10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2023

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

For the transition period from_______ to ________

Commission File Number: 001-34864

GREEN GIANT INC. 

(Exact Name of Registrant as Specified in Its Charter)

Florida	33-0961490
(State or Other Jurisdiction of Incorporation)	(I.R.S. Employer Identification Number)

6 Xinghan Road, 19th Floor, Hanzhong City

Shaanxi Province, PRC 723000

(Address of Principal Executive Offices, Zip Code)

+(86) 091 - 62622612

(Registrant’s Telephone Number, including Area Code)

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

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

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

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

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

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

The number of shares outstanding of each of the issuer’s classes of common equity, as of May 3, 2023 is as follows:

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

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION	1
Item 1.	Unaudited Interim Financial Statements	1
	Condensed Consolidated Balance Sheets at March 31, 2023 (unaudited) and September 30, 2022	1
	Condensed Unaudited Consolidated Statements of Income and Comprehensive Income for The Three and Six Months Ended March 31, 2023 and 2022	2
	Condensed Unaudited Consolidated Statements of Changes in Stockholders’ Equity for The Three and Six Months Ended March 31, 2023 and 2022	3
	Condensed Unaudited Consolidated Statements of Cash Flows for The Six Months Ended March 31, 2023 and 2022	4
	Notes to Condensed Unaudited Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33
Item 4.	Controls and Procedures	34
PART II	OTHER INFORMATION	35
Item 1.	Legal Proceedings	35
Item 1A	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6	Exhibits	36
	Signatures	37

i

PART I: FINANCIAL INFORMATION

ITEM 1. INTERIM FINANCIAL STATEMENTS

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,			September 30,
	2023			2022
ASSETS	(Unaudited)
Cash	$	275,909		$	1,360,217
Restricted cash		3,000,478			3,007,960
Contract assets		7,600,292			7,628,770
Prepayment		32,291,315			26,936,915
Real estate property development completed		76,907,727			74,772,530
Other assets		4,176,104			3,767,190
Property, plant and equipment, net		488,974			483,219
Security deposits		1,834,432			1,771,019
Real estate property under development		153,153,112			145,300,588
Due from local governments for real estate property development completed		43,875,684			42,358,986
Total Assets	$	323,604,027		$	307,387,394
LIABILITIES AND STOCKHOLDERS’ EQUITY
Construction loans	$	112,246,496		$	108,366,351
Accounts payable		10,971,486			10,606,635
Other payables		16,798,944			13,578,713
Construction deposits		3,138,041			3,029,565
Contract liabilities		2,051,785			1,989,898
Customer deposits		20,207,154			19,842,768
Accrued expenses		11,755,135			10,547,436
Taxes payable		20,158,468			19,980,358
Total liabilities		197,327,509			187,941,724
Commitments and Contingencies
Stockholders’ equity
Common stock, $0.001 par value, 200,000,000 shares authorized, 55,793,268 and 6,464,929 shares issued and outstanding at March 31, 2023 and September 30, 2022, respectively		55,793			46,464
Additional paid-in capital		190,119,912			184,821,771
Statutory surplus		11,095,939			11,095,939
Retained earnings		(69,311,528	)		(67,432,727	)
Accumulated other comprehensive income		(5,683,598	)		(9,085,777	)
Total stockholders’ equity		126,276,518			119,445,670
Total Liabilities and Stockholders’ Equity	$	323,604,027		$	307,387,394

1

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	Three months ended March 31,						Six months ended March 31,
	2023			2022			2023			2022
Real estate sales, net of sales tax		489,877			4,302,992			652,583			7,121,986
Cost of real estate sales		(403,370	)		(2,305,103	)		(533,662	)		(3,760,659	)
Gross profit		86,507			1,997,889			118,921			3,361,327
Operating expenses:
Selling and distribution expenses		62,431			29,871			102,861			249,658
General and administrative expenses		1,184,079			650,426			1,750,896			1,282,353
Total operating expenses		1,246,510			680,297			1,853,757			1,532,011
Operating income		(1,160,003	)		1,317,592			(1,734,836	)		1,829,316
Interest income, net		924			744			2,052			2,205
Other (expense)		(146,000	)		(251,201	)		(146,017	)		(251,201	)
(Loss)/Income  before income taxes		(1,305,079	)		1,067,135			(1,878,801	)		1,580,320
Provision for income taxes		—			334,350			—			483,225
Net (loss)/income		(1,305,079	)		732,785			(1,878,801	)		1,097,095
Other comprehensive income (loss)
Foreign currency translation adjustment		414,271			1,038,059			3,402,179			3,205,460
Comprehensive (loss)/income	$	(890,808	)	$	1,770,844		$	1,523,378		$	4,302,555
Basic and diluted income per common share:
Basic	$	(0.02	)	$	0.02		$	(0.03	)	$	0.04
Diluted	$	(0.02	)	$	0.01		$	(0.02	)	$	0.02
Weighted average common shares outstanding:
Basic		55,781,268			35,143,439			54,491,243			30,301,681
Diluted		77,016,371			56,524,453			75,726,347			50,321,940

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

2

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

												Accumulated
					Additional							Other
	Common Stock				Paid-in		Statutory		Retained			Comprehensive
	Shares		Amount		Capital		Surplus		Earnings			Income (loss)			Total
Balance at September 30, 2020		22,525,000	$	22,525	$	129,930,330	$	10,458,395	$	34,954,061		$	(7,039,490	)	$	168,325,821
Net income for the period		—		—		—		—		2,512,824			—			2,512,824
Foreign currency translation adjustments		—		—		—		—		—			6,253,728			6,253,728
Balance at March 31, 2021 - unaudited		22,525,000	$	22,525	$	129,930,330	$	10,458,395	$	37,466,885		$	(785,762	)	$	177,092,373
Balance at September 30, 2021		25,617,807	$	25,617	$	136,535,303	$	11,095,939	$	40,691,955		$	2,348,897		$	190,697,711
Private placements		14,847,122		14,847		28,922,068		—		—			—			28,936,915
Net income for the period		—		—		—		—		1,097,095			—			1,097,095
Foreign currency translation adjustments		—		—		—		—		—			3,205,460			3,205,460
Balance at March 31, 2022 - unaudited		40,464,929	$	40,464	$	165,457,371	$	11,095,939	$	41,789,050		$	5,554,357		$	223,937,181
Balance as of September 30, 2022		46,464,929		46,464		184,821,771		11,095,939		(67,432,727	)		(9,085,777	)		119,445,670
Private placements		9,328,339		9,329		5,298,141		—		—			—			5,307,470
Net income for the period		—		—		—		—		(1,878,801	)		—			(1,878,801	)
Foreign currency translation adjustments		—		—		—		—		—			3,402,179			3,402,179
Balance as of March 31, 2023		55,793,268		55,793		190,119,912		11,095,939		(69,311,528	)		(5,683,598	)		126,276,518

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

3

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six months ended March 31,
	2023			2022
Cash flows from operating activities
Net (loss)/income	$	(1,878,801	)	$	1,097,095
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation		11,367			12,450
Changes in operating assets and liabilities:
Contract assets		296,941			119,872
Real estate property development completed		533,662			3,766,754
Real estate property under development		(2,608,704	)		(8,113,047	)
Other current assets		(277,011	)		4,309,818
Accounts payables		(14,696	)		(5,897,638	)
Other payables		2,715,488			2,271,946
Contract liabilities		(9,218	)		(172,426	)
Customer deposits		(340,718	)		2,924,829
Accrued expenses		817,894			(581,968	)
Taxes payables		(403,283	)		269,649
Net cash provided by (used in) operating activities		(1,157,079	)		7,334
Cash flow from investing activities
Prepayment		(5,354,400	)		(18,461,700	)
Net cash used in investing activities		(5,354,400	)		(18,461,700	)
Cash flow from financing activities
Proceeds from private placements		5,307,470			28,936,915
Net cash provided by financing activities		5,307,470			28,936,915
Effect of changes of foreign exchange rate on cash and restricted cash		112,219			(356,551	)
Net increase (decrease) in cash and restricted cash		(1,091,790	)		10,125,998
Cash and restricted cash, beginning of period		4,368,177			3,465,189
Cash and restricted cash, end of period	$	3,276,387		$	13,591,187
Supplemental disclosures of cash flow information:
Interest paid	$	—		$	—
Income taxes paid	$	—		$	—
Reconciliation of net cash:
Cash, end of period	$	275,909		$	10,310,540
Restricted, end of period	$	3,000,478		$	3,280,647
Total cash and restricted cash, end of period	$	3,276,387		$	13,591,187
Cash, beginning of period	$	1,360,217		$	170,001
Restricted, beginning of pe	$	3,007,960		$	3,295,188
Total cash and restricted cash, beginning of period	$	4,368,177		$	3,465,189
Non-cash financing activities:
Reclassification of interest payable to other liabilities	$	—		$	3,444,532
Settlement of accounts payable with real estate property*	$	—		$	569,299
Settlement of accounts payable and accounts receivable*	$	—		$	2,758,731
Real estate sales for settlement in real estate property under development	$	—		$	—

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

4

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION

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

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the U.S. generally accepted accounting principles (“U.S. GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended March 31, 2023 and 2022 are not necessarily indicative of the results that may be expected for the full year. The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2022 filed with the SEC on January 13, 2023.

Liquidity

In recent years, the Chinese government has implemented measures to control overheating residential and commercial property prices including but not limited to restrictions on home purchase, increasing the down-payment requirement against speculative buying, development of low-cost rental housing properties to help low-income groups while reducing the demand in the commercial housing market, increasing real estate property taxes to discourage speculation, control of the land supply and slowdown the construction land auction process, etc. In addition, in December 2019, a novel strain of coronavirus (COVID-19) surfaced. COVID-19 has spread rapidly throughout China and worldwide, which has caused significant volatility in the PRC and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the PRC and international economies. To reduce the spread of COVID-19, the Chinese government has employed measures including city lockdowns, quarantines, travel restrictions, suspension of business activities and school closures. Due to difficulties resulting from the COVID-19 pandemic, including, but not limited to, the temporary closure of the Company’s facilities and operations beginning in early February through early March 2020, limited support from the Company’s employees, delayed access to construction raw material supplies, reduced customer visits to the Company’s sales office, and inability to promote real estate property sales to customers on a timely basis, The Company had real estate sales of approximately $0.7 million for the six months ended March 31, 2023, decreased from $7.2 million in the same period of last year. Based on the assessment of the current economic environment, customer demand and sales trends, we believe that consumer spending has been restored in the local real estate market and real estate sales are expected to grow in the coming periods. On the other side, due to the negative impact from the COVID-19 pandemic and its variants, the development period of real estate properties and our operating cycle has been extended and we may not be able to liquidate our large balance of completed real estate properties within the short term as we originally expected. In addition, as of March 31, 2023, we had large construction loans payable of approximately $112.2 million and accounts payable of approximately $11.0 million to be paid to subcontractors. The extent of the impact of COVID-19 on the Company’s future financial results will be dependent on future developments such as the length and severity of the crisis, the potential resurgence of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the local economy and real estate markets, among many other factors, all of which remain highly uncertain and unpredictable. Given this uncertainty, the Company is currently unable to quantify the expected impact of the COVID-19 pandemic on its future operations, financial condition, liquidity and results of operations if the current situation continues. The above-mentioned facts raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date of this filing.

5

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION (continued)

In assessing its liquidity, management monitors and analyzes the Company’s cash on-hand, its ability to generate sufficient revenue sources in the future, and its operating and capital expenditure commitments. As of March 31, 2023, our total cash and restricted cash balance was approximately $3.3 million, decreased from approximately $4.4 million as of September 30, 2022. With respect to capital funding requirements, the Company budgeted its capital spending based on ongoing assessments of its needs to maintain adequate cash. On January 27, 2023, the Company closed a private placement with net proceeds of approximately $0.1 million. As of March 31, 2023, we had approximately $76.9 million of completed residential apartments and commercial units available for sale to potential buyers. Although we reported approximately $11.0 million accounts payable as of March 31, 2023, due to the long-term relationship with our construction suppliers and subcontractors, we were able to effectively manage cash spending on construction and negotiate with them to adjust the payment schedule based on our cash on hand. In addition, most of our existing real estate development projects relate to the old town renovation which are supported by the local government. As of March 31, 2023, we reported approximately $112.2 million of construction loans borrowed from financial institutions controlled by the local government and such loans can only be used on the old town renovation related project development. We expect that we will be able to renew all of the existing construction loans upon their maturity and borrow additional new loans from local financial institutions, when necessary, based on our past experience and the Company’s good credit history. Also, the Company’s cash flows from pre-sales and current sales should provide financial support for our current development projects and operations. For the three months ended March 31, 2023, we had six large ongoing construction projects (see Note 3, real estate properties under development) which were under the preliminary development stage due to delayed inspection and acceptance of the development plans by the local government. In June 2020, we completed the residence relocation surrounding the Liangzhou Road related projects and launched the construction of these projects in December 2020. For the other four projects, we expect we will be able to obtain the government’s approval of the development plans on these projects in the coming fiscal year and start the pre-sale of the real estate properties to generate cash when certain property development milestones have been achieved.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

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

Use of estimates

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

Fair value of financial instruments

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

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

6

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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

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

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

Revenue recognition

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

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

● identification of the performance obligations in the contract;

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

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

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

Most of the Company’s revenue is derived from real estate sales of condominiums and commercial properties in the PRC. The majority of the Company’s contracts contain a single performance obligation involving significant real estate development activities that are performed together to deliver a real estate property to its customers. Revenues arising from real estate sales are recognized when or as the control of the asset is transferred to the customer. The control of the asset may transfer over time or at a point in time. For the sales of individual condominium units in a real estate development project, the Company has an enforceable right to payment for performance completed to date, revenue is recognized over time by measuring the progress towards complete satisfaction of that performance obligation (“percentage completion method”). Otherwise, revenue is recognized at a point in time when the customer obtains control of the asset. For the three and six months ended March 31, 2023 and 2022, the Company did not have any construction in progress recognized under the percentage of completion method.

7

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue recognition (continued)

Disaggregation of Revenue

Disaggregated revenues are as follows:

	For the three months ended March 31,
	2023		2022
Revenue recognized for completed condominium real estate projects, net of sales tax	$	489,877	$	4,302,992
Revenue recognized for condominium real estate projects under development, net of sales tax		—		—
Total revenue, net of sales tax	$	489,877	$	4,302,992

	For the six months ended March 31,
	2023		2022
Revenue recognized for completed condominium real estate projects, net of sales tax	$	652,583	$	7,121,986
Revenue recognized for condominium real estate projects under development, net of sales tax		—		—
Total revenue, net of sales tax	$	652,583	$	7,121,986

Contract balances

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

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

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

8

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Foreign currency translation

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

	For three months ended				For six months ended
	March 31,				March 31,				September 30,
	2023		2022		2023		2022		2022
Period end RMB: USD exchange rate		6.8676		6.3393		6.8676		6.3393		7.1135
Period average RMB: USD exchange rate		6.8423		6.3914		6.9761		6.3694		6.5532

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

Real estate property development completed and under development

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

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

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

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

9

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Capitalization of Interest

Interest incurred during and directly related to real estate development projects is capitalized to the related real estate property under development during the active development period, which generally commences when borrowings are used to acquire real estate assets and ends when the properties are substantially complete or the property becomes inactive. Interest is capitalized based on the interest rate applicable to specific borrowings or the weighted average of the rates applicable to other borrowings during the period. Interest capitalized to real estate properties under development is recorded as a component of the cost of real estate sales when related units are sold. All other interest is expensed as incurred. For the three and six months ended March 31, 2023, the total interest capitalized for real estate property development was $1,422,212 and $2,865,459, respectively. For the three and six months ended March 31, 2022, the total interest capitalized in the real estate property development was $1,711,308 and $3,444,532, respectively.

Impairment of long-lived assets

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

Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds the estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally determined by using the asset’s expected future discounted cash flows or market value. The Company estimates fair value of the assets based on certain assumptions such as budgets, internal projections, and other available information as considered necessary. There was no impairment of long-lived assets for the three and six months ended March 31, 2023 and 2022.

Income taxes

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

ASC 740-10-25 prescribes a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax positions taken (or expected to be taken) in a tax return. It also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, years open for tax examination, accounting for income taxes in interim periods and income tax disclosures. There are no material uncertain tax positions as of March 31, 2023 and September 30, 2022.

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

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

10

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income taxes (continued)

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a U.S. corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. Due to the complexity involved in applying the provisions of the Tax Act, we made reasonable estimates of the effects and recorded accrued amounts in our consolidated financial statements as of March 31, 2023 and September 30, 2022, including approximately $2.3 million provision on the deemed repatriation of undistributed foreign earnings and an additional $1.3 million provision for delinquent U.S. and State tax fillings. The Company plans to engage a tax professional to file its delinquent tax returns in 2022. Failure to furnish any income tax and information returns with respect to any foreign business entity required, within the time prescribed by the IRS, subjects the Company to civil penalties.

Land appreciation tax (“LAT”)

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

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

Comprehensive income (loss)

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

Basic and diluted earnings (loss) per share

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

As of March 31, 2023, there were outstanding warrants to purchase approximately 55,793,268 shares of the Company’s common stock (September 30, 2022 – 46,464,929), which resulted in 77,016,371 and 75,726,347 dilutive shares for the three and six months ended March 31, 2023, respectively. There were no dilutive shares for the three and six months ended March 31, 2022.

11

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Concentration risk

The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC’s economy. The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittances abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company’s cash and restricted cash were on deposit at financial institutions in the PRC, which the management believes are of high credit quality. In May, 2015, China’s new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in China are required to purchase deposit insurance for deposits in RMB and in foreign currencies placed with them. Such Deposit Insurance Regulation would not be effective in providing complete protection for the Company’s accounts, as its aggregate deposits are much higher than the compensation limit of RMB500,000 (approximately $78,000). However, the Company believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon in China and the Company believes that the Chinese banks that hold the Company’s cash and restricted cash are financially sound based on public available information. The Company has not experienced any losses in its bank accounts.

For the three and six months ended March 31, 2023 and 2022, the Company did not have any individual customer that accounted for more than 10% of the Company real estate sales revenue for the related periods.

NOTE 3. PREPAYMENT

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

	March 31,		September 30,
	2023		2022
	(Unaudited)
Energy equipment	$	26,936,915	$	26,936,915
Professional service		5,200,000		-
Supply of zorba scrap		154,400		-
Total	$	32,291,315	$	26,936,915

(A) On March 23, 2023, Green Giant Energy Texas Inc. (“Green Giant Energy”), an indirect wholly owned subsidiary of Green Giant Inc., entered into a sales contract with AGR Enterprises Inc. (“AGR”), pursuant to which Green Giant Energy agreed to purchase, and AGR agreed to sell to Green Giant Energy, 80 MT Zorba Scrap, with the unit price of $1,930 per MT. Green Giant Energy prepaid $154,400 after both parties signed the agreement.

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

(C) In 4th quarter of fiscal 2022, the Company made the prepayment in $24.44 million to Golden Mainland Inc. and Golden Ocean Inc. for energy equipment purchase.

12

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 4. REAL ESTATE PROPERTY DEVELOPMENT COMPLETED AND UNDER DEVELOPMENT

The following summarizes the components of real estate property development completed and under development as of March 31, 2023 and September 30, 2022:

	Balance as of
	March 31, 2023			September 30, 2022
	(Unaudited)
Development completed:
Hanzhong City Mingzhu Garden Phase II	$	21,412,510		$	20,672,000
Hanzhong City Oriental Pearl Garden		18,049,449			17,425,514
Yang County Yangzhou Pearl Garden Phase II		2,105,346			2,039,912
Yang County Yangzhou Palace		35,340,422			34,635,104
Real estate property development completed	$	76,907,727		$	74,772,530
Under development:
Hanzhong City Liangzhou Road and related projects (a)	$	181,335,658		$	173,289,941
Hanzhong City Hanfeng Beiyuan East (b)		815,132			786,954
Hanzhong City Beidajie (b)		33,330,687			31,144,446
Yang County East 2nd Ring Road (c)		7,925,809			7,904,869
Real estate property under development	$	223,407,286		$	213,126,210
Impairment		(70,254,174	)		(67,825,622	)
Real estate property under development		153,153,112			145,300,588

(a) In September 2013, the Company entered into an agreement (“Liangzhou Agreement”) with the Hanzhong local government on the Liangzhou Road reformation and expansion project (Liangzhou Road Project”). Pursuant to the agreement, the Company is contracted to reform and expand the Liangzhou Road, a commercial street in downtown Hanzhong City, with a total length of 2,080 meters and a width of 30 meters and to resettle the existing residences in the Liangzhou road area. The government’s original road construction budget was approximately $33 million in accordance with the Liangzhou Agreement. The Company, in return, is being compensated by the local government to have an exclusive right on acquiring at least 394.5 Mu land use rights in a specified location of Hanzhong City. The Liangzhou Road Project’s road construction started at the end of 2013. In 2014, the original scope and budget on the Liangzhou road reformation and expansion project was extended, because the local government included more area and resettlement residences into the project, which resulted in additional investments from the Company. In return, the Company is authorized by the local government to develop and manage the commercial and residential properties surrounding the Liangzhou Road project. The Company launched the construction of the Liangzhou Road related projects in December 2020. As of March 31, 2023, the main Liangzhou road construction is substantially completed.

The Company’s development cost incurred for the Liangzhou Road Project is treated as the Company’s deposit on purchasing the related land use rights, as agreed by the local government. As of March 31, 2023, the actual costs incurred by the Company were approximately $181.3 million (September 30, 2022 - $173.3 million) and the incremental cost related to residence resettlements approved by the local government. The Company determined that the Company’s investment in the Liangzhou Road Project in exchange for interests in future land use rights is a barter transaction with commercial substance.

(b)

In September 2012, the Company was approved by the Hanzhong local government to construct four municipal roads with a total length of approximately 1,192 meters. The project was deferred and then restarted during the quarter ended June 30, 2014. As of March 31, 2023, the local government has not completed the budget for these projects therefore the delivery for these projects for the government’s acceptance and related settlement were extended to March 2023.

(c)

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

13

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 5. CONSTRUCTION LOANS

	March 31,		September 30,
	2023		2022
	(Unaudited)
Loan A	$	94,958,190	$	91,675,668
Loan B		17,288,306		16,690,683
Total	$	112,246,496	$	108,366,351

(A) On June 26, 2015 and March 10, 2016, the Company signed phase I and Phase II agreements with Hanzhong Urban Construction Investment Development Co., Ltd, a state-owned Company, to borrow up to approximately $112.8 million (RMB775,000,000) for a long-term loan with interest at 4.75% to develop the Liangzhou Road Project. As of March 31, 2023, the Company borrowed approximately $95.0 million under this credit line (September 30, 2022 - $91.7 million). Due to the local government’s delay in the relocation of residences in the Liangzhou Road Project and related area, the Hanzhong Urban Construction Investment Development Co., Ltd has not released all the funds available to the Company and additional withdrawals will be based on the project’s development progress. The loan is guaranteed by Hanzhong City Hantai District Municipal Government and pledged by the Company’s Yang County Yangzhou Palace project with a carrying value of $35,340,422 as of March 31, 2023 (September 30, 2022- $34,635,104). For the three and six months ended March 31, 2023, the interest was $851,453 and $1,708,111 (March 31, 2022 - $1,571,441 and $3,164,722), respectively, which was capitalized into the development cost of the Liangzhou Road Project.

(B) In December 2016, the Company signed a loan agreement with Hantai District Urban Construction Investment Development Co., Ltd, a state-owned Company, to borrow up to approximately $17.3 million (RMB119,000,000) for the development of the Hanzhong City Liangzhou Road Project. The interest is 1.2% and due on June 20, 2031. The Company is required to repay the loan in equal annual principal repayments of approximately $3.3 million commencing from December 2027 through June 2031 with interest payable on an annual basis. The Company pledged the assets of the Liangzhou Road related projects with a carrying value of approximately $181.3 million as collateral for the loan. Total interest of $52,175 and $102,918 for the three and six months ended March 31, 2023 was capitalized into the development cost of the Hanzhong City Liangzhou Road Project (March 31, 2022 - $56,612 and $113,256), respectively.

(C) Additionally, in September 2017, the Urban Development Center Co., Ltd. approved a construction loan for the Company in the amount of approximately $25.5 million (RMB175,000,000) with an annual interest rate of 1.2% per year in connection with the Liangzhou Road and related Project. The Company is required to repay the loan in equal annual principal repayment of approximately $5 million commencing from December 2027 through May 2031 with the interest payable on an annual basis. The amount of this loan is available to be drawn down as soon as the land use rights of the Liangzhou Road Project are approved and the construction starts, which is expected to be completed before the end of 2023. Interest charges for the three and six months ended March 31, 2023 were $76,729 and $151,350 (March 31, 2022 - $83,255 and $166,554), which was included in the construction capitalized costs.

14

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 6. CUSTOMER DEPOSITS

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

	March 31,		September 30,
	2023		2022
	(Unaudited)
Customer deposits by real estate projects:
Mingzhu Garden (Mingzhu Nanyuan and Mingzhu Beiyuan)	$	8,602,097	$	8,300,749
Oriental Pearl Garden		3,123,500		3,015,526
Liangzhou road and related projects		186,382		186,968
Yangzhou Pearl Garden		757,679		731,206
Yang County East 2nd Ring Road		2,184,169		2,108,667
Yangzhou Palace		5,353,327		5,499,652
Total	$	20,207,154	$	19,842,768

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

NOTE 7. TAXES

(A) Business sales tax and VAT

The Company is subject to a 5% VAT for its existing real estate projects based on the local tax authority’s practice. As of March 31, 2023, the Company had business VAT tax payable of $4,021,992 (September 30, 2022 - $4,144,254), which is expected to be paid when the projects are completed and assessed by the local tax authority.

(B) Corporate income taxes (“CIT”)

The Company’s PRC subsidiary and VIE are governed by the Income Tax Law of the People’s Republic of China for privately run enterprises, which are generally subject to income tax on income reported in the statutory financial statements after appropriate tax adjustments. The Company’s CIT rate is 25% on taxable income. Although the possibility exists for reinterpretation of the application of the tax regulations by higher tax authorities in the PRC, potentially overturning the decision made by the local tax authority, the Company has not experienced any reevaluation of the income taxes for prior years. The PRC tax rules are different from the local tax rules and the Company is required to comply with local tax rules. The difference between the two tax rules will not be a liability of the Company. There will be no further tax payments for the difference. As of March 31, 2023 and September 30, 2022, the Company’s total income tax payable amounted to $13,593,838 and $13,279,845, respectively, which included the income tax payable balances in the PRC of $10,028,839 and $9,714,844, respectively, and the Company expects to pay this income tax payable balance when the related real estate projects are completely sold.

15

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 7. TAXES (continued)

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

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2023			2022			2023			2022
Chinese statutory tax rate		25.0	%		25.0	%		25.0	%		25.0	%
Valuation allowance change and other adjustments*		(25	)%		6.3	%		(25	)%		5.6	%
Effective tax rate		-	%		31.3	%	$	-	%		30.6	%

* other adjustment mainly represented non-deductible expenses for the three and six months ended March 31, 2023 and 2022.

Income tax expense for the three and six months ended March 31, 2023 and 2022 is summarized as follows:

	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2023		2022		2023		2022
Current tax provision	$	-	$	334,350	$	-	$	483,225
Deferred tax provision		-		-		-		-
Income tax provision	$	-	$	334,350	$	-	$	483,225

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

For the year ended September 30, 2018, the Company recognized a one-time transition toll tax of approximately $2.3 million that represented management’s estimate of the amount of U.S. corporate income tax based on the deemed repatriation to the United States of the Company’s share of previously deferred earnings of certain non-U.S. subsidiaries and the VIE of the Company mandated by the U.S. Tax Reform. The Company’s estimate of the onetime transition toll tax is subject to the finalization of management’s analysis related to certain matters, such as developing interpretations of the provisions of the Tax Act and amounts related to the earnings and profits of certain foreign VIEs and the filing of our tax returns. U.S. Treasury regulations, administrative interpretations or court decisions interpreting the Tax Act may require further adjustments and changes in our estimates. The Company had a toll tax liability of $2.3 million in fiscal 2017 to reflect the max exposure on the toll tax effect. However, the Company has no U.S. operations and no U.S financing in the past, therefore, the Company does not believe it needs to pay such tax and no additional provision was accrued even since then, hence the balance remains $2.3 million as of March 31, 2023 and September 30, 2022, respectively.

16

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 7. TAXES (continued)

(C) Land Appreciation Tax (“LAT”)

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

As of March 31, 2023 and September 30, 2022, the outstanding LAT payable balance was nil with respect to completed real estate properties sold up to March 31, 2023 and September 30, 2022, respectively.

(D) Taxes payable consisted of the following:

	March 31,		September 30,
	2023		2022
	(Unaudited)
CIT	$	13,593,838	$	13,279,845
Business tax		4,021,992		4,144,254
Other taxes and fees		2,542,638		2,556,259
Tax payable	$	20,158,468	$	19,980,358

NOTE 8. COMMON STOCK

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

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

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

17

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 8. COMMON STOCK (continued)

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

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

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

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

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

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

On January 27, 2023, the company granted 40,000 shares of GGE’s restricted stock to FTGC or its designee for the termination of the Exclusion Placement Agent Agreement.

18

GREEN GIANT INC.

(FORMERLY CHINA HGS REAL ESTATE INC.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 9. COMMITMENTS AND CONTINGENCIES

From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs related to these matters when they become probable and as a result the amount of loss can be reasonably estimated. In determining whether a loss from a claim is probable, and if it is possible to estimate the loss, the Company reviews and evaluates its litigation and regulatory matters on at least a quarterly basis in light of potentially relevant factual and legal developments. If the Company determines a favorable outcome is probable, or that the amount of loss cannot be reasonably estimated, the Company does not accrue costs for a potential litigation loss.

As of March 31, 2023, the VIE, Guangsha, was subject to several civil disputes with a supplier (the “General Contractor”), a general contractor of the Company’s certain real estate projects. The total claim by the supplier is approximately $10.4 million, for which the Company estimated that it is more than likely to pay approximately $10.4 million which was included in the accounts payable and other payables in the accompanying consolidated balance sheets. The General Contractor and the Company are in the process of negotiating a settlement. The Company believes it can reach a settlement with a favorable outcome.

In addition, there are 139 cases against the Company, the total claims of year to day amounts to $6.7 million according to the judgement outcome from local courts as of April 4, 2023, of which approximately $5.9 million was accrued for the month ended December 31, 2022. The difference of $0.8 million was accrued for the current reporting month ended March 31, 2023. The Company disputes the allegations in the lawsuit and intends to vigorously defend itself in the action.

As an industry practice, the Company provides guarantees to PRC banks with respect to loans procured by the purchasers of the Company’s real estate properties for the total mortgage loan amount until the buyer obtains the “Certificate of Ownership” of the properties from the government, which generally takes six to twelve months. Because the banks provide loan proceeds without getting the “Certificate of Ownership” as loan collateral during the six-to-twelve-month period, the mortgage banks require the Company to maintain as restricted cash, at least 5% of the mortgage proceeds as security for the Company’s obligations under such guarantees. If a purchaser defaults on its payment obligations, the mortgage bank may deduct the delinquent mortgage payment from the security deposit and require the Company to pay the excess amount if the delinquent mortgage payments exceed the security deposit. If the delinquent mortgage payments exceed the security deposit, the banks may require us to pay the excess amount. If multiple purchasers’ default on their payment obligations at around the same time, we will be required to make significant payments to the banks to satisfy our guarantee obligations. If we are unable to resell the properties underlying defaulted mortgages on a timely basis or at prices higher than the amounts of our guarantees and related expenses, we will suffer financial losses. The Company has the required reserves in its restricted cash account to cover any potential mortgage defaults as required by the mortgage lenders. Since inception through the release of this report, the Company has not experienced any delinquent mortgage loans and has not experienced any losses related to these guarantees. As of March 31, 2023 and September 30, 2022, our outstanding guarantees in respect of our customers’ mortgage loans amounted to approximately $25.7 million. As of March 31, 2023 and September 30, 2022, the amount of restricted cash reserved for these guarantees was approximately $3.0 million and the Company believes that such reserves are sufficient.

NOTE 10. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date the financial statements were available to be issued. No other matters were identified affecting the accompanying financial statements or related disclosures.

NOTE 11. GOING CONCERN

As of March 31, 2023, the Company had cash balance of $3.3 million. In addition to the cash balance, the Company has restricted cash of $3.0 million, contract assets of $7.6 million, security deposits of $1.8 million and due from local governments for real estate property development completed of $43.9 million. The balances of these assets are expected to be repaid on maturity dates and will also be used for working capital for daily operation in the twelve months to come.

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

On November 14, 2022, the company announced to transform itself into the new energy business. The Company secured a purchase contract with AGR in March 2023 and delivered battery recycle product to a vendor on April 16, 2023, the Company believes it will generate more revenue from its new business.

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

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

The following discussion and analysis of financial condition and results of operations relates to the operations and financial condition reported in the unaudited condensed consolidated financial statements of Green Giant Inc. for the three and six months ended March 31, 2023 and 2022 and should be read in conjunction with such financial statements and related notes included in this report. As used in this report, the terms “Company,” “we,” “our,” “us” and “GGE” refer to Green Giant Inc., its subsidiaries and the VIE.

Forward-Looking Statements.

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

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

● our ability to sustain our project development

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

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

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

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

Business Overview

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

The Company engages in real estate development, primarily in the construction and sale of residential apartments, car parks and commercial properties in mainland China through Guangsha. Guangsha was founded by Mr. Xiaojun Zhu, and commenced operations in 1995 in Hanzhong, a prefecture-level city in Shaanxi Province.

Currently, we conduct our real estate development business through the VIE, in Hanzhong, Shaanxi Province. Since the initiation of our real estate development business, we have been focused on expanding our business in certain Tier 3 and Tier 4 cities and counties in China.

For the six months ended March 31, 2023, our sales and gross profit were $0.7 million and $0.1million, respectively, representing an approximate 90.8% and 96.5% decrease in sales and gross profit as compared to six months ended March 31, 2022, respectively. The decrease in sales and gross profit was mainly the result of less gross floor area (“GFA “) sold during the first half of fiscal 2023.

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For the six months ended March 31, 2023, the average selling price (“ASP”) for our real estate projects located in Yang County was approximately $633 per square meter, increased from the ASP of $518 per square meter for the six months ended March 31, 2022, which was mainly attributable to the following:

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

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

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

Recent Development

New Office Opening

On February 3, 2023, the Company announced the opening of its Texas’ office located at 1330 Post Oak Blvd, Ste 1175, Houston, Texas via its subsidiary Green Giant Energy Texas Inc. (“GGE Texas”). The Company has launched the green energy business since March 2023  specializing in uniting operational knowledge with critical project funding to help companies conquer clean energy transition challenges and reducing their carbon footprint.

Registration Statement Filed

On March 7, 2023, the Company filed with the U.S. Securities and Exchange Commission a registration statement on Form S-3, as amended, with aggregate offering amount not exceed $500,000,000 of the common stock, preferred stock, warrants, subscription rights, debt securities units, or any combination thereof, together or separately as described in the prospectus. The registration statement on Form S-3 was declared effective on May 2, 2023.

Resignation of the Chairman and CEO

Effective March 12, 2023, Mr. Neng Chen, resigned from his positions as the Chief Executive Officer (the “CEO”) of the Company and Chairman of the Board. Mr. Neng Chen’s resignation is not as a result of any disagreement with the Company relating to its operations, policies or practices.

Appointment of Chairman and CEO

Effective March 13, 2023, the Board appointed Mr. Yuhuai Luo as the CEO of the Company and Chairman of the Board, to fill the vacancy created by the resignation of Mr. Neng Chen. Mr. Luo has served as the vice president of Guizhou Tobacco Company since September 2016. From January 2009 to June 2016, Mr. Luo served as the vice president of Huaxin Energy Subsidiary Company. From September 1989 to March 2008, Mr. Luo served as the director of Guizhou Tobacco Company (Guiyang Branch). Mr. Luo obtained his bachelor’s degree from China Guizhou Agricultural University.

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Contract With AGR

On March 23, 2023, the Company’s indirect wholly owned subsidiary, Green Giant Energy Texas Inc. entered into a sales contract with AGR Enterprises Inc. pursuant to which Green Giant Energy agreed to purchase, and AGR agreed to sell to Green Giant Energy, 80 MT Zorba Scrap, with the unit price of $1,930 per MT.

Market Outlook

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

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

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

Critical Accounting Policies and Estimates

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

We believe the following critical accounting policies affect our significant estimates and judgments used in the preparation of our condensed consolidated financial statements. These policies should be read in conjunction with Note 2 of the notes to the unaudited condensed consolidated financial statements.

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Revenue recognition

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

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

● identification of the performance obligations in the contract;

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

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

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

Most of the Company’s revenue is derived from real estate sales of condominiums and commercial properties in the PRC. The majority of the Company’s contracts contain a single performance obligation involving significant real estate development activities that are performed together to deliver a real estate property to its customers. Revenues arising from real estate sales are recognized when or as the control of the asset is transferred to the customer. The control of the asset may transfer over time or at a point in time. For the sales of individual condominium units in a real estate development project, the Company has an enforceable right to payment for performance completed to date, revenue is recognized over time by measuring the progress towards complete satisfaction of that performance obligation (“percentage completion method”). Otherwise, revenue is recognized at a point in time when the customer obtains control of the asset. For the three and six months ended March 31, 2023 and 2022, the Company did not have any construction in progress recognized under the percentage of completion method.

Disaggregation of Revenue

Disaggregated revenues are as follows:

	For the three months ended March 31,
	2023		2022
Revenue recognized for completed condominium real estate projects, net of sales tax	$	489,877	$	4,302,992
Revenue recognized for condominium real estate projects under development, net of sales tax		—		—
Total revenue, net of sales tax	$	489,877	$	4,302,992

	For the six months ended  March 31,
	2023		2022
Revenue recognized for completed condominium real estate projects, net of sales tax	$	652,583	$	7,121,986
Revenue recognized for condominium real estate projects under development, net of sales tax		—		—
Total revenue, net of sales tax	$	652,583	$	7,121,986

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Contract balances

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

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

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

Use of estimates

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

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Real estate property development completed and under development

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

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

Cost of amenities transferred to buyers is allocated to specific units as a component of total construction cost. The amenity cost includes landscaping, road paving, etc. Once the projects are completed, the amenities are under control of the property management companies. Real estate property development completed and under development are subject to valuation adjustments when the carrying amount exceeds fair value. An impairment loss is recognized only if the carrying amount of the assets is not recoverable and exceeds its fair value. The carrying amount is not recoverable if it exceeds the sum of the undiscounted cash flows expected to be generated by the assets. The Company reviews all of its real estate projects for future losses and impairment by comparing the estimated future undiscounted cash flows for each project to the carrying value of such project. For the three and six months ended March 31, 2023 and 2022, the Company did not recognize any impairment loss for its real estate properties.

Results of Operations

Three Months Ended March 31, 2023 compared to Three Months Ended March 31, 2022

Revenue

The following is a breakdown of revenue:

	For the three months ended March 31,
	2023		2022
Revenue recognized for completed condominium real estate projects, net of sales tax	$	489,877	$	4,302,992
Revenue recognized for condominium real estate projects under development, net of sales tax		—		—
Total revenue, net of sales tax	$	489,877	$	4,302,992

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Revenue recognized for completed condominium real estate projects

The following table summarizes our revenue generated by different projects:

	For Three Months Ended March 31,
	2023						2022						Variance
	Revenue			%			Revenue			%			Amount			%
Mingzhu Garden (Mingzhu Nanyuan & Mingzhu Beiyuan) Phase I and II	$	—			—	%	$	235,375			5.4	%	$	(235,375	)		(100.0	)%
Nanyuan II Project		—			—			—			—	%						%
Yangzhou Palace		488,172			98.21	%		4,126,622			94.4	%		(3,638,450	)		(88.2	)%
Yangzhou Pearl Garden Phase I and II		8,874			1.79	%		7,626			0.2	%		1,248			16.4	%
Gross Real Estate Sales		497,046			100.0	%		4,369,623			100.0	%		(3,872,577	)		(88.6	)%
Less: Sales Tax		(7,169	)					(66,631	)					59,462			(89.2	)%
Revenue, net of sales tax	$	489,877					$	4,302,992					$	(3,813,115	)		(88.6	)%

Our revenues are derived from the sale of residential buildings, commercial store-fronts and parking spaces in projects that we have developed. Comparing to the same period of last year, revenues decreased by 88.6% to approximately $0.5 million for the three months ended March 31, 2023 from approximately $4.3 million. The total GFA sold during six months ended March 31, 2023 was 898 square meters, decreased from the 8,113 square meters completed and sold during the same period of last fiscal year. The sales tax for the three months ended March 31, 2023 was approximately $7,169, decreased by 89.2% from same period of last year, consistent with the decreased revenue.

Cost of Sales

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

	For Three Months Ended March 31,
	2023					2022					Variance
	Cost		%			Cost		%			Amount			%
Land use rights	$	46,465		11.5	%	$	218,985		9.5	%	$	(172,520	)		(78.8	)%
Construction cost		356,905		88.5	%		2,086,118		90.5	%		(1,729,213	)		(82.9	)%
Total cost	$	403,370		100.0	%	$	2,305,103		100.0	%	$	(1,901,733	)		(82.5	)%

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

Cost of sales was approximately $0.4 million for the three months ended March 31, 2023 compared to $2.3 million for the same period of last year. The $1.9 million decrease in cost of sales was mainly attributable to less GFA sold during the three months ended March 31, 2023.

Land use rights cost: The cost of land use rights includes the land premium we pay to acquire land use rights for our property development sites, plus taxes. Our land use rights cost varies for different projects according to the size and location of the site and the minimum land premium set for the site, all of which are influenced by government policies, as well as prevailing market conditions. Costs for land use rights for the three months ended March 31, 2023 and 2022 were approximately $0.05 million and $0.2 million, respectively.

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Construction cost: We outsource the construction of all of our projects to third party contractors, whom we select through a competitive tender process. Our construction contracts provide a fixed payment which covers substantially all labor, materials and equipment costs, subject to adjustments for some types of excess, such as design changes during construction or changes in government-suggested steel prices. Our construction costs consist primarily of the payments to our third-party contractors, which are paid over the construction period based on specified milestones. In addition, we purchase and supply a limited range of fittings and equipment, including elevators, window frames and door frames. Our construction costs for the three months ending March 31, 2023 were approximately $0.4 million as compared to approximately $2.1 million for the same period of last year, representing a decrease of approximately $1.7 million. The decrease in construction cost was due to less real estate projects sold during the quarter ended March 31, 2023.

Gross Profit

Gross profit and gross margin were approximately $0.09 million and 17.7 % respectively for the three months ended March 31, 2023 as compared to approximately $2.0 million and 46.4% respectively in the same period of last year due to the economic downturn caused by the epidemic control in China and aforementioned.

	For Three Months Ended March 31,
	2023						2022
	Gross Profit			Gross Margin			Gross Profit			Gross Margin
Mingzhu Garden (Mingzhu Nanyuan & Mingzhu Beiyuan) Phase I and II	$	—			—	%	$	185,567			78.8	%
Oriental Garden		—			—			—			—	%
Yangzhou Pearl Garden Phase I and II		1,386			15.6	%		1,192			15.6	%
Yangzhou Palace		92,290			18.9	%		1,877,761			45.5	%
Sales Tax		(7,169	)					(66,631	)
Total gross profit	$	86,507			17.7	%	$	1,997,889			46.4	%
Revenue, net of sales tax	$	489,877					$	4,302,992

Operating Expenses

Total operating expenses increased by 83.2% to approximately $1.2 million for the three months ended March 31, 2023 from $0.7 million for the three months ended March 31, 2022, primarily due more general and administrative expense incurred for the three months ended March 31, 2022. Our general and administrative expense was approximately $1.2 million for the three months ended March 31, 2023, increased by $0.7million from the three months ended March 31, 2022 due to litigation case of construction contract dispute with Zhejiang Hongcheng Construction Group Co., Ltd. in amount of RMB5.84 million (US$0.85 million). Our total operating expenses accounted for 254.5% and 15.8% of our real estate sales for the three months ended March 31, 2023 and 2022, respectively.

	For Three Months Ended
	March 31,
	2023			2022
Selling expenses	$	62,431		$	29,871
General and administrative expenses		1,184,079			650,426
Total operating expenses	$	1,246,510		$	680,297
Percentage of revenue, net of sales tax		254.5	%		15.8	%

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Income Taxes

PRC Taxes

The Company’s PRC subsidiary and VIE are governed by the Income Tax Law of the People’s Republic of China concerning the privately run enterprises, which are generally subject to income tax on income reported in the statutory financial statements after appropriate tax adjustments. The Company’s CIT rate is 25% on taxable income. Although the possibility exists for reinterpretation of the application of the tax regulations by higher tax authorities in the PRC, potentially overturning the decision made by the local tax authority, the Company has not experienced any reevaluation of the income taxes for prior years. The PRC tax rules are different from the local tax rules and the Company is required to comply with local tax rules. The difference between the two tax rules will not be a liability of the Company. There will be no further tax payments for the difference. For the three months ended March 31, 2023 and 2022, the Company’s effective income tax rate was 0% and 31.3%. The increase in the effective income tax rate for the three months ended March 31, 2023 was due to nondeductible expenses including professional fees, and penalties and interest expense related to our U.S. delinquent tax filings.

Net income

We reported net income of approximately $1.3 million for the three months ended March 31, 2023, as compared to net income of approximately $0.7 for the three months ended March 31, 2022. The decrease of approximately $0.6 million in our net income was primarily due to less revenue for the three months ended March 31, 2022 as discussed above under Revenues and Gross Profit.

Six Months Ended March 31, 2023 compared to Six Months Ended March 31, 2022

Revenue

The following is a breakdown of revenue:

	For the six months ended
	March 31,
	2023		2022
Revenue recognized for completed condominium real estate projects, net of sales taxes	$	652,583	$	7,121,986
Revenue recognized for condominium real estate projects under development, net of sales taxes		—		—
Total revenue, net of sales taxes	$	652,583	$	7,121,986

Revenue recognized for completed condominium real estate projects

The following table summarizes our revenue generated by different projects:

	For Six Months Ended March 31,
	2023						2022						Variance
	Revenue			%			Revenue			%			Amount			%
Mingzhu Garden (Mingzhu Nanyuan & Mingzhu Beiyuan) Phase I and Phase II	$	—			—	%	$	1,051,238			14.5	%	$	(1,051,238	)		(100.0	)%
Nanyuan II Project		—			—			—			—	%		—			—	%
Yangzhou Pearl Garden Phase I and Phase II		8,874			1.3	%		7,626			0.1	%		1,248			16.4	%
Oriental Garden		—			—	%		773,113			10.7			(773,113	)		(100.0	)%
Yangzhou Palace		652,884			98.7	%		5,416,861			74.7	%		(4,763,977	)		(87.9	)%
Gross Real Estate Sales		661,758			100.0	%		7,248,838			100.0	%		(6,587,080	)		(90.9	)%
Less: Sales Tax		(9,175	)					(126,852	)					117,677			(92.8	)%
Revenue, net of sales tax	$	652,583					$	7,121,986					$	(6,469,403	)		(90.8	)%

28

Our revenue is derived from the sale of residential buildings, commercial store-fronts and parking spaces in projects that we have developed. Compared to the same period of last year, revenues decreased by 90.8% to approximately $0.7 million for the six months ended March 31, 2023 from approximately $7.1 million in the same period of last year. The total GFA sold during six months ended March 31, 2023 was 1,045 square meters, decreased from the 11,783 square meters completed and sold during the same period of last year. The sales tax for the six months ended March 31, 2023 was approximately $9,175 decreased by 92.8% from same period of last year, consistent with the decreased revenue.

Cost of Sales

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

	For Six Months Ended March 31,
	2023					2022					Variance
	Cost		%			Cost		%			Amount			%
Land use rights	$	52,238		9.8	%	$	357,263		9.5	%	$	(305,025	)		(85.4	)%
Construction cost		481,424		90.2	%		3,403,396		90.5	%		(2,921,972	)		(85.9	)%
Total cost	$	533,662		100.0	%	$	3,760,659		100.0	%	$	(3,226,997	)		(85.8	)%

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

Cost of sales was approximately $0.5 million for the six months ended March 31, 2023 compared to $3.8 million for the same period of last year. The $3.2 million decrease in cost of sales was mainly attributable to less GFA sold during the six months ended March 31, 2023.

Land use rights cost: The cost of land use rights includes the land premium we pay to acquire land use rights for our property development sites, plus taxes. Our land use rights cost varies for different projects according to the size and location of the site and the minimum land premium set for the site, all of which are influenced by government policies, as well as prevailing market conditions. Costs for land use rights for the six months ended March 31, 2023 and 2022 were approximately $0.05 million and $0.4 million, respectively.

Construction cost: We outsource the construction of all of our projects to third party contractors, whom we select through a competitive tender process. Our construction contracts provide a fixed payment which covers substantially all labor, materials and equipment costs, subject to adjustments for some types of excess, such as design changes during construction or changes in government-suggested steel prices. Our construction costs consist primarily of the payments to our third-party contractors, which are paid over the construction period based on specified milestones. In addition, we purchase and supply a limited range of fittings and equipment, including elevators, window frames and door frames. Our construction costs for the six months ending March 31, 2023 were approximately $0.5 million as compared to approximately $3.4 million for the same period of last year, representing a decrease of approximately $2.9 million. The decrease in construction cost was due to less real estate property units sold during the first half of fiscal 2023.

Gross Profit

Gross profit and gross margin were approximately $0.12 million and 18.2 % respectively for the six months ended March 31, 2023 as compared to approximately $3.3 million and 47.2% respectively in the same period of last year due to the economic downturn caused by the epidemic control in China and aforementioned.

29

The following table sets forth the gross margin of each of our projects:

	For Six Months Ended March 31,
	2023						2022
	Gross			Percentage			Gross			Percentage
	Profit			of Revenue			Profit			of Revenue
Mingzhu Garden (Mingzhu Nanyuan & Mingzhu Beiyuan)	$	—			—	%	$	432,047			41.1	%
Oriental Garden		—			—	%		615,807			79.7	%
Nanyuan II project		—			—	%		—			—	%
Yangzhou Pearl Garden Phase I and Phase II		1,386			15.6	%		1,192			15.6	%
Yangzhou Palace		126,710			19.4	%		2,439,133			45.0	%
Sales Tax		(9,175	)		—			(126,852	)		—
Total gross profit	$	118,921			18.2	%	$	3,361,327			47.2	%
Revenue, net of sales tax	$	652,583			—		$	7,121,986			—

Operating Expenses

Total operating expenses were approximately $1.9 million and $1.5 million for the six months ended March 31, 2023 and 2022, respectively. The 36.5% increase in general administration expense for the six months ended March 31, 2023 due to litigation case of construction contract dispute with Zhejiang Hongcheng Construction Group Co., Ltd. in amount of RMB5.84 million (US$0.85 million). Our total operating expenses accounted for 284.1% and 21.5% of our real estate sales for the six months ended March 31, 2023 and 2022, respectively.

	For Six Months Ended
	March 31,
	2022			2021
Selling expenses	$	102,861		$	249,658
General and administrative expenses		1,750,896			1,282,353
Total operating expenses	$	1,853,757		$	1,532,011
Percentage of Revenue, net of sales tax		(284.1	)%		21.5	%

Income Taxes

PRC Taxes

Our Company is governed by the Enterprise Income Tax Law of the People’s Republic of China concerning private-run enterprises, which are generally subject to tax at a statutory rate of 25% on income reported in the statutory financial statements after appropriate tax adjustments. For the six months ended March 31, 2023 and 2022, the Company is subject to income tax rate of 25% on taxable income. Although the possibility exists for reinterpretation of the application of the tax regulations by higher tax authorities in the PRC, potentially overturning the decision made by the local tax authority, the Company has not experienced any reevaluation of the income taxes for prior years. The PRC tax rules are different from the local tax rules and the Company is required to comply with local tax rules. The difference between the two tax rules will not be a liability of the Company. There will be no further tax payments for the difference.

Net Income

We reported net income of approximately negative $1.9 million for the six months ended March 31, 2023, as compared to net income of approximately $1.1million for the six months ended March 31, 2022. The decrease of $3.0 million in our net income was primarily due to less revenue reported for the first half of fiscal 2023 as discussed above under Revenues and Gross Profit.

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Liquidity and Capital Resources

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

Liquidity

In recent years, the Chinese government has implemented measures to control overheating residential and commercial property prices including but not limited to restrictions on home purchase, increasing the down-payment requirement against speculative buying, development of low-cost rental housing properties to help low-income groups while reducing the demand in the commercial housing market, increasing real estate property taxes to discourage speculation, control of the land supply and slowdown the construction land auction process, etc. In addition, in December 2019, a novel strain of coronavirus (COVID-19) surfaced. COVID-19 has spread rapidly throughout China and worldwide, which has caused significant volatility in the PRC and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the PRC and international economies. To reduce the spread of COVID-19, the Chinese government has employed measures including city lockdowns, quarantines, travel restrictions, suspension of business activities and school closures. Due to difficulties resulting from the COVID-19 pandemic, including, but not limited to, the temporary closure of the Company’s facilities and operations beginning in early February through early March 2020, limited support from the Company’s employees, delayed access to construction raw material supplies, reduced customer visits to the Company’s sales office, and inability to promote real estate property sales to customers on a timely basis, The Company had real estate sales of approximately $0.7 million for the six months ended March 31, 2023, decreased from $7.2 million in the same period of last year. Based on the assessment of the current economic environment, customer demand and sales trends, we believe that consumer spending has been restored in the local real estate market and real estate sales are expected to grow in the coming periods. On the other side, due to the negative impact from the COVID-19 pandemic and its variants, the development period of real estate properties and our operating cycle has been extended and we may not be able to liquidate our large balance of completed real estate properties within the short term as we originally expected. In addition, as of March 31, 2023, we had large construction loans payable of approximately $112.2 million and accounts payable of approximately $11.0 million to be paid to subcontractors. The extent of the impact of COVID-19 on the Company’s future financial results will be dependent on future developments such as the length and severity of the crisis, the potential resurgence of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the local economy and real estate markets, among many other factors, all of which remain highly uncertain and unpredictable. Given this uncertainty, the Company is currently unable to quantify the expected impact of the COVID-19 pandemic on its future operations, financial condition, liquidity and results of operations if the current situation continues. The above-mentioned facts raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date of this filing.

In assessing its liquidity, management monitors and analyzes the Company’s cash on-hand, its ability to generate sufficient revenue sources in the future, and its operating and capital expenditure commitments. As of March 31, 2023, our total cash and restricted cash balance was approximately $3.3 million, increased from approximately $4.4 million as of September 30, 2022. With respect to capital funding requirements, the Company budgeted its capital spending based on ongoing assessments of needs to maintain adequate cash. As of March 31, 2023, we had approximately $76.9million of completed residential apartments and commercial units available for sale to potential buyers. Although we reported approximately $11.0 million accounts payable as of March 31, 2023, due to the long-term relationship with our construction suppliers and subcontractors, we were able to effectively manage cash spending on construction and negotiate with them to adjust the payment schedule based on our cash on hand. In addition, most of our existing real estate development projects relate to the old town renovation which are supported by the local government. As of March 31, 2023, we reported approximately $112.2 million of construction loans borrowed from financial institutions controlled by the local government and such loans can only be used on the old town renovation related project development. We expect that we will be able to renew all of the existing construction loans upon their maturity and borrow additional new loans from local financial institutions, when necessary, based on our past experience and the Company’s good credit history. Also, the Company’s cash flows from pre-sales and current sales should provide financial support for our current development projects and operations. For the three months ended March 31, 2023, we had six large ongoing construction projects (see Note 3, real estate properties under development) which were under the preliminary development stage due to delayed inspection and acceptance of the development plans by the local government. For the other four projects, we expect we will be able to obtain the government’s approval of the development plans on these projects in the coming fiscal year and start the pre-sale of the real estate properties to generate cash when certain property development milestones have been achieved.

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Cash Flow

Comparison of cash flows results is summarized as follows:

	Six months ended
	March 31,
	2023			2022
Net cash provided by (used in) operating activities	$	(1,157,079	)	$	7,334
Net cash used in investing activities		(5,354,400	)		(18,461,700	)
Net cash provided by financing activities		5,307,470			28,936,915
Effect of change of foreign exchange rate on cash and restricted cash		112,219			(356,551	)
Net increase (decrease) in cash and restricted cash		(1,091,790	)		10,125,998
Cash and restricted cash, beginning of period		4,368,177			3,465,189
Cash and restricted cash, end of period	$	3,276,387		$	13,591,187

Operating Activities

Net cash provided by operating activities during the six months ended March 31, 2023 was $1,157,079, consisting of net loss of approximately $ 1.9 million and net changes in our operating assets and liabilities, which mainly included an increase of spending in real estate property under development of $2.6 million, offset by an increase in other payables of $2.72 million.

Net cash provided by operating activities during the six months ended March 31, 2022 was $7,334, consisting of net income of approximately $1.1 million and net changes in our operating assets and liabilities, which mainly included an increase of spending in real estate property under development of $8.1 million, a decrease in accounts payable of $5.9 million due to more payments to our supplier during the first half of fiscal 2022, offset by decrease of real estate property completed of $3.8 million due to sales of real estate  and a decrease in other assets of $4.3 million due to the reduction of receivables from housing buyers, an increase of $2.9 million in customer deposits received from real estate sales and an increase of $2.3 million in other payable due to additional cost accrued for the first half of fiscal 2022.

Investing Activities

Net cash flows used in investing activities was approximately $5.4 million for six months ended March 31, 2023, which was mainly the prepayment made to purchase energy equipment and professional services. There was $18,461,700 cash flows used in investing activities for six months ended March 31, 2022.

Financing Activities

Net cash flows provided by financing activities was approximately $5.3 million for six months ended March 31, 2023, which was the proceeds received from two private placements completed by the Company during the first half of fiscal 2023. There was $28,936,915 cash flows provided by financing activities for six months ended March 31, 2022.

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Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements as of the date of this quarterly report on the Form 10-Q.

As an industry practice, the Company provides guarantees to PRC banks with respect to loans procured by the purchasers of the Company’s real estate properties for the total mortgage loan amount until the buyer obtains the “Certificate of Ownership” of the properties from the government, which generally takes six to twelve months. Because the banks provide loan proceeds without getting the “Certificate of Ownership” as loan collateral during the six-to-twelve-month period, the mortgage banks require the Company to maintain, as restricted cash of at least 5% of the mortgage proceeds as security for the Company’s obligations under such guarantees. If a purchaser defaults on its payment obligations, the mortgage bank may deduct the delinquent mortgage payment from the security deposit and require the Company to pay the excess amount if the delinquent mortgage payments exceed the security deposit. If the delinquent mortgage payments exceed the security deposit, the banks may require us to pay the excess amount. If multiple purchasers’ default on their payment obligations at around the same time, we will be required to make significant payments to the banks to satisfy our guarantee obligations. If we are unable to resell the properties underlying defaulted mortgages on a timely basis or at prices higher than the amounts of our guarantees and related expenses, we will suffer financial losses. The Company has the required reserves in its restricted cash account to cover any potential mortgage defaults as required by the mortgage lenders. Since inception through the release of this report, the Company has not experienced any delinquent mortgage loans and has not experienced any losses related to these guarantees. As of March 31, 2023 and September 30, 2022, our outstanding guarantees in respect of our customers’ mortgage loans amounted to approximately $25.7 million. As of March 31, 2023 and September 30, 2022, the amount of restricted cash reserved for these guarantees was approximately $3.0 million and the Company believes that such reserves are sufficient.

Inflation

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Inflation

Inflationary factors, such as increases in the cost of our products and overhead costs, could impair our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and selling, general and administrative expenses as a percentage of sales revenue if the selling prices of our products do not increase with these increased costs.

We Conduct Substantially All Our Business in Foreign Country

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

33

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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

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

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

The remedial measures being undertaken may not be fully effectuated or may be insufficient to address the significant deficiencies we identified, and there can be no assurance that significant deficiencies or material weaknesses in our internal control over financial reporting will not be identified or occur in the future. If additional significant deficiencies (or if material weaknesses) in our internal controls are discovered or occur in the future, among other similar or related effects: (i) the Company may fail to meet future reporting obligations on a timely basis, (ii) the Company’s consolidated financial statements may contain material misstatements, and (iii) the Company’s business and operating results may be harmed.

Changes in Internal Control over Financial Reporting

Except for the matters described above to improve our internal controls over financial reporting, there were no changes in our internal control over financial reporting for the three months ended March 31, 2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, however, the Company is in the process of designing and planning to change as described above.

34

PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We may be subject to, from time to time, various legal proceedings relating to claims arising out of our operations in the ordinary course of our business.

As of March 31, 2023, the VIE, Guangsha, was subject to several civil disputes with a supplier (the “General Contractor”), a general contractor of the Company’s certain real estate projects. The total claim by the supplier is approximately $10.4 million, for which the Company estimated that it is more than likely to pay approximately $10.4 million which was included in the accounts payable and other payables in the accompanying consolidated balance sheets. The General Contractor and the Company are in the process of negotiating a settlement. The Company believes it can reach a settlement with a favorable outcome.

In addition, there are 139 cases against the Company, the total claims of year to day amounts to $6.7 million according to the judgement outcome from local courts as of April 4, 2023, of which approximately $5.9 million was accrued for the month ended December 31, 2022. The difference of $0.8 million was accrued for the current reporting months  ended March 31, 2023. The Company disputes the allegations in the lawsuit and intends to vigorously defend itself in the action.

ITEM 1A. RISK FACTORS

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

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

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

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

35

ITEM 6. EXHIBITS

(a) Exhibits

Exhibit Number	Description of Exhibit
3.1	Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the SB-2 Registration Statement filed with SEC on August 31, 2001).
3.2	Bylaws (incorporated by reference to Exhibit 3.2 to the SB-2 Registration Statement filed with SEC on August 31, 2001).
3.3	Articles of Amendment to Articles of Incorporation changing the name of the Company to China Agro Sciences Corp. (incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K filed with SEC on May 5, 2006).
3.4	Articles of incorporation of the registrant as amended with the Secretary of State of Florida on October 8, 2009 (incorporated by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q filed with SEC on August 16, 2010).
3.5	Articles of Amendment to Articles of Incorporation to effect 1 share for 2 shares reverse split (incorporated by reference to Exhibit 3.1 to the current report on Form 8-K filed with SEC on September 1, 2020).
3.6	Articles of Amendment to Articles of Incorporation to change the name of the Company to “Green Giant Inc.” (incorporated by reference to Exhibit 3.1 to the current report on Form 8-K filed with SEC on March 23, 2022).
3.7	Articles of Amendment to Articles of Incorporation for the increase of the authorized shares of common stock (incorporated by reference to Exhibit 3.1 to the current report on Form 8-K filed with SEC on July 11, 2022).
4.1	Description of Securities (incorporated by reference to Exhibit 4.1 to the Annual Report on Form 10-K filed with SEC on January 13, 2023).
10.1	Employment Agreement, dated March 13, 2023 by and between the Company and Yuhuai Luo (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed with SEC on March 15, 2023)
10.2	Sales Contract, dated March 23, 2023, by and between Green Giant Energy Texas Inc. and AGR Enterprises Inc. (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed with SEC on April 7, 2023)
31.1*	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	Inline XBRL Instance
101.SCH*	Inline XBRL Taxonomy Extension Schema
101.CAL*	Inline XBRL Taxonomy Extension Calculation
101.DEF*	Inline XBRL Taxonomy Extension Definition
101.LAB*	Inline XBRL Taxonomy Extension Labels
101.PRE*	Inline XBRL Taxonomy Extension Presentation
104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith
**	Furnished herewith

36

SIGNATURES

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

	Green Giant Inc.
Date: May 5, 2023	By:	/s/ Yuhuai Luo
		Yuhuai Luo
		Chief Executive Officer

	Green Giant Inc.
Date: May 5, 2023	By:	/s/ Rongrong Dai
		Rongrong Dai
		Chief Financial Officer

37

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Yuhuai Luo, certify that:

1. I have reviewed this report on Form 10-Q of Green Giant Inc., for the fiscal period ended March 31, 2023;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a- 15(e) and 15d- 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a- 15(f) and 15d- 15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 5, 2023

/s/ Yuhuai Luo

Yuhuai Luo

Chairman of the Board of Directors and

Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Rongrong Dai, certify that:

1. I have reviewed this report on Form 10-Q of Green Giant Inc., for the fiscal period ended March 31, 2023;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a- 15(e) and 15d- 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a- 15(f) and 15d- 15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 5, 2023

/s/ Rongrong Dai

Rongrong Dai

Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certifies, in his capacity as an officer of Green Giant Inc. (the “Company”), for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

(1) The Quarterly Report of the Company on Form 10-Q for the three months ended March 31, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 5, 2023

/s/ Yuhuai Luo

Yuhuai Luo

Chairman of the Board of Directors and

Chief Executive Officer (Principal Executive Officer)

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certifies, in her capacity as an officer of Green Giant Inc. (the “Company”), for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of her knowledge:

(1) The Quarterly Report of the Company on Form 10-Q for the three months ended March 31, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 5, 2023

/s/ Rongrong Dai

Rongrong Dai

Chief Financial Officer (Principal Financial Officer)

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.

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Document And Entity Information - shares	6 Months Ended
	Mar. 31, 2023	May 03, 2023
Document Information Line Items
Entity Registrant Name	GREEN GIANT INC.
Trading Symbol	GGE
Document Type	10-Q
Current Fiscal Year End Date	--09-30
Entity Common Stock, Shares Outstanding		55,793,268
Amendment Flag	false
Entity Central Index Key	0001158420
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Mar. 31, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-34864
Entity Incorporation, State or Country Code	FL
Entity Tax Identification Number	33-0961490
Entity Address, Address Line One	6 Xinghan Road, 19th Floor
Entity Address, City or Town	Hanzhong City
Entity Address, Country	CN
Entity Address, Postal Zip Code	723000
City Area Code	+(86)
Local Phone Number	091 - 62622612
Title of 12(b) Security	Common Stock, $0.001 par value
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2023	Sep. 30, 2022
Statement of Financial Position [Abstract]
Cash	$ 275,909	$ 1,360,217
Restricted cash	3,000,478	3,007,960
Contract assets	7,600,292	7,628,770
Prepayment	32,291,315	26,936,915
Real estate property development completed	76,907,727	74,772,530
Other assets	4,176,104	3,767,190
Property, plant and equipment, net	488,974	483,219
Security deposits	1,834,432	1,771,019
Real estate property under development	153,153,112	145,300,588
Due from local governments for real estate property development completed	43,875,684	42,358,986
Total Assets	323,604,027	307,387,394
LIABILITIES AND STOCKHOLDERS’ EQUITY
Construction loans	112,246,496	108,366,351
Accounts payable	10,971,486	10,606,635
Other payables	16,798,944	13,578,713
Construction deposits	3,138,041	3,029,565
Contract liabilities	2,051,785	1,989,898
Customer deposits	20,207,154	19,842,768
Accrued expenses	11,755,135	10,547,436
Taxes payable	20,158,468	19,980,358
Total liabilities	197,327,509	187,941,724
Commitments and Contingencies
Stockholders’ equity
Common stock, $0.001 par value, 200,000,000 shares authorized, 55,793,268 and 6,464,929 shares issued and outstanding at March 31, 2023 and September 30, 2022, respectively	55,793	46,464
Additional paid-in capital	190,119,912	184,821,771
Statutory surplus	11,095,939	11,095,939
Retained earnings	(69,311,528)	(67,432,727)
Accumulated other comprehensive income	(5,683,598)	(9,085,777)
Total stockholders’ equity	126,276,518	119,445,670
Total Liabilities and Stockholders’ Equity	$ 323,604,027	$ 307,387,394

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Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares	Mar. 31, 2023	Sep. 30, 2022
Statement of Financial Position [Abstract]
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	55,793,268	6,464,929
Common stock, shares outstanding	55,793,268	6,464,929

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Condensed Consolidated Statements of Income and Comprehensive Income (Loss) (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Real estate sales, net of sales tax	$ 489,877	$ 4,302,992	$ 652,583	$ 7,121,986
Cost of real estate sales	(403,370)	(2,305,103)	(533,662)	(3,760,659)
Gross profit	86,507	1,997,889	118,921	3,361,327
Operating expenses:
Selling and distribution expenses	62,431	29,871	102,861	249,658
General and administrative expenses	1,184,079	650,426	1,750,896	1,282,353
Total operating expenses	1,246,510	680,297	1,853,757	1,532,011
Operating income	(1,160,003)	1,317,592	(1,734,836)	1,829,316
Interest income, net	924	744	2,052	2,205
Other (expense)	(146,000)	(251,201)	(146,017)	(251,201)
(Loss)/Income before income taxes	(1,305,079)	1,067,135	(1,878,801)	1,580,320
Provision for income taxes		334,350		483,225
Net (loss)/income	(1,305,079)	732,785	(1,878,801)	1,097,095
Other comprehensive income (loss)
Foreign currency translation adjustment	414,271	1,038,059	3,402,179	3,205,460
Comprehensive (loss)/income	$ (890,808)	$ 1,770,844	$ 1,523,378	$ 4,302,555
Basic and diluted income per common share:
Basic (in Dollars per share)	$ (0.02)	$ 0.02	$ (0.03)	$ 0.04
Diluted (in Dollars per share)	$ (0.02)	$ 0.01	$ (0.02)	$ 0.02
Weighted average common shares outstanding:
Basic (in Shares)	55,781,268	35,143,439	54,491,243	30,301,681
Diluted (in Shares)	77,016,371	56,524,453	75,726,347	50,321,940

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Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($)	Common Stock	Additional Paid-in Capital	Statutory Surplus	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Total
Balance at Sep. 30, 2020	$ 22,525	$ 129,930,330	$ 10,458,395	$ 34,954,061	$ (7,039,490)	$ 168,325,821
Balance (in Shares) at Sep. 30, 2020	22,525,000
Net income for the period				2,512,824		2,512,824
Foreign currency translation adjustments					6,253,728	6,253,728
Balance at Mar. 31, 2021	$ 22,525	129,930,330	10,458,395	37,466,885	(785,762)	177,092,373
Balance (in Shares) at Mar. 31, 2021	22,525,000
Balance at Sep. 30, 2021	$ 25,617	136,535,303	11,095,939	40,691,955	2,348,897	190,697,711
Balance (in Shares) at Sep. 30, 2021	25,617,807
Private placements	$ 14,847	28,922,068				28,936,915
Private placements (in Shares)	14,847,122
Net income for the period				1,097,095		1,097,095
Foreign currency translation adjustments					3,205,460	3,205,460
Balance at Mar. 31, 2022	$ 40,464	165,457,371	11,095,939	41,789,050	5,554,357	223,937,181
Balance (in Shares) at Mar. 31, 2022	40,464,929
Balance at Sep. 30, 2022	$ 46,464	184,821,771	11,095,939	(67,432,727)	(9,085,777)	119,445,670
Balance (in Shares) at Sep. 30, 2022	46,464,929
Private placements	$ 9,329	5,298,141				5,307,470
Private placements (in Shares)	9,328,339
Net income for the period				(1,878,801)		(1,878,801)
Foreign currency translation adjustments					3,402,179	3,402,179
Balance at Mar. 31, 2023	$ 55,793	$ 190,119,912	$ 11,095,939	$ (69,311,528)	$ (5,683,598)	$ 126,276,518
Balance (in Shares) at Mar. 31, 2023	55,793,268

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities
Net (loss)/income	$ (1,878,801)	$ 1,097,095
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation	11,367	12,450
Changes in operating assets and liabilities:
Contract assets	296,941	119,872
Real estate property development completed	533,662	3,766,754
Real estate property under development	(2,608,704)	(8,113,047)
Other current assets	(277,011)	4,309,818
Accounts payables	(14,696)	(5,897,638)
Other payables	2,715,488	2,271,946
Contract liabilities	(9,218)	(172,426)
Customer deposits	(340,718)	2,924,829
Accrued expenses	817,894	(581,968)
Taxes payables	(403,283)	269,649
Net cash provided by (used in) operating activities	(1,157,079)	7,334
Cash flow from investing activities
Prepayment	(5,354,400)	(18,461,700)
Net cash used in investing activities	(5,354,400)	(18,461,700)
Cash flow from financing activities
Proceeds from private placements	5,307,470	28,936,915
Net cash provided by financing activities	5,307,470	28,936,915
Effect of changes of foreign exchange rate on cash and restricted cash	112,219	(356,551)
Net increase (decrease) in cash and restricted cash	(1,091,790)	10,125,998
Cash and restricted cash, beginning of period	4,368,177	3,465,189
Cash and restricted cash, end of period	3,276,387	13,591,187
Supplemental disclosures of cash flow information:
Interest paid
Income taxes paid
Reconciliation of net cash:
Cash, end of period	275,909	10,310,540
Restricted, end of period	3,000,478	3,280,647
Total cash and restricted cash, end of period	3,276,387	13,591,187
Cash, beginning of period	1,360,217	170,001
Restricted, beginning of pe	3,007,960	3,295,188
Total cash and restricted cash, beginning of period	4,368,177	3,465,189
Non-cash financing activities:
Reclassification of interest payable to other liabilities		3,444,532
Settlement of accounts payable with real estate property*		569,299
Settlement of accounts payable and accounts receivable*		2,758,731
Real estate sales for settlement in real estate property under development

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Organization and Basis of Presentation

6 Months Ended

Mar. 31, 2023

Organization and Basis of Presentation [Abstract]

ORGANIZATION AND BASIS OF PRESENTATION

NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION

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

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the U.S. generally accepted accounting principles (“U.S. GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended March 31, 2023 and 2022 are not necessarily indicative of the results that may be expected for the full year. The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2022 filed with the SEC on January 13, 2023.

Liquidity

In recent years, the Chinese government has implemented measures to control overheating residential and commercial property prices including but not limited to restrictions on home purchase, increasing the down-payment requirement against speculative buying, development of low-cost rental housing properties to help low-income groups while reducing the demand in the commercial housing market, increasing real estate property taxes to discourage speculation, control of the land supply and slowdown the construction land auction process, etc. In addition, in December 2019, a novel strain of coronavirus (COVID-19) surfaced. COVID-19 has spread rapidly throughout China and worldwide, which has caused significant volatility in the PRC and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the PRC and international economies. To reduce the spread of COVID-19, the Chinese government has employed measures including city lockdowns, quarantines, travel restrictions, suspension of business activities and school closures. Due to difficulties resulting from the COVID-19 pandemic, including, but not limited to, the temporary closure of the Company’s facilities and operations beginning in early February through early March 2020, limited support from the Company’s employees, delayed access to construction raw material supplies, reduced customer visits to the Company’s sales office, and inability to promote real estate property sales to customers on a timely basis, The Company had real estate sales of approximately $0.7 million for the six months ended March 31, 2023, decreased from $7.2 million in the same period of last year. Based on the assessment of the current economic environment, customer demand and sales trends, we believe that consumer spending has been restored in the local real estate market and real estate sales are expected to grow in the coming periods. On the other side, due to the negative impact from the COVID-19 pandemic and its variants, the development period of real estate properties and our operating cycle has been extended and we may not be able to liquidate our large balance of completed real estate properties within the short term as we originally expected. In addition, as of March 31, 2023, we had large construction loans payable of approximately $112.2 million and accounts payable of approximately $11.0 million to be paid to subcontractors. The extent of the impact of COVID-19 on the Company’s future financial results will be dependent on future developments such as the length and severity of the crisis, the potential resurgence of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the local economy and real estate markets, among many other factors, all of which remain highly uncertain and unpredictable. Given this uncertainty, the Company is currently unable to quantify the expected impact of the COVID-19 pandemic on its future operations, financial condition, liquidity and results of operations if the current situation continues. The above-mentioned facts raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date of this filing.

In assessing its liquidity, management monitors and analyzes the Company’s cash on-hand, its ability to generate sufficient revenue sources in the future, and its operating and capital expenditure commitments. As of March 31, 2023, our total cash and restricted cash balance was approximately $3.3 million, decreased from approximately $4.4 million as of September 30, 2022. With respect to capital funding requirements, the Company budgeted its capital spending based on ongoing assessments of its needs to maintain adequate cash. On January 27, 2023, the Company closed a private placement with net proceeds of approximately $0.1 million. As of March 31, 2023, we had approximately $76.9 million of completed residential apartments and commercial units available for sale to potential buyers. Although we reported approximately $11.0 million accounts payable as of March 31, 2023, due to the long-term relationship with our construction suppliers and subcontractors, we were able to effectively manage cash spending on construction and negotiate with them to adjust the payment schedule based on our cash on hand. In addition, most of our existing real estate development projects relate to the old town renovation which are supported by the local government. As of March 31, 2023, we reported approximately $112.2 million of construction loans borrowed from financial institutions controlled by the local government and such loans can only be used on the old town renovation related project development. We expect that we will be able to renew all of the existing construction loans upon their maturity and borrow additional new loans from local financial institutions, when necessary, based on our past experience and the Company’s good credit history. Also, the Company’s cash flows from pre-sales and current sales should provide financial support for our current development projects and operations. For the three months ended March 31, 2023, we had six large ongoing construction projects (see Note 3, real estate properties under development) which were under the preliminary development stage due to delayed inspection and acceptance of the development plans by the local government. In June 2020, we completed the residence relocation surrounding the Liangzhou Road related projects and launched the construction of these projects in December 2020. For the other four projects, we expect we will be able to obtain the government’s approval of the development plans on these projects in the coming fiscal year and start the pre-sale of the real estate properties to generate cash when certain property development milestones have been achieved.

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Summary of Significant Accounting Policies

6 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

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

Use of estimates

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

Fair value of financial instruments

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

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

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

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

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

Revenue recognition

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

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

● identification of the performance obligations in the contract;

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

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

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

Most of the Company’s revenue is derived from real estate sales of condominiums and commercial properties in the PRC. The majority of the Company’s contracts contain a single performance obligation involving significant real estate development activities that are performed together to deliver a real estate property to its customers. Revenues arising from real estate sales are recognized when or as the control of the asset is transferred to the customer. The control of the asset may transfer over time or at a point in time. For the sales of individual condominium units in a real estate development project, the Company has an enforceable right to payment for performance completed to date, revenue is recognized over time by measuring the progress towards complete satisfaction of that performance obligation (“percentage completion method”). Otherwise, revenue is recognized at a point in time when the customer obtains control of the asset. For the three and six months ended March 31, 2023 and 2022, the Company did not have any construction in progress recognized under the percentage of completion method.

Disaggregation of Revenue

Disaggregated revenues are as follows:

	For the three months ended March 31,
	2023		2022
Revenue recognized for completed condominium real estate projects, net of sales tax	$	489,877	$	4,302,992
Revenue recognized for condominium real estate projects under development, net of sales tax		—		—
Total revenue, net of sales tax	$	489,877	$	4,302,992

	For the six months ended March 31,
	2023		2022
Revenue recognized for completed condominium real estate projects, net of sales tax	$	652,583	$	7,121,986
Revenue recognized for condominium real estate projects under development, net of sales tax		—		—
Total revenue, net of sales tax	$	652,583	$	7,121,986

Contract balances

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

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

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

Foreign currency translation

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

	For three months ended				For six months ended
	March 31,				March 31,				September 30,
	2023		2022		2023		2022		2022
Period end RMB: USD exchange rate		6.8676		6.3393		6.8676		6.3393		7.1135
Period average RMB: USD exchange rate		6.8423		6.3914		6.9761		6.3694		6.5532

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

Real estate property development completed and under development

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

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

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

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

Capitalization of Interest

Interest incurred during and directly related to real estate development projects is capitalized to the related real estate property under development during the active development period, which generally commences when borrowings are used to acquire real estate assets and ends when the properties are substantially complete or the property becomes inactive. Interest is capitalized based on the interest rate applicable to specific borrowings or the weighted average of the rates applicable to other borrowings during the period. Interest capitalized to real estate properties under development is recorded as a component of the cost of real estate sales when related units are sold. All other interest is expensed as incurred. For the three and six months ended March 31, 2023, the total interest capitalized for real estate property development was $1,422,212 and $2,865,459, respectively. For the three and six months ended March 31, 2022, the total interest capitalized in the real estate property development was $1,711,308 and $3,444,532, respectively.

Impairment of long-lived assets

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

Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds the estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally determined by using the asset’s expected future discounted cash flows or market value. The Company estimates fair value of the assets based on certain assumptions such as budgets, internal projections, and other available information as considered necessary. There was no impairment of long-lived assets for the three and six months ended March 31, 2023 and 2022.

Income taxes

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

ASC 740-10-25 prescribes a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax positions taken (or expected to be taken) in a tax return. It also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, years open for tax examination, accounting for income taxes in interim periods and income tax disclosures. There are no material uncertain tax positions as of March 31, 2023 and September 30, 2022.

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

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

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a U.S. corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. Due to the complexity involved in applying the provisions of the Tax Act, we made reasonable estimates of the effects and recorded accrued amounts in our consolidated financial statements as of March 31, 2023 and September 30, 2022, including approximately $2.3 million provision on the deemed repatriation of undistributed foreign earnings and an additional $1.3 million provision for delinquent U.S. and State tax fillings. The Company plans to engage a tax professional to file its delinquent tax returns in 2022. Failure to furnish any income tax and information returns with respect to any foreign business entity required, within the time prescribed by the IRS, subjects the Company to civil penalties.

Land appreciation tax (“LAT”)

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

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

Comprehensive income (loss)

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

Basic and diluted earnings (loss) per share

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

As of March 31, 2023, there were outstanding warrants to purchase approximately 55,793,268 shares of the Company’s common stock (September 30, 2022 – 46,464,929), which resulted in 77,016,371 and 75,726,347 dilutive shares for the three and six months ended March 31, 2023, respectively. There were no dilutive shares for the three and six months ended March 31, 2022.

Concentration risk

The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC’s economy. The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittances abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company’s cash and restricted cash were on deposit at financial institutions in the PRC, which the management believes are of high credit quality. In May, 2015, China’s new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in China are required to purchase deposit insurance for deposits in RMB and in foreign currencies placed with them. Such Deposit Insurance Regulation would not be effective in providing complete protection for the Company’s accounts, as its aggregate deposits are much higher than the compensation limit of RMB500,000 (approximately $78,000). However, the Company believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon in China and the Company believes that the Chinese banks that hold the Company’s cash and restricted cash are financially sound based on public available information. The Company has not experienced any losses in its bank accounts.

For the three and six months ended March 31, 2023 and 2022, the Company did not have any individual customer that accounted for more than 10% of the Company real estate sales revenue for the related periods.

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Prepayment

6 Months Ended

Mar. 31, 2023

Prepayment [Abstract]

PREPAYMENT

NOTE 3. PREPAYMENT

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

	March 31,		September 30,
	2023		2022
	(Unaudited)
Energy equipment	$	26,936,915	$	26,936,915
Professional service		5,200,000		-
Supply of zorba scrap		154,400		-
Total	$	32,291,315	$	26,936,915

(A) On March 23, 2023, Green Giant Energy Texas Inc. (“Green Giant Energy”), an indirect wholly owned subsidiary of Green Giant Inc., entered into a sales contract with AGR Enterprises Inc. (“AGR”), pursuant to which Green Giant Energy agreed to purchase, and AGR agreed to sell to Green Giant Energy, 80 MT Zorba Scrap, with the unit price of $1,930 per MT. Green Giant Energy prepaid $154,400 after both parties signed the agreement.

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

(C) In 4th quarter of fiscal 2022, the Company made the prepayment in $24.44 million to Golden Mainland Inc. and Golden Ocean Inc. for energy equipment purchase.

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Real Estate Property Development Completed and Under Development

6 Months Ended

Mar. 31, 2023

Real Estate [Abstract]

REAL ESTATE PROPERTY DEVELOPMENT COMPLETED AND UNDER DEVELOPMENT

NOTE 4. REAL ESTATE PROPERTY DEVELOPMENT COMPLETED AND UNDER DEVELOPMENT

The following summarizes the components of real estate property development completed and under development as of March 31, 2023 and September 30, 2022:

	Balance as of
	March 31, 2023			September 30, 2022
	(Unaudited)
Development completed:
Hanzhong City Mingzhu Garden Phase II	$	21,412,510		$	20,672,000
Hanzhong City Oriental Pearl Garden		18,049,449			17,425,514
Yang County Yangzhou Pearl Garden Phase II		2,105,346			2,039,912
Yang County Yangzhou Palace		35,340,422			34,635,104
Real estate property development completed	$	76,907,727		$	74,772,530
Under development:
Hanzhong City Liangzhou Road and related projects (a)	$	181,335,658		$	173,289,941
Hanzhong City Hanfeng Beiyuan East (b)		815,132			786,954
Hanzhong City Beidajie (b)		33,330,687			31,144,446
Yang County East 2nd Ring Road (c)		7,925,809			7,904,869
Real estate property under development	$	223,407,286		$	213,126,210
Impairment		(70,254,174	)		(67,825,622	)
Real estate property under development		153,153,112			145,300,588

(a) In September 2013, the Company entered into an agreement (“Liangzhou Agreement”) with the Hanzhong local government on the Liangzhou Road reformation and expansion project (Liangzhou Road Project”). Pursuant to the agreement, the Company is contracted to reform and expand the Liangzhou Road, a commercial street in downtown Hanzhong City, with a total length of 2,080 meters and a width of 30 meters and to resettle the existing residences in the Liangzhou road area. The government’s original road construction budget was approximately $33 million in accordance with the Liangzhou Agreement. The Company, in return, is being compensated by the local government to have an exclusive right on acquiring at least 394.5 Mu land use rights in a specified location of Hanzhong City. The Liangzhou Road Project’s road construction started at the end of 2013. In 2014, the original scope and budget on the Liangzhou road reformation and expansion project was extended, because the local government included more area and resettlement residences into the project, which resulted in additional investments from the Company. In return, the Company is authorized by the local government to develop and manage the commercial and residential properties surrounding the Liangzhou Road project. The Company launched the construction of the Liangzhou Road related projects in December 2020. As of March 31, 2023, the main Liangzhou road construction is substantially completed.

The Company’s development cost incurred for the Liangzhou Road Project is treated as the Company’s deposit on purchasing the related land use rights, as agreed by the local government. As of March 31, 2023, the actual costs incurred by the Company were approximately $181.3 million (September 30, 2022 - $173.3 million) and the incremental cost related to residence resettlements approved by the local government. The Company determined that the Company’s investment in the Liangzhou Road Project in exchange for interests in future land use rights is a barter transaction with commercial substance.

(b)

In September 2012, the Company was approved by the Hanzhong local government to construct four municipal roads with a total length of approximately 1,192 meters. The project was deferred and then restarted during the quarter ended June 30, 2014. As of March 31, 2023, the local government has not completed the budget for these projects therefore the delivery for these projects for the government’s acceptance and related settlement were extended to March 2023.

(c)

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

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Construction Loans

6 Months Ended

Mar. 31, 2023

Construction Loans [Abstract]

CONSTRUCTION LOANS

NOTE 5. CONSTRUCTION LOANS

	March 31,		September 30,
	2023		2022
	(Unaudited)
Loan A	$	94,958,190	$	91,675,668
Loan B		17,288,306		16,690,683
Total	$	112,246,496	$	108,366,351

(A) On June 26, 2015 and March 10, 2016, the Company signed phase I and Phase II agreements with Hanzhong Urban Construction Investment Development Co., Ltd, a state-owned Company, to borrow up to approximately $112.8 million (RMB775,000,000) for a long-term loan with interest at 4.75% to develop the Liangzhou Road Project. As of March 31, 2023, the Company borrowed approximately $95.0 million under this credit line (September 30, 2022 - $91.7 million). Due to the local government’s delay in the relocation of residences in the Liangzhou Road Project and related area, the Hanzhong Urban Construction Investment Development Co., Ltd has not released all the funds available to the Company and additional withdrawals will be based on the project’s development progress. The loan is guaranteed by Hanzhong City Hantai District Municipal Government and pledged by the Company’s Yang County Yangzhou Palace project with a carrying value of $35,340,422 as of March 31, 2023 (September 30, 2022- $34,635,104). For the three and six months ended March 31, 2023, the interest was $851,453 and $1,708,111 (March 31, 2022 - $1,571,441 and $3,164,722), respectively, which was capitalized into the development cost of the Liangzhou Road Project.

(B) In December 2016, the Company signed a loan agreement with Hantai District Urban Construction Investment Development Co., Ltd, a state-owned Company, to borrow up to approximately $17.3 million (RMB119,000,000) for the development of the Hanzhong City Liangzhou Road Project. The interest is 1.2% and due on June 20, 2031. The Company is required to repay the loan in equal annual principal repayments of approximately $3.3 million commencing from December 2027 through June 2031 with interest payable on an annual basis. The Company pledged the assets of the Liangzhou Road related projects with a carrying value of approximately $181.3 million as collateral for the loan. Total interest of $52,175 and $102,918 for the three and six months ended March 31, 2023 was capitalized into the development cost of the Hanzhong City Liangzhou Road Project (March 31, 2022 - $56,612 and $113,256), respectively.

(C) Additionally, in September 2017, the Urban Development Center Co., Ltd. approved a construction loan for the Company in the amount of approximately $25.5 million (RMB175,000,000) with an annual interest rate of 1.2% per year in connection with the Liangzhou Road and related Project. The Company is required to repay the loan in equal annual principal repayment of approximately $5 million commencing from December 2027 through May 2031 with the interest payable on an annual basis. The amount of this loan is available to be drawn down as soon as the land use rights of the Liangzhou Road Project are approved and the construction starts, which is expected to be completed before the end of 2023. Interest charges for the three and six months ended March 31, 2023 were $76,729 and $151,350 (March 31, 2022 - $83,255 and $166,554), which was included in the construction capitalized costs.

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Customer Deposits

6 Months Ended

Mar. 31, 2023

Customer Deposits [Abstract]

CUSTOMER DEPOSITS

NOTE 6. CUSTOMER DEPOSITS

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

	March 31,		September 30,
	2023		2022
	(Unaudited)
Customer deposits by real estate projects:
Mingzhu Garden (Mingzhu Nanyuan and Mingzhu Beiyuan)	$	8,602,097	$	8,300,749
Oriental Pearl Garden		3,123,500		3,015,526
Liangzhou road and related projects		186,382		186,968
Yangzhou Pearl Garden		757,679		731,206
Yang County East 2nd Ring Road		2,184,169		2,108,667
Yangzhou Palace		5,353,327		5,499,652
Total	$	20,207,154	$	19,842,768

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

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Taxes

6 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

TAXES

NOTE 7. TAXES

(A) Business sales tax and VAT

The Company is subject to a 5% VAT for its existing real estate projects based on the local tax authority’s practice. As of March 31, 2023, the Company had business VAT tax payable of $4,021,992 (September 30, 2022 - $4,144,254), which is expected to be paid when the projects are completed and assessed by the local tax authority.

(B) Corporate income taxes (“CIT”)

The Company’s PRC subsidiary and VIE are governed by the Income Tax Law of the People’s Republic of China for privately run enterprises, which are generally subject to income tax on income reported in the statutory financial statements after appropriate tax adjustments. The Company’s CIT rate is 25% on taxable income. Although the possibility exists for reinterpretation of the application of the tax regulations by higher tax authorities in the PRC, potentially overturning the decision made by the local tax authority, the Company has not experienced any reevaluation of the income taxes for prior years. The PRC tax rules are different from the local tax rules and the Company is required to comply with local tax rules. The difference between the two tax rules will not be a liability of the Company. There will be no further tax payments for the difference. As of March 31, 2023 and September 30, 2022, the Company’s total income tax payable amounted to $13,593,838 and $13,279,845, respectively, which included the income tax payable balances in the PRC of $10,028,839 and $9,714,844, respectively, and the Company expects to pay this income tax payable balance when the related real estate projects are completely sold.

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

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2023			2022			2023			2022
Chinese statutory tax rate		25.0	%		25.0	%		25.0	%		25.0	%
Valuation allowance change and other adjustments*		(25	)%		6.3	%		(25	)%		5.6	%
Effective tax rate		-	%		31.3	%	$	-	%		30.6	%

* other adjustment mainly represented non-deductible expenses for the three and six months ended March 31, 2023 and 2022.

Income tax expense for the three and six months ended March 31, 2023 and 2022 is summarized as follows:

	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2023		2022		2023		2022
Current tax provision	$	-	$	334,350	$	-	$	483,225
Deferred tax provision		-		-		-		-
Income tax provision	$	-	$	334,350	$	-	$	483,225

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

For the year ended September 30, 2018, the Company recognized a one-time transition toll tax of approximately $2.3 million that represented management’s estimate of the amount of U.S. corporate income tax based on the deemed repatriation to the United States of the Company’s share of previously deferred earnings of certain non-U.S. subsidiaries and the VIE of the Company mandated by the U.S. Tax Reform. The Company’s estimate of the onetime transition toll tax is subject to the finalization of management’s analysis related to certain matters, such as developing interpretations of the provisions of the Tax Act and amounts related to the earnings and profits of certain foreign VIEs and the filing of our tax returns. U.S. Treasury regulations, administrative interpretations or court decisions interpreting the Tax Act may require further adjustments and changes in our estimates. The Company had a toll tax liability of $2.3 million in fiscal 2017 to reflect the max exposure on the toll tax effect. However, the Company has no U.S. operations and no U.S financing in the past, therefore, the Company does not believe it needs to pay such tax and no additional provision was accrued even since then, hence the balance remains $2.3 million as of March 31, 2023 and September 30, 2022, respectively.

(C) Land Appreciation Tax (“LAT”)

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

As of March 31, 2023 and September 30, 2022, the outstanding LAT payable balance was nil with respect to completed real estate properties sold up to March 31, 2023 and September 30, 2022, respectively.

(D) Taxes payable consisted of the following:

	March 31,		September 30,
	2023		2022
	(Unaudited)
CIT	$	13,593,838	$	13,279,845
Business tax		4,021,992		4,144,254
Other taxes and fees		2,542,638		2,556,259
Tax payable	$	20,158,468	$	19,980,358

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Common Stock

6 Months Ended

Mar. 31, 2023

Common Stock [Abstract]

COMMON STOCK

NOTE 8. COMMON STOCK

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

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

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

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

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

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

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

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

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

On January 27, 2023, the company granted 40,000 shares of GGE’s restricted stock to FTGC or its designee for the termination of the Exclusion Placement Agent Agreement.

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Commitments and Contingencies

6 Months Ended

Mar. 31, 2023

Contingencies and Commitments [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 9. COMMITMENTS AND CONTINGENCIES

From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs related to these matters when they become probable and as a result the amount of loss can be reasonably estimated. In determining whether a loss from a claim is probable, and if it is possible to estimate the loss, the Company reviews and evaluates its litigation and regulatory matters on at least a quarterly basis in light of potentially relevant factual and legal developments. If the Company determines a favorable outcome is probable, or that the amount of loss cannot be reasonably estimated, the Company does not accrue costs for a potential litigation loss.

As of March 31, 2023, the VIE, Guangsha, was subject to several civil disputes with a supplier (the “General Contractor”), a general contractor of the Company’s certain real estate projects. The total claim by the supplier is approximately $10.4 million, for which the Company estimated that it is more than likely to pay approximately $10.4 million which was included in the accounts payable and other payables in the accompanying consolidated balance sheets. The General Contractor and the Company are in the process of negotiating a settlement. The Company believes it can reach a settlement with a favorable outcome.

In addition, there are 139 cases against the Company, the total claims of year to day amounts to $6.7 million according to the judgement outcome from local courts as of April 4, 2023, of which approximately $5.9 million was accrued for the month ended December 31, 2022. The difference of $0.8 million was accrued for the current reporting month ended March 31, 2023. The Company disputes the allegations in the lawsuit and intends to vigorously defend itself in the action.

As an industry practice, the Company provides guarantees to PRC banks with respect to loans procured by the purchasers of the Company’s real estate properties for the total mortgage loan amount until the buyer obtains the “Certificate of Ownership” of the properties from the government, which generally takes six to twelve months. Because the banks provide loan proceeds without getting the “Certificate of Ownership” as loan collateral during the six-to-twelve-month period, the mortgage banks require the Company to maintain as restricted cash, at least 5% of the mortgage proceeds as security for the Company’s obligations under such guarantees. If a purchaser defaults on its payment obligations, the mortgage bank may deduct the delinquent mortgage payment from the security deposit and require the Company to pay the excess amount if the delinquent mortgage payments exceed the security deposit. If the delinquent mortgage payments exceed the security deposit, the banks may require us to pay the excess amount. If multiple purchasers’ default on their payment obligations at around the same time, we will be required to make significant payments to the banks to satisfy our guarantee obligations. If we are unable to resell the properties underlying defaulted mortgages on a timely basis or at prices higher than the amounts of our guarantees and related expenses, we will suffer financial losses. The Company has the required reserves in its restricted cash account to cover any potential mortgage defaults as required by the mortgage lenders. Since inception through the release of this report, the Company has not experienced any delinquent mortgage loans and has not experienced any losses related to these guarantees. As of March 31, 2023 and September 30, 2022, our outstanding guarantees in respect of our customers’ mortgage loans amounted to approximately $25.7 million. As of March 31, 2023 and September 30, 2022, the amount of restricted cash reserved for these guarantees was approximately $3.0 million and the Company believes that such reserves are sufficient.

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Subsequent Events

6 Months Ended

Mar. 31, 2023

Subsequent Events [Abstract]

Subsequent Events

NOTE 10. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date the financial statements were available to be issued. No other matters were identified affecting the accompanying financial statements or related disclosures.

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Going Concern

6 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GOING CONCERN

NOTE 11. GOING CONCERN

As of March 31, 2023, the Company had cash balance of $3.3 million. In addition to the cash balance, the Company has restricted cash of $3.0 million, contract assets of $7.6 million, security deposits of $1.8 million and due from local governments for real estate property development completed of $43.9 million. The balances of these assets are expected to be repaid on maturity dates and will also be used for working capital for daily operation in the twelve months to come.

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

On November 14, 2022, the company announced to transform itself into the new energy business. The Company secured a purchase contract with AGR in March 2023 and delivered battery recycle product to a vendor on April 16, 2023, the Company believes it will generate more revenue from its new business.

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

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Accounting Policies, by Policy (Policies)

6 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Principles of consolidation

Principles of consolidation

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

Use of estimates

Use of estimates

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

Fair value of financial instruments

Fair value of financial instruments

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

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

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

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

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

Revenue recognition

Revenue recognition

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

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

● identification of the performance obligations in the contract;

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

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

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

Most of the Company’s revenue is derived from real estate sales of condominiums and commercial properties in the PRC. The majority of the Company’s contracts contain a single performance obligation involving significant real estate development activities that are performed together to deliver a real estate property to its customers. Revenues arising from real estate sales are recognized when or as the control of the asset is transferred to the customer. The control of the asset may transfer over time or at a point in time. For the sales of individual condominium units in a real estate development project, the Company has an enforceable right to payment for performance completed to date, revenue is recognized over time by measuring the progress towards complete satisfaction of that performance obligation (“percentage completion method”). Otherwise, revenue is recognized at a point in time when the customer obtains control of the asset. For the three and six months ended March 31, 2023 and 2022, the Company did not have any construction in progress recognized under the percentage of completion method.

Disaggregation of Revenue

Disaggregated revenues are as follows:

	For the three months ended March 31,
	2023		2022
Revenue recognized for completed condominium real estate projects, net of sales tax	$	489,877	$	4,302,992
Revenue recognized for condominium real estate projects under development, net of sales tax		—		—
Total revenue, net of sales tax	$	489,877	$	4,302,992

	For the six months ended March 31,
	2023		2022
Revenue recognized for completed condominium real estate projects, net of sales tax	$	652,583	$	7,121,986
Revenue recognized for condominium real estate projects under development, net of sales tax		—		—
Total revenue, net of sales tax	$	652,583	$	7,121,986

Contract balances

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

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

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

Foreign currency translation

Foreign currency translation

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

	For three months ended				For six months ended
	March 31,				March 31,				September 30,
	2023		2022		2023		2022		2022
Period end RMB: USD exchange rate		6.8676		6.3393		6.8676		6.3393		7.1135
Period average RMB: USD exchange rate		6.8423		6.3914		6.9761		6.3694		6.5532

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

Real estate property development completed and under development

Real estate property development completed and under development

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

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

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

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

Capitalization of interest

Capitalization of Interest

Interest incurred during and directly related to real estate development projects is capitalized to the related real estate property under development during the active development period, which generally commences when borrowings are used to acquire real estate assets and ends when the properties are substantially complete or the property becomes inactive. Interest is capitalized based on the interest rate applicable to specific borrowings or the weighted average of the rates applicable to other borrowings during the period. Interest capitalized to real estate properties under development is recorded as a component of the cost of real estate sales when related units are sold. All other interest is expensed as incurred. For the three and six months ended March 31, 2023, the total interest capitalized for real estate property development was $1,422,212 and $2,865,459, respectively. For the three and six months ended March 31, 2022, the total interest capitalized in the real estate property development was $1,711,308 and $3,444,532, respectively.

Impairment of long-lived assets

Impairment of long-lived assets

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

Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds the estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally determined by using the asset’s expected future discounted cash flows or market value. The Company estimates fair value of the assets based on certain assumptions such as budgets, internal projections, and other available information as considered necessary. There was no impairment of long-lived assets for the three and six months ended March 31, 2023 and 2022.

Income taxes

Income taxes

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

ASC 740-10-25 prescribes a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax positions taken (or expected to be taken) in a tax return. It also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, years open for tax examination, accounting for income taxes in interim periods and income tax disclosures. There are no material uncertain tax positions as of March 31, 2023 and September 30, 2022.

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

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

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a U.S. corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. Due to the complexity involved in applying the provisions of the Tax Act, we made reasonable estimates of the effects and recorded accrued amounts in our consolidated financial statements as of March 31, 2023 and September 30, 2022, including approximately $2.3 million provision on the deemed repatriation of undistributed foreign earnings and an additional $1.3 million provision for delinquent U.S. and State tax fillings. The Company plans to engage a tax professional to file its delinquent tax returns in 2022. Failure to furnish any income tax and information returns with respect to any foreign business entity required, within the time prescribed by the IRS, subjects the Company to civil penalties.

Land appreciation tax (“LAT”)

Land appreciation tax (“LAT”)

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

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

Comprehensive income (loss)

Comprehensive income (loss)

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

Basic and diluted earnings (loss) per share

Basic and diluted earnings (loss) per share

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

As of March 31, 2023, there were outstanding warrants to purchase approximately 55,793,268 shares of the Company’s common stock (September 30, 2022 – 46,464,929), which resulted in 77,016,371 and 75,726,347 dilutive shares for the three and six months ended March 31, 2023, respectively. There were no dilutive shares for the three and six months ended March 31, 2022.

Concentration risk

Concentration risk

The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC’s economy. The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittances abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company’s cash and restricted cash were on deposit at financial institutions in the PRC, which the management believes are of high credit quality. In May, 2015, China’s new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in China are required to purchase deposit insurance for deposits in RMB and in foreign currencies placed with them. Such Deposit Insurance Regulation would not be effective in providing complete protection for the Company’s accounts, as its aggregate deposits are much higher than the compensation limit of RMB500,000 (approximately $78,000). However, the Company believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon in China and the Company believes that the Chinese banks that hold the Company’s cash and restricted cash are financially sound based on public available information. The Company has not experienced any losses in its bank accounts.

For the three and six months ended March 31, 2023 and 2022, the Company did not have any individual customer that accounted for more than 10% of the Company real estate sales revenue for the related periods.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

​Schedule of disaggregated revenues

	For the three months ended March 31,
	2023		2022
Revenue recognized for completed condominium real estate projects, net of sales tax	$	489,877	$	4,302,992
Revenue recognized for condominium real estate projects under development, net of sales tax		—		—
Total revenue, net of sales tax	$	489,877	$	4,302,992

	For the six months ended March 31,
	2023		2022
Revenue recognized for completed condominium real estate projects, net of sales tax	$	652,583	$	7,121,986
Revenue recognized for condominium real estate projects under development, net of sales tax		—		—
Total revenue, net of sales tax	$	652,583	$	7,121,986

​Schedule of currency exchange rate

	For three months ended				For six months ended
	March 31,				March 31,				September 30,
	2023		2022		2023		2022		2022
Period end RMB: USD exchange rate		6.8676		6.3393		6.8676		6.3393		7.1135
Period average RMB: USD exchange rate		6.8423		6.3914		6.9761		6.3694		6.5532

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Prepayment (Tables)

6 Months Ended

Mar. 31, 2023

Prepayment [Abstract]

Schedule of prepayments

	March 31,		September 30,
	2023		2022
	(Unaudited)
Energy equipment	$	26,936,915	$	26,936,915
Professional service		5,200,000		-
Supply of zorba scrap		154,400		-
Total	$	32,291,315	$	26,936,915

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Real Estate Property Development Completed and Under Development (Tables)

6 Months Ended

Mar. 31, 2023

Real Estate [Abstract]

​Schedule of components of real estate property development completed and under development

	Balance as of
	March 31, 2023			September 30, 2022
	(Unaudited)
Development completed:
Hanzhong City Mingzhu Garden Phase II	$	21,412,510		$	20,672,000
Hanzhong City Oriental Pearl Garden		18,049,449			17,425,514
Yang County Yangzhou Pearl Garden Phase II		2,105,346			2,039,912
Yang County Yangzhou Palace		35,340,422			34,635,104
Real estate property development completed	$	76,907,727		$	74,772,530
Under development:
Hanzhong City Liangzhou Road and related projects (a)	$	181,335,658		$	173,289,941
Hanzhong City Hanfeng Beiyuan East (b)		815,132			786,954
Hanzhong City Beidajie (b)		33,330,687			31,144,446
Yang County East 2nd Ring Road (c)		7,925,809			7,904,869
Real estate property under development	$	223,407,286		$	213,126,210
Impairment		(70,254,174	)		(67,825,622	)
Real estate property under development		153,153,112			145,300,588

(a) In September 2013, the Company entered into an agreement (“Liangzhou Agreement”) with the Hanzhong local government on the Liangzhou Road reformation and expansion project (Liangzhou Road Project”). Pursuant to the agreement, the Company is contracted to reform and expand the Liangzhou Road, a commercial street in downtown Hanzhong City, with a total length of 2,080 meters and a width of 30 meters and to resettle the existing residences in the Liangzhou road area. The government’s original road construction budget was approximately $33 million in accordance with the Liangzhou Agreement. The Company, in return, is being compensated by the local government to have an exclusive right on acquiring at least 394.5 Mu land use rights in a specified location of Hanzhong City. The Liangzhou Road Project’s road construction started at the end of 2013. In 2014, the original scope and budget on the Liangzhou road reformation and expansion project was extended, because the local government included more area and resettlement residences into the project, which resulted in additional investments from the Company. In return, the Company is authorized by the local government to develop and manage the commercial and residential properties surrounding the Liangzhou Road project. The Company launched the construction of the Liangzhou Road related projects in December 2020. As of March 31, 2023, the main Liangzhou road construction is substantially completed.

The Company’s development cost incurred for the Liangzhou Road Project is treated as the Company’s deposit on purchasing the related land use rights, as agreed by the local government. As of March 31, 2023, the actual costs incurred by the Company were approximately $181.3 million (September 30, 2022 - $173.3 million) and the incremental cost related to residence resettlements approved by the local government. The Company determined that the Company’s investment in the Liangzhou Road Project in exchange for interests in future land use rights is a barter transaction with commercial substance.

(b)

In September 2012, the Company was approved by the Hanzhong local government to construct four municipal roads with a total length of approximately 1,192 meters. The project was deferred and then restarted during the quarter ended June 30, 2014. As of March 31, 2023, the local government has not completed the budget for these projects therefore the delivery for these projects for the government’s acceptance and related settlement were extended to March 2023.

(c)

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

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Construction Loans (Tables)

6 Months Ended

Mar. 31, 2023

Construction Loans [Abstract]

Schedule of construction loans

	March 31,		September 30,
	2023		2022
	(Unaudited)
Loan A	$	94,958,190	$	91,675,668
Loan B		17,288,306		16,690,683
Total	$	112,246,496	$	108,366,351

(A) On June 26, 2015 and March 10, 2016, the Company signed phase I and Phase II agreements with Hanzhong Urban Construction Investment Development Co., Ltd, a state-owned Company, to borrow up to approximately $112.8 million (RMB775,000,000) for a long-term loan with interest at 4.75% to develop the Liangzhou Road Project. As of March 31, 2023, the Company borrowed approximately $95.0 million under this credit line (September 30, 2022 - $91.7 million). Due to the local government’s delay in the relocation of residences in the Liangzhou Road Project and related area, the Hanzhong Urban Construction Investment Development Co., Ltd has not released all the funds available to the Company and additional withdrawals will be based on the project’s development progress. The loan is guaranteed by Hanzhong City Hantai District Municipal Government and pledged by the Company’s Yang County Yangzhou Palace project with a carrying value of $35,340,422 as of March 31, 2023 (September 30, 2022- $34,635,104). For the three and six months ended March 31, 2023, the interest was $851,453 and $1,708,111 (March 31, 2022 - $1,571,441 and $3,164,722), respectively, which was capitalized into the development cost of the Liangzhou Road Project.

(B) In December 2016, the Company signed a loan agreement with Hantai District Urban Construction Investment Development Co., Ltd, a state-owned Company, to borrow up to approximately $17.3 million (RMB119,000,000) for the development of the Hanzhong City Liangzhou Road Project. The interest is 1.2% and due on June 20, 2031. The Company is required to repay the loan in equal annual principal repayments of approximately $3.3 million commencing from December 2027 through June 2031 with interest payable on an annual basis. The Company pledged the assets of the Liangzhou Road related projects with a carrying value of approximately $181.3 million as collateral for the loan. Total interest of $52,175 and $102,918 for the three and six months ended March 31, 2023 was capitalized into the development cost of the Hanzhong City Liangzhou Road Project (March 31, 2022 - $56,612 and $113,256), respectively.

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Customer Deposits (Tables)

6 Months Ended

Mar. 31, 2023

Customer Deposits [Abstract]

Schedule of customer deposits from pre-sale of residential units

	March 31,		September 30,
	2023		2022
	(Unaudited)
Customer deposits by real estate projects:
Mingzhu Garden (Mingzhu Nanyuan and Mingzhu Beiyuan)	$	8,602,097	$	8,300,749
Oriental Pearl Garden		3,123,500		3,015,526
Liangzhou road and related projects		186,382		186,968
Yangzhou Pearl Garden		757,679		731,206
Yang County East 2nd Ring Road		2,184,169		2,108,667
Yangzhou Palace		5,353,327		5,499,652
Total	$	20,207,154	$	19,842,768

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Taxes (Tables)

6 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of statutory rates to the Company’s effective tax rate

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2023			2022			2023			2022
Chinese statutory tax rate		25.0	%		25.0	%		25.0	%		25.0	%
Valuation allowance change and other adjustments*		(25	)%		6.3	%		(25	)%		5.6	%
Effective tax rate		-	%		31.3	%	$	-	%		30.6	%

Schedule of statutory rates to the Company’s effective tax rate

	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2023		2022		2023		2022
Current tax provision	$	-	$	334,350	$	-	$	483,225
Deferred tax provision		-		-		-		-
Income tax provision	$	-	$	334,350	$	-	$	483,225

Schedule of taxes payable

	March 31,		September 30,
	2023		2022
	(Unaudited)
CIT	$	13,593,838	$	13,279,845
Business tax		4,021,992		4,144,254
Other taxes and fees		2,542,638		2,556,259
Tax payable	$	20,158,468	$	19,980,358

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Organization and Basis of Presentation (Details) - USD ($) $ in Millions	1 Months Ended	6 Months Ended
	Jan. 27, 2023	Mar. 31, 2023	Mar. 31, 2022	Sep. 30, 2022
Accounting Policies [Abstract]
Real estate sales		$ 0.7	$ 7.2
Construction loans payable		112.2
Accounts payable		11.0
Cash and restricted cash balance		3.3		$ 4.4
Net proceeds	$ 0.1
Sale to potential buyer		76.9
Accounts payable		11.0
Loans		$ 112.2

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Summary of Significant Accounting Policies (Details)		3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 22, 2017	Mar. 31, 2023 USD ($) shares	Mar. 31, 2022 USD ($)	Mar. 31, 2023 USD ($) shares	Mar. 31, 2022 USD ($)	Sep. 30, 2022 USD ($)	Mar. 31, 2023 CNY (¥)
Summary of Significant Accounting Policies (Details) [Line Items]
Total interest capitalized		$ 1,422,212	$ 1,711,308	$ 2,865,459	$ 3,444,532
Repatriation of undistributed foreign earnings				$ 2,300,000
Provision for delinquent						$ 1,300,000
Warrants to purchase | shares				55,793,268
Payments for Repurchase of Warrants						$ 46,464,929
Dilutive shares | shares		77,016,371		75,726,347
Aggregate deposits		$ 78,000		$ 78,000			¥ 500,000
Sales revenue, percentage					10.00%
Minimum [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Down-payments percentage				20.00%
Corporate tax rate	21.00%
Maximum [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Down-payments percentage				50.00%
Corporate tax rate	35.00%
Hanzhong [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Land appreciation tax rate				1.00%		1.00%
Yang Country [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Land appreciation tax rate						0.50%
Sales [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Sales revenue, percentage				10.00%

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Summary of Significant Accounting Policies (Details) - ​Schedule of disaggregated revenues - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Schedule of Disaggregated Revenues [Abstract]
Revenue recognized for completed condominium real estate projects, net of sales tax	$ 489,877	$ 4,302,992	$ 652,583	$ 7,121,986
Revenue recognized for condominium real estate projects under development, net of sales tax
Total revenue, net of sales tax	$ 489,877	$ 4,302,992	$ 652,583	$ 7,121,986

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Summary of Significant Accounting Policies (Details) - ​Schedule of currency exchange rate	3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022	Sep. 30, 2022
Schedule of Currency Exchange Rate [Abstract]
Period end RMB: USD exchange rate	6.8676	6.3393	6.8676	6.3393	7.1135
Period average RMB: USD exchange rate	6.8423	6.3914	6.9761	6.3694	6.5532

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Prepayment (Details) - USD ($)		1 Months Ended	3 Months Ended	12 Months Ended
	Oct. 15, 2022	Mar. 23, 2023	Dec. 31, 2022	Sep. 30, 2022
Prepayment (Details) [Line Items]
Unit price		$ 1,930
Prepaid amount		$ 154,400
Reserves amount	$ 5,200,000
Commission percentage	3.00%
Vocob Inc.[Member]
Prepayment (Details) [Line Items]
Prepayment amount			$ 5,200,000
Golden Mainland Inc. [Member]
Prepayment (Details) [Line Items]
Prepayment amount				$ 24,440,000

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Prepayment (Details) - Schedule of prepayments - USD ($)	6 Months Ended	12 Months Ended
	Mar. 31, 2023	Sep. 30, 2022
Schedule of Prepayments [Abstract]
Energy equipment	$ 26,936,915	$ 26,936,915
Professional service	5,200,000
Supply of zorba scrap	154,400
Total	$ 32,291,315	$ 26,936,915

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Real Estate Property Development Completed and Under Development (Details) $ in Millions	6 Months Ended	12 Months Ended
	Mar. 31, 2023 USD ($)	Sep. 30, 2022 USD ($)	Mar. 31, 2023 MUR (₨)
Real Estate [Abstract]
Construction budget	$ 33.0
Land use rights (in Rupees) | ₨			₨ 394.5
Costs incurred	$ 181.3	$ 173.3
Interest rate, percentage	4.75%	4.75%	4.75%

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Real Estate Property Development Completed and Under Development (Details) - ​Schedule of components of real estate property development completed and under development - USD ($)		6 Months Ended
		Mar. 31, 2023	Sep. 30, 2022
Development completed:
Real estate property development completed		$ 76,907,727	$ 74,772,530
Under development:
Real estate property under development		223,407,286	213,126,210
Impairment		(70,254,174)	(67,825,622)
Real estate property under development		153,153,112	145,300,588
Hanzhong City Mingzhu Garden Phase II [Member]
Development completed:
Real estate property development completed		21,412,510	20,672,000
Hanzhong City Oriental Pearl Garden [Member]
Development completed:
Real estate property development completed		18,049,449	17,425,514
Yang County Yangzhou Pearl Garden Phase II [Member]
Development completed:
Real estate property development completed		2,105,346	2,039,912
Yang County Yangzhou Palace [Member]
Development completed:
Real estate property development completed		35,340,422	34,635,104
Hanzhong City Liangzhou Road and related projects [Member]
Under development:
Real estate property under development	[1]	181,335,658	173,289,941
Hanzhong City Hanfeng Beiyuan East [Member]
Under development:
Real estate property under development	[2]	815,132	786,954
Hanzhong City Beidajie [Member]
Under development:
Real estate property under development	[2]	33,330,687	31,144,446
Yang County East 2nd Ring Road [Member]
Under development:
Real estate property under development	[3]	$ 7,925,809	$ 7,904,869

[1] In September 2013, the Company entered into an agreement (“Liangzhou Agreement”) with the Hanzhong local government on the Liangzhou Road reformation and expansion project (Liangzhou Road Project”). Pursuant to the agreement, the Company is contracted to reform and expand the Liangzhou Road, a commercial street in downtown Hanzhong City, with a total length of 2,080 meters and a width of 30 meters and to resettle the existing residences in the Liangzhou road area. The government’s original road construction budget was approximately $33 million in accordance with the Liangzhou Agreement. The Company, in return, is being compensated by the local government to have an exclusive right on acquiring at least 394.5 Mu land use rights in a specified location of Hanzhong City. The Liangzhou Road Project’s road construction started at the end of 2013. In 2014, the original scope and budget on the Liangzhou road reformation and expansion project was extended, because the local government included more area and resettlement residences into the project, which resulted in additional investments from the Company. In return, the Company is authorized by the local government to develop and manage the commercial and residential properties surrounding the Liangzhou Road project. The Company launched the construction of the Liangzhou Road related projects in December 2020. As of March 31, 2023, the main Liangzhou road construction is substantially completed. The Company’s development cost incurred for the Liangzhou Road Project is treated as the Company’s deposit on purchasing the related land use rights, as agreed by the local government. As of March 31, 2023, the actual costs incurred by the Company were approximately $181.3 million (September 30, 2022 - $173.3 million) and the incremental cost related to residence resettlements approved by the local government. The Company determined that the Company’s investment in the Liangzhou Road Project in exchange for interests in future land use rights is a barter transaction with commercial substance.

[2] In September 2012, the Company was approved by the Hanzhong local government to construct four municipal roads with a total length of approximately 1,192 meters. The project was deferred and then restarted during the quarter ended June 30, 2014. As of March 31, 2023, the local government has not completed the budget for these projects therefore the delivery for these projects for the government’s acceptance and related settlement were extended to March 2023.

[3] The Company was engaged by the Yang County local government to construct the East 2nd Ring Road with a total length of 2.15 km. The local government is required to repay the Company’s project investment costs within 3 years with interest at the interest rate based on the commercial borrowing rate with the similar term published by the China Construction Bank (March 31, 2023 and 2022 – 4.75%). The local government has approved a refund to the Company by reducing local surcharges or taxes otherwise required in the real estate development. The road construction was substantially completed as of March 31, 2023 and is in process of the government’s review and approval.

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Construction Loans (Details)		1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 10, 2016 CNY (¥)	Sep. 30, 2017 USD ($)	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2017 CNY (¥)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 CNY (¥)	Jun. 26, 2015 USD ($)
Construction Loans (Details) [Line Items]
Borrow amount	¥ 775,000,000											$ 112,800,000
Long term loan interest percentage	4.75%
Credit line borrowed amount			$ 95,000,000		$ 95,000,000			$ 91,700,000
Carrying value			35,340,422		35,340,422			$ 34,635,104
Interest amount			851,453	$ 1,571,441	$ 1,708,111	$ 3,164,722
Interest, description					The interest is 1.2% and due on June 20, 2031.
Equal annual principal repayments					$ 3,300,000
Debt instrument, face amount			181,300,000		181,300,000
Total interest					102,918		$ 52,175
Total interest				56,612		113,256
Hantai District Urban [Member]
Construction Loans (Details) [Line Items]
Borrow amount										$ 17,300,000	¥ 119,000,000
Construction Loans [Member]
Construction Loans (Details) [Line Items]
Debt instrument, face amount		$ 25,500,000							¥ 175,000,000
Urban Development Center Co., Ltd [Member]
Construction Loans (Details) [Line Items]
Long term loan interest percentage		1.20%
Equal annual principal repayments		$ 5,000,000
Construction Loans [Member]
Construction Loans (Details) [Line Items]
Total interest			$ 76,729	$ 83,255	$ 151,350	$ 166,554

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Construction Loans (Details) - Schedule of construction loans - USD ($)		Mar. 31, 2023	Sep. 30, 2022
Construction Loans (Details) - Schedule of construction loans [Line Items]
Total construction loans		$ 112,246,496	$ 108,366,351
Loan A [Member]
Construction Loans (Details) - Schedule of construction loans [Line Items]
Total construction loans	[1]	94,958,190	91,675,668
Loan B [Member]
Construction Loans (Details) - Schedule of construction loans [Line Items]
Total construction loans	[2]	$ 17,288,306	$ 16,690,683

[1] On June 26, 2015 and March 10, 2016, the Company signed phase I and Phase II agreements with Hanzhong Urban Construction Investment Development Co., Ltd, a state-owned Company, to borrow up to approximately $112.8 million (RMB775,000,000) for a long-term loan with interest at 4.75% to develop the Liangzhou Road Project. As of March 31, 2023, the Company borrowed approximately $95.0 million under this credit line (September 30, 2022 - $91.7 million). Due to the local government’s delay in the relocation of residences in the Liangzhou Road Project and related area, the Hanzhong Urban Construction Investment Development Co., Ltd has not released all the funds available to the Company and additional withdrawals will be based on the project’s development progress. The loan is guaranteed by Hanzhong City Hantai District Municipal Government and pledged by the Company’s Yang County Yangzhou Palace project with a carrying value of $35,340,422 as of March 31, 2023 (September 30, 2022- $34,635,104). For the three and six months ended March 31, 2023, the interest was $851,453 and $1,708,111 (March 31, 2022 - $1,571,441 and $3,164,722), respectively, which was capitalized into the development cost of the Liangzhou Road Project.

[2] In December 2016, the Company signed a loan agreement with Hantai District Urban Construction Investment Development Co., Ltd, a state-owned Company, to borrow up to approximately $17.3 million (RMB119,000,000) for the development of the Hanzhong City Liangzhou Road Project. The interest is 1.2% and due on June 20, 2031. The Company is required to repay the loan in equal annual principal repayments of approximately $3.3 million commencing from December 2027 through June 2031 with interest payable on an annual basis. The Company pledged the assets of the Liangzhou Road related projects with a carrying value of approximately $181.3 million as collateral for the loan. Total interest of $52,175 and $102,918 for the three and six months ended March 31, 2023 was capitalized into the development cost of the Hanzhong City Liangzhou Road Project (March 31, 2022- $56,612 and $113,256), respectively.

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Customer Deposits (Details)	6 Months Ended
	Mar. 31, 2023
Minimum [Member]
Customer Deposits (Details) [Line Items]
Customer deposit percentage	10.00%
Selling price percentage	30.00%
Maximum [Member]
Customer Deposits (Details) [Line Items]
Customer deposit percentage	20.00%
Selling price percentage	50.00%

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Customer Deposits (Details) - Schedule of customer deposits from pre-sale of residential units - USD ($)	Mar. 31, 2023	Sep. 30, 2022
Customer Deposits (Details) - Schedule of customer deposits from pre-sale of residential units [Line Items]
Total	$ 20,207,154	$ 19,842,768
Mingzhu Garden (Mingzhu Nanyuan and Mingzhu Beiyuan) [Member]
Customer Deposits (Details) - Schedule of customer deposits from pre-sale of residential units [Line Items]
Total	8,602,097	8,300,749
Oriental Pearl Garden [Member]
Customer Deposits (Details) - Schedule of customer deposits from pre-sale of residential units [Line Items]
Total	3,123,500	3,015,526
Liangzhou road and related projects [Member]
Customer Deposits (Details) - Schedule of customer deposits from pre-sale of residential units [Line Items]
Total	186,382	186,968
Yangzhou Pearl Garden [Member]
Customer Deposits (Details) - Schedule of customer deposits from pre-sale of residential units [Line Items]
Total	757,679	731,206
Yang County East 2nd Ring Road [Member]
Customer Deposits (Details) - Schedule of customer deposits from pre-sale of residential units [Line Items]
Total	2,184,169	2,108,667
Yangzhou Palace [Member]
Customer Deposits (Details) - Schedule of customer deposits from pre-sale of residential units [Line Items]
Total	$ 5,353,327	$ 5,499,652

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Taxes (Details) - USD ($)		3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 22, 2017	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022	Sep. 30, 2022	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2021
Taxes (Details) [Line Items]
Percentage of value added tax				5.00%
Tax payable		$ 4,021,992		$ 4,021,992		$ 4,144,254
Local income tax rate				25.00%
Income tax payable		$ 13,593,838		$ 13,593,838		13,279,845
Federal corporate income tax rate		25.00%	25.00%	25.00%	25.00%
Foreign tax credits deduction percentage				50.00%
Toll tax amount							$ 2,300,000
Tax liabilty								$ 2,300,000
Provision for Other Losses				$ 2,300,000		2,300,000
Payable balance
Maximum [Member]
Taxes (Details) [Line Items]
Federal corporate income tax rate	35.00%
Progressive tax rates				60.00%
Minimum [Member]
Taxes (Details) [Line Items]
Federal corporate income tax rate	21.00%
Progressive tax rates				30.00%
PRC [Member]
Taxes (Details) [Line Items]
Income tax payable		10,028,839		$ 10,028,839		$ 9,714,844
GILTI [Member]
Taxes (Details) [Line Items]
Income tax payable
Yang County [Member]
Taxes (Details) [Line Items]
Land appreciation tax rate				0.50%
Hanzhong [Member]
Taxes (Details) [Line Items]
Land appreciation tax rate				1.00%		1.00%

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Taxes (Details) - Schedule of statutory rates to the company’s effective tax rate		3 Months Ended		6 Months Ended
		Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Schedule statutory rates to the Company’s effective tax rate [Abstract]
Chinese statutory tax rate		25.00%	25.00%	25.00%	25.00%
Valuation allowance change and other adjustments	[1]	(25.00%)	6.30%	(25.00%)	5.60%
Effective tax rate			31.30%		30.60%

[1] other adjustment mainly represented non-deductible expenses for the three and six months ended March 31, 2023 and 2022.

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Taxes (Details) - Schedule of income tax expense - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Schedule of income tax expense [Abstract]
Current tax provision		$ 334,350		$ 483,225
Deferred tax provision
Income tax provision		$ 334,350		$ 483,225

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Taxes (Details) - Schedule of taxes payable - USD ($)	Mar. 31, 2023	Sep. 30, 2022
Schedule of taxes payable [Abstract]
CIT	$ 13,593,838	$ 13,279,845
Business tax	4,021,992	4,144,254
Other taxes and fees	2,542,638	2,556,259
Tax payable	$ 20,158,468	$ 19,980,358

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Common Stock (Details) - USD ($)				1 Months Ended			6 Months Ended
	Sep. 06, 2022	Aug. 10, 2022	Jan. 14, 2022	Jan. 27, 2023	Mar. 16, 2022	Sep. 25, 2012	Mar. 31, 2023	Sep. 30, 2022
Common Stock (Details) [Line Items]
Aggregate shares		5,990,000	10,247,122		4,600,000
Par value (in Dollars per share)		$ 0.001	$ 0.001		$ 0.001		$ 0.001	$ 0.001
Exercise price (in Dollars per share)			2.375
Price per share (in Dollars per share)	$ 2.27	$ 3.23	$ 2.375
Gross proceeds (in Dollars)			$ 24,300,000
Aggregate purchase price (in Dollars)					$ 4,600,000
Private placement							10,247,122
Warrants issued			30,741,366
Reserved shares						1,000,000
Granted shares				40,000		500,000
Share-based compensation (in Dollars)	$ 22,700	$ 19,347,700					$ 19,370,400
Common shares	10,000
Common Stock [Member]
Common Stock (Details) [Line Items]
Exercise price (in Dollars per share)			$ 2.375

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Commitments and Contingencies (Details) - USD ($) $ in Millions	6 Months Ended
	Mar. 31, 2023	Dec. 31, 2022	Sep. 30, 2022
Contingencies and Commitments [Abstract]
Total claim amount	$ 10.4
Accounts payable and other payables	10.4
Claim amount	6.7
Accrued claim amount	$ 0.8	$ 5.9
Percentage of mortgage proceeds as security	5.00%
Mortgage loan	$ 25.7		$ 25.7
Restricted cash	$ 3.0		$ 3.0

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Going Concern (Details) - USD ($) $ in Millions	1 Months Ended
	Mar. 31, 2023	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash	$ 3.3
Restricted cash	3.0	$ 3.0
Contract assets	7.6
Security deposits	1.8
Real estate property development expense	$ 43.9