Mr. Vernekar will provide all the labor required to operate the website, travel arrangements and bookings at no additional cost. Since we intend to operate with very limited administrative support, Mr. Vernekar will continue to be responsible for at least the first year of operations.


Off Balance Sheet Arrangements


We do not have any off-balance sheet arrangements.


Liquidity and Capital Resources

As of the date of this prospectus, we have yet to generate any revenues from our business operations.

The following table provides selected financial data about our company for the period from the date of incorporation through July 31, 2009. For detailed financial information, see the financial statements included in this prospectus.


Balance Sheet Data

July 31, 2009


                 Cash

$ 9,741

                 Total assets

$ 9,741

                 Total liabilities

$ 4,266

                 Shareholders' equity

$ 5,475


Other than the shares offered by this prospectus, no other source of capital has been has been identified or sought. If we experience a shortfall in operating capital prior to funding from the proceeds of this offering, our director has verbally agreed to advance the Company funds to complete the registration process to the maximum of $20,000.

Limited operating history; need for additional capital

There is no historical financial information about us upon which to base an evaluation of our performance. We are in the development stage of our operations and have not generated any revenues. We cannot assure you that we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.

To become profitable and competitive, we have to locate and negotiate agreements with service providers to allow us to represent them for a percentage-based commission. We then have to locate clients to book those services through us. We are seeking equity financing to provide for the capital required to implement our operations.

We cannot assure you that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.





Going Concern Consideration

The report of our independent registered accounting firm raises concern about our ability to continue as a going concern based on the absence of an established source of revenue, recurring losses from operations, and our need for additional financing in order to fund our operations in 2010.  Please see footnote 1 to our financial statements for additional information.


Critical Accounting Policies


An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements.


Financial Reporting Release No. 60 requires all companies to include a discussion of critical accounting policies or methods used in the preparation of financial statements.  Note 2 to the financial statements, included elsewhere in this prospectus, includes a summary of the significant accounting policies and methods used in the preparation of our financial statements.  The following is a brief discussion of the more significant accounting policies and methods used by us.

Basis of accounting


Our financial statements are prepared using the accrual method of accounting. We have elected July 31 as our fiscal year end.


Use of estimates and assumptions


The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


Revenue and Cost Recognition


We have generated no revenues to date.  We plan to recognize revenue on arrangements in accordance with Securities and Exchange Commission Staff Accounting Bulletin (“SAB”) No. 101, “Revenue Recognition in Financial Statements” and SAB No. 104, “Revenue Recognition.” In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectibles is reasonably assured.   We will recognize revenues from the sale of our tours when the payment has been received.


Intellectual Property


Commission. We have adopted the provisions of Emerging Issues Task Force 00-2, “Accounting for Web Site Development Costs.” Costs incurred in the planning stage of a website are expensed as research and development while costs incurred in the development stage are capitalized and amortized over the life of the asset, estimated to be five years. Expenses subsequent to the launch will be expensed as research and development expenses. We will expense upgrades and revisions to our website as incurred. We incurred no costs for research and development during fiscal 2010.  Once our website is fully operational, this asset will be amortized over a sixty month period.


Income taxes


Income taxes are provided in accordance with Statement of Financial Accounting Standards No. 109 (“SFAS 109”), “Accounting for Income Taxes.”  A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.






Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.


At July 31, 2009, a full deferred tax asset valuation allowance has been provided and no deferred tax asset benefit has been recorded.


Recent Accounting Pronouncements


We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.


CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE


We have not had any changes in or disagreements with our accountants on accounting and financial disclosure. LBB & Associates Ltd., LLP has served as our accounting firm since our inception.



WHERE YOU CAN GET MORE INFORMATION

In accordance with the Securities Act of 1933, we are filing with the SECalso filed a registration statement on Form S-1, of whichincluding exhibits, with the SEC with respect to the shares being offered in this offering. This prospectus is a part covering the securities being offering by the selling stockholders. As permitted by rules and regulations of the SEC, this prospectusregistration statement, but it does not contain all of the information set forthincluded in the registration statement.statement or exhibits. For further information regarding both our Companywith respect to us and our common stock, we refer you to the registration statement including alland to the exhibits and schedules whichto the registration statement. Statements contained in this Prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement. Each of these statements is qualified in all respects by this reference. You may inspect a copy of the registration statement without charge at the public reference facilitiesSEC's principal office in Washington, D.C., and copies of all or any part of the SEC’s Washington, D.C. office,registration statement may be obtained from the Public Reference Section of the SEC, 100 F Street, N.E.,F. St. NE, Washington, D.C. 20549, on official business days duringupon payment of fees prescribed by the hours of 10amSEC. The SEC maintains a World Wide Web site that contains reports, proxy and 3pm,information statements and onother information regarding registrants that file electronically with the SEC Internet site atwww.sec.gov. Information regarding the operationSEC. The address of the public reference rooms mayWeb site is http://www.sec.gov. The SEC's toll free investor information service can be obtained by calling the SECreached at 1-800-SEC-0330.




GOA SWEET TOURS LTD.

(A Development Stage Company)

FINANCIAL STATEMENTS

The Company’s financial statements for thefiscal year ending July 31, 2016, the fiscal year ending July 31, 2015, the fiscal year ending July 31, 2014, and the quarterly period ended April 30, 2017 are annexed hereto.

62


Xiangtian (USA) Air Power Co., Ltd.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JULY 31, 20092016, 2015 AND 2014


Table of Contents

Page
Report of Independent Registered Public Accounting FirmF-2 - F-4
Consolidated Balance Sheets for the years Ended July 31, 2016, 2015 and 2014F-5
Consolidated Statement of Operations and Comprehensive Income (Loss) for the years Ended July 31, 2016, 2015 and 2014.F-6
Consolidated Statements of Stockholders' Equity for the Period from September 2, 2008 (Inception) through July 31, 2016F-7
Consolidated Statements of Cash Flows for the years Ended July 31, 2016, 2015 and 2014F-8
Notes to Consolidated Financial StatementsF-9 - F-25

F-1


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM







Report of Independent Registered Public Accounting Firm


To the Board of Directors and StockholderStockholders of
Goa Sweet Tours Ltd.
(A Development Stage Company)
Benaulim, Goa, India
Xiangtian (USA) Air Power Co., Ltd and its Subsidiaries

We have audited the accompanying consolidated balance sheetsheets of Goa Sweet Tours Ltd.Xiangtian (USA) Air Power Co., Ltd and its Subsidiaries as of July 31, 2009,2016 and 2015, and the related statementconsolidated statements of operations stockholder’sand comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the two-year period from September 2, 2008 (Inception) throughended July 31, 2009. These2016. Xiangtian (USA) Air Power Co., Ltd.’s management is responsible for these financial statements are the responsibility of the Company’s management.statements. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Xiangtian (USA) Air Power Co., Ltd and Subsidiaries as of July 31, 2016 and 2015, and the results of its operations and its cash flows for each of the years in the two-year period ended July 31, 2016, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Accounting Oversight Board (United States) Xiangtian (USA) Air Power Co., Ltd and Subsidiaries’ internal control over financial reporting as of July 31, 2016, based on criteria establish in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated October 24, 2016, expressed a disclaimer of opinion.

/s/ Yichien Yeh, CPA

Oakland Gardens, NY
October 24, 2016

F-2


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Xiangtian (USA) Air Power Co., Ltd and its Subsidiaries

We were engaged to audit Xiangtian (USA) Air Power Co., Ltd and Subsidiaries’ internal control over financial reporting as of July 31, 2016, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Xiangtian (USA) Air Power Co., Ltd.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting.

The management of Xiangtian (USA) Air Power Co., Ltd. is unable to provide a complete set of documentation of the company’s internal control designs and implementation. This scope limitation prevented us from performing sufficient audit procedures to form an opinion on management's assessment of internal control over financial reporting and an opinion on the effectiveness of the company's internal control over financial reporting.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Since the management of the Company was not able to provide a complete set of documentation of the company’s internal control policies and procedures designed for implementation and we were unable to apply other procedures to obtain sufficient evidence about the effectiveness of the company’s internal control over financial reporting, the scope of our work was not sufficient to enable us to express, and we do not express, an opinion on Xiangtian (USA) Air Power Co., Ltd and Subsidiaries’ internal control over financial reporting.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows of Xiangtian (USA) Air Power Co., Ltd and its Subsidiaries, and our report dated October 24, 2016, expressed an unqualified opinion.

/s/ Yichien Yeh, CPA

Oakland Gardens, NY
October 24, 2016

F-3


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Xiangtian (USA) Air Power Co., Ltd and its Subsidiaries

We have audited the accompanying consolidated balance sheets of Xiangtian (USA) Air Power Co., Ltd and its Subsidiaries as of July 31, 2014, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the year in the year period ended July 31, 2014. Xiangtian (USA) Air Power Co., Ltd and its Subsidiaries’ management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Companycompany is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’scompany’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by manage ment,management, as well as evaluating the overall financial statement presentation. We believe that our audit providesaudits provide a reasonable basis for our opinion.


In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Goa Sweet Tours Ltd.Xiangtian (USA) Air Power Co., Ltd and Subsidiaries as of July 31, 2009,2014, and the results of its operations and its cash flows for each of the year in the year period from September 2, 2008 (Inception) throughended July 31, 2009,2014, in conformity with accounting principles generally accepted in the United States of America.


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered losses from operations which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding this matter also are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


LBB & Associates Ltd., LLP

Houston, Texas

August 26, 2009





GOA SWEET TOURS LTD.

(A Development Stage Company)

BALANCE SHEET

July 31, 2009



/s/ Jimmy P. Lee, CPA PC

July 31,
2009
$

Astoria, NY

November 13, 2014 except for the effects of the restatement described in Note 4, as to which the date is September

ASSETS

4, 2015

F-4



Xiangtian (USA) Air Power Co., Ltd.

Current assets

Consolidated Balance Sheets

Cash

9,741

    Total current assets

9,741

      Total assets

9,741


LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES

Current liabilities

Accounts payables and accrued liabilities

4,266

    Total current liabilities

4,266

    Total liabilities

4,266


STOCKHOLDER’S EQUITY

Preferred stock: $0.001 par value, 100,000,000 authorized, 0 issued and outstanding

-

Common stock: $0.001 par value, 100,000,000 authorized, 5,000,000 issued and outstanding

5,000

Additional paid-in capital

20,000

Deficit accumulated during the development stage

(19,525)

     Total stockholder’s equity

5,475

     Total liabilities and stockholder’s equity

9,741

(Stated in US Dollars)

  July 31,  July 31,  July 31, 
  2016  2015  2014 
        (Restated) 
ASSETS         
Current assets         
Cash and cash equivalence$ 1,226,220 $ 502,029 $ 556,788 
Accounts receivable 2,848,904  4,720,093  - 
Other receivables 491,290  360,071  23,791 
Advances to suppliers 4,594,299  5,173,680  7,490,564 
Due from related parties -  611,879  638,926 
Inventory 2,080,853  1,463,856  1,142,726 
Deferred tax asset -  -  111,844 
Costs in excess of billings 710,652  -  - 
Other current asset 126,395  721,868  1,146,786 
Total current assets$ 12,078,613 $ 13,553,476 $ 11,111,425 
          
Non-current assets         
Property, plant and equipment, net$ 4,520,735 $ 7,679,323 $ 6,779,256 
Deposit for property, plant and equipment 178,617  90,826  1,590,581 
Total non-current assets 4,699,352  7,770,149  8,369,837 
          
Total assets$ 16,777,965 $ 21,323,625 $ 19,481,262 
          
LIABILITIES AND STOCKHOLDERS’ EQUITY         
          
LIABILITIES         
Current liabilities         
Accounts payable and accrued liabilities$ 4,851,630 $ 3,074,079 $ 327,759 
Due to shareholders -  18,954  18,934 
Capital lease obligations - current -  33,152  31,022 
Due to director 414,876  417,770  430,928 
Due to related parties 1,716,734  1,056,568  3,080,147 
Advance from customers 620,814  451,962  120,649 
Deferred tax liabilities 107,609  83,101  - 
Other payables 234,791  459,337  28,102 
Income tax payable 329,177  1,557  - 
Billings in excess of costs -  3,489,776  3,847,085 
Total current liabilities 8,275,631  9,086,256  7,884,626 
          
Non-current liabilities         
Capital lease obligations - non-current -  2,687,887  2,718,106 
Total non-current liabilities -  2,687,887  2,718,106 
          
Total liabilities$ 8,275,631 $ 11,774,143 $ 10,602,732 
          
Commitments and contingencies         
          
STOCKHOLDERS’ EQUITY         
Preferred stock: $0.001 par value,
     100,000,000 shares authorized,
     none issued and outstanding
 -  -  - 
Common stock: $0.001 par value,
     1,000,000,000 shares authorized,
     591,042,000 shares issued and outstanding
591,042591,042598,042
Additional paid-in capital 9,713,675  9,457,675  9,451,675 
Subscription receivable (310,000) (310,000) (317,000)
Deficit accumulated (812,935) (204,751) (862,211)
Accumulated other comprehensive gain (loss) (679,448) 15,516  8,024 
Total stockholders’ equity 8,502,334  9,549,482  8,878,530 
Total liabilities and stockholders’ equity$ 16,777,965 $21,323,625 $19,481,262 

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

F-5







Xiangtian (USA) Air Power Co., Ltd.

GOA SWEET TOURS LTD.

Consolidated Statement of Operations and Comprehensive Income (Loss)

(A Development Stage Company)

STATEMENT OF OPERATIONS

Stated in US Dollars)


Period from September 2, 2008 (Inception) to

July 31, 2009

$

EXPENSES

     General and administrative

               3,259

     Professional fees

               16,266

NET LOSS

             (19,525)

Basic and diluted net loss per share

              (0.00)

Weighted average shares outstanding

5,000,000



  For the  For the  For the 
  Year Ended  Year Ended  Year Ended 
  July 31,  July 31,  July 31, 
  2016  2015  2014 
        (Restated) 
Revenue 10,839,955  20,772,028  - 
          
Cost of sales$ 9,642,803 $17,781,011 $ - 
          
Gross profit$ 1,197,152 $2,991,017 $ - 
          
Operating expenses:         
Selling expenses 24,184  21,912  5,479 
General and administrative expenses 1,699,679  1,216,041  745,127 
Total operating expenses 1,723,863  1,237,953  750,606 
          
Income (loss) from operations (526,711) 1,753,064  (750,606)
Other (expense) income 144,933  -    
Interest expense 276  (178,661) (44,909)
Other expense -  (90) - 
Exchange gain -  (13) 389 
Total other income(expense), net 145,209  (178,764) (44,520)
           Net income (loss) before taxes$ (381,502)$1,574,300 $ (795,126)
          
Income tax expense (226,682) (916,840) 113,932 
          
           Net income (loss) after taxes$ (608,184)$657,460 $ (681,194)
          
Foreign currency translation adjustment (694,964) 7,492  7,552 
          
Comprehensive income (loss) (1,303,148) 664,952  (673,642)
          
Net earnings (loss) per common share – basic and diluted$ (0.00$ 0.00 $ (0.00)
          
Weighted average number of common shares outstanding - basic and diluted 591,042,000  597,907,753  284,206,285 

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

F-6










Xiangtian (USA) Air Power Co., Ltd.

GOA SWEET TOURS LTD.

Consolidated Statement of Stockholders’ Equity (Deficit)

(A Development Stage Company)

STATEMENT OF CASH FLOWS


For the Period from September 2, 2008 (inception) to

(Inception) through July 31, 2009

$

2016

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss

           (19,525)

Changes(Stated in operating assets and liabilities

Accounts payables and accrued liabilities

             4,266

NET CASH USED IN OPERATING ACTIVITIES

             (15,259)

CASH FLOWS FROM FINANCING ACTIVITIES

Common stock issued for cash

            25,000

NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES

            25,000

NET INCREASE IN CASH

            9,741

CASH, BEGINNING OF PERIOD

                   -   

CASH, END OF PERIOD

             9,741

Supplemental cash flow information:

Cash paid for:

– Interest paid

                   -   

– Income taxes paid

                   -   

US Dollars)



  Common Stock  Additional        Other    
     Par  Paid-in  Subscription  Deficit  Comprehensive    
  Shares  Value  Capital  Receivable   Accumulated   Income (Loss)  Total 
                      
Balances, September2, 2008 (inception) - $ - $ - $   $- $- $ - 
Common stock issued for cash 5,000,000  5,000  20,000  -  -  -  25,000 
Net loss -  -  -  -  (19,525) -  (19,525)
                      
Balances, July 31,2009 5,000,000  5,000  20,000  -  (19,525) -  5,475 
Common stock issued for cash 3,000,000  3,000  27,000  -  -  -  30,000 
Net loss -  -  -  -  (24,141) -  (24,141)
                      
Balances, July 31,2010 8,000,000  8,000  47,000  -  (43,666) -  11,334 
Net loss -  -  -  -  (18,818) -  (18,818)
                      
Balances, July 31,2011 8,000,000  8,000  47,000  -  (62,484) -  (7,484)
Sale of Goa Excursion -  -  20,460  -  -  -  20,460 
Donated rent -  -  1,500  -  -  -  1,500 
Net loss -  -  -  -  (30,944) -  (30,944)
Donated rent                     
                      
Balances, July 31,2012 8,000,000  8,000  68,960  -  (93,428) -  (16,468)
Donated rent -  -  6,000  -  -  -  6,000 
Contribution from shareholders -  -  1,629,983  -  -  -  1,629,983 
Other comprehensive income -  -  -  -  -  472  472 
Net loss -  -  -  -  (87,589) -  (87,589)
                      
Balances, July 31,2013 8,000,000  8,000  1,704,943  -  (181,017) 472  1,532,398 
Common stock issued 317,000,000  317,000  -  (317,000) -  -  - 
Common stock issued for the acquisition of Sanhe 273,042,000  273,042  (273,042) -  -  -  - 
Contribution from shareholders -  -  8,013,774  -  -  -  8,013,774 
Donated rent -  -  6,000  -  -  -  6,000 
Other comprehensive income -  -  -  -  -  7,552  7,552 
Net loss -  -  -  -  (681,194) -  (681,194)
                      
Balances, July 31,2014 (Restated) 598,042,000  598,042  9,451,675  (317,000) (862,211) 8,024  8,878,530 
Donated rent -  -  6,000  -  -  -  6,000 
                      
Cancellation of issued shares (7,000,000) (7,000) -  7,000  -  -  - 
                      
Other comprehensive income -  -  -  -  -  7,492  7,492 
Net income -  -  -  -  657,460  -  657,460 
                      
Balances, July 31,2015 591,042,000  591,042  9,457,675  (310,000) (204,751) 15,516  9,549,482 
Donated rent -  -  6,000  -  -  -  6,000 
                      
Contribution from shareholders -  -  250,000  -  -  -  250,000 
Other comprehensive income -  -  -  -  -  (694,964) (694,964)
Net income -  -  -  -  (608,184) -  (608,184)
                      
Balances, July 31,2016 591,042,000  591,042  9,713,675  (310,000) (812,935) (679,448) 8,502,334 

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

F-7







Xiangtian (USA) Air Power C o., Ltd.

GOA SWEET TOURS LTD.

Consolidated Statements of Cash Flows

(A Development Stage Company)

STATEMENT OF STOCKHOLDER’S EQUITY

For the period September 2, 2008 (Inception) to July 31, 2009

Stated in US Dollars)


 

Common Stock

Additional Paid-in

Deficit Accumulated During the Development

 

 

Number

Par Value

Capital

Stage

Total

 

 

 

 

 

 

Balance, September 2, 2008 (inception)

-

 $             -   

 $             -   

 $                -   

 $             -   

Common stock issued for cash

5,000,000

5,000

20,000

-

25,000

Net loss

-

-

-

       (19,525)

    (19,525)

 

 

 

 

 

 

Balance, July 31, 2009

5,000,000

 $      5,000

 $    20,000

 $    (19,525)

 $    5,475


  For the  For the  For the 
  Year Ended  Year Ended  Year Ended 
  July 31,  July 31,  July 31, 
  2016  2015  2014 
Cash flows from operating activities:         
Net income (loss)$ (608,184)$ 657,460 $ (681,194)
Adjustments to reconcile net loss to net cash used in operating activities:         
Depreciation 266,773  414,623  74,053 
Allowance for doubtful accounts 60,242  -  - 
Gain on termination of capital lease (128,379) -  - 
Rent contributed by shareholders as paid-in capital 6,000  6,000  6,000 
Changes in operating assets and liabilities:         
Accounts receivable 1,758,079  (4,736,375) - 
Other receivables 43,289  (337,078) (24,235)
Prepayment 485,715  2,438,844  (7,630,372)
Due from related party 583,124  (581,671) - 
Inventory 503,892  6,315,793  (9,825,555)
Deferred tax asset -  113,932  (113,932)
Other current asset 594,895  422,426  (1,146,785)
Accounts payable and accrued liabilities 1,881,936  2,900,812  69,894 
Other payables and tax payables 115,154  607,729  105,623 
          
Advance from customers (5,213,700) (6,056,247) 12,052,437 
Advance from shareholders -  -  (50,165)
Deferred tax liability 26,832  83,388  - 
Net cash provided by(used in) operating activities 375,668  2,249,636  (7,164,231)
          
Cash flows from investing activities:         
Purchase of property and equipment (91,814) (63,234) (5,792,087)
Loan repaid from/(made to) related parties 30,865  (32,319) - 
Loan repaid from/(made to) third parties (185,190) -  - 
Net cash used in financing activities (246,139) (95,553) (5,792,087)
          
Cash flows from financing activities:         
Advances from /(Repayment to) related parties 671,461  (2,022,822) 3,046,744 
Advances from/(Repayment to) director (2,817) (13,007) 421,665 
Advances from shareholders -  -  19,287 
Capital contribution from shareholders 250,000  -  8,013,774 
Net cash provided by (used in) financing activities 918,644  (2,035,829) 11,501,470 
          
Effect of exchange rate change on cash (323,982) (173,013) 371,629 
          
Net change in cash and cash equivalents 724,191  (54,759) (1,083,219)
          
Cash and cash equivalents - beginning of period 502,029  556,788 $ 1,640,007 
          
Cash and cash equivalents - end of period$ 1,226,220 $502,029  556,788 
       $  
          
          
Supplemental disclosure of cash flow information      $  
Interest paid$ - $ -  - 
Income tax paid$ 140,171 $ 426,616  - 

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



F-8





Xiangtian (USA) Air Power Co., Ltd.

GOA SWEET TOURS LTD.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

For the period September 2, 2008 (Inception)Notes to July 31, 2009

Consolidated Financial Statements



1.NOTE 1 - NATURE AND CONTINUANCE OF OPERATIONS

The CompanyXiangtian (USA) Air Power Co., Ltd. (the “Company”) was incorporated in the State of Delaware on September 2, 2008 and is in the development stage.as Goa Sweet Tours Ltd. The Company was originally formed to provide personalized concierge tour packages to tourists who visit the State of Goa, India. On April 17, 2012, the Company entered into Share Purchase Agreements, by and among, Luck Sky International Investment Holdings Limited (“Lucky Sky”), an entity owned and controlled by Zhou Deng Rong, and certain of our former stockholders who owned, in the aggregate, 7,200,000 shares of the Company’s common stock (90% of the at then outstanding shares). Luck Sky purchased all 7,200,000 shares for an aggregate of $235,000. The sale was completed on May 15, 2012.

InOn May 1, 2012, the Company sold its Indian subsidiary, Goa Excursion Private Limited (“Goa Excursion”), to IqbalBoga for a total value of $10. Both the purchaser and the seller fully release, discharge, waive, and hold harmless the subsidiary’s debts and liabilities, including related party’s debts.

On May 25, 2012, the Company formed a corporation under the laws of the State of Delaware called Xiangtian (USA) Air Power Co., Ltd. ("Merger Sub") and on the same day, acquired one hundred shares of Merger Sub's common stock for cash. As such, Merger Sub became a wholly-owned subsidiary of the Company.

Effective as of May 29, 2012, Merger Sub was merged with and into the Company. As a result of the merger, the Company’s name was changed to “Xiangtian (USA) Air Power Co., Ltd.”. Prior to the merger, Merger Sub had no liabilities and nominal assets and, as a result of the merger, the separate existence of the Merger Sub ceased. The Company was the surviving corporation in the merger and, except for the name change provided for in the Agreement and Plan of Merger, there was no change in the directors, officers, capital structure or business of the Company.

On September 5, 2013, the Company entered into a business combination by means of merger of LuckSky (Hong Kong) Shares Limited (“HK Shares”), a Hong Kong corporation, for 250,000,000 shares of common stock of the Company. As a result of the acquisition, HK Shares was merged into the Company.

On May 30, 2014, the Company entered into a Stock Purchase Agreement and acquired 100% of the issued and outstanding shares of common stock of Luck Sky (Hong Kong) Aerodynamic Electricity Limited (“Luck Sky HK”), a Hong Kong corporation. Luck Sky (Shen Zhen) Aerodynamic Electricity Limited (“Luck Sky Shen Zhen”), a corporation incorporated under the laws of the People Republic of China (“PRC”), is a wholly owned subsidiary of Luck Sky HK. As a result of the acquisition, Luck Sky HK became a wholly owned subsidiary of the Company and Luck Sky Shen Zhen became an indirect subsidiary of the Company through Luck Sky HK.

On July 25, 2014, Luck Sky (Shen Zhen) Aerodynamic Electricity Limited (“Luck Sky Shen Zhen”), a corporation incorporated under the laws of the People Republic of China (“PRC”), an indirect wholly-owned subsidiary; Sanhe City Lucksky Electrical Engineering Co., Ltd. (“Sanhe”), a corporation incorporated under the laws of the PRC; and Mr. Zhou Jian and Mr. Zhou Deng Rong, the owners of 97% and 3%, respectively, of Sanhe; entered into a series of agreements known as variable interest agreements (the “VIE Agreements”) pursuant to which Sanhe became Luck Sky Shen Zhen’s contractually controlled affiliate. The purpose and effect of the VIE Agreements is to provide Luck Sky Shen Zhen (our indirect wholly-owned subsidiary) with all of the management, control and net profits of Sanhe.

Simultaneously, the Company entered into a common stock purchase agreement with Zhou Jian and Zhou Deng Rong, the owners of 97% and 3%, respectively, of Sanhe in consideration for the execution of the VIE Agreements and the acquisition of Sanhe. Pursuant to the Stock Purchase Agreement, the Company issued Zhou Jian and Zhou Deng Rong 264,850,740 and 8,191,260 shares, respectively, of our common stock, representing 51.4% of the our issued and outstanding shares of common stock.

F-9


NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements of the Company have been prepared in accordance with SFAS No.7,generally accepted accounting principles in the United States of America. This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. The Company’s consolidated financial statements are expressed in U.S. dollars.

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported losses.

Use of Estimates and Assumptions

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

Principle of Consolidation

The consolidated financial statements include the financial statements of the Company, its subsidiaries, including the wholly-foreign owned enterprise ("WOFE"), and VIEs for which the Company is deemed the primary beneficiary. All significant inter-company accounts and transactions have been eliminated in consolidation.

The Company evaluates the need to consolidate its VIE in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support.

The VIE agreement was not consummated until July 25, 2014, however, the purpose and design of the establishment of VIE, Sanhe, was to be consolidated under the Company through common control. ASC 810-10-25-38F states that a reporting entity’s involvement in the design of a VIE may indicate that the reporting entity had the opportunity and the incentive to establish arrangements that result in the reporting entity being the variable interest holder with the power to direct the activities that most significantly impact the VIE’s economic performance. As both the Company and the acquired VIE, Sanhe, are under the common control of Zhou Dengrong and Zhou Jian immediately before and after the acquisition, this transaction was accounted for as a merger under common control, using merger accounting as if the merger had been consummated at the beginning of the earliest period presented, and no gain or loss was recognized. All the assets and liabilities of the VIE, Sanhe, are recorded at carrying value. Hence, Sanhe was consolidated under the Company since its inception due to the purpose and design of its establishment.

F-10


Details of the typical VIE structure of the Company's significant VIEs, primarily domestic companies associated with the operations of Sanhe, are set forth below:

Framework Agreement on Business Cooperation, entered between Luck Sky Shen Zhen and Sanhe, pursuant to which Luck Sky Shen Zhen and Sanhe have agreed to enter into a series of VIE agreements and to cooperate in all prospective of Sanhe’s business operation and management.

Exclusive Management, Consulting and Training and Technical Service Agreement, entered between Luck Sky Shen Zhen and Sanhe, pursuant to which Luck Sky Shen Zhen has agreed to provide Sanhe with complete business support and technical support and related management, training and consulting services. In consideration for such services, Luck Sky Shen Zhen is entitled to receive an amount equal to 100% of Sanhe’s net income.

Exclusive Option Agreement, entered among Luck Sky HK, Luck Sky Shen Zhen, Zhou Deng Rong, Zhou Jian and Sanhe, pursuant to which Zhou Deng Rong and Zhou Jian, the owners of Sanhe, have granted to Luck Sky Shen Zhen and Luck Sky HK the irrevocable right and option to acquire all of their equity interests in Sanhe.

Equity Pledge Agreement, entered among Luck Sky Shen Zhen, Zhou Deng Rong, Zhou Jian, and Sanhe, pursuant to which Zhou Deng Rong and Zhou Jian, the owners of Sanhe, have pledged all of their rights, titles and interests in Sanhe to Luck Sky Shen Zhen to guarantee Sanhe’s performance of its obligations under all the other VIE Agreements.

Know-How Sub-License Agreement, entered between Luck Sky Shen Zhen and Sanhe, pursuant to which Luck Sky Shen Zhen has granted Sanhe an exclusive right to use and develop a series of aerodynamics related patents and technologies with respect to electrical generation for commercial and residential structures, not including automobile and wind towers. Luck Sky Shen Zhen possesses the rights licensed under this agreement through two license agreements dated July 25, 2014 with Zhou Deng Rong, Zhou Jian and Lucksky Group, the owners of the aforesaid patents and technologies. For the sublicense contemplated under this Agreement, Sanhe will pay Luck Sky Shen Zhen an annual royalty fee of five percent of revenue; and

Power of Attorney. Pursuant to a power of attorney, each of the Sanhe stockholders agreed to irrevocably entrust Luck Sky Shen Zhen with his stockholder voting rights and other stockholder rights for representing him to exercise such rights at the stockholders’ meeting of Sanhe in accordance with applicable laws and its Article of Association, including, but not limited to, the right to sell or transfer all or any of his equity interest in Sanhe, and appoint and vote for the directors and Chairman of Sanhe as the authorized representative of the Sanhe stockholders. The term of each proxy and voting agreement is as long as each of the Sanhe stockholders is a shareholder of Sanhe and is binding on any transferee.

Under the contractual arrangements with the VIEs, the Company has the power to direct activities of the VIEs and can have assets transferred out of the VIE under its control.

Therefore, the Company considers that there is no asset in any of the consolidated VIE that can be used only to settle obligations of the VIE, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIE do not have recourse to the general credit of the Company for any of the liabilities of the consolidated VIE.

The Company’s total assets and liabilities presented in the consolidated financial statements represent substantially all of total assets and liabilities of the VIE because the other entities in the consolidation are non-operating holding entities with nominal assets and liabilities.

The following financial statement amounts and balances of the VIE, which is established on August 6, 2014, were included in the accompanying consolidated financial statements as of July 31, 2016, 2015 and 2014 and for the years ended July 31, 2016, 2015 and 2014, respectively:

F-11



          
  July 31, 2016  July 31, 2015    July 31, 2014 
Total assets$ 16,566,891 $20,948,502 $ 26,927,076 
Total liabilities 7,944,737  11,457,633  17,610,720 
          
        For the 
  For the year  For the year  year 
  ended  ended  ended 
  July 31,  July 31,  July 31, 
  2016  2015  2014 
          
Net income (loss)$ (263,796)$ 165,029 $ (455,727)

Financial Instrument

The carrying amount reported in the balance sheet for cash, accounts receivable, inventory, other receivables, accounts payable, accrued liabilities and other payables approximate fair value because of the immediate or short-term maturity of these financial instruments.

Fair Value Measurements

The Company applies the provisions of ASC Subtopic 820-10, “Fair Value Measurements”, for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

There were no assets or liabilities measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of July 31, 2016, 2015 and 2014.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

F-12


Accounts Receivable

Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollected amounts through a charge to earnings and a credit to an allowance for bad debts based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for bad debts and a credit to accounts receivable.

Inventory

Inventory is stated at the lower of cost or market. Cost is principally determined using the weighted average basis. Construction costs incurred on contracts are included in inventories which consist of raw materials, accessory parts, and contracts work in progress.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation and impairment losses. Gains or losses on dispositions of property and equipment are included in operating income (loss). Major additions, renewals and betterments are capitalized, while maintenance and repairs are expensed as incurred.

Depreciation and amortization are provided over the estimated useful lives of the assets using the straight-line method from the time the assets are placed in service. Estimated useful lives are as follows, taking into account the assets' estimated residual value:

ClassificationEstimated useful life
Machinery equipment5-10 years
Computer and office equipment3 years
Vehicle5 years
Property under capital lease20 years

Impairment of Long-Lived Assets

The Company accounts for impairment of plant and equipment and amortizable intangible assets in accordance with the standard, “Accounting for Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of,” codified with ASC 360, which requires the Group to evaluate a long-lived asset for recoverability when there is event or circumstance that indicate the carrying value of the asset may not be recoverable. An impairment loss is recognized when the carrying amount of a long-lived asset or asset group is not recoverable (when carrying amount exceeds the gross, undiscounted cash flows from use and disposition) and is measured as the excess of the carrying amount over the asset’s (or asset group’s) fair value.

F-13


Revenue Recognition

Sales of power generation system in conjunction of system installation are recognized under accounting for construction-type contracts, based on the nature of the contract using the

Completed-Contract Method.

The reason for selecting completed-contract method is (a) The Company’s contract is duration is less than one year and financial position and results of operations would not vary materially from those resulting from use of the percentage-of completion method. (b) Reasonably dependable estimate cannot be made due to nature of contracts. Accordingly, revenue is recognized upon the completion of the construction, provided persuasive evidence of an arrangement exists, title and risk of loss has transferred, the fee is fixed and determinable, and collection is reasonably assured. We provide for any loss that we expect to incur on these contracts when that loss is probable.

Percentage-of Completion Method

For contracts with long duration and it is practical to make reasonable estimate, percentage-of completion method is used. Revenue is recognized based on the percentage of total income. The percentage is based on incurred costs to date bearing to estimate total cost after giving effect to estimates of cost to complete based on most recent information. We provide for any loss that we expect to incur on these contracts when that loss is probable.

For the year ended July 31, 2016, percentage-of completion method is used for one contract which was not completed as of July 31, 2016. The gross revenue recognized under percentage-of completion method and completed-contract method are $874,510 and $9,997,255, respectively for the year ended July 31, 2016. For the year ended July 31, 2015, completed-contract method was used for all contracts. The gross revenue recognized under percentage-of completion method and completed-contract method are $0 and $20,829,309, respectively for the year ended July 31, 2015. For the year 2014, there was no

Warranty and Returns

The Company generally provides limited warranties for work performed under its contracts. The warranty periods typically extend for a limited duration following substantial completion of the Company's work on a project. At the time a sale is recognized, we record estimated future warranty costs. Such estimated costs for warranties are included in the individual project cost estimates for purposes of accounting for long-term contracts. Generally, the estimated claim rates of warranty are based on actual warranty experience or Company’s best estimate.

No right of return exists on sales of equipment. Replacement part returns are estimable and accrued at the time a sale is recognized.

Value added taxes

The Company is subject to VAT at a rate of 17% on proceeds received from customers, and are entitled to a refund for VAT already paid or borne on the goods purchased by it that have generated the gross sales proceeds. The VAT balance is recorded in other payables on the balance sheets.

Income Taxes

The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.

F-14


Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the year incurred. No significant penalties or interest relating to income taxes have been incurred during the period from July 8, 2013 (inception) to December 31, 2013. US GAAP also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures and transition.

Segment Information

The standard, “Disclosures about Segments of an Enterprise and Related Information,” codified with ASC 280, requires certain financial and supplementary information to be disclosed on an annual and interim basis for each reportable segment of an enterprise. The Company believes that it operates in one business segment (research, development, production, marketing and sales) and in one geographical segment (China), as all of the Company’s current operations are carried out in China.

Comprehensive Loss

The Company follows the provisions of the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 220 “Reporting Comprehensive Income”, and establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general purpose financial statements.

Foreign Currency Translation

The Company’s functional currency is Chinese Renminbi (“RMB”) as substantially all of the Company’s PRC subsidiaries’ operations use this denomination. The consolidated financial statements are presented in U.S. dollars. Foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Non-monetary assets and liabilities are translated at the exchange rates prevailing at the transaction date. Revenues and expenses are translated at average rates of exchange during the year. Gains or losses resulting from foreign currency transactions are included in results of operations.

For the purpose of presenting these financial statements of subsidiaries in PRC, the Company’s assets and liabilities are expressed in US$ at the exchange rate on the balance sheet date, which is 6.6371, 6.2097 and 6.2164 as of July 31, 2016, July 31, 2015 and July 31, 2014, respectively; stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rate during the period, which is 6.4798, 6.1884 and 6.1025 for the year ended July 31, 2016, July 31, 2015 and July 31, 2014, respectively. The resulting translation adjustments are reported under accumulated other comprehensive income in the stockholder’s equity section of the balance sheets.

For the purpose of presenting these financial statements of the subsidiary in Hong Kong, the Company’s assets and liabilities are expressed in US$ at the exchange rate on the balance sheet date, which is 7.7588, 7.7514 and 7.7497 as of July 31, 2016, July 31, 2015 and July 31, 2014, respectively; stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rate during the period, which is 7.7595, 7.7536 and 7.7545 for the year ended July 31, 2016, July 31, 2015 and July 31, 2014, respectively. The resulting translation adjustments are reported under accumulated other comprehensive income in the stockholder’s equity section of the balance sheets.

F-15


Earnings (Loss) per Share

Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted earnings per share gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Earnings per share excludes all potential dilutive shares of common stock if their effect is anti-dilutive. There were no potential dilutive securities at July 31, 2016, 2015 or 2014.

Related Parties

A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.

Recent Accounting Pronouncements

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which modifies existing requirements regarding measuring inventory at the lower of cost or market. Under existing standards, the market amount requires consideration of replacement cost, net realizable value (NRV), and NRV less an approximately normal profit margin. The new ASU replaces market with NRV, defined as estimated selling prices in the development stage.  Its activitiesordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This eliminates the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. The amendments are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The Company is currently assessing this ASU’s impacts on the Company’s consolidated results of operations and financial condition.

In February 2015, FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The new consolidation standard changes the way reporting enterprises evaluate whether (a) they should consolidate limited partnerships and similar entities, (b) fees paid to a decision maker or service provider are variable interests in a VIE, and (c) variable interests in a VIE held by related parties of the reporting enterprise require the reporting enterprise to consolidate the VIE. The guidance is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2015. Early adoption is allowed, including early adoption in an interim period. A reporting entity may apply a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption or may apply the amendments retrospectively. The Company is currently assessing the impact of the adoption of this guidance on the consolidated financial statements.

In August 2014, the Financial Accounting Standards Board issued ASU No. 2014-15, Presentation of Financial Statements— Going Concern (Subtopic 205-40). This standard is intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments contained in this ASU apply to all companies and not-for-profit organizations. The amendments are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The Company is currently assessing this ASU’s impact on the Company’s consolidated results of operations and financial condition.

F-16


The Company believes that there were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations.

NOTE 3 – ACQUISITIONS

Acquisition of Luck Sky (Hong Kong) Shares Limited (“HK Shares”)

On September 15, 2013, the Company entered into an agreement to acquire HK Shares, a Hong Kong corporation, for 250,000,000 shares of common stock of the Company. Prior to the acquisition, HK Shares was majority owned (approximately 41%) by Mr. Zhou Deng Hua who is the brother of the former CEO of the Company and a director of the Company. On September 23, 2013, the Company issued 250,000,000 shares of common stock to the shareholders of HK Shares in exchange for 250,000,000 shares of HK Shares subscribed at $0.001 per share for a total amount of $250,000. At the completion of the acquisition, HK Shares was merged into the Company.

HK Shares was formed in September 24, 2013 and issued 250,000,000 shares at $0.001 to 24 shareholders for a total of $250,000. The shares subscribed were paid up on October 23, 2015. On the date of the merger acquisition HK Shares had no operations other than the subscription receivable; and accordingly, the transaction was accounted for as an acquisition from related party.

The Company valued the 250,000,000 shares of common stock issued at $250,000 as there was no market for the Company’s common stock and it has limited or no trading; and there is thought to be minimal value in the Company at the time, therefore the par value is thought to match the assumed market price of the Company’s common stock which is at $0.001 per share.

Acquisition of Luck Sky (Hong Kong) Aerodynamic Electricity Limited (“Luck SkyHK”)

In order to comply with the PRC laws, rules and regulations that restrict foreign ownership of PRC companies, the management of the Company has made the following arrangement to go public in the United States of America (the “Going Public Arrangement”). On May 30, 2014, the Company entered into the Stock Purchase.

Agreement with Zhou Jian, the sole shareholder of Luck Sky HK, a Hong Kong corporation, pursuant to which it purchased 100% of the issued and outstanding shares of common stock of Luck Sky HK. The Company paid Zhou Jian a purchase price in the amount of HKD $10,000.00 (approximately USD$1,289.98) in cash which is equal to amount of its registered capital. Zhou Jian, a director of the Company, is also the son of the former CEO of the Company, and a nephew of Mr. Zhou Deng Hua (a director and shareholder of the Company), as a result, the acquisition was accounted for as an acquisition from an entity under common control and the asset was recorded at Luck Sky HK’s historical cost.

Luck Sky HK and Luck Sky Shen Zhen, a wholly owned subsidiary of Luck Sky HK, had no operating business, no liabilities and nominal assets as of the date of the acquisition. As a result of the acquisition, Luck Sky HK became our wholly owned subsidiary and Luck Sky Shen Zhen became our indirect subsidiary through Luck Sky HK.

Acquisition of Sanhe City Lucksky Electrical Engineering Co., Ltd. (“Sanhe”)

As part of the Going Public Arrangement, on July 25, 2014, Luck Sky Shen Zhen, the Company’s indirectly wholly-owned subsidiary, Sanhe City Lucksky Electrical Engineering Co., Ltd. (“Sanhe”), a corporation incorporated under the laws of the PRC; Mr. Zhou Jian and Mr. Zhou Deng Rong, the owners of 97% and 3%, respectively, of Sanhe; entered into a series of agreements known as VIE Agreements pursuant to which Sanhe became Luck Sky Shen Zhen’s affiliate through contractual control. The purpose and effect of the VIE Agreements is to provide Luck Sky Shen Zhen with all of the management, control and net profits of Sanhe.

F-17


Simultaneously, the Company entered into a common stock purchase agreement with Zhou Jian and Zhou Deng Rong, the owners of 97% and 3%, respectively, of Sanhe, in consideration for the execution of the VIE Agreements and the acquisition of Sanhe. Pursuant to such common stock purchase agreement, the Company issued Zhou Jian and Zhou Deng Rong 264,850,740 and 8,191,260 shares, respectively, of our common stock, representing a total of 46.2% of the our issued and outstanding shares of common stock.

NOTE 4 – INVENTORIES

Inventories consist of the following:

  July 31,  July 31,  July 31, 
  2016  2015  2014 
Raw materials$ 1,151,708 $365,248 $ 115,839 
Accessory parts 929,145  848,887  635,708 
Work in process -  249,721  391,179 
Total$ 2,080,853 $ 1,463,856 $1,142,726 

NOTE 5 - PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

  July 31,  July 31,  July 31, 
  2016  2015  2014 
Machinery equipment$ 4,951,227 $ 5,275,080  3,997,506   
Computer and office equipment 53,933  56,558  59,316 
Vehicle 69,339  74,111  38,558 
Property under capital lease -  2,759,547  2,756,573 
Total property, plant and equipment 5,074,499  8,165,296  6,851,953 
Less: accumulated depreciation (553,764 ) (485,973)   (72,697)
Total$ 4,520,735 $ 7,679,323  6,779,256   

Total depreciation expenses for the years ended July 31, 2016, 2015 and 2014 were $266,773, $414,623 and $74,053, respectively. Depreciation relating to Contract work in progress for the years ended July 31, 2016, 2015 and 2014 were $201,666, $252,473 and $38,241, respectively, and depreciation relating to general and administrative expenses for the years ended July 31, 2016, 2015 and 2014 were $65,107, $162,150 and $35,812, respectively.

On August 1, 2015, the Company terminated the finance leasing with Sanhe Dong Yi Glass Machine Company Limited. The factory and office were returned to the lessor. The assets were no longer recorded as fixed assets, which lead to the decrease of Property, plant and equipment. The Company recognized $128,379 gain due to this termination.

NOTE 6 – BILLINGS IN EXCESS OF COSTS

Billings in excess of costs consist of the following:

 July 31, 2016  July 31, 2015  July 31, 2014 
Costs incurred on uncompleted contracts$ 853,787 $2,033,840 $7,863,873 
          
Billings to date (143,135) (5,523,616) (11,710,958)
          
 $ 710,652 $ (3,489,776)$ (3,847,085)
          
Included in the accompanying balance sheets as follows:         
Costs in excess of billings on uncompleted contracts$ 710,652 $ - $ - 
Billings on uncompleted contracts in excess of costs -  (3,489,776) (3,847,085)
          
 $ 710,652 $ (3,489,776)$ (3,847,085)

F-18


NOTE 7 - RELATED PARTY TRANSACTIONS

Since inception, Sanhe rented an office from Sanhe Dong Yi Glass Machine Company Limited (“Sanhe Dong Yi”), a Company owned by Zhou Deng Rong, our former general manager and former majority shareholder of the Company. The rental period was from June 15, 2013 to June 14, 2014, and the full rent amount of $3,965 (RMB 12,000) was paid in advance. The Company also paid $1,487 (RMB 9,000) to Sanhe Dong Yi to purchase several articles of furniture and computer equipment for its operation purpose in September 2014.

On July 25, 2014, Luck Sky Shen Zhen obtained an exclusive, worldwide, royalty free license from Zhou Deng Rong and Zhou Jian (his son) and a second exclusive, worldwide royalty free license from LuckSky Group to an aggregate of 48 Chinese patents and related know how and trade secrets, including the technology underlying 13 patent applications (the “Technology”). The Technology represents all of the patents, patent applications and related know how and trade secrets owned by the licensors with respect to PV installations and the air energy storage power generation technology as applied to commercial and residential buildings, but not wind towers. On July 25, 2014, Luck Sky Shen Zhen granted Sanhe an exclusive sublicense with respect to the use of the Technology for commercial and residential buildings, but not for other uses, including wind towers, vehicles and trains, which sublicense also provides for a royalty payment to Luck Sky Shen Zhen equal of five percent of Sanhe’s revenues.

Sanhe leases its principal office, factory and dormitory from LuckSky Group in Sanhe City, Hebei Province. LuckSky Group is owned by Zhou Deng Rong, our former CEO and Zhou Jian, our General Manager and Chairman of the Board. The space in the office, factory and dormitory being leased are 1296, 5160 and 1200 square meters, respectively. The office and factory space are leased for a rent of $105,053 (RMB 697,248) per year and the dormitory is leased for a rent of $19,527 (RMB 129,600) per year. The leases expire in April 30, 2024 and are subject to renewal with a prior two-month written notice. LuckSky Group is in the process of obtaining the land use approval and ownership certificate of the leased building.

On April 28, 2012, Zhou Jian obtained the right of usage of 44.3 acres agricultural land where our principal office, factory and dormitory are located for 18 years and 8 months, starting May 1, 2012. The annual price paid for such usage rights is $5,200 (RMB 34,510). On May 1, 2012, Zhou Jian signed a commitment letter that allowed Xiangtian Kelitai, Yanjiao Branch, a division of LuckSky Group to use this agricultural land. LuckSky Group constructed the buildings on such agricultural land. In the event we are unable to use our principal factory and office space as a result of this usage issue, the lease provides that LuckSky Group will use every effort to complete and perfect the ownership and usage rights, or provide Sanhe with equivalent space.

On July 25, 2014, prior to the Acquisition, Sanhe and LuckSky Shen Zhen and Sanhe’s shareholders entered into a series of VIE Agreements, pursuant to which Sanhe became LuckSky Shen Zhen’s contractually controlled affiliate. The VIE Agreements include the Framework Agreement on Business Cooperation, the Exclusive Management, Consulting and Training and Technical Services Agreement, the Exclusive Option Agreement, the Equity Pledge Agreement, the Know-How Sub-License Agreement and the Power-of-Attorney. The purpose and effect of the VIE Agreements is to provide LuckSky Shen Zhen (the Company’s indirect wholly-owned subsidiary) with all of the management and control of Sanhe and all of its net income. While LuckSky Shen Zhen does not actually own at present any of the equity and shares in Sanhe, the purpose and effect of the VIE Agreements is to instill in LuckSky Shen Zhen total management and voting control of Sanhe for all material purposes. The use of VIE agreements is a common structure used to acquire PRC corporations, particularly in certain industries in which foreign investment is restricted or forbidden by the PRC government.

F-19


On July 25, 2014, the Company entered into the Stock Purchase Agreement with Zhou Jian and Zhou Deng Rong, the owners of 97% and 3%, respectively, of Sanhe. The Company agreed to issue to Zhou Jian and Zhou Deng Rong 264,850,740 and 8,191,260 shares, respectively, of the Company’s common stock, representing 51.4% of the issued and outstanding shares of common stock.

Construction Project

On April 25, 2014, Sanhe entered into a construction project agreement with Xianning Lucksky Aerodynamic Electricity Ltd (“Xianning Lucksky”). Prior to April 10, 2014, Xianning Lucksky was majorly (70%) owned by Zhou Deng Rong, former majority shareholder and former CEO of the Company, and former general manager of Sanhe; where he has significant influence over Xianning Lucksky. As of July 31, 2016, the project was completed and $8,705,527 of revenue and $7,752,526 of cost of sales were recognized.

Due from related parties

On April 25, 2015, Sanhe entered into a loan agreement with Xiangtian Kelitai, Yanjiao Branch, a division of LuckSky Group, which is owned by Zhou Deng Rong, former CEO and Sanhe’s former general manager and former majority shareholder of the Company, with a total amount of $507,917 (RMB3,150,000). The loan is unsecured and matures on December 31, 2015. If the loan is not fully repaid on the maturity date, Sanhe will be entitled to receive an interest at 5% per annum. As of July 31, 2016 and July 31, 2015, the outstanding principal on the loan was $0 and $32,208. On November 27, 2015, the Company lent another short-term capital loan for $15,209 to Xiangtian Kelitai without a contract. The loan is unsecured and bears no interest. This loan was repaid on March 8, 2016.

Sanhe has been working on a construction project for Xiangtian Kelitai where Sanhe was promised to be reimbursed for the cost of the project. The accumulated cost on the construction project was $579,671 as of July 31, 2015. As of July 31, 2016, the project was completed and $811,197 of revenue and $730,141 of cost of sales were recognized.

Due to related parties.

Prior to the incorporation of Sanhe, Kelitai Air Powered Machinery Co., Ltd. (“Kelitai”), a subsidiary of LuckSky Group, an entity owned by Zhou Deng Rong, former general manager and former majority shareholder of the Company, executed various purchase agreements (the “Agreements”) with Beijing Hengruier Machinery Company Limited (“Hengruier”) and made certain prepayments on behalf of the Company. On July 15, 2013, Kelitai, Hengruier and the Company executed a tripartite agreement to transfer the rights and obligations of the Agreements to the Company. The outstanding amounts due to related parties were $0, $0 and $1,242,198 (RMB 7,722,000) as of July 31, 2016, 2015 and 2014, respectively. These amounts were unsecured, non-interest bearing, and due on demand.

In May 2014, Sanhe entered into an agreement with Kelitai, to purchase some of Keizai’s fixed assets for the use in its own production. The total amount for the fixed assets and inventory was $1,261,872 (RMB 7,844,300) and Sanhe paid $47,265 (RMB 162,900) for equipment and $21,000 (RMB 130,919) for inventory. The outstanding amount due to related party – Kelitai – were $0, $0 and $1,235,667 (RMB 7,681,400) as of July 31, 2016, 2015 and 2014. The amount was unsecured, non-interest bearing, and due on demand.

Sanhe leases its principal office, factory and dormitory from LuckSky Group in Sanhe City, Hebei Province. LuckSky Group is owned by Zhou Deng Rong, our former CEO and Zhou Jian, our General Manager and Chairman of the Board. The space in the office, factory and dormitory being leased are 1296, 5160 and 1200 square meters, respectively. The office and factory space are leased for a rent of $105,053 (RMB 697,248) per year and the dormitory is leased for a rent of $19,527 (RMB 129,600) per year. The leases expire in April 30, 2024 and are subject to renewal with a prior two-month written notice. LuckSky Group is in the process of obtaining the land use approval and ownership certificate of the leased building. As of July 31, 2016, 2015 and 2014, the lease payables to LuckSky Group were $280,304, $166,443 and $33,253, respectively.

F-19


Until August 1, 2015, Sanhe leased a second factory and office in Sanhe City from Sanhe Dong Yi Glass Machine Company Limited, which is owned by Zhou Deng Rong. A portion of this facility was used by Sanhe to demonstrate its products but the facility was primarily intended as a backup to the first facility in Sanhe City and/or for expansion. The factory and office are 4,748.96 square meters. The rent paid by Sanhe for the factory and the office was RMB1, 306,500 per year. As of July 31, 2016, 2015 and 2014, the lease payables to Sanhe Dong Yi Glass Machine Company Limited were $246,060, $262,996 and $52,542, respectively. On August 1, 2015, the two parties terminated the finance lease. As the Company no longer needs the factory and office, the assets were returned to the lessor effective August 1, 2015.

From time to time, Mr. Zhou Deng Rong prepaid some expenses for the company. As of July 31, 2016, 2015 and 2014, amounts due to related parties were as follows:

  July 31, 2016  July 31, 2015  July 31, 2014 
Rental fees:         
LuckSky Group 280,304  166,443  33,253 
Sanhe Dong Yi (Capital lease payable)$ 246,060 $ 262,996 $ 52,542 
          
Purchase Fixed assets:         
Kelitai -  -  1,235,667 
          
Borrowings:         
LuckSky Group -  -  1,242,198 
Sanhe Dong Yi -  -  160,865 
          
Prepaid expenses on behalf of the company:         
Kelitai -  -  1,510 
Zhou Deng Rong 1,190,370  627,129  354,112 
          
Total$ 1,716,734 $ 1,056,568 $ 3,080,147 

Due to Shareholders

Since inception to April 2014, the Company’s shareholder has paid several employees’ salaries on behalf of the Company. On June 30, 2016, the shareholder announced to abandon his claim. As of July 31, 2016, 2015 and 2014, the amount due to shareholders was $0, $18,934 and $18,934, respectively.

Due to Directors

From time to time, the Company receives advances from its directors. As of July 31, 2016, 2015 and 2014, the Company received $414,876, $417,770 and $430,928, respectively. The Company used the funds for its operations. These advances are due on demand, unsecured and non-interest bearing.

NOTE 8 GOVERNMENT CONTRIBUTION PLAN

The Company participates in a government-mandated multi-employer defined contribution plan pursuant to which certain retirement, medical and other welfare benefits are provided to employees. Chinese labor regulations require the Company to pay to the local labor bureau a monthly contribution at a stated contribution rate based on the monthly basic compensation of qualified employees. The relevant local labor bureau is responsible for meeting all retirement benefit obligations; the Company has no further commitments beyond its monthly contribution.

The outstanding amount was $92,134, $62,846 and $22,098 for the year ended July 31, 2016, 2015 and 20145, respectively.

F-20


NOTE 9. STATUTORY RESERVE

Pursuant to the laws applicable to the PRC, PRC entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10% of after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC ("PRC GAAP") at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations should be made to the “reserve fund”. For foreign invested enterprises, the annual appropriation for the “reserve fund” cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC GAAP at each year-end). If the Company has accumulated loss from prior periods, the Company is able to use the current period net income after tax to offset against the accumulate loss.

NOTE 10 - CAPITAL STOCK AND EQUITY TRANSACTIONS

Common Stock

The total number of common shares authorized that may be issued by the Company is 1,000,000,000 shares with a par value of $0.001 per share.

During the period ended July 31, 2009, the Company issued 5,000,000 shares of common stock for total cash proceeds of $25,000 to the Company’s sole director and officer. During the year ended July 31, 2010, the Company sold 3,000,000 shares of common stock for total cash proceeds of $30,000.

On September 23, 2013, the Company issued 250,000,000 shares of common stock to the shareholders of HK shares, in exchange of 250,000,000 shares of HK shares.

On September 23, 2013, the Company issued a total of 67,000,000 shares of restricted common stock at $0.001 per share, such that 60,000,000 shares were issued to Mr. Roy Thomas Phillips, who was then a consultant to the Company and later served as the acting CFO of the Company beginning July 29, 2014, and 7,000,000 shares were issued to two other non-related parties. The shares were issued in contemplation of a secondary offering. The Company takes the position that these shares should be cancelled since no secondary offering was consummated. The Company is taking steps to have these shares canceled. The Company valued the 67,000,000 shares of common stock issued at $67,000 as there was no market for the Company’s common stock and it has limited or no trading; and there is thought to be minimal value in the Company at the time of issuance, therefore the par value is thought to match the assumed market price of the Company’s common stock which is at $0.001 per share. On July 24, 2015, 7,000,000 shares issued to two other non-related parties were cancelled.

On July 25, 2014, we entered into the Stock Purchase Agreement in connection with the acquisition of Sanhe with Zhou Jian and Zhou Deng Rong, the owners of 97% and 3%, respectively, of Sanhe. We agreed to issue to Zhou Jian and Zhou Deng Rong 264,850,740 and 8,191,260 shares, respectively, of our common stock, representing 51.4% of the our issued and outstanding shares of common stock.

Preferred Stock

The total number of preferred shares authorized that may be issued by the Company is 100,000,000 shares with a par value of $0.001 per share. The preferred stock may be issued in one or more series, from time to time, with each series to have such designation, relative rights, preference or limitations, as adopted by the Company’s Board of Directors. No preferred shares have been limitedissued.

F-21


NOTE 11 - INCOME TAXES

United States

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The cumulative tax effect at the expected rate of 34% of significant items comprising the net deferred tax amount is at July 31, 2016, 2015 and 2014 as follows:

  2016  2015  2014 
Deferred tax assets:         
Net operating losses$ 228,278 $ 78,278 $ 170,552 
          
Total deferred tax assets 228,278  78,278  170,552 
Less: valuation allowance (228,278) (78,278) (170,552)
          
Deferred tax assets, net$ - $ - $ - 

As of July 31, 2016, for U.S. federal income tax reporting purposes, the Company has approximately $1,403,259 of unused net operating losses (“NOLs”) available for carry forward to capital formation, organization and developmentfuture years. The benefit from the carry forward of such NOLs will begin expiring during the year ended July 31, 2029. Because United States tax laws limit the time during which NOL carry forwards may be applied against future taxable income, the Company may be unable to take full advantage of its business plan.NOLs for federal income tax purposes should the Company generate taxable income. Further, the benefit from utilization of NOL carry forwards could be subject to limitations due to material ownership changes that could occur in the Company as it continues to raise additional capital. Based on such limitations, the Company has significant NOLs for which realization of tax benefits is uncertain.

F-22


Hong Kong

The Company’s subsidiaries established in HKSAR are subject to Hong Kong Profits Tax. However, these subsidiaries did not earn any income derived in Hong Kong from its date of incorporation to July 31, 2016, and therefore were not subject to Hong Kong Profits Tax.

PRC

The Company’s subsidiaries established in PRC are subject to income tax rate of 25%.

1)

Luck Sky Shenzhen

For the years ended July 31, 2016, 2015 and 2014, Luck Sky Shenzhen had $432,088 and $963,727 in net income before tax and $6,283 in net operating loss, respectively. Income tax expense were$108,022 and $239,383 income tax expenses were 2016 and 2015, respectively.

2)

Sanhe

For the year ended July 31, 2016, Sanhe had $145,136 net loss before tax. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The cumulative tax effect at the expected rate of 25% of significant items comprising the net deferred tax amount is at July 31, 2016, 2015 and 2014 as follows:

  2016  2015  2014 
Deferred tax assets:         
Net operating losses$ - $ - $ 111,844 
          
Total deferred tax assets -  -  111,844 
Less: valuation allowance -  -  - 
          
Deferred tax assets, net$ - $ - $ 111,844 
          
Deferred tax liabilities:         
Timing differences of revenue recognition$ 107,609 $ 83,101 $ - 
          
Total deferred tax liabilities 107,609  83,101  - 

Significant components of income tax expense for the years ended July 31, 2016, 2015 and 2014 are as follows

  For the  For the  For the 
  year  year  year 
  ended  ended  ended 
  July 31,  July 31,  July 31, 
  2016  2015  2014 
Current tax expense$ 196,099 $ 833,452 $ - 
Deferred tax expense 30,583  83,388  - 
Benefits of operating loss carryforwards -  -  (113,932)
Tax expense (benefit)$ 226,682 $ 916,840 $ (113,932)

Reconciliation of Effective Income Tax Rate

F-23



        For the 
  For the year  For the year  year 
  ended  ended  ended 
  July 31,  July 31,  July 31, 
  2016  2015  2014 
Statutory U.S. tax rate 34.00%  34.00%  34.00% 
PRC Statutory Tax Rate 25.00%  25.00%  25.00% 
HK Statutory Tax Rate 15.00%  15.00%  15.00% 
Less: Valuation Allowance (92.85%) (45.44%) (59.67%)
Nondeductible/nontaxable items (40.57%) 29.40%  - 
Tax expense (benefit) (59.42%) 57.96%  14.33% 

Reconciliation of Effective Income Tax Expense

        For the 
  For the year  For the year  year 
  ended  ended  ended 
  July 31,  July 31,  July 31, 
  2016  2015  2014 
Statutory U.S. tax rate$ (228,278)$ (78,278$ (170,552)
PRC Statutory Tax Rate 71,923  451,874  (113,932)
HK Statutory Tax Rate (185) (252) (675)
Less: Valuation Allowance 228,463  464,966  171,227 
Nondeductible/nontaxable items 154,759  75,530  - 
Tax expense (benefit)$ 226,682 $916,840  $ (113,932

NOTE 12. COMMITMENTS, CONTINGENCIES, RISKS AND UNCERTAINTIES

Capital Commitments

The Company purchased property, plant and equipment which the payment was due within one year. As of July 31, 2016, 2015 and 2014, the Company has a capital commitment of $9,247,569, $17,697,627 and $27,777,872, respectively.

Operation Commitments

The total future minimum lease payments under the non-cancellable operating lease with respect to the office and the dormitory as of July 31, 2016 are payable as follows:

Year ending July 31, 2017124,580
Year ending July 31, 2018124,580
Year ending July 31, 2019124,580
Year ending July 31, 2020124,580
After 2020467,174
Total$ 965,494

Rental expense of the Company for the year ended July 31, 2016, 2015 and 2014 were $127,835, $344,736 and $89,760, respectively.

F-24


Credit risk

Cash deposits with banks are held in financial institutions in China, which are not federally insured deposit protection. Accordingly, the Company has a concentration of credit risk related to these uninsured bank deposits. The Company has not commenced operations.experienced any losses in such accounts and believes it is not exposed to significant credit risk in this area.

TheseContingencies

On September 23, 2013, the Company issued 60,000,000 shares of restricted common stock at $0.001 per share to Mr. Roy Thomas Phillips, who was then a consultant to the Company and later served as the acting CFO of the Company beginning July 29, 2014, and two other non-related parties, obtained a total of 7,000,000 shares of restricted common stock. The shares were issued in contemplation of a secondary offering. The Company takes the position that these shares should be cancelled since no secondary offering was consummated. The Company is taking steps to have these shares canceled. The Company valued the 67,000,000 shares of common stock issued at $67,000 as there was no market for the Company’s common stock and it has limited or no trading; and there is thought to be minimal value in the Company at the time of issuance, therefore the par value is thought to match the assumed market price of the Company’s common stock which is at $0.001 per share. The issuance of these securities could result in further dilution to the Company’s stockholders which effects the earnings (loss) per share amount of the Company. The Company might incur additional expenses to have these shares canceled. On July 24, 2015, 7,000,000 shares issued to two other non-related parties were cancelled. For the year ended July 31, 2016, the dilutive effect of not canceling the 60,000,000 shares is incorporated in the consolidated financial statements as the Company recorded such shares as issued and outstanding. The loss per share remained $0.00 with the dilutive effect of not canceling such shares. If the shares are not voluntarily returned for cancellation, the Company will need to commence litigation in Delaware to obtain a judgment to cancel the shares for lack of consideration. At this time, the Company is unable to estimate the cost such litigation if it takes place.

NOTE 13. QUARTERLY DATA (UNAUDITED)

   First  Second  Third  Fourth  Year 
2016  Quarter  Quarter  Quarter  Quarter  2016 
Revenue $ 66,610 $ 2,510 $ 8,940,206 $ 1,830,629 $ 10,839,955 
Cost of sales  62,015  1,528  7,957,023  1,622,237  9,642,803 
Net income (loss) after taxes  (212,343) (225,991) 278,719  (448,569) (608,184)
Net earnings (loss) per common share – basic and diluted  (0.00) (0.00) (0.00) (0.00) (0.00)

   First  Second  Third  Fourth  Year 
2015  Quarter  Quarter  Quarter  Quarter  2015 
Revenue $ - $ - $ 1,133,522 $ 19,638,506 $ 20,772,028 
Cost of sales  -  -  938,674  16,842,337  17,781,011 
Net income (loss) after taxes  (304,418) (362,275) (24,206) 1,348,359  657,460 
Net earnings (loss) per common share – basic and diluted  (0.00) (0.00) (0.00) 0.00  0.00 

Gross profit is calculated as revenue minus cost of sales.

F-25


Xiangtian (USA) Air Power Co., Ltd.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2017

Table of Contents

Page
Condensed Consolidated Balance Sheets as of April 30, 2017 (Unaudited) and July 31, 2016F-27
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended April 30, 2017 and 2016 (Unaudited)F-28
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended April 30, 2017 and 2016 (Unaudited)F-29
Notes to Condensed Consolidated Financial Statements (Unaudited)F-30 - F-44

F-26


PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Xiangtian (USA) Air Power Co., Ltd.
Consolidated Balance Sheets
(Stated in US Dollars)

  April 30,  July 31, 
  2017  2016 
  (Unaudited)    
ASSETS      
Current assets      
Cash and cash equivalence$ 191,279 $ 1,226,220 
Accounts receivable 1,552,477  2,848,904 
Other receivables 15,877  491,290 
Advances to suppliers 3,539,296  4,594,299 
Due from related parties 72,569  - 
Due from director 145,138  - 
Inventory 3,291,950  2,080,853 
Costs in excess of billings 1,172,900  710,652 
Other current asset 507,539  126,395 
Total current assets$ 10,489,025 $ 12,078,613 
       
Non-current assets      
   Property, plant and equipment, net$ 4,290,367 $ 4,520,735 
   Deposit for property, plant and equipment 2,030,312  178,617 
Total non-current assets 6,320,679  4,699,352 
       
Total assets$ 16,809,704 $ 16,777,965 
       
LIABILITIES AND STOCKHOLDERS’ EQUITY      
       
LIABILITIES      
Current liabilities      
Accounts payable and accrued liabilities$ 5,176,910 $ 4,851,630 
Due to director 415,652  414,876 
Due to shareholder 84,180  - 
Due to related parties 2,333,015  1,716,734 
Advance from customers 117,126  620,814 
Deferred tax liabilities 16,437  107,609 
Other payables 293,281  234,791 
Income tax payable 415,633  329,177 
Net Advance billings 897,191  - 
Total current liabilities 9,749,425  8,275,631 
       
Total liabilities$ 9,749,425 $ 8,275,631 
      
Commitments and contingencies      
STOCKHOLDERS’ EQUITY      
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued and outstanding -  - 
Common stock: $0.001 par value, 1,000,000,000 shares authorized, 591,042,000 shares issued and outstanding 591,042  591,042 
Additional paid-in capital 9,718,175  9,713,675 
Subscription receivable (310,000) (310,000)
Accumulated deficit (1,893,532) (812,935)
Accumulated other comprehensive loss (1,045,406) (679,448)
Total stockholders’ equity 7,060,279  8,502,334 
Total liabilities and stockholders’ equity$ 16,809,704 $ 16,777,965 

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

F-27


Xiangtian (USA) Air Power Co., Ltd.
Consolidated Statement of Operations and Comprehensive Loss
(Stated in US Dollars)
(Unaudited)

  For the  For the  For the  For the 
  Three  Three  Nine  Nine 
  Months  Months  Months  Months 
  Ended  Ended  Ended  Ended 
  April 30,  April 30,  April 30,  April 30, 
  2017  2016  2017  2016 
Revenue 3,276,810  8,940,206  4,329,466  9,009,326 
             
Cost of sales$ 2,765,087 $ 7,957,023 $ 3,670,799  8,020,566 
             
Gross profit$ 511,723 $ 983,183 $ 658,667  988,760 
             
Operating expenses:            
Selling expenses 5,337  6,668  23,527  16,015 
General and administrative expenses 544,865  401,734  1,712,892  1,027,521 
Total operating expenses 550,202  408,402  1,736,419  1,043,536 
             
(Loss) gain from operations (38,479) 574,781  (1,077,752) (54,776)
Other (expenses) income            
Interest income 116  136  1,154  136 
Other expenses -  -  (53) - 
Non-operating income (expense) 1,079  (767) 7,496  135,296 
Exchange gain (loss) -  8  -  (17,910)
    Total other income (expenses), net 1,195  (623) 8,597  117,522 
             
                 Net (loss) income beforetaxes$ (37,284) 574,158  (1,069,155) 62,746 
             
Income tax expenses (71,372) (295,439) (11,442) (222,361)
             
                 Net (loss) income aftertaxes$ (108,656) 278,719  (1,080,597) (159,615)
             
Foreign currency translation adjustment (20,679) 151,172  (365,958) (420,880)
             
Comprehensive (loss) income (129,335) 429,891  (1,446,555) (580,495)
             
Net (loss) income per common share – basic and diluted$ (0.00)$ 0.00 $ (0.00) (0.00)
             
Weighted average number of common shares outstanding - basic and diluted 591,042,000  591,042,000  591,042,000  591,042,000 

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

F-28


Xiangtian (USA) Air Power Co., Ltd.
Consolidated Statements of Cash Flows
(Stated in US Dollars)
(Unaudited)

  For the  For the 
  Nine Months  Nine Months 
  Ended  Ended 
  April 30,  April 30, 
  2017  2016 
Cash flows from operating activities:      
Net loss$ (1,080,597)$ (159,615)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:    
Depreciation 214,664  201,090 
Rent contributed by shareholders as paid-in capital 4,500  4,500 
Gain on termination of capital lease -  (129,159)
Changes in operating assets and liabilities:      
Accounts receivable 1,348,286  (1,445,208)
Other receivables 311,056  (164,202)
Prepayment 1,127,376  805,207 
Inventory (1,788,872) 2,233,930 
Due from related party -  (117,041)
Other current asset (383,728) 606,446 
Accounts payable and accrued liabilities 267,203  2,745,623 
Other payables and tax payables 139,164  341,447 
Advance billings on contracts 517,312  (5,668,290)
Deferred tax liability (93,601) (83,388)
Net cash provided by (used in) operating activities 582,763  (828,660)
       
Cash flows from investing activities:      
Purchase of property and equipment (1,887,453) (98,250)
Repayment of loan made to related parties -  31,053 
Repayment of loan made to third parties 176,105  - 
Net cash used in investing activities (1,711,348) (67,197)
       
Cash flows from financing activities:      
Advances from related parties 611,281  392,061 
Advances from director 1,799  1,327 
Loan made to director (146,754) - 
Advances from shareholders 85,118  250,000 
Net cash provided by financing activities 551,444  643,388 
       
Effect of exchange rate change on cash (457,800) (205,007)
       
Net change in cash and cash equivalents (1,034,941) (457,476)
       
Cash and cash equivalents - beginning of period 1,226,220  502,029 
       
Cash and cash equivalents - end of period$ 191,279 $ 44,553 

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

F-29


Xiangtian (USA) Air Power Co., Ltd.
Notes to Consolidated Financial Statements
(Unaudited)

NOTE 1 - NATURE OF OPERATIONS

Xiangtian (USA) Air Power Co., Ltd. (the “Company”) was incorporated in the State of Delaware on September 2, 2008 as Goa Sweet Tours Ltd. The Company was originally formed to provide personalized concierge tour packages to tourists who visit the State of Goa, India. On April 17, 2012, the Company entered into Share Purchase Agreements, by and among, Luck Sky International Investment Holdings Limited (“Luck Sky”), an entity owned and controlled by Zhou Deng Rong, and certain of our former stockholders who owned, in the aggregate, 7,200,000 shares of the Company’s common stock (90% of the then outstanding shares). Luck Sky purchased all 7,200,000 shares for an aggregate of $235,000. The sale was completed on May 15, 2012.

On May 25, 2012, the Company formed a corporation under the laws of the State of Delaware called Xiangtian (USA) Air Power Co., Ltd. ("Merger Sub") and on the same day, acquired one hundred shares of Merger Sub's common stock for cash. As such, Merger Sub became a wholly-owned subsidiary of the Company.

Effective as of May 29, 2012, Merger Sub was merged with and into the Company. As a result of the merger, the Company’s name was changed to “Xiangtian (USA) Air Power Co., Ltd.”. Prior to the merger, Merger Sub had no liabilities and nominal assets and, as a result of the merger, the separate existence of the Merger Sub ceased. The Company was the surviving corporation in the merger and, except for the name change provided for in the Agreement and Plan of Merger, there was no change in the directors, officers, capital structure or business of the Company.

Merger with LuckSky (Hong Kong) Shares Limited

On September 5, 2013, the Company entered into a business combination by means of merger of LuckSky (Hong Kong) Shares Limited (“HK Shares”), a Hong Kong corporation, for 250,000,000 shares of common stock of the Company. Prior to the merger, HK Shares had no liabilities and nominal assets. On September 23, 2013, the Company issued 250,000,000 shares of common stock to the shareholders of HK Shares. Effectively on September 24, 2013, the shareholders of HK Shares accepted the shares from the Company and surrendered its control of HK Shares to the Company in exchange of 250,000,000 shares of HK Shares to be issued to its shareholders. On October 16, 2013, HK Shares completed the issuance of its 250,000,000 shares accordingly. Management cancelled HK Shares in October 2014.

Acquisition of Sanhe City Lucksky Electrical Engineering Co., Ltd.

On July 25, 2014, Luck Sky (Shen Zhen) Aerodynamic Electricity Limited (“Luck Sky Shen Zhen”), a corporation incorporated under the laws of the People Republic of China (“PRC”), an indirect wholly-owned subsidiary; Sanhe City Lucksky Electrical Engineering Co., Ltd. (“Sanhe”), a corporation incorporated under the laws of the PRC; and Mr. Zhou Jian and Mr. Zhou Deng Rong, the owners of 97% and 3%, respectively, of Sanhe; entered into a series of agreements known as variable interest agreements (the “VIE Agreements”) pursuant to which Sanhe became Luck Sky Shen Zhen’s contractually controlled affiliate. The purpose and effect of the VIE Agreements is to provide Luck Sky Shen Zhen (our indirect wholly-owned subsidiary) with all of the management, control and net profits of Sanhe.

Simultaneously, the Company entered into a common stock purchase agreement with Zhou Jian and Zhou Deng Rong, the owners of 97% and 3%, respectively, of Sanhe, in consideration for the execution of the VIE Agreements and the acquisition of Sanhe. Pursuant to the Stock Purchase Agreement, the Company issued Zhou Jian and Zhou Deng Rong 264,850,740 and 8,191,260 shares, respectively, of our common stock, representing 51.4% of our issued and outstanding shares of common stock.

F-30


Reincorporation in Nevada

We reincorporated in Nevada effective October 31, 2016 as a result of a merger of Xiangtian (USA) Air Power Co., Ltd., a Delaware corporation, with its wholly-owned subsidiary, Xiangtian (USA) Air Power Co., Ltd., a Nevada corporation.

NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America. This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. The Company’s consolidated financial statements are expressed in U.S. dollars.

Use of Estimates and Assumptions

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

Interim Financial Statements

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) applicable to interim financial information and the requirements of Form 10-Q and Rule 8-03 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosure required by accounting principles generally accepted in the United States of America for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included. These interim financial statements should be read in conjunction with the audited financial statements for the year ended July 31, 2016, as not all disclosures required by generally accepted accounting principles for annual financial statements are presented. The interim financial statements follow the same accounting policies and methods of computations as the audited financial statements for the year ended July 31, 2016.

These interim financial statements should be read in conjunction with the audited financial statements for the year ended July 31, 2016, as not all disclosures required by generally accepted accounting principles for annual financial statements are presented. The interim financial statements follow the same accounting policies and methods of computations as the audited financial statements for the year ended July 31, 2016.

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported net income or losses.

Principle of Consolidation

The consolidated financial statements include the accounts of the Company, its subsidiaries and VIE for which it is deemed the primary beneficiary. All significant inter-company accounts and transactions have been eliminated in consolidation.

F-31


The Company evaluates the need to consolidate its VIE in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support.

The VIE agreement was not consummated until July 25, 2014, however, the purpose and design of the establishment of VIE, Sanhe, was to consolidate common control under the Company. ASC 810-10-25-38F states that a reporting entity’s involvement in the design of a VIE may indicate that the reporting entity had the opportunity and the incentive to establish arrangements that result in the reporting entity being the variable interest holder with the power to direct the activities that most significantly impact the VIE’s economic performance. As both the Company and the acquired VIE, Sanhe, are under the common control of Zhou Dengrong and Zhou Jian immediately before and after the acquisition, this transaction was accounted for as a merger under common control, using merger accounting as if the merger had been consummated at the beginning of the earliest period presented, and no gain or loss was recognized. All the assets and liabilities of the VIE, Sanhe, are recorded at carrying value. Hence, Sanhe was consolidated under the Company since its inception due to the purpose and design of its establishment.

The following financial statement amounts and balances of the VIE, which is established on August 6, 2014, were included in the accompanying consolidated financial statements as of April 30, 2017 and July 31, 2016 and for the nine months ended April 30, 2017 and 2016, respectively:

  April 30,  July 31, 
  2017  2016 
  (Unaudited)    
Total assets$ 16,523,294 $ 16,566,891 
Total liabilities 9,051,307  7,944,737 

  For the nine  For the nine 
  months  months 
  Ended  ended 
  April 30,  April 30, 
  2017  2016 
  (Unaudited)  (Unaudited) 
Net loss$ 842,907 $ 223,651 

Fair Value Measurements

The Company applies the provisions of ASC Subtopic 820-10, “Fair Value Measurements”, for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

[  ]      Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

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[  ]      Level 2 inputs to the valuation methodology includes quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

[  ]      Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

There were no assets or liabilities measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of April 30, 2017 and July 31, 2016.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Advances to suppliers

Advances to suppliers consist of the prepayment for inventories, including PV panels, storage tanks and other accessory parts.

Inventory

Inventory is stated at the lower of cost or market. Cost is principally determined using the weighted average basis. Construction costs incurred on contracts are included in inventories which consist of raw materials, accessory parts, and contracts work in progress.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation and impairment losses. Gains or losses on dispositions of property and equipment are included in operating income (loss). Major additions, renewals and betterments are capitalized, while maintenance and repairs are expensed as incurred.

Depreciation and amortization are provided over the estimated useful lives of the assets using the straight-line method from the time the assets are placed in service. Estimated useful lives are as follows, taking into account the assets' estimated residual value:

ClassificationEstimated useful life
Machinery equipment5-10 years
Computer and office equipment3 years
Vehicle5 years
Property under capital lease20 years

Revenue Recognition

Sales of power generation system in conjunction of system installation are recognized under accounting for construction-type contracts, based on the nature of the contract using the

Completed-Contract Method.

The reason for selecting completed-contract method is (a) The Company’s contract is duration is less than one year and financial position and results of operations would not vary materially from those resulting from use of the percentage-of completion method. (b) Reasonably dependable estimate cannot be made due to nature of contracts.

F-33


Accordingly, revenue is recognized upon the completion of the construction, provided persuasive evidence of an arrangement exists, title and risk of loss has transferred, the fee is fixed and determinable, and collection is reasonably assured. We provide for any loss that we expect to incur on these contracts when that loss is probable.

Percentage-of Completion Method

For contracts with long duration and it is practical to make reasonable estimate, percentage-of completion method is used. Revenue is recognized based on the percentage of total income. The percentage is based on incurred costs to date bearing to estimate total cost after giving effect to estimates of cost to complete based on most recent information. We provide for any loss that we expect to incur on these contracts when that loss is probable.

Warranty and Returns

The Company generally provides limited warranties for work performed under its contracts. The warranty periods typically extend for a limited duration following substantial completion of the Company's work on a project. At the time a sale is recognized, we record estimated future warranty costs. Such estimated costs for warranties are included in the individual project cost estimates for purposes of accounting for long-term contracts. Generally, the estimated claim rates of warranty are based on actual warranty experience or Company’s best estimate.

No right of return exists on sales of equipment. Replacement part returns are estimable and accrued at the time a sale is recognized.

Value added taxes

The Company is subject to VAT at a rate of 17% on proceeds received from customers, and are entitled to a refund for VAT already paid or borne on the goods purchased by it that have generated the gross sales proceeds. The VAT balance is recorded in other payables on the balance sheets.

Income Taxes

The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the year incurred. No significant penalties or interest relating to income taxes have been incurred during the period from July 8, 2013 (inception) to December 31, 2013. US GAAP also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures and transition.

F-34


Comprehensive Loss

The Company follows the provisions of the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 220 “Reporting Comprehensive Income”, and establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general purpose financial statements.

Foreign Currency Translation

The Company’s functional currency is Chinese Renminbi (“RMB”) as substantially all of the Company’s PRC subsidiaries’ operations use this denomination. The consolidated financial statements are presented in U.S. dollars. Foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Non-monetary assets and liabilities are translated at the exchange rates prevailing at the transaction date. Revenues and expenses are translated at average rates of exchange during the year. Gains or losses resulting from foreign currency transactions are included in results of operations.

For the purpose of presenting these financial statements of subsidiaries in PRC, the Company’s assets and liabilities are expressed in US$ at the exchange rate on the balance sheet date, which is 6.8900 and 6.6371 as of April 30, 2017 and July 31, 2016, respectively; stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rate during the period, which is 6.8141 and 6.4407 for the nine months ended April 30, 2017 and April 30, 2016. The resulting translation adjustments are reported under accumulated other comprehensive income in the stockholder’s equity section of the balance sheets.

For the purpose of presenting these financial statements of subsidiaries in Hong Kong, PRC, the Company’s assets and liabilities are expressed in US$ at the exchange rate on the balance sheet date, which is 7.7779 and 7.7588 as of April 30, 2017 and July 31, 2016, respectively; stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rate during the period, which is 7.7599 and 7.7591 the nine months ended April 30, 2017 and April 30, 2016, respectively. The resulting translation adjustments are reported under accumulated other comprehensive income in the stockholder’s equity section of the balance sheets.

Earnings (Loss) per Share

Basic earnings per share are computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted earnings per share gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Earnings per share excludes all potential dilutive shares of common stock if their effect is anti-dilutive. There were no potential dilutive securities at April 30, 2017 or April 30, 2016.

Recent Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for us in our first quarter of fiscal 2018 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09 (full retrospective method); or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09 (modified retrospective method). We are currently assessing the impact to our consolidated financial statements, and have not yet selected a transition approach.

F-35


In August 2014, the Financial Accounting Standards Board issued ASU No. 2014-15, Presentation of Financial Statements— Going Concern (Subtopic 205-40). This standard is intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern basisand to provide related footnote disclosures. The amendments contained in this ASU apply to all companies and not-for-profit organizations. The amendments are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The Company is currently assessing this ASU’s impact on the Company’s consolidated results of operations and financial condition.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which assumesmodifies existing requirements regarding measuring inventory at the lower of cost or market. Under existing standards, the market amount requires consideration of replacement cost, net realizable value (NRV), and NRV less an approximately normal profit margin. The new ASU replaces market with NRV, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This eliminates the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. The amendments are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The Company is currently assessing this ASU’s impacts on the Company’s consolidated results of operations and financial condition.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): The amendments in this Update apply to all entities, including both business entities and not-for-profit entities that are required to present a statement of cash flows under Topic 230. The amendments in this Update provide guidance on the following eight specific cash flow issues. The amendments are an improvement to GAAP because they provide guidance for each of the eight issues, thereby reducing the current and potential future diversity in practice described above. ASU 2016-15 is effective for the Company for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is still evaluating the effect that this guidance will have on the Company’s consolidated financial statements and related disclosures.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): “Restricted Cash”(“ASU 2016-18”). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This update is effective in fiscal years, including interim periods, beginning after December 15, 2017 and early adoption is permitted. The adoption of this guidance will result in the inclusion of the restricted cash balances within the overall cash balance and removal of the changes in restricted cash activity, which are currently recognized in Other financing activities, on the Statements of Consolidated Cash Flows. Furthermore, an additional reconciliation will be required to reconcile Cash and cash equivalents and restricted cash reported within the Consolidated Balance Sheets to sum to the total shown in the Statements of Consolidated Cash Flows. The Company anticipates adopting this new guidance effective January 1, 2018. The Company is currently evaluating this guidance and the impact it will have on the Consolidated Financial Statements and disclosures.

The Company believes that there were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations.

NOTE 3 - GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming the Company will not be  able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.continue as a going concern. The Company has incurred a losslosses since its inception resulting in an accumulated deficit of $19,525$1,893,532 as at July 31, 2009of April 30, 2017 and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they comebecome due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and/or the private placement of common stock.  

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Basis of Presentation

TheThese consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with generally accepted accounting principles requires managementbe unable to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

Due to the limited level of operations, the Company has not had to make material assumptions or estimates other than the assumption that the Company iscontinue as a going concern.


F-36


The Company expects to finance operations primarily through cash flow from revenue and capital contributions from principal shareholders. In the event that we require additional funding to finance the growth of the Company’s current and expected future operations as well as to achieve our strategic objectives, our principal shareholders have indicated the intent and ability to provide additional equity financing.

CashThese conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent on our ability to meet obligations as they become due and Cash Equivalentsto obtain additional equity or alternative financing required to fund operations until sufficient sources of recurring revenues can be generated. There can be no assurance that the Company will be successful in its plans described above or in attracting equity or alternative financing on acceptable terms, or if at all. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 4 – ADVANCES TO SUPPLIERS

Advances to suppliers consist of the following:

  April 30,  July 31, 
  2017  2016 
  (Unaudited)    
Advances to suppliers$ 3,539,296 $ 4,594,299 

NOTE 5 – INVENTORIES

Inventories consist of the following:

  April 30,  July 31, 
  2017  2016 
  (Unaudited)    
Raw materials$ 2,266,001 $ 1,151,708 
Accessory parts 767,021  929,145 
Contracts work in progress 258,928  - 
Total$ 3,291,950 $ 2,080,853 

NOTE 6 - PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

  April 30,  July 31, 
  2017  2016 
  (Unaudited)    
Machinery equipment$ 4,903,364 $ 4,951,227 
Computer and office equipment 65,948  53,933 
Vehicle 66,793  69,339 
Total property, plant and equipment 5,036,105  5,074,499 
Less: accumulated depreciation (745,738) (553,764)
Total$ 4,290,367 $ 4,520,735 

F-37


Total depreciation expenses for the nine months ended April 30, 2017 and 2016 were $214,664 and $201,090, respectively. Depreciation relating to Contract work in progress for the nine months ended April 30, 2017 and 2016 were $15,685 and $182,565, respectively, and depreciation relating to general and administrative expenses for the nine months ended April 30, 2017 and 2016 were $198,979 and $18,525, respectively.

NOTE 7 – BILLINGS IN EXCESS OF COSTS

Billings in excess of costs consist of the following:

  April 30,  July 31, 
  2017  2016 
  (Unaudited)    
Costs incurred on uncompleted contracts$ 1,444,069 $ 853,787 
       
Billings to date (1,168,360) (143,135)
       
 $ 275,709 $ 710,652 
       
Included in the accompanying balance sheets as follows:      
Costs in excess of billings on uncompleted contracts$ 1,172,900 $ 710,652 
Billings on uncompleted contracts in excess of costs (897,191) - 
       
 $ 275,709 $ 710,652 

NOTE 8 - RELATED PARTY TRANSACTIONS

On July 25, 2014, Luck Sky Shen Zhen obtained an exclusive, worldwide, royalty free license from Zhou Deng Rong and Zhou Jian (his son) and a second exclusive, worldwide royalty free license from LuckSky Group to an aggregate of 48 Chinese patents and related know how and trade secrets, including the technology underlying 13 patent applications (the “Technology”). The Technology represents all of the patents, patent applications and related know how and trade secrets owned by the licensors with respect to PV installations and the air energy storage power generation technology as applied to commercial and residential buildings, but not wind towers. On July 25, 2014, Luck Sky Shen Zhen granted Sanhe an exclusive sublicense with respect to the use of the Technology for commercial and residential buildings, but not for other uses, including wind towers, vehicles and trains, which sublicense also provides for a royalty payment to Luck Sky Shen Zhen equal of five percent of Sanhe’s revenues.

Construction Project

On April 25, 2014, Sanhe entered into a construction project agreement with Xianning Lucksky Aerodynamic Electricity Ltd (“Xianning Lucksky”). As of July 31, 2016, the project was completed and $8,705,527 of revenue and $7,752,526 of cost of sales were recognized.

On July 26, 2016, Sanhe entered into a construction project agreement of 3MW PV panel installations with Xianning Lucksky. As of July 31, 2016, the project was not started. As of April 30, 2017, the project was completed and $2,822,199 of revenue and $2,366,177 of cost of sales were recognized.

On July 26, 2016, Sanhe entered into a construction project agreement of 4MW PV panel installations with Xianning Lucksky. As of April 30, 2017, the accumulated cost on the construction project was $169,572 and the accumulated billing was $1,066,763.

F-38


On July 7, July 28 and August 5, 2016, Sanhe entered into three construction project agreements for 93KW, 365KW and 75KW PV panel installations with Sanhe Liguang Kelitai Equipment Ltd (“Sanhe Keilitai”)., Sanhe Keilitai is majority (95%) owned by Zhou Jian, our Chairman of the Board. As of April 30, 2017, the accumulated costs on the construction projects were $32,656, $68,974 and $67,126 and the accumulated billings were $18,109, $68,974 and $14,514 respectively.

Sanhe has been working on a construction project for Xianning Lucksky, which agreed to reimburse Sanhe for the cost of the project. As of April 30, 2017, the project was completed and $90,310 of revenue and $80,617 of cost of sales were recognized.

Due from related parties

On January 19, 2017, Luck Sky Shen Zhen entered into a loan agreement with Sanhe Keilitai with an amount of $72,569 at 0.45% interest rate per month. The due date is July 19, 2017. The interest income for the nine months ended April 30, 2017 was $1,112.

Due from director

On January 19, 2017, Luck Sky Shen Zhen entered into two loan agreements with Zhou Jian with a total amount of $145,138. The due date is July 19, 2017 and non-interest bearing.

Due to related parties

Sanhe leases its principal office, factory and dormitory from LuckSky Group in Sanhe City, Hebei Province. LuckSky Group is owned by Zhou Deng Rong, our former CEO and Zhou Jian, our General Manager and Chairman of the Board. The space in the office, factory and dormitory being leased are 1296, 5160 and 1200 square meters, respectively. The office and factory space are leased for a rent of $102,855 (RMB 697,248) per year and the dormitory is leased for a rent of $19,118 (RMB 129,600) per year. The leases expire in April 30, 2024 and are subject to renewal with a prior two-month written notice. LuckSky Group is in the process of obtaining the land use approval and ownership certificate of the leased building. As of April 30, 2017 and July 31, 2016, the lease payables to LuckSky Group were $360,021 and $280,304, respectively.

Until August 1, 2015, Sanhe leased a second factory and office in Sanhe City from Sanhe Dong Yi Glass Machine Company Limited, which is owned by Zhou Deng Rong. A portion of this facility was used by Sanhe to demonstrate its products but the facility was primarily intended as a backup to the first facility in Sanhe City and/or for expansion. The factory and office are 4,748.96 square meters. The rent paid by Sanhe for the factory and the office was RMB1, 306,500 per year. As of April 30, 2017 and July 31, 2016, the rental fee accrued but unpaid under the leases from LuckSky Group and Sanhe Dong Yi were $237,028 and $246,060, respectively. On August 1, 2015, the two parties terminated the finance leasing. As the Company no longer needs the factory and office, the assets were returned to the lessor effective August 1, 2015.

On July 27, 2016, Xianning Xiangtian Air Energy Electric Co., Ltd. (“Xianning Xiangtian”), the wholly-owned subsidiary of the Company, entered into a rental agreement with Xianning Lucksky. The space in the factory being leased is 4628 square meters. The factory space is leased for a rent of $81,924 (RMB 555,360) per year. The lease expires on July 31, 2018 and is subject to renewal with a prior one-month written notice.

On January 26, 2017, Xianning Lucksky lent $21,771 to Xianning Xiangtian. The Company used the funds for its operations. These advances are due on demand, unsecured and non-interest bearing.

From November 2016, Xianning Lucksky prepaid $18,902 expenses for Xianning Xiangtian. From time to time, Mr. Zhou Deng Rong prepaid some expenses for the Company. As of April 30, 2017 and July 31, 2016, amounts due to related parties were as follows:

F-39



  April 30,  July 31, 
  2017  2016 
  (Unaudited)    
Rental fees:      
LuckSky Group 360,021  280,304 
Sanhe Dong Yi (Capital lease payable) 237,028  246,060 
Xianning Lucksky 60,453  - 
       
Prepaid expenses on behalf of the company:      
Zhou Deng Rong 1,634,840  1,190,370 
Xianning Lucksky 18,902  - 
       
Borrowings:      
Xianning Lucksky$ 21,771 $ - 
       
Total$ 2,333,015 $ 1,716,734 

Due to Directors

From time to time, the Company receives advances from its directors. As of April 30, 2017 and July 31, 2016, the Company received $415,652 and $414,876, respectively. The Company used the funds for its operations. These advances are due on demand, unsecured and non-interest bearing.

Due to Shareholders

From time to time, the Company receives advances from its shareholder, Zhou Deng Rong. As of April 30, 2017 and July 31, 2016, the Company received $84,180 and $0, respectively. The Company used the funds for its operations. These advances are due on demand, unsecured and non-interest bearing.

NOTE 9 -GOVERNMENT CONTRIBUTION PLAN

The Company considersparticipates in a government-mandated multi-employer defined contribution plan pursuant to which certain retirement, medical and other welfare benefits are provided to employees. Chinese labor regulations require the Company to pay to the local labor bureau a monthly contribution at a stated contribution rate based on the monthly basic compensation of qualified employees. The relevant local labor bureau is responsible for meeting all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.










GOA SWEET TOURS LTD.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

For the period September 2, 2008 (Inception) to July 31, 2009



2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


Fair Value of Financial Instruments


retirement benefit obligations; the Company has no further commitments beyond its monthly contribution.

The carrying valueoutstanding amount was $127,279 and $92,134 as of cashApril 30, 2017 and accounts payables and accrued liabilities approximates their fair value becauseJuly 31, 2016, respectively.

NOTE 10 - STATUTORY RESERVE

Pursuant to the laws applicable to the PRC, PRC entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10% of after-tax profit until the aggregated appropriations reach 50% of the short-term natureregistered capital (as determined under accounting principles generally accepted in the PRC ("PRC GAAP") at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations should be made to the “reserve fund”. For foreign invested enterprises, the annual appropriation for the “reserve fund” cannot be less than 10% of these instruments.  Unless otherwise noted, it is management’s opinionafter-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC GAAP at each year-end). If the Company has accumulated loss from prior periods, the Company is not exposedable to significant interest, currency or credit risks arising from these financial instruments.use the current period net income after tax to offset against the accumulate loss.


F-40


Foreign Currency Translation


The financial statements are presented in United States dollars.  In accordance with Statement of Financial Accounting Standards No. 52, “Foreign Currency Translation”, foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date.  Non monetary assets and liabilities are translated at the exchange rates prevailing at the transaction date. Revenue and expenses are translated at average rates of exchange during the year.  Gains or losses resulting from foreign currency transactions are included in results of operations.


Revenue and Cost Recognition


The Company’s revenues will be derived principally by providing tour packages to tourists in Goa, India. The Company has generated no revenues to date. The Company plans to recognize revenue on arrangements in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” and SAB No. 104, “Revenue Recognition”. The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement that the services have been rendered to the customer, the sales price is fixed or determinable, and collectability is reasonably assured.


Intellectual Properties


The Company has adopted the provisions of Emerging Issues Task Force 00-2, “Accounting for Web Site Development Costs.” Costs incurred in the planning stage of a website are expensed as research and development while costs incurred in the development stage are capitalized and amortized over the life of the asset, estimated to be five years. Expenses subsequent to the launch will be expensed as research and development expenses. The Company will expense upgrades and revisions to its website as incurred.  The Company incurred no costs for research and development during fiscal 2009.  Once the Company’s website is fully operational, this asset will be amortized over a sixty month period.


Basic and Diluted Loss Per Share


The Company computes loss per share in accordance with SFAS No. 128, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period including stock options and warrants using the treasury method. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.  









GOA SWEET TOURS LTD.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

For the period September 2, 2008 (Inception) to July 31, 2009



2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


Income Taxes


Income taxes are provided in accordance with Statement of Financial Accounting Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.


Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.


At July 31, 2009 a full deferred tax asset valuation allowance has been provided and no deferred tax asset benefit has been recorded.


Recent Accounting Pronouncements


The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.


3.NOTE 11 - CAPITAL STOCK AND EQUITY TRANSACTIONS


Common Stock

The total number of common shares authorized that may be issued by the Company is 100,000,0001,000,000,000 shares with a par value of $0.001 per share.


During the period ended July 31, 2009, the Company issued 5,000,000 shares of common stock for total cash proceeds of $25,000 to the Company’s sole director and officer. During the year ended July 31, 2010, the Company sold 3,000,000 shares of common stock for total cash proceeds of $30,000.

On September 23, 2013, the Company issued 250,000,000 shares of common stock to the shareholders of HK Shares, in exchange of 250,000,000 shares of HK Shares.

On September 23, 2013, the Company issued a total of 67,000,000 shares of restricted common stock at $0.001 per share, such that 60,000,000 shares were issued to Mr. Roy Thomas Phillips, who was then a consultant to the Company and later served as the acting CFO of the Company beginning July 29, 2014, and 7,000,000 shares were issued to two other non-related parties. The shares were issued in contemplation of a secondary offering. The Company takes the position that these shares should be cancelled since no secondary offering was consummated. The Company is taking steps to have these shares canceled. The Company valued the 67,000,000 shares of common stock issued at $67,000 as there was no market for the Company’s common stock and it has limited or no trading; and these shares are s thought to be of minimal value to the Company at the time of issuance, therefore the par value is thought to match the assumed book value of the Company’s common stock which is at $0.001 per share. On July 24, 2015, 7,000,000 shares issued to two other non-related parties were cancelled.

On July 25, 2014, we entered into the Stock Purchase Agreement in connection with the acquisition of Sanhe with Zhou Jian and Zhou Deng Rong, the owners of 97% and 3%, respectively, of Sanhe. We agreed to issue to Zhou Jian and Zhou Deng Rong 264,850,740 and 8,191,260 shares, respectively, of our common stock, representing 51.4% of our issued and outstanding shares of common stock.

Preferred Stock

The total number of preferred shares authorized that may be issued by the Company is 100,000,000 shares with a par value of $0.001 per share. The preferred stockshares may be issued in one or more series, from time to time, with each series to have such designation, relative rights, preference or limitations, as adopted by the Company’s Board of Directors. No preferred shares have been issued.


NOTE 12 - INCOME TAXES

DuringUnited States

Deferred income taxes reflect the periodnet tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The cumulative tax effect at the expected rate of 34% of significant items comprising the net deferred tax amount is at April 30, 2017 and July 31, 2016 as follows:

F-41



  April 30,  July 31, 2016 
  2017    
  (Unaudited)    
Deferred tax assets:      
Net operating losses$ 377,676 $ 228,278 
       
Total deferred tax assets 377,676  228,278 
Less: valuation allowance (377,676) (228,278)
       
Deferred tax assets, net$ - $ - 

As of April 30, 2017, for U.S. federal income tax reporting purposes, the Company has approximately $1,110,812 of unused net operating losses (“NOLs”) available for carry forward to future years. The benefit from the carry forward of such NOLs will begin expiring during the year ended July 31, 2009,2029. Because United States tax laws limit the time during which NOL carry forwards may be applied against future taxable income, the Company may be unable to take full advantage of its NOLs for federal income tax purposes should the Company generate taxable income. Further, the benefit from utilization of NOL carry forwards could be subject to limitations due to material ownership changes that could occur in the Company as it continues to raise additional capital. Based on such limitations, the Company has significant NOLs for which realization of tax benefits is uncertain.

Hong Kong

The Company’s subsidiaries established in HKSAR are subject to Hong Kong Profits Tax. However, these subsidiaries did not earn any income derived in Hong Kong from its date of incorporation to April 30, 2017, and therefore were not subject to Hong Kong Profits Tax.

PRC

The Company’s subsidiaries established in PRC are subject to income tax rate of 25%.

1)

Luck Sky Shen Zhen

For the nine months ended April 30, 2017 and 2016, Luck Sky Shen Zhen had $141,353 and $370,215 in net profit, $47,118 and $92,553 income tax was accrued accordingly.

2)

Sanhe

For the nine months ended April 30, 2017, Sanhe and Xianning Xiantian had $842,907 in net loss. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The cumulative tax effect at the expected rate of 25% of significant items comprising the net deferred tax amount is at April 30, 2017 and July 31, 2016 as follows:

  April 30,  July 31, 2016 
  2017    
  (Unaudited)    
Deferred tax assets: -  - 
Net operating losses$ -  $- 
       
Total deferred tax assets      
Less: valuation allowance -  - 
       
Deferred tax assets, net$ - $ - 
Deferred tax liabilities:      
Timing differences of revenue recognition$ 16,437 $ 107,609 
       
Total deferred tax liabilities 16,437  107,609 

F-42


Significant components of income tax expense for the nine months ended April 30, 2017 and 2016

  For the Nine  For the Nine 
  months  months 
  Ended  ended 
  April 30,  April 30, 
  2017  2016 
  (Unaudited)  (Unaudited) 
Current tax expense$ 99,636 $ 302,482 
Deferred tax expense (88,194) (80,121)
Tax expense (benefit)$ 11,442 $ 222,361 

Reconciliation of Effective Income Tax Rate

  For the Nine  For the Nine 
  months  months 
  ended  ended 
  April 30,  April 30, 
  2017  2016 
  (Unaudited)  (Unaudited) 
Statutory U.S. tax rate 34.00%  34.00% 
PRC Statutory Tax Rate 25.00%  25.00% 
HK Statutory Tax Rate 15.00%  15.00% 
Permanent Difference (8.12%) 178.91% 
Less: Valuation Allowance (75.20%) 101.47% 
Deferred Tax 8.25%  - 
Tax expense (benefit) (1.07%) 354.38% 

NOTE 13. COMMITMENTS, CONTINGENCIES, RISKS AND UNCERTAINTIES

Capital Commitments

The capital commitments are mainly related to the future payments to suppliers. As of April 30, 2017 and July 31, 2016, the Company has a capital commitment of $15,764,399 and $9,247,569, respectively. The increase of capital commitments was caused by the increase of principal projects from 13 to 25. Funds will be generated from the customers in line with the projects' construction progress, and will be used to pay for our capital commitments.

Operation Commitments

The total future minimum lease payments under the non-cancellable operating lease with respect to the office and the dormitory as of April 30, 2017 are payable as follows:

Year ending July 31, 201750,153
Year ending July 31, 2018200,611
Year ending July 31, 2019120,007
Year ending July 31, 2020120,007
After 2020450,026
Total$ 940,804

F-43


Rental expense of the Company for the nine months ended April 30, 2017 and 2016 were $152,134 and $96,284, respectively.

Credit risk

Cash deposits with banks are held in financial institutions in China, which are not federally insured deposit protection. Accordingly, the Company has a concentration of credit risk related to these uninsured bank deposits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk in this area.

Contingencies

On September 23, 2013, the Company issued 5,000,00060,000,000 shares of restricted common stock at $0.001 per share to Mr. Roy Thomas Phillips, who was then a consultant to the Company and later served as the acting CFO of the Company beginning July 29, 2014, and two other non-related parties, obtained a total of 7,000,000 shares of restricted common stock. The shares were issued in contemplation of a secondary offering. The Company takes the position that these shares should be cancelled since no secondary offering was consummated. The Company is taking steps to have these shares canceled. The Company valued the 67,000,000 shares of common stock issued at $67,000 as there was no market for total cash proceedsthe Company’s common stock and it has limited or no trading; and there is thought to be minimal value in the Company at the time of $25,000issuance, therefore the par value is thought to match the assumed market price of the Company’s common stock which is at $0.001 per share. The issuance of these securities could result in further dilution to the Company’s sole director and officer.


Atstockholders which effects the earnings (loss) per share amount of the Company. The Company might incur additional expenses to have these shares canceled. On July 24, 2015, 7,000,000 shares issued to two other non-related parties were canceled. For the year ended July 31, 2009, there were no outstanding stock options or warrants.




















GOA SWEET TOURS LTD.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

For the period September 2, 2008 (Inception) to July 31, 2009



4.    INCOME TAXES

As2015, the dilutive effect of July 31, 2009,not canceling the Company had net operating loss carry forwards of approximately $19,525 that may be available to reduce future years’ taxable income through 2027. Future tax benefits which may arise as a result of these losses have not been recognized60,000,000 shares is incorporated in thesethe consolidated financial statements as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowancesuch shares as issued and outstanding. The loss per share remained $0.00 with the dilutive effect of not canceling such shares. If the shares are not voluntarily returned for the deferred tax asset relating to these tax loss carry-forwards.

The components of the deferred tax asset, the statutory tax rate, the effective tax rate and the elected amount of the valuation allowance are indicated below:

From September 2, 2008 (Inception)  to 
July 31, 2009

Net Operating Loss

$       19,525

Statutory Tax Rate

34%

Deferred Tax Asset

6,638

Valuation Allowance

(6,638)

Net Deferred Tax Asset

$                -



5.  RELATED PARTY TRANSACTIONS

The Company neither owns nor leases any real or personal property.  Mr. Chuntan Vernekar, sole officer and director ofcancellation, the Company will provideneed to commence litigation in Delaware to obtain a judgment to cancel the shares for lack of consideration. At this time, the Company with use of office space and services free of charge. The Company's sole officer and  director is involved in other  business  activities  and may inunable to estimate the future, become involved in other business opportunities as they become available. Thus he may face a conflict in selecting between the Company and his other business interests.  The Company has not formulated a policy for the resolution ofcost such conflicts.litigation if it takes place.

Mr. Vernekar, sole officer and director of the Company, will not be paid for any underwriting services that he performs on behalf of the Company with respect to the Company's upcoming S-1 offering.  He will also not receive any interest on any funds that he advances to the Company for offering expenses prior to the offering being closed which will be repaid from the proceeds of the offering.F-44









Until ________, 2009 [90 days from date of prospectus], all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

You should rely only on the information contained in this prospectus. We have not authorized any dealer, salesperson or other person to give you different information. This prospectus does not constitute an offer to sell nor are they seeking an offer to buy the securities referred to in this prospectus in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus and the documents incorporated by reference are correct only as of the date shown on the cover page of these documents, regardless of the time of the delivery of these documents or any sale of the securities referred to in this prospectus.



GOA SWEET TOURS LTD.

3,000,000YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. WE ARE OFFERING TO SELL, AND SEEKING OFFERS TO BUY, SHARES OF COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS REGARDLESS OF THE TIME OF DELIVERY OF THIS PROSPECTUS, OR OF ANY SALE OF OUR COMMON STOCK.

XIANGTIAN (USA) AIR POWER CO., LTD.

100,000,000 Shares of Common Stock

PROSPECTUS


__________________, 2017



September 17, 2009



II-1



64




PART II


- INFORMATION NOT REQUIRED IN PROSPECTUS

ItemITEM 13. Other Expenses of Issuance and Distribution


OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the expenses in connection with the issuance and distribution of the securities being registered hereby. All such expenses willto be bornepaid by the registrant.

Securities and Exchange Commission registration fee

$

2

Transfer Agent Fees

$

1,000

Legal, accounting, consulting fees and expenses

$

14,000

Edgar filing, printing and engraving fees

 

$

1,000

Total(

 

$

16,002


Registrant are as follows. All amounts, other than the Commission’sSEC registration fee, are estimates.   All expenses will be borne by the registrant.

Amount to
Be Paid
SEC registration fee$ 26,077.50
Legal fees and expenses$ 85,000
Accounting fees and expenses$ 5,000
Miscellaneous$ 2,000
Total$ 118,077.50


ItemITEM 14. Indemnification of Directors and Officers


INDEMNIFICATION OF DIRECTORS AND OFFICERS

Our bylaws provide for the indemnification of our present and prior directors and officers and directors are indemnifiedor any person who may have served at our request as provided by the General Corporation Law of the state of Delaware (the “GCL”).  Under the GCL, a corporation may indemnify a director or officer forof another corporation in which we own shares of capital stock or of which we are a creditor, against expenses including attorneys’ fees, judgments, fines,actually and amounts paid in settlementnecessarily incurred by them in connection with certainthe defense of any actions, provided the corporation has determined thatsuits or proceedings in which they, meet the applicable standardsor any of conduct set forth therein. Such determination shall bethem, are made with respect toparties, or a person who is a directorparty, by reason of being or officer at the timehaving been director(s) or officer(s) of us or of such determination:other corporation, in the absence of negligence or misconduct in the performance of their duties. This indemnification policy could result in substantial expenditure by us, which we may be unable to recoup.


(1)Insofar as indemnification by a majority voteus for liabilities arising under the Securities Exchange Act of 1934 may be permitted to our directors, officers and controlling persons pursuant to provisions of the directors who are not parties toAmended Articles of Incorporation and Bylaws, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy and is, therefore, unenforceable. In the event that a claim for indemnification by such director, officer or controlling person of us is in the successful defense of any action, suit or proceeding even though less thanis asserted by such director, officer or controlling person in connection with the securities being offered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a quorum, or

(2)court of appropriate jurisdiction the question whether such indemnification by a committeeus is against public policy as expressed in the Act and will be governed by the final adjudication of such directors designated by majority voteissue.

At the present time, there is no pending litigation or proceeding involving a director, officer, employee or other agent of such directors, even though less than a quorum,ours in which indemnification would be required or

(3) if there permitted. We are no such directors,not aware of any threatened litigation or if such directors so direct, by independent legal counselproceeding which may result in a written opinion, orclaim for such indemnification.

(4)ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

None.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)Exhibits

No.Description
2.1

Agreement and Plan of Merger dated May 25, 2012 by and between Goa Sweet Tours Ltd. and Xiangtian (USA) Air Power Co., Ltd. (previously filed with Current Report on 8-K on August 4, 2014)

2.2

Certificate of Ownership and Merger dated May 29, 2012 (previously filed with Current Report on 8- K on May 29, 2012)

65



2.3

Common Stock Purchase Agreement dated May 30, 2014 by and among the Registrant, Luck Sky (Hong Kong) Aerodynamic Electricity Limited and Zhou Jian (previously filed with Current Report on 8-K on June 9, 2014)

2.4

Common Stock Purchase Agreement dated July 25, 2014 by and among the Registrant, Zhou Deng Rong and Zhou Jian (previously filed with Current Report on 8-K on August 4, 2012)

3.1

Articles of Incorporation of the Registrant (previously filed with Form S-1 Registration Statement on September 18, 2009)

3.2

By-laws of the Registrant (previously filed with Form S-1 Registration Statement on September 18, 2009)

3.3

Certificate of Amendment of Certificate of Incorporation of the Registrant dated August 14, 2013 ( previously filed with Current Report on 8-K on August 20, 2013)

5.1Opinion of Mclaughlin & Stern, LLP* (previously filed with Amendment No. 1 to Registration Statement on form S-1 on August 15, 2017)
10.1

Framework Agreement on Business Cooperation dated July 25, 2014 by and between Luck Sky Shen Zhen and Sanhe (translated to English) (previously filed with Current Report on 8-K on August 4, 2014)

10.2

Exclusive Option Agreement dated July 25, 2014 by and among Luck Sky HK, Luck Sky Shen Zhen, Zhou Deng Rong, Zhou Jian and Sanhe (translated to English) (previously filed with Current Report on 8-K on August 4, 2014)

10.3

Exclusive Management, Consulting and Training and Technical Service Agreement dated July 25, 2014 by and between Luck Sky Shen Zhen and Sanhe (translated to English) (previously filed with Current Report on 8-K on August 4, 2014)

10.4

Equity Pledge Agreement dated July 25, 2014 by and among Luck Sky Shen Zhen, Zhou Deng Rong, Zhou Jian, and Sanhe (translated to English) (previously filed with Current Report on 8-K on August 4, 2014)

10.5

Know-How Sub-License Agreement dated July 25, 2014 by and between Luck Sky Shen Zhen and Sanhe (translated to English) (previously filed with Current Report on 8-K on August 4, 2014)

10.6

Power-of-Attorney dated July 25, 2014 issued by Zhou Deng Rong and Zhou Jian to Luck Sky Shen Zhen (translated to English) (previously filed with Current Report on 8-K on August 4, 2014)

10.7

Licensing Agreement dated July 25, 2014 by and among Zhou Deng Rong, Zhou Jian and Luck Sky Shen Zhen (translated to English) (previously filed with Current Report on 8-K on August 4, 2014)

10.8

Licensing Agreement dated July 25, 2014 by and between LuckSky Group and Luck Sky Shen Zhen (translated to English) (previously filed with Current Report on 8-K on August 4, 2014)

10.9

Project Transfer Agreement dated February 28, 2014 by and between Sanhe and Deyang Zhenlin Technology Co., Ltd. (translated to English) (previously filed with Current Report on 8-K on August 4, 2014)

10.10

Project Transfer Agreement dated April 18, 2014 by and between Sanhe and Bin Zhou Xin Tuo Natural Energy Electrical Engineering Limited (translated to English) (previously filed with Current Report on 8-K on August 4, 2014)

10.11

Project Transfer Agreement dated April 25, 2014 by and between Sanhe and Xianning Auspicious Day Air Energy Power Company Limited (translated to English) (previously filed with Current Report on 8- K on August 4, 2014)

66



10.12

Lease Agreements dated May 1, 2014 by and between Sanhe and LuckSky Group (translated to English) (previously filed with Current Report on 8-K on August 4, 2014)

10.13

Lease Agreement dated April 1, 2014 by and between Sanhe and Sanhe Dong Yi (translated to English) (previously filed with Current Report on 8-K on August 4, 2014)

10.14

Consulting Agreement between Beijing Luck Sky Oriental Power Engineering LLC and Bezalel International LLC dated May 22, 2013 (previously filed with Current Report on 8-K on August 4, 2014)

10.15

Amendment to Project Transfer Agreement dated November 12, 2014 between Sanhe and Bing Zhou Xin Tuo Natural Energy Electrical Engineering Limited (translated to English) (previously filed with Current Report on 10-K on November 20, 2014)

10.16

Amendment to Project Transfer Agreement dated November 12, 2014 between Sanhe and Xianning Xiangtian Air Energy Electric Company (previously filed with Current Report on 10-KA on April 24, 2015)

10.17

Consulting Agreement between Xiangtian (USA) Air Power Co., Ltd. and Bezalel International LLC dated June 22, 2014 (previously filed with Current Report on 10-KA on April 24, 2015)

10.18

Equipment Transfer Contract dated May 19, 2014 between Sanhe and Xiangtian Kelitai (previously filed with Current Report on 10-KA on April 24, 2015)

10.19

Loan Agreement dated July 18, 2013 between Sanhe and Xiangtian Kelitai, pursuant to which Sanhe borrowed RMB 7,722,000 from Xiangtian Kelitai (previously filed with Current Report on 10-KA on April 24, 2015)

10.20

Loan Agreement dated April 1, 2014 between Sanhe and LuckSky Group, pursuant to which Sanhe borrowed RMB 3,000,000 from LuckSky Group (previously filed with Current Report on 10-KA on April 24, 2015)

10.21

Inventory Transfer Agreement dated April 30, 2014 between Sanhe and Xiangtian Kelitai (previously filed with Current Report on 10-KA on April 24, 2015)

10.22

Loan agreement dated April 25, 2015 between Sanhe and Xiangtian Kelitai.Air Powered Machinery Co., Ltd., Yaojiao Branch office (Filed with Current Report on 10-K on November 13, 2015)

10.23

Xiangtian (USA) Air Power Co. Ltd. 2017 Stock Incentive Plan (the “Plan”) (Filed with Current Report on Form 8-K on July 5, 2017)

10.24Letter dated July 24, 2017 from Yichien Yeh, CPA to the Securities and Exchange Commission. (Filed with Report on Form 8-K on July 24, 2017)
21.1

List of Subsidiaries (previously filed with Current Report on 8-K on August 4, 2014)

23.1Consent of Jimmy Po Lee CPA PC (previously filed with Amendment No. 1 to Registration Statement on form S-1 on August 15, 2017)
23.2

Consent of Mclaughlin & Stern LLP (contained in Exhibit 5.1)

23.3

Consent of Yichien Yeh, CPA (previously filed with Amendment No. 2 to Registration Statement on form S-1 on September 8, 2017)

23.4

Consent of Yichien Yeh, CPA (previously filed with Amendment No. 2 to Registration Statement on form S-1 on September 8, 2017)

24.1

Powers of Attorney authorizing execution of Registration Statement on Form S-1 on behalf of certain officers and directors of the Company (included on the signature pages hereto).

67


XBRL Exhibit

101.INSXBRL

Instance Document*

101.SCH XBRL

Taxonomy Extension Schema Document.*

101.CAL XBRL

Taxonomy Extension Calculation Linkbase Document.*

101.DEF XBRL

Taxonomy Extension Definition Linkbase Document.*

101.LAB XBRL

Taxonomy Extension Label Linkbase Document.*

101.PRE XBRL

Taxonomy Extension Presentation Linkbase Document.*

*filed herewith

68


ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes to provide certificates in such denominations and registered in such names as required by the stockholders.


Our bylaws provide that we will indemnify our directors and officerspurchasers to the fullest extent not prohibited by Delaware law.


permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 as amended, may be permitted to directors, officers and controlling persons of the registrantRegistrant pursuant to any provision of the certificate of incorporation, bylaws, contract arrangements, statute,foregoing provisions, or otherwise, the registrantRegistrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act, of 1933, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrantRegistrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant issuerRegistrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdicti onjurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933, and will be governed by the final adjudication of such issue.


Item 15.

  Recent sales of unregistered securities




II-1






Set forth below is information regarding the issuance and sales of securities without registration since inception. No such sales involved the use of an underwriter; no advertising or public solicitation was involved; the securities bear a restrictive legend; and no commissions were paid in connection with the sale of any securities.


On September 2, 2008, the Company issued a total of 5,000,000 shares of common stock to Mr. Chuntan Vernekar for cash at $0.005 per share for a total of $25,000.


These securities were issued in reliance upon the exemption contained in Section 4(2) of the Securities Act of 1933. These securities were issued to a promoter of the company, bear a restrictive legend and were issued to a non-US resident.


Item 16.  Exhibits and Financial Statement Schedules


Exhibits

Exhibit No.

Description

3.1

Articles of Incorporation

3.2

Bylaws

4.1

Specimen Stock Certificate

5.1

Legal opinion of Gersten Savage LLP

23.1

Consent of LBB & Associates Ltd., LLP

23.2

Consent of Gersten Savage LLP (Reference is made to Exhibit 5.1)



Financial Statement Schedules


The financial statement schedules are omitted because they are inapplicable or the requested information is shown in our financial statements or related notes thereto.


Item 17.  Undertakings.


The undersigned registrantRegistrant hereby undertakes that:undertakes:


(a) (1) It willTo file, during any period in which it offers or sells securities,sales are being made, a post-effective amendment to this Registration Statement to:registration statement:


(a)

Include(i) To include any prospectus required by Sectionsection 10(a)(3) of the Securities Act of 1933;

(b)

Reflect(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or together,in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the ‘‘Calculation"Calculation of Registration Fee’’Fee" table in the effective registration statement; andstatement.

(c)

Include(iii) To include any additional or changed material information onwith respect to the plan of distribution;


 (2)    For determining liability underdistribution not previously disclosed in the Securities Act of 1933, it will treat each post-effective amendment as a new registration statement ofor any material change to such information in the securities offered, andregistration statement;

(2) That, for the offeringpurpose of the securities at that time to be the initial bona fide offering; and


(3)    It will file a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering.



II-2







(4)    For determining any liability under the Securities Act of 1933, it will treat the information omitted from the form of prospectus filed as part of thiseach such post-effective amendment shall be deemed to be a new registration statement in reliance upon Rule 430Arelating to the securities offered therein, and contained inthe offering of such securities at that time shall be deemed to be the initialbona fide offering thereof.

(3) To remove from registration by means of a form of prospectus filed by the small business issuer under Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933, as part of this registration statement aspost-effective amendment any of the timesecurities being registered which remain unsold at the Commission declared it effective.termination of the offering.


(4) Not applicable.

(5) ForThat for the purpose of determining any liability under the Securities Act of 1933 it will treat each post-effective amendment that contains a formto any purchaser:

(ii) Each prospectus filed pursuant to Rule 424(b) as part of prospectus as a newthis registration statement, shall be deemed to be part of and included in this registration statement as of the date it is first used after effectiveness; provided, however, that no statement made in this registration statement or prospectus that is part of this registration statement or made in a document incorporated or deemed incorporated by reference into this registration statement or prospectus that is part of this registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in this registration statement or prospectus that was part of this registration statement or made in any such document immediately prior to such date of first use.

69


(6) That, for the securities offeredpurpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, and that offeringregardless of the underwriting method used to sell the securities atto the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that time asis an offer in the initial bona fide offering of those securities.made by the undersigned registrant to the purchaser.




II-3







SIGNATURES


Pursuant to the requirements of the Securities Act, of 1933, the Registrantregistrant has duly caused this registration statementAmendment No. 3 to the Registration Statement on Form S-1 to be signed on its behalf by the undersigned thereunto duly authorized, in the City of Benaulim, State of Goa, India on September 17, 2009.


13, 2017.

XIANGTIAN (USA) AIR POWER CO., LTD.

GOA SWEET TOURS LTD.

By:

/s/ Chuntan Vernekar

 /s/ Zhou Deng Hua                         

Name: Zhou Deng Hua
Title:   Chief Executive Officer

Chuntan Vernekar
President, Treasurer, Secretary and Director

             (Principal Executive Officer)


70



POWER OF ATTORNEY


Each person whose signature appears below constitutes and appoints Zhou Deng Hua his or her true and lawful attorney in fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post effective amendments) to the Registration Statement, and to sign any registration statement for the same offering covered by this amendment to the Registration Statement that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and all post effective amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, each acting alone, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant toIn accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated: Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.indicated:


In accordance with the requirements of the Securities Act of 1933, this Amendment No. 3 to the Registration Statement on Form S-1 was signed by the following persons in the capacities and on the dates indicated.

By: /s/ Zhou Deng Hua

Name

Name: Zhou Deng Hua

Title

Date

Title: Chief Executive Officer

/s/Chuntan Vernekar

(Principal Executive Officer)

Date: September 13, 2017
By: /s/ Zhou Jian
Name: Zhou Jian
Title: Director
Date: September 13, 2017
By: /s/ Paul Kam Shing Chiu
Name: Paul Kam Shing Chiu
Title: Chief Financial Officer
(Principal Financial Officer,
Secretary and Director

Officer)

September 17, 2009

Date: September 13, 2017

Chuntan Vernekar

By: /s/ Marco Hon Wai Ku
Name: Marco Hon Wai Ku
Title: Director
Date: September 13, 2017
By: /s/ Yizhao Zhang
Name: Yizhao Zhang
Title: Director
Date: September 13, 2017
By: /s/ Jiehua Zhang
Name: Jiehua Zhang
Title: Director
Date: September 13, 2017




II-4



71 




INDEX TO EXHIBITS



II-5