Filed pursuant to Rule 424(b)(4)

Registration No. 333-271425

750,000 American Depositary Shares

Nature Wood Group Limited

Representing 6,000,000 ordinary shares

This is the initial public offering in the United States of American depositary shares, or ADSs, representing ordinary shares of Nature Wood Group Limited (the “Company”), a British Virgin Islands (the “BVI”) company. We are offering 750,000 ADSs. Each ADS represents eight ordinary shares, $0.001 par value per share (the “Ordinary Share”) on a firm commitment basis. The initial public offering price is $9 per ADS.

Our ADSs have been approved for listing on the Nasdaq Capital Market under the symbol “NWGL”. We cannot guarantee that we will be able to maintain the listing of our ADSs on Nasdaq; however, we will not complete this offering unless our ordinary shares remain so listed.

Our Company is a holding company incorporated in the BVI. As a holding company with no material operations of our own, we conduct our operations mainly in Peru, France, Hong Kong and Macau, through our subsidiaries, including Swift Top Capital Resources Limited, Parquet Nature (France) S.A.R.L., Choi Chon Investment Company Limited, South American Wood S.A.C., Grupo Maderero Amaz S.A.C., Zhang Hermanos S.A.C., E&T Forestal S.A.C., Nuevo San Martin S.A.C., Sepahua Tropical Forest S.A.C., Maderera Industrial Isabelita S.A.C., Saavedra Forest S.A.C., Inversiones H.S.T. S.A.C., Forestal Tuesta S.A.C., Agro Forest A&J S.A.C., Sanra Inversiones S.A.C., and Latinoamerican Forest S.A.C. (collectively, the “Operating Subsidiaries”).

This is an offering of the ADSs of our Company, the holding company in the BVI, instead of shares of our Operating Subsidiaries. You may never directly hold any equity interest in our Operating Subsidiaries. We are offering 750,000 ADSs of our Company, representing 5.4% of the issued and outstanding Ordinary Shares following completion of the offering of our Company, assuming the underwriters do not exercise their over-allotment option. Following the offering, 750,000 ADSs, representing 5.4% of the issued and outstanding Ordinary Shares will be held by public shareholders, assuming the underwriters do not exercise their over-allotment option.

Following the completion of this offering, we will be a “controlled company” within the meaning of the NASDAQ Stock Market Rules and may rely on exemptions from certain corporate governance requirements. As at the date of this prospectus, approximately 86.3% of the issued share capital of the Company is owned by Easy Bliss Limited, which in turn is owned approximately 60.2% by Mr. Hok Pan Se, our Director. Mr. Hok Pan Se therefore beneficially owns approximately 51.9% of our total voting power as at the date of this prospectus. Following completion of this offering, approximately 81.6% of the issued share capital of the Company will be owned by Easy Bliss Limited and Mr. Hok Pan Se will in turn beneficially own approximately 49.1% of our total voting power. Following completion of this offering and assuming full conversion of the outstanding convertible bonds of the Company, approximately 69.9% of the issued share capital of the Company will be owned by Easy Bliss Limited and Mr. Hok Pan Se will in turn beneficially own approximately 43.1% of our total voting power. See “Management — Controlled Company Exception”.

As our Company is a holding company incorporated in the BVI and not a Chinese operating company, our operations in Hong Kong, Macau and China are conducted by our subsidiaries based in Hong Kong, Macau and China. The ADSs offered in this offering are shares of Nature Wood Group Limited, the BVI holding company, instead of shares of the Operating Subsidiaries. Investors in this offering are purchasing interests in the BVI holding company and will not directly hold equity interests in the Operating Subsidiaries. This structure involves unique risks to investors. See “Risk Factors” beginning on page 11 of this prospectus for a discussion of risks facing the Company and the offering as a result of this structure. We may be subject to unique risks due to uncertainty of the interpretation and the application of the PRC laws and regulations, including but not limited to the cybersecurity review and regulatory review of overseas listing of our ADSs through an offshore holding company. We are also subject to the risks of uncertainty about any future actions of the Chinese government or authorities in Hong Kong and Macau in this regard.

Should the Chinese government choose to exercise significant oversight and discretion over the conduct of our business, they may intervene in or influence our operations. Such governmental actions:

● could affect our operations;

● could significantly limit or completely hinder our ability to continue our operations;

● could hinder our ability to continue to offer securities to investors; and

● may cause the value of our ADSs to significantly decline or be worthless.

Additionally, although we have direct ownership of our operating entities in Hong Kong, Macau and China and currently do not have or intend to have any contractual arrangement to establish a variable interest entity (“VIE”) structure with any entity in China, we are still subject to certain legal and operational risks associated with our Operating Subsidiaries in Hong Kong, Macau and China.

In addition, our ADSs may be prohibited from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable Act (the “HFCA Act”) (as amended by the Accelerating Holding Foreign Companies Accountable Act, which was enacted on December 29, 2022) if the Public Company Accounting Oversight Board (United States) (the “PCAOB”) is unable to inspect our auditors for two consecutive years. Our auditor has been inspected by the PCAOB on a regular basis, with the last inspection in December 2021, and our auditor is not subject to the determinations announced by the PCAOB on December 16, 2021, which determinations were vacated on December 15, 2022. If trading in our ADSs is prohibited under the HFCA Act in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, Nasdaq may determine to delist our ADSs and trading in our ADSs could be prohibited. On August 26, 2022, the PCAOB signed SOP Agreements with the China Securities Regulatory Commission and China’s Ministry of Finance. The SOP Agreements established a specific, accountable framework to make possible complete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong, as required under U.S. law. On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB vacated its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s, control. However, if the PCAOB continues to be prohibited from conducting complete inspections and investigations of PCAOB-registered public accounting firms in mainland China and Hong Kong, the PCAOB is likely to determine by the end of 2023 that positions taken by authorities in the PRC obstructed its ability to inspect and investigate registered public accounting firms in mainland China and Hong Kong completely, then the companies audited by those registered public accounting firms would be subject to a trading prohibition on U.S. markets pursuant to the Holding Foreign Companies Accountable Act. See “Risk Factors — Risks Related to Doing Business in China — Although the audit report included in this prospectus is prepared by U.S. auditors who are currently inspected by the PCAOB, there is no guarantee that future audit reports will be prepared by auditors inspected by the PCAOB and, as such, in the future investors may be deprived of the benefits of such inspection. Furthermore, trading in our ADSs may be prohibited under the HFCA Act if the SEC subsequently determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely, and as a result, U.S. national securities exchanges, such as the Nasdaq, may determine to delist our securities. Furthermore, on December 29, 2022, the Accelerating Holding Foreign Companies Accountable Act was enacted, which amended the HFCA Act and requires the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, and thus, would reduce the time before our ADSs may be prohibited from trading or delisted.”

Our ability to pay dividends depends upon dividends paid by our subsidiaries. If the PRC subsidiary or any newly formed PRC subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, the PRC subsidiary is permitted to pay dividends to us only out of their respective retained earnings, if any, as determined in accordance with Chinese accounting standards and regulations. Under applicable PRC laws and regulations, PRC subsidiary is required to set aside a portion of its after tax profits each year to fund certain statutory reserves, and funds from such reserves may not be distributed to us as cash dividends except in the event of liquidation of such subsidiaries. These statutory limitations affect, and future covenant debt limitations might affect, the PRC subsidiary’s ability to pay dividends to us. We have not declared or paid dividends in the past, nor any dividends or distributions were made by a subsidiary to our holding company. We do not intend to distribute dividends in the foreseeable future, but we do not have a fixed dividend policy. Our board of directors have complete discretion on whether to distribute dividends, subject to applicable laws. See “Prospectus Summary — Our Corporate Structure — Transfers of Cash to and from our Subsidiaries”.

To the extent cash or assets in our business is in the PRC or Hong Kong or in our PRC or Hong Kong subsidiaries, the funds or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations on our ability or the ability of our subsidiaries by the PRC government to transfer cash or assets. See “Risk Factors – Risks Relating to Doing Business in China – In the event that we rely on dividends and other distributions on equity paid by our PRC or Hong Kong subsidiaries to fund any cash and financing requirements we may have, any limitation on the ability of our PRC or Hong Kong subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business” and “– To the extent cash or assets in our business is in the PRC or Hong Kong or in our PRC or Hong Kong subsidiaries, the funds or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations on our ability or the ability of our subsidiaries by the PRC government to transfer cash or assets”.

Our holding company Nature Wood Group Limited indirectly controls our subsidiaries. Within our holding structure, the cross-border transfer of funds within our corporate group is legal and compliant with the laws and regulations of the respective jurisdictions where our Operating Subsidiaries were established, including Peru, France, Hong Kong and Macau. After foreign investors’ funds enter our Company at the closing of this offering, the funds can be transferred directly to Nature Flooring (Europe) Company Limited and Peru Forestry Management Co., Limited, and then to our Operating Subsidiaries. If our Company intends to distribute dividends in the future, the Operating Subsidiaries will transfer the dividends to Nature Flooring (Europe) Company Limited and Peru Forestry Management Co., Limited in accordance with the laws and regulations of Peru, France, Hong Kong and Macau, and then Nature Flooring (Europe) Company Limited and Peru Forestry Management Co., Limited will transfer the dividends to our Company, and the dividends will then be distributed from our Company to all shareholders respectively in proportion to the shares they hold, regardless of whether the shareholders are U.S. investors or investors in other countries or regions. As at the date of this prospectus, no transfer, dividend or distribution have been made between our Company, its subsidiaries and consolidated entities, or to investors.

For the year ended December 31, 2022 and 2021 and up to the date of this prospectus, we did not declare or pay any dividends. As at the date of this prospectus, dividend payables balance was nil. We do not have any current intentions to distribute further earnings. If we determine to pay dividends on any of our ADSs in the future, as a holding company, we will be dependent on receipt of funds from our subsidiaries by way of dividend payments. See “Dividend Policy”, Summary Consolidated Financial Data and Consolidated Statements of Change in Shareholders’ Equity in the Report of Independent Registered Public Accounting Firm for further details.

We are aware that recently the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in China, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, expanding the efforts in anti-monopoly enforcement and regulating the overseas offering and listing activities involving PRC domestic companies. Since these statements and regulatory actions are new, it is uncertain how soon the legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any. It is also uncertain what the potential impact such modified or new laws and regulations will have on our daily business operation in Hong Kong, Macau or the PRC, our ability to accept foreign investments and the listing of our ADSs on a U.S. or other foreign exchanges.

Investing in our ADSs is highly speculative and involves a high degree of risk. Before buying any shares, you should carefully read the discussion of material risks of investing in our ADSs in “Risk Factors” beginning on page 11 of this prospectus.

We are an “emerging growth company” as defined under the federal securities laws and, as such, will be subject to reduced public company reporting requirements. See “Prospectus Summary — Implications of Being an Emerging Growth Company and a Foreign Private Issuer” for additional information.

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

	PER ADS		TOTAL
Initial public offering price	$	9.00	$	6,750,000
Underwriting discounts(1)	$	0.63	$	472,500
Proceeds, before expenses, to us	$	8.37	$	6,277,500

(1) For a description of the compensation to be received by the underwriters, see “Underwriting” beginning on page 123.

We expect our total cash expenses for this offering (including cash expenses payable to our underwriters for their out-of-pocket expenses) to be approximately $1.9 million, exclusive of the above discounts. In addition, we will pay additional items of value in connection with this offering that are viewed by the Financial Industry Regulatory Authority, or FINRA, as underwriting compensation. These payments will further reduce proceeds available to us before expenses See “Underwriting.”

This offering is being conducted on a firm commitment basis. The underwriters are obligated to take and pay for all of the shares if any such shares are taken. We have granted the underwriters an option for a period of 45 days from the date of the prospectus to purchase up to 15% of the total number of our ADSs to be offered by us pursuant to this offering (excluding shares subject to this option), solely for the purpose of covering over-allotments, at the initial public offering price less the underwriting discounts. If the underwriters exercise the option in full, the total underwriting discounts payable will be $543,375 based on a public offering price of $9 per ADS, and the total gross proceeds to us, before underwriting discounts and expenses, will be $7,762,500. If we complete this offering, net proceeds will be delivered to us on the closing date. We will not be able to use such proceeds in China, however, until we complete capital contribution procedures which require prior approval from each of the respective local counterparts of China’s Ministry of Commerce, the State Administration for Market Regulation, and the State Administration of Foreign Exchange. See remittance procedures in the section titled “Use of Proceeds” beginning on page 43.

The underwriters expect to deliver the ADSs against payment as set forth under “Underwriting”, on or about September 14, 2023.

Prime Number Capital

The date of this prospectus is September 12, 2023.

TABLE OF CONTENTS

	Page
Prospectus Summary	1
Risk Factors	11
Special Note Regarding Forward-Looking Statements	30
Industry and Market Data	31
Use of Proceeds	43
Dividend Policy	44
Capitalization	45
Dilution	46
Exchange Rate Information	47
Corporate History and Structure	48
Selected Consolidated Financial Data	51
Management’s Discussion and Analysis of Financial Condition and Results of Operations	52
Business	61
Regulation	72
Management	86
Related Party Transactions	90
Principal Shareholders	91
Description of Share Capital and Governing Documents	92
Description of American Depositary Shares	101
Shares Eligible for Future Sale	112
Material Income Tax Considerations	114
Underwriting	123
Expenses Related to this Offering	131
Legal Matters	132
Experts	132
Enforcement of Liabilities	133
Where You Can Find Additional Information	135
Index to Consolidated Financial Statements	F-1

We are responsible for the information contained in this prospectus and any free writing prospectus we prepare or authorize. We have not, and the underwriters have not, authorized anyone to provide you with different information, and we and the underwriters take no responsibility for any other information others may give you. We are not, and the underwriters are not, making an offer to sell our ADSs in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or the sale of any ADSs.

For investors outside the United States: Neither we nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction, other than the United States, where action for that purpose is required. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the ADSs and the distribution of this prospectus outside the United States.

Our Company is incorporated under the laws of the British Virgin Islands and a majority of our outstanding securities are owned by non-U.S. residents. Under the rules of the U.S. Securities and Exchange Commission, or the SEC, we currently qualify for treatment as a “foreign private issuer.” As a foreign private issuer, we will not be required to file periodic reports and financial statements with the Securities and Exchange Commission, or the SEC, as frequently or as promptly as domestic registrants whose securities are registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

Until and including October 7, 2023 (twenty-five (25) days after the date of this prospectus), all dealers that buy, sell or trade our ADSs, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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CONVENTIONS THAT APPLY TO THIS PROSPECTUS

Unless otherwise indicated or the context otherwise requires, all references in this prospectus to:

● “ADSs” are to American depositary shares, each of which represents eight ordinary shares;

● “BVI” are to the British Virgin Islands;

● “FSC” are to the Forest Stewardship Council;

● “Hong Kong” are to the Hong Kong Special Administrative Region in the People’s Republic of China;

● “Macau” are to the Macao Special Administrative Region in the People’s Republic of China;

● “Ordinary Shares” are the ordinary shares of our Company, par value of $0.001 per share;

● “our Company” are to Nature Wood Group Limited, the holding company incorporated in the BVI that will issue the ADSs being offered in this offering;

● “our Forests” are to parcels of land in Peru with an aggregate area of approximately 615,333 hectares, of which our Group owned the natural forest concessions and cutting rights for the exploitation of timber, as at June 30, 2023

● “our Group”, “the Group”, “we”, “us” and “our” are to our Company and its subsidiaries; where the discussions in the context relate to business operations and/or financial performance, then the terms “Company,” “we,” “us,” “our,” “our Company,” “our Group”, “the Group” and “our business” refer to the business operations and/or financial performance of the Operating Subsidiaries;

● “our Director(s)” are to the director(s) of our Company;

● “PEFC” are to Programme for the Endorsement of Forest Certification;

● “PRC” or “China” are to the People’s Republic of China, excluding Hong Kong, Macau and Taiwan for the purposes of this prospectus only;

● “RMB” or “Renminbi” are to the legal currency of China;

● “sawn timber” are to square timber and commercial materials;

● “$”, “USD”, “US$” or “U.S. dollars” are to the legal currency of the United States;

● “HKD” or “HK$” are to the legal currency of Hong Kong;

● “EUR” are to the legal currency of the European Union;

● “MOP” are to the legal currency of Macau;

● “SOL” or “S/” are to the legal currency of Peru.

We have made rounding adjustments to some of the figures included in this prospectus. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.

Unless the context indicates otherwise, all information in this prospectus assumes no exercise by the underwriters of their over-allotment option or the outstanding options.

The functional currency of our entities located in Hong Kong and the European Union is EUR, the functional currency of our entities located in Macau is HKD, the functional currency of our entities located in the PRC is RMB and the functional currency of our entities located in Peru is USD. Our consolidated financial statements are presented in USD. We use USD as reporting currency in our consolidated financial statements and in this prospectus. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the period. Gains or losses resulting from foreign currency transactions are included in the accompanying consolidated statement of income and other comprehensive income.

Translations of balances in the consolidated balance sheets, consolidated statements of income and consolidated statements of cash flows from EUR, HKD and RMB into USD as of and for the year ended December 31, 2022 are solely for the convenience of the reader and were calculated at the rate of EUR 1.000 to USD 1.066, HKD 1.000 to USD 0.128 and RMB 1.000 to USD 0.144, respectively. No representation is made that the EUR, HKD and RMB amounts represent or could have been, or could be, converted, realized or settled into USD at that rate, or at any other rate.

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PROSPECTUS SUMMARY

The following summary highlights information contained elsewhere in this prospectus and does not contain all of the information you should consider before investing in our ADSs. You should read the entire prospectus carefully, including “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and the related notes thereto, in each case included in this prospectus. You should carefully consider, among other things, the matters discussed in the section of this prospectus titled “Business” before making an investment decision.

Overview

We are a global leading vertically-integrated forestry company headquartered in Macau that focuses on FSC business operations. Our operations cover both up-stream forest management and harvesting, and down-stream wood-processing and distribution. We offer a broad line of products, including logs, decking, flooring, sawn timber, recycled charcoal, synthesized charcoal, machine-made charcoal and essential oils, primarily through our sales network in Europe, South Asia, South America, North America and China. According to the Frost & Sullivan Report, we are (i) the second largest wood products export supplier; (ii) the second largest wood products export supplier certified by the FSC; and (iii) the largest decking product supplier, in Peru in terms of export value in 2021. We are also the largest oak export supplier and the second largest hardwood export supplier, in France in terms of export volume in 2021 according to the Frost &Sullivan Report.

Our Group owns concession rights of forests in Peru which covered an area of approximately 615,333 hectares as of June 30, 2023. As of June 30, 2023, approximately 13.67% and 1.66% of our Forests are covered by Cumaru and Estoraque, respectively. Cumaru and Estoraque are valuable hardwood timber which produce strong and durable wood that are well suited for high value markets. In particular, Cumaru is commonly used for producing flooring, decking and other construction materials, while Estoraque is commonly used for producing flooring and furniture.

To ensure the sustainability of our forest resources, we establish a set of harvesting rules and operating standards. For instance, we typically only harvest timber meeting the minimum stem circumference requirements. Our standard of forestry operations was recognized by the FSC, an independent accreditation body that is dedicated to promoting responsible and sustainable forest management.

According to the Frost & Sullivan Report, we are one of the few forestry companies that have successfully implemented FSC-certified operations, including forest management, harvesting and manufacturing of wood products. We commenced our FSC business operations in 2016, when Grupo Maderero Amaz S.A.C., a subsidiary of our Group, first obtained FSC Chain of Custody (CoC) certification and began to sell FSC-certified products. As at the date of this prospectus, five subsidiaries of our Group (including Choi Chon Investment Company Limited, E&T Forestal S.A.C., Grupo Maderero Amaz S.A.C., Nuevo San Martin S.A.C. and Latinoamerican Forest S.A.C) have obtained FSC CoC certifications. We also have built a professional forest management team to implement FSC forest management. Our forest management team is led by our head of forest engineer who is qualified to carry out FSC forest management and the key members of our team have an average of over 8 years of experience in FSC forest management. According to the Frost & Sullivan Report, FSC-certified products can be sold at a premium of around 5% to 15% over non-FSC-certified products.

With the growing public concern about environmental protection, consumers are more willing to pay a premium to buy “green” products that are certified by reputable accreditation bodies or ecolabel organizations. As such, products certified by the FSC, one of the world’s most trusted accreditation body, have received wide acceptance across the world, especially the United States and Europe. Revenue generated from sales of FSC-certified products increased by 162.8% from approximately $3.7 million for the year ended December 31, 2020 to approximately $9.9 million for the year ended December 31, 2021, which further increased by 13.7% to approximately $11.2 million for the year ended December 31, 2022, which accounted for approximately 10.0%, 20.7% and 20.3% of our revenue of the respective periods. We believe that such growing trend will continue in the future.

Some of the logs we harvested will be sold to customers immediately after harvesting, others will be processed into a wide variety of products, such as decking and flooring, in our wood processing facilities. As at the date of this prospectus, our Group owns two facilities in Peru, and the Peru base has a monthly log processing capacity of more than 6,000 m³ and a monthly export volume of up to 65 containers (approximately 1,560 m³).

 To further capture the benefit of vertical integration of our manufacturing operation and to secure a stable supply of our wood materials, we sourced logs and semi-finished air-dried planks from local forest owners in Peru, and flooring and decking through sourcing from Gabon. In addition, we source logs through timber auctions or local forest owners in France. To secure a stable supply of logs, our forest management team would assist forest owners in Peru and France with forest management and harvest planning. Similar to logs harvested from our Forests, logs we procured from third parties are either sold directly to customers or further processed in our processing facilities.

We perform the manufacturing process for certain of our products at our Peru base and outsource part of the manufacturing process to third party manufacturers in Peru. We also provide original design manufacturer (ODM) services by combining our in-house product design and development expertise with our ODM partners. For the years ended December 31, 2022, 2021 and 2020 approximately 18.4%, 18.2% and 20.8% of our revenue from our products was generated from our ODM business respectively.

For the years ended December 31, 2022, 2021 and 2020, we generated revenue of approximately $55.3 million, $47.7 million and $37.5 million, respectively. Revenue from sales of logs, flooring and decking and sawn timber accounted for 50.2%, 21.7%, 24.9% and 3.2% of our total revenue for the year ended December 31, 2022 respectively, accounted for 44.4%, 25.0%, 25.2% and 5.4% of our total revenue for the year ended December 31, 2021 respectively, and accounted for 43.9%, 34.4%, 17.5% and 4.2% of our total revenue for the year ended December 31, 2020 respectively.

Competitive Strengths

We believe the following competitive strengths differentiate us from our competitors:

● large, sustainable and high quality forest resources base;

● sustainable, socially responsible and environmentally friendly FSC-certified forest management system;

● our vertically-integrated business model enables us to achieve operational efficiency and better quality control;

● light-asset FSC business operations; and

● experienced management team with extensive industry knowledge.

Our Strategies

We intend to pursue the following strategies to further expand our business:

● acquisitions of concession rights;

● selectively pursue strategic cooperation with local forest owners in South American countries; and

● further optimize our product offering and increase our market share; and

● proposed trading of carbon credits.

Our Corporate History

With more than 15 years of experience in forest land operation, our Group has become a diversified enterprise integrating the production and sales of a range of wood products, including logs, decking, flooring, sawn timber, recycled charcoal, synthesized charcoal, machine-made charcoal and essential oils. Our Group has a supply chain throughout South America, Africa and Europe, owning natural forest concessions and cutting rights for the exploitation of timbers of forests in Peru which covered an area of approximately 615,333 hectares and two wood processing facilities in Peru as of June 30, 2023. Among them, our Peru base was established in 2016 and has 300 employees as of June 30, 2023, with monthly log processing capacity of more than 6,000 m³ and monthly export volume of up to 65 containers (approximately 1,560 m³).

With Mr. Hok Pan Se becoming our principal shareholder in June 2016, he pursued his vision of developing our Group into a vertically-integrated forestry company by acquiring more new forests with a view to reducing the impact of our business from market fluctuations on raw materials.

In January 2017, we acquired our first wood processing facility in Peru and expanded our product category and started selling decking which are ready-to-use products directly sold to end customers, as compared to our flooring products sold before 2017 which required reprocessing before they can be used.

In June 2020, we acquired a second wood processing facility in Peru with equipment and hardware located in the largest distribution area of wood products in Peru, which contributed substantial growth of our business. To better utilize the biological resources of our Forests, we introduced essential oils as our new product in November 2020 which are refined from the timber in our Forests and commenced the production and export of essential oils to our customers.

1

Our Corporate Structure

The following diagram illustrates our corporate structure as of the date of this prospectus and after giving effect to this offering (assuming the underwriters do not exercise the over-allotment options).

All of the entities held by our Group below are direct or indirect subsidiaries of our Company.

Notes:

1.	South American Wood S.A.C. is held 99% by Peru Forestry Investments Co. and 1% by Peruvian Forestry Investments Co., Limited.
2.	Grupo Maderero Amaz S.A.C. is held 96.95% by Peru Forestry Investments Co. and 3.05% by Peruvian Forestry Investments Co., Limited.
3.	E&T Forestal S.A.C. is held 25% by One Talent Enterprises Limited and 75% by Allied Kingdom Enterprises Limited.

4. Nuevo San Martin S.A.C. is held 0.01% by One Talent Enterprises Limited and 99.99% by Allied Kingdom Enterprises Limited.

5.	Sepahua Tropical Forest S.A.C. is held 99.999% by One Talent Enterprises Limited and 0.001% by Allied Kingdom Enterprises Limited.
6.	Maderera Industrial Isabelita S.A.C. is held 74.98% by Golden Vast Development Limited and 25.02% by Star Max Development Limited.
7.	Latinoamerican Forest S.A.C. is held 75% by Golden Vast Development Limited and 25% by Star Max Development Limited.
8.	Inversiones H.S.T. S.A.C. is held 99.999% by Saavedra Forest S.A.C. and 0.001% by Maderera Industrial Isabelita S.A.C..
9.	Forestal Tuesta S.A.C. is held 99% by Saavedra Forest S.A.C. and 1% by Maderera Industrial Isabelita S.A.C..
10.	Agro Forest A&J S.A.C. is held 99% by Saavedra Forest S.A.C. and 1% by Maderera Industrial Isabelita S.A.C..

Transfers of Cash to and from our Subsidiaries

Our Company is permitted under the laws of BVI to provide funding to our subsidiaries through loans or capital contributions without restrictions on the amount of the funds. Our non-PRC subsidiaries are permitted under the laws of their respective jurisdictions to provide funding to our Company through dividend distribution without restrictions on the amount of the funds.

The PRC has currency and capital transfer regulations that require us to comply with certain requirements for the movement of capital. To utilize the expected proceeds from this offering, we may make additional capital contributions to our PRC subsidiary or make loans to our PRC subsidiary. Our PRC subsidiary has not transferred and do not intend to transfer any earnings or cash to our Company. Nevertheless, as a result of PRC laws and regulations (noted below) that require annual appropriations of 10% of after-tax income to be set aside in a general reserve fund prior to payment of dividends, our PRC subsidiary is restricted in that respect, as well as in other respects noted below, in their ability to transfer a portion of their net assets to our Company as a dividend.

We currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business but we may declare or pay dividends in the future. Any future determination related to our dividend policy will be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements, contractual requirements, business prospects and other factors the board of directors deems relevant, and subject to the restrictions contained in any future financing instruments.

Subject to the BVI Business Companies Act and our memorandum and articles of association, our board of directors may authorize and declare a dividend to shareholders at such time and of such an amount as they think fit if they are satisfied, on reasonable grounds, that immediately before or following the dividend the value of our assets will exceed our liabilities and we will be able to pay our debts as they become due, and the value of assets of our Company will not be less than the sum of our total liabilities. There is no further BVI statutory restriction on the amount of funds which may be distributed by us by dividend.

2

Pursuant to Article 119 bis 2 of the Code Général des Impôts, dividends distributed by corporations which have their registered office in France to non-French tax residents (individuals or legal entities), are subject to withholding tax in France. See “Material Income Tax Considerations – Taxation in France – Profit distribution and withholding tax” for more information.

Save as disclosed in the paragraph headed “Regulation - Overview of the Laws and Regulations Relating to Our Business and Operations in China - Regulations Related to Foreign Exchange”, for our Company and our subsidiaries located outside China, there is no restrictions on foreign exchange for such entities and they are able to transfer cash among these entities, across borders and to U.S. investors without any restriction. Also, there is no restrictions and limitations on the abilities of non-PRC subsidiary to distribute earnings from their businesses, including from subsidiaries to the parent company or from the holding company to the U.S. investors as well as the abilities to settle amounts owed.

For the years ended December 31, 2022, 2021 and 2020 and up to the date of this prospectus, we did not declare or pay any dividends. If we determine to pay dividends on any of our ADSs in the future, as a holding company, we will be dependent on receipt of funds from our subsidiaries by way of dividend payments.

See “Dividend Policy”, “Risk Factors — We rely on dividends and other distributions on equity paid by our subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on our ability to conduct our business.” Summary Consolidated Financial Data and Consolidated Statements of Change in Shareholders’ Equity in the Report of Independent Registered Public Accounting Firm for more information.

Risks Related to Our Business and Industry (beginning on page 11 of this prospectus)

Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may materially and adversely affect our business, financial condition, results of operations, cash flows and prospects that you should consider before making a decision to invest in our ADSs. These risks are discussed more fully in “Risk Factors” set out in page 11 to page 29. These risks include, but are not limited to, the following:

● Our revenues are sensitive to fluctuations of log price and selling price of our products in the forestry industry.

● We may face increased costs for new forest acquisitions.

● Our Forests are subject to environmental regulations in Peru and France.

● We are dependent on the availability of large numbers of workers to perform manual labor.

● Our Forests may not grow in accordance with our expectations.

● Our forest survey and knowledge of our Forests are subject to errors in the survey.

● Our inability to obtain logging permits with sufficient logging amounts could reduce our future revenues.

● Our inability to obtain certificates from the FSC could reduce our future revenues.

● Our inability to acquire enough immediately harvestable forests may affect our ability to meet demand.

● Social conflicts may disrupt our operations.

● We are heavily dependent on key personnel and consultants.

● The forestry industry faces competition from solid wood substitutes.

● Abnormally high or prolonged levels of rain at our Forests may adversely impact our ability to harvest timber.

● We are subject to certain risks relating to the delivery of our products.

● Disruption to the supply of raw materials or increase in raw material prices could materially and adversely affect our Group’s business, financial condition and results of operations.

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Risks Related to Our Corporate Structure (beginning on page 14 of this prospectus)

● We rely on dividends and other distributions on equity paid by our subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on our ability to conduct our business.

Risks Related to Doing Business in China (beginning on page 15 of this prospectus)

● Due to the long arm provisions under the current PRC laws and regulations, if Chinese government exercises any significant oversight and discretion over the conduct of our business and intervenes in or influences our operations at any time our operations and/or the value of our ADSs could be affected. The policies, regulations, rules, and the enforcement of laws of the Chinese government may also be changed or amended and our assertions and beliefs of the risk imposed by the PRC legal and regulatory system could be uncertain.

● The enactment of the Law of the PRC on Safeguarding National Security in the Hong Kong Special Administrative Region could impact our Hong Kong subsidiaries.

● A downturn in Hong Kong, China or the global economy, and the economic and political policies of China could materially and adversely affect our business and financial condition.

● The Hong Kong legal system embodies uncertainties which could limit the legal protections available to our Company.

● Changes in international trade policies, trade disputes, barriers to trade, or the emergence of a trade war may dampen growth in China and other markets where the majority of our clients reside.

● Fluctuations in exchange rates could have a material and adverse effect on our results of operations and the value of your investment.

Risks Related to our ADSs (beginning on page 22 of this prospectus)

● There has been no public market for our ADSs prior to this offering, and you may not be able to resell our Shares at or above the price you pay for them, or at all.

● We will incur increased costs as a result of being a public company, particularly after we cease to qualify as an “emerging growth company.”

● Recent joint statements by the SEC and PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offering.

● If we fail to meet applicable listing requirements, Nasdaq may delist our ADSs from trading, in which case the liquidity and market price of our ADSs could decline.

● Volatility in our ADSs price may subject us to securities litigation.

● The price and the trading volume of our ADSs may be volatile which could result in substantial losses for investors purchasing our Shares under this offering.

● We may not pay any dividends on the ADSs.

4

Regulatory Permission

We are currently not required to obtain approval from PRC authorities to list on U.S. exchanges, however, if our subsidiaries or the holding company were required to obtain approval in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on a U.S. exchange, which would materially affect the interest of the investors. It is uncertain when and whether our Company will be required to obtain permission from the PRC government to list on U.S. exchanges in the future, and when such permission is obtained, whether it will be rescinded. Although our Company is currently not required to obtain permission from any of the PRC central or local government to list on U.S. exchanges and has not received any denial to list on a U.S. exchange, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to its business or industry. If we are subsequently advised by any Chinese authorities that permission for this offering and/or listing on the Nasdaq Stock Market was required, we may not be able to obtain such permission in a timely manner, if at all. If this risk occurs, our ability to offer securities to investors could be significantly limited or completely hindered and the ADSs currently being offered may substantially decline in value or become worthless.

We are an offshore holding company with some of our major operations conducted in Hong Kong and Macau. We do not intend to apply the proceeds of this offering to make loans to our PRC subsidiary, or make additional capital contributions to our PRC subsidiary, or establish new PRC subsidiary and make capital contributions to these new PRC subsidiaries, or acquire offshore entities with business operations in China in an offshore transaction. Nevertheless, the aforementioned activities are subject to PRC regulations and approvals or registration. For example, loans by us to our wholly owned PRC subsidiary to finance its activities cannot exceed statutory limits and must be registered with the local counterpart of SAFE. If we decide to finance our wholly owned PRC subsidiary by means of capital contributions, these capital contributions are subject to registration with the State Administration for Market Regulation or its local branch, reporting of foreign investment information with the Ministry of Commerce, or registration with other governmental authorities in China. In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, or at all, with respect to future loans to our PRC subsidiary or future capital contributions by us to our PRC subsidiary. For more details, see “Risk Factors — Risks Relating to Doing Business in China — PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of this offering to make loans or additional capital contributions to our PRC subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand our business.”

Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Strictly Cracking Down on Illegal Securities Activities, which were made available to the public on July 6, 2021. The Opinions on Strictly Cracking Down on Illegal Securities Activities emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Pursuant to the Opinions, Chinese regulators are required to accelerate rulemaking related to the overseas offering and listing of securities, and update the existing laws and regulations related to data security, cross-border data flow, and management of confidential information. Numerous regulations, guidelines and other measures are expected to be adopted under the umbrella of or in addition to the Cybersecurity Law and Data Security Law.

On February 17, 2023, the China Securities Regulatory Commission (the “CSRC”) issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (“Overseas Listing Measures”), which became effective on March 31, 2023. The Overseas Listing Measures require that a PRC domestic enterprise seeking to issue and list its securities overseas (“Overseas Offering and Listing”) shall complete the filing procedures and submit the relevant information to CSRC. An Overseas Offering and Listing includes direct and indirect issuance and listing. The recognition of overseas indirect issuance and listing of PRC domestic enterprises shall follow the principle of substance over form. If the issuer meets both of the following circumstances, it shall be deemed an overseas indirect issuance and listing: (1) 50% or more of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year is accounted for by domestic companies; and; and (2) the main parts of the issuer’s business activities are conducted in the Chinese Mainland, or its main places of business are located in the Chinese Mainland, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in the Chinese mainland.

We understand that the Overseas Listing Measures apply to overseas offerings and listings of companies mainly operating in China, which is not the case for us. Legally, Macau, as a special administrative region of China, exercises a high degree of autonomy and enjoys executive, legislative and independent judicial power, including that of final adjudication, authorized by the National People’s Congress of PRC, in accordance with the provisions of the Basic Law of the Macau. In accordance with PRC laws, our sole PRC subsidiary has been regarded and treated as a foreign-invested enterprise since its establishment. Considering that (i) the main parts of our company’s business activities are conducted outside mainland China, the sole PRC subsidiary is not involved in the major part of the Company’ s operations, and we currently do not intend to conduct any major part of our operations through it, (ii) our principal executive office is located in Macau, and (iii) most of our senior managers responsible for business operations and management are permanent residents of Peru, France, Hong Kong, Macau and the PRC or their habitual residence is located in Peru, France, Hong Kong, Macau and the PRC, based on our understanding of the conditions of overseas indirect issuance and listing, we believe that this proposed offering will not be identified as an overseas indirect offering and listing of PRC domestic enterprises and that therefore we will not be required to file with the CSRC.

However, there is uncertainty as to whether our Company will be required to obtain permission from or file with the PRC government to list on a U.S. stock exchange in the future and the Chinese authorities may ultimately take a view contrary to or otherwise different from ours. If we are subsequently notified by any Chinese authorities that permission/filing for this offering and/or listing on the Nasdaq Stock Market was required, we may not be able to obtain such permission or complete such filing in a timely manner, if at all. Any failure to obtain such permission or complete such filing in a timely manner may restrict our ability to complete the proposed offering or any future equity capital raising activities and may subject us or relevant persons to certain penalties (See “Regulations–Regulations Related to Securities Offering and Listing Overseas” for details), which would have a material adverse effect on our business and financial position. However, as the Overseas Listing Measures was recently promulgated, there remain substantial uncertainties as to its interpretation, application and enforcement and how it may impact our ability to complete this offering or to raise or utilize fund.

5

On December 28, 2021, the Cyberspace Administration of China (the “CAC”) jointly with the relevant authorities formally published Measures for Cybersecurity Review (2021) which took effect on February 15, 2022 and replace the former Measures for Cybersecurity Review (2020). Measures for Cybersecurity Review (2021) stipulates that operators of critical information infrastructure purchasing network products and services, and online platform operator (together with the operators of critical information infrastructure, the “Operators”) carrying out data processing activities that affect or may affect national security, shall conduct a cybersecurity review, any online platform operator who controls more than one million users’ personal information must go through a cybersecurity review by the cybersecurity review office if it seeks to be listed in a foreign country. On July 7, 2022, the CAC released the Measures for the Security Assessment of Cross-Border Data, which becomes effective on September 1, 2022. According to the Measures for the Security Assessment of Cross-Border Data, where a data processor provides data abroad under any of the following circumstances, it shall apply for exit security assessment of data to the national cyberspace administration through the local provincial cyberspace administration: (1) the data processor provides important data abroad; (2) the operators of key information infrastructure and data processors that process the personal information of more than 1 million people provide personal information abroad; (3) data processors who have provided 100,000 personal information or 10,000 sensitive personal information abroad in aggregate since January 1 of last year provide personal information abroad; and (4) other situations required for security assessment as stipulated by the state cyberspace administration. Given that: (i) we are not operators of key information infrastructure; (ii) we do not possess personal information on more than one million users in our business operations; (iii) we do not provide overseas personal information of more than 100,000 individuals or any sensitive personal information of more than 10,000 individuals in aggregate since January 1 of the previous year; and (iv) data processed in our business does not have a bearing on national security, economy operation, social stability or public health and security and thus may not be classified as core or important or significant data by the authorities, we would not be required to apply for a cybersecurity review or a cross-border data assessment under such Measures.

However, if the CSRC, CAC or other regulatory agencies later promulgate new rules or explanations requiring that we obtain their approvals for this offering and any follow-on offering, we may be unable to obtain such approvals and we may face sanctions by the CSRC, CAC or other PRC regulatory agencies for failure to seek their approval which could significantly limit or completely hinder our ability to offer or continue to offer securities to our investors and the ADSs currently being offered may substantially decline in value and be worthless. For more details, see “Risk Factors — Risks Related to Doing Business in China — If the Chinese government chooses to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, such action may significantly limit or completely hinder our ability to offer or continue to offer ADSs to investors and cause the value of our ADSs to significantly decline or be worthless.”

PCAOB Developments

Our ADSs may be prohibited from trading on a national exchange under the HFCA Act (as amended by the Accelerating Holding Foreign Companies Accountable Act, which was enacted on December 29, 2022) if the PCAOB is unable to inspect our auditors for two consecutive years. The delisting of our ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.

Our auditor, WWC, P.C. the independent registered public accounting firm that issues the audit report included elsewhere in this prospectus, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess our auditor’s compliance with the applicable professional standards. Our auditor has been inspected by the PCAOB on a regular basis, with the last inspection in December 2021.

On December 16, 2021, the PCAOB issued a report on its determinations that it was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in Mainland China and in Hong Kong, because of positions taken by PRC authorities in those jurisdictions, which determinations were vacated on December 15, 2022. The PCAOB made its determinations pursuant to PCAOB Rule 6100, which provides a framework for how the PCAOB fulfills its responsibilities under the HFCA Act, which determinations were vacated on December 15, 2022. The report further listed in its Appendix A and Appendix B, the Registered Public Accounting Firms Subject to the Mainland China Determination and Registered Public Accounting Firms Subject to the Hong Kong Determination, respectively, which determinations were vacated on December 15, 2022. Our auditor, WWC, P.C. is headquartered in the United States, and did not appear as part of the report and was not listed under its Appendix A or Appendix B.

On August 26, 2022, the PCAOB signed SOP Agreements with the China Securities Regulatory Commission (the “CSRC”) and China’s Ministry of Finance. The SOP Agreements established a specific, accountable framework to make possible complete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong, as required under U.S. law. On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB vacated its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s control. However, if the PCAOB continues to be prohibited from conducting complete inspections and investigations of PCAOB-registered public accounting firms in mainland China and Hong Kong, the PCAOB is likely to determine by the end of 2023 that positions taken by authorities in the PRC obstructed its ability to inspect and investigate registered public accounting firms in mainland China and Hong Kong completely, then the companies audited by those registered public accounting firms would be subject to a trading prohibition on U.S. markets pursuant to the HFCA Act.

For more detailed information, see “Risk Factors — Risks Related to Doing Business in China — Although the audit report included in this prospectus is prepared by U.S. auditors who are currently inspected by the PCAOB, there is no guarantee that future audit reports will be prepared by auditors inspected by the PCAOB and, as such, in the future investors may be deprived of the benefits of such inspection. Furthermore, trading in our ADSs may be prohibited under the HFCA Act if the SEC subsequently determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely, and as a result, U.S. national securities exchanges, such as the Nasdaq, may determine to delist our securities. Furthermore, on December 29, 2022 the Accelerating Holding Foreign Companies Accountable Act was enacted, which amended the HFCA Act and requires the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, and thus reducing the time before our ADSs may be prohibited from trading or delisted.”

6

Implications of Being an Emerging Growth Company and a Foreign Private Issuer

As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, or JOBS Act, enacted in April 2012, and may take advantage of reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:

● being permitted to present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations in our filings with the SEC;

● not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;

● reduced disclosure obligations regarding executive compensation in periodic reports, proxy statements and registration statements; and

● exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

We may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the date of the first sale of our ADSs pursuant to this offering. However, if certain events occur before the end of such five-year period, including if we become a “large accelerated filer”, our annual gross revenues exceed $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company before the end of such five-year period.

In addition, Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. We have elected to take advantage of the extended transition period for complying with new or revised accounting standards and acknowledge such election is irrevocable pursuant to Section 107 of the JOBS Act.

We are a “foreign private issuer,” as defined by the SEC. As a result, in accordance with the rules and regulations of The Nasdaq Stock Market LLC, or Nasdaq, we may comply with home country governance requirements and certain exemptions thereunder rather than complying with Nasdaq corporate governance standards. We may choose to take advantage of the following exemptions afforded to foreign private issuers:

● Exemption from filing quarterly reports on Form 10-Q or provide current reports on Form 8-K disclosing significant events within four (4) days of their occurrence.

● Exemption from Section 16 rules regarding sales of ADSs by insiders, which will provide less data in this regard than shareholders of U.S. companies that are subject to the Exchange Act.

● Exemption from the Nasdaq rules applicable to domestic issuers requiring disclosure within four (4) business days of any determination to grant a waiver of the code of business conduct and ethics to directors and officers. Although we will require board approval of any such waiver, we may choose not to disclose the waiver in the manner set forth in the Nasdaq rules, as permitted by the foreign private issuer exemption.

● Exemption from the requirement that our board of directors have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.

● Exemption from the requirements that director nominees are selected, or recommended for selection by our board of directors, either by (i) independent directors constituting a majority of our board of directors’ independent directors in a vote in which only independent directors participate, or (ii) a committee comprised solely of independent directors, and that a formal written charter or board resolution, as applicable, addressing the nominations process is adopted.

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Furthermore, Nasdaq Rule 5615(a)(3) provides that a foreign private issuer, such as us, may rely on our home country corporate governance practices in lieu of certain of the rules in the Nasdaq Rule 5600 Series and Rule 5250(d), provided that we nevertheless comply with Nasdaq’s Notification of Noncompliance requirement (Rule 5625), the Voting Rights requirement (Rule 5640) and that we have an audit committee that satisfies Rule 5605(c)(3), consisting of committee members that meet the independence requirements of Rule 5605(c)(2)(A)(ii). If we rely on our home country corporate governance practices in lieu of certain of the rules of Nasdaq, our shareholders may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq. If we choose to do so, we may utilize these exemptions for as long as we continue to qualify as a foreign private issuer.

Although we are permitted to follow certain corporate governance rules that conform to the BVI requirements in lieu of many of the Nasdaq corporate governance rules, we intend to comply with the Nasdaq corporate governance rules applicable to foreign private issuers.

Implication of Being a Controlled Company

We are and will continue, following this offering, to be a “controlled company” within the meaning of the Nasdaq Stock Market Rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.

We are, and will remain, a “controlled company” as defined under the Nasdaq Stock Market Rules. As at the date of this prospectus, approximately 86.3% of the issued share capital of the Company is owned by Easy Bliss Limited, which in turn is owned approximately 60.2% by Mr. Hok Pan Se, our Director. Mr. Hok Pan Se therefore beneficially owns approximately 51.9% of our total voting power as at the date of this prospectus. Following completion of this offering, approximately 81.6% of the issued share capital of the Company will be owned by Easy Bliss Limited and Mr. Hok Pan Se will in turn beneficially own approximately 49.1% of our total voting power. Following completion of this offering and assuming full conversion of the outstanding convertible bonds of the Company, approximately 68.9% of the issued share capital of the Company will be owned by Easy Bliss Limited and Mr. Hok Pan Se will in turn beneficially own approximately 43.1% of our total voting power. For so long as we are a controlled company, we are permitted to elect not to comply with certain stock exchange rules regarding corporate governance, including the following requirements:

– that a majority of its board of directors consist of independent directors;

– that its director nominees be selected or recommended for the board’s selection by a majority of the board’s independent directors in a vote in which only independent directors participate or by a nominating committee comprised solely of independent directors, in either case, with a formal written charter or board resolutions, as applicable, addressing the nominations process and such related matters as may be required under the federal securities laws; and

– that its compensation committee be composed solely of independent directors with a written charter addressing the committee’s purpose and responsibilities.

As a result, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements.

Although we do not intend to rely on the “controlled company” exemption under the Nasdaq listing rules, we could elect to rely on this exemption after we complete this offering. If we elect to rely on the “controlled company” exemption, a majority of the members of our board of directors might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors after we complete this offering. See “Risk Factors — Risks Related to Our ADSs — We will be a “controlled company” within the meaning of Nasdaq rules and we will qualify for and may rely on exemptions from certain corporate governance requirements.”

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Impact of COVID-19

The ongoing outbreak of a novel strain of coronavirus (“COVID-19”) has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities globally for the past years. In March 2020, the World Health Organization declared COVID-19 as a pandemic. A recent outbreak of the Omicron variant of COVID-19 worldwide also forced new orders on temporary lockdown or social distancing in some countries or regions. Given the rapidly expanding nature of and the uncertainty surrounding the COVID-19 pandemic, we believe there is a risk that our business, results of operations, and financial condition will be adversely affected. Potential impact to our results of operations will also depend on future developments and new information that may emerge regarding the duration and severity of COVID-19 and the actions taken by government authorities and other entities to contain COVID-19 or mitigate its impact, almost all of which are beyond our control.

In January 2020, the Chinese government issued a series of policies to prevent the spread of COVID-19. The Chinese government has shown signs of relaxing its COVID-19 policies. For instance, the Chinese government has eased the border restrictions by reopening certain border crossing points between mainland China and Hong Kong to travelers since January 8, 2023. On March 15, 2020, Peru announced a nationwide lockdown due to the pandemic, which was lifted in June of the same year. After that, various pandemic prevention measures have been introduced in various countries and regions around the world.

With regard to our production base in Peru, during the lockdown period, production in all of our factories was suspended for around three months, many businesses ceased to operate and shops were closed, and all government departments (including, among others, the forestry bureau and tax bureau) did not work normally, which hindered our business operations in terms of production, delivery as well as raw materials procurement. The pandemic and lockdown measures also raised concerns over health and safety among the workers and led to changes in their mentality, which resulted in instability in personnel and high turnover rate, in turn affecting the normal work progress in our production base. Furthermore, the resulting inflation, which significantly raised diesel prices, electricity fees as well as employee base salary, had an impact on our costs of operation. To mitigate the inflationary pressures, we have adjusted prices to our customers to reflect changes in our operating costs. Other control measures imposed as a response to the pandemic also led to delay in the development of various parts of the forests, resulting in a period of supply shortage and rising costs of raw materials for our business operations.

With regard to our sales, COVID-19 related lockdown and other control measures imposed in other countries which form part of the overseas market for our products had and may continue to have an impact on our international exports. For instance, the Chinese market will not be able to receive delivery of our products during the period of lockdown, and consumers’ demand for wooden floors will decline, which will significantly affect the quantity and price of flooring materials we sell in China. In addition, as the price of sea freight has increased by 300% as compared with that before the pandemic, this has led to higher overall costs for our customers. The shortage in supply of cargo containers, reduction in shipping frequency and longer shipping period have also affected the shipment and delivery of our products to a certain extent. Additionally, the pandemic has resulted in the shutdown of factory production, rising costs, delays in transportation and delivery, and shortage in supply of raw materials, which raised the price of wood products in the whole market. At the same time, due to the impact of the pandemic on the global economy, market consumption was weak, resulting in a backlog of goods, which in turn affected the number of orders placed by our customers.

Because of the uncertainty surrounding the COVID-19 pandemic, business disruption and its financial impact related to the COVID-19 pandemic cannot be reasonably estimated at this time. In the long term, this may have an adverse impact on our business and financial performance. During the years ended December 31, 2022, 2021 and 2020, COVID-19 has had a limited impact on the Company’s operations. However, it could impact economies and financial markets, resulting in an economic downturn that could impact our ability to raise capital or slow down potential business opportunities. There are still uncertainties of COVID-19’s future impact, and the extent of the impact will depend on a number of factors, including the duration and severity of the pandemic; and the macroeconomic impact of government measures to contain the spread of COVID-19 and related government stimulus measures. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

Corporate Information

Our principal executive office is located at Avenida da Amizade n.o1287, Chong Fok Centro Comercial, 13 E Macau S.A.R. Our telephone number is (+853) 2855-3594. Our registered office in the BVI is located at 4th Floor, Water’s Edgar Building Meridian Plaza, Road Town, Tortola, VG1110, British Virgin Islands.

Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42^nd Street, 18^th Floor, New York, NY 10168. Our website is located at www.nature-wood.com. Information contained on, or that can be accessed through, our website is not a part of, and shall not be incorporated by reference into, this prospectus.

9

The Offering⁽¹⁾

ADSs being offered:	750,000 ADSs on a firm commitment basis.
Price per ADS:	$9 per ADS.
Number of Ordinary Shares outstanding before this offering:	105,263,000
Number of ADSs outstanding after this offering:	750,000 ADSs (or 862,500 ADSs if the underwriters exercise in full the option to purchase additional ADSs).
Ordinary Shares Outstanding Immediately After This Offering:	111,263,000 Ordinary Shares (or 112,163,000 Ordinary Shares if the underwriters exercise in full the option to purchase additional ADSs).
The ADSs:	Each ADS represents eight Ordinary Shares.
	The depositary will be the holder of the Ordinary Shares underlying the ADSs and you will have the rights of an ADS holder as provided in the deposit agreement among us, the depositary and all holders and beneficial owners of ADSs thereunder.
	You may surrender your ADSs to the depositary to withdraw the Ordinary Shares underlying your ADSs. The depositary will charge you a fee for such an exchange.
	We and the depositary may amend or terminate the deposit agreement for any reason without your consent. Any amendment that imposes or increases fees or charges or which materially prejudices any substantial existing right you have as an ADS holder will not become effective as to outstanding ADSs until 30 days after notice of the amendment is given to ADS holders. If an amendment becomes effective, you will be bound by the deposit agreement as amended if you continue to hold your ADSs.
	To better understand the terms of the ADSs, you should carefully read the section in this prospectus entitled “Description of American Depositary Shares.” We also encourage you to read the deposit agreement, which is an exhibit to the registration statement that includes this prospectus.
Option to purchase additional ADSs:	We have granted to the underwriters an option, exercisable for 45 days from the date of this prospectus, to purchase up to an aggregate of 112,500 additional ADSs at the public offering price, less underwriting discounts.
Use of proceeds:	Based upon an initial public offering price of $9 per ADS, we estimate that we will receive net proceeds from this offering, after deducting the estimated underwriting discounts and the estimated offering expenses payable by us, of approximately $4,374,764 if the underwriters do not exercise their over-allotment option, and $5,316,389 if the underwriters exercise their over-allotment option in full, after deducting the underwriting discounts and estimated offering expenses payable by us. We plan to use the net proceeds of this offering as follows: ● Approximately 50% for acquisition of concession rights and forest-related business; ● Approximately 35% for acquisition of factories in Europe or South America and development of new products; and ● The balance to fund working capital and for other general corporate purposes. For more information on the use of proceeds, see “Use of Proceeds” on page 43.
Lock-up:	We, all of our Directors, officers, shareholders and holders of our convertible bonds and share options have agreed with the underwriters, subject to certain exceptions, not to sell, transfer or dispose of, directly or indirectly, any of our ADSs, Ordinary Shares, or securities convertible into or exercisable or exchangeable for our ADSs for a period of 180 days from the date of this prospectus. See “Shares Eligible for Future Sale” and “Underwriting” for more information.
Listing:	Our ADSs have been approved for listing on the Nasdaq Capital Market.
Nasdaq trading symbol:	“NWGL”.
Depositary:	The Bank of New York Mellon
Risk factors:	Investing in our ADSs is highly speculative and involves a high degree of risk. As an investor you should be able to bear a complete loss of your investment. You should carefully consider the information set forth in the “Risk Factors” section beginning on page 11.

Unless otherwise indicated, all information contained in this prospectus assumes no exercise of the underwriters’ over-allotment option or the outstanding options and no conversion of the outstanding convertible bonds of the Company and is based on 105,263,000 Ordinary Shares outstanding as of the date of this prospectus.

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RISK FACTORS

An investment in our ADSs involves a high degree of risk. You should carefully consider the following information about these risks, together with the other information appearing elsewhere in this prospectus, before deciding to invest in our ADSs. The occurrence of any of the following risks could have a material adverse effect on our business, financial condition, results of operations and future growth prospects. In these circumstances, the market price of our ADSs could decline, and you may lose all or part of your investment.

Risks Related to Our Business and Industry

Our revenues are sensitive to fluctuations of log price and selling price of our products in the forestry industry.

Historically, prices for logs have been volatile and are affected by numerous factors that are not under control, including demand for wood and wood products, supply from illegal logging, changes in currency exchange rates, economic growth rates, foreign and domestic interest rates, trade policies, and prevailing fuel and transportation costs.

In addition, industry-wide increases in the supply of logs during a favorable price period can also lead to downward pressure on prices through oversupply. Increased production by us and our competitors could lead to oversupply and lower prices. Oversupply and lower prices may also result from illegal logging activity or decreased government enforcement of logging restrictions. Our revenues and profits are extremely sensitive to changes in log prices and selling prices of our products. Slight changes in log prices and selling prices of our products may cause a disproportionally large change in our revenues and our results of operation. If market prices for logs or our products were to decline, it could have a material adverse effect on our business, financial condition and results of operation.

We may face increased costs for new forest acquisitions.

As the forestry sector develops, sellers may become increasingly sophisticated about the valuation and prices of their forests and may demand higher premiums for high quality forests. There is no assurance that we will be able to negotiate favorably low prices for our new forest acquisitions. Rising acquisition costs and intensifying competition for new forests may hamper our expansion plans and have an adverse impact on the profitability and results of our operations.

Our Forests are subject to environmental regulations in Peru and France.

The operations of our forestry business in Peru and France are subject to a wide range of environmental laws and regulations, which regulate, among other things, forestry activities, including harvesting, land clearing for forests and the emission, noise or discharge of pollutants, effluents, or solid waste, water or atmosphere.

Environmental laws and regulations have generally become more stringent in recent years and could become even more stringent in the future. We may be required to obtain certain licenses before we are permitted to occupy certain premises and/or carry out certain activities. They also protect endangered or threatened wildlife species which may live in our Forests. Some of these environmental laws and regulations could impose significant costs, expenses, penalties, administrative measures, and liabilities on us for violations of existing conditions attached to our licenses or commitments of environmental impact assessments, whether or not we caused or knew about them. Violations of such laws and regulations may result in civil penalties (such as fines and recovery of costs), remediation expenses, potential injunctions and prohibition orders and criminal penalties. Some environmental statutes impose strict liability, rendering a person liable for environmental damage without regard to the person’s negligence or fault.

Compliance with, or damages or penalties for violating, current and future environmental laws and regulations could result in a reduction in harvesting volume, suspension of our activities and may force us to incur significant expenses, which in turn could have a material adverse effect on our business, financial condition, and results of operations. Any tightening of the requirements prescribed by environmental laws and regulations in Peru or France, or changes in the manner of interpretation or enforcement of such existing laws or regulations, could adversely impact our operations by increasing our compliance costs and potential liabilities in connection with such laws and regulations, including additional capital or operating expenditures, which may place additional demands on our liquidity and adversely affect our results of operations.

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We are dependent on the availability of large numbers of workers to perform manual labor.

We rely on large numbers of workers to harvest logs and perform manual labor. As many of our Forests are located in remote areas far from population centers, there is a risk that manpower for harvesting logs and for maintaining our Forests will not be available on a continuous basis due to factors such as rural-urban migration. We are also vulnerable to labor shortages due to strikes, labor stoppages and civil unrest. Any shortage of labor could increase our costs and reduce our production, which may have a material adverse effect on our business, financial condition and results of operations.

Our Forests may not grow in accordance with our expectations.

The success of our business depends in part upon the productivity of our existing and future forests. Growth in forests depends on a number of factors, many of which are beyond our control. These include, but are not limited to, damage by fire, diseases, pests, environmental pollution, and other natural or man-made disasters, as well as weather, climate, genetic factors and soil conditions. Our ability to improve the growth speed of our Forests will depend on the factors described above as well as our ability to improve our forest management practices. As a result, there can be no assurance that our Forest will grow as we expect. Our future business, financial condition and results of operations may be adversely affected if our Forests grow at a slower rate than we expect.

Our forest survey and knowledge of our Forests are subject to errors in the survey.

Our operating results depend on our knowledge of forests, especially in Peru and France. We regularly visit our Forests to monitor their growth and condition. In this process, we use a random sampling method for our survey of forests. We cannot guarantee the reliability of the results of our survey. In the event that the results of our survey are not reliable, our knowledge of our Forests and our ability to manage our Forests could be greatly hampered, which may have a material adverse effect on our business, financial condition and results of operations.

We depend on certain major customers.

For each of the years ended December 31, 2022, 2021 and 2020, we had a total of 158, 115 and 101 customers respectively, which had purchased our wood products. Our five largest customers during the respective periods accounted for approximately 55.3%, 55.1% and 49.9% of our total turnover respectively; whilst our largest customer accounted for approximately 19.5%, 22.6% and 28.0% of our total turnover respectively.

We may face increased operating costs and staff costs.

Our business may face increased operating costs as the forestry industry continues to develop. Our operating expenses for logging activities consist of our costs of harvesting, such as labor costs, and costs associated with applying for logging permits for our Forests. We expect labor costs to rise as workers who harvest our logs become more experienced and increase their wage demands. Logging permits for our Forests are subject to periodic revisions by the local forest bureaus and we expect them to increase as the industry develops. Increases in our operating expenses for logging activities and staff costs may have a material adverse effect on our business, financial condition and results of operations.

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Our inability to obtain logging permits with sufficient logging amounts could reduce our future revenues.

A logging permit setting out, among other things, the quota (in terms of the maximum area and/or number of trees) allowable for logging and the period of logging must be obtained from the local forestry bureaus for harvesting in Peru.

Because the availability of logging permits is subject to the approval of the relevant local forestry bureau, there is no assurance that we will be able to continue obtaining logging permits, or that the logging amount given to us under the logging permits will be sufficient for our operations. Should we fail to obtain logging permits with logging amounts sufficient for our operations, our revenues in the future may be reduced and our business, financial condition and results of operations may be materially and adversely affected.

Our inability to obtain certificates from the FSC could reduce our future revenues.

During the years ended December 31, 2022, 2021 and 2020, revenue generated from FSC-certified decking amounted to approximately $11.2 million, $9.9 million and $3.7 million, representing approximately 20.3%, 20.7% and 10.0% of our total revenue. This, in turn, requires that we retain and renew our existing FSC Chain of Custody (CoC) certifications. Our retention and renewal of these certificates depend on our performance in forest management.

We cannot assure you that we will be able to retain or renew our existing certificates or obtain new certificates. If we are unable to renew or retain certificates, our business, results of operations and financial condition will be materially and adversely affected.

Our inability to acquire enough immediately harvestable forests may affect our ability to meet demand.

As at June 30, 2023, our Forests covered an area of approximately 615,333 hectares. We rely on acquisitions of new forests to increase our timber supply, particularly new forests which are immediately harvestable. There can be no assurance that we will be able to acquire sufficient immediately harvestable forests in the future to keep up with demand. If we cannot do so, our business, financial condition and results of operation may be materially adversely affected.

The current global market fluctuations and economic downturn could materially and adversely affect our business, financial condition and results of operations.

The global capital and credit markets have been experiencing extreme volatility and disruption in recent times. Concerns over inflation or deflation, energy costs, geopolitical issues, and the availability and cost of credit have contributed to unprecedented levels of market volatility and diminished expectations for the global economy and the capital and consumer markets in the future. These factors, combined with volatile oil prices, declining business activities and consumer confidence and increased unemployment, have precipitated an economic slowdown and a possible prolonged global recession. These events have led to a slowdown in the global economy which a number of economists predict could be significant and protracted. As a result, the demand for our wood products may significantly decrease, thereby materially and adversely affecting our business, financial condition and results of operations.

Social conflicts may disrupt our operations.

Despite Peru’s ongoing economic growth and stabilization, high levels of poverty and unemployment and social and political tensions continue to be pervasive problems in the country. Peru has, from time to time, experienced social and political turmoil, including riots, nationwide protests, strikes and street demonstrations. In the past, Peru has experienced periods of political instability that has included a succession of regimes with differing economic policies and programs. Recently, since December 2022, Peru has experienced unrelenting political turmoil. Part of our operations are conducted in Peru and depend on economic and political developments in the country. As a result, any social conflicts may disrupt our business operations, which could have a material adverse effect on our business and financial performance.

We are heavily dependent on key personnel and consultants.

We are heavily dependent on our Directors and management for the success of our operations. Our ability to negotiate successfully with the forest owners for our forest rights, and to acquire high quality forests, depends on the skills, relationships and reputation of our senior management. In particular, we rely on the management skills of our chairman, Mr. Hok Pan Se, for our business across borders. We also rely on the expertise and experience of our forest management staff, procurement and inventory staff, production staff, sales and marketing staff and consultants.

If we lose the services of any of our key personnel and/or if we cannot attract or retain quality consultants to advise us, we may lose our competitive advantage and our business could be adversely affected.

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We face competition from other companies in the forestry industry.

We face many local and overseas competitors who also supply wood products to the market. Our primary competitors operate either domestically or within the Asia Pacific region. In particular, we face competition from a host of small logging firms, some of which may not comply with environmental and other industry standards to the same extent as we do, resulting in their potentially lower operating costs.

Competition in our industry is influenced by factors including the costs of new forest acquisitions, regulatory compliance, and forest insurance. Some of our competitors may have lower costs than we do, or, if their operations are located in less developed countries, may be subject to less stringent environmental and other governmental regulations than we are, because of different or regional laws and business practices. If we are unable to compete effectively, or if competition increases in the future, our revenues could decline, and there may be material adverse effects on our business, financial condition, results of operations and cash flows.

The forestry industry faces competition from solid wood substitutes.

In addition to competition within the forestry industry, the forest industry faces competition from solid wood substitutes. We face competition from companies that manufacture wood substitutes, such as imitation wood, fiber-cement wood, ceramic tile and other materials that are used as alternative materials mainly in construction and furniture production. The demand for wood products is also affected by changes in consumer trends and tastes. Preference for wood substitutes among manufacturers, construction companies and consumers could decrease demand for our products and have a material adverse effect on our revenue, financial condition and results of operations.

Abnormally high or prolonged levels of rain at our Forest locations may adversely impact our ability to harvest timber.

Our harvesting activity is dependent on, among other things, the weather conditions at our Forest locations. For safety reasons, we discontinue logging in our Forests during the rainy season, which is usually from late November to May. Abnormally prolonged periods of rainfall or unusually intense rainfall will reduce the volume of logs we are able to extract, which may have a material adverse effect on our business, financial condition and results of operations and revenues.

We are subject to certain risks relating to the delivery of our products.

We often rely on third-party logistics service providers for the delivery of our wood products to customers. Such delivery services could be suspended and thus interrupt the supply of our wood products if unforeseen events occur which are beyond our control, such as transportation bottlenecks, natural disasters, disease outbreaks or labor strikes. Any failure of this personnel to provide high-quality or timely delivery to our customers may negatively impact the purchase experience of our customers, damage our reputation and cause us to lose customers. Any negative publicity or poor feedback regarding our customer service overall may harm our brand and reputation and in turn cause us to lose customers and market share.

Disruption to the supply of raw materials or increase in raw material prices could materially and adversely affect our Group’s business, financial condition and results of operations.

The major raw materials used to produce our wood products are logs and floorings. The purchase of wood products and logs together accounted for approximately 97.8%, 93.9% and 95.1% of the total raw material purchase costs during the years ended December 31, 2022, 2021 and 2020 respectively. However, our Group has not entered into any long-term supply contracts with our suppliers. In the event that the ban on commercial logging is imposed by the French government or the places where our suppliers are located or natural disasters, the supply of timber for the production of our wood products and the hosting of timber auctions may be affected. It is therefore possible that our Group will not be able to purchase sufficient raw materials from our suppliers, in a timely manner and on commercially acceptable terms, or at all.

In addition, if we are unable to acquire raw materials from our existing suppliers for any reason, we cannot assure that our Group will be able to source the raw materials from alternative sources within a reasonable period of time, and at acceptable prices or at all. Our Group cannot assure that such shortages will not occur in the future. Any failure to obtain adequate supplies of raw materials on a timely basis may disrupt our Group’s operation, and may have a material adverse effect on the business, financial condition and results of operations of our Group.

Risks Related to Our Corporate Structure

We rely on dividends and other distributions on equity paid by our subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on our ability to conduct our business.

Our Company is a holding company, and we rely on dividends and other distributions on equity paid by our subsidiaries for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders and service any debt we may incur. If any of our subsidiaries incur debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us. Any limitation on the ability of our Operating Subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

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Risks Related to Doing Business in China

Our operations are based in Peru, France, Hong Kong and Macau. We have a subsidiary that is established in the PRC, namely Foshan City Linjia Technology Company Limited, which is engaged in IT consultancy and business consultancy. As of the date of this prospectus, the PRC subsidiary has not (i) conducted any other business operation in the PRC, (ii) owned any material assets in the PRC, (iii) received loans or additional investments, (iv) distributed any dividends to shareholders, or (v) subjected to any administrative penalties in the PRC. The PRC subsidiary does not involve in the major part of our operations and we do not intend to conduct any major part of our operations through it in the future. Although we have equity ownership in our PRC, Hong Kong and Macau subsidiaries and currently do not have or intend to have any contractual arrangement to establish a variable interest entity structure with any entity in China, we may still be subject to unique risks due to uncertainty about any future actions of the Chinese government or authorities in Hong Kong and Macau in relation to business operations in the PRC, Hong Kong or Macau, or regulatory oversight of overseas listing of companies with operations in the PRC, Hong Kong or Macau.

Despite the fact that our operations in the PRC are insignificant, a major part of our operations is based in Hong Kong and Macau, each a Special Administrative Region of China. Although Hong Kong and Macau have their own governmental and legal system that is independent of the PRC, it is uncertain whether in the future the Hong Kong or Macau government will implement regulations and policies of the Chinese government, or adopt regulations and policies of its own that are substantially the same as those of the Chinese government. Moreover, given that policies, regulations, rules, and the enforcement of laws of the Chinese government may be changed or amended, it is also uncertain in the future whether our operations in Hong Kong or Macau will be subject to the oversight of the Chinese authorities.

We may be subject to the risks that are specific to doing business in the PRC. Nevertheless, we believe that the effect of the risks below on our Group would not be material.

Due to the long arm provisions under the current PRC laws and regulations, if the Chinese government exercises any significant oversight and discretion over the conduct of our business and intervenes in or influences our operations, our operations and/or the value of our ADSs could be affected. The policies, regulations, rules, and the enforcement of laws of the Chinese government may also be changed or amended with little advance notice and our assertions and beliefs of the risk imposed by the PRC legal and regulatory system could be uncertain.

Our Company is a holding company and we conduct our operations through our Operating Subsidiaries in Peru, France, Hong Kong, Macau and China. As at the date of this prospectus, we are not materially affected by recent statements by the Chinese Government indicating an extent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. However, due to long arm provisions under the current PRC laws and regulations, there remains regulatory uncertainty with respect to the implementation and interpretation of laws in China. The PRC government may choose to exercise significant oversight and discretion, and the policies, regulations, rules, and enforcement of laws of the Chinese government to which we are subject may change from time to time. As a result, the application, interpretation, and enforcement of new and existing laws and regulations in the PRC and our assertions and beliefs of the risk imposed by the PRC legal and regulatory system could also be uncertain. In addition, these laws and regulations may be interpreted and applied inconsistently by different agencies or authorities, and inconsistently with current policies and practices. New laws, regulations, and other government directives in the PRC may also be costly to comply with, and such compliance or any associated inquiries or investigations or any other government actions may:

● delay or impede our development;

● result in negative publicity or increase our operating costs;

● require significant management time and attention; and

● subject us to remedies, administrative penalties and even criminal liabilities that may harm our business, including fines assessed for our current or historical operations, or demands or orders that we modify or even cease our business practices.

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We are aware that recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in China, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation-making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list on a U.S. or other foreign exchange.

The Chinese government may intervene or influence our operations at any time or may exert more control over offerings conducted overseas and foreign investment in China-based issuers, which may affect our operations and/or the value of our ADSs. The promulgation of new laws or regulations, or the new interpretation of existing laws and regulations, in each case that restricts or otherwise unfavorably impacts the ability or way we conduct our business and could require us to change certain aspects of our business to ensure compliance, which could decrease demand for our services, reduce revenues, increase costs, require us to obtain more licenses, permits, approvals or certificates, or subject us to additional liabilities. To the extent any new or more stringent measures are required to be implemented, our business, financial condition and results of operations could be adversely affected as well as materially decrease the value of our ADSs, potentially rendering them worthless.

If the Chinese government chooses to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, such action may significantly limit or completely hinder our ability to offer or continue to offer ADSs to investors and cause the value of our ADSs to significantly decline or be worthless.

Recent statements by the Chinese government have indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investments in China-based issuers. On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws. On December 24, 2021, the CSRC published the drafts of the Provisions of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies, and the Administrative Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies for public comment. On February 17, 2023, the CSRC published the formal Overseas Listing Measures to regulate overseas securities offering and listing activities by domestic companies. For more details, see “Prospectus Summary-Regulatory Permission” and “Regulations-Overview of the Laws and Regulations Relating to Our Business and Operations in China-Regulations Related to Securities Offering and Listing Overseas”.

Furthermore, on December 28, 2021, the CAC, the National Development and Reform Commission (“NDRC”), and several other administrations jointly issued the revised Measures for Cybersecurity Review, or the “Revised Review Measures”, which became effective on February 15, 2022 and replaced the existing Measures for Cybersecurity Review. According to the Revised Review Measures, if an “online platform operator” that is in possession of the personal data of more than one million users intends to list in a foreign country, it must apply for a cybersecurity review. Moreover, the CAC released the draft of the Regulations on Network Data Security Management in November 2021 for public consultation, which among other things, stipulates that a data processor listed overseas must conduct an annual data security review by itself or by engaging a data security service provider and submit the annual data security review report for a given year to the municipal cybersecurity department before January 31 of the following year. On July 7, 2022, the CAC released the Measures for the Security Assessment of Cross-Border Data, which becomes effective on September 1, 2022. According to the Measures for the Security Assessment of Cross-Border Data, where a data processor provides data abroad under any of the following circumstances, it shall apply for exit security assessment of data to the national cyberspace administration through the local provincial cyberspace administration: (1) the data processor provides important data abroad; (2) the operators of key information infrastructure and data processors that process the personal information of more than 1 million people provide personal information abroad; (3) data processors who have provided 100,000 personal information or 10,000 sensitive personal information abroad in aggregate since January 1 of last year provide personal information abroad; and (4) other situations required for security assessment as stipulated by the state cyberspace administration. Given the recency of the issuance of the Measures for the Security Assessment of Cross-Border Data, no guidance on the interpretation or implementation of such Measures has been published.

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We sell a range of logs and flooring primarily in Hong Kong and Macau respectively, but not in mainland China. Our subsidiaries in Hong Kong and Macau have not collected or stored any data (including certain personal information) from PRC individuals. As a result, the likelihood of us being subject to the review of the CAC is remote.

In the event that we rely on dividends and other distributions on equity paid by our PRC or Hong Kong subsidiaries to fund any cash and financing requirements, we may have, any limitation on the ability of our PRC or Hong Kong subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.

In general, our PRC subsidiary’s ability to distribute dividends is based upon their distributable earnings. Current PRC regulations permit our PRC subsidiary to pay dividends to its shareholders only out of its accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, our PRC subsidiary, as a Foreign Invested Enterprise, or FIE, is required to draw 10% of its after-tax profits each year, if any, to fund a common reserve, which may stop drawing its after-tax profits if the aggregate balance of the common reserve has already accounted for over 50 percent of its registered capital. These reserves are not distributable as cash dividends. If our PRC subsidiary incurs debt on its own in the future, the instruments governing the debt may restrict its ability to pay dividends or make other payments to us. Any limitation on the ability of our PRC subsidiary to distribute dividends or other payments to its shareholders could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends or otherwise fund and conduct our business.

The Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises are incorporated.

Under Hong Kong law, dividends could only be paid out of distributable profits (that is, accumulated realized profits less accumulated realized losses) or other distributable reserves. Dividends cannot be paid out of share capital. Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us.

Any limitation on the ability of our PRC or Hong Kong subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

To the extent cash or assets in our business is in the PRC or Hong Kong or in our PRC or Hong Kong subsidiaries, the funds or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations on our ability or the ability of our subsidiaries by the PRC government to transfer cash or assets.

We may in the future depend on dividends and other distributions on equity paid by our PRC and Hong Kong subsidiaries or depend on our assets located in China or Hong Kong for our cash and financing requirements. The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. Shortages in the availability of foreign currency may then restrict the ability of our PRC subsidiary to remit sufficient foreign currency to our offshore entities for our offshore entities to pay dividends or make other payments or otherwise to satisfy our foreign-currency-denominated obligations. Therefore, to the extent cash or assets in our business is in the PRC or Hong Kong or in our PRC or Hong Kong subsidiaries, the funds or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations on our ability or the ability of our subsidiaries by the PRC government to transfer cash or assets.

The PRC government may continue to strengthen its capital controls, and more restrictions and substantial vetting processes may be put forward by the State Administration of Foreign Exchange of the PRC for cross-border transactions. Any limitation on the ability of our PRC and Hong Kong subsidiaries to pay dividends or make other kinds of payments to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends or otherwise fund and conduct our business.

PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of this offering to make loans or additional capital contributions to our PRC subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

We are an offshore holding company with some of our operations conducted in Hong Kong, Macau and China. We do not intend to apply the proceeds from this offering to make loans to our PRC subsidiary, make additional capital contributions to our PRC subsidiary, establish a new PRC subsidiary and make capital contributions to this new PRC subsidiary, or acquire offshore entities with business operations in China in an offshore transaction.

Nevertheless, the aforementioned activities are subject to PRC regulations and approvals or registration. If we decide to finance our wholly owned PRC subsidiary by means of capital contributions, these capital contributions are subject to registration with the State Administration for Market Regulation or its local branch, reporting of foreign investment information with the Ministry of Commerce, or registration with other governmental authorities in China. If we provide funding to our wholly foreign-owned subsidiaries through shareholder loans, (a) in the event that the foreign debt management mechanism as provided in the Measures for Foreign Debts Registration and Administration and other relevant rules applies, the balance of such loans cannot exceed the difference between the total investment and the registered capital of the subsidiaries and we will need to register such loans with the SAFE or its local branches, or (b) in the event that the mechanism as provided in the Notice of the People’s Bank of China on Matters concerning the Macro-Prudential Management of Full-Covered Cross-Border Financing, or PBOC Notice No. 9, applies, the balance of such loans will be subject to the risk-weighted approach and the net asset limits and we will need to file the loans with the SAFE in its information system pursuant to applicable requirements and guidelines issued by the SAFE or its local branches. According to the Circular of the People’s Bank of China and the State Administration of Foreign Exchange on Adjusting the Macro-prudent Adjustment Parameter for Cross-border Financing issued on January 7, 2021, the limit for the total amount of foreign debt under the Macro-prudential Management Mode is adjusted to two times of our subsidiary’s net assets. On October 25, 2022, the People’s Bank of China and the State Administration of Foreign Exchange announced that they decided to adjust the parameter to 1.25, under which the limit for the total amount of foreign debt under the Macro-prudential Management Mode would be adjusted to 2.5 times of our subsidiary’s net assets. Moreover, any medium or long-term loan to be provided by us to our PRC subsidiaries must also be registered with the NDRC.

In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, or at all, with respect to future loans to our PRC subsidiary or future capital contributions by us to our PRC subsidiary. As a result, uncertainties exist as to our ability to provide prompt financial support to our PRC subsidiary when needed. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds we expect to receive from this offering and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

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Although the audit report included in this prospectus is prepared by U.S. auditors who are currently inspected by the PCAOB, there is no guarantee that future audit reports will be prepared by auditors inspected by the PCAOB and, as such, in the future investors may be deprived of the benefits of such inspection. Furthermore, trading in our ADSs may be prohibited under the HFCA Act if the SEC subsequently determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely, and as a result, U.S. national securities exchanges, such as the Nasdaq, may determine to delist our securities. Furthermore, on December 29, 2022, the Accelerating Holding Foreign Companies Accountable Act was enacted, which amended the HFCA Act and requires the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, and thus reducing the time before our ADSs may be prohibited from trading or delisted.

As an auditor of companies that are registered with the SEC and publicly traded in the United States and a firm registered with the PCAOB, our auditor is required under the laws of the United States to undergo regular inspections by the PCAOB to assess their compliance with the laws of the United States and professional standards. The PCAOB is currently unable to conduct inspections without the approval of the Chinese government authorities. Inspections of other auditors conducted by the PCAOB outside mainland China have at times identified deficiencies in those auditors’ audit procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality. The lack of PCAOB inspections of audit work undertaken in mainland China prevents the PCAOB from regularly evaluating auditors’ audits and their quality control procedures. As a result, if there is any component of our auditor’s work papers become located in mainland China in the future, such work papers will not be subject to inspection by the PCAOB. As a result, investors would be deprived of such PCAOB inspections, which could result in limitations or restrictions on our access to the U.S. capital markets.

On May 20, 2020, the U.S. Senate passed the HFCA Act, which includes requirements for the SEC to identify issuers whose audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely because of a restriction imposed by a non-U.S. authority in the auditor’s local jurisdiction. The U.S. House of Representatives passed the HFCA Act on December 2, 2020, and the HFCA Act was signed into law on December 18, 2020. Additionally, in July 2020, the U.S. President’s Working Group on Financial Markets issued recommendations for actions that can be taken by the executive branch, the SEC, the PCAOB or other federal agencies and departments with respect to Chinese companies listed on U.S. stock exchanges and their audit firms, in an effort to protect investors in the United States. In response, on November 23, 2020, the SEC issued guidance highlighting certain risks (and their implications to U.S. investors) associated with investments in China-based issuers and summarizing enhanced disclosures the SEC recommends China-based issuers make regarding such risks.

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements in the HFCA Act. On December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate. We will be required to comply with these rules if the SEC identifies us as having a “non-inspection” year under a process to be subsequently established by the SEC. The final amendments require any identified registrant to submit documentation to the SEC establishing that the registrant is not owned or controlled by a government entity in the public accounting firm’s foreign jurisdiction, and also require, among other things, disclosure in the registrant’s annual report regarding the audit arrangements of, and government influence on, such registrants. Under the HFCA Act (as amended by the Accelerating Holding Foreign Companies Accountable Act, which was enacted on December 29, 2022), our securities may be prohibited from trading on the Nasdaq or other U.S. stock exchanges if our auditor is not inspected by the PCAOB for two consecutive years, and this ultimately could result in our ADSs being delisted.

On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would amend the HFCA Act and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, and thus, would reduce the time before our ADSs may be prohibited from trading or delisted.

On September 22, 2021, the PCAOB adopted a final rule implementing the HFCA Act, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCA Act, whether the Board is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.

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On November 5, 2021, the SEC approved the PCAOB’s Rule 6100, Board Determinations Under the Holding Foreign Companies Accountable Act. Rule 6100 provides a framework for the PCAOB to use when determining, as contemplated under the HFCA Act, whether it is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.

On December 16, 2021, the PCAOB issued a report on its determinations that it was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in Mainland China and in Hong Kong, because of positions taken by PRC authorities in those jurisdictions, which determinations were vacated on December 15, 2022. The PCAOB made its determinations pursuant to PCAOB Rule 6100, which provides a framework for how the PCAOB fulfills its responsibilities under the HFCA Act, which determinations were vacated on December 15, 2022. The report further listed in its Appendix A and Appendix B, the Registered Public Accounting Firms Subject to the Mainland China Determination and Registered Public Accounting Firms Subject to the Hong Kong Determination, respectively, which determinations were vacated on December 15, 2022. Our auditor, WWC, P.C. is headquartered in the United States, and did not appear as part of the report under the lists in its Appendix A or Appendix B.

On August 26, 2022, the PCAOB signed SOP Agreements with the China Securities Regulatory Commission (the “CSRC”) and China’s Ministry of Finance. The SOP Agreements established a specific, accountable framework to make possible complete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong, as required under U.S. law. On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB vacated its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s control. However, if the PCAOB continues to be prohibited from conducting complete inspections and investigations of PCAOB-registered public accounting firms in mainland China and Hong Kong, the PCAOB is likely to determine by the end of 2023 that positions taken by authorities in the PRC obstructed its ability to inspect and investigate registered public accounting firms in mainland China and Hong Kong completely, then the companies audited by those registered public accounting firms would be subject to a trading prohibition on U.S. markets pursuant to the HFCA Act.

The SEC is assessing how to implement other requirements of the HFCA Act, including the listing and trading prohibition requirements described above. Future developments in respect of increasing U.S. regulatory access to audit information are uncertain, as the legislative developments are subject to the legislative process and the regulatory developments are subject to the rule-making process and other administrative procedures.

While we understand that there has been dialogue among the CSRC, the SEC and the PCAOB regarding the inspection of PCAOB-registered accounting firms in mainland China, there can be no assurance that we will be able to comply with requirements imposed by U.S. regulators if there is a significant change to current political arrangements between mainland China, Macau and Hong Kong, or if any component of our auditor’s work papers become located in mainland China in the future. Delisting of our ADSs would force holders of our ADSs to sell their ADSs. The market price of our ADSs could be adversely affected as a result of anticipated negative impacts of these executive or legislative actions, regardless of whether these executive or legislative actions are implemented and regardless of our actual operating performance.

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If we fail to comply with work safety or environmental regulations, we could be exposed to penalties, fines, suspensions or action in other forms.

Our operations are subject to the work safety, fire safety and environmental protection laws and regulations promulgated by the PRC government. These laws and regulations require us to maintain safe working conditions and adopt effective measures to control and properly dispose of solid waste and other environmental pollutants. We could be exposed to penalties, fines, suspensions or actions in other forms if we fail to comply with these laws and regulations. The laws and regulations in China may be amended from time to time and changes in those laws and regulations may cause us to incur additional costs in order to comply with the more stringent rules. In the event that changes to existing laws and regulations require us to incur additional compliance costs or require costly changes to our production process, our costs could increase and we may suffer a decline in sales for certain products, as a result of which our business, results of operations and financial condition could be materially and adversely affected.

Increases in labor costs and enforcement of stricter labor laws and regulations in China and our additional payments of statutory employee benefits may adversely affect our business and profitability.

The average wage in China has increased in recent years and is expected to continue to grow. The average wage level for our employees has also increased in recent years. We expect that our labor costs, including wages and employee benefits, will continue to increase. Unless we are able to pass on these increased labor costs to our customers, our profitability and results of operations may be materially and adversely affected. In addition, we have been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees and paying various statutory employee benefits, including pensions, housing funds, medical insurance, work related injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit of our employees. Pursuant to the PRC Labor Contract Law and its implementation rules, employers are subject to stricter requirements in terms of signing labor contracts, paying remuneration, determining the term of employee’s probation and unilaterally terminating labor contracts. In the event that we decide to terminate some of our employees or otherwise change our employment or labor practices, the PRC Labor Contract Law and its implementation rules may limit our ability to effect those changes in a desirable or cost-effective manner, which could adversely affect our business and results of operations.

Pursuant to PRC laws and regulations, companies registered and operating in China are required to apply for social insurance registration and housing fund deposit registration within 30 days of their establishment and to pay for their employees various social insurance including pension insurance, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to the extent required by law. According to the Social Insurance Law, if an employing entity does not pay the full amount of social insurance premiums as scheduled or required, the social insurance premium collection institution shall order it to make the payment or make up the difference within the stipulated period and impose a daily fine equivalent to 0.05% of the overdue payment from the day on which the payment is overdue. If the payment is not made within the prescribed time ordered by the social insurance authority, the authority shall impose a fine ranging from one to three times of the overdue payment amount. According to the Regulations on Management of Housing Provident Funds, where an entity fails to deposit the housing provident fund in full within the prescribed deadline, it shall be ordered by the housing provident fund management center to deposit the fund within a time limit; if it still fails to deposit the fund within the time limit, the housing provident fund management center may apply to the People’s Court for enforcement. We have paid social insurance for all employees and housing provident fund for most of our employees in China. While our payment base of social insurance and housing provident fund meets the respective local government’s minimum requirements in respect of the locations of our PRC subsidiary, it is lower than the national legal standard. As of the date of this prospectus, we have not received any notice of warning or been subject to any material administrative penalties or other material disciplinary actions from the relevant governmental authorities for our historical shortfall in social insurance and housing fund contribution. However, as the PRC government enhanced its enforcement measures relating to social insurance collection, we may be required to make up the contributions for our employees, and may be further subjected to late fees payment and administrative fines, which may adversely affect our financial condition and results of operations. As the interpretation and implementation of labor-related laws and regulations are still evolving, we cannot assure you that our current employment practices do not and will not violate other effective or future labor-related laws and regulations in China, which may subject us to labor disputes or government investigations. In addition, we may incur additional expenses in order to comply with such laws and regulations, which may adversely affect our business and profitability.

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The enactment of the Law of the PRC on Safeguarding National Security in the Hong Kong Special Administrative Region (the “Hong Kong National Security Law”) could impact our Hong Kong subsidiaries.

On June 30, 2020, the Standing Committee of the PRC National People’s Congress adopted the Hong Kong National Security Law. This law defines the duties and government bodies of the Hong Kong National Security Law for safeguarding national security and four categories of offences — secession, subversion, terrorist activities, and collusion with a foreign country or external elements to endanger national security — and their corresponding penalties. On July 14, 2020, former U.S. President Donald Trump signed the Hong Kong Autonomy Act, or HKAA, into law, authorizing the U.S. administration to impose blocking sanctions against individuals and entities who are determined to have materially contributed to the erosion of Hong Kong’s autonomy. The spokesperson of the PRC government has issued statements that this document was grossly trampled on the international law and basic norms of international relations, seriously interfered in China’s internal affairs, and should have been repealed a long time ago. On August 7, 2020 the U.S. government imposed HKAA-authorized sanctions on eleven individuals, including HKSAR chief executive Carrie Lam. On October 14, 2020, the U.S. State Department submitted to relevant committees of Congress the report required under HKAA, identifying persons materially contributing to “the failure of the Government of China to meet its obligations under the Joint Declaration or the Basic Law.” The HKAA further authorizes secondary sanctions, including the imposition of blocking sanctions, against foreign financial institutions that knowingly conduct a significant transaction with foreign persons sanctioned under this authority. The imposition of sanctions may directly affect foreign financial institutions as well as any third parties or customers dealing with any foreign financial institution that is targeted. It is difficult to predict the full impact of the Hong Kong National Security Law and HKAA on Hong Kong and companies located in Hong Kong. Any such continued tension between the U.S. and the PRC may affect the economy of Hong Kong and in turn, materially and adversely affect our business and operation. If our subsidiaries in Hong Kong are determined to be in violation of the Hong Kong National Security Law or the HKAA by competent authorities, our business operations, financial position and results of operations could be materially and adversely affected.

A downturn in Hong Kong, China or the global economy, and the economic and political policies of China could materially and adversely affect our business and financial condition.

We conduct our operation through our Operating Subsidiaries in Europe, the U.S. and Asia, primarily in Hong Kong and China. Accordingly, our business, prospects, financial condition and results of operations may be influenced to a significant degree by political, economic and social conditions in Hong Kong and China generally and by continued economic growth in Hong Kong and China as a whole. The Chinese economy differs from the economies of most developed countries in many respects, including the amount of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. While the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy but may have a negative effect on us.

Economic conditions in Hong Kong and China are sensitive to global economic conditions. Any prolonged slowdown in the global or Chinese economy may affect potential clients’ confidence in the financial market as a whole and have a negative impact on our business, results of operations and financial condition. Additionally, continued turbulence in the international markets may adversely affect our ability to access the capital markets to meet liquidity needs.

The Hong Kong legal system embodies uncertainties which could limit the legal protections available to our Company.

Hong Kong is a Special Administrative Region of the PRC and enjoys a high degree of autonomy under the “one country, two systems” principle. The Hong Kong Special Administrative Region’s constitutional document, the Basic Law, ensures that the current political situation will remain in effect for 50 years. Hong Kong has enjoyed the freedom to function with a high degree of autonomy for its affairs, including currencies, immigration and custom, an independent judiciary system and a parliamentary system. The National People’s Congress of the PRC has the right to amend the Basic Law. We cannot assure you that there will not be any amendment to the Basic Law that may affect the judiciary and legal systems of Hong Kong and guarantee the implementation of the “one country, two systems” principle and the level of autonomy as currently in place at the moment. Any changes in the state of the political environment in Hong Kong may materially and adversely affect our business and operation. Additionally, intellectual property rights and confidentiality protections in Hong Kong may not be as effective as in the United States or other countries. These uncertainties could limit the legal protections available to us, including our ability to enforce our agreements with our clients.

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Changes in international trade policies, trade disputes, barriers to trade, or the emergence of a trade war may dampen growth in China and other markets where the majority of our clients reside.

Political events, international trade disputes, and other business interruptions could harm or disrupt international commerce and the global economy, and could have a material adverse effect on us and our customers, service providers and other partners. International trade disputes could result in tariffs and other protectionist measures which may materially and adversely affect our business.

Tariffs could increase the cost of goods and products which could affect customers’ investment decisions. In addition, political uncertainty surrounding international trade disputes and the potential of the escalation to trade war and global recession could have a negative effect on customer confidence, which could materially and adversely affect our business. We may have also access to fewer business opportunities, and our operations may be negatively impacted as a result. In addition, the current and future actions or escalations by either the United States or China that affect trade relations may cause global economic turmoil and potentially have a negative impact on our markets, our business, or our results of operations, as well as the financial condition of our clients. and we cannot provide any assurances as to whether such actions will occur or the form that they may take.

Under the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, Hong Kong is exclusively in charge of its internal affairs and external relations, while the government of the PRC is responsible for its foreign affairs and defense. As a separate customs territory, Hong Kong maintains and develops relations with foreign states and regions. However, based on recent political development, the U.S. State Department has indicated that the United States no longer considers Hong Kong to have significant autonomy from China. Hong Kong’s preferential trade status was removed by the United States government and the United States may impose the same tariffs and other trade restrictions on exports from Hong Kong that it places on goods from mainland China. These and other recent actions may represent an escalation in political and trade tensions involving the U.S., China and Hong Kong, which could potentially harm our business.

Fluctuations in exchange rates could have a material and adverse effect on our results of operations and the value of your investment.

Our revenues and expenses will be denominated in Hong Kong dollars, EUR, Renminbi and U.S. dollars. Although the exchange rate between the Hong Kong dollar to the U.S. dollar has been pegged since 1983, we cannot assure you that the Hong Kong dollar will remain pegged to the U.S. dollar. Any significant fluctuations in the exchange rates between Hong Kong dollars to the U.S. dollars may have a material adverse effect on our revenue and financial condition. For example, to the extent that we are required to convert U.S. dollars we receive from this offering into Hong Kong dollars for our operations, fluctuations in the exchange rates between Hong Kong dollars against the U.S. dollar would have an adverse effect on the amounts we receive from the conversion. We have not used any forward contracts, futures, swaps or currency borrowings to hedge our exposure to foreign currency risk.

Risks Related to our ADSs

There has been no public market for our ADSs prior to this offering, and you may not be able to resell our ADSs at or above the price you pay for them, or at all.

Prior to this offering, there has not been a public market for our ADSs. We plan to apply for the listing of our ADSs on the Nasdaq Capital Market. An active public market for our ADSs, however, may not develop or be sustained after the offering, in which case the market price and liquidity of our ADSs will be materially and adversely affected.

In recent years, the stock markets generally have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors may significantly affect the market price of our ADSs, regardless of our actual operating performance. These fluctuations may be even more pronounced in the trading market for our ADSs shortly following this offering. If the market price of our ADSs after this offering does not ever exceed the initial public offering price, you may not realize any return on your investment in us and may lose some or all of your investment.

In addition, in the past, class action litigation has often been instituted against companies whose securities have experienced periods of volatility in market price. Securities litigation brought against us following volatility in our share price, regardless of the merit or ultimate results of such litigation, could result in substantial costs, which would hurt our financial condition and operating results and divert management’s attention and resources from our business.

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We will incur increased costs as a result of being a public company, particularly after we cease to qualify as an “emerging growth company.”

Upon consummation of this offering, we will incur significant legal, accounting and other expenses as a public company that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC, impose various requirements on the corporate governance practices of public companies. We are an “emerging growth company,” as defined in the JOBS Act and will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a)following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our ADSs that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 in the assessment of the emerging growth company’s internal control over financial reporting and permission to delay adopting new or revised accounting standards until such time as those standards apply to private companies.

Compliance with these rules and regulations increases our legal and financial compliance costs and makes some corporate activities more time-consuming and costly. After we are no longer an “emerging growth company,” or until five years following the completion of our initial public offering, whichever is earlier, we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 and the other rules and regulations of the SEC. For example, as a public company, we have been required to increase the number of independent directors and adopt policies regarding internal controls and disclosure controls and procedures. We have incurred additional costs in obtaining director and officer liability insurance. In addition, we incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.

Recent joint statements by the SEC and PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offering.

U.S. public companies that have substantially all of their operations in China (including in Hong Kong) have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud.

On December 7, 2018, the SEC and the PCAOB issued a joint statement highlighting continued challenges faced by the U.S. regulators in their oversight of financial statement audits of U.S.-listed companies with significant operations in China. On April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including China, reiterating past SEC and PCAOB statements on matters including the difficulty associated with inspecting accounting firms and audit work papers in China and higher risks of fraud in emerging markets and the difficulty of bringing and enforcing SEC, Department of Justice and other U.S. regulatory actions, including in instances of fraud, in emerging markets generally.

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On May 20, 2020, the U.S. Senate passed the HFCA Act requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the company’s auditors for three consecutive years, the issuer’s securities are prohibited to trade on a national exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding Foreign Companies Accountable Act.

On May 21, 2021, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in a “Restrictive Market”, (ii) prohibit Restrictive Market companies from directly listing on Nasdaq Capital Market, and only permit them to list on Nasdaq Global Select or Nasdaq Global Market in connection with a direct listing and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company’s auditors.

On August 26, 2022, the PCAOB signed SOP Agreements with the China Securities Regulatory Commission and China’s Ministry of Finance. The SOP Agreements established a specific, accountable framework to make possible complete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong, as required under U.S. law. On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB vacated its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s control. However, if the PCAOB continues to be prohibited from conducting complete inspections and investigations of PCAOB-registered public accounting firms in mainland China and Hong Kong, the PCAOB is likely to determine by the end of 2023 that positions taken by authorities in the PRC obstructed its ability to inspect and investigate registered public accounting firms in mainland China and Hong Kong completely, then the companies audited by those registered public accounting firms would be subject to a trading prohibition on U.S. markets pursuant to the Holding Foreign Companies Accountable Act.

On December 29, 2022, the Accelerating Holding Foreign Companies Accountable Act was enacted, which reduces the period of time for foreign companies to comply with PCAOB audits to two consecutive years instead of three, thus reducing the time period for triggering the prohibition on trading.

As a result of these scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese companies sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on us, our offering, our business and our share price. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our company. This situation will be costly and time-consuming and distract our management from developing our growth. If such allegations are not proven to be groundless, we and our business operations will be severely affected and you could sustain a significant decline in the value of our share.

If we fail to meet applicable listing requirements, Nasdaq may delist our ADSs from trading, in which case the liquidity and market price of our ADSs could decline.

Assuming our ADSs are listed on Nasdaq, we cannot assure you that we will be able to meet the continued listing standards of Nasdaq in the future. If we fail to comply with the applicable listing standards and Nasdaq delists our ADSs, we and our shareholders could face significant material adverse consequences, including:

● a limited availability of market quotations for our ADSs;

● reduced liquidity for our ADSs;

● a determination that our ADSs are “penny stock”, which would require brokers trading in our ADSs to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our ADSs;

● a limited amount of news about us and analyst coverage of us; and

● a decreased ability for us to issue additional equity securities or obtain additional equity or debt financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect that our ADSs will be listed on Nasdaq, such securities will be covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulations in each state in which we offer our securities.

Volatility in our ADSs price may subject us to securities litigation.

The market for our ADSs may have, when compared to seasoned issuers, significant price volatility and we expect that our ADS price may continue to be more volatile than that of a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management’s attention and resources.

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The price and the trading volume of our ADSs may be volatile which could result in substantial losses for investors purchasing our Shares under this offering.

The price and trading volume of our ADSs may be volatile. The market price of our ADSs may fluctuate significantly and rapidly as a result of the following factors, among others, some of which are beyond our control:

● fluctuations in stock market price and volume;

● depth and liquidity of the market for our ADSs;

● investors’ perceptions of us and our business;

● actions by institutional shareholders;

● changes in accounting standards, policies, guidance, interpretations and principles;

● additions or departures of our key personnel;

● regulatory or legal developments, including involvement in litigation; and

● general global economic, political and stock market conditions.

There were instances of extreme stock price run-ups followed by rapid price declines and stock price volatility seemingly unrelated to company performance following a number of recent initial public offerings, particularly among companies with relatively smaller public floats. Such volatility, including stock run-up, may be unrelated or disproportionate to the actual or expected operating performance and financial condition or prospects of such companies, making it difficult for investors to assess the rapidly changing value of our ADSs.

In addition, if the trading volumes of our ADSs are low, persons buying or selling in relatively small quantities may easily influence prices of our ADSs. This low volume of trades could also cause the price of our ADSs to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Holders of our ADSs may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our ADSs. As a result of this volatility, investors may experience losses on their investment in our ADSs. A decline in the market price of our ADSs also could adversely affect our ability to issue additional ADSs and our ability to obtain additional financing in the future. No assurance can be given that an active market in our ADSs will develop or be sustained. If an active market does not develop, holders of our ADSs may be unable to readily sell the ADSs they hold or may not be able to sell their shares at all.

Our pre-IPO shareholders will be able to sell their ADSs after completion of this offering subject to restrictions under Rule 144.

Our pre-IPO shareholders, may be able to sell their ADSs under Rule 144 after completion of this offering. Because these shareholders have paid a lower price per ADS than participants in this offering, when they are able to sell their pre-IPO shares under Rule 144, they may be more willing to accept a lower sales price than the IPO price. This fact could impact the trading price of the stock following completion of this offering, to the detriment of participants in this offering. Under rule 144, before our pre-IPO shareholders can sell their shares, in addition to meeting other requirements, they must meet the required holding period. We do not expect any of the ADSs to be sold pursuant to Rule 144 during the pendency of this offering.

If you purchase our ADSs in this offering, you will incur immediate and substantial dilution in the book value of your shares.

Investors purchasing our ADSs in this offering will pay a price per share that substantially exceeds the pro forma as adjusted net tangible book value per ADS. As a result, investors purchasing ADSs in this offering will incur immediate dilution. The exercise of outstanding options will result in further dilution. For more information on the dilution, you may experience as a result of investing in this offering, see “Dilution”.

We will be a “controlled company” within the meaning of Nasdaq rules and we will qualify for and may rely on exemptions from certain corporate governance requirements.

We will be a “controlled company” within the meaning of Nasdaq Stock Market Rules. As at the date of this prospectus, approximately 86.3% of the issued share capital of the Company is owned by Easy Bliss Limited, which in turn is owned approximately 60.2% by Mr. Hok Pan Se, our Director. Mr. Hok Pan Se therefore beneficially owns approximately 51.9% of our total voting power as at the date of this prospectus. Following completion of this offering, approximately 81.6% of the issued share capital of the Company will be owned by Easy Bliss Limited and Mr. Hok Pan Se will in turn beneficially own approximately 49.1% of our total voting power. Following completion of this offering and assuming full conversion of the outstanding convertible bonds of the Company, approximately 68.9% of the issued share capital of the Company will be owned by Easy Bliss Limited and Mr. Hok Pan Se will in turn beneficially own approximately 43.1% of our total voting power. Under the Nasdaq rules, a company of which more than 50% of the voting power with respect to the election of directors is held by an individual, a company or a group of persons acting together is a “controlled company” and may elect not to comply with certain stock exchange rules regarding corporate governance, including the following requirements:

– that a majority of its board of directors consists of independent directors;

– that its director nominees be selected or recommended for the board’s selection by a majority of the board’s independent directors in a vote in which only independent directors participate or by a nominating committee comprised solely of independent directors, in either case, with a formal written charter or board resolutions, as applicable, addressing the nominations process and such related matters as may be required under the federal securities laws; and

– that its compensation committee is composed solely of independent directors with a written charter addressing the committee’s purpose and responsibilities.

If we elect to be treated as a controlled company and use these exemptions, you may not have the same protections afforded to stockholders of companies that are subject to all of Nasdaq rules regarding corporate governance, which could make our ADSs less attractive to investors or otherwise harm our stock price.

Our management has broad discretion to determine how to use the funds raised in the offering and may use them in ways that may not enhance our results of operations or the price of our ADSs.

We anticipate that we will use the net proceeds from this offering for our architectural woodworking business and other corporate purposes. Our management will have significant discretion as to the use of the net proceeds to us from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the market price of our ADSs.

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Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

Upon the closing of this offering, we will become subject to the periodic reporting requirements of the Exchange Act. We will design our disclosure controls and procedures to provide reasonable assurance that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.

We may not pay any dividends on the ADSs.

For the years ended December 31, 2022, 2021 and 2020 and up to the date of this prospectus, we did not declare or pay any dividends. We cannot guarantee when, if, or in what form, dividends will be paid on the ADSs following the listing. A declaration of dividends must be proposed by our board of directors and will be based on, and limited by, various factors, including our business and financial performance, capital and regulatory requirements and general business conditions. Furthermore, we may not have sufficient profits to make dividend distributions to our shareholders in the future, even if our financial statements prepared in accordance with U.S. GAAP indicate that our operations have been profitable.

Securities analysts may not publish favorable research or reports about our business or may publish no information at all, which could cause our share price or trading volume to decline.

If a trading market for our ADSs develops, the trading market will be influenced to some extent by the research and reports that industry or financial analysts publish about us and our business. We do not control these analysts. As a newly public company, we may be slow to attract research coverage and the analysts who publish information about our ADSs will have had relatively little experience with us or our industry, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates. In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us provide inaccurate or unfavorable research or issue an adverse opinion regarding our share price, our share price could decline. If one or more of these analysts cease coverage of us or fail to publish reports covering us regularly, we could lose visibility in the market, which in turn could cause our share price or trading volume to decline and result in the loss of all or a part of your investment in us.

Investors may have difficulty enforcing judgments against us, our Directors and management.

We are incorporated under the laws of the BVI and all of our Directors and officers reside outside the United States. Moreover, many of these persons do not have significant assets in the United States. As a result, it may be difficult or impossible to effect service of process within the United States upon these persons, or to recover against us or them on judgments of U.S. courts, including judgments predicated upon the civil liability provisions of the U.S. federal securities laws. Even if you are successful in bringing an action of this kind, the laws of the BVI could render you unable to enforce a judgment against our assets or the assets of our Directors and officers.

There is uncertainty as to whether the courts of the BVI would (i) recognize or enforce judgments of U.S. courts obtained against us or our Directors or officers predicated upon the civil liability provisions of the securities laws of the U.S. or any state in the U.S. or (ii) entertain original actions brought in the BVI against us or our Directors or officers predicated upon the securities laws of the U.S. or any state in the U.S.

The U.S. and the BVI do not have a treatment providing for reciprocal recognition and enforcement of judgments of courts of the U.S. in civil and commercial matters and that a final judgment for the payment of money rendered by any general or state court in the U.S. based on civil liability, whether or not predicated solely upon the U.S. federal securities laws would not be enforceable in the BVI. A final and conclusive judgment obtained in U.S. federal or state courts under which a sum of money is payable as compensatory damages (i.e., not being a sum claimed by a revenue authority for taxes or other charges of a similar nature by a governmental authority, or in respect of a fine or penalty or multiple or punitive damages) may be the subject of an action on a debt in the court of the BVI under the common law doctrine of obligation. Furthermore, it is uncertain that BVI courts would: (1) recognize or enforce judgments of U.S. courts obtained in actions against us or our Directors or officers predicated upon the civil liability provisions of the U.S. federal securities laws; or (2) entertain original actions brought against us or other persons predicated upon the Securities Act.

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You may have more difficulty protecting your interests than you would as a shareholder of a U.S. corporation.

Our corporate affairs are governed by the provisions of our memorandum and articles of association, as amended and restated from time to time, and by the provisions of applicable BVI law. The rights of shareholders and the fiduciary responsibilities of our Directors and officers under BVI law are not as clearly established as they would be under statutes or judicial precedents in some jurisdictions in the U.S., and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.

These rights and responsibilities are to a large extent governed by the BVI Business Companies Act, 2004 as amended from time to time (the “BVI Act”) and the common law of the BVI. The common law of the BVI is derived in part from judicial precedent in the BVI as well as from English common law, which has persuasive, but not binding, authority on a court in the BVI. In addition, BVI law does not make a distinction between public and private companies and some of the protections and safeguards (such as statutory pre-emption rights, save to the extent expressly provided for in the memorandum and articles of association) that investors may expect to find in relation to a public company are not provided for under BVI law.

There may be less publicly available information about us than is regularly published by or about U.S. issuers. Also, the BVI regulations governing the securities of BVI companies may not be as extensive as those in effect in the U.S., and the BVI law and regulations regarding corporate governance matters may not be as protective of minority shareholders as state corporation laws in the U.S. Therefore, you may have more difficulty protecting your interests in connection with actions taken by our Directors and officers or our principal shareholders than you would as a shareholder of a corporation incorporated in the U.S.

The laws of BVI may provide less protections for minority shareholders than those under U.S. law, so minority shareholders will not have the same options for recourse in comparison to the United States if the shareholders are dissatisfied with the conduct of our affairs.

Under the laws of the BVI, there is limited statutory protection of minority shareholders other than the provisions of the BVI Act dealing with shareholder remedies. The principal protections under BVI statutory law are derivative actions, actions brought by one or more shareholders for relief from unfair prejudice, oppression and unfair discrimination and/or to enforce the BVI Act or the memorandum and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordance with the BVI Act and the memorandum and articles of association, and are entitled to payment of the fair value of their respective shares upon dissenting from certain enumerated corporate transactions.

There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law since the common law of the BVI is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse to interfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairs by the majority of the board of directors. However, every shareholder is entitled to seek to have the affairs of the company conducted properly according to the law and the constitutional documents of the company. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions of the company’s memorandum and articles of association, then the courts may grant relief. Generally, the areas in which the courts will intervene are the following: (i) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (ii) where the company has not complied with provisions requiring approval of a special or extraordinary majority of shareholders; (iii) acts that infringe or are about to infringe on the personal rights of the shareholders, such as the right to vote; or (iv) acts that constitute fraud on the minority where the wrongdoers control the company.

These rights may be more limited than the rights afforded to minority shareholders under the laws of states in the United States.

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Other than as set forth in the BVI Act, shareholders of BVI companies like us have no general rights under BVI law to inspect corporate records or to obtain copies of lists of shareholders of these companies. Our Directors have the discretion to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders, other than as set forth in the BVI Act. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States.

We qualify as a foreign private issuer and, as a result, we will not be subject to U.S. proxy rules and will be subject to Exchange Act reporting obligations that permit less detailed and less frequent reporting than that of a U.S. domestic public company.

Upon the closing of this offering, we will report under the Exchange Act as a non-U.S. company with foreign private issuer status. Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (i) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; (ii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and (iii) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K upon the occurrence of specified significant events. In addition, our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and the rules thereunder. Therefore, our shareholders may not know on a timely basis when our officers, directors and principal shareholders purchase or sell our shares. In addition, foreign private issuers are not required to file their annual report on Form 20-F until one hundred twenty (120) days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within seventy-five (75) days after the end of each fiscal year. Foreign private issuers also are exempt from Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information. As a result of the above, you may not have the same protections afforded to shareholders of companies that are not foreign private issuers.

If we lose our status as a foreign private issuer, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and Nasdaq rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the cost we would incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs and would make some activities highly time-consuming and costly. We also expect that if we were required to comply with the rules and regulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain and maintain directors’ and officers’ liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our board of directors.

As a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with corporate governance listing standards.

As a foreign private issuer, we are permitted to take advantage of certain provisions in the Nasdaq rules that allow us to follow our home country’s law for certain governance matters. Certain corporate governance practices in our home country, the BVI, may differ significantly from Nasdaq corporate governance listing standards. Currently, we do not plan to rely on some home country practices with respect to our corporate governance after we complete this offering. However, if we choose to follow home country practices in the future, our shareholders may be afforded less protection than they would otherwise enjoy under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.

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There can be no assurance that we will not be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, which could result in adverse U.S. federal income tax consequences to U.S. holders of our ADSs.

A non-U.S. corporation will be a PFIC for any taxable year if either (i) at least 75% of its gross income for such year consists of certain types of “passive” income; or (ii) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income, or the asset test. Based on our current and expected income and assets (taking into account the expected cash proceeds and our anticipated market capitalization following this offering), we do not presently expect to be a PFIC for the current taxable year or the foreseeable future. However, no assurance can be given in this regard because the determination of whether we are or will become a PFIC is a fact-intensive inquiry made on an annual basis that depends, in part, upon the composition of our income and assets. In addition, there can be no assurance that the Internal Revenue Service, or IRS, will agree with our conclusion or that the IRS would not successfully challenge our position. Fluctuations in the market price of our ADSs may cause us to become a PFIC for the current or subsequent taxable years because the value of our assets for the purpose of the asset test may be determined by reference to the market price of our ADSs. The composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets and the cash raised in this offering. If we were to be or become a PFIC for any taxable year during which a U.S. Holder holds our ADSs, certain adverse U.S. federal income tax consequences could apply to such U.S. Holder. See “Material Income Tax Considerations — Material U.S. Federal Income Tax Considerations for U.S. Holders - Passive Foreign Investment Company Consequences”.

We may not be able to pay any dividends on our ADSs in the future due to BVI law.

Under BVI law, we may only pay dividends to our shareholders if the value of our assets exceeds our liabilities and we are able to pay our debts as they become due. We cannot give any assurance that we will declare dividends of any amounts, at any rate, or at all in the future. Future dividends, if any, will be at the discretion of our board of directors, and will depend upon our results of operations, cash flows, financial condition, payment to us of cash dividends by our subsidiaries, capital needs, future prospects and other factors that our Directors may deem appropriate.

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

We are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter. We would lose our foreign private issuer status if, for example, more than 50% of our ADSs are directly or indirectly held by residents of the United States and we fail to meet additional requirements necessary to maintain our foreign private issuer status. If we lose our foreign private issuer status on this date, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability to rely upon exemptions from certain corporate governance requirements under the Nasdaq rules. As a U.S. listed public company that is not a foreign private issuer, we will incur significant additional legal, accounting and other expenses that we will not incur as a foreign private issuer, and accounting, reporting and other expenses in order to maintain a listing on a U.S. securities exchange.

We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.

We are an emerging growth company, as defined in the JOBS Act, and we may take advantage of certain exemptions from requirements applicable to other public companies that are not emerging growth companies, including, most significantly, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 for so long as we remain an emerging growth company. As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain information they may deem important.

The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. We do not plan to opt out of such exemptions afforded to an emerging growth company. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective data.

We may amend the deposit agreement without consent from holders of ADSs and, if such holders disagree with our amendments, their choices will be limited to selling the ADSs or cancelling and withdrawing the underlying Ordinary Shares.

We may agree with the depositary to amend the deposit agreement without consent from holders of ADSs. If an amendment increases fees to be charged to ADS holders or prejudices a substantial existing right of ADS holders, it will not become effective until 30 days after the depositary notifies ADS holders of the amendment. At the time an amendment becomes effective, ADS holders are considered, by continuing to hold their ADSs, to have agreed to the amendment and to be bound by the amended deposit agreement. If holders of ADSs do not agree with an amendment to the deposit agreement, their choices will be limited to selling the ADSs or cancelling and withdrawing the underlying Ordinary Shares. No assurance can be given that a sale of ADSs could be made at a price satisfactory to the holder in such circumstances.

Holders of ADSs may be subject to limitations on transfer of their ADSs.

ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer, or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deems it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by the words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “goal,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. The forward-looking statements and opinions contained in this prospectus are based upon information available to us as of the date of this prospectus and, while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. Forward-looking statements include statements about:

● timing of the development of future business;

● capabilities of our business operations;

● expected future economic performance;

● competition in our market;

● continued market acceptance of our services and products;

● protection of our intellectual property rights;

● changes in the laws that affect our operations;

● inflation and fluctuations in foreign currency exchange rates;

● our ability to obtain and maintain all necessary government certifications, approvals, and/or licenses to conduct our business;

● continued development of a public trading market for our securities;

● the cost of complying with current and future governmental regulations and the impact of any changes in the regulations on our operations;

● managing our growth effectively;

● projections of revenue, earnings, capital structure and other financial items;

● fluctuations in operating results;

● health crisis, including due to pandemics such as the COVID-19 pandemic and government measures taken in response thereto; and

● other factors set forth under “Risk Factors.”

You should refer to the section titled “Risk Factors” for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this prospectus will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus forms a part, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

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INDUSTRY AND MARKET DATA

SOURCES OF INFORMATION

This section includes information from the Frost & Sullivan Report, a report commissioned by us, as we believe such information imparts a greater understanding of the industry. Frost & Sullivan is a global consulting company and an independent third party. Founded in 1961, Frost & Sullivan provides market research on a variety of industries, among other services.

In preparing the Frost & Sullivan Report, Frost & Sullivan performed both primary research which involved conducting interviews with leading industry participants and experts and secondary research which involved reviewing company reports, independent research reports and data based on Frost & Sullivan’s research database. Frost & Sullivan also assumed that major regions’ economy is likely to maintain its steady growth in the forecast period, major regions’ social, economic and political environment is likely to remain stable in the forecast period, relevant market drivers are likely to drive the growth of the global log trade industry, and there is no extreme force majeure or industry regulation which may dramatically or fundamentally affect the market.

OVERVIEW OF GLOBAL FORESTRY AND LOGGING INDUSTRY

Definition of Global Forestry and Logging Market

The forestry and logging market consists of sales of forest products (lumber, paper and fodder) and logs by entities (organizations, sole traders, and partnerships) that produce or harvest forestry products and logs and are involved in growing, cutting, and transporting timber, operations of the timber tract, growing timber for reforestation and collecting forest by-products such as gums, barks, and fibers.

The main types of forestry and logging market are logging, timber tract operations, forest nurseries, and the gathering of forest products. Logging refers to the process of harvesting timber, sawing them into appropriate lengths, and transporting them to a sawmill.

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The chart below indicates the industry chain of global forestry market:

Global Forestry Industry Chain Analysis

Source: Frost & Sullivan Report

The Market Size of Global Forestry and Logging Market

The chart below sets forth the market size of global production of log market for the years indicated.

Production of Log, Global

Million CUM; 2016-2026E
CAGR	2016-2020			2020-2026E
Production of Log		0.4	%		1.1	%

 

Note: Log refers to the sum of industrial log and wood fuel.

Source: Food and Agriculture Organization of the United Nations, Frost & Sullivan Report;

Between 2016 and 2021, the total global production of log increased slightly, with a CAGR of 0.4%. In 2016 the production of log was 3,850.5 million CUM and in 2020 the production of log reached 3,912.0 million CUM.

As global production is growing, the total global production of roundwood is expected to reach 4,188.1 million CUM by 2026, with a CAGR of 1.1% from 2020 to 2026.

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Production of Log Breakdown by Major Regions, Global

1000 CUM; 2016-2026E
CAGR	Global			Africa			NA			LAC			Asia			Europe			Oceania
2016-2020		0.4	%		1.0	%		-1.4	%		0.2	%		0.2	%		1.2	%		3.2	%
2020-2026E		1.1	%		0.9	%		0.5	%		0.7	%		0.9	%		2.0	%		4.1	%

 

Note: Log refers to the sum of industrial log and wood fuel.

Source: Food and Agriculture Organization of the United Nations, Frost & Sullivan Report.

For the Asian market, as one of the largest log production regions, the production was 1,148,139.0 thousand CUM in 2016 while the production in 2020 was 1,158,909.0 thousand CUM, with a CAGR of 0.2%. By 2026, the production is expected to increase to about 1,225,331.0 thousand CUM, with a CAGR of 0.9%. In Africa, the production is relatively higher and the CAGR between 2016 and 2020 was 1.0%. By 2026, the production is expected to increase from 791,610.1 thousand CUM to 835,328.8 thousand CUM, with a CAGR of 0.9%. In North America, the production was stable from 2016 to 2020. By 2026, the production of log is expected to increase to 579,524.6 thousand CUM, with a CAGR of 0.5%.

For the European market, the production increased from 765,444.7 thousand CUM to 803,680.9 thousand CUM from 2016 to 2020, with a CAGR of 1.2%. By 2026, the production is expected to increase to about 906,849.0 thousand CUM, with a CAGR of 2.0%. In Latin America and the Caribbean, the production in 2016 was 505,535.7 thousand CUM while the production in 2020 was 509,035.7 thousand CUM, with a CAGR of 0.2%. By 2026, the production is expected to be around 530,264.2 thousand CUM, with a CAGR of 0.7%. In Oceania, the production in 2016 was 76,601.7 thousand CUM while in 2020 the production was 86,836.0 thousand CUM, with a CAGR of 3.2%. By 2026, the production is estimated to be around 110,828.9 thousand CUM with a CAGR of 4.1%.

Overview of FSC Forest Certification

FSC Forest Certification is a certification system promoted by the Forest Stewardship Council, or FSC. FSC forest management certification confirms that the forest is being managed in a way that preserves biological diversity and benefits the lives of local people and workers, while ensuring it sustains economic viability. FSC-certified forests are managed to strict environmental, social and economic standards. There are ten principles that any forest operation must adhere to before it can receive FSC forest management certification. These principles cover a broad range of issues, from maintaining high conservation values to community relations and workers’ rights, as well as monitoring the environmental and social impacts of the forest management.

As of April 2023, the global FSC forest certification area reached 195 million hectares, covering 89 countries around the world. 1,614 FSC promotional license holders and 54,231 FSC chain-of-custody certified enterprises. Among them, the number of FSC certified companies in Peru is 92 up to April 2023.

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The chart below indicates the FSC certification process:

FSC Certification Process

Source: Frost & Sullivan Report

The Benefits of FSC

Environmental benefits

The new FSC standard will make it possible to protect the intact of forests and conserve the biodiversity of forest ecosystems more efficiently, and as such, will improve the management of production forests. One of its advantages are independent audits of certified companies, which will help make the certification process more transparent for concessions and other stakeholders involved such as environmental organizations and eco-activists, local communities, and forestry authorities.

Also, the company needs to conduct routine, quantitative, and targeted harvesting in accordance with the relevant rules and regulations under the supervision of the FSC standard. The staggered growth of logs at various age stages is controlled through a scientific and appropriate harvesting plan, especially for the protection of seed trees, and the trees end up growing more than the amount collected. This not only satisfies the demand for timber consumption, but it also substantially promotes the forest’s sustainable development.

Social benefits

Credible forest certification covers much more than just logging practices, it also accounts for the social and economic well-being of workers and local communities, transparency and inclusiveness in decision-making. The FSC will not only protect the relevant rights of logging companies, but also those of local people.

In particular, FSC-certified companies will help local residents with employment and provide job opportunities; they will also provide the appropriate infrastructure building and basic social welfare provision. To a certain extent, they help to build and develop local communities.

Economic benefits

Firstly, forest certification helps improve the green quality level of forest products, which consequently enhances the export competitive advantage of forest products. At the same time, the source of the trees is guaranteed to be legal and in compliance with the regulations. In this regard, forest certification has an export competitive effect.

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Secondly, FSC-certified products have a premium over non-FSC products, which can improve the competitiveness and credibility of the company’s products in the international market and bring economic benefits to the company.

Overview of The FSC Chain of Custody (CoC)

The FSC chain of custody (CoC) is the path taken by products from the forest, or in the case of recycled materials from the moment when the material is reclaimed, to the point where the product is sold with an FSC claim and/or it is finished and FSC labelled. The CoC includes each stage of sourcing, processing, trading, and distribution where progress to the next stage of the supply chain involves a change of product ownership.

Any change of ownership in the supply chain of FSC-certified products requires the establishment of effective CoC management systems at the level of the respective organization and their verification by an independent FSC-accredited certification body, if the organization wants to make an FSC claim about their products.

FSC certification of such management systems is designed to provide a credible assurance that products which are sold with an FSC claim originate from well managed forests, controlled sources, reclaimed materials, or a mixture of these. FSC CoC certification thereby facilitates the transparent flow of goods made from such materials through the supply chain.

Global Forestry Logging Market Industry Drivers

Some countries have high demand for wood due to historical and cultural reasons

Some countries have a special preference for wood products due to long-standing cultural factors and traditions.

The primary reason is that these regions have produced wood in abundance since ancient times, making the population use wood more frequently. Secondly, various factors such as religion, culture and history have led to a strong demand for high-value wood among the peoples of these regions.

High downstream demand for wood products drives industry growth

The development of downstream industries such as the construction, furniture, and handicraft industries is driving the logging industry. The global construction industry is growing across the board, mainly due to global population growth and rising disposable incomes, as well as increased urbanization, which is expected to drive revenue growth in the global construction market.

OVERVIEW OF GLOBAL FORESTRY PROCESSING AND BY-PRODUCTS INDUSTRY

Definition of Global Forestry Processing Market

The wood processing market consists of sales of processed wood which is treated with preservatives by entities that make dimension lumber, boards, beams, timbers, poles, ties, shingles, shakes, siding, and wood chips from logs or bolts. The wood processing market is segmented into sawmills and wood preservation. Wood processing refers to the various procedures used to convert raw wood into substances or supplies that are used as raw materials in the manufacture of various products.

Products can be divided into following fourteen categories:

Wood in the rough (Roundwood): wood fuel, others

Wood simple worked or processed: wood charcoal, torrefied wood, etc.

Wood chips and particles residues and recoverable wood products: wood chips and particles, etc.

Wood pellets and other agglomerates: wood pellets, wood briquettes, other agglomerates

Sawnwood: coniferous, tropical non-coniferous, other non-coniferous

Veneer sheets: decorative veneer sheets, non-decorative veneer sheets

Wood-based panels: Plywood, Particle board, Fibreboard, etc.

Wood pulp: mechanical wood pulp, semi-chemical wood pulp, etc.

Other pulp: pulp from fibres other than wood, recovered fibre pulp

Recovered paper: unbleached kraft paper or paperboard or corrugated paper or paperboard

Paper and paperboard: packaging materials, etc.

Cork: natural cork, agglomerated cork and articles of agglomerated cork

Secondary wood products: further-processed sawnwood, wooden furniture, etc.

Secondary paper products: composite paper and paperboard, etc.

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Wood Processing Flow

Overview of Global Wood Processing Manufacturing Model

Typically, the manufacturing model in wood processing industry can be classified into three types:

ODM

ODM means that the panel processing company A designs and produces the product according to the specifications of company B. The biggest advantage of this is that company B reduces the time for its own development. ODM is different from OEM in that the ODM manufacturer will have its own developed technology and design, and even molded products.

OEM

OEM is a cooperative production method in which the original company (brand company) commissions a contract for product development and manufacturing, using the original company’s trademark and sold or operated by the original company. It has a close relationship with modern industrial society. With the further acceleration of the development trend of economic globalization, OEM demanders are likely to select OEM suppliers in a wider range, especially to countries and regions with low processing and manufacturing costs.

OBM

OBM requires plate processing enterprises to register their own trademarks, develop markets, and create their own brands while taking advantage of design and manufacturing. The trademark marks a big step from “using the brand” to “creating the brand” and is a qualitative leap in the development of the enterprise.

Overview of Global Forestry Processing and By-Products Industry (Wood Charcoal)

The chart below sets forth the market size of global production of wood charcoal market for the years indicated.

Production of Wood Charcoal, Global

1000 MT; 2016-2026E

CAGR	2016-2020			2020-2026E
Production of Wood Charcoal		1.2	%		1.4	%

Source: Food and Agriculture Organization of the United Nations, Frost & Sullivan Report；

The global production of wood Charcoal keeps relatively stable. From 2016 to 2020, The production increases to 53,141.6 thousand MT, with a CAGR of 1.2%. In the future, as the awareness of protecting the environment increases, more and more wood waste tends to be produced as wood charcoal. What is more, The European energy crisis resulting from the Russian-Ukrainian war and the explosion of the Nord Stream gas pipeline has led to increased demand for charcoal in the European region, and global charcoal production will continue to increase in the future. the growth rate should be higher. By 2026, the production is estimated to be 57,864.7 thousand MT, with a CAGR of 1.4%.

Overview of Global Forestry Carbon Sink Business Market

“Forestry carbon sink” refers to the process, activity or mechanism of using the carbon storage function of forests to absorb and fix carbon dioxide in the atmosphere by implementing afforestation and reforestation, strengthening forest management, reducing deforestation, protecting and restoring forest vegetation, etc., and combining it with carbon sink trading in accordance with relevant rules.

Carbon credits are measurable, verifiable emission reductions from certified climate action projects. These projects reduce, remove or avoid greenhouse gas (GHG) emissions. But they also bring a whole host of other positive benefits, for example, they empower communities, protect ecosystems, restore forests or reduce reliance on fossil fuels. After an organization or an individual buys a carbon credit, the credit is permanently retired so it can’t be reused.

In the fight against climate change, not only humanity to counteract the effects of global warming with mitigation and adaptation measures, but nature itself has its own weapons to try to keep the average temperature of the planet from increasing. For that, carbon sinks, which are natural (oceans and forests) and artificial deposits (certain technologies and chemicals) absorb and capture carbon dioxide (CO2) from the atmosphere and reduce its concentration in the air.

The scope of forest land statistics for forestry carbon sinks includes both “forest land remaining forest land” and “land converted to forest land”. Carbon trade is the buying and selling of credits that permit a company or other entity to emit a certain amount of carbon dioxide or other greenhouse gases. The carbon credits and the carbon trade are authorized by governments with the goal of gradually reducing overall carbon emissions and mitigating their contribution to climate change.

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Carbon Trading Process

The chart below sets the market size of global forestry carbon sink business for the years indicated.

Verra VCU Issuances, Global

Million VCU; 2017-2026E

CAGR	2017-2021			2021-2026E
Global VCU Issuance		61.4	%		22.6	%

Source: Verra, Frost & Sullivan Report；

Verra data shows VCU issuances rising rapidly. Almost 300 million VCUs were issued in 2021, the highest number of annual issuances ever and more than twice as many as in 2020. In 2017, the VCU issuances was 43.5 million VCU; and in 2021 the total amount was 295.1 million VCU, which is an increase of almost 700% year-on-year. VCUs will continue to grow in the future due to the emphasis on carbon reduction by governments. It is estimated that the VCU issuance will reach 817.0 million by 2026, with a CAGR of 22.6% from 2021 to 2026.

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The chart below sets the market size of average value for major region allowance prices for carbon emissions for the years indicated.

Average Value for Major Region Allowance Prices for Carbon Emissions, US and EU

USD per metric ton of CO2, 2017-2026E

CAGR	2017-2022			2022-2026E
US		14.7	%		27.4	%
EU		69.0	%		30.2	%

The EU carbon price increases quickly starting in 2017 and reaches USD 87.3/ton in 2022 with a CAGR of 69.0% from 2017 to 2022. The year 2021 had the largest year-over-year growth, with an increase of approximately 116.0%. Future carbon prices are anticipated to increase as the market for carbon trading develops and more participants join, with a CAGR of 1.2%, to reach a conservative estimate of USD 251.2/ton in 2026.

Comparatively to the EU carbon price, the U.S. carbon price has climbed more gradually. With a CAGR of 14.7%, prices increased from USD 14.3/ton in 2017 to USD 28.5/ton in 2022. The projected U.S. carbon price will rise to USD74.9/ton in 2026, with a CAGR of around 27.4%.

The global production of wood charcoal remains relatively stable. From 2016 to 2020, the production increased to 53,141.6 thousand MT, with a CAGR of 1.2%. In the future, as the awareness of protecting the environment increases, more and more wood waste will likely be produced as wood charcoal. In addition, the European energy crisis resulting from the Russian-Ukrainian war and the explosion of the Nord Stream gas pipeline has led to increased demand for charcoal in the European region, and global charcoal production is set to continue to increase in the future. By 2026, the production is estimated to be 57,864.7 thousand MT, with a CAGR of 1.4%.

The chart below sets the market size of global voluntary carbon offset for the years indicated.

Voluntary Carbon Offset Market Transaction Size, Global

USD Million; 2017-2026E

	2017-2021	2021-2026E
CAGR	92.0%	76.4%

Source: Verra, Frost & Sullivan Report；

The market share of carbon offsets from forestry and land use has demonstrated a pattern of rapid increase with the trend of the rise of the entire voluntary carbon offset market. The global voluntary carbon offset market transaction size was USD146.0 million in 2017, rapid growth to USD 1,985.0 million in 2021, with a CAGR of 92.0%. With the gradual expansion of the construction of carbon sink markets in various countries, it is expected that by 2026, the global voluntary carbon offset market transaction size will increase to USD33,869.1 million in 2026.

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Market Drivers for Global Forestry Processing and By-Products Industry

Global construction market will experience growth

Rapid technological advancements in infrastructure development and growing demand for low-carbon and eco-friendly buildings are other key factors contributing to the growth of the global construction market.

Another factor expected to drive the growth of the construction market is improving economic conditions in developing countries, leading to increased consumer disposable income and increased government investments in public infrastructure. The growth of the global construction market will increase the global demand for wood and thus drive the timber harvesting market.

The popularity of high-quality custom furniture led to an increase demand for wood furniture

Large-scale home customizing services have expanded within the global manufacturing sector in recent decades, becoming a new mode of production.

The demand for high-end bespoke furniture is expected to increase significantly over the next five years. The market’s consumption potential is substantial, and the industry’s revenue ratio will rise along with the expansion rate and strong growth prospects.

The wooden furniture manufacturing industry is one of the main downstream industries of the wood processing industry, there is a certain demand for various wood, artificial board, veneer, fiberboard and other products for high-quality custom furniture. In addition to high demand of high-quality custom furniture, in recent years, with the impact of COVID-19, customers have higher requirements for the home environment and longer home time, making the consumer demand for household products rising, and the user consumption potential is constantly tapped and enhanced.

OVERVIEW OF GLOBAL LOG TRADE INDUSTRY

Overview of Global Transaction of Log Market

The chart below sets forth the market volume of global transaction of log market for the years indicated.

Total Import Volume of Log and Breakdown by Major Regions, Global

1000 CUM; 2016-2026E
CAGR	Global			Africa			NA			LAC			Asia			Europe			Oceania
2016-2020		0.0	%		4.3	%		-7.3	%		-2.0	%		0.1	%		0.8	%		-14.6	%
2020-2026E		4.6	%		4.5	%		3.0	%		2.1	%		4.1	%		5.3	%		1.0	%

Note: Log refers to the sum of industrial log and wood fuel.

Source: Food and Agriculture Organization of the United Nations, Frost & Sullivan Report;

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For global log imports, imports data show a fluctuating trend from 2016 to 2020. In 2016, the global total import was 140.1 million CUM; and in 2020 the global total import volume was 140.4 million CUM. It is estimated that the import volume will reach 183.9 million cubic meters by 2026, with a CAGR of 4.6% from 2020 to 2026.

In 2016, among all regions – Asia had the largest import volume, reaching 72,117.7 thousand cubic meters. This is followed by Europe at 58,819.5 thousand cubic meters and Africa at 1,296.1 thousand cubic meters. It is estimated that by 2026, the import volume of Africa can reach 2,000.2 thousand cubic meters, the import volume of Asia can reach 92,148.9 thousand cubic meters, and the import volume of Europe can reach 82,856.4 thousand cubic meters. In 2020, among all regions – Asia still had the largest import volume, reaching 72,339.4 thousand m3. This is followed by Europe at 60,666.6 thousand cubic meters and NA at 5,570.5 thousand cubic meters.

The chart below sets forth the market value of global transaction of log market for the years indicated.

Total Import Value of Log and Breakdown by Major Regions, Global

USD Thousand; 2016-2026E
CAGR	Global			Africa			NA			LAC			Asia			Europe			Oceania
2016-2020		-1.9	%		12.8	%		-2.7	%		15.3	%		-2.5	%		-0.4	%		-15.8	%
2020-2026E		5.6	%		4.4	%		3.2	%		1.7	%		5.4	%		6.4	%		1.2	%

Note: Log refers to the sum of industrial log and wood fuel.

Source: Food and Agriculture Organization of the United Nations, Frost & Sullivan Report;

The global log import amount is also showing a fluctuation from 2016 to 2020, reaching a top value of USD20,202.8 million in 2018, with a CAGR of -1.9% from 2016 to 2020. Total global log imports value in 2026 will reach USD21,286.1 million, with a CAGR of 5.6% from 2020 to 2026.

In Africa, the import of log by value was USD98,265.0 thousand and the CAGR between 2016 and 2020 is 12.8%. By 2026, the import value increases from USD159,149.0 thousand to USD206,171.9 thousand, with a CAGR of 4.4%. In North America, the import value slightly decreased from 2016 to 2020. By 2026, the import of log by value will increase to USD432,468.5 thousand with a CAGR of 3.2%. For the European market, the import value decreases from USD4,030,758.0 thousand to USD3,962,598 thousand from 2016 to 2020, with a CAGR of -0.4%. By 2026, the import value will be about USD5,745,369.9 thousand, with a CAGR of 6.4%. In LAC, the import value in 2016 was USD37,925.0 thousand while the import value in 2020 is USD67,054.0 thousand, with a CAGR of 15.3%. By 2026, the import value will be USD74,121.0 thousand, with a CAGR of 1.7%. For Asia, the import value was USD11,971,409.0 thousand in 2016 while the import value in 2020 is USD10,797,168.0 thousand, with a CAGR of -2.5%. By 2026, the import value will be increased to about USD14,822,458.5 thousand, with a CAGR of 5.4%. In Oceania, the import value in 2016 USD10,549.0 thousand while in 2020 the import value is USD5,310.0 thousand, with a CAGR of -15.8%. By 2026, it estimates the import value is USD5,688.8 thousand with a CAGR of 1.2%.

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Overview of Log Trade Industry in China

China predominately imports raw material for its wood processing industry. Ninety-four percent (94%) of China’s timber imports continued to be in log, sawnwood, or woodchip form. Woodchip imports rose fastest over the decade, followed by sawnwood and logs; together, imports of these three products rose 57% from 2011 to 2020.

China’s log imports grew steadily, with stronger demand for softwood species towards the end of the decade. China’s imports of hardwood logs rose 17%. The main sources for China’s hardwood log imports have remained stable, topped by the higher risk countries of Papua New Guinea (PNG) and the Solomon Islands, and followed by Russia, which doubled its market share over the decade. Brazil experienced the highest gain in market share, with additional growth from the US and European Union (EU) plus European Free Trade Association (EFTA) Member States (hereinafter “EU/EFTA”).

In contrast, there was much stronger growth in China’s softwood log imports (49%), particularly since 2018. The comparatively slow growth in hardwood log imports, in contrast to sawnwood, woodchips, and softwood logs, may be due to more countries introducing or enforcing log export restrictions (LERs) to promote domestic value-added processing.

The chart below sets forth the market value of global transaction of log market for the years indicated.

Consumption of Log, China

Million CUM; 2016-2026E
CAGR	2016-2020			2020-2026E
Consumption of Log		0.9	%		1.2	%

 

Note: the consumption of log includes the consumption in both mainland China and Hong Kong SAR of China.

Source: Food and Agriculture Organization of the United Nations, Frost & Sullivan Report;

From 2016 to 2020, China’s consumption of log increased from 383.3 million CUM to 396.7 million CUM, with CAGR of 0.9%. Due to the increase in production, the growth rate of log consumption will be higher. It is estimated that by 2026, the production will be about 427.0 million CUM, with a CAGR of 1.2%.

Key Growth Drivers for the Log Trade Market in China

Cross-border e-commerce offers the best opportunities for the global forestry trade industry

Since the COVID-19 outbreak, the wood supply chain has faced significant challenges while also opening up new opportunities. The rise of the “home economy” has reshaped global consumption habits and pushed more consumers to switch from offline to online shopping, effectively stimulating global e-commerce development, and the massive overseas e-commerce consumer market offers the best opportunity for global trade in wood products.

China launched 27 measures to promote the growth of timber imports and exports

China, as the world’s largest timber consumer, has a huge demand for import and export timber trade, as approximately 56% of its annual timber requirements have been imported from other countries since the announcement of the ban on natural forest areas in 2017. Recently, the State Council announced 27 new measures to improve cross-border trade facilitation, including to reduce logistics costs, improve logistics efficiency, make cross-border trade more convenient, lay a solid foundation for steady growth of foreign trade, create a good policy environment, and effectively promote the growth of China’s timber imports and exports.

The market for wood by-products will further expand

The use of recycled wood is gaining more attention due to the increased emphasis on environmental protection around the world, which will further fuel the market for wood by-products’ quick expansion.

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Development Trend for the Log Trade Market in China

Countries that trade mainly in plantation timber will be the main suppliers of logs

The main suppliers of logs will be countries that primarily trade in plantation timber. Tropical natural forests are unsustainable, and planted forests will primarily supply logs in the future. As a result, developed forestry nations like Europe and the United States, which have advanced planted forest cultivation and management techniques, and developing nations like South America, which are actively developing planted forests, will serve as the world’s primary suppliers of timber.

Competition in the international timber market will become more intense in the future

Environmental protection-related policies have been introduced one after another, and the number of countries restricting log exports has increased again, implying that the competition in the international seller’s timber market is bound to be more intense in the future.

There will still be a number of restrictions on the export trade of forest products in export markets. For a while to come, exports of forest products will continue to be hampered by trade obstacles like formaldehyde, tariffs, and double anti-barriers. To get around these obstacles, businesses will invest in third-party nations while also stepping up their R&D efforts to create more innovative products. On the one hand, businesses will invest in third-party nations to avoid them, while on the other, they will enhance R&D to create products with better value-added.

Entry Barriers for the Log Trade Market in China

Legal barriers

The international trade in timber is presently being conducted progressively, and the relevant nations have various import and export regulations as well as distinct documentation requirements. For trading companies, these legislative criteria have specific financial, environmental, technological, and product requirements. There are certain challenges for new entrants.

Financial and manpower barriers

The industry of timber import and export trading needs a lot of financial and human resources. In addition to paying for new forest, employee training, industry-specific equipment, and other expenses, new entrants will also need to spend more money on transportation as the price of oil rises globally. These will be significant expenses for new entrants.

Professional Identification Barrier

For the identification of wood species, quality and a series of other identification work need to have professional background knowledge to identify. In particular, quality identification requires not only professional knowledge, but also years of relevant observation experience. Therefore, there are certain industry barriers to relevant expertise.

COMPETITIVE LANDSCAPE OF THE LOG TRADE MARKET

The French log export trade is highly competitive, not only with domestic log exporters but also with those outside France. The French forest is growing at the rate of 88 million cubic meters of wood per year. Half of this volume is collected annually by the primary processing industry. Of all the hardwood species in France, oak has the largest volume and is the most exported species. More widespread than all other species of hardwood in France, oak accounts for 5,530,000 ha of French forest. For Peruvian wood products export suppliers, China, the largest buyer of Peruvian wood products, accounts for approximately 30% of Peruvian wood products exports. Chinese wood products exporters are also gradually setting up in Peru, and with the restrictions on log exports from Peru, more shaped wood products will be exported in the future. Competition for wood products exports from Peru is now increasing.

Ranking of the leading oak export suppliers in France, 2021

Ranking	Company	Oak export volume(m3)
1	Nature Wood Group Limited (previously known as “China Nature Wood Industry Group Limited”)	~43,500
2	A	~16,000
3	B	~13,600
4	C	~9,425
5	D	~8,852
Total	N/A	~91,377

Source: Frost & Sullivan Report

Ranking of the leading hardwood export suppliers in France, 2021

Ranking	Company	Hardwood export volume(m3)
1	E	~66,500
2	Nature Wood Group Limited (previously known as “China Nature Wood Industry Group Limited)	~53,900
3	A	~20,000
4	F	~17,500
5	D	~9,000
Total	N/A	~166,900

Source: Frost & Sullivan Report

Ranking of the leading wood products export suppliers in Peru,2021

Ranking	Company	Wood products export value (USD Thousand)
1	G	~17,501.4
2	GRUPO MADERERO AMAZ S.A.C.	~16,532.3
3	H	~14,718.1
4	I	~7,145.7
5	J	~6,687.7
Total	N/A	~62,585.2

Source: Peruvian Customs, Frost & Sullivan Report

Ranking of the leading wood products export suppliers in Peru (FSC),2021

Ranking	Company	Wood products export value (USD Thousand)
1	H	~7,671.0
2	GRUPO MADERERO AMAZ S.A.C.	~7,378.5
3	K	~4,143.2
4	I	~1,140.7
5	J	~682.3
Total	N/A	~21,015.7

Source: Peruvian Customs, Frost & Sullivan Report

Ranking of the leading wood products export suppliers to France in Peru (FSC),2021

Ranking	Company	Wood products export value (USD Thousand)
1	GRUPO MADERERO AMAZ S.A.C.	~3,571.0
2	K	~541.4
3	H	~465.9
4	J	~388.9
5	I	~233.9
Total	N/A	~5,201.1

Source: Peruvian Customs, Frost & Sullivan Report

Ranking of the leading decking products export suppliers in Peru,2021

Ranking	Company	Wood products export value(USD Thousand)
1	GRUPO MADERERO AMAZ S.A.C.	~7,445.9
2	I	~6,673.0
3	H	~6,566.8
4	G	~3,876.6
5	J	~3,503.3
Total	N/A	~28,065.6

Source: Peruvian Customs, Frost & Sullivan Report

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USE OF PROCEEDS

Based upon an initial public offering price of $9 per ADS, we estimate that we will receive net proceeds from this offering, after deducting the estimated underwriting discounts and the estimated offering expenses payable by us, of approximately $4,374,764 if the underwriters do not exercise their over-allotment option, and $5,316,389 if the underwriters exercise their over-allotment option in full.

Each $1.00 increase (decrease) in the initial public offering price of $9 per ADS would increase (decrease) the net proceeds to us from this offering by $697,500, assuming that the number of ADSs offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the underwriting discounts and estimated offering expenses payable by us.

The primary purposes of this offering are to create a public market for our shares for the benefit of all shareholders. We plan to use the net proceeds of this offering as follows:

● Approximately 50% for acquisition of concession rights and forest-related business;

● Approximately 35% for acquisition of factories in Europe or South America and development of new products; and

● The balance to fund working capital and other general corporate purposes

The foregoing represents our current intentions based upon our present plans and business conditions to use and allocate the net proceeds of this offering. Our management, however, will have significant flexibility and discretion to apply the net proceeds of this offering. If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as described in this registration statement. We reserve the right to change the use of proceeds that we presently anticipate and describe herein.

To the extent that the net proceeds we receive from this offering are not immediately used for the above purposes, we intend to invest our net proceeds in short-term, interest-bearing bank deposits or debt instruments.

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DIVIDEND POLICY

We currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business but we may declare or pay dividends in the future. Any future determination related to our dividend policy will be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements, contractual requirements, business prospects and other factors the board of directors deems relevant, and subject to the restrictions contained in any future financing instruments.

For the year ended December 31, 2022, 2021 and 2020 and up to the date of this prospectus, we did not declare or pay any dividends. As at the date of this prospectus, dividend payables balance was nil.

The declaration, amount and payment of any future dividends will be at the sole discretion of our board of directors, subject to compliance with applicable BVI laws regarding solvency. Our board of directors will take into account general economic and business conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and other implications on the payment of dividends by us to our shareholders or by our subsidiaries to us, and such other factors as our board of directors may deem relevant.

Under BVI law and our memorandum and articles of association, our board of directors may authorize payment of a dividend to shareholders at such time and of such an amount as they determine if they are satisfied on reasonable grounds that immediately following the dividend the value of our assets will exceed our liabilities and we will be able to pay our debts as they become due. There is no further BVI statutory restriction on the amount of funds which may be distributed by us by dividend.

Cash dividends, if any, on our ADSs will be paid in U.S. dollars.

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CAPITALIZATION

The following table sets forth our capitalization as of December 31, 2022 on:

● On August 23, 2018, the then sole director of our Company resolved and approved an increase in the number of maximum authorized shares from 50,000 shares to 100,000 shares of a single class each with a par value of US$1.00 (the “First Increase in Share Capital”). Following the First Increase in Share Capital, on October 8, 2018, the then sole director of our Company resolved and approved a second increase in the number of maximum authorized shares from 100,000 shares to 200,000 shares of a single class each with a par value of US$1.00 (the “Second Increase in Share Capital”). Pursuant to the written resolutions dated September 20, 2020 passed by all of the then directors of our Company, the shares of our Company have been subdivided from 200,000 shares of a single class each with a par value of US$1.00 to 200,000,000 shares of a single class each with a par value of US$0.001 (the “Share Subdivision”). Following the Share Subdivision, on September 25, 2020, our Company had an aggregate of 105,263,000 ordinary shares with a par value of US$0.001 in issue. As at the date of this prospectus, there are 105,263,000 ordinary shares issued and outstanding.

● A pro forma as adjusted basis to give effect to the sale of ADSs in this offering at the initial public offering price of $9 per ADS after deducting the underwriting discounts and estimated offering expenses payable by us, assuming the underwriters do not exercise their over-allotment option.

You should read this information together with our audited consolidated financial statements appearing elsewhere in this prospectus and the information set forth under the sections titled “Selected Consolidated Financial Data,” “Exchange Rate Information,” “Use of Proceeds” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

	As of December 31, 2022
	Actual		Pro Forma As Adjusted assuming for this public offering (1)			Pro Forma As Adjusted assuming for this public offering and accounting for full conversion of the outstanding convertible bonds (2)
Long-term debts
Bank borrowings, non-current portion	$	836,532	$	836,532		$	836,532
Amount due to an ultimate beneficial shareholder		17,087,553		17,087,553			17,087,553
Lease liabilities		65,513		65,513			65,513
	$	17,989,598	$	17,989,598		$	17,989,598
Equity
Ordinary shares, $0.001 par value per share: 200,000,000 shares authorized; 105,263,000 shares issued and outstanding; 111,263,000 shares issued and outstanding pro forma assuming no conversion of the outstanding convertible bonds of the Company; 131,738,377 shares issued and outstanding pro forma assuming full conversion of the outstanding convertible bonds of the Company (3)	$	105,263	$	111,263		$	131,738
Additional paid-in capital (4)		12,834,431		17,203,195			29,393,047
Statutory and other reserves (4)		57,456		57,456			57,456
Retained earnings (4)		358,195		358,195			358,195
Accumulated other comprehensive income (4)		(863,669)		(863,669	)		(863,669	)
Total equity		12,491,676		16,866,440			29,076,767
Total capitalization	$	30,481,274	$	34,856,038		$	47,066,365

(1)	Reflects the issuance of total 750,000 ADSs (6,000,000 ordinary shares) in this offering at an initial public offering price of $9 per ADS, and after deducting the underwriting discounts and estimated offering expenses payable by us. The pro forma as adjusted information is illustrative only, and we will adjust this information based on the actual initial public offering price and other terms of this offering determined at pricing. Additional paid-in capital reflects the net proceeds we expect to receive, after deducting the underwriting discounts and estimated offering expenses payable by us. We estimate that such net proceeds will be approximately $4,374,764. For an itemization of an estimation of the total offering expenses payable by us, see “Expenses Related to this Offering.”
(2)	Other than the adjusted Pro Forma in point 1 above, it also assumes the full conversion of the outstanding convertible bonds of the Company amounting to $12,210,327 into 20,475,377 of the Company’s ordinary shares.
(3)	The number of Ordinary Shares outstanding set forth in the table above excludes 7,320,000 Ordinary Shares to be issuable upon the exercise of outstanding options of the Company.
(4)	Additional paid-in capital and statutory and other reserves in aggregate represent capital reserves in the Consolidated Statement of Financial Position. Retained earnings and statutory and accumulated other comprehensive income in aggregate represent accumulated comprehensive losses in the Consolidated Statement of Financial Position.

Each $1.00 increase (decrease) in the initial public offering price of $9 per ADS would increase (decrease) the pro forma as adjusted amount of total capitalization by $697,500 and $697,500, assuming that no conversion and full conversion of the outstanding convertible bonds of the Company respectively, the number of ADSs offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and estimated offering expenses payable by us.

45

DILUTION

If you invest in our ADSs in this offering, your interest will be immediately diluted to the extent of the difference between the initial public offering price per ADS in this offering and the net tangible book value per ADS after this offering. Dilution results from the fact that the initial public offering price per ADS is substantially in excess of the net tangible book value per ADS. As of December 31, 2022, we had a historical net tangible book value of $12,491,676, or $0.95 per ADS. Our net tangible book value per share represents total tangible assets less total liabilities, all divided by the number of ADSs outstanding as of December 31, 2022.

Dilution to new investors purchasing ADSs in this offering assuming full conversion of the outstanding convertible bonds of the Company

After giving effect to the sale of ADSs in this offering at the initial public offering price of $9 per ADS, we will have 16,467,297 ADSs outstanding, and after deducting the underwriting discounts and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value at December 31, 2022 would have been $29,076,767, or $1.77 per ADS. This represents an immediate increase in pro forma as adjusted net tangible book value of $0.82 per ADS to existing investors and immediate dilution of $7.23 per ADS to new investors.

The following table illustrates this dilution to new investors purchasing ADSs in this offering assuming full conversion of the outstanding convertible bonds of the Company:

	Post-Offering (1)		Full Exercise of Over-allotment Option (2)
Initial public offering price per ADS	$	9.00	$	9.00
Net tangible book value per ADS as of December 31, 2022 (3)	$	0.95	$	0.95
Increase in pro forma as adjusted net tangible book value per ADS attributable to new investors purchasing ADSs in this offering	$	0.82	$	0.86
Pro forma as adjusted net tangible book value per ADS after this offering	$	1.77	$	1.81
Dilution per ADS to new investors in this offering	$	7.23	$	7.19

(1)	Assumes net proceeds from the offering of ADSs, and assumes that the underwriters’ over-allotment option has not been exercised.
(2)	Assumes net proceeds from the offering of ADSs, and assumes that the underwriters’ over-allotment option has been exercised in full.
(3)	Net tangible book value includes intangible assets for which recovery of book value is not subject to significant uncertainty or illiquidity.

Each $1.00 increase (decrease) in the initial public offering price of $9 per ADSs would increase (decrease) our pro forma as adjusted net tangible book value as of December 31, 2022 after this offering by approximately $0.05 per ADS assuming full conversion of the outstanding convertible bonds of the Company, and would increase (decrease) dilution to new investors by $0.95 per ADS, after deducting the underwriting discounts and estimated offering expenses payable by us. The pro forma as adjusted information is illustrative only, and we will adjust this information based on the actual initial public offering price and other terms of this offering determined at pricing.

If the underwriters exercise their over-allotment option in full, the pro forma as adjusted net tangible book value per ADS after this offering would be $1.81, the increase in net tangible book value per ADS to existing shareholders would be $0.86, and the immediate dilution in net tangible book value per ADS to new investors in this offering would be $7.19.

The following table summarizes, on a pro forma as adjusted basis as of December 31, 2022, the differences between the existing shareholders and the new investors with respect to the number of ordinary shares (in the form of ADSs or ordinary shares) purchased from us in this offering, the total consideration paid and the average price per ordinary share paid and per ADS at the public offering price of US$9 per ADS before deducting underwriting discounts and estimated offering expenses payable by us. The total number of ordinary shares does not include ordinary shares underlying the ADSs issuable upon the exercise of the option to purchase additional ADSs which we granted to the underwriters.

	Ordinary shares purchased					Total consideration					Average
	Number		Percent			Amount		Percent			price per ordinary share		Average price per ADS
Existing shareholders		105,263,000		79.9	%	$	12,939,694		40.6	%	$	0.12	$	0.96
Conversion of convertible bonds		20,475,377		15.5	%		12,210,327		38.3	%		0.60		4.80
New investors		6,000,000		4.6	%		6,750,000		21.1	%		1.13		9.00
Total		131,738,377		100.0	%	$	31,900,021		100.0	%	$	0.24	$	1.92

The pro forma as adjusted information discussed above is illustrative only.

Dilution to new investors purchasing ADSs in this offering assuming no conversion of the outstanding convertible bonds of the Company

After giving effect to the sale of ADSs in this offering at the initial public offering price of $9 per ADS, we will have 13,907,875 ADSs outstanding, and after deducting the underwriting discounts and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value at December 31, 2022 would have been $16,866,440, or $1.21 per ADS. This represents an immediate increase in pro forma as adjusted net tangible book value of $0.26 per ADS to existing investors and immediate dilution of $7.79 per ADS to new investors.

The following table illustrates this dilution to new investors purchasing ADSs in this offering assuming no conversion of the outstanding convertible bonds of the Company:

	Post-Offering (1)		Full Exercise of Over-allotment Option (2)
Initial public offering price per ADS	$	9.00	$	9.00
Net tangible book value per ADS as of December 31, 2022	$	0.95	$	0.95
Increase in pro forma as adjusted net tangible book value per ADS attributable to new investors purchasing ADSs in this offering	$	0.26	$	0.32
Pro forma as adjusted net tangible book value per ADS after this offering	$	1.21	$	1.27
Dilution per ADS to new investors in this offering	$	7.79	$	7.73

(1)	Assumes net proceeds from the offering of ADSs, and assumes that the underwriters’ over-allotment option has not been exercised.
(2)	Assumes net proceeds from the offering of ADSs, and assumes that the underwriters’ over-allotment option has been exercised in full.

Each $1.00 increase (decrease) in the initial public offering price of $9 per ADSs would increase (decrease) our pro forma as adjusted net tangible book value as of December 31, 2022 after this offering by approximately $0.05 per ADS, and would increase (decrease) dilution to new investors by $0.95 per ADS, after deducting the underwriting discounts and estimated offering expenses payable by us.

If the underwriters exercise their over-allotment option in full, the pro forma as adjusted net tangible book value per ADS after this offering and assuming full conversion of the outstanding convertible bonds of the Company would be $1.27, the increase in net tangible book value per ADS to existing shareholders would be $0.32, and the immediate dilution in net tangible book value per ADS to new investors in this offering would be $7.73.

To the extent that we issue additional ADSs in the future, there will be further dilution to new investors participating in this offering.

The following table summarizes, on a pro forma as adjusted basis as of December 31, 2022, the differences between the existing shareholders and the new investors with respect to the number of ordinary shares (in the form of ADSs or ordinary shares) purchased from us in this offering, the total consideration paid and the average price per ordinary share paid and per ADS at the initial public offering price of US$9 per ADS before deducting underwriting discounts and estimated offering expenses payable by us. The total number of ordinary shares does not include ordinary shares underlying the ADSs issuable upon the exercise of the option to purchase additional ADSs which we granted to the underwriters.

	Ordinary shares purchased					Total consideration					Average
	Number		Percent			Amount		Percent			price per ordinary share		Average price per ADS
Existing shareholders		105,263,000		94.6	%	$	12,939,694		65.7	%	$	0.12	$	0.96
New investors		6,000,000		5.4	%		6,750,000		34.3	%		1.13		9.00
Total		111,263,000		100.0	%	$	19,689,694		100.0	%	$	0.18	$	1.44

The pro forma as adjusted information discussed above is illustrative only.

46

EXCHANGE RATE INFORMATION

The functional currency of our entities located in Hong Kong and the European Union is EUR, the functional currency of our entities located in Macau is HKD, the functional currency of our entities located in the PRC is RMB and the functional currency of our entities located in Peru is USD. Our consolidated financial statements are presented in USD. We use USD as reporting currency in our consolidated financial statements and in this prospectus. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the period. Gains or losses resulting from foreign currency transactions are included in the accompanying consolidated statement of income and other comprehensive income.

Translations of balances in the consolidated balance sheets, consolidated statements of income and consolidated statements of cash flows from EUR, HKD and RMB into USD as of and for the year ended December 31, 2022 are solely for the convenience of the reader and were calculated at the rate of EUR 1.00 to USD 1.066, HKD 1 to USD 0.128 and RMB 1 to USD 0.144, respectively. No representation is made that the EUR, HKD and RMB amounts represent or could have been, or could be, converted, realized or settled into USD at that rate, or at any other rate.

47

CORPORATE HISTORY AND STRUCTURE

Our Corporate History

With more than 15 years of experience in forest land operation, our Group has become a diversified enterprise integrating the production and sales of a range of wood products, including logs, decking, flooring, sawn timber. recycled charcoal, synthesized charcoal, machine-made charcoal and essential oils. Our Group has a supply chain throughout South America and Europe, owning natural forest concessions and cutting rights for the exploitation of timbers of forests in Peru which covered an area of approximately 615,333 hectares and two wood processing facilities in Peru. Among them, our Peru base was established in 2016 and has 300 employees as of June 30, 2023, with monthly log processing capacity of more than 6,000 cubic meters and monthly export volume of up to 65 containers (approximately 1,560 m³).

With Mr. Hok Pan Se becoming our principal shareholder since June 2016, he pursued his vision of developing our Group into a vertically-integrated forestry company by acquiring more new forests with a view to reducing the impact of our business from market fluctuations on raw materials.

In January 2017, we acquired our first wood processing facility in Peru, and expanded our product category and started selling decking which are ready-to-use products directly sold to end customers, as compared to our flooring products sold before 2017 which required reprocessing before they can be used.

In June 2020, we acquired our second wood processing facility in Peru with equipment and hardware located in the largest distribution area of wood products in Peru, which contributed substantial growth of our business. To better utilize the biological resources of our Forests, we introduced essential oils as our new product in November 2020 which are refined from the wood and timber in our Forests and commenced the production and export of essential oils to our customers.

Our Corporate Structure

The following diagram illustrates our corporate structure as of the date of this prospectus and after giving effect to this offering (assuming the underwriters do not exercise the over-allotment options).

All of the entities held by our Group below are direct or indirect subsidiaries of our Company.

Notes:

1.	South American Wood S.A.C. is held 99% by Peru Forestry Investments Co. and 1% by Peruvian Forestry Investments Co., Limited.
2.	Grupo Maderero Amaz S.A.C. is held 96.95% by Peru Forestry Investments Co. and 3.05% by Peruvian Forestry Investments Co., Limited.
3.	E&T Forestal S.A.C. is held 25% by One Talent Enterprises Limited and 75% by Allied Kingdom Enterprises Limited.
4.	Nuevo San Martin S.A.C. is held 0.01% by One Talent Enterprises Limited and 99.99% by Allied Kingdom Enterprises Limited.
5.	Sepahua Tropical Forest S.A.C. is held 99.999% by One Talent Enterprises Limited and 0.001% by Allied Kingdom Enterprises Limited.
6.	Maderera Industrial Isabelita S.A.C. is held 74.98% by Golden Vast Development Limited and 25.02% by Star Max Development Limited.
7.	Latinoamerican Forest S.A.C. is held 75% by Golden Vast Development Limited and 25% by Star Max Development Limited.
8.	Inversiones H.S.T. S.A.C. is held 99.999% by Saavedra Forest S.A.C. and 0.001% by Maderera Industrial Isabelita S.A.C..
9.	Forestal Tuesta S.A.C. is held 99% by Saavedra Forest S.A.C. and 1% by Maderera Industrial Isabelita S.A.C..
10.	Agro Forest A&J S.A.C. is held 99% by Saavedra Forest S.A.C. and 1% by Maderera Industrial Isabelita S.A.C..

48

Our Company

Our Company, Nature Wood Group Limited, was incorporated under the laws of the BVI on September 22, 2011. Our principal executive office is located at Avenida da Amizade no. 1287, Chong Fok Centro Comercial, 13 E Macau S.A.R. Our registered office in the BVI is located at 4th Floor, Water’s Edgar Building Meridian Plaza, Road Town, Tortola, VG1110, British Virgin Islands.

On August 23, 2018, the then sole director of our Company resolved and approved an increase in the number of maximum authorized shares from 50,000 shares to 100,000 shares of a single class each with a par value of US$1.00.

On October 8, 2018, the then sole director of our Company resolved and approved a second increase in the number of maximum authorized shares from 100,000 shares to 200,000 shares of a single class each with a par value of US$1.00.

Pursuant to written resolutions dated September 20, 2020 passed by all of the then directors of our Company, the shares of our Company have been further subdivided from 200,000 shares of a single class each with a par value of US$1.00 to 200,000,000 shares of a single class each with a par value of US$0.001.

On September 25, 2020, our Company issued 105,263,000 new ordinary shares with a par value of US$0.001. All ADS and per ADS amounts used elsewhere in this prospectus and the consolidated financial statements have been retroactively restated to reflect the Share Subdivision.

As at the date of this prospectus, there are 105,263,000 ordinary shares issued and outstanding. We are offering 750,000 ADSs, representing 5.4% of the issued and outstanding Ordinary Shares of our Company, assuming no exercise of the underwriters’ over-allotment option or the outstanding options. Upon closing of this offering, our Directors, officers and principal shareholders will hold in aggregate, approximately 53.6% of the aggregate voting power of our issued and outstanding Ordinary Shares.

At each general meeting, each shareholder who is present in person or by proxy (or, in the case of a shareholder being a corporation, by its duly authorized representative) will have one vote for each ADS which such shareholder holds. There are no prohibitions to cumulative voting under the laws of the BVI, but our memorandum and articles of association do not provide for cumulative voting.

As at the date of this prospectus, our Company has outstanding convertible bonds in an aggregate principal amount of HK$95,200,625, which shall be convertible into Ordinary Shares of the Company. The maturity date of the convertible bonds is December 31, 2023. Details of the convertible bonds are set out in the table below:

Holders of convertible bonds	Capacity	Issue date	Principal amount of convertible bonds (HK$)	Number of Ordinary Shares upon full conversion	Immediately upon full conversion of the convertible bonds before closing of this offering (assuming no further allotment of Ordinary Shares) (approximate percentage)
Qing Cai Huang	Independent third party	September 28, 2020	35,165,146	7,544,303	5.7%
Wing Luk Chan	Independent third party	September 28, 2020	35,035,479	7,516,484	5.7%
China Home Hong Kong Limited	Independent third party	September 28, 2020	15,000,000	3,269,198	2.5%
Hok Pan Se	Chairman and Director	July 1, 2021	10,000,000	2,145,392	1.6%

49

Our Subsidiaries

Branching from our corporate structure above, our subsidiaries as of the date of this prospectus are set forth in the table below.

Name	Background	Ownership	Principal Activities
Nature Flooring (Europe) Company Limited	A BVI company incorporated on October 4, 2011	100% owned by our Company	Investment holding
Peru Forestry Management Co., Limited	A Hong Kong company incorporated on December 20, 2016	100% owned by our Company	Investment holding
Swift Top Capital Resources Limited	A Hong Kong company incorporated on November 20, 2012	100% owned by Nature Flooring (Europe) Company Limited	Trading of logs
Parquet Nature (France) S.A.R.L.	A French company incorporated on August 21, 2012	Owned as to 99% and 1% by Nature Flooring (Europe) Company Limited and Swift Top Capital Resources Limited, respectively	Trading of logs
Foshan City Linjia Technology Company Limited	A PRC company incorporated on December 20, 2018	100% owned by Swift Top Capital Resources Limited	IT consultancy, and business consultancy
Choi Chon Investment Company Limited	A Macau company incorporated on March 12, 2015	Owned as to 96.67% and 3.33% by Swift Top Capital Resources Limited and Nature Flooring (Europe) Company Limited, respectively	Trading of wood products
Peru Forestry Investments Co., Limited	A Hong Kong company incorporated on September 23, 2016	100% owned by Peru Forestry Management Co., Limited	Investment holding
Peruvian Forestry Investments Co., Limited	A Hong Kong company incorporated on September 23, 2016	100% owned by Peru Forestry Management Co., Limited	Investment holding
Double Castle Holdings Limited	A Hong Kong company incorporated on November 15, 2016	100% owned by Peru Forestry Management Co., Limited	Investment holding
Jumbo Sources Holdings Limited	A Hong Kong company incorporated on November 15, 2016	100% owned by Peru Forestry Management Co., Limited	Investment holding and holding of trademarks
One Talent Enterprises Limited	A Hong Kong company incorporated on January 10, 2017	100% owned by Peru Forestry Management Co., Limited	Investment holding
Allied Kingdom Enterprises Limited	A Hong Kong company incorporated on November 15, 2016	100% owned by Peru Forestry Management Co., Limited	Investment holding
Golden Vast Development Limited	A Hong Kong company incorporated on January 10, 2017	100% owned by Peru Forestry Management Co., Limited	Investment holding
Stars Max Development Limited	A Hong Kong company incorporated on November 15, 2016	100% owned by Peru Forestry Management Co., Limited	Investment holding
South American Wood S.A.C.	A Peruvian company incorporated on December 16, 2019	Owned as to 99% and 1% by Peru Forestry Investments Co., Limited and Peruvian Forestry Investments Co., Limited, respectively	Trading of wood products
Grupo Maderero Amaz S.A.C.	A Peruvian company incorporated on July 27, 2016	Owned as to 96.95% and 3.05% by Peru Forestry Investments Co., Limited and Peruvian Forestry Investments Co., Limited, respectively	Trading of wood products
Zhang Hermanos S.A.C.	A Peruvian company incorporated on March 3, 2014	Owned as to 99% and 1% by Double Castle Holdings Limited and Jumbo Sources Holdings Limited, respectively	Trading of wood products
E&T Forestal S.A.C.	A Peruvian company incorporated on May 2, 2014	Owned as to 25% and 75% by One Talent Enterprises Limited and Allied Kingdom Enterprises Limited, respectively	Manufacturing of wood products and holding of concession rights
Nuevo San Martin S.A.C.	A Peruvian company incorporated on June 5, 2002	Owned as to 0.01% and 99.99% by One Talent Enterprises Limited and Allied Kingdom Enterprises Limited, respectively	Manufacturing and trading of wood products and holding of concession rights
Sepahua Tropical Forest S.A.C.	A Peruvian company incorporated on June 5, 2002	Owned as to 99.999% and 0.001% by One Talent Enterprises Limited and Allied Kingdom Enterprises Limited, respectively	Holding of concession rights
Maderera Industrial Isabelita S.A.C.	A Peruvian company incorporated on February 22, 2002	Owned as to 74.98% and 25.02% by Golden Vast Development Limited and Stars Max Development Limited, respectively	Trading of wood products and holding of concession rights
Saavedra Forest S.A.C.	A Peruvian company incorporated on November 19, 2012	Owned as to 99% and 1% by Nuevo San Martin S.A.C. and Maderera Industrial Isabelita S.A.C., respectively	Investment holding and holding of concession rights
Inversiones H.S.T. S.A.C.	A Peruvian company incorporated on June 13, 2002	Owned as to 99.999% and 0.001% by Saavedra Forest S.A.C. and Maderera Industrial Isabelita S.A.C., respectively	Holding of concession rights
Forestal Tuesta S.A.C.	A Peruvian company incorporated on June 5, 2002	Owned as to 99% and 1% by Saavedra Forest S.A.C. and Maderera Industrial Isabelita S.A.C., respectively	Holding of concession rights
Agro Forest A&J S.A.C.	A Peruvian company incorporated on June 12, 2002	Owned as to 99% and 1% by Saavedra Forest S.A.C. and Maderera Industrial Isabelita S.A.C., respectively	Holding of concession rights
Sanra Inversiones S.A.C.	A Peruvian company incorporated on June 15, 2002	Owned as to 99.999% and 0.001% by Agro Forest A&J S.A.C. and Maderera Industrial Isabelita S.A.C., respectively	Holding of concession rights
Latinoamerican Forest S.A.C.	A Peruvian company incorporated on March 31, 2022	Owned as to 75% and 25% by Golden Vast Development Limited and Stars Max Development Limited, respectively	Trading of wood products

50

SELECTED CONSOLIDATED FINANCIAL DATA

The following tables summarize our selected consolidated financial data for the periods and as of the dates indicated. The summary consolidated statements of income and comprehensive income for the years ended December 31, 2022, 2021 and 2020, and the summary consolidated balance sheets as of December 31, 2022 and 2021 are derived from our consolidated financial statements, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), and included elsewhere in this prospectus. The condensed financial statements include all adjustments, consisting only of normal and recurring adjustments, that we consider necessary for a fair representation of our financial position and operating results for the periods presented. Our consolidated financial statements are prepared and presented in accordance with IFRS. Our historical results do not necessarily indicate results expected for any future periods. Our historical results are not necessarily indicative of the results that may be expected in the future. The following summary consolidated financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements included elsewhere in this prospectus.

	For the year ended December 31, 2022			For the year ended December 31, 2021			For the year ended December 31, 2020
Consolidated Statements of Profit or Loss and Other Comprehensive Income:
Revenue	$	55,339,277		$	47,684,127			37,501,069
Cost of revenue		(35,423,411	)		(31,272,086	)		(27,457,202	)
Gross profits		19,915,866			16,412,041			10,043,867
Operating expenses		(13,652,925	)		(12,689,872	)		(10,425,129	)
Other non-operating expenses, net		(1,052,121	)		(1,761,626	)		(653,879	)
Profit (loss) before income tax		5,210,820			1,960,543			(1,035,141	)
Income tax expenses		(431,925	)		(628,253	)		(147,514	)
Profit (loss) for the year		4,778,895			1,332,290			(1,182,655	)
Exchange difference arising from translation of foreign operations		(314,831	)		(174,231	)		233,247
Total comprehensive income (loss) for the year		4,464,064			1,158,059			(949,408	)
Earnings per share – basic and diluted	$	0.05		$	0.01			(0.01	)
Weighted average number of Ordinary Shares outstanding for basic and diluted earnings per share		105,263,000			105,263,000			105,263,000

	December 31, 2022			December 31, 2021
Consolidated Balance Sheet Data:
Current assets	$	38,902,819		$	34,811,356
Total assets		68,046,687			64,199,621
Current liabilities		(37,565,413	)		(27,383,461	)
Total liabilities		(55,555,011	)		(56,172,009	)
Total equity		(12,491,676	)		(8,027,612	)
Total liabilities and equity	$	(68,046,687	)	$	(64,199,621	)

51

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this prospectus. This discussion and analysis and other parts of this prospectus contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under “Risk Factors” and elsewhere in this prospectus. You should carefully read the “Risk Factors” section of this prospectus to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

Overview

We are a holding company incorporated as an exempted company under the laws of the British Virgin Islands (“BVI”). As a holding company with no material operations of our own, we conduct our substantial operations mainly in Peru, France, Hong Kong and Macau, through our Operating Subsidiaries.

We are a vertically-integrated forestry company which focuses on FSC business operations, with facilities located in Peru. We produce a range of products, including logs, decking, flooring, sawn timber, recycled charcoal, synthesized charcoal, machine-made charcoal and essential oils. Our Group owns natural forest concessions and cutting rights for the exploitation of timbers on parcels of land in Peru which covered an area of approximately 615,333 hectares. We also work with local forest owners in Peru and engage in timber auctions in France for supply of logs. We are committed to sustainable management of forests, efficient use of resources, continuous development of new products, and providing high-quality products to our customers consistently. Our goal is to become a leading player in the wood industry and provide sustainable and high-quality wood products at an affordable price to our customers.

We commenced our FSC business operations in 2016, when Grupo Maderero Amaz S.A.C., a subsidiary of our Group, first obtained FSC CoC certification and began to sell FSC-certified products. As at the date of this prospectus, five subsidiaries of our Group (including Choi Chon Investment Company Limited, E&T Forestal S.A.C., Grupo Maderero Amaz S.A.C., Nuevo San Martin S.A.C. and Latinoamerican Forest S.A.C) have obtained FSC CoC certifications. We also have built a professional forest management team to implement FSC forest management. Our forest management team is led by our head of forest engineer who is qualified to carry out FSC forest management and the key members of our team have an average of over 8 years of experience in FSC forest management. According to the Frost & Sullivan Report, FSC-certified products can be sold at a premium of around 5% to 15% over non-FSC-certified products.

Our products and services provide significant value for consumers, through our “NATU” brand. We also seek to maximize consumers’ access to our products and services through competitive pricing and regular evaluations of our pricing arrangements and contracts with our distributors.

Our customers include importers, retailers and processors located in China, Peru, France, Hong Kong, Luxembourg, Belgium, the United States and South Asia, and we expect to expand our existing markets in Europe and North America by establishing an agency system, as well as expand into new geographic markets, such as the United Arab Emirates, Australia and Korea, where we believe there is significant market demand for decking.

Key Factors that Affect Operating Results

We believe the following key factors may affect our financial condition and results of operations:

● our ability to achieve product certification approvals for all our products in the jurisdictions we planned to expand into;

● our ability to acquire concession rights;

● our ability to commercialize our logs, flooring, decking, sawn timber, recycled charcoal, synthesized charcoal, machine-made charcoal and essential oils products;

● our ability to launch successful marketing and sales activities to sell our products;

● our ability to enter into production agreements with our existing and potential suppliers for our flooring and decking products at competitive prices;

● our ability to raise additional funds for accelerating business growth;

● our ability to attract and retain professional personnel specializing in FSC forest management, manufacturing, procurement, and sales and marketing; and

● our ability to enhance our operational efficiency.

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Effects of COVID-19 on the Group

The COVID-19 pandemic has resulted in quarantines, travel restrictions, limitations on social or public gatherings, and the temporary closure of business venues and facilities across the world. In January 2020, the Chinese government issued a series of policies to prevent the spread of COVID-19. The Chinese government has shown signs of relaxing its COVID-19 policies. For instance, the Chinese government has eased the border restrictions by reopening certain border crossing points between mainland China and Hong Kong to travelers since January 8, 2023. On March 15, 2020, Peru announced a nationwide lockdown due to the pandemic, which was lifted in June of the same year. After that, various pandemic prevention measures have been introduced in various countries and regions around the world.

With regard to our production base in Peru, during the lockdown period, production in all of our factories was suspended for around three months, many businesses ceased to operate and shops were closed, and all government departments (including, among others, the forestry bureau and tax bureau) did not work normally, which hindered our business operations in terms of production, delivery as well as raw materials procurement. The pandemic and lockdown measures also raised concerns over health and safety among the workers and led to changes in their mentality, which resulted in instability in personnel and a high turnover rate, in turn affecting the normal work progress in our production base. Furthermore, the resulting inflation, which significantly raised diesel prices, electricity fees as well as employee base salary, had an impact on our costs of operation. To mitigate the inflationary pressures, we have adjusted prices to our customers to reflect changes in our operating costs. Other control measures imposed as a response to the pandemic also led to delays in the development of various parts of the forests, resulting in a period of supply shortage and rising costs of raw materials for our business operations.

With regard to our sales, COVID-19 related lockdowns and other control measures imposed in other countries which form part of the overseas market for our products had and may continue to have an impact on our international exports. For instance, the Chinese market will not be able to receive delivery of our products during the period of lockdown, and consumers’ demand for wooden floors will decline, which will significantly affect the quantity and price of flooring materials we sell in China. In addition, as the price of sea freight has increased by 300% as compared with that before the pandemic, this has led to higher overall costs for our customers. The shortage in supply of cargo containers, reduction in shipping frequency and longer shipping period have also affected the shipment and delivery of our products to a certain extent. Nevertheless, save for delivery delay of some of our products which in turn caused delay in recording of account receivables, the supply chain disruptions do not have any material impact on the sales, profits or liquidity of the Group. Additionally, the pandemic has resulted in the shutdown of factory production, rising costs, delays in transportation and delivery, and a shortage in the supply of raw materials, which raised the price of wood products in the whole market. At the same time, due to the impact of the pandemic on the global economy, market consumption was weak, resulting in a backlog of goods, which in turn affected the number of orders placed by our customers.

Many of the quarantine and lockdown measures within China and around the world have been gradually relaxed. Nevertheless, relaxation of restrictions on economic and social activities may lead to new cases which may result in the return of restrictions. If the current outbreak of the COVID-19 pandemic continues to grow, the effects of such widespread infectious disease and epidemic may inhibit our ability to conduct our business and operations and could materially harm our Group. COVID-19 may cause us to have to reduce operations as a result of various lock-down procedures enacted by the relevant local, state or federal government in the jurisdictions where we operate, which could restrict the movement of our staff and the ability to recruit new staff when required, distributors and suppliers. COVID-19 may also cause a decrease in spending by potential customers of our products as a result of the economic turmoil resulting from the spread of COVID-19 and thereby having a negative effect on our ability to generate revenue. Further, if there is a spread of the coronavirus within any of our operating jurisdictions, it may cause local disruptions and could potentially cause a specific location to be entirely quarantined. The continued COVID-19 outbreak may also restrict our ability to raise funding when needed. The specific and actual effects of the spread of coronavirus on the Group are difficult to assess at this time as the actual effects will depend on many factors beyond our control and knowledge. The spread of COVID-19 and related mutations of this virus, if it continues, may cause an overall decline in the economies we plan to operate in as a whole and also may materially harm our Group.

Notwithstanding the foregoing possible negative impacts on our business and results of operations, during the years ended December 31, 2022, 2021 and 2020, COVID-19 has had a limited impact on the Company’s operations. However, the ultimate impact of the COVID-19 pandemic on our operations remains unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the coronavirus outbreak, new information which may emerge concerning the severity of the coronavirus pandemic, and any additional preventative and protective actions that governments, or our Group, may direct, which may result in an extended period of business disruption and reduced operations. The long-term financial impact cannot be reasonably estimated at this time and may ultimately have a material adverse impact on our business, financial condition, and results of operations.

Results from Operations

Years Ended December 31, 2022 2021 and 2020

	For the year ended December 31, 2022			For the year ended December 31, 2021			For the year ended December 31, 2020
Revenue	$	55,339,277		$	47,684,127			37,501,069
Cost of revenue		(35,423,411	)		(31,272,086	)		(27,457,202	)
Gross profits		19,915,866			16,412,041			10,043,867
Net foreign exchange losses		(958,564	)		(1,515,866	)		(495,698	)
Other income, net		1,823,162			1,625,523			1,462,690
Selling and distribution expenses		(8,632,192	)		(9,342,690	)		(7,211,573	)
Administrative expenses		(5,020,733	)		(3,347,182	)		(3,213,556	)
Finance income		11,573			892			388
Finance costs		(1,928,292	)		(1,872,175	)		(1,621,259	)
Profit (loss) before income tax	$	5,210,820		$	1,960,543			(1,035,141	)
Income tax expenses		(431,925	)		(628,253	)		(147,514	)
Profit (loss) for the year	$	4,778,895		$	1,332,290			(1,182,655	)
Other comprehensive (loss) profit:
Exchange difference arising from translation of foreign operations		(314,831	)		(174,231	)		233,247
Other comprehensive (loss) profit	$	(314,831	)	$	(174,231	)		233,247
Total comprehensive income (loss) for the year	$	4,464,064		$	1,158,059			(949,408	)

	For the year ended December 31, 2022			For the year ended December 31, 2021			For the year ended December 31, 2020
Revenue	$	55,339,277		$	47,684,127			37,501,069
Cost of revenue		(35,423,411	)		(31,272,086	)		(27,457,202	)
Gross Profits		19,915,866			16,412,041			10,043,867
Operating Expenses
Selling and distribution expenses	$	(8,632,192	)	$	(9,342,690	)		(7,211,573	)
Administrative expenses		(5,020,820	)		(3,347,182	)		(3,213,556	)
Other non-operating expenses, net		(1,052,121	)		(1,761,626	)		(653,879	)
Profit (loss) before income tax		5,210,820			1,960,543			(1,035,141	)
Income tax expenses		(431,925	)		(628,253	)		(147,514	)
Other comprehensive (loss) profit		(314,831	)		(174,231	)		233,247
Exchange difference arising from translation of foreign operations		(314,831	)		(174,231	)		233,247
Total comprehensive income (loss) for the year	$	4,464,064		$	1,158,059			(949,408	)

Revenue

We generate our revenues from sales of logs from Peru or France, sales of decking and flooring either manufactured in Peru or sourced from our suppliers in Gabon, and sales of sawn timbers processed in Peru.

Sales of logs: We harvest timbers from our Forests and other local forests in Peru and sell them to domestic manufacturers. We also source logs in France through auctions or directly from forest owners and sell them to manufacturers in France or in China.

Sales of decking, flooring and sawn timbers: We process logs into decking, flooring or sawn timbers in our factories in Peru, or source from our suppliers and sell to overseas markets. Our customers include importers, retailers and processors in China, Peru, France, Hong Kong, Luxembourg, Belgium and the United States, Southeast Asia.

Set forth below are the revenues generated from our business and the percentage of total revenues for the years indicated:

	For the year ended December 31, 2022				For the year ended December 31, 2021				For the year ended December 31, 2020
Logs	$	27,798,257	50.2	%	$	21,145,998	44.4	%		16,447,702	43.9	%
Flooring		11,993,435	21.7	%		11,939,024	25.0	%		12,905,465	34.4	%
Decking		13,799,992	24.9	%		12,032,415	25.2	%		6,579,430	17.5	%
Sawn timber		1,747,593	3.2	%		2,566,690	5.4	%		1,568,472	4.2	%
Total	$	55,339,277	100.0	%	$	47,684,127	100.0	%		37,501,069	100.0	%

Revenue was approximately $55.3 million and $47.7 million for the years ended December 31, 2022 and 2021, respectively, representing an increase of approximately 16.1%, primarily attributable to the increase in revenue generated from sales of logs by 31.5% and from decking by 14.7%, as a result of the increase in selling price from our existing customers in China and Europe respectively.

Revenue was approximately $47.7 million and approximately $37.5 million for the years ended December 31, 2021 and 2020, respectively, representing an increase of approximately 27.2%, primarily attributable to the increase in revenue generated from sales of decking and logs by 82.9% and 28.6% respectively, due to surge in demand for decking in Europe and logs in China during the pandemic, which resulted in the increase in sales volume and selling price of both products from our existing customers.

53

Cost of revenue

The cost of revenue for the years ended December 31, 2022, 2021 and 2020 was $35.4 million, $31.3 million and $27.5 million, respectively. The increase was attributable to the increase in raw materials incurred in line with the revenue.

Of the $35.4 million incurred for the year ended December 31, 2022, $28.0 million, $1.3 million and $6.1 million were related to raw materials, labor costs and overhead expenses, respectively.

Of the $31.3 million incurred for the year ended December 31, 2021, $22.2 million, $1.5 million and $7.6 million were related to raw materials, labor costs and overhead expenses, respectively.

Of the $27.5 million incurred for the year ended December 31, 2020, $18.2 million, $1.2 million and $8.1 million were related to raw materials, labor costs and overhead expenses, respectively.

Gross profits

Gross profits for the years ended December 31, 2022, 2021 and 2020 were $19.9 million, $16.4 million and $10 million, respectively. The gross profit for the year ended December 31, 2022 increased by approximately 21.3% as compared to that for the year ended December 31, 2021. The increase in gross profits was primarily attributable to the increase in unit price of logs and decking. The gross profit for the year ended December 31, 2021 increased by approximately 63.4% as compared to that for the year ended December 31, 2020. The significant increase in gross profits was primarily due to the strong demand for logs and decking in 2021 and the decrease in overhead expenses due to the improved operational efficiency of our factories.

Of the gross profit generated in 2022 from sales of logs, flooring, decking and sawn timber of $13.0 million, $1.6 million, $5.2 million and $0.1 million, respectively.

Of the gross profit generated in 2021, sales of logs, flooring, decking and sawn timber generated gross profits of $9.8 million, $1.8 million, $4.1 million and $0.7 million, respectively.

Of the gross profit generated in 2020, sales of logs, flooring, decking and sawn timber generated gross profits of $7 million, $1.7 million, $1.2 million and $0.1 million, respectively.

Set forth below table are the gross profit and gross profit margin generated from our business for the years indicated:

		For the year ended December 31, 2022			For the year ended December 31, 2021					For the year ended December 31, 2020
		Gross profit	Gross profit margin		Gross profit		Gross profit margin			Gross profit		Gross profit margin
	$	(‘000)			$ (‘000)
Logs		13,028	46.9	%	$	9,761		46.2	%		6,986		42.5	%
Flooring		1,611	13.4	%		1,816		15.2	%		1,700		13.2	%
Decking		5,200	37.7	%		4,091		34.0	%		1,225		18.6	%
Sawn timber		77	4.4	%		744		29.0	%		133		8.5	%
Total	$	19,916	36.0	%	$	16,412		34.4	%		10,044		26.8	%

Net Foreign Exchange losses

Net foreign exchange losses were approximately $1.0 million and $1.5 million for the years ended December 31, 2022 and 2021, respectively. The decrease in net foreign exchange losses in 2022 was due to the slight foreign exchange rate fluctuation of USD against PEN as compared to significant depreciation of PEN against USD in 2021.

Net foreign exchange losses were approximately $1.5 million and $0.5 million for the years ended December 31, 2021 and 2020, respectively. The increase in net foreign exchange losses in 2021 was due to the strong appreciation of USD by approximately 10% against PEN in 2021. The depreciation of EUR against HKD by approximately 8.7% in 2021 also contributed to the increase in net foreign exchange losses.

Operating Expenses

Operating expenses comprising selling and distribution expenses and administrative expenses were approximately $13.7 million, $12.7 million and $10.4 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The selling and distribution expenses amounted to $8.6 million and $9.3 million for the year ended December 31, 2022 and 2021 respectively. The decrease of selling and distribution expenses was primarily attributable to the decrease in export and freight charges.

The selling and distribution expense amounted to $9.3 million and $7.2 million for the year ended December 31, 2021 and 2020 respectively, of which export and freight charges amounted to $7.6 million and $5.8 million out of the total selling and distribution expense for the respective year. The increase in export and freight charges was due to the surged cost of export and freight charges during the pandemic, and the increase in export volume.

The administrative expense amounted to $5.0 million and $3.3 million for the year ended December 31, 2022 and 2021 respectively. The increase of administrative expense was primarily attributable to the increase in employee benefits to award our employees for the remarkable results of the Group in 2022. There was no material fluctuation on administrative expenses for the years ended December 31, 2021 and 2020.

	For the year ended December 31, 2022		For the year ended December 31, 2021		For the year ended December 31, 2020
Operating expenses:
Selling and distribution expenses	$	8,632,192	$	9,342,690		7,211,573
Administrative expenses		5,020,733		3,347,182		3,213,556
Total operating expenses	$	13,652,925	$	12,689,872		10,425,129

Total Other Income, Net

For the years ended December 31, 2022, 2021 and 2020, our total other income, net amounting to approximately $1.8 million, $1.6 million and $1.5 million respectively was primarily consisted of VAT tax concessions and sales of side products and spare parts.

Finance Costs

The finance cost amounting to approximately $1.9 million, $1.9 million and $1.6 million for the years ended December 31, 2022, 2021 and 2020, respectively consists of i) interest expenses for bank loans, shareholders loans, lease liabilities, convertible loans and other loans, and ii) bank charges. Interest expenses amounted to approximately $1.8 million $1.7 million and $1.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. The increase in interest expense in 2021 was primarily due to the new bank loans obtained for our business expansion while the increase in interest expense in 2022 was attributable to the increase in bank interest rate.

Income tax expenses

Income tax expenses were $0.4 million and $0.6 million for the years ended December 31, 2022 and 2021, respectively. The decrease in tax expense was primarily due to the utilization of accumulated tax losses on certain subsidiaries. Income tax expenses were $0.6 million and $0.1 million for the years ended December 31, 2021 and 2020, respectively. The increase in tax expense was primarily due to the increase in taxable profits.

54

Total comprehensive income (loss) for the year

For the year ended December 31, 2022 and 2021, our total comprehensive income was approximately $4.5 million and $1.2 million respectively. The increase in comprehensive income was primarily due to the increase in profits of logs and decking.

For the year ended December 31, 2021, our total comprehensive income was approximately $1.2 million, while a total comprehensive loss of $0.9 million was recorded for the year ended December 31, 2020. The loss in 2020 was primarily due to the lockdown and other control measures around the world, including Peru, Europe and China under COVID-19, which affected our production and shipment to our customers.

Liquidity and Capital Resources

For the years ended December 31, 2022, 2021 and 2020

	For the year ended December 31, 2022			For the year ended December 31, 2021			For the year ended December 31, 2020
Cash generated from (used in) operating activities	$	5,871,162		$	3,251,499			(2,600,306	)
Cash used in investing activities		(1,429,012	)		(2,482,105	)		(3,135,627	)
Cash (used in) generated from financing activities		(2,544,981	)		395,174			5,883,067
Effect of exchange rate change		(360,040	)		(1,173,227	)		(277,621	)
Change in cash during the year		1,897,169			1,164,568			147,134
Cash, beginning of the year		3,545,458			3,554,117			3,684,604
Cash, end of the year	$	5,082,587		$	3,545,458			3,554,117

To date, the Group has financed its operations primarily through internally-generated cash flows and financing.

Net cash generated from operating activities was approximately $5.9 million and $3.3 million for the year ended December 31, 2022 and 2021, respectively. The increase in cash generated from operations was mainly due to the increase in net profits.

Net cash generated from operating activities was approximately $3.3 million for the year ended December 31, 2021 and net cash used in operating activities was approximately $2.6 million for the year ended December 31, 2020, respectively. The increase in cash generated from operations was mainly due to the increase in revenue and profit while making loss in 2020.

Net cash used in investing activities was approximately $1.4 million, $2.5 million and $3.1 million for the year ended December 31, 2022, 2021 and 2020, respectively. The cash used in investing activities was primarily for acquisition of property, plant and equipment.

Net cash used in financing activities was $2.5 million for the year ended December 31, 2022 but generated from financing activities was $0.4 million for the year ended December 31, 2021, respectively. The cash used in financing activities was primarily attributable to the net repayment to bank borrowings for the year ended December 31, 2022.

Net cash generated from financing activities was $0.4 million and approximately $5.9 million for the year ended December 31, 2021 and 2020 respectively. The cash generated from financing activities was primarily attributable to the net proceed from bank borrowings and ultimate beneficial shareholder loans.

As of December 31, 2022, 2021 and 2020, the Group had a cash and bank balance of approximately $5.1 million, approximately $3.5 million, approximately $3.6 million respectively.